[*] = Certain confidential information contained in this document, marked by
brackets, is omitted because it is both (i) not material and (ii) would be
competitively harmful if publicly disclosed.

Exhibit 10.47

 

 

Manufacturing Services Agreement

 

(the “Agreement”)

 

 

 

by and between

 

 

 

 

Lonza AG

Muenchensteinerstrasse 38

Ch-4002, Basel

Switzerland

- hereinafter “Lonza” -

and

Portola Pharmaceuticals, Inc.

270 E. Grand Avenue

South San Francisco, CA  94080

USA

 

- hereinafter “Customer” -

Effective as of 15 August, 2017 (the “Effective Date”)

1

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Table of Contents

Page

1Definitions and Interpretation3

2Performance of Services14

3Project Management / Steering Committee21

4Visp Facility23

5Quality23

6Insurance24

7Minimum Order; Forecasting, Ordering, Rescheduling and Cancellation24

8Delivery and Acceptance30

9Price and Payment and Changes32

10Intellectual Property37

11Warranties38

12Indemnification and Liability41

13Confidentiality43

14Term and Termination44

15Force Majeure49

16Miscellaneous49

 

Appendix A: Cell Line

 

Appendix B: Batch Price and Minimum Order

 

Appendix C: Bill of materials

 

Appendix D: [Reserved]

 

Appendix E: Stages of Work

 

Appendix F: Estimated Visp Facility Construction and Validation Timeline

 

Appendix G: Certain Process Validation Activities

 

Appendix H: Form Common Stock Purchase Agreement

 

 

 

2

[*] = Certain confidential information contained in this document, marked by
brackets, is omitted because it is both (i) not material and (ii) would be
competitively harmful if publicly disclosed.

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Recitals

WHEREAS, Customer and Lonza’s Affiliate Lonza Sales AG entered into the
Manufacturing Services Agreement effective 8 October 2014, as amended (the “2014
Agreement”) for certain development services regarding the product known
variously as PRT4445 and Andexanet alfa at Lonza’s facilities located in Slough,
UK and certain development and manufacturing services regarding such product at
Lonza’s facilities located in Porrino, Spain;

WHEREAS, Lonza has entered into joint venture agreement with a Third Party for
the construction of a biologics manufacturing facility in Visp, Switzerland, in
respect of which Lonza operates and is authorized to sell up to [*] of the Visp
Facility’s manufacturing capacity, which will initially consist of [*] batches
per year out of [*] at the [*] liter scale, [*];  

WHEREAS, Customer wishes to engage Lonza for additional commercial scale
manufacturing of the Product as described in this Agreement at Lonza’s
facilities located in Visp, Switzerland and Porrino, Spain;

WHEREAS, Lonza, or its Affiliate, is prepared to perform such manufacturing
services for Customer on the terms and subject to the conditions set out herein;
and

WHEREAS, Customer and Lonza are entering into an amendment to the 2014 Agreement
as of even date herewith.

NOW, THEREFORE, in consideration of the mutual promises contained herein, and
for other good and valuable consideration, the Parties intending to be legally
bound, agree as follows:

1Definitions and Interpretation

“Adjusted Minimum Order”

has the meaning given in Clause 7.1.3.

“Affiliate”

means any company, partnership or other entity which directly or indirectly
Controls, is Controlled by or is under common Control with the relevant
Party.  As used in this definition, “Control” means the ownership of more than
fifty percent (50%) of the issued share capital or the legal power to direct or
cause the direction of the general management and policies of the relevant
Party. For the avoidance of doubt and notwithstanding the foregoing, neither the
JV Entity nor the JV Partner shall be regarded or construed as an “Affiliate” of
Lonza for the purposes of this Agreement.

“Agreement”

means this agreement incorporating all Appendices, as amended from time to time
by written agreement of the Parties.

“Applicable Laws”

means all relevant federal, state and local laws, statutes, rules, and
regulations in the U.S., European Union and Japan which are applicable to a
Party’s activities hereunder, and any other jurisdictions as may be agreed by
the Parties in writing, including in each case, without limitation, the
applicable regulations and guidelines of any

3

[*] = Certain confidential information contained in this document, marked by
brackets, is omitted because it is both (i) not material and (ii) would be
competitively harmful if publicly disclosed.

--------------------------------------------------------------------------------

Governmental Authority in such jurisdictions and all applicable cGMP together
with amendments thereto.

“Approval”

means marketing approval by the FDA, the EMA or MHLW, of Product manufactured at
the Visp Facility for commercial supply (and the date of first Approval shall be
the date on which the first of these approvals occurs).

“Background Intellectual Property”

means any Intellectual Property either: (i) owned or controlled by a Party or
any of its Affiliates prior to the Effective Date; or (ii) developed or acquired
by a Party or any of its Affiliates independently from the performance of the
activities under this Agreement during the Term of this Agreement. For the
avoidance of doubt Lonza’s Background Intellectual Property shall include Lonza
Information and any and all applicable portions of the Manufacturing Process (in
each case) owned, controlled, or developed prior to the provision of services to
Customer by Lonza under the 2014 Agreement or developed or acquired
independently of this Agreement and the 2014 Agreement.

“Baseline Batches”

has the meaning given in Clause 9.5.2.

“Batch”

means a batch of the Product produced during a single run of the Manufacturing
Process in a [*] fermenter at the Visp Facility and in a [*] fermenter at the
Porrino Facility, as applicable, purified and tested as a single batch as
defined by the applicable Batch record, and which may be an Engineering Batch, a
Process Validation Batch or a cGMP Batch.

“Batch Price”

means the Price of each Batch.

[*]

[*]

“Campaign”

means a series of cGMP Batches at either the Visp Facility or the Porrino
Facility, as applicable.

“Cancellation Fee”

has the meaning given in Clause 7.5.

“Cell Line”

means the Customer’s cell line, particulars of which are set out in Appendix A.

“Certificate of Analysis”

means a document prepared by Lonza listing tests performed by Lonza or approved
External Laboratories against the Specifications and the results of such tests.

4

[*] = Certain confidential information contained in this document, marked by
brackets, is omitted because it is both (i) not material and (ii) would be
competitively harmful if publicly disclosed.

--------------------------------------------------------------------------------

“Certificate of Compliance”

means a document prepared by Lonza: (i) listing the manufacturing date, unique
Batch number, and concentration of Product in such Batch; (ii) contains a
Transmissible Spongiform Encephalopathy / Bovine Spongiform Encephalopathy
Compliance statement; (iii) certifying that such Batch was manufactured in
accordance with the Master Batch Record and cGMP, if applicable; and (iv)
certifying that all deviations and investigations have been appropriately
investigated.

“cGMP”

means those laws and regulations applicable in the U.S., European Union, Japan,
and/or such other jurisdictions as the Parties may agree in writing,  relating
to the manufacture of medicinal products for human use, including, without
limitation, current good manufacturing practices as specified in the ICH
guidelines, including without limitation, ICH Q7A “ICH Good Manufacturing
Practice Guide for Active Pharmaceutical Ingredients”, US Federal Food Drug and
Cosmetic Act at 21CFR (Chapters 210, 211, 600 and 610), JNDA and the Guide to
Good Manufacturing Practices for Medicinal Products as promulgated under
European Directive 91/356/EEC.  For the avoidance of doubt, Lonza’s operational
quality standards may be defined in internal cGMP policy documents.

“cGMP Batch”

means any Batches manufactured in accordance with cGMP after the completion of
the Engineering Batches and which for clarity, shall include Process Validation
Batches and Commercial Batches.

“Change of Control”

means the occurrence, in a single transaction or in a series of related
transactions, of any one or more of the following events:

(a) any Exchange Act Person becomes the owner, directly or indirectly, of
securities of Customer representing more than fifty percent (50%) of the
combined voting power of Customer’s then outstanding issued share capital. 
Notwithstanding the foregoing, a Change of Control shall not be deemed to occur:
(i)  on account of the acquisition of shares of Customer by an investor, any
affiliate thereof or any other Exchange Act Person, that acquires Customer’s
shares in a transaction or series of related transactions the sole purpose of
which is to obtain financing for Customer through the issuance of shares;  or
(ii) solely because the level of ownership held by any Exchange Act Person (the

5

[*] = Certain confidential information contained in this document, marked by
brackets, is omitted because it is both (i) not material and (ii) would be
competitively harmful if publicly disclosed.

