Eastman Kodak Co – ‘8-K’ for 6/30/94

As of:  Tuesday, 10/18/94   ·   For:  6/30/94   ·   Accession #:  31235-94-19   ·   File #:  1-00087

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Current Report   —   Form 8-K
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: 8-K         Current Report                                       189    399K 

Document Table of Contents

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SECURITIES AND EXCHANGE COMMISSION  

Washington, D.C. 20549  

FORM 8-K  

CURRENT REPORT  
PURSUANT TO SECTION 13 OR 15(d) OF  
THE SECURITIES EXCHANGE ACT OF 1934   

Date of Report (Date of earliest event reported)          June 30, 1994         

EASTMAN KODAK COMPANY   
(Exact name of registrant as specified in its charter)  

NEW JERSEY                       1-87                16-0417150   
(State of incorporation)      (Commission File Number)    (IRS Employer         
                                                   Identification No.)

343 STATE STREET, ROCHESTER, NEW YORK                       14650               
(Address of principal executive offices)                    (Zip Code)          

Registrant's telephone number, including area code:         716-724-4000        

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ITEM 2.  ACQUISITION OR DISPOSITION OF ASSETS                                   

On October 3, 1994, the Company completed the divestiture of its                
Sterling Winthrop worldwide pharmaceuticals unit to Sanofi for $1.675 billion   
in cash and Sanofi's interest in a separate European over-the-counter           
medicines alliance, effective October 1, 1994.  Details of the divestiture      
are contained in a press release issued by the Company on October 3, 1994 and   
set forth herein on page 12.                                                    

ITEM 5. OTHER EVENTS                                                            

On August 29, 1994, the Company issued a press release describing the proposed  
sale of its Sterling Winthrop Inc. subsidiary to SmithKline Beecham plc.  That  
press release is set forth herein on page 9.  On September 6, 1994, the         
Company issued a press release describing the proposed sale of its Clinical     
Diagnostics Division to Johnson & Johnson.  That press release is set forth     
herein on page 10.  On September 26, 1994, the Company issued a press release   
describing the proposed sale of the household products businesses of its L&F    
Products unit to Reckitt & Colman plc.  That press release is set forth herein  
on page 11.  On October 14, 1994, the Company issued a press release describing 
the proposed sale of the do-it-yourself products businesses of L&F Products to  
Forstmann Little & Co.  That press release is set forth herein on page 13.      

ITEM 7.  FINANCIAL STATEMENTS AND EXHIBITS                                      

(b)  Pro forma financial information                                            

(1) Eastman Kodak Company is filing pro forma consolidated financial          
information detailed on pages 4-7 to provide historical financial     
  information reflecting the reclassification of financial information for
 the following non-imaging health businesses which the Company announced
its intent to divest on May 3, 1994:  the pharmaceutical and consumer 
    health businesses of Sterling Winthrop Inc., L&F Products and the Clinical
 Diagnostics Division.  The pharmaceutical business of Sterling Winthrop
Inc. was divested effective October 1, 1994.                          

   This Current Report on Form 8-K is dated June 30, 1994 because as of June
 30, 1994, the Company concluded that measurement dates had occurred for
the sales of the non-imaging health businesses.                       

(c)  Filed herewith as Exhibit 10, pages 15 to 188 is the Amended and Restated  
Asset Purchase Agreement among the Company, Sterling Winthrop Inc. and
Sanofi dated as of September 30, 1994.                                

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Eastman Kodak Company and Subsidiary Companies  
Index to Exhibits and Financial Statement Schedules   

                                                                Page No.
1.  Pro forma consolidated financial information of Eastman             
Kodak Company:                                                
   Consolidated statement of earnings                                4
   Consolidated statement of financial position                      6

2.  Other Information                                                   
        - August 29, 1994 Press Release                              9
        - September 6, 1994 Press Release                           10
        - September 26, 1994 Press Release                          11
        - October 3, 1994 Press Release                             12
        - October 14, 1994 Press Release                            13

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                                                                [Download Table]
Eastman Kodak Company and Subsidiary Companies                                  
PRO FORMA CONSOLIDATED STATEMENT OF EARNINGS - UNAUDITED                        

                                                        1993      1992     1991 
(in millions)                                                                   
                                                                                
REVENUES                                                                        
  Sales                                              $12,600   $12,900  $12,400 
  Earnings from equity interests and                                            
   other revenues                                        200       300      200 
                                                     -------   -------  ------- 
       TOTAL REVENUES                                 12,800    13,200   12,600 
                                                     -------   -------  ------- 
COSTS                                                                           
  Cost of goods sold                                   6,600     6,700    6,400 
  Marketing and administrative expenses                3,400     3,700    3,500 
  Research and development costs                         900     1,000    1,000 
  Interest expense                                       150       200      200 
  Restructuring costs                                    500       200    1,475 
  Other charges                                          200       100      200 
                                                     -------   -------  ------- 
       TOTAL COSTS                                    11,750    11,900   12,775 
                                                     -------   -------  ------- 
Earnings (loss) from continuing operations                                      
 before income taxes                                   1,050     1,300     (175)

Provision (benefit) for income taxes from                                       
 continuing operations                                   400       475     (175)
                                                     -------   -------  ------- 
Earnings from continuing operations                                             
 before extraordinary item and cumulative                                       
  effect of changes in accounting principle              650       825        - 

Earnings from discontinued operations                                           
 before cumulative effect of changes in                                         
  accounting principle                                    17       169       17 
                                                     -------   -------  ------- 
Earnings before extraordinary item and                                          
 cumulative effect of changes in                                                
  accounting principle                                   667       994       17 

Extraordinary item                                       (14)        -        - 
                                                     -------   -------  ------- 
Earnings before cumulative effect of changes                                    
 in accounting principle                                 653       994       17 
                                                     -------   -------  ------- 
Cumulative effect of changes in accounting                                      
 principle from continuing operations                 (1,649)      100        - 

Cumulative effect of changes in accounting                                      
 principle from discontinued operations                 (519)       52        - 
                                                     -------   -------  ------- 
Total cumulative effect of changes in                                           
 accounting principle                                 (2,168)      152        - 
                                                     -------   -------  ------- 

       NET EARNINGS (LOSS)                           $(1,515)  $ 1,146  $    17 
                                                     =======   =======  ======= 

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                                                                [Download Table]
Eastman Kodak Company and Subsidiary Companies                                 
PRO FORMA CONSOLIDATED STATEMENT OF EARNINGS - UNAUDITED                       

                                                        1993      1992     1991
                                                                               
Primary earnings per share from                                                
 continuing operations before extraordinary                                    
  item and cumulative effect of changes                                        
   in accounting principle                           $  1.95   $  2.55  $     -

Primary earnings per share from discontinued                                   
 operations before cumulative effect of changes                                
  in accounting principle                                .07       .51      .05
                                                     -------   -------  -------

Primary earnings per share before extraordinary                                
 item and cumulative effect of changes in                                      
  accounting principle                                  2.02      3.06      .05

Extraordinary item                                      (.04)        -        -
                                                     -------   -------  -------
Primary earnings per share before cumulative                                   
 effect of changes in accounting principle              1.98      3.06      .05
                                                     -------   -------  -------

Cumulative effect of changes in accounting                                     
 principle from continuing operations                  (5.02)      .31        -

Cumulative effect of changes in accounting                                     
 principle from discontinued operations                (1.58)      .16        -
                                                     -------   -------  -------
Total cumulative effect of changes in                                          
 accounting principle                                  (6.60)      .47        -
                                                     -------   -------  -------

Primary earnings (loss) per share                    $ (4.62)  $  3.53  $   .05
                                                     =======   =======  =======

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                                                                [Download Table]
Eastman Kodak Company and Subsidiary Companies                               
PRO FORMA CONSOLIDATED STATEMENT OF FINANCIAL POSITION - UNAUDITED           


(in millions)                                                December 31,    
                                                         1993           1992 
                                                                             
ASSETS                                                                       

CURRENT ASSETS                                                               
Cash and cash equivalents                             $ 1,635        $   361 
Marketable securities                                     331            186 
Receivables (net of allowances of $92 and $98)          2,817          2,820 
Inventories                                             1,532          1,592 
Deferred income tax charges                               339            143 
Other                                                     203            189 
                                                      -------        ------- 
      Total current assets                              6,857          5,291 
                                                      -------        ------- 
PROPERTIES                                                                   
Land, buildings and equipment at cost                  11,601         12,082 
Less: Accumulated depreciation                          6,574          6,562 
                                                      -------        ------- 
      Net properties                                    5,027          5,520 

OTHER ASSETS                                                                 
Unamortized goodwill (net of accumulated                                     
 amortization of $179 and $145)                           272            220 
Long-term receivables and other noncurrent assets         912          1,107 
Deferred income tax charges                               393              - 
Net assets of discontinued operations                   5,349          6,900 
                                                      -------        ------- 
      TOTAL ASSETS                                    $18,810        $19,038 
                                                      =======        ======= 

LIABILITIES AND SHAREOWNERS' EQUITY                                          

CURRENT LIABILITIES                                                          
Payables                                              $ 2,877        $ 2,425 
Short-term borrowings                                     611          1,683 
Taxes-income and other                                    384            449 
Dividends payable                                         165            163 
Deferred income tax credits                                16             22 
                                                      -------        ------- 
      Total current liabilities                         4,053          4,742 

OTHER LIABILITIES                                                            
Long-term borrowings                                    6,727          5,259 
Postemployment liabilities                              3,491            760 
Other long-term liabilities                             1,183          1,194 
Deferred income tax credits                                 -            526 
                                                      -------        ------- 
      Total liabilities                                15,454         12,481 
                                                      -------        ------- 
SHAREOWNERS' EQUITY                                                          
Common stock, par value $2.50 per share                   948            936 
      950,000,000 shares authorized; issued                                  
      379,079,777 in 1993 and 374,479,114 in 1992                            
Additional capital paid in or transferred                                    
 from retained earnings                                   213             26 
Retained earnings                                       4,469          7,721 
Accumulated translation adjustment                       (235)           (85)
                                                      -------        ------- 
                                                        5,395          8,598 

Less: Treasury stock, at cost                           2,039          2,041 
      48,513,344 shares in 1993 and 48,562,835                               
      shares in 1992                                                         
                                                      -------        ------- 
      Total shareowners' equity                         3,356          6,557 
                                                      -------        ------- 
      TOTAL LIABILITIES AND SHAREOWNERS' EQUITY       $18,810        $19,038 
                                                      =======        ======= 


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Notes to Pro Forma Consolidated Statement of Earnings and Consolidated          
Statement of Financial Position                                                 

DISCONTINUED OPERATIONS                                                         

On May 3, 1994, the Company announced its intent to divest the following        
non-imaging health businesses:  the pharmaceutical and consumer health          
businesses of Sterling Winthrop Inc., L&F Products and the Clinical Diagnostics 
Division.  Beginning with the second quarter of 1994, these businesses are      
being reported as discontinued operations with results for prior periods        
restated.  On June 23, 1994, the Company announced Sanofi has agreed to         
acquire the pharmaceutical business of Sterling Winthrop Inc. for $1.675        
billion in cash and its interest in the "Over-the-Counter" alliance with        
Sterling Winthrop Inc.  On October 1, 1994, the Company completed this sale.    
On August 29, 1994, the Company announced SmithKline Beecham plc has agreed to  
acquire the consumer health business of Sterling Winthrop Inc. for $2.925       
billion in cash.  On September 6, 1994, the Company announced Johnson & Johnson 
has agreed to acquire the Clinical Diagnostics Division for $1.008 billion in   
cash.  On September 26, 1994, the Company announced Reckitt & Colman plc has    
agreed to acquire the worldwide household businesses of L&F Products for        
$1.55 billion in cash.  On October 14, 1994, the Company announced Forstmann    
Little & Co. has agreed to acquire the do-it-yourself products businesses of    
L&F Products for $700 million in cash.  The Company expects to complete these   
transactions upon receipt of regulatory approvals.  In addition, as part of the 
divestiture, the Company is actively negotiating with potential buyers for its  
pharmaceutical research and development facility and its NanoSystems unit, and  
anticipates closing dates for these transactions over the next few months.      

As of June 30, 1994, the Company concluded that measurement dates had occurred  
for the sales of the non-imaging health businesses.  Accordingly, the           
financial statement information related to these businesses has been presented  
on one line in the Consolidated Statement of Financial Position, "net assets    
of discontinued operations", and in the "discontinued operations" section of    
the Consolidated Statement of Earnings.  The amounts presented for prior        
periods have been restated for appropriate comparability.  The "net assets of   
discontinued operations" represents the assets intended to be sold offset by    
the liabilities anticipated to be assumed by potential buyers of these          
businesses.  The amounts presented in the Consolidated Statement of Earnings    
for prior periods have been restated to reflect the allocation of interest      
expense from continuing operations to discontinued operations.  The allocation  
of interest expense was performed by reference to the interest expense on       
indebtedness that is anticipated to be repaid from the net proceeds received    
from the divestment transactions.                                               

The Company currently does not anticipate an overall loss on the divestment     
transactions including income from operations during the phase-out period       
which is estimated to end on or about December 31, 1994.  Consequently, all     
gains estimated at this time will be recognized by the Company at the closing   
date of such transactions.                                                      

Summarized results of the Health businesses, including an allocation of         
interest expense, are as follows:                                               

(in millions)                                 1993        1992         1991     

Sales                                       $3,764      $3,645       $3,551     
                                       ======      ======       ======

Earnings (loss) before income taxes         $ (165)     $ (133)      $ (272)    
Provision (benefit) for income taxes           (40)        (35)          30     
                                       ------      ------       ------
Earnings (loss) before cumulative effect                                        
of changes in accounting principle         $ (125)     $  (98)      $ (302)   
                                       ======      ======       ======

Allocated interest expense included in earnings before income taxes was         
approximately $450 million for 1993, $450 million for 1992 and $450 million for 
1991.                                                                           

Net assets of the Health businesses as reported in the Consolidated Statement   
of Financial Position are comprised of the following:                           
                            Dec. 31,    Dec. 31,
(in millions)                                 1993        1992                  

Current assets                              $1,164      $1,150                  
Land, buildings and equipment, net           1,339       1,244                  
Other assets                                 4,282       4,403                  
                          ------      ------
Total assets                            6,785       6,797             
                          ------      ------
Current liabilities                            857         804                  
Long-term borrowings                           126         143                  
Other liabilities                              453         356                  
                          ------      ------
Total liabilities                       1,436       1,303             
                          ------      ------
Net assets of discontinued                                            
operations                           $5,349      $5,494           
                          ======      ======

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Total net assets of the Health businesses at December 31, 1993 and December 31, 
1992 reflect the expected settlement of intercompany balances.                  

On June 15, 1993, the Company announced a plan to spin-off its Eastman          
Chemical Company operations, which was completed on December 31, 1993.          

Summarized results of the Chemicals segment, including an allocation of         
interest expense, are as follows:                                               

(in millions)                                1993         1992        1991      

Earnings before cumulative effect of                                            
changes in accounting principle             $192         $267        $319     
                                       ====         ====        ====

Net assets of the Chemicals segment as reported in the December 31, 1992        
Consolidated Statement of Financial Position are $1,406 million.                

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KODAK TO SELL STERLING WINTHROP TO SMITHKLINE BEECHAM FOR $2.9 BILLION          

Continuing Progress in Divestiture Program                                      
Strengthens Focus on Core Imaging Businesses                                    

Rochester, N.Y. August 29, 1994--Eastman Kodak Company today announced an       
agreement to sell its Sterling Winthrop Inc. subsidiary, a leading supplier of  
consumer health products, to SmithKline Beecham for $2.925 billion in cash.     

Under terms of the agreement, SmithKline Beecham will acquire from Kodak 100    
percent of the stock of Sterling Winthrop Inc.  This will provide SmithKline    
Beecham with all of Sterling Winthrop's assets including its global consumer    
health products business, all personnel, brands, facilities, intellectual       
properties, and other assets.                                                   

The agreement follows Kodak's previously announced sale of Sterling Winthrop's  
pharmaceutical business to Sanofi SA of France in exchange for $1.675 billion   
in cash and Sanofi's interest in a consumer health products joint venture       
between Sanofi and Sterling Winthrop.                                           

Both transactions are expected to be completed upon receipt of regulatory       
approvals.                                                                      

"This agreement is a major step in our continuing divestiture program.  When    
complete, Kodak's resource base and management attention will be sharply        
focused on its core imaging businesses," said George M.C. Fisher, Kodak's       
chairman, president, and CEO.  "We believe this transaction represents a solid  
strategic fit between SmithKline Beecham, a world leader in healthcare, and     
our Sterling Winthrop subsidiary."                                              

SmithKline Beecham Chief Executive Jan Leschly said: "This is an important      
step toward our goal of becoming the world's leading healthcare company.  The   
combination of Sterling Winthrop's extensive geographic reach and SmithKline    
Beecham Consumer Healthcare's excellent brand portfolio creates a powerhouse    
in the increasingly important field of self-medication, and is a landmark       
opportunity to make SB the world leader in OTC medicines."                      

Sterling Winthrop's global consumer health products business generated more     
than $1 billion in revenues during 1993.  The company sells a wide array of     
well known over-the-counter analgesics and other medicines.                     

Among the leading consumer health brands which SmithKline Beecham will acquire  
with Sterling Winthrop are: Bayer aspirin in the U.S., Panadol analgesics (one  
of the worlds' leading pain relievers); Phillips' milk of magnesia and          
Andrew's gastrointestinal products; Valda cough-cold products; Neo-Synephrine   
decongestants; and Stri-Dex and Hinds skin care products.                       

Sterling Winthrop manufactures consumer health products in more than 19         
locations around the world including the U.S., Europe, Latin America and the    
Pacific Rim.  The company markets products under the Sterling Health name and   
its product development efforts are supported by a dedicated, world-class       
research and development organization.                                          

Proceeds from the transaction will be used to substantially reduce Kodak's      
debt and for other company purposes.                                            

As part of its divestiture program, Kodak intends to sell in separate           
transactions its Clinical Diagnostics Division, and the household and           
do-it-yourself products businesses of its L&F Products unit.                    

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JOHNSON & JOHNSON TO ACQUIRE KODAK'S CLINICAL DIAGNOSTICS UNIT                  

Rochester, N.Y., and New Bruswick, N.J., Sept. 6, 1994--Eastman Kodak Company   
and Johnson & Johnson today announced an agreement calling for Kodak to sell    
its Clinical Diagnostics business, a leading worldwide supplier of diagnostic   
products, to Johnson & Johnson for $1.008 billion in cash.                      

The agreement calls for Kodak to transfer to Johnson & Johnson essentially all  
its assets relating to the Clinical Diagnostics business.  This includes all    
personnel, patents and technology, production equipment and products of the     
clinical business.                                                              

Kodak also has agreed to continue to provide customer equipment service         
support to Johnson & Johnson customers in order to maintain the current level   
of service excellence.                                                          

During 1993, Kodak's Clinical Diagnostics division generated worldwide          
revenues of $535 million.                                                       

Kodak Chairman, President and Chief Executive Officer George M.C. Fisher said:  
"Thousands of medical professionals around the world depend on diagnostic       
products from our Clinical Diagnostics Division.  This agreement with a         
worldclass health care company will enable Clinical Diagnostics to continue to  
meet the needs of these valued customers."                                      

"This announcement comes one week after our agreement with SmithKline Beecham   
for the sale of Sterling Winthrop.  It demonstrates our resolve to rapidly      
achieve our strategic goal of total dedication and resource commitment to our   
core imaging businesses," Fisher added.                                         

Ralph S. Larsen, Chairman and CEO of Johnson & Johnson said: "This acquisition  
fits perfectly our strategic objective of enhancing our business in diagnostic  
products.  The acquisition will add important positions in clinical chemistry   
and immunodiagnostics to our existing diagnostics businesses and significantly  
broaden our customer base in the hospital central diagnostic laboratories.      
When combined with our existing blood virus screening and diagnostic products   
used in blood donor centers, hospitals, and other laboratories, and our home    
test products in blood glucose monitoring, pregnancy and other applications,    
we believe this will raise our worldwide market position to number three in     
diagnostics."                                                                   

At the time the transaction is completed, Clinical Diagnostics will become an   
operating company of Johnson & Johnson, based in Rochester, N.Y.                

Current major Clinical Diagnostics manufacturing, research and administrative   
facilities are located in Rochester, N.Y.; Cardiff, Wales; Pollards Wood,       
England; and Strasbourg, France.  Johnson & Johnson expects to continue to      
operate from these sites.                                                       

Both parties expect to complete the transaction upon obtaining any necessary    
regulatory approvals.                                                           

Proceeds from the transaction will be used to substantially reduce Kodak's      
debt and for other company purposes.                                            

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HOUSEHOLD BUSINESSES OF L&F PRODUCTS TO BE ACQUIRED BY RECKITT & COLMAN         

Agreement Marks The Start Of Final Phase In Kodak's Continuing Divestiture      
Program                                                                         

Rochester, N.Y. Sept. 26 -- Eastman Kodak Company today announced an agreement  
to sell the worldwide household businesses of its L&F Products unit, a leading  
supplier of cleaners, disinfectants, personal care, and professional products,  
to London, England-based Reckitt & Colman, plc for $1.55 billion in cash.       

The agreement calls for Kodak to transfer to Reckitt & Colman all assets        
relating to the household businesses of L&F Products.  This includes            
personnel, brand names, products, patents, technology, and production and       
distribution facilities supporting the household products businesses.           

During 1993, L&F Products generated worldwide revenues of approximately         
$800 million from sales of these businesses.                                    

"This transaction takes us much closer to our strategic goal of total           
dedication and resource commitment to our core imaging businesses," said        
George M.C. Fisher, Kodak's Chief Executive Officer.  "I am pleased to achieve  
an agreement that benefits all parties, including Kodak, Reckitt & Colman, the  
people of L&F Products, and the many consumers who trust our well-known brand   
name products."                                                                 

Commenting on today's announcement, Veron Sankey, Chief Executive of Reckitt &  
Colman, said: "The acquisition of L&F's household businesses represents a       
unique opportunity for us to achieve two important objectives.  First, we are   
transforming the position and prospects of our U.S. household products          
business and, second, we are taking a major step forward towards becoming one   
of the leading worldwide household products groups."                            

Upon completion of the transaction, L&F Products' Household businesses will be  
merged with Reckitt & Colman's businesses.                                      

L&F's household businesses are headquartered in Montvale, N.J., as is its       
technical center for product development.  Manufacturing and distribution       
facilitied are located in Belle Mead, N.J.; Lincoln, Ill.; Alliance, Ohio;      
Sidney, Ohio; Toledo, Ohio; and Glasshutte, Germany (under the Shulke & Mayr    
name).                                                                          

L&F Products markets a family of well known products under a variety of leading 
brand names, including Lysol cleaners and disinfectants, Mop & Glo cleaner and  
polish, Resolve carpet cleaners, Ogilvie home permanents, Chubs Baby Wipes,     
and Wet Ones moist towelettes.  Products from L&F household businesses are      
sold in 37 countries around the world.                                          

Both parties expect to complete the transaction upon obtaining any necessary    
regulatory approvals.  In addition, Reckitt & Colman must obtain shareholder    
approval for the transaction.                                                   

The "do-it-yourself" operation of L&F Products is the last large business       
remaining to be sold as part of Kodak's divestiture program.  In addition,      
the company is selling its pharmaceutical research and development facility and 
its NanoSystems subsidiary, a small technology development operation, both      
located near Philadelphia, Pa.                                                  

Kodak has said that the proceeds from its divestiture program will be used to   
substantially reduce debt and for other company purposes.                       

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KODAK COMPLETES SALE OF STERLING WINTHROP PHARMACEUTICALS                       
BUSINESS TO SANOFI                                                              

Rochester, N.Y., October 3, 1994 -- Eastman Kodak Company and Sanofi SA         
announced today the completion of the sale of Sterling Winthrop's worldwide     
pharmaceuticals business to Sanofi, a leading French healthcare and beauty      
products company.                                                               

The closing date for the transaction was October 1.  Sanofi purchased Sterling  
Winthrop's interest in its pharmaceutical alliance with Sanofi in exchange for  
$1.675 billion in cash and Sanofi's interest in a separate European             
over-the-counter medicines alliance.                                            

Sanofi did not acquire Sterling Winthrop's research and development center      
located near Philadelphia, Pa., or its NanoSystems unit, a technology           
development unit established to commercialize pharmaceuticals based on          
patented small particle technology.  Both will be sold in separate              
transactions.                                                                   

Subsequent to the closing, Sanofi sold the diagnostic imaging portion of        
Sterling Winthrop's business to Nycomed of Norway.                              

Kodak also will sell Sterling Winthrop's worldwide over-the-counter medicines   
businesses to SmithKline Beecham in a separate transaction.  That transaction   
will close upon both parties obtaining regulatory approval.                     

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L&F PRODUCTS 'DIY' BUSINESSES                                                   
ACQUIRED BY FORSTMANN LITTLE                                                    

Kodak's Divestiture Program Essentially Complete                                
Company Now Focused on Core Imaging Businesses                                  

Rochester, N.Y., October 14, 1994 -- Eastman Kodak Company today announced an   
agreement to sell the do-it-yourself (DIY) products businesses of its L&F       
Products unit to Forstmann Little & Co., a New York City-based investment       
partnership, for $700 million in cash.                                          

The agreement calls for Kodak to transfer to Forstmann Little all assets        
relating to the DIY businesses of L&F Products.  This includes personnel, brand 
names, product formulations and technology, plus production and distribution    
facilities supporting the DIY businesses.                                       

"This transaction completes the major portion of our divestiture program.  In   
less than six months, we have reshaped Kodak.  We are a smaller company with a  
stronger balance sheet, focused exclusively on our core imaging businesses,"    
said George M.C. Fisher, Kodak's Chief Executive Officer.                       

L&F Products' DIY businesses market a wide range of wood finishing products     
including interior stains and clear finishes, exterior waterproofing products,  
interior wood refinishing products and specialty enamels.  Key brands include   
Thompson's, Minwax, Formby's, Red Devil and Ronseal (in the United Kingdom and  
Ireland).                                                                       

The parties intend to close the transaction by mid-November.  Kodak will use    
the proceeds to reduce debt and for other company purposes.                     

As part of this divestiture program, Kodak also will sell its pharmaceutical    
research and development facility and its NanoSystems unit, a small technology  
development operation.  Both are located near Philadelphia, Pa.                 

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SIGNATURES  

Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the        
undersigned thereunto duly authorized.                                          

                                 EASTMAN KODAK COMPANY
                                (Registrant)

Date October 17, 1994                                                           

C. Michael Hamilton, General Comptroller,                                       
                          Principal Accounting Officer and
                 Duly Authorized Officer

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AMENDED AND RESTATED    

ASSET PURCHASE AGREEMENT    

among     

EASTMAN KODAK COMPANY     

and     

STERLING WINTHROP INC.    

and     

SANOFI    

Dated as of September 30, 1994    

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TABLE OF CONTENTS     

                                                            Page

ARTICLE I     

DEFINITIONS AND TERMS     

Section 1.1 Specific Definitions  . . . . . . . . . . . . . . . .    25         

Section 1.2 Other Terms . . . . . . . . . . . . . . . . . . . . .    42         

Section 1.3 Other Definitional Provisions . . . . . . . . . . . .    42         

ARTICLE II    

PURCHASE AND SALE OF THE BUSINESS     

Section 2.1  Purchase and Sale of Assets . . . . . . . . . . . . .    43        

Section 2.2  Excluded Assets . . . . . . . . . . . . . . . . . . .    44        

Section 2.3  Assumption of Liabilities . . . . . . . . . . . . . .    46        

Section 2.4  Excluded Liabilities  . . . . . . . . . . . . . . . .    49        

Section 2.5  Purchase Price  . . . . . . . . . . . . . . . . . . .    51        

Section 2.6  Business Post-Closing Adjustments . . . . . . . . . .    54        

Section 2.7  Disposition of Cash and                                            
       Short-term Investments  . . . . . . . . . . . . . .    59

Section 2.8  Transfer of the OTC Portion . . . . . . . . . . . . .    59        

Section 2.9  Closing . . . . . . . . . . . . . . . . . . . . . . .    60        

Section 2.10 Deliveries by Purchaser . . . . . . . . . . . . . . .    63        

Section 2.11 Deliveries by Seller and Kodak  . . . . . . . . . . .    64        

Section 2.12 Agreement of Means of Transfer  . . . . . . . . . . .    65        

ARTICLE III     

REPRESENTATIONS AND WARRANTIES OF SELLER AND KODAK    

Section 3.1 Organization and Qualification  . . . . . . . . . . .    68         

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                                                            Page

Section 3.2  Subsidiaries; Joint Ventures, etc.  . . . . . . . . .    69        

Section 3.3  Corporate Authorization . . . . . . . . . . . . . . .    70        

Section 3.4  Consents and Approvals  . . . . . . . . . . . . . . .    71        

Section 3.5  Non-Contravention . . . . . . . . . . . . . . . . . .    72        

Section 3.6  Binding Effect  . . . . . . . . . . . . . . . . . . .    73        

Section 3.7  Financial Statements  . . . . . . . . . . . . . . . .    73        

Section 3.8  Litigation and Claims . . . . . . . . . . . . . . . .    74        

Section 3.9  Taxes   . . . . . . . . . . . . . . . . . . . . . . .    75        

Section 3.10 Employee Benefits . . . . . . . . . . . . . . . . . .    78        

Section 3.11 Compliance with Laws  . . . . . . . . . . . . . . . .    82        

Section 3.12 Environmental Matters . . . . . . . . . . . . . . . .    83        

Section 3.13 Intellectual Property . . . . . . . . . . . . . . . .    84        

Section 3.14 Collective Bargaining Agreements  . . . . . . . . . .    85        

Section 3.15 Contracts . . . . . . . . . . . . . . . . . . . . . .    86        

Section 3.16 Title to Property . . . . . . . . . . . . . . . . . .    86        

Section 3.17 Finders' Fees . . . . . . . . . . . . . . . . . . . .    88        

Section 3.18 Absence of Change . . . . . . . . . . . . . . . . . .    89        

Section 3.19 Reaffirmation of Representations  . . . . . . . . . .    89        

Section 3.20 Insurance . . . . . . . . . . . . . . . . . . . . . .    90        

Section 3.21 Food and Drug Administration  . . . . . . . . . . . .    90        

Section 3.22 No Other Representations or                                        
       Warranties  . . . . . . . . . . . . . . . . . . . .    92

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                                                            Page

ARTICLE IV    

REPRESENTATIONS AND WARRANTIES OF PURCHASER     

Section 4.1  Organization and Qualification  . . . . . . . . . . .    92        

Section 4.2  Subsidiaries; Joint Ventures, etc.  . . . . . . . . .    93        

Section 4.3  Corporate Authorization . . . . . . . . . . . . . . .    94        

Section 4.4  Consents and Approvals  . . . . . . . . . . . . . . .    94        

Section 4.5  Non-Contravention . . . . . . . . . . . . . . . . . .    95        

Section 4.6  Binding Effect  . . . . . . . . . . . . . . . . . . .    96        

Section 4.7  OTC Assets  . . . . . . . . . . . . . . . . . . . . .    97        

Section 4.8  Title to Property . . . . . . . . . . . . . . . . . .    97        

Section 4.9  Finders' Fees . . . . . . . . . . . . . . . . . . . .    98        

Section 4.10 Financial Capability  . . . . . . . . . . . . . . . .    98        

Section 4.11 Reaffirmation of Representations  . . . . . . . . . .    99        

Section 4.12 No Other Representations                                           
       or Warranties . . . . . . . . . . . . . . . . . . .    99

