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Exhibit 10.324    
    

	CONFIDENTIAL	 	REDACTED VERSION

[***] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH
RESPECT TO THE OMITTED PORTIONS.

 
 

HIV PROBE LICENSE AND OPTION AGREEMENT—EUROPEAN UNION
  between    
    
    CHIRON CORPORATION    
    
    F. HOFFMAN-LA ROCHE LTD.    
    
    and    
    
    ROCHE MOLECULAR
SYSTEMS, INC.    
    

 
 

HIV PROBE LICENSE AND OPTION AGREEMENT—EUROPEAN UNION
  
    TABLE OF CONTENTS    
    

	 
	 	 
	 	Page

	RECITALS	 	 	 	1
	

ARTICLE 1	
 	

DEFINITIONS	
 	

1
	

ARTICLE 2	
 	

LICENSE GRANTS	
 	

8
	

ARTICLE 3	
 	

PAYMENTS, ROYALTIES	
 	

10
	

ARTICLE 4	
 	

RECORDS AND REPORTS	
 	

10
	

ARTICLE 5	
 	

OTHER ACTIONS	
 	

11
	

ARTICLE 6	
 	

REPRESENTATIONS AND WARRANTIES	
 	

12
	

ARTICLE 7	
 	

TERM AND TERMINATION	
 	

14
	

ARTICLE 8	
 	

CONFIDENTIALITY	
 	

16
	

ARTICLE 9	
 	

INDEMNITY	
 	

17
	

ARTICLE 10	
 	

ALTERNATIVE DISPUTE RESOLUTION	
 	

18
	

ARTICLE 11	
 	

MISCELLANEOUS	
 	

18
	

ARTICLE 12	
 	

FIELD RESTRICTIONS AND OTHER COVENANTS	
 	

21
	

ARTICLE 13	
 	

INFRINGEMENT BY THIRD PARTIES	
 	

24
	

ARTICLE 14	
 	

EUROPEAN COMMUNITY PROVISIONS	
 	

25
	

EXHIBIT A:	
 	

COMPENSATION TO CHIRON	
 	

 
	

EXHIBIT B:	
 	

CHIRON PATENT LIST	
 	

 
	

EXHIBIT C:	
 	

ROCHE PATENT LIST	
 	

 
	

EXHIBIT D:	
 	

CHIRON LICENSED PRODUCTS & UNIT SIZES	
 	

 
	

EXHIBIT E:	
 	

FORM OF REPORT	
 	

 
	

EXHIBIT F:	
 	

EXISTING LICENSES	
 	

 

 
HIV PROBE LICENSE AND OPTION AGREEMENT—EUROPEAN UNION  

        This agreement (hereinafter "Agreement") is made by and between CHIRON CORPORATION, a Delaware corporation, of 4560 Horton Street, Emeryville, California 94608
(hereinafter referred to as "CHIRON"), F. HOFFMANN-LA ROCHE LTD., a Swiss corporation, of Grenzacherstrasse 124, Basel, Switzerland (hereinafter referred to as "ROCHE PARENT"), and
ROCHE MOLECULAR SYSTEMS, INC., a Delaware corporation, of 1145 Atlantic Avenue, Suite 100, Alameda, California 94501 (hereinafter referred to as "RMS" and collectively with ROCHE PARENT,
"ROCHE"). 

 
 

BACKGROUND    
    

        WHEREAS, CHIRON and ROCHE currently own or control certain patent rights relating to the human immunodeficiency virus ("HIV"), as defined below. 

        WHEREAS,
CHIRON and ROCHE entered into that certain Settlement Agreement dated October, 20 2000 (the "Settlement Agreement") pertaining to the settlement of the certain litigation
matters described therein. 

        WHEREAS,
in consideration of and subject to the execution and delivery of the Settlement Agreement, CHIRON granted licenses to ROCHE under certain patent rights relating to HIV for use
in assays for the detection of nucleic acid sequences for use in in vitro diagnostics (excluding use in Blood Screening, as defined below, but without
limiting the effect of the Blood Screening Agreements, as defined below, or the provisions of Section 12 of this Agreement), all on the terms and conditions set forth in the HIV Probe License
and Option Agreement dated as of October 10, 2000, as amended from time to time (the "Original License Agreement"). 

        WHEREAS,
in consideration of and subject to the execution and delivery of the Settlement Agreement, ROCHE granted to CHIRON an option to license certain patent rights relating to HIV for
use in assays for the detection of nucleic acid sequences for use in Blood Screening and the
Transplantation Field (as defined below), all on the terms and conditions set forth in the Original License Agreement. 

        WHEREAS,
the parties wish to amend the Original License Agreement by entering into a separate license and option agreement containing certain terms and conditions mutually agreed upon by
the parties for the region of the European Union, all on the terms and conditions set forth herein. 

        NOW,
THEREFORE, in consideration of the above provisions and the mutual covenants contained herein, CHIRON and ROCHE hereby agree as follows: 

 
 

ARTICLE 1
  DEFINITIONS    
    

        In this Agreement the following words and phrases shall have the following meanings: 

        1.1   "ADR"
means Alternative Dispute Resolution in accordance with Article 10. 

        1.2   "Affiliate"
means an entity that directly, or indirectly through one or more intermediaries, controls or is controlled by or is under common control with, a specified
entity. For the purposes of this definition, "control" (including with correlative meanings, the terms "controlling", "controlled by" and "under common control with"), as applied to any entity, means:
(a) the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of that entity, whether through the ownership of voting securities or by
contract or otherwise; or (b) the ownership of at least fifty percent (50%) of the voting securities of that entity. Notwithstanding anything to the contrary contained herein, "Affiliate" shall
not include, in the case of CHIRON, Novartis AG or any Affiliate of Novartis AG, unless Novartis shall have acquired direct control of a majority of the Board of Directors of CHIRON. Notwithstanding
anything to the contrary contained herein, "Affiliate" shall 

1

 

not
include, in the case of ROCHE, Genentech Inc. or any Affiliate of Genentech Inc., nor Chugai Pharmaceutical Co., Ltd. or any Affiliate of Chugai Pharmaceutical
Co., Ltd. 

        1.3   "Authorized
Distributor" means a bona fide, unaffiliated distributor, but excluding any entity which is a Major IVD
Manufacturer (as defined below) that is not licensed in the Field (as defined below) under one or more of the CHIRON Licensed Patents (as defined below) or is affiliated with, or directly or
indirectly controlled by, such a Major IVD Manufacturer, except to the extent that such unlicensed Major IVD Manufacturer or its Affiliates distributes CHIRON Licensed Product for ROCHE or its
Affiliates on a local country basis and in the same manner in which it distributes other diagnostic products for ROCHE or its Affiliates and ROCHE and its Affiliates are not otherwise selling CHIRON
Licensed Products in such country. 

        1.4   "Average
Unit Price" or "AUP" means with respect to CHIRON Licensed Products sold by ROCHE or its Affiliates from and including the first day of the Calendar Quarter
commencing immediately prior to the Effective Date, with respect to a Calendar Quarter (as defined below), Net Sales of such future CHIRON Licensed Product by ROCHE or its Affiliates calculated on a
per Unit basis, in each country within the Region, on a product-by-product basis, using customary and reasonable methodologies for determining average unit pricing generally
consistent with the definition herein of Net Sales, during the preceding two (2) Calendar Quarters. 

        1.5   "Bayer
Cross License" means the Cross-License Agreement by and between Chiron Diagnostics Corporation and CHIRON dated November 30, 1998, as amended from time to
time. 

        1.6   "Blood
Screening" means the commercial use of products that detect nucleic acid sequences(s) for: (a) the screening of blood, plasma or blood components intended
for transfusion or for use in blood products (e.g., without limitation, immunoglobulins); or (b) confirmatory or supplemental testing of the same samples otherwise screened for purposes
described in Section 1.6(a). 

        1.7   "Blood
Screening Agreements" means the Blood Screening HIV Probe License Agreement—European Union by and between CHIRON and ROCHE dated as of the Effective
Date and the Blood Screening HIV Probe License Agreement by and between CHIRON and ROCHE dated as of January 1, 2001, each as amended from time to time. 

        1.8   "Blood
Screening End User" means an entity that purchases CHIRON Licensed Products, whether from ROCHE, its Affiliates, its Authorized Distributors, or End Users
(including, without limitation, Cross Sellers), for the primary purpose of Blood Screening, but expressly excluding any entity that purchases such products for the primary purpose of Plasma
Fractionation (as such term is defined in the Blood Screening Agreements). 

        1.9   "Calendar
Quarter" means the three (3) month period beginning January 1, April 1, July 1 or October 1, provided that the Calendar
Quarter and Calendar Year (as defined below) shall be consistent with ROCHE financial reporting practices. 

        1.10 "Calendar
Year" means January 1 through December 31. 

        1.11 "CHIRON
Future HIV Sequence Patent Rights" means any and all Valid Claims Directed to HIV of United States and foreign patents and patent applications: (a) which
are based upon inventions conceived or rights acquired [***] (as defined below); (b) which claim HIV nucleic acid
sequence(s) or a method to use (other than in the manufacture of peptides) or detect such sequences specifically; (c) which are owned by, licensed to or otherwise controlled by CHIRON or its
Affiliates, with rights to license or sublicense; and (d) with respect to which CHIRON has the right to grant the option provided for in Section 2.5 of this Agreement. For purposes of
this Agreement, an invention will be deemed to have been conceived if there is a patent, patent application, written invention disclosure statement or other tangible document (whether or not
witnessed) describing such invention. 

2

 

        1.12 "CHIRON
Licensed Patents" means Valid Claims Directed to HIV which cover the manufacture, use, sale, offer for sale or importation of a Product that are contained
within any of the following: (a) the patents and applications identified in Exhibit B and any continuation, continuation-in-part and divisional applications
therefrom; (b) any reissued or reexamined patents obtained from such patents and applications; (c) all foreign counterparts of such patents and applications; and (d) all future
patents and applications which are based on inventions conceived by CHIRON or its Affiliates on or before the Effective Date. 

        1.13 "CHIRON
Licensed Products" means current and future Products which are used by or sold under circumstances and in jurisdictions, such that in the absence of the
licenses granted under Sections 2.1 and 2.3, such use or sale would constitute an infringement of a Valid Claim of the CHIRON Licensed Patents, including without limitation the Products identified in
Exhibit D, as modified from time to time by mutual agreement of the parties or as determined in accordance with Section 5.2. 

        1.14 "Cross
Sales" or "Cross Selling" shall have the meaning specified in Section 12.3. 

        1.15 "Cross
Seller" means an End User that is engaged in Cross Selling. 

        1.16 "Directed
to HIV" means that the claim or technology in question is directed to methods, compositions, reagents or kits specifically for use in nucleic
acid-based diagnostic assays for the detection of HIV nucleic acid sequence(s), or specifically for use in the manufacture of any compositions or reagents for use in, or manufacture of
nucleic acid-based diagnostic assays for detection of HIV nucleic acid sequence(s) (excluding, for example, PCR claims and technology and other methods for detection of nucleic acid
sequence(s) generally which involve nucleic acid amplification). The terminology "specifically for use" as used in this Section 1.16, is intended to exclude inventions suitable for use with
viruses or analytes other than HIV (including by way of example and not by way of limitation, inventions relating to PCR, or assay formats, improved expression systems, detectable labels,
instrumentation, packaging and the like), which shall not be considered "specifically for use" in HIV detection as contemplated by this Section 1.16 and shall therefore not be considered as
"Directed to HIV" hereunder. 

        1.17 "Earned
Royalty" shall have the meaning specified in Paragraph 1 of Exhibit A. 

        1.18 "Effective
Date" means [***]. 

        1.19 "Eligible
Third Party License" means a license agreement in the Field entered into by CHIRON or Bayer or their respective Affiliates with a Licensed Third Party (as
defined below) after the Effective Date and includes any material amendment made after the Effective Date to a license existing on the Effective Date, other than the Bayer Cross License, which:
(a) grants such Licensed Third Party the license under one or more of the CHIRON Licensed Patents to make, have made, use, import, offer for sale or sell Product which ROCHE is licensed to
make, have made, use, import, offer for sale or sell under this Agreement; and (b) imposes payment obligations which would have the effect of providing more favorable license payment terms to
such Licensed Third Party than the terms to ROCHE under this Agreement. 

        1.20 "End
User" means a person or entity who is a final purchaser of a Product, and whose use of a Product results in the Product's consumption, operation, destruction or
loss of activity. 

        1.21 "Field"
means the commercial use of human in vitro diagnostic products that detect nucleic acid sequences of HIV.
Without prejudice to the provisions herein related to use outside of the Field, expressly excluded from the Field are: (a) products in Blood Screening; and (b) products specifically
labeled or promoted for use in the Transplantation Field (as defined below). 

        1.22 "Foundational
Patents" means the CHIRON Licensed Patents identified in Exhibit B which are stated therein to be Foundational Patents. 

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        1.23 "HIV"
means any viral isolate of the human immunodeficiency virus classified as HIV by the International Committee on the Taxonomy of Viruses (or any body that replaces
such Committee) or any subtype of such isolate and further includes any isolate that is at least forty percent (40%) homologous to any such Isolate and of the same genomic type and substantially the
same genomic organization, any isolate that has a genome that either hybridizes to or Is substantially Identical to any such isolate or its compliment, and any defective or modified form of any of the
above isolates. 

        1.24 "HIV
Qualitative Assay" means a Product which: (a) is an assay; (b) detects or measures the presence of HIV in an analyzed sample; (c) does not
determine the quantity of HIV in the analyzed sample; and (d) is not by itself, through a single use, capable of being used as an HIV Genotyping Assay or an HIV Resistance Assay (as each is
defined herein). 

        1.25 "HIV
Quantitative Assay," means a Product which: (a) is an assay; (b) measures the presence of HIV in an analyzed sample; (c) does determine the
quantity of HIV in the analyzed sample; and (d) is not by itself, through a single use, capable of being used as an HIV Genotyping Assay or an HIV Resistance Assay. 

        1.26 "HIV
Genotyping Assay" means a Product which is an assay or method (e.g., sequencing) that is labeled or promoted as being useful through a single use to determine and
differentiate individual genotypes of an HIV virus that are present in an analyzed. 

        1.27 "HIV
Resistance Assay" means a Product which is an assay or method (e.g., sequencing) that is labeled or promoted as being useful to detect through a single use the
specific drug resistance mutation(s) present in the HIV virus in an analyzed sample. 

        1.28 "HIV
Taqman Qualitative/Quantitative Assay" means a Product which: (a) is an assay; (b) detects and measures the presence of HIV in an analyzed sample by
utilization of ROCHE's proprietary 5' nuclease detection method; (c) does determine the quantity of HIV in an analyzed same; and (d) is not by itself, through a single use capable of
being used as only an HIV Qualitative Assay, HIV Classification Assay, HIV Genotyping Assay or HIV Resistance Assay. 

        1.29 "Infringing
Third Party Sales" means sales by a Major IVD Manufacturer of Products: (a) which infringe one or more of the CHIRON Licensed Patents; or
(b) as to which a license under one or more of the CHIRON Licensed Patents has been granted, but as to which the licensee is not paying royalties thereunder. 

        1.30 "Licensed
Patents" means the CHIRON Licensed Patents and the ROCHE Optioned Patents. 

        1.31 "Licensed
Third Party" means an unaffiliated third party to whom CHIRON or Bayer or their respective Affiliates grants a license or a covenant not to sue after the
Effective Date, under which license or covenant not to sue such third party is allowed to make, have made, use, import, offer for sale or sell any Product, directly or indirectly, under one or more of
the CHIRON Licensed Patents. Expressly excluded from Licensed Third Party are: (a) any Affiliate of CHIRON; (b) Bayer or any of its Affiliates (to the extent operating under the Bayer
Cross License); or (c) any entity which receives a judicially, or other governmental agency, imposed license or freedom from suit under any one or more of the CHIRON Licensed Patents and does
not otherwise have a Voluntary License (as defined below). 

        1.32 "Major
IVD Manufacturer" means a commercial entity (and its Affiliates) that manufactures, sells and engages in other commercial activities with respect to  in vitro diagnostic products, and has a significant
marketing presence in the Region. Major IVD Manufacturers include Abbott, Bayer, Johnson &
Johnson, Pasteur, Sanofi, Dade Behring, Organon Teknika, Becton Dickinson, bioMerieux, BioRad, Fujirebio, Beckman Coulter, Visible Genetics, Innogenetics and PE Corporation and each of their
successors and assigns and any other entity which commands in the future at least an equivalent presence as measured by total product sales as do any of the foregoing entities as of the Effective Date
in the Region. 

4

 

        1.33 "Minimum
Royalty" and "Minimum Royalty Amount" shall have the meanings specified in Paragraph 2 of Exhibit A. 

        1.34 "Net
Sales" means the amount billed or invoiced for CHIRON Licensed Products sold by ROCHE or its Affiliates in the Region, less: 

        (a)   Discounts
actually allowed and taken; 

        (b)   Amounts
repaid or credited by reason of rejection or return; 

        (c)   To
the extent separately stated on purchase orders, invoices or other documents of sale, taxes levied on and/or other governmental charges made as to production,
transportation or insurance charges; 

        (d)   The
reasonable value of the instrument, instrument financing, consumables other than the CHIRON Licensed Products in question (including without limitation sample
preparation) and service components of an operating or capital lease for instrumentation on which the CHIRON Licensed
Products are used (collectively, "Associated Goods and Equipment"), for which the charges are included in the price of the CHIRON Licensed Products purchased, provided that the methods for determining
such value shall be proposed by ROCHE and subject to CHIRON's written consent, not to be unreasonably withheld; 

        (e)   Charges
for freight, handling and transportation paid by the selling entity; and 

        (f)    Sales,
use and value-added taxes and other similar taxes incurred and separately stated on invoices. 

        (1)   Net
Sales shall include all sales to non-Affiliate third parties, including sales to Authorized Distributors in countries in the Region where, due to
regulatory constraints and/or market practice, substantially all sales of the relevant CHIRON Licensed Product are made through distributors, provided that ROCHE shall use reasonable efforts in
connection with sales to such Authorized Distributors to comply with clause (A) immediately below. With respect to sales to all other Authorized Distributors within the Region, if Net Sales are
based on the transfer price to the Authorized Distributor rather than End User sales, either: (A) Net Sales on which royalties shall be calculated shall be deemed to be not less than the higher
of the average selling price for the applicable Product in the applicable country within the Region; or (B) the parties shall adopt another mechanism for preserving for CHIRON the same
economics as if such sales had been made to the End User by ROCHE or its Affiliate rather than the Authorized Distributor. Any such mechanism shall be proposed by ROCHE and shall be subject to
CHIRON's prior written consent, which shall not be unreasonably withheld. CHIRON shall not withhold its consent to a proposal by ROCHE to calculate Net Sales at  [***] of the transfer price to an
Authorized Distributor or such lesser percentage as reflects reasonably the distributor
mark-ups prevailing generally in the relevant country. 