--------------------------------------------------------------------------------

“Subject Person”) exceeds the designated percentage threshold of the outstanding
voting shares as a result of a repurchase or other acquisition of voting shares
by Customer reducing the number of shares outstanding, provided that if a Change
of Control would occur (but for the operation of this sentence) as a result of
the acquisition of voting shares by Customer, and after such share acquisition,
the Subject Person becomes the owner of any additional voting shares that,
assuming the repurchase or other acquisition had not occurred, increases the
percentage of the then outstanding voting shares owned by the Subject Person
over the designated percentage threshold, then a Change of Control shall be
deemed to occur;

(b) without the consent of the Board of Directors of Customer, any Exchange Act
Person becomes the owner, directly or indirectly, of securities of Customer
representing more than forty percent (40%) of the combined voting power of
Customer’s then outstanding shares;

(c) there is consummated a merger, consolidation or similar transaction
involving (directly or indirectly) Customer and, immediately after the
consummation of such merger, consolidation or similar transaction, the
shareholders of Customer immediately prior thereto do not own, directly or
indirectly, either (i) outstanding voting shares representing more than
fifty percent (50%) of the combined outstanding voting rights in the surviving
entity in such merger, consolidation or similar transaction or (ii) more than
fifty percent (50%) of the combined outstanding voting rights in the parent of
the surviving entity in such merger, consolidation or similar transaction, in
each case in substantially the same proportions as their ownership of the
outstanding voting shares of Customer immediately prior to such transaction;

(d) the shareholders of Customer approve or the Board of Directors of Customer
approves a plan of complete dissolution or liquidation of Customer, or a
complete dissolution or liquidation of Customer shall otherwise occur, except
for a liquidation into a parent corporation; or

(e)  there is consummated a sale, lease, exclusive license or other disposition
of all or substantially all of the consolidated assets of Customer and its
subsidiaries, other than a sale, lease, license or other disposition of all or
substantially all of the

6

[*] = Certain confidential information contained in this document, marked by
brackets, is omitted because it is both (i) not material and (ii) would be
competitively harmful if publicly disclosed.

--------------------------------------------------------------------------------

consolidated assets of Customer and its subsidiaries to an entity, more than
fifty percent (50%) of the combined voting power of the voting shares of which
are owned by shareholders of Customer in substantially the same proportions as
their Customer ownership of the outstanding voting shares of Customer
immediately prior to such sale, lease, license or other disposition.

Notwithstanding the foregoing definition or any other provision of this
Agreement, the term Change of Control shall not include a sale of assets, merger
or other transaction effected exclusively for the purpose of changing the
domicile of Customer, provided that such transaction is not carried out as part
of, or in contemplation of any of the events set out on (a) to (e) above.

In addition to all of the above, the term “Change of Control” shall also include
a transaction in which the control of the Customer (where “Control” is the right
to exercise more than 50% of the voting rights in the Customer) passes to any
person or persons other than those who exercise Control immediately prior to the
closing of such transaction.

“Commencement Date”

means the date of [*].

“Commercial Batches”

means cGMP Batches which are not Process Validation Batches.

“Comparison Batches”

has the meaning given in Clause 9.5.2.

“Confidential Information”

means Customer Information and/or Lonza Information, as the context requires.

“Contract Facility”

means, in relation to the Visp Facility and the Services, the entity that is
deemed the “contract facility” under the most current FDA Guidance for Industry:
“Contract Manufacturing Arrangements for Drugs: Quality Agreements.

“Customer Indemnitee(s)”

has the meaning given in Clause 12.1.

“Customer Information”

means all information that is proprietary to Customer or any Affiliate of
Customer and that is maintained in confidence by Customer or any Affiliate of
Customer and that is disclosed by Customer or any Affiliate of Customer to Lonza
or any Affiliate of Lonza (or the JV Partner, JV Entity, or the Contract
Facility, if different), or any other information which is disclosed by or on

7

[*] = Certain confidential information contained in this document, marked by
brackets, is omitted because it is both (i) not material and (ii) would be
competitively harmful if publicly disclosed.

--------------------------------------------------------------------------------

behalf of Customer to Lonza or any Affiliate of Lonza (or the JV Partner, JV
Entity, or the Contract Facility, if different), under or in connection with
this Agreement, including without limitation, any and all Customer know-how and
trade secrets; (in each case whether disclosed under this Agreement, or to the
extent that they are used pursuant to this Agreement, disclosed under the 2014
Agreement or any previous agreement).

“Customer Materials”

means any Raw Materials, components of Product, or other materials of any
nature, in each case provided by Customer (whether provided under this
Agreement, or to the extent that they are used pursuant to this Agreement,
provided under the 2014 Agreement or any previous agreement) or on behalf of
Customer.  

“Delay”

has the meaning given in Clause 2.1.

“Disclosing Party”

has the meaning given in Clause 13.1.

“EMA”

means the European Medicines Agency, or any successor agency having
substantially the same functions.

“Engineering Batch”

means a Batch that is intended to demonstrate the transfer of the Manufacturing
Process to the Visp Facility as further defined in Clause 2.8.1.

“Exchange Act”

means the US Securities Exchange Act of 1934, as amended, and the rules and
regulations promulgated thereunder.

“Exchange Act Person”

means any natural person, entity or “group” (within the meaning of Section 13(d)
or 14(d) of the Exchange Act), except that “Exchange Act Person” shall not
include: (a) Customer, or any subsidiary of Customer; (b) any employee benefit
plan of the Customer or any subsidiary of Customer or any trustee or other
fiduciary holding securities under an employee benefit plan of Customer or any
subsidiary of Customer; (c) an underwriter temporarily holding securities
pursuant to a registered public offering of such securities; (d) an entity
owned, directly or indirectly, by the stockholders of Customer in substantially
the same proportions as their ownership of stock of Customer; or (e) any natural
person, entity or “group” (within the meaning of Section 13(d) or 14(d) of the
Exchange Act) that, as of the Effective Date, is the owner, directly or
indirectly, of securities of Customer representing more than

8

[*] = Certain confidential information contained in this document, marked by
brackets, is omitted because it is both (i) not material and (ii) would be
competitively harmful if publicly disclosed.

--------------------------------------------------------------------------------

fifty percent (50%) of the combined voting power of Customer’s then outstanding
securities.

“Executive Committee”

has the meaning given in Clause 3.4.

“External Laboratories”

means any Third Party instructed by Lonza, with Customer’s consent, to conduct
activities required to complete portion(s) of the Services that are not
customarily offered by Lonza or any of its Affiliates.

“Failed cGMP Batch”

has the meaning given in Clause 8.3.3.

“FDA”

means the United States Food and Drug Administration, or any successor agency
having substantially the same functions.

“Firm Order”

means a Purchase Order submitted by Customer that has been accepted by Lonza and
is binding on both Parties, in each case in accordance with this Agreement.

“First Tranche Equity”

has the meaning given in Clause 9.5.1.

“Forecast”

has the meaning given in Clause 7.2.2.

“Gen 1”

means the first generation Manufacturing Process.

“Gen 2”

means the second generation Manufacturing Process used at the Porrino Facility
under the 2014 Agreement as of the Effective Date.

[*]

[*]

“Governmental Authority”

means any Regulatory Authority and any national, multi-national, regional, state
or local regulatory agency, department, bureau, or other governmental entity in
the US, the European Union, Japan, and/or such other jurisdiction as may be
agreed in writing between the Parties.

“Indemnitee”

means, as the context dictates, a Customer Indemnitee or a Lonza Indemnitee.

“Intellectual Property”

means: (i) inventions (whether or not patentable), patents, trade secrets,
copyrights, trademarks, trade names and domain names, rights in designs, rights
in computer software, database rights, rights in confidential information,
know-how and any other intellectual property rights, in each case whether
registered or unregistered; (ii) all applications (or rights to apply) for, and
renewals or extensions of, any of the rights described in the foregoing clause
(i); and (iii) and

9

[*] = Certain confidential information contained in this document, marked by
brackets, is omitted because it is both (i) not material and (ii) would be
competitively harmful if publicly disclosed.

--------------------------------------------------------------------------------

all rights and applications that are similar or equivalent to the rights and
application described in the foregoing clauses (i) and (ii), which exist now, or
which come to exist in the future, in any part of the world.

“JV Entity”

means the legal entity which will be incorporated with Lonza and the JV Partner
as the only shareholders.

“JV Partner”

means [*].

“Losses”

means claims, liabilities, loss, damages, costs and expenses (including
reasonable attorney fees).

“Lonza Indemnitee(s)”

has the meaning given in Clause 12.2.