ARTICLE V     

COVENANTS     

Section 5.1 Access  . . . . . . . . . . . . . . . . . . . . . . .    99         

Section 5.2 Conduct of Business . . . . . . . . . . . . . . . . .   101         

Section 5.3 Reasonable Efforts; Good Faith  . . . . . . . . . . .   104         

Section 5.4 Tax Matters . . . . . . . . . . . . . . . . . . . . .   105         

Section 5.5 Post-Closing Obligations of the                                     
           Business to Certain Employees . . . . . . . .   115

Section 5.6 UPT Facility Lease  . . . . . . . . . . . . . . . . .   131         

Section 5.7 Compliance with WARN, etc.  . . . . . . . . . . . . .   132         

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Section 5.8  Further Assurances  . . . . . . . . . . . . . . . . .   132        

Section 5.9  Use of Corporate Names  . . . . . . . . . . . . . . .   133        

Section 5.10 License Agreements  . . . . . . . . . . . . . . . . .   134        

Section 5.11 Transition Services . . . . . . . . . . . . . . . . .   143        

Section 5.12 Supply Agreement  . . . . . . . . . . . . . . . . . .   144        

Section 5.13 Sublease Agreement  . . . . . . . . . . . . . . . . .   145        

Section 5.14 Maintenance of Shared Service                                      
       Arrangements  . . . . . . . . . . . . . . . . . . .   148

Section 5.15 Dental Agreements   . . . . . . . . . . . . . . . . .   153        

Section 5.16 Insurance . . . . . . . . . . . . . . . . . . . . . .   154        

Section 5.17 Closing Asset and Liability Statement . . . . . . . .   156        

Section 5.18 Schering Agreement  . . . . . . . . . . . . . . . . .   156        

Section 5.19 Confidentiality . . . . . . . . . . . . . . . . . . .   156        

Section 5.20 Schedules . . . . . . . . . . . . . . . . . . . . . .   160        

Section 5.21 Phiso . . . . . . . . . . . . . . . . . . . . . . . .   160        

Section 5.22 Subrogation and Related Matters . . . . . . . . . . .   162        

ARTICLE VI    

CONDITIONS TO CLOSING     

Section 6.1 Conditions to the Obligations of Kodak,                             
      Purchaser and Seller . . . . . . . . . . . . . . . .   165

Section 6.2 Conditions to the Obligations of                                    
      Purchaser  . . . . . . . . . . . . . . . . . . . . .   166

Section 6.3 Conditions to the Obligations of                                    
      Kodak and Seller . . . . . . . . . . . . . . . . . .   168

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                                                            Page

ARTICLE VII     

SURVIVAL; INDEMNIFICATION     

Section 7.1 Survival  . . . . . . . . . . . . . . . . . . . . . .   170         

Section 7.2 Indemnification by Purchaser  . . . . . . . . . . . .   171         

Section 7.3 Indemnification by Seller and Kodak . . . . . . . . .   172         

Section 7.4 Indemnification Procedures  . . . . . . . . . . . . .   175         

Section 7.5 Characterization of Indemnification                                 
     Payments  . . . . . . . . . . . . . . . . . . . . .   178

ARTICLE VIII    

TERMINATION     

Section 8.1 Termination . . . . . . . . . . . . . . . . . . . . .   178         

Section 8.2 Effect of Termination . . . . . . . . . . . . . . . .   180         

ARTICLE IX    

MISCELLANEOUS     

Section 9.1  Notices . . . . . . . . . . . . . . . . . . . . . . .   180        

Section 9.2  Amendment; Waiver . . . . . . . . . . . . . . . . . .   182        

Section 9.3  Assignment  . . . . . . . . . . . . . . . . . . . . .   182        

Section 9.4  Entire Agreement  . . . . . . . . . . . . . . . . . .   184        

Section 9.5  Fulfillment of Obligations  . . . . . . . . . . . . .   184        

Section 9.6  Parties in Interest . . . . . . . . . . . . . . . . .   185        

Section 9.7  Public Disclosure . . . . . . . . . . . . . . . . . .   185        

Section 9.8  Return of Information . . . . . . . . . . . . . . . .   185        

Section 9.9  Expenses  . . . . . . . . . . . . . . . . . . . . . .   186        

Section 9.10 Schedules . . . . . . . . . . . . . . . . . . . . . .   186        

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                                                            Page

Section 9.11 GOVERNING LAW; SUBMISSION TO                                       
      JURISDICTION . . . . . . . . . . . . . . . . . . .   186

Section 9.12 Counterparts . . . . . . . . . . . . . . . . . . . .   187         

Section 9.13 Headings . . . . . . . . . . . . . . . . . . . . . .   187         

Section 9.14 Severability . . . . . . . . . . . . . . . . . . . .   187         

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SCHEDULES AND                                                                   
ANNEXES                                                                         

ANNEXES                                                                         

Annex 6.2(c)            - Opinion of Seller's Counsel                           
Annex 6.3(c)            - Opinion of Purchaser's Counsel                        

SCHEDULES                                                                       

Schedule 1.1(a)(i)      - [reserved]                                            
Schedule 1.1(a)(ii)     - [reserved]                                            
Schedule 1.1(b)         - Dual Product                                          
Schedule 1.1(c)(i)      - Dental Applications                                   
Schedule 1.1(c)(ii)     - [reserved]                                            
Schedule 1.1(d)         - Leased Real Property                                  
Schedule 1.1(e)         -                                                       
[reserved] Schedule 1.1(f)         -                                            
OTC Shares Schedule 1.1(g)         -                                            
[reserved] Schedule 1.1(h)         - Owned                                      
Real Property Schedule 1.1(i)                                                   
- [reserved] Schedule 1.1(j)                                                    
- Trade Names Schedule 1.1(k)                                                   
- [reserved] Schedule 1.1(l)         - Principles for the                       
Computation of                                                                  
       Net Working Capital and Net Worth
Schedule 2.2(c)         - Excluded Ethical Intellectual                         
Property                  
Schedule 2.2(f)         - Fixtures and Equipment                                
Schedule 2.2(g)         - Contracts                                             
Schedule 2.3            - List of Newcos Schedule                               
2.5(b)(iii)    - Net Debt Adjustment Payment Schedule                           
2.5(c)(i)      - [reserved]                                                     
Schedule 2.12(a)(i)     - Manner of Transfer                                    
Schedule 3.1(a)         - Organization and Qualification                        
Schedule 3.2(a)(i)      - Subsidiaries; Joint Ventures, etc.                    
Schedule 3.2(a)(ii)     - Certain Subsidiaries                                  
Schedule 3.2(b)         - Capital Stock of Subsidiaries                         
Schedule 3.4            - Consent and                                           
Approvals Schedule 3.5            -                                             
Non-Contravention Schedule 3.7(a)(i)      -                                     
Financial Statements Schedule 3.7(a)(ii)     - Exceptions to GAAP               
- Statement of Assets                                                           
and Liabilities           
Schedule 3.7(a)(iii)    - Exceptions to GAAP - Income Statement                 
Schedule 3.8(a)         - Litigation and Claims                                 
Schedule 3.8(b)         - Orders and Judgments                                  
Schedule 3.9            - Taxes                                                 
Schedule 3.10(a)        - Benefit Plans                                         
Schedule 3.10(b)        - Benefit Plan Litigation                               
Schedule 3.10(e)        - Retiree Benefits                                      

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Schedule 3.10(f)        - Amended Plans                                         
Schedule 3.10(h)        -     Unfunded Liabilities                              
Schedule 3.11           - Compliance with Laws                                  
Schedule 3.12           - Environmental Matters Schedule                        
3.13(a)        - Intellectual Property Related                                  
to the Business           
Schedule 3.13(b)(i)     - Restrictions of Use Concerning                        
   Ethical Intellectual Property
Schedule 3.13(b)(ii)    - Trademarks                                            
Schedule 3.14           - Collective Bargaining Agreements                      
Schedule 3.15(i)        - Contracts                                             
Schedule 3.15(ii)       - Validity of Contracts                                 
Schedule 3.15(iii)      - Contracts in Default                                  
Schedule 3.16(a)        - Necessary Property                                    
Schedule 3.16(b)        - Encumbrances                                          
Schedule 3.19           - Representations of Seller                             
Schedule 3.20           - Insurance                                             
Schedule 4.1            - Organization and Qualification                        
Schedule 4.2(a)(i)      -                                                       
[reserved] Schedule 4.2(a)(ii)     -                                            
[reserved] Schedule 4.2(b)         -                                            
[reserved] Schedule 4.4            - Consent and                                
Authorization Schedule 4.5            -                                         
Non-Contravention Schedule 4.7(a)         -                                     
OTC Assets Schedule 4.7(b)(i)      - Restrictions on Use of                     
OTC Assets Schedule 4.7(b)(ii)     -                                            
Trademarks Schedule 4.8(b)         -                                            
Encumbrances Schedule 4.11           - Reaffirmation of                         
Representations Schedule 5.5(b)(ii)     - [reserved]                            
Schedule 5.5(g)         - Shared Liabilities for Benefits to Former             
Employees                 
Schedule 5.6            - UPT Facility Lease                                    
Schedule 5.10(a)        - Nanoparticulate License Agreement                     
Schedule 5.10(b)        - Products Under Development -                          
Chemical                  
Schedule 5.10(c)        - Products Under Development -                          
Medical Safety            
Schedule 5.12           - Supply Agreement Pricing                              
Schedule 5.14(b)(ii)    - Certain Provisions Schedule                           
5.14(c)        - Countries Dual Products Marketed                               
as Ethical                

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  AMENDED AND RESTATED ASSET PURCHASE AGREEMENT, dated as of

September 30, 1994, among EASTMAN KODAK COMPANY, a New Jersey corporation       

("Kodak"), STERLING WINTHROP INC., a Delaware corporation ("Seller"), and       

SANOFI, a societe anonyme organized under the laws of the Republic of           

France ("Purchaser").                                                           

W I T N E S E T H:    

 WHEREAS, Seller, an indirectly wholly-owned subsidiary of

Kodak, is engaged worldwide in the ethical drug business through the Human      

Ethical Pharmaceutical Products business and Sterling Organics, including       

the manufacturing, marketing, sales, distribution, support operations and       

research and development activities related thereto (the "Business");           

     WHEREAS, the parties hereto desire that Seller sell, transfer

and assign to Purchaser and Purchaser purchase and assume from Seller,          

certain of the assets and liabilities of the Business, all as more              

specifically provided herein;                                                   

     WHEREAS, the parties hereto desire that Purchaser transfer to

Seller and Seller purchase from Purchaser, Purchaser's interest in the OTC      

Venture, and certain related shares and assets, all as more specifically        

provided herein; and                                                            

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     WHEREAS, Kodak and Purchaser desire to enter into one or more

license agreements with respect to the Kodak Licensed Intellectual              

Property;                                                                       

WHEREAS, pursuant to Section 9.2 of the Asset Purchase  

Agreement, dated as of June 22, 1994, among Kodak, Seller and Purchaser         

(the "Original Agreement");                                                     

    NOW, THEREFORE, in consideration of the mutual covenants and

undertakings contained herein, and subject to and on the terms and              

conditions herein set forth, the parties hereto agree as follows:               

ARTICLE I     

DEFINITIONS AND TERMS     

      Section 1.1  Specific Definitions.  As used in this Agreement,

the following terms shall have the meanings set forth or as referenced          

below:                                                                          

"Accounts Payable to Kodak" shall mean all U.S. Intercompany Accounts           
Payable of the Transferred Business that are outstanding at any time
prior to the Closing to (x) Kodak or (y) a U.S. Affiliate of Kodak  
that does not constitute part of the Transferred Business.          

"Accounts Receivable from Kodak" shall mean all U.S. Intercompany Accounts      
Receivable of the Transferred Business that are outstanding at any  
time prior to the Closing from (x) Kodak or (y) a U.S. Affiliate of 
Kodak that does not constitute part of the Transferred Business.    

"Actions" shall have the meaning set forth in Section 5.22.                     

"Adjusted Closing Net Worth Statement" shall have the meaning set forth in      
Section 2.6(b).                                                     

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"Adjusted Closing Working Capital Statement" shall have the meaning set         
forth in Section 2.6(b).                                            

"Affected Party" shall have the meaning set forth in Section 5.4(e).            

"Affiliates" shall mean, with respect to any Person, any Persons directly       
or indirectly controlling, controlled by, or under common control   
with, such other Person.                                            

"Aggregate Newco Net Worth" as of any date, shall mean (x) the sum, for all     
Newcos, including the reserved activities in the United Kingdom and 
Japan, of the Net Worth of each Newco, including the reserved       
activities in the United Kingdom and Japan, as of such date         
multiplied by Seller's percentage equity interest in such entities, 
minus (y) the sum, for all OTC Newcos, of the Net Worth of each OTC 
Newco as of such date multiplied by Purchaser's percentage equity   
interest in such OTC Newco, all computed in accordance with the     
principles set forth in Schedule 1.1(1).                            

"Agreement" shall mean this Amended and Restated Agreement, as the same may     
be amended or supplemented from time to time in accordance with the 
terms hereof.                                                       

"Allendale" shall have the meaning set forth in Section 5.22.                   

"Ancillary Agreements" shall mean the Trademark and Trade Name Agreement,       
Trade Name Agreement, Nanoparticulate License Agreement, Chemical   
License Agreement, Sanofi License Agreements, Shared Intellectual   
Property License Agreements, Trade Name License Agreement, Ethical  
 Transitional Services Agreement, OTC Supply Agreement, Ethical Supply
Agreement and Real Property Lease Agreements, Dudley Supply         
Agreement, Sublease Agreement, Shared Service Agreement, Marcaine   
License Agreement and Toll Manufacturing Agreement.                 

"Asset and Liability Statement", shall mean the unaudited pro forma             
statement of assets and liabilities of the Transferred Business at  
December 31, 1993, attached as Schedule 3.7(a)(i) hereto.           

"Assumed Liabilities" shall have the meaning set forth in Section 2.3.          

"Assumed Pension Plans" shall have the meaning set forth in                     
Section 5.5(c)(ii).                                                 

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"Audited Taxes" shall have the meaning set forth in Section 5.4(e).             

"Benefit Plans" shall have the meaning set forth in Section 3.10(a).            

"BMS Agreements" shall mean the agreements, each dated as of July 29, 1993,     
among Seller, Sanofi and Bristol-Myers Squibb Company, including the
two letter agreements between Seller and Purchaser, dated as of the 
same date, relating to Participation as SW Party in the BMS         
Agreements.                                                         

"Books and Records" shall mean all books, ledgers, files, reports, plans        
and operating records of, or maintained by, the Transferred Business
except to the extent included in or related to any Excluded Assets. 

"Business" shall have the meaning set forth in the recitals of this             
Agreement.                                                          

"Business Day" shall mean any day other than a Saturday, a Sunday or a day      
 on which banks in New York City are authorized or obligated by law or
executive order to close.                                           

"Cash Portion" shall have the meaning set forth in Section 2.5(a).              

"Chemical License Agreement" shall have the meaning set forth in Section        
5.10(b).                                                            

"Claim Notice" shall have the meaning set forth in Section 7.4.                 

"Closing" shall mean the closing of the transactions contemplated by this       
Agreement.                                                          

"Closing Date" shall have the meaning set forth in Section 2.9(a).              

"Closing Net Worth Statement" shall have the meaning set forth in               
Section 2.6(a).                                                     

"Closing Statements" shall have the meaning set forth in Section 2.6(a).        

"Closing Working Capital Statement" shall have the meaning set forth in         
Section 2.6(a).                                                     

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"Code" shall mean the Internal Revenue Code of 1986, as amended.                

"Confidentiality Agreement" shall mean the Agreement, dated May 2, 1994         
between Purchaser and Goldman, Sachs & Co.                          

"Consideration" shall have the meaning set forth in Section 5.4(f).             

"Continuation Coverage" shall have the meaning set forth in Section 5.5(d).     

"Contracts" shall mean all agreements, contracts, leases, purchase orders,      
arrangements, commitments and licenses that are Related to the      
 Business or to which the Transferred Assets are subject except to the
extent included in the Excluded Assets.                             

"CPA Firm" shall have the meaning set forth in Section 2.6(b).                  

"Current Assets" shall mean all current assets of the Transferred Business,     
(i) including cash, investment securities and other short- and      
medium-term investments, Inventory, accounts receivable and prepaid 
 expenses but excluding (ii) (x) cash, investment securities and other
 short- and medium-term investments of the Specified Companies and the
U.S. operations of the Business and (y) Accounts Receivable from    
Kodak.                                                              

"Current Liabilities" shall mean all current liabilities of the Transferred     
 Business, (i) including accounts payable and accrued expenses and all
other current obligations of the Transferred Business but excluding 
(ii) (x) indebtedness for money borrowed of the Specified Companies 
and the U.S. operations of the Business and (y) Accounts Payable to 
Kodak.                                                              

"Demolition" shall have the meaning set forth in Section 5.21(b).               

"Dental Agreements" shall mean the Trademark License Agreement between          
Sterling Winthrop Inc. and Kodak and the Master Purchase Agreement  
between Sanofi Winthrop, L.P. and Kodak, each effective as of June  
17, 1994.                                                           

"Development Agreement" shall mean the Development Collaboration Agreement      
between Sterling Drug Inc. and Sanofi, dated April 26, 1991.        

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"Dual Product" shall mean the products set forth in Schedule 1.1(b) hereto.     

"Dudley Supply Agreement" shall have the meaning set forth in Section           
5.12(c).                                                            

"Due Date" shall have the meaning set forth in Section 5.4(c).                  

"Employees" shall mean, with respect to the Business, all current or former     
employees of Seller or any of Seller's subsidiaries who were or are 
dedicated to the Business (other than persons employed primarily in 
 the research, development or marketing of nanoparticulate technology,
except as otherwise agreed between the parties).                    

"Encumbrances" shall mean liens, charges, encumbrances, security interests,     
options, or any other restrictions or third party rights.           

"Environmental Law" shall mean any applicable federal, state, local or          
foreign law, statute, ordinance, rule, regulation, code, order,     
judgment, decree or injunction relating to (x) the protection of the
 environment (including, without limitation, air, water vapor, surface
water, groundwater, drinking water supply, surface or subsurface    
 land), (y) occupational safety and health to the extent it relates to
exposure to Hazardous Substances or (z) the exposure to, or the use,
storage, recycling, treatment, generation, transportation,          
processing, handling, labelling, protection, release or disposal of,
radioactive materials or Hazardous Substances.                      

"ERISA" shall mean the Employee Retirement Income Security Act of 1974, as      
amended.                                                            

"ERISA Affiliate" shall have the meaning set forth in Section 3.10(c).          

"Ethical Intellectual Property" shall mean all of the Intellectual Property     
Related to the Business which is not Shared Intellectual Property.  

"Ethical Supply Agreement" shall have the meaning set forth in Section          
5.12(a).                                                            

"Ethical Transitional Services Agreement" shall have the meaning set forth      
in Section 5.11(a).                                                 

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"Exchange Act" shall mean the Securities Exchange Act of 1934, as               
amended.                                                                        

"Excluded Assets" shall have the meaning set forth in Section 2.2.              

"Excluded Liabilities" shall have the meaning set forth in Section 2.4.         

"FDA" shall have the meaning set forth in Section 3.21(a).                      

"FDC Act" shall have the meaning set forth in Section 3.21(a).                  

"Financial Statements" shall have the meaning set forth in Section 3.7(a).      

"First Chooser" shall have the meaning set forth in Section 2.12(b)(2).         

"Fixtures and Equipment" shall mean all furniture, fixtures, furnishings,       
machinery, vehicles, equipment and other tangible personal property 
 Related to the Business except to the extent included in the Excluded
Assets.                                                             

"Former Employees" shall have the meaning set forth in Section 5.5(g).          

"GAAP" shall mean United States generally accepted accounting principles.       

"Gamma" shall mean Gamma CHEMIKLIEN, a Swiss Company.                           

"Governmental Authorizations" shall mean all licenses, permits,                 
 certificates and other authorizations and approvals required to carry
on the Transferred Business or the business of the OTC Portion, as  
the case may be, as currently conducted under the applicable laws,  
ordinances or regulations of any Federal, state, local or foreign   
governmental authority.                                             

"Hazardous Substances" shall mean any hazardous substances  within the          
meaning of 101(14) of CERCLA, 42 U.S.C. sec. 9601(14), or any       
pollutant or constituent that is regulated under any Environmental  
Law.                                                                

"HSR Act" shall mean the Hart-Scott-Rodino Antitrust Improvements Act of        
1976, as amended.                                                   

"Human Ethical Pharmaceutical Products" shall mean those articles and           
devices (including chemical or biological                           

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entities and devices consisting of pharmaceutical drug delivery systems or      
technology) which                                                               

          (i)  are, in whole or in part, introduced in or applied to
the human body;                                                     

         (ii)  are intended (a) to (or, in the case of a device, for
 use to) diagnose, cure, mitigate, treat, prevent or detect disease or
(b) to affect the structure or function of the human body; and      

     (iii)  can be dispensed to or purchased by consumers in a
 particular country (a) only by way of or pursuant to the prescription
 or direction of a lawfully licensed or authorized practitioner or (b)
without such prescription or direction, where such dispensation or  
purchase is reimbursable by any supranational, national, regional,  
state or local government, court, governmental agency, authority,   
board, bureau, instrumentality or regulatory body in such country,  
except as may be otherwise mutually agreed by the parties to the    
Pharm A Agreement and Pharm B Agreement.                            

Notwithstanding the foregoing, the term "Human Ethical  
Pharmaceutical Products"                                            

       (A)  shall not include (I) articles intended for the in
vitro diagnosis or detection of disease in the human body, (II) any 
dental applications or indications of articles or devices otherwise 
included in this definition, including those set forth on Schedule  
 1.1(c)(i) hereto, and (III) the product lines and businesses referred
to in Section 12.1(e) of the Pharm A Agreement and Section 10.01(e) 
of the Pharm B Agreement; and                                       

           (B)  shall only include those devices which (I) are used or
suitable for use in the delivery of articles which are themselves   
 Human Ethical Pharmaceutical Products, or (II) are otherwise included
in the Pharm Ventures by mutual agreement of the parties thereto.   

"IND" shall have the meaning set forth in Section 3.21(d).                      

"Indemnified Parties" shall have the meaning set forth in Section 7.3(a).       

"Indemnifying Party" shall have the meaning set forth in Section 7.4.           

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"Intellectual Property" shall mean trademarks, service marks, brand             
names,                                                                          
certification marks, trade dress, assumed names, trade names and    
other indications of origin, the goodwill associated with the       
foregoing and registrations in any jurisdiction of, and applications
in any jurisdiction to register, the foregoing, including any       
extension, modification or renewal of any such registration or      
 application; inventions, discoveries and ideas, whether patentable or
not in any jurisdiction; patents, applications for patents          
(including, without limitation, divisions, continuations,           
continuations in-part and renewal applications), and any renewals,  
extensions or reissues thereof, in any jurisdiction; non-public     
 information, trade secrets and confidential information and rights in
any jurisdiction to limit the use or disclosure thereof by any      
 Person; writings and other works, whether copyrightable or not in any
jurisdiction; registrations or applications for registration of     
copyrights in any jurisdiction, and any renewals or extensions      
 thereof; any similar intellectual property or proprietary rights; and
any claims or causes of action arising out of or related to any     
infringement or misappropriation of any of the foregoing.           

"Inventory" shall mean all inventory held for resale and all raw materials,     
work in process, finished products, wrapping, supply and packaging  
items Related to the Business, except to the extent included in the 
Excluded Assets.                                                    

"Investment Canada Act" shall mean the Investment Canada Act, R.S.C. ch. 20     
(1985), as amended.                                                 

"Kodak" shall have the meaning set forth in the recitals.                       

"Kodak Licensed Intellectual Property" shall mean the Intellectual Property     
to be licensed to Purchaser by Kodak upon execution of the          
 Nanoparticulate License Agreement, the Chemical License Agreement and
the Medical Safety License Agreement.                               

"Last Closing" shall mean the later of (i) the Closing Date of the              
 transactions contemplated by this Agreement and (ii) the closing date
of the sale by Kodak of Seller or the sale by Seller of its consumer
health business, as the case may be.                                

"Laws" shall include any federal, state, foreign or local law, statute,         
ordinance, rule, regulation, order, judgment or decree.             

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"Leased Real Property" shall mean all real property leased by Seller or its     
Majority Owned Subsidiaries from parties other than Kodak, including
any buildings, structures and improvements thereon or appurtenances 
and Property Related Rights thereto, Related to the Business.  The  
 material Leased Real Property is set forth on Schedule 1.1(d) hereto.

"Listed Countries" shall have the meaning set forth in Section 2.12(b)(1).      

"Losses" shall have the meaning set forth in Section 7.2(a).                    

"Majority Subsidiary" shall mean (i) all corporations and other entities        
Related to the Business with respect to which more than 50% of the  
voting shares or other voting equity interests are owned directly or
indirectly by Seller and (ii) Sanofi Winthrop Asia Pte Ltd.         

"Marcaine License Agreement" shall have the meaning set forth in                
Section 5.10(g).                                                    

"Material Adverse Change" shall mean a change that has had a Material           
Adverse Effect.                                                     

"Material Adverse Effect" shall mean (x) in the case of the Business, an        
effect that is materially adverse to the value of the Transferred   
Assets and Kodak Licensed Intellectual Property taken as a whole or 
 materially adverse to the business, financial condition or results of
operations of the Business taken as a whole and (y) in the case of  
 the OTC Portion, an effect that is materially adverse to the value of
the OTC Venture or materially adverse to the business, financial    
condition or results of operations of the OTC Venture, but shall    
exclude in each case (x) and (y) any change or development involving
a prospective change arising out of any proposed or adopted national
healthcare legislation, or any other proposal or enactment by any   
governmental or regulatory authority affecting the pharmaceutical   
industry generally.                                                 

"Minority Subsidiary" shall mean all corporations and other entities            
Related to the Business with respect to which less than 50% of the  
voting shares or other voting equity interests are owned directly or
indirectly by Seller.                                               

"Nanoparticulate License Agreement" shall have the meaning set forth in         
Section 5.10(a).                                                    

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"Net Adjustment Payment" shall have the meaning set forth                       
in Section 2.6(d).                                                  

"Net Working Capital" shall mean (x) Current Assets minus (y) Current           
Liabilities.  It is understood that, for purposes of determining Net
 Working Capital, (i) Transferred Assets and Assumed Liabilities shall
be taken into account and (ii) Excluded Assets and Excluded         
Liabilities shall not be taken into account.                        

"Net Worth", with respect to any Territory A Newco, Territory B Newco or        
OTC Newco, including reserved activities in the United Kingdom and  
Japan, and as of any date, shall mean the sum of (x) Net Working    
Capital of such Newco, including reserved activities in the United  
Kingdom and Japan, computed in accordance with Schedule 1.1(l), and 
(y) long-term assets, net of long-term liabilities, including       
deferred tax assets and liabilities, of such Newco, including       
reserved activities in the United Kingdom and Japan, computed in    
accordance with the principles set forth in Schedule 1.1(l), subject
to the relevant exceptions set forth in Schedule 3.7(a)(ii).        

"Net Worth Statement" as of any date, shall mean a statement, prepared in       
accordance with the principles set forth in Schedule 1.1(l), setting
forth the Aggregate Newco Net Worth as of such date.                

"Newco" shall mean each entity listed in Schedule 2.3 hereto.                   

"Nonmedical Leave" shall mean maternity or paternity leave, leave under the     
Family and Medical Leave Act of 1993, educational leave, military   
leave with veteran's reemployment rights under federal law, or      
personal leave (unless any of such is determined to be a medical    
leave).                                                             

"Non-U.S. Venture Companies" shall have the meaning set forth in                
Section 2.5(b)(iii).                                                

"Notice Period" shall have the meaning set forth in Section 7.4.                

"Oldcos" shall have the meaning given to such term in the Pharm A               
Agreement.                                                          

"Opening Net Worth Statement" shall have the meaning set                        
forth in Section 2.6(a).                                            

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"Opening Statements" shall have the meaning set forth in Section 2.6(a).        

"Opening Working Capital Statement" shall have the meaning set forth in         
Section 2.6(a).                                                     

"OTC Agreement" shall mean the OTC Business Joint Venture Agreement between     
Seller and Sanofi, dated as of April 26, 1991, as amended to and    
including the amendment dated December 16, 1993.                    

"OTC Assets" shall mean all of the intangible assets owned by Purchaser         
that are primarily related to, arising primarily out of or used     
primarily in connection with the OTC Venture in Italy.              

"OTC Newco" shall mean each entity listed on Schedule 1.1(f).                   

"OTC Business" shall mean the OTC Venture and the other consumer health         
operations of Seller.                                               

"OTC Owner" shall have the meaning assigned thereto in Section 5.14(b).         

"OTC Portion" shall have the meaning set forth in Section 2.5(a).               

"OTC Portion Permitted Encumbrances" shall have the meaning set forth in        
Section 4.8(b).                                                     

"OTC Product Agreement" shall have the meaning set forth in Section             
5.14(b).                                                            

"OTC Shares" shall mean all of the equity interests held by Purchaser in        
the entities listed on Schedule 1.1(f).                             

"OTC Supply Agreement" shall have the meaning set forth in Section 5.12(b).     

"OTC Trademark Agreement" shall have the meaning set forth in                   
Section 5.9(b).                                                     

"OTC Venture" shall mean the joint ventures established pursuant to the OTC     
Agreement.                                                          

"Over-the-Counter Human Pharmaceutical Products" shall mean those articles      
and devices (including chemical or biological entities and devices  
consisting of pharmaceutical drug delivery systems or technology)   
which (i) are, in whole or in part, introduced in or                

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  applied to the human body; (ii) are intended (a) to (or in the case of a
device, for use to) diagnose, cure, mitigate, treat, prevent or detect
     disease or (b) to affect the structure or function of the human body; (iii)
can be dispensed to or purchased by consumers in a particular country 
    without the prescription or direction of a lawfully licensed or authorized
     practitioner; and (iv) are not reimbursable by any supranational, national,
     regional, state or local government, court, governmental agency, authority,
   board, bureau, instrumentality or regulatory body in such country, except
  as may be otherwise mutually agreed by the parties to the OTC Agreement.
Notwithstanding the foregoing, the term "Over-the-Counter Human       
     Pharmaceutical Products" (A) shall not include articles intended for the in
 vitro diagnosis or detection of disease in the human body and (B) shall
  only include those devices which (I) are used or suitable for use in the
     delivery of articles constituting products covered by the OTC Agreement, or
   (II) are otherwise included in the OTC Venture by mutual agreement of the
parties to the OTC Agreement.                                         

"Owned Real Property" shall mean all real property owned by Seller and its      
Majority Owned Subsidiaries Related to the Business set forth on    
Schedule 1.1(h) hereto, including any buildings, structures and     
improvements thereon or appurtenances and Property Related Rights   
thereto.                                                            

"Parent Entity" shall have the meaning set forth in Section 5.4(b)(ii).         

"Payor" shall have the meaning set forth in Section 5.4(c).                     

"Pension Excess" shall have the meaning assigned thereto in Section 5.5(c).     

"Pension Plan" shall have the meaning set forth in Section 3.10(b).             

"Pension Shortfall Amount" shall have the meaning assigned thereto in           
Section 5.5(c).                                                     

"Permitted Encumbrances" shall have the meaning set forth in Section            
3.16(b).                                                            

"Person" shall mean an individual, a corporation, a partnership, an             
association, a trust or other entity or organization.               

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"Pharm A Agreement" shall mean the Prescription A Joint Venture Agreement       
between Sterling Drug Inc. and Sanofi, dated as of April 26, 1991.  

"Pharmaceutical License (or Sublicense)" shall mean a license (or               
sublicense) for the manufacture, sale, marketing and distribution of
Over-the-Counter Human Pharmaceutical Products and Human Ethical    
Pharmaceutical Products.                                            

"Pharm B Agreement" shall mean the Prescription B Joint Venture Agreement       
between Sterling Drug Inc. and Sanofi, dated as of April 26, 1991.  

