<PAGE>   1
                                                                   EXHIBIT 10.22


CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS,
HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.


                          FLUMIST(TM) SUPPLY AGREEMENT


                                 BY AND BETWEEN

                                     AVIRON

                                       AND

                       AMERICAN HOME PRODUCTS CORPORATION

                               ACTING THROUGH ITS

                       WYETH-AYERST LABORATORIES DIVISION



                                JANUARY 11, 1999


                                       1.
<PAGE>   2
CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS,
HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

                          FLUMIST(TM) SUPPLY AGREEMENT

        THIS FLUMISTTM SUPPLY AGREEMENT (the "Agreement"), dated as of January
11, 1999 (the "Signing Date"), is by and between Aviron, a Delaware corporation
with its principal place of business at 297 North Bernardo Avenue, Mountain
View, California 94043 ("Aviron"), and AMERICAN HOME PRODUCTS CORPORATION
("AHPC"), acting through its WYETH-AYERST LABORATORIES DIVISION, a Delaware
corporation with its principal place of business at 555 Lancaster Avenue, St.
Davids, Pennsylvania, 19087 ("Wyeth-Ayerst"). Aviron and Wyeth-Ayerst are
sometimes referred to herein individually as a "Party" and collectively as the
"Parties."

                                    RECITALS:

        WHEREAS, Aviron and Wyeth-Ayerst have entered into that certain United
States License and Co-Promotion Agreement of even date herewith regarding the
marketing and co-promotion of Aviron's intranasally delivered cold adapted
vaccine formulation for the prevention of influenza and influenza-associated
illnesses, [***], known as FluMist(TM) or FluEnz(TM) (the "Product," as further
described herein) in the United States and its territories and possessions (the
"U.S. Agreement"); and

        WHEREAS, Aviron and Wyeth-Ayerst have entered into that certain
International FluMist(TM) License Agreement of even date herewith, under which
Aviron has granted to Wyeth-Ayerst exclusive marketing rights in certain
territories outside of the United States and its territories and possessions
(the "International Agreement"); and

        WHEREAS, Aviron and Wyeth-Ayerst desire to enter into an agreement
pursuant to which Aviron shall (a) supply, or have supplied, Finished Product in
the [***] for distribution and sale under the U.S. Agreement; (b) supply, or
have supplied, Finished Product in the [***] to Wyeth-Ayerst for distribution
and sale under the U.S. Agreement and the International Agreement; (c) supply,
or have supplied, [***] from the [***] for the Product [***] in order that [***]
Product in the [***] for distribution and sale under the U.S. Agreement and the
International Agreement; and (d) blend, fill, finish and package [***] Product
in the [***] for distribution and sale under the U.S. Agreement and the
International Agreement; and [***] (a) manufacture and supply [***] Product in
the [***] for the U.S. Territory and [***] the International Territory, and (b)
blend, fill, finish and package [***] Product in the [***] for distribution and
sale under the International Agreement [***].

        NOW, THEREFORE, in consideration of the foregoing recitals and the
mutual covenants and agreements contained herein, the parties hereby agree as
follows:

1.      DEFINITIONS

        Unless otherwise indicated, capitalized terms used herein shall have the
same meaning as in the U.S. Agreement.

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

[***] = CONFIDENTIAL TREATMENT REQUESTED.


                                       1.
<PAGE>   3

        1.1 "[***] PRODUCT" means the Finished Product manufactured and supplied
[***] by Aviron (or its contractor(s)) hereunder [***] the manufacturing
process.

        1.2 "[***] PRODUCT" means [***] Product for which [***].

        1.3 "CALENDAR YEAR" means the period of time commencing on January 1 of
a given year, and ending on December 31 of such year.

        1.4 "COMMERCIALIZATION COMMITTEE" means the JCC or the ICC, as
applicable, which may be collectively referred to herein as the
"Commercialization Committees."

        1.5 "COMMERCIALLY REASONABLE EFFORTS" shall have the meaning set forth
in Section 1.11 of the U.S. Agreement.

        1.6 "DEVELOPMENT COMMITTEE" means the "Joint Development Committee" (as
defined in the U.S. Agreement) or the "International Development Committee" (as
defined in the International Agreement), as applicable, which may be
collectively referred to herein as the "Development Committees."

        1.7 "EFFECTIVE DATE" shall have the meaning set forth in Section 1.18 of
the U.S. Agreement.

        1.8 "[***] AGREEMENT" means that certain [***] Agreement by and between
[***] and Aviron on [***].

        1.9 "FINISHED PRODUCT" shall mean the Product in the [***] in finished,
packaged form.

        1.10 "[***]" means [***] the Product which, during the dating period
established by the FDA, maintains stability [***] and may maintain stability
[***] but does not maintain stability [***] or [***].

        1.11 "FLU SEASON" means the "Flu Season" as defined in the U.S.
Agreement or the International Agreement, as applicable.

        1.12 "FORECAST" shall mean the U.S. [***] Forecast (as defined in
Section 3.1 hereof), the U.S. [***] Forecast (as defined in Section 3.2 hereof),
or the International Forecast (as defined in Section 4.1 hereof), as applicable.

        1.13 "[***] PRODUCT" means the Finished Product [***].

        1.14 "[***] MONOVALENT" means Monovalent Bulk for the [***].

        1.15 "GLOBAL TERRITORY" means the U.S. Territory and the International
Territory.

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

[***] = CONFIDENTIAL TREATMENT REQUESTED.


                                       2.
<PAGE>   4
        1.16 "GROSS SALES REVENUE" means the sum of all amounts actually
received and all other consideration actually received (or, when in a form other
than cash or its equivalent, the fair market value thereof when received) by
Wyeth-Ayerst and its Affiliates and sublicensees from persons or entities due to
or by reason of the sale, distribution or use of Finished Product. Sales of
Finished Product intended for resale to Third Parties, and made internally
amongst Wyeth-Ayerst and its Affiliates or sublicensees shall not be deemed
sales for purposes of calculating "Gross Sales Revenues" (however the resale by
the recipient shall be included in the calculation of "Gross Sales Revenues").

        1.17 "GOOD MANUFACTURING PRACTICE" OR "GMP" shall mean the standards and
regulations for the manufacture of biologicals promulgated by any applicable
Regulatory Agency.

        1.18 "JCC" means the "Joint Commercialization Committee" as defined in
the U.S. Agreement.

        1.19 "[***] PRODUCT" means [***] Product for which [***] has supplied
the [***] has manufactured the [***] and [***] has conducted [***].

        1.20 "ICC" means the "International Commercialization Committee" as
defined in the International Agreement.

        1.21 "[***]" means [***] to be [***] in order to [***] Product for sale
and distribution by Wyeth-Ayerst [***].

        1.22 "INTERNATIONAL TERRITORY" means the "Territory" as defined in the
International Agreement.

        1.23 "[***]" means a [***] of the Product which, during the dating
period established by the FDA, maintains stability [***] provided that if [***]
the Product which exists as of the Effective Date is determined to [***] during
the dating period, then such [***] shall be included in [***].

        1.24 "[***] MONOVALENT" means Monovalent Bulk for the [***].

        1.25 "[***] PRODUCT" means the Finished Product in the [***].

        1.26 "[***] PLANT" means [***] plant located at [***].

        1.27 "[***]" shall have the meaning set forth in Section [***] of the
U.S. Agreement.

        1.28 "MICHIGAN" means the Regents of the University of Michigan, a
constitutional corporation of the State of Michigan with offices located at
Wolverine Tower, Room 2071, 3003 South State Street, Ann Arbor, Michigan,
48109-1280, USA.

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

[***] = CONFIDENTIAL TREATMENT REQUESTED.


                                       3.
<PAGE>   5

        1.29 "MICHIGAN AGREEMENT" means the Materials Transfer and Intellectual
Property Agreement between Aviron and Michigan dated February 24, 1995, as
amended, and attached as Schedule 1.41 to the U.S. Agreement.

        1.30 "MONOVALENT BULK" means the three influenza virus strains contained
in the Product, each in monovalent bulk form.

        1.31 "PLA" means the Product Licensing Application/Establishment
Licensing Application or Biologics License Application for the Product in the
Field.

        1.32 "PRODUCT" means the "Product" as defined in the U.S. Agreement or
the International Agreement, as applicable.

        1.33 "[***]" means:

               (A) In the case of [***] manufactured [***] the [***] of (i)
[***] the Product to be included in the [***] of Finished Product, or (ii) [***]
(as defined in Section [***] hereof) per Flu Season ending with the Flu Season
that commences in Calendar Year [***]; and the [***] of (x) [***] the Product to
be included in the [***] of Finished Product, or (y) [***] of the [***] per Flu
Season beginning with the Flu Season that commences in Calendar Year [***]; or
as otherwise agreed in writing by the Parties; and

               (B) In the case of [***] Product supplied by Aviron to
Wyeth-Ayerst for sale and distribution pursuant to the U.S. Agreement and the
International Agreement, [***] Finished Product per each Flu Season (as defined
in the U.S. Agreement), or as otherwise agreed in writing by the Parties.

        1.34 "REGULATORY AGENCY" means any supranational, national, regional,
state, provincial or local regulatory agency, department, bureau, commission,
council or other governmental entity, responsible for the granting of any
approvals, licenses, registrations or authorizations necessary for the
commercial manufacture, use, storage, importation, export, transport or sale of
the Product in a regulatory jurisdiction within the Global Territory.

        1.35 "SECONDARY MANUFACTURE" OR "SECONDARY MANUFACTURING" means the
blending of the monovalent Product, e.g. [***] Monovalent, to form trivalent
Product, and the filling, finishing and packaging of such trivalent Product to
create Finished Product.

        1.36 "SPECIFICATIONS" means the applicable specifications pursuant to
which [***] (in the case of [***]), or [***] (in the case of [***]), as
established in the PLA approved by the FDA, or as otherwise approved by the
applicable Development Committee.

        1.37 "TERRITORY" means the U.S. Territory or the International
Territory, as applicable.

        1.38 "[***]" means [***] to be utilized in [***] in order to [***] for
sale and distribution by Wyeth-Ayerst [***].

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

[***] = CONFIDENTIAL TREATMENT REQUESTED.



