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EXHIBIT 10.32

 

TOLL MANUFACTURING AGREEMENT

By and Between

WYETH,

Acting through its Wyeth Pharmaceuticals Division

and

GENENTECH, INC.

 

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TABLE OF CONTENTS

ARTICLE  1.

DEFINITIONS

2

ARTICLE  2.

COMMITMENT TO MANUFACTURE; DEDICATED FACILITY

12

ARTICLE  3.

MANAGEMENT OF PROJECT

13

ARTICLE  4.

TECHNOLOGY TRANSFER; MANUFACTURING PROCESS
IMPLEMENTATION AND OPERATION

20

ARTICLE  5.

COMMERCIAL PRODUCTION AND SUPPLY; DELIVERIES

25

ARTICLE  6.

FINANCIAL TERMS

28

ARTICLE  7.

MANUFACTURER WARRANTIES

30

ARTICLE  8.

SPECIFICATIONS AND MANUFACTURING -- PROCESS CHANGEs

30

ARTICLE  9.

NON-CONFORMING PRODUCT

33

ARTICLE  10.

MANUFACTURING AUDITS; CERTIFICATE OF COMPLIANCE; AND
REGULATORY MATTERS

34

ARTICLE  11.

RECALLS

36

ARTICLE  12.

QUALITY ASSURANCE; QUALITY CONTROL; VALIDATION; STABILITY

37

ARTICLE  13.

WYETH'S OBLIGATIONS AS MANUFACTURER

37

ARTICLE  14.

LICENSES

39

ARTICLE  15.

OWNERSHIP OF INTELLECTUAL PROPERTY, MATERIALS AND
EQUIPMENT

40

ARTICLE  16.

REPRESENTATIONS AND WARRANTIES

43

ARTICLE  17.

INDEMNIFICATION AND INSURANCE

44

ARTICLE  18.

LIABILITY

45

ARTICLE  19.

CONFIDENTIALITY

46

ARTICLE  20.

PRESS RELEASES; USE OF NAMES

48

ARTICLE  21.

TERM; TERMINATION

49

ARTICLE  22.

ASSIGNMENT

52

ARTICLE  23.

DISPUTE RESOLUTION

52

ARTICLE  24.

FORCE MAJEURE

53

ARTICLE  25.

MISCELLANEOUS

53

Exhibit A Excluded Patents

58

Exhibit B Countries in Territory

59

 

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TOLL MANUFACTURING AGREEMENT

 

            This TOLL MANUFACTURING AGREEMENT (the "Agreement") is made
effective as of September 15, 2004 (the "Effective Date"), by and between Wyeth,
a Delaware corporation acting through its Wyeth Pharmaceuticals Division having
its principal place of business at Five Giralda Farms, Madison, New Jersey 07940
("Wyeth"), and Genentech, Inc., a Delaware corporation, having its principal
place of business at One DNA Way, South San Francisco, California 94080
("Genentech"). Wyeth and Genentech may each be referred to herein individually
as a "Party" and collectively as the "Parties."

RECITALS

      WHEREAS, Genentech markets and sells a certain proprietary biological
pharmaceutical product known as Herceptin, and Genentech desires to obtain
additional supply of commercial quantities of Herceptin bulk drug substance.

      WHEREAS, Wyeth has experience and expertise necessary to perform the
manufacturing and related services needed to supply Herceptin bulk drug
substance, and Wyeth owns a facility that, with some modifications, would be
suitable for production of commercial quantities of Herceptin bulk drug
substance.

      WHEREAS, Genentech desires to retain Wyeth on a nonexclusive basis, to
convert Raw Materials (as defined below) into commercial quantities of Herceptin
bulk drug substance, and Wyeth desires to perform such services, all on the
terms and conditions set forth in this Agreement.

      WHEREAS, on August 11, 2004 the Parties entered into a Letter of Intent
(the "LOI") contemplating their entry into this Agreement and the other
Transaction Agreements (as defined below) and preliminary activities relating to
the Technology Transfer (as defined below) have been initiated by the Parties
pursuant thereto.

      WHEREAS, on even date herewith, Wyeth and Genentech are entering into a
Quality Agreement 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.
DEFINITIONS

      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       "Affiliate" means, with respect to either 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 managing 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, provided,
however, that the term "Affiliate" shall not include subsidiaries or other
entities in which a Party or its Affiliates owns a majority of the ordinary
voting power necessary to elect a majority of the board of directors or other
governing body but is restricted from electing such majority by contract or
otherwise until such time as such restrictions are no longer in effect.
Notwithstanding the foregoing, Roche shall not be considered an Affiliate of
Genentech for purposes of this Agreement.

 

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            1.2       "Batch" or "Lot" means the quantity of Product produced
from a single Run, and refers to a Commercial Batch or Lot, a Development Batch
or Lot, a Pilot Batch or Lot and/or a Qualification Batch or Lot, as the context
requires. A given Run may result in more than one sub-batch or sub-lot due to
splitting into tanks downstream in the Manufacturing Process, but all such
sub-batches or sub-lots shall still constitute the same Batch or Lot.

            1.3       "Batch Records" means the documentary evidence (electronic
or hard copy) of all activities required to manufacture, process, test, label,
store and package a Batch.

            1.4       "Bill of Materials" means (i) a list of all Raw Materials
(including Specialized Raw Materials) and Genentech Proprietary Materials
required to complete a Run and (ii) the corresponding quantities (including
appropriate amounts of wastage) of such Raw Materials (including an allocable
portion of Raw Materials used for multiple Runs (e.g., resins)) and Genentech
Proprietary Materials required to complete a Run.

            1.5       "Calendar Year" or "CY" means a one (1) year period
commencing on January 1st and ending on December 31st.

            1.6       "cGMP" means both the regulatory requirements for current
good manufacturing practices promulgated by the FDA under the FD&C Act, 21
C.F.R. Sections 210, 211 and 600 et seq. and under the PHS Act, 21 C.F.R.
Sections 600-610 and the ICH Guideline for Industry Q7A Good Manufacturing
Practice Guidance for Active Pharmaceutical Ingredients, as the same may be
amended from time to time.

            1.7       "Cell Line" means the proprietary Genentech Chinese
Hamster Ovary cell line that expresses the Product.

            1.8       "Centrifuge" means the [*] Centrifuge that has been
purchased by Genentech [*] for use in the Manufacturing Process at the Facility,
[*]

            1.9       "Certificate of Analysis" means, as further specified in
the Quality Agreement, with respect to each Batch, a document prepared by Wyeth:
(a) listing tests performed by Wyeth, 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 Analysis to be used under
this Agreement.

            1.10       "Certificate of Compliance" means, as further specified
in the Quality Agreement, with respect to each Batch, a document prepared by
Wyeth: (a) listing the manufacturing date, unique Batch number, and quantity of
Product in such Batch, and (b) certifying that such Batch was manufactured in
accordance with the Manufacturing Documentation, cGMP, the Product
Specifications existing as of the time of the inoculation of the [*] bioreactor
for such Batch 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.

            1.11       "Commercial Batch" or "Commercial Lot" means a Batch or
Lot produced from a Commercial Run.

            1.12       "Commercial Production" means the operation of the
Facility after sBLA Filing with [*] of its capacity dedicated to running the
Manufacturing Process to manufacture Product that is or is expected to be
(following FDA Approval) commercially saleable.

            1.13       "Commercial Run" means a Run that is initiated after
achievement of PAI Readiness for the purpose of manufacturing Product that is or
is expected to be (following FDA Approval) commercially saleable.

            1.14       "Commercially Reasonable Diligent Efforts" means: [*]
Notwithstanding the foregoing, to the extent that the performance of a Party's
obligations hereunder is adversely affected by the other Party's failure to
perform its obligations hereunder, such Party would not be deemed to have failed
to use its Commercially Reasonable Diligent Efforts in performing the adversely
affected obligations.

            1.15       "Commercially Reasonable Efforts" of a Party means those
efforts and resources normally used by such Party with respect to a
biopharmaceutical product owned by such Party or to which such Party has similar

 

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rights and that is of similar market potential at a similar stage in the
development or life of such product. Notwithstanding the foregoing, to the
extent that the performance of a Party's obligations hereunder is adversely
affected by the other Party's failure to perform its obligations hereunder, such
Party would not be deemed to have failed to use its Commercially Reasonable
Efforts in performing the adversely affected obligations.

            1.16       "Commissioning" means those activities occurring after
Mechanical Completion that are intended to verify that the Facility (and
equipment and systems therein) meet pre-established design specifications,
installation and operational requirements. Commissioning typically precedes and
supports Qualification and includes Factory Acceptance Test ("FAT"), Site
Acceptance Test ("SAT"), and full-scale wet-testing ("Water Dummy Runs") in
order to provide reasonable assurance of the successful Qualification of the
equipment, systems, and Facility.

            1.17       "Completed Development Run" means a Development Run for
which Product has been processed through the final purification step and filled
and frozen in a Vessel according to the instructions, procedures and
requirements described in the Manufacturing Documentation established for said
procedures; provided, however, that a Development Run need not be processed
through the high temperature short (residence) time skid ("HTST Skid") to be
considered a Completed Development Run.

            1.18       "Completed Qualification Run" means a Qualification Run
for which Product has been processed through the final purification step and
filled and frozen in a Vessel according to the instructions, procedures and
requirements described in the Manufacturing Documentation established for said
procedures.

            1.19       "Confidential Information" means Genentech Confidential
Information and/or Wyeth Confidential Information, as the context requires.

            1.20       "Control" or "Controlled" means possession of the ability
to grant a license or sublicense without violating (a) any law or governmental
regulation applicable to such license or sublicense or (b) the terms of an
agreement with a Third Party.

            1.21       "Conversion Fee" means the conversion fee to be paid by
Genentech to Wyeth for Product as determined in accordance with the terms of
this Agreement.

            1.22       "Development Batch" means a Batch or Lot produced from a
Development Run. Development Batches are intended for testing only and are not
saleable.

            1.23       "Development Run" means a Run that (i) is used for
Commissioning the Facility, testing equipment, Manufacturing Process
demonstration, confirmation of some or all of the Manufacturing Process steps,
finalizing Manufacturing Documentation, and training, as further described in
Section 4.6 hereof. Development Runs may also be referred to as "Engineering
Runs" or "Trial Runs".

            1.24       "Excluded Patents" means [*] as those terms are defined
on Exhibit A hereto, as well as any other Patent Rights owned or Controlled by
Genentech that are not required for Wyeth to perform its obligations under the
Transaction Agreements in accordance with the terms and conditions thereof.

            1.25       "Facility" means one or more of the following, as the
context requires: the [*] at Wyeth's commercial manufacturing facility located
at Andover, Massachusetts and, to the extent used by Wyeth in the Manufacturing
Process or the storage of Product hereunder, the Utilities, the Warehouse and
the QC Laboratory.

            1.26       "Facility Modifications and Services Costs" means all
costs and expenses incurred by Wyeth (including, without limitation, Wyeth's
internal labor and material costs) for the modifications needed to implement the
Manufacturing Process at Wyeth's Andover, Massachusetts facility, including,
without limitation, design and engineering services, equipment and/or Utilities
installed at or necessary for the operation of the Facility (or any part
thereof) or used to modify the Facility (or any part thereof) in accordance with
the Technology Transfer Project Plan.

            1.27       "Facility Validation" means validation of the Facility,
including manufacturing equipment and

 

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systems, computer systems, testing equipment and including non-Product specific
processes such as sterilization, all as required by and in accordance with the
Quality Agreement.

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

            1.29       "FDA" means the United States Food and Drug
Administration, or any successor agency thereto.

            1.30       "Finished Product" means Product that has been
formulated, compounded, filled into containers, labeled and placed in final
commercial packaging.

            1.31       "For Cause Audit" means a non-routine audit of the
Facility required and conducted by Genentech's quality compliance organization
due to the existence of an Operational Issue that Genentech reasonably believes
in good faith may result in a significant quality or cGMP deficiency.

            1.32       "Genentech Confidential Information" means the
Manufacturing Documentation and all technical and other information, whether
patented or unpatented, relating to the Genentech Proprietary Materials, the
Manufacturing Process, the Technology and/or the Product, Genentech processes,
methods, operations, technologies, forecasts and business information, in the
case of each of the foregoing that (a) are disclosed or supplied to Wyeth by or
on behalf of Genentech pursuant to this Agreement and/or the Quality Agreement,
(b) Wyeth may first become aware through the presence of its employees or agents
at Genentech offices or facilities or at other facilities (other than Wyeth's
facilities) that manufacture the Product for Genentech or (c) is Genentech Data
generated hereunder. The foregoing may include, without limitation, trade
secrets, know-how, processes, concepts, experimental methods and results,
business and scientific plans and information, designs, algorithms, software and
facility layout and schematics. Notwithstanding the foregoing, "Genentech
Confidential Information" shall not include any information that: (i) at the
time of disclosure, is known publicly or thereafter becomes known publicly
through no breach of this Agreement by Wyeth, its Affiliates or agents; (ii)
becomes available to Wyeth from a Third Party which is not legally prohibited
from disclosing such information, provided such information was not acquired
directly or indirectly from Genentech under obligations of confidentiality;
(iii) was developed by Wyeth independently of information obtained from
Genentech as evidenced by competent proof; (iv) was already known to Wyeth
before receipt from Genentech, as shown by competent proof, provided that such
information was not acquired directly or indirectly from Genentech under
obligations of confidentiality; or (v) is released with the prior written
consent of Genentech. In determining whether or not Genentech's Confidential
Information has entered the public domain and is therefore no longer falls
within the definition of Genentech Confidential Information, only that portion
of said Genentech Confidential Information that has become public shall cease to
be within the definition of Genentech Confidential Information, and any
information remaining confidential (including, without limitation, the
organization of such information, the existence of such public information
within the Genentech Confidential Information or information regarding the
relationships between individual pieces of Genentech Confidential Information
and information that is in the public domain) shall retain their status as
Genentech Confidential Information.

            1.33       "Genentech Data" means (i) those elements of
Manufacturing Data that pertain to the Manufacturing Process, the conduct of the
Manufacturing Process at the Facility, the Genentech Proprietary Materials, the
Raw Materials or the Product (ii) those elements of other data generated by
Wyeth in the performance of its obligations hereunder that pertain to the
Manufacturing Process, the conduct of the Manufacturing Process at the Facility,
the Genentech Proprietary Materials, the Raw Materials or the Product (iii) data
generated by Genentech hereunder that pertain to the Manufacturing Process, the
conduct of the Manufacturing Process at the Facility, the Genentech Proprietary
Materials, the Raw Materials, the Product or (iv) information generated by
Genentech that pertains to any equipment, processes, algorithms or software
installed or used in the Facility, in the case of each the foregoing, excluding
the Wyeth Data.

            1.34       "Genentech Proprietary Materials" means the Cell Line,
Master Cell Bank, Working Cell Bank and all Genentech proprietary reagents,
reference standards and assays required to implement the Technology Transfer,
utilize the Technology, conduct the Manufacturing Process and/or manufacture
Product, all in accordance with the Manufacturing Documentation, and as each is
further defined in Exhibit B to the Technology Transfer Project Plan.

 

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"Genentech Proprietary Materials" shall also include any other proprietary
materials of Genentech provided to Wyeth hereunder that are identified in
writing by Genentech as "proprietary" at the time of delivery.

            1.35       "GMP Commissioning" means the acceptance of the Facility
by Genentech for cGMP activities as required by and in accordance with the
Quality Agreement.

            1.36       "Herceptin" means those pharmaceutical formulations
containing the Product, currently marketed by Genentech in the United States and
currently marketed by Roche outside of the United States each as the commercial
product Herceptin.

            1.37       "Manufacturing Data" means either or both, as the case
requires: (i) all data and information (including the Batch Records) related to
the conduct of the Manufacturing Process at the Facility that is generated by
Wyeth in the performance of its obligations hereunder from the Effective Date
through the date of achievement of PAI Readiness and that would be necessary or
useful for Genentech to complete the filing of the sBLA with the FDA, including
without limitation data related to the Commissioning and validation of the
Facility, and/or (ii) all data and information (including the Batch Records)
related to the manufacture of Product at the Facility that is generated by Wyeth
in the performance of its obligations hereunder following achievement of PAI
Readiness and that would be necessary or useful for Genentech to comply with all
laws and regulations pertaining to the manufacture, use, storage or sale of
Product manufactured by Wyeth under this Agreement.

            1.38       "Manufacturing Documentation" means all documents and
records describing or otherwise related to the Manufacturing Process or any part
of the Manufacturing Process provided to Wyeth by or on behalf of Genentech
under this Agreement or the Quality Agreement, including, without limitation,
documents and records consisting of or containing process descriptions,
requirements and specifications, process flow diagrams ("PFDs"), piping and
instrumentation diagrams ("P&IDs") for Genentech's facilities, Genentech's
facility layout schematics, equipment and instrumentation specifications,
software logic and requirements specifications, bills of materials, raw
material, in-process, and final Product specifications, process trend and
variability data, validation protocols and reports, process development reports,
batch records, and standard operating procedures ("SOPs"), including, without
limitation, SOPs for Raw Material handling, manufacturing operations, equipment
operation, Raw Material, in-process, and final Product quality control testing,
quality assurance, validation, storage, and shipping.

            1.39       "Manufacturing Process" means the [*] production process
for the conversion of certain Genentech Proprietary Materials using the Raw
Materials into Product and testing of such Product, [*] and is to be used by
Wyeth pursuant to this Agreement for the manufacture of Product, [*], as such
process may be changed from time to time in accordance with this Agreement.

            1.40       "Master Cell Bank" [*]

            1.41       "Mechanical Completion" means that the Facility is ready
for Commissioning, Qualification and validation according to criteria
established by the TOC for those activities. For the Facility to be considered
mechanically complete, (i) all equipment (except the HTST skid) and Programmable
Logic Controller/Supervisory Control And Data Acquisition ("PLC/SCADA") software
required to implement the Manufacturing Process must be installed, tagged, and
adjusted, (ii) mechanical and hydrostatic testing on said equipment (except the
HTST skid) must be complete, and (iii) all applicable documentation must be
compiled and complete. An element of Mechanical Completion shall be that the
Manufacturing Execution System ("MES") software is available as required to
support Commissioning.

            1.42       "Non-Conforming Product" means Product that fails to
conform to any of the warranties set forth in Section 7.1 hereof as of the
Warranty Date.

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

 

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            1.44       "Operational Issue" means an issue, concern or problem
related to or arising from the implementation or conduct of the Technology
Transfer Project and/or the Manufacturing Process at the Facility or at any of
Genentech's facilities that might or does adversely impact (i) the operation of
the Facility, (ii) the conduct of the Manufacturing Process by Wyeth, or (iii)
the manufacture of Product hereunder, with respect to each of the foregoing,
including, without limitation, any contamination, regulatory or quality control
issues, problems or concerns, materials shortages, any issues, concerns or
problems that may arise from the performance of the obligations under this
Agreement and/or the Quality Agreement.

            1.45       "PAI" means the pre-approval inspection of the Facility
that will be conducted by the FDA prior to FDA Approval.

            1.46       "PHS Act" means the Public Health Service Act, Biological
Products, as amended, as the same may be amended from time to time.

            1.47       "Party" or "Parties" means Wyeth and/or Genentech, as the
context requires.

            1.48       "Patent Rights" means all United States and foreign
issued patents and patent applications, including, but not limited to,
provisionals, divisionals, continuations, continuations-in-part (to the extent
the claims in such continuation-in-part application are directed to subject
matter specifically described in such prior patent application), and patents
issuing therefrom, reissues, reexaminations, substitutions, renewals,
restorations, additions, registrations, and foreign counterparts thereof, as
well as extensions and supplementary protection certificates based thereon.

            1.49       "Pilot Batch" means a Batch produced from a Run that is
completed through the [*] bioreactor, and which is subsequently harvested [*]
and purified at the laboratory scale using an appropriate small scale laboratory
model of the Manufacturing Process. For a Batch to be considered a Pilot Batch
the Batch must be completed [*] and provide sufficient quantities of samples to
enable the Parties to complete analytical testing [*]. A Pilot Batch may be
processed through the final purification step at the laboratory scale.

            1.50       "Portable Equipment" means the portable equipment
described with particularity in the Technology Transfer Project Plan and
referred to in Sections 5.7 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, agitators and filter housings, shall also be
deemed Portable Equipment.

            1.51       "Pre-existing Defect" means a defect in (i) any Raw
Material delivered to Wyeth by [*] Genentech or (ii) any Genentech Proprietary
Material delivered to Wyeth by Genentech, where such defect, in the case of
either (i) or (ii), could not have been detected by Wyeth performing those
manufacturing steps and testing procedures to be performed by Wyeth as required
by the Manufacturing Documentation.

            1.52       "Product" means the bulk form of Genentech's proprietary
biological drug substance anti-Her-2 antibody (as more particularly described in
Genentech's BLA for Herceptin STN: BL 103792, including any successor filing
thereto with the FDA, and any supplements to or amendments to any of the
foregoing) which has been (i) manufactured by Wyeth pursuant to this Agreement,
and (ii) purified to a concentrated form from one or more Batches by Wyeth
pursuant to this Agreement.

            1.53       "Product Specifications" means the specifications
developed by Genentech for Product, including, without limitation, testing
methods and acceptance criteria for each Batch, a copy of which shall be
attached to the Quality Agreement prior to the start of Development Runs, 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 FDA Approval.

            1.54       "QC Laboratory" means either or both the laboratory
facilities located in Wyeth's Andover, Massachusetts commercial manufacturing
facility or any Third Party laboratory facilities approved by Genentech in
accordance with Section 13.5, in each case to the extent that they are required
for Wyeth to perform the testing of all

 

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Raw Materials and in-process and finished Product in accordance with the
Transaction Agreements.

            1.55       "Qualification" means establishing documented evidence
that a piece of equipment or a manufacturing process operates within
predetermined parameters consistently and reproducibly, and that such piece of
equipment or manufacturing process is capable of producing Product that
consistently meets all applicable quality specifications. Qualification may
refer to Installation Qualification ("IQ"), Operational Qualification ("OQ"),
and Performance Qualification ("PQ") as those terms have been generally defined
by the FDA and the pharmaceutical industry.

            1.56       "Qualification Batch" or "Qualification Lot" means a
Batch or Lot produced from a Qualification Run. Each Qualification Batch is
intended to produce Product that is or is expected to be (following FDA
Approval) commercially saleable.

            1.57       "Qualification Run" means a Run conducted (i) to
demonstrate and document the consistency and reproducibility of the
Manufacturing Process at the Facility, (ii) to establish the comparability of
the Product manufactured therefrom to Herceptin manufactured by Genentech as
required by the FDA and (iii) to support licensure of both the Facility and the
Manufacturing Process at the Facility under the sBLA. Each Qualification Run
must be produced from an inoculation of the [*], all in accordance with cGMP and
the Manufacturing Documentation.

            1.58       "Quality Agreement" means the quality agreement entered
into by and between the Parties of even date herewith that references this
Agreement and relates to Wyeth's manufacture of the Product hereunder, as
amended from time to time.

            1.59       "Regulatory Agency" means any applicable supranational,
national, federal, state or local regulatory agency, department, bureau or other
governmental entity of any country or jurisdiction in the Territory having
responsibility in such country or jurisdiction for any Regulatory Approval of
any kind in such country or jurisdiction, and any successor agency or authority
thereto.

            1.60       "Regulatory Approval" means any approvals, licenses,
registrations or authorizations of any Regulatory Agency necessary for the
manufacture and sale of the Product in each regulatory jurisdiction in which the
Product will be sold.

            1.61       "Raw Materials" means those materials set forth on the
Bill of Materials attached to the Technology Transfer Project Plan that are used
in the Manufacturing Process, including, but not limited to, chemicals,
reagents, chromatography resins, and specialty filters.

            1.62       "Roche" means Roche Holdings, Inc., a Delaware
corporation, and its "Affiliates" (as hereinafter defined) other than Genentech
and Genentech's subsidiaries. Subject to the foregoing, 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.

            1.63       "Run" means a single fermentation run of the
Manufacturing Process commencing at the [*] at the Facility and progressing
through, as applicable, [*] harvest, recovery, purification, freezing and
quality testing and release, and refers to a Commercial Run, Development Run
and/or Qualification Run, as the context requires; [*]

            1.64       "Run Start" [*]

            1.65       "sBLA" means the supplemental biologics license
application to be submitted to the FDA to permit the licensure of the Facility
to manufacture the Product using the Manufacturing Process, any equivalent
successor filing thereto with the FDA, and any supplements or amendments to any
of the foregoing.

 

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            1.66       "Sourcing Date" means the date that the FDA approves the
sBLA.

            1.67       "Specialized Raw Materials" means that subset of Raw
Materials that are identified as such on the Bill of Materials attached to the
Technology Transfer Project Plan and that require higher levels of inventory
planning and control due to shortage of supply, long supplier lead times and
criticality to Product quality. Examples include chromatography resins and
certain media components.