"Pharm Ventures" shall mean the joint ventures established pursuant to the      
Pharm A Agreement and the Pharm B Agreement.                        

"Phiso Building" shall have the meaning set forth in Section 5.21(a).           

"Phiso Products" shall have the meaning set forth in Section 5.21(a).           

"Plans" shall have the meaning set forth in Section 3.10(b).                    

"Preparer" shall have the meaning set forth in Section 5.4(c).                  

"Property Related Rights" shall mean the bundle of rights and interests,        
including without limitations all easements, privileges, permits,   
rights of way, licenses, warranties, guaranties, if any, held by or 
in possession of Seller relating to the use, occupancy, operation,  
construction or development of leased or owned real property or     
tangible personal property, to the extent legally transferable.     
Whenever any provision of this Agreement or any of the Ancillary    
Agreements specifically describes, defines, refers to or otherwise  
addresses any right that could also be deemed to be a Property      
Related Right, such provision shall supersede for all purposes any  
other provision of this Agreement that describes, defines, refers to
or otherwise addresses Property Related Rights.                     

"Purchase Price" shall have the meaning set forth in Section 2.5(a).            

"Purchaser" shall have the meaning set forth in the recitals.                   

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"Purchaser Indemnified Parties" shall have the meaning set forth in Section     
7.3(a).                                                             

"Purchaser's Objection" shall have the meaning set forth in Section 2.6(b).     

"Recipient" shall have the meaning set forth in Section 5.4(e).                 

"Related Actions" shall have the meaning set forth in Section 5.22.             

"Related to the Business" or "Relating to the Business" shall mean              
primarily related to, arising primarily out of or used primarily in 
 connection with, the Business prior to the Closing; provided that (i)
manufacturing and related activities (together with any related     
assets and liabilities, but not any related Intellectual Property)  
that supply products primarily to Seller's businesses other than the
 Transferred Business, but that are currently conducted as part of the
Transferred Business at a facility constituting an Owned Real       
Property or a Leased Real Property, shall be considered Related to  
the Business and (ii) manufacturing and related activities (together
with any related assets and liabilities, but not any related        
Intellectual Property) that supply products primarily to the        
Transferred Business, but that are currently conducted as part of   
 Seller's businesses other than the Transferred Business at a facility
that does not constitute an Owned Real Property or a Leased Real    
 Property, shall not be considered Related to the Business.  The terms
"Related to the Transferred Assets" and "Relating to the Transferred
Assets" shall have meanings correlative to the foregoing.           

"Rensselaer Site I" shall mean the Sterling Organics main manufacturing         
plant located in Rensselaer, New York which has been used           
continuously since 1889 for the manufacture of pharmaceutical and   
chemical products.  The plant is generally bordered by the Columbia 
Turnpike, Rensselaer Avenue, Belmore Avenue, Riverside Avenue, a    
common boundary with Wyandotte Corporation and a Conrail right-of-  
way.                                                                

"Rensselaer Site II" shall mean those areas along the current site of           
Route 9J in East Greenbush, New York where it is alleged that wastes
 from the Rensselaer plant were disposed of in the past.  This site is
currently owned by the New York State Department of Transportation  
and is currently undergoing an                                      

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investigation by Sterling pursuant to a November 1993 Consent Order with        
the New York State Department of Environmental Conservation.                    

"Rensselaer Site III" shall mean the former landfill site along Pepscanee       
Creek in East Greenbush, New York on lands currently or formerly    
owned by Graziano and Niagra Mohawk at which Sterling is currently  
 analyzing remedial measures for the landfill and a resulting off-site
plume.                                                              

"Requested Amount" shall have the meaning set forth in Section 5.4(c).          

"Required Approvals" shall have the meaning set forth in Section 3.4.           

"Reserved Activities" shall mean the Sterling Reserved Activities as            
defined in the Shareholders' Agreement among Sterling-Winthrop Group
Limited and Sanofi UK Limited and Sanofi Winthrop Limited dated 31st
December 1991.                                                      

"Retirement Plan Employees" shall have the meaning set forth in Section         
5.5(c).                                                             

"Rx Buyer" shall have the meaning assigned thereto in Section 5.4(i).           

"Sanofi" shall mean Purchaser.                                                  

"Sanofi License Agreement" shall have the meaning set forth in                  
Section 5.10(d).                                                    

"SAR Plan" shall have the meaning set forth in Section 2.5(c).                  

"Savings Plan Employees" shall have the meaning set forth in Section            
5.5(c).                                                             

"Schering" shall mean Schering Aktiengesellschaft.                              

"Schering Agreement" shall mean the Amended and Restated License Agreement      
dated as of December 23, 1992 between Schering and Seller.          

"Seller" shall have the meaning set forth in the recitals.                      

"Seller Indemnified Parties" shall have the meaning set forth in Section        
7.2(a).                                                             

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"Seller Retirement Plans" shall have the meaning set forth in Section           
5.5(c).                                                             

"Seller Savings Plans" shall have the meaning set forth in Section 5.5(c).      

"Settlement Payment" shall have the meaning set forth in Section 5.4(c).        

"Shared Intellectual Property" shall mean all Intellectual Property used by     
(i) one or both of the Pharm Ventures and (ii) the OTC Business in  
the conduct of their respective businesses.                         

"Shared Intellectual Property License Agreements" shall have the meaning        
set forth in Section 5.10(e).                                       

"Shared Service Agreement" shall have the meaning set forth in Section          
5.14(a).                                                            

"Specified Companies" shall mean Sterling Winthrop Products, Inc. (Panama),     
Sterling Pharmaceutical, Inc. (PR), Gamma, STERWIN AG and STERPHARM 
AG.                                                                 

"Sublease Agreement" shall have the meaning set forth in Section 5.13.          

"Subsidiaries" shall mean all corporations and other entities in which          
Seller owns directly or indirectly any shares or other equity       
 interests, the shares of which or other equity interests in which are
determined pursuant to Section 2.12 to be transferred to Purchaser  
pursuant to this Agreement.                                         

"Tax Package" shall have the meaning set forth in Section 5.4(d).               

"Tax Returns" shall mean all reports and returns required to be filed with      
respect to Taxes.                                                   

"Taxes" shall mean all federal, state, local or foreign income, gross           
receipts, windfall profits, value added, severance, property,       
production, sales, use, license, excise, franchise, employment,     
withholding or similar taxes, together with any interest, additions 
 or penalties with respect thereto and any interest in respect of such
additions or penalties.                                             

"Trade Name License Agreement" shall have the meaning set forth in Section      
5.10(f).                                                            

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"Trade Names" shall mean the trade names set forth in Schedule 1.1(j).          

"Trademark Agreement" shall have the meaning set forth in Section 5.9(a).       

"Transfer Taxes" shall have the meaning set forth in Section 5.4(h).            

"Transferee Pension Plans" shall have the meaning set forth in Section          
5.5(c).                                                             

"Transferee Savings Plans" shall have the meaning set forth in Section          
5.5(c).                                                             

"Transferred Assets" shall have the meaning set forth in Section 2.1.           

"Transferred Business" shall mean the portion of the Business represented       
by the Transferred Assets and the Assumed Liabilities.              

"Transferred Employees" shall have the meaning set forth in Section 5.5(b).     

"U.S. Antitrust Laws" shall mean and include the Sherman Act, as amended,       
the Clayton Act, as amended, the HSR Act, the Federal Trade         
 Commission Act, as amended, and all other federal and state statutes,
rules, regulations, orders, decrees, administrative and judicial    
doctrines, and other laws that are designed or intended to prohibit,
restrict or regulate actions having the purpose or effect of        
monopolization or restraint of trade.                               

"UPT Facility" shall have the meaning set forth in Section 5.6.                 

"UPT Lease Agreement" shall have the meaning set forth in Section 5.6.          

"U.S. Affiliate of Kodak" shall mean any Affiliate of Kodak (other than         
Sterling Pharmaceuticals, Inc.) incorporated in a jurisdiction      
located in the United States (other than Puerto Rico).              

"U.S. Intercompany Accounts Payable of the Transferred Business" shall mean     
accounts payable of the Transferred Business that arise out of the  
portions of the Transferred Business conducted in the United States.

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"U.S. Intercompany Accounts Receivable of the Transferred Business" shall       
mean accounts receivable of the Transferred Business that arise out 
of the portions of the Transferred Business conducted in the United 
States.                                                             

"WARN" shall mean the Worker Adjustment and Retraining Notification Act.        

"Welfare Plans" shall have the meaning set forth in Section 5.5(d).             

"Wholly Owned Subsidiary" shall mean each corporation or other entity           
Related to the Business, all of the voting shares or other voting   
equity interests (other than directors' qualifying shares) in which 
are owned directly or indirectly by Seller.                         

"Working Capital Statement", as of any date, shall mean a statement,            
prepared in accordance with Schedule 1.1(l), setting forth the Net  
Working Capital of the Transferred Business, other than the Newcos, 
 including the required activities in the United Kingdom and Japan, as
of such date.                                                       

       Section 1.2  Other Terms.  Other terms may be defined elsewhere

in the text of this Agreement and, unless otherwise indicated, shall have       

such meaning throughout this Agreement.                                         

Section 1.3  Other Definitional Provisions.             

     (a)   The words "hereof", "herein", and "hereunder" and words

of similar import, when used in this Agreement, shall refer to this             

Agreement as a whole and not to any particular provision of this Agreement.     

       (b)   The terms defined in the singular shall have a comparable

meaning when used in the plural, and vice versa.                                

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  (c)   The terms "dollars" and "$" shall mean United States

dollars.                                                                        

ARTICLE II    

PURCHASE AND SALE OF THE BUSINESS     

Section 2.1  Purchase and Sale of Assets.               

       On the terms and subject to the conditions set forth herein, at

the Closing, Seller agrees to sell, convey, transfer, assign and deliver to     

Purchaser, and Purchaser agrees to purchase from Seller, all of Seller's        

right, title and interest in and to the assets of Seller Related to the         

Business, whether tangible or intangible, real or personal, except for the      

Excluded Assets (the "Transferred Assets"), including without limitation        

(other than as specifically limited by (a) through (l) of this Section          

2.1), all of Seller's right, title and interest in the following:               

    (a)  The joint ventures established by the Pharm A Agreement

and the Pharm B Agreement or the assets held by such joint ventures 

and all other rights under the Pharm A Agreement and the Pharm B    

Agreement;                                                          

(b)  The Human Ethical Pharmaceutical Products;         

(c)  Seller's rights under the BMS Agreements;          

    (d)  The Owned Real Property and Leased Real Property and no

other real property;                                                

(e)  The Fixtures and Equipment;                        

(f)  All Current Assets as of the Closing Date;         

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  (g)  The Ethical Intellectual Property (subject to Kodak's

rights under the Dental Agreements), Trade Names and, subject to    

Sections 5.10(e) and 5.10(f), the Shared Intellectual Property;     

(h)  Contracts;                                         

 (i)  All of the stock of or other equity interests in the

Subsidiaries;                                                       

      (j)  All Books and Records of, or maintained by, the Business;

provided, however, that Seller may retain one copy of any such Books

and Records so long as Seller provides at least one copy of such    

Books and Records to Purchaser;                                     

      (k)  All refunds of Taxes to the extent such Taxes are Assumed

Liabilities; and                                                    

   (l)  All insurance policies owned by Seller or any Majority

Owned Subsidiary that relate primarily to Assumed Liabilities or are

Related to the Business, provided, in each case, that such policies 

are assignable and remain in effect following the Closing.          

      Section 2.2  Excluded Assets.  Notwithstanding anything herein

to the contrary, from and after the Closing, Seller shall retain all of its     

right, title and interest in and to, and there shall be excluded from the       

sale, conveyance, assignment or transfer to Purchaser hereunder, and the        

Transferred Assets shall not include, the following (collectively, the          

"Excluded Assets"):                                                             

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(a)   The joint ventures established by the OTC Agreement;

(b)   Seller's consumer products business, including the  

business conducted by the Sterling Health and L&F Products divisions

of Seller (including the manufacturing, marketing, sales,           

distribution, support operations and research and development       

activities related thereto and all inventories and other assets of  

such businesses, in each case except to the extent Related to the   

Business);                                                          

   (c)   All Ethical Intellectual Property set forth in Schedule

2.2(c) and, subject to Sections 5.10(e) and 5.10(f), Shared         

Intellectual Property and all trademarks and trademark registrations

relating to any Dual Product in each jurisdiction in which such Dual

Product is sold as an Over-the-Counter Human Pharmaceutical Product;

(d)   Subject to Section 5.16, Seller's rights under all  

insurance policies, including insurance policies in respect of      

directors and officers who are Transferred Employees, and to all    

claims against insurance carriers (other than rights under any      

insurance policy referred to in Section 2.1(l));                    

(e)   The UPT Facility;                                   

    (f)   The fixtures and equipment set forth in Schedule 2.2(f);

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(g)   The contracts set forth in Schedule 2.2(g);         

(h)   (i) Cash, investment securities and other short- and

medium-term investments of the Specified Companies and the U.S. and 

Puerto Rican operations of the Business and (ii) Accounts Receivable

from Kodak;                                                         

  (i)   All refunds of Taxes that are not Assumed Liabilities;

(j)   The capital lease relating to the SWIC manufacturing

facility (and related equipment) in Sharon Hill, Pennsylvania;      

(k)   All Tax Returns of Seller or Kodak;                 

      (l)   All real property or interests in real property other than

the Owned Real Property and the Leased Real Property;               

   (m)   Any Books and Records that Seller is required by law to

retain so long as Seller delivers at least one copy thereof to      

Purchaser; and                                                      

      (n)   All rights to the names "Eastman", "Kodak" and, subject to

Section 5.9(a) "Sterling".                                          

 Section 2.3  Assumption of Liabilities.  On the terms and

subject to the conditions set forth herein, at the Closing, Purchaser           

agrees to assume and discharge or perform when due, all debts, liabilities,     

or obligations whatsoever, other than Excluded Liabilities, that are            

Related to the Business or that otherwise are Related to the Transferred        

Assets, whether arising before or after the Closing and                         

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whether known or unknown, fixed or contingent (the "Assumed Liabilities"),      

including, without limitation (other than as specifically limited by            

Section 2.4 hereof), the following:                                             

    (a)   The Contracts, including (i) the Pharm A Agreement and

the Pharm B Agreement; (ii) the Development Agreement; (iii) the BMS

 Agreements; (iv) all licenses from third parties (including Kodak and

any Affiliate of Kodak that does not constitute part of the         

 Transferred Business) assigned or otherwise transferred to Purchaser;

and (v) subject to Section 5.15, the Dental Agreements;             

(b)   All Current Liabilities as of the Closing Date;   

 (c)   All liabilities with respect to all actions, suits,

proceedings, disputes, claims or investigations that are Related to 

 the Business or otherwise Relating to the Transferred Assets, at law,

in equity or otherwise, including but not limited to (i) product    

liability claims and (ii) liability for any damage arising out of or

relating to, and for any obligation to remediate, environmental     

conditions associated with the Owned Real Property and Leased Real  

Property, whether on-site or off-site (except to the extent such    

liability or obligation arises out of or relates to the disposal at 

Rensselaer Site II or Rensselaer Site III                           

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     of Hazardous Waste generated at Rensselaer Site I or any other Owned Real

Property or Leased Real Property);                                  

    (d)   All liabilities for non-U.S. Taxes (whether imposed by

any national, state, departmental, provincial, local or other       

jurisdiction) imposed on or with respect to each Newco to the extent

such Taxes are Related to the Transferred Assets or the Transferred 

Business for the taxable periods, or portions thereof, ending on or 

before the Closing Date; provided, however, that Assumed Liabilities

shall not include liabilities for any Taxes that are imposed on     

Kodak, Seller, the Affiliates of either Kodak or Seller, any third  

 party that acquires Seller or any portion of the assets of Seller, or

Purchaser or any Affiliate of Purchaser and (X) are attributable to 

any taxable periods ending before, on or after the Closing Date that

arise with respect to, or are attributable to, the Reserved         

Activities, or (Y) for the taxable periods, or portions thereof,    

ending on or before the Closing Date that arise as a result of      

transfers (by distribution or otherwise) of cash or sales or        

 transfers (by distribution or otherwise) of other property, occurring

prior to the Closing (with respect to the country in which such cash

or other property is located prior to such sale or transfer), and in

the case of sales or transfers of property other than cash, also    

occurring                                                           

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     outside of the ordinary course of business, in all cases including, without

     limitation, sales and transfers of cash or other property contemplated by

   Section 2.7 or 2.12 of this Agreement.  Neither this Section 2.3(d) nor

     Section 2.4(b) nor Section 2.4(g) shall govern the allocation between the

   parties of any Transfer Taxes allocated pursuant to Section 5.4(h); and

  (e)   (i) All employee benefit, compensation and severance

liabilities and other similar liabilities associated with any       

 Transferred Employees to the extent provided in Sections 5.5 and 5.7,

(ii) one half of the severance liabilities due to any non-U.S.      

Transferred Employee whose employment is deemed to be terminated by 

operation of law as a result of the transactions contemplated herein

and (iii) all liabilities under all union contracts with respect to 

all such Transferred Employees.                                     

     Section 2.4  Excluded Liabilities.  Notwithstanding any other

provision of this Agreement, the liabilities and obligations of Seller or       

any subsidiary, which are not to be assumed by Purchaser hereunder (the         

"Excluded Liabilities") are the following:                                      

       (a)  All liabilities arising out of or relating to the Excluded

Assets (including any liability or obligation arising out of or     

relating to the disposal                                            

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     at Rensselaer Site II or Rensselaer Site III of Hazardous Waste generated

at Rensselaer Site I or any other Owned Real Property or Leased Real

Property);                                                          

  (b)  All liabilities for Taxes imposed with respect to the

Transferred Business for the taxable periods, or portions thereof,  

ending on or before the Closing Date (whether imposed by a Taxing   

authority or by virtue of any Tax sharing agreement) not expressly  

assumed pursuant to Section 2.3(d) hereof;                          

    (c)  All (i) indebtedness for money borrowed, if any, of the

Specified Companies, the Oldcos of Seller in Spain and Belgium and  

the U.S. operations of the Business and (ii) Accounts Payable to    

Kodak;                                                              

 (d)  The capital lease relating to the SWIC manufacturing

facility in Sharon Hill, Pennsylvania;                              

       (e)  All other liabilities and obligations for which Seller has

expressly assumed responsibility pursuant to this Agreement;        

    (f)  All debts, liabilities, or obligations whatsoever, that

are not Related to the Business or that are not otherwise Related to

the Transferred Assets;                                             

   (g)  All costs or expenses other than Taxes that arise as a

result of transfers (by distribution or otherwise) of cash or sales 

or transfers (by distribution or otherwise) of other property       

occurring                                                           

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   prior to the Closing (with respect to the country in which such cash or

      other property is located prior to such sale or transfer), and in the case

     of sales or transfers of property other than cash, also occurring outside

the ordinary course of business, in all cases including, without    

     limitation, sales and transfers of cash or property contemplated by Section

   2.7 or 2.12 of this Agreement.  Neither this Section 2.4(g) nor Section

     2.3(d) nor Section 2.4(b) shall govern the allocation between the parties

of any Transfer Taxes allocated pursuant to Section 5.4(h); and     

      (h)  All employee benefit, compensation, welfare and severance

liabilities and other liabilities associated with any Employees,    

Transferred Employees or Former Employees, except to the extent     

otherwise expressly provided in Section 5.5 and 5.7 hereof and      

Section 2.3(e) hereof.                                              

Section 2.5  Purchase Price.                            

 (a)  On the terms and subject to the conditions set forth

herein, Purchaser agrees (i) to pay Seller $1,602,763,000 (the "Cash            

Portion") and (ii) in accordance with the provisions of Section 2.8 hereof      

and without further consideration being paid by Seller, to sell, convey,        

transfer, assign and deliver to Seller, all of Purchaser's right, title and     

interest in and to the OTC Venture, the OTC Shares and the OTC Assets (and      

all assets of Purchaser                                                         

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related thereto that the parties determine, pursuant to Section 2.12(a)         

hereof, to transfer otherwise than through the transfer of the OTC Venture,     

the OTC Shares or the OTC Assets) (the "OTC Portion") (the Cash Portion and     

the OTC Portion together being the "Purchase Price").  The Cash Portion         

shall be subject to adjustment as provided in paragraphs (b) and (c) of         

this Section 2.5 and Section 2.6 hereof.                                        

       (b)  (i) In addition to the foregoing, immediately prior to the

Closing, the parties will settle the balances of any payments due between       

them in connection with each of the Pharm A Agreement, the Pharm B              

Agreement, the Development Agreement and the OTC Agreement in the manner        

agreed by the parties.  In addition, Purchaser shall pay Seller $72,237,000     

pursuant to Section 12.2 of the Development Agreement in consideration of       

the termination of such agreement.  Upon the Closing, each of the Pharm A       

Agreement, the Pharm B Agreement, the Development Agreement and the OTC         

Agreement shall be automatically terminated.                                    

     (ii) In addition to the foregoing, at the Closing the

parties will settle the balance of any payments due, or to become due in        

respect of periods prior to the Closing, to Seller or a related entity          

under the BMS Agreements by Purchaser or a related entity.  Notwithstanding     

anything contained herein to the contrary,                                      

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any amounts paid to Seller in accordance with this Section 2.5(b)(ii) shall     

not be considered to be Transferred Assets.                                     

          (iii) In addition to the foregoing, immediately prior to the

Closing, Seller shall pay to Purchaser an adjustment payment in an amount       

equal to the excess of Seller's share of the aggregate indebtedness for         

borrowed money of the companies and other entities established as part of       

the Pharm Ventures and OTC Ventures outside the United States (the "Non-        

U.S. Venture Companies") over Seller's share of the aggregate of the cash,      

investment securities and other short- and medium-term investments of the       

Non-U.S. Venture Companies, all as determined in accordance with                

Schedule 2.5(b)(iii) hereto.                                                    

 (c)  In addition to the foregoing, Purchaser shall pay to

Seller within 30 days after the Closing Date:                                   

    (i)  the sum of $1.6 million with respect to the

outstanding phantom stock appreciation rights under the Sterling    

Winthrop Inc. Affiliates Phantom Stock Appreciation Rights Plan (the

"SAR Plan") of the Transferred Employees (as defined in             

 Section 5.5(b)) on the Closing Date; provided that Seller shall cause

such phantom stock appreciation rights to be fully vested on the    

Closing Date and to remain outstanding for the balance of their     

respective exercise periods as set forth in the applicable notice of

grant, except to the extent agreed otherwise by a Transferred       

Employee; and                                                       

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             (ii)  the sum of $4.0 million with respect to the account

balances of the Transferred Employees under the Sterling Winthrop   

Inc. Deferred Compensation Plan on the Closing Date.                

Section 2.6  Business Post-Closing Adjustments.         

        (a)  Seller shall prepare (or cause to be prepared), and shall

deliver to Purchaser, (i) no later than the Closing Date, a Working Capital     

Statement and a Net Worth Statement, in each case as of December 31, 1993       

(respectively, the "Opening Working Capital Statement" and the "Opening Net     

Worth Statement", and together, the "Opening Statements"), and (ii) within      

60 days following the Closing, a Working Capital Statement and a Net Worth      

Statement, in each case as of the Closing Date (respectively, the "Closing      

Working Capital Statement" and the "Closing Net Worth Statement", and           

together, the "Closing Statements").  The parties shall have the right to       

correct manifest errors in the Opening Statements within 60 days after the      

Closing Date (any corrected Opening Statement delivered to Purchaser shall      

replace such Opening Statement delivered on the Closing Date for all            

purposes under this Agreement and be deemed to have been delivered on the       

Closing Date).                                                                  

     (b)  Purchaser and Purchaser's accountants shall, within 60

days after the delivery by Seller of the Closing Statements, complete their     

review of such Statements.  In                                                  

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the event that Purchaser determines that one or more of such Statements         

have not been prepared in accordance with Schedule 1.1(1) and 3.7(a)(ii),       

or that one or both Closing Statements have not been prepared on the same       

basis as the related Opening Statement, Purchaser shall inform Seller in        

writing (the "Purchaser's Objection"), setting forth a specific description     

of the basis of Purchaser's Objection and the adjustments to the Net            

Working Capital and/or the Aggregate Newco Net Worth which Purchaser            

believes should be made, on or before the last day of such 60-day period.       

Seller shall then have 30 days to review and respond to Purchaser's             

Objection.  If Seller and Purchaser are unable to resolve all of their          

disagreements with respect to the determination of the foregoing items          

within 10 days following the completion of Seller's review of Purchaser's       

Objection, they shall refer their remaining differences to Coopers and          

Lybrand or another internationally recognized firm of independent public        

accountants as to which Seller and Purchaser mutually agree (the "CPA           

Firm"), who shall, acting as experts and not as arbitrators, determine on       

the basis of the principles set forth in Schedule 1.1(l) and 3.7(a)(ii),        

and only with respect to the remaining differences so submitted, whether        

and to what extent, if any, the Net Working Capital and/or the Aggregate        

Newco Net Worth, as reflected on the Closing Statements, require                

adjustment.  The CPA Firm shall deliver its written                             

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determination to Purchaser and Seller no later than the twentieth day           
after                                                                           

the remaining differences underlying the Purchaser's Objection are referred     

to the CPA Firm, or such longer period of time as the CPA Firm determines       

is necessary.  The CPA Firm's determination shall be conclusive and binding     

upon Purchaser and Seller.  The fees and disbursements of the CPA Firm          

shall be shared equally by Purchaser and Seller.  Purchaser and Seller          

shall make readily available to the CPA Firm all relevant books and records     

and any work papers (including those of the parties' respective                 

accountants) relating to the Opening Statements and the Closing Statements      

and all other items reasonably requested by the CPA Firm.                       

      The "Adjusted Closing Statement" (or the "Adjusted Closing Net

Worth Statement") shall be (i) the Closing Working Capital Statement (or        

the Closing Net Worth Statement, as the case may be) in the event that (x)      

no Purchaser's Objection is delivered to Seller during the 30-day period        

specified above with respect to such Statement, or (y) Seller and Purchaser     

so agree, (ii) the Closing Working Capital Statement (or the Closing Net        

Worth Statement, as the case may be), adjusted in accordance with the           

Purchaser's Objection in the event that Seller does not respond to              

Purchaser's Objection (to the extent related to such Statement) within the      

30-day period following receipt by Seller of Purchaser's Objection, or          

(iii) the Closing                                                               

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Working Capital Statement (or the Closing Net Worth Statement, as the case      

may be), as adjusted by either (x) the agreement of Seller and Purchaser or     

(y) the CPA Firm.                                                               

In the event that the adjustment of a Closing Statement 

pursuant to this Section 2.6(b) discloses that it is appropriate to include     

an item in the calculation of Net Working Capital (or the Aggregate Newco       

Net Worth, as the case may be) that had been omitted from the related           

Opening Statement or to omit an item in the calculation of Net Working          

Capital (or the Aggregate Newco Net Worth, as the case may be) that had         

been included in the related Opening Statement, Seller shall prepare a          

revised Opening Statement so that the differences between the amount of Net     

Working Capital (or the Aggregate Newco Net Worth, as the case may be)          

reflected on the Opening Statement and on the Closing Statement reflect         

only the impact of the passage of time on the balances of the accounts          

included in the determination of Net Working Capital (or the Aggregate          

Newco Net Worth, as the case may be).                                           

      (c)  Purchaser shall provide Seller and its accountants full

access to the Books and Records, any other information, including working       

papers of its accountants, and to any employees to the extent necessary for     

Seller to prepare the Closing Statements, the Adjusted Closing Working          

Capital Statement and the Adjusted Closing Net Worth Statement.                 

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     (d)  Within 10 Business Days following issuance of both the

Adjusted Closing Working Capital Statement and the Adjusted Closing Net         

Worth Statement, the net adjustment payment payable pursuant to this            

Section 2.6(d) hereof (the "Net Adjustment Payment") shall be paid by wire      

transfer of immediately available funds to a bank account designated by         

Purchaser or Seller, as the case may be.  The Net Adjustment Payment shall      

be the arithmetic sum of the adjustment payment in respect of the Adjusted      

Closing Working Capital Statement and the adjustment payment in respect of      

the Adjusted Closing Net Worth Statement, each determined as follows:           

(i)   the adjustment payment in respect of the Adjusted Closing Working         

Capital Statement shall be the difference, if any, between (x) Net  

 Working Capital, as reflected on the Adjusted Closing Working Capital

Statement, and (y) Net Working Capital, as reflected on the Opening 

Working Capital Statement.                                          

(ii)  the adjustment payment in respect of the Adjusted Closing Net Worth       

Statement shall be the difference, if any, between (x) the Aggregate

Newco Net Worth, as reflected on the Adjusted Closing Net Worth     

 Statement, and (y) the Aggregate Newco Net Worth, as reflected on the

Opening Net Worth Statement.                                        

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   The Net Adjustment Payment shall be payable by Purchaser to

Seller, if positive, and by Seller to Purchaser, if negative.                   

  (e)  On the date of any transfer of assets from a Seller

Retirement Plan to a Transferee Pension Plan, Seller shall pay to Purchaser     

the Pension Shortfall Amount, if applicable, or the Purchaser shall pay to      

the Seller the Pension Excess, if applicable.                                   

    Section 2.7  Disposition of Cash and Short-term Investments.

Prior to the Closing, Seller shall cause all cash balances, investment          

securities and other short- and medium-term investments held by Gamma to be     

distributed or otherwise paid, in a manner chosen by Seller, to Seller or       

one of Seller's Affiliates that does not constitute a part of the               

Transferred Business.  All costs and expenses of the distributions or           

payments contemplated by this Section 2.7 (including liabilities for any        

Taxes arising as a result of such distributions or payments) shall be borne     

by Seller.                                                                      

Section 2.8  Transfer of the OTC Portion.               

       On the terms and subject to the conditions set forth herein, at

the Closing, Purchaser agrees to sell, convey, transfer, assign and deliver     

to Seller, and Seller agrees to purchase from Purchaser, all of Purchaser's     

right, title and interest in and to the OTC Venture, the OTC Shares and the     

OTC Assets.                                                                     

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Section 2.9  Closing.                                   

       (a)   The Closing shall take place at the offices of Sullivan &

Cromwell, 125 Broad Street, New York, New York 10004 at 12:01 A.M. New York     

City time, on October 1, 1994, provided that all of the conditions set          

forth in Sections 6.1, 6.2(e) and 6.3(e) hereof have been satisfied or          

waived with respect to at least (x) all Transferred Assets located in the       

United States and Puerto Rico and (y) the OTC Portion of the Purchase           

Price, or at such other time and place as the parties hereto may mutually       

agree.  The date on which the Closing occurs is called the "Closing Date".      

   (b)   Notwithstanding anything to the contrary contained in

this Agreement, to the extent that the sale, assignment, transfer,              

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

or delivery to (x) Purchaser of any Transferred Asset or (y) Seller of any      

part of the OTC Portion is prohibited by any applicable law or would            

require any governmental or third party authorizations, approvals, consents     

or waivers and such authorizations, approvals, consents or waivers shall        

not have been obtained prior to the Closing or, in the case of the              

Transferred Assets, at the date of the Closing the conditions set forth in      

Section 6.1 have not been satisfied with respect to Transferred Assets          

located outside of the United States, this Agreement shall not constitute a     

sale, assignment, transfer, conveyance or delivery, or any                      

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

Following the Closing, the parties shall use reasonable efforts, and            

cooperate with each other, to obtain promptly such authorizations,              

approvals, consents or waivers; provided, however, that neither Seller nor      

Purchaser shall be required to pay any consideration therefor, other than       

filing, recordation or similar fees payable to any governmental authority,      

which fees shall be shared  2.9(b))equally by Purchaser and Seller.             

