MANUFACTURING AND SUPPLY AGREEMENT

Exhibit 10.31

MANUFACTURING AND SUPPLY AGREEMENT

Between

GENENTECH, INC. and LONZA BIOLOGICS, INC.

Dated December 7,  2003

MANUFACTURING AND SUPPLY AGREEMENT

“THIS MANUFACTURING AND SUPPLY AGREEMENT (“Agreement”) is made effective as of December 7 2003, by and between Lonza Biologics PLC, having its principal place of business at 228 Bath Road, Slough, Berkshire SL1 4DX, England (“LB”), Lonza Biologics, Inc. having its principal place of business at 101 International Drive Portsmouth, New Hampshire 03801 (“Lonza Inc”) (collectively LB and Lonza Inc, hereinafter “Lonza”), and Genentech, Inc., a Delaware corporation, having its principal place of business at One DNA Way, South San Francisco, California 94080 (“Genentech”).

BACKGROUND

Genentech markets and sells a certain proprietary biological pharmaceutical product known as Rituxan. Genentech desires to obtain additional supply of commercial quantities of Rituxan bulk drug substance. Lonza has the experience and expertise necessary to perform the manufacturing and related services needed to supply Rituxan bulk drug substance, and Lonza owns a facility that, with some modifications, could be suitable for production of commercial quantities of Rituxan bulk drug substance.

Genentech desires to retain Lonza as a nonexclusive manufacturer of commercial quantities of Rituxan bulk drug substance and purchase commercial quantities of such product from Lonza, and Lonza desires to perform such services and sell commercial quantities of such product to Genentech, all on the terms and conditions set forth in this Agreement.

Within ten (10) business days after the Effective Date (or such other date as agreed to by the Parties), Lonza and Genentech shall enter into a Tech Transfer Agreement and Quality Agreement (each as defined below) for the purpose of further effectuating the intent of the Parties hereunder.

AGREEMENT

NOW, THEREFORE, IN CONSIDERATION OF the mutual covenants set forth in this Agreement, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereby agree as follows:

ARTICLE 1.

The following terms, whether used in the singular or plural, shall have the meanings assigned to them below for purposes of this Agreement.

     1.1 “ Acquisition Cost ” means the actual invoiced price paid by Lonza to any Third Party for acquiring any raw materials, packaging components and intermediates used exclusively in the manufacture of the Product under this Agreement, including [*] in connection with the acquisition of such materials, packaging components and intermediates.

     1.2 “ Affiliate ” means, with respect to any Party, any other corporation or business entity that directly, or indirectly through one or more intermediaries, controls, is controlled by or is under common control with such Party. For purposes of this definition, the term “control” means direct or indirect ownership of fifty percent (50%) or more of the securities or other ownership interests representing the equity voting stock or general partnership or membership interest of such entity or the power to direct or cause the direction of the management or policies of such entity, whether through the ownership of voting securities, by contract, resolution or otherwise. Notwithstanding the foregoing, Roche shall not be considered an Affiliate of Genentech.

     1.3 “ Batch ” or “ Lot ” means the quantity of Bulk Drug produced from a single Run, and refers to a Commercial Batch or Lot, a Development Batch or Lot, and/or a Qualification Batch or Lot, as the context requires. A Run may result in more than one sub-batch or sub-lot due to splitting into tanks downstream in the Manufacturing Process.

     1.4 “ Batch Records ” shall have the meaning set forth in the Quality Agreement.

     1.5 “ Bulk Drug ” means the bulk form of the Product which has been manufactured by Lonza pursuant to this Agreement, which has been purified to a concentrated form from one or more Batches, and which has been manufactured in compliance with and conforms to cGMP, the Bulk Drug Specifications, Target Yield and the warranties in Section 7.1.

     1.6 “ Bulk Drug Commitment ” refers to the [*] of each binding rolling Product Manufacturing Forecast (including all amendments thereto), and means a commitment by Lonza to comply with and make available the Lonza Facility during the Campaign specified therein and perform the number of Runs set forth therein (as described with more particularity in Section 5.3.1 hereof).

     1.7 Bulk Drug Specifications ” means specifications developed by Genentech for Bulk Drug, including, without limitation, testing methods and acceptance criteria for each Batch generated, a summary of which is attached to the Quality Agreement, as such specifications may be amended from time to time in accordance with Article 8 hereof, including, without limitation, such amendments as may be required to obtain and/or maintain Regulatory Approval in the Territory.

     1.8 “ Campaign ” means a specified period of time in any calendar year (as further defined in Exhibit A) during which Lonza shall ensure that the Lonza Facility ready and available to perform Commercial Production.

     1.9 “ cGMP ” means the regulatory requirements for current good manufacturing practices promulgated by the FDA under the FD&C Act, 21 C.F.R. §§ 210, 211 and 600 et seq. and under the PHS Act, 21 C.F.R. §§ 600-610, as the same may be amended from time to time and with respect to the product, the corresponding or similar laws, rules and regulations of those jurisdictions in which the Product is sold.

     1.10 “ Cell Line ” [*]

     1.11 “ Certificate of Compliance ” means, as further specified in the Quality Agreement, for each Batch, a document prepared by Lonza: (a) listing the manufacturing date, unique Batch number, and quantity of Bulk Drug in such Batch, and (b) certifying that such Batch was manufactured in accordance with cGMP, the Bulk Drug Specifications, Target Yield and the warranties set forth in Section 7.1. The Parties shall from time to time agree upon a format or formats for the Certificate of Compliance to be used under this Agreement.

     1.12 “ Certificate of Testing ” means, as further specified in the Quality Agreement, for each Batch, a document prepared by Lonza: (a) listing tests performed by Lonza, specifications, and test results, and (b) certifying the accuracy of the foregoing. The Parties shall from time to time agree upon a format or formats for the Certificate of Testing to be used under this Agreement.

     1.13 “ Commercial Batch ” or “ Commercial Lot ” means a Batch or Lot produced from a Commercial Run.

     1.14 “ Commercial Run ” means a Run that is initiated following the commencement of Commercial Production and is used to manufacture commercial Bulk Drug.

     1.15 “ Commercially Reasonable Efforts ” means prompt efforts and resources consistent with prudent business judgment.

     1.16 “ Commercially Reasonable Best Efforts ” [*]

     1.17 “ Confidential Information ” means Genentech Confidential Information and/or Lonza Confidential Information, as the context requires.

     1.18 “ Development Batch ” means a Batch or Lot produced from a Development Run.

     1.19 “ Development Run ” means a Run used for process demonstration and confirmation of some or all of the Manufacturing Process steps, and is described in Section 4.4.1 hereof.

     1.20 “ Effective Date ” means December 7 2003, which is the date set forth in the first paragraph of this Agreement and shall be the effective date of this Agreement.

     1.21 “ EMEA ” means the European Medicines Evaluation Agency, or any successor agency.