        (2)   For
clarity of understanding, Net Sales shall not include any CHIRON Licensed Product furnished to third parties for which no payment is received, such as, experimental,
test market, promotional or other free goods. On the other hand, Net Sales shall include any CHIRON Licensed Product furnished in return for payment, whether or not such CHIRON Licensed Product is for
commercial, research or other use. For clarity of understanding, per Unit Minimum Royalties shall apply to each CHIRON Licensed Product Shipped to a customer for any purpose, except for CHIRON
Licensed Products Shipped to third parties at no charge for: (A) use in ROCHE's preclinical or clinical trials in the Field or the Transplantation Field; (B) testing, quality control or
evaluation purposes; or (C) replacement of rejected or defective goods. Without limiting the foregoing, CHIRON Licensed Products furnished to third parties at price discounts, including,
without limitation, free goods furnished as part of sales promotions, shall be subject to Minimum Royalties. 

5

 

        (3)   A
sale shall be deemed to have been made and Earned Royalties or Minimum Royalties incurred (except as specifically set forth in Section 1.34(2) and this
Section 1.34(3)) when the CHIRON Licensed Product is consumed, invoiced or shipped by ROCHE or its Affiliates to a non-Affiliate third party ("Shipped"); provided that where an
invoice is issued, the obligations to pay Earned Royalties and Minimum Royalties hereunder shall arise on the invoice date. Sales to or between Affiliates shall not be included in Net Sales or Minimum
Royalties until ROCHE or its Affiliate consumes the CHIRON Licensed Product in providing a commercial service for a non-Affiliate third party or Ships the CHIRON Licensed Product to a
non-Affiliate third party. Notwithstanding the anything in this Section 1.34, Passive Sales shall be deemed to have been made and the associated royalties shall be deemed to have
been incurred and shall be paid in the manner set forth in the Blood Screening Agreements, including without limitation Section 4.1 thereof, and shall be dealt with by the parties consistently
with the parties' dealings under the Blood Screening Agreements. 

        (4)   In
the event that a CHIRON Licensed Product subject to royalties hereunder is sold in combination with another Product or assay, other than the Associated Goods and
Equipment covered by Clause (d) above, for a single price (a "Combination Product"), Net Sales from sales of a Combination Product, for purposes of calculating royalties due under this
Agreement, shall be calculated by multiplying the Net Sales of that Combination Product by the fraction A/(A+B), where A is the AUP in the country of sale, during the applicable reporting period, of
the CHIRON Licensed Product subject to royalties hereunder if sold separately in the country of sale, and B is the AUP in the country of sale, during the applicable reporting period, of the other
Product(s) or assays sold separately in the country of sale. In the event that no such separate sales are made, Net Sales, for purposes of determining royalty payments on such Combination Products,
shall be a reasonable apportionment of the gross amount invoiced therefor based upon the relative contribution of the CHIRON Licensed Product subject to royalties hereunder to the price of the
Combination Product. Such apportionment for Combination Products currently or previously sold shall be a reasonable apportionment of the gross amount invoiced therefor based upon the relative
contribution of the CHIRON Licensed Product subject to royalties hereunder to the price of the Combination Product. Such apportionment shall be determined by ROCHE based upon its past practice and
experience subject to CHIRON's written consent, not to be unreasonably withheld. The apportionment of future Combination Products will be handled in this same fashion prior to the first Unit Shipped
or consumed by ROCHE or an Affiliate in providing a commercial service, or resolved in accordance with Section 5.2. Notwithstanding the above, if a CHIRON Licensed Product is an assay that is
capable in a single use of being used in more than one fashion (e.g., as both an HIV Quantitative Assay and as an HIV Qualitative Assay), such CHIRON Licensed Product is not a Combination Product
solely for that reason, but shall be treated for purposes of calculating Minimum Royalties in the same fashion as the HIV Taqman Qualitative/Quantitative Assay, as set forth in Exhibit A. 

        (5)   In
the event a sale of a CHIRON Licensed Product is conditioned upon the payment of an initial licensing fee, access fee or other required fee the payment of which is a
prerequisite to the Shipment, consumption or use of a CHIRON Licensed Product, Net Sales, for the purpose of determining royalty payments on such CHIRON Licensed Product, shall include a reasonable
apportionment of the amount invoiced for such fee, based upon the relative value of the intellectual property contained within the CHIRON Licensed Product subject to royalties hereunder to the
intellectual property contained within the other product or service components Shipped, licensed, consumed or used. Such apportionment shall be determined by ROCHE based upon its past practice and
experience subject to CHIRON's written consent, not to be unreasonably withheld, and Net Sales shall not include any portion of a licensing fee, access fee or other required fee reasonably allocated
with specificity to the access, license or use of the ROCHE PCR patents. 

        (6)   In
the event that ROCHE or its Affiliates perform assays for commercial purposes utilizing CHIRON Licensed Products, Net Sales means the invoiced amount for the patient
result provided as a 

6

 

result
of performance of such assays, less a reasonable deduction for the value of the services and or other products provided therewith, less the applicable deductions pursuant to this
Section 1.34. The allocation of value to services or other products provided shall be determined by ROCHE based upon its past practice and experience, and shall be subject to CHIRON's prior
written consent, which shall not be unreasonably withheld. 

        (7)   Notwithstanding
anything to the contrary in this Agreement, Passive Sales by ROCHE or an Affiliate of ROCHE shall be deemed to have made and the associated royalties
shall be deemed to have been incurred and shall be reported and paid in the manner set forth in the Blood Screening Agreements, including without limitation Section 4.1 thereof and any
"alternative methodology" agreed to by the parties thereunder, and shall be dealt with by the parties consistently with the parties' dealings under the Blood Screening Agreements. The calculation of
amounts due from Roche to Chiron on such Passive Sales shall be made in accordance with paragraph 2(b) of Exhibit A. 

        (8)   In
the case of sales by ROCHE or an Affiliate of CHIRON Licensed Products to an End User which Cross Sells such products outside the Field,
(i) Section 1.34(3) shall apply to the initial sale to such End User, and (ii) the royalty earned on such initial sale shall be credited against any amounts owing under
paragraphs 2(b) and (c) of Exhibit A. Notwithstanding anything to the contrary in this Agreement, Cross Sales by an End User shall be deemed to have been made when, and the associated
royalties shall be deemed to have been incurred and shall be reported and paid, in the manner set forth in the Blood Screening Agreements, including without limitation Section 4.1 thereof and
any "alternative methodology" agreed to by the parties thereunder, and shall be dealt with by the parties consistently with the parties' dealings under the Blood Screening Agreements. The calculation
of amounts due from Roche to Chiron on such Cross Sales shall be made in accordance with Section 12.3 and paragraph 2(b) of Exhibit A. 

        1.35 "Passive
Sales" or "Passive Selling" means [***]. 

        1.36 "PCR"
means polymerase chain reaction technology. 

        1.37 "Product(s)"
means reagents, compositions or kits suitable for use in the Field or the Transplantation Field. 

        1.38 "Product
Category" has the meaning set forth in Paragraph 4 of Exhibit A. 

        1.39 "Region"
shall mean, with respect to any Calendar Quarter, all member states whose accession to the European Union has become effective as of the first day of each such
Calendar Quarter. 

        1.40 "Registration"
means a filing with respect to the commercial sale of the CHIRON Licensed Products made with any governmental or regulatory body or other body having
authority over the commercial sale of the CHIRON Licensed Products, made [***] of this Agreement in any country located within,
or covering all of the countries within, the Region including, without limitation, applications for registration under the CE mark. 

        1.41 "ROCHE
Future HIV Sequence Patent Rights" means any and all Valid Claims Directed to HIV of United States and foreign patents and patent applications: (a) which
are based upon inventions conceived or rights acquired [***]; (b) which claim HIV nucleic acid sequence(s) or a method to
use (other than in the manufacture of peptides) or detect such sequences specifically; (c) which are owned by, licensed to or otherwise controlled by ROCHE or its Affiliate, with rights to
license or sublicense; and (d) with respect to which ROCHE has the right to grant the option provided for in Section 2.6 of this Agreement. For purposes of this Agreement, an invention
will be deemed to have been conceived if there is a patent, patent application, written invention disclosure statement or other tangible document (whether or not witnessed) describing such invention. 

7

 

        1.42 "ROCHE
Optioned Patents" means: (a) the patents and applications identified in Exhibit C and any continuation,
continuation-in-part and divisional applications therefrom; (b) any reissued or reexamined patents obtained from such patents and applications; (c) all foreign
counterparts of such patents and applications; and (d) all future patents and applications which are based on inventions conceived by ROCHE or its Affiliates on or before the Effective Date, to
the extent the items described in clauses (a) through (d) of this Section 1.42 contain a Valid Claim Directed to HIV which covers the manufacture, use, sale, offer for sale or
importation of a Product. 

        1.43 "ROCHE
Optioned Products" means Products which are manufactured, used, offered for sale, imported or sold under circumstances which would, in the absence of the
licenses for which an option is granted under Section 2.6, constitute an infringement of a Valid Claim of the ROCHE Optioned Patents. 

        1.44 "Royalty
Cap" has the meaning specified in Paragraph 2 of Exhibit A. 

        1.45 "Shipped"
has the meaning set forth in Section 1.34(f)(3). 

        1.46 "Significant
End User" has the meaning set forth in Section 12.3(b). 

        1.47 "Term"
has the meaning set forth in Section 7.1 

        1.48 "Transplantation
Field" means the commercial use of products that detect nucleic acid sequences for the screening of any biological materials intended for transfusion
or transplantation, in each case from any donor, including autologous donors, other than the transfusion or transplantation of blood or its derivatives, components or replacements. 

        1.49 "Unit"
means, for each CHIRON Licensed Product, the number of individual patient results generated by the use of a CHIRON Licensed Product. The number of patient
results that each CHIRON Licensed Product currently or previously sold generates shall be mutually determined by the parties through good faith negotiation and resolved if necessary through the ADR
process in accordance with Article 10 of this Agreement. Following such determination, the number of Units contained in each CHIRON Licensed Product will be set forth on a schedule to be
attached as Exhibit E to this Agreement. The determination of the number of "Units" in future CHIRON Licensed Products developed by ROCHE shall be handled in accordance with Section 5.2,
and Exhibit D shall be modified accordingly. If future CHIRON Licensed Products are developed by ROCHE or its Affiliates that do not contain reagents or other single-use consumable
materials, a method for calculating the number of "Units" in such CHIRON Licensed Product shall be determined in accordance with Section 5.2. In the case of pooled blood samples tested through
the use of a CHIRON Licensed Product, "individual patient results" refers to each individual donation of blood, plasma or other blood components that is represented in the tested pool, regardless of
the number of times such donation is tested. 

        1.50 "Valid
Claim" means a claim in any issued, active, unexpired patent which has not been withdrawn, cancelled, lapsed or disclaimed, or held unpatentable, invalid or
permanently unenforceable by a non-appealed or nonappealable final decision by a court or other appropriate body of competent jurisdiction. The scope of a Valid Claim shall be limited to
its terms as defined by any such court or decision-making body of competent jurisdiction in a non-appealable or non-appealed final decision. 

        1.51 "Voluntary
License" means a license or covenant not to sue granted by contract under any one or more of the CHIRON Licensed Patents to make, use, offer for sale, import
or sell Products in the Field or the Transplantation Field, except to the extent granted by compulsion of law, such as a compulsory license, whether by court order or action of other governmental
authority. 

8

 

 
 

ARTICLE 2
  LICENSE GRANTS    
    

        2.1    CHIRON Grants.    Subject to the terms and conditions of this Agreement, CHIRON hereby grants to ROCHE and its
Affiliates, so long as they remain Affiliates of ROCHE, a semi-exclusive license, without the right to sublicense, under the CHIRON Licensed Patents to research, develop, make, have made,
import, use, offer for sale and sell CHIRON Licensed Products within the Region for use in the Field and, to the extent permitted in Section 12, for use outside of the Field. CHIRON covenants
not to sue any End User of a CHIRON Licensed Product (with respect to which ROCHE has performed all of its material obligations under this Agreement) to the extent of activities in the Field, outside
of the Field (to the extent provided in Section 12) or as otherwise permitted under this Agreement. Conversely, no immunity from suit shall apply to End User activities in Blood Screening, or
otherwise outside of the Field, except as otherwise provided in this Agreement or as provided in the Blood Screening Agreements. CHIRON retains the right to conduct research in any field, including to
develop Products and, without prejudice to Section 2.3, Article 12 and the Blood Screening Agreements, retains all rights outside of the Field, including the nonexclusive right to
practice and to grant licenses under the CHIRON Licensed Patents to make, have made, use, import, offer for sale and sell any products in the Transplantation Field. 

        2.2    Exclusion from CHIRON License.    ROCHE acknowledges that neither ROCHE nor its Affiliates are licensed under
this Agreement to perform research or to develop any product other than a CHIRON Licensed Product. 

        2.3    CHIRON Transplantation Field License.    Subject to the terms and conditions of this Agreement, CHIRON hereby
grants to ROCHE and its Affiliates, so long as they remain Affiliates of ROCHE, a non-exclusive license, without the right to sublicense, under CHIRON Licensed Patents to research,
develop, make, have made, import, use, offer for sale and sell CHIRON Licensed Products within the Region for use in the Transplantation Field. CHIRON covenants not to sue any End User of such CHIRON
Licensed Products (with respect to which ROCHE has performed all of its material obligations under this Agreement) to the extent of activities in the Transplantation Field or as otherwise permitted
under this Agreement. Conversely, no immunity from suit under this Section 2.3
shall apply to End User activities in Blood Screening, except as otherwise provided in this Agreement or as provided in the Blood Screening Agreements, or otherwise outside of the Transplantation
Field. 

        2.4    Semi-Exclusive CHIRON License.    The license granted under Section 2.1 shall be
semi-exclusive to ROCHE and its Affiliates. Semi-exclusive means that, in addition to licenses to third parties under existing agreements referenced in Exhibit G
including, without limitation, the [***], and licenses that may be granted by such licensees, including licenses that may be
granted by [***], CHIRON retains only the right to practice in the field under the CHIRON Licensed Patents and/or to grant
additional licenses under one or more of the CHIRON Licensed Patents in the Field within the Region as follows: 

        (a)   CHIRON
may grant up to [***] within the Region, if CHIRON is not engaged in the sale of Products; 

        (b)   If
CHIRON has not granted [***] under Section 2.4(a) and CHIRON is not then engaged in the
sale of Products, CHIRON shall have the right, in its sole discretion, in lieu of such worldwide license, to grant [***] under
the Licensed Patents in the Field within the Region; 

        (c)   If
CHIRON chooses to engage in the sale of Products, such activities shall replace [***] CHIRON
is permitted to grant under Section 2.4(a) and Section 2.4(b); 

        (d)   Licenses
granted under Section 2.4(a) or 2.4(b) shall not include the right to grant sublicenses, except to Affiliates for so long as they remain Affiliates of
the licensee; 

9

 

        (e)   In
the event that a license referenced in Exhibit F is terminated, including without limitation the  [***], CHIRON shall have the right to replace such license with a new license, consistent with the
limitations required hereby
and the scope, field and territory of the license that is replaced. Notwithstanding anything herein to the contrary, the [***],
if terminated, could be replaced by a new license to a new licensee and containing terms determined by CHIRON in its discretion without any restrictions imposed by this Agreement; provided, however,
that if [***] CHIRON enters into a license to replace the  [***] with a third party that is not [***], or an
Affiliate, successor, assignee or licensee of  [***], ROCHE shall have the rights provided by Paragraph 6 of Exhibit A with respect thereto; 

        (f)    Following
the last to expire of the Foundational Patents, the license hereunder shall be nonexclusive; and 

        (g)   Notwithstanding
this Section 2.4, CHIRON retains the nonexclusive right under the CHIRON Licensed Patents to conduct research in any field, including to develop
Products and, without prejudice to Article 12 and the Blood Screening Agreements, all rights outside of the Field and in the Transplantation Field, including the nonexclusive right to practice
and to grant licenses under the CHIRON Licensed Patents to make, have made, use, import, offer for sale and sell any products in the Transplantation Field. 

        2.5    CHIRON Future HIV Sequence Patent Rights.    CHIRON grants to ROCHE a non-exclusive option to
obtain one or more non-exclusive licenses, or sublicenses, as the case may be, with a right to sublicense to ROCHE Affiliates only, under the CHIRON Future HIV Sequence Patent Rights, to
make, have made, use, import, offer for sale and sell CHIRON Licensed Products and/or products in the Field and/or the Transplantation Field within the Region.  [***]. 

        2.6    ROCHE Optioned Patents and ROCHE Future HIV Sequence Patent Rights.    ROCHE grants to CHIRON a
non-exclusive option to obtain one or more non-exclusive licenses, or sublicenses, as the case may be, with a right to sublicense solely to CHIRON Affiliates only, under the
ROCHE Optioned Patents and ROCHE Future HIV Sequence Patent Rights, to make, have made, use, import, offer for sale and sell ROCHE Optioned Products and/or products in Blood Screening and/or the
Transplantation Field within the Region. [***]. 

 
 

ARTICLE 3
  PAYMENTS. ROYALTIES    
    

        With respect both to CHIRON Licensed Products sold or Shipped, ROCHE shall make payments to CHIRON as set forth in Exhibit A. 

 
 

ARTICLE 4
  RECORDS AND REPORTS    
    

        4.1    Net Sales Report.    ROCHE shall, within sixty (60) days after the last day of each Calendar Quarter
commencing [***], deliver to CHIRON a true and accurate report for the prior Calendar Quarter, substantially in the form
attached as Exhibit E to this Agreement, which shall state the amount of monies due hereunder, if any, as Earned Royalties and Minimum Royalties, and shall include all information reasonably
necessary to calculate such amount, including, but not limited to, the following information, presented for the Region by product and Product Category (as defined in Paragraph 2 of
Exhibit A): 

        (a)   the
amount of Net Sales, expressed in United States Dollars (with applicable exchange rates to the extent specifically requested in writing by CHIRON), and the
applicable Earned Royalty rate or rates, and all credits and adjustments thereto; 

10

 

        (b)   the
number of Units Shipped and the applicable Minimum Royalty Amounts; and adjustments to Units Shipped (returns, replacements, etc.); and 

        (c)   a
statement of the basis for any deviation from the Earned Royalty rates and Minimum Royalty Amounts as expressed in Paragraphs 1 and 2 of Exhibit A. 