Pending such authorization, approval, consent or waiver, (i) the parties        

shall cooperate with each other in any reasonable and lawful arrangements       

designed to provide to (x) Purchaser the benefits and liabilities of use of     

such Transferred Asset and (y) Seller the benefits and liabilities of use       

of such part of the OTC Portion, in each case from the Closing Date through     

the date of the relevant closing, and (ii) to the extent legally                

permissible, Seller shall transfer to Purchaser the effective management of     

the Transferred Business and, to the extent such transfer is legally            

impermissible, operate the Transferred Business in accordance with              

Purchaser's instructions and at Purchaser's cost.  Once such authorization,     

approval, consent or waiver for the sale, assignment, transfer, conveyance      

or delivery of a Transferred Asset or part of the OTC Portion, as the case      

may be, not sold, assigned, transferred, conveyed or delivered at the           

Closing is obtained, Seller or Purchaser,                                       

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as the case may be, shall promptly assign, transfer, convey and deliver         

such Transferred Asset or part of the OTC Portion, as the case may be, to       

Purchaser or Seller, as the case may be, at no additional cost.  To the         

extent that any such Transferred Asset or part of the OTC Portion, as the       

case may be, cannot be transferred or the full benefits and liabilities of      

use of any such Transferred Asset or part of the OTC Portion, as the case       

may be, cannot be provided to Purchaser or Seller, as the case may be,          

following the Closing pursuant to this Section 2.9(b), then Purchaser and       

Seller shall enter into such arrangements (including subleasing or              

subcontracting if permitted) to provide to the parties the economic (taking     

into account Tax costs and benefits) and operational equivalent of              

obtaining such authorization, approval, consent or waiver and the perfor-       

mance by Purchaser and Seller of their respective obligations thereunder.       

(c)   Seller shall endeavor to transfer as many of the  

Transferred Assets to Purchaser as is practical on the Closing Date.  It is     

understood, however, that Seller will be undertaking restructuring              

transactions with respect to certain of the Transferred Assets that may not     

be complete prior to the Closing Date.  Subject to Section 2.9(b) above,        

Seller will complete such transfers of Transferred Assets to Purchaser by       

December 31, 1994 (it being understood that any ruling from Tax or other        

governmental authorities regarding                                              

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the Tax effect of the transactions referred to in the previous sentence         

shall not be deemed to constitute required governmental or third party          

authorizations, approvals, consents or waivers referred to in Section           

2.9(b)).                                                                        

Section 2.10  Deliveries by Purchaser.  At the Closing, 

Purchaser shall deliver to Seller, and with respect to Sections 2.10(f) and     

2.10(g) as applicable, to Kodak, the following:                                 

     (a)  the Cash Portion, in immediately available funds by wire

transfer to an account designated by Seller not less than two business days     

prior to the Closing;                                                           

     (b)  assignments, in form and substance acceptable to Seller,

assigning to Seller all of Seller's right, title and interest in the OTC        

Venture, OTC Assets and all OTC Shares;                                         

    (c)  such instruments of assumption and other instruments or

documents, in form and substance reasonably acceptable to Seller, as may be     

necessary to effect Purchaser's assumption of the Assumed Liabilities;          

(d)   such other instruments and documents, in form and 

substance reasonably acceptable to Seller, as may be necessary to effect        

the Closing;                                                                    

      (e)  a duly executed copy of each of the Ancillary Agreements;

 (f)  the certificates and other documents to be delivered

pursuant to Section 6.3 hereof; and                                             

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    (g)  any payment required pursuant to Section 2.5(b) hereof.

      Section 2.11  Deliveries by Seller and Kodak.  At the Closing,

Seller, and with respect to Sections 2.11(b) and 2.11(f) and as applicable,     

Kodak, shall deliver to Purchaser the following:                                

   (a)  bills of sale and any other appropriate instruments of

sale and conveyance, in form and substance reasonably acceptable to             

Purchaser, transferring all tangible personal property included in the          

Transferred Assets to Purchaser;                                                

(b)  assignments, in form and substance acceptable to   

Purchaser, assigning to Purchaser all Ethical Intellectual Property and,        

subject to Section 2.12 hereof, Seller's interests in all corporations,         

partnerships and other entities which interests are included in the             

Transferred Assets;                                                             

      (c)  deeds, in limited warranty or other similar form, and any

other customary instruments of sale or conveyance, in each case in form and     

substance reasonably acceptable to Purchaser, transferring all Owned Real       

Property to Purchaser subject to any and all Permitted Encumbrances;            

    (d)  assignments or, where necessary, subleases, in form and

substance reasonably acceptable to Purchaser,                                   

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assigning or subleasing to Purchaser all Leased Real Property;                  

       (e)  such other instruments or documents, in form and substance

reasonably acceptable to Purchaser, as may be necessary to effect the           

Closing;                                                                        

      (f)  a duly executed copy of each of the Ancillary Agreements;

  (g)  copies of surveys and title insurance policies in the

possession of Seller or Seller's representatives, if any, with respect to       

Owned Real Property and Leased Real Property and, if applicable, copies of      

certificates in the possession of Seller or Seller's representatives with       

respect to Owned Real Property and Leased Real Property;                        

 (h)  the certificates and other documents to be delivered

pursuant to Section 6.2 hereof; and                                             

     (i)  any payments required pursuant to Section 2.5(b) hereof.

Section 2.12  Agreement of Means of Transfer.           

(a)  Notwithstanding anything contained in Section 2.1, 2.3, 2.8, 2.10 or       

2.11 hereof, (i) Seller and Purchaser hereby agree to restructure and to        

transfer the Transferred Assets (and related Assumed Liabilities and            

Transferred Employees) and the assets (and related liabilities)                 

constituting part of the OTC Portion, in each case as described in Schedule     

2.12(a)(i), in the manner therein described, and (ii) Seller                    

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and Purchaser will negotiate in good faith to agree, on a country-by-           

country basis as to the restructuring and means of transfer of the              

Transferred Assets, Assumed Liabilities and Transferred Employees (e.g.,        

the sale of the equity interests in corporate or unincorporated entities or     

the sale of the assets held by and assumption of liabilities of such            

entities) to the extent not described in Schedule 2.12(a)(i).  If not           

otherwise described in Schedule 2.12(a)(i) and subject to Section 2.12(c),      

with respect to the OTC Portion, the OTC Shares will be transferred in          

stock transactions and the OTC Assets will be transferred in an asset           

transaction.                                                                    

      (b)   If an agreement has not been reached pursuant to Section

2.12(a) on or before August 31, 1994 regarding the means of transfer of the     

Transferred Assets (and related Assumed Liabilities and Transferred             

Employees) in any country, the means of transfer in each such country shall     

be determined in accordance with the following procedure which shall be         

completed on or before September 1, 1994:                                       

 (1)   A list shall be compiled of all such countries (the

"Listed Countries");                                                            

       (2)   Purchaser and Seller shall flip a coin to determine which

of them (the "First Chooser") shall choose the first country pursuant to        

clause (3);                                                                     

   (3)   The parties shall alternate, beginning with the First

Chooser, in selecting from the Listed Countries,                                

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countries that have not already been chosen.  The party that selects any        

country shall choose, as the means of transfer, either (i) a transfer of        

equity interests or (ii) a transfer of assets in that country.                  

     The means of transfer chosen pursuant to this Section 2.12(b)

shall be binding unless the parties agree otherwise.                            

     (c)   The parties acknowledge that, notwithstanding whether a

transfer of assets occurs by transferring an interest in an entity or the       

assets held by such entity, or any other means chosen pursuant to Section       

2.12(a) hereof, the transfer will be structured in a manner that gives          

effect to the definitions of Transferred Assets, Excluded Assets, Assumed       

Liabilities, Excluded Liabilities, OTC Assets and OTC Shares.  The              

foregoing shall include, without limitation, the right of Seller to remove      

any Excluded Asset from an entity constituting a Transferred Asset prior to     

transferring such entity.                                                       

       (d)   In the event that the parties determine, pursuant to this

Section 2.12, that any assets constituting part of the OTC Portion shall be     

transferred otherwise than through the transfer of the OTC Venture, the OTC     

Shares or the OTC Assets, Purchaser shall, as of the Closing Date, make         

representations and warranties to Seller and Kodak, solely with respect to      

such assets to be transferred by Purchaser or an Affiliate of Purchaser,        

comparable in scope                                                             

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to the representations made by Seller in Sections 3.3, 3.4, 3.5, and, if        

applicable, Sections 3.16 and 4.7 relating to the transfer of the               

Transferred Assets and the OTC Assets, as the case may be.                      

ARTICLE III     

REPRESENTATIONS AND WARRANTIES OF SELLER AND KODAK    

     Seller, and with respect only to Sections 3.1, 3.3, 3.4, 3.5,

3.6, and 3.10 insofar as it relates to Plans maintained by Kodak, Kodak,        

represent and warrant to Purchaser as of the date hereof and as of the          

Closing Date (except that representations and warranties that are made as       

of a specific date need be true only as of such date) as follows:               

     Section 3.1  Organization and Qualification.  (a) Seller is a

corporation duly organized, validly existing and in good standing under the     

laws of the jurisdiction of its incorporation and has all requisite             

corporate power and authority to own and operate the Transferred Assets and     

to carry on the Business as currently conducted.  Except as set forth on        

Schedule 3.1(a) hereto, Seller is duly qualified to do business and is in       

good standing as a foreign corporation in each jurisdiction where the           

ownership or operation of the Transferred Assets or the conduct of the          

Business requires such qualification, except where the failure to be so         

qualified or in good standing, as the case may be, would not                    

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materially adversely affect Purchaser's ability to conduct the                  
Transferred                                                                     

Business substantially as heretofore conducted.                                 

    (b)  Kodak is a corporation duly organized, validly existing

and in good standing under the laws of the jurisdiction of its                  

incorporation.                                                                  

      Section 3.2  Subsidiaries; Joint Ventures, etc.  (a)  Schedule

3.2(a)(i) hereto sets forth a list of each corporation and other entity the     

shares of which or interests in, or assets owned by, constitute Transferred     

Assets (other than Minority Subsidiaries), together with its jurisdiction       

of organization and its authorized and outstanding capital stock or other       

equity interests as of the date hereof.  Except as set forth on Schedule        

3.2(a)(ii) hereto, each such entity is a corporation or other entity duly       

organized, validly existing, and in good standing under the laws of its         

jurisdiction of organization and has all requisite corporate or similar         

power and authority to own and operate its properties and assets and to         

carry on its business as presently conducted and is duly qualified to do        

business and is in good standing as a foreign corporation or other entity       

in each jurisdiction where the ownership or operation of its properties and     

assets or the conduct of its business requires such qualification, except       

where the failure to be so duly organized, validly existing, qualified or       

in good standing would not materially adversely affect                          

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Purchaser's ability to conduct the Transferred Business substantially           
as                                                                              

heretofore conducted.  Seller has heretofore delivered, or will deliver         

prior to Closing, to Purchaser true and complete copies of the governing        

documents of each Subsidiary.                                                   

  (b)  Except as set forth on Schedule 3.2(b) hereto, Seller

owns, directly or indirectly, all of the outstanding capital stock or other     

equity interest of each Wholly Owned Subsidiary free and clear of all           

Encumbrances.  There are no preemptive or other outstanding rights,             

options, warrants, conversion rights or agreements or commitments to issue      

or sell any shares of capital stock or other equity interest of any such        

Subsidiary or any securities or obligations convertible into or                 

exchangeable for, or giving any Person a right to subscribe for or acquire,     

any shares of capital stock or other equity interest of any such                

Subsidiary, and no securities or obligations evidencing such rights are         

outstanding.                                                                    

    Section 3.3  Corporate Authorization.  Seller and Kodak have

full corporate power and authority to execute and deliver this Agreement        

and each of the Ancillary Agreements, and to perform their obligations          

hereunder and thereunder.  The execution, delivery and performance by           

Seller and Kodak of this Agreement and each of the Ancillary Agreements         

have  been duly and validly authorized and no additional corporate              

authorization or consent is required in connection with the                     

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execution, delivery and performance by Seller and Kodak of this                 
Agreement                                                                       

and each of the Ancillary Agreements.                                           

    Section 3.4  Consents and Approvals.  Except as specifically

set forth in Schedule 3.4 or as required by U.S. Antitrust Laws, Argentina,     

Australia, Brazil, Canada, Mexico, EC Competition Law (or France, Germany,      

Italy, Spain, the United Kingdom, to the extent not subject to EC               

jurisdiction), Comprehensive Drug Abuse Prevention and Control Act of 1970,     

Drug Enforcement Agency, Bureau of Alcohol and Tobacco, Hazardous Waste         

facility permits, air permits, water permits and any other permits required     

by any other Environmental Law, Federal Food, Drug and Cosmetics Act, U.S.      

state wholesale drug licensing laws, the Exchange Act, the Nuclear              

Regulatory Act, the Investment Canada Act and any other similar laws or         

regulations, no consent, approval, waiver or authorization is required to       

be obtained by Seller, Kodak or any Majority Subsidiary from, and no notice     

or filing is required to be given by Seller, Kodak or any Majority              

Subsidiary to or made by Seller, Kodak or any Majority Subsidiary with, any     

Federal, state, local or other governmental authority or other Person in        

connection with the execution, delivery and performance by Seller of this       

Agreement and each of the Ancillary Agreements, other than in all cases         

where the failure to obtain such consent, approval, waiver or                   

authorization, or to give or make such notice of filing would not               

materially adversely affect                                                     

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Purchaser's ability to conduct the Transferred Business substantially           
as                                                                              

heretofore conducted or materially impair or delay the ability of Seller to     

effect the Closing (together with the consents, approvals, waivers,             

authorizations, notices and filings referred to in Section 4.4 and              

Schedules 3.4 and 4.4 hereof, the "Required Approvals").                        

Section 3.5  Non-Contravention.  Except as set forth on 

Schedule 3.5, the execution, delivery and performance by Seller and Kodak       

of this Agreement and each of the Ancillary Agreements, and the                 

consummation of the transactions contemplated hereby and thereby, does not      

and will not (i) conflict with or violate any provision of the Articles of      

Incorporation, Bylaws or other organizational documents of Seller or Kodak,     

(ii) subject to obtaining the consents referred to in Section 3.4, conflict     

with, or result in the breach of, or constitute a default under, or result      

in the termination, cancellation or acceleration (whether after the filing      

of notice or the lapse of time or both) of any right or obligation of           

Seller or Kodak under, or to a loss of any benefit to which Seller or Kodak     

is entitled under, any Contract or result in the creation of any                

Encumbrance upon any of the Transferred Assets, or (iii) assuming the           

consents and approvals listed in Sections 3.4 and 4.4 are obtained, violate     

or result in a breach of or constitute a default under any law, rule,           

regulation, judgment,                                                           

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injunction, order, decree or other restriction of any court                     
or                                                                              

governmental authority to which Seller or Kodak is subject, including any       

Governmental Authorization, other than in the cases of clauses (ii) and         

(iii), any conflict, breach, termination, default, cancellation,                

acceleration, loss, violation or Encumbrance which, individually or in the      

aggregate, would not materially impair Purchaser's ability to conduct the       

Transferred Business substantially as heretofore conducted or materially        

adversely affect or delay Seller's or Kodak's ability to perform its            

obligations hereunder.                                                          

     Section 3.6  Binding Effect.  This Agreement constitutes, and

each of the Ancillary Agreements when executed and delivered by the parties     

thereto will constitute, a valid and legally binding obligation of each of      

Seller and Kodak enforceable in accordance with its terms, subject to           

bankruptcy, insolvency, reorganization, moratorium and similar laws of          

general applicability relating to or affecting creditors' rights and to         

general equity principles.                                                      

       Section 3.7  Financial Statements.  (a) The unaudited pro forma

Asset and Liability Statement of the Transferred Business and the unaudited     

income statement of the Transferred Business for the year ended December        

31, 1993 attached as Schedule 3.7(a)(i) hereto (together, the "Financial        

Statements") fairly present the financial                                       

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condition of the Transferred Business as of the date thereof, or the period     

then ended, as the case may be, and were prepared in accordance with GAAP       

as interpreted and applied historically by Seller using such methodologies,     

including such exceptions to GAAP, as are described in Schedule 3.7(a)(ii),     

in the case of the Asset and Liability Statement, and as are described in       

Schedule 3.7(a)(iii), in the case of the income statement.  The Working         

Capital Statement is derived from the Asset and Liability Statement.  The       

asset and liability statement, to be dated as of the Closing Date, will         

fairly present the financial condition of the Transferred Business as of        

the date thereof and will be prepared on the same basis as the Asset and        

Liability Statement, except as will be described in the notes thereto.          

(b)   All of the liabilities reflected on the Asset and 

Liability Statement are Related to the Business and arose out of or were        

incurred in the conduct of the Transferred Business.                            

     Section 3.8  Litigation and Claims.  (a)  Except as set forth

in Schedule 3.8(a), there is no civil, criminal or administrative action,       

suit, demand, claim, hearing, proceeding or investigation pending or, to        

the knowledge of Seller, threatened, involving the Transferred Business         

(other than those related to Minority Subsidiaries) or any of the               

Transferred Assets (except where owned by Minority Subsidiaries) other than     

those which, individually or in the                                             

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aggregate, would not materially adversely affect Purchaser's ability            
to                                                                              

conduct the Transferred Business substantially as heretofore conducted or       

materially impair or delay Seller's ability to effect the Closing.              

 (b)   Except as set forth in Schedule 3.8(b), none of the

Transferred Assets (except where owned by Minority Subsidiaries) is subject     

to any order, writ, judgment, award, injunction, or decree of any court or      

governmental or regulatory authority of competent jurisdiction or any           

arbitrator or arbitrators other than those which, individually or in the        

aggregate, would not materially adversely affect Purchaser's ability to         

conduct the Transferred Business substantially as heretofore conducted or       

materially impair or delay the ability of Seller to effect the Closing.         

 Section 3.9  Taxes.  Except as set forth in the Financial

Statements or Schedule 3.9:                                                     

       (a)  All Tax Returns that are required to be filed on or before

the date of this Agreement (taking into account any applicable extensions)      

with respect to the Business by or with respect to those corporate or           

unincorporated entities the interests in which, or assets held directly or      

indirectly by Seller, constitute Transferred Assets, have been duly filed,      

except for Tax Returns the failure to file which, when taken together with      

all other such failures, do not result in a material understatement of the      

aggregate Tax                                                                   

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liability of such entities; (b) all information provided in such Tax            

Returns is true, complete and accurate in all material respects; (c) all        

Taxes attributable to each entity described in clause (a) that are or were      

due and payable (without regard to whether such Taxes have been assessed)       

have been timely paid, except for such Taxes the failure to pay which, when     

taken together with all other such failures, will not be material; (d) no       

adjustments relating to the Tax Returns referred to in clause (a) have been     

proposed by the Internal Revenue Service or the appropriate state, local or     

foreign taxing authority, except for such adjustments which, when taken         

together with all other such adjustments that have been proposed, are not       

reasonably expected to be material; (e) there are no pending or, to the         

knowledge of Seller, threatened actions or proceedings for the assessment       

or collection of Taxes against any entity described in clause (a), except       

for such actions or proceedings which, when taken together with all other       

such actions and proceedings that are pending or have been threatened, are      

not reasonably expected to be material; (f) there are no outstanding            

waivers or agreements extending to the applicable statute of limitations        

for any period with respect to any Taxes of any entity described in clause      

(a), except for any such waiver or agreement, when taken together with all      

other such waivers and agreements that are outstanding, are not reasonably      

expected to be material;                                                        

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(g) no audit examinations with respect to any entity described in clause        

(a) are presently in progress, except for such audit examinations which,        

when taken together with all other such audit examinations that are in          

progress, are not reasonably expected to result in a liability that is          

material; (h) Seller and each of the Subsidiaries have withheld from their      

employees (and timely paid to the appropriate governmental entity or set        

aside in an account for such purposes) proper and accurate amounts for all      

periods through the date of this Agreement in compliance with all Tax           

withholding provisions of applicable Federal, state, local and foreign laws     

(including, without limitation, income, social security and employment Tax      

withholding for all types of compensation) except such amounts, which when      

added to all other such amounts not so withheld, paid or set aside, would       

not be material; (i) there is no contract, agreement or intercompany            

account system in existence under which Seller or any of the Subsidiaries       

have, or may at any time in the future have, an obligation to contribute to     

the payment of any portion of a Tax (or pay any amount calculated with          

reference to any portion of a Tax) determined on a consolidated, combined       

or unitary basis with respect to an affiliated group (as defined in Section     

1504 of the Code) or other group of corporations of which the Subsidiaries      

are or were a part which when taken together with all other such contracts,     

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agreements, or account systems result in an obligation that is                  
material;                                                                       

and (j) adequate provisions in accordance with GAAP appropriately and           

consistently applied (except as set forth on Schedule 3.7(a)(ii)) have been     

made in the Asset and Liability Statement for the payment of all non-U.S.       

Tax liabilities of the entities described in clause (a) with respect to the     

Business for the periods covered thereby that were not yet due and payable      

as of the dates thereof, regardless of whether the liability for such Taxes     

is disputed other than Taxes which taken together are not material.             

 Section 3.10  Employee Benefits.  (a)  All benefit plans,

contracts or arrangements covering U.S. Employees, including, but not           

limited to, "employee benefit plans" within the meaning of Section 3(3) of      

ERISA, and plans of deferred compensation (the "Benefit Plans"), are listed     

in Schedule 3.10(a).  True and complete copies of all Benefit Plans,            

including, but not limited to, any trust instruments and insurance              

contracts forming a part of any Benefit Plans, and all amendments thereto       

have been provided or made available to Purchaser.                              

    (b)  All employee benefit plans covering U.S. Employees (the

"Plans"), to the extent subject to ERISA or the Code, are in substantial        

compliance with ERISA and the Code.  Each Plan which is an "employee            

pension benefit plan" within the meaning of Section 3(2) of ERISA ("Pension     

Plan")                                                                          

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and which is intended to be qualified under Section 401(a) of the Code, has     

received a favorable determination letter from the Internal Revenue             

Service, and Seller is not aware of any circumstances likely to result in       

revocation of any such favorable determination letter.  Except as set forth     

in Schedule 3.10(b), there is no material pending or threatened litigation      

relating to the Plans and, to the knowledge of Seller, no such litigation       

is likely.  Neither Seller, Kodak, nor any of the Majority Owned                

Subsidiaries has engaged in a transaction, and no event has occurred with       

respect to any Plan that, assuming the taxable period of such transaction       

expired as of the date hereof, could subject Seller or any Majority Owned       

Subsidiary to a tax or penalty imposed by Section 4975 or 4976 of the Code      

or Section 406 or 502(i) of ERISA in an amount which would be material.         

    (c)  No liability under Subtitle C or D of Title IV of ERISA

has been or is expected to be incurred by Seller or any of the Majority         

Owned Subsidiaries with respect to any ongoing, frozen or terminated            

"single-employer plan", within the meaning of Section 4001(a)(15) of ERISA,     

currently or formerly maintained by any of them, or the single-employer         

plan of any entity which is considered one employer with Seller under           

Section 4001 of ERISA or Section 414 of the Code (an "ERISA Affiliate").        

Seller and the Majority Owned Subsidiaries have not incurred any                

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withdrawal liability with respect to a multiemployer plan under Subtitle        
E                                                                               

of Title IV of ERISA.  No notice of a "reportable event", within the            

meaning of Section 4043 of ERISA for which the 30-day reporting requirement     

has not been waived, has been required to be filed for any Pension Plan or      

by any ERISA Affiliate within the 12-month period ending on the date            

hereof.                                                                         

     (d)  Neither any Pension Plan nor any single-employer plan of

an ERISA Affiliate has an "accumulated funding deficiency" (whether or not      

waived) within the meaning of Section 412 of the Code or Section 302 of         

ERISA and no ERISA Affiliate has an outstanding funding waiver.  Neither        

Seller nor any of the Majority Owned Subsidiaries has provided, or is           

required to provide, security to any Pension Plan or to any single-employer     

plan of an ERISA Affiliate pursuant to Section 401(a)(29) of the Code.          

      (e)  Neither Seller nor any of the Majority Owned Subsidiaries

has any obligations for retiree health and life benefits under any Benefit      

Plan, except as set forth on Schedule 3.10(e).                                  

 (f)  Other than as set forth on Schedule 3.10(f), neither

Seller, its Majority Owned Subsidiaries nor Kodak has any announced plan or     

legally binding commitment to establish any additional Benefit Plan or to       

amend, modify or terminate any existing Benefit Plan.                           

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    (g)  Neither Seller nor the Majority Owned Subsidiaries have

any obligation to contribute to any multiemployer plan.                         

  (h)  All employee benefit plans, contracts or arrangements

covering non-U.S. Employees comply in all material respects with applicable     

law.  Except as set forth in Schedule 3.10(h), Seller and its Majority          

Owned Subsidiaries have no material unfunded liabilities with respect to        

non-U.S. Employees.                                                             

     (i)  The transactions contemplated by this Agreement will not

result in the payment or series of payments to a Transferred Employee or to     

any other person of a parachute payment within the meaning of Section 280G      

of the Code.                                                                    

      (j)  The consummation of the transactions contemplated by this

Agreement will not (i) entitle any Transferred Employee to severance pay        

(other than any deemed termination indemnities due to non-U.S. Transferred      

Employees), or (ii) accelerate the time of payment or vesting, or increase      

the amount of compensation due to any such Transferred Employee or Former       

Employee, except as expressly provided in this Agreement or as listed on        

Schedule 3.10(a) and designated as a Section 3.10(j) plan.                      

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   Section 3.11  Compliance with Laws.  Except as set forth in

Schedule 3.11 hereto, the Transferred Business (except to the extent            

conducted by Minority Subsidiaries) is being conducted in compliance with       

all applicable laws, rules and regulations, except where the failure so to      

comply, individually or in the aggregate, would not materially adversely        

affect Purchaser's ability to conduct the Transferred Business                  

substantially as heretofore conducted, the Transferred Business (except to      

the extent conducted by Minority Subsidiaries) has all Governmental             

Authorizations necessary for the conduct of the Transferred Business as         

currently conducted, other than those the absence of which would not            

materially adversely affect Purchaser's ability to conduct the Transferred      

Business substantially as heretofore conducted and there are no proceedings     

pending, or to the knowledge of Seller, threatened which may result in the      

revocation, cancellation or suspension of any such Governmental                 

Authorization except those that would not materially adversely affect           

Purchaser's ability to conduct the Transferred Business substantially as        

heretofore conducted; it being understood that nothing in this                  

representation is intended to address any compliance issue that is the          

subject of any other representation or warranty set forth herein.               

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    Section 3.12  Environmental Matters.  Except as set forth in

Schedule 3.12 hereto other than as relates to an Excluded Liability:            

 (a)  to the knowledge of Seller, the Transferred Business

(except to the extent conducted by Minority Subsidiaries) is in compliance      

with all applicable Environmental Laws and there are no liabilities under       

any Environmental Law with respect to the Transferred Business (except to       

the extent conducted by the Minority Subsidiaries), other than non-             

compliance or liabilities which would not materially adversely affect           

Purchaser's ability to conduct the Transferred Business substantially as        

heretofore conducted;                                                           

(b)  Seller and its Majority Owned Subsidiaries have not

received any notice of any material violation or alleged material violation     

of, or any material liability under, any Environmental Law in connection        

with the Transferred Business during the past three years;                      

      (c)  there are no material writs, injunctions, decrees, orders

or judgments outstanding, or any actions, suits, proceedings or                 

investigations pending or, to the knowledge of Seller, threatened, relating     

to compliance with or liability under any Environmental Law affecting the       

Transferred Business (except to the extent conducted by the Minority            

Subsidiaries) or the Transferred Assets (except where owned by the Minority     

Subsidiaries); and                                                              

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    (d)   to the knowledge of Seller, there are no environmental

liens affecting the Transferred Business (except to the extent conducted by     

the Minority Subsidiaries) or the Transferred Assets (except where owned by     

the Minority Subsidiaries), except for such liens as would not materially       

adversely affect Purchaser's ability to conduct the Transferred Business        

substantially as heretofore conducted.                                          

   Section 3.13  Intellectual Property.  (a)  Schedule 3.13(a)

sets forth a list and description (including where applicable the country       

of registration) of (i) all patents, patent applications, registered            

trademarks, trademark applications, copyrights and copyright applications       

related to the Transferred Business that are owned by Seller or its             

subsidiaries and (ii) all agreements under which Seller or its subsidiaries     

are licensed or otherwise permitted to use patents, trademarks and              

copyrights which are material to the Transferred Business.                      

(b)  Except as set forth in Schedule 3.13(b)(i), to the 

knowledge of Seller (i) with respect to Ethical Intellectual Property other     

than trademarks, no product (or component thereof or process) used, sold or     

manufactured by the Business infringes on or otherwise violates the             

Intellectual Property of any other Person, (ii) with respect to trademarks      

constituting Ethical Intellectual Property that are listed on                   

Schedule 3.13(b)(ii), there are no                                              

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restrictions that would materially affect the use of those trademarks           
in                                                                              

connection with the Transferred Business and the trademarks do not infringe     

upon or otherwise violate the trademarks of any other Person, and (iii) no      

Person is challenging, infringing or otherwise violating the Ethical            

Intellectual Property or Shared Intellectual Property (excluding trademarks     

not included on Schedule 3.13(b)(ii)), except in each case for challenges,      

infringements or violations, that individually or in the aggregate, would       

not materially adversely affect Purchaser's ability to conduct the              

Transferred Business substantially as heretofore conducted.  The trademarks     

that constitute Transferred Assets that are material to the Transferred         

Business are listed on Schedule 3.13(b)(ii).                                    

      Section 3.14  Collective Bargaining Agreements.  Except as set

forth in Schedule 3.14 hereto, neither Seller nor any Subsidiary (other         

than a Minority Subsidiary) is a party to or bound by any material labor        

agreement or collective bargaining agreement respecting the Transferred         

Employees (other than any Employee of a Minority Subsidiary), nor is there      

pending, or to the knowledge of Seller threatened, any strike, walkout or       

other work stoppage or any union organizing effort by or respecting the         

Transferred Employees.                                                          

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     Section 3.15  Contracts.  Schedule 3.15(i) sets forth a list,

as of the date hereof, of each written Contract that is material to the         

Business other than purchase orders in the ordinary and usual course of         

business.  Except as set forth in Schedule 3.15(ii), to the knowledge of        

Seller, each material Contract is a valid and binding agreement of Seller       

or a subsidiary of Seller and is in full force and effect.  Except as           

otherwise provided in Schedule 3.15(iii), Seller has no knowledge of any        

material default under any Contract listed on Schedule 3.15(i) which            

default has not been cured or waived and which default would materially         

adversely affect Purchaser's ability to conduct the Transferred Business        

substantially as heretofore conducted.                                          

     Section 3.16  Title to Property.  (a)  Except as set forth in

Schedule 3.16(a) the Transferred Assets and the Kodak Licensed Intellectual     

Property constitute all the assets, properties and rights necessary to          

conduct the Transferred Business in all material respects as currently          

conducted.                                                                      

      (b)   Seller has good and (in the case of Owned Real Property)

marketable title to, or a valid and binding leasehold interest in, the          

property included in the Transferred Assets (other than the Ethical             

Intellectual Property subject to Section 3.13), free and clear of all           

Encumbrances, except (i) as set forth in Schedule 3.16(b),                      

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(ii) any encumbrances disclosed in the Financial Statements, (iii) liens        

for Taxes, assessments and other governmental charges not yet due and           

payable or due but not delinquent or being contested in good faith by           

appropriate proceedings, (iv) mechanics', workmen's, repairmen's,               

warehousemen's, carriers' or other like liens arising or incurred in the        

ordinary course of business, original purchase price conditional sales          

contracts and equipment leases with third parties entered into in the           

ordinary course of business, (v) with respect to real property, (A)             

easements, quasi-easements, licenses, covenants, rights-of-way, and other       

similar restrictions, including without limitation any other agreements,        

conditions or restrictions which would be shown by a current title report       

or other similar report or listing, (B) any conditions that may be shown by     

a current survey or physical inspection and (C) zoning, building and other      

similar restrictions and (vi) Encumbrances which, individually or in the        

aggregate, would not materially adversely affect Purchaser's ability to         

conduct the Transferred Business substantially as heretofore conducted (all     

items included in (i) through (vi), together with any matter set forth in       

Schedule 3.16(b), are referred to collectively herein as the "Permitted         

Encumbrances").                                                                 

    (c)   All of the leases relating to the material Leased Real

Property (except to the extent leased by Minority Subsidiaries) are valid,      

subsisting and in full                                                          

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force and effect in accordance with their terms.  All payments (including,      

without limitation, rent) with respect to material Leased Real Property         

(except to the extent leased by Minority Subsidiaries) due and payable and      

not being contested by Seller have been paid by Seller.                         