                                       4.
<PAGE>   6
        1.39 "U.S. TERRITORY" shall mean the "Territory" as defined in the U.S.
Agreement.

        1.40 "WORKING SEEDS" means the manufacturer's working virus seeds [***]
from which monovalent bulk Product is produced.

2.      SCOPE

        2.1    GENERAL OBLIGATIONS AND RIGHTS OF THE PARTIES.

               (a)    MANUFACTURE AND SUPPLY FOR THE U.S. TERRITORY.

                      (i) Aviron shall have the exclusive right and obligation,
using Commercially Reasonable Efforts, to manufacture and supply [***] Product
to Wyeth-Ayerst for distribution and sale by Wyeth-Ayerst pursuant to the U.S.
Agreement.

                      (ii) [***] shall manufacture and supply [***] as follows:
(A) [***] shall have the right and obligation, using Commercially Reasonable
Efforts, to manufacture and supply [***] to the extent that the JCC determines
that the market demand for [***] Product in the U.S. Territory for a given Flu
Season will [***] for [***] or the amount [***] for such Flu Season if less than
such [***] and (B) [***] shall have the right, but not the obligation, to
manufacture and supply [***] to the extent of the forecasted market demand for
[***] Product up to [***] for [***].

                      (iii) Subject to the right of [***] to establish [***] as
provided herein, [***] shall have the right and obligation, using Commercially
Reasonable Efforts, to perform, or have performed, all [***] of all [***]
including that [***] and shall exclusively supply all [***] Product [***] for
distribution and sale by Wyeth-Ayerst pursuant to the U.S. Agreement, provided
that [***] shall not be obligated, nor shall it have the right, to perform, or
have performed, [***] of all [***] taken together) in excess of [***] Product.
[***] shall have the right to perform all [***] to produce [***] Product in
[***] of [***] Product.

                      (iv) The provisions of this subsection (a) are subject to
[***] under Section [***] of the U.S. Agreement.

               (b)    MANUFACTURE AND SUPPLY FOR THE INTERNATIONAL TERRITORY.

                      (i) [***] shall have the right and obligation, using
Commercially Reasonable Efforts, to [***] subject to [***] as set forth in
Section [***].

                      (ii) If the ICC determines that the market demand for
[***] Product in the International Territory for a given Flu Season is [***] to
[***] then [***] shall have the [***] right to [***] of such doses of [***] as
are in excess of [***] for such Flu Season. Such manufacture and supply shall
occur in a manner to be determined by the IDC.

                      (iii) Subject to [***] as provided herein, Aviron shall
have the right and obligation, using Commercially Reasonable Efforts, to
perform, or have performed, all [***] of

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

[***] = CONFIDENTIAL TREATMENT REQUESTED.


                                       5.
<PAGE>   7

all [***] and shall exclusively supply all [***] for distribution and sale by
Wyeth-Ayerst pursuant to the International Agreement, provided that [***] shall
not be obligated, nor shall it have the right, to perform, or have performed,
[***] of all [***] taken together) in [***] Product. [***] to perform all [***]
to produce [***] Product in [***] Product. Such [***] shall occur in a manner to
be determined by the appropriate Development Committee.

                      (iv) The provisions of this subsection (b) are subject to
[***] under Section [***] of the International Agreement.

               (c) FACILITIES. [***] to undertake the capital investment and
staffing commitments and to take all other actions necessary to enable it to
[***] obligations hereunder, including establishing a new facility, or
remodeling an existing facility, and validating and licensing such facility for
such manufacture and supply, as directed by the applicable Development
Committees.

               (d) [***]. Aviron shall, using Commercially Reasonable Efforts,
produce and supply [***] for all of [***] hereunder.

               (e) GENERAL PRINCIPLES. The Parties shall collaborate in their
activities hereunder in order to: (i) minimize the time of the Product's
production cycle, (ii) minimize the time required to bring the Product to
market, (iii) maintain low production cost, and (iv) comply with GMP in their
manufacturing efforts, all as coordinated by the applicable Development
Committee and Commercialization Committee. The applicable Development Committee
will decide the best way to meet the production goals for [***].

               (f) AGREEMENT OF TECHNICAL RESPONSIBILITY. In order to achieve
the goals set forth in subsection (d) above, the Parties shall, as soon as is
practicable following the Effective Date, agree upon the [***] for the
manufacturing activities contemplated hereunder (the "Agreement of Technical
Responsibility"), which agreement shall be generally in the form of [***]. The
Agreement of Technical Responsibility shall contain the criteria for [***]
hereunder, as determined by the applicable Development Committee, and shall be
reviewed and approved at the first meeting of each Development Committee
following the Effective Date. The Agreement of Technical Responsibility shall be
implemented within thirty (30) days of its execution. The applicable Development
Committee shall have the right to amend the Agreement of Technical
Responsibility from time to time.

        2.2 MANAGEMENT BY COMMERCIALIZATION COMMITTEES. All supply constraints
and coordination of the Parties' activities hereunder shall be managed jointly
by the JCC and the ICC, with the overall objective of maximizing sales of the
Product, subject to the terms of this Agreement.

        2.3 THIRD PARTY SUPPLY. Aviron may, at its election in its sole
discretion, arrange for one or more Third Party contractors to carry out any or
all of its manufacturing and supply rights or obligations hereunder, subject to
the prior written approval of the Commercialization Committee that oversees the
territory as to which such manufacturing and supply rights or 

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

[***] = CONFIDENTIAL TREATMENT REQUESTED.


                                       6.
<PAGE>   8
obligations apply. Such Commercialization Committee's prior written approval
shall not be required for the contractors set forth on Schedule 2.3.

        2.4 WYETH-AYERST ADVISORY ROLE. Wyeth-Ayerst, at its own expense, shall
provide to Aviron reasonable manufacturing expertise, advice and know-how in its
possession and control and consultation services with respect to the manufacture
and supply of the Finished Product, as determined by the Development Committee,
in order to optimize the supply of the Finished Product to Wyeth-Ayerst.

3.      PRODUCT FORECASTS FOR U.S. TERRITORY

        3.1 U.S. [***] FORECAST. The JCC shall prepare and present to Aviron and
Wyeth-Ayerst a rolling [***]* forecast of the anticipated market demand for the
[***] Product in the U.S. Territory for the applicable Flu Season, subject to
Section 2.2., together with an estimate of Net Sales in the U.S. Territory for
such Flu Season. Such forecast shall be updated regularly and shall be
non-binding except as follows: The JCC shall update such forecast to Aviron and
Wyeth-Ayerst in writing no later than [***] of the year immediately prior to the
year in which the applicable Flu Season begins. The JCC shall thereafter update
the forecast of [***] of the year immediately prior to the year in which the
applicable Flu Season begins, provided that the [***] forecast may not vary by
more than [***] from the [***] forecast. The [***] forecast shall thereafter be
deemed the "U.S. [***] Forecast" for such Flu Season, provided that if Aviron
reasonably believes that for such Flu Season it will be unable to meet the
forecast set by the JCC, Aviron shall inform the JCC of the amount of [***]
Product which it reasonably believes it will be in a position to supply to
Wyeth-Ayerst for such Flu Season, and upon the JCC's confirmation of Aviron's
estimate of its production capacity for [***] Product for such Flu Season, such
amount shall then be deemed to be the U.S. [***] Forecast for such Flu Season.
Notwithstanding the foregoing, the JCC's original forecast shall be deemed the
"JCC Forecast" for purposes of awarding to Aviron the supply goal payments
pursuant to Section 8.3 of the U.S. Agreement. Wyeth-Ayerst agrees to purchase
all [***] Product supplied by Aviron in accordance with the U.S. [***] Forecast
and accepted by Wyeth-Ayerst pursuant to Section 6.3(a). In the event that
Aviron fails to meet the JCC Forecast for a given year, Wyeth-Ayerst's sole
remedy shall be [***] as set forth in Section [***] of the U.S. Agreement,
provided that Wyeth-Ayerst may not [***] nor any [***] under the U.S. Agreement
or the International Agreement.

        3.2 U.S. [***] FORECAST. The JCC shall prepare and present to Aviron and
Wyeth-Ayerst a rolling [***] forecast of the anticipated market demand for the
[***] Product in the U.S. Territory for the applicable Flu Season, subject to
Section 2.2., together with an estimate of Net Sales and Gross Sales Revenue in
the U.S. Territory for such Flu Season. Such forecast shall be updated regularly
and shall be non-binding except as follows: The JCC shall update such forecast
to Aviron in writing no later than [***] of the year immediately prior to the
year in which the applicable Flu Season begins. The JCC shall thereafter update
the forecast of [***] of the year immediately prior to the year in which the
applicable Flu Season begins, provided that the [***] forecast may not vary by
more than [***] from the [***] forecast. The [***] forecast shall thereafter be
deemed the "U.S. [***] Forecast" for such Flu Season. Wyeth-Ayerst agrees to

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

[***] = CONFIDENTIAL TREATMENT REQUESTED.


                                       7.
<PAGE>   9
purchase all [***] Product supplied by Aviron in accordance with the U.S. [***]
Forecast and accepted by Wyeth-Ayerst pursuant to Section 6.3(a).

        3.3 [***]. During a given Flu Season and on a calendar quarter basis,
the JCC may [***]* for such Flu Season, subject to Section 2.2 and further
provided that:

               (a) The JCC may [***] without the [***] and [***] shall use
Commercially Reasonable Efforts to [***] provided that [***] failure to [***]
shall not be a breach of this Agreement;

               (b) In the event that the JCC decreases or cancels a Forecast for
a given Flu Season, Aviron shall use Commercially Reasonable Efforts to wind
down any Secondary Manufacturing then occurring or planned to produce doses of
the applicable Finished Product in excess of the JCC's revised Forecast, and
Wyeth-Ayerst shall reimburse Aviron for all non-cancelable costs actually
incurred by Aviron in the manufacture and supply of the applicable Finished
Product for such Flu Season in fulfilling its obligation to meet the Forecast
first specified by the applicable JCC for such Flu Season, provided that
Wyeth-Ayerst shall only be obligated to reimburse Aviron for those costs which
are in excess of any payments made by Wyeth-Ayerst pursuant to Section 7.2 for
such Flu Season; and

               (c) If the JCC increases the U.S. [***] Forecast for such Flu
Season, the original JCC Forecast for such Flu Season, and not the increased
figure, shall be the basis for determining whether Aviron has achieved the
supply goals set forth in Section 8.3 of the U.S. Agreement.