“Lonza Information”

means all information that is proprietary to Lonza or any Affiliate of Lonza and
that is maintained in confidence by Lonza or any Affiliate of Lonza (or the JV
Partner, JV Entity, or the Contract Facility, if different) and that is
disclosed by Lonza or any Affiliate of Lonza (or the JV Partner, JV Entity, or
the Contract Facility, if different) to Customer under or in connection with
this Agreement or to the extent used pursuant to this Agreement or the 2014
Agreement or any other previous agreement between the Parties, or disclosed
under the 2014 Agreement, or any other previous agreement between the Parties,
and including without limitation, any and all Lonza know-how and trade secrets.

“Lonza Responsibility”

has the meaning given in Clause 8.3.3.

“Manufacturing Process”

means the production process for the manufacture of Product by Lonza, as such
process may be improved or modified from time to time by agreement of the
Parties in writing.

“Master Batch Record”

means the document, proposed by Lonza and approved by Customer, which defines
the manufacturing methods, test methods and other procedures, directions and
controls associated with the manufacture and testing of Product.

“MHLW”

means the Ministry of Health, Labour and Welfare of Japan, or any successor
agency having substantially the same functions.

“Minimum Order”

means the Engineering Batches and Process Validation Batches set forth in Clause
7 and the minimum aggregate number of Commercial Batches that Customer shall
purchase and

10

[*] = Certain confidential information contained in this document, marked by
brackets, is omitted because it is both (i) not material and (ii) would be
competitively harmful if publicly disclosed.

--------------------------------------------------------------------------------

Lonza shall manufacture under both the 2014 Agreement and this Agreement during
the Term, as scheduled in Appendix B.

“New Customer Intellectual Property”

has the meaning given in Clause 10.2.

“New [*] Intellectual

Property”

has the meaning given in Clause 10.3.

“Notification”

has the meaning given in Clause 9.9.

“Party”

means each of Lonza and Customer and, together, the “Parties”.

“2014 Agreement”

shall have the meaning set out in the first recital of this Agreement.

 

“Porrino Approval”

means marketing the first marketing approval by either the FDA or the EMA, of
andexanet alfa manufactured at the Porrino Facility for commercial supply (and
the date of “Porrino Approval” shall be the date on which the first of these
such approvals occurs).

“Porrino Facility”

means the facility of Lonza’s Affiliate in Porrino, Spain.

“Primary Supply”

means those Commercial Batches to be made at the Porrino Facility which shall be
no less than the greater of either: (i) [*] Batches at [*] scale; or (ii) [*] of
the Firm Orders in any year of this Agreement, in each case, following the date
of first Approval.

“Price”

means the price for the Services and Products as set out in Appendix B.

“Process Validation Batch”

means a Batch that is: (i) produced in a [*] fermentation vessel at the Visp
Facility in compliance with cGMP; (ii) produced with the intent to show
reproducibility of the Manufacturing Process; and (iii) required to complete
process validation studies.

“Product”

means andexanet alfa bulk drug substance manufactured by Lonza at the Visp
Facility in accordance with: (a) the Gen 2; and/or (b) [*] (as may be further
agreed by the Parties).

“Purchase Order”

means a purchase order placed by Customer for the production and delivery of
Batches or other Services.

“Quality Agreement”

means (i) the quality agreement to be entered into by Portola and Lonza and,
(ii) if required by

11

[*] = Certain confidential information contained in this document, marked by
brackets, is omitted because it is both (i) not material and (ii) would be
competitively harmful if publicly disclosed.

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Regulatory Authority or Applicable Laws, the quality agreement between Portola
and the Contract Facility; in each case after the Effective Date, which will set
out the responsibilities of the Parties and the Contract Facility in relation to
quality at the Visp Facility as required for compliance with cGMP.

“Raw Materials”

means all ingredients, solvents, medias, feeds, bags, filters, flasks, bottles
and other components of the Product required to perform the Manufacturing
Process or Services set forth in the bill of materials detailing the same
(including Resins but excluding any consumables or wearables). An initial bill
of materials for the Gen 2 process is attached to this Agreement as Appendix C,
which may be amended from time to time as agreed to in writing by the Parties.

“Raw Materials Fee”

means: (i) the acquisition cost of Raw Materials; and (ii) a procurement and
handling fee in the amount of [*] of such acquisition costs for all Raw
Materials other than: (a) [*]; (b) [*]; and (c) any and all Raw Materials which
[*].

“Receiving Party”

has the meaning given in Clause 13.1.

“Regulatory Authority”

means the FDA, EMA, MHLW, and any other similar regulatory authorities in such
other jurisdictions as may be agreed upon in writing by the Parties.

“Release”

has the meaning given in Clause 8.1.

“[*]”

has the meaning given in Clause [*].

“Resin”

means the chromatographic media and/or UF membranes intended to refine or purify
the Product, as specified in the Master Batch Record.

“Second Tranche Equity”

has the meaning given in Clause 9.5.2.

“Secondary Supply”

means those Batches which are not manufactured at the Porrino Facility as part
of the Primary Supply, but which are to be made at the Visp Facility following
the date of first Approval of the Visp Facility.

“Services”

means all or any part of the services to be performed by Lonza under this
Agreement (including, without limitation, process and analytical method
transfer, scale up, validation, clinical and commercial manufacturing, as well

12

[*] = Certain confidential information contained in this document, marked by
brackets, is omitted because it is both (i) not material and (ii) would be
competitively harmful if publicly disclosed.

--------------------------------------------------------------------------------

as quality control and quality assurance activities), particulars of which are
set out in the applicable Stages of Work.  

“Specifications”

means the specifications of the Product as approved by the Regulatory Authority
at the applicable time.

“Stages of Work”

means the mutually agreed upon stages of work which are part of this Agreement
and attached as Appendix E, describing the scope, Price, timeline and
deliverables of Services, including any update and modification thereof to which
the Parties may agree from time to time.

“Steering Committee”

has the meaning given in Clause 3.3.

“Supply Terms”

means, in relation to any Commercial Batches ordered under this Agreement and
manufactured in the Porrino Facility, the terms and conditions of the 2014
Agreement that apply to such Batches.  Specifically, the Supply Terms refer to
the following provisions of the 2014 Agreement: Clauses 2.2, 2.6, 2.7, 2.8.3,
2.8.4, 2.10, 2.11, 2.12, 2.13, 3.5, 4, 5, 7.1, 7.2, 8.6, 11, 12 and 13.

“Target Yield”

has the meaning given in Clause 2.4.2.

“Term”

has the meaning given in Clause 14.1.

“Termination Fee”

shall mean the fees payable on termination in accordance with Clause 14.3.

“Third Party”

means any party other than Customer, Lonza and their respective Affiliates.

“Visp Facility”

means the facility to be built at Lonza’s site at Visp CH3930, Switzerland and
which shall initially contain [*].

“Yield Minimum”

has the meaning given in Clause 2.4.2.

 

In this Agreement references to the Parties are to the Parties to this
Agreement, headings are used for convenience only and do not affect its
interpretation, references to a statutory provision include references to the
statutory provision as modified or re-enacted or both from time to time and to
any subordinate legislation made under the statutory provision, references to
the singular include the plural and vice versa, and references to the word
“including” are to be construed without limitation.

2Performance of Services

2.1A

Lonza has entered into a joint venture agreement with the JV Partner for the
construction and operation of the Visp Facility, which will be owned by the JV
Entity.

13

[*] = Certain confidential information contained in this document, marked by
brackets, is omitted because it is both (i) not material and (ii) would be
competitively harmful if publicly disclosed.

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2.1

Construction.  Subject to receiving the appropriate approvals, Lonza (and/or its
Affiliate) shall procure the use of commercially reasonable efforts to complete
the construction and validation of the Visp Facility in accordance with the
estimated construction and validation schedule as set out in Appendix F (as
amended from time to time), and transfer the Manufacturing Process to the Visp
Facility pursuant to Clause 2.4 so that Lonza may manufacture and supply
Secondary Supply of Product to Customer from the Visp Facility.  If any
necessary approval for the construction is not obtained, or if there are any
material delays in the construction of the Visp Facility or successful
technology transfer to the Visp Facility (as set forth in Clause 2.4) (each, a
“Delay”), Lonza shall inform Customer and [*] Lonza shall manufacture and
continue to supply to Customer using the Porrino Facility under the terms of the
2014 Agreement any and all Commercial Batches that cannot be manufactured at the
Visp Facility at the scheduled time due to any Delay, which were either: (a)
subject to a Firm Order placed by Customer to be manufactured at the Visp
Facility under this Agreement; or (b) included in the Minimum Order.  