    (d)   Seller makes no representation in this Agreement as to

the physical condition of the real or tangible personal property included       

in the Transferred Assets.                                                      

     Section 3.17  Finders' Fees.  Except for Goldman, Sachs & Co.

and McKinsey and Co., whose fees will be paid by Seller, as of the date of      

this Agreement there is no investment banker, broker, finder or other           

intermediary which has been retained by or is authorized to act on behalf       

of Kodak, Seller or any Majority Owned Subsidiary who might be entitled to      

any fee or commission from Seller in connection with the transactions           

contemplated by this Agreement.  Seller and Kodak may retain one or more        

brokers or other intermediaries in connection with the sale of the UPT          

Facility as contemplated by Section 5.6.  Any fees or commissions of such       

brokers or other intermediaries may be paid as part of the transaction          

costs out of the gross proceeds of such sale.                                   

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  Section 3.18  Absence of Change.  Except (x) to the extent

arising out of or relating to the transactions contemplated by this             

Agreement and the proposed sale of Seller and Seller's other businesses,        

including restructuring transactions in connection with the offer and sale      

of the Transferred Business or (y) contracts entered into since December        

31, 1993 that are listed in Schedule 2.2(g), since December 31, 1993, (i)       

the Transferred Business has been operated in the ordinary course in a          

manner consistent with past practice and (ii) there has not been any change     

in the operations, properties, assets, condition, financial or otherwise,       

or prospects of the Transferred Business other than, in each case (i) and       

(ii), changes which would not individually or in the aggregate materially       

adversely affect Purchaser's ability to conduct the Transferred Business        

substantially as heretofore conducted.                                          

      Section 3.19  Reaffirmation of Representations.  Except as set

forth in Schedule 3.19, Seller hereby reaffirms that the representations        

and warranties made by Seller in Article VII of the Pharm A Agreement were      

true and correct as of the dates any assets were contributed by Seller to       

the joint venture established pursuant to the Pharm A Agreement, provided       

that with respect to any such representation and warranty qualified by the      

knowledge (or any similar term) of Seller, Seller hereby confirms that, to      

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the best of Seller's present knowledge, such representations and warranties     

were true and correct as of the dates any assets were contributed by Seller     

to the joint venture established pursuant to the Pharm A Agreement.             

      Section 3.20  Insurance.  Schedule 3.20 is a true and complete

list of all insurance policies that relate primarily to Assumed Liabilities     

or are Related to the Business.                                                 

    Section 3.21  Food and Drug Administration.  With respect to

Human Ethical Pharmaceutical Products included in the Transferred Business      

and either currently sold or under development in the United States and         

with respect to each facility in the United States at which Human Ethical       

Pharmaceutical Products included in the Transferred Assets are                  

manufactured, packaged or distributed, as the case may be:                      

    (a)   Seller or its subsidiaries hold all permits, licenses,

certificates or other authorizations of the United States Food and Drug         

Administration (the "FDA") and all similar state and local governmental         

agencies necessary to sell its existing Human Ethical Pharmaceutical            

Products other than those permits, licenses, certificates or authorizations     

the absence of which would not materially adversely affect Purchaser's          

ability to conduct the Transferred Business substantially as heretofore         

conducted.  To the knowledge of Seller, it is presently not in violation        

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of, and has not received from the FDA or any similar state or local             

governmental agency any notice or charge, which has not been complied with      

or withdrawn, asserting any violation of, the Federal Food, Drug, and           

Cosmetic Act, as amended (the "FDC Act") or any similar state or local law      

(including the rules or regulations promulgated thereunder), which              

violation would have a material adverse effect on Purchaser's ability to        

conduct the Transferred Business substantially as heretofore conducted.         

       (b)   To the knowledge of Seller, Seller and each Subsidiary is

in compliance with all FDA and similar state and local governmental agency      

requirements concerning the maintenance, compilation and filing of reports,     

including, without limitation, adverse drug experience reports, except          

where such non-compliance would not materially adversely affect Purchaser's     

ability to conduct the Transferred Business substantially as heretofore         

conducted.                                                                      

       (c)   To the knowledge of Seller, each facility included in the

Transferred Business which is used in connection with the manufacturing,        

packaging, distribution or sale of Seller's existing Human Ethical              

Pharmaceutical Products is in compliance with the FDC Act and the               

regulations promulgated thereunder, including, without limitation, the          

FDA's good manufacturing practice regulations, except where such non-           

compliance would not materially adversely affect Purchaser's ability to         

conduct                                                                         

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the Transferred Business substantially as heretofore conducted.                 

     (d)   Each ongoing clinical investigation conducted by Seller

that is required by law to be conducted under an Investigational New Drug       

application (an "IND") or similar application has an IND or similar             

application that is currently in effect.  To the knowledge of Seller, such      

IND is not subject to a clinical hold (except WIN 8883), and such               

investigation is in compliance with the terms and conditions of the IND and     

applicable FDA regulations.                                                     

     Section 3.22  No Other Representations or Warranties.  Except

for the representations and warranties contained in this Article III,           

neither Seller nor any other Person makes any other express or implied          

representation or warranty on behalf of Seller.                                 

ARTICLE IV    

REPRESENTATIONS AND WARRANTIES OF PURCHASER     

       Purchaser represents and warrants to Seller and Kodak as of the

date hereof and as of the Closing Date (except that representations and         

warranties that are made as of a specific date need be true only as of such     

date), as follows:                                                              

    Section 4.1  Organization and Qualification.  Purchaser is a

corporation duly organized, validly existing and in good standing under the     

laws of the jurisdiction of                                                     

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its incorporation and has all requisite corporate power and authority to        

own and operate the OTC Portion and to carry on such business as currently      

conducted.  Except as set forth on Schedule 4.1 hereto, Purchaser is duly       

qualified to do business and is in good standing as a foreign corporation       

in each jurisdiction where the ownership or operation of the OTC Portion or     

the conduct of such business requires such qualification, except where the      

failure to be so qualified or in good standing, as the case may be, would       

not materially adversely affect Seller's ability to conduct the business of     

the OTC Portion substantially as heretofore conducted.                          

Section 4.2  Subsidiaries; Joint Ventures, etc.  Each of

Sterling Midy S.A. and Sterling Midy Industrie S.A., each a societe anonyme     

under laws of the Republic of France, is a corporation duly organized,          

validly existing, and in good standing under the laws of its jurisdiction       

of organization and has all requisite corporate power and authority to own      

and operate its properties and assets and to carry on its business as           

presently conducted and is duly qualified to do business and is in good         

standing as a foreign corporation in each jurisdiction where the ownership      

or operation of its properties and assets or the conduct of its business        

requires such qualification, except where the failure to be so duly             

organized, validly existing, qualified or in good standing would not            

materially adversely affect                                                     

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Seller's ability to conduct the business of the OTC Portion substantially       

as heretofore conducted.  Purchaser has heretofore delivered to Seller true     

and complete copies of each such entity's governing documents as in effect      

as of the date hereof.                                                          

 Section 4.3  Corporate Authorization.  Purchaser has full

corporate power and authority to execute and deliver this Agreement and         

each of the Ancillary Agreements, and to perform their obligations              

hereunder and thereunder.  The execution, delivery and performance by           

Purchaser of this Agreement and each of the Ancillary Agreements have been      

duly and validly authorized and no additional corporate authorization or        

consent is required in connection with the execution, delivery and              

performance by Purchaser of this Agreement and each of the Ancillary            

Agreements.                                                                     

    Section 4.4  Consents and Approvals.  Except as specifically

set forth in Schedule 4.4 or as required by U.S. Antitrust laws, Argentina,     

Australia, Brazil, Canada, Mexico, EC Competition Law (or France, Germany,      

Italy, Spain, the United Kingdom, to the extent not subject to EC               

jurisdiction), Comprehensive Drug Abuse Prevention and Control Act of 1970,     

Drug Enforcement Agency, Bureau of Alcohol and Tobacco, Hazardous Waste         

facility permits, air permits, water permits and any other permits required     

by any other Environmental Law, Federal Food, Drug and Cosmetics Act, U.S.      

state wholesale drug licensing laws, the Exchange                               

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Act, the Nuclear Regulatory Act and any other similar laws and regulations,     

no consent, approval, waiver or authorization is required to be obtained by     

Purchaser from, and no notice or filing is required to be given by              

Purchaser to or made by Purchaser with, any Federal, state, local or other      

governmental authority or other Person in connection with the execution,        

delivery and performance by Purchaser of this Agreement and each of the         

Ancillary Agreements, other than in all cases those the failure of which to     

obtain, give or make would not materially adversely affect Seller's ability     

to conduct the business of the OTC Portion substantially as heretofore          

conducted or materially impair or delay the ability of Purchaser to effect      

the Closing.                                                                    

Section 4.5  Non-Contravention.  Except as set forth on 

Schedule 4.5, the execution, delivery and performance by Purchaser of this      

Agreement and each of the Ancillary Agreements, and the consummation of the     

transactions contemplated hereby and thereby, does not and will not             

(i) conflict with or violate any provision of the Articles of                   

Incorporation, Bylaws or other organizational documents of Purchaser, (ii)      

subject to obtaining the consents referred to in Section 4.4, conflict          

with, or result in the breach of, or constitute a default under, or result      

in the termination, cancellation or acceleration (whether after the filing      

of notice or the lapse of time or both) of any right or obligation of           

Purchaser under, or to a                                                        

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loss of any benefit to which Purchaser is entitled under, any OTC Portion       

Contract or result in the creation of any Encumbrance upon the OTC Portion,     

or (iii) assuming the consents and approvals listed in Sections 3.4 and 4.4     

are obtained, violate or result in a breach of or constitute a default          

under any law, rule, regulation, judgment, injunction, order, decree or         

other restriction of any court or governmental authority to which Purchaser     

is subject, including any Governmental Authorization, other than in the         

cases of clauses (ii) and (iii), any conflict, breach, termination,             

default, cancellation, acceleration, loss, violation or Encumbrance which,      

individually or in the aggregate, would not materially adversely affect         

Seller's ability to conduct the business of the OTC Portion substantially       

as heretofore conducted or materially impair or delay Purchaser's ability       

to perform its obligations hereunder.                                           

     Section 4.6  Binding Effect.  This Agreement constitutes, and

each of the Ancillary Agreements when executed and delivered by the parties     

thereto will constitute, a valid and legally binding obligation of              

Purchaser enforceable in accordance with its terms, subject to bankruptcy,      

insolvency, reorganization, moratorium and similar laws of general              

applicability relating to or affecting creditors' rights and to general         

equity principles.                                                              

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   Section 4.7  OTC Assets.  (a)  Schedule 4.7(a) sets forth a

list and description (including the country of registration) of all             

material OTC Assets.                                                            

(b)  Except as set forth in Schedule 4.7(b)(i), to the  

knowledge of Purchaser (i) with respect to OTC Assets other than                

trademarks, no product (or component thereof or process) used, sold or          

manufactured by the OTC Portion infringes on or otherwise violates the          

Intellectual Property of any other Person, (ii) with respect to trademarks      

constituting OTC Assets, there are no restrictions upon the trademarks          

listed in Schedule 4.7(b)(ii) that would materially affect the use of those     

trademarks in connection with the business of the OTC Portion, and (iii) no     

Person is challenging, infringing or otherwise violating the OTC Assets,        

except in each case for challenges, infringements or violations, that           

individually or in the aggregate, would not materially adversely affect         

Seller's ability to conduct the business of the OTC Portion substantially       

as heretofore conducted.                                                        

    Section 4.8  Title to Property.  (a)  The OTC Assets and the

OTC Shares constitute all the assets, properties and rights of Purchaser        

used in the conduct of the business of the OTC Portion in all material          

respects as currently conducted.                                                

  (b)   Purchaser has good title to the OTC Shares, free and

clear of all Encumbrances, except (i) as set forth                              

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in Schedule 4.8(b), (ii) liens for Taxes, assessments and other                 

governmental charges not yet due and payable or due but not delinquent or       

being contested in good faith by appropriate proceedings, (iii) mechanics',     

workmen's, repairmen's, warehousemen's, carriers' or other like liens           

arising or incurred in the ordinary course of business, original purchase       

price conditional sales contracts and equipment leases with third parties       

entered into in the ordinary course of business, and (iv) Encumbrances          

which, individually or in the aggregate, would not materially adversely         

affect Seller's ability to conduct the business of the OTC Portion              

substantially as heretofore conducted (all items included in (i) through        

(iv), together with any matter set forth in Schedule 4.8, are referred to       

collectively herein as the "OTC Portion Permitted Encumbrances").               

    Section 4.9  Finders' Fees.  Except for Lehman Brothers Inc.

and The Blackstone Group, whose fees will be paid by Purchaser, there is no     

investment banker, broker, finder or other intermediary which has been          

retained by or is authorized to act on behalf of Purchaser who might be         

entitled to any fee or commission from Purchaser in connection with the         

transactions contemplated by this Agreement.                                    

 Section 4.10  Financial Capability.  On the Closing Date,

Purchaser will have sufficient funds to effect                                  

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the Closing and all other transactions contemplated by this Agreement.          

      Section 4.11  Reaffirmation of Representations.  Except as set

forth in Schedule 4.11, Purchaser hereby reaffirms that the representations     

and warranties made by Purchaser in Article IX of the OTC Agreement were        

true and correct as of the dates any assets were contributed by Purchaser       

to the OTC Venture, provided that with respect to any such representation       

and warranty qualified by the knowledge (or any similar term) of Purchaser,     

Purchaser hereby confirms that, to the best of Purchaser's present              

knowledge, such representations and warranties were true and correct as of      

the dates any assets were contributed by Purchaser to the OTC Venture.          

     Section 4.12  No Other Representations or Warranties.  Except

for the representations and warranties contained in this Article IV,            

neither Purchaser nor any other Person makes any other express or implied       

representation or warranty on behalf of Purchaser.                              

ARTICLE V     

COVENANTS     

     Section 5.1  Access.  (a)  Prior to the Closing, Seller shall

permit Purchaser, any potential acquiror of any part of Purchaser's             

interest in the Transferred Assets designated by Purchaser (provided that       

such potential                                                                  

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acquiror shall have executed and delivered to each of Kodak, Seller and         

Purchaser a confidentiality agreement in form and substance mutually            

satisfactory to Kodak, Seller and Purchaser), and their respective              

representatives to have access, during regular business hours and upon          

reasonable advance notice, to the Transferred Assets, and Purchaser shall       

permit Seller, any potential acquiror of any part of the OTC Venture and        

their respective representatives to have access, during regular business        

hours and upon reasonable advance notice, to the OTC Portion, subject to        

reasonable rules and regulations of Seller or Purchaser, as the case may        

be, and shall furnish, or cause to be furnished, to Purchaser or Seller, as     

the case may be, any financial and operating data and other information         

that is available with respect to (x) the Transferred Business as Purchaser     

shall from time to time reasonably request or (y) the OTC Portion as Seller     

shall from time to time reasonably request.                                     

    (b)   Until the applicable statute of limitations (including

periods of waiver) has run for any Tax Returns filed or required to be          

filed covering the periods up to and including the Closing Date, Purchaser,     

with respect to the Transferred Assets and the Transferred Business, and        

Seller, with respect to the OTC Portion, each agrees to retain all Books        

and Records in existence on the Closing Date and after the Closing Date         

will provide Seller and Kodak or Purchaser, as the case may be, with            

information (including financial                                                

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information), and grant Seller and Kodak or Purchaser, as the case may          
be,                                                                             

access to such Books and Records for inspection and copying by Seller,          

Kodak or Purchaser, as the case may be, and, in each case, their agents at      

Seller's or Kodak's expense with respect to the Transferred Assets and the      

Transferred Business and Purchaser's expense with respect to the OTC            

Portion, upon reasonable request and upon reasonable notice.  After the         

expiration of such time period, no such Books and Records shall be              

destroyed by Purchaser or Seller without first advising the tax director of     

each of Kodak and Seller or Purchaser, as the case may be, in writing           

detailing the contents of any such Books and Records and giving Kodak and       

Seller or Purchaser, as the case may be, at least 120 days to obtain            

possession thereof.                                                             

      Section 5.2  Conduct of Business.  (a)  During the period from

the date hereof to the Closing, except as otherwise contemplated by this        

Agreement or as Purchaser shall otherwise agree in writing in advance with      

respect to the Business, Seller covenants and agrees that Seller and each       

of the Subsidiaries (other than Minority Subsidiaries) shall conduct the        

Business in the ordinary and usual course, and use its reasonable efforts       

to preserve intact its business and relationships with third parties.           

During the period from the date hereof to the Closing, except as otherwise      

provided for in this Agreement or as Purchaser shall otherwise consent          

(which consent shall not be                                                     

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unreasonably withheld) Seller covenants and agrees that it will continue        
to                                                                              

perform its obligations under the Pharm A Agreement, the Pharm B Agreement,     

the Development Agreement and the BMS Agreements in accordance with past        

practice and that with respect to the Business, other than in the ordinary      

and usual course, it shall and shall cause the subsidiaries (other than         

Minority Subsidiaries) to:                                                      

      (i)  not approve any new individual capital expenditure that

is in excess of $1,000,000;                                                     

       (ii)  not dispose of or incur, create or assume any Encumbrance

on any individual capital asset of the Business if the greater of the book      

value or the fair market value of such capital asset exceeds $1,000,000         

other than Permitted Encumbrances;                                              

   (iii)  not incur any indebtedness for money borrowed or enter

into any contract or other commitment (including any hedging arrangement or     

other derivative transaction), in each case that constitutes an Assumed         

Liability in excess of $1,000,000;                                              

  (iv)  not enter into any transaction that would materially

adversely affect Purchaser's ability to conduct the Transferred Business        

substantially as heretofore conducted;                                          

(v)  not increase materially the salary, wage, rate of

compensation, commission, bonus or other direct or indirect remuneration        

payable to, or other compensation of,                                           

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any Transferred Employees, or enter into any contract or other binding          

commitment in respect of any such increase, nor amend, adopt or terminate       

any Benefit Plan covering Transferred Employees or Former Employees in any      

way that materially increases the amount of the Assumed Liability in            

respect of such plan or enter into any negotiation in respect of or enter       

into any collective bargaining agreement covering Transferred Employees         

that would constitute an Assumed Liability;                                     

      (vi)  not amend in any respect that would materially adversely

affect the use and enjoyment thereof by Purchaser, or terminate, any of the     

leases relating to 90 Park Avenue, New York, New York or any other leases       

relating to a material Leased Real Property or default in the performance       

of any material covenant or obligation thereunder which default is not          

cured within any applicable grace period; and                                   

      (vii)  continue its pricing and sales practices substantially in

accordance with Seller's past practices.                                        

  (b)   Notwithstanding the foregoing, the Business shall be

permitted at all times prior to the Closing Date to make distributions of       

cash to Seller as provided in Section 2.7.                                      

    (c)   During the period from the date hereof to the Closing,

except as otherwise contemplated by this Agreement or as Seller shall           

otherwise agree in writing in advance,                                          

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Purchaser covenants and agrees that Purchaser shall conduct the business of     

the OTC Portion in the ordinary and usual course, and use its reasonable        

efforts to preserve intact its business and relationships with third            

parties.  During the period from the date hereof to the Closing, except as      

otherwise provided for in this Agreement or as Seller shall otherwise           

consent (which consent shall not be unreasonably withheld) Purchaser            

covenants and agrees that it shall continue to perform its obligations          

under the OTC Agreement in accordance with past practice.                       

Section 5.3  Reasonable Efforts; Good Faith.  Seller and

Purchaser will cooperate and use their respective reasonable efforts to         

fulfill the conditions precedent to the other party's obligations               

hereunder, including but not limited to, securing as promptly as                

practicable all consents, approvals, waivers and authorizations required in     

connection with the transactions contemplated hereby.  In each instance in      

which a consent, approval, waiver or authorization cannot be obtained prior     

to the Closing Date, Seller shall use its reasonable efforts to enter into      

such alternative arrangements and agreements with Purchaser as may be           

appropriate in order to permit Purchaser to receive and enjoy substantially     

similar rights and benefits and to enable Purchaser to conduct the              

Transferred Business until such consent or waiver is obtained.  If, after       

the exercise of reasonable efforts, any such consent or waiver is not           

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obtained, Seller agrees to cooperate with Purchaser in establishing any         

reasonable arrangements designed to provide, to the extent reasonably           

practicable, Purchaser with any and all rights of Seller under the relevant     

Contracts.  Purchaser and Seller will promptly file documentary materials       

required by the U.S. Antitrust laws, E.C. Competition law, Environmental        

Law and each of the other items listed in Section 3.4 and Section 4.4 and       

promptly file any additional information requested as soon as practicable       

after receipt of request thereof.                                               

      Section 5.4  Tax Matters.  (a)  Proration of Taxes.  Except as

otherwise agreed to by the parties, whenever it is necessary to determine       

the liability for Taxes for a portion of a taxable year or period that          

begins before and ends after the Closing Date, the determination of the         

Taxes for the portion of the year or period ending on, and the portion of       

the year or period beginning after, the Closing Date shall be determined by     

assuming that the taxable year or period ended at the close of business on      

the Closing Date, except that annual property taxes and exemptions,             

allowances or deductions that are calculated on an annual basis shall be        

prorated on a time basis.                                                       

  (b)   Computation of Tax Liabilities.  (i)  Whenever it is

necessary to determine the liability of Seller for Taxes, such                  

determination shall be made as if Seller had computed and paid such Taxes       

separate from Kodak.                                                            

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    (ii)  Whenever it is necessary to determine the liability of

Purchaser for Taxes, the determination shall be made as if Purchaser had        

computed and paid such Taxes separate from any entity owning an interest in     

Purchaser (a "Parent Entity").                                                  

      (iii) Whenever it is necessary to allocate the amount of Taxes

imposed on or with respect to any entity or any asset between the               

Transferred Business and any business retained by Seller or the OTC Portion     

and any business retained by Purchaser, such allocation shall be made by        

allocating all items of expense, loss, deduction, and credit between such       

businesses based upon the relative gross income of each such entity             

attributable to each such business for the taxable year or period to which      

each such item relates.                                                         

  (c)   Tax Returns.  (i)  Unless otherwise agreed to by the

parties, and except as otherwise appropriate by reason of any portion of        

the Transferred Assets not being transferred on the Closing Date, for the       

taxable year or period beginning before and ending on or after the Closing      

Date, (A) Kodak or Seller shall file or cause to be filed when due all U.S.     

Federal and U.S. state and local Tax Returns with respect to Taxes which        

constitute Excluded Liabilities and (B) Purchaser shall file or cause to be     

filed when due all Tax Returns (whether imposed by any national, state,         

departmental, provincial, local or other jurisdiction) with respect to          

Taxes which constitute Assumed                                                  

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Liabilities.  To the extent permitted by law or administrative                  
practice,                                                                       

the taxable year of each corporate or unincorporated entity which               

constitutes a Transferred Asset shall be treated as closing at the close of     

the Closing Date.                                                               

       (ii)  If either party shall be liable hereunder for any portion

of the Tax shown due on any Tax Returns required to be filed by the other       

party, the party preparing such Tax Return (the "Preparer") shall deliver a     

copy of the relevant portions of such Tax Return to the party so liable         

(the "Payor") for its review and approval, which may not be unreasonably        

withheld, not less than thirty (30) days prior to the date on which such        

Tax Returns are due to be filed (taking into account any applicable             

extensions) (the "Due Date").  If the Payor objects to any items reflected      

on such returns, the parties shall attempt to resolve the disagreement.  If     

the parties are unable to resolve the disagreement, the dispute shall be        

referred to the CPA Firm whose determination shall be binding upon the          

parties.  The fees and expenses of such CPA Firm shall be borne equally by      

Seller and Purchaser.  If the dispute has not been resolved or the CPA Firm     

has not made its determination prior to the Due Date, the Payor shall pay       

to the Preparer the amount requested by the Preparer (the "Requested            

Amount").  When the amount due to the Preparer from the Payor in respect of     

such Tax Return is finally determined, a settlement payment                     

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(the "Settlement Payment") shall be made in an amount equal to the              

Requested Amount minus the amount finally determined to be due, from the        

Preparer to the Payor if the Settlement Payment is a positive number, and       

from the Payor to the Preparer if the Settlement Payment is a negative          

number.                                                                         

(iii)  Purchaser shall cause the entities constituting  

Transferred Assets organized under the laws of Brazil, Argentina, U.K.,         

Japan and Mexico, Sanofi Winthrop PHARMA and any other corporate entity the     

shares of which are transferred to Purchaser or an Affiliate of Purchaser       

pursuant to Section 2.12 hereto not to take any action described in the         

following sentence during the period beginning on the Closing Date and          

ending on December 31, 1994.  The actions referred to in the prior sentence     

shall include only the following:  selling (including a deemed sale             

pursuant to Section 338 of the Code or a similar law of any other country),     

exchanging, distributing, reorganizing or otherwise disposing of the stock      

of any subsidiary corporation, disposing of any other property the sale of      

which produces personal holding company income within the meaning of            

Section 954(a)(1) of the Code and the regulations thereunder, and making        

any distribution to shareholders in excess of current earnings and profits      

as computed for U.S. Federal income tax purposes derived during the period      

beginning on the day following the Closing Date and ending on the first         

December 31 thereafter.                                                         

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       (iv)  All Tax Returns referred to in Section 5.4(c)(i) shall be

prepared and income, gain, expenses, losses, deductions and credits in          

respect of such returns shall be calculated in a manner consistent with         

prior years unless Kodak or Seller obtains the consent of Purchaser or          

Purchaser obtains the consent of Kodak to do otherwise, which consent shall     

not be unreasonably withheld in either case.                                    

       (d)   Information to be Provided by Purchaser.  With respect to

Tax Returns to be filed by Kodak or Seller pursuant to Section 5.4(c)(i)(A)     

hereof, Purchaser shall promptly, following the end of the taxable year         

beginning before and ending on or after the Closing Date, prepare and           

provide to Seller a package of tax information materials (the "Tax              

Package"), which shall be completed in accordance with past practice,           

including past practice as to providing the information, schedules and work     

papers and as to the method of computation of separate taxable income or        

other relevant measures of income of the Seller.                                

      (e)   Contest Provisions.  Each of Purchaser, Kodak and Seller

(the "Recipient") shall promptly notify each other party or parties whose       

liability for Taxes (including any such liability assumed pursuant to this      

Agreement and any obligation to indemnify any person in respect of such         

Taxes pursuant to Article VII of this Agreement may be materially affected      

thereby (each, an "Affected Party") in                                          

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writing upon receipt by the Recipient, of notice of any pending or              

threatened audits or assessments with respect to Taxes (the "Audited            

Taxes").  For purposes of this Section 5.4(e), the term "Affected Party"        

shall include a party whose Tax liability in respect of any period              

subsequent to the period or periods in which such Audited Taxes arose may       

be materially affected in any manner (including the reduction of asset          

basis or cost adjustments, the reduction of credit carryovers, the              

imposition of tax deficiencies and the increase of taxable income) by such      

audit or assessment.  The party liable for the Audited Taxes pursuant to        

Article II of this Agreement shall control the complete defense of the          

interests of itself and each Affected Party in any tax audit or                 

administrative or court proceeding relating to Taxes.  Each Affected Party      

shall be entitled to participate at its expense in such defense and to          

employ counsel of its choice at its expense.  No Affected Party may agree       

to settle any claim for such Audited Taxes without the prior written con-       

sent of each other Affected Party, which may not be unreasonably withheld.      

(f)   Allocation of Consideration.  The parties to this 

Agreement agree to determine the amount of and allocate the total               

consideration transferred by Purchaser to Seller pursuant to this Agreement     

(the "Consideration") in accordance with the fair market value of the           

assets and liabilities transferred.  Kodak, Seller and Purchaser shall          

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each prepare one or more schedules determining and allocating the               

Consideration and shall negotiate in good faith to reconcile such               

schedules.  If the Purchaser and Kodak cannot agree on a mutually               

acceptable determination, allocation or determination and allocation of the     

Consideration, Purchaser and Seller shall each determine, allocate or           

determine and allocate, as the case may be, such Consideration in the           

manner it considers appropriate.  Seller and Purchaser each agree to            

prepare and file an IRS Form 8594 in a timely fashion in accordance with        

the rules under Section 1060 of the Code.  To the extent that the               

Consideration is adjusted after the Closing Date, the parties agree to          

revise and amend the schedule and IRS Form 8594 in the same manner and          

according to the same procedure.  Any determination, allocation or              

determination and allocation of the Consideration agreed upon by the            

Parties pursuant to the second sentence of this subsection shall be binding     

on Kodak, Seller and Purchaser for all tax reporting purposes.                  

       (g)   Employee Withholding and Reporting Matters.  With respect

to the Transferred Employees, Purchaser shall, in accordance with and to        

the extent permitted pursuant to Revenue Procedure 84-77, 1984-2 C.B. 753,      

assume all responsibility for preparing and filing Form W-2, Wage and Tax       

Statement, Form W-3, Transmittal of Income and Tax Statements, Form 941,        

Employer's Quarterly Federal Tax                                                

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Return, Form W-4, Employee's Withholding Allowance Certificate, and Form W-     

5, Earned Income Credit Advance Payment Certificate.  Seller and Purchaser      

agree to comply with the procedures described in Section 5 of Revenue           

Procedure 84-77.                                                                

(h)  Transfer Taxes.  All excise, sales, use, transfer, 

(including real property transfer or gains), stamp, documentary, filing,        

recordation and other similar taxes which may be imposed or assessed as the     

result of (i) the transfer of the Transferred Assets to the Purchaser or an     

Affiliate of Purchaser pursuant to this Agreement or (ii) the transfer of       

the OTC Portion to Seller pursuant to this Agreement (the "Transfer             

Taxes"), together with any interest, additions or penalties with respect        

thereto and any interest in respect of such additions or penalties shall be     

borne equally by Seller and Purchaser.  Any Tax Returns that must be filed      

in connection with Transfer Taxes shall be prepared by the party primarily      

or customarily responsible under the applicable local law for filing such       

Tax Returns which will use its reasonable best efforts to provide such Tax      

Returns to the other parties at least 10 days prior to the date such Tax        

Returns are due to be filed.  Such Tax Returns shall be prepared consistent     

with the allocation of the Consideration pursuant to Section 5.4(f) hereof.     