     1.22 “ Facility Modifications and Services Costs ” means the actual invoiced price paid by Lonza to any Third Party for acquiring services, including, without limitation, design and engineering services, and necessary equipment used exclusively to modify the Lonza Facility in order to implement the Manufacturing Process at the Lonza Facility, all to the extent incurred in accordance with the Tech Transfer Agreement.

     1.23 “ Facility Validation ” shall have the meaning ascribed to it in the Tech Transfer Agreement.

     1.24 “ FD&C Act ” means the United States Federal Food, Drug and Cosmetic Act, as the same may be amended from time to time.

     1.25 “ FDA ” means the United States Food and Drug Administration, or any successor agency thereto.

     1.26 “ Finished Product ” means Bulk Drug which has been formulated, compounded, filled into containers, and labeled, and placed in final commercial packaging.

     1.27 “ For Cause Audit ” shall have the meaning set forth in the Quality Agreement.

     1.28 “ Genentech Confidential Information ” means the Cell Line, Master Cell Bank, Working Cell Bank, Manufacturing Documentation, Manufacturing Process, and Product, and all technical and other information, whether patented or unpatented, relating thereto and/or to Genentech processes, methods, operations, technologies, forecasts and business information that are disclosed or supplied to Lonza by or on behalf of Genentech pursuant to this Agreement, the Tech Transfer Agreement and/or the Quality Agreement, or of which Lonza may become aware of through the presence of its employees or agents at Genentech offices or facilities or at other facilities that manufacture the Product, including, without limitation, trade secrets, know-how, processes, concepts, experimental methods and results and business and scientific plans and information and facility layout and schematics. All documents and records describing or to the extent relating to the Manufacturing Process at the Lonza Facility, including, without limitation, process trend and variability data related to the Product, shall be deemed to be Genentech Confidential Information.

     1.29 “ Lonza Confidential Information ” means all technical and other information, whether patented or unpatented, relating to the Lonza Facility and/or Lonza processes, methods, operations, technologies, forecasts and business information that are disclosed or supplied to, or used on behalf of Genentech by Lonza pursuant to this Agreement, the Tech Transfer Agreement and/or the Quality Agreement, or of which Genentech may become aware of through the presence of their employees or agents at Lonza offices or at the Lonza Facility, including, without limitation, trade secrets, know-how, processes, concepts, experimental methods and results and business and scientific plans and information and facility layout and schematics.

     1.30 “ Lonza Facility ” means Lonza’s commercial manufacturing facility located at Portsmouth, New Hampshire.

     1.31 “ Manufacturing Documentation ” means all documents and records describing or otherwise related to the Manufacturing Process or any part of the Manufacturing Process provided to Lonza by or on behalf of Genentech under this Agreement, the Tech Transfer Agreement or the Quality Agreement, including, without limitation, documents and records consisting of or containing piping and instrumentation diagrams, software logic and descriptions, batch records, standard operating procedures, including, without limitation, standard operating procedures for in-process quality control testing, facility layout schematics, equipment and instrumentation specifications and process trend and variability data.

     1.32 “ Manufacturing Process ” means the production process for the manufacture of Bulk Drug pursuant to this Agreement, as summarily described in the Quality Agreement and as described in the Tech Transfer Agreement, as such process may be changed from time to time in accordance with this Agreement.

     1.33 “ Master Cell Bank ” [*]

     1.34 “ MHWJ means the Ministry of Health and Welfare in Japan, or any successor thereto.

     1.35 “ Non-Conforming Bulk Drug ” means Bulk Drug that fails to conform to any of the warranties set forth in Section 7.1 hereof.

     1.36 “ Non-Portable Equipment ” means the Equipment (as defined in Section 15.2 hereof), excluding any Portable Equipment. Components of the Non-Portable Equipment, such as valves, pumps and agitators, shall also be deemed Non-Portable Equipment. Non-Portable Equipment includes the related documentation regarding the design, validation, operation, calibration and maintenance of such equipment.

     1.37 “ PHS Act ” means the Public Health Service Act, Biological Products, as amended, as the same may be amended from time to time.

     1.38 “ Party ” or “ Parties ” means Lonza and/or Genentech, as the context requires.

     1.39 “ Portable Equipment ” means the portable equipment described with particularity in the Tech Transfer Agreement and referred to in Section 5.5 hereof, including, without limitation, the related documentation regarding the design, validation, operation, calibration, and maintenance of such equipment. The Portable Equipment is a part of the Genentech Equipment, as defined in Section 15.2 hereof. Components of the Portable Equipment, such as valves, pumps and agitators, shall also be deemed Portable Equipment.

     1.40 “ Product ” means any pharmaceutical formulation containing Rituxan, or pursuant to Section 4.9 a substituted product, whether under development or approved by the appropriate regulatory agencies.

     1.41 “ Purchase Price ” means the Purchase Price to be paid by Genentech to Lonza for Bulk Drug as determined in accordance with the terms of this Agreement.

     1.42 “ Qualification Batch ” or “ Qualification Lot ” means a Batch or Lot produced from a Qualification Run.

     1.43 “ Qualification Run ” means a Run used to document the operability and reproducibility of the Manufacturing Process at the Lonza Facility, and is described in Section 4.4.2 hereof.

     1.44 “ Quality Agreement ” means the quality agreement entered into by and between the Parties after the Effective Date and which refers to this Agreement.

     1.45 “Regulatory Approval ” means any approvals, licenses, registrations or authorizations of any regional, national, federal, state or local regulatory agency, department, bureau or other governmental entity, necessary for the manufacture and sale of the Product in each regulatory jurisdiction in which the Product will be sold.

     1.46 “ Rituxan ” means the proprietary anti-CD20 biological pharmaceutical product of Genentech, more particularly described in Genentech’s BLA, including any successor or filing thereto with the FDA, and any supplements to or amendments to any of the foregoing.

     1.47 “ Roche ” means Roche Holdings, Inc., a Delaware corporation, and its “Affiliates” (as hereinafter defined) other than Genentech and Genentech’s subsidiaries. With respect to Roche, “Affiliates” means any other corporation or business entity that directly, or indirectly through one or more intermediaries, controls, is controlled by or is under common control with Roche Holdings, Inc.; and, for purposes of this definition, the term “control” means direct or indirect ownership of fifty percent (50%) or more of the securities or other ownership interests representing the equity voting stock or general partnership or membership interest of such entity or the power to direct or cause the direction of

the management or policies of such entity, whether through the ownership of voting securities, by contract, resolution or otherwise.

     1.48 “ Run ” means a single fermentation run of the Manufacturing Process commencing at the [*] at the Lonza Facility and progressing through the [*], harvest, recovery, quality testing and release, and refers to a Commercial Run, Development Run and/or Qualification Run, as the context requires.

     1.49 “ sBLA ” means a biologics license application for the Product, any equivalent successor filing thereto with the FDA, and any supplements or amendments to any of the foregoing.

     1.50 “Successful ” means, with respect to a Run, success, as determined in accordance with this Agreement, the Tech Transfer Agreement and the Quality Agreement, in achieving all requirements for Bulk Drug produced from a single Run.

     1.51 “ Target Yield ” shall have the meaning set forth in Exhibit C attached hereto and incorporated herein by reference.