 

2.2

Performance of Services.  Subject to Clause 2.1 and Clause 2.8, Lonza shall, and
to the extent necessary require Lonza’s Affiliates, the JV Entity, and/or the
Contract Facility (if not a Lonza Affiliate or the JV Entity) to, at the Visp
Facility, diligently carry out the Services as provided in the Stages of Work
and manufacture the Batches, in each case [*].  Without limiting the foregoing,
and subject to Firm Orders and the terms of this Agreement, Lonza will: (i)
conduct any process validation work in accordance with the applicable Stages of
Work; and (ii) manufacture the Batches in accordance with the applicable Stages
of Work.  Lonza shall retain appropriately qualified and trained personnel with
the requisite knowledge and experience to perform the Services in accordance
with this Agreement.  [*], provided that [*]; provided that [*].  In the event
[*], Lonza shall [*]. Lonza shall be responsible for the acts and omissions of
the Contract Facility, JV Entity, the JV Partner, Lonza Affiliate, and for all
purposes of this Agreement shall be deemed acts and omissions of Lonza.

2.3

Timetables.  Lonza shall use [*] to achieve the estimated timescales set out in
Appendices F, G and H.

2.4

Technology Transfer between Lonza Facilities.

 

2.4.1

Lonza shall, [*], transfer the Manufacturing Process from the Porrino Facility
to the Visp Facility pursuant to a schedule and timeline agreed by the Parties
and set forth in the Stages of Work, and conduct any scale up activities and/or
manufacture any pilot batches if necessary. Other than any activities which
Lonza decides at its sole discretion to undertake at its sole risk and expense,
the transfer of the Manufacturing Process shall not commence before the date of
Porrino Approval. The Parties will commence development of a technology transfer
plan following Porrino Approval, and shall complete a detailed technology
transfer plan for such transfer prior to [*]. If Lonza believes that [*] and
Customer does not agree then [*] shall have the right to make the final
decision; provided that [*].

 

2.4.2

Unless the Parties otherwise agree, if Lonza  is unable to achieve at least [*]
of the yield of the Baseline Batches (the “Target Yield”) in [*] (the “Yield
Minimum”) during [*] at the Visp Facility, then Lonza shall be obliged to fulfil
its supply obligations using the

14

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brackets, is omitted because it is both (i) not material and (ii) would be
competitively harmful if publicly disclosed.

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Porrino Facility in accordance with this Agreement and otherwise under the
Supply Terms of the 2014 Agreement, but Lonza may commence manufacturing from
the Visp Facility if Lonza subsequently achieves the Yield Minimum.  

 

2.4.3

In addition to Clause 2.4.2, if Lonza does not meet the Yield Minimum:

 

(a)

Lonza shall not proceed with the manufacturing of the Process Validation Batches
unless and until Lonza can achieve the Yield Minimum; and

 

(b)

[*] additional work (including Raw Materials) to be conducted at the Visp
Facility to achieve the Yield Minimum, including without limitation to
manufacture any additional Engineering Batches, [*] such additional Engineering
Batches in the event Lonza achieves at least [*] of the Target Yield [*].  

 

(c)

If Lonza is unable to achieve the Yield Minimum within [*] of determining the
yield of such second Engineering Batch, then the Parties shall meet and agree to
a plan to resolve such technology transfer failure. Unless and until such
technology transfer failure is resolved, Lonza shall fulfill its Commercial
Batch manufacturing obligations under this Agreement using the Porrino Facility
under the Supply Terms of the 2014 Agreement.

 

2.5

Validation of the Visp Facility. Unless set out otherwise in the relevant Stage
of Work, Lonza will be responsible for, at its expense, performing the
validation of the Visp Facility, equipment and cleaning and maintenance
processes employed in the Manufacturing Process in accordance with cGMP (if
applicable), Lonza’s SOPs, the applicable Quality Agreement and Applicable
Law.  Lonza will also be responsible for ensuring that all such Visp Facility
validation activities are carried out in accordance with cGMP.

 

2.6

Process Validation Activities.

 

2.6.1

Lonza and Customer shall agree on the process validation activities to be
performed. Lonza shall conduct those process validation activities as set out in
Appendix G (and such other activities as may be agreed by the Parties) which
shall be approved by Customer in advance (such approval to be in accordance with
the agreed timeline) and for which Customer shall pay in accordance with the
pricing set forth in such Appendix G.  

 

2.6.2

Any regulatory support activities (including pre-Approval inspection) required
and agreed to by Customer to support the Approval of the Product from the Visp
Facility shall [*].  All such regulatory support activities are [*], and shall
be approved in advance by the Customer as part of the applicable Stage of Work,
and the financial arrangements for such activities shall be as set forth in
Clause 9.3.

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brackets, is omitted because it is both (i) not material and (ii) would be
competitively harmful if publicly disclosed.

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2.7

Licenses and Permits.  Lonza will be responsible for obtaining, at its expense,
any licenses or permits required by Applicable Law for the performance of the
Services at the Visp Facility (including any licenses or permits required for
the operation of the Visp Facility and maintaining that for the Porrino
Facility) and any regulatory and government approvals necessary for the
performance of Services by Lonza under this Agreement at the Visp Facility, but,
for the avoidance of doubt, Lonza shall not be responsible for any regulatory,
governmental, and/or marketing approvals of the Product itself.  At Customer’s
request, Lonza will provide Customer with copies of all such approvals and
submissions to Government Authorities, and Customer will have the right to use
and/or refer to any and all information contained in such approvals or
submissions in connection with regulatory approval and/or commercial development
of Product, however, if Customer’s request would involve the disclosure of any
proprietary or confidential information, Lonza may at its sole discretion opt to
disclose such information to the appropriate Government Authority directly
rather than to Customer, and Lonza hereby grants Customer (and its designee who
is a technology transfer recipient under Clause 10.7) a right of reference to
such information in connection with the manufacture, development,
commercialization and regulatory activities for the Product.  Customer shall at
all times be solely responsible for obtaining regulatory approvals for the
Product and andexanet alfa.

 

2.8

Batches.  

 

2.8.1

Engineering Batches.  It is agreed that Lonza shall manufacture [*] Engineering
Batches at the Visp Facility prior to the commencement of Process Validation
Batches, or such fewer number as shall be agreed by the Parties. Lonza shall
manufacture Engineering Batches in accordance with the applicable Stage of Work
and in compliance with cGMP. Lonza shall test each Engineering Batch against the
Specification but Lonza shall not have any obligation to achieve the
Specifications (and such results may not be used to reject a Batch). Customer
shall pay for each of the Engineering Batches, unless [*] for a particular
Engineering Batch(es), in which case Customer would not have to pay for such
Engineering Batch(es). An Engineering Batch may only be rescheduled in
accordance with Clause 7.4.  Customer shall have the right to make whatever use
of any Engineering Batches as it shall determine in compliance with Applicable
Laws, provided that Customer shall not use any Engineering Batches for human use
unless the Engineering Batch is found to meet Specifications and to have been
made in accordance with cGMP and such use is also permissible under Applicable
Laws.  Lonza makes no warranty that Engineering Batches will meet
Specifications; provided that Process Validation Batches shall not commence
until it is demonstrated that the Manufacturing Process can produce Product that
meets the Specifications (and the Target Yield as provided in Clause 2.4.2). If
an Engineering Batch is found to meet the Specifications and to have been made
in accordance with cGMP, Lonza may Release such Engineering Batch as cGMP
Product upon prior written consent from Customer and all warranties applicable
to cGMP Product shall thereafter apply to such Batch of Product.  Customer shall
pay to Lonza the Price for all Engineering Batches at the applicable Price set
forth in Clause 9.1, plus the Raw Materials Fee associated with Engineering
Batches.  For clarity, Customer

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brackets, is omitted because it is both (i) not material and (ii) would be
competitively harmful if publicly disclosed.

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shall not be required to make any additional payment to Lonza for its technology
transfer of the Manufacturing Process from Lonza’s Porrino Facility to the Visp
Facility. In respect of such Engineering Batches, Customer shall be required to
pay the Raw Materials Fee, shipping costs, the costs of any External
Laboratories.  If additional Engineering Batches are required pursuant to Clause
2.4.3 then the provisions of Clause 2.4 shall apply to such additional
Engineering Batches.

 

2.8.2

Process Validation Batches.  It is agreed that; (i) following agreement by the
Parties that the Engineering Batches have demonstrated that the Manufacturing
Process can produce Product that meets the Specifications (and the Target Yield
as provided in Clause 2.4.3), and the Parties agreeing to proceed; then Lonza
shall manufacture [*] (any additional Batches to be agreed between the Parties
no later than [*] prior to commencement of the [*] Process Validation Batches
referred to in this Clause 2.8.2) Process Validation Batches in [*] at the Visp
Facility, and that this is an irrevocable commitment by both Parties and
Customer shall pay for such Process Validation Batches. Following the successful
completion of the second Engineering Batch, Lonza shall manufacture and deliver
Process Validation Batches as mutually agreed by the Parties sufficient to
document the operability and reproducibility of the Manufacturing Process and
permit the Parties to complete and file the necessary regulatory documents.