            1.68       "Successful" means, subject to Section 5.7, with respect
to a single Qualification Run or Commercial Run, or a single Batch or Lot
produced from such a single Qualification Run or Commercial Run, conformance of
that Run to all elements of: (i) the quality requirements of this Agreement, the
Technology Transfer Project Plan and the Quality Agreement; (ii) the Product
Specifications as they exist at the time of the inoculation [*] bioreactor for
such Batch (or such earlier time as may be appropriate in the event that there
are any modifications to those portions of the Manufacturing Process occurring
prior to the inoculation [*] bioreactor or which require changes to the
materials used (or specifications therefor) prior to the inoculation [*]
(bioreactor); and (iii) all applicable United States laws and regulations. For
the avoidance of doubt, a Successful Batch will be or is expected to be
(following FDA Approval) saleable following the Sourcing Date.

            1.69       "Success Rate" means, with respect to a particular
campaign or a specified period of time, the ratio of the number of Successful
Batches produced during such campaign or period of time by the Party in question
over the number of Run Starts made during such campaign or period of time by the
Party in question.

            1.70       "Technology" means the Manufacturing Process, assays,
quality control analyses, specifications, transportation and storage
requirements, and other know-how and information provided by Genentech to Wyeth
(including, without limitation, the Manufacturing Documentation) and which is
required to reproducibly manufacture, test, store and transport Product: (i) in
compliance with cGMP; (ii) in conformity with the applicable Product
Specifications; (iii) in compliance with Genentech's approved sBLA; and (iv)
which meets the protocols for analytical comparability and bioequivalency of
Product, which protocols shall be developed by Genentech and subject to
agreement of the Parties.

            1.71       "Technology Transfer" means the transfer of all
technology, information, documentation, equipment, materials, tools, and
technical assistance between the Parties (including the transfer of Technology
from Genentech to Wyeth) in order to implement the Manufacturing Process at the
Facility and obtain FDA Approval for manufacture of commercial quantities of the
Product at the Facility under the sBLA. Technology Transfer shall also include
such additional assistance as Genentech will provide to Wyeth pursuant to the
terms hereof, including without limitation, the transfer of the Technology and
technical assistance by Genentech to Wyeth and the transfer of information by
Wyeth to Genentech hereunder necessary for the transfer of Technology to Wyeth
and the implementation of the Manufacturing Process at the Facility in order to
and as required to start up and operate the Facility. Technology Transfer will
be considered to begin as of the effective date of the LOI and to be complete as
of the Sourcing Date.

            1.72       "Technology Transfer Project" means the activities
conducted by or under the authority of the Parties under the Technology Transfer
Project Plan in order to complete the Technology Transfer.

            1.73       "Technology Transfer Project Plan" means a written
description of the Technology Transfer, as the same may be amended from time to
time by mutual written agreement of the Parties, that includes, but is not
limited to, the objective, scope, approach, functional strategies, resources,
roles and responsibilities, statement of work, activities, deliverables,
milestones, schedule and success criteria. The Technology Transfer Project Plan
will also incorporate by reference more detailed functional plans as needed
(e.g., the Master Validation Plan, Comparability Plan, GMP Commissioning Plan,
etc.). The Technology Transfer Project Plan is hereby incorporated into this
Agreement by reference. The initial Technology Transfer Project Plan has been
exchanged between the Parties as of the Effective Date and describes the
understanding of the Parties (as of the Effective Date) regarding the transfer
of Technology and implementation of the Manufacturing Process, test methods and
testing at the Facility, and the modifications to the Facility needed to
implement the Manufacturing Process at the Facility, as jointly developed by the
Parties.

 

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            1.74       "Termination Fee" means that amount payable by Genentech
to Wyeth in accordance with Section 21.8 hereof as a result of the termination
of this Agreement in accordance with Section 21.8.

            1.75       "Territory" means the United States and those countries
set forth on Exhibit B hereto.

            1.76       "Third Party" means any party other than Genentech, Wyeth
and their respective Affiliates.

            1.77       "Transaction Agreements" means this Agreement and the
Quality Agreement, including any attachments and exhibits thereto and any
amendments to the foregoing mutually agreed upon in writing by the Parties.

            1.78       "United States" or "U.S." means the United States of
America, its territories and possessions, and the Commonwealth of Puerto Rico.

            1.79       "Utilities" means the utilities and other service
hook-ups related to the Facility, QC Laboratory or Warehouse to the extent that
they are necessary for Wyeth perform its obligations under the Transaction
Agreements.

            1.80       "Vessel" means a portable, [*] that is supplied to Wyeth
by Genentech to store and ship Product to Genentech at a controlled temperature.

            1.81       "Warehouse" means the shared cGMP storage facilities at
Wyeth's Andover, Massachusetts manufacturing facility to the extent that they
are used by Wyeth to handle, store, ship and receive Raw Materials, Genentech
Proprietary Materials, Vessels and Product, all in accordance with the terms and
conditions of the Transaction Agreements.

            1.82       "Working Cell Bank" or "WCB" means [*]

            1.83       "Wyeth Confidential Information" means all technical and
other information, whether patented or unpatented, relating to the Facility
and/or Wyeth processes, methods, operations, technologies, forecasts and
business information that (a) are disclosed or supplied to, or used by Wyeth in
the performance of its obligations or exercise of its rights under this
Agreement, the Technology Transfer Project Plan and/or the Quality Agreement, or
(b) Genentech may first become aware of through the presence of its employees or
agents at Wyeth offices or at the Facility or any other Wyeth facility, or (c)
is Wyeth Data generated hereunder. The foregoing may include, without
limitation, trade secrets, know-how, processes, concepts, experimental methods
and results and business and scientific plans and information and facility
layout and schematics. Notwithstanding the foregoing, "Wyeth Confidential
Information" shall not include any information that: (i) at the time of
disclosure, is known publicly or thereafter becomes known publicly through no
breach of this Agreement by Genentech, its Affiliates or agents; (ii) becomes
available to Genentech from a Third Party that is not legally prohibited from
disclosing such information, provided such information was not acquired directly
or indirectly from Wyeth under obligations of confidentiality; (iii) was
developed by Genentech independently of information obtained from Wyeth as
evidenced by competent proof; (iv) was already known to Genentech before receipt
from Wyeth, as shown by competent proof, provided that such information was not
acquired directly or indirectly from Wyeth under obligations of confidentiality;
or (v) is released with the prior written consent of Wyeth. In determining
whether or not Wyeth's Confidential Information has entered the public domain
and therefore no longer falls within the definition of Wyeth Confidential
Information, only that portion of said Wyeth Confidential Information that has
become publicly known shall cease to be within the definition of Wyeth
Confidential Information, and any information remaining confidential (including,
without limitation, the proprietary use or organization of such public
information, the existence of such public information within the Wyeth
Confidential Information or the relationship between individual pieces of Wyeth
Confidential Information and such public information) shall retain its status as
Wyeth Confidential Information.

            1.84       "Wyeth Data" means (i) those elements of the
Manufacturing Data that solely pertain to the Facility, the operations of the
Facility or the processes, algorithms, software or equipment in the Facility,
(ii) those elements of other data generated by Wyeth in performance of its
obligations hereunder that solely pertain to the Facility, the operations of the
Facility or the processes, algorithms, software or equipment in the Facility or
(iii) those elements

 

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of the data generated by Genentech hereunder that solely pertain to the
Facility, the operations of the Facility or the processes, algorithms, software
or equipment in the Facility.

            1.85       "Wyeth Equipment" means the equipment listed in the
Technology Transfer Project Plan, including all components thereof (i.e., pipes,
valves, pumps, agitators and other related equipment), already owned or leased
or to be acquired by Wyeth and installed at the Wyeth Facility for the purposes
of implementing the Manufacturing Process, and the related documentation
regarding the design, validation, operation, calibration and maintenance of such
equipment, as such list may be amended from time to time according to the
provisions in this Agreement and the Technology Transfer Project Plan.

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

Defined Term

Section

[*]

4.3.6

"Acceptance"

5.6

"Acceptance Date"

5.6

"Actual Cost"

4.9.6(b)

"Agreement"

Preamble

"Annual Maximum Purchase Commitment"

5.4

[*]

4.9.1

"Asserting Party"

19.4.3

"Bonus Run Completion"

5.1

"Bonus Runs"

5.1.1

"Breaching Party"

21.2

"Budgeted Costs"

4.9.6(a)

[*]

Exhibit A

"CGL"

17.3.1

"Change of Control"

21.8.1

"Cure Period"

21.2

"Delivery Schedule"

5.5.2

"Designated Carrier"

5.8

[*]

4.9.1

"Development Run Completion"

4.3.2

"Dual Use Improvement Option"

15.1.3(g)(ii)

"Effective Date"

Preamble

"ESC" or "Executive Steering Committee"

3.1.1(a)

"Excessive Use"

4.9.6

"Exchange Act"

21.8.1

"FAT"

1.16

"FDA Approval"

4.3.8

"Facility Data"

14.1.2

"Fermentation Run Starts"

4.7.1

"Force Majeure Event"

24.1

"GAAP

4.9.5

"Genentech"

Preamble

"Genentech Equipment"

15.2.1

"Genentech Financial Records"

6.10(c)

"Genentech Indemnified Parties"

17.1.2

"Genentech Proprietary Materials"

1.3.4

"Herceptin Improvements"

15.1.3

"HTST Skid"

1.1.7

"Indemnitee"

17.2.1

"Indemnitor"

17.2.1

"Initial Qualification Run Completion"

4.3.3

"Intentional Breach

18.1

 

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"JPST" or "Joint Project Sub-Teams"

3.1.2(b)(ii)

"JPT" or "Joint Project Team"

3.1.2(a)

"JQT" or Joint Quality Team

3.1.4(a)

"Lead Quality Representative"

Quality Agreement

"Liabilities"

17.1.1

"Licensed Parties"

14.2

"MES"

1.41

"Mechanical Completion"

4.3.1

"Milestone Payment"

6.4

"Nonbreaching Party"

21.2

"Nonsuit"

14.2

"Notified Party"

19.3.1

"Notifying Party"

19.3.1

"PAI Readiness"

4.3.6

"Permitted Use of Genentech Confidential Information

15.1.3(e)

"P&IDs"

1.38

"Portable Equipment"

5.7

"PFDs"

1.38

"Production Plan"

5.5.1

"PLC/SCADA

1.41

"Projected Usage"

4.9.5

"Project Team Leader"

3.1.5

"Raw Material Specifications"

4.9.1

"Release"

5.6

"sBLA Data Delivery"

4.3.5

"sBLA Filing"

4.3.7

"SEC"

19.2

"SAT"

1.16

"Standard Bill of Materials Cost"

4.9.2

"Standard Cost"

4.9.5

"SOPs"

1.38

"Start Fee"

6.7.1

"Success Fee"

6.7.2

"Successful Qualification Batch Delivery"

4.3.4

"Target Date"

4.3

"Target Resolution Date"

3.2.2

"Technical Issues"

3.1.2(a)

"TOC" or "Technical Operations Committee"

3.1.2(a)

"Term"

21.1

"warning letter"

Quality Agreement

"Warranty Date"

7.1

"Water Dummy Runs"

1.16

"Wyeth"

Preamble

"Wyeth Entities"

21.8.1

"Wyeth Financial Records"

6.10(b)

"Wyeth Indemnified Parties"

17.1.1

"Wyeth Production Records"

6.10(a)

"Wyeth Release Documentation"

Quality Agreement

"Wyeth Trade Secret"

14.3

ARTICLE  2.
COMMITMENT TO MANUFACTURE; DEDICATED FACILITY

            2.1       Commitment to Manufacture. Subject to the terms and
conditions set forth in this Agreement, during the Term: (a) Genentech shall
retain Wyeth as a non-exclusive manufacturer of Product; (b) Wyeth shall
dedicate [*]

 

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portion of the Facility exclusively to enable the Technology Transfer and to
conduct the Manufacturing Process; (c) Wyeth shall dedicate adequate time and/or
capacity at the Warehouse and QC Laboratory to enable the Technology Transfer
and to conduct the Manufacturing Process; (d) Wyeth shall use its Commercially
Reasonable Efforts to deliver Product meeting the warranties set forth in
Section 7.1 hereof to Genentech for use by Genentech in completing the
manufacture (e.g., filling, finishing and packaging) of its Herceptin product to
be sold by Genentech in the United States or supplied by Genentech to Roche and
its Affiliates for sale elsewhere in the Territory; and (e) Genentech shall
purchase all such Product from Wyeth (subject to Section 5.4, up to the Annual
Maximum Purchase Commitment).

            2.2       Exclusive Use of Facility. All activities conducted by
Wyeth related to the manufacture of Product hereunder shall be conducted solely
at the Facility. Wyeth shall use no other facility, other than the Facility, for
the handling and storing of all Raw Materials, Genentech Proprietary Materials,
Vessels and all Successful Batches awaiting shipment to Genentech, and Wyeth
shall use its Commercially Reasonable Efforts to maintain the Warehouse such
that during the Term it meets the applicable specifications for storage of
Genentech Proprietary Materials, Vessels, Product and Raw Materials. Wyeth shall
use no facility other than the QC Laboratory for testing of all Raw Materials,
Genentech Proprietary Materials and in-process and finished Product without the
prior written consent of Genentech.

ARTICLE  3.
MANAGEMENT OF PROJECT

            3.1       Management.

                        3.1.1      Executive Steering Committee.

                                  (a)      Formation. Within fifteen (15) days
after the Effective Date, the Parties will establish an Executive Steering
Committee (the "ESC") to provide oversight and decision-making support to the
TOC and JPT (as those acronyms are defined below) and to manage Product
manufacturing at the Facility. The ESC will be composed of two (2)
representatives appointed by each of Wyeth and Genentech, with one (1)
representative from each of Wyeth and Genentech having oversight for Quality.
All such representatives will be officers of Genentech or Wyeth (or, in the case
of Wyeth, any operating division of Wyeth or any of its Affiliates involved in
the manufacture of the Product hereunder); provided, however, that no such
representative shall also serve as a Party's representative on either the TOC or
the JPT or be a Party's designated executive officer for dispute resolution
pursuant to Section 23.2.1. Either Party may replace any or all of its
representatives at any time upon prior written notice to the other Party. The
ESC will meet at least once each Calendar Quarter, or as otherwise agreed by the
ESC or as necessary to make determinations as required of it under Section 4.8.2
and 5.1.1 in a prompt and timely manner, and will operate by unanimous decision
of its members, except as expressly set forth herein. If the ESC is unable to
unanimously resolve a dispute regarding any issue presented to it, such dispute
shall be resolved in accordance with Article 23.

                                  (b)      Function. In particular, the ESC is
responsible for performing the following functions:

                                            (i)      Overseeing and monitoring
the Technology Transfer and implementation of the Manufacturing Process at the
Facility, and any changes to the foregoing approved or recommended by the TOC
under Article 8;

                                            (ii)       Establishing and
overseeing the governance structure for the manufacture of Product at the
Facility;

                                            (iii)       Settling disputes or
disagreements that are unresolved by an operating committee formed pursuant to
the Transaction Agreements unless otherwise indicated in this Agreement;

                                            (iv)       making determinations as
required of it under Sections 4.8.2 and 5.1.1 in a prompt and timely manner; and

 

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

                        3.1.2      Technical Operations Committee.

                                  (a)      Formation. Within fifteen (15) days
after the Effective Date, the Parties will establish a Technical Operations
Committee (the "TOC") which is a Director-level, cross-functional body
responsible for providing technical guidance and decision-making support to the
Joint Project Team (the "JPT") (as described below), regarding manufacturing,
process sciences, quality control or regulatory affairs issues (collectively,
"Technical Issues") arising in the transfer of Technology and implementation of
the Manufacturing Process and commercial manufacturing of Product at the
Facility. The TOC will be composed of an equal number of at least three (3)
representatives appointed by each of Wyeth and Genentech. Each Party will have
one (1) vote on all matters within the TOC's technical purview. Such
representatives will include Technical Product Managers/Leads, Directors of
Quality Assurance and 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 TOC will meet at least once every two (2)
calendar months, or as otherwise agreed by the TOC, as directed by the ESC or as
required by the Transaction Agreements. The TOC will operate by unanimous
decision of its members, except as expressly set forth herein. If the TOC is
unable to resolve a dispute regarding any issue presented to it, such dispute
shall be resolved in accordance with Section 3.1.6 below. Members of the JPT or
the ESC shall not serve on the TOC.

                                  (b)      Function. In particular, the TOC is
responsible for performing the following functions:

                                            (i)      Providing technical
guidance on the overall Technology Transfer and manufacturing strategy for the
manufacture of Product at the Facility, including strategies for licensure of
the Facility for manufacture of Product;

                                            (ii)      Providing strategic and
technical guidance to the JPT and the Joint Project Sub-Teams (the "JPST") (as
described below), including reviewing and approving changes to the Technology
Transfer Project Plan;

                                            (iii)      Conducting stage reviews
as required by the Technology Transfer Project Plan with the JPT at appropriate
milestones or completion of a sequence of events to ensure the Technology is
being implemented appropriately and to review and approve (a) deliverables, and
(b) next steps recommended by the JPT;

                                            (iv)      Reviewing and approving
any requested changes to the Product Specifications, testing methods,
Manufacturing Process, the Facility or the equipment used to manufacture
Product, all in accordance with Article 8;

                                            (v)      Settling disputes or
disagreements that are unresolved by the JPT; and

                                            (vi)      Surfacing disputes or
disagreements to the ESC.

                        3.1.3      Joint Project Team.

                                  (a)      Formation. Within fifteen (15) days
after the Effective Date, the Parties will establish a Joint Project Team (the
"JPT"). The JPT shall be composed of an equal number of up to eight (8)
representatives from the manufacturing, process sciences, quality control or
regulatory affairs areas appointed by each of Wyeth and Genentech, and will be
led by the Project Team Leaders from each of Wyeth and Genentech in accordance
with Section 3.1.5 below. Project managers appointed by each of Wyeth and
Genentech will support the JPT. Each representative will have one (1) vote on
all matters within the JPT's purview, except such project managers, who will
have no vote. To ensure continuity of information sharing and consistency of
decision-making, each Party shall appoint its lead representative from each of
the JPSTs to sit on the JPT and such other individuals with expertise and
responsibilities in the same areas of manufacturing, process sciences, quality
control or regulatory affairs as each

 

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Party deems necessary. Either Party may replace any or all of its
representatives on the JPT at any time upon written notice to the other Party.
The JPT will operate by unanimous decision of its members, 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 3.1.6
below.

                                  (b)      Function. In particular, the JPT is
responsible for performing the following functions:

                                            (i)      Determining the overall
Technology Transfer and manufacturing strategy for the manufacture of Product at
the Facility, including strategies for licensure of the Facility for the
Product;

                                            (ii)      Planning, reviewing,
monitoring, guiding, and managing the overall Technology Transfer Project and
implementation of the Manufacturing Process per the Technology Transfer and
manufacturing strategy;

                                            (iii)      Coordinating the
activities of the Parties to ensure successful Technology Transfer, including
providing timely decisions to the JPSTs and managing the technical aspects of
the implementation of the Manufacturing Process;

                                            (iv)      Reporting to and
consulting with the TOC, and keeping the ESC periodically informed of the
progress of the Technology Transfer Project, status of Technical Issues and
Operational Issues and implementation of the Manufacturing Process;

                                            (v)      Scheduling and conducting
project and technical reviews with the TOC to solicit guidance on resolution of
Technical Issues and Operational Issues;

                                            (vi)      Surfacing disputes or
disagreements to the TOC and/or ESC, as appropriate;

                                            (vii)      Establishing, overseeing
and managing the JPSTs;

                                            (viii)      Reviewing and
recommending (to the TOC) changes to (a) the Technology Transfer Project Plan
and (b) the Manufacturing Process and Facility changes recommended by the JPSTs;
and

                                            (ix)      Settling disputes or
disagreements that are unresolved by the JPSTs.

                        3.1.4      Joint Project Sub-Teams.

                                  (a)      Formation. The JPT will establish
JPSTs for manufacturing, process sciences, quality control or regulatory affairs
areas, and the following functional areas:  quality, process, QC/analytical,
supply chain management, and regulatory. Each JPST may establish additional
sub-teams responsible for specific technical areas who report to the respective
JPST, for example the process JPST may establish separate cell culture and
recovery sub-teams. The Joint Quality Team established under the Quality
Agreement (the "JQT") shall be one of the JPSTs. Each JPST will be responsible
for planning, organizing, managing, conducting, and completing the Technology
Transfer steps and activities assigned to the particular JPST by the JPT. Each
JPST representative will have one (1) vote on all matters within its purview and
all decisions made by each JPST will require unanimous consent of all
representatives. Either Party may replace any of its representatives on any JPST
at any time upon written notice to the other Party. JPST members will be listed
in the Technology Transfer Project Plan, but in general each JPST will be
comprised of an equal number of representatives from the appropriate functional
disciplines of Genentech and Wyeth.

                                  (b)      Function. In particular, the JPSTs
are responsible for performing the following functions:

                                            (i)      Planning, reviewing,
monitoring, guiding, and managing the functional activities of the Technology
Transfer Project and implementation of the Manufacturing Process;

 

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                                            (ii)      Coordinating the
functional activities of the Parties to ensure successful Technology Transfer;

                                            (iii)      Reporting to and keeping
the JPT periodically informed of the progress of the functional activities for
the Technology Transfer Project;

                                            (iv)      Developing and reviewing
functional recommendations with the JPT; and

                                            (v)      Surfacing disputes or
disagreements to the JPT.

                        3.1.5      Appointment of Project Team Leader. Within
fifteen (15) days after 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
Technology Transfer Project Plan and/or Commercial Production of the Product (as
described in Articles 4 and 5 below). Each such Project Team Leader, unless
otherwise mutually agreed, shall serve as the Genentech and Wyeth functional
leaders of the JPT. The initial Project Team Leaders are:

            Genentech:  [*]

            Wyeth:  [*]

Notwithstanding anything to the contrary in this Article 3, the ESC shall have
the right (i) to approve the appointment of the Project Team Leader of both
Parties and (ii) to require a Party to replace its Project Team Leader, upon the
ESC's request, and to review and approve the new Project Team Leader.

                        3.1.6      Decision-making.

                                  (a)      All decisions of the ESC, the TOC and
the JPT, except as expressly set forth herein (including without limitation
Sections 3.1.6(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. Such written reports
shall be subject to approval by the authorized representatives of the Parties;
provided, however, that no operating committee herein may amend or waive any
provision of this Agreement, including, without limitation, the Target Dates set
forth in Section 4.2, the Milestones set forth in Section 6.3 or the financial
terms set forth in Article 6, it being understood that this Agreement may be
amended, and any provision of this Agreement may be waived, only by a written
agreement signed by authorized officers of each Party that specifically states
that the Parties are amending or waiving this Agreement.

                                  (b)      In the event that the JPT is unable,
despite the good faith efforts of all members, to resolve within seven (7)
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 TOC. In the event
the TOC is unable to resolve the disputed issue within an additional seven (7)
business days, the disputed issue will be referred to the ESC. If the dispute
cannot be resolved by the ESC within an additional ten (10) business days, the
matter will be handled in accordance with Article 23 hereof.

                                  (c)      Notwithstanding anything to the
contrary in this Agreement and/or the Quality Agreement, with respect to any
disagreement over issues relating to quality, such issues shall be resolved as
follows: each Party's Lead Quality Representative (as defined in the Quality
Agreement) on the JPT, 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 seven (7) business days after such issue is referred to the JPT).
If the dispute cannot be resolved by the ESC within an additional (10) business
days, the matter with be resolved in accordance with the dispute resolution
provisions of Article 23 hereof.

                                  (d)       Subject to the foregoing provisions
of this Section 3.1.6, the Project Team Leaders (or their respective designees)
will in good faith attempt to mutually resolve in a timely fashion any

 

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disagreement with respect to the implementation of the Manufacturing Process
which could reasonably affect Product quality (including any procurement,
engineering, installation, scale-up, testing and validation of the equipment and
systems and other modifications to the Facility required to implement the
Manufacturing Process) and the manufacture of the Product, 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 matters relating to
manufacturing the Product.

            3.2       Resolution of Operational Issues.

                        3.2.1      Identification of Operational Issues. Either
Party shall have the right to raise an Operational Issue that it has identified
or otherwise believes exists by having its Project Team Leader contact the other
Party's Project Team Leader with a reasonably detailed description of the issue.
Accordingly, each Party shall have the right to initiate the resolution process
set forth below upon its good faith determination of or good faith belief in the
existence of an Operational Issue.