     1.52 “ Tech Transfer Agreement ” means the technology transfer agreement and process implementation plan entered into by and between the Parties after the Effective Date, which refers to this Agreement, and which describes the agreement of the Parties regarding the transfer of technology and implementation of the Manufacturing Process, test methods and testing at the Lonza Facility, and the modifications to the Lonza Facility needed to implement the Manufacturing Process at the Lonza Facility, including a timeline, budget and statement of work jointly developed by the Parties, as the same may be amended from time to time by mutual written agreement of the Parties.

     1.53 “ Territory ” means the entire world.

     1.54 “ Third Party ” means any party other than Genentech, Lonza and their respective Affiliates.

     1.55 “ United States ” or “ U.S. ” means the United States of America, its territories and possessions, and the Commonwealth of Puerto Rico.

     1.56 “ Working Cell Bank ” [*]

     1.57 Each of the following definitions are found in the body of this Agreement, or elsewhere, as indicated below:

ARTICLE 2.

     2.1 Commitment to Manufacture; Purchase . Subject to the terms and conditions set forth in this Agreement, during the Term, Genentech shall retain Lonza as a non-exclusive manufacturer of Bulk Drug, Lonza shall make the Lonza Facility available to Genentech for manufacture of the Bulk Drug in accordance with the terms of this Agreement (including Exhibit A and the Campaigns specified therein), and manufacture and supply exclusively for the benefit of Genentech (and its designees) certain of Genentech’s requirements of Bulk Drug, and, as set forth herein, Genentech shall purchase such Bulk Drug from Lonza.

     2.2 LB and Lonza Inc . It is understood and agreed to by the Parties, that LB shall have primary responsibility for Lonza’s obligations hereunder, but may subcontract with, and does hereby subcontract with, Lonza Inc for actual performance of Lonza’s obligations hereunder; provided, LB shall remain primarily responsible for, and guarantees the performance of, Lonza’s obligations hereunder. It is further understood and agreed to by the Parties, that the foregoing shall not (i) in any way relieve Lonza Inc, Lonza LB, or any of their Affiliates of any financial and other obligations under this Agreement that can only be performed by such entity, or (ii) in any way limit or prohibit Genentech from bringing any cause of action directly against LB and/or Lonza Inc for either entity’s failure to perform any obligation due hereunder. It is further understood and agreed that with respect to Article 18 herein, all Genentech Confidential Information disclosed hereunder to Lonza shall remain at Lonza Inc, and shall not be transferred or disclosed to any employee of LB or any Lonza Affiliate unless on a need to know basis in order to perform an obligation of Lonza hereunder and only with prior written notice to Genentech specifying the name of the employee to whom the disclosure is to be made, the information to be disclosed, and the purpose of such disclosure.

     2.3 Execution of Tech Transfer Agreement and Quality Agreement . It is understood and agreed by the Parties, that in order to timely effectuate the intent of the Parties hereunder, it is in both Parties’ interest to enter into and execute the Tech Transfer Agreement and Quality Agreement as soon as practicable after the Effective Date. In the event the Tech Transfer Agreement and Quality Agreement are not entered into and executed by the Parties within ten

(10) business days following the Effective Date or such longer period as the Parties may mutually agree in writing (the “Effective Period”), either Party may terminate this Agreement upon written notice to the other Party. Such right to terminate may only be exercised by a Party within ten (10) days after Effective Period, and such termination shall be effective immediately upon receipt of such written notice by the receiving Party. Following any such termination, neither Party shall have any rights or obligations hereunder, except as provided in Sections 20.3.4 and 20.3.5.

ARTICLE 3.

     3.1 Management.

          3.1.1 Executive Steering Committee.

               (a) Within thirty (30) days of the Effective Date, the Parties will establish an Executive Steering Committee to oversee and manage the manufacture of Bulk Drug at the Lonza Facility. The Executive Steering Committee will be composed of two representatives appointed by each of Lonza and Genentech. All such representatives will be senior officers of Genentech or Lonza. Either Party may replace any or all of its representatives at any time upon prior written notice to the other Party. The Executive Steering Committee will meet at least once each calendar quarter, or more frequently, as agreed by the Executive Steering Committee, and will operate by unanimous decision, except as expressly set forth herein. If the Executive Steering Committee is unable to resolve a dispute regarding any issue presented to it, such dispute shall be resolved in accordance with Article 22 below.

               (b) The Executive Steering Committee shall perform the following functions:

                    (i) determine the overall strategy for the manufacture of Bulk Drug at the Lonza Facility in the manner contemplated by this Agreement, including without limitation, overseeing and monitoring the transfer and implementation of the Manufacturing Process, and the manufacture of Bulk Drug, at the Lonza Facility;

                    (ii) establish a governance structure for the collaboration including overseeing the establishment and organization of one or more operating committees, or other structure to implement this Agreement. The establishment of certain operating committees is provided for in Sections 3.1.2 and 3.1.3 of this Agreement. Each operating committee contemplated by this Agreement shall be subordinate to the Executive Steering Committee. If any operating committee contemplated by this Agreement is not constituted or continued, any reference to such committee in this Agreement shall be deemed to be a reference to the Executive Steering Committee or such other committees or structures to which the Executive Steering Committee may delegate responsibility;

                    (iii) settle disputes or disagreements that are unresolved by an operating committee unless otherwise indicated in this Agreement; and

                    (iv) perform such other functions as appropriate to further the purposes of this Agreement as determined by the Parties.

          3.1.2 Technical Committee .

               (a) Within thirty (30) days of the Effective Date, the Parties will establish a Technical Committee to oversee and control the transfer and implementation of the Manufacturing Process, and the manufacture of Bulk Drug, at the Lonza Facility. The Technical Committee will be composed of [*] representatives appointed by each of Lonza and Genentech. Each representative will have one vote on all matters within the Technical Committee’s purview. Such representatives will include Product Managers, Technical Product Managers/Leads, Directors of Quality Assurance/Regulatory, Director of Manufacturing, or other individuals with expertise and responsibilities in the same areas of manufacturing, process sciences, quality control or regulatory affairs. Either Party may replace any or all of its representatives at any time upon written notice to the other Party. The Technical Committee will meet at least once each calendar month, or more frequently, as agreed by the Technical Committee. The Technical Committee will operate by

unanimous decision, except as expressly set forth herein. If the Technical Committee is unable to resolve a dispute regarding any issue presented to it, such dispute shall be resolved in accordance with Section 3.1.4 below.

               (b) The Technical Committee shall: (i) oversee and manage the day to day activities of the transfer and implementation of the Manufacturing Process; (ii) settle disputes or disagreements that are unresolved by the Joint Project Team unless otherwise indicated in this Agreement; and; (iii) report to and keep the Executive Steering Committee informed of the progress of the transfer and implementation of the Manufacturing Process, and the manufacture of Development Lots and Qualifications Lots, at the Lonza Facility; and (iv) perform such other tasks and undertake such other responsibilities as may be specifically delegated to the Technical Committee by mutual agreement of the Parties. Following commencement of Commercial Production, the Parties may elect to change the name and function of the Technical Committee to serve other functions and responsibilities, as mutually agreed by the Parties.