        4.2    Payment Dates.    Not later than the date each report required under Section 4.1 is due, ROCHE shall pay
to CHIRON the royalty due under this Agreement for the period covered by such report. If no royalties are due, ROCHE shall so report, stating the reasons why no such royalty is due. 

        4.3    Payment Procedures.    ROCHE shall pay royalties and all other payments due hereunder to CHIRON in immediately
available funds on the due date by wire transfer to: 

Bank
of America-San Francisco

San Francisco, California

Account Name: Chiron Corporation

Account Number: [***]

ABA #: [***]

Reference: ROCHE HIV Probe License Agreement 

or
at such place and in such other manner as CHIRON may designate in a notice signed by CHIRON's Treasurer or Controller to ROCHE. 

        4.4    Taxes on Royalties.    ROCHE shall deduct from amounts payable hereunder all taxes assessed or imposed against,
or required to be withheld from, royalty payments due and shall pay such amount to the appropriate fiscal or tax authorities on behalf of CHIRON. ROCHE shall forward promptly to CHIRON all tax
receipts received by ROCHE evidencing payment of such taxes. 

        4.5    Audit.    ROCHE shall keep reasonably detailed and accurate records and books of account to enable a
determination of the amounts payable by ROCHE and its Affiliates to CHIRON hereunder. Upon thirty (30) days written notice by CHIRON, and not more frequently than once per Calendar Year, CHIRON
may have such records and books of account examined during reasonable business hours by a mutually acceptable independent certified public accountant selected by CHIRON and at CHIRON's expense, whose
acceptance shall not unreasonably be withheld by ROCHE, for the purpose of verifying the amounts due hereunder; provided that such independent accountant agrees to provide CHIRON only the information
necessary to verify the calculation of amounts due hereunder. A copy of any final written report provided by the independent accountant to CHIRON shall be given concurrently to ROCHE. Such examination
shall not be permitted unless it is requested within three (3) years following the end of the Calendar Year to which the books and records pertain. Where such examination results in a finding
that ROCHE underpaid CHIRON by the greater of [***], ROCHE shall reimburse CHIRON for its reasonable costs and expenses in
conducting such examination. ROCHE and CHIRON shall promptly rectify any overpayments or underpayments by repaying such amounts together with interest thereon at an annual rate equal to the lesser of:
(a) [***] as published in the Wall Street Journal, or (b) the maximum rates permitted by applicable law, from the
time such payment was originally due to the time it is paid. 

        4.6    Confidentiality of Audit.    CHIRON agrees that all audited information shall be confidential to ROCHE and its
Affiliates, and that any person or entity conducting an audit on behalf of CHIRON pursuant to Section 4.5 shall be required to protect the confidentiality of such information. 

        4.7    Payment in United States Currency.    All payments shall be made in United States Dollars and shall be made on
the dates set forth herein. The Net Sales amount calculated hereunder for sales in countries other than the United States shall be converted into equivalent United States Dollars in accordance with
the methods used for internal financial reporting purposes within ROCHE. 

11

 

        4.8    Late Payment Fee.    Any payment, including, without limitation, royalty payments, made by ROCHE hereunder
after the date such payment is due, as set forth in this Article 4 hereof, shall bear interest at the lesser of
(a) [***] as published in the Wall Street Journal as of the date such payment was due, or (b) the maximum rate
permitted by applicable law. 

 
 

ARTICLE 5
  OTHER ACTIONS    
    

        5.1    Patent Validity; Enforceability.    ROCHE represents and warrants that, on or before the Effective Date and
consistent with the Settlement Agreement, it has discontinued any opposition, challenge, compulsory license application or the like with respect to the CHIRON Licensed Patents within the Region.
CHIRON represents and warrants that, on or before the Effective Date and consistent with the Settlement Agreement, it has discontinued any opposition, challenge, interference or the like with respect
to the ROCHE Optioned Patents within the Region. 

        5.2    Future Products Directed to HIV.    

        (a)   Promptly
upon its determination to Ship, or to provide a commercial service within the Region utilizing, a Product Directed to HIV not then set forth as a CHIRON
Licensed Product on Exhibit D, ROCHE shall provide CHIRON with written notice of such Product and the parties will engage in good faith negotiations to determine the existing or new Product
Category for such Product as set forth on Exhibit A, the number of Units in such Product pursuant to Section 1.49, the reasonable value of Associated Goods and Equipment, if any, to be
deducted from the Net Sales of such Product pursuant to Section 1.34(d), and, if such Product is a Combination Product, the apportionment of the gross amount to be invoiced for such Product
pursuant to Section 1.34(f)(4). As set forth in these Sections, [***] Promptly following such determinations, CHIRON will
prepare a revised Exhibit D to include this Product and such revised Exhibit D shall be incorporated into and become part of this Agreement. 

        (b)   If
ROCHE determines to Ship, or to provide a commercial service within the Region utilizing, a Product Directed to HIV not then set forth on Exhibit D as a CHIRON
Licensed Product and ROCHE reasonably believes that the sales of such Product would not, in the absence of the licenses granted pursuant to Sections 2.1 and 2.3, constitute an infringement of a Valid
Claim of a CHIRON Licensed Patent, then ROCHE's written notice to CHIRON shall set forth the basis of ROCHE's reasonable belief in sufficient detail to permit CHIRON to evaluate the matter.  [***].

        (c)   ROCHE
may elect, in its reasonable discretion, to commence Shipping, or the provision of a commercial service within the Region utilizing, a Product Directed to HIV not
then set forth on Exhibit D as a CHIRON Licensed Product [***], provided ROCHE shall make a reasonable determination as
to the applicable existing Product Category to determine the applicable Minimum Royalty Amount and shall utilize a reasonable determination of the number of Units in such Product and the deductions
and apportionment for the calculation of Earned Royalty due on the Net Sales of such Product. [***], any underpayment or
overpayment of the Minimum Royalty or Earned Royalty shall be rectified in accordance with the provisions set forth in Section 4.8;  [***]. 

        5.3   Notwithstanding
the provisions of Section 12.1 of this Agreement or Section 12.1 of the Blood Screening Agreements, ROCHE or any of its Affiliates may
elect, at any time during the Term, in its sole discretion and at its sole cost and expense, to seek a Registration, or to provide assistance to a third party in such third party's seeking a
Registration, of a CHIRON Licensed Product [***]. If ROCHE or an Affiliate of ROCHE files a Registration, or provides
substantial assistance to a third party for such third party's Registration [***] then ROCHE or the applicable ROCHE Affiliate
will promptly inform CHIRON in writing of the existence and subject matter of such Registration. CHIRON acknowledges and agrees that ROCHE's or any ROCHE Affiliate's election to seek (or 

12

 

assist
a third party in seeking) any such Registration outside of the Field (absent other labeling or promoting activities by ROCHE or such ROCHE Affiliate which would independently fall outside the
definition of Passive Selling) will constitute Passive Selling for purposes of this Agreement. [***]

 
 

ARTICLE 6
  REPRESENTATIONS AND WARRANTIES    
    

        6.1    Corporate Authority.    Each party represents and warrants to the other party that it has the necessary
corporate authority to enter into this Agreement. 

        6.2    Right to Grant.    Each party represents and warrants that they have the right to grant the licenses or options
granted in Article 2 hereof and that they are the sole owner of their respective Licensed Patents, subject to licenses existing as of the Effective Date. CHIRON represents and warrants to ROCHE
that, to the best of its knowledge, neither CHIRON nor any of its Affiliates have transferred to [***] or any if its Affiliates
(a) before December 1, 1998, title to any patent or patent application Directed to HIV in the Field existing on that date; or (b) on or after that date, title to any patent,
patent application or invention Directed to HIV in the Field. 

        6.3    Current Licenses.    CHIRON represents and warrants that: (a) as of the Effective Date the entities set
forth in Exhibit F are the only parties to which it has granted any licensed rights or other grants or immunities to one or more of the CHIRON Licensed Patents in the Field; and
(b) Exhibit F contains a complete and accurate description of the effective scope, field and territory of such grant as of the Effective Date. CHIRON also represents and warrants that  [***]
except as disclosed in Exhibit F. 

        6.4    Complete Patent List.    CHIRON represents and warrants to ROCHE that, to the best of its knowledge and belief,
Exhibit B contains a complete list, as of the Effective Date, of all patents and patent applications owned by, licensed to (with a right to sublicense), or otherwise controlled by CHIRON or its
Affiliates containing claims Directed to HIV in the Field in any country located in the Region. To the extent that any other patent or patent application owned by, licensed to (with a right to
sublicense), or otherwise controlled by CHIRON or its Affiliates and filed on or before the Effective Date contains a claim Directed to HIV in the Field in any country located in the Region, such
patent or patent application shall be automatically added to the CHIRON Licensed Patents. Upon ROCHE's written request, not more frequently than annually, CHIRON shall provide ROCHE with an updated
Exhibit B and a report of the prosecution status of applications within CHIRON Licensed Patents. ROCHE represents and warrants to CHIRON that, to the best of its knowledge and belief,
Exhibit C contains a complete list, as of the Effective Date, of all patents and patent applications owned by, licensed to (with a right to sublicense), or otherwise controlled by ROCHE or its
Affiliates containing claims Directed to HIV in the Field in any country located in the Region. To the extent that any other patent or patent application owned by, licensed to (with a right to
sublicense), or otherwise controlled by ROCHE or its Affiliates and filed on or before the Effective Date contains a claim Directed to HIV in the Field in any country located in the Region, such
patent or patent application shall be automatically added to the ROCHE Optioned Patents. Upon CHIRON's written request, not more frequently than annually, ROCHE shall provide CHIRON with an updated
Exhibit C and a report of the prosecution status of applications within ROCHE Optioned Patents. 

        6.5    Exclusions.    Nothing contained in this Agreement shall be construed as: 

        (a)   A
representation or warranty by any party hereto as to the validity of any patent rights which are the subject of this Agreement; 

        (b)   A
representation or warranty that anything made, used, imported, offered for sale, sold or otherwise disposed of under any of the patent rights which are the subject of
this Agreement is or 

13

 

will
be free from infringement of patents of third parties or of patents of either party that are not Directed to HIV; 

        (c)   An
obligation to bring or prosecute actions or suits against third parties for infringement of any patent rights which are the subject of this Agreement; 

        (d)   A
grant of any right to bring or prosecute actions or suits against third parties for infringement of any patent rights which are the subject of this Agreement; or 

        (e)   A
grant, by implication, estoppel or otherwise, of any license, option, covenant or right other than those which are expressly stated herein, including without
limitation (i) any license under any patent or patent application (or claim thereof) not within the Licensed Patents, or (ii) any covenant by CHIRON or ROCHE not to sue under any such
patent or patent application (or claim thereof). 

        6.6    Further ROCHE Assurance.    ROCHE acknowledges that the inclusion of ROCHE Affiliates within the license and
option grants pursuant to Sections 2.1, 2.3 and 2.5 is intended to enable ROCHE to utilize the manufacturing and sales capabilities of its Affiliates in connection with the manufacture and sale of
CHIRON Licensed Products in a manner substantially similar to the involvement of such Affiliates in the manufacture and sale of ROCHE's products generally. ROCHE shall not, directly or indirectly,
take any action having or intended to have the effect of sublicensing ROCHE's rights under any of the CHIRON Licensed Patents, other than to a bona fide
Affiliate, including, without limitation, by creating Affiliates specifically in connection with CHIRON Licensed Products, or through other third party arrangements such as joint ventures,
collaborations, or distribution arrangements with distributors. ROCHE and its Affiliates are licensed hereunder to sell and distribute CHIRON Licensed Products only under the label, name and trademark
rights owned by, licensed to or otherwise controlled by ROCHE or its Affiliates, and only through the sales force of ROCHE or its Affiliates, or through Authorized Distributors or Cross Sellers
(subject to Section 12). ROCHE and its Affiliates are not licensed to perform OEM manufacturing of CHIRON Licensed Products for a third party other than an Authorized Distributor or a Cross
Seller (subject to Section 12); to supply CHIRON Licensed Products for resale to any third party other than an Authorized Distributor or a Cross Seller (subject to Section 12); to permit
any Authorized Distributor or other third party to sell any CHIRON Licensed Products under another third party label, name or trademark or to permit any Authorized Distributor or other third party to
sell any CHIRON Licensed Products under the Authorized Distributors or any third party's own label, name or trademark for use on an instrument bearing the label name or trademark of a party other than
ROCHE or its Affiliates; provided, however, that nothing in this Section 6.6 shall be construed to limit the rights of ROCHE or its Affiliates to engage in activities with such third parties,
to the extent such third parties have obtained rights under the CHIRON Licensed Patents permitting such activities. 

        6.7    Limitation of Warranty.    EXCEPT AS SPECIFICALLY SET FORTH HEREIN, NO PARTY MAKES ANY REPRESENTATION OR
WARRANTY, EITHER EXPRESS OR IMPLIED, ARISING BY LAW OR OTHERWISE, INCLUDING, BUT NOT LIMITED TO, IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE. 

 
 

ARTICLE 7
  TERM AND TERMINATION    
    

        7.1    Term.    

        (a)   The
parties acknowledge and agree that, effective as of the Effective Date (i) the Original License Agreement shall be terminated, solely with respect to the
application of its terms and conditions to the activities contemplated thereunder with respect to customers or potential customers of ROCHE and ROCHE Affiliates which customers or potential customers
are located 

14

 

within
the Region; (ii) the terms and conditions of this Agreement shall replace and supercede the Original License Agreement with respect to the activities contemplated thereunder and
hereunder with respect to customers or potential customers of ROCHE and ROCHE Affiliates which customers or potential customers are located within the Region; and (iii) notwithstanding the
foregoing clauses (i) and (ii), the provisions of the Original License Agreement relating to the Region shall survive the termination described in clause (i) above, solely with respect
to the activities contemplated thereunder occurring prior to the Effective Date with respect to customers or potential customers of ROCHE and ROCHE Affiliates which customers or potential customers
are located within the Region. 

        (b)   Unless
earlier terminated pursuant to Sections 7.2 or 7.3 below, this Agreement shall be in effect from the Effective Date and shall terminate in each member country
within the Region seventeen (17) years from October 10, 2000, or on the expiration of the last to expire of the patents within the CHIRON Licensed Patents based upon a patent existing or
a patent application pending as of the Effective Date, whichever is later (the "Term"); provided, however, that prior to the termination of this Agreement in the first member country in which it would
otherwise terminate pursuant to the foregoing, ROCHE may, in its discretion, elect by written notice to CHIRON to extend this Agreement as to all such member countries for an additional term which
shall expire on a country-by-country basis on the expiration date of the last to expire patent within the CHIRON Licensed Patents existing in such member country as of the date
of such extension. 

        7.2    Voluntary Termination.    ROCHE shall have the right to voluntarily terminate all, but not less than all,
licenses granted to ROCHE and its Affiliates under this Agreement and the Original License Agreement on not less than six (6) months prior written notice to CHIRON. Notwithstanding the above,
ROCHE may voluntarily terminate all, but not less than all, licenses granted to ROCHE and its Affiliates under this Agreement and the Original License Agreement on a
country-by-country basis within the Region, on not less than six (6) months prior written notice to CHIRON, after  [***]. 

        7.3    Termination by CHIRON.    CHIRON may terminate this Agreement and the Original License Agreement only upon any
of the following grounds: 

        (a)   ROCHE's
or its Affiliate's material breach of this Agreement or the Original License Agreement, including, without limitation, a breach resulting from ROCHE's or its
Affiliate's failure to pay any sums due hereunder or thereunder, where such breach shall not have been remedied within thirty (30) days of the receipt of a written notification from CHIRON
identifying the breach and requiring its remedy; whereupon termination under this Section 7.3(a) shall be effective upon the expiration of such thirty (30) day cure period, subject to
Section 7.6; or 

        (b)   [***]. 

        [***]. 

        7.4    Enforcement After Termination.    Upon valid termination of this Agreement under Section 7.2 or 7.3,
ROCHE and its Affiliates shall have no further rights under CHIRON Licensed Patents and CHIRON shall not be limited to its remedies under this Agreement, to the extent of such termination. 

        7.5    Accrued Rights.    Termination of this Agreement for whatever reason shall not affect any rights which have
accrued prior to termination, including without limitation royalty obligations occurring during the Term, calculated in accordance with Article 3 and Exhibit A. 

        7.6    ROCHE Challenge to Section 7.3(a) Termination.    In the event ROCHE provides written notification to
CHIRON prior to expiration of the thirty (30) day notice/cure period referenced in Section 7.3(a) that ROCHE disputes whether the grounds for termination under Section 7.3(a) are
present, such dispute shall be submitted to ADR pursuant to Article 10. The thirty (30) day notice/cure period shall be suspended during the pendancy of such ADR, provided that during
the pendancy of the 

15

 

ADR,
ROCHE shall continue to make any disputed payments to CHIRON, on the condition that CHIRON shall repay ROCHE the amounts of such disputed payments if ROCHE prevails in the ADR, plus interest at
the rate described in Section 4.8. Notwithstanding anything in this Section 7.6 to the contrary, ROCHE may submit a dispute concerning a method by which amounts payable by ROCHE and its
Affiliates to CHIRON hereunder are calculated only one time, and any resolution from the ADR shall bind the parties as to such calculation method thereafter. 

        7.7    ROCHE Challenge to Section 7.3(b) Termination.    In the event that ROCHE, within thirty
(30) days of receiving notice of termination by CHIRON for the grounds set forth in Section 7.3(b) above, provides written notice to CHIRON that ROCHE disputes whether such grounds are
present, such dispute shall be submitted to ADR pursuant to Article 10 and termination of this Agreement shall be suspended during the pendancy of the ADR, provided that ROCHE suspends its
action, suit or proceeding (other than in an ADR proceeding between the parties as permitted by Section 7.3(b) and Article 10)  [***], and continues to perform all of its material obligations
hereunder. 

        7.8    Audit Results Not Grounds for Termination.    CHIRON's request for an audit under Section 4.5 shall not
be treated as a notice of breach under Section 7.3(a). In the event such audit determines there has been an underpayment by ROCHE, such underpayment shall not constitute grounds for termination
by CHIRON under Section 7.3(a) unless: (a) ROCHE has failed to rectify such underpayment in accordance with Section 4.5; (b) ROCHE has failed to rectify such underpayment
after notification and opportunity to cure under Section 7.3(a); and (c) any ADR requested by ROCHE, pursuant to Section 7.6, and directed to any dispute concerning such
underpayment, results in a determination favorable to CHIRON and ROCHE has failed to rectify such underpayment. Notwithstanding the foregoing, ROCHE shall continue to make the disputed payments to
CHIRON, on the condition that CHIRON shall repay ROCHE the amounts of such disputed payments with respect to which ROCHE prevails in the ADR, plus interest at the rate described in Section 4.8. 

