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                                                            [LETTERHEAD]

CHIRON




                                                            LAW DEPARTMENT

                              CONSULTING AGREEMENT

         THIS AGREEMENT is made effective as of February 25, 2000 by and between
Chiron Corporation ("CHIRON"), 4560 Horton Street, Emeryville, California 94608,
and Edward E. Penhoet, Ph.D. ("DR. PENHOET"), with a mailing address at 688
Alvarado Road, Berkeley, California 94705, as follows:


                                    RECITALS

         WHEREAS, Dr. Penhoet has served with great distinction as a founder and
as President and Chief Executive Officer of Chiron and Vice Chairman of the
Chiron Board of Directors since it was created in 1981. He has contributed
directly to its success through his leadership, scientific vision and management
skills. He has made and assisted others in making inventions that are
transforming the practice of medicine and provide the foundation for Chiron's
success and the value realized by its stockholders. Dr. Penhoet will retire from
his position as a Chiron officer and employee on February 25, 2000; and

         WHEREAS, Chiron wishes to retain Dr. Penhoet as a consultant for at
least one (1) year following his retirement and Dr. Penhoet is willing to so
serve;

         NOW, THEREFORE, in consideration of the premises and the mutual
covenants and conditions hereinafter set forth in the Agreement and herein, the
parties agree as follows:


         1.       TERM. Chiron hereby retains Dr. Penhoet as a consultant, and
Dr. Penhoet hereby accepts such retention, commencing as of the date of this
Agreement and expiring one (1) year thereafter. Either party may terminate this
Agreement upon sixty (60) days written notice to the other party. At Chiron's
request, Dr. Penhoet may perform additional consulting services as mutually
agreed upon by both parties.

         2.       CONSULTING SERVICES. Dr. Penhoet shall serve as a consultant
to Chiron in the field of providing general advice with respect to corporate
matters: (the "CONSULTING SERVICES").

         3.       COMPENSATION.

                  3.1.     As compensation for his performance of the Consulting
Services, Chiron will pay Dr. Penhoet $50,000.00 per year, payable monthly in
advance in the amount of $4,166.67.  During


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the term of this Agreement, Dr. Penhoet shall devote such time and effort as
Chiron reasonably may request in performing the Consulting Services. In
addition, Chiron shall reimburse Dr. Penhoet for reasonable out-of-pocket
expenses incurred in performing the Consulting Services, including travel,
accommodation and related expenses in accordance with the Chiron Corporate
Travel Policy attached hereto as Exhibit A and incorporated herein. Chiron's
checks shall be made payable to "Edward E. Penhoet, Ph.D.", Social Security
Number: ###-##-####, and mailed to the address provided above.

                  3.2.     During the term of this Agreement, Chiron will
provide Dr. Penhoet with reasonable administrative support including office
space in Emeryville, telephone, PC workstation and shared administrative
support.

         4.       OUTSIDE EMPLOYMENT. Chiron acknowledges that during the term
of this Agreement Dr. Penhoet may be employed by other companies and may provide
consulting services to one or more other institutions. Dr. Penhoet represents
that he is not and shall not become a party to any agreement which conflicts
with the duties hereunder. Chiron may terminate this Agreement if in its
reasonable opinion the performance of such work will conflict with its
interests. Dr. Penhoet shall not disclose to Chiron any inventions, trade
secrets, or other information of third parties that Dr. Penhoet does not have
the right to disclose and that Chiron is not free to use without liability.

         5.       INVENTIONS AND WORK PRODUCT. Dr. Penhoet shall keep separate
and segregated from other work all documents, records, notebooks and
correspondence arising from his performance of the Consulting Services. Upon
expiration or termination of this Agreement, all such documents and material,
including copies thereof, whether prepared by Dr. Penhoet or others, will be
delivered to Chiron.

                  5.1.     An "INVENTION" shall mean and refer to any
composition of matter, device, process, treatment, or improvement thereof
discovered, created, made, conceived, or reduced to practice ("INVENTED") by Dr.
Penhoet, whether patentable or not, during the term of this Agreement and which:
(i) was Invented with the equipment, supplies, facilities, or Confidential
Information of Chiron or those acting on its behalf, or (ii) was Invented by Dr.
Penhoet as a direct result of performing the Consulting Services, or (iii)
resulted from any work performed by Dr. Penhoet for Chiron under this Agreement.

                  5.2.     "WORK PRODUCT" shall mean and refer to any records,
reports or other documents, charts, or other materials, whether written,
graphic, or in the form of electronic media, written, edited or otherwise
created by Dr. Penhoet resulting from his performance of the Consulting
Services.