 

2.8.3

cGMP Batches.  Lonza shall manufacture all cGMP Batches in accordance with cGMP,
the Specifications and the applicable Stage of Work, provided that Lonza shall
not commence manufacturing of additional cGMP Batches beyond the Process
Validation Batches at the Visp Facility until after the Process Validation
Batches (pursuant to Clause 2.8.2) have been successfully completed and the
Parties agree that the Specification is achievable. No cGMP Batch shall be
commenced at the Visp Facility until such time as the Parties agree. If Lonza
determines that a cGMP Batch does conform with cGMP and the Specifications, it
shall Release such cGMP Batch as specified in Clause 8 and Customer shall pay
for such cGMP Batch at the applicable Price set forth in Clause 9.1.  For the
avoidance of doubt, if any cGMP Batch is not manufactured in accordance with
cGMP or the Specifications, the provisions of Clause 8.3.3 shall apply, but
Customer may pay a reduced price (to be agreed by the Parties) for any Failed
cGMP Batch in the event Customer desires to use such Batch as a non cGMP Batch
for research and development and in accordance with Applicable Law and not for
any in vivo human use.

 

2.8.4

Customer shall have the right to make whatever use of any Batch as it shall
determine, provided that Customer’s use of such Batch does not violate any
Applicable Laws, and further provided that Customer may only use cGMP Batch
(including any Process Validation Batches) for human use if Customer pays the
applicable Price and Lonza Releases such Batch as having been

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brackets, is omitted because it is both (i) not material and (ii) would be
competitively harmful if publicly disclosed.

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manufactured in accordance with cGMP and meeting the Specifications.

 

2.8.5

Following the completion of each Batch (or, in the case of Batches that are
manufactured as a Campaign, at the completion of such Campaign), the Parties
shall hold a meeting of the Steering Committee to discuss and agree next steps
with regard to the manufacture of any further Batches, including whether or not
to proceed to Process Validation Batches (if applicable).

 

2.9

Supply of Customer Information and Customer Materials.  Customer shall supply to
Lonza all materials in the bill of materials which are Customer Materials. Lonza
shall not be responsible for any delays arising out of Customer’s failure to
provide such Customer Materials, and Customer shall be responsible for all
reasonable additional costs and expenses arising out of such delay in accordance
with the terms of this Agreement after reasonable attempts to mitigate such
costs by Lonza. Customer hereby agrees that any and all: (i) Customer Materials
and Customer Information; and/or (ii) Customer Background Intellectual Property
and any other information or materials or Intellectual Property; provided to
Lonza (or any of its Affiliates) under the 2014 Agreement may be used for the
purposes of this Agreement by Lonza and/or its Affiliates.

 

2.10

Raw Materials and Customer Materials.  

 

2.10.1

Raw Materials. Lonza shall procure all required Raw Materials as well as
consumables other than those Raw Materials that are Customer Materials and shall
procure such Raw Materials and/or consumables at a reasonable price (taking into
consideration efficiency of supply, quality and price).  Lonza shall [*] to
procure such Raw Materials [*]. [*] Customer shall pay for all Raw Materials and
the Raw Materials Fee (including those required for Process Validation
activities) as provided in this Agreement, provided that, for any and all Raw
Materials Fee reimbursement under this Agreement [*].  In addition, Customer
may, following completion of construction, visit the Visp Facility to conduct an
audit of such costs (at its own cost).  At any time during the Term, and subject
always to any duties of confidentiality which Lonza or any of its Affiliates may
have to any Third Party(ies), Customer shall have the right to elect to assume
the responsibility to procure any Raw Materials and such Raw Materials shall
then be deemed Customer Materials. For clarity, [*] which Customer purchases
from an Affiliate of Lonza under a separate agreement shall be deemed to be
Customer supplied Customer Materials.

 

2.10.2

Safety Stock. Lonza will, unless Customer instructs Lonza otherwise, and subject
to Customer paying the appropriate Raw Materials Fee, maintain a sufficient
safety stock of Raw Materials (including a safety stock of Resin) as agreed to
by the Parties.  

 

2.10.3

Handling of Customer Materials. Lonza agrees: (a) to account for all Customer
Materials; (b) not to provide Customer Materials to any Third Party (other than
Affiliates, permitted sub-contractors, or External Laboratories for the sole
purpose of performing the Services on behalf of Lonza) without the express prior
written consent of Customer; (c) not to use Customer Materials for any

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brackets, is omitted because it is both (i) not material and (ii) would be
competitively harmful if publicly disclosed.

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purpose other than conducting the Services, and without limiting the generality
of the foregoing, will not analyze, characterize, modify or reverse engineer any
Customer Materials or take any action to determine the structure or composition
of any Customer Materials unless required pursuant to an agreed Stages of Work;
and (d) to destroy or return to Customer all unused quantities of Customer
Materials according to Customer’s written directions. Lonza shall not be
responsible for any quality issues or defects (including any latent defect) in
such Customer Materials existing as of the time Lonza takes possession of such
Customer Materials.

 

2.10.4

Ownership of Customer Materials.  Customer will at all times retain title to and
ownership of and risk in the Customer Materials that it has paid for or provided
to Lonza. Lonza will ensure that Customer Materials are free and clear of any
liens or encumbrances whilst in Lonza’s possession.  Lonza will at all times
take such measures as are reasonable to protect the Customer Materials and
components of any Customer Materials from loss, damage and theft at all stages
of the Manufacturing Process.  Lonza will at all times store Customer Materials
separate from other materials of Lonza or third parties and in a readily
identifiable manner. Lonza will immediately notify Customer if at any time it
believes any Customer Materials or components of any Customer Materials have
been damaged, lost or stolen.

2.11

Waste Disposal.  The generation, collection, storage, handling, transportation,
movement and release of hazardous materials and waste generated by Lonza in
connection with the Services will be the responsibility of Lonza at Lonza’s sole
cost and expense, unless any special treatment, collection, storage, handling,
transportation, movement or release of hazardous materials or waste is required
by Customer or which is specific to the Product, Raw Materials required for the
manufacture of Product or the Manufacturing Process at the Visp Facility, in
which case the Parties shall discuss in advance and use reasonable endeavours to
agree how such additional costs shall be borne.  Without limiting other
applicable requirements, Lonza will comply with local law at the Visp Facility
in relation to waste disposal.

2.12

Safety Procedures. Lonza will be solely responsible for implementing and
maintaining health and safety procedures for the performance of Services and for
its handling of any materials or hazardous waste used in or generated by the
Services.  Promptly following the signature of this Agreement, Customer shall
supply (or cause to be supplied) to Lonza such information as Lonza may
reasonably require (including full details of any hazards and the material
safety data sheet for the Product, the Cell Line and any other Customer
Materials, their storage and use). After review and approval by Lonza’s safety
committee of such information and hazard information, Customer shall supply to
Lonza such of the Customer Information and Customer Materials that may be
required by Lonza for the performance of the Services.

2.13

[*].

2.14

At all times during the term of this Agreement, provided that (i) Lonza fulfils
its obligation to manufacture the Commercial Batches of the Minimum Order and
any additional Commercial Batches under Firm Order, and (ii) the Primary Supply
is fulfilled

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brackets, is omitted because it is both (i) not material and (ii) would be
competitively harmful if publicly disclosed.

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from the Porrino Facility, Lonza shall have [*] to decide whether it wishes to
fulfill any Commercial Batches under Firm Order beyond the Primary Supply from
the Visp Facility or the Porrino Facility.

2.15

For clarity, in the event Customer cancels any Batch subject to a Firm Order
under this Agreement, Customer shall be subject to the cancellation fees and
other obligations under either this Agreement or the 2014 Agreement depending on
where the Batch was to be manufactured.  Any Commercial Batches manufactured at
the Porrino Facility after the Effective Date shall be subject to the Supply
Terms of the 2014 Agreement but otherwise subject to the terms and conditions of
this Agreement.

 

3Project Management / Steering Committee

3.1

Stages of Work.  With respect to a new Stage of Work to be governed by this
Agreement, a new Stage of Work shall be added by the Parties’ written agreement
and appended to Appendix E.  Each Stage of Work shall include a description of
the Services to be provided, Specifications, a schedule for completion of the
Stage of Work, pricing details, and such other information as is necessary for
relevant Services.  In the event of a conflict between the terms of a Stage of
Work and this Agreement, the terms of this Agreement will govern.  For clarity,
Customer shall not be required to reimburse or pay for any fees, costs or
expenses unless expressly set forth and budgeted in the Stages of Work.