        7.9    Survival.    The following provisions of this Agreement shall survive termination or expiration of this
Agreement, in accordance with their respective terms: Article 1; Sections 4.5, 4.6, 4.7, 4.8, 6.7, 7.4, 7.5 and 7.9; Articles 8, 9, and 10; Sections 11.9 through 11.14; Sections 12.1(d) and
12.2(b); and Section 14.1. 

 
 

ARTICLE 8
  CONFIDENTIALITY    
    

        8.1    Obligation.    From time to time during the Term, CHIRON and ROCHE may provide to each other information
concerning patents, patent applications, license agreements and other confidential or proprietary information related to this Agreement (the "Information"). Each party receiving the Information (the
"Receiving Party") shall during the Term and for a period of three (3) years after termination hereof (a) maintain the Information in confidence; (b) not disclose the Information
to any third party, other than employees, agents or consultants of the Receiving Party, its Affiliates or permitted sublicensees who have a need to know the Information and who are bound by
confidentiality obligations to the Receiving Party no less restrictive than those contained herein; and (c) not use the Information for any purpose not directly related to performance hereunder
or otherwise authorized under this Agreement. 

        8.2    Exclusions.    The obligations of this Article 8 shall not apply to any Information which: (a) is
or which becomes generally known to the public by publication or by means other than a breach of a duty by the Receiving Party; (b) is otherwise known by the Receiving Party at the time of
disclosure by the other party; (c) otherwise becomes available to the Receiving Party from a third party not in breach of confidentiality obligations to the other party; or (d) is
developed by or for the Receiving Party independent of any disclosure from the other party. The Receiving Party also shall be permitted to 

16

 

make
disclosures of Information which are reasonably necessary in connection with a possible grant of a permitted sublicense by the Receiving Party or in due diligence related to a possible
acquisition, merger, consolidation, substantial asset transfer or similar transaction of the Receiving Party, provided that the recipient is bound to the Receiving Party by confidentiality obligations
with respect to the Information no less restrictive than those contained herein. Nothing herein shall prevent the Receiving Party from making such disclosures of Information as are reasonably required
by law, regulation (including 37 C.F.R. § 1.56), or order of any court or governmental agency; provided that the Receiving Party has provided reasonable advance notice to allow the
disclosing party the opportunity to seek a protective order or otherwise contest, prevent or limit such disclosure. 

        8.3    Return of Information.    Upon termination of this Agreement for any reason, the Receiving Party shall return,
or at the option of the disclosing party, certify destruction of, all Information and copies thereof; provided that the Receiving Party may retain one copy thereof in its law department files solely
for evidentiary and regulatory purposes. 

        8.4    Disclosure of Agreements and Terms.    The parties shall issue a joint press release disclosing the existence
and certain financial terms of this Agreement. CHIRON may disclose any of the terms in the Agreement to any Affiliate of CHIRON or to Abbott or Bayer or a permitted sublicensee; provided that the
recipient of such disclosure is obligated to confidentiality terms no less restrictive that those contained in this Article 8. CHIRON and ROCHE may each disclose the amounts of the Prior Sales
Royalty, the European License Fee and the U.S. License Fee (as these terms are defined in Exhibit A of the Original License Agreement) individually and/or in the aggregate and the amounts
thereof that will be recognized from time-to-time in its respective financial statements. Each party may disclose any information contained in or regarding this Agreement to
the extent required in its respective reasonable judgment by applicable law, regulation or order of any court or governmental agency. Further, each party may determine in its respective discretion to
file this Agreement under the Securities and Exchange Act of 1934 or otherwise with any United States or foreign governmental agency, even if that filing may result in this Agreement becoming
available to the public generally. The filing party shall seek confidential treatment for at least the essential financial terms hereof in connection with any such filing, subject to applicable law
and regulation, and shall notify the other party in advance of any such filing and consider such suggestions as the other party may make as to the terms herein as to which the filing party should seek
confidential treatment. 

 
 

ARTICLE 9
  INDEMNITY    
    

        9.1    ROCHE Indemnity.    ROCHE shall indemnify, defend and hold harmless CHIRON and its Affiliates and their
officers, directors, shareholders, employees, representatives and agents, against any claim, demand, loss, damage or injury, including reasonable attorneys' fees, asserted by a third party, arising
from, relating to, or otherwise in respect of, (a) the manufacture, use or sale of CHIRON Licensed Products within the Region, or (b) any breach by ROCHE or its Affiliates of any
representation, warranty or covenant under this Agreement; provided, however, that such indemnity shall not extend to damages arising directly from any breach or willful or negligent act of CHIRON or
its Affiliates. 

        9.2    CHIRON Indemnity.    CHIRON shall indemnify, defend and hold harmless ROCHE and its Affiliates and their
officers, directors, shareholders, employees, representatives and agents, against any claim, demand, loss, damage or injury, including reasonable attorneys' fees, asserted by a third party, arising
from, relating to, or otherwise in respect of, (a) the manufacture, use or sale of ROCHE Licensed Products within the Region, if CHIRON exercises the options granted in Section 2.6, or
(b) any breach by CHIRON or its Affiliates of any representation, warranty or covenant under this Agreement; provided, however, that such indemnity shall not extend to damages arising directly
from any breach or willful or negligent act of ROCHE or its Affiliates. 

17

 

        9.3    Indemnification Procedures.    In the event either party claims indemnification pursuant to this
Article 9, the indemnified party shall promptly notify the indemnifying party in writing upon becoming aware of any claim to which such indemnification may apply. Delay in providing such notice
shall constitute a waiver of the indemnifying party's indemnity obligations hereunder only if the indemnifying party's ability to defend such claim is materially impaired thereby. The indemnifying
party shall have the right to assume and solely control the defense of the claim at its own expense. If the right to assume and solely control the defense is exercised, the indemnified party shall
have the right to participate in, but not to control, such defense at its own expense, and the indemnifying party's indemnity obligations shall be deemed not to include attorneys' fees and litigation
expenses incurred by the indemnified party after the assumption of the defense by the indemnifying party. If the indemnifying party does not assume the defense of the claim, the indemnified party may
defend the claim at the indemnifying party's expense. The indemnified party shall not settle or compromise the claim without the prior written consent of the indemnifying party, and the indemnifying
party shall not settle or compromise the claim in any manner which would have an adverse effect on the indemnified party without the consent of the indemnified party, which consent, in each case,
shall not be unreasonably withheld. The indemnified party shall reasonably cooperate with the indemnifying party and shall make available to the indemnifying party all pertinent information under the
control of the indemnified party, all at the expense of the indemnifying party. 

        9.4    Sunset.    The provisions of Sections 9.1 and 9.2 shall continue in effect on a
claim-by-claim basis, after the termination of this Agreement, only until the expiration of the last to expire statute of limitations applicable to such claim. 

        9.5    Limitation of Liability.    Neither party shall be liable to the other for any consequential, special, indirect
or exemplary damages or for the loss of profits arising from the performance or nonperformance of this Agreement or any acts or omissions associated herewith. 

 
 

ARTICLE 10
  ALTERNATIVE DISPUTE RESOLUTION    
    

        The parties recognize that bona-fide disputes may from time to time arise which relate to any aspect
of this Agreement, including, without limitation, any of the parties' rights and/or obligations hereunder, and including, without limitation, disputes relating to the interpretation, form, validity,
performance and/or termination of this Agreement or relating to infringement, scope, claims construction, or (without limiting the effect of Section 7.3(b)) validity or enforceability of the
Licensed Patents. In the event of the occurrence of any dispute, a party may, by notice to the other party, have such dispute referred to their respective employees designated below or their
successors, for attempted resolution by good faith negotiations within ninety (90) days after such notice is received. Said designated officers are as follows: 

	

For ROCHE:
 President

Roche Molecular Systems, Inc.
	
For CHIRON:
 President

Blood Testing

        In
the event the designated officers, after such good faith negotiations, are not able to resolve such dispute within such ninety (90) day period, or any agreed extension thereof,
a party may invoke the provisions for binding ADR as set forth in Paragraph 9 of the Settlement Agreement. Neither party shall seek recourse against the other hereunder in any court or other
forum, except as permitted by Paragraph 9 of the Settlement Agreement or as may be necessary to enforce a determination made in ADR pursuant to this Article 10 and Paragraph 9 of
the Settlement Agreement. 

18

 

 
 

ARTICLE 11
  MISCELLANEOUS    
    

        11.1    Assignment.    

        (a)   ROCHE
and its Affiliates may not assign or transfer any rights under this Agreement without the prior written consent of CHIRON, except to an ROCHE Affiliate, and then
only for so long as the assignee remains an ROCHE Affiliate, or as part of the sale or transfer of all or substantially all of ROCHE's and all of its Affiliates' assets and businesses to which this
Agreement relates. In the case of a permitted assignment or transfer, the performance of the assignee shall be guaranteed by ROCHE. 

        (b)   CHIRON
and its Affiliates may not assign or transfer any rights under this Agreement without the prior written consent of ROCHE, except to a CHIRON Affiliate, and then
only for so long as the assignee remains a CHIRON Affiliate, or as part of the sale or transfer of all or substantially all of
CHIRON's and all of its Affiliates' assets and businesses to which this Agreement relates. In the case of a permitted assignment or transfer, the performance of the assignee shall be guaranteed by
CHIRON. 

        11.2    Force Majeure.    A party hereto shall not be liable for, nor shall this Agreement be terminable or cancelable
by reason of, any delay or default in any such party's performance hereunder, to the extent that such default or delay is caused by events beyond such party's reasonable control including, but not
limited to: acts of God; regulation, law or action of any government or agency thereof; war or insurrection; civil commotion; labor disturbances; epidemic; or failure of suppliers, public utilities or
common carriers. Each party shall give prompt notice to the other party of such cause, and shall take whatever reasonable steps are necessary to relieve the effect of such cause as rapidly as
possible. 

        11.3    Severability.    In the event that any one or more of the provisions of this Agreement should for any reason
be held by any court or authority having jurisdiction over this Agreement or over the parties hereto to be invalid, illegal or unenforceable, such, provision or provisions shall be reformed to
approximate as nearly as possible the intent of the parties, in such jurisdiction; elsewhere, this Agreement shall not be affected. 

        11.4    Entire Agreement.    This Agreement together with the Exhibits, Attachments and Schedules and  [***] constitute the entire
agreement among the parties relating to the subject matter of this Agreement. There are no other
understandings, representations or warranties of any kind, and this Agreement shall supercede all prior written and oral agreements or understandings with respect to the subject matter hereof,
including specifically the Original License Agreement, which is hereby terminated and superceded by this Agreement solely with respect to its application to the Region, as more fully described in
Section 7.1(a) above. 

        11.5    Amendment.    This Agreement shall not be altered, extended or modified except by written agreement of the
parties. 

        11.6    Waiver.    Failure by a party hereunder to enforce any right under this Agreement shall not be construed as a
waiver of such right or any other rights under this Agreement; nor shall a waiver by a party hereunder in one or more instances be construed as constituting a continuing waiver or as a waiver in other
instances. 

        11.7    Costs.    Each of the parties hereto shall be responsible for its respective legal and other costs incurred in
relation to the preparation of this Agreement. 

        11.8    Counterparts.    This Agreement may be executed in two (2) or more counterparts, each of which shall be
deemed to be an original, but all of which, taken together, shall constitute one and the 

19

 

same
instrument. Facsimile copies of signatures for a party shall be deemed to be originals for purposes of execution of the Agreement and for determining the Effective Date. 

        11.9    Notices.    

        (a)   Any
notice or other document to be given under this Agreement shall be in writing and shall be deemed to have been duly given if personally delivered or sent by first
class mail, or express or air mail or other postal service, or by certified mail, return receipt requested. 

        (b)   Any
notice required by this Agreement shall be forwarded to the respective addresses and marked for the attention of the persons set forth below unless such addresses
subsequently change by written notice to the other party: 

	
ROCHE:	
 	

F. Hoffmann-La Roche Ltd.

Grenzacherstrasse 124

Basel

Bale 4002

Switzerland

Attn.: Head of Diagnostics Division
	

Copy to:	
 	

General Counsel

Roche Molecular systems, Inc.

1145 Atlantic Avenue

Alameda, CA 94501
	
CHIRON:	
 	

Chiron Corporation

4560 Horton Street

Emeryville, California 94608

Attn.: President, Blood Testing
	

Copy to:	
 	

General Counsel

Chiron Corporation

4560 Horton Street

Emeryville, CA 94608

        (c)   Any
such notice or other document shall be deemed to have been effective when received by the addressee. To prove the giving of a notice or other document it shall be
sufficient to show that it was received. 

        11.10    Governing Law.    All matters affecting the interpretation, form, validity, performance and termination of
this Agreement shall be decided and interpreted under the laws of the State of New York, excluding any choice of law rules which may direct application of the laws of any other jurisdiction. 

        11.11    Relationship of the Parties.    The relationship of the parties under this Agreement is that of independent
contractors. Nothing contained in this Agreement is intended or is to be construed so as to constitute the parties as partners, joint venturers or agents of the other. Neither party or its Affiliates
has any express or implied right or authority under this Agreement to assume or create any obligations or make any representations or warranties on behalf of or in the name of the other party or its
Affiliates. 

        11.12    Headings.    The headings of the Articles and Sections in this Agreement have been inserted for convenience
only and do not constitute part of this Agreement. 

        11.13    No Trademark Rights.    No right, express or implied, is granted by this Agreement to either party to use in
any manner the name, trade name or trademark of the other party in connection with the performance of this Agreement. 

20

 

        11.14    No Implied Licenses.    No license, express or implied, is granted by this Agreement to either party, other
than the licenses or options granted under Sections 2.1, 2.3, 2.5 and 2.6. 

 
 

ARTICLE 12
  FIELD RESTRICTIONS AND OTHER COVENANTS    
    

        12.1    ROCHE Covenant Regarding Use Outside the Field.    

        (a)   ROCHE
and its Affiliates shall not label or promote any CHIRON Licensed Product labeled or promoted for use in the Field or the Transplantation Field in any respect for
use outside the Field (namely, in Blood Screening) within the Region; and ROCHE shall use commercially reasonable efforts to prevent its Authorized Distributors from labeling or promoting any CHIRON
Licensed Products labeled or promoted for use in the Field or the Transplantation Field in any respect for use outside the Field (namely, in Blood Screening within the Region. 

        (b)   Further,
ROCHE and its Affiliates and Authorized Distributors shall include on or with each CHIRON Licensed Product labeled or promoted for use in the Field or the
Transplantation Field within the Region a statement to the effect that the CHIRON Licensed Product is not for use for testing or screening pooled samples containing specimens from more than one
individual, or otherwise in blood or plasma screening, using language to be determined by ROCHE and approved in advance in writing by CHIRON, which approval shall not be unreasonably withheld. The
location of such notice shall be the product insert of such CHIRON Licensed Products or such other reasonably prominent location to be determined by ROCHE. 

        (c)   In
the event that ROCHE or CHIRON becomes aware of any material use in Blood Screening of CHIRON Licensed Products labeled or promoted for use in the Field or the
Transplantation Field within the Region, such party will promptly notify the other in writing of the relevant facts and, if so requested by CHIRON, ROCHE will meet and confer with CHIRON in good faith
to determine what steps either or both should take to abate such infringing use. 

        (d)   Without
limiting the labeling and promoting obligations under this Section 12.1, CHIRON shall not sue ROCHE, its Affiliates, its Authorized Distributors or its
End User customers for the sale or use as a confirmatory or supplemental test in conjunction with the screening of blood, plasma or blood products (a "Confirmatory Test") of a CHIRON Licensed Product
that is labeled or promoted for use in the Field or the Transplantation Field, if the End User customer has substantial noninfringing uses for such CHIRON Licensed Product in the Field or the
Transplantation Field. 

        (e)   Nothing
in this Section 12.1 shall apply to any product to the extent that ROCHE's activity and that of its Affiliates with respect to such product is either for
or through an entity licensed in Blood Screening under the CHIRON Licensed Patents [***]. 

        12.2    Passive Sales.    

        (a)   Notwithstanding
anything to the contrary in this Agreement and specifically the foregoing provisions of Section 12.1, nothing in this Agreement is intended to
prohibit Passive Sales of the CHIRON Licensed Product by ROCHE, its Affiliates, its Authorized Distributors or Cross Sellers (subject to Section 12) within the Region. Passive Sales will be
subject to the royalty provisions set forth in Article 3 and Exhibit A. 

        (b)   Without
limiting the labeling and promoting obligations under Section 12.1, CHIRON shall not sue ROCHE, its Affiliates, its Authorized Distributors or its End
User customers (including, but not limited to, Cross Sellers) for any Passive Sale, or for the use by Blood Screening End Users of a CHIRON Licensed Product outside of the Field within the Region,
whether arising during the Term, or during the term of the Original License Agreement prior to 

21

 

the
Effective Date (it being understood that nothing herein constitutes an admission by ROCHE or any of its Affiliates with respect to any such actual or alleged sales or use under the Original
License Agreement). 

        12.3    Cross Sales.    

        (a)   Definition. Notwithstanding anything to the contrary in this Agreement and subject to the provisions of this
Section 12.3, nothing in this Agreement is intended to prohibit an End User from selling CHIRON Licensed Product purchased from ROCHE, its Affiliates or an Authorized Distributor to a person or
entity [***] ("Cross Sales"). 

        (b)   Treatment as Passive Sales. Cross Sales of CHIRON Licensed Products to a Blood Screening End User will be deemed to be
Passive Sales and subject to the royalty provisions set forth in paragraphs 2(b) and (c) of Exhibit A to the extent set forth in, and in accordance with the terms and conditions of, this
Section 12.3. [***]. 

        (c)   [***]. 

        (d)   Inquiry. ROCHE shall promptly make reasonable inquiry, in accordance with the provisions of this Section 12.3, as
to the nature and extent of Cross Sales activities of an End User customer as to which
(i) ROCHE is actually aware that it is engaged in Cross Sales [***] of CHIRON Licensed Products to Blood Screening End
Users, or (ii) CHIRON presents credible written evidence to ROCHE that it is engaged in Cross Sales [***] of CHIRON
Licensed Products to Blood Screening End Users. Such inquiry shall be directed to ascertaining the relevant information within 120 days after ROCHE's initial inquiry. 