4.      [***] FORECASTS FOR INTERNATIONAL TERRITORY

        4.1    FORECASTS.

               (a) The ICC shall prepare and present to the Parties, in
coordination with the JCC pursuant to Section 3.1 of the International
Agreement, a rolling [***] forecast of the market demand for [***] Product in
the International Territory, in accordance herewith and with Section 2.2 (the
"International Forecast"). Such Forecast shall include the Specifications for
the [***] to be manufactured and supplied by Aviron to Wyeth-Ayerst [***], and
the amount and Specifications for the [***], as well as a schedule for the
foregoing activities, together with an estimate Gross Sales Revenue in the
International Territory for such Flu Season. Such Forecast shall be updated
regularly and shall be non-binding except as follows:

                      (i) For Flu Seasons in the Northern Hemisphere, the ICC
shall update such Forecast in writing to the Parties, in coordination with the
JCC, no later than [***] of the year immediately prior to the year in which the
applicable Flu Season begins, provided that the Forecast of [***] may not vary
more than [***] from the Forecast of [***].

                      (ii) For Flu Seasons in the Southern Hemisphere, the ICC
shall update such Forecast in writing to the Parties, in coordination with the
JCC, no later than [***] of the year [***] the year in which the applicable Flu
Season begins, and [***] of the year immediately 

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

[***] = CONFIDENTIAL TREATMENT REQUESTED.


                                       8.
<PAGE>   10
prior to the year in which such Flu Season begins, provided that the Forecast of
[***] may not vary more than [***] from the Forecast of [***].

               (b) [***] to conduct the manufacture and supply activities
anticipated hereunder in order to produce a sufficient quantity of [***] Product
to meet such Forecast for each Flu Season. Wyeth-Ayerst agrees to purchase all
[***] Product supplied by Aviron in accordance with the International Forecast
and accepted by Wyeth-Ayerst as provided herein.

5.      FAILURE TO [***].

        5.1 NOTICE OF [***]. In the event that a Party with an obligation to
[***] hereunder (the "[***] Party") reasonably believes that it will fall short
of its obligations to [***] under [***] for a given Flu Season by [***], it
shall give prompt written notice of such belief to the applicable Development
Committee and Commercialization Committee. The other Party (the "[***] Party")
shall then have the right, but not the obligation, to [***] by providing written
notice that it is exercising such right to the applicable Development Committee
and Commercialization Committee.

        5.2 [***] PRODUCT. If, for a given Flu Season, (a) the [***] Party fails
to meet its obligations to [***] under [***], and (b) the [***] Party has not
[***] pursuant to Section 5.1, and (c) there is no [***] in the applicable
Territory, then the applicable Commercialization Committee shall determine
whether the [***] Party has [***] to the [***] Party's [***] to manufacture
[***] under such [***] and the [***] if any, on the [***] Party. If the [***] is
so determined to have [***], it shall be [***] as follows:

                      (i) If [***] is the [***] Party with a [***], then [***]
shall elect, in its sole discretion, to [***] for such Flu Season under either
subsection (1) or subsection (2) below:

                             (1) The [***] as applicable, shall be [***]; or

                             (2) [***] shall have the right to [***] for the
subsequent Flu Season under [***] as applicable, by [***] of the [***] which
would have been applicable in the Flu Season in which the [***] based on the
[***] by the applicable Commercialization Committee. Such [***] shall apply only
for such period of time until the [***] that would be [***] the originally
applicable [***] for such period, and (B) the [***] under the [***] for such
period, [***] as determined above by the applicable Commercialization Committee.
Thereafter, the [***] shall apply.

                      (ii) If [***] is the [***] Party with a [***], then [***]
shall have the right to [***] for the subsequent Flu Season under [***], as
applicable, by [***] of the [***] which would have been applicable in the Flu
Season in which the [***] based on the [***] by the applicable Commercialization
Committee. Such [***] shall apply only for such period of time until the [***]
under the [***] for such period, and (B) the [***] that would be [***] under the
originally applicable [***] for such period, [***] as determined above by the
applicable Commercialization Committee. Thereafter, the [***] shall apply.

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

[***] = CONFIDENTIAL TREATMENT REQUESTED.


                                       9.
<PAGE>   11

                      (iii) This Section 5.2 shall not apply to the extent that
a Party's failure to meet its obligations to [***] is attributable to the other
Party's failure to meet its obligations [***].

        5.3 [***]. In the event that [***] to meet its obligations to [***]
under [***] results in [***] being unable to [***] for the Flu Season to which
[***] relates, the provisions of Section 5.2 above shall not apply, and [***]
shall be entitled to [***] (in the case of a [***]) or the [***] (in the case of
[***]) by [***] upon written notice to [***]. [***] must provide such written
notice to [***] within [***] days of the end of the Flu Season in which such
[***] occurred, or its right to [***] as applicable, due to [***] for such Flu
Season shall lapse.

        5.4 SOLE REMEDY. The provisions of this Article 5 shall be the [***]
Party's sole remedy for the [***] Party's failure to meet its obligations to
[***] hereunder, subject to Section [***].

6.      SPECIFICATIONS, DELIVERY AND ACCEPTANCE OF [***] PRODUCT

        6.1 SPECIFICATIONS. Aviron shall manufacture and supply (or cause to be
manufactured and supplied) [***] Product to Wyeth-Ayerst in accordance with the
applicable Specifications and GMP or other relevant governmental laws, rules and
regulations for Wyeth-Ayerst's exclusive sale pursuant to the U.S. Agreement and
the International Agreement. As of the Signing Date, it is Aviron's intent to
manufacture Monovalent Bulk in the [***] Formulation through its contractor
[***] pursuant to and for the term of the [***] which as of the Signing Date is
in effect through [***]; provided that Aviron shall retain at all times the
right to manufacture and supply to Wyeth-Ayerst [***] Product and [***] Product
itself and/or through one or more other Third Party contractors, subject to
Section 2.3.

        6.2 DELIVERY AND SHIPMENT. Finished Product shall be shipped ex works
Aviron's applicable Secondary Manufacturing site. Receipt shall be made by
Wyeth-Ayerst's designated carrier. Each lot of Finished Product so received
shall be accompanied by the FDA lot release letter (to the extent required by
the FDA) or comparable documentation from the applicable Regulatory Agency (if
available), and other lot release specifications to be agreed upon by the
applicable Development Committee.

        6.3    ACCEPTANCE AND REJECTION.

               (a) Any lot of Finished Product released to Wyeth-Ayerst
hereunder shall be received by Wyeth-Ayerst or its designated carrier subject to
inspection and testing by Wyeth-Ayerst or its designated agent, to ensure that
such lot of Finished Product meets the applicable Specifications and otherwise
complies with the warranties provided in this Agreement, in accordance with
testing and release procedures for the Finished Product, as established in the
PLA as approved by the FDA or as otherwise required by the applicable Regulatory
Agency. Wyeth-Ayerst shall be allowed a maximum of [***] days from the date of
release of any shipment, or such other time period agreed in writing by the
applicable Development Committee, (the "Inspection Period") for inspection and
provision of written notice to Aviron of rejection of 

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

[***] = CONFIDENTIAL TREATMENT REQUESTED.


                                      10.
<PAGE>   12

any portion or all of that lot. If Wyeth-Ayerst does not deliver such written
notice to Aviron within the Inspection Period, such lot of Finished Product
shall be deemed to have met the applicable Specifications and to comply with all
warranties hereunder, and Wyeth-Ayerst shall be deemed to have accepted the
shipment. Aviron shall, as soon as is commercially feasible, but in no event
later than [***] days after receipt of a rejection notice from Wyeth-Ayerst,
replace the rejected quantity of Finished Product, subject to Sections 6.3(b)
and (c).

               (b) Promptly following any rejection of a lot of Finished
Product, Aviron shall determine whether the rejected lot conformed to the
applicable Specifications and warranties. If Aviron does not agree with
Wyeth-Ayerst, the applicable Development COMMITTEE shall select an independent
laboratory mutually acceptable to both Parties to carry out tests on
representative samples from the rejected portion of the lot. The results of
these tests shall be binding on both Parties.

               (c) If it is determined, either by the Parties' mutual agreement
or by such independent laboratory, that the rejected lot of Finished Product did
not conform to the applicable Specifications and/or warranties, Aviron shall, as
promptly as is commercially reasonable, replace such rejected lot with a
conforming lot as provided in subsection (a) above. Such replacement shall be
Aviron's sole responsibility to Wyeth-Ayerst for non-conforming Finished
Product. Rejected lots shall be returned to Aviron or disposed of at Aviron's
expense, in accordance with Aviron's instructions. In the event of any
destruction of a non-conforming lot, Wyeth-Ayerst shall deliver to Aviron an
appropriate certificate of destruction.

               (d) In the event that Wyeth-Ayerst has paid Aviron for Finished
Product which the Third Party tester determines does not conform to the
Specifications, Wyeth-Ayerst shall receive a credit to its account for such
amounts actually paid to Aviron for such non-conforming Finished Product,
provided that Wyeth-Ayerst shall remain liable for all payments owed to Aviron
under Article 7 for replacement Finished Product accepted by Wyeth-Ayerst
hereunder. Such credit may only be applied to costs incurred by Wyeth-Ayerst
under this Agreement. Wyeth-Ayerst shall receive a refund of any such credit
existing at the expiration or termination of this Agreement.

7.      PRICING AND PAYMENT FOR [***] PRODUCT

        7.1 TRANSFER PRICE. The transfer price for each dose of each [***]
Product supplied by Aviron to Wyeth-Ayerst hereunder shall be [***] of the
average Net Sales per dose for the relevant Flu Season (the "Transfer Price").

        7.2    TRANSFER PRICE PAYMENT.

               (a)    [***] PRODUCT, FIRST FLU SEASON.