          3.1.3 Joint Project Team .

               (a) Within thirty (30) days of the Effective Date, the Parties will establish a Joint Project Team (the “JPT”). The JPT shall be composed of [*] representatives appointed by each of Lonza and Genentech. Each representative will have one vote on all matters within the JPT’s purview. Such representatives will include the Product Manager, Technical Lead, Manufacturing Lead, Quality Control Lead, Quality Assurance/Regulatory Lead, Raw Materials Lead, Supply Chain Lead and Engineering Lead, or other individuals with expertise and responsibilities in the same areas of manufacturing, process sciences, quality control or regulatory affairs. Either Party may replace any or all of its representatives at any time upon written notice to the other Party; provided, Lonza shall only appoint a new representative to succeed its prior representative with prior notice to, and after good faith consultation with, Genentech, and provided further, any such new representative shall be mutually agreed to by the Parties. Genentech shall not unreasonably withhold its agreement to any such new representative proposed by Lonza. The JPT will meet at least once each week, or more frequently, as agreed by the JPT. The JPT will operate by unanimous decision, except as expressly set forth herein. If the JPT is unable to resolve a dispute regarding any issue presented to it, such dispute shall be resolved in accordance with Section 3.1.4 below.

               (b) The purposes of the JPT shall be to (i) monitor, review and guide the transfer and implementation of the Manufacturing Process, and the manufacture of Bulk Drug, at the Lonza Facility, (ii) coordinate the activities of the Parties hereunder to ensure transfer and implementation of the Manufacturing Process, and the manufacture of Bulk Drug, at the Lonza Facility, including management of technical aspects of routine manufacture of the Bulk Drug; iii) report to and keep the Technical Committee informed of the progress of the transfer and implementation of the Manufacturing Process, and the manufacture of Bulk Drug, at the Lonza Facility; and (iv) performing such other tasks and undertaking such other responsibilities as may be specifically delegated to the JPT by mutual agreement of the Parties.

               (c)  Appointment of Project Team Leader . Within thirty (30) days of the Effective Date, each Party shall appoint a Project Team Leader (each, a “Project Team Leader”) to act as the primary contact for such Party in connection with matters related to the implementation of the Manufacturing Process, in connection with activities to be performed under the Tech Transfer Agreement and/or Commercial Production of the Bulk Drug (as defined in Section 5.1 below). Each such Project Team Leader, unless otherwise mutually agreed, shall serve as a member of the JPT. The initial Project Team Leaders are:

     Genentech: [*]

     Lonza: [*]

A Party may replace its Project Team Leader at any time and from time to time for any reason by providing written notice of the change to the other Party; [*].

          3.1.4 Decision-making .

               (a) All decisions of the Executive Steering Committee, the Technical Committee and the JPT, except as expressly set forth herein (including without limitation Section 3.1.4(c) and (d) below), shall be made by the unanimous agreement of all of its members or their designated representatives, and shall be reflected in written

meeting reports which summarily address topics discussed, delegation of work, schedules and decisions of such committee or team, which shall be signed by the authorized representatives of the Parties; provided no operating committee herein may materially amend this Agreement, including without limitation the Campaign Minimums, Campaign Minimum Runs, Annual Minimum Success Rate, Target Yield, target dates set forth in Section 4.7 or the milestones set forth in Section 6.3 without entering into a written agreement signed by both Parties that specifically states that the Parties are amending this Agreement.

               (b) In the event that the JPT is unable, despite the good faith efforts of all members, to resolve within five (5) business days a disputed issue that is within the purview of the JPT, the disputed issue shall be referred immediately by the JPT to the Technical Committee. In the event the Technical Committee is unable to resolve the disputed issue within an additional five (5) business days, the disputed issue will be referred to, the Executive Steering Committee. If the dispute cannot be resolved by the Executive Steering Committee within an additional five (5) business days, the matter will be handled in accordance with Section 22.2 hereof.

               (c) Notwithstanding anything to the contrary in this Agreement, the Tech Transfer Agreement and/or the Quality Agreement, with respect to any disagreement over issues relating to quality, such issues shall be resolved in accordance with this Section 3.1.4(c)as follows: Each Party’s Lead Quality Representative on the JQT (each, as defined in the Quality Agreement), or their respective designees, will in good faith attempt to mutually resolve such disagreements in a timely fashion (but in any event, in no more than five (5) days after such issue is referred to the JQT); provided,

                    (1) With respect to issues relating to: (i) interpretation of quality or cGMP , (ii) acceptability of validation results, (iii) acceptability of Product testing (including in-process testing), results or procedures, (iv) disposition of Bulk Drug (including non-Conforming Bulk Drug) and/or (v) changes to the Manufacturing Process and/or Bulk Drug Specifications, [*] (to the extent not otherwise provided in this Agreement, the Tech Transfer Agreement, the Quality Agreement and/or required by cGMP standards based on both industry precedents and Genentech’s standards), the Parties will discuss in good faith and mutually agree on the costs to effect such implementation of such decision and Genentech shall pay such mutually agreed costs; and

                    (2) With respect to all other issues relating to quality (not otherwise specified in Section 3.1.4(c)(1) above), including without limitation operation of quality systems, change control, quality control issues, and/or quality control testing, in each case, if delay in making a decision could jeopardize the quality of the Bulk Drug, including without limitation the testing or control thereof, [*] such final decision shall be immediately referred to the Executive Steering Committee for reconciliation; provided, if time does not allow, as soon as possible thereafter. The Executive Steering Committee shall seek to reconcile such action within five (5) days in order to ensure that such disagreement over such issue will not be repeated in the future. If the Executive Steering Committee cannot reconcile such final decision within such five (5) day period, either Party shall have the right to request that such final decision be referred to the dispute resolution provisions of Article 22. [*] will result in additional cost to Lonza to implement (to the extent not otherwise expressly provided in this Agreement, the Tech Transfer Agreement and/or the Quality Agreement), the Parties will discuss in good faith and mutually agree on the timelines and costs to effect such implementation of such decision (with the expectation that such implementation shall be effected as soon as possible) and Genentech shall pay such mutually agreed costs and Lonza shall use Commercially Reasonable Best Efforts to effect such implementation.