        (e)   [***] Inquiry. A "Significant End User" means an End User which
purchased, in the Calendar Year most recently ended at the time of determination, [***]. For purposes of determining whether a
Significant End User's Cross Sales [***], (i) following  [***], ROCHE will examine whether any Significant End User purchased a number of Units of
CHIRON Licensed Products in such  [***] of such Significant End User's [***], and
(ii) [***], ROCHE will examine whether any Significant End User purchased a number of Units of CHIRON Licensed Products
in such [***] of such Significant End User's purchases of such Units during  [***]. If any Significant End User's purchases are  [***], then ROCHE will make reasonable inquiry of such Significant End User whether it is engaging in Cross Sales  [***]. 

        (f)    No Other Inquiry. ROCHE shall not have any obligation of affirmative investigation as to whether a End User's Cross Sales
exceed [***] except those expressly set forth in this Section 12.3. 

        (g)   Reliance. ROCHE shall be entitled to rely upon the End User's written statements in response to any written inquiry
pursuant to Section 12.3(d) or (e) or otherwise as to [***], provided ROCHE is acting in good faith in so relying.
All such written statements shall be made available during an audit commenced pursuant to Section 4.6. 

        (h)   End User Agreement Modification. If (x) an End User fails or refuses to give a response satisfying
Section 12.3(g) within [***] after (i) the end of each  [***] examination period referred to in Section 12.3(e), in the case of  [***] inquiry pursuant to such Section, or (ii) after ROCHE's inquiry, in the case of other inquiry, or (y) the
information available to ROCHE, including without limitation the End User's written response to such inquiry and any information provided by CHIRON in writing, demonstrates to ROCHE, in ROCHE's
reasonable judgment exercised in good faith, that an End User is engaging in Cross Sales [***], and such End User fails or
refuses to deliver the information needed for the calculation of the amounts provided in paragraphs 2(b) and (c) of Exhibit A, within  [***] after ROCHE's inquiry, then ROCHE will notify CHIRON
of such fact, meet and confer with CHIRON with respect to such
failure or refusal as reasonably 

22

 

requested
by CHIRON so long as such failure or refusal continues, and ROCHE will use its reasonable business efforts to: 

        (i)    as
promptly as its binding obligations, if any, permit ROCHE to do so, impose legal obligations on the End User to regularly report Cross Sales to Blood Screening End
Users and to require, for ROCHE's or an Affiliate's benefit, such Blood Screening End Users to report to the Cross Selling End User and ROCHE or such Affiliate the information needed for the
calculation of the amounts provided in paragraphs 2(b) and (c) of Exhibit A, and 

        (ii)   determine
the information needed to establish whether such End User's Cross Sales [***] (if that
has not already been demonstrated as stated above) and, if so, determine the information needed for the calculation of the amounts provided in paragraphs 2(b) and (c) of Exhibit A. 

        (i)    Passive Sales Royalty Obligation. If an End User's Cross Sales to Blood Screening End Users  [***] the entire amount of such End User's Cross Sales to Blood Screening
End Users (including the portion below the De Minimis
Cross Sales Amount) shall be subject to paragraphs 2(b) and 2(c) in Exhibit A. 

        (j)    Royalty Accrual and Payment. ROCHE will be obligated to pay the amounts set forth in paragraph 2(b) of
Exhibit A only with respect to the quarterly period during which [***] and for all subsequent quarterly periods until
credible evidence establishes to ROCHE, in ROCHE's reasonable judgment exercised in good faith, that the End User is no longer engaging in Cross Sales  [***]. The payment date for the amounts set forth
in paragraph 2 of Exhibit A in respect of Cross Sales which are
subject to paragraph (b) of Exhibit A shall not be sooner than [***]. 

        (k)   Pre-Existing Contracts. Notwithstanding any of the foregoing provisions of this Section 12.3,  [***]. 

        (l)    [***]. [***] set forth in Sections 12.3(c) and (d), respectively, shall
be adjusted upward by [***]. 

        12.4    ROCHE Covenant Regarding Product Labeling.    ROCHE and its Affiliates shall include on or with each CHIRON
Licensed Product a statement as to the number of Units contained within each such CHIRON Licensed Product, using such language to be determined by ROCHE and approved in advance in writing by CHIRON,
which approval shall not be unreasonably withheld. The location of such statement shall be product insert of such CHIRON Licensed Products or such other reasonably prominent location to be determined
by ROCHE. 

        12.5    Patent Marking.    ROCHE and its Affiliates shall include a patent notice on each CHIRON Licensed Product to
identify the CHIRON Licensed Patents which such CHIRON Licensed Product, but for the licenses granted herein, would infringe one or more Valid Claims (or for which royalties are being paid); provided,
however, identification of CHIRON Licensed Patents on a CHIRON Licensed Product shall in no way be deemed to be an admission by ROCHE or its Affiliates, or raise a presumption, that such CHIRON
Licensed Product is in fact covered by such CHIRON Licensed Patent. 

        12.6    CHIRON Covenant Regarding Field.    

        (a)   CHIRON
and its Affiliates shall not, and CHIRON shall require any of its future licensees under the CHIRON Licensed Patents that are licensed in Blood Screening to agree
not to, label or promote, in any respect for use in the Field, any product sold in, labeled or promoted for use in Blood Screening, which product detects nucleic acid sequences of HIV. 

        (b)   Further,
CHIRON and its Affiliates shall, and CHIRON shall require its future licensees in Blood Screening to, include with each such HIV product sold by CHIRON or its
Affiliates or 

23

 

licensees
in Blood Screening a statement to the effect that such product is not for use in the Field, using language to be determined by CHIRON and approved by ROCHE, which approval shall not be
unreasonably withheld. The location of such notice shall be in the product insert for such product or such other reasonably prominent location to be determined by CHIRON. 

        (c)   In
the event that CHIRON or ROCHE becomes aware of any material use of any such product in the Field, such party will promptly notify the other in writing of the
relevant facts and, if so requested by ROCHE, CHIRON will (i) meet and confer with ROCHE in good-faith to determine what steps either or both of them should take to abate such use
and (ii) notify in writing any of its customers that engage in such use that use of the relevant product in the Field may infringe one or more of the CHIRON Licensed Patents. 

        (d)   Nothing
in this Section 12.6 shall apply to any product to the extent that CHIRON's activity and that of its Affiliates or licensees with respect to such product
either (i) is for or through an entity that is licensed under the CHIRON Licensed Patents in the Field or (ii) is within CHIRON's rights to practice in the Field, pursuant to its rights
retained under, and subject to the limitations of, Section 2.1. 

        (e)   The
understanding and intent of the parties is that the amendments made by this Agreement reflect the unique circumstances applicable to ROCHE arising from the fact that
ROCHE is a licensee under both this Agreement and the Blood Screening Agreements, and that, taking such unique circumstances into account, this Agreement imposes new burdens on ROCHE rather than
granting new benefits to ROCHE. [***]. 

 
 

ARTICLE 13
  INFRINGEMENT BY ThIRD PARTIES    
    

        13.1    Notice of Infringement.    Each party shall notify the other if it becomes aware of Infringing Third Party
Sales. CHIRON shall have the exclusive right to take action against any infringement of any of the CHIRON Licensed Patents, in its sole discretion, subject to this Article 13. 

        13.2    Infringement Litigation.    

        (a)   In
the event that "substantial" Infringing Third Party Sales are occurring in a country within the Region in which ROCHE or its Affiliates or an Authorized Distributor
is selling a CHIRON Licensed Product (in each such country, the "Impacted Product"), and ROCHE has notified CHIRON pursuant to Section 13.1 of the existence of such infringement  [***] (an
"Infringement Notice"), then the provisions of this Section 13.2 shall apply. For purposes of this
Section 13.2, an Infringing Third Party Sale shall be considered substantial in a country if the infringing third party achieves market share of at least  [***] of the Aggregated Products in such
country [***].
For purposes of this Section 13.2, [***]. For purposes of this Section 13.2, "Aggregated Products" means the
number of CHIRON Licensed Products of the applicable Product Category and Competitive
Products sold in a country, and "Competitive Products" means Products which are sold in the Field and which compete with a CHIRON Licensed Product sold by ROCHE or its Affiliates in a country. 

        (b)   If
the Infringement Notice identified an Impacted Product in a Major Country and CHIRON fails to institute legal action against the infringing party  [***], [***] following receipt by CHIRON of the
Infringement Notice and infringement is not otherwise abated; then ROCHE shall be relieved of the obligation to pay the portion of Earned Royalties set forth in Section 13.2(c) and all  [***], with
respect to the Impacted Product until such time as CHIRON institutes such legal action as described in this
Section 13.2(b); provided, however, that CHIRON need not initiate or continue any such legal action, if, after reasonably diligent effort (including reasonably diligent effort by ROCHE if
requested by CHIRON), CHIRON is unable to acquire 

24

 

admissible
evidence sufficient to establish a prima facia case of infringement under the law of the applicable country. 

        (c)   If
CHIRON has not instituted such legal action at the end of such [***], to the extent required
under Section 13.2(b), and such infringement is not otherwise abated, the Earned Royalty with respect to an Impacted Product shall be reduced by  [***]. If, at the end of each [***] thereafter, CHIRON
has not instituted such legal action, to the extent so required, and infringement is not otherwise abated, such Earned Royalties shall be reduced by  [***] of the original Earned Royalties, such that if
legal action required under Section 13.2(b) has not commenced and
the infringement is not otherwise abated by the end of the [***] following receipt by CHIRON of the Infringement Notice  [***] shall be payable hereunder
with respect to the Impacted Product. 

        (d)   The
obligations to pay Earned Royalties and Minimum Royalties shall be reinstated on a prospective basis at such time as ROCHE receives written notice of the institution
of legal action in accordance with Section 13.2(b) or the infringement is otherwise abated, all subject to Section 13.2(e). 

        (e)   If
legal action required under Section 13.2(b) has not been instituted and the infringement is not otherwise abated for more than  [***] following receipt by CHIRON of the Infringement Notice, and if,
as a result of the infringement, sales of the Impacted
Product in a Major Country by ROCHE, its Affiliates or an Authorized Distributor have declined by [***] or more during the
preceding [***], then upon reinstatement of Earned Royalties and Minimum pursuant to Section 13.2(d), the parties shall
meet and confer regarding possible adjustments to the Earned Royalties and Minimum Royalties for the Impacted Product in view of such degradation of the market. The parties will discuss possible rate
reductions, as well as a plan for reinstating the original economic expectations of the parties. It is expected that any agreement for reduction of Earned Royalties and Minimum Royalties will be
phased
out over time, so as to return to the Earned Royalties and Minimum Royalties set forth in Exhibit A. If the parties fail to reach agreement on any such adjustment, the matter shall be submitted
for resolution by ADR, except that in the event of ADR, each party shall submit to the neutral a proposal with respect to adjustments pursuant to this Section 13.2(e). The neutral shall be
empowered to choose one proposal or the other, but shall not be empowered to order any such adjustment other than as proposed by one of the parties. 

        13.3    Cooperation.    ROCHE and its Affiliates shall cooperate with CHIRON in connection with any legal action
referred to in this Article 13. 

 
 

ARTICLE 14
  OTHER EUROPEAN COMMUNITY PROVISIONS    
    

        14.1    Competition Notification.    If either party (the "Notifying Party") elects to file a notification with
respect to this Agreement (a "Notification") with the Competition Directorate of Commission of European Community (the "Commission") in accordance with regulations established by the Commission, the
Notifying Party shall provide a non-confidential version of the final draft to the other party for comment at least thirty (30) days before making the filing and shall consider in
good faith the modification thereto, if any, that the other party may propose. The other party shall execute all documents reasonably required by the Notifying Party and shall otherwise reasonably
cooperate in connection with the Notification. The Notifying Party shall bear all costs incurred by it relating to the Notification. 

        14.2    Reformation.    If, at any time during the Term, either party receives a request or other communication from
the Commission with respect to the Notification (a "Request"), such party shall promptly inform the other of the nature of the Request. In the event that the Commission indicates in 

25

 

a
Statement of Objection(s) that this Agreement will violate the provisions of Article 81 or 82 of the Treaty of Rome, then the parties shall amend this Agreement by making those minimal
modifications necessary to satisfy the concerns of the Commission as set forth in the Statement of Objection(s). Notwithstanding the foregoing, the parties agree that ROCHE shall retain substantially
the same license rights at substantially the same royalties as specified under this Agreement. 

        IN
WITNESS WHEREOF this Agreement has been executed by duly authorized officers of CHIRON and ROCHE as of the Effective Date. 

	CHIRON CORPORATION
	

By:	
 	

/s/  WILLIAM G. GREEN      
	
 	

 
	

Title:	
 	

SVP, General Counsel & Secretary	
 	

 
	

Date:	
 	

July 10, 2003
	
 	

 
	
F. HOFFMANN-LA ROCHE LTD.
	

By:	
 	

/s/  HEINO VON PRONDZYNSKI      
	
 	

 
	

Title:	
 	

Head of Diagnostics	
 	

 
	

Date:	
 	

July 29, 2003
	
 	

 
	

By:	
 	

 	
 	

 
	 	 	
	 	 
	

Title:	
 	

 	
 	

 
	

Date:	
 	

 	
 	

 
	 	 	
	 	 
	ROCHE MOLECULAR SYSTEMS, INC.
	

By:	
 	

/s/  H. DREISMANN      
	
 	

 
	

Title:	
 	

President	
 	

 
	

Date:	
 	

July 18, 2003
	
 	

 

26

 
 

HIV Exhibit A
  Compensation to CHIRON    
    

        1.    Earned Royalty.    In consideration of the licenses granted pursuant to Sections 2.1 and 2.3, ROCHE shall pay  [***] of Net
Sales of CHIRON Licensed Products, that would,  [***]. 

Earned
Royalties shall be payable quarterly, commencing with the Calendar Quarter ending [***], within sixty (60) days
following the end of each Calendar Quarter, and shall be accompanied by a report pursuant to Article 4 of this Agreement. 

        2.    (a) Minimum Royalty.    Notwithstanding the Earned Royalties due pursuant to Paragraph 1 of this
Exhibit A, and subject to the adjustments referenced in this Exhibit A, royalties paid to CHIRON under this Agreement in any Calendar Quarter for Units of CHIRON Licensed Product Shipped
(but excluding any Passive Sales of CHIRON Licensed Product which are the subject of the minimum royalty provisions set forth in Paragraph 2(b) below), shall not be less than a minimum royalty
in such quarter (the "Minimum Royalty") calculated as follows: 

The
Minimum Royalty for each Calendar Quarter shall be the sum of the products obtained by multiplying (x) [***] in each
category within the CHIRON Licensed Products (a "Product Category") in the Region times (y) the number of Units generated by each such CHIRON Licensed Product (which shall be determined
assuming no pooled sample testing unless the provisions of Paragraph 2(b) of this Exhibit A are applicable) times (z) the applicable minimum amount (the "Minimum Royalty Amount"),
each of which Minimum Royalty Amounts shall be calculated by the following equation: 

[***]

Where:

        A equals [***] (the "Minimum Amount"); 

        B equals [***]; and 

        C equals [***]. 

        Minimum
Amount                                        
                
 

	Field:	 	 	 	 
	[***]	 	 	 	[***]
	[***]	 	 	 	[***]
	

[***]	
 	

 	
 	

[***]
	[***]	 	 	 	[***]
	
Transplantation Field:	
 	

 	
 	

 
	[***]	 	 	 	[***]
	[***]	 	 	 	[***]
	

[***]	
 	

 	
 	

[***]
	[***]	 	 	 	[***]

        (b)   Passive Sales Royalty. 

        (i)    Notwithstanding
the foregoing, in the case of Passive Sales of CHIRON Licensed Products by ROCHE or an Affiliate or, to the extent provided and on the terms and
conditions set forth in Section 12.3 (Cross Sales), the Minimum Royalty Amount will be equal to [***] ("Royalty Cap"). 

        (iii)  In
the event that CHIRON institutes legal action against a Blood Screening End User for alleged infringement of the CHIRON Licensed Patents arising out of Home Brew
Screening (as such term is defined in the Blood Screening Agreements) by such Blood Screening End User, [***]. 

        (c)   [***]. 

 

        (d)   The
Minimum Royalty shall be determined on a [***]. 

        (e)   In
the event that action by governmental pricing or reimbursement authority or other governmental agency in a country results in a requirement that ROCHE or its
Affiliates sell a CHIRON Licensed Product [***] (after adjustment as provided in Paragraph 2(c) of Exhibit A),
excluding for the purpose of calculating the impact of such price reduction any currency exchange rate fluctuations from the Effective Date (i.e., the calculation shall be made using the exchange rate
in effect as of the Effective Date) [***]. If any such action or series of actions results in a requirement that ROCHE or its
Affiliates sell a CHIRON Licensed Product [***] then at the request of ROCHE, the parties shall meet and reasonably consider
greater adjustment to the Minimum Amount with respect to the CHIRON Licensed Product in that country. No adjustment shall be made to the Minimum Amount unless mutually agreed or determined pursuant to
ADR as provided in this subparagraph 2(e). 

[***]

        (f)    Within
sixty (60) days of the third anniversary of the Effective Date and every third anniversary thereafter during the Term of this Agreement the parties shall
meet and reasonably consider adjustment to the Minimum Amount with respect to each CHIRON Licensed Product based on the average price increase if any for diagnostics products on an
industry-wide basis in the Region over the prior three-year period; provided that no adjustment shall be made to any Minimum Amount unless mutually agreed or determined
pursuant to ADR as provided in this subparagraph 2(f), and provided further that [***]. 

        (g)   Minimum
Royalties shall be payable quarterly commencing with the Calendar Quarter ending [***],
within sixty (60) days following the end of each Calendar Quarter. Such payment shall be accompanied by a report pursuant to Article 4 and shall be fully creditable against Earned
Royalties payable pursuant to paragraph 1 of Exhibit A for the same Calendar Quarter. 

        (h)   Notwithstanding
anything set forth in this Exhibit A or in the Agreement, in the event that  [***] or customers of [***] are making sales in the  [***] of products which, but for the [***],
respectively, would constitute an infringement of a Valid Claim of the CHIRON Licensed Patents, the parties will meet and consider what, if any,  [***]. 

        3.    Single Royalty Per CHIRON Licensed Product.    Only one payment of Earned Royalty shall be due with respect to
any Net Sales or only one payment of Minimum Royalty shall be due with respect to any Unit of CHIRON Licensed Product Shipped, irrespective of the number of patents or Valid Claims in the CHIRON
Licensed Patents covering such CHIRON Licensed Product. 