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      (i)  Foreign Tax Receipts.  Purchaser shall deliver to the tax

director of Kodak certified copies of all receipts for any foreign Tax with     

respect to which Kodak or Seller could claim a foreign tax credit, and any      

other documentation required in connection with Seller or Kodak claiming or     

supporting a claim for such foreign tax credits promptly following either a     

request by Kodak for such receipts or documentation or payment of any such      

foreign Taxes by Purchaser, any Affiliate of Purchaser or any other party       

to whom Purchaser or an Affiliate of Purchaser transfers any portion of the     

Transferred Assets.  To the extent Purchaser transfers any equity interests     

constituting a 50% or greater interest in any entity constituting a             

Transferred Asset to a party or parties unrelated to Purchaser (each, an        

"Rx Buyer"), Purchaser shall be relieved of the obligation described in the     

preceding sentence to the extent that Purchaser obtains the written             

agreement of the Rx Buyer to fulfill Purchaser's obligations pursuant to        

the preceding sentence with respect to any taxes paid by Purchaser prior to     

such transfer or by an Rx Buyer after such transfer.                            

  (j)   Assistance and Cooperation.  The parties agree that,

after the Closing Date:                                                         

 (A)  The parties shall assist (and cause their respective

Affiliates to assist) the other parties in preparing any Tax Returns

with respect to the Business                                        

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which such other parties are responsible for preparing and filing;              

   (B)  The parties shall cooperate fully in preparing for any

audits of, or disputes with taxing authorities regarding, any Tax   

Returns and payments in respect thereof;                            

      (C)  The parties shall make available to each other and to any

taxing authority as reasonably requested all relevant Books and     

Records relating to Taxes;                                          

    (D)  The parties shall provide timely notice to the other in

 writing of any pending or proposed audits or assessments with respect

to Taxes for which the other may have a liability under this        

Agreement;                                                          

  (E)  Each party shall furnish the other with copies of all

relevant correspondence received from any taxing authority in       

connection with any audit or information request with respect to any

Taxes referred to in subsection (D) above; and                      

      (F)  The party requesting assistance or cooperation shall bear

the other party's out-of-pocket expenses in complying with such     

request to the extent that those expenses are attributable to fees  

and other costs of unaffiliated third-party service providers.      

 (k)   The Purchaser will not make an election pursuant to

Section 338 of the Code or a similar law of any                                 

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other country with respect to any corporation transferred pursuant to           

Section 2.12 hereof which is not a U.S. corporation, unless such election       

is needed by Purchaser in order to avoid taking a carryover basis, for U.S.     

Federal income tax purposes, in assets directly acquired from Seller or an      

Affiliate of Seller.                                                            

Section 5.5  Post-Closing Obligations of the Business to

Certain Employees.  (a)  Purchaser shall offer employment in comparable         

positions to all Transferred Employees on the Closing Date or upon the          

return of any such Transferred Employee to active employment, and will          

maintain for a period of two years after the Closing Date, without              

interruption, employee compensation and benefit plans, programs and             

policies and fringe benefits (including post-employment welfare benefits)       

that, in the aggregate, will provide benefits to Transferred Employees          

that, in the good faith judgment of Purchaser, are no less favorable than       

those provided pursuant to such employee benefit plans, programs and            

policies, and fringe benefits, of the Business as in effect on the Closing      

Date and listed on Schedule 3.10(a) and designated therein as a Section         

5.5(a) plan; provided, however, that the requirements of this sentence          

shall not apply to:  (i) Transferred Employees who are covered by a             

collective bargaining agreement, (ii) benefits the value of which is based      

on the value of the securities of Kodak or Seller or which gave Transferred     

Employees the                                                                   

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right to purchase securities of Kodak or Seller, (iii) benefits which vest,     

or the payment of which is accelerated or increased in amount, upon a           

change in control of Kodak, Seller or Purchaser, or (iv) benefits or            

changes therein mandated by applicable law.  Notwithstanding the foregoing,     

for a period of two years after the Closing Date, Purchaser will provide to     

each Transferred Employee (other than a Transferred Employee covered by a       

collective bargaining agreement) severance pay and benefits which are no        

less favorable than under Seller's severance plans, programs and policies       

as in effect on the date of this Agreement and listed on Schedule 3.10(a)       

and designated as a Section 5.5(a) severance plan, other than with respect      

to Seller's "Employee Protection Plan" or any other benefit plan, program       

or arrangement that provides benefits upon a change in control of Kodak.        

To the extent permitted by applicable law, Transferred Employees shall be       

given credit for all service with Seller or any subsidiary (or service          

credited by Seller or any subsidiary) under all employee benefit plans,         

programs and policies, and fringe benefits of the Business or Purchaser in      

which they become participants for purposes of eligibility, vesting and         

benefit accrual to the same extent as if rendered to Purchaser; provided,       

however, that nothing herein shall require Purchaser to provide duplicate       

benefits for the same period of service.  In addition, and notwithstanding      

the foregoing, Purchaser will                                                   

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assume the responsibility to pay, and shall provide to, Transferred             

Employees the benefits due and owing under the SWPRD relocation program and     

other Sterling Winthrop Inc. relocation programs and listed on Schedule         

3.10(a).                                                                        

(b)   "Transferred Employees" means all of the following

Employees:                                                                      

  (i)  Except as specifically agreed to between Seller and

Purchaser, all active Employees of (A) Sanofi Winthrop Territory B, (B)         

Sterling Winthrop's research division, (C) Sterling Organics and (D)            

Sterling Winthrop Pharmaceuticals Group headquarters, and in each case,         

their subsidiaries;                                                             

      (ii)  Sterling Winthrop K.K.'s active pharmaceutical Employees

in Japan; and                                                                   

   (iii)  those members of Seller's corporate staff as agreed by

Purchaser and Seller prior to Closing.                                          

For purposes of (A)-(D) in subsection (i) above and of  

subsection (ii) above, Employees shall be considered active even though on      

the Closing Date, they are (x) on temporary leave for purposes of jury or       

annual two-week national service/military duty; (y) on Nonmedical Leave of      

absence; provided, however, that no such Employee shall be guaranteed           

reinstatement to active service if his return to employment is contrary to      

the terms of his leave, unless otherwise required by applicable law; or (z)     

on disability or medical leave and for whom it has been 180 calendar days       

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or less since their last day of active employment; provided, however, that      

no such Employee shall be guaranteed reinstatement to active service if he      

is incapable of working in accordance with the policies, practices and          

procedures of Purchaser.                                                        

    (c)   (i)  Effective as of the Closing Date, Purchaser shall

establish one or more defined contribution plans (the "Transferee Savings       

Plans") for the benefit of Transferred Employees and Former Employees who       

were participants in the Eastman Kodak Employees' Savings and Investment        

Plan, the Sterling Winthrop Inc. Salaried Employees' Savings Plan and the       

Sterling Winthrop Inc. Hourly Employees' Savings Plan (the "Seller Savings      

Plans").  Such Transferred Employees are referred to hereinafter as the         

"Savings Plan Employees".                                                       

      Kodak and Seller shall cause to be transferred from the Seller

Savings Plans to the Transferee Savings Plans the liability for the account     

balances of the Savings Plan Employees, together with assets (the form of       

which shall be agreed to by the parties) the fair market value of which is      

equal to such liability, and Purchaser shall cause the Transferee Savings       

Plans to accept such transfers.  The transfer of assets shall take place        

within 90 days after the Closing Date; provided, however, that in no event      

shall such transfer take place until the later of (i) the furnishing to         

Seller by Purchaser of a favorable determination letter from                    

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the Internal Revenue Service with respect to the qualification of the           

Transferee Savings Plans under Section 401(a) of the Code, and (ii) the         

receipt by Seller of favorable determination letters from the Internal          

Revenue Service with respect to the continued qualification of the Seller       

Savings Plans under Section 401(a) of the Code, as amended to comply with       

changes to the qualification requirements of Section 401(a) of the Code         

made by the Tax Reform Act of 1986 and other recent legislation and             

regulations.                                                                    

(ii)  On or before the Closing Date, Seller shall amend,

effective as of the Closing Date, the Sterling Winthrop Inc. Pension Plan       

for Hourly Employees and the Sterling Winthrop Inc. International Chemical      

Workers Union Pension Plan for Hourly Employees (the "Assumed Pension           

Plans") to make Purchaser (or a subsidiary thereof) the "plan sponsor" (as      

such term is defined in Section 3(16) of ERISA) thereof.  Seller will make      

appropriate amendments to the Assumed Pension Plans and the trust               

agreements thereunder to implement such change of plan sponsor.  Seller         

shall take all other actions necessary to enable Purchaser (or a subsidiary     

thereof) to assume, and Purchaser hereby agrees to assume (or cause a           

subsidiary to assume), all benefit liabilities and obligations with respect     

to the Assumed Pension Plans.  Seller shall, not later than 90 days after       

the Closing Date, cause the trustee of the trust under                          

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each Assumed Pension Plan to transfer to a trustee designated by Purchaser      

all of the assets of such Plan.  To the extent the assets are held in a         

master trust, the transfer shall be made in the form of cash or cash            

equivalents, or such marketable securities as the parties may agree.  From      

the date hereof to the date of such transfer (or if the assets are not held     

in a master trust, the Closing Date), Seller shall not, and shall not           

permit the trustee of any Assumed Pension Plan to, make any significant         

changes in the investment policy in connection with the management of the       

assets of such Plans.                                                           

(iii)  Effective as of the Closing Date, Purchaser shall

establish one or more defined benefit plans (the "Transferee Pension            

Plans") for the benefit of Retirement Plan Employees (as defined below) who     

participated in the Kodak Retirement Income Plan and the Sterling Products      

International Inc. Pension Plan for Salaried Employees who are Employed at      

Facilities Located in Puerto Rico (the "Seller Retirement Plans").  For         

purposes of this Agreement, "Retirement Plan Employees" means the               

Transferred Employees, the Former Employees (other than Former Employees of     

the Seller's L&F Division and Former Employees who are continuing to accrue     

a benefit under the Seller Retirement Plans) and the applicable                 

beneficiaries thereof.  The Transferee Pension Plans shall (A) recognize        

for all purposes thereunder the service of the Retirement Plan                  

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Employees which was recognized under the Seller Retirement Plans and (B)        

provide, upon the transfer of assets referred to below, that the benefit        

liabilities of the Retirement Plans Employees under the Transferee Pension      

Plans shall in no event be less than their benefit liabilities under the        

Seller Retirement Plans as of the Closing Date.                                 

       With respect to each Seller Retirement Plan, Seller shall cause

to be transferred from the trust under such Seller Retirement Plan to the       

trust under the Transferee Pension Plan assets, the value of which shall be     

equal to the lesser of (x) the sum of (1) the "accumulated benefit              

obligation" (as defined in Statement of Financial Accounting Standards          

No. 87) of the Retirement Plan Employees under such Seller Retirement Plan      

as of the Closing Date, calculated using the actuarial assumptions that         

were used in preparing the audited financial statements of Kodak and the        

Seller for the year ended December 31, 1993, except that the interest rate      

assumption shall be equal to the sum of (A) the yield to maturity of 30-        

year U.S. Treasury bonds on the Closing Date and (B) 75 basis points (such      

sum is herein referred to as the "Interest Rate") and (2) interest on the       

amount determined pursuant to the preceding clause (i) calculated at the        

Interest Rate, compounded daily, for the period from and including the          

Closing Date to, but excluding, the actual date of transfer or (y) the          

maximum amount permitted to be transferred in                                   

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accordance with Section 414(l) of the Code.  With respect to each               
Seller                                                                          

Retirement Plan, the excess, if any, of the amount described in clause (x)      

of the preceding sentence over the amount described in clause (y) therein,      

is referred to herein as the "Pension Shortfall Amount".                        

 Notwithstanding anything to the contrary in the preceding

paragraph, if the minimum amount required to be transferred in accordance       

with Section 414(l) of the Code exceeds the amount described in clause (x)      

of the first sentence of the preceding paragraph (such excess being             

referred to as the "Pension Excess"), then Seller shall cause such minimum      

amount to be transferred from the trust under the applicable Seller             

Retirement Plan to the trust under the Transferee Pension Plan.  Purchaser      

shall cause the Transferee Pension Plans to accept such transfers.              

   The amount to be transferred shall be equitably adjusted to

take into account benefit payments made from the Seller Retirement Plans to     

the Retirement Plan Employees after the Closing Date but prior to the date      

of transfer.  The amounts under the preceding two paragraphs shall be           

determined jointly by the respective actuaries for the Seller Retirement        

Plan and the Transferee Pension Plan.                                           

 The transfer of assets referred to above shall take place

within 180 days after the Closing Date; provided, however, that in no event     

shall such transfer take place until the last to occur of the following:        

(i) Purchaser has                                                               

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furnished to Seller a favorable determination letter from the Internal          

Revenue Service with respect to the qualification of the applicable             

Transferee Pension Plan under Section 401(a) of the Code, (ii) the receipt      

by Seller of a favorable determination letter from the Internal Revenue         

Service with respect to the continued qualification of the applicable           

Seller Retirement Plan under Section 401(a) of the Code, as amended to          

(A) comply with changes to the qualification requirements of Section 401(a)     

of the Code made by the Tax Reform Act of 1986 and other recent legislation     

and regulations and (B) provide for the transfer of assets and benefit          

liabilities referred to in this Section, and (iii) the receipt of any other     

necessary governmental approval.  Such transfer shall be made in the form       

of such readily marketable securities as the parties shall agree.               

 Notwithstanding anything contained in this Section to the

contrary, (A) in the event that the Internal Revenue Service or any other       

governmental agency takes the position in a determination letter, ruling,       

advisory opinion or other written or oral communication that the transfer       

of assets referred to in this Section cannot be made unless (i) additional      

contributions are made to a Seller Retirement Plan or a Transferee Pension      

Plan or (ii) a Seller Retirement Plan retains primary or secondary              

liability with respect to the benefit liabilities under such Seller             

Retirement Plan attributable to Transferred Retirement Plan                     

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Employees or (B) in the event that a lawsuit is instituted by any of the        

foregoing or by one or more participants in, or fiduciaries (other than         

Seller, Kodak or Purchaser) of, a Seller Retirement Plan or a Transferee        

Pension Plan which seeks to enjoin such transfer, to require additional         

contributions to a Seller Retirement Plan or Transferee Pension Plan, or to     

have a Seller Retirement Plan remain liable in whole or in part with            

respect to any of the benefit liabilities under such Seller Retirement Plan     

attributable to Transferred Retirement Plan Employees, then the transfer of     

assets referred to in this Section from such Seller Retirement Plan will        

not be made until the earliest of (I) the date the issues raised by the         

Internal Revenue Service or any other governmental agency or such lawsuit       

are resolved favorably, and Seller, Kodak and the Seller Retirement Plan        

shall make every effort in good faith to carry out the asset transfer,          

including, but not limited to, the vigorous defense of any lawsuit              

described in clause (B), and the exhaustion of all rights of available          

judicial review and appeal, or (II) the date Seller and Purchaser or Kodak      

and Purchaser, as applicable, enter into a written agreement to resolve on      

a basis mutually satisfactory to them the issues raised by the Internal         

Revenue Service or any other governmental agency or such lawsuit.  In the       

event of any delay beyond two years from the Closing Date of the transfer       

of assets and liabilities from a Seller Retirement                              

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Plan by reason of the preceding sentence, Kodak shall hold Purchaser            

harmless from any economic loss resulting from such delay.  Furthermore, if     

such transfer has not occurred by the fourth anniversary of the Closing         

Date by reason of the second preceding sentence, then there shall be no         

transfer of such assets and liabilities and Purchaser shall have no             

obligations under this Section 5.5(c)(iii), including the obligation to         

recognize service of the Retirement Plan Employees under the Transferee         

Pension Plan.                                                                   

       (iv)  Pending the completion of the transfers described in this

paragraph (c), Seller and Purchaser shall make arrangements for any             

required payments (A) to the Savings Plan Employees and the Retirement Plan     

Employees from the Seller Savings Plans and the Seller Retirement Plans and     

(B) to participants and beneficiaries in the Assumed Pension Plans.  Seller     

and Purchaser shall provide each other with access to information               

reasonably necessary in order to carry out the provisions of this paragraph     

and shall otherwise cooperate in the administration of said Plans for the       

benefit of the Transferred Employees and Former Employees.                      

(d)   Effective as of the Closing Date, all Transferred 

Employees shall cease to be covered by Seller's employee welfare benefit        

plans, including plans, programs, policies and arrangements which provide       

medical and dental coverage, life and accident insurance, disability            

coverage,                                                                       

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and vacation and severance pay (collectively, "Welfare Plans"), except to       

the extent provided otherwise by the applicable Welfare Plan.  Seller shall     

retain responsibility for, and sole liability in respect of, providing          

group health coverage required by Section 4980B of the Code or Section 601      

of ERISA ("Continuation Coverage") under the terms of the health plan           

maintained by Seller to (i) Employees of Seller who were employed in            

connection with the Business, who terminated employment prior to the            

Closing Date and who elected such Continuation Coverage or (ii) Employees       

of Seller who are employed in connection with the Business and who are          

entitled to such Continuation Coverage as a result of the transactions          

contemplated by this Agreement.                                                 

    (e)  Seller shall retain responsibility for all Welfare Plan

claims incurred by Transferred Employees (i) under any medical, dental or       

health plans for treatment or service rendered prior to the Closing Date;       

(ii) under any life insurance plans with respect to deaths occurring prior      

to the Closing Date; and (iii) any other payments or benefits due and           

payable but not paid on or prior to the Closing Date under any other            

Welfare Plans.  For purposes of this paragraph, a claim shall be deemed to      

have been incurred on the date on which medical or other treatment or           

service was rendered and not the date of the inception of                       

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the related illness to injury or the date of submission of a claim related      

thereto.                                                                        

  (f)  Purchaser shall include the Transferred Employees and

their beneficiaries in Purchaser's applicable medical, dental or health         

plans as of the Closing Date and such plans shall waive any preexisting         

condition limitations and shall honor any deductible and out of pocket          

expenses incurred by such Transferred Employees and their beneficiaries         

under Seller's medical, dental or health plans during the portion of the        

calendar year preceding the Closing Date.                                       

    (g)  Seller shall retain the liability for employee benefits

(other than as expressly provided otherwise in Sections 5.5(c) and 5.5(k))      

and deferred compensation payable to all employees of Seller and its            

subsidiaries who, on or before the Closing Date, have retired, are              

receiving or are eligible to receive long-term disability benefits, or have     

otherwise terminated employment, and to the beneficiaries and survivors of      

such employees (hereinafter referred to collectively as the "Former             

Employees").  Purchaser shall pay to Seller quarterly on an estimated           

basis, within 30 days, in accordance with Seller's statement of the             

estimated annual cost of the employee benefits and deferred compensation        

payable to the Former Employees under the plans and arrangements listed on      

Schedule 5.5(g), an amount equal to                                             

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the result of multiplying one fourth of such annual cost for each such plan     

or arrangement by the fraction, the numerator of which is equal to the          

number of U.S. Transferred Employees of the Business on the Closing Date,       

and the denominator of which is equal to the number of U.S. active              

employees of Seller and all of its subsidiaries on the Closing Date.  (The      

determination of whether an employee is an active employee shall be             

determined using the principles set forth in Section 5.5(b); provided,          

however, that in no event shall such fraction exceed seven-tenths; and          

provided further that with respect to the Sterling Winthrop Inc. Foreign        

Service Pension Plan such fraction shall be determined on the basis of non-     

U.S. employees and shall not exceed 46%.)  Any overpayment or underpayment      

of such annual cost shall be adjusted within 60 days after Seller furnishes     

to Purchaser a final statement of such annual costs, by a payment to Seller     

or to Purchaser, as applicable.                                                 

     (h)   Purchaser shall assume the liability for, and honor the

terms and conditions of, all executive employment security agreements of        

Transferred Employees in effect on the date of this Agreement and listed on     

Schedule 3.15(i).                                                               

  (i)   Seller and Purchaser shall use their best efforts to

provide for transfers of assets and liabilities from Seller's overseas          

benefit plans for Transferred Employees in a manner consistent with the         

general principles expressed in this Section.                                   

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      (j)   For a period of time not to exceed nine months after the

Closing Date, Seller and its Affiliates shall provide Purchaser, at             

Purchaser's reasonable expense, with such reasonable administrative             

services in respect of any employee benefit plan, program or arrangement        

adopted by Purchaser for the benefit of the Transferred Employees which is      

substantially similar to an employee benefit plan, program or arrangement       

of the Business as in effect on the Closing Date, as Purchaser may              

reasonably request.                                                             

(k)   (i)   Purchaser shall assume the rights and       

responsibilities with respect to Former Employees (other than Former            

Employees who, on the Closing Date, are receiving or are eligible to            

receive long-term disability benefits) who, as of the Closing Date, are         

then entitled to benefits under the Sterling Winthrop Inc. Group Insurance      

Plan for Salaried Employees-Retiree Medical Plan, Sterling Winthrop Inc.        

Group Insurance Plan for Hourly Employees-Retiree Medical Plan, Sterling        

Winthrop Inc. Life Insurance Plan for Salaried Employees-Retiree Life           

Insurance Plan, the Sterling Winthrop Inc. Life Insurance Plan for Hourly       

Employees-Retiree Life Insurance Plan, and the Sterling Winthrop Inc. Group     

Insurance Plan for its Employees in Puerto Rico-Retiree Medical Insurance       

Plan (hereinafter referred to collectively as the "Retiree Welfare Plans").     

The Former Employees referred to in the preceding sentence are referred to      

herein as the "Retiree Welfare Plan                                             

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Participants".  Seller represents that the census data supplied to              
the                                                                             

actuary who performed the January 1, 1993 valuation of post-employment          

welfare benefits of the Retiree Welfare Plans for purposes of reporting in      

accordance with Statement of Financial Accounting Standards No. 106 is          

accurate and complete in all material respects and consisted of all persons     

who would be considered as Retiree Welfare Plan Participants if "January 1,     

1993" were substituted for the "Closing Date" in the first sentence of this     

Section 5.5(k).  Seller represents to the best of its knowledge after due       

investigation, that it has reserved the right to amend or terminate the         

Retiree Welfare Plans.                                                          

      (ii)   Seller shall pay to Purchaser quarterly on an estimated

basis, within 30 days, in accordance with Purchaser's statement of the          

estimated annual cost of the benefits under the Retiree Welfare Plans           

payable with respect to the Retiree Welfare Plan Participants, an amount        

equal to the result of multiplying (A) one fourth of such annual cost by        

(B) one minus a fraction, the numerator of which is equal to the number of      

U.S. Transferred Employees of the Business on the Closing Date, and the         

denominator of which is equal to the number of U.S. active employees of         

Seller and all of its subsidiaries on the Closing Date.  (The determination     

of whether an employee is an active employee shall be determined using the      

principles set forth in Section 5.5(b); provided, however, that in no event     

shall                                                                           

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such fraction exceed seven-tenths.)  Any overpayment or underpayment of         

such annual cost shall be adjusted within 60 days after Purchaser furnishes     

to Seller a final statement of such annual costs, by a payment to Purchaser     

or to Seller, as applicable.                                                    

(l)   Seller shall reimburse Purchaser for the cost of  

severance benefits paid by Purchaser to any Transferred Employee whose          

employment is terminated as a direct result of the exercise after the           

Closing Date by an employee of Seller other than a Transferred Employee of      

"bumping rights" under a collective bargaining or other similar agreement.      

Purchaser shall reimburse Seller for the cost of severance benefits paid by     

Seller to any employee of Seller whose employment is terminated as a direct     

result of the exercise  after the Closing Date by a Transferred Employee of     

"bumping rights" under a collective bargaining or other similar agreement.      

      (m)   Effective as of the Closing Date, Purchaser shall assume

the liability as of the Closing Date for the benefits of Transferred            

Employees under the Sterling Winthrop Inc. Supplemental Executive               

Retirement Plan, the Sterling Winthrop Inc. Foreign Service Pension Plan        

and the Sterling Winthrop Inc. Supplemental Retirement Benefit Plan.            

    Section 5.6  UPT Facility Lease.  At the Closing, Seller and

Purchaser shall execute and deliver a lease agreement for the UPT facility      

(the "UPT Lease Agreement")                                                     

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located in Upper Providence Township, Pennsylvania (the "UPT Facility").        

The UPT Lease Agreement shall be subject to the terms and conditions set        

forth in Schedule 5.6.  Schedule 5.6 also sets forth certain additional         

provisions regarding the future operation and disposition of the UPT            

Faiclity by the Parties.                                                        

    Section 5.7  Compliance with WARN, etc.  With respect to the

Transferred Employees Purchaser will timely give all notices required to be     

given under, or will otherwise comply with, WARN or other similar statutes      

or regulations of any jurisdiction relating to any plant closing or mass        

layoff or as otherwise required by any such statute.  For this purpose,         

Purchaser shall be deemed to have caused a mass layoff if the mass layoff       

would not have occurred but for Purchaser's failure to employ the               

Transferred Employees in accordance with the terms of this Agreement.           

       Section 5.8  Further Assurances.  At any time after the Closing

Date, Seller and Purchaser shall cooperate with each other and shall            

promptly execute, acknowledge and deliver any other assurances or documents     

reasonably requested by Seller and Purchaser, as the case may be, and           

necessary for Seller and Purchaser, as the case may be, to satisfy its          

respective obligations hereunder or obtain the benefits contemplated            

hereby.  Such documents shall include, without limitation, documentation        

providing for the transfer                                                      

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to Purchaser of (i) all Ethical Intellectual Property that may                  

inadvertently be omitted from the transfer documentation to be executed at      

Closing, and (ii) all Shared Intellectual Property (other than trademark        

registrations) the ownership of which shall not have been determined prior      

to Closing that are determined by the parties in good faith to be allocable     

to the Transferred Business.  In the case of any Shared Intellectual            

Property (other than trademark registrations) that is identified as such        

after the Closing, the party determined to be the owner thereof shall           

execute and deliver one or more perpetual, assignable, royalty-free license     

agreements effective as of the Closing with respect to such Shared              

Intellectual Property.                                                          

       Section 5.9  Use of Corporate Names.  (a)  On the Closing Date,

Purchaser and Seller shall execute and deliver a royalty-free trademark and     

trade name agreement (the "Trademark and Trade Name Agreement") pursuant to     

which Seller will license to Purchaser the right to use the names               

"Sterling", "Sterling Organics" and "Sydney Ross" and related trademarks        

and to use the Sterling ankh to the extent currently used in the                

Transferred Business for a period of up to one year from the date of            

Closing.                                                                        

    (b)  On the Closing Date, Purchaser and Seller shall execute

and deliver a royalty-free trademark and trade name agreement (the "Trade       

Name Agreement") licensing all rights to the name "Midy" in combination         

with the name                                                                   

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"Sterling" to the OTC Owner for use in selling Over-the-Counter Human           

Pharmaceutical Products in countries where they are sold as of the date of      

this Agreement and providing that the name "Midy" will not be used by           

Purchaser or licensed by Purchaser to any other Person for use in respect       

of Over-the-Counter Human Pharmaceutical Products.                              

Section 5.10  License Agreements.  (a)  At the Closing, 

Purchaser and Kodak shall execute and deliver a license agreement relating      

to Kodak's nanoparticulate technology (the "Nanoparticulate License             

Agreement").  The Nanoparticulate License Agreement shall be subject to the     

terms and conditions set forth on Schedule 5.10(a).                             

  (b)  At the Closing, Purchaser and Kodak shall execute and

deliver a non-assignable (except upon the sale by the Purchaser of              

substantially all of the assets related to the license), royalty-free           

license agreement pursuant to which Kodak will license to Purchaser rights      

to use Kodak's chemical file to the extent necessary to permit Purchaser        

to, and to hire others on terms satisfactory to Kodak to, manufacture and       

sell (x) products currently manufactured and sold as part of the Business       

and (y) the products currently under development by the Business listed in      

Schedule 5.10(b) (the "Chemical License Agreement").                            

    (c)   Purchaser hereby grants to Kodak and its Affiliates an

irrevocable, worldwide, non-assignable (except upon the sale by Kodak or        

its Affiliates of substantially                                                 

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all of the assets or business pertaining to any product related hereto),        

royalty-free, non-exclusive license under (i) the medical safety injection      

delivery patents and patent applications listed in Schedule 5.10(c)(i)          

(including, without limitation, divisions, continuations, continuations-in-     

part, reissues and renewal applications), (ii) the primary packaging            

patents and patent applications listed in Schedule 5.10(c)(ii) (including,      

without limitation, divisions, continuations, continuations-in-part,            

reissues, extensions, and renewal applications), and (iii) the rights in        

technology embodied in the invention reports and technical reports listed       

in Schedule 5.10(c)(iii) (including, any subsequently filed patents and         

patent applications based on such rights in technology), to make, have          

made, use, sell and otherwise dispose of any products other than                

pharmaceutical products.  Purchaser shall not be obligated by Kodak or its      

Affiliates to file, prosecute or maintain any of the patents or patent          

applications included in the foregoing license and Purchaser may, at its        

sole discretion, discontinue any such filing, prosecution or maintenance.       

   (d)  At the Closing, Seller and Purchaser shall execute and

deliver a non-assignable (except upon the sale of substantially all of the      

assets related to the license by the Seller), royalty-free license              

agreement pursuant to which Purchaser will license to Seller Intellectual       

Property                                                                        

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owned by Purchaser and not included in the OTC Assets to the extent             

currently used in the business of the OTC Portion and to the extent             

necessary for the development, manufacture and distribution of current          

products of the OTC Portion and products currently under development by the     

OTC Portion (the "Sanofi License Agreement").                                   

    (e)  Prior to the Closing, Purchaser and Seller shall agree,

with respect to each item of Shared Intellectual Property (including            

software) other than trademark registrations, which party shall own such        

item of Shared Intellectual Property.  At the Closing, Purchaser and Seller     

shall take such steps as are necessary to transfer the Shared Intellectual      

Property (including software) to the party determined in accordance with        

the prior sentence to be the owner thereof and shall execute and deliver        

one or more, perpetual, assignable, royalty-free license agreements with        

respect to such Shared Intellectual Property (the "Shared Intellectual          

Property License Agreements").                                                  

(f)(i)  Seller and Purchaser shall reach agreement on the allocation

of ownership of trademark registrations owned by Seller (the "Trademarks")      

on or prior to Closing, and shall transfer or retain ownership, as the case     

may be, of the Trademarks at Closing.  Subject to Sections 5.10(f)(vi) and      

(vii), allocation of ownership, and any such retention or transfer, shall       

be subject to the following principles:                                         

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1.    subject to clauses 2, 4 and 5 below, each Trademark shall be  

     deemed to be Related to the Business (and therefore allocated

   to the Transferred Business) if the 1993 worldwide sales by

  Seller, its Affiliates (including, for these purposes, the

     entities included in the Pharm Ventures) and its licensees of

 Human Ethical Pharmaceutical Products marketed under such

Trademark exceed the 1993 worldwide sales by Seller, its

Affiliates (including, for these purposes, the entities 

      included in the Pharm Ventures) and its licensees of Over-the-

 Counter Human Pharmaceutical Products marketed under such

Trademark;                                              

2.    subject to clauses 4 and 5 below, in the event that either    

  (x) no products are marketed anywhere in the world under a

     Trademark as of the date hereof but one or more such products

      are planned to be launched or (y) the product was launched for

      the first time anywhere in the world in 1993 or 1994, then, in

each case, Seller and Purchaser shall consider the 1997 

     projected worldwide sales figures in Seller's 1993 long range

    plan for purposes of making the determination under clause 1

above;                                                  

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 3.    in the event that no products are marketed under a Trademark as

     of the date hereof and no products are planned to be launched

      under such Trademark, but the Trademark has been registered as

    a "defensive" or secondary trademark with respect to another

    Trademark, such Trademark shall be allocated along with such

other Trademark;                                        

4.    any Trademark that is not Related to the Business by          

       application of clause 1 or 2 above but that belongs to a family

   of trademarks or tradenames that is Related to the Business

shall be deemed to be Related to the Business; and      

 5.    any Trademark that is Related to the Business by application of

      clause 1 or 2 above but that belongs to a family of trademarks

   or trade names that is not Related to the Business shall be

deemed not to be Related to the Business.               