3.2

Project Management.  Each Party will appoint a project manager who will be the
person responsible for overseeing Services under this Agreement.

3.3

Steering Committee.  Each Party shall name a mutually agreed upon equal number
of representatives for the “Steering Committee,” which shall meet (whether by
telephone or in person, as mutually agreed by the Parties) [*] (or as the
Parties may agree otherwise) until Approval of the Product and thereafter [*],
or as otherwise mutually agreed by the Parties.  In the event that a Steering
Committee dispute cannot be resolved, such dispute shall be escalated to the
Executive Committee.

The primary function of the Steering Committee is to ensure the ongoing
communication between the Parties and discuss and resolve any issues arising
under this Agreement.  In addition to the primary function described above, the
Steering Committee shall also take on the following responsibilities: (a)
discuss and seek resolution of issues around management of the Services; (b)
agree and monitor deadlines and milestones for the Services; (c) discuss and
review forecasts and Lonza’s capacity as set forth in Clause 7.2.6; and (d)
discuss and recommend any changes to the Services (although such changes will
not take effect until they have been incorporated into a written agreement to
modify the applicable Stage of Work which has been signed by the Parties).

3.4

Executive Committee. Each Party shall name a mutually agreed upon equal number
of suitable senior representatives for the “Executive Committee,” which shall
meet (whether by telephone or in person) as mutually agreed by the Parties, but
in any event at least [*].  The role of the Executive Committee shall be to
provide oversight and to act as a forum for (without limitation) the
coordination of supply demand and capacity and for the prompt resolution of
matters escalated from the Steering Committee.

3.5

Person in Plant.  Customer shall be permitted to have, at no additional cost,
[*] representatives (provided that Customer shall be fully responsible for them
and ensure that they maintain the confidentiality obligations as if they were a
Party hereto) at the Visp Facility as reasonably requested by Customer, at any
time during the

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brackets, is omitted because it is both (i) not material and (ii) would be
competitively harmful if publicly disclosed.

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Manufacturing Process or the performance of Services for the purpose of
observing, reporting on, and consulting as to the performance of the Services,
subject to Customer providing reasonable advance notice and subject to
confidentiality restrictions of Third Party customers of Lonza who may also have
projects in the Visp Facility at the same time.  Such person(s) shall be subject
to and agree to abide by confidentiality obligations to Lonza and Third Parties
and Lonza’s customary practices and operating procedures regarding persons in
plant, and such employee agrees to comply with all reasonable instructions of
Lonza’s employees at the Visp Facility and if requested, Lonza shall use its
reasonable endeavours to supply information of such to Customer in advance.

3.6

2014 Agreement.  The Parties agree that to the extent practicable, activity
under the 2014 Agreement and this Agreement may be jointly managed by a single
Steering Committee and a single Executive Committee to facilitate efficiency and
consistency, and the terms of this Clause 3 shall apply (in place of Clause 3 of
the 2014 Agreement) to such Steering Committee and Executive Committee.

3.7

[*].

4Visp Facility

4.1

Construction and Ownership.  As between the parties, Lonza shall own the Visp
Facility and all equipment therein and shall be responsible for its
construction, capital improvements, furbishing, and all other capital
expenditures related thereto, all at Lonza’s expense.  

4.2

Construction Timeline.  Planning and construction of the Visp Facility is
currently scheduled to commence in [*] and proceed according to the estimated
timeline set forth in Appendix F (as amended from time to time).  Lonza shall
provide Customer with regular updates regarding progress in the planning and
construction of the Visp Facility, including prompt notifications of any
significant deviations from the estimated timeline.  Customer shall also have
the right to review construction plans, and conduct a site visit, but shall not
have the right to direct or coordinate construction and shall have no obligation
with respect to capital expenditures related thereto. If a material delay in
construction of the Visp Facility prohibits Lonza from completing delivery of
Engineering Batches and Process Validation Batches under the obligations of this
Agreement at the Visp Facility, then the provisions of Clause 2.1 shall apply.

4.3

Operation.  As between the Parties, Lonza shall be solely responsible for the
operation of the Visp Facility at its own expense, including without limitation:
(a) operational qualification of the Visp Facility; (b) start-up and validation
of all manufacturing process equipment and utilities at the Visp Facility; (c)
all technology transfer into the Visp Facility from other Lonza facilities,
including the transfer of the Gen 2 manufacturing processes to the Visp
Facility; and (d) the scaling-up of the Gen 2 and manufacturing processes for
use in [*] fermenters. For clarity, Customer shall be responsible for the
marketing approval of the Product, except that Lonza shall be responsible for
carrying out its regulatory and manufacturing obligations set forth in this
Agreement to support such marketing approval.

4.4

Capacity.  Subject to Clause 7.2, Lonza shall, at all times, have the right to
use manufacturing capacity at the Visp Facility and the Porrino Facility not
reserved for Customer pursuant to Clauses 7.1.1 or 7.2.1 to manufacture products
other than andexanet alfa for Third Party customers.

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brackets, is omitted because it is both (i) not material and (ii) would be
competitively harmful if publicly disclosed.

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4.5

Capital Equipment.  Unless otherwise mutually agreed by the Parties, any capital
equipment required for the performance of the Services shall be acquired at
Lonza’s expense and Lonza, at its expense, shall be responsible for all
validation of such capital equipment that is to be used at the Visp Facility,
and shall maintain such capital equipment while it is being used by Lonza in the
Visp Facility for the Services. For clarity, Lonza may use such capital
equipment when not being used to manufacture Product to perform services for
Third Party customers.

5Quality

5.1

Responsibility for quality assurance and quality control of Product shall be
allocated between Customer, Lonza and the Contract Facility as set forth in the
Quality Agreement and in Lonza standard operating procedures.  If there is a
conflict between the terms and conditions of this Agreement and the Quality
Agreement, the terms and conditions of this Agreement shall prevail except for
matters pertaining to quality and disposition of the Product, in which case the
Quality Agreement shall prevail.  Lonza shall be responsible for the Contract
Facility’s performance under the Quality Agreement.

5.2

Provisions regarding inspections by Regulatory Authorities and audits shall be
set out in the Quality Agreement.

6Insurance

6.1

Each Party shall, during the Term and for [*] years after delivery of the last
Product manufactured or Services provided under this Agreement, obtain and
maintain at its own cost and expense from a qualified insurance company,
comprehensive general liability insurance with a general aggregate limit of at
least [*] US Dollars and product liability coverage with a general aggregate
limit of at least [*] US Dollars per occurrence and in the annual
aggregate.  Each Party shall periodically review its insurance coverage, and
shall provide the respective other Party with a certificate of such insurance
upon reasonable request. Customer shall review its insurance coverage after
Approval in accordance with customary and appropriate coverage levels for
similarly situated companies.

7Minimum Order; Forecasting, Ordering, Rescheduling and Cancellation

7.1

Minimum Order and Reduction of Minimum Order.  

 

7.1.1

Minimum Order.

 

(a)

Customer shall place Purchase Orders, which Lonza shall accept as Firm Orders,
for [*] Engineering Batches to be manufactured in the Visp Facility in [*], or
such other date as may be agreed in the Project Plan, but in no event shall
Customer be required to place such Purchase Orders prior to the date of Porrino
Approval;

 

(b)

Customer shall place Purchase Orders, which Lonza shall accept as Firm Orders,
for [*] Process Validation Batches to be manufactured in the Visp Facility in
[*], or such other date as may be agreed in the Project Plan, but in no event
shall Customer be required to place such Purchase Orders prior to the date of
Porrino Approval;

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brackets, is omitted because it is both (i) not material and (ii) would be
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(c)

In each of the [*], Customer shall be obligated to purchase, and Lonza shall be
obligated to manufacture at the Porrino Facility or the Visp Facility, as
applicable, the Commercial Batches scheduled as part of the Minimum Order in
each such year.