        4.    Most Favored License Adjustment.    In the event after the Effective Date that CHIRON enters into an  [***], CHIRON shall
promptly provide ROCHE a written summary of the applicable royalty terms thereof and, upon request, true
copies of the applicable contract terms (including definitions and methods of calculating royalty amounts). ROCHE shall have the  [***], on a prospective basis, only by giving written notice of such
election to CHIRON written sixty (60) days of the
receipt by ROCHE of notice from CHIRON; provided, however, that [***], but would otherwise retain all rights to most favored
licensee status contained in this Agreement with respect to other Product Categories and countries. 

        5.    Royalty Stacking.    If ROCHE's Aggregate Royalty Percentage exceeds  [***] of Net Sales for a CHIRON Licensed Product, then:

        (a)   [***] 

        (b)   [***] 

        (i)    [***] 

2

 

        (ii)   [***]; 

        (c)   [***]. 

        (d)   As
utilized herein, "Aggregate Royalty Percentage" shall mean the [***] as per paragraph 1
of this Exhibit A and the [***]. 

        6.    Dispute Resolution.    Any dispute between CHIRON and ROCHE regarding whether any adjustment to or credits
against Earned Royalties or Minimum Royalties under this Exhibit A is appropriate, and which the parties fail to resolve themselves may only be resolved by resort to the ADR provisions of
Article 10. Until such dispute is resolved, ROCHE shall pay CHIRON the Earned Royalty or Minimum Royalty provided for herein without benefit of the applicable disputed adjustment on the
condition that CHIRON shall repay ROCHE the amounts of such disputed payments if ROCHE prevails in the ADR, plus interest at the rate described in Section 4.8. 

3

 
 

Exhibit B—HIV
  Page 1 of 1    
    

[***]

[***]

        [***]

        [***]

        [***]

        [***]

        [***]

        [***]

        [***]

[***]

        [***]

 
 

[***]Exhibit C—HIV
  Page 1 of 1    
    

[***]

        [***]

        [***]

        [***]

        [***]

        [***]

        [***]

        [***]

        [***]

        [***]

        [***]

        [***]

        [***]

        [***]

        [***]

        [***]

        [***]

        [***]

        [***]

        [***]

        [***]

        [***]

        [***]

        [***]

        [***]

        [***]

        [***]

        [***]

 
 

Exhibit D    
    

Product Codes, HCV kits:  

	Description
	 	SAP/Part No.
	 	Max Labeled Capacity
	 	Units
	 	Controls

	

	QUALITATIVE KITS	 	 	 	 	 	 	 	 
	[***]	 	 	 	 	 	 	 	 
	[***]	 	[***]	 	[***]	 	[***]	 	[***]
	[***]	 	[***]	 	[***]	 	[***]	 	[***]
	[***]	 	 	 	 	 	 	 	 
	[***]	 	[***]	 	[***]	 	[***]	 	[***]
	[***]	 	[***]	 	[***]	 	[***]	 	[***]
	QUANTITATIVE KITS	 	 	 	 	 	 	 	 
	[***]	 	 	 	 	 	 	 	 
	[***]	 	[***]	 	[***]	 	[***]	 	[***]
	[***]	 	[***]	 	[***]	 	[***]	 	[***]
	[***]	 	 	 	 	 	 	 	 
	[***]	 	 	 	 	 	 	 	 
	[***]	 	[***]	 	[***]	 	[***]	 	[***]
	[***]	 	 	 	 	 	 	 	 
	[***]	 	[***]	 	[***]	 	[***]	 	[***]
	[***]	 	[***]	 	[***]	 	[***]	 	[***]
	[***]	 	 	 	 	 	 	 	 
	[***]	 	[***]	 	[***]	 	[***]	 	[***]
	[***]	 	 	 	 	 	 	 	 
	[***]	 	[***]	 	[***]	 	[***]	 	[***]

 
 

[Exhibit E—Page 1]
  
    HIV Probes Royalty Report
  Region ____:_________________    
    For the quarter ending _________    
    

	Product
	 	Number of Product Sold
	 	Units per Product
	 	Units
	 	Minimum Amount
	 	Maximum Labeled Capacity
	 	Minimum Royalty Amount
	 	Minimum Royalty

	HIV Quantitative	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	[SKU#1]	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	[SKU#2]	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	[SKU#3]	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	[SKU#4]	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	HCV Qualitative	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	[SKU#1]	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	[SKU#2]	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	[SKU#3]	 	 	 	[***]	 	 	 	 	 	 	 	 	 	 
	 	[SKU#4]	 	[***]	 	[***]	 	[***]	 	[***]	 	[***]	 	[***]	 	[***]
	 	 	[***]	 	[***]	 	[***]	 	[***]	 	 	 	 	 	 
	HIV Genotyping	 	[***]	 	[***]	 	[***]	 	[***]	 	 	 	 	 	 
	 	[SKU#1]	 	 	 	[***]	 	[***]	 	[***]	 	 	 	 	 	 
	 	[SKU#2]	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	[SKU#3]	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	[SKU#4]	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	HIV Resistance	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	[SKU#1]	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	[SKU#2]	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	[SKU#3]	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	[SKU#4]	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Total	 	 	 	 	 	 	 	 	 	 	 	 	 	 

	*
	[***]

[***][Exhibit E—Page 2]

HCV Probes Royalty Report

Region ____:_________________  

 For the quarter ending _________  

	Product
	 	Sales
	 	Deductions
	 	Net Sales
	 	Earned Royalty Rate
	 	Earned Royalty
	 	Royalty Payment Due

	HCV Quantitative	 	 	 	 	 	 	 	 	 	 	 	 
	 	[SKU#1]	 	 	 	 	 	 	 	 	 	 	 	 
	 	[SKU#2]	 	 	 	 	 	 	 	 	 	 	 	 
	 	[SKU#3]	 	 	 	 	 	 	 	 	 	 	 	 
	 	[SKU#4]	 	 	 	 	 	 	 	 	 	 	 	 
	HCV Qualitative	 	 	 	 	 	 	 	 	 	 	 	 
	 	[SKU#1]	 	 	 	 	 	 	 	 	 	 	 	[***]
	 	[SKU#2]	 	 	 	 	 	 	 	 	 	 	 	[***]
	 	[SKU#3]	 	[***]	 	 	 	 	 	 	 	[***]	 	[***]
	 	[SKU#4]	 	[***]	 	[***]	 	 	 	 	 	[***]	 	[***]
	 	 	[***]	 	[***]	 	[***]	 	[***]	 	[***]	 	[***]
	HCV Genotyping	 	[***]	 	[***]	 	 	 	 	 	[***]	 	[***]
	 	[SKU#1]	 	[***]	 	 	 	 	 	 	 	 	 	[***]
	 	[SKU#2]	 	 	 	 	 	 	 	 	 	 	 	[***]
	 	[SKU#3]	 	 	 	 	 	 	 	 	 	 	 	 
	 	[SKU#4]	 	 	 	 	 	 	 	 	 	 	 	 
	HCV Resistance	 	 	 	 	 	 	 	 	 	 	 	 
	 	[SKU#1]	 	 	 	 	 	 	 	 	 	 	 	 
	 	[SKU#2]	 	 	 	 	 	 	 	 	 	 	 	 
	 	[SKU#3]	 	 	 	 	 	 	 	 	 	 	 	 
	 	[SKU#4]	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	

	Total	 	 	 	 	 	 	 	 	 	 	 	[***]
	 	 	 	 	 	 	 	 	 	 	 	 	

 
 

HIV Exhibit F    
    

[TO BE UPDATED]

Existing Licenses or Rights granted in the Field under the Licensed Patents as of the Effective Date  

	1.	 	[***]
	2.	 	[***]
	 	 	[***]
	 	 	[***]
	 	 	[***]
	 	 	[***]
	3.	 	[***]
	 	 	[***]
	 	 	[***]
	4.	 	[***]
	 	 	[***]
	 	 	[***]
	 	 	[***]

QuickLinks

Exhibit 10.324

HIV PROBE LICENSE AND OPTION AGREEMENT—EUROPEAN UNION between CHIRON CORPORATION F. HOFFMAN-LA ROCHE LTD. and ROCHE MOLECULAR SYSTEMS, INC.

HIV PROBE LICENSE AND OPTION AGREEMENT—EUROPEAN UNION TABLE OF CONTENTS

BACKGROUND

ARTICLE 1 DEFINITIONS

ARTICLE 2 LICENSE GRANTS

ARTICLE 3 PAYMENTS. ROYALTIES

ARTICLE 4 RECORDS AND REPORTS

ARTICLE 5 OTHER ACTIONS

ARTICLE 6 REPRESENTATIONS AND WARRANTIES

ARTICLE 7 TERM AND TERMINATION

ARTICLE 8 CONFIDENTIALITY

ARTICLE 9 INDEMNITY

ARTICLE 10 ALTERNATIVE DISPUTE RESOLUTION

ARTICLE 11 MISCELLANEOUS

ARTICLE 12 FIELD RESTRICTIONS AND OTHER COVENANTS

ARTICLE 13 INFRINGEMENT BY ThIRD PARTIES

ARTICLE 14 OTHER EUROPEAN COMMUNITY PROVISIONS

HIV Exhibit A Compensation to CHIRON

Exhibit B—HIV Page 1 of 1

[***] Exhibit C—HIV Page 1 of 1

Exhibit D

[Exhibit E—Page 1] HIV Probes Royalty Report Region ____:_________________ For the quarter ending _________

HIV Exhibit FQuickLinks
 -- Click here to rapidly navigate through this document

 
 

Exhibit 10.501    
    

 
 

CHIRON 1991 STOCK OPTION PLAN
  AS AMENDED AUGUST 14, 1993, APRIL 11, 1994, FEBRUARY 24, 1995,
  MARCH 8, 1996, FEBRUARY 28, 1997, AUGUST 7, 1998, AUGUST 20, 1999,
  FEBRUARY 25, 2000, SEPTEMBER 21, 2000, FEBRUARY
16, 2001 AND, JUNE 30 2003    
    

I.     PURPOSES  

        This Chiron 1991 Stock Option Plan ("Plan") is intended to enable Chiron Corporation ("Corporation") to attract and retain the following individuals by offering
them incentives and rewards, in the form of options, restricted shares, share rights, share units and performance units ("awards") which will encourage them to acquire a proprietary interest in the
Corporation, to continue in the service of the Corporation or its subsidiaries, and to provide incentive to build value for stockholders: (a) employees (including officers and directors) of the
Corporation and its subsidiaries, (b) non-employee members of the Board of Directors of the Corporation ("Board"), and (c) consultants and independent contractors who perform
valuable services for the Corporation and its subsidiaries. 

        In
addition, the Plan is intended to permit the Corporation to satisfy its obligations in connection with options it assumed pursuant to the terms of the Agreement and Plan of Merger
dated as of July 21, 1991 by and among the Corporation, Chiron Acquisition Subsidiary, Inc., and Cetus Corporation ("Agreement"). Upon consummation of the transactions described in the
Agreement ("Merger"), the Plan superseded Cetus Corporation's Amended and Restated Common Stock Option Plan and Cetus Corporation's Non-Employee Directors' Stock Option Plan ("Cetus Prior
Plans"). Upon stockholder approval in December 1991, this Plan superseded the following Chiron prior plans: the Protos Corporation 1988 Stock Option Plan (upon the merger of Protos into
Chiron), the Chiron Ophthalmics, Inc. 1986 Stock Option Plan (upon the merger of Chiron Ophthalmics into a wholly owned subsidiary of Chiron), the Corporation's 1982 Stock Option Plan and the
Corporation's 1984 Non-Qualified Stock Option Plan (collectively, "Chiron Prior Plans"). 

II.    ADMINISTRATION  

        The Plan will be administered by a committee or committees appointed by the Board and consisting of one or more members of the Board or a subcommittee or
subcommittees thereof. The Board may delegate the responsibility for administration of the Plan with respect to designated classes of award holders to different committees, subject to such limitations
as the Board deems appropriate, and each committee may similarly delegate its responsibilities to one or more subcommittees. Members of a committee or subcommittee will serve for such term as the
Board or committee may determine, and will be subject to removal by the Board at any time. With respect to any matter, the term "Committee," when used in this Plan, will refer to the committee or
subcommittee that has been delegated authority with respect to such matter. 

        In
determining the composition of any committee or subcommittee, the Board or committee, as the case may be, shall consider the desirability of compliance with the compositional
requirements of (i) Rule 16b-3 of the Securities and Exchange Commission with respect to award holders who are subject to the trading restrictions of Section 16(b) of
the Securities Exchange Act of 1934 ("1934 Act") with respect to securities of the Corporation and (ii) Section 162(m) of the Internal Revenue Code ("Code") with respect to performance
units, but shall not be bound by such compliance. 

        (a)   AUTHORITY.    Each
Committee will have full authority to administer the Plan within the scope of its delegated responsibilities, including authority to
interpret and construe any relevant provision of the Plan, to adopt such rules and regulations as it may deem necessary, and to determine the terms and conditions of awards made under the Plan (which
need not be identical). Decisions of a 

 

Committee
made within the discretion delegated to it by the Board will be final and binding on all persons who have an interest in the Plan. 

III.  ELIGIBILITY FOR AWARDS  

        (a)   DISCRETIONARY
AWARDS.    From time to time the Committee may, in its discretion, select individuals from among the following categories to receive awards under
the Plan: 

        (1)   EMPLOYEES.    The
Committee may select employees of the Corporation or its parent or subsidiaries (including officers, whether or not they are also members of
the Board). 

        (2)   CONSULTANTS
AND INDEPENDENT CONTRACTORS.    The Committee may select consultants and independent contractors whose services tend to contribute materially to
the success of the Corporation or a parent or subsidiary or whose services may reasonably be anticipated to so contribute. 

        (3)   DIRECTORS.    The
Committee may select members of the Board or the board of directors of a parent or subsidiary that are not employees of the Corporation,
parent or subsidiaries for awards in addition to awards made in accordance with the Plan's automatic grant provisions. 

        (b)   PERFORMANCE
UNITS.    Corporate vice-presidents and other executive officers of the Corporation or a parent or subsidiary ("162(m) executives")
will be eligible to receive performance units in addition to, or in lieu of, other discretionary awards granted under the Plan. 

        (c)   AUTOMATIC
GRANTS.    Members of the Board who are not employees of the Corporation or a subsidiary will receive awards in accordance with the Plan's automatic
grant provisions. 

        (d)   SUBSTITUTE
OPTIONS.    Upon consummation of the Merger, outstanding options under the Cetus Prior Plans (including related Limited Stock Appreciation Rights)
were converted, in the manner and at the exchange ratio specified in the Agreement, into substitute options under this Plan to acquire Common Stock (as defined below). Upon stockholder approval and,
with regard to the Protos prior plan options and the Chiron Ophthalmics prior plan options, consummation of the relevant mergers, outstanding options under the Chiron Prior Plans were converted into
options under this Plan. These options preserved the exercise price of the outstanding options as adjusted, in the case of options under the Protos Corporation 1988 Stock Option Plan and the Chiron
Ophthalmics, Inc. 1986 Stock Option Plan, to reflect the substitution of Common Stock. These options also preserved the other terms and conditions of the outstanding options; provided, however,
that on the Effective Date of this Plan, outstanding automatic option grants under the Corporation's 1982 Stock Option Plan were conformed, other than to extend the term, to the Automatic Option
Grants under this Plan. Collectively, these options are referred to as "Substitute Options." 

IV.    STOCK SUBJECT TO THE PLAN  

        (a)   CLASS.    The
stock subject to awards under the Plan is (i) the Corporation's authorized but unissued or reacquired Common Stock ("Common Stock"), or
(ii) shares of one or more series of the Corporation's authorized but unissued or reacquired Restricted Common Stock, in the aggregate, "Company Stock." In connection with the grant of awards
under the Plan, the Corporation may repurchase shares in the open market or otherwise. 

        (b)   AGGREGATE
AMOUNT 

        (1)   SHARES.    Subject
to adjustment under Sections IV (c) and IV(b)(3), the aggregate maximum number of shares of Company Stock that may be subject to
awards under the Plan is 50,262,347 (comprised of the original number of shares authorized under the Plan, including the number of shares of Company Stock remaining for issuance on the Effective Date
of this Plan 

2

 

under
the Corporation's 1982 Stock Option Plan and the Corporation's 1984 Non-Qualified Stock Option Plan, plus all annual increases thereto through January 1, 1997, plus an
increase of 13,000,000 shares by amendment effective February 28, 1997). Notwithstanding the foregoing, as of the first day of each fiscal year beginning after January 1, 1997 the
aggregate number of shares of Company Stock that may be subject to awards under the Plan will be increased by 1.50% of the number of Chiron Common Equivalent Shares outstanding as of last day of the
preceding fiscal year. Subject to adjustment under Section IV(c), the maximum number of shares of Company Stock with respect to which awards may be granted to any employee during the term of
the Plan is 4,000,000 shares. Subject to adjustment under Sections IV(c) and IV(b)(3), not more than 50,262,347 shares of Company Stock, increased, as of the first day of each fiscal year beginning
after January 1, 1997, by 1.50% of the number of Chiron Common Equivalent Shares outstanding as of December 31, 1996, may be subject to Incentive Options (as defined below) granted under
the Plan after the Effective Date. "Chiron Common Equivalent Shares" are the total number of outstanding shares of Common Stock plus the total number of shares of Common Stock issuable upon conversion
or exercise of outstanding warrants, options and convertible securities. In no event will more than 2,000,000 shares of Restricted Common Stock, whether in a single series or in multiple series, be
subject to awards under the Plan. 

        (2)   RESTRICTED
COMMON STOCK.    Shares of Restricted Common Stock may be issued under the Plan in one or more separate series. The rights, preferences and
privileges, together with the restrictions and limitations and the number of shares, of each series of Restricted Common Stock issuable under the Plan will be set forth in the Corporation's
Certificate of Determination of Preferences of Common Stock ("Certificate") as in effect from time to time during the term of the Plan. Shares of each series of Restricted Common Stock will be
convertible or exchangeable into shares of Common Stock in accordance with the terms and provisions of the Certificate applicable to that series. 