                      (i) For the first Flu Season during which [***] Product is
sold commercially in the U.S. Territory, Wyeth-Ayerst shall make an advance
payment to Aviron of [***] per dose of [***] Product multiplied by the number of
doses estimated to be sold during the applicable Flu Season according to the
U.S. [***] Forecast (the "Transfer Price Payment"),

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

[***] = CONFIDENTIAL TREATMENT REQUESTED.


                                      11.
<PAGE>   13

in order to assist Aviron in defraying its initial manufacturing expenses.
Except as set forth in subsection (ii) below, the Transfer Price Payment shall
be paid in full on the January 1 of the Calendar Year in which such Flu Season
begins.

                      (ii) In the event that on or following the October 1
preceding the Calendar Year in which such Flu Season begins and prior to January
1 of such Calendar Year, Aviron determines that there is a reasonable likelihood
that it will [***] Aviron shall so notify Wyeth-Ayerst in writing. Wyeth-Ayerst
shall pay to Aviron up to [***] of the Transfer Price Payment as requested by
Aviron as soon as reasonably practicable following Wyeth-Ayerst's receipt of
such notice, or shall otherwise provide to Aviron such [***], but in no event
shall Wyeth-Ayerst be required to pay more than [***] of the Transfer Price
Payment to Aviron pursuant to such notice. Wyeth-Ayerst shall pay Aviron the
balance of the Transfer Price Payment in three (3) equal installments on the
January 1, April 1 and July 1 of the Calendar Year in which such Flu Season
begins.

               (b) OTHER TRANSFER PRICE PAYMENTS. For all [***] Product that is
[***] Product, and for all [***] Product to which subsection (a) above does not
apply, the Transfer Price Payment shall be [***] of the projected Net Sales in
the relevant Forecast for the relevant Flu Season. Wyeth-Ayerst shall pay Aviron
such Transfer Price Payment upon Wyeth-Ayerst's acceptance of such [***]
Product, calculated by multiplying the number of doses of Finished Product
accepted by the average Net Sales price per dose based upon the applicable
Forecast.

        7.3    RECONCILIATION.

               (a) CALCULATION OF TRANSFER PRICE. Within thirty (30) days
following the end of each Flu Season, Wyeth-Ayerst shall provide Aviron with a
written calculation of the Transfer Price per dose for [***] Product for such
Flu Season based upon Net Sales of [***] Product during such Flu Season.

               (b) TRANSFER PRICE PAYMENT EXCEEDS TRANSFER PRICE. If the
Transfer Price Payment for [***] Product for a given Flu Season exceeds the
Transfer Price for such [***] Product payable by Wyeth-Ayerst for such Flu
Season, Aviron shall pay Wyeth-Ayerst the difference between such amounts.

               (c) TRANSFER PRICE EXCEEDS TRANSFER PRICE PAYMENT. If the
Transfer Price for an [***] Product for a given Flu Season exceeds the Transfer
Price Payment for such [***] Product paid by Wyeth-Ayerst for such Flu Season,
Wyeth-Ayerst shall pay to Aviron the difference between such amounts.

               (d) TIMING. All payments due under this Section 7.3 shall be made
within thirty (30) days of Aviron's receipt from Wyeth-Ayerst of the calculation
report set forth in Section 7.3(a).

               (e) AUDITING. Aviron shall have the right to audit Wyeth-Ayerst's
records in order to conform its calculation of the Transfer Price, in accordance
with the procedures provided in Section 17.4 of the U.S. Agreement or Section
16.4 of the International Agreement,

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

[***] = CONFIDENTIAL TREATMENT REQUESTED.


                                      12.
<PAGE>   14

as applicable, provided that such audit shall be made within ninety (90) days of
the end of the relevant Flu Season, but in no event more than once per each
Calendar Year.

8.      PROCEDURES AND PAYMENTS FOR [***] PRODUCT

        8.1 SUPPLY OF [***].

               (a) GENERAL. Aviron shall manufacture and supply to Wyeth-Ayerst
the [***] hereunder, in accordance with the applicable Specifications and with
GMP and all other relevant laws, rules and regulations promulgated by the
applicable Regulatory Agency.

               (b) [***] TRANSFER PRICE AND PAYMENT. In the event that Aviron
supplies [***] to Wyeth-Ayerst [***] for which [***] Wyeth-Ayerst shall pay
Aviron for such [***] at a transfer price equal to [***] per each trivalent dose
of Finished Product [***], as set forth in the applicable Forecast. Such
transfer price shall be due and payable within [***] days of Wyeth-Ayerst's
acceptance of such [***] pursuant to Section 8.1(d).

               (c) SHIPPING AND DELIVERY. Aviron shall deliver each lot of [***]
to the [***] Aviron shall ship the [***] in a commercially reasonable manner
using a validated shipping protocol approved by the applicable Development
Committee. Risk of loss for each lot of [***] delivered hereunder shall transfer
to Wyeth-Ayerst upon Wyeth-Ayerst's acceptance of such lot pursuant to Section
8.1(d). Each lot of [***] so delivered to Wyeth-Ayerst shall be accompanied by
the appropriate analytical summaries for such lot as agreed upon in writing by
the appropriate Development Committee.

               (d) ACCEPTANCE AND REJECTION.

                      (i) Any lot of [***] released to Wyeth-Ayerst hereunder
shall be received by Wyeth-Ayerst subject to inspection and testing by
Wyeth-Ayerst or its designated agent, to ensure that such lot of [***] meets the
applicable Specifications and otherwise complies with the warranties provided in
this Agreement, in accordance with testing and release procedures for the [***]
as established in the PLA as approved by the FDA or as otherwise required by the
applicable Regulatory Agency. Wyeth-Ayerst shall be allowed a maximum of [***]
days from the date of delivery of any shipment, or such other time period agreed
in writing by the appropriate Development Committee, (the "Inspection Period")
for inspection and provision of written notice to Aviron of rejection of any
portion or all of that shipment. If Wyeth-Ayerst does not deliver such written
notice to Aviron within the Inspection Period, such lot of [***] shall be deemed
to have met the applicable Specifications and to comply with all warranties
hereunder, and Wyeth-Ayerst shall be deemed to have accepted the shipment.
Aviron shall, as soon as is commercially feasible, but in no event more than
[***] days after receipt of a rejection notice from Wyeth-Ayerst, replace the
rejected quantity of [***] subject to Sections 8.1(d)(ii) and (iii).

                      (ii) Promptly following any rejection of a lot of [***]
Aviron shall determine whether the rejected lot conformed to the applicable
Specifications and warranties. If Aviron does not agree with Wyeth-Ayerst, the
applicable Development Committee shall select

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

[***] = CONFIDENTIAL TREATMENT REQUESTED.


                                      13.
<PAGE>   15

an independent laboratory mutually acceptable to both Parties to carry out tests
on representative samples from the rejected portion of the shipment. The results
of these tests shall be binding on both Parties.

                      (iii) If it is determined, either by the Parties' mutual
agreement or by such independent laboratory, that the rejected lot of [***] did
not conform to the applicable Specifications and/or warranties, Aviron shall, as
promptly as is commercially reasonable, replace such rejected lot with a
conforming lot as provided in subsection (i) above. Such replacement shall be
the Aviron's sole responsibility to Wyeth-Ayerst for non-conforming [***] Aviron
acknowledges and agrees that [***] performance of its obligations under Section
[***]. Rejected lots shall be returned to Aviron or disposed of at Aviron's
expense, in accordance with Aviron's instructions. In the event of any
destruction of a non-conforming lot, Wyeth-Ayerst shall deliver to Aviron an
appropriate certificate of destruction. Wyeth-Ayerst shall remain liable for all
payments due to Aviron under subsection (b) above for all replacement [***]
accepted by Wyeth-Ayerst pursuant to this subsection (d).

        8.2    SUPPLY OF [***].

               (a) MANUFACTURE, SHIPMENT AND DELIVERY. [***] shall deliver each
lot of [***] facility, as directed by [***] expense. [***] shall ship the [***]
in a commercially reasonable manner using a validated shipping protocol. Risk of
loss for each lot of [***] delivered to [***] hereunder shall transfer to [***]
upon [***] acceptance of such lot pursuant to Section 8.2(d). Such delivery
shall be accompanied by the appropriate analytical summaries for such lot as
agreed upon in writing by the appropriate Development Committee.

               (b) ACCEPTANCE AND REJECTION.

                      (i) Any lot of [***] released to [***] hereunder shall be
received by [***] subject to inspection and testing by [***] or its designated
agent, to ensure that such lot of [***] meets the applicable Specifications and
otherwise complies with the warranties provided in this Agreement, in accordance
with testing and release procedures for the [***] established in the PLA as
approved by the FDA or as otherwise required by the applicable Regulatory
Agency. [***] shall be allowed a maximum of [***] days from the date of delivery
of any shipment, or such other time period as agreed in writing by the
appropriate Development Committee, (the "Inspection Period") for inspection and
provision of written notice to [***] of rejection of any portion or all of that
shipment. If [***] does not deliver such written notice to [***] within such
Inspection Period, such lot of [***] shall be deemed to have met the applicable
Specifications and to comply with all warranties hereunder, and [***] shall be
deemed to have accepted the shipment. [***] shall, as soon as is commercially
feasible, but in no event more than [***] days after receipt of a rejection
notice from [***] replace the rejected quantity of [***] subjection to
subsections (ii) and (iii) below.

                      (ii) Promptly following any rejection of a lot of [***]
Aviron and Wyeth-Ayerst agree to mutually determine whether the rejected lot
conformed to the applicable Specifications and warranties. If the Parties cannot
agree, the applicable Development

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

[***] = CONFIDENTIAL TREATMENT REQUESTED.


                                      14.
<PAGE>   16
Committee shall select an independent laboratory mutually agreeable to both
Parties to carry out tests on representative samples from the rejected portion
of the shipment. The results of these tests shall be binding on both Parties.

                      (iii) If it is determined, either by the Parties' mutual
agreement or by such independent laboratory, that the rejected lot of [***] did
not conform to the applicable Specifications and/or warranties, [***] shall
replace such rejected lot with a conforming lot. [***] acknowledges and agrees
that [***] performance of its obligations under Section [***]. Rejected lots
shall be returned to [***] or disposed of at [***] expense, in accordance with
[***] instructions. In the event of any destruction of a non-conforming lot,
[***] shall deliver to [***] an appropriate certificate of destruction.