 

(d)

Purchase Orders for the Engineering Batches and Process Validation Batches
(referred to in Clause 7.1.1 (a) and (b)) shall be placed, and accepted by Lonza
as Firm Orders, promptly following the date of Porrino Approval. Each Purchase
Order for Commercial Batches referred to in Clause 7.1.1(c) (other than those
purchase orders that have been submitted by Customer under the 2014 Agreement at
the date of Porrino Approval, which shall count towards the Minimum Order under
this Agreement for the applicable year) is to be placed, and accepted by Lonza
as a Firm Order, at least [*] prior to the Commencement Date for the first Batch
of the Campaign;

Customer shall be obligated to place Purchase Orders, which Lonza shall be
obligated to accept as Firm Orders, for Batches no fewer than the portion of the
Minimum Orders not already under a firm order under the 2014 Agreement. Customer
shall be deemed to have placed a Purchase Order which Lonza shall be deemed to
have accepted as a Firm Order, for each such Batch under Clause 7.1.1 at the
time Customer is obligated to place the Purchase Order for such Batch, whether
or not Customer takes the affirmative action to place such Purchase Order, or
Lonza takes affirmative action to accept as Firm Orders, provided that,
Customer’s obligation to place Purchase Orders for such Minimum Order (either
affirmatively or automatically as described above) shall not apply: (i) during
the notice period after either Party has provided the other Party with a
termination notice pursuant to Clause 14.2.2(a); or (ii) after the Parties have
agreed to terminate this Agreement and have agreed to waive such Minimum
Orders.  

 

7.1.2

[Not used]

 

7.1.3

Reduction of Minimum Order. If, at any time on or after [*], [*] reasonably
demonstrates that [*], then the Parties shall meet to discuss and use reasonable
endeavours to agree to a mechanism to reduce the Minimum Order, any such
revisions to this Agreement being subject to [*] and [*] (“Adjusted Minimum
Order”), under reasonable commercial terms to be agreed by the Parties.  By way
of example (and without limitation), such reasonable commercial terms may
include [*] or [*] or [*].  If the Parties are unable to agree to reasonable
business terms with respect to the Adjusted Minimum Order within [*] of
initiating such negotiations, Customer shall have the right to terminate this
Agreement in accordance with Clause 14.2.1(c) and following such termination any
future orders for Product to be manufactured by Lonza shall be placed under, and
be subject to, the 2014 Agreement.

7.2

Forecasting for Batches.  

 

7.2.1

Transition Provision. After the date of Porrino Approval all forecasting,
ordering, rescheduling and cancellation of Batches

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competitively harmful if publicly disclosed.

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shall be made in accordance with this Agreement (although the actual manufacture
of such Batches shall be made pursuant to this Agreement or the Supply Terms of
the 2014 Agreement depending on the location of the manufacture), and, subject
to the obligations regarding Engineering Batches, Process Validation Batches,
Primary Supply under Clause 7.7 and Lonza’s obligation to manufacture Commercial
Batches that are either part of the Minimum Order or otherwise under Firm
Orders, Lonza [*] the Porrino Facility or the Visp Facility to fulfil Customer’s
demand.

 

7.2.2

On the date of Porrino Approval, the then current forecast for Batches under the
2014 Agreement shall become the initial forecast under this Agreement (the
“Forecast”). Thereafter, no later than [*], Customer shall update the Forecast
by supplying Lonza with a written forecast showing Customer’s good faith
estimated annual requirements for Batches for at least the following [*] period,
which shall include at least the Minimum Order for each year as set forth in
Appendix B.  Subject to Clause 7.2.3, no later than [*] following Lonza’s
receipt of a Forecast, Lonza shall provide written notice to Customer of whether
it has (as of the date of receipt of the Forecast) capacity at the Visp Facility
and/or the Porrino Facility available to conduct such Batch production as
forecasted therein and shall provide Customer with an estimated schedule showing
the estimated Commencement Date of each such forecasted Campaign from either the
Visp Facility or the Porrino Facility, provided always that [*], and that prior
to the Approval of the Visp Facility, the Commercial Batches included in the
Minimum Order or otherwise under Firm Orders shall be fulfilled exclusively at
the Porrino Facility.

 

7.2.3

Lonza shall reserve sufficient capacity at the Visp Facility and/or the Porrino
Facility (subject to Clause 7.7) to manufacture the Minimum Order and Batches
otherwise under Firm Order, split between the Visp Facility and the Porrino
Facility in accordance with the Primary Supply and Secondary Supply principles
(provided that prior to the Approval, the Commercial Batches shall be fulfilled
exclusively at the Porrino Facility). At each facility Lonza shall manufacture
the applicable portion of the Commercial Batches that is to be manufactured at
that facility in a single Campaign in each calendar year, unless otherwise
agreed by the Parties. Each year Lonza shall provide Customer with an estimated
production schedule for the Product.

 

7.2.4

If the Forecast submitted by Customer consists of additional Commercial Batches
in excess of the Minimum Order, [*] Customer has placed a binding Purchase Order
in accordance with Lonza’s response to such Forecast, and Lonza has accepted
such Purchase Order as a Firm Order. However, [*] the number of Commercial
Batches referred to in the Forecast at either the Visp Facility or the Porrino
Facility (at Lonza’s discretion), provided always that the Primary Supply [*].
Customer’s ability to reserve, Lonza’s obligation to provisionally schedule or
accept, such additional Commercial Batches shall depend on [*] at the time of
the Forecast or of placing a Purchase Order (as applicable).

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brackets, is omitted because it is both (i) not material and (ii) would be
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7.2.5

If Lonza [*] Lonza shall promptly notify Customer in writing.  If Customer
wishes to proceed with the forecasted additional Batches, Customer shall [*] of
its receipt of such notice from Lonza in accordance with Clause 7.3 and Lonza
[*]. If Customer does not respond to Lonza within [*] of its receipt of such
notice, Lonza shall be free to sell such capacity to the Third Party.

 

7.2.6

Forecasting and Lonza’s capacity will be reviewed on [*] basis or as otherwise
agreed by the Steering Committee.

 

7.2.7

Lonza shall provide Customer with a non-binding indication as to the
availability of manufacturing slots in the Visp Facility and the Porrino
Facility for the [*] period following the period covered by the Forecast.

 

7.2.8

At all times, Customer shall be solely responsible for generating the Forecast
based on its estimated market demands of the Product.

7.3

Purchase Orders.  

 

7.3.1

[Intentionally left blank].

 

7.3.2

Batches.

 

(a)

Customer shall place Purchase Orders for the Minimum Order in accordance with
Clause 7.1 (whether affirmatively or automatically), plus Customer shall place
Purchase Orders for any other Batches it wishes to order in accordance with this
Clause 7.3.2, and taking into consideration Lonza’s most recent response to the
Forecast or in accordance with a manufacturing schedule as agreed in writing
between the Parties after the date of this Agreement. All Purchase Orders must
be placed at least [*] prior to the commencement of such order, or earlier as
set forth in Clauses 7.2.4 and 7.2.5.

 

(b)

Customer may place Purchase Orders under this Agreement for Batches in addition
to the Minimum Orders, provided that Lonza has received a Forecast for such
additional Batches and Lonza has issued a production schedule for such
additional Batches. Subject to Lonza’s obligations under Clauses 7.2.4 and
7.2.5, Lonza shall have no obligation to accept Purchase Orders for such
additional Batches or to reserve capacity prior to accepting such Purchase
Orders.

 

(c)

Each Purchase Order shall be signed by Customer and shall authorize Lonza to
manufacture such Batches of the Product as are set forth therein, and Lonza
shall notify Customer of its acceptance of such Purchase Order within [*] after
its receipt, provided that Lonza shall not reject any Purchase Orders placed
pursuant to this Agreement for any Batch included in the Minimum Order or
Commercial Batches in excess of the Minimum Order under Clause 7.2.5.  

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brackets, is omitted because it is both (i) not material and (ii) would be
competitively harmful if publicly disclosed.

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(d)

Subject to Lonza’s obligation to accept Purchase Orders for the Minimum Order or
for Commercial Batches in excess of the Minimum Order under Clause 7.2.5, Lonza
shall not be obligated to commence manufacture of any Batch, whether part of the
Minimum Order or additional Commercial Batches in excess of the Minimum Order
unless and until such written Purchase Order is accepted in writing by Lonza, at
which point such Purchase Order shall become a Firm Order and binding upon both
Parties.  

 

(e)

Any additional or inconsistent terms or conditions of any Customer Purchase
Order, acknowledgement or similar standardized form given or received pursuant
to this Agreement shall have no effect and such terms and conditions are hereby
rejected. All ordered Batches in a single Firm Order shall be scheduled in
single Campaigns at the Porrino Facility and/or the Visp Facility, as
applicable, unless otherwise agreed in writing by both Parties.

 

7.4

Rescheduling.  

 

7.4.1

[Intentionally left blank].

 

7.4.2

Batches.