        (3)   REUSE
OF SHARES.    If any outstanding option under the Chiron Prior Plans, the Cetus Prior Plans or this Plan (including the Substitute Options) expires or is
terminated or canceled for any reason (including pursuant to Section X of the Plan but other than pursuant to surrender of the option for a cash payment in accordance with Section XIII
of the Plan) before being exercised for the full number of shares to which it applies, then the shares allocable to the unexercised portion of such option will not be charged against the limitations
of Section IV(b)(1) and will become available for subsequent grants under the Plan. To the extent that a share right or share unit expires or is terminated, or is canceled or forfeited for any
reason without being paid in cash or shares of Company Stock, any remaining shares allocable to the unpaid portion of such share right or share unit shall not be charged against the limitations of
Section IV(b)(1) and will become available again for subsequent grants under the Plan. Unvested shares issued under the Plan and subsequently cancelled, forfeited or repurchased by the
Corporation at the original exercise or issue price paid per share pursuant to the Corporation's repurchase rights under the Plan shall be added back to the number of shares of Common Stock reserved
for issuance under Section IV(b)(1). Shares subject to any option or portion of an option surrendered in accordance with the "Surrender of Options for Cash or Stock" provisions of this Plan and
shares for which a cash payment is made in lieu thereof under a restricted share, share unit or share right will not be available for subsequent awards under the Plan. If the exercise price of an
option under the Plan is paid with shares of Common Stock or if shares of Common Stock otherwise issuable under the Plan are withheld by the Corporation in satisfaction of the withholding taxes
incurred in connection with the exercise of an option or the vesting of a stock issuance under the Plan, then the number of shares of Common Stock available for issuance under Section IV(b)(1)
shall be reduced by the gross number of shares for which the option is exercised or which vest under the stock issuance, and not by the net number of shares of Common Stock issued to the holder of
such option or stock issuance. 

3

 

        (c)   ADJUSTMENTS.    In
the event any change is made to the Company Stock subject to the Plan (whether by reason of merger, consolidation, reorganization,
recapitalization, stock dividend, stock split, combination of shares, exchange of shares, or other change in corporate or capital structure of the Corporation affecting the outstanding Common Stock as
a class without the Corporation's receipt of consideration) then, unless such change results in the termination of all awards, the Committee will make appropriate adjustments to (i) the number
and/or class of securities available under the Plan, (ii) the number and/or class of securities for which any one person may be granted awards under the Plan, (iii) the number and/or
class of securities to be made under automatic grants to non-employee directors, and (iv) the number and/or class of securities and, where applicable, price per share of securities
subject to outstanding awards. Such adjustments are to be effected in a manner which shall preclude the enlargement or dilution of rights and benefits of awards and shall be final, binding and
conclusive. 

V.     TERMS AND CONDITIONS OF DISCRETIONARY OPTIONS  

        Discretionary stock options granted under the Plan may, in the Committee's discretion, be either incentive stock options ("Incentive Options") qualifying under
Section 422 of the Internal Revenue Code of 1986, as amended ("Internal Revenue Code"), or nonstatutory options. Individuals who are
not employees of the Corporation or its subsidiaries may only be granted nonstatutory options. Options will be evidenced by instruments in such form as the Committee may from time to time approve.
These instruments will conform to the following terms and conditions and, in the discretion of the Committee, may contain such other terms, conditions and restrictions as are not inconsistent with the
following: 

        (a)   OPTION
PRICE.    The option price per share will be fixed by the Committee, but in no event will the option price per share be less than
eighty-five percent (85%) of the Fair Market Value of the option shares on the date of the option grant; provided, however, that in no event will the option price per share of an Incentive
Option be less than one hundred percent (100%) of the Fair Market Value of the option shares on the date of the option grant. However, the Committee may grant options with an option price per share
less than eighty-five percent (85%) of the Fair Market Value of the option shares on the date of the option grant in substitution for the outstanding options of the acquired company in a
merger, if such options are granted with an option price per share which preserves the option price of the outstanding options, as adjusted for the merger. Notwithstanding the foregoing, Substitute
Options will have an option price per share determined pursuant to Section III(d) of this Plan. 

        (b)   NUMBER
OF SHARES, TERM AND EXERCISE TERM AND NUMBER.    Each option granted under the Plan will be exercisable on such date or dates, during such period, and
for such number of shares of Company Stock as the Committee determines and sets forth in the instrument evidencing the option. No option granted under the Plan will have an expiration date that is
more than 10 years after the date of the option grant. 

        (1)   EXERCISE.    After
any option granted under the Plan becomes exercisable, it may be exercised by delivering notice in such form to such person as the
Corporation may designate at any time prior to the termination of such option. Except as authorized by the Committee in accordance with Section VIII, the option price for the number of shares
for which the option is exercised will become due and payable upon exercise. 

        (2)   PAYMENT.    The
option price will be payable in full in cash (including cash equivalents); provided, however, that the Committee may, either at the time the
option is granted or at the time it is exercised and subject to such limitations as it may determine, authorize payment of all or a portion of the option price in one or a combination of the following
alternative forms 

	(i)
	a
promissory note authorized pursuant to Section VIII; 

4

 

	(ii)
	full
payment in shares of Common Stock valued as of the exercise date and held for the requisite period to avoid a charge to the Corporation's earnings; or

	(iii)
	to
the extent the option is exercised for vested shares, through a special sale and remittance procedure pursuant to which the optionee shall provide irrevocable
instructions, in such form and pursuant to such procedures as the Corporation shall specify, to (a) a Corporation-approved brokerage firm to effect the immediate sale of the purchased shares
and remit to the Corporation, out of the sale proceeds available on the settlement date, sufficient funds to cover the aggregate exercise price payable for the purchased shares plus all applicable
Federal, state and local income and employment taxes required to be withheld by the Corporation by reason of such exercise, and (b) the Corporation to deliver the certificates for the purchased
shares directly to such brokerage firm in order to complete the sale. 

        (c)   TERMINATION
OF SERVICES.    The Committee will determine and set forth in each option whether the option will continue to be exercisable, and the terms and
conditions of such exercise, on and after the date that an optionee ceases to be employed by, or to provide services to, the Corporation or its subsidiaries. The date of termination of an optionee's
employment or services will be determined by the Committee, which determination will be final. 

        (d)   INCENTIVE
OPTIONS.    Options granted under the Plan that are intended to be Incentive Options will be subject to the following additional terms and
conditions: 

        (1)   DOLLAR
LIMITATION.    To the extent that the aggregate Fair Market Value (determined as of the respective date or dates of grant) of shares with respect to
which options that are granted after 1986 and that would otherwise be Incentive Options are exercisable for the first time by any individual during any calendar year under the Plan (or any other plan
of the Corporation, a parent or subsidiary corporation or predecessor thereof) exceeds the sum of $100,000 (or such greater amount as may be permitted under the Internal Revenue Code), whether by
reason of acceleration or otherwise, such options will not be treated as Incentive Options. In making such a determination, options will be taken into account in the order in which they were granted. 

        (2)   10%
STOCKHOLDER.    If any employee to whom an Incentive Option is to be granted pursuant to the provisions of the Plan is, on the date of grant, the owner of
stock (determined with application of the ownership attribution rules of Section 424(d) of the Internal Revenue Code) possessing more than ten percent (10%) of the total combined voting power
of all classes of stock of his or her employer corporation or of its parent or subsidiary corporation ("10% Stockholder"), then the following special provisions will apply to the option granted to
such individual: 

	(i)
	The
option price per share of the stock subject to such Incentive Option will not be less than one hundred ten percent (110%) of the Fair Market Value of the option
shares on the date of grant; and

	(ii)
	The
option will not have a term in excess of five (5) years from the date of grant. 

        (3)   PARENT
AND SUBSIDIARY.    For purposes of this Section V(d), "parent corporation" and "subsidiary corporation" will have the meaning attributed to those
terms, as they are used in Section 422(b) of the Internal Revenue Code. 

        (e)   WITHHOLDING

        (1)   OBLIGATION.    The
Corporation's obligation to deliver stock certificates upon the exercise of an option will be subject to the option holder's satisfaction of
all applicable federal, state and local income and employment tax withholding requirements. 

5

 

        (2)   PAYMENT.    In
the event that an option holder is required to pay to the Corporation an amount with respect to income and employment tax withholding
obligations in connection with exercise of an option, the Committee may, in its discretion and subject to such limitations and rules as it may adopt, permit the option holder to satisfy the
obligation, in whole or in part, by delivering shares of Common Stock already held by the option holder or by making an irrevocable election that a portion of the total value of the shares subject to
the option be paid in the form of cash in lieu of the issuance of Company Stock, and that such cash payment be applied to the satisfaction of the withholding obligations. 

VI.   DISCRETIONARY RESTRICTED SHARES, SHARE RIGHTS, SHARE UNITS AND PERFORMANCE UNITS  

        (a)   NATURE
OF AWARDS 

        (1)   RESTRICTED
SHARES.    A restricted share granted under the Plan shall consist of shares of Company Stock, the retention and transfer of which is subject to
such terms, conditions and restrictions (whether based on performance standards or periods of service or otherwise and including repurchase and/or forfeiture rights in favor of the Corporation) as the
Committee shall determine. The terms, conditions and restrictions to which restricted shares are subject shall be evidenced by instruments in such form as the Committee may from time to time approve
and may vary from grant to grant. The Committee shall have the absolute discretion to determine whether any consideration (other than the services of the potential award holder) is to be received by
the Corporation or its subsidiaries as a condition precedent to the issuance of restricted shares. 

        (2)   SHARE
RIGHTS.    A share right granted under the Plan shall consist of the right, subject to such terms, conditions and restrictions (whether based on
performance standards or periods of service or otherwise), to receive a share of Company Stock (together with cash dividend equivalents if so determined by the Committee) as the Committee shall
determine and shall be evidenced by instruments in such form as the Committee may from time to time approve. The Committee shall have the absolute discretion to determine whether any consideration
(other than the services of the potential award holder) is to be received by the Corporation or its subsidiaries as a condition precedent to the issuance of shares pursuant to share rights. The terms,
conditions and restrictions to which share rights are subject may vary from grant to grant. 

        (3)   SHARE
UNITS.    A share unit granted under the Plan shall consist of the right to receive an amount in cash equal to the Fair Market Value of one share of
Company Stock on the date of valuation of the unit (together with cash dividend equivalents if so determined by the Committee) less such amount, if any, as the Committee shall specify. The date of
valuation and payment of cash under a share unit and the conditions, if any, to which such payment will be subject (whether based on performance standards or periods of service or otherwise) shall be
determined by the Committee. The terms, conditions and restrictions to which share units are subject may vary from grant to grant. 

        (b)   WITHHOLDING.    The
Committee may require, or permit an award holder to elect, that a portion of the total value of the shares of Common Stock subject to
restricted shares or share rights held by one or more award holders be paid in the form of cash in lieu of the issuance of Company Stock and that such cash payment be applied to the satisfaction of
the federal, state and local income and employment tax withholding obligations that arise at the time the restricted shares and share rights become free of all restrictions under the Plan. 

        (c)   CASH
PAYMENTS.    The Committee may provide award holders with an election to receive a percentage of the total value of the Company Stock subject to
restricted shares or share rights in the form of a cash payment, subject to such terms, conditions and restrictions as the Committee shall specify. 

6

 

        (d)   ELECTIVE
AND TANDEM AWARDS.    The Committee may award restricted shares, share rights, and share units independently of other compensation or in lieu of
compensation that would otherwise be paid in cash or stock options, whether at the election of the potential award holder or otherwise. The number of restricted shares, share rights or share units to
be awarded in lieu of any cash compensation amount or number of stock options shall be determined by the Committee in its sole discretion and need not be equal to such foregone compensation in Fair
Market Value. In addition, restricted shares, share rights, and share units may be awarded in tandem with stock options, so that a portion of such award becomes payable or becomes free of restrictions
only if and to the extent that the tandem options are not exercised or are forfeited, subject to such terms and conditions as the Committee may specify. 

        (e)   MODIFICATION
OF AWARDS.    Except to the extent an award is granted as a performance unit, the Committee may, in its sole discretion, modify or waive any or
all of the terms, conditions or restrictions applicable to any outstanding restricted share, share right or share unit; provided, however, that no such modification or waiver shall, without the
consent of the holder of an outstanding award, adversely affect the holder's rights thereunder. 

        (f)    PERFORMANCE
UNITS.    Effective March 8, 1996, the Committee may grant restricted shares, share rights and share units to 162(m) executives that comply
with the requirements of Code Section 162(m). Performance units will become payable or vest upon attainment of specified performance goals over a specified performance period. 

        (1)   PERFORMANCE
GOALS.    The Committee will determine the Corporation performance goal or goals that must be met to achieve the maximum payout within the shorter
of the first 90 days of the specified performance period over which the performance goal or goals will be measured, or 25% of such performance period. The Committee may establish a goal based
on more than one performance criteria, or may establish multiple goals, but any payout must be based on the satisfaction of at least one goal. The Committee may provide for different levels of payouts
based on relative performance toward a performance goal. 

        (2)   PERFORMANCE
CRITERIA.    Performance units may be based on one or more of the following performance criteria: total shareholder return; the achievement of a
specified closing or average closing price of Common Stock; the absolute or percentage increase in the closing or average closing price of Common Stock and/or one or more of the following measures of
the Corporation's net income for the specified performance period determined in accordance with generally accepted accounting principles as consistently applied by the Corporation: absolute net income
or a percentage or absolute dollar increase in net income, earnings per share or a percentage or absolute dollar increase in earnings per share, or return on assets employed or equity or a percentage
or absolute dollar increase in return on assets employed or equity; or the Corporation's absolute gross revenues or a percentage or absolute dollar increase in gross revenues for the specified
performance period determined in accordance with generally accepted accounting principles as consistently applied by the Corporation. The awards may based on the Corporation's performance alone, or
the Corporation's performance may be measured against variously weighted published benchmark indices that the Committee determines are representative of the Corporation's peer group, which indices may
include the Standard & Poor's Health
Care Composite Index, the Standard & Poor's Health Care Diversified Index, and the AMEX Biotechnology Index, among others. 

        For
purposes of this Plan, net income and gross revenues shall be net income and gross revenues of the Corporation and its consolidated subsidiaries as reported by the Corporation and
certified by its independent public accountants, but the Committee in fixing any goal may exclude any or all of the following if they have a material effect on annual net income or gross revenues:
events or transactions that are either unusual in nature or infrequent in occurrence (such as 

7

 

restructuring/reorganization
charges, the purchase or sale of in process technology, the sale or discontinuance of a business segment, the sale of investment securities, losses from litigation, the
cumulative effect of changes in accounting principles and natural disasters), depreciation, interest or taxes. 

        (3)   REDUCTION
OR CANCELLATION OF PERFORMANCE UNITS.    Final payouts are subject to the approval of the Committee, which may reserve the absolute discretion to
reduce or cancel any payout thereunder. 

VII. AUTOMATIC AWARDS TO DIRECTORS  

        (a)   OPTIONS.    Effective
on and after June 30, 2003, non-employee members of the Board ("Eligible Directors") will automatically be granted
nonstatutory options to purchase the number of shares of Common Stock determined as set forth below (subject to adjustment under Section IV(c) hereof) on the dates and terms set forth below: 

        (1)   INITIAL
OPTION GRANTS.    On the date that an individual is first elected or appointed as an Eligible Director, he or she will receive an option to purchase
30,000 shares of Common Stock (the "Initial Option Grant"), subject to adjustment in accordance with Section IV(c). 

        (2)   TERMS
AND CONDITIONS.    The terms and conditions applicable to each Initial Option Grant will be as follows: 

	(i)
	PRICE.    The
option price per share will be equal to one hundred percent (100%) of the Fair Market Value of one share of Common Stock on the date of grant.

	(ii)
	TERM.    Each
Initial Option Grant will have a term of ten (10) years, measured from the date of grant.

	(iii)
	EXERCISE/VESTING.    Each
Initial Option Grant will become exercisable, in a series of three (3) equal annual installments over the three
(3)-year period measured from the grant date, provided the optionee continues to provide such services. In addition, each Initial Option Grant will become fully exercisable, should one or
more of the following events occur while the optionee is providing such services: (A) the optionee's death, or (B) the optionee's permanent disability.

	(iv)
	PAYMENT.    Upon
exercise of the Initial Option Grant, the option price for the purchased shares will become payable immediately in cash or in shares of
Common Stock that the optionee has held for at least six (6) months. Payment may also be made by delivery of a properly executed exercise notice together with irrevocable instructions to a
broker to promptly deliver to the Corporation the amount of sale or loan proceeds to pay the option price, subject to the resale restriction imposed by Section VII (a)(2)(vi) below.

	(v)
	CESSATION.    In
the event the optionee ceases to provide services to the Corporation or its subsidiaries as a director, an employee, a consultant or an
independent contractor, then, to the extent exercisable at the time of such cessation in accordance with Section VII(a)(2)(iii) above, the Initial Option Grant may be exercised for a
period of three (3) years after the date of such cessation or, if shorter the remaining portion of the ten (10) year term of the Initial Option Grant. In the case of death, the Automatic
Option may be exercised within such period by the estate or heirs of the optionee.

	(vi)
	RESALE
RESTRICTION.    Fifty percent (50%) of the shares purchased under the Initial Option Grant may not be sold or otherwise transferred for value unless
and 

8

 

until
the optionee beneficially owns, and will continue to beneficially own immediately following the sale or other transfer for value, vested shares of Common Stock (including for this purpose shares
issuable pursuant to any vested share right award) with a fair market value of at least $500,000. If a portion of the exercise price of an Initial Option is paid in the form of common stock pursuant
to Section VII(a)(2)(iv) above, the resale restriction shall apply only to 50% of the net number of new shares received by the optionee upon exercise. If a portion of the exercise price
of an Initial Option is paid with the proceeds of the sale of a portion of the option shares pursuant to Section VII(a)(2)(iv) above, the resale restriction shall not apply to the shares
sold to pay the exercise price, but shall apply to the remaining shares subject to the exercise. 

        (b)   SHARE
RIGHTS.    Effective on and after June 30, 2003, Eligible Directors will automatically be granted a number of share rights determined as set forth
below (subject to adjustment under Section IV(c) hereof) on the dates and terms set forth below: 

        (1)   AUTOMATIC
SHARE RIGHT AWARD.    Each Eligible Director shall receive an annual share rights grant (the"Automatic Share Right Award") on the last business day
of April each year (the "Automatic Grant Date"). However, with respect to the 2003 year, annual share rights shall be granted to Eligible Directors on June 30, 2003. An Automatic Share
Right shall be fully vested and entitle the holder to receive a number of shares of Common Stock following cessation of service on the Board pursuant to his or her election, as described below. The
number of share rights subject to each Automatic Share Right Award shall be that number of shares (rounded to the nearest whole share) equal to (i) $160,000 divided by (ii) the Fair
Market Value of one share of Common Stock on the date of grant; provided that each Eligible Director who was newly elected or appointed on a date after the previous year's Automatic Grant Date, or
with respect to the 2003 year grants after June 30, 2002, will receive in lieu thereof on the current Automatic Grant Date, an Automatic Share Right Award for a pro rata number of whole
shares of Common Stock determined by multiplying $13,333 by the number of calendar months (calculated to the nearest whole month, but not to exceed 12) between the continuing Eligible
Director's election or appointment date and the current Automatic Grant Date and dividing the product by the Fair Market Value of one share of Common Stock on the Automatic Grant Date. 