                        3.2.2      Resolution of Operational Issues. Once an
Operational Issue has been identified to the JPT through notice by either or
both Project Team Leaders, the Project Team Leaders shall assign appropriate
members of the JPT and/or the JPSTs to investigate, confirm and resolve any such
Operational Issue(s) if such issue is not already the subject of such efforts;
provided, however, that this resolution process excludes Batch-specific
deviations and any quality disposition decisions related to specific Batches.
Operational Issues that are deviations linked to specific Batches and the
disposition of Product will be resolved in accordance with the procedures
established pursuant to the Quality Agreement and will not be subject of the
timeframes or decision-making process for resolution of Operational Issues under
this Section 3.2.2. The resolution process for all other Operational Issues will
require the Parties to work together in good faith to identify and solve any
Operational Issue(s) that may arise during the Term in a timely and
collaborative manner. This resolution process will also include a mutually
agreed target period for resolution of each Operational Issue, such period not
to exceed ninety (90) days from the date such Operational Issue is communicated
in writing to the JPT or such longer period that (i) is reasonably necessary to
resolve the Operational Issue and (ii) has been approved in writing by the ESC,
such approval not to be unreasonably withheld or delayed by either Party's
representatives on the ESC (in each case, the last day of such target period for
resolution of an Operational Issue shall be referred to as the "Target
Resolution Date"). If an Operational Issue is preventing substantial performance
by either Party under this Agreement and remains unresolved for more than thirty
(30) days after the Target Resolution Date, Genentech shall have the right to
terminate this Agreement in accordance with Section 21.6. In addition, if an
Operational Issue is preventing substantial performance by either Party under
this Agreement and remains unresolved for more than sixty (60) days after the
Target Resolution Date, Wyeth shall also have the right to terminate this
Agreement in accordance with Section 21.6. The Parties agree and acknowledge
that the existence of and/or a failure to resolve an Operational Issue in
accordance with this Section 3.2 in and of itself shall not be deemed to be a
breach of this Agreement; provided, however, that if a Party has failed to
comply with the terms and conditions of this Section 3.2 and/or the terms and
conditions of this Agreement in relation to an Operational Issue or resolution
of an Operational Issue, a breach of this Agreement may have occurred. Subject
to Sections 4.5 and 4.6 and Article 8, each Party shall be responsible for any
costs and expenses incurred by it relating to the resolution of any Operational
Issue.

            3.3       Genentech Personnel at the Facility.

                        3.3.1      Prior to Commercial Production. Pursuant to
and as set forth in greater detail in the Technology Transfer Project Plan and
Quality Agreement, in order to expedite the Technology Transfer and to
coordinate, expedite and guide the Development Runs and Qualification Runs,
Genentech shall have the right to have [*] Genentech personnel [*] with
operational expertise and another with quality expertise) on-site at the
Facility on a full-time basis during all operational hours prior to the start of
Commercial Production; provided, however, that Genentech shall use its
Commercially Reasonable Efforts to assign the same [*] individuals to represent
Genentech for the duration of such period so as to minimize the total number of
Genentech personnel that are on-site at Wyeth's facility during such period. In
addition, Wyeth shall use its Commercially Reasonable Efforts to accommodate up
to [*] additional Genentech personnel to be present in the Facility on a
periodic or part-time basis; provided, however, that, absent Wyeth's request,
Genentech shall use its Commercially Reasonable Efforts to

 

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minimize the total number of different Genentech personnel that are on-site at
the Facility for the duration of such period so as to minimize the impact of
their presence in the Facility on Wyeth's operations. Subject to Wyeth's
approval, not to be unreasonably withheld or delayed, Genentech shall have the
right to designate a reasonable number of additional Genentech personnel on-site
at the Facility on a periodic or part-time basis at all times prior to the start
of Commercial Production. All such personnel will coordinate closely with Wyeth
in order to minimize the impact of their presence on other Wyeth operations.
Unless otherwise agreed by Wyeth, such Genentech personnel shall have access
only to those portions of Wyeth's Andover facility (including the Facility)
reasonably related to the Technology Transfer, implementation of the
Manufacturing Process, as well as cafeterias, designated office space and public
areas. All Genentech personnel at the Facility shall comply with all Wyeth
policies and procedures. In the event any Genentech personnel assigned to the
facility fail to comply with any applicable Wyeth policy or procedure,
Genentech, upon Wyeth's request, shall immediately replace such personnel.

                        3.3.2      After Commencement of Commercial Production.
As further described in the Quality Agreement, Genentech shall have the right to
have [*] Genentech personnel [*] with operational expertise and another with
quality expertise) on-site at the Facility on a full-time basis during all
operational hours following the start of Commercial Production to coordinate,
expedite and guide the Commercial Runs and Wyeth's performance of its
obligations under this Agreement; provided, however, that Genentech shall use
its Commercially Reasonable Efforts to assign the same [*] individuals to
represent Genentech for the duration of such period so as to minimize the total
number of Genentech personnel that are on-site at Wyeth's facility during such
period. In addition, Wyeth shall use its Commercially Reasonable Efforts to
accommodate up to [*] additional Genentech personnel to be on-site at the
Facility on a periodic or part-time basis; provided, however, that, absent
Wyeth's request, Genentech shall use its Commercially Reasonable Efforts to
minimize the total number of different Genentech personnel that are on-site at
the Facility for the duration of such period so as to minimize the impact of
their presence in the Facility on Wyeth's operations. Subject to Wyeth's
approval, such approval not to be unreasonably withheld or delayed, Genentech
shall have the right to designate a reasonable number of additional Genentech
personnel to be present at the Facility during Commercial Production on a
periodic or part-time basis. Unless otherwise agreed by Wyeth, such
representatives of Genentech shall have access to all areas of the Facility as
are relevant to the manufacture, storage and/or quality testing of the Product,
as well as cafeterias, designated office space and public areas. All Genentech
personnel at the Facility shall comply with all Wyeth policies and procedures.
In the event any Genentech personnel assigned to the Facility fail to comply
with any applicable Wyeth policy or procedure, Genentech, upon Wyeth's request,
shall immediately replace such personnel.

                        3.3.3      Personnel Accommodations. With respect to any
Genentech personnel assigned by Genentech to be present at the Facility, Wyeth
shall provide at Wyeth's cost: (a) reasonable access to the Facility during all
operational hours; (b) adequate on-site offices (at least one (1) dedicated
office for the Genentech Project Team Leader, and such other offices or
workstations for other Genentech personnel as are reasonably required by the
Genentech personnel and to the extent available in excess of Wyeth's own needs),
reasonable access to conference rooms (as necessary for meetings), parking
facilities and toilet facilities; (c) reasonable access to and use of telephone,
internet (but not Wyeth's intranet), facsimile and photocopying services; and
(d) such other reasonable and customary business accommodations for such
Genentech personnel as are necessary to perform any activities relating to the
manufacture, storage and/or quality testing of the Product at the Facility.

                        3.3.4      Confidentiality. Genentech shall not assign
any of its employees or representatives to visit or otherwise be present in any
of Wyeth's facilities unless such employees or representatives are legally
obligated to maintain the confidentiality of and limit their use of all Wyeth
Confidential Information that is disclosed to them, or to which they otherwise
have access to while in Wyeth's facilities or while otherwise performing any of
Genentech's obligations or exercising any of Genentech's rights under any of the
Transaction Agreements, under terms and conditions no less restrictive than
those set forth in this Agreement. Genentech shall be responsible for the breach
of any of the confidentiality or limitation of use obligations under this
Agreement by any of its employees or representatives and shall take all actions
necessary to prevent such breach or to remedy any such breach that occurs.

            3.4       Wyeth Personnel at Genentech's Facilities.

                        3.4.1      During Fall 2004 Campaign. In order to
expedite the implementation of the Technology Transfer and to heighten Wyeth's
understanding of the Manufacturing Process, Wyeth shall have the right to have

 

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[*] Wyeth personnel on-site at [*]. These personnel may be on-site during all
operational hours of Genentech's Fall 2004 campaign of the Manufacturing
Process; provided, that such personnel shall not be allowed in such facility
earlier than four (4) weeks after the beginning of such campaign. Wyeth shall
use its Commercially Reasonable Efforts to minimize the total number of Wyeth
personnel that are on-site at [*] provided, that Wyeth shall not assign more
than [*] different individuals to be on-site at such facility during the
campaign. All such Wyeth personnel shall coordinate closely with Genentech in
order to minimize the impact of their presence in the facility on Genentech's
operations. Unless otherwise agreed by Genentech, such Wyeth personnel shall
have access only to those portions of [*] reasonably related to the conduct of
the Manufacturing Process, as well as cafeterias, designated office space and
public areas, and shall comply with all applicable Genentech policies and
procedures. In the event any Wyeth personnel assigned to the facility fail to
comply with any applicable Genentech policy or procedure, Wyeth, upon
Genentech's request, shall immediately replace such personnel.

                        3.4.2      Personnel Accommodations. With respect to any
Wyeth personnel assigned by Wyeth to be present at the [*] in accordance with
this Section 3.4.2, Genentech shall provide at Genentech's cost: (a) reasonable
access to the [*] during the times that the Manufacturing Process is being run;
(b) adequate on-site offices (as reasonably required by the Wyeth personnel and
to the extent available in excess of Genentech's own needs), reasonable access
to conference rooms (as necessary for meetings), parking facilities and toilet
facilities; (c) reasonable access to and use of telephone, internet (but not
Genentech's intranet), facsimile and photocopying services; and (d) such other
reasonable and customary business accommodations as the Wyeth personnel may
request.

                        3.4.3      Confidentiality. Wyeth shall not assign any
of its employees or representatives to visit or otherwise be present in any of
Genentech's facilities unless such employees or representatives are legally
obligated to maintain the confidentiality of and limit their use of all
Genentech Confidential Information that is disclosed to them, or to which they
otherwise have access to while in Genentech's facilities or while otherwise
performing any of Wyeth's obligations or exercising any of Wyeth's rights under
any of the Transaction Agreements, under terms and conditions no less
restrictive than those set forth in this Agreement. Wyeth shall be responsible
for the breach of any of the confidentiality or limitation of use obligations
under this Agreement by any of its employees or representatives and shall take
all actions necessary to prevent such breach or to remedy any such breach that
occurs.

            3.5       No Relationship of Employees, Etc.

                        3.5.1      Genentech acknowledges and agrees that
nothing in Section 3.3 shall be deemed to create any employment, agency or
independent contractor relationship between Wyeth and any Genentech personnel,
and that any Genentech personnel assigned to the Facility shall at all times
remain employees of Genentech and as such, shall remain subject to the benefit
plans and policies of Genentech and shall not be eligible to participate in any
Wyeth benefit plan or policy. Genentech also acknowledges and agrees that it
shall be responsible for all compensation payable to such personnel and for any
tax payments or withholding with respect to such personnel. Genentech shall be
liable for and shall defend, indemnify and hold Wyeth harmless from and against
all actions taken by Genentech's personnel or any government agency or entity
with respect to such Genentech personnel at Wyeth's Andover facility.

                        3.5.2      Wyeth acknowledges and agrees that nothing in
Section 3.4 shall be deemed to create any employment, agency or independent
contractor relationship between Genentech and any Wyeth personnel, and that any
Wyeth personnel assigned to the [*] shall at all times remain employees of Wyeth
and as such, shall remain subject to the benefit plans and policies of Wyeth and
shall not be eligible to participate in any Genentech benefit plan or policy.
Wyeth also acknowledges and agrees that it shall be responsible for all
compensation payable to such personnel and for any tax payments or withholding
with respect to such personnel. Wyeth shall be liable for and shall defend,
indemnify and hold Genentech harmless from and against all actions taken by
Wyeth's personnel or any government agency or entity with respect to such Wyeth
personnel at the [*]

 

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ARTICLE  4.
TECHNOLOGY TRANSFER;
MANUFACTURING PROCESS IMPLEMENTATION AND OPERATION

            4.1       Technology Transfer and Manufacturing Process
Implementation. The Parties have jointly developed a Technology Transfer Project
Plan that establishes the process and timeline for the transfer of Technology
from Genentech to Wyeth and the implementation of the Manufacturing Process at
the Facility. Pursuant to the LOI, the Parties have commenced, and pursuant to
this Agreement, the Parties shall continue to transfer the Manufacturing Process
for the Product and the Product Specifications to Wyeth. The Technology Transfer
Project Plan sets forth the specific responsibilities of the Parties in
connection with Technology Transfer and implementation of the Manufacturing
Process at the Facility. The Technology Transfer Project Plan includes
reasonable milestones for the transfer of Technology, exchange of information,
and implementation of the Technology Transfer Project, reasonable schedules for
achieving such milestones, and criteria for assessing the progress and success
of the project as it progresses. Each Party shall be solely responsible for its
own internal labor and overhead costs incurred in connection with the Technology
Transfer Project.

            4.2       Commercially Reasonable Diligent Efforts; Cooperation.
Wyeth shall use its Commercially Reasonable Diligent Efforts to meet those Wyeth
obligations arising under the Transaction Agreements prior to the Sourcing Date
in a timely manner and in accordance with the terms and conditions hereof;
provided that Wyeth's responsibilities during the Technology Transfer are
limited to Wyeth's obligations under the Transaction Agreements. In addition,
Wyeth shall use its Commercially Reasonable Diligent Efforts to cooperate with
and assist Genentech in its efforts to perform Genentech's obligations arising
under the Transaction Agreements prior to the Sourcing Date. Genentech shall use
its Commercially Reasonable Diligent Efforts to meet those Genentech obligations
arising under the Transaction Agreements prior to the Sourcing Date in a timely
manner and in accordance with the terms and conditions thereof; provided that
Genentech's responsibilities during the Technology Transfer are limited to
Genentech's obligations under the Transaction Agreements. Furthermore, Genentech
is not responsible for and does not promise or guarantee to address issues not
directly related to the Technology or the Technology Transfer. In addition,
Genentech shall use Commercially Reasonable Diligent Efforts to cooperate with
and assist Wyeth in its efforts to perform Wyeth's obligations arising under the
Transaction Agreements prior to the Sourcing Date. [*]

            4.3       Target Dates. Each Party shall use its Commercially
Reasonable Diligent Efforts to complete each of the following activities by the
associated target date (each, a "Target Date"):

                        4.3.1      Mechanical Completion. The Target Date to
complete the purchase, construction and installation of all equipment required
in the Facility in order to manufacture the Product and to complete the Facility
modifications (except installation of the HTST Skid), all in accordance with the
Technology Transfer Project Plan ("Mechanical Completion") shall be [*]

                        4.3.2      Development Run Completion. The Target Date
to complete the manufacture at commercial scale of [*] Development Runs in
accordance with both Section 4.6 and the Technology Transfer Project Plan
("Development Run Completion") shall be [*]

                        4.3.3      Initial Qualification Run Completion. The
Target Date to manufacture at commercial scale [*] Completed Qualification [*]
("Initial Qualification Run Completion") shall be [*].

                        4.3.4      Successful Qualification Batch Delivery. The
Target Date for Wyeth to complete the disposition, according to the Quality
Agreement, of [*] Successful Qualification Batches [*] including all appropriate
data, records and reports related thereto, all in accordance with both Section
4.8 and the Technology Transfer Project Plan ("Successful Qualification Batch
Delivery") shall be [*]

                        4.3.5      sBLA Data Delivery. The Target Date for Wyeth
to complete the delivery to Genentech of both (i) all Manufacturing Data and
Manufacturing Documentation generated through completion of all Qualification
Batches needed to satisfy sBLA filing requirements described in the Technology
Transfer Project Plan and Section 4.3.4 and (ii) Wyeth's review of and comment
on all sBLA sections received on or before [*] ("sBLA

 

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Data Delivery

") shall be [*]

                        4.3.6      PAI Readiness. The Target Date to complete
the manufacture at Commercial scale of [*] Successful Qualification Batches [*]
including Wyeth Qualification Batch disposition according to the Quality
Agreement and all appropriate Manufacturing Data and Manufacturing Documentation
related thereto, all in accordance with both Section 4.8 and the Technology
Transfer Project Plan (collectively, "PAI Readiness") shall be [*]

                        4.3.7      sBLA Filing. The Target Date for Genentech to
file the sBLA with the FDA ("sBLA Filing") shall be [*]

                        4.3.8      FDA Approval. The Target Date to obtain FDA
approval of the sBLA, thereby enabling sale of Product manufactured at the
Facility ("FDA Approval") shall be [*]

                        4.3.9      Extension of Target Dates. In the event that
Wyeth is unable to complete any of the foregoing activities required of Wyeth by
the applicable Target Date and such failure is caused by Genentech's failure to
timely perform any obligation required of it under any of the Transaction
Agreements, which failure materially prevents or delays Wyeth from completing
any of the foregoing activities required of Wyeth by the applicable Target
Date(s), such Target Date(s) shall be extended for that number of days by which
Genentech's failure to perform prevented or delayed Wyeth's performance of such
activities.

            4.4       Delivery of Genentech Proprietary Materials. By no later
than the applicable delivery deadlines set forth in the Technology Transfer
Project Plan, Genentech shall deliver to Wyeth, [*] recurring shipments of (i)
[*] and (ii) [*]. Genentech shall provide such Genentech Proprietary Materials
in such quantities as are set forth in the Technology Transfer Project Plan and,
once Commercial Production has commenced, in such quantities as are set forth in
the Manufacturing Documentation, all in accordance with the production plan set
by the JPT. [*]

            4.5       Changes to Technology Transfer Project Plan; Genentech
Changes to the Manufacturing Process. Prior to the Sourcing Date, and subject to
Section 3.1.6 hereof, the TOC shall have the authority to modify or supplement
attachments and exhibits to the Technology Transfer Project Plan as necessary to
ensure implementation of the Manufacturing Process in the Facility in a timely
manner. In addition, prior to the Sourcing Date, subject to Section 8.5,
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 Facility in a timely manner, provided, however, that (i)
Genentech shall not have the right to require Wyeth to modify the Manufacturing
Process in a way that would, in Wyeth's reasonable judgment, violate any
applicable laws or regulations or that would result in the infringement or
practice of any Patent Right owned or Controlled by Wyeth, its Affiliates or any
Third Party, provided that in the case where such a Patent Right would be
infringed or practiced, Wyeth must notify Genentech of the existence of such
Patent Right prior to the implementation of such modification by Wyeth, and (ii)
[*] (i.e., above and beyond the costs of implementing the Manufacturing Process
prior to such modifications) and such modifications shall not be implemented
until the Parties mutually agree upon any revisions, if any, to the Target Dates
specified in Section 4.3 that may be necessary as a result of such
modifications. To the extent Genentech elects to make any modifications to the
Manufacturing Process after the Sourcing Date, such modifications shall be
subject to the provisions of Article 8.

            4.6       Modifications and Improvements to Facility. Except with
respect to changes to the Manufacturing Process that are made by Genentech in
accordance with Section 4.5 or any changes made in accordance with Section 8.1
or required by the FDA in accordance with Section 8.4, which changes shall be
subject to either Section 4.5 or Article 8 as the case requires, [*] Genentech
shall provide Wyeth with the Genentech Equipment specified in the Technology
Transfer Project Plan, and all documentation regarding the design, operation,
calibration, and maintenance thereof. [*]

            4.7       Development Runs.

                        4.7.1      Conduct of Development Runs. During the
Technology Transfer, Wyeth shall use its Commercially Reasonable Diligent
Efforts to conduct Development Runs at such size and in such quantity (subject

 

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to the remaining provisions of this Section 4.7) sufficient to produce [*]
Completed Development Runs as set forth in the Technology Transfer Project Plan
and to achieve Development Run Completion as quickly as possible using as few
Development Run Starts as possible. The Parties agree and acknowledge that the
[*] Development Run Starts initiated by Wyeth may conclude with the fermentation
phase of the Manufacturing Process ("Fermentation Run Starts"), [*] Wyeth shall
manufacture such Development Runs [*]. With respect to each Development Run,
Wyeth shall perform in-process, comparability and release testing and analysis,
as required by and in accordance with the Quality Agreement. Upon completion of
each Development Run, Wyeth shall deliver to Genentech the complete
documentation for such Run as required by the Technology Transfer Project Plan.
Wyeth and Genentech shall collaboratively analyze all appropriate data
pertaining to each Development Run to identify any anomalies or errors in each
Development Batch and identify possible causes and solutions in order to apply
such solutions to the next subsequent Development Run Start.

                        4.7.2      Additional Runs; Termination Rights. If Wyeth
is unable to achieve [*] Completed Development Runs [*] Development Run Starts,
Genentech shall either (i) terminate the Transaction Agreements in accordance
with Section 21.5.1 or (ii) authorize Wyeth to commence up to [*] additional
Development Runs Starts [*] Completed Development Runs. Genentech shall notify
Wyeth, in writing, of its election within ten (10) business days after
Genentech's receipt from Wyeth of an investigation report regarding the root
cause(s) of the Development Run failures. If Genentech fails to notify Wyeth in
such ten (10) business day period, Wyeth shall provide written notice to
Genentech of such failure and Wyeth shall then have the right (at its sole
discretion) to commence [*] additional Development Run Starts; provided, that if
Wyeth does not elect to commence such additional Development Runs and Genentech
has not terminated the Agreement within fifteen (15) days of such notice from
Wyeth, Wyeth shall have the right to terminate the Agreement in accordance with
Section 21.5.2. [*] Development Run Starts [*]. If Wyeth elects to commence
additional Development Run Starts as provided above and still fails to achieve
[*] Completed Development Runs [*] Development Run Starts as applicable based on
Wyeth's election, either Genentech or Wyeth shall have the right to terminate
the Transaction Agreements in accordance with Section 21.5.

                        4.7.3      Shipping. In order to test shipping and
transfer procedures, Wyeth, at Genentech's expense, shall ship [*] of frozen
Product resulting from a Completed Development Run to Genentech using a Vessel
and in accordance with the delivery terms set forth in Section 5.8 hereof to
test shipping logistics and validation. At Genentech's election, Genentech, to
the extent permitted by applicable laws and regulations, may make whatever
further use (other than use in humans) of the material from such Completed
Development Run (including, without limitation, any Product therefrom) by having
Wyeth deliver such Batches to Genentech at Genentech's cost and in accordance
with the delivery terms set forth in Section 5.8 hereof or Genentech can direct
Wyeth, at Genentech's cost, to dispose of the material from such Completed
Development Runs.

            4.8       Qualification Runs.

                        4.8.1      Conduct of Qualification Runs. Genentech
shall use its Commercially Reasonable Diligent Efforts to review and approve the
deliverables specified in Section 4.6 above documenting the [*] Completed
Development Runs and GMP Commissioning activities (including, without
limitation, all required equipment and Facility qualifications and validations
described in Section 12.3) in a manner that will enable Wyeth to adhere to the
timeline of activities set forth in Section 4.3. Once Genentech has reviewed and
approved such deliverables, Wyeth shall use its Commercially Reasonable Diligent
Efforts to perform all required process validation obligations described in
Section 12.3 and to commence the Qualification Runs. Subject to Section 4.8.2
below, Wyeth shall use its Commercially Reasonable Diligent Efforts to
manufacture [*] enable licensure of the Facility for the Product [*]

                        4.8.2      Additional Runs; Termination Rights. If the
ESC in good faith determines, based on the conduct of in-process testing of [*]
Qualification Run Starts and the evaluation of the results of such in-process
tests, that Wyeth is not likely to meet the [*] Qualification Run Starts, Wyeth
shall be authorized to commence up to [*] additional Qualification Run Starts if
and only if those additional Qualification Runs Starts would enable achievement
of [*] Successful Qualification Batches [*]; such additional Qualification Runs
Starts would not be authorized if [*] Successful Qualification Batches [*] would
be mathematically impossible [*] Qualification Run Starts, and in such event,
Genentech shall either (i) terminate the Transaction Agreements in accordance
with Section 21.5.1 or (ii) authorize Wyeth to commence [*] additional
Qualification Runs Starts to achieve [*]

 

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Successful Qualification Batches [*] Genentech shall notify Wyeth, in writing,
of its election within ten (10) business days after receipt of an investigation
report from Wyeth regarding the root cause(s) of the Qualification Run failures.
If Genentech fails to so notify Wyeth during such time period, Wyeth shall be
deemed to have been authorized to commence [*] Qualification Run Starts. If
Wyeth is authorized to conduct the [*] additional Qualification Runs and yet
does not achieve [*] Successful Qualification Batches [*] Qualification Run
Starts, Genentech shall either (i) terminate the Transaction Agreements in
accordance with Section 21.5.1 or (ii) authorize Wyeth to commence [*]
additional Qualification Runs Starts to achieve [*] Successful Qualification
Batches [*]. Genentech shall notify Wyeth, in writing, of its election within
ten (10) business days after receipt of an investigation report from Wyeth
regarding the root cause(s) of the Qualification Run failures. If Genentech
fails to so notify Wyeth during such time period, Wyeth shall be deemed to have
been authorized to commence [*] additional Qualification Run Starts. If
Genentech authorizes or Wyeth is deemed to be authorized to commence additional
Run Starts in accordance with (ii) above, and Wyeth still fails to achieve [*]
Successful Qualification Batches [*] from those additional Qualification Run
Starts, either Genentech or Wyeth shall have the right to terminate the
Transaction Agreements in accordance with Section 21.5. Notwithstanding the
foregoing, if the ESC makes a good faith determination in accordance with
Section 5.1.1 that the initial [*] Qualification Runs [*] but later determine
[*] Qualification Runs, the Bonus Runs shall be deemed to be authorized,
additional Qualification Runs for purposes of this Agreement.

                        4.8.3      Payment and Shipping of Qualification
Batches. Wyeth shall provide all Qualification Batches and all documentation
associated with each Batch to Genentech, at no other costs other than the cost
specified in Sections 4.9, 5.8 and 6.6.2 and in accordance with Genentech's
supply to Wyeth of the Genentech Proprietary Materials as provided in Section
4.4 and the delivery terms set forth in Section 5.8 hereof. Subject to FDA
regulations, Genentech may make whatever further use of such Qualification
Batches in the Territory, including, without limitation, any saleable Product
therefrom, as it shall determine appropriate; provided, however, Genentech shall
not sell or otherwise use in humans any Product from any Qualification Batch
that is not a Successful Qualification Batch, was not manufactured in accordance
with cGMP standards, or is otherwise not useable for such purposes.