        8.3    [***] MANUFACTURE OF [***].

               (a) DELIVERY AND SHIPMENT. [***] Product shall be shipped ex
works Aviron's applicable [***] site. Receipt shall be made by Wyeth-Ayerst's
designated carrier. Each lot of [***] Product so received shall be accompanied
by the FDA lot release letter (to the extent required by the FDA) or comparable
documentation from the applicable Regulatory Agency (if available), and other
lot release specifications to be agreed upon by the applicable Development
Committee.

               (b) ACCEPTANCE AND REJECTION.

                      (i) Any lot of [***] Product released to Wyeth-Ayerst
hereunder shall be received by Wyeth-Ayerst or its designated carrier subject to
inspection and testing by Wyeth-Ayerst or its designated agent, to ensure that
such lot of [***] Product meets the applicable Specifications and otherwise
complies with the warranties provided in this Agreement, in accordance with
testing and release procedures for the [***] Product, established in the PLA as
approved by the FDA or other applicable Regulatory Agency. Wyeth-Ayerst shall be
allowed a maximum of [***] days from the date of release of any shipment, or
such other time period agreed in writing by the applicable Development
Committee, (the "Inspection Period") for inspection and provision of written
notice to Aviron of rejection of any portion or all of that lot. If Wyeth-Ayerst
does not deliver such written notice to Aviron within the Inspection Period,
such lot of [***] Product shall be deemed to have met the applicable
Specifications and to comply with all warranties hereunder, and Wyeth-Ayerst
shall be deemed to have accepted the shipment. Aviron shall, as soon as is
commercially feasible, but in no event later than [***] days after receipt of a
rejection notice from Wyeth-Ayerst, replace the rejected quantity of [***]
Product, subject to Sections 8.3(c)(ii) and 8.3(c)(iii).

                      (ii) Promptly following any rejection of a lot of [***]
Product, Aviron shall determine whether the rejected lot conformed to the
applicable Specifications and warranties. If Aviron does not agree with
Wyeth-Ayerst, the applicable Development Committee shall select an independent
laboratory mutually acceptable to both Parties to carry out tests on
representative samples from the rejected portion of the lot. The results of
these tests shall be binding on both Parties.

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

[***] = CONFIDENTIAL TREATMENT REQUESTED.


                                      15.
<PAGE>   17

                      (iii) If it is determined, either by the Parties' mutual
agreement or by such independent laboratory, that the rejected lot of [***]*
Product did not conform to the applicable Specifications and/or warranties,
Aviron shall, as promptly as is commercially reasonable, replace such rejected
lot with a conforming lot as provided in subsection (i) above. Such replacement
shall be Aviron's sole responsibility to Wyeth-Ayerst for non-conforming [***]
Product. Rejected lots shall be returned to Aviron or disposed of at Aviron's
expense, in accordance with Aviron's instructions. In the event of any
destruction of a non-conforming lot, Wyeth-Ayerst shall deliver to Aviron an
appropriate certificate of destruction. Wyeth-Ayerst shall remain liable for all
payments owed to Aviron under subsection (c) below for all replacement [***]
Product accepted by Wyeth-Ayerst pursuant to this subsection (b).

               (c) [***] PRODUCT TRANSFER PRICE. The combined transfer price for
the [***] Product delivered by Aviron and accepted by Wyeth-Ayerst hereunder
shall be the greater of [***] per trivalent dose of [***] Product, or [***] of
the average Gross Sales Revenue per trivalent dose of Finished Product per Flu
Season in the U.S. Territory or International Territory, as applicable.
Wyeth-Ayerst shall pay Aviron such transfer price as follows:

                      (i) [***]. For each lot of [***] accepted by Wyeth-Ayerst
pursuant to Section 8.1(d), Wyeth-Ayerst shall pay Aviron an amount equal to
[***] times the number of doses of [***] manufactured and supplied hereunder
[***], based on the [***] (the "[***] Doses"). Such amount is due and payable to
Aviron within [***] days of Wyeth-Ayerst's acceptance of the [***] pursuant to
Section 8.1(d).

                      (ii) [***] Wyeth-Ayerst shall pay Aviron an amount equal
to [***] times the number of doses of [***] Product manufactured and supplied
hereunder. Such payment is due and payable to Aviron within [***] days of
Wyeth-Ayerst's acceptance of each lot thereof pursuant to Section [***].

                      (iii) RECONCILIATION. Within thirty (30) days following
the end of each Flu Season in applicable Territory, Wyeth-Ayerst shall provide
Aviron with a written calculation of (A) the average Gross Sales Revenue per
dose of Finished Product sold in such Territory during such Flu Season, and (B)
the number of doses of [***] Product delivered by Aviron and accepted by
Wyeth-Ayerst pursuant to Section 8.3(b) in such Territory during such Flu Season
(the "Doses Supplied"). The "Sales-Based Transfer Price" for [***] Product in
such Territory during such Flu Season shall be deemed to be [***] of the product
of (A) multiplied by (B).

                             (1) If the Sales-Based Transfer Price for such
Territory during such Flu Season exceeds the total amount paid by Wyeth-Ayerst
to Aviron pursuant to subsections (i) and (ii) above for such [***] Product,
then Wyeth-Ayerst shall pay Aviron the difference between such amount and the
Sales-Based Transfer Price. All payments due under this subsection (iii) shall
be made within thirty (30) days of Aviron's receipt from Wyeth-Ayerst of such
calculation report.

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

[***] = CONFIDENTIAL TREATMENT REQUESTED.


                                      16.
<PAGE>   18

                             (2) If Aviron [***] manufacture Finished Product
under a U.S. [***] Forecast or an International Forecast, then Aviron shall
[***] provided that Aviron shall not [***] to the extent that [***] arises from
[***] hereunder in manufacturing the [***] from which the [***] Product was
[***].

               (d) AUDITS. Aviron shall have the right to audit Wyeth-Ayerst's
records in order to confirm its calculation of the Sales-Based Transfer Price,
in accordance with the procedures provided in Section 17.4 of the U.S. Agreement
or Section 16.4 of the International Agreement, as applicable, provided that
such audit shall be made within ninety (90) days of the end of the relevant Flu
Season.

9.      REGULATORY ISSUES

        9.1    COMPLIANCE.

               (a) AVIRON. Aviron shall obtain and maintain, and shall require
all of its contractors to obtain and maintain, all necessary permits,
registrations and licenses required to manufacture and supply [***] Product
under this Agreement. Aviron shall, and shall require all of its contractors to,
manufacture and handle all [***] Product manufactured and supplied by Aviron
hereunder in accordance with all laws, rules and regulations promulgated by the
applicable Regulatory Agency, and in compliance with GMP.

               (b) WYETH-AYERST. Wyeth-Ayerst shall obtain and maintain all
necessary permits, registrations and licenses required to manufacture and supply
such [***] under this Agreement. Wyeth-Ayerst shall manufacture and handle all
[***] manufactured and supplied by Wyeth-Ayerst hereunder in accordance with all
applicable federal, state and local laws, government regulations, and in
compliance with GMP.

               (c) COORDINATION OF EFFORTS. The applicable Development Committee
will coordinate the Parties' efforts under this Section 9.1 in complying with
all facilities and process regulatory requirements of the applicable Regulatory
Agency.

        9.2    AUDITS.

               (b) BY WYETH-AYERST. Wyeth-Ayerst shall have the right during
normal business hours and upon reasonable notice to Aviron, but not more often
than once during any Calendar Year, to inspect and audit in a reasonable manner
Aviron's manufacturing and other facilities in order to ensure its compliance
with its obligations under Section 9.1(a), including the inspection and audit of
all batch records and lot release records for all lots of [***] supplied by
Aviron hereunder. If any issue of product quality arises with respect to any of
such [***], then Wyeth-Ayerst shall have the right to inspect the relevant
manufacturing facilities, including all applicable documentation and records
relating to the manufacture of the product in question, upon reasonable notice
to Aviron. Aviron shall use Commercially Reasonable Efforts to obtain for
Wyeth-Ayerst substantially similar audit rights from its contractors hereunder.

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

[***] = CONFIDENTIAL TREATMENT REQUESTED.


                                      17.
<PAGE>   19
               (b) BY AVIRON. Aviron shall have the right during normal business
hours and upon reasonable notice to Wyeth-Ayerst, but not more often than once
during any Calendar Year, to inspect and audit in a reasonable manner
Wyeth-Ayerst's manufacturing and other facilities in order to ensure its
compliance with its obligations under Section 9.1(b), including the inspection
and audit of all batch records and lot release records for all lots of [***]*
manufactured by Wyeth-Ayerst hereunder. If any issue of product quality arises
with respect to any of such [***] then Aviron shall have the right to inspect
the relevant manufacturing facilities, including all applicable documentation
and records relating to the manufacture of the product in question, upon
reasonable notice to Wyeth-Ayerst.

10.     WARRANTIES, REPRESENTATIONS AND COVENANTS

        10.1 BY AVIRON. Aviron hereby represents and warrants that all [***]
manufactured by Aviron and supplied to Wyeth-Ayerst under this Agreement: (a)
will conform to the applicable Specifications; (b) will not be adulterated or
misbranded within the meaning of any applicable U.S. or other governmental law,
rule, order or regulation; and (c) will comply with all U.S. laws, regulations,
rules, standards, FDA approvals, registrations or permits, and all other
regulatory permits, approvals and licenses applicable to the manufacture of such
[***] In no event shall Aviron be liable under this Agreement for any failure of
any [***] to meet the applicable Specifications due to improper use, storage or
shipment by Wyeth-Ayerst.

        10.2 BY WYETH-AYERST. Wyeth-Ayerst hereby represents and warrants that
all [***] manufactured by Wyeth-Ayerst [***] under this Agreement, and all [***]
manufactured by Wyeth-Ayerst under this Agreement and sold or distributed by
Wyeth-Ayerst pursuant to the U.S. Agreement: (a) will conform to the applicable
Specifications; (b) will not be adulterated or misbranded within the meaning of
any applicable U.S. or other governmental law, rule, order or regulation; and
(c) will comply with all U.S. laws, regulations, rules, standards, FDA
approvals, registrations or permits, and all other regulatory permits, approvals
and licenses applicable to the manufacture of such [***]. In no event shall
Wyeth-Ayerst be liable under this Agreement for any failure of any [***] to meet
the applicable Specifications due to improper use, storage or shipment by
Aviron.