        (2)   SHARE
RIGHT ACCOUNT.    A "Share Right Account" will be established for each Eligible Director who receives an Automatic Share Right Award and all such
Automatic Share Right Awards made to such director shall be credited to such account. The share rights credited to such account shall be an unfunded and unsecured right of a general creditor. 

        (3)   DIVIDEND
RIGHTS.    Each time a dividend is paid on Common Stock after an Automatic Share Right Award is made to an Eligible Director, the Eligible Director
will be credited with a dollar
amount equal to the dividend paid per share multiplied by the number of shares previously credited to Participant's Share Right Account and not distributed as of the record date for the dividend. As
of the first business day in January of each year, the Eligible Director's Share Right Account will be credited with a number of share rights equal to (i) the cash dividend equivalent amounts
credited to the Eligible Director for the immediately preceding year divided by (ii) the average of the Fair Market Value of one share of Common Stock on each of the dates in the immediately
preceding year on which dividends were paid. 

        (4)   DISTRIBUTION
ELECTIONS.    Each Eligible Director shall elect to receive a distribution from his or her Share Right Account either (i) within thirty
(30) days following his or her termination of Board service or (ii) on February 1 of the year following the year of his or her termination of Board service, and to receive
payments from his or her Share Right Account either (i) in the form of a single lump sum or (ii) in up to ten (10) annual installments. Such election 

9

 

must
be filed (i) before July 30, 2003 for directors eligible to receive Automatic Share Right Awards in the 2003 year and (ii) for all Eligible Directors first eligible to
receive Automatic Share Right Awards in any year after the 2003 year, before the date of grant of the first Automatic Share Right. An election will apply to any and all Automatic Share Right
Awards received by the Eligible Director and will remain in effect until all payments from the Eligible Director's Share Right Account have been made, unless earlier revoked or changed by filing a
written revocation in such form as the Committee shall specify, but any revocation or change cannot be made effective unless it is made at least one (1) year before the date of the Eligible
Director's termination of Board service. 

        (5)   CORPORATE
TRANSACTION/CHANGE IN CONTROL.    In the event an Automatic Share Right Award is to be assumed by the successor corporation or parent thereof or
replaced with a comparable award in accordance with Section XI(b), such Automatic Share Right Award shall be deemed assumed for purposes of Section XI(b) only if in the opinion of the
Committee the award holder is entitled upon distribution of his or her assumed Share Right Account to any additional shareholder rights awarded to the Corporation's common stockholders in connection
with the applicable transaction. 

VIII. LOANS AND INSTALLMENT PAYMENTS  

        In order to assist an award holder (including an employee who is an officer or director of the Corporation) in the acquisition of shares of Company Stock pursuant
to an award granted under the Plan (other than pursuant to the Automatic Option Grant provisions of this Plan), the Committee may authorize, at either the time of the grant of an award or the time of
the acquisition of Company Stock pursuant to the award (i) the extension of a loan to the award holder by the Corporation, (ii) the payment by the award holder of the purchase price, if
any, of the Company Stock in installments, or (iii) the guarantee by the Corporation of a loan obtained by the award holder from a third party. The terms of any loans, guarantees or installment
payments, including the interest rate and terms of repayment, will be subject to the discretion of the Committee. Loans, installment payments and guarantees may be granted without security, the
maximum credit available being the purchase price, if
any, of the Company Stock acquired plus the maximum federal and state income and employment tax liability that may be incurred in connection with the acquisition. 

IX.   ASSIGNABILITY  

        No award granted under the Plan is assignable or transferable by the award holder other than by Will or by the laws of descent and distribution, and during the
lifetime of the award holder, only the award holder may exercise options or exercise the rights provided under awards granted under the Plan. However, if and to the extent that the Committee so
authorizes at the time an award is granted or amended, an option (other than an option designated as an Incentive Option) or other award may be assigned in whole or in part during the grantee's
lifetime to one or more of the grantee's family members or an entity substantially owned, benefiting or controlled by the grantee or one or more of grantee's family members if and to the extent that
the Securities and Exchange Commission Form S-8 Registration Statement would continue to be available for the exercise of the award and resale of the underlying securities following
such assignment. The terms applicable to the assigned portion shall be the same as those in effect for the award immediately prior to such assignment and shall be set forth in such documents issued to
the assignee as the Committee may deem appropriate. 

X.    CANCELLATION AND NEW GRANT OF OPTIONS  

        The Committee will have the authority to effect, at any time and from time to time, with the consent of the affected option holders, the cancellation of any or
all outstanding options under the Plan, a Cetus Prior Plan or a Chiron Prior Plan (other than options granted under automatic option 

10

 

grant
provisions of these plans) and to grant in substitution therefor new options under the Plan covering the same or different numbers of shares, but having an option price per share not less than
eighty-five percent (85%) of the Fair Market Value on the new grant date or, in the case of an Incentive Option, one hundred percent (100%) of the Fair Market Value on the new grant date
(or, in the case of an Incentive Option granted to a 10% Stockholder, one hundred ten percent (110%) of such Fair Market Value). 

XI.   ACCELERATION AND TERMINATION OF AWARDS  

        (a)   ACCELERATION.    If
the Corporation or its stockholders enter into an agreement to dispose of all or substantially all of the assets of the Corporation, enter
into an agreement to merge or consolidate with another entity or enter into a plan of reorganization or liquidation, each award will be automatically accelerated so that (1) options become
fully exercisable with respect to the total number of shares purchasable under the options; (2) restrictions on restricted shares will be eliminated, and the shares will immediately vest; and
(3) share rights and share units will immediately vest and become payable. The Committee may also provide for the automatic termination of repurchase rights upon the occurrence of such an
event. 

        (b)   NO
ACCELERATION.    No acceleration of awards will occur if the terms of the agreement require that each such award either be assumed by the successor
corporation or parent thereof or be replaced with a comparable award subject to shares of the successor corporation or parent thereof. The determination of such comparability will be made by the
Committee, and its determination will be final, binding and conclusive. Upon consummation of the transaction contemplated by the agreement, all awards, whether or not accelerated, will terminate
unless assumed pursuant to a written agreement by the successor corporation or parent thereof. However, nothing in this Section will prohibit the Committee from granting an award that provides for the
acceleration of exercisability and/or vesting of the award either (i) upon the occurrence of any specified event, including a corporate transaction or change in control of the Corporation (as
defined by the Committee) whether or not the award is assumed or replaced with a comparable award or (ii) upon termination of employment or other occurrence following such an event. 

        (c)   CORPORATE
STRUCTURE.    The grant of awards under this Plan will in no way affect the right of the Corporation to adjust, reclassify, reorganize, or otherwise
change its capital or business structure or to merge, consolidate, dissolve, liquidate or sell or transfer all or any part of its business or assets. 

XII. VALUATION  

        With regard to all Substitute Options, Fair Market Value will be determined in accordance with the relevant option plan documents on the date that the outstanding
options were granted. With regard to awards granted under this Plan, for all valuation purposes under the Plan, the Fair Market Value of a share of Common Stock or Restricted Common Stock (as the case
may be) on any relevant date will be determined in accordance with the following provisions: 

        (a)   If
the Common Stock or Restricted Common Stock is not at the time listed or admitted to trading on any stock exchange, but is traded in the
over-the-counter market, the Fair Market Value will be the average between the reported high price and the reported low price of one share of Common Stock or Restricted Common
Stock (as the case may be) on the date in question in the over-the-counter market, as such prices are reported by the National Association of Securities Dealers through its
NASDAQ system or any successor system. 

        (b)   If
the Common Stock or Restricted Common Stock is at the time listed or admitted to trading on any stock exchange, then the Fair Market Value will be the average between
the reported high price and the reported low price of one share of Common Stock or Restricted Common Stock (as the case 

11

 

may
be) on the date in question on the stock exchange that is the primary market for the stock, as such prices are officially quoted on such exchange. 

        (c)   If
the Common Stock or Restricted Common Stock (as the case may be) is at the time neither listed nor admitted to trading on any stock exchange nor traded in the
over-the-counter market, or if the Committee determines that neither subparagraph (a) nor subparagraph (b) above reflects Fair Market Value of the stock and the
award was not granted pursuant to the Plan's Automatic Award provisions, then the Fair Market Value will be determined by the Committee after taking into account such factors as the Committee deems
appropriate, or in the case of Automatic Awards, by an independent third party valuation. 

XIII. SURRENDER OF OPTIONS FOR CASH OR STOCK  

        (a)   STOCK
APPRECIATION RIGHTS.    If, and only if the Committee, in its discretion, elects to implement an option surrender program under the Plan, one or more
option holders may, upon such terms and conditions as the Committee may establish at the time of the option grant or at any time thereafter, be granted the right to surrender all or part of an
unexercised option in exchange for a distribution equal in amount to the difference between (i) the Fair Market Value (at date of surrender) of the shares for which the surrendered option or
portion thereof is at the time exercisable and (ii) the aggregate option price payable for such shares. The distribution to which an option holder becomes entitled under this Section may be
made in shares of Common Stock or Restricted Common Stock, valued at Fair Market Value at the date of surrender, in cash, or partly in shares and partly in cash, as the Committee, in its sole
discretion, deems appropriate. The option surrender provisions of this Section will not apply to options granted pursuant to the Automatic Option Grant provisions of this Plan. 

        (b)   LIMITED
STOCK APPRECIATION RIGHTS.    If outstanding options of Cetus for which Substitute Options are issued pursuant to Section III(d) have Limited
Stock Appreciation Rights ("LSARs") attached thereto, then each such LSAR shall be honored by the Corporation in accordance with its terms and remain exercisable for a period of 60 days
following the date that stockholders of Cetus approve the Merger; provided, however, that if the LSAR was originally granted within 6 months of the date that Cetus stockholders approve the
Merger, then the LSAR will be exercisable for a period of 60 days following expiration of such six-month period. Upon expiration of the applicable 60-day period, each
such LSAR not previously exercised shall expire. Upon exercise of an LSAR, the related option will be cancelled, and Chiron will pay to the LSAR holder an amount in cash for each share with respect to
which the LSAR is exercised determined in accordance with the terms of the Cetus Prior Plans. 

XIV. REPURCHASE RIGHTS  

        The Committee may, in its discretion, establish as a term of one or more awards granted under the Plan that the Corporation (or its assigns) will have the right,
exercisable upon the award holder's termination of employment with, or cessation of services for, the Corporation and its subsidiaries, to repurchase at the original price paid, if any, for such
shares of (1) Company Stock acquired by the award holder pursuant to the granted award, or (2) Common Stock into which acquired Restricted Common Stock may have been converted or for
which Restricted Common Stock may have been exchanged. Any such repurchase right will be exercisable by the Corporation (or its assigns) upon such terms and conditions (including provisions for the
expiration of such right in one or more installments) as the Committee may specify in the instrument evidencing such right. The Committee will also have full power and authority to provide for the
automatic termination of the Corporation's repurchase rights, in whole or in part, thereby accelerating the vesting of any or all of the purchased shares (other than purchased shares obtained pursuant
to the Automatic Award provisions of this Plan) upon the occurrence of any change in control specified in Article XI. 

12

 

XV.  RIGHT OF FIRST REFUSAL  

        The Committee may, in its discretion, establish as a term of one or more awards granted under the Plan that the Corporation has a right of first refusal with
respect to the proposed disposition by the award holder (or any successor in interest by reason of purchase, gift or other mode of transfer) of any shares of (1) Company Stock acquired by the
award holder pursuant to the granted award, or (2) Common Stock into which purchased Restricted Common Stock may have been converted or for which acquired Restricted Common Stock may have been
exchanged. Any such right of first refusal will be exercisable by the Corporation or its assigns in accordance with the terms and conditions specified in the instrument evidencing such right. 

XVI. EFFECTIVE DATE AND TERM OF PLAN  

        (a)   EFFECTIVE
DATE.    The Plan became effective on December 10, 1991, the date that it was approved by the Corporation's stockholders. The Plan was
subsequently amended on several occasions and, as amended through March 8, 1996, was approved by the Corporation's stockholders on May 16, 1996. The Plan was further amended on
February 28, 1997, and as amended through February 28, 1997 was approved by the Corporation's stockholders on May 15, 1997. The Plan was subsequently amended on a number of
occasions and was further amended on February 16, 2001 to (i) eliminate the automatic share rights awards to Eligible Directors contained in then Section VII (b) of the
Plan, (ii) change the annual automatic option grant to non-employee directors from an option to purchase a number of shares of Common Stock determined by dividing $100,000 by the
average stock price of a share of Common Stock over the preceding 12 months to an option to purchase 15,000 shares of Common Stock, and reduce the vesting schedule for such option from
5 years to 6 months, and (iii) implement an initial option grant feature, whereby each newly elected or appointed non-employee director automatically receives an
option grant to purchase 30,000 shares of Common Stock which vests over a 3-year period. The Plan was amended on June 30, 2003 to (i) eliminate the annual 15,000 share
automatic option grant to non-employee directors, (ii) implement an automatic share right grant feature, whereby each continuing non-employee director automatically
receives on the last business day of April each year (or with respect to the 2003 year, June 30, 2003) a number of share rights equal to $160,000 worth of Common Stock (or if such
non-employee director has not completed a full year of board service prior to the applicable grant date, a pro-rated award based on the number of whole calendar months of board
service completed prior to the grant date) and (iii) change the initial automatic option grant to non-employee directors to eliminate the ability to exercise such options prior to
vesting in the shares subject to the option and to impose a transfer restriction on certain shares purchased pursuant to the option until the non-employee director holds $500,000 worth of
vested shares of Common Stock. 

        (b)   TERM.    Incentive
Options may be granted under the Plan until May 14, 2007, and may not be issued under the Plan after that date. Subject to this
limitation, the Committee may grant awards under the Plan at any time after the Effective Date of the Plan and before the Plan is terminated by the Board. 

XVII. AMENDMENT OR DISCONTINUANCE  

        (a)   BOARD.    The
Board may amend, suspend or discontinue the Plan in whole or in part at any time; provided, however, that (a) except to the extent
necessary to qualify as Incentive Options any or all options granted under the Plan that are intended to so qualify, such action may not, without the consent of the award holder, adversely affect
rights and obligations with respect to awards outstanding under the Plan; (b) certain amendments may, as determined by the Board in its sole discretion, require stockholder approval pursuant to
applicable laws or regulations. 

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        (b)   COMMITTEE.    The
Committee will have full power and authority to modify or waive any or all of the terms, conditions or restrictions applicable to any
outstanding award (other than Automatic Option Grants), to the extent not inconsistent with the Plan. 

        (c)   SUBSTITUTE
OPTIONS.    Substitute Options will be subject to amendment in accordance with the terms of this Plan. 

XVIII. NO OBLIGATION  

        Nothing contained in the Plan (or in any award granted under this Plan, a Chiron Prior Plan or a Cetus Prior Plan) shall confer upon any employee, consultant, or
independent contractor any right to continue in the employ of, or to provide services to, the Corporation or any affiliate or constitute a contract or agreement of employment or for the provision of
services, or interfere in any way with the right of the Corporation or an affiliate to reduce such employee's, consultant's or independent contractor's compensation from the rate in existence at the
time of the granting of an award or to terminate such employee's, consultant's or independent contractor's employment or services at any time, with or without cause; but nothing contained in the Plan
or in any award granted under this Plan shall affect any contractual rights of an employee pursuant to a written employment agreement. 

XIX. USE OF PROCEEDS  

        The cash proceeds received by the Corporation pursuant to awards granted under the Plan will be used for general corporate purposes. 

XX. COMPLIANCE  

        (a)   FEDERAL
AND STATE LAWS.    No option may be exercised, and the Corporation will not be obligated to issue stock under any award unless, in the opinion of
counsel for the Corporation, such exercise and issuance is in compliance with all applicable federal and state securities laws. As a condition to the grant of any award, or to the issuance of stock
under any award, the Committee may require that the award holder agree to comply with such provisions of federal and state securities laws as may be applicable to such grant, or to the sale of stock
acquired pursuant to the Plan, and that the award holder deliver to the Corporation a written agreement, in form and substance satisfactory to the Corporation and its counsel, implementing such
agreement. 

        (b)   INFORMATION.    The
Corporation will furnish to each award holder participating in the Plan (other than a key employee or a director) a copy of the
Corporation's Annual Report to Stockholders for the most recent fiscal year, and additional copies will be furnished, without charge, to such award holders upon request to the Secretary of the
Corporation. 

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APPENDIX A
  SPECIAL PROVISIONS RELATED TO 1995 CIBA-GEIGY TRANSACTION    
    

        Those
persons holding options to acquire shares of Common Stock under the Corporation's 1991 Stock Option Plan on November 20, 1994 are granted the following rights ("Rights")
with respect to each such option: 

	(i)
	the
right to receive upon the closing of the tender offer contemplated under the Investment Agreement entered into on such date among the Corporation and
Ciba-Geigy Limited, Ciba-Geigy Corporation and Ciba Biotech Partnership, Inc. (the "Closing") a cash payment equal to (A) 37.33% of the number of shares of Common
Stock with respect to which each such option would first become exercisable in calendar year 1995 multiplied by (B) the difference between $117 per share and the exercise price per share of
such option with respect to such shares and

	(ii)
	with
respect to the remaining shares of Common Stock subject to each such option, the right, exercisable at any time after the later of the Closing or the date that
such an option first becomes exercisable with respect to such shares, to surrender that portion of such option relating to 37.33% of such shares in return for a cash payment equal (A) to the
difference between $117 per share and the exercise price per share of such option multiplied by (B) the number of shares with respect to which such option is so surrendered. However, the grant
and exercise of any such right with respect to any officer or director subject to Section 16 of the Securities Exchange Act of 1934 shall be subject to stockholder approval of the grant of such
rights at the Corporation's 1995 stockholder meeting. The grant of such rights, which are made with respect to 1,858,776 optioned shares shall be in addition to, and shall not count against, the
aggregate and annual limits on the number of shares with respect to which other awards under the Plan may be made to all individuals and/or a single individual. 

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QuickLinks

Exhibit 10.501

CHIRON 1991 STOCK OPTION PLAN AS AMENDED AUGUST 14, 1993, APRIL 11, 1994, FEBRUARY 24, 1995, MARCH 8, 1996, FEBRUARY 28, 1997, AUGUST 7, 1998, AUGUST 20, 1999, FEBRUARY 25, 2000, SEPTEMBER 21, 2000, FEBRUARY 16,
2001 AND, JUNE 30 2003

APPENDIX A SPECIAL PROVISIONS RELATED TO 1995 CIBA-GEIGY TRANSACTION

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