               (d) Notwithstanding anything to the contrary in this Agreement, the Quality Agreement and/or the Tech Transfer Agreement (but subject to Section 3.1.4(c) above), with respect to any disagreement over the implementation of the Manufacturing Process which could reasonably affect Product quality or total outcome of the Campaign at the Lonza Facility (including any procurement, engineering, installation, scale-up, testing and validation of the equipment and systems and other modifications to the Lonza Facility required to implement the Manufacturing Process) and the manufacture of the Product during each Campaign (including any related activities immediately preceding or following each such Campaign), including without limitation the related management processes and operations, control of production planning and scheduling, prioritization decisions, allocation of resources, timing of in-process testing, oversight of auxiliary facilities (e.g., in-process tests that need to be conducted at the labs), all start-up, registration and troubleshooting decisions, and any other related matters to manufacturing of the Product, the Project Team Leaders (or their respective designees) will in good faith attempt to mutually resolve such disagreement in a timely fashion; provided, if delay in making a decision could jeopardize the manufacture of Bulk Drug, including without limitation a delay that could affect the ability of the Parties to timely meet a target date and/or milestone set forth in

Section 4.7 and/or 6.3 herein, [*] such final decision shall be immediately referred to the Executive Steering Committee for reconciliation; provided, if time does not allow, as soon as possible thereafter. The Executive Steering Committee shall seek to reconcile such action within 5 days in order to ensure that such disagreement will not be repeated in the future. If the Executive Steering Committee cannot reconcile such final decision within such 5 day period, either Party shall have the right to request that such final decision be referred to the dispute resolution provisions of Article 22.

     3.2 On-Site Participation of Genentech Personnel at the Lonza Facility .

          3.2.1 Prior to Commercial Production . Pursuant to and as set forth in greater detail in the Tech Transfer Agreement and Quality Agreement, in order to expedite the implementation of the Tech Transfer Agreement and to coordinate, expedite and guide the Development Runs and Qualification Runs, Genentech may elect at its discretion to have up to [*] of its personnel on-site at the Lonza Facility, and such additional personnel in such numbers as may be agreed to by the Parties or as otherwise required to implement a decision made pursuant to Section 3.1.4. All such personnel will coordinate closely with Lonza in order to minimize impact on other Lonza operations. Unless otherwise agreed by Lonza, such Genentech personnel shall have access only to those portions of the Lonza Facility reasonably related to the technology transfer and implementation of the Manufacturing Process, cafeterias, designated office space and public areas.

          3.2.2 After Commencement of Commercial Production . As further described in the Quality Agreement, Genentech shall have the right to designate at its discretion up to [*] of its personnel (and such additional personnel in such numbers as may be agreed to by the parties or as otherwise required to implement a decision made pursuant to Section 3.1.4) to be present in the Lonza Facility during all operational hours during the Term of this Agreement to coordinate, expedite and guide the Commercial Runs and Lonza’s performance of its obligations under this Agreement. While at the Lonza Facility, such representative of Genentech shall have access to all areas as are relevant to the manufacture, storage and or quality testing of the Bulk Product, cafeterias, designated office space and public areas, or as otherwise authorized by Lonza, and shall comply with all applicable Lonza policies and procedures.

          3.2.3 Office Space . With respect to any Genentech personnel assigned by Genentech to be present at the Lonza Facility, Lonza shall provide (a) reasonable access to the Lonza Facility during all operational hours[*]

     3.3 Lonza Personnel at the Lonza Facility . It is understood that Genentech is entering into this Agreement, the Tech Transfer Agreement and the Quality Agreement in reliance upon the commitment by Lonza to fully and adequately staff the Lonza Facility with all managers, supervisors, engineers, technicians, inspectors, and other dedicated personnel necessary, and with sufficient technical expertise and reasonably acceptable to Genentech, to perform its obligations under this Agreement, the Tech Transfer Agreement and the Quality Agreement, including without limitation the implementation of the Manufacturing Process, manufacture, storage and quality testing of the Bulk Drug at the Lonza Facility. Without limiting any other provision of this Agreement, so long as such personnel remain employed by Lonza, Lonza will use Commercially Reasonable Best Efforts to provide that such individuals are available to perform the obligations, as appropriate, to be provided by Lonza hereunder.

ARTICLE 4.

     4.1 Technology Transfer and Manufacturing Process Implementation .

          4.1.1 Process Description and Tech Transfer Agreement . The Parties acknowledge that in order to enable them to fulfill their respective obligations under this Agreement, they have entered into the Tech Transfer Agreement and, pursuant thereto, jointly developed a plan for the transfer of technology and implementation of the Manufacturing Process at the Lonza Facility. Pursuant to this Agreement and the Tech Transfer Agreement, Genentech shall disclose to Lonza the Manufacturing Process for the Bulk Drug and the Bulk Drug Specifications. The Tech Transfer Agreement sets forth the specific responsibilities of the Parties in connection with technology transfer and implementation of the Manufacturing Process at the Lonza Facility, and the modifications to the Lonza Facility needed to implement the Manufacturing Process at the Lonza Facility, including a timeline, budget and statement of work jointly developed by the Parties. The Tech Transfer Agreement includes reasonable milestones for the transfer of technology,

exchange of information, and implementation of the project, reasonable timelines for achieving such milestones, and criteria for assessing the progress and success of the project as it progresses.

          4.1.2 Commercially Reasonable Best Efforts; Cooperation; Tech Transfer Agreement . Lonza shall use Commercially Reasonable Best Efforts to complete its responsibilities in a timely manner under and in accordance with the Tech Transfer Agreement and Section 4.1 of this Agreement. In addition, Lonza agrees to use Commercially Reasonable Best Efforts to cooperate with and assist Genentech in its efforts to perform its obligations under the Tech Transfer Agreement and Section 4.1 of this Agreement.

          4.1.3 Delivery of Working Cell Bank . By not later than the applicable delivery deadline set forth in the Tech Transfer Agreement, Genentech shall deliver to Lonza the Working Cell Bank, which shall conform to Genentech’s applicable release criteria, as set forth in Genentech’s Working Cell Bank specifications.

     4.2 Changes to Tech Transfer Agreement; Changes to the Manufacturing Process . Prior to the commencement of Commercial Production of Bulk Drug under this Agreement, and subject to Section 3.1.4 hereof, the JPT shall have the authority to modify or supplement attachments and exhibits to the Tech Transfer Agreement as necessary to ensure implementation of the Manufacturing Process in the Lonza Facility in a timely manner. In addition, Genentech may, in its sole discretion, modify the Manufacturing Process as it deems appropriate or useful to ensure implementation of the Manufacturing Process in the Lonza Facility in a timely manner. To the extent such modifications are directed to implementing Genentech’s Manufacturing Process (as such process existed as of the Effective Date) at the Lonza Facility, it is understood and agreed by the Parties that such modifications are contemplated by the Tech Transfer Agreement and the Quality Agreement and the payments set forth in Section 6.3 and 6.4 herein. To the extent Genentech elects to make any other modifications to Genentech’s Manufacturing Process, and such modifications would result in a material change and cost to the Parties to implement, such modifications shall be subject to the provisions of Article 8.

     4.3 Facility Modifications and Improvements . Lonza shall use Commercially Reasonable Best Efforts to: (a) make facility modifications as required to conduct the Manufacturing Process at the Lonza Facility, and (b) procure, engineer, install, scale-up, test and validate the equipment and systems necessary to conduct the Manufacturing Process at the Lonza Facility, in each case as described in, and in accordance with, the Tech ‘Transfer Agreement, in each as determined by Genentech in its reasonable discretion.