            4.9       Materials, Suppliers and Inventory.

                        4.9.1      Raw Materials. A list of Raw Materials is
included in the Technology Transfer Project Plan, which list may be amended from
time to time by Genentech at its reasonable discretion in accordance with the
change control provisions set forth in Article 8. Genentech will provide
detailed "Raw Material Specifications" for each Raw Material on the Raw Material
list during the Technology Transfer, as such Raw Material Specifications may be
amended from time to time by Genentech in its reasonable discretion in
accordance with the change control provisions set forth in Article 8. The Raw
Material Specifications will include specifications for [*] for each Raw
Material. [*]. [*] If Genentech enters into new supply contracts for Raw
Materials used in the manufacture of the Product, then, during the Term,
Genentech shall provide [*] the products and services provided thereunder [*].
Genentech shall provide Wyeth with [*] or if Genentech is not permitted to
provide such [*] to Wyeth, Genentech shall provide Wyeth with a [*]; provided,
further that Genentech shall use its Commercially Reasonable Efforts to secure
the right to provide such [*] to Wyeth. [*] as provided for in the Quality
Agreement; [*] such Raw Materials in the quantities reasonably necessary to
fulfill Wyeth's obligations hereunder (including the maintenance of safety stock
of all Raw Materials). [*] shall only be used for manufacture of the Product and
for no other purpose, unless otherwise agreed in [*].

                        4.9.2      Raw Materials Management and Safety Stock.
Wyeth shall, [*] use its Commercially Reasonable Efforts to [*], maintain and
store such amounts of Raw Materials as reasonably required for the Development
Runs described in Section 4.7, the Qualification Runs described in Section 4.8
and the Commercial Runs described in Article 5, each in accordance with the
applicable Bill of Materials for each such Run. Such Bill of Materials shall be
provided to Wyeth by Genentech. In addition, beginning at a time prior to
Commercial Production to be determined with precision by the TOC, Wyeth shall,
[*], use its Commercially Reasonable Efforts to [*], maintain and store a safety
stock of Raw Materials sufficient to [*] Commercial Production. Wyeth will
secure such Raw Materials and provide such procurement and management services
with no additional mark-up or administrative fees; provided, however, that to
the extent Wyeth is unable to [*] for Development Runs, Qualification Runs or
Commercial Runs (with respect to the Commercial Runs, only to the extent that
Genentech

 

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has excess inventory of such Raw Materials), Genentech shall provide such Raw
Materials and components to Wyeth [*] and provided, further, that if Wyeth
places orders for Raw Materials and components in accordance with the provisions
of this Section 4.9.2 but [*] do not fill such orders, Wyeth shall have no
liability in respect thereof (or for failing to make Run Starts as a result
thereof) and shall be deemed to have satisfied its obligations under this
Section 4.9.2. [*]. In addition, within fifteen (15) days after the end of each
calendar quarter, Wyeth shall submit to Genentech a statement setting forth in
reasonable detail the actual amounts of all Raw Materials actually used by Wyeth
during such calendar quarter. During the thirty (30) day period after Wyeth
submits such statement to Genentech, Wyeth and Genentech together shall review
such statement and make adjustments to such schedule as are mutually agreed to
by Wyeth and Genentech (such agreement not to be unreasonably withheld or
delayed). [*]. For purposes of this Section 4.9, "Standard Bill of Materials
Cost" means the Standard Cost multiplied by the Projected Usage (as those terms
are defined in Section 4.9.5). Within thirty (30) days after the end of each
Calendar Year (or more frequently as the Parties determine is necessary), Wyeth
and Genentech shall mutually agree on a revised Standard Bill of Materials Cost
(such agreement not to be unreasonably withheld or delayed) based on changes to
either the Standard Cost, Bill of Materials or Projected Usage during such
Calendar Year.

                        4.9.3      Raw Materials Testing. Wyeth shall use its
Commercially Reasonable Efforts to perform testing and evaluation of the Raw
Materials as required by the applicable Raw Material Specifications or Product
Specifications and cGMP, and otherwise in accordance with the Technology
Transfer Project Plan, the Quality Agreement and standard operating procedures
to be agreed upon in writing by the Parties.

                        4.9.4      Inventory Management. Wyeth shall use its
Commercially Reasonable Efforts to create and maintain a database for reporting
of inventory information and demand forecasts for all Raw Materials (including
Specialized Raw Materials) and Genentech Proprietary Materials. Wyeth shall
provide Genentech's Materials Planning Department with detailed reports from
this database [*] to enable Genentech to monitor Raw Materials and Genentech
Proprietary Materials usage by Wyeth and plan for future requirements.

                        4.9.5      Standard Cost; Projected Usage. The standard
cost for all Raw Materials [*] and Genentech's standard cost for all Genentech
Proprietary Materials [*] (collectively, the "Standard Cost") shall be
established [*]. The quantities of Raw Materials and Genentech Proprietary
Materials required for each Run (including appropriate amounts of wastage) (the
"Projected Usage") that will be used to establish the initial Budgeted Cost (as
defined below) have been provided to Wyeth by Genentech prior to the Effective
Date; provided, that the TOC shall have the right to evaluate and approve
modifications to the amount(s) of wastage included in the Projected Usage based
on Genentech's actual wastage of such materials in its conduct of the [*]

                        4.9.6      Excessive Use. [*]

                                  (a)      [*]

                                  (b)       [*]

                        4.9.7      Additional Materials. For the avoidance of
doubt but subject to Article 8, during the Term, [*]

            4.10       Regulatory Matters. Genentech shall use its Commercially
Reasonable Diligent Efforts to prepare, file, prosecute and maintain the sBLA.
Wyeth shall use its Commercially Reasonable Diligent Efforts to timely provide
reasonable assistance to Genentech for Genentech to obtain and maintain all
Regulatory Approvals that are required for Wyeth to manufacture Product at the
Facility and that are required for Genentech to market and sell Finished Product
containing such Product in the Territory, including, without limitation, (i)
Genentech's preparation, filing and maintenance of the sBLA, (ii) reasonably
assisting with the preparation and review of the draft chemistry, manufacturing
and controls sections of the sBLA, (iii) reasonably assisting Genentech in
responding to requests and inquiries from the FDA prior to, during and after
regulatory review periods, (iv) providing all data, records and reports
reasonably requested by Genentech relevant to such FDA review periods, and (v)
attending meetings with the FDA to the extent Genentech reasonably requests for
Wyeth to participate given its unique knowledge or its status as manufacturer of
Product under this Agreement. Wyeth personnel shall also prepare necessary
materials related to the Facility in support of, and represent the Facility at,
Genentech's preliminary meetings with the FDA to

 

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obtain information from the FDA as to the acceptability of the proposed approach
for manufacturing Product at the Facility, Product validation (comparability)
and licensure of the Facility. In addition, as of the date of PAI Readiness,
Wyeth personnel shall have (i) prepared all materials related to the Facility
necessary to support the PAI, (ii) trained all necessary personnel to perform
their required responsibilities during the PAI and (iii) readied the Facility
for the PAI. Wyeth shall lead the PAI of the Facility with Genentech's
assistance and participation. [*] In addition, Genentech shall use its
Commercially Reasonable Diligent Efforts to proactively respond to inquiries
from all Regulatory Agencies other than the FDA to persuade such other
Regulatory Agencies of the redundancy of additional inspections other than the
PAI and cGMP inspections conducted by the FDA.

            4.11       Manufacturing Documentation. Genentech shall, by the
relevant date that is set forth in the Technology Transfer Project Plan, as such
date may be modified by the TOC, provide to Wyeth the Manufacturing
Documentation described in the Technology Transfer Project Plan. Thereafter,
from time to time and in accordance with the schedule set forth in the
Technology Transfer Project Plan, Genentech shall provide to Wyeth such
additional Manufacturing Documentation as Wyeth shall reasonably require in
order to implement the Technology Transfer Project Plan and the Manufacturing
Process and otherwise perform its obligations under this Agreement. [*] In
accordance with the terms of the Technology Transfer Project Plan, Genentech and
Wyeth shall agree on a reasonable process, systems, and tools for managing
hardcopy documents, data, and other information during Technology Transfer and
Commercial Production. Genentech and Wyeth shall mutually agree on reasonable
written security procedures for safeguarding all Confidential Information.

ARTICLE  5.
COMMERCIAL PRODUCTION AND SUPPLY; DELIVERIES

            5.1       Commercial Production Ramp-Up. Except as set forth in this
Section 5.1, Wyeth shall not conduct any Commercial Production prior to the
Sourcing Date. [*]

                        5.1.1      Bonus Pre-Commercial Run Starts. If the ESC
in good faith determines, based on the conduct of in-process testing of [*] and
the evaluation of the results of such in-process tests, [*] Wyeth shall be
authorized to start and to manufacture [*] Commercial Runs (the "Bonus Runs")
[*]. Once such Bonus Runs are complete, Wyeth and the Facility shall be subject
to the terms of Section 5.1.2 below.

                        5.1.2      [*]

                        5.1.3      Partial Commercial Production. Wyeth shall
use its Commercially Reasonable Diligent Efforts to commence Run Starts [*]

                        5.1.4      Full Commercial Production. Wyeth shall use
its Commercially Reasonable Diligent Efforts to ramp up the commercial run rate
of the Facility from [*]. For the avoidance of doubt, Wyeth shall ramp up the
run rate in its sole discretion and use Commercially Reasonable Diligent Efforts
to have the Facility running at full Commercial Production by the Sourcing Date.

                        5.1.5      Production Issues. After Commercial
Production has commenced, any change to the Manufacturing Process shall be made
as set forth in Article 8 hereof and the Quality Agreement. Issues relating to
the quality of Product shall be resolved in accordance with the Quality
Agreement.

            5.2       Commercial Production. Following the Sourcing Date, Wyeth
shall dedicate the [*] of the Facility exclusively to Commercial Production in
accordance with the terms and conditions of this Agreement. [*] Notwithstanding
the foregoing, Wyeth shall have no obligation to make any Run Starts after the
expiration or earlier termination of this Agreement.

            5.3       Efforts, Targets and Requirements For Commercial
Production.

                        5.3.1      Commercially Reasonable Efforts. Wyeth shall
use its Commercially Reasonable Efforts to conduct Commercial Production as
specified in this Agreement. Without limiting the foregoing, commencing on the
Sourcing Date, Wyeth shall use its Commercially Reasonable Efforts to [*] and to
make Successful Batches and

 

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deliver such Batches. If Wyeth fails to achieve a Success Rate in any full
Calendar Year after the Sourcing Date equal to or greater than [*], the Parties
shall initiate a review led by the Project Team Leaders to identify and resolve
the manufacturing issues, if any, that may be impacting the success of the
Manufacturing Process. If the Project Team Leaders determine that any such
manufacturing issues exist, the Parties, through the Operational Issue
resolution process provided for in Section 3.2, will collaborate to address and
resolve such issues under the direction of the ESC. During such resolution
process, Genentech will have the right to deploy a reasonable number of
additional Genentech personnel at the Facility as mutually agreed to by the
Parties, such agreement not to be unreasonably withheld or delayed, to ensure an
increased level of coordination and oversight of the resolution of such
manufacturing issues. [*].

                        5.3.2      Commercial Production Requirements. Within a
reasonable period of time prior to the start of Commercial Production, Genentech
may propose a checklist of requirements to be fulfilled and maintained by Wyeth
using its Commercially Reasonable Efforts during the remainder of the Term,
subject to and in accordance with Wyeth's rights and obligations under this
Agreement. Such checklist and the substance of such requirements and any
modifications thereto shall be subject to review and approval by the JPT, and
such checklist may include, without limitation, that Wyeth use its Commercially
Reasonable Efforts to ensure: (i) that the Facility is compliant with all
federal, state and local regulations in effect in the United States; (ii) that,
subject to the provisions of this Agreement, the Facility is outfitted with all
tools, equipment and utility services necessary to perform Commercial
Production; (iii) that, subject to the provisions of this Agreement, the
Facility has been properly maintained and that any maintenance that is required
to be performed on equipment and tools within the Facility has been performed
prior to Commercial Production; (iv) that the Facility is reasonably staffed
with supervisors, engineers, technicians, inspectors, and other personnel
reasonably necessary, and with reasonable and sufficient technical expertise, to
perform Commercial Production in accordance with the terms of this Agreement,
including any quality testing of Product produced; (v) that the Facility is
protected from contamination; and (vi) that, subject to the provisions of this
Agreement, Wyeth has adequate stock of Raw Materials on hand to perform
Commercial Production in accordance with the terms of this Agreement. To the
extent reasonably practical, such checklist shall be consistent with Wyeth's
standard operating procedures.

            5.4       Annual Maximum Purchase Commitment. [*].

            5.5       Management of Production Plans.

                        5.5.1      Production Plans. 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 or
approximate dates on which Runs will start and be performed; (ii) dates or
approximate dates for Wyeth's and Genentech's release of Product; (iii) size or
approximate size of Batches; (iv) dates or approximate dates for delivery of
Batches; (v) destination for shipment of Batches; and (vi) status of Batches
undergoing investigation. All of the foregoing estimates and information shall
be compiled into a "Production Plan" that shall be distributed to the entire JPT
promptly after each such meeting and updated accordingly in subsequent meetings.

                        5.5.2      Delivery. Genentech and Wyeth will work
together in good faith to determine delivery dates and a shipping schedule for
deliveries of Product under this Agreement, and shall establish a written
"Delivery Schedule" as a part of the Production Plan.

            5.6       Acceptance of Product. In accordance with the Quality
Agreement and applicable standard operating procedures approved by both Parties,
Wyeth shall deliver to Genentech samples of all Batches manufactured under this
Agreement and the related Batch Records and other Manufacturing Data for each
Batch. Upon receipt of such samples and documentation, Genentech shall use its
Commercially Reasonable Efforts to perform testing and review of Manufacturing
Data and samples (as appropriate) for each Batch [*]. Genentech shall use its
Commercially Reasonable Efforts to initiate and conduct any Genentech quality
investigation associated with such Batch in accordance with Genentech's
applicable standard operating procedures as quickly as reasonably possible;
provided that Genentech shall not be subject to any time limit for completing
any such quality investigation. Subject to Genentech's right to reject a Batch
as provided under Article 9 hereof, a Batch shall be deemed to have been
accepted by Genentech (the "Acceptance") on the earlier of either (i) the date
on which Wyeth receives written

 

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notice from Genentech that such Batch has been released by Genentech pursuant to
applicable release testing standard operating protocols established pursuant to
the Quality Agreement ("Release") or (ii) [*] days after Genentech's receipt of
samples of such Batch together with the related Batch Record and other Batch
documentation (the date determined in accordance with clause (i) or (ii), as the
case may be, is referred to herein as the "Acceptance Date"). If any quality
investigation remains open [*] after Genentech's receipt of samples of such
Batch together with the related Batch Record and other Batch documentation, the
Batch will be deemed to have been accepted on the Acceptance Date as set forth
above, but such Batch will not be considered to be released unless Genentech's
quality organization has notified Wyeth that it has released such Batch.

            5.7       Vessels. In accordance with the Production Plan developed
pursuant to Section 5.5.1, Genentech, [*], shall procure and provide, in a
timely manner, to Wyeth sufficient quantities of Vessels for shipment of Product
by Genentech from Wyeth's Facility to Genentech's designated facility. Wyeth
shall maintain such Vessels pursuant to the terms of the Quality Agreement.
Title to such Vessels shall be retained by Genentech. Such Vessels shall be
deemed to be "Portable Equipment" and shall be subject to Section 15.2 hereof.
All Vessels supplied by Genentech shall be cleaned and shall have the proper
fittings configured for use in the Facility prior to delivery thereof to Wyeth,
and Wyeth shall be responsible for re-cleaning and sterilizing each Vessel prior
to use in accordance with the Manufacturing Documentation and Wyeth's standard
operating procedures. Genentech shall use its Commercially Reasonable Efforts to
deliver Vessels to Wyeth on a delivery schedule established by the JPT and in
accordance with the Production Plan (which plan shall require Genentech to
deliver Vessels [*] prior to the date(s) set forth therein for commencing
purification for any Batch); provided, however, that Wyeth shall notify
Genentech [*] prior to commencing purification for any Batch if it has an
insufficient number of Vessels for such Batch and, subject to Wyeth's providing
such notice, Genentech shall be solely responsible for ensuring that a
sufficient number of Vessels delivered as set forth above are delivered to Wyeth
prior to the final purification step for any Batch to ensure their availability
for the storage of Product upon completion of the final purification step for
such Batch. Subject to Wyeth's providing notice as set forth in the proviso in
the preceding sentence, in the event that Genentech fails to timely deliver a
sufficient number of Vessels to Wyeth for the storage of Product upon completion
of the final purification step for a Batch, such Batch shall be deemed to be a
Successful Batch and to have been accepted by Genentech for purposes of Section
5.6 and Article 6 hereof as of the date Wyeth completes the final purification
step despite the fact that such Batch is not filled into a Vessel. Additionally,
Genentech shall reimburse Wyeth for all costs incurred by Wyeth in destroying
any Product that cannot be stored due to Genentech's failure to deliver a
sufficient number of Vessels to Wyeth in a timely manner; provided, however,
that if Wyeth does not notify Genentech [*] to commencing purification of a
Batch that it has an insufficient number of Vessels, such Batch shall not be
deemed a Successful Batch if it is destroyed or is otherwise unsaleable as a
result of improper storage, and Genentech shall have no obligation to reimburse
Wyeth for any costs incurred in destroying any Product resulting from such Batch
that Wyeth cannot store.

            5.8       Delivery Terms. Genentech shall undertake and arrange for
shipment of Product [*] after the date of Release or, for Product that has not
been Released, [*] after the Acceptance Date for such Product. Wyeth shall
provide storage for such Product [*] during the period prior to shipment as set
forth above. In the event Genentech's carrier fails to accept delivery of
Product [*], as applicable, Wyeth shall have the right, at its sole discretion,
to either destroy the Product upon fourteen (14) days prior notice to Genentech
or store such Product to the extent adequate storage space is available in the
Warehouse; provided, however, that Genentech shall reimburse Wyeth for the
fully-absorbed cost of storing or destroying such Product [*]. On the
agreed-upon shipment date, Wyeth shall deliver Product in a Vessel, suitably
packed in agreed-upon shipping containers, [*] at the Facility loading dock for
pick-up by Genentech's designated carrier (the "Designated Carrier"), [*] Prior
to the delivery of any Product to the Designated Carrier, Genentech shall obtain
all appropriate approvals and consents of any governmental authority necessary
for the transportation or shipment of such Product. Wyeth shall comply with all
applicable laws and regulations regarding the packaging of Product for shipment
[*] Product resulting from Development Runs and Qualification Runs (see Sections
4.6 and 4.8 hereof) shall also be subject to the delivery terms set forth in
this Section 5.8. [*]

            5.9       Storing and Packaging. Subject to Sections 5.7 and 5.8,
Wyeth shall store and package the Product, [*], according to the Product
Specifications and the Quality Agreement. With respect to each Batch, Wyeth
shall not ship any Product to Genentech prior to the Acceptance Date for such
Batch unless so directed in writing by Genentech.

 

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ARTICLE  6.
FINANCIAL TERMS

            6.1       Signing Bonus. As consideration for the execution of this
Agreement, Genentech shall pay Wyeth a one-time signing bonus of [*]

            6.2       Technology Transfer Assistance Fee. Genentech shall pay to
Wyeth [*]

            6.3       Equipment Transfer. Genentech shall purchase and deliver
to the Facility the Centrifuge, along with all manuals and documentation
pertaining thereto, [*] Wyeth shall install, [*] and use the Centrifuge in the
manufacture of the Product during the Term. [*]

            6.4       Milestones; Milestone Payments. For each milestone set
forth in this Section 6.3 (each, a "Milestone") that Wyeth achieves by the
respective Target Date described in Section 4.3, Genentech shall pay Wyeth the
associated payment (each, a "Milestone Payment"). [*].

                        6.4.1      Completion of Milestone A: Mechanical
Completion. Upon achievement of Mechanical Completion (see Section 4.3.1 for the
applicable Target Date), Genentech shall be obligated to pay to Wyeth a
Milestone Payment of [*]

                        6.4.2      Completion of Milestone B: Development Run
Completion. Upon achievement of Development Run Completion (see Section 4.3.2
for the applicable Target Date), Genentech shall be obligated to pay to Wyeth a
Milestone Payment of [*]

                        6.4.3      Completion of Milestone C: PAI Readiness.
Upon achievement of PAI Readiness (see Section 4.3.6 for the applicable Target
Date), Genentech shall be obligated to pay to Wyeth a Milestone Payment of [*]

            6.5       Completion of Successful Pre-Approval Inspection. On the
date that Wyeth receives notice from the FDA or Genentech that the Facility
successfully passed the PAI with no further follow-up items that will impact FDA
Approval or re-inspection(s) required, [*]

            6.6       Conversion Fees; Invoicing.

                        6.6.1      Development Run Starts. For each Development
Run Start (up to a maximum of [*] Development Run Starts), Genentech shall pay
Wyeth a Conversion Fee equal to [*] Wyeth shall invoice Genentech for the
Conversion Fee of each Development Run Start following the Run Start for that
Development Run. [*]

                        6.6.2     Qualification Run Starts. For each of the
first [*] Genentech shall be obligated to pay Wyeth a Conversion Fee equal to
[*]

            6.7       Commercial Batches.

                        6.7.1      Start Fees. For each Commercial Run Start
commenced by Wyeth during the Term [*] Commercial Run Starts per Calendar Year),
including Run Starts for Bonus Runs commenced pursuant to Section 5.1.1,
Genentech shall pay Wyeth [*]

Calendar Year

Applicable Start Fee per Commercial Run Start

2005 + 2006

[*]

2007

[*]

2008

[*]

2009

[*]

[*]

 

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                        6.7.2      Success Fees. Except as otherwise expressly
set forth in this Agreement, for each Successful Commercial Batch [*]

            6.8       Invoicing Genentech for Batches and Start Fees.

                        6.8.1      Batches.

                                  (a)      Wyeth may invoice Genentech for the
Conversion Fee for each Development Run (as per Sections 4.7 and 6.6.1) on or
after the Run Start for each Development Run.

                                  (b)      Wyeth may invoice Genentech for the
Conversion Fee for each Qualification Run (as per Sections 4.8 and 6.6.2) on or
after the Run Start for each Qualification Run.

                                  (c)      Wyeth may invoice Genentech for the
balance of the Conversion Fee due for each Commercial Batch (up to the Annual
Maximum Purchase Commitment in each Calendar Year and subject to Sections 5.1,
5.3 and 5.4) on or after the Acceptance Date of such Commercial Batch. Each such
invoice shall reference the Batch Number, Batch Record, the Acceptance Date, the
Start Fee, the Success Fee and the total Conversion Fee for such Batch. With
respect to those Batches for which Wyeth has previously invoiced a Start Fee,
Wyeth shall only invoice Genentech for the Success Fee (the Conversion Fee less
the Start Fee) and indicate previous invoicing and the status of payment of the
Start Fee on the invoice.

                        6.8.2      Start Fees. For amounts owed under Sections
6.7, Wyeth may submit invoices to Genentech on or after the date of each Run
Start. Such invoices shall reference the Batch Number, the total Conversion Fee
for the Batch and the Start Fee for the Run Start.

            6.9       Payment Method. All amounts owed under invoices (except as
set forth below) shall be due and payable in United States currency within [*]
days after the invoice date for all invoices for Success Fee payments or (ii)
[*] days after the invoice date for all other payments, [*] In the event that a
Party believes, in good faith, that any portion of an invoice issued hereunder
by the other Party is incorrect or otherwise inaccurate, the Party questioning
such invoice shall, no later than the applicable due date for payment of that
invoice (i) issue a written notice to the other Party describing in reasonable
detail the nature of the dispute and (ii) pay any undisputed portion of such
invoice. Upon receipt of such notice, the Parties shall use their respective
Commercially Reasonable Efforts to resolve such dispute within fifteen (15) days
after such notice; provided, that if the Parties are unable to resolve such
dispute, it shall be handled in accordance with Article 23. All payments due
hereunder shall be made by wire transfer from a bank in the United States in
immediately available funds to a bank in the United States designated in writing
by the Party to receive payment. All payment amounts set forth herein are in
United States dollars and all payments hereunder shall be made in United States
dollars. [*]

6.10 Audit.

                                  (a)       For at least three (3) years after
final payment under this Agreement, Wyeth shall maintain complete and accurate
books, records, documents, and other evidence of Raw Materials usage, the Run
Starts and Commercial Production of Product made pursuant to this Agreement (for
purposes of this Section 6.10, hereinafter collectively called "Wyeth Production
Records"). Prior to the end of such three (3) year period, Genentech, acting
through its independent public accountants of recognized national standing
selected by Genentech and reasonably acceptable to Wyeth, shall have a right at
its own expense to examine and audit such Wyeth Production Records at those
Wyeth facilities where such Wyeth Production Records are kept once per Calendar
Year, upon at least thirty (30) days' prior written notice. Wyeth may require
any such accountant to sign a non-disclosure agreement prior to the audit.