  (ii)  At the Closing, Purchaser and Seller shall take such steps

as are necessary to transfer the Trademarks to the party determined in          

accordance with Section 5.10(f)(i) to be the owner thereof.                     

(iii)  In the case of each Trademark that is allocated to either

party pursuant to clauses 1, 2 or 3 of Section 5.10(f)(i) and that              

constitutes Shared Intellectual Property, the owner hereby grants as of the     

Closing to the other party an exclusive, perpetual, assignable, royalty-        

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free Pharmaceutical License for each territory in which such other party        

uses such Trademark as of the date hereof with respect to the manufacture,      

marketing, sale and distribution of pharmaceutical products.                    

   (iv)  In the case of any Trademark that is allocated to Purchaser

pursuant to clause 4 of Section 5.10(f)(i), Purchaser hereby grants as of       

the Closing to Seller an exclusive, perpetual, assignable, royalty-free         

Pharmaceutical License with respect to each such Trademark on a worldwide       

basis, and Seller hereby grants as of the Closing to Purchaser an               

exclusive, perpetual, assignable, royalty-free Pharmaceutical Sublicense in     

the territories in which such Trademark is used on the date hereof for          

products that are Human Ethical Pharmaceutical Products.                        

    (v)  In the case of any Trademark that would have been allocated

to the Purchaser but for clause 5 of Section 5.10(f)(i), Seller hereby          

grants as of the Closing to Purchaser an exclusive, perpetual, assignable,      

royalty-free Pharmaceutical License with respect to each such Trademark on      

a worldwide basis, and Purchaser hereby grants as of the Closing to Seller      

an exclusive, perpetual, assignable, royalty-free Pharmaceutical Sublicense     

in the territories in which such Trademark is used on the date hereof for       

products that are Over-the-Counter Human Pharmaceutical Products.               

(vi)  Without limiting the generality of clause 5 of Section  

5.10(f)(i), the following Trademarks shall be the                               

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property of Seller:  (a) all Trademarks in the "pana" family of trademarks      

(including, without limitation, Panadol, Panamax, Panadeine, Panadeine          

Forte); (b) all Trademarks in the "solpa" family of trademarks (including,      

without limitation, Solpadol and Solpadeine); (c) Actiprofen; and (d)           

Pepsamar.  With respect to such Trademarks as are used on the date hereof       

for products that are Human Ethical Pharmaceutical Products, Seller hereby      

grants as of the Closing to Purchaser an exclusive, perpetual, assignable,      

royalty-free Pharmaceutical License in the territories in which such            

Trademarks are used on the date hereof for products that are Human Ethical      

Pharmaceutical Products.  In addition, Seller hereby grants as of the           

Closing to Purchaser an exclusive, perpetual, assignable, royalty-free          

Pharmaceutical License with respect to Actiprofen in Chile, provided that       

Actiprofen shall be introduced as a Human Ethical Pharmaceutical Product in     

such territory within 12 months after the Closing Date.                         

(vii)  Without limiting the generality of clause 5 of Section   

5.10(f)(i), the "phiso" family of trademarks (including, without                

limitation, Phisoderm and Phisohex) shall be the property of Seller.  With      

respect to products marketed, sold, supplied or distributed under the           

Phisoderm Trademark, Seller hereby grants as of the Closing to Purchaser an     

exclusive, perpetual, assignable, royalty-free Pharmaceutical License to        

use such Trademarks in connection                                               

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with the marketing, sale, supply and distribution of such products to the       

Hospital Business (as defined in the Asset Purchase and Sale Agreement          

between Signal Investment & Management Co. and Seller, dated as of June 17,     

1994) in the United States.  With respect to Phisohex, Seller hereby grants     

as of the Closing to Purchaser an exclusive, perpetual, assignable,             

royalty-free Pharmaceutical License on a worldwide basis, and Purchaser         

hereby grants as of the Closing to Seller an exclusive, perpetual,              

assignable, royalty-free Pharmaceutical Sublicense in the territories in        

which such Trademark is used on the date hereof for products that are Over-     

the-Counter Human Pharmaceutical Products.                                      

(viii)  The parties further agree that, in the event that any     

Trademark that is deemed to be Related to the Business by application of        

the above principles is not transferred to Purchaser at the Closing, Seller     

shall take such steps as may be necessary to effect such transfer where         

transfer is called for by this Section 5.10 (and to enter into the licenses     

provided for in Sections 5.10(f)(iii) or (iv)) as promptly as practicable.      

The parties further agree that, in the event that any Trademark that is not     

Related to the Business by Application of the above principles is               

transferred to Purchaser at the Closing, Purchaser shall take such steps as     

may be necessary to effect the return of such Trademark (and to enter into      

the licenses provided for in Sections 5.10(f)(iii) or (iv) as promptly as       

practicable.                                                                    

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(ix)  Without limiting the generality of clause 4 of Section  

5.10(f)(i), the following Trademarks shall be the property of Purchaser:        

(a) all Trademarks in the "win" family of trademarks (including, without        

limitation, Winasorb and Winasol); and (b) AAS.  Purchaser hereby grants as     

of the Closing to Seller an exclusive, perpetual, assignable, royalty-free      

Pharmaceutical License in the territories in which such Trademarks are used     

on the date hereof for products that are Over-the-Counter Human                 

Pharmaceutical Products.                                                        

     (x)  With respect to each license granted under paragraphs (iii),

(iv), (v), (vi), (vii), (viii) or (ix) above, the parties shall take such       

steps as are necessary to ensure that the Pharmaceutical License is valid,      

binding and enforceable, including making such filings and recording such       

documents as may be necessary.                                                  

 (xi)  In all cases where a Trademark in a territory is licensed

under this Section 5.10(f), the licensor shall be obligated to maintain         

said Trademarks so as to allow exclusive use by the licensee.  If the           

licensor does not intend to maintain any such Trademark in any territory,       

licensor will be obligated to offer to licensee the right to continue           

maintenance of that Trademark in that territory.  Thereafter, the Trademark     

will be owned by the party maintaining said Trademark.                          

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   (g)  At the Closing, Seller and Purchaser shall execute and

deliver a non-assignable (except upon a sale of a portion of the Seller's       

business, including Seller's L&F Products and consumer health divisions),       

royalty-free license agreement pursuant to which Purchaser will license to      

Seller the right to use the name "Winthrop" to the extent currently used in     

the businesses of Seller other than the Transferred Business for a period       

of one year from the date of Closing (the "Trade Name License Agreement").      

   (h)  At the Closing, Seller and Purchaser shall execute and

deliver an assignable, exclusive, royalty-free license agreement (the           

"Marcaine License Agreement") pursuant to which Purchaser will license to       

Kodak the benefit of a supplement S-023 to a new drug application relating      

to Marcaine 0.5% with epinephrine.                                              

(i)   Within 30 days following the Closing, Seller and  

Purchaser shall execute and deliver an assignable, exclusive, royalty-free      

license agreement (the "Phiso License Agreement") pursuant to which Seller      

will license to Purchaser the right (i) to use the Phisohex trademarks and      

(ii) to use the other Phiso prefix trademarks in connection with the            

hospital business to the extent such Phiso prefix trademarks are currently      

used by the Transferred Business.                                               

Section 5.11  Transition Services.  On the Closing Date,

Purchaser and Seller shall execute and deliver a transitional services          

agreement (the "Ethical Transitional                                            

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Services Agreement") pursuant to which for a period not to exceed six           

months following the Closing Date, Seller shall make available to Purchaser     

the head office support and administrative services currently being             

provided to the Business on a basis, and for a price, substantially             

consistent with Seller's recent historical practice and in accordance with      

the Seller's Shared Service Guidelines (May 1994), including, without           

limitation, computer and data processing services and any software              

associated therewith, customer billing services, customer equipment             

services, site services, utility services, distribution services and            

maintenance services for equipment included in the Transferred Assets.          

       Section 5.12  Supply Agreement.  (a)  At the Closing, Purchaser

and Seller shall execute and deliver one or more supply agreements (each an     

"Ethical Supply Agreement") pursuant to which Seller shall agree to             

maintain in place all agreements existing on the Closing Date (whether or       

not in writing) that provide for the supply by Seller of materials to the       

Transferred Business for a period of three years from the Closing Date or       

such longer period as the parties agree, subject to such terms and              

conditions regarding allocation of the unamortized portion as of the            

expiration of the agreement of the cost of equipment dedicated to               

manufacturing materials pursuant to such agreement as Seller and Purchaser      

shall agree prior to                                                            

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Closing.  Such agreement shall also provide that, should either party not       

intend to renew the term of such agreement upon the expiration of its term,     

such party shall give at least one year's prior written notice.                 

   (b)  At the Closing, Purchaser and Seller shall execute and

deliver one or more supply agreements (each an "OTC Supply Agreement")          

pursuant to which Purchaser shall agree to maintain in place all agreements     

existing on the Closing Date (whether or not in writing) that provide for       

the supply by Purchaser of materials to the OTC Business for a period of        

three years from the Closing Date or such longer period as the parties          

agree, subject to such terms and conditions regarding allocation of costs       

relating to equipment dedicated to manufacturing materials pursuant to such     

agreement as Seller and Purchaser shall agree prior to Closing.  Such           

agreement shall also provide that, should either party not intend to renew      

the term of such agreement upon the expiration of its term, such party          

shall give at least one year's prior written notice.                            

   (c)  At the Closing, Purchaser and Seller shall execute and

deliver a supply agreement regarding the Dudley facility located in Dudley,     

England (the "Dudley Supply Agreement"), pursuant to which all supply           

arrangements between the Dudley facility and the OTC Business as of the         

date of this Agreement will continue in force on the same terms for a           

period of five years commencing on the Closing                                  

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Date or such longer period as the parties agree, subject to such terms and      

conditions regarding allocation of costs relating to equipment dedicated to     

manufacturing materials pursuant to such agreement as Seller and Purchaser      

shall agree prior to Closing.  Such agreement shall also provide that,          

should either party not intend to renew the term of such agreement upon the     

expiration of its term, such party shall give at least one year's prior         

written notice.                                                                 

 (d)  Each of the Ethical Supply Agreement, the OTC Supply

Agreement and the Dudley Supply Agreement shall include pricing terms           

designed to maintain the same effective pricing structure as that               

prevailing under the currently existing arrangements, after giving effect       

to the transactions contemplated by this Agreement, all as more fully           

described in Schedule 5.12 hereto.                                              

   Section 5.13  Sublease Agreement.  At the Closing, provided

that Seller shall have obtained all required consents to such sublease,         

Purchaser and Seller shall execute and deliver the sublease agreement (the      

"Sublease Agreement") pursuant to which Purchaser shall sublease from           

Seller the portion of Seller's lease for its offices at 90 Park Avenue, New     

York, New York Relating to the Business (aggregating approximately 150,000      

square feet in such locations as Purchaser and Seller agree taking into         

account the relative desirability of the space) on the terms and at the         

price pursuant to which Seller leases such office space.                        

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In addition to any other amounts payable by Purchaser to Seller in respect      

of such office space, Purchaser shall make monthly payments to Seller in an     

amount equal to Seller's monthly amortization expense (determined in            

accordance with GAAP as interpreted and applied consistently with Seller's      

past practices) for Purchaser's allocable share of leasehold improvements       

made by Seller prior to the Closing, such allocation to be made in              

accordance with Seller's past allocation practices.  Seller and Purchaser       

shall cooperate in the reconfiguration of the office space in such facility     

so as (a) to relocate certain current uses related to the Business to other     

locations in such office space for purposes of configuring the space to be      

subleased to Purchaser hereunder into one or more contiguous blocks of          

space and (b) to facilitate the further sublease of such space by               

Purchaser, should it so desire, provided that any such reconfiguration          

shall accommodate Seller's reasonable plans for the use or occupancy of the     

remainder of the office space leased by Seller at the facility and shall        

not materially adversely affect Purchaser's and Seller's continued use of       

such office for the purposes for which they are currently used in               

connection with their respective businesses.  The costs of any such             

reconfiguration shall be shared by Seller and Purchaser in proportion to        

the respective amounts of space allocated to each of them hereunder.            

Furthermore, notwithstanding the foregoing,                                     

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Purchaser shall cooperate with any efforts by Seller to negotiate for           

Seller's landlord at such facility to release Seller from its obligations       

with respect to the subleased space and for Seller's landlord to lease the      

space to be subleased hereunder directly to Purchaser, and Purchaser and        

Seller shall cooperate in seeking an assignment of such space to Purchaser.     

      Section 5.14  Maintenance of Shared Service Arrangements.  (a)

At the Closing, Purchaser and Seller shall enter into a shared service          

agreement and a manufacturing agreement (the "Shared Service Agreement" and     

the "Toll Manufacturing Agreement," respectively) providing that Purchaser      

and Seller shall maintain in force all existing shared service and              

manufacturing arrangements between the Seller or the OTC Business, on the       

one hand, and the Pharm Ventures, on the other hand, and shall continue to      

apply Seller's Shared Service Guidelines (May 1994) to such arrangements.       

Subject to Section 5.12(c) with respect to the Dudley facility, such shared     

service and manufacturing arrangements shall remain in force until the          

earlier of (i) one year from the Last Closing, in the case of shared            

services, and three years from the Last Closing, in the case of shared          

manufacturing, and (ii) such date as the Purchaser and the purchaser of         

Seller's interest in the OTC Business (or the purchaser of Seller, as the       

case may be) shall agree.  Pursuant to these continuing arrangements, the       

Pharm                                                                           

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Ventures shall continue to provide shared services and manufacturing to the     

OTC Business on the same terms as such shared services and manufacturing        

have previously been provided to the OTC Business by the Pharm Ventures and     

shall continue to purchase shared services and manufacturing from the OTC       

Business on the same terms as such shared services and manufacturing have       

previously been purchased from the OTC Business.                                

   (b)   Purchaser and Seller hereby agree that regarding Dual

Products and AAS:                                                               

   (i)   With respect to Dual Products, the parties agree that

whenever any Dual Product has become an Over-the-Counter Human                  

Pharmaceutical Product in any country in which such Dual Product is as of       

June 22, 1994 marketed as a Human Ethical Pharmaceutical Product, (x)           

Purchaser may at its option require Seller or the purchaser of Seller's         

interest in the OTC Business or the purchaser of Seller, or any successor       

thereto or assignee thereof from time to time, as the case may be (such         

person being herein referred to as the "OTC Owner") to purchase and (y) the     

OTC Owner may at its option purchase from Purchaser, in each case (x) and       

(y) at fair market value, the rights to manufacture, market, sell and           

distribute such Dual Product in such country.  In the event that the OTC        

Owner purchases such rights, Purchaser will license to the OTC Owner all        

Intellectual Property necessary for the manufacturing, marketing, sale and      

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distribution of such Dual Product in such country and, in the case              
of                                                                              

trademarks, Purchaser shall assign the trademark and any registration           

thereof in each jurisdiction in such country to the OTC Owner as promptly       

as possible but, in any case, within one year from the date of sale of the      

rights with respect to such Dual Product in such country provided, however,     

that with respect to Panadeine, Panamax, Panadol and each other product         

using the "Pana" trademark (the Intellectual Property with respect to which     

will be owned by the OTC Owner), the right of Purchaser to use such             

Intellectual Property in any jurisdiction in which the OTC Owner acquired a     

Dual Product shall terminate.  If no agreement can be reached as to the         

fair market value of the rights to manufacture, market, sell and distribute     

a Dual Product as an Over-the-Counter Human Pharmaceutical Product in any       

country, (x) Purchaser shall be prohibited from manufacturing, marketing,       

selling or distributing such Dual Product in such country as an Over-the-       

Counter Human Pharmaceutical Product (it being understood that Purchaser        

may continue to manufacture, market, sell and distribute such product as an     

Ethical Human Pharmaceutical Product in such jurisdiction), provided,           

however, that these limitations on the manufacturing, marketing, sale and       

distribution rights with respect to such Dual Product shall not be taken        

into account in determining the fair market value of such rights; and (y)       

the parties shall cause the                                                     

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fair market value of the rights to manufacture, market, sell and distribute     

such Dual Product in such territory to be determined by an independent          

industry expert selected by the parties.  For purposes of this paragraph,       

Purchaser shall have the right to cause a Dual Product to become an Over-       

the-Counter Human Pharmaceutical Product in any territory if Purchaser has      

removed such product from the list for reimbursement in such territory,         

even if such product continues to be reimbursable by any supranational,         

national, regional, state or local government, court, governmental agency,      

authority, board, bureau, instrumentality or regulatory body governing          

reimbursement in such country in such territory.                                

     Purchaser shall be prohibited from transferring any rights to

manufacture, market, sell or distribute any Dual Product as an Over-the-        

Counter Human Pharmaceutical Product to any party other than the OTC Owner.     

     If (x) the OTC Owner acquires a Dual Product pursuant to this

Section 5.14(b)(i) and (y) Purchaser had, prior to the acquisition of such      

Dual Product by the OTC Owner, regularly marketed such Dual Product through     

medical promotion, then any medical promotion by the OTC Owner  shall be        

through Purchaser.  The terms of the medical promotion marketing                

arrangements between Purchaser and the OTC Owner shall be as agreed between     

such parties.                                                                   

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 (ii)  Notwithstanding any other provision of this Section

5.14(b), with respect to the rights to manufacture, market, sell and            

distribute Panamax, the OTC Owner shall only be entitled to exercise its        

rights under paragraph (i) above on the terms set forth in                      

Schedule 5.14(b)(ii).                                                           

      (iii)  With respect to the marketing by Purchaser of Solpadol,

Panadeine, Panadeine Forte, Panamax and each other product marketed under       

the name "Pana" in combination with any other name or word, Purchaser and       

the OTC Owner shall meet at least every six months to consult as to             

Purchaser's advertising and promotional materials.  In the event that the       

OTC Owner shall have reasonable objections to the content or proposed           

manner of use of any such advertising and promotional materials, Purchaser      

shall modify such materials accordingly.                                        

      (iv)  With respect to AAS, in the event it has become an Over-

the-Counter Human Pharmaceutical Product in Brazil, Purchaser may at its        

option require the OTC Owner to purchase, on the terms and conditions           

specified in paragraph (i) above, the rights to manufacture, market, sell       

and distribute AAS in Brazil.   Purchaser may sell AAS in Brazil as an          

Over-the-Counter Human Pharmaceutical Product.  Other than as provided for      

in this Section 5.14(b)(iv) Purchaser may not sell the rights to                

manufacture, market, sell and distribute AAS in Brazil for a period of four     

years following the Closing.                                                    

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   (c)   A list of countries in which the parties believe Dual

Products are currently marketed as Human Ethical Pharmaceutical Products is     

attached as 5.14(c).                                                            

      Section 5.15  Dental Agreements.  At the Closing, Seller shall

transfer and assign to Purchaser, and Purchaser shall accept and assume,        

all of Seller's rights and obligations under the Dental Agreements.             

Notwithstanding the foregoing, in the event that, based on its review of        

the Books and Records, Purchaser determines that the terms relating to          

pricing contained in the Master Purchase Agreement, dated as of June 17,        

1994, between Sanofi Winthrop L.P. and Kodak are less favorable to              

Purchaser than those applied in past practice prior to the execution of         

such agreement, Purchaser shall have the right to terminate the Dental          

Agreements without any further liability (notwithstanding any provision of      

the Dental Agreements to the contrary), provided, that, in the event of any     

such termination, Purchaser and Kodak shall immediately enter into              

appropriate supply and licensing arrangements designed to ensure the            

continued long-term supply to Kodak of the products covered by the Dental       

Agreements and the licensing to Kodak of all Intellectual Property licensed     

under the Dental Agreements, all subject to the same terms and conditions       

(not limited to pricing) as those in effect prior to the execution of such      

Dental Agreements.                                                              

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    Section 5.16  Insurance.  (a)  Kodak and Seller shall, until

the Closing, maintain insurance coverage with respect to the Transferred        

Business at presently existing levels so long as such insurance is              

available at commercially reasonable rates.                                     

(b)   With respect to property insurance underwritten by

(i) Wheeling Insurance Company and (y) all other insurance companies that       

are not Affiliates of Kodak, Kodak or Seller will promptly file and             

diligently prosecute all claims relating to any loss suffered by the            

Transferred Business after December 31, 1993 that is covered by such            

insurance.  To the extent that Kodak or Seller receives payment in respect      

of any such claim Kodak or Seller will either (a) apply the amounts             

received to the Transferred Business in the event such amounts are received     

prior to Closing or (b) pay over such amounts to Purchaser.  To the extent      

permissible under the terms of such insurance policies and applicable law,      

Kodak or Seller shall cause Purchaser to be a named beneficiary under such      

insurance policies and, as of the Closing Date, to assign outstanding           

claims to Purchaser.                                                            

   (c)   With respect to insurance covering liability to third

parties underwritten by (x) Wheeling Insurance Company and (y) all other        

insurance companies that are not Affiliates of Kodak and that is written on     

a claims-made basis, Kodak or Seller will promptly file and diligently          

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prosecute all claims relating to any liability that constitutes or would        

constitute an Assumed Liability and that is covered by such insurance.  To      

the extent that Kodak or Seller receives payment in respect of any such         

liability which had not been discharged by Seller prior to Closing, Kodak       

or Seller will either apply such amounts to discharge (to the extent of         

such amounts) such liability prior to the Closing or pay over such amounts      

to Purchaser at or after Closing, in either case promptly after the receipt     

thereof by Kodak or Seller.  Seller will assign outstanding claims to           

Purchaser as of the Closing Date.                                               

       (d)   With respect to insurance of Seller covering liability to

third parties that is written on an occurrence basis, to the extent Seller      

receives payment in respect of any claim relating to a liability that           

constitutes or would constitute an Assumed Liability and has not been           

discharged prior to Closing, Seller will either apply such amounts to           

discharge (to the extent of such amounts) such liability prior to the           

Closing or will pay over such amounts to Purchaser at or after Closing, in      

either case promptly after receipt thereof by Seller.  Seller shall, to the     

extent permissible under the terms of such insurance policies and               

applicable law, cause Purchaser to be a named beneficiary in respect of any     

claims relating to Assumed Liabilities which had not been discharged by         

Seller prior to Closing and, as                                                 

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of the Closing Date, to assign outstanding claims to Purchaser.                 

       Section 5.17  Closing Asset and Liability Statement.  Within 60

days following the Closing Date, Seller will deliver to Purchaser an asset      

and liability statement, dated as of the Closing Date, prepared as set          

forth under Section 3.7.                                                        

  Section 5.18  Schering Agreement.  Seller will endeavor to

assist Purchaser in obtaining Schering's consent to the assignment by           

Purchaser of the Schering Agreement upon the resale of the diagnostic           

imaging business by Purchaser.                                                  

    Section 5.19  Confidentiality.  (a)  From and after the date

hereof, each of Kodak and Seller shall keep, and shall cause their              

respective Affiliates, officers, directors, employees and agents to keep,       

confidential all information proprietary to the Transferred Business that       

has been acquired by Kodak or Seller, as the case may be, through its           

ownership and management of the Transferred Business, including information     

acquired from Purchaser in connection with the Pharma Venture provided that     

the foregoing restriction shall not apply to information that (i) is or         

hereafter becomes generally available to the public other than by reason of     

any default with respect to confidentiality under this Agreement, (ii) was      

included in the Confidential Memorandum -- Sterling Winthrop                    

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Pharmaceuticals Group (including annexes), dated June, 1994, prepared           
by                                                                              

Goldman, Sachs & Co., (iii) is hereafter disclosed to Kodak or Seller by a      

third party who is not in default of any confidentiality obligation to          

Purchaser, (iv) is hereafter developed by or on behalf of Kodak or Seller,      

without reliance on confidential information acquired prior to the date         

hereof through the ownership and management of the Transferred Business,        

(v) is submitted by Kodak or Seller to governmental agencies, provided that     

reasonable measures shall be taken to assure confidential treatment of such     

information, (vi) is provided by Kodak or Seller under appropriate terms        

and conditions, including confidentiality provisions equivalent to those in     

this Agreement, (X) to third parties for consulting, accounting, legal and      

similar purposes, or (Y) to prospective purchasers of Seller or of all or       

any portion of the Excluded Assets to the extent considered reasonably          

necessary by Kodak or Seller to facilitate such purchase, (vii) Kodak or        

Seller considers reasonably necessary to disclose in connection with any        

action, suit or proceeding before any court or any governmental or other        

regulatory agency or body or any arbitral panel, or any audit or                

investigation brought by any governmental or other regulatory agency or         

body, (viii) Kodak or Seller considers reasonably necessary to disclose in      

order to assert any claim against any insurer or other third party,             

(ix) Kodak or Seller considers reasonably                                       

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necessary to disclose in connection with the performance of their               

respective obligations under this Agreement and the Ancillary Agreements        

and the consummation of the transactions contemplated hereby and thereby or     

(x) is required to be disclosed in compliance with applicable laws or           

regulations or order by a court or other governmental or regulatory agency      

or body having competent jurisdiction.  Each party recognizes that any          

violation of this confidentiality provision would cause Purchaser               

irreparable harm and agrees that Purchaser shall be entitled, in addition       

to any other right or remedy it may have, at law or in equity, to an            

injunction without the posting of any bond or other security, enjoining         

Kodak, Seller, their Affiliates and their respective officers, directors,       

employees and agents from any violation or potential violation of this          

Section.                                                                        

       (b)   From and after the date hereof, Purchaser shall keep, and

shall cause its Affiliates, officers, directors, employees and agents to        

keep, confidential all information proprietary to the OTC Business that has     

been acquired by Purchaser through its ownership and participation in the       

OTC Venture, including information acquired from Kodak or Seller in             

connection with the OTC Venture, provided that the foregoing restriction        

shall not apply to information that (i) is or hereafter becomes generally       

available to the public other than by reason or                                 

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any default with respect to confidentiality under this Agreement, (ii) is       

hereafter disclosed to Purchaser by a third party who is not in default of      

any confidentiality obligation to Kodak or Seller, (iii) is hereafter           

developed by or on behalf of Purchaser, without reliance on confidential        

information acquired prior to the date hereof through the ownership and         

participation in the OTC Venture, (iv) is submitted by Purchaser to             

governmental agencies, provided that reasonable measures shall be taken to      

assure confidential treatment of such information, (v) is provided by           

Purchaser to third parties under appropriate terms and conditions,              

including confidentiality provisions equivalent to those in this Agreement,     

for consulting, accounting, legal and similar purposes, (vi) Purchaser          

considers reasonably necessary to disclose in connection with any action,       

suit or proceeding before any court or any governmental or other regulatory     

agency or body or any arbitral panel, or any audit or investigation brought     

by any governmental or other regulatory agency or body, (vii) Purchaser         

considers reasonably necessary to disclose in order to assert any claim         

against any insurer or other third party, (viii) Purchaser considers            

reasonably necessary to disclose in connection with the performance of          

their respective obligations under this Agreement and the Ancillary             

Agreements and the consummation of the transactions contemplated hereby and     

thereby or (ix) is                                                              

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required to be disclosed in compliance with applicable laws or regulations      

or order by a court or other governmental or regulatory agency or body          

having competent jurisdiction.  Each party recognizes that any violation of     

this confidentiality provision would cause Kodak or Seller, as the case may     

be, irreparable harm and agrees that each of Kodak and Seller shall be          

entitled, in addition to any other right or remedy it may have, at law or       

in equity, to an injunction without the posting of any bond or other            

security, enjoining Purchaser, its Affiliates and their respective              

officers, directors, employees and agents from any violation or potential       

violation of this Section.                                                      

      Section 5.20  Schedules.  Schedules 1.1(h), 1.1(d), 1.1(j) and

3.2(a)(i) attached hereto are true and complete in all material respects.       

As promptly as possible after the date hereof and in any event not later        

than July 15, 1994, Seller shall deliver to Purchaser copies of such            

schedules, revised to reflect all of the information required to be             

reflected thereon and to correct any errors thereon (at which time such         

revised Schedules shall replace the Schedules attached hereto for all           

purposes under this Agreement and shall be deemed to have been attached         

hereto as of the date hereof).                                                  

       5.21  Phiso.      (a)   Sterling and Kodak shall bear all costs

associated with the discontinuation of the manufacturing of Phisohex,           

Phisoderm and the other Phiso                                                   

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related products (the "Phiso Products") at Rensselaer Site I, provided,         

however, that the Demolition (as defined below) and the costs associated        

with the Demolition of building seven at Rensselaer Site I which is             

currently used for manufacturing the Phiso Products (the "Phiso Building")      

is subject to Sections 5.21(b), (c) and (d) below.                              

     (b)   The owner of Rensselaer Site I shall be responsible for

causing the demolition of the Phiso Building and any required restoration       

of the real property underlying the Phiso Building in order to make it          

suitable for industrial use (the "Demolition"), which Demolition shall not      

occur prior to April 1, 1995.  The owner of Rensselaer Site I shall submit      

its plan of Demolition to Kodak for approval, which approval shall not be       

unreasonably withheld, prior to beginning the Demolition of the Phiso           

Building.                                                                       

     (c)   Sterling shall indemnify the owner of Rensselaer Site I

for those Demolition costs in excess of $1 million and the owner of             

Rensselaer Site I shall reimburse Sterling to the extent that the               

Demolition costs are less than $1 million.  Sterling shall indemnify the        

owner of Rensselaer Site I for all Losses (as defined in Section 7.2)           

arising out of the operation of the Phiso Building and the manufacture of       

the Phiso Products at Rensselaer Site I after the Closing.  The indemnity       

and reimbursement obligations contained in this Section 5.21(c) shall be        

independent of the liability limits and thresholds contained in Sections        

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7.2 and 7.3, except with respect to any environmental remediation of the        

soil or groundwater under or surrounding the Phiso Building that may be         

required by law as a result of the Demolition (but such exception shall not     

apply to any required environmental remediation of or within the Phiso          

Building itself conducted as part of the Demolition).                           

      (d)   The Closing Working Capital Statement shall include, and

notwithstanding anything to the contrary herein the Opening Working Capital     

Statement shall not include, a liability of $1 million as a reserve             

established with respect to the Demolition.                                     

Section 5.22      Subrogation and Related Matters                   

(a)   In relation to the civil litigation Sterling      

Pharmaceuticals, Inc. et al. v. Rosenmund, Inc., et al., Civil Action No.       

92-2855 (CC) in the United States District Court for the District of Puerto     

Rico, Sterling Pharmaceuticals, Inc. and Allendale Mutual Insurance Company     

v. Borinquen Container Corp., Transportes Mercado, Raul Mercado, Ramon          

Amador and Felix M. Figueroa-Fliciano, in the Superior Court of Puerto          

Rico, Civil Action No. COP-93-1102, respectively, (the "Actions"),              

Northfield Insurance Company v. Gaston County Dyeing Machine Company, Inc.,     

et al., Civil Action No. 93-2475 in the United States District Court for        

the District of Puerto Rico and Gaston County Dyeing Machine Company v.         

Northfield Insurance Company, et al., Civil Action No. 94-CVS-1715 in the       

Superior Court for Mecklenburg                                                  

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County, North Carolina, respectively, (the "Related Actions"), Purchaser        

agrees to cooperate with Allendale Mutual Insurance Company ("Allendale")       

and its attorneys, agents and employees (pursuant to Allendale's rights of      

subrogation to the rights of Seller and Kodak under Allendale Policy No.        