     4.4 Initial Runs and Batches .

          4.4.1 Development Runs . Lonza shall use Commercially Reasonable Best Efforts to perform Development Runs at such size and in such number sufficient to produce [*] as set forth in the Tech Transfer Agreement. Lonza will provide the Product resulting from such Successful Development Runs and Development Batches to Genentech, at no cost other than the cost specified in Section 6.4.1 and in accordance with the delivery terms set forth in Section 5.5 hereof; provided, Genentech shall have no obligation to pay Lonza for [*]. At Genentech’s election, Genentech may make whatever further use of such Development Runs, including, without limitation, any Product therefrom, as it shall determine, or direct Lonza, at Lonza’s cost, to dispose of the material from such Development Runs. It is understood that if Lonza commences a Development Run, and delivers 3 Successful Development Runs prior to finishing such commenced Development Run, Genentech will pay for such commenced Development Run (subject to not having to pay for more than four (4) Development Runs) .

          4.4.2 Validation and Qualification Batches . Once scale-up of the Manufacturing Process is completed at the Lonza Facility, and Genentech has reviewed and approved the deliverables specified in Section 4.4.1 above, Lonza shall use Commercially Reasonable Best Efforts to perform all required process validation described in Section 12.3 and shall perform Qualification Runs sufficient to produce, at commercial scale, [*] as set forth in the Tech Transfer Agreement in order to document the operability and reproducibility of the Manufacturing Process and permit the Parties to complete and file the regulatory documents described in Section 4.6 hereof. Lonza shall provide the Product and Bulk Drug resulting from such Qualification Runs and Qualification Batches to Genentech, at no other costs than the cost specified in Section 6.4.2 (except as otherwise agreed by the Parties pursuant to Section 4.9 hereof) in accordance with the delivery terms set forth in Section 5.5 hereof; provided, Genentech shall have [*] Genentech may make whatever further use of such Qualification Batches, including, without limitation, any Product therefrom, as it shall determine appropriate.

     4.5 Raw Materials and Suppliers .

          4.5.1 Raw Materials . Genentech has developed specifications for the raw materials, used in the Manufacturing Process. The raw material specifications [*] for raw materials will be included in the Tech Transfer Agreement, which raw material specifications may be amended from time to time by Genentech at its reasonable discretion[*] for raw materials used in the manufacture of the Bulk Drug, then, during the Term, Genentech shall provide Lonza with [*]

          4.5.2 Raw Materials Management and Safety Stock . Subject to Section 6.4, Lonza shall procure [*] maintain and store, such amounts of raw materials and components as required, including as agreed by the Parties an adequate supply of safety stock, for the Development Runs and Qualification Runs described in Section 4.4 above and the Commercial Runs described in Article 5. Lonza will provide such raw materials and components and such procurement and management services with no additional mark-up or administrative fees to Genentech; provided, to the extent Lonza is unable to procure such raw materials from the Approved Suppliers for the Development Runs and Qualification Runs, Genentech shall provide such raw materials and components to Lonza with no additional mark-up or administrative fees.

          4.5.3 Raw Materials Testing . Lonza shall perform testing and evaluation of the raw materials as required by the applicable raw material specifications or Bulk Drug Specifications and cGMP, and otherwise in accordance with the Tech Transfer Agreement, the Quality Agreement and standard operating procedures to be agreed upon in writing by the Parties.

     4.6 Regulatory Matters . Lonza shall use Commercially Reasonable Best Efforts to timely prepare, assist and enable Genentech to obtain and maintain all Regulatory Approvals that are required to manufacture Bulk Drug at the Lonza Facility and that are required to market and sell in the Territory the Product resulting from the Bulk Drug, including, without limitation, the preparation, filing and maintenance of supplements to any Lonza existing FDA licenses’, and Lonza shall reasonably assist Genentech to timely prepare, assist and enable Genentech to obtain all Regulatory Approvals that are required to market and sell in the Territory the Product resulting from the Manufacturing Process as carried out at the Lonza Facility, including, without limitation, reasonably assisting with the preparation and review of the drafts of the chemistry, manufacturing and controls sections of the sBLA to be filed by Genentech with FDA. Lonza shall also reasonably assist Genentech in responding to requests and inquiries from the FDA prior to, during and after regulatory review periods, including without limitation, providing all data, records and reports requested by Genentech relevant to such review periods, and by attending meetings with such regulatory authorities to the extent Genentech requests for Lonza to participate given its unique knowledge or its status as manufacturer of Bulk Drug under this Agreement. Lonza personnel shall also facilitate pre-approval inspection of the Lonza Facility conducted by such regulatory authorities. The assistance to be provided by Lonza under this Section 4.6 shall be provided at no additional cost to Genentech, except as otherwise provided in Sections 4.9 and 5.8 hereof.

     4.7 Target Dates .

          4.7.1 Target Date for Facility Modification Completion . Lonza agrees to use Commercially Reasonable Best Efforts to complete the modifications specified under Section 4.3 and make the Lonza Facility ready and available by [*] for Lonza to perform Development Runs and manufacture Development Batches at such size and in such number as is set forth in the Tech Transfer Agreement, as determined by Genentech in its reasonable discretion (the “Phase A Completion”). If Phase A Completion is not achieved by [*], with respect to each Supplemental Batch Payment to be paid by Genentech pursuant to Section 6.4.3(b), such amount shall be reduced by an amount equal to [*] (i.e., amount to be paid shall equal to [*] and, if Phase A Completion is not achieved by [*], each Supplemental Batch Payment to be paid by Genentech pursuant to Section 6.4.3(b) shall be reduced by an additional amount equal to [*] (i.e. [*] equals a total of [*] (i.e., amount to be paid by Genentech shall equal to [*]

          4.7.2 Target Date for 1 ^st Successful Development Run . In addition to the foregoing, Lonza agrees to use Commercially Reasonable Best Efforts by [*] to manufacture at commercial scale and fill the first (1 ^st ) Successful Development Lot, as further defined in the Tech Transfer Agreement (the “Development Run Initiation”).

          4.7.3 Target Date for Commencement of Qualification Runs . In addition to the foregoing, Lonza agrees to use Commercially Reasonable Best Efforts by [*] to commence manufacture of the first (1 ^st ) Qualification

Batch in at least a [*] as determined by achievement of certain criteria (such criteria to be agreed upon by the Parties) specified in the Tech Transfer Agreement (the “Qualification Run Initiation”).

          4.7.4 Target Date for Successful Qualification Runs . In addition to the foregoing, Lonza agrees to use Commercially Reasonable Best Efforts by [*] to manufacture at commercial scale and deliver to Genentech [*] produced from [*] including all appropriate data, records and reports related thereof, as further described in the Tech Transfer Agreement (the “Phase B Completion”). It is understood and agreed by the Parties, that so long as Lonza delivers to Genentech samples from each of such Qualification Lots by the target date specified in Section 6.3.4, and uses its Commercially Reasonable Best Efforts to deliver to Genentech all appropriate data, records and reports related thereof as soon as possible thereafter (but in any event, no more than sixty (60) days after such target date) and such Qualification Lots are thereafter determined to be Successful, Lonza shall be deemed to have “delivered” such Successful Qualification Lots to Genentech by such target date.