        10.3 WARRANTY DISCLAIMERS AND LIMITATIONS. EXCEPT AS SPECIFICALLY SET
FORTH IN SECTIONS 10.1 AND 10.2 ABOVE, NEITHER PARTY MAKES ANY WARRANTIES,
EXPRESS OR IMPLIED, WITH RESPECT TO ANY [***] MANUFACTURED AND SUPPLIED
HEREUNDER, AND SPECIFICALLY, WITHOUT LIMITATION, EACH PARTY HEREBY DISCLAIMS ANY
IMPLIED WARRANTY OF FITNESS FOR A PARTICULAR PURPOSE. EXCEPT AS SET FORTH ABOVE,
NEITHER PARTY ASSUMES OR AUTHORIZES ANY PERSON TO ASSUME ANY LIABILITY OR
WARRANTY IN CONNECTION WITH ANY [***] MANUFACTURED AND/OR SUPPLIED HEREUNDER. IN
THE EVENT OF A BREACH BY AVIRON OF THE WARRANTY SET FORTH IN SECTION 10.1 ABOVE,
OR A BREACH BY WYETH-AYERST OF THE WARRANTY SET FORTH IN SECTION 10.2 ABOVE, THE
NON-

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

[***] = CONFIDENTIAL TREATMENT REQUESTED.


                                      18.
<PAGE>   20
BREACHING PARTY'S SOLE REMEDY WILL BE TO RETURN THE AFFECTED [***]* FOR
REPLACEMENT OR CREDIT, IN ACCORDANCE WITH THE TERMS HEREOF.

        10.4 LIMITATION OF LIABILITY. IN NO EVENT SHALL EITHER PARTY BE LIABLE
FOR ANY INDIRECT, INCIDENTAL, SPECIAL OR CONSEQUENTIAL DAMAGES, INCLUDING LOSS
OF PROFITS, REVENUE, DATA OR USE, INCURRED BY THE OTHER PARTY, WHETHER IN
CONTRACT OR TORT OR BASED ON A WARRANTY, EVEN IF THE OTHER PARTY HAS BEEN
ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.

11.     TERM AND TERMINATION

        11.1 TERM. The term of this Agreement will begin on the Effective Date
and will expire on the later of (a) the date of expiration or termination of the
U.S. Agreement (the "U.S. Termination Date"), or (b) the date of expiration or
termination of the International Agreement (the "International Termination
Date"), unless terminated earlier or extended by the mutual written agreement of
the Parties.

               (a) In the event that the U.S. Termination Date occurs prior to
the International Termination Date, all provisions of this Agreement
specifically relating to the manufacture and supply of Product for the U.S.
Territory shall terminate, except as set forth in Section 11.3 or otherwise
explicitly stated herein, and all other provisions of this Agreement shall
continue in full force and effect.

               (b) In the event that the International Termination Date occurs
prior to the U.S. Termination Date, all provisions of this Agreement
specifically relating to the manufacture and supply of Product for the
International Territory shall terminate, except as set forth in Section 11.3 or
otherwise explicitly stated herein, and all other provisions of this Agreement
shall continue in full force and effect.

        11.2   EFFECT OF TERMINATION.

               (a) CONFIDENTIAL INFORMATION. Each Party shall return all of the
other Party's Confidential Information within sixty (60) days of termination or
expiration of this Agreement.

               (b) WORK IN PROCESS. Upon termination or expiration of this
Agreement, Wyeth-Ayerst shall provide Aviron with full particulars of all [***]
(including quantities of [***], and the dates on which the [***] was
manufactured) in its possession. Aviron shall be entitled, at its discretion, to
purchase from Wyeth-Ayerst any such [***] at a fair and reasonable price to be
agreed on in good faith by the Parties, but which in no event shall exceed [***]
of the average Net Sales per dose based on the then-current Flu Season. If so
requested by Aviron, Wyeth-Ayerst shall arrange for delivery of such [***]
purchased by Aviron pursuant to this subsection (i) to such destination or
destinations as may be designated by Aviron. All delivery arrangements shall be
subject to the prior approval of Aviron. Freight and insurance of such delivery
shall be at the cost of Aviron.

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

[***] = CONFIDENTIAL TREATMENT REQUESTED.


                                      19.
<PAGE>   21

        11.3 SURVIVAL. Sections 11.2 and 11.3, and Articles 10, 12, 13 and 14 of
this Agreement shall survive any expiration or termination of this Agreement, or
of any provisions thereof as provided in Section 11.1. Any and all claims and
payment obligations that accrue prior to any termination or expiration of this
Agreement, or of any provision hereof, shall survive such termination or
expiration.

12.     CONFIDENTIALITY

        12.1 CONFIDENTIAL INFORMATION. Except to the extent expressly authorized
by this Agreement or otherwise agreed in writing, the Parties agree that the
receiving Party shall keep confidential, and shall not publish or otherwise
disclose or use for any purpose other than as provided for in this Agreement,
any Information and other information and materials (including without
limitation the Aviron Product Materials) furnished to it by the other Party
pursuant to this Agreement or any Information developed during the course of the
collaboration hereunder, or any provisions of this Agreement that are the
subject of an effective order of the Securities Exchange Commission (the "SEC")
granting confidential treatment pursuant to the Securities Act of 1934, as
amended (collectively, "Confidential Information"), except to the extent that it
can be established by the receiving Party that such Confidential Information:

               (a) was already known to the receiving Party, other than under an
obligation of confidentiality, at the time of disclosure by the other Party;

               (b) was generally available to the public or otherwise part of
the public domain at the time of its disclosure to the receiving Party;

               (c) became generally available to the public or otherwise part of
the public domain after its disclosure to the receiving Party, and other than
through any act or omission of the receiving Party in breach of this Agreement;

               (d) was disclosed to the receiving Party, other than under an
obligation of confidentiality, by a Third Party who had no obligation to the
disclosing Party not to disclose such information to others; or

               (e) was independently developed by employees of the receiving
Party who had no knowledge of or access to the Confidential Information of the
other Party.

        For Confidential Information other than the Aviron Product Materials and
information relating to the Aviron Product Materials or the manufacture of the
Product, the non-disclosure obligations under this Section 12.1 shall terminate
upon the later of: (i) [***]* years following the expiration or termination of
this Agreement, or (ii) [***] years from the Effective Date.

        12.2   AUTHORIZED DISCLOSURE.

               (a) Each Party may disclose Confidential Information hereunder to
the extent such disclosure is reasonably necessary in securing agreements with
Third Party contractors, prosecuting or defending litigation or complying with
applicable governmental regulations,

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

[***] = CONFIDENTIAL TREATMENT REQUESTED.


                                      20.
<PAGE>   22
provided, however, that if a Party is required by law or regulation to make any
such disclosures of the other Party's Confidential Information it will, except
where impracticable for necessary disclosures (for example in the event of
medical emergency) give reasonable advance notice to the other Party of such
disclosure requirement (e.g., filings with the SEC and stock markets) and, will
use its reasonable efforts to secure confidential treatment of such Confidential
Information required to be disclosed, unless in the judgement of such disclosing
Party's legal counsel such Confidential Information is legally required to be
fully disclosed.

               (b) In addition, and with prior notice to the other Party of each
Third Party with whom a confidential disclosure agreement is being entered into,
each Party shall be entitled to disclose, under a binder of confidentiality
containing provisions at least as protective as those of this Article 12,
Confidential Information to any Third Party for the purpose of carrying out the
purposes of this Agreement.

13.     MICHIGAN AGREEMENT

        13.1 WYETH-AYERST OBLIGATIONS. Wyeth-Ayerst accepts that the following
provisions of the Michigan Agreement are hereby incorporated by reference and
shall be binding upon Wyeth-Ayerst as a "sublicensee" under the Michigan
Agreement (as defined in Section 2.6 of the Michigan Agreement):

               (a) Section 3.5 (U.S. government "march-in" rights);

               (b) Article 4 (obligations and restrictions relating to [***]
(as defined in Section [***] of the Michigan Agreement), products and their
ownership and use);

               (c) Section 6.2 (duties of use of a nomenclature system);

               (d) Section 6.3 (duties to keep records and rights of
inspection);

               (e) Section 8.5 (preference for U.S. manufacturers);

               (f) Article 9 (obligations regarding the periodic reporting,
disclosure and grant of rights to certain intellectual property);

               (g) Section 13.4 (duties to avoid improper representations or
responsibilities);

               (h) Article 14 (obligations to defend, hold harmless and
indemnify Michigan);

               (i) Section 14.3 (obligations to retain insurance);

               (j) Section 15.2 (survival of certain obligations);

               (k) Section 15.5 (obligations relating to the return and non-use
of [***] and certain intellectual property and prohibition on the manufacture of
products after termination of the Michigan Agreement);

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

[***] = CONFIDENTIAL TREATMENT REQUESTED.


                                      21.
<PAGE>   23
               (l) Section 15.6 (duties to provide rights to Michigan to certain
intellectual property upon termination of the Michigan Agreement);

               (m) Articles 16 and 17 (duties relating to confidential
information and to pre-publication disclosure);

               (n) Article 20 (duties to control export); and

               (o) Article 22 (duty to restrict use of Michigan's name).

        13.2 USE OF AVIRON PRODUCT MATERIALS. Wyeth-Ayerst acknowledges and
agrees that the Aviron Product Materials (as defined in the U.S. Agreement and
the International Agreement) are confidential materials of Aviron and Michigan,
and that access to the Aviron Product Materials shall be limited to those of its
employees reasonably requiring such access for the purposes set forth in this
Agreement, who further will be required, in writing, to treat the Aviron Product
Materials as confidential. In addition, Wyeth-Ayerst agrees that in the event
[***] other than the Aviron Product Materials come into its possession, it shall
promptly notify Aviron in writing; provided, however, that although it is not
the Parties' intent as of the Signing Date that [***] in the event that [***]
Wyeth-Ayerst agrees [***] and shall not [***] upon expiration or termination of
this Agreement, except to the extent [***] pursuant to [***].

