[LETTERHEAD]
December 19, 1997
Xxxxx Xxxxxx, President
Novartis Pharma Corporation
00 Xxxxx 00
Xxxx Xxxxxxx, XX 00000
Dear Xxxxx:
This letter is to confirm the terms to which you and I have agreed today
regarding the copromotion by Chiron Corporation ("Chiron") on behalf of Novartis
Pharmaceuticals Corporation ("Novartis") of Aredia. These terms implement that
certain agreement dated November 27, 1996, between Chiron and Ciba-Geigy Ltd.
(the "Agreement").
1. The duration of the copromotion services provided by Chiron to
Novartis shall extend from April 1, 1997 to April 3, 1998. Each party hereby
waives any right to require the other to perform such services under the
Agreement after April 3, 1998.
2. The parties agree that the terms and conditions reflected in this
letter represent reasonable and customary commercial terms for the performance
of the copromotion services rendered by Chiron.
3. Chiron shall direct its field sales force to devote equal and
co-primary promotional and sales effort to each of Aredia and Proleukin and
shall establish and maintain reasonable incentive programs intended to motivate
its sales force to provide such efforts. There shall be no specific accounting
of sales calls, details, or the proportions of full time equivalent employees
devoted to these copromotional services.
4. Novartis shall pay Chiron the following for these copromotional
services:
(a) In 1997, $4.5 million plus 30% of the sales of Aredia made in
1997 in excess of $144.5 million.
(b) In 1998, $1.2 million plus 25% of the sales of Aredia made in the
first quarter of 1998 in excess of 1.25 times the amount of sales of Aredia made
in the fourth quarter of 1997.
Nothing in this letter affects the continuing obligation of Novartis to pay
the tailing compensation due Chiron under that certain promotion agreement
between Chiron and Ciba-Geigy Corporation dated April 2, 1994.
If the foregoing correctly expresses our understanding, please sign and
return to me a copy of this letter.
Thanks again for your help in resolving this matter, Xxxxx. I hope that
you have a happy holiday season and a really good New Year. I hope to have the
opportunity to meet with you soon.
Sincerely, yours,
/s/ Xxxxxx X. Xxxxxxx
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Xxxxxx X. Xxxxxxx
President
Chiron Corporation
Agreed:
December _____, 1997
/s/ Xxxxx X. Xxxxxx
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Xxxxx Xxxxxx
President
Novartis Pharma Corporation