          4.7.5 Target Date for Enablement of sBLA Filing . In addition to the foregoing, Lonza agrees to use Commercially Reasonable Best Efforts to prepare, assist and enable Genentech to file the sBLA with the FDA by [*] as required in order to manufacture Bulk Drug at the Lonza Facility, including without limitation, assisting with the preparation and review of the drafts of the chemistry, manufacturing and control sections of the sBLA to be filed (the “sBLA Enablement”).

          4.7.6 Target Date for FDA Approval . Lonza agrees to use Commercially Reasonable Best Efforts to prepare, assist and enable Genentech (including, without limitation, those obligations of Lonza specified in Section 4.6) to obtain by [*] FDA approval for the manufacture of Bulk Drug at the Lonza Facility (the “FDA Approval”).

          4.7.7 Termination for Failure to Achieve Certain Target Dates . Without limiting the foregoing, if Phase B Completion is not achieved by [*], or if sBLA Enablement is not achieved by [*] or FDA Approval of the Lonza Facility is not received by [*], Genentech shall also have the right to terminate the Agreement in accordance with Section 20.2.3 hereof.

     4.8 Manufacturing, Documentation . In accordance with the terms of the Tech Transfer Agreement, Genentech shall, by the relevant date that is set forth in the Tech Transfer Agreement as such date may be modified by the JPT, provide to Lonza the Manufacturing Documentation listed within exhibits and schedules to the Tech Transfer Agreement, and shall, thereafter, from time to time and in accordance with the timeline set forth in the Tech Transfer Agreement, provide to Lonza such additional Manufacturing Documentation as Lonza shall reasonably require in order to implement the Tech Transfer Agreement and the Manufacturing Process and otherwise perform its obligations under this Agreement. In accordance with the terms of the Quality Agreement and cGMP, Lonza shall maintain a process notebook which maintains a record of the Manufacturing Process as implemented at the Lonza Facility, including, without limitation, the process trend and variability data (the “Process Notebook”). Genentech shall have the right to review and copy any information in such Process Notebook at any time during the Term. Genentech’s obligations under this Section 4.8 shall be subject to obligations to Third Parties as set forth in written agreements in effect prior to the Effective Date of this Agreement. In the event an obligation to a Third Party prohibits Genentech from rendering such assistance, Genentech shall promptly seek from such Third Party permission to render such assistance. Such Manufacturing Documentation and Process Notebook shall be the sole property of Genentech, and shall be treated in all respects as Genentech Confidential Information. The Process Notebook, including any copies or any portion thereof, shall be delivered to Genentech upon expiration or termination of this Agreement.

     4.9 Product Substitution . Genentech shall have the right at any time prior to [*] to substitute for manufacture under this Agreement another product or products for the Bulk Drug; provided (i) such substitute product is a cell culture derived protein produced with the use of similar unit operations as are used for the Bulk Drug; and (ii) the Parties agree upon new dates, deadlines and costs set forth in this Agreement to the extent impacted by such product substitution.

ARTICLE 5.

     5.1 Commercial Production of Bulk Drug . [*] that comply with cGMP and the Bulk Drug Specifications, the Target Yield and the warranties in Section 7.1, and the execution and delivery by Lonza of the related Certificates of Compliance and Certificates of Testing, “Commercial Production” of Bulk Drug will commence under this Agreement, with the first Commercial Run performed after Phase B Completion and prior to FDA Approval. After Commercial Production has commenced, changes to the Manufacturing Process shall be made as set forth in Article 8 hereof and the Quality Agreement or as the Parties may otherwise agree in writing. Issues relating to quality of Product shall be resolved in accordance with the Quality Agreement.

     5.2 Efforts .

          5.2.1 Commercially Reasonable Best Efforts . Lonza shall use Commercially Reasonable Best Efforts to conduct Commercial Production and deliver Bulk Drug in the amounts and time frame specified in this Agreement.

          5.2.2 Minimum Runs and Campaign Period . Notwithstanding anything to the contrary in this Article 5, but subject to the other terms of this Agreement, in each calendar year during the Term, Lonza shall make available the Lonza Facility during each Campaign and perform at least the number of Runs set forth in Exhibit A during such Campaign, as further defined as the “Campaign Minimum “ and “Campaign Minimum Run” for such calendar quarter on Exhibit A attached hereto and incorporated herein. For purposes of this Article 5, the term “Runs” refers to Commercial Runs, and does not refer to Qualification Runs or Development Runs.

          5.2.3 Pre-Campaign/Campaign Requirements . It is understood that Genentech is entering into this Agreement, the Tech Transfer Agreement and the Quality Agreement in reliance upon Lonza being fully prepared and able to conduct manufacturing of the Bulk Drug during each Campaign. In order to ensure such preparedness and ability, [*] such checklist to include without limitation, the following requirements: (i) that the Lonza Facility is compliant with all regional, national, federal, state and local regulations in the Territory; (ii) that the Lonza Facility is outfitted with all tools, equipment and utility services necessary to perform Commercial Production; (iii) that the Lonza Facility has been properly maintained and that any maintenance that is required to be performed on equipment and tools within the Lonza Facility has been performed prior to such Campaign; (iv) that the Lonza Facility is fully and adequately staffed with all supervisors, engineers, technicians, inspectors, and other dedicated personnel necessary, and with sufficient technical expertise and acceptable to Genentech, to perform Commercial Production, including any quality testing of Bulk Drug produced (in addition, the Parties shall mutually agree upon each of the primary and secondary Lonza key personnel to be assigned to perform the Commercial Production during each Campaign, and once agreed, Lonza may not change such assignment without Genentech’s mutual agreement); (v) that Lonza has adequate stock of raw materials on hand to perform all Runs required during such Campaign; and (vi) that the Lonza Facility is accessible [*]

          5.2.4 Genentech Right of Review and Approval . In no event shall Genentech’s right to review and/or approve an activity hereunder obligate Genentech to do so, nor shall its exercise or failure to exercise such right constitute a basis of any claim by Lonza against Genentech.