        13.3 WARRANTY DISCLAIMER. Wyeth-Ayerst acknowledges Michigan's warranty
disclaimer and limitation of liability contained in the Michigan Agreement, and
will make no statements, representations or warranties inconsistent with such
warranty disclaimer or limitation of liability.

        13.4 COOPERATION. The Parties agree to cooperate reasonably with each
other in assisting each Party to comply with its obligations under the Michigan
Agreement as it pertains to such Party's performance of its rights and
obligations under this Agreement.

14.     INDEMNIFICATION

        14.1 INDEMNIFICATION BY AVIRON. Except as set forth in Section 14.2
hereof, and except to the extent caused by Wyeth-Ayerst's or its Affiliates' or
sublicensees' negligent, reckless or willful acts or omissions, Aviron shall
indemnify, defend and hold Wyeth-Ayerst and its directors, officers, employees,
agents and Affiliates harmless from and against any third party claims, damages,
costs or expenses, including reasonable attorneys' fees (collectively,
"Liabilities"), which Wyeth-Ayerst incurs by reason of any [***] supplied by
Aviron to Wyeth-Ayerst hereunder that results in injury, death or illness of any
person, to the extent that such claims arise out of, relate to or result from
the breach by Aviron of any of its representations or warranties contained
within this Agreement.

        14.2 INDEMNIFICATION BY WYETH-AYERST. Except as set forth in Section
14.1 hereof, and except to the extent caused by Aviron's negligent, reckless or
willful acts or omissions, Wyeth-Ayerst shall indemnify, defend and hold Aviron
and its directors, officers, employees, agents and Affiliates harmless from and
against any Liabilities which Aviron incurs by reason of

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

[***] = CONFIDENTIAL TREATMENT REQUESTED.


                                      22.
<PAGE>   24
any [***] manufactured by Wyeth-Ayerst hereunder that results in injury, death
or illness of any person, to the extent such Liabilities arise out of, relate to
or result from the breach by Wyeth-Ayerst of any of its representations or
warranties contained within this Agreement.

        14.3 INDEMNIFICATION PROCEDURES. A Party which intends to claim
indemnification under Section 14.1 or 14.2 hereof (the "Indemnitee") shall
promptly notify the other Party (the "Indemnitor") in writing of any third party
claim, lawsuit or other action in respect of which the Indemnitee or any of its
directors, officers, employees, agents and Affiliates intend to claim such
indemnification. The Indemnitee shall permit, and shall cause its directors,
officers, employees, agents and Affiliates to permit, the Indemnitor, at its
discretion, to settle any such claim, lawsuit or other action and agrees to the
complete control of such defense or settlement by the Indemnitor; provided that
such settlement does not adversely affect the Indemnitee's rights hereunder or
impose any obligations on the Indemnitee in addition to those set forth herein
in order for it to exercise such rights. No such claim, lawsuit or other action
shall be settled without the prior written consent of the Indemnitor, and the
Indemnitor shall not be responsible for any legal fees or other costs incurred
other than as provided herein. The Indemnitee, its directors, officers,
employees, agents and Affiliates shall cooperate fully with the Indemnitor and
its legal representatives in the investigation and defense of any claim, lawsuit
or other action covered by the provisions of this Article 14. The Indemnitee
shall have the right, but not the obligation, to be represented by counsel of
its own selection and expense.

        14.4 INSURANCE. Each Party shall maintain comprehensive general
liability insurance coverage, including products liability, with a minimum limit
of not less than [***],* and shall provide the other Party with a certificate of
such insurance as requested.

15.     DISPUTE RESOLUTION

        15.1   DISPUTES.

               (a) The Parties recognize that disputes as to certain matters may
from time to time arise during the term of this Agreement that relate to either
Party's rights and/or obligations hereunder or thereunder. It is the objective
of the Parties to establish procedures to facilitate the resolution of disputes
arising under this Agreement in an expedient manner by mutual cooperation and
without resort to litigation. To accomplish this objective, the Parties agree to
follow the procedures set forth in this Article 15 if and when a dispute arises
under this Agreement.

               (b) Unless otherwise specifically recited in this Agreement,
disputes between the Parties shall be first referred to the Commercialization
Committee or Development Committee responsible for such issue by either Party as
soon as reasonably possible after such dispute has arisen. If the relevant
Commercialization Committee or Development Committee is unable to resolve such a
dispute within ten (10) days of being requested by a Party to resolve such
dispute, or if the preceding sentence is not applicable to such dispute, either
Party may, by written notice to the other, have such dispute referred to their
respective executive

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

[***] = CONFIDENTIAL TREATMENT REQUESTED.


                                      23.
<PAGE>   25

officers designated below or their designees, for attempted resolution by
negotiations within fifteen (15) days after such notice is received. The
designated officers are as follows:

        For Wyeth-Ayerst:   President of Wyeth-Ayerst Global Pharmaceuticals

        For Aviron:         Aviron Chief Executive Officer

In the event such designated officers are unable to resolve such dispute, the
Parties shall then be permitted to pursue all available remedies at law or in
equity; provided, however, that no lawsuit may be commenced by one Party unless
it gives the other Party fifteen (15) days notice of its intent to initiate an
action.

16.     MISCELLANEOUS

        16.1   ASSIGNMENT.

               (a) Neither Party may assign its rights or obligations under this
Agreement without the prior written consent of the other Party, except in
connection with a merger, acquisition nor similar reorganization or the sale of
all or substantially all of its assets, or, in the case of Wyeth-Ayerst, the
sale or transfer of substantially all of the vaccine business of Wyeth-Ayerst.
Subject to [***], this Agreement shall survive any such merger or
reorganization of either Party with or into, or such sale of assets to, another
party and no consent for such merger, reorganization or sale shall be needed;
provided, that in the event of such merger, reorganization or sale, no
intellectual property rights of the acquiring corporation shall be included in
the technology licensed hereunder.

               (B) This Agreement shall be binding upon and inure to the benefit
of the successors and permitted assigns of the Parties. Any assignment not in
accordance with this Agreement shall be void.

        16.2 CONSENTS NOT UNREASONABLY WITHHELD OR DELAYED. Whenever provision
is made in this Agreement for either Party to secure the consent or approval of
the other, that consent or approval shall not unreasonably be withheld or
delayed, unless specifically otherwise provided.

        16.3 FORCE MAJEURE. Neither Party shall lose any rights hereunder or be
liable to the other Party for damages or losses on account of failure of
performance by the defaulting Party if the failure is occasioned by government
action, war, fire, explosion, flood, strike, lockout, embargo, act of God, or
any other similar cause beyond the control of the defaulting Party, provided
that the Party claiming force majeure has exerted all reasonable efforts to
avoid or remedy such force majeure and has given the other Party prompt notice
describing such event, the effect thereof and the actions being taken to avoid
or remedy such force majeure; provided, however, that in no event shall a Party
be required to settle any labor dispute or disturbance.

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

[***] = CONFIDENTIAL TREATMENT REQUESTED.


                                      24.
<PAGE>   26

        16.4 FURTHER ACTIONS. Each Party agrees to execute, acknowledge and
deliver such further instruments, and to do all such other acts, as may be
necessary or appropriate in order to carry out the purposes and intent of this
Agreement.

        16.5 NOTICES. All notices hereunder shall be in writing and shall be
deemed given if delivered personally or by facsimile transmission (receipt
verified), telexed, mailed by registered or certified mail (return receipt
requested), postage prepaid, or sent by express courier service, to the Parties
at the following addresses (or at such other address for a Party as shall be
specified by like notice; provided that notices of a change of address shall be
effective only upon receipt thereof).

        If to Aviron:        Aviron
                             297 North Bernardo Avenue
                             Mountain View, California 94043
                             Attention:     Chief Executive Officer
                             Telephone:     (650) 919-6600
                             Facsimile:     (650) 919-6612

        With copies to:      Cooley Godward LLP
                             5 Palo Alto Square
                             3000 El Camino Real
                             Palo Alto, California
                             Attention:     Barbara A. Kosacz
                             Telephone:     (650) 843-5000
                             Facsimile:     (650) 857-0663

        If to Wyeth-Ayerst:  Wyeth-Ayerst Laboratories
                             555 Lancaster Avenue
                             St. Davids, Pennsylvania, 19087
                             Attention:     Sr. Vice President, 
                                              Global Business Development
                             Telephone:     (610) 688-5809
                             Facsimile:     (610) 688-9498

        With copies to:      American Home Products Corporation
                             Five Giralda Drive
                             Madison, New Jersey 07940
                             Attention:     Sr. Vice President and 
                                              General Counsel
                             Telephone:     (973) 660-6040
                             Facsimile:     (973) 660-7155

        16.6 WAIVER. Except as specifically provided for herein, the waiver from
time to time by either of the Parties of any of their rights or their failure to
exercise any remedy shall not operate or be construed as a continuing waiver of
same or any other of such Party's rights or remedies provided in this Agreement.

        16.7 SEVERABILITY. If any term, covenant or condition of this Agreement
or the application thereof to any Party or circumstances shall, to any extent,
be held to be invalid or

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

[***] = CONFIDENTIAL TREATMENT REQUESTED.


                                      25.
<PAGE>   27

unenforceable, then (i) the remainder of this Agreement, or the application of
such term, covenant or condition to Parties or circumstances other than those as
to which it is held invalid or unenforceable, shall not be affected thereby and
each term, covenant or condition of this Agreement shall be valid and be
enforced to the fullest extent permitted by law; and (ii) the Parties hereto
covenant and agree to renegotiate any such term, covenant or application thereof
in good faith in order to provide a reasonably acceptable alternative to the
term, covenant or condition of this Agreement or the application thereof that is
invalid or unenforceable, it being the intent of the Parties that the basic
purposes of this Agreement are to be effectuated.

        16.8 AMBIGUITIES. Ambiguities, if any, in this Agreement shall not be
construed against any Party, irrespective of which Party may be deemed to have
authored the ambiguous provision.

