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                                                                  [LETTERHEAD]

CHIRON

                                                                  LAW DEPARTMENT

                              CONSULTING AGREEMENT

         THIS AGREEMENT is made effective as of February 25, 2000 by and between
Chiron Corporation ("CHIRON"), 4560 Horton Street, Emeryville, California 94608,
and William J. Rutter, Ph.D. ("DR. RUTTER"), with a mailing address at 111
Telegraph Hill Blvd., San Francisco, California 94133, as follows:

                                    RECITALS

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

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

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

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

         2.       CONSULTING SERVICES. Dr. Rutter shall serve as a consultant to
Chiron in the fields of providing management and direction of a strategic
advisory board; consult and advise with respect to the international development
of vaccines; and participate in the strategic review of possible mergers and
acquisitions: (the "CONSULTING SERVICES").

         3.       COMPENSATION.

                  3.1.     As compensation for his performance of the Consulting
Services, Chiron will pay Dr. Rutter $200,000.00 per year, payable monthly in
advance in the amount of $16,666.67.  During the

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

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

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

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

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

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

                  5.3.     Chiron shall own all right, title and interest in all
Work Product and Inventions, all of which will be deemed Chiron Confidential
Information as defined in Article 6 herein. Dr. Rutter shall promptly and
without royalty, but at Chiron's expense: (i) disclose to Chiron all information
with respect to all Work Product and Inventions, (ii) execute all applications,
assignments, and other

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instruments and do such other acts that Chiron may deem necessary to obtain
and maintain patents, copyrights, and similar rights anywhere in the world,
and (iii) provide Chiron with evidence needed in any legal proceedings
regarding the Work Product and any Invention.

         6.       CONFIDENTIALITY.

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

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

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

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

If to Chiron:                                    If to Dr. Rutter:

 Chiron Corporation                              William J. Rutter, Ph.D.
 4560 Horton Street                              111 Telegraph Hill Blvd.
 Emeryville, California 94608                    San Francisco, California 94133
 Attention: General Counsel
 With a copy to:    Supervisor,
                    Contracts Administration,
                    Law Department

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

         9.       ASSIGNMENT AND GOVERNING LAW. This Agreement and any rights
under it may not be assigned by Dr. Rutter without Chiron's prior written
consent. Any unauthorized attempt to assign by

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Dr. Rutter shall be void. Chiron party may freely assign this Agreement,
upon written notice to Dr. Rutter, to any person or entity who acquires all
or substantially all of Chiron's business or assets (or of the business
division or product line of such party to which the Consulting Services
primarily relate). This Agreement shall be governed by the laws of the State
of California without regard to its choice of law principles.

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

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

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

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

CHIRON CORPORATION                                 WILLIAM J. RUTTER, PH.D.

By:   /s/ William G. Green                         /s/ William J. Rutter
   ---------------------------------------         ----------------------------
      William G. Green                             Signature
      Senior Vice President, General Counsel
         and Secretary

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                                  [LETTERHEAD]

December 31, 1999

Novartis Corporation                        VIA FACSIMILE AND FEDERAL EXPRESS
564 Morris Avenue
Summit, NJ 07901

Attn:    Jeff Benjamin
         Vice President and
           Associate General Counsel

Gentlemen:

This letter confirms the agreement between Chiron Corporation ("Chiron") on
behalf of itself and its wholly-owned subsidiary, Chiron SpA, on the one hand,
and Novartis Corporation ("Novartis") to amend that certain Limited Liability
Company Agreement between them, dated as of December 28, 1995, as amended (the
"LLC Agreement") in certain respects. Terms not defined in this letter shall
have the meaning set forth in the LLC Agreement.

1.       SECTION 2.3.1 OF THE LLC AGREEMENT shall be amended to extend the date
         through which Chiron may sell Units of Membership Interest to Novartis
         from December 31, 1999 to December 31, 2000, without thereby extending
         the period within which R&D Costs may be included within the Net
         Purchased Amount.

2.       SECTION 2.3.3. OF THE LLC AGREEMENT shall be amended to replace
         subsection (e) with the following:

         "(e) in 1999, Fifty million three hundred thousand dollars (US
         $50,300,000) plus any unused portion of the funding limit for 1998
         which unused portion amounts to Eight million dollars (US $8,000,000);
         and
         (f) in 2000, any unused portion of the funding limit for 1999, but
         in no event more than Nineteen million three hundred thousand dollars
         (US $19,300,000) so that the total funding amount does not exceed Two
         hundred sixty five million dollars (US $265,000,000)."

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If the foregoing accurately reflects our understanding effective as of the date
of this letter, please sign and return one copy to me.

Very truly yours,                             AGREED:

CHIRON CORPORATION                            NOVARTIS CORPORATION

/s/ William G. Green
By: William G. Green                       By: /s/ Jeff Benjamin
    Senior Vice President and                 --------------------------
      General Counsel
                                           Title: Vice President & Associate
                                                  General Counsel
                                                 ----------------------------

cc:      Herbert Gut
         Joseph Mamie

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