                                  (b)      For at least three (3) years after
final payment under this Agreement, Wyeth shall maintain complete and accurate
books, records, documents, and other evidence of costs, expenses and allowances
for which Wyeth may be entitled to payment or reimbursement under Section 4.5,
Section 4.9 or Article 8 (for purposes of this Section 6.10, hereinafter
collectively called "Wyeth Financial Records"). Prior to the end of such three
(3) year period, Genentech, acting through its independent public accountants of
recognized national standing selected by Genentech and reasonably acceptable to
Wyeth, shall have a right at its own expense to examine and

 

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audit such Wyeth Financial Records at those Wyeth facilities where such Wyeth
Financial Records are kept once per Calendar Year, upon at least thirty (30)
days' prior written notice. Wyeth may require any such accountant to sign a
non-disclosure agreement prior to the audit.

                                  (c)      For at least three (3) years after
final payment under this Agreement, Genentech shall maintain complete and
accurate books, records, documents, and other evidence of costs, expenses and
allowances for which Genentech may be entitled to payment or reimbursement under
Section 4.9 or Article 9 or Article 11 (for purposes of this Section 6.10,
hereinafter collectively called "Genentech Financial Records"). Prior to the end
of such three (3) year period, Wyeth, acting through its independent public
accountants of recognized national standing selected by Wyeth and reasonably
acceptable to Genentech, shall have a right at its own expense to examine and
audit such Genentech Financial Records at those Genentech facilities where such
Genentech Financial Records are kept once per Calendar Year, upon at least
thirty (30) days' prior written notice. Genentech may require any such
accountant to sign a non-disclosure agreement prior to the audit

ARTICLE  7.
MANUFACTURER WARRANTIES

            7.1       Product Warranties by Wyeth. With respect to each Batch
from a Qualification Run or Commercial Run that is shipped to Genentech, Wyeth
hereby warrants to Genentech that, as of the earlier of (a) the time of delivery
of such Batch to Genentech's Designated Carrier or (b) sixty (60) days after the
Acceptance Date related thereto (in either case, the "Warranty Date"), such
Batch:

                        7.1.1      conforms to the Product Specifications
existing as of the time of the inoculation of the [*] bioreactor for such Batch
(or such earlier time as may be appropriate in the event that there are any
modifications to those portions of the Manufacturing Process occurring prior to
the inoculation of the [*] bioreactor or which require changes to the materials
used (or specifications therefor) prior to the inoculation [*] bioreactor);

                        7.1.2      was manufactured in compliance with the
requirements of cGMP;

                        7.1.3      was manufactured in compliance with the
requirements of all applicable material federal, state and local laws,
ordinances and governmental rules and regulations of the United States;

                        7.1.4      was manufactured in compliance with Wyeth's
applicable standard operating procedures;

                        7.1.5      was manufactured in compliance with the
Quality Agreement; and

                        7.1.6      is being transferred free and clear of any
liens or encumbrances of any kind to the extent arising through or as a result
of the acts or omissions of Wyeth, its Affiliates or their respective agents.

ARTICLE  8.
SPECIFICATION AND MANUFACTURING PROCESS CHANGES

            8.1       Genentech Requested Changes to Product Specification and
Manufacturing Process. Except as otherwise expressly set forth to the contrary
in the Quality Agreement or Section 4.5 of this Agreement, in the event that
Genentech is required, or desires, to change the Product Specifications, testing
methods or the Manufacturing Process after the Sourcing Date, Wyeth shall use
its Commercially Reasonable Efforts to accommodate such request to the extent
doing so would not have a direct and material adverse impact on any other
product manufactured or to be manufactured by Wyeth at its Andover,
Massachusetts facility, provided that the foregoing is subject to the provisions
of Section 8.5. Genentech shall be responsible for all costs incurred by either
Party or its Affiliates in connection with making any such changes and shall
reimburse Wyeth for all such costs (on a fully-absorbed basis) [*] after Wyeth
submits an invoice to Genentech for such costs.

            8.2       Wyeth Requested Changes to Product Specification and
Manufacturing Process Changes. Notwithstanding anything to the contrary in this
Agreement and/or the Quality Agreement, Wyeth shall not change the Product
Specifications, testing methods or the Manufacturing Process except with
Genentech's prior written consent, which consent shall not be unreasonably
withheld or delayed, provided that the foregoing is subject to the

 

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provisions of Section 8.5. Any Wyeth-requested changes that are approved by
Genentech shall be in accordance with the Quality Agreement and standard
operating procedures (i.e., change control procedures) agreed upon in writing by
Genentech and Wyeth from time to time. Genentech shall retain the right and
responsibility for final approval of any changes to the Manufacturing Process,
testing methods, facilities, and equipment used to manufacture the Product or
the specifications for the Product. Wyeth shall be responsible for all costs
incurred by Wyeth in implementing a change requested by Wyeth in accordance with
this Section 8.2.

            8.3       Wyeth Requested Changes to Shared Facilities. For
facilities, warehouses, utilities, and equipment that Wyeth utilizes for both
the Product and other products, Wyeth shall inform Genentech of any revisions or
changes to these facilities, warehouses, utilities, or equipment that may impact
the Product, and, in such event, Wyeth shall not make any revisions or changes
to these facilities, warehouses, utilities, or equipment without prior written
approval of Genentech, such approval not to be unreasonably withheld or delayed,
provided that the foregoing is subject to the provisions of Section 8.5. Any
such revisions or changes, once approved, shall be implemented by Wyeth in
accordance with the Quality Agreement and standard operating procedures (i.e.,
change control procedures) agreed upon in writing by Genentech and Wyeth from
time to time. Wyeth shall be responsible for all costs incurred by Wyeth in
implementing a revision or change to these facilities, warehouses, utilities, or
equipment requested by Wyeth. In the event that Wyeth desires to revise or
change any facilities, warehouses, utilities, or equipment at Wyeth's Andover,
Massachusetts facility and such revision or change could reasonably be expected
to impact the manufacture, storage, testing or shipment of Product by Wyeth at
the Facility, Wyeth shall provide advance written notice to Genentech of any
such revisions or changes sufficiently in advance of the implementation of such
revisions or changes so as to enable (i) Genentech to review and provide
comments on such revisions or changes and (ii) the Parties to make any necessary
adjustments to the manufacture, storage, testing or shipment of Product by Wyeth
at the Facility.

            8.4       FDA Requested Changes.

                        8.4.1      Facility Related. If the FDA requests or
requires that a change be made in the Facility or the utilities or equipment
used to manufacture the Product or if changes to the Facility or the utilities
or equipment used to manufacture the Product are required in order to comply
with applicable laws or regulations (including, without limitation, cGMP), in
each of the foregoing cases, which changes are not Product specific (i.e., the
changes must be made regardless of the product being manufactured in the
Facility), Wyeth, subject to Section 8.5, shall use its Commercially Reasonable
Efforts to make such changes in accordance with the Quality Agreement and
standard operating procedures (i.e., change control procedures) agreed upon in
writing by Genentech and Wyeth from time to time. Such changes shall be subject
to Genentech's approval, which approval shall not be unreasonably withheld or
delayed. Wyeth shall be responsible for all costs incurred by Wyeth in
connection with making any such change(s).

                        8.4.2      Process or Product Related. If the FDA
requests or requires that a change be made in the Manufacturing Process, the
Product Specifications or the Facility, utilities or equipment used to
manufacture the Product (solely to the extent such facility, utility or
equipment change is Product specific), or if changes to the Manufacturing
Process, Product Specifications or the Facility, utilities or equipment used to
manufacture the Product (solely to the extent such facility, utility or
equipment change is Product specific) are required in order to comply with
applicable laws or regulations, Wyeth, subject to Section 8.5, shall use its
Commercially Reasonable Efforts to make such changes in accordance with the
Quality Agreement and standard operating procedures (i.e., change control
procedures) agreed upon in writing by Genentech and Wyeth from time to time.
Such changes shall be subject to Genentech's approval, which approval shall not
be unreasonably withheld or delayed. Genentech shall be responsible for all
costs incurred by either Party or its Affiliates in connection with making any
such changes and shall reimburse Wyeth for all such costs (on a fully-absorbed
basis) [*] after Wyeth submits an invoice to Genentech for such costs.

            8.5       Process for Making Requested Changes.

                        8.5.1      Notice and Review. With respect to any change
requested in accordance with Sections 8.1, 8.2, 8.3 or 8.4, the Party requesting
the change (or the Party that receives a request from the FDA to make a change)
shall promptly advise the other Party, in writing, of any such requested
change(s), and provide all information reasonably necessary to the other Party
to evaluate the effect of and possible means for implementing such requested

 

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change(s). The TOC (drawing on any necessary assistance it requires from the JPT
or any JPSTs) shall promptly advise the ESC as to (i) the most efficient and
least impactful manner to accomplish such requested change (making full use of
any scheduled shutdowns of the Facility to the extent possible) and (ii) any
revisions to the Technology Transfer and/or Commercial Production schedules that
may result from such change(s). The notification and approval procedure shall be
in accordance with the change control procedures established pursuant to the
Quality Agreement and standard operating procedures agreed upon by the Parties
from time to time. Following completion of the evaluation procedure established
pursuant to the Quality Agreement, the Parties shall hold a JPT meeting in a
timely manner with appropriate advisors invited to discuss implementing such
changes as appropriate.

                        8.5.2      Excessive Downtime. If the TOC, in evaluating
a requested change, determines that (i) the time to implement such change would
require [*] of Facility downtime (if the requested change would be made prior to
Commercial Production) or (ii) the time to implement such change would require
[*] of Facility downtime (if the requested change would be made during
Commercial Production), the Party requesting such change shall have the right to
either (a) withdraw the request, (b) resubmit a modified version of the
requested change to the TOC for reevaluation or (c) confirm that such requested
change is necessary and submit such requested change to the non-requesting Party
for consideration. Notwithstanding any provision to the contrary, if the
non-requesting Party is presented with a requested change in accordance with (c)
above, the non-requesting Party shall, within ten (10) business days after
receipt of the request, either agree to such requested change or provide notice
of termination of this Agreement in accordance with Section 21.7. In the event
that the requested change originated with the FDA, the terms of this Section
8.5.2 shall still apply, but in such event, either Party shall have the right to
terminate this Agreement in accordance with Section 21.7.

                        8.5.3      Adjustments to Agreements. Prior to
implementation of any Genentech or FDA requested change(s) to the Product
Specifications, Manufacturing Process, the Facility, or equipment or utilities
used to manufacture the Product, the Parties agree to negotiate in good faith in
an attempt to reach agreement on (i) any increases in the Conversion Fee for any
Product manufactured under this Agreement by Wyeth that directly result from
such material change, giving due consideration to the effect of such material
change on Wyeth's direct manufacturing costs for Product, and (ii) any other
amendments to this Agreement or any of the other Transaction Agreements which
may be necessitated by such material changes.

                        8.5.4      Costs. Prior to implementation of any
Genentech or FDA requested change(s), Wyeth will provide Genentech with an
estimate of the reasonable and necessary expenses that would be incurred by
Wyeth as a result of the implementation of any such change(s) to the Product
Specifications, Manufacturing Process, the Facility, or equipment or utilities
used to manufacture the Product, including, without limitation, its validation
and analytical development costs, and capital expenditure costs. If such
change(s) are implemented, Genentech will reimburse Wyeth for the reasonable and
necessary expenses as agreed upon in advance and incurred by Wyeth as a result
of any such change(s) to the Product Specifications, Manufacturing Process, the
Facility, or equipment or utilities used to manufacture the Product, including,
without limitation, reimbursing Wyeth for its additional validation and
analytical development costs and capital expenditure costs with no additional
mark-up or administrative fees.

                        8.5.5      Implementation. Wyeth shall promptly make
those changes described in this Section 8.5; provided, that Wyeth shall have no
obligation to make any such change where doing so would, in Wyeth's reasonable
judgment, violate any applicable laws or regulations or that would result in the
infringement or practice of any Patent Right owned or Controlled by Wyeth, its
Affiliates or any Third Party, provided that in the case where such a Patent
Right would be infringed or practiced Wyeth must notify Genentech of the
existence of such Patent Right prior to the implementation of such modification
by Wyeth. Wyeth shall cooperate with Genentech in good faith to implement all
agreed upon changes to the Product Specifications or Manufacturing Process in
accordance with the agreed upon schedule. During the pendency of Wyeth
implementing any such changes to the Manufacturing Process, Product
Specifications, the Facility, or equipment or utilities used to manufacture the
Product, Wyeth, to the extent possible in light of the changes being made,
shall, at Genentech's written request, produce and Genentech shall purchase
Product in accordance with the terms of this Agreement and the Manufacturing
Process, Product Specifications, the Facility, or equipment or utilities used to
manufacture the Product in effect immediately prior to the implementation of
such change, and Genentech shall pay such invoice in accordance with Section
6.9.

 

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                        8.5.6      Raw Materials. If any such changes to the
Product Specifications, Manufacturing Process, the Facility, or equipment or
utilities used to manufacture the Product, renders obsolete or unusable any Raw
Materials, components or supplies used to manufacture the Product, and to the
extent such materials may not be returned to the appropriate vendor for a
credit, Wyeth shall either destroy or deliver to Genentech, at Genentech's sole
option and expense, that amount of inventory of such Raw Materials (for which
Genentech has reimbursed Wyeth or remains obligated to reimburse Wyeth),
components or supplies, as the case may be, so rendered obsolete or unusable,
not to exceed the amount of such Raw Materials, components or supplies which
would have been reasonably required for Wyeth to maintain in inventory
(including, without limitation, any safety stock) in order to meet its
obligations to manufacture and supply Product under this Agreement. Wyeth shall
invoice Genentech for Wyeth's cost of all such Raw Materials rendered obsolete
or unusable upon destruction or delivery of such Raw Materials and Genentech
shall pay such invoice in accordance with Section 6.9.

            8.6       Vendor or Supplier Changes. Notwithstanding anything to
the contrary in this Agreement and/or the Quality Agreement, Wyeth shall not
change any vendor or supplier of Raw Materials or analytical reagents used in
the manufacture or testing of Product except with Genentech's prior written
consent, which consent shall not be unreasonably withheld or delayed.

ARTICLE  9.
NON-CONFORMING PRODUCT

            9.1       Notice of Non-Conformance.

                        9.1.1      In the event that Genentech, in good faith,
reasonably determines through review of Batch Records and other Manufacturing
Data provided by Wyeth and/or testing of the Product by Genentech that a Batch
from a Qualification Run or Commercial Run is Non-Conforming Product, Genentech
may reject such Batch on the grounds that such Product is Non-Conforming Product
by giving written notice thereof to Wyeth [*] after samples of such Product are
delivered to Genentech for testing in accordance with Section 5.6.

                        9.1.2      In the event that, after the Acceptance Date,
Genentech determines, in good faith, that any Batch from a Qualification Run or
Commercial Run is determined to have been Non-Conforming Product as of the
Warranty Date, and the cause of such non-conformance as of the Warranty Date is
not a Pre-existing Defect, Genentech may reject such Batch by giving prompt
notice thereof to Wyeth, [*] after the Warranty Date for such Batch.

                        9.1.3      In the case of any rejection under Section
9.1.1 or 9.1.2 above, the notice of rejection shall state with particularity all
of the reasons for such rejection and specify the manner in which such Product
is alleged to be Non-Conforming Product and shall be accompanied by any test
results or reports evidencing such non-conformity. Alternatively, rather than
initially issuing a notice of rejection under Section 9.1.1 above, Genentech may
give written notice to Wyeth within the time period set forth in Section 9.1.1
above of a Genentech decision to investigate whether a Batch is potentially
non-conforming, which notice shall include, for Wyeth's review and comment, a
written plan for investigating and resolving such potential non-conformance,
which investigation shall be completed in accordance with the procedures
established pursuant to the Quality Agreement. For the sake of clarity,
Genentech shall not have the right to reject any Batch and require Wyeth to
refund any Success Fee if such Non-Conforming Product is non-conforming due to
any action or omission of Genentech or its employees or agents or Genentech's
Designated Carrier after delivery of such Product to Genentech's Designated
Carrier.

            9.2       No Wyeth Liability. After rejection of a Batch or Batches
in accordance with Section 9.1.1 or 9.1.2, if it is determined by agreement of
the members of the JQT (or in the absence of such agreement, by a mutually
acceptable qualified independent Third Party whose fees shall be paid by the
non-prevailing Party) that either (i) an alleged Batch (or Batches) of
Non-Conforming Product was not in fact Non-Conforming Product as of the Warranty
Date, or (ii) an alleged Batch (or Batches) of Non-Conforming Product was in
fact Non-Conforming Product as of the Warranty Date and such non-conformity was
not caused by Wyeth (or its agents) but by a Pre-existing Defect, then Wyeth
shall have no liability to Genentech with respect thereto, and Genentech shall
pay to Wyeth [*] after such determination the Conversion Fee and/or Success Fee
(as applicable) for such Product, if not already paid.

 

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            9.3       Wyeth Liability; Replacement of Product. Subject to
Section 9.2, if Genentech has provided the notice as and when required under
Section 9.1.1 or 9.1.2, as the case may be, and it is determined that Wyeth is
responsible for such non-conformance, at Genentech's written request, Wyeth
shall use its Commercially Reasonable Efforts to replace such Non-Conforming
Product as soon as practicable with conforming Product, and Wyeth shall promptly
and in any event [*] credit to Genentech the amount of the Success Fee, if any,
previously paid by Genentech to Wyeth for such Non-Conforming Product, such
credit to be applied on the next invoice submitted by Wyeth to Genentech, and
Genentech shall pay the Conversion Fee (including the Start Fee and Success Fee)
for the replacement Product.

            9.4       Cooperation in Investigations, Disposition of
Non-Conforming Product. If Genentech desires to make a claim against Wyeth with
respect to and reject a Batch of Non-Conforming Product pursuant to Section 9.3,
Genentech agrees that it shall not dispose of or allow such Product to be
disposed of without written prior notification to Wyeth. Disposition of
Non-Conforming Product shall be determined in accordance with the provisions of
the Quality Agreement. If any rejected Product is disposed of by or on behalf of
Genentech prior to completion of all investigations and final determination as
to whether or not such Product is Non-Conforming Product in accordance with this
Article 9, Genentech shall be deemed to have waived all rights under this
Article 9 with respect to such Product and shall be deemed to have accepted such
Product for purposes of Section 5.6 and the payment provisions of this
Agreement.

ARTICLE  10.
MANUFACTURING AUDITS; CERTIFICATE OF COMPLIANCE;
AND REGULATORY MATTERS

            10.1       Audits of Facility.

                        10.1.1      During Technology Transfer. During
Technology Transfer and in support of Technology Transfer activities, including
the PAI, Genentech shall have the right, at its own cost, to conduct [*] cGMP
compliance audits of the Facility and the pertinent records maintained by Wyeth
in connection with the conduct of the Manufacturing Process and the manufacture
of Product, all in accordance with the Technology Transfer Project Plan and
pursuant to the Quality Agreement. Such cGMP audits shall be conducted upon
Genentech's request and with reasonable prior written notice to Wyeth to permit
Wyeth to support said cGMP audits. In addition, Genentech shall have the right,
at its own cost, to perform, directly or through its representatives, For Cause
Audits and additional follow-up audits that are reasonably necessary as a result
of the findings of any of the foregoing audits, all in accordance with the
Technology Transfer Project Plan and pursuant to the Quality Agreement. During
such audits, personnel of Genentech or its representatives shall have access
only to all public areas (including the cafeteria) and those areas that are
directly related to the performance of Wyeth's obligations under this Agreement,
including the manufacture, testing, storage and shipping of Product. Any such
audits shall be during Wyeth's normal business hours on dates mutually agreed to
by the Parties.

                        10.1.2      During Commercial Production. During
Commercial Production, Genentech shall have the right, at its own cost, to
perform, directly or through its representatives, a cGMP compliance audit [*] as
well as For Cause Audits and additional follow-up audits that are reasonably
necessary as a result of the findings of any of the foregoing audits, all in
accordance with the Quality Agreement. During such audits, personnel of
Genentech or its representatives shall have access only to all public areas
(including the cafeteria) and those areas that are directly related to the
performance of Wyeth's obligations under this Agreement, including the
manufacture, testing, storage and shipping of Product. Any such audits shall be
during Wyeth's normal business hours on dates mutually agreed to by the Parties.

                        10.1.3      Security Audit. Upon Genentech's request and
with reasonable prior written notice to Wyeth to permit Wyeth to support such
audit, Genentech shall have the right, at its own cost, to conduct a security
audit of the Facility and the pertinent records maintained by Wyeth in
connection with the security procedures of the Facility, prior to the start of
the first Qualification Run. Such audit shall be during Wyeth's normal business
hours on dates mutually agreed to by the Parties.

 

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                        10.1.4      Audit Reports. The conduct of any audit
under this Section 10.1 and any findings of such audit (excluding information
not generated in the conduct of such audit) shall constitute Genentech's
Confidential Information, and accordingly the Parties agree that both the
conduct of any audit and any findings of such audit are subject to Article 19.
Genentech shall provide copies of such findings to Wyeth promptly following
completion of the audit.

                        10.1.5      Personnel. Genentech shall be responsible
for the actions of its employees, agents or representatives involved in
conducting any audit of Wyeth's facilities while they are in such facilities or
are otherwise on Wyeth's property. Genentech shall not assign any employee,
agent or representative to conduct an audit unless such employee, representative
or agent is legally obligated to maintain the confidentiality of and limit their
use of Wyeth's Confidential Information under terms and conditions no less
restrictive than those set forth in this Agreement.

            10.2       Certificates; Manufacturing Issues; Records.

                        10.2.1      Certificates; Manufacturing Issues. Within
[*] after completion of manufacture, testing and Wyeth's disposition of a Batch
(including review of records by Wyeth), unless otherwise agreed by Genentech,
Wyeth shall furnish to Genentech the Batch Records and Wyeth's release
documentation described in the Quality Agreement, including, without limitation,
a Certificate of Analysis, a Certificate of Compliance and a summary (in a
format to be agreed upon by Genentech and Wyeth) of any deviations or
investigations that occurred during the manufacturing or testing of the Product
that is part of such shipment. Subject to Section 5.6 hereof, the provisions set
forth in the Quality Agreement regarding deviations shall control whether a
deviation results in Non-Conforming Product.

                        10.2.2      Records. Wyeth shall maintain all of its
manufacturing and analytical records, all records of shipments of Product and
all validation data relating to Product for the time periods required by
applicable United States laws and regulations. Wyeth agrees that, in response to
any complaint, or in the defense by Genentech of any litigation (other than
litigation between Genentech and Wyeth), hearing, regulatory proceeding or
investigation relating to Product, Wyeth, at Genentech's expense, shall use its
Commercially Reasonable Efforts to make available to Genentech such Wyeth
employees and records reasonably necessary to permit the effective response to,
defense of, or investigation of such matters, subject to appropriate
confidentiality protections.

            10.3       Complaints. Wyeth shall provide Genentech with a copy of
any complaints received by Wyeth with respect to the Product in accordance with
the Quality Agreement and standard operating procedures to be agreed upon by
Genentech and Wyeth from time to time. Genentech shall have responsibility for
responding to all such complaints, and for promptly providing Wyeth with a copy
of any responses to complaints relating to the manufacture of the Product. Wyeth
shall use its Commercially Reasonable Efforts to respond to requests from
Genentech for information in Wyeth's possession that is necessary for Genentech
to respond to complaints arising out of the manufacture of the Product.
Genentech shall have sole responsibility for reporting any complaints relating
to the Product to the FDA and any other Regulatory Agency, including, but not
limited to, complaints relating to the manufacture of the Product and adverse
drug experience reports. Genentech shall provide Wyeth with a copy of all
reports submitted to the FDA or any other Regulatory Agency regarding the
Product that relate or are attributable to any manufacturing, testing, storage,
or shipping activities by or on behalf of Wyeth. Genentech shall maintain
complaint files in accordance with cGMP and all other applicable laws and
regulations.

            10.4       Regulatory Correspondence.

                        10.4.1      Notification to Other Parties of Regulatory
Correspondence. Each Party shall immediately and within one (1) business day
notify the other Party in writing of, and shall provide the other Party with
copies of, any correspondence and other documentation received or prepared by
such Party in connection with any of the following events: (i) receipt of a
regulatory letter, warning letter, or similar item, from the FDA or any other
Regulatory Agency directed to the manufacture, testing, storage or packaging of
Product by Wyeth or in connection with any general cGMP inspections applicable
to the Facility; (ii) any recall, market withdrawal or correction of any Batch
manufactured, tested, stored, or packaged hereunder or resulting Finished
Product, in the case of such Product or Finished Product where the recall,
market withdrawal or correction is attributable to any manufacturing, testing,

 

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storage, or packaging activities by or on behalf of Wyeth; and (iii) receipt of
a regulatory letter, warning letter or similar item from the FDA or any other
Regulatory Agency directed to or any regulatory comments related to Product
manufactured, tested, stored, or packaged hereunder or resulting Finished
Product, in the case of such Product or Finished Product where the comments
relate or are attributable to any manufacturing, testing, storage, or packaging
activities by or on behalf of Wyeth.