 

(a)

With the prior written consent of Customer, not to be unreasonably withheld or
delayed, Lonza will have the right to reschedule the Commencement Date of any
Firm Order for a Batch, but only [*], by no more than [*] to manage the Visp
Facility capacity or the Porrino Facility capacity (as applicable) (or [*] so
long as Lonza notifies Portola in advance in writing, and Portola confirms that
such additional variation in timing [*] and/or [*]), but Lonza will not
otherwise alter any Firm Order.

 

(b)

Either Party may reschedule (with the agreement of the other Party, not to be
unreasonably withheld), an Engineering Batch, or a Process Validation Batch, or
a Commercial Batch for technical or other material reasons, such as if the
preceding Stage of Work or preceding Batch was not successfully completed.

 

(c)

Customer shall have the right to request in writing to reschedule a Batch, and
Lonza shall use reasonable endeavours to determine as to whether or not it
agrees to such request to reschedule. [*] accept any request for rescheduling if
[*] or [*].  

 

7.5

Cancellation of a Firm Order.  Customer may cancel a Firm Order upon written
notice to Lonza, in accordance with this Section 7.5, subject to the applicable
payment of a cancellation fee as calculated below (the “Cancellation Fee”):

 

7.5.1

[Intentionally left blank].

 

7.5.2

Batches. Other than cancellation [*] or [*], and subject to Clause 7.6, if
Customer provides written notice of cancellation to Lonza of any Firm Order
(whether as part of the Minimum Order or

26

[*] = Certain confidential information contained in this document, marked by
brackets, is omitted because it is both (i) not material and (ii) would be
competitively harmful if publicly disclosed.

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otherwise) [*], then [*] of the Batch Price of each such Batch cancelled is
payable by Customer as a Cancellation Fee plus, subject to Lonza’s obligation to
provide itemized invoice as set forth in Clause 2.10.1 and the last sentence of
Clause 2.10.1, Customer shall pay the Raw Materials Fee in respect of any Raw
Materials which were acquired by Lonza for such cancelled Batch and which Lonza
cannot use for another customer project and any non-cancellable commitments of
subcontractors and External Laboratories in each case to the extent not already
included in the calculation of the Batch Price.

 

7.5.3

Payment of Cancellation Fee.  Any Cancellation Fee shall be payable within
[*].  Any Batch cancelled under Clause 7.5.2 is subject to payment by Customer
of the applicable Raw Materials Fee associated with Raw Materials that are
irrevocably incurred by Lonza. Any Batch cancelled is also subject to payment by
Customer of any non-cancellable commitments of subcontractors and External
Laboratories.  

 

7.5.4

Notwithstanding Clause 7.5.2 and Clause 7.5.3, with respect to [*], in the event
that [*], Customer shall have the right to cancel [*] without being subject to
any Cancellation Fee.

 

7.5.5

Notwithstanding Clause 7.5.2 and Clause 7.5.3, if [*], then Customer shall have
the right to cancel [*] without being subject to any Cancellation Fee.

 

7.6

Replacement Project.  Notwithstanding the foregoing, Lonza will use commercially
reasonable efforts to secure a new project to fill the slot which would have
been occupied by the cancelled Firm Order with another previously uncontracted
Customer biologics project or with a previously uncontracted Third Party
customer project for each cancelled Batch, and to the extent successful then the
Cancellation Fee for such cancelled Batch shall be waived.

 

7.7

Facility Flexibility. At all times, subject to Clause 2.14 regarding the Primary
Supply and the Secondary Supply, and the obligations regarding the Engineering
Batches and Process Validation Batches manufactured at the Visp Facility, Lonza
[*] whether to manufacture Batches from the Visp Facility or from the Porrino
Facility; provided that once a Batch is subject to a Firm Order, Lonza may not
change the place of manufacture without the prior written approval of Customer.

8Delivery and Acceptance

8.1

Delivery.  All Product manufactured in the Visp Facility shall be delivered
[*].  Lonza shall deliver to Customer the Certificate of Analysis, the
Certificate of Compliance, fully executed consolidated batch records, deviation
summary reports, component Certificate of Analysis and Certificate of
Compliance, analytical raw data in accordance with the Quality Agreement, and
such other documentation as is reasonably required to meet all applicable
regulatory requirements of the Governmental Authorities not later than the date
of the [*] delivery of Batches and/or, as appropriate for the relevant Stage of
Work, any other deliverable from that stage (which shall be the date on which
Lonza places a Batch and/or, as appropriate for the relevant Stage of Work, any
other deliverable from that stage at the disposal of Customer at the Visp
Facility not cleared for export and not loaded onto any collecting vehicle) (the
“Release”). With respect to

27

[*] = Certain confidential information contained in this document, marked by
brackets, is omitted because it is both (i) not material and (ii) would be
competitively harmful if publicly disclosed.

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Product, title and risk of loss shall transfer to Customer upon Release in
accordance with this provision.

8.2

Storage.  

 

8.2.1

Unless the Parties otherwise agree, Customer shall arrange for shipment and take
delivery of each Batch from the Visp Facility, at Customer’s expense and risk,
within [*] after Release or pay applicable storage costs. Lonza shall provide
storage on a bill and hold basis for such Batch(es) at no charge for up to [*];
provided that any additional storage beyond [*] will be subject to availability
and, if available, will be charged to Customer and will be subject to a separate
agreement.  In addition, Customer shall be responsible for all value added tax
(VAT) and any other applicable taxes, levies, import, duties and fees of
whatever nature imposed as a result of any storage and Lonza shall reasonably
cooperate with the Customer to minimize such VAT and/or other taxes, levies,
import, duties and fees. Notwithstanding anything to the contrary contained in
this Agreement, in no event shall Lonza be required to store any Batch for more
than [*] after Release.  Within [*] following a written request from Lonza,
Customer shall provide Lonza with a letter in a form satisfactory to Lonza
confirming the bill and hold status of each stored Batch.  

 

8.2.2

Unless otherwise requested in writing by Customer, Lonza will (acting as agent
for Customer) arrange for insurance of Product whilst held by Lonza after
Release (awaiting transportation) for a maximum of [*] on terms equivalent to
those under which Lonza insures Product prior to Release. All reasonable costs
and expenses incurred by Lonza in arranging such insurance shall be charged to
Customer in addition to the Price.

 

8.2.3

Lonza shall not be required to store any Batch (including any Engineering or
Process Validation Batch and whether or not such Batch was successful) for more
than [*]. However, if Customer requires storage and Lonza is able to provide
this, then Lonza and Customer shall discuss and agree the terms of an amendment
to this Agreement to provide for such storage.

 

8.3

Acceptance/Rejection of Product.

 

8.3.1

[*] following the Release of a cGMP Batch, Customer may inspect such cGMP Batch
and shall have the right to independently test or have tested such cGMP Batch to
determine that the cGMP Batch was manufactured in accordance with cGMP and that
it meets the Specifications.  Customer shall notify Lonza in writing of any
rejection of a cGMP Batch based on any claim that it was not manufactured in
accordance with cGMP or fails to meet the Specifications within [*] of the later
of Release or Customer’s receipt of all required documentation for such cGMP
Batch, after which time, in either case, any un-rejected cGMP Batch shall be
deemed accepted, subject to Customer’s right to reject any Batch at a later time
for latent defect, provided that such latent defect was not reasonably
detectable and the Customer notifies Lonza

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brackets, is omitted because it is both (i) not material and (ii) would be
competitively harmful if publicly disclosed.

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of such latent defect within [*] after its discovery, provided that such latent
defect is discovered within [*] of the date of Release.  

 

8.3.2

In the event that Lonza believes that a cGMP Batch has been incorrectly
rejected, Lonza may require that Customer provide to it cGMP Batch samples for
testing.  Lonza may retain and test the samples of such cGMP Batch.  In the
event of a discrepancy between Customer’s and Lonza’s test results such that
Lonza’s test results fall within relevant Specifications, or there exists a
dispute between the Parties over the extent to which such failure is
attributable to a given Party, the Parties shall cause an independent laboratory
promptly to review records, test data and perform comparative tests and/or
analyses on samples of the Product that allegedly fails to conform to
Specifications.  Such independent laboratory shall be mutually agreed upon by
the Parties.  The independent laboratory’s results shall be in writing and shall
be final and binding save for manifest error.  Unless otherwise agreed to by the
Parties in writing, the costs associated with such testing and review shall be
borne by the Party against whom the independent laboratory rules.

 

8.3.3

Lonza shall replace any cGMP Batch that was not manufactured in accordance with
cGMP or does not meet the Specifications [*] (a “Failed cGMP Batch”). Any such
Failed cGMP Batch shall be deemed to be a “Lonza Responsibility.” Such
replacement shall be made as promptly as practicable, in light of available
manufacturing capacity