     5.3 Production and Supply.

          5.3.1 Product Manufacturing Forecast . By not later than the Effective Date of this Agreement and thereafter on a calendar quarter by calendar quarter basis of each year, beginning on [*], for the remainder of the Term, Genentech shall provide to Lonza a rolling “Product Manufacturing Forecast” which shall commence with the first day of the next calendar quarter and establish, on a yearly basis, for the remainder of the Term, the dates on which Campaigns are to be conducted, the number of Runs to be performed and the quantity of Bulk Drug reasonably expected to be manufactured, released and supplied to Genentech, all within the ranges set forth in Exhibit A hereto (except as otherwise agreed pursuant to Section 5.7 hereof). The Product Manufacturing Forecast shall be used for joint planning purposes and shall be non-binding unless otherwise specified herein, and may be amended by the Parties from time to time as the Parties deem appropriate. Beginning [*] the anticipated commencement of Commercial Production (or such other date as agreed upon by the Parties in writing), each Product Manufacturing Forecast shall be binding for the first [*] of the next calendar quarter following such forecast, and non-binding for the remainder of the Term, as further described below. Beginning with the initial binding Product Manufacturing Forecast, the forecasts for Bulk Drug and Campaigns within the first [*] months of the next calendar quarter following each such rolling Product Manufacturing

Forecast shall constitute a Bulk Drug Commitment and shall be binding upon the Parties and cannot be changed except upon mutual written consent of the Parties. By way of example only, when the rolling Product Manufacturing Forecast for [*] is issued, the twelve (12)-month period covered by such forecast shall commence on [*], and shall end on [*], and shall be binding for the period [*]. The Bulk Drug Commitment shall include approximate harvest dates for each Commercial Run. Concurrent with each Product Manufacturing Forecast, Genentech shall issue to Lonza a written purchase order, consistent with the Bulk Drug Commitment for such Product Manufacturing Forecast, and such purchase order shall be binding on both Parties.

          5.3.2 Weekly Meetings . The JPT shall participate in a weekly meeting (or at such frequency as otherwise mutually agreed), in person or via telephone, to review and discuss production, supply and logistics operations for the next three (3) month period, including: (i) the dates on which Campaigns shall occur, (ii) dates or approximate dates on which Runs will start and be performed; (iii) dates or approximate dates for Lonza’s and Genentech’s release of Bulk Drug; (iv) size or approximate size of Batches; (v) dates or approximate dates for delivery of Batches; (vi) destination for shipment of Batches; and (vii) status of Batches undergoing investigation, and related matters, and to issue and, as appropriate, update the Product Manufacturing Forecast.

     5.4 Management of Product Manufacturing Forecast .

          5.4.1 Delivery . Genentech and Lonza will work together in good faith to determine delivery dates and a shipping schedule for deliveries of Bulk Drug under this Agreement, and shall establish a written “Delivery Schedule” as a part of the Product Manufacturing Forecast and the related Bulk Drug Commitment.

          5.4.2 Delivery Dates . For each Run, the delivery date respectively set forth in the Delivery Schedule will be the “Delivery Date” for such Run, unless the Parties agree on an alternative delivery date; provided, however, that for purposes of Section 9.1 (a)(ii) hereof, the “Delivery Date” for any particular Bulk Drug shall be later of the actual date on which such Bulk Drug is delivered to Genentech’s Designated Carrier at Lonza’s Facility in accordance with Section 5.5 hereof, or the actual date of delivery to Genentech of the records specified in Section 10.2.1 for such Bulk Drug (e.g., Batch Records, Lonza’s Release Documentation, Certificate of Testing, Certificate of Compliance, etc.).

          5.4.3 Purchase Quantities . Except as otherwise set forth in this Agreement (including, without limitation, upon mutual agreement of the Parties under Section 4.9 or Section 5.8 hereof, Genentech shall purchase all Bulk Drug that complies with and conforms to cGMP, the Bulk Drug Specifications, the Target Yield and the warranties set forth in Section 7.1 up to the applicable Campaign Maximum set forth in Exhibit A hereto (except as otherwise agreed pursuant to Section 5.7 hereof).

          5.4.4 Shortages; Shortfalls; Delivery Delays . If at any time during the Term, Lonza is unable to fulfill the Bulk Drug Commitments on the related Delivery Date(s), then Lonza shall (1) immediately notify Genentech in writing as to the reason for the shortfall, shortage and/or delay, and provide an indication of the likely duration of the shortfall, shortage and/or delay, and (2) at Genentech’s written request, use Commercially Reasonable Best Efforts to provide Genentech with additional Commercial Runs to meet outstanding Bulk Drug Commitments under this Agreement, including, without limitation, extending the then existing Campaign and/or scheduling and conducting an additional Campaign within the next [*] in order to make-up such shortfall, shortage or delay. In addition, Lonza shall also promptly notify Genentech in writing when any such shortfall, shortage and/or delay is over. It is understood and agreed that nothing herein this Section 5.4.4 shall release Lonza from its obligation to promptly supply Bulk Drug to Genentech and/or their respective designee, as appropriate, to meet such Bulk Drug Commitments.

          5.4.5 Manufacturing Success Rate . If at any time during the Term, Lonza is unable to meet the Annual Minimum Success Rate and/or Target Yield for a calendar quarter (as further described on Exhibit B attached hereto and incorporated herein): (i) at Genentech’s request, Lonza shall discuss in good faith with Genentech a reduction in the Purchase Price for all Commercial Batches accepted by Genentech in accordance with Section 5.4.6 for such calendar quarter (the determination of such reduction to be based upon the actual success rate achieved over such calendar quarter, including without limitation the actual Target Yield achieved in each Commercial Lot produced in such calendar quarter), and (ii) Genentech shall have the right to terminate the Agreement in accordance with Section 20.2.4 hereof. Notwithstanding anything to the contrary, nothing herein shall obligate Genentech to accept any Runs that do not conform to the cGMP, the Bulk Drug Specifications, the Target Yield and the warranties in Section 7.1.

          5.4.6 Acceptance of Bulk Drug . Lonza shall deliver to Genentech samples of all Batches manufactured under this Agreement, as and when Batches are manufactured, and otherwise in accordance with the Quality Agreement and applicable standard operating procedures approved by both Parties. Lonza shall also provide the related Batch Record and other Batch documentation described in the Quality Agreement for each Batch of Bulk Drug. Upon receipt of samples of a particular Batch of Bulk Drug together with the related Batch Record and other Batch documentation (as set forth in the Quality Agreement or as otherwise reasonably requested by Genentech), Genentech shall perform release testing and review the Batch Record and other Batch documentation for each Batch, in good faith, and, in the absence of an investigation for said Batch pursuant to the Quality Agreement or Section 9.1 hereof, such testing and review shall be completed within [*] after Genentech’s receipt of samples of such Batch together with the related Batch Record and other Batch documentation. Any investigation shall be initiated and conducted in accordance with Genentech’s applicable standard operating procedure. Subject to Genentech’s rights to make claims under Article 9 hereof, a Batch shall be deemed to have been accepted by Genentech on the date (the “Acceptance Date”) on which Lonza receives written notice from Genentech that such Batch has been released by Genentech pursuant to applicable release testing standard operating protocols as described in the Quality Agreement.

     5.5 Delivery Terms . Lonza shall deliver Bulk Drug, suitably packed in agreed upon shipping containers, to Genentech’s [*] at which time title to and risk of loss for the Bulk Drug shall transfer to Genentech. Genentech shall have the right to designate the carrier. Genentech shall undertake and arrange for shipment of Bulk Drug within [*] after the Acceptance Date related thereto. Lonza shall provide storage for such Bulk Drug at no charge during this period. Prior to shipping any Bulk Drug, Genentech shall obtain all appropriate approvals and consents of any governmental authority necessary for the transportation or shipment of such Bulk Drug. Lonza shall comply with all applicable laws and regulations regarding the packaging of Bulk Drug for shipment. [*] Bulk Drug re