                        10.4.2      Regulatory Correspondence Requiring a Wyeth
Response. In the event Wyeth receives any regulatory letter or comments from any
Regulatory Agency in the Territory directed to its manufacture, testing,
storage, or packaging of Product requiring a response or action by Wyeth,
including, but not limited to, receipt of a Form 483 (Inspectional Observations)
or a warning letter, Genentech will, to the extent within its control or
possession, promptly provide Wyeth with all data or information required by
Wyeth in preparing any response related to Wyeth's manufacture, testing,
storage, or packaging of Product and will cooperate fully with Wyeth in
preparing such response. Wyeth shall provide Genentech with a copy of each such
response (redacted to remove information not related to the manufacture,
testing, storage, or packaging of Product, the Facility or Wyeth's other
obligations under this Agreement) for Genentech's review and comment prior to
Wyeth's submission of its detailed written response. Wyeth shall give all due
consideration to any Genentech comments to each such proposed Wyeth response
provided that Genentech conveys its comments to Wyeth in a timely manner.
Likewise, in the event Genentech receives any regulatory letter or comments from
any Regulatory Agency in the Territory related to any Product manufactured,
tested, stored, or packaged at the Facility, including, but not limited to,
receipt of a Form 483 (Inspectional Observations) or a warning letter, Wyeth
will, to the extent within its control or possession, promptly provide Genentech
with relevant data or information related to the Product manufactured, tested,
stored, or packaged at the Facility sufficient for Genentech to prepare any
response related to the manufacture, testing, storage, or packaging of Product
and will cooperate fully with Genentech in preparing such response. Genentech
shall provide Wyeth with a copy of each such response (redacted to remove
information not related to the manufacture, testing, storage, or packaging of
Product at Wyeth's Facility or Genentech's obligations under this Agreement) for
Wyeth's review and comment prior to Genentech's submission of its detailed
written response. Genentech shall give all due consideration to any Wyeth
comments to each such proposed Genentech response provided that Wyeth conveys
its comments to Genentech in a timely manner.

            10.5       Inspections; Non-Compliance; Failure to Manufacture.

                        10.5.1      Inspections. In the event the Facility is
inspected, or Wyeth is notified that the Facility will be inspected, by
representatives of any Regulatory Agency in the Territory directed to Wyeth's
manufacture, testing, storage, or packaging of Product, Wyeth shall notify
Genentech within one (1) business day after receipt of notice of such
inspection, and shall supply Genentech with copies of any correspondence or
portions of correspondence which relate to the Product. Genentech may send, and
upon the request of Wyeth shall send, representatives to the Facility to
participate in any portion of such inspection that is directed to the Product.

                        10.5.2      Non-Compliance; Failure to Manufacture. In
the event that any Regulatory Agency in the Territory shall determine, as a
result of an inspection described in Section 10.5.1 above, that Wyeth is not in
compliance with applicable United States laws or regulations or otherwise not in
compliance with cGMP with respect to the manufacture, testing, storage, or
packaging of Product, Wyeth shall use its Commercially Reasonable Efforts to
remedy any such non-compliance as soon as practicable subject to the provisions
of Article 8.

ARTICLE  11.
RECALLS

            11.1       Recalls. Genentech shall notify Wyeth promptly (and in
any event within one (1) business day of receipt of written notice) if any Batch
manufactured by Wyeth or resulting Finished Product is the subject of a
threatened or actual recall, market withdrawal or correction attributable to any
manufacturing, testing, storage, or shipping activities conducted by or on
behalf of Wyeth [*]. Notwithstanding the foregoing, to the extent such recall,
market withdrawal or correction was caused directly by Wyeth's breach of any of
its warranties set forth in Article 7 hereof as of the Warranty Date with
respect to the subject Batch and not caused by a Pre-existing Defect or an
action of omission of Genentech, its Affiliates, Genentech's Designated Carrier
or any of their respective employees or agents, Wyeth shall credit Genentech for
the Success Fee (prorated based on the amount of Product recovered or

 

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destroyed in the recall) for the Product recalled or used to make such recalled
Finished Product and shall reimburse Genentech for all of Genentech's reasonable
out-of-pocket expenses directly related to the implementation and conduct of the
recall, market withdrawal or correction, if any. As between the Parties,
Genentech or its agent shall make all decisions regarding, and in all events
shall have sole authority for, conducting any recalls, market withdrawals or
corrections with respect to the Product in the Territory; provided, however,
that if Wyeth reasonably and in good faith notifies Genentech that a recall is
necessary with respect to a given Batch and Genentech elects not to make such
recall, Genentech, [*]

ARTICLE  12.
QUALITY ASSURANCE; QUALITY CONTROL; VALIDATION; STABILITY

            12.1       Responsibility for Quality Assurance and Quality Control.
Responsibility for quality assurance and quality control of Product shall be
allocated between Genentech and Wyeth as set forth in the Quality Agreement. To
the extent reasonably practicable and consistent with industry practice and
cGMP, Wyeth shall incorporate its obligations under the Quality Agreement into
standard operating procedures that comply with the Quality Agreement. In
general, (a) Wyeth shall be responsible for performing certain in-process
testing and acceptance testing on the Product as set forth in the Technology
Transfer Project Plan and the Quality Agreement, and (b) Genentech shall be
responsible for acceptance of all test results and authorizing final Release of
all Product to the market as set forth in the Quality Agreement.

            12.2       Validation of Facility. Wyeth shall use its Commercially
Reasonable Efforts to qualify and validate the Facility, including all
utilities, manufacturing equipment and systems, cleaning procedures, computer
systems, testing equipment and non-Product specific processes such as
sterilization used in the manufacture of Product at the Facility, as further
defined in the Technology Transfer Project Plan and Quality Agreement. Wyeth
shall use its Commercially Reasonable Efforts to complete all validation reports
by sBLA Filing or earlier as defined in the Technology Transfer Project Plan and
shall make all relevant validation reports applicable thereto prepared by or for
Wyeth available to Genentech for review at Genentech's reasonable request.

            12.3       Validation of Manufacturing Process. In accordance with
the requirements of Article 4, the Technology Transfer Project Plan and the
Quality Agreement, Genentech shall use its Commercially Reasonable Efforts to
provide Wyeth with all Manufacturing Documentation related to the validated
Manufacturing Process, as further described therein. Genentech is responsible
for defining the process validation in a process validation project plan. The
process validation project plan will (i) describe all process validation studies
to be completed by the Parties including those previously performed for the
Product that need not be repeated and those needed to validate and demonstrate
comparability of the Manufacturing Process as implemented at the Facility to the
Manufacturing Process as conducted by Genentech as required by the FDA and (ii)
identify those studies for which Wyeth has specific responsibilities (typically
additional sampling and associated sample handling) per Genentech's process
validation protocols.

            12.4       Stability. Genentech shall conduct all necessary
stability testing to comply with cGMP and other applicable regulatory
guidelines. Wyeth shall prepare all stability samples, and shall sublot
stability samples and package and ship stability samples to Genentech, all in
accordance with schedules, protocols and procedures agreed upon by Wyeth and
Genentech and established pursuant to the Quality Agreement.

ARTICLE  13.
WYETH'S OBLIGATIONS AS MANUFACTURER

            13.1       Control of Working Cell Bank. Wyeth shall maintain all
portions of the Working Cell Bank that it receives in safe and secure storage
under its control in the Facility, and shall not permit the transfer of the
Working Cell Bank to any Wyeth facility other than the Facility or to any Third
Party, in each case that is not specifically authorized in advance and in
writing by Genentech.

            13.2       Manufacturing Capabilities. Wyeth or one or more of its
Affiliates (or its or their successors upon sale of the Facility) shall, at all
relevant times throughout the Term, own or lawfully control the Facility. Wyeth
or one or more of its Affiliates shall use its Commercially Reasonable Efforts
to staff the Facility with sufficient

 

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numbers of appropriately qualified managers, supervisors, engineers,
technicians, inspectors, and other personnel, all of whom have reasonable and
sufficient technical expertise, in each case to enable Wyeth to manufacture
Product in accordance with the Product Specifications and to fulfill its
obligations under this Agreement.

            13.3       Compliance with Law. Wyeth shall use its Commercially
Reasonable Efforts to perform all work and services under this Agreement in
conformance with cGMP and in conformance with the substantive requirements of
all applicable material federal, state and local laws, ordinances and
governmental rules or regulations in the United States, and shall have all
applicable licenses and permits required of it to perform the work and services
hereunder, the absence of which would materially adversely affect the
marketability of the Product. In addition, Wyeth shall use its Commercially
Reasonable Efforts to comply with all applicable material United States laws and
regulatory requirements relating to general safety and compliance in handling
and storage of the Working Cell Bank and any Raw Materials, other Genentech
Proprietary Materials and additional components used in manufacturing Product.

            13.4       Facility. Wyeth shall use its Commercially Reasonable
Efforts to ensure that the Facility is maintained in accordance with cGMP and
Wyeth's standard operating procedures for the Facility are in such condition as
will allow Wyeth to manufacture the Product in accordance with the terms and
conditions of this Agreement. Wyeth shall use its Commercially Reasonable
Efforts to maintain security practices at the Facility consistent with industry
standards for comparable manufacturing facilities.

            13.5       Subcontracting. Wyeth shall not subcontract any of its
obligations hereunder relating to the manufacture of Product or the testing
thereof without the prior written approval of Genentech, such approval not to be
unreasonably withheld or delayed. The JPT shall review the list of Wyeth
subcontractors that will participate in the Technology Transfer. As part of the
process for obtaining Genentech's approval for the use of subcontractors for the
testing of Product, such subcontractors will be subject to Genentech's
certification process and in accordance with the Quality Agreement. As between
the Parties, Wyeth shall be liable for the actions of any subcontractor(s)
approved and certified in accordance with this Section 13.5 to the same extent
as if Wyeth has performed the subcontracted work itself.

            13.6       Regulatory Documentation.

                        13.6.1      Manufacturing and Control Records. Wyeth
shall use its Commercially Reasonable Efforts to provide Genentech in a timely
manner with a copy of any Wyeth manufacturing and control records for Product
that are required for any Genentech regulatory filings with respect to the
Product, which records shall be in Wyeth's standard formats unless otherwise
agreed upon, in writing, by the Parties.

                        13.6.2      Other Information. Wyeth shall use its
Commercially Reasonable Efforts to provide Genentech promptly after the end of
each annual reporting period for the Product (as calculated consistent with
applicable United States regulations and guidelines) with such Product related
information as is reasonably requested in writing by Genentech for the
preparation of the annual report with respect to the manufacturing and control
of the Product for such annual reporting period. Thereafter, Genentech shall
provide to Wyeth [*] prior to Genentech's filing with the respective regulatory
authorities a copy of such Genentech annual report, and Genentech shall take
into consideration any Wyeth comments to such annual report with respect to the
manufacture of Product.

            13.7       Manufacturing Data. Wyeth shall use its Commercially
Reasonable Efforts to collect Manufacturing Data from each Batch and make
reports summarizing the same available to the JPT in the form of a monthly
manufacturing status report in Wyeth's standard format or in such other format
as may be agreed by the Parties. Wyeth shall use its Commercially Reasonable
Efforts to retain such Manufacturing Data in accordance with the requirements of
applicable United States laws, rules and regulations.

            13.8       Retention and Reserve Samples. Wyeth shall use its
Commercially Reasonable Efforts to isolate, identify and, subject to Section
21.9.4 hereof, retain retention and reserve samples of all Raw Materials and
in-process production steps used in the production of Product as may be required
by standard operating procedures to be agreed upon in writing by Wyeth and
Genentech from time to time.

 

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            13.9       Analytical Testing. Wyeth shall perform the analytical
testing on Product as contemplated by the Quality Agreement.

            13.10       Accurate Documentation. Each Party shall use its
Commercially Reasonable Efforts to ensure all records and documentation provided
to the other Party in connection with the manufacture of Product shall be
accurate in all material respects.

ARTICLE  14.
LICENSES

            14.1       License Grants by Genentech.

                        14.1.1      Genentech, on behalf of itself and its
Affiliates, hereby grants to Wyeth and Wyeth's Affiliates a non-exclusive,
royalty-free, non-sublicensable (except as necessary for approved subcontractors
to perform their obligations in connection with the manufacture or testing of
Product under this Agreement) license under Genentech Confidential Information,
and under Patent Rights and all other intellectual property rights, if any,
owned or Controlled by Genentech or its Affiliates as of the Effective Date or
during the Term excluding the Excluded Patents, to the extent necessary to make
(solely at the Facility) and sell (solely to Genentech or Genentech's Affiliates
in the Territory) Product in accordance with the terms and conditions of the
Transaction Agreements.

                        14.1.2      Genentech, on behalf of itself and its
Affiliates, hereby grants to Wyeth and Wyeth's Affiliates a non-exclusive,
royalty-free, non-sublicensable, transferable (solely with the sale or transfer
of the Facility), perpetual, irrevocable license under the Facility Data solely
for the purpose of operating the Facility with respect to any other
pharmaceutical product (and any equipment installed therein) following the
expiration or termination of this Agreement. For purposes of this Section
14.1.2, "Facility Data" means those elements of the Genentech Confidential
Information (including, without limitation, the Genentech Data) that directly
pertain to the Facility, the operation of the Facility and/or the equipment
installed at the Facility.

            14.2       Covenant Not To Sue. Wyeth, on behalf of itself and its
Affiliates, hereby covenants that it shall not file suit or assert any claim
against Genentech, Roche, their respective Affiliates, their distributors,
authorized sales agents and downstream purchasers and users of Product
(collectively, the "Licensed Parties") based on infringement by the Licensed
Parties of any Manufacturing Process Patent (as defined below), or use of Wyeth
know-how or Wyeth Confidential Information that is necessary to perform the
Manufacturing Process, in each case arising from the Licensed Parties' use,
further manufacture, sale, offer to sell or importation of Product manufactured
by Wyeth and delivered to Genentech hereunder (the "Nonsuit"); provided that,
Genentech shall be required to reimburse Wyeth for any payments Wyeth is
required to make to any Third Party in consideration of licenses or other rights
under Manufacturing Process Patents (as defined below) granted to Wyeth by such
Third Party and conveyed to the Licensed Parties pursuant to the Nonsuit as a
result of (i) Wyeth's practice of any of the Manufacturing Process Patents in
the manufacture of Product in accordance with the Manufacturing Process
hereunder or (ii) the Licensed Parties' use, further manufacture, sale, offer to
sell or importation of Product manufactured by Wyeth and delivered to Genentech
hereunder. The Nonsuit granted pursuant to this Section 14.2 shall not apply to
any Herceptin that is not manufactured by Wyeth hereunder or any other antibody
or any other product.

For purposes of this Article 14, a "Manufacturing Process Patent" means and
includes those claims of any Patent Rights owned or Controlled by Wyeth or its
Affiliates as of the Effective Date or during the Term of this Agreement, which
claims are directed to any part of the Manufacturing Process as it exists on the
Effective Date or as it is modified during the Term in accordance with Article
8, subject to the restrictions of Section 14.3. For the sake of clarity,
excluded from Manufacturing Process Patents are those claims of Patent Rights
owned or Controlled by Wyeth that (a) are not directed to the Manufacturing
Process or the manufacture of Herceptin and (b) are specifically directed to (i)
all or part of the composition of matter of Herceptin (solely to the extent that
such claims were conceived and reduced to practice by Wyeth without use of or
reference to Genentech Confidential Information and not from Wyeth's performance
of its obligations under any of the Transaction Agreements) or an antibody other
than Herceptin, or a product other than Herceptin, (ii) any formulation of
Herceptin, any other antibody or any other product, or (iii) any method of using
Herceptin, or (iv) any method of using any other

 

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antibody or any other product.

            14.3       Modifications to the Manufacturing Process. In the event
that Genentech requests a modification to the Manufacturing Process pursuant to
Section 8.1 or a request to modify the Manufacturing Process is made pursuant to
Sections 8.2, 8.3 or 8.4, and any such change would result in the infringement
or practice of any Patent Rights owned or Controlled by Wyeth, or would result
in the use of a Wyeth Trade Secret (as defined below) Wyeth shall identify such
Patent Right or Wyeth Trade Secret to Genentech, and Genentech shall have the
option to obtain a limited license or covenant not to sue under such Patent
Rights or Wyeth Trade Secret on commercially reasonable terms, which license or
covenant not to sue shall be limited to Product manufactured by Wyeth for
Genentech under this Agreement and to Genentech's practice (or a Third Party's
practice on behalf of Genentech) of such licensed modifications to the
Manufacturing Process for so long as Genentech continues to manufacture
Herceptin using such licensed modification (i.e., such license shall be
transferable after the expiration or termination of this Agreement and shall
apply to Herceptin manufactured by or for Genentech after the Term). In the
event that the Parties are unable to reach agreement on commercially reasonable
terms despite good faith efforts to do so, the matter shall be submitted to a
Third Party expert in the field who is mutually acceptable to the Parties, which
Third Party shall review the positions of both Parties and shall conclusively
establish the final, binding commercially reasonable terms and conditions for
such license by (i) applying standards consistent with comparable industry
licenses that have been negotiated between independent parties conducting
arms-length negotiations (i.e., without giving regard to Wyeth and Genentech's
relationship under the Transaction Agreements) and (ii) not granting terms that
would materially alter the terms of any Wyeth license of the Patent Rights or
Wyeth Trade Secret that has been granted to a Third Party prior to the
commencement of negotiations between the Parties and that contains a "most
favored nation" or comparable provision requiring adjustment of the terms of
such Third Party license to match any more favorable terms later granted by
Wyeth under a separate license of the Patent Rights or Wyeth Trade Secrets. The
costs of such Third Party expert shall be paid for by Genentech. For purposes of
this Section 14.3, "Wyeth Trade Secret" means a trade secret owned or controlled
by Wyeth that is Wyeth Confidential Information, that is not utilized as part of
the Manufacturing Process prior to the request to modify the Manufacturing
Process pursuant to Section 8.4, and which would be utilized as a result of such
modification of the Manufacturing Process.

            14.4       No Implied Licenses. Each Party acknowledges and agrees
that, except as expressly set forth in this Agreement, no rights or licenses,
express, implied or otherwise, covering or relating to the manufacture, use or
sale of Product, Herceptin, Finished Product or any other product or process,
are granted to either Party by the other Party. Except as expressly set forth in
this Agreement, the Transaction Agreements do not grant any right or license,
express, implied or otherwise, to either Party under any intellectual property
rights of the other Party, by virtue of disclosure of Confidential Information
or otherwise and no other right or license is to be implied or inferred from any
provision of the Transaction Agreements or by the conduct of the Parties.

ARTICLE  15.
OWNERSHIP OF INTELLECTUAL PROPERTY, MATERIALS AND EQUIPMENT

            15.1       Inventorship, Existing Confidential Information, and
Inventions.

                        15.1.1      Inventorship. Inventorship shall be
determined in accordance with the rules of inventorship of United States patent
laws. As between the Parties, (i) each Party shall solely own any and all
inventions or discoveries that are conceived or reduced to practice solely by
such Party or its employees or agents in the course of or resulting from the
Transaction Agreements, and (ii) the Parties shall jointly own inventions or
discoveries that are conceived or reduced to practice jointly by or on behalf of
the Parties in the course of or resulting from the Transaction Agreements,
without duty of accounting or reporting. The Parties hereby agree that neither
Party shall be considered an "employee or agent" of the other Party.

                        15.1.2      Ownership of Confidential Information. As
between the Parties, Genentech shall own all Genentech Confidential Information,
and Wyeth shall own all Wyeth Confidential Information; provided, however, that
the foregoing shall not limit Genentech's ownership of its rights in and to the
Cell Line, the Master Cell Bank, the Working Cell Bank and/or the Manufacturing
Process.

                        15.1.3      Inventions. Notwithstanding Section 15.1.1,
as between the Parties:

 

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                                  (a)      Subject to Section 14.1, Genentech
shall own all rights, including without limitation, all intellectual property
rights, in and title to the biological materials described as the Cell Line, the
Master Cell Bank, and/or the Working Cell Bank that were made by either Party in
performing its obligations under the Transaction Agreements, and all progeny of
any of the foregoing that were made by either Party in performing its
obligations under the Transaction Agreements.

                                  (b)      Subject to Section 14.1, Genentech
shall own all of its rights, including without limitation, all intellectual
property rights, in and title to the Manufacturing Process and/or the Product,
as each of the foregoing existed prior to the Effective Date or as may have been
improved, invented or created solely by Genentech, its Affiliates or any of
their respective employees, consultants or agents during the Term of this
Agreement.

                                  (c)      Genentech shall own all rights,
including without limitation, all intellectual property rights, in and title to
the Herceptin Improvements, as defined below. "Herceptin Improvements" means,
and includes, any and all improvements or enhancements to the Cell Line, the
Master Cell Bank, the Working Cell Bank, the Manufacturing Process and/or the
Product (or any derivatives or variant of the foregoing, or any use of or method
of manufacture of the foregoing) that (i) are created by either Party and arise
from the performance of their respective obligations under any of the
Transaction Agreements and (ii) are solely related to the Cell Line, the Master
Cell Bank, the Working Cell Bank, the Manufacturing Process and/or the Product.
For the avoidance of doubt, Herceptin Improvements exclude Dual Use Improvements
(as defined below).

                                  (d)      Wyeth shall assign to Genentech its
entire right, title and interest in any and all Herceptin Improvements (and all
intellectual property rights therein, excluding pre-existing intellectual
property that may be necessary to practice such Herceptin Improvement).

                                  (e)      For purposes of this Agreement, a
"Dual Use Improvement" shall mean any and all improvements, enhancements or
discoveries relating to the Cell Line, the Master Cell Bank, the Working Cell
Bank, and/or the Manufacturing Process as to which Wyeth would be deemed an
inventor pursuant to Section 15.1.1, which improvement, enhancement or discovery
(x) arose from Wyeth's performance of its obligations under any of the
Transaction Agreements or through the Permitted Use of Genentech Confidential
Information (as defined below) and (y) includes: (i) an enhancement or an
improvement to any cell line in addition to or other than the Cell Line, the
Master Cell Bank, or the Working Cell Bank, or (ii) a method or process which
may be used to manufacture, generate or propagate any cell line in addition to
or other than the Cell Line, the Master Cell Bank, or the Working Cell Bank, or
(iii) a method for the manufacture of any product in addition to or other than
the Product. For purposes of this Section 15.1, a "Permitted Use of Genentech
Confidential Information" means, and is limited to, Wyeth's use of Genentech
Confidential Information that is expressly permitted under the terms of this
Agreement, and excludes any use of Genentech Confidential Information that is
proscribed under the terms of this Agreement.

                                  (f)      Ownership of Dual Use Improvements
shall be determined according to inventorship, pursuant to Section 15.1.1
herein. Subject to Section 15.1.3(g) below, Wyeth shall retain ownership of
Wyeth's interest in any Dual Use Improvements as to which Wyeth is a sole or
joint inventor, and any intellectual property rights therein.

                                  (g)      Wyeth hereby grants to Genentech
under its interest in any Dual Use Improvements and any intellectual property
rights therein, the following license and option rights:

                                            (i)      an exclusive, perpetual,
irrevocable, fully-paid (subject to Genentech's obligation to reimburse Wyeth
for any payments Wyeth is required to make to any Third Party as a result of
Wyeth granting such license to Genentech and Genentech's practice thereof)
worldwide license to use such Dual Use Improvement solely for the manufacture of
Herceptin or any anti HER-2 antibody that, under applicable United States laws
and regulations, is substitutable for Herceptin as a generic product; and

                                            (ii)      an option to negotiate a
nonexclusive, nontransferable license, on commercially reasonable terms and
conditions, to use such Dual Use Improvement for the manufacture of proteins
other than either Herceptin or any anti HER-2 antibody that under applicable
United States laws and regulations is substitutable

 

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for Herceptin as a generic product (the "Dual Use Improvement Option"). The Dual
Use Improvement Option may be exercised by Genentech by providing written notice
to Wyeth within sixty (60) days after Wyeth provides Genentech written
notification of the existence of such Dual Use Improvement. In the event that
Genentech notifies Wyeth of its desire to negotiate for such a license, the
Parties shall negotiate in good faith to arrive at commercially reasonable terms
and conditions for such license for a period of one-hundred eighty (180) days.
In the event that the Parties are unable to reach agreement on commercially
reasonable terms by the end of such one hundred eighty (180) day period despite
good faith efforts to do so, the matter shall be submitted to a Third Party
expert in the field who is mutually acceptable to the Parties, which Third Party
shall review the positions of both Parties and shall conclusively establish the
final, binding commercially reasonable terms and conditions for such license by
(i) applying standards consistent with comparable industry licenses that have
been negotiated between independent parties conducting arms-length negotiations
(i.e., without giving regard to Wyeth and Genentech's relationship under the
Transaction Agreements) and (ii) not granting terms that would materially alter
the terms of any Wyeth license of the Dual Use Improvement that has been granted
to a Third Party prior to the commencement of negotiations between the Parties
and that contains a "most favored nation" or comparable provision requiring
adjustment of the terms of such Third Party license to match any more favorable
terms later granted by Wyeth under a separate license of the Dual Use
Improvement; provided, however, that the Parties shall have no obligation to
submit the unresolved terms of a license to a Dual Use Improvement to such
expert in the event that the Dual Use Improvement to be licensed was conceived
and reduced to practice without use of or reference to the Genentech
Confidential Information. The costs of such Third Party expert shall be paid for
by Genentech. Notwithstanding the foregoing, except as set forth in Section
15.1.3(g)(i) above, Wyeth shall have no obligation to grant to Genentech any
license or other right, title or interest in or to any Dual Use Improvement to
the extent doing so would be prohibited by any agreement in existence between
Wyeth and any Third Party at the time such Dual Use Improvement is made.
Notwithstanding the foregoing, after the Effective Date, Wyeth shall not
knowingly enter into any agreement with a Third Party that would materially
diminish Genentech's rights to take a license to a Dual Use Improvement under a
Dual Use Improvement Option.