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                  5.3.     Chiron shall own all right, title and interest in all
Work Product and Inventions, all of which will be deemed Chiron Confidential
Information as defined in Article 6 herein. Dr. Penhoet shall promptly and
without royalty, but at Chiron's expense: (i) disclose to Chiron all information
with respect to all Work Product and Inventions, (ii) execute all applications,
assignments, and other instruments and do such other acts that Chiron may deem
necessary to obtain and maintain patents, copyrights, and similar rights
anywhere in the world, and (iii) provide Chiron with evidence needed in any
legal proceedings regarding the Work Product and any Invention.

         6.       CONFIDENTIALITY.

                  6.1.     CONFIDENTIAL INFORMATION. "CONFIDENTIAL INFORMATION"
shall mean all information relating to Chiron's proprietary materials, research
and development data and plans, proprietary technologies, intellectual property,
business or research strategies, trade secrets and material embodiments thereof,
and manufacturing processes and technologies disclosed by Chiron to Dr. Penhoet.

                  6.2.     CONFIDENTIALITY AND NON-USE. Dr. Penhoet shall not
disclose the Confidential Information to any third party. Dr. Penhoet shall use
Chiron's Confidential Information solely for his performance of the Consulting
Services, unless otherwise mutually agreed in writing. Upon request by Chiron,
Dr. Penhoet shall return or destroy, at Chiron's option, all Confidential
Information, including any notes, copies, summaries or extracts thereof.

                  6.3.     EXCLUSIONS. Confidential Information shall not
include information that: (i) is shown by contemporaneous documentation of Dr.
Penhoet to have been in his rightful possession prior to receipt from Chiron;
(ii) is or becomes, through no fault of Dr. Penhoet, publicly known; (iii) is
furnished to Dr. Penhoet by a third party without breach of a duty to Chiron;
(iv) is independently developed by Dr. Penhoet without access to or reliance
upon the Confidential Information; or (v) which Dr. Penhoet is required to
disclose such information by law, order or regulation of a governmental agency
or a court of competent jurisdiction or international authority (after providing
Chiron with reasonable notice of such requirement to divulge and with an
opportunity to obtain a protective order).

         7.       NOTICE. Any notice to Chiron shall be addressed as follows or
as shall be specified by a party in writing:

If to Chiron:                                        If to Dr. Penhoet:

  Chiron Corporation                                 Edward E. Penhoet, Ph.D.
  4560 Horton Street                                 688 Alvarado Road
  Emeryville, California 94608                       Berkeley, California 94705
  Attention: General Counsel
  With a copy to:    Supervisor,
                     Contracts Administration,
                     Law Department



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         8.       AMENDMENT, TERMINATION AND SURVIVAL. This Agreement may be
amended or renewed only with the written agreement of both parties. The terms
and obligations of Articles 5 and 6 shall survive termination or expiration of
this Agreement.

         9.       ASSIGNMENT AND GOVERNING LAW. This Agreement and any rights
under it may not be assigned by Dr. Penhoet without Chiron's prior written
consent. Any unauthorized attempt to assign by Dr. Penhoet shall be void. Chiron
party may freely assign this Agreement, upon written notice to Dr. Penhoet, to
any person or entity who acquires all or substantially all of Chiron's business
or assets (or of the business division or product line of such party to which
the Consulting Services primarily relate). This Agreement shall be governed by
the laws of the State of California without regard to its choice of law
principles.

         10.      NOT AN EMPLOYEE. Dr. Penhoet is an independent contractor and
is not an employee or agent of Chiron. Dr. Penhoet shall not be entitled to any
benefits or compensation from Chiron except as set forth in this Agreement, and
shall in no event be entitled to any fringe benefits payable to employees of
Chiron. Dr. Penhoet shall be solely responsible for meeting his tax
requirements. Additionally, nothing contained in this Agreement shall entitle
Dr. Penhoet to the right or authority to make any representation on behalf of or
bind Chiron to others in any manner, or to use Chiron's name or trademarks in
any public disclosure, without Chiron's prior written permission.

         11.      WAIVER AND SEVERABILITY. No waiver of any of the provisions of
this Agreement shall be deemed, or shall constitute, a waiver of any other
provision, whether or not similar, nor shall any waiver constitute a continuing
waiver. No waiver shall be binding unless executed in writing by the party
making the waiver. In the event of a conflict between the provisions in the body
of this Agreement and any attachments, the terms in the body of this Agreement
will control.

         12.      ENTIRE AGREEMENT. This Agreement is the entire agreement of
the parties relating to the Consulting Services. Dr. Penhoet acknowledges that
nothing in this Agreement shall affect any of his obligations under any of his
prior agreements with Chiron.

IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first written above.


CHIRON CORPORATION                                 EDWARD E. PENHOET, PH.D.


By:   /s/ William G. Green                          /s/ Edward E. Penhoet
   -----------------------                          ---------------------------
      William G. Green                              Signature
      Senior Vice President, General Counsel
         and Secretary


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