CC295), and Kodak and its attorneys, agents and employees, in connection        

with the prosecution of any Actions and the defense of the Related Actions      

by Allendale or Kodak, as the case may be.                                      

    (b)   Purchaser agrees, upon the reasonable request of Kodak

which shall not unduly disrupt the operation of Purchaser's business, to        

use best efforts (i) to make all Transferred Employees who may have             

knowledge of the claims, counterclaims or defenses asserted in the Actions      

and Related Actions available to Allendale and Kodak to testify in person       

at depositions related to and at the trial of, the Actions and Related          

Actions, (ii) to provide Allendale, Kodak and their attorneys, agents and       

employees with access to (x) all Transferred Employees who may have             

knowledge of the claims, counterclaims or defenses asserted in the Actions      

and Related Actions; (y) all documents in the possession, custody or            

control of Purchaser and the agents or employees of Purchaser which may be      

related to the claims, counterclaims or defenses asserted in the Actions        

and Related Actions; and (z) all facilities of Seller, including Seller's       

facilities located at Barceloneta, Puerto                                       

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Rico, 90 Park Avenue, New York, New York and Rensselaer, New York, which        

are either involved in the production of Iohexol or may contain information     

related to the Actions or Related Actions and any physical evidence which       

is currently in the possession, custody or control of Purchaser,                

Transferred Employees or agents of Purchaser.                                   

 For the purposes of clause (x) of this paragraph (b)(ii),

"access" shall include verbal contact (by telephone or in person) and           

written contact (by letter or facsimile).  For the purposes of clause (y)       

of this paragraph (b)(ii), "access" shall include the ability to review         

documents at the location where such documents are usually maintained on        

reasonable notice and during normal business hours, to review documents         

with the agents or employees of Purchaser at the usual place of business of     

such agents or employees, and to obtain copies of such documents.               

      (c)   In the event that Purchaser sells or assigns, or a third

party succeeds to, Purchaser's interests in Seller's former facilities in       

Barceloneta, Puerto Rico, 90 Park Avenue, New York, New York and                

Rensselaer, New York, as the case may be, Purchaser agrees to cause such        

transfer, assignment, or succession, to be made subject to the assumption       

by the assignee, transferee or successor, of all of the obligations of          

Purchaser contained in paragraphs (a), (b) and (c) of this Section 5.22.        

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       (d)   Kodak agrees to reimburse Purchaser (and all assignees or

transferees of, or successors to, Purchaser's interests in Seller's             

facilities located at Barceloneta, Puerto Rico, 90 Park Avenue, New York,       

New York and Rensselaer, New York) for all transportation costs, lodging        

and other reasonable costs and expenses incurred by Purchaser (and all          

assignees or transferees of, or successors to, Purchaser's interests in         

Seller's facilities in Barceloneta, Puerto Rico, 90 Park Avenue, New York,      

New York and Rensselaer, New York) in complying with the provisions of this     

Section 5.22.                                                                   

(e)   Nothing in this Section 5.22 shall be construed as

excluding from the Transferred Assets, or otherwise waiving or limiting         

Purchaser's rights with respect to, any claims of Seller to which Allendale     

is subrogated.                                                                  

ARTICLE VI    

CONDITIONS TO CLOSING     

      Section 6.1  Conditions to the Obligations of Kodak, Purchaser

and Seller.  The obligations of the parties hereto to effect the Closing        

are subject to the satisfaction (or waiver) prior to the Closing of the         

following conditions:                                                           

  (a)  HSR and Other Antitrust Laws.  All filings under U.S.

Antitrust Laws, EC competition law and other                                    

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similar laws shall have been made and any required waiting period under the     

such laws applicable to the transactions contemplated hereby shall have         

expired or been earlier terminated.                                             

   (b)  No Injunctions.  No court or governmental authority of

competent jurisdiction shall have enacted, issued, promulgated, enforced or     

entered any statute, rule, regulation, or non-appealable judgment, decree,      

injunction or other order which is in effect on the Closing Date and            

prohibits the consummation of the Closing.                                      

   (c)   Consents and Approvals.  All Required Approvals shall

have been obtained.                                                             

   (d)  Schering.  Either Schering shall have consented to the

assignment to Purchaser of the Schering Agreement or Seller shall have          

granted Purchaser an exclusive sublicense pursuant to the Schering              

Agreement.                                                                      

     Section 6.2  Conditions to the Obligations of Purchaser.  The

obligation of Purchaser to effect the Closing is subject to the                 

satisfaction (or waiver) prior to the Closing, of the following conditions:     

     (a)  Representations and Warranties.  The representations and

warranties of Seller and Kodak contained herein shall have been true and        

correct in all material respects when made and shall be true and correct in     

all material respects as of the Closing, as if made as of the Closing           

(except that representations and warranties that are                            

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made as of a specific date need be true in all material respects only as of     

such date), and Purchaser shall have received certificates to such effect       

dated the Closing Date and executed by a duly authorized officer of Seller      

and by a duly authorized officer of Kodak.  Notwithstanding the foregoing,      

if any representations or warranties of Seller or Kodak that were true and      

correct in all material respects as of the date of this Agreement have          

ceased to be true and correct in all material respects as of the Closing,       

the condition to Purchaser's obligations provided in this Section 6.2(a)        

shall nonetheless be deemed to be satisfied unless the failure of such          

representations and warranties as of the Closing results from or                

constitutes a Material Adverse Change with respect to the Business.             

   (b)  Covenants.  The covenants and agreements of Seller and

Kodak to be performed on or prior to the Closing shall have been duly           

performed in all material respects, and Purchaser shall have received           

certificates to such effect dated the Closing Date and executed by a duly       

authorized officer of Seller and by a duly authorized officer of Kodak.         

(c)  Legal Opinions.  Purchaser shall have received the 

opinions of Seller's and Kodak's counsels, dated as of the Closing Date,        

addressed to Purchaser substantially to the effect set forth in                 

Annex 6.2(c) hereto.                                                            

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      (d)   Ancillary Agreements.  Seller and Kodak, as the case may

be, shall have executed and delivered the Ancillary Agreements.                 

       (e)   No Material Adverse Change.  Since December 31, 1993, the

Business shall not have suffered a Material Adverse Change.                     

       Section 6.3  Conditions to the Obligations of Kodak and Seller.

The obligation of Seller and Kodak to effect the Closing is subject to the      

satisfaction (or waiver) prior to the Closing of the following conditions:      

      (a)   Representations and Warranties.  The representations and

warranties of Purchaser contained herein shall have been true and correct       

in all material respects when made and shall be true correct in all             

material respects as of the Closing, as if made as of the Closing (except       

that representations and warranties that are made as of a specific date         

need be true in all material respects only as of such date), and Seller and     

Kodak shall have received a certificate to such effect dated the Closing        

Date and executed by a duly authorized officer of Purchaser.                    

Notwithstanding the foregoing, if any representations or warranties of          

Purchaser that were true and correct in all material respects as of the         

date of this Agreement have ceased to be true and correct in all material       

respects as of the Closing, the condition to Seller's obligations provided      

in this Section 6.3(a) shall nonetheless be deemed to be                        

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satisfied unless the failure of such representations and warranties as of       

the Closing, in the aggregate, results from or constitutes a Material           

Adverse Change with respect to the OTC Venture.                                 

      (b)   Covenants.  The covenants and agreements of Purchaser to

be performed on or prior to the Closing shall have been duly performed in       

all material respects, and Seller and Kodak shall have received a               

certificate to such effect dated the Closing Date and executed by a duly        

authorized officer of Purchaser.                                                

       (c)   Legal Opinions.  Seller and Kodak shall have received the

opinions of Purchaser's counsels dated as of the Closing Date, addressed to     

Seller and Kodak substantially to the effect set forth in Annex 6.3(c)          

hereto.                                                                         

      (d)   Ancillary Agreements.  Purchaser shall have executed and

delivered the Ancillary Agreements.                                             

       (e)   No Material Adverse Change.  Since December 31, 1993, the

OTC Portion shall not have suffered a Material Adverse Change.                  

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ARTICLE VII     

SURVIVAL; INDEMNIFICATION     

     Section 7.1  Survival.  The representations and warranties of

Seller, Kodak and Purchaser contained in this Agreement shall survive the       

Closing for the period set forth in this Section 7.1.  All of the               

representations and warranties of Seller and Kodak contained in this            

Agreement and all claims and causes of action with respect thereto shall        

terminate upon expiration of 18 months after the Closing Date, except that      

the representations and warranties in Sections 3.1, 3.2, 3.3, 3.4, 3.5, 3.6     

and 3.16 shall have no expiration date, the representation and warranty in      

Section 3.9 shall survive, with respect to any Tax Return, until the            

applicable statute of limitations has run for any such Tax Return required      

to be filed on or before the date of this Agreement, the representation and     

warranty in Section 3.7 with respect to the Working Capital Statement shall     

survive only until the delivery of the Closing Working Capital Statement,       

and the representation in Section 3.12 shall survive for eight years and        

all of the representations and warranties of Purchaser contained in this        

Agreement and all claims and causes of action with respect thereto shall        

terminate upon expiration of 18 months after the Closing Date, except that      

the representations and warranties in Sections 4.1, 4.2, 4.3, 4.4, 4.5 and      

4.6 shall have no expiration date; it being understood that in the event        

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notice of any claim for indemnification under Section 7.2(a)(i) or              

Section 7.3(a)(i) hereof shall have been given (within the meaning of           

Section 9.1) within the applicable survival period, the representations and     

warranties that are the subject of such indemnification claim shall survive     

until such time as such claim is finally resolved.                              

  Section 7.2  Indemnification by Purchaser.  (a)  Purchaser

hereby agrees that it shall indemnify, defend and hold harmless Seller,         

Kodak, their Affiliates, and, if applicable, their respective directors,        

officers, shareholders, partners, attorneys, accountants, agents and            

employees and their heirs, successors and assigns (the "Seller Indemnified      

Parties") from, against and in respect of any damages, claims, losses,          

charges, actions, suits, proceedings, deficiencies, taxes, interest,            

penalties, and reasonable costs and expenses (including without limitation      

reasonable attorneys' fees, removal costs, remediation costs, closure           

costs, fines, penalties and expenses of investigation and ongoing               

monitoring) (collectively, the "Losses") imposed on, sustained, incurred or     

suffered by or asserted against any of the Seller Indemnified Parties,          

directly or indirectly relating to or arising out of (i) subject to Section     

7.2(b), any breach of any representation or warranty made by Purchaser          

contained in this Agreement for the period such representation or               

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warranty survives, (ii) the Assumed Liabilities, and (iii) the breach of        

any covenant or agreement of Purchaser contained in this Agreement.             

     (b)   Purchaser shall not be liable to the Seller Indemnified

Parties for any Losses with respect to the matters contained in Section         

7.2(a)(i) except to the extent (and then only to the extent) the Losses         

therefrom exceed an aggregate amount equal to $2,000,000 and then only for      

all such Losses in excess thereof up to an aggregate amount equal to            

$17,000,000.                                                                    

      Section 7.3  Indemnification by Seller and Kodak.  (a)  Seller

and Kodak hereby agree that they shall indemnify, defend and hold harmless      

Purchaser, its Affiliates and, if applicable, their respective directors,       

officers, shareholders, partners, attorneys, accountants, agents and            

employees (other than the Transferred Employees) and their heirs,               

successors and assigns (the "Purchaser Indemnified Parties" collectively        

with the Seller Indemnified Parties, the "Indemnified Parties") from,           

against and in respect of any Losses imposed on, sustained, incurred or         

suffered by or asserted against any of the Purchaser Indemnified Parties,       

directly or indirectly relating to or arising out of (i) subject to Section     

7.3(b), any breach of any representation or warranty made by Seller or          

Kodak contained in this Agreement for the period such representation or         

warranty survives, (ii) all Excluded                                            

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Liabilities (including, without limitation, liabilities relating                
to                                                                              

(A) investigation, removal, remediation, containment, cleanup or abatement      

of the presence, release or threatened release of any Hazardous Substance,      

whether on-site or off-site and (B) any claim by any third party,               

including, without limitation, tort suits for personal or bodily injury,        

property damage or injunctive relief, in each case relating to an Excluded      

Asset), (iii) the breach of any covenant or agreement of Seller or Kodak        

contained in this Agreement, and (iv) subject to Sections 7.3(b) and (c),       

liabilities relating to the investigation, removal, remediation,                

containment, clean-up or abatement of Hazardous Substances contamination in     

soils and groundwater (including off-site migration) at Rensselaer Site I.      

For purposes of the foregoing and Section 7.3(c), any liability related to      

Environmental Law or Hazardous Substances incurred by Purchaser pursuant to     

the Agreement of Purchase and Sale, dated as of July 22, 1991, between          

Winthrop Products Inc. and BASF Corporation shall be deemed to constitute       

liabilities of the kind referred to in clause (iv) of this Section 7.3(a).      

Purchaser acknowledges that this Article VII constitutes Purchaser's sole       

remedy with respect to any Losses or liability under any Environmental Law      

or with respect to any Hazardous Substance, except to the extent such items     

constitute Excluded Liabilities, and expressly waives any other rights or       

cause of action under                                                           

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any Environmental Law or with respect to any claim involving the presence       

or exposure to any Hazardous Substance.                                         

   (b)   Seller and Kodak shall not be liable to the Purchaser

Indemnified Parties for any Losses with respect to the matters contained in     

Section 7.3(a)(i) except to the extent (and then only to the extent) the        

Losses therefrom exceed an aggregate amount equal to $16,000,000 and then       

only for all such Losses in excess thereof up to an aggregate amount equal      

to $142,000,000.                                                                

  (c)  Subject to the aggregate liability limit contained in

Section 7.3(b) but not the aggregate threshold amount, Seller and Kodak         

shall be liable for 50% of the Losses with respect to matters covered in        

Section 7.3(a)(iv) except to the extent (and then only to the extent) the       

Losses therefrom exceed $20,000,000 over and above the $3,200,000 reserve       

for environmental remediation at Rensselaer Site I as reflected in the          

Asset and Liability Statement subject to compliance with the following          

conditions (i) Purchaser (and any transferee) shall continue chemical           

production operations at the site (unless Purchaser is required in              

connection with environmental remediation obligations to cease such             

operations), (ii) Purchaser shall not transfer its rights under this            

indemnity with respect to Rensselaer Site I to a third party without the        

prior written consent of Kodak, such consent not to be unreasonably             

withheld,  (iii) Purchaser shall comply with the                                

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requirements of the Agreement and Determination effective December 1,           
1983,                                                                           

Index Number T110783, between Sterling Drug, Inc. and the New York State        

Department of Environmental Conservation ("NYSDEC") concerning Rensselaer       

Site I and (iv) Purchaser shall use reasonable efforts to continue to           

maintain a cooperative working relationship with the NYSDEC with respect to     

activities at Rensselaer Site I.  Kodak's and Seller's payments under this      

Section shall be reduced and/or refunded by an amount equal to any              

recoveries benefiting Purchaser or its assigns under pre-Closing insurance      

policies attributable to Losses arising out of environmental contamination      

at Rensselaer Site I.                                                           

       Section 7.4  Indemnification Procedures.  With respect to third

party claims other than those relating to Taxes, all claims for                 

indemnification by any Indemnified Party hereunder shall be asserted and        

resolved as set forth in this Section 7.4.  In the event that any written       

claim or demand for which an indemnifying party, Seller, Kodak or Purchaser     

as the case may be (an "Indemnifying Party") would be liable to any             

Indemnified Party hereunder is asserted against or sought to be collected       

from any Indemnified Party by a third party, such Indemnified Party shall       

promptly, but in no event more than 15 days following such Indemnified          

Party's receipt of such claim or demand, notify the Indemnifying Party of       

such claim or demand and the amount or the estimated amount thereof to the      

extent then feasible                                                            

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(which estimate shall not be conclusive of the final amount of such claim       

and demand) (the "Claim Notice").  The Indemnifying Party shall have 90         

days from the personal delivery or mailing of the Claim Notice (the "Notice     

Period") to notify the Indemnified Party (a) whether or not the                 

Indemnifying Party disputes the liability of the Indemnifying Party to the      

Indemnified Party hereunder with respect to such claim or demand and            

(b) whether or not it desires to defend the Indemnified Party against such      

claim or demand.  All costs and expenses incurred by the Indemnifying Party     

in defending such claim or demand shall be a liability of, and shall be         

paid by, the Indemnifying Party; provided, however, that the amount of such     

costs and expenses that shall be a liability of the Indemnifying Party          

hereunder shall be subject to the limitations set forth in Sections 7.2(b)      

and 7.3(b) hereof.  Except as hereinafter provided, in the event that the       

Indemnifying Party notifies the Indemnified Party within the Notice Period      

that it desires to defend the Indemnified Party against such claim or           

demand, the Indemnifying Party shall have the right to defend the               

Indemnified Party by appropriate proceedings and shall have the sole power      

to direct and control such defense.  If any Indemnified Party desires to        

participate in any such defense it may do so at its sole cost and expense.      

The Indemnified Party shall not settle a claim or demand without the            

consent of the Indemnifying Party.  The                                         

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Indemnifying Party shall not, without the prior written consent of              
the                                                                             

Indemnified Party, settle, compromise or offer to settle or compromise any      

such claim or demand on a basis which would result in the imposition of a       

consent order, injunction or decree which would restrict the future             

activity or conduct of the Indemnified Party or any subsidiary or affiliate     

thereof.  If the Indemnifying Party elects not to defend the Indemnified        

Party against such claim or demand, whether by not giving the Indemnified       

Party timely notice as provided above or otherwise, then the amount of any      

such claim or demand, or, if the same be contested by the Indemnified           

Party, then that portion thereof as to which such defense is unsuccessful       

(and the reasonable costs and expenses pertaining to such defense) shall be     

the liability of the Indemnifying Party hereunder, subject to the               

limitations set forth in Sections 7.2(b) and 7.3(b) hereof.  To the extent      

the Indemnifying Party shall direct, control or participate in the defense      

or settlement of any third party claim or demand, the Indemnified Party         

will give the Indemnifying Party and its counsel access to, during normal       

business hours, the relevant business records and other documents, and          

shall permit them to consult with the employees and counsel of the              

Indemnified Party.  The Indemnified Party shall use its best efforts in the     

defense of all such claims.                                                     

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       Section 7.5  Characterization of Indemnification Payments.  All

amounts paid by Seller, Kodak or Purchaser, as the case may be, under           

Article II and this Article VII (other than payments contemplated by            

Section 2.5(b) or Section 2.9(b) hereof), to the extent relating to any         

period ending on or before the Closing shall be treated as included in, or      

as adjustments to, the Purchase Price for all Tax purposes.  To the extent      

that any amount described in the preceding sentence is not treated as           

included in, or as an adjustment to, the Purchase Price for Tax purposes in     

any applicable Taxing jurisdiction, the amount of the Loss being                

indemnified for shall be reduced by any net Tax savings actually realized       

by the indemnified party by reason of such Loss and increased by any net        

Tax costs actually incurred by the indemnified party as a result of the         

receipt of such amount.  Any contest affecting the determination of such        

Tax costs and Tax Savings shall be subject to the provisions of Section         

5.4(e).                                                                         

ARTICLE VIII    

TERMINATION     

      Section 8.1  Termination.  This Agreement may be terminated at

any time prior to the Closing:                                                  

(a)   by agreement of Purchaser and Seller;             

     (b)   by Purchaser, Seller or Kodak if the Board of Directors

of Kodak shall not have approved the transactions                               

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contemplated by this Agreement by 11:59 p.m. New York City time on June         
22,                                                                             

1994;                                                                           

     (c)   by either Purchaser or Seller, by giving written notice

of such termination to the other party, if the Closing shall not have           

occurred on or prior to October 31, 1994; provided that the terminating         

party is not in material breach of its obligations under this Agreement;        

       (d)   by either Purchaser or Seller if there shall be in effect

any law or regulation that prohibits the consummation of the Closing or if      

consummation of the Closing would violate any non-appealable final order,       

decree or judgment of any court or governmental body having competent           

jurisdiction;                                                                   

     (e)   by Purchaser if Seller or Kodak has materially breached

any representation, warranty, covenant or agreement contained in this           

Agreement and such breach is either not capable of being cured prior to the     

Closing or if such breach is capable of being cured, is not so cured within     

a reasonable amount of time;                                                    

     (f)   by Seller or Kodak if Purchaser has materially breached

any representation, warranty, covenant or agreement contained in this           

Agreement and such breach is either not capable of being cured prior to the     

Closing or if such breach is capable of being cured, is not so cured within     

a reasonable amount of time; or                                                 

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Section 8.2  Effect of Termination.  In the event of the

termination of this Agreement in accordance with Section 8.1 hereof, this       

Agreement shall thereafter become void and have no effect, and no party         

hereto shall have any liability to the other party hereto or their              

respective Affiliates, directors, officers or employees, except for the         

obligations of the parties hereto contained in this Section 8.2 and in          

Sections 9.1, 9.7, 9.8, 9.9 and 9.11 hereof, and except that nothing herein     

will relieve any party from liability for any breach of this Agreement          

prior to such termination.                                                      

ARTICLE IX    

MISCELLANEOUS     

  Section 9.1  Notices.  All notices or other communications

hereunder shall be deemed to have been duly given and made if in writing        

and if served by personal delivery upon the party for whom it is intended,      

if delivered by registered or certified mail, return receipt requested, or      

by a national courier service, or if sent by telecopier, provided that the      

telecopy is promptly confirmed by telephone confirmation thereof, to the        

person at the address set forth below, or such other address as may be          

designated in writing hereafter, in the same manner, by such person:            

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To Purchaser:                                           

SANOFI              
32-34 rue Marbeuf   
75008 Paris         
Telephone:  331 4073
    Telecopy:  331 4073 4799
  Attn:  General Counsel

With a copy to:                                         

              CLEARY, GOTTLIEB, STEEN & HAMILTON
One Liberty Plaza   
     New York, New York  10006
      Telephone:  (212) 225-2000
      Telecopy:   (212) 225-3999
Attn:  Peter Karasz 

To Kodak:                                               

 EASTMAN KODAK COMPANY
343 State Street    
      Rochester, New York  14650
    Telephone:  716-724-4332
   Telecopy:  716-724-9448
  Attn:  General Counsel

With a copy to:                                         

SULLIVAN & CROMWELL 
125 Broad Street    
    New York, New York 10004
      Telephone:  (212) 558-4000
     Telecopy:  (212) 558-3588
  Attn:  George H. White

To Seller:                                              

  STERLING WINTHROP INC.
90 Park Avenue      
     New York, New York  10016
      Telephone:  (212) 907-2000
     Telecopy:  (212) 907-3084
  Attn:  General Counsel

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With a copy to:                                         

SULLIVAN & CROMWELL 
125 Broad Street    
    New York, New York 10004
      Telephone:  (212) 558-4000
     Telecopy:  (212) 558-3588
  Attn:  George H. White

Section 9.2  Amendment; Waiver.  Any provision of this  

Agreement may be amended or waived if, and only if, such amendment or           

waiver is in writing and signed, in the case of an amendment, by Purchaser,     

Seller and Kodak, or in the case of a waiver, by the party against whom the     

waiver is to be effective.  No failure or delay by any party in exercising      

any right, power or privilege hereunder shall operate as a waiver thereof       

nor shall any single or partial exercise thereof preclude any other or          

further exercise thereof or the exercise of any other right, power or           

privilege.  The rights and remedies herein provided shall be cumulative and     

not exclusive of any rights or remedies provided by law.                        

     Section 9.3  Assignment.  (a)  No party to this Agreement may

assign any of its rights or obligations under this Agreement without the        

prior written consent of the other party hereto.  Notwithstanding the           

foregoing, (i) each of Purchaser, Seller and Kodak may assign all or any        

portion of its rights and obligations pursuant to this Agreement to one or      

more of its Affiliates, (ii) Purchaser may assign all or any portion of its     

rights and obligations pursuant to                                              

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this Agreement to a third party who shall have agreed to acquire from           

Purchaser all or part of the Transferred Assets and Assumed Liabilities,        

provided that such assignment is not inconsistent with the means of             

transfer agreed by the parties pursuant to Section 2.12, and (iii) Seller       

and Kodak may assign all or any portion of their respective rights and          

obligations pursuant to this Agreement to the OTC Owner, provided that such     

assignment is not inconsistent with the means of transfer agreed by the         

parties pursuant to Section 2.12, provided, further, in each case, that the     

assigning party shall remain jointly and severally liable for the               

performance of the obligations hereunder that are so assigned.  In              

connection with any assignment pursuant to this Section 9.3 and any offer       

by Kodak to sell the stock of Seller, copies of this Agreement may be           

provided to the assignee or offeree, as the case may be, subject to             

appropriate confidentiality provisions and to the deletion of information       

relating to such matters as Purchaser, Seller and Kodak may agree.              

(b)   Purchaser shall indemnify Kodak, Seller and their 

Affiliates against, and hold each of them harmless from, any loss, claim,       

damage, liability or expense arising out of or relating to the assignment       

by Purchaser to a third party other than an Affiliate of Purchaser, of all      

or any portion of its rights and obligations pursuant to this                   

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Agreement including, without limitation any increased liability for Taxes       

or Transfer Taxes.                                                              

  (c)   Each of Seller and Kodak, severally and not jointly,

shall indemnify Purchaser and its Affiliates against, and hold each of them     

harmless from, any loss, claim, damage, liability or expense arising out of     

or relating to the assignment by Seller or Kodak, as the case may be, of        

all or any portion of its rights and obligations pursuant to this Agreement     

to the OTC Owner, including, without limitation, any increased liability        

for Taxes or Transfer Taxes.                                                    

    (d)   The indemnities provided for in paragraphs (b) and (c)

above shall be in addition to any liability that the respective parties may     

otherwise have under this Agreement and shall not be subject to the             

limitations provided in Sections 7.1, 7.2 and 7.3 hereof.                       

     Section 9.4  Entire Agreement.  This Agreement (including all

Schedules and Annexes hereto) contains the entire agreement between the         

parties hereto with respect to the subject matter hereof and supersede all      

prior agreements and understandings, oral or written, with respect to such      

matters.                                                                        

       Section 9.5  Fulfillment of Obligations.  Any obligation of any

party to any other party under this Agreement or any of the Ancillary           

Agreements, which obligation is performed, satisfied or fulfilled by an         

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Affiliate of such party, shall be deemed to have been performed, satisfied      

or fulfilled by the such party.                                                 

     Section 9.6  Parties in Interest.  This Agreement shall inure

to the benefit of and be binding upon the parties hereto and their              

respective successors and permitted assigns.  Nothing in this Agreement,        

express or implied, is intended to confer upon any Person other than            

Purchaser, Seller, Kodak, their successors or permitted assigns or an           

Indemnified Party, any rights or remedies under or by reason of this            

Agreement.                                                                      

 Section 9.7  Public Disclosure.  Notwithstanding anything

herein to the contrary, each of the parties to this Agreement hereby agrees     

with the other party hereto that, except as may be required to comply with      

the requirements of any applicable Laws, and the rules and regulations of       

each stock exchange upon which the securities of one of the parties is          

listed, no press release or similar public announcement or communication        

shall ever, whether prior to or subsequent to the Closing, be made or           

caused to be made concerning the execution or performance of this Agreement     

unless specifically approved in advance by all parties hereto.                  

Section 9.8  Return of Information.  If for any reason  

whatsoever the transactions contemplated by this Agreement are not              

consummated, Purchaser shall promptly return to Seller all Books and            

Records furnished by Kodak,                                                     

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Seller, the Business or any of their respective agents, employees, or           

representatives (including all copies, if any, thereof), and Seller shall       

promptly return to Purchaser, the Books and Records related to the OTC          

Portion furnished by Purchaser or the OTC Portion or any of their               

respective agents, employees, or representatives (including all copies, if      

any, thereof) and shall not use or disclose the information contained in        

such Books and Records for any purpose or make such information available       

to any other entity or person.                                                  

      Section 9.9  Expenses.  Except as otherwise expressly provided

in this Agreement, whether or not the transactions contemplated by this         

Agreement are consummated, all costs and expenses incurred in connection        

with this Agreement and the transactions contemplated hereby shall be borne     

by the party incurring such expenses.                                           

     Section 9.10  Schedules.  The disclosure of any matter in any

schedule to this Agreement shall be deemed to be a disclosure for all           

purposes of this Agreement to which such matter could reasonably be             

expected to be pertinent, but shall expressly not be deemed to constitute       

an admission by Seller or Purchaser or to otherwise imply, that any such        

matter is material for the purposes of this Agreement.                          

      SECTION 9.11  GOVERNING LAW; SUBMISSION TO JURISDICTION.  THIS

AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS      

OF THE STATE OF NEW                                                             

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YORK WITHOUT REFERENCE TO THE CHOICE OF LAW PRINCIPLES THEREOF.  PURCHASER      

HEREBY AGREES TO SUBMIT TO THE JURISDICTION OF ANY COURT OF GENERAL             

JURISDICTION SITTING IN THE COUNTY OF NEW YORK, STATE OF NEW YORK, AND          

PURCHASER DESIGNATES PRENTICE HALL, AS ITS AGENT AND ATTORNEY IN FACT FOR       

THE PURPOSE OF ACCEPTING SERVICE AND MAKING AN APPEARANCE ON ITS BEHALF IN      

SUCH PROCEEDING AND TAKING ALL SUCH ACTS AS MAY BE NECESSARY OR APPROPRIATE     

IN ORDER TO CONFER JURISDICTION ON IT UPON SUCH COURT AND PURCHASER             

STIPULATES THAT SUCH CONSENT AND APPOINTMENT IS IRREVOCABLE AND COUPLED         

WITH AN INTEREST.                                                               

      Section 9.12  Counterparts.  This Agreement may be executed in

one or more counterparts, each of which shall be deemed an original, and        

all of which shall constitute one and the same Agreement.                       

       Section 9.13   Headings.  The heading references herein and the

table of contents hereto are for convenience purposes only, do not              

constitute a part of this Agreement and shall not be deemed to limit or         

affect any of the provisions hereof.                                            

      Section 9.14   Severability.  The provisions of this Agreement

shall be deemed severable and the invalidity or unenforceability of any         

provision shall not affect the validity or enforceability of the other          

provisions hereof.  If any provision of this Agreement, or the application      

thereof to any person or entity or any circumstance, is                         

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invalid or unenforceable, (a) a suitable and equitable provision shall be       

substituted therefor in order to carry out, so far as may be valid and          

enforceable, the intent and purpose of such invalid or unenforceable            

provision and (b) the remainder of this Agreement and the application of        

such provision to other persons, entities or circumstances shall not be         

affected by such invalidity or unenforceability, nor shall such invalidity      

or unenforceability affect the validity or enforceability of such               

provision, or the application thereof, in any other jurisdiction.               

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    IN WITNESS WHEREOF, the parties have executed or caused this

Agreement to be executed as of the date first written above.                    

             EASTMAN KODAK COMPANY

By:     
   Name:
    Title:

              STERLING WINTHROP INC.

By:     
   Name:
    Title:

SANOFI  

By:     
   Name:
    Title:

Dates Referenced Herein   and   Documents Incorporated by Reference

				Referenced-On Page
This ‘8-K’ Filing		Date		First		Last			Other Filings
		4/1/95		161
		12/31/94		7		108			10-K,  10-K/A,  8-K
		10/31/94		179
Filed on:		10/18/94
		10/17/94		14
		10/14/94		2		13
		10/3/94		2		12
		10/1/94		2		60
		9/30/94		2		24			10-Q
		9/26/94		2		7
		9/6/94		2		10
		9/1/94		66
		8/31/94		66
		8/29/94		2		9
		7/15/94		160
For Period End:		6/30/94		1		7			10-Q,  8-K/A
		6/23/94		7
		6/22/94		25		179
		6/17/94		28		153
		5/3/94		2		7
		5/2/94		28
		12/31/93		8		169			10-K,  10-K/A
		12/16/93		35
		7/29/93		27
		6/15/93		8
		1/1/93		130
		12/31/92		8
		12/23/92		39
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