                                  (h)       Subject to Sections 14.2 and 14.3,
Wyeth shall have no obligation to assign or otherwise grant to Genentech any
right, title or interest in or to any Wyeth Other Invention (as defined below).
For purposes of this Section 15.1, "Wyeth Other Invention" means any invention,
development or discovery (including any intellectual property rights therein)
that was made by or on behalf of Wyeth or any of its Affiliates, or which
otherwise came into the control of Wyeth or any of its Affiliates prior to the
Effective Date or during the term of any of the Transaction Agreements, provided
any such invention, development or discovery (including any intellectual
property rights therein) (i) is not a Herceptin Improvement or a Dual Use
Improvement, (ii) did not arise from the use of Genentech Confidential
Information and (iii) did not arise from the performance of Wyeth's obligations
under the Transaction Agreements.

                        15.1.4      Survival. The terms of this Section 15.1
shall survive the expiration or termination of this Agreement, and shall be
binding upon and inure to the benefit of the successors and assigns of the
Parties. The Parties will continue to reasonably cooperate with each other to
perfect the rights granted in this Section 15.1.

            15.2       Ownership of Equipment.

                        15.2.1      Genentech Equipment. Genentech shall own all
right, title and interest in and to any and all equipment [*] materials, and
other assets purchased by Genentech and provided to Wyeth for use under this
Agreement, including, without limitation, the equipment listed in Exhibit D of
the Technology Transfer Project Plan, the Portable Equipment specified in
Section 5.7 and Non-Portable Equipment (collectively, the "Genentech
Equipment"), free and clear of any right or claim of Wyeth. All Genentech
Equipment shall be maintained in good repair by Wyeth.

                        15.2.2      Facilities; Wyeth Equipment. Wyeth or one or
more of its Affiliates shall own all right, title and interest in and to any and
all facilities improvements, [*] and any and all equipment, materials, and other
assets purchased by Wyeth or such Affiliates hereunder (including, without
limitation, the Wyeth Equipment).

                        15.2.3      Purchase of Genentech Equipment by Wyeth.
Notwithstanding the foregoing, however, at the expiration or termination of this
Agreement, Wyeth may, upon mutual agreement of the Parties (including

 

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mutual agreement as to the amount Wyeth shall reimburse Genentech thereof to
retain such Genentech Equipment), retain some or all of the Genentech Equipment.
In addition, all of the Genentech Equipment shall also be subject to the
provisions of Section 21.9 below.

                        15.2.4      Removal of Genentech Equipment. Upon
expiration or termination of this Agreement, if Wyeth fails to timely arrange
for the removal, at Genentech's expense, of the Genentech Equipment (other than
the Genentech Equipment that the Parties have mutually agreed that Wyeth shall
retain and reimburse Genentech for) from the Facility, Genentech shall send
written notice requesting such removal. If such removal has not occurred within
thirty (30) days after such notice, then Genentech shall be entitled to hire a
qualified Third Party at Genentech's expense to enter the Facility with written
notice at least five (5) business days in advance and remove such Genentech
Equipment, which shall be removed in a reasonable manner without damage to the
Facility. For clarification purposes, removal of the Genentech Equipment shall
not in and of itself be considered damage to the Facility.

ARTICLE  16.
REPRESENTATIONS AND WARRANTIES

            16.1       Genentech. Genentech hereby represents and warrants to
Wyeth that:

                        16.1.1      As of the Effective Date, and without
expanding any representation and warranty set forth in this Section 16.1,
Genentech owns or has sufficient right, title or interest in and to the Working
Cell Bank, Genentech Confidential Information (including, without limitation,
the Manufacturing Documentation), and all information to be supplied by
Genentech to Wyeth under any of the Transaction Agreements to supply the same to
Wyeth for Wyeth's use in accordance with the terms and conditions of the
Transaction Agreements;

                        16.1.2      Except as otherwise disclosed to Wyeth by
Genentech as of the Effective Date, to the actual knowledge of members of the
Genentech legal department as of the Effective Date, without a duty of inquiry
and without conducting any additional inquiry with respect to this Agreement,
there is no lawsuit pending against Genentech in the Territory that alleges
patent infringement by the manufacture or sale of the Product, the use of the
Manufacturing Process or the use or propagation of any of the Genentech
Proprietary Materials or Raw Materials (to the extent such use or propagation is
undertaken as part of performing the Manufacturing Process);

                        16.1.3      Except as otherwise disclosed to Wyeth by
Genentech as of the Effective Date, to the actual knowledge of members of the
Genentech legal department as of the Effective Date, without a duty of inquiry
and without conducting any additional inquiry with respect to this Agreement,
Genentech has not received written notice alleging infringement of a Third Party
patent by the manufacture or sale of the Product;

                        16.1.4      To the actual knowledge of members of the
Genentech legal department as of the Effective Date, without a duty of inquiry
and without conducting any additional inquiry with respect to this Agreement,
the manufacture, use or sale of the Product, the use of the Manufacturing
Process (including the use or propagation of any of the Genentech Proprietary
Materials or the Raw Materials to the extent such use or propagation is
undertaken as part of performing the Manufacturing Process) do not infringe any
issued United States patent owned or controlled by any Third Party;

                        16.1.5      To the actual knowledge of members of the
Genentech legal department as of the Effective Date, without a duty of inquiry
and without conducting any additional inquiry with respect to this Agreement,
based upon the scope of claims and content of such patent applications as of the
Effective Date, no Third Party has any United States patent application pending
which, if issued, would be infringed by the manufacture, use or sale of the
Product, the use of the Manufacturing Process, including the use of any of the
Genentech Proprietary Materials or the Raw Materials to the extent such use is
undertaken as part of performing the Manufacturing Process;

                        16.1.6      Genentech's license agreements to the [*]
and [*] (as those terms are defined in Exhibit A hereto) grant Genentech the
right to retain Wyeth to manufacture Product as provided hereunder and as a
result, Wyeth's manufacture of the Product hereunder and in accordance with the
terms and conditions of this Agreement would not constitute an unlicensed
infringement of the [*]; and

 

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                        16.1.7      Genentech has the corporate power and
authority and the legal right to enter into this Agreement and to perform its
obligations under this Agreement.

            16.2       Wyeth. Wyeth hereby represents and warrants to Genentech
that:

                        16.2.1      To Wyeth's knowledge as of the Effective
Date, Wyeth is free to supply the Wyeth Confidential Information to Genentech;

                        16.2.2      Wyeth has the corporate power and authority
and the legal right to enter into this Agreement and to perform its obligations
under this Agreement;

                        16.2.3      Wyeth owns, lawfully controls or has
sufficient rights to use the Facility to perform its obligations hereunder; and

                        16.2.4      Wyeth has not entered into written
agreements with any Third Party to conduct commercial production at the Facility
or is otherwise subject to any covenant or obligation that would result in Wyeth
not being able to fulfill the manufacturing obligations assumed by it hereunder.

ARTICLE  17.
INDEMNIFICATION AND INSURANCE

            17.1       Indemnification.

                        17.1.1      Indemnification by Genentech. Subject to and
except to the extent of any indemnification from Wyeth pursuant to Section
17.1.2 below, Genentech shall indemnify, defend and hold Wyeth, its Affiliates,
and their respective directors, officers, employees and the estates and heirs
thereof (the "Wyeth Indemnified Parties") harmless from and against any and all
losses, damages, liabilities, settlements, penalties, fines, costs and expenses
(including, without limitation, reasonable attorneys' fees and expenses),
(collectively, the "Liabilities") to the extent such Liabilities arise out of or
result from any claim, lawsuit or other action or threat by a Third Party
arising out of [*] Notwithstanding the foregoing, Genentech's indemnity
obligation hereunder shall not apply to those Liabilities for which Wyeth is
obligated to indemnify Genentech pursuant to Section 17.1.2 [*]

                        17.1.2      Indemnification by Wyeth. Wyeth shall
indemnify, defend and hold Genentech, and its Affiliates, directors, officers,
employees and the estates and heirs thereof (the "Genentech Indemnified
Parties") harmless from and against all Liabilities to the extent such
Liabilities arise out of or result from any claim, lawsuit or other action or
threat by a Third Party arising out of [*] Notwithstanding the foregoing,
Wyeth's indemnity obligation hereunder shall not apply to those Liabilities for
which Genentech is obligated to indemnify Wyeth pursuant to Section 17.1.1 [*]

            17.2       Indemnification Procedures.

                        17.2.1      Identification of Indemnitor and Indemnitee.
An "Indemnitor" means Genentech with respect to Section 17.1.1 hereof, and Wyeth
with respect to Section 17.1.2 hereof. An "Indemnitee" means any of Wyeth, its
Affiliates, and their respective directors, officers, and employees with respect
to Section 17.1.1 hereof, and any of Genentech, and its respective Affiliates,
directors, officers and employees with respect to Section 17.1.2 hereof.

                        17.2.2      Indemnification Procedures. An Indemnitee
that intends to claim indemnification under Section 17.1.1 or 17.1.2 hereof
shall promptly notify the Indemnitor in writing of any claim, lawsuit or other
action in respect of which the Indemnitee, its Affiliates, or any of their
respective directors, officers, and employees intend to claim such
indemnification. The Indemnitee shall permit, and shall cause its Affiliates and
their respective directors, officers, and employees to permit, the Indemnitor,
at its discretion, to settle any such claim, lawsuit or other action and agrees
to the complete control of such defense or settlement by the Indemnitor;
provided, however, such settlement does not adversely affect the Indemnitee's
rights under this Agreement or impose any obligations on the Indemnitee in
addition to those set forth herein in order for the Indemnitor to exercise such
rights. No such

 

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claim, lawsuit or other action shall be settled without the prior written
consent of the Indemnitor and the Indemnitor shall not be responsible for any
legal fees or other costs incurred other than as provided herein. The
Indemnitee, its Affiliates and their respective directors, officers, employees
and agents shall cooperate fully with the Indemnitor and its legal
representatives in the investigation and defense of any claim, lawsuit or other
action covered by this indemnification, all at the reasonable expense of the
Indemnitor. The Indemnitee shall have the right, but not the obligation, to be
represented by counsel of its own selection and expense.

            17.3       Insurance.

                        17.3.1      Insurance. During the term of this
Agreement, and thereafter for the period of time required below, each Party
shall maintain:

                                            (i)      Workers Compensation
Insurance as required by applicable law with Employers Liability limits at a
limit of [*]

                                            (ii)       Commercial General
Liability ("CGL") insurance, including contractual and professional liability
coverage, in the [*] for bodily injury and property damage with an [*]

                                            (iii)      A Fidelity Bond or Crime
Coverage policy; and

                                            (iv)      All Risks property
insurance, including transit coverage (transit coverage may be included in
separate policy), in an amount equal to the value of Genentech's property while
it is at the Facility. Coverage afforded herein shall be primary coverage up to
the required limit regardless of other insurance clauses.

                        17.3.2      Special Requirements.

                                  (a)      Genentech or Wyeth, as applicable,
shall be named as additional insureds under the insurance policies set forth in
Section 17.3.1, excluding the Workers Compensation policy.

                                  (b)      Genentech or Wyeth, as applicable,
shall have the right to perform, directly or through its representatives,
property inspections and loss control inspections with respect to the all-risk
property policy.

                                  (c)      The CGL insurance policy shall be
under either an occurrence or a claims made based policy form and the CGL
insurance coverage shall be maintained by Genentech or Wyeth, as applicable, for
at least three (3) years following expiration or termination of this Agreement.

                                  (d)      Each of the above insurance policies
shall be primary insurance as respects Genentech's or Wyeth's participation
under this Agreement.

                                  (e)      All of the above insurance coverage
shall be maintained with an insurance company or companies having an A.M. Best's
rating of "A-VII" or higher.

                        17.3.3      Notice of Insurance. Within thirty (30) days
from the execution of this Agreement, each Party shall provide the other Party a
certificate insurance reflecting the above requirements. Renewal certificates
shall continue to be provided throughout the term of this Agreement, and in case
of cancellation or material change, a thirty (30) day notice shall be provided
to the other Party.

            17.4       Survival of Indemnification Obligations. The provisions
of Section 17.1 and 17.2 and the right of a Party to seek coverage from an
insurance policy required by Section 17.3 for events or activities that occurred
prior to termination or expiration of this Agreement shall survive the
termination or expiration of this Agreement.

ARTICLE  18.
LIABILITY

            18.1       Liability for Intentional Breach by Wyeth. [*]

 

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            18.2       Duty to Mitigate Damages. In the event of an uncured
Intentional Breach by Wyeth as expressly set forth in Section 18.1, Genentech
shall use its Commercially Reasonable Efforts to take all actions to mitigate
any damages arising from such breach, including, without limitation, drawing
from Genentech's existing inventory of Product that is above and beyond its risk
mitigation inventory (as described below) or other reasonably available sources
of Product to address any shortfall in inventory resulting from such breach;
provided, however, that this Section 18.2 shall not obligate Genentech (i) to
draw from its risk mitigation inventory, [*], intermediate formulations thereof
and Finished Product) to mitigate such damages or (ii) to initiate Product
manufacturing at an alternate production site if such manufacturing would have a
material adverse impact on Genentech's production or supply of any other
biopharmaceutical product.

            18.3       Disclaimer of Consequential Damages. EXCEPT FOR CLAIMS
ARISING FROM (A) THE INTENTIONAL MISUSE OR MISAPPROPRIATION OF THE OTHER PARTY'S
CONFIDENTIAL INFORMATION OR INTELLECTUAL PROPERTY, (B) ANY INDEMNIFICATION
OBLIGATIONS ARISING UNDER ARTICLE 17 OR (C) [*], IN NO EVENT SHALL EITHER PARTY
BE LIABLE TO THE OTHER PARTY FOR ANY INCIDENTAL, INDIRECT, EXEMPLARY, SPECIAL,
PUNITIVE OR CONSEQUENTIAL DAMAGES ARISING FROM OR RELATED TO BREACH OF THIS
AGREEMENT, INCLUDING, WITHOUT LIMITATION, ANY CLAIMS FOR DAMAGES BASED UPON LOST
PROFITS FOR SALES TO THIRD PARTIES.

            18.4       Limitation of Liability.

                        18.4.1      Except as set forth in Section 18.1 above
and for claims arising from Wyeth's indemnification obligations under Section
17.1.2, [*] however the same may be caused, including, without limitation,
through the fault, breach of contract, tort (including the concurrent or sole
and exclusive negligence), strict liability or otherwise of Wyeth, provided
however, that to the extent such direct damages arose from the willful
misconduct of Wyeth and its Affiliates, such liability cap(s) shall not apply.
For purposes of the foregoing, any losses or damages arising out of a series of
related events or the same set of operative facts or circumstances shall be
treated as a single occurrence.

                        18.4.2      With respect to Genentech's direct damages
for a breach of Wyeth's obligation to manufacture Product hereunder, [*]
Genentech's damages shall be determined by calculating the incremental
reasonable cost above the Conversion Fee (including only the per batch fees and
excluding start up costs or fees, technology transfer costs or fees, capacity
reservation or commitment costs or fees, lost opportunity costs or fees,
development costs or fees whether billed separately or included as part of a per
batch fee or cost) incurred by Genentech in obtaining that quantity of Product
to meet any shortfall resulting from such Wyeth breach.

ARTICLE  19.
CONFIDENTIALITY

            19.1       Confidentiality Obligations.

                        19.1.1      Wyeth Confidentiality Obligations. Wyeth
shall not disclose Genentech Confidential Information to any Third Party other
than:

                                  (a)      its employees who are bound by
obligations of confidentiality and nonuse no less restrictive than those set
forth in this Agreement, and who have a need to know such information in order
to perform their duties in carrying out Wyeth's obligations under the
Transaction Agreements,

                                  (b)      consultants, agents or subcontractors
used by Wyeth in accordance with Section 13.5 hereof who are bound by
obligations of confidentiality and nonuse no less restrictive than those set
forth in this Agreement, and who have a need to know such information in order
to provide direction to Wyeth or Genentech regarding their respective
obligations under the Transaction Agreements or in order to (i) perform their
duties in carrying out Wyeth's obligations under the Transaction Agreements, or
(ii) provide direction to Wyeth regarding the subject matter of this Agreement,
including, but not limited to, production, testing, storage or quality of the
Product or regulatory or compliance issues related to the Product, or

 

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                                  (c)      regulatory authorities, for example,
the FDA, that require such information in order to review a BLA or sBLA for the
Product or other regulatory filing.

                        19.1.2      Genentech Confidentiality Obligations.
Genentech shall not disclose any Wyeth Confidential Information to any Third
Party other than:

                                  (a)       employees, consultants, agents or
contractors of Genentech or Genentech's Affiliates who are bound by obligations
of confidentiality and nonuse no less restrictive than those set forth in this
Agreement and who have a need to know such information in order to perform their
duties in carrying out Genentech's obligations under the Transaction Agreements,
or in order to provide direction to Genentech regarding the subject matter of
this Agreement, including, but not limited to, production, testing, storage or
quality of the Product or regulatory or compliance issues related to the
Product, or

                                  (b)       regulatory authorities, for example,
the FDA, that require such information in order to review a BLA or sBLA for the
Product or other regulatory filing.

            19.2       Terms of Agreement. Subject to Sections 19.3 and 20.1
hereof, neither Party shall, without the prior written consent of the other
Party, disclose in any manner to any Third Party the terms and conditions of
this Agreement. Notwithstanding the foregoing, either Party may disclose the
terms of this Agreement to the extent required, in the reasonable opinion of
such Party's legal counsel, to comply with applicable laws, including without
limitation the rules and regulations promulgated by the United States Securities
and Exchange Commission (the "SEC"), provided, however, that before disclosing
this Agreement or any of the terms hereof pursuant to this Section 19.2, the
Parties will consult with one another on the terms of this Agreement to be
redacted in making any such disclosure. If a Party discloses this Agreement or
any of the terms hereof in accordance with this Section 19.2, such Party agrees,
at its own expense, to use diligent efforts to obtain confidential treatment of
portions of this Agreement or such terms, as may be reasonably requested by the
other Party.

            19.3       Notification of Mandatory Disclosure.

                        19.3.1      Notification and Consultation. In the event
that a Party (in such case, the "Notifying Party") believes it is required by
applicable statute or regulation, or by judicial or administrative process to
disclose any part of the other Party's (in such case, the "Notified Party")
Confidential Information which is disclosed to it under this Agreement, the
Notifying Party shall (i) promptly notify the Notified Party of each such
requirement and identify the documents so required thereby, so that the Notified
Party may seek an appropriate protective order or other remedy and/or waive
compliance by the Notifying Party with the provisions of this Agreement, and
(ii) consult with the Notified Party on the advisability of taking legally
available steps to resist or narrow the scope of such requirement.

                        19.3.2      Limited Disclosure. If, in the absence of
such a protective order or such a waiver by the Notified Party of the provisions
of this Agreement, the Notifying Party is nonetheless required by mandatory
applicable law to disclose any part of the Notified Party's Confidential
Information which is disclosed to it under this Agreement, the Notifying Party
may disclose such Confidential Information without liability under this
Agreement, except that the Notifying Party shall furnish only that portion of
the Confidential Information which is legally required to be disclosed.

            19.4       Maintenance of Confidentiality; Non-use Obligations.

                        19.4.1      [RESERVED].

                        19.4.2      Maintenance of Confidentiality. Each Party
shall use reasonable and customary precautions to safeguard the other Party's
Confidential Information, including ensuring that all employees, consultants,
agents or contractors who are provided access to such Confidential Information
are informed of the confidential and proprietary nature of such Confidential
Information and have confidentiality and nonuse obligations that are at least as
restrictive as those contained in this Agreement.

 

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                        19.4.3      Non-use Obligations. Wyeth shall not use
Genentech Confidential Information for any purpose other than performing its
obligations under the Transaction Agreements, without first obtaining
Genentech's prior written consent to such utilization. Wyeth Confidential
Information shall not be utilized by Genentech for any purpose except as
expressly set forth in the Transaction Agreements, without first obtaining
Wyeth's prior written consent to each such utilization. Without limiting the
foregoing, a Party (the "Asserting Party") and its Affiliates shall not assert
against the other Party or that Party's Affiliates any intellectual property
right owned or controlled by the Asserting Party or its Affiliates to the extent
such assertion is based on knowledge or information obtained from access
hereunder to the other Party's Confidential Information. Without limiting the
foregoing, Wyeth and its Affiliates shall not use or refer to the Genentech
Confidential Information either to make inventions or to file for Patent Rights
except as expressly permitted under the terms and conditions of Section 15.1,
and Genentech and its Affiliates shall not use or refer to the Wyeth
Confidential Information either to make inventions or to file for Patent Rights
except as expressly permitted under the terms and conditions of Section 15.1.

            19.5       Survival of Confidentiality Obligations. The provisions
of this Article 19 shall survive the termination or expiration of this Agreement
for a period of five (5) years; provided, however, that with respect to the
Facility Data, the provisions of this Article 19 shall survive the termination
or expiration of this Agreement for so long as Wyeth uses such Facility Data and
for a period of five (5) years thereafter.

            19.6       Termination of Certain Prior Agreements. This Agreement
supersedes the Confidential Disclosure Agreement between the Parties dated
November 18, 2003. All Confidential Information exchanged between the Parties
under such previous agreement shall be deemed Confidential Information under
this Agreement (either Genentech Confidential Information or Wyeth Confidential
Information, as the context requires) and shall be subject to the terms of this
Agreement.

            19.7       No Disclosure of Unrelated Information. Neither Party
shall disclose Confidential Information to the other Party that is not
reasonably necessary for performance of a Party's obligations under the
Transaction Agreements, including but not limited to manufacturing processes for
other products, marketing plans and clinical development plans. Notwithstanding
the foregoing, nothing in this provision shall limit the confidentiality and
non-use obligations and rights herein, including, without limitation, with
respect to any such other Confidential Information inadvertently disclosed to or
which is observed by the other Party or its representatives in the course of
performing its obligations or exercising it rights under any of the Transaction
Agreements.

ARTICLE  20.
PRESS RELEASES; USE OF NAMES

            20.1       Press Releases. Following the Effective Date, the Parties
shall agree upon a press release to announce the execution of this Agreement
together with a corresponding question and answer outline for use in responding
to inquiries about this Agreement. Such press release shall be made on or before
September 31, 2004, the timing of which such announcement shall be mutually
agreed by the Parties. Following the publication of such press release, each
Party shall be entitled to make or publish any public statement consistent with
the contents of such press release and question and answer outline without the
need for further approval by the other. Except as set forth in the preceding
sentences of this Section 20.1, no press release, publicity or other form of
public written disclosure related to this Agreement shall be permitted by either
Party unless the other Party has indicated its consent to the form of the
release in writing subject to Section 19.2 above. This Section 20.1 shall not
apply to any disclosure as is deemed necessary, in the reasonable judgment of
the responsible Party, to comply with regional, national, federal or state or
local laws or regulations in the Territory (including the rules and regulations
of any national stock exchange on which such Party's securities are traded).

            20.2       Use of Names. No Party shall make use of the name of any
other Party in any advertising or promotional material, or otherwise, in
connection with this Agreement or any related agreements, without the prior
written consent of such other Party; provided, however, either Party may include
the name of the other Party on a general list of business partners or
collaborations.

 

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ARTICLE  21.
TERM; TERMINATION

            21.1       Term; Option to Extend. Unless sooner terminated pursuant
to the terms of this Agreement, the term of this Agreement (the "Term") shall
commence on the Effective Date and shall continue until [*]; provided, however,
that the Parties may extend the Term for an additional one (1) year upon mutual
written agreement of terms and conditions to be reached no later than [*].
During any such extension, all terms of this Agreement and the Quality Agreement
shall apply. As used herein "Term" shall mean the initial Term, including any
extension thereof.