        16.9 GOVERNING LAW. This Agreement shall be governed by and interpreted
under the laws of the [***] as applied to contracts entered into and performed
entirely in [***]* residents.

        16.10 HEADINGS. The Sections and paragraph headings contained herein are
for the purposes of convenience only and are not intended to define or limit the
contents of the Sections or paragraphs to which they apply.

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

        16.12 ENTIRE AGREEMENT; AMENDMENTS. This Agreement, the U.S. Agreement,
the International Agreement and the Credit Agreement (as defined in Section 13.1
of the U.S. Agreement) (collectively, the "Agreements"), including all Exhibits
and Schedules attached thereto, set forth all the covenants, promises,
agreements, warranties, representations, conditions and understandings between
the Parties hereto with respect to the subject matter thereof, and supersede and
terminate all prior agreements and understandings between the Parties with
respect to such subject matter, except as provided in Section 11.3(e) of the
International Agreement. There are no covenants, promises, agreements,
warranties, representations, conditions or understandings, either oral or
written, between the Parties with respect to the subject matter thereof other
than as set forth therein. No subsequent alteration, amendment, change or
addition to the Agreements shall be binding upon the Parties hereto unless
reduced to writing and signed by the respective authorized officers of the
Parties. The Agreements, including without limitation the Exhibits, Schedules
and attachments thereto, are intended to define the full extent of the legally
enforceable undertakings of the Parties thereto with respect to the subject
matter thereof, and no promise or representation, written or oral, which is not
set forth explicitly is intended by either Party to be legally binding. Both
Parties acknowledge that in deciding to enter into the Agreements and to
consummate the transaction contemplated thereby neither Party has relied upon
any statement or representations, written or oral, other than those explicitly
set forth therein.

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

[***] = CONFIDENTIAL TREATMENT REQUESTED.


                                      26.
<PAGE>   28
        16.13 INDEPENDENT CONTRACTORS. The status of the Parties under this
Agreement shall be that of independent contractors. Neither Party shall have the
right to enter into any agreements on behalf of the other Party, nor shall it
represent to any person that it has any such right or authority. Nothing in this
Agreement shall be construed as establishing a partnership or joint venture
relationship between the Parties.

        16.14 CURRENCY. The references in this Agreement to amounts expressed in
dollars ($) shall mean United States dollars.

        16.15 EFFECTIVE DATE. The "Effective Date" of this Agreement shall be
the same as the "Effective Date" as defined in the U.S. Agreement. In the event
that the Effective Date has not occurred within three (3) months after the
Signing Date, the Parties shall revert to their status prior to signing this
Agreement; provided that Aviron may extend such three month period in one (1)
month increments upon written notice to Wyeth-Ayerst, such extended period not
to exceed three (3) months. This Section 16.15 shall bind Aviron and
Wyeth-Ayerst upon execution of this Agreement, but the other provisions of the
Agreement shall not become effective until the Effective Date.


                                      27.
<PAGE>   29

        IN WITNESS WHEREOF, Aviron and Wyeth-Ayerst have caused this Agreement
to be executed as of the date first written above by their respective officers
thereunto duly authorized.

AMERICAN HOME PRODUCTS CORPORATION  AVIRON

By:    /s/ Gerad A. Jibilian             By:     /s/ Carol A. Olson
       -----------------------------             -------------------------------
Name:                                    Name:
       -----------------------------             -------------------------------
Title:                                   Title:
       -----------------------------             -------------------------------


                                      28.
<PAGE>   30
                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                           PAGE
                                                                                           ----
<S>     <C>                                                                                <C>
1.      DEFINITIONS..........................................................................1

        1.1    "[***] Product"...............................................................2

        1.2    "[***] Product"...............................................................2

        1.3    "Calendar Year"...............................................................2

        1.4    "Commercialization Committee".................................................2

        1.5    "Commercially Reasonable Efforts".............................................2

        1.6    "Development Committee".......................................................2

        1.7    "Effective Date"..............................................................2

        1.8    "[***] Agreement".............................................................2

        1.9    "Finished Product"............................................................2

        1.10   "[***]".......................................................................2

        1.11   "Flu Season"..................................................................2

        1.12   "Forecast"....................................................................2

        1.13   "[***] Product"...............................................................2

        1.14   "[***] Monovalent"............................................................2

        1.15   "Global Territory"............................................................2

        1.16   "Gross Sales Revenue".........................................................3

        1.17   "Good Manufacturing Practice" or "GMP"........................................3

        1.18   "JCC".........................................................................3

        1.19   "[***] Product"...............................................................3

        1.20   "ICC".........................................................................3

        1.21   "[***]".......................................................................3

        1.22   "International Territory".....................................................3

        1.23   "[***]".......................................................................3

        1.24   "[***]".......................................................................3

        1.25   "[***] Product"...............................................................3

        1.26   "[***] Plant".................................................................3

        1.27   "[***]".......................................................................3

        1.28   "Michigan"....................................................................3
</TABLE>

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

[***] = CONFIDENTIAL TREATMENT REQUESTED.


                                       i.
<PAGE>   31

                                TABLE OF CONTENTS
                                   (CONTINUED)

<TABLE>
<CAPTION>
                                                                                           PAGE
                                                                                           ----
<S>     <C>                                                                                <C>
        1.29   "Michigan Agreement"..........................................................4

        1.30   "Monovalent Bulk".............................................................4

        1.31   "PLA".........................................................................4

        1.32   "Product".....................................................................4

        1.33   "[***]".......................................................................4

        1.34   "Regulatory Agency"...........................................................4

        1.35   "Secondary Manufacture" or "Secondary Manufacturing"..........................4

        1.36   "Specifications"..............................................................4

        1.37   "Territory"...................................................................4

        1.38   "[***]".......................................................................4

        1.39   "U.S. Territory"..............................................................5

        1.40   "Working Seeds"...............................................................5

2.      SCOPE................................................................................5

        2.1    General Obligations and Rights of the Parties.................................5

        2.2    Management by Commercialization Committees....................................6

        2.3    Third Party Supply............................................................6

        2.4    Wyeth-Ayerst Advisory Role....................................................7

3.      PRODUCT FORECASTS FOR U.S. TERRITORY.................................................7

        3.1    U.S. [***] Forecast...........................................................7

        3.2    U.S. [***] Forecast...........................................................7

        3.3    [***].........................................................................8

4.      [***] FORECASTS FOR INTERNATIONAL TERRITORY..........................................8

        4.1    Forecasts.....................................................................8

5.      FAILURE TO [***].....................................................................9

        5.1    Notice of [***]...............................................................9

        5.2    [***] Product.................................................................9

        5.3    [***]........................................................................10

        5.4    Sole Remedy..................................................................10

6.      SPECIFICATIONS, DELIVERY AND ACCEPTANCE OF [***] PRODUCT............................10
</TABLE>

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

[***] = CONFIDENTIAL TREATMENT REQUESTED.


                                      ii.
<PAGE>   32
                                TABLE OF CONTENTS
                                   (CONTINUED)

<TABLE>
<CAPTION>
                                                                                           PAGE
                                                                                           ----
<S>     <C>                                                                                <C>
        6.1    Specifications...............................................................10

        6.2    Delivery and Shipment........................................................10

        6.3    Acceptance and Rejection.....................................................10

7.      PRICING AND PAYMENT FOR [***] PRODUCT...............................................11

        7.1    Transfer Price...............................................................11

        7.2    Transfer Price Payment.......................................................11

               (a)    [***] Product, First Flu Season.......................................11

               (b)    Other Transfer Price Payments.........................................12

        7.3    Reconciliation...............................................................12

8.      PROCEDURES AND PAYMENTS FOR [***] PRODUCT...........................................13

        8.1    Supply of [***]..............................................................13

        8.2    Supply of [***]..............................................................14

        8.3    [***] Manufacture of [***]...................................................15

9.      REGULATORY ISSUES...................................................................17

        9.1    Compliance...................................................................17

        9.2    Audits.......................................................................17

10.     WARRANTIES, REPRESENTATIONS AND COVENANTS...........................................18

        10.1   By Aviron....................................................................18

        10.2   By Wyeth-Ayerst..............................................................18

        10.3   Warranty Disclaimers and Limitations.........................................18

        10.4   Limitation of Liability......................................................19

11.     TERM AND TERMINATION................................................................19

        11.1   Term.........................................................................19

        11.2   Effect of Termination........................................................19

        11.3   Survival.....................................................................20

12.     CONFIDENTIALITY.....................................................................20

        12.1   Confidential Information.....................................................20

        12.2   Authorized Disclosure........................................................20

13.     MICHIGAN AGREEMENT..................................................................21
</TABLE>

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

[***] = CONFIDENTIAL TREATMENT REQUESTED.


                                      iii.
<PAGE>   33
                                TABLE OF CONTENTS
                                   (CONTINUED)

<TABLE>
<CAPTION>
                                                                                           PAGE
                                                                                           ----
<S>     <C>                                                                                <C>
        13.1   Wyeth-Ayerst Obligations.....................................................21

        13.2   Use of Aviron Product Materials..............................................22

        13.3   Warranty Disclaimer..........................................................22

        13.4   Cooperation..................................................................22

14.     INDEMNIFICATION.....................................................................22

        14.1   Indemnification by Aviron....................................................22

        14.2   Indemnification by Wyeth-Ayerst..............................................22

        14.3   Indemnification Procedures...................................................23

        14.4   Insurance....................................................................23

15.     DISPUTE RESOLUTION..................................................................23

        15.1   Disputes.....................................................................23

16.     MISCELLANEOUS.......................................................................24

        16.1   Assignment...................................................................24

        16.2   Consents Not Unreasonably Withheld or Delayed................................24

        16.3   Force Majeure................................................................24

        16.4   Further Actions..............................................................25

        16.5   Notices......................................................................25

        16.6   Waiver.......................................................................25

        16.7   Severability.................................................................25

        16.8   Ambiguities..................................................................26

        16.9   Governing Law................................................................26

        16.10  Headings.....................................................................26

        16.11  Counterparts.................................................................26

        16.12  Entire Agreement; Amendments.................................................26

        16.13  Independent Contractors......................................................27

        16.14  Currency.....................................................................27

        16.15  Effective Date...............................................................27
</TABLE>




                                      iv.