            21.2       Notice; Cure. In the even that a Party (the "Breaching
Party") is in material breach of any provision of this Agreement, the other
Party (the "Nonbreaching Party") may provide written notice thereof to the
Breaching Party, specifying in reasonable detail the nature of such breach. The
Breaching Party shall have (a) thirty (30) days after receipt of written notice
to cure any breach of an obligation to make a payment under this Agreement
(other than any portion thereof that is disputed in accordance with Section 6.9)
and (b) ninety (90) days after receipt of such written notice to cure any other
breach, or a longer period of time if the Breaching Party delivers written
notice to the Nonbreaching Party of the Breaching Party's good faith
determination that such material breach is not reasonably capable of being cured
within such ninety (90) days and that the Breaching Party is working diligently
to cure such breach, but in no event shall the time for curing such breach
exceed an additional ninety (90) days or a total of one hundred eighty (180)
days (any such period, a "Cure Period"). If the Breaching Party's breach is a
material breach of a material provision of this Agreement, the Nonbreaching
Party shall have no right to suspend its performance hereunder during the Cure
Period unless and only to the extent that such breach by the Breaching Party
adversely affects the ability of the Nonbreaching Party to perform.

            21.3       Termination for Material Breach. In the event any
material breach of a material provision of this Agreement is not cured within
the applicable Cure Period, after receipt of written notice from the
Nonbreaching Party to the Breaching Party in accordance with Section 21.2, this
Agreement shall terminate as set forth in the Nonbreaching Party's notice of
breach and in accordance with the terms of this Article 21; provided, however,
that this Agreement shall not be terminated prior to the end of such Cure
Period.

            21.4       Termination for Failure to Timely Achieve Key Milestones.

                        21.4.1      Wyeth, in its sole discretion, may terminate
this Agreement in its entirety upon thirty (30) days prior written notice to
Genentech, if Genentech does not file the sBLA with the FDA within ninety (90)
days after the completion of sBLA Data Delivery by Wyeth.

                        21.4.2      In addition, notwithstanding Section 24.1,
either Party shall have the right to terminate this Agreement, in its sole
discretion, upon thirty (30) days prior written notice to the other Party, in
the event that either (i) the sBLA for the Product is withdrawn or rejected or
(ii) FDA Approval is not received within one (1) Calendar Year of the date
Genentech files the sBLA with the FDA.

            21.5       Termination for Failure to Achieve Development Run
Completion or [*]

                        21.5.1      Genentech may, in its sole discretion,
terminate this Agreement in its entirety upon [*] prior written notice to Wyeth,
if either (i) Wyeth cannot achieve Development Run Completion after [*]
Following notice of termination under this Section 21.5.1, the Parties will use
the remaining days of the Term to wind-down activities under this Agreement,
consistent with Section 21.9.

                        21.5.2      Wyeth may, in its sole discretion, terminate
this Agreement in its entirety [*] prior written notice to Genentech, if
Genentech has not terminated the Agreement under Section 21.5.1 [*] after
receiving notice from Wyeth of Genentech's failure to notify Wyeth of its
election to either authorize additional Development Runs or terminate the
Agreement (all in accordance with Section 4.7.2), [*] prior written notice to
Genentech, if Wyeth cannot achieve Development Run Completion after either [*]
prior written notice to Genentech, Wyeth cannot achieve [*] after completion of
the total number of Qualification Run Starts authorized in accordance with
Section 4.8.2. Following notice of termination under this Section 21.5.2, the
Parties will use the remaining days of the Term to wind-down activities under
this Agreement, consistent with Section 21.9.

 

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            21.6       Termination for Failure to Resolve Operational Issues.
Genentech, in its sole discretion, shall have the right to terminate this
Agreement in its entirety upon thirty (30) days prior written notice to Wyeth,
if an Operational Issue is preventing substantial performance by either Party
under this Agreement and remains unresolved for more than thirty (30) days after
the mutually agreed Target Resolution Date for such issue despite good faith
efforts by both Parties to resolve the issue in accordance with Section 3.2.
Wyeth, in its sole discretion, shall have the right to terminate this Agreement
in its entirety upon thirty (30) days prior written notice to Genentech, if an
Operational Issue is preventing substantial performance by either Party under
this Agreement and remains unresolved for more than sixty (60) days after the
mutually agreed Target Resolution Date for such issue despite good faith efforts
by both Parties to resolve the issue in accordance with Section 3.2.

            21.7       Termination for Excessive Impact of Requested Changes.
Either Party shall have the right to terminate this Agreement upon ninety (90)
days prior written notice to the other Party in the event that any requested
change made by the other Party or the FDA in accordance with Section 8.5 (and
that is not withdrawn in accordance with Section 8.5.2) would result in either
(i) [*] of Facility downtime (in the case of requested changes to be implemented
prior to Commercial Production) or (ii) [*] of Facility downtime (in the case of
requested changes to be implemented during Commercial Production).

            21.8       Termination upon Certain Events; [*]

                        21.8.1      In the event (a) of any Change of Control of
Wyeth or the business or operating unit(s) of Wyeth or its Affiliates that are
performing all or substantially all of Wyeth's obligations hereunder (the "Wyeth
Entities"), or (b) that Wyeth sells to a Third Party its Andover, Massachusetts
facility or the portion thereof containing the Facility, Genentech shall have
the right to terminate this Agreement, in its sole discretion, upon written
notice to Wyeth and payment of the applicable Termination Fee, which notice must
be delivered to Wyeth within thirty (30) days after consummation of such event
or, if such event is not the subject of a public announcement made by Wyeth,
within thirty (30) days after Wyeth delivers notice to Genentech that such event
has been consummated. In addition, notwithstanding Section 24.1, either Party
shall have the right to terminate this Agreement, in its sole discretion, upon
thirty (30) days prior written notice to the other Party, in the event that the
BLA for Herceptin is withdrawn by Genentech or Genentech otherwise withdraws
Herceptin from the market in the United States. For purposes of this Section
21.8.1, "Change of Control" means the occurrence of any of the following events:
(a) any "person" or "group" (as such terms are used in Sections 13(d) and 14(d)
of the Exchange Act) becomes the "beneficial owner" (as defined in Rule 13d-3
and 13d-5 under the Exchange Act) of more than fifty percent (50%) of the total
voting stock of a Wyeth Entity or (b) a Wyeth Entity consolidates with, or
merges with or into, another person or sells, assigns, conveys, transfers,
leases or otherwise disposes of all or substantially all of its assets to any
person, or any person consolidates with, or merges with or into a Wyeth Entity,
in any such event pursuant to a transaction in which the holders of the
outstanding voting stock of that Wyeth Entity immediately prior to such
transaction hold less than fifty percent (50%) of the outstanding voting stock
of the surviving or transferee company or its parent company immediately after
such transaction or immediately after such transaction any "person" or "group"
(as such terms are used in Sections 13(d) and 14(d) of the Exchange Act) is the
"beneficial owner" (as defined in Rules 13d-3 and 13d-5 under the Exchange Act),
directly or indirectly, of more than fifty percent (50%) of the total voting
stock of the surviving or transferee company or its parent company; provided,
however, that a "Change of Control" shall not include a transfer of all or
substantially all of the assets of a Wyeth Entity to one or more wholly owned
subsidiaries or any merger or consolidation of Wyeth immediately after which
holders of the outstanding voting stock of that Wyeth entity immediately prior
to such transaction hold fifty percent (50%) or more of the outstanding voting
stock of the surviving company or its parent company. For purposes of this
definition, "Exchange Act" means the Securities Exchange Act of 1934 and the
rules and regulations of the U.S. Securities and Exchange Commission thereunder,
and any successor to such statute or such rules and regulations.

                        21.8.2      In the event of any termination of this
Agreement by Genentech or Wyeth pursuant to this Section 21.8, Genentech, in
addition to any amounts that may be payable in accordance with Section 21.9
below, shall pay to Wyeth [*]

            21.9       Consequences of Termination.

 

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                        21.9.1      Payment of Amounts Due; Cumulative Remedies.
Expiration or termination of this Agreement for any reason shall not exempt any
Party from paying to any other Party any amounts (other than amounts in dispute
in accordance with procedures set forth in Section 6.9) owing to such Party at
the time of such expiration or termination (and after resolution of such
dispute, from paying such previously disputed amount, if applicable). Except as
expressly stated otherwise herein, remedies under this Agreement are cumulative,
and nothing in this Agreement shall prevent any Party, in the case of a material
breach (after expiration of the applicable Cure Period and notice periods), from
terminating this Agreement and seeking to enforce its rights under this
Agreement.

                        21.9.2      Work in Progress. Upon any termination of
this Agreement, Genentech shall pay Wyeth at the prevailing Conversion Fee for
all Batches that have been manufactured but not yet delivered to Genentech as of
the effective date of such termination and at a price to be agreed upon (but in
no event to exceed the Conversion Fee) for all Batches that are otherwise
in-process Runs as of the effective date of such termination. Upon termination
of this Agreement, any Runs that were scheduled to be initiated on or after the
effective date of such termination shall be canceled. Runs that are in-process
at the [*] scale as of the effective date of any such termination shall not be
cancelled without the mutual agreement of the Parties, and the Agreement shall
continue to survive with respect to those in-process Runs.

                        21.9.3      Return of Raw Materials. Subject to Wyeth's
obligation upon receipt of a notice of termination to place no further orders
for Raw Materials, intermediates or packaging components except as may be
necessary for completion of any portion of Wyeth's services hereunder that are
not immediately terminated, upon expiration of this Agreement or termination of
this Agreement pursuant to this Article 21, Wyeth shall either destroy or
transfer to Genentech, at Genentech's option and expense, all remaining usable
Raw Materials ordered from the [*] for the manufacture and packaging of Product
under this Agreement. Wyeth shall invoice Genentech for Wyeth's cost of all such
Raw Materials destroyed or delivered to Genentech under this Section 21.9.3 upon
the date of destruction or delivery of such Raw Materials, and Genentech shall
pay such invoice in accordance with the terms of Section 6.9.

                        21.9.4      Return of Genentech Proprietary Materials
and of Genentech Confidential Information, Transfer of Genentech Equipment. Upon
expiration or termination of this Agreement, unless otherwise directed by
Genentech, Wyeth shall, within thirty (30) days after such expiration or
termination: (i) either destroy or transfer to Genentech, at Genentech's option
and expense, all quantities of Product and all quantities of the Cell Line,
Master Cell Bank, and Working Cell Bank received by Wyeth under this Agreement
or the Quality Agreement, with any such destruction to be certified in writing
to Genentech by an authorized Wyeth officer, (ii) return all Genentech
Confidential Information to Genentech, provided that Wyeth may keep one (1) copy
of the Genentech Confidential Information for its legal records with such
Confidential Information continuing to be subject to the confidentiality
provisions of this Agreement, and (iii) return to Genentech all retention and
reserve samples of Product being held by Wyeth pursuant to Section 13.8 hereof.
In addition, if requested by Genentech, Wyeth, at Genentech's expense, shall
transfer the Genentech Equipment to Genentech in accordance with Section 15.2
hereof.

                        21.9.5      Return of Wyeth Confidential Information.
Upon expiration or termination of this Agreement, and at Wyeth's written
request, Genentech shall promptly return all Wyeth Confidential Information to
Wyeth; provided that Genentech may keep one (1) copy of such Wyeth Confidential
Information for its legal records with such Confidential Information continuing
to be subject to the confidentiality provisions of this Agreement.

                        21.9.6      Accrued Rights. Except as otherwise
expressly set forth herein, any termination or expiration of this Agreement
shall be without prejudice to any right which shall have accrued to the benefit
of either Party and shall not relieve either Party of any warranties or
obligations that have accrued prior to the effective date of such termination or
expiration including, without limitation, any liability for breach of this
Agreement, which obligations or warranties shall remain in full force and effect
for the period provided therein or, if no period is provided therein, then such
obligations shall remain in full force and effect indefinitely.

 

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ARTICLE  22.
ASSIGNMENT

            22.1       Assignment. This Agreement shall be binding upon the
successors and assigns of the Parties and the name of a Party appearing herein
shall be deemed to include the names of its successors and assigns. Neither
Party may assign its interest under this Agreement without the prior written
consent of the other Party; provided, however, either Party may assign its
interest under this Agreement, without the prior written consent of the other
Party, (a) to an Affiliate, so long as such Party guarantees the obligations of
such Affiliate, or (b) subject to Section 21.8, to a successor of such Party's
business by reason of merger, sale of all or substantially all of the assets of
the business to which this Agreement relates or other form of acquisition. Any
purported assignment without a required consent shall be void. No assignment
shall relieve any Party of responsibility for the performance of any obligation
that accrued prior to the effective date of such assignment. Notwithstanding
anything in this Agreement to the contrary, Wyeth may use one or more of its
Affiliates to perform all or a portion of its obligations hereunder, but Wyeth
will not thereby be relieved of any obligation under this Agreement.

ARTICLE  23.
DISPUTE RESOLUTION

 

            23.1       Intellectual Property Disputes. Any dispute relating to
the determination of validity of a Party's patents or other issues relating to a
Party's intellectual property and which dispute arises under this Agreement
shall be submitted exclusively to any federal court having jurisdiction over the
Parties and the matter, or to a state court in such jurisdiction if the
applicable rules of civil procedure preclude federal court jurisdiction, and the
Parties hereby consent to the jurisdiction and venue of such courts, and
therefore Section 23.1 below shall not apply to any such disputes.

            23.2       Dispute Resolution.

                        23.2.1      Disputes. The Parties recognize that a bona
fide dispute as to certain matters may from time to time arise during the term
of this Agreement that relates to a Party's rights and/or obligations under the
Transaction Agreements. Unless otherwise specifically recited in this Agreement,
disputes arising under the Transaction Agreements will be resolved as recited in
this Section 23.1. In the event of the occurrence of such a dispute, either
Party may, by written notice to the other Party, have such dispute referred to
their respective executive officers designated below, or their respective
successors or designees, for attempted resolution by good faith negotiations
within thirty (30) business days after such notice is received. Such designated
officers are as follows:

            For Genentech -- Vice President, Global Supply Chain

            For Wyeth -- Executive Vice President and General Manager, BioPharma
Business Unit

In the event the executive officers, or their respective successors or
designees, are not able to resolve such dispute within such thirty (30)-day
period, or such other period of time as the Parties may mutually agree in
writing, either Party may pursue any legal or equitable remedies available to it
by filing a claim exclusively in the federal courts of the state of Delaware,
provided, however, that if there is no federal court jurisdiction over such
claim, either Party may pursue such claim exclusively in Delaware state court
and, in the case of each of the foregoing, each Party hereby consents to the
jurisdiction of such court and each Party hereby irrevocably waives its right to
a jury trial before any such court. Notwithstanding the foregoing, nothing in
this Section 23.1 (including the duty to engage in good faith negotiations
between the Parties' executive officers) shall prohibit a Party from seeking
provisional or equitable relief, including, without limitation, attachment,
replevin, or preliminary or temporary injunctive relief from any state or
federal court having jurisdiction over the matter to avoid irreparable harm,
maintain the status quo, or preserve the subject matter of the dispute pending
the resolution of a dispute in accordance with the provisions of this Section
23.1.

 

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ARTICLE  24.
FORCE MAJEURE

            24.1       Effect of Force Majeure Event. Neither Party shall be in
breach of this Agreement if there is any failure of its performance under this
Agreement (except for payment of any amounts due under this Agreement) as a
result of any reason beyond the control and without the fault or negligence of
the Party affected thereby, including an act of God (including, without
limitation, fire, earthquake, flood, storm or other natural disaster), act of
government or state or an agency thereof (including without limitation, any
changes to applicable laws or regulations, order or injunction, that has a
material adverse affect on a Party's ability to perform its obligations
hereunder), war, acts of terrorists, civil unrest, insurrection, embargo, lack
of viability of any biological materials provided by Genentech and a failure of
Genentech to replace such biological materials, an infectious virus or other
contaminant which causes a shutdown for a substantial period of a large portion
of Wyeth's Andover facility or all or part of the Facility itself due to
contamination despite Wyeth's use of Commercially Reasonable Diligent Efforts to
prevent such occurrence, prevention from or hindrance in obtaining energy or
other utilities, a market shortage of or other failure of Third Party suppliers
to supply Raw Materials or other necessary components of the Manufacturing
Process (other than due to Wyeth's failure to satisfy its obligations under
Section 4.9.2), or labor disputes (including work stoppages resulting therefrom)
of whatever nature (each, a "Force Majeure Event"). Nothing in this Section 24.1
shall, however, release such Party from using its Commercially Reasonable
Diligent Efforts to avoid or remove all such causes. Upon cessation of such
Force Majeure Event, the affected Party shall promptly resume performance under
this Agreement.

            24.2       Notice of Force Majeure. Each Party agrees to give the
other Party prompt written notice of the occurrence of any Force Majeure Event,
the nature thereof, and the extent to which the affected Party will be unable
fully to perform its obligations under this Agreement. Each Party further agrees
to use Commercially Reasonable Diligent Efforts to correct the Force Majeure
Event as quickly as practicable and to give the other Party prompt written
notice when it is again fully able to perform such obligations.

            24.3       Target Dates and Milestones. In the event of any Force
Majeure Event, the Target Dates specified in Section 4.3 and/or the dates for
completion of milestones set forth in Section 6.3 shall be extended by the
period of time during which such Force Majeure Event exists.

            24.4       Termination. Subject to Sections 21.8 and 21.9, either
Party may terminate this Agreement if a Party is unable to substantially perform
its obligations hereunder as a direct result of a Force Majeure Event that
remains unresolved for a period of six (6) months despite efforts to correct the
Force Majeure Event in accordance with Section 24.2.

ARTICLE  25.
MISCELLANEOUS

            25.1       Notices. Other than notices within the jurisdiction of
the respective Project Team Leaders, which shall be given to those individuals,
any notice required or permitted to be given under this Agreement by any Party
shall be in writing and shall be (a) delivered personally, (b) sent by
registered mail, return receipt requested, postage prepaid, (c) sent by a
nationally-recognized courier service guaranteeing next-day or second day
delivery, charges prepaid, or (d) delivered by facsimile (with the original
promptly sent by any of the foregoing manners), to the addresses or facsimile
numbers of the other Parties set forth below, or at such other addresses as may
from time to time be furnished by similar notice by any Party. The effective
date of any notice under this Agreement shall be the date of receipt by the
receiving Party.

If to Genentech:

Corporate Secretary
Genentech, Inc.
One DNA Way
South San Francisco, CA 94080
Fax: (650) 952-9881
Phone: (650) 225-1672

 

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with a copy to:

Senior Vice President of Product Operations
Genentech, Inc.
One DNA Way, MS 53
South San Francisco, CA 94080
Fax: (650) 225-5007
Phone: (650) 225-3978

   

If to Wyeth:

Executive Vice President and General Manager, BioPharma Business Unit
Wyeth Pharmaceuticals
500 Arcola Road
Collegeville, PA 19426
Fax: (484) 865-9091
Phone: (484) 865-7951

   

with a copy to:

General Counsel
Wyeth
Five Giralda Farms
Madison, NJ 07940
Fax: (973) 660-7050
Phone: (973) 660-6138

     

and

     

Senior Vice President, Global Business Development
Wyeth Pharmaceuticals
500 Arcola Road
Collegeville, PA 19426
Fax: (484) 865-6476
Phone: (484) 865-5442

            25.2       Applicable Law. This Agreement shall be construed,
interpreted and enforced in accordance with the internal substantive laws of the
State of Delaware and with respect to patent disputes, United States federal law
to the extent not covered by state law, without reference to the choice of law
doctrine of such state.

            25.3       Headings. The table of contents and all headings in this
Agreement are for convenience of reference only and shall not affect the
interpretation of this Agreement.

            25.4       Exhibits. All exhibits referred to herein form an
integral part of this Agreement and are incorporated into this Agreement by such
reference.

            25.5       Severability. Each Party hereby expressly agrees that it
has no intention to violate any public policy, statutory or common laws, rules,
regulations, treaty or decision of any government agency or executive body
thereof of any country or community or association of countries; that if any
word, sentence, paragraph, clause or combination thereof in this Agreement is
found by a court or executive body with judicial powers having jurisdiction over
this Agreement or any Party hereto, in a final unappealed or unappealable order,
to be in violation of any such provisions in any country or community or
association of countries, such words, sentences, paragraphs, clauses or
combination shall be inoperative in such country or community or association of
countries and the remainder of this Agreement shall remain binding upon the
Parties, so long as enforcement of the remainder does not violate the Parties'
overall intentions in this transaction.

            25.6       Independent Contractors. Each of the Parties is an
independent contractor and nothing herein contained shall be deemed to
constitute the relationship of partners, joint venturers, nor of principal and
agent between the Parties. Neither Party shall hold itself out to Third Parties
as purporting to act on behalf of, or serving as the agent of, the other Party.

 

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            25.7       Waiver. No waiver of any term, provision or condition of
this Agreement whether by conduct or otherwise in any one or more instances
shall be deemed to be or construed as a further or continuing waiver of any such
term, provision or condition or of any other term, provision or condition of
this Agreement.

            25.8       Counterparts. This Agreement and any amendment hereto may
be executed in any number of counterparts, each of which shall for all purposes
be deemed an original and all of which shall constitute the same instrument.
This Agreement shall be effective upon full execution by facsimile or original,
and a facsimile signature shall be deemed to be and shall be as effective as an
original signature.

            25.9       Harmful or Additional Materials. During the Term, Wyeth
shall not introduce any cell lines or biological products into the Facility
other than as set forth herein without Genentech's prior written consent. In
addition, Wyeth agrees not to use any form of penicillin or cephalosporin in the
Manufacturing Process utilized at the Facility, without Genentech's prior
written consent.

            25.10       Non-Solicitation. The Parties recognize that each Party
has a substantial interest in preserving and maintaining confidential its
Confidential Information hereunder. Each Party recognizes that certain of the
other Party's key or technical employees, including those engaged in
manufacturing, validating and testing Product, may have access to such
Confidential Information of the other Party. The Parties therefore agree not to
knowingly solicit or otherwise induce or attempt to induce for purposes of
employment, any key or technical employees from the other Party directly
involved in the manufacturing, validating or testing of any Product during the
Term and for a period of two (2) years thereafter, it being understood that the
foregoing shall not include (i) employees who first approach a Party for
employment, (ii) solicitations or hiring as part of a general employee
solicitation not targeted specifically at employees of the other Party, and
(iii) solicitations or hiring by members of a Party's organization without
knowledge of this Agreement or who have not been exposed to the Confidential
Information of the other Party.

            25.11       Entirety; Amendments. This Agreement, including any
exhibits attached hereto and referenced herein, constitutes the full
understanding of the Parties and a complete and exclusive statement of the terms
of their agreement with respect to the specific subject matter hereof (i.e.,
purchase and supply of Product), and supersedes and terminates all other
agreements, oral or otherwise, between the Parties, including, without
limitation the LOI and the Confidential Disclosure Agreement between the Parties
dated November 18, 2003. No terms, conditions, understandings or agreements
purporting to modify or vary the terms thereof shall be binding unless it is
hereafter made in writing and signed by each of the Parties. No modification to
this Agreement shall be effected by the acknowledgment or acceptance of any
purchase order or shipping instruction forms or similar documents containing
terms or conditions at variance with or in addition to those set forth herein.
In the event of a conflict between this Agreement, the exhibits hereto, the
Technology Transfer Project Plan or the Quality Agreement, the terms of this
Agreement shall control. This Agreement may be amended and supplemented only by
a written instrument signed by each of the Parties.

            25.12       SAP Implementation. Wyeth shall use its Commercially
Reasonable Diligent Efforts to avoid any material adverse impact on the conduct
of either the Technology Transfer or the activities necessary to support FDA
Approval as a result of the implementation of the enterprise resource planning
system from SAP at Wyeth's Andover, Massachusetts facility during the Term.

            25.13       Interpretation. For purposes of interpreting this
Agreement, whenever the context requires, the singular number will include the
plural, and vice versa; the masculine gender will include the feminine and
neuter genders; the feminine gender will include the masculine and neuter
genders; and the neuter gender will include the masculine and feminine genders.
Any rule of construction to the effect that ambiguities are to be resolved
against the drafting Party will not be applied in the construction or
interpretation of this Agreement. As used in this Agreement, the words "include"
and "including" and variations thereof, will not be deemed to be terms of
limitation, but rather will be deemed to be followed by the words "without
limitation."

            25.14       No Presumptions. Each Party hereto represents that it
has been represented by legal counsel in connection with this Agreement and each
of the other Transaction Agreements and acknowledges that it has participated in
the drafting hereof or thereof. In interpreting and applying the terms and
provisions of any of the Transaction Agreements, the Parties agree that no
presumption shall exist or be implied against the Party which

 

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drafted such terms and provisions.

[the remainder of this page intentionally blank]

 

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IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed as of
the Effective Date.

 

GENENTECH, INC.

 

WYETH, acting through its
Wyeth Pharmaceuticals Division

         

By:

/s/LOUIS J. LAVIGNE, JR.

 

By:

/s/CAVAN M. REDMOND

Name:

Louis J. Lavigne, Jr.

 

Name:

Cavan M. Redmond

Title:

Executive Vice President & CFO

 

Title:

Executive Vice President and General Manager, BioPharma Business Unit

                   

By:

/s/DAVID A. EBERSMAN

     

Name:

David A. Ebersman

     

Title:

Sr. Vice President, Product Operations

     

         

Legal:    JDJ             Finance:    RA   

     

 

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Exhibit A
Excluded Patents

[*]

 

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Exhibit B
Countries in Territory

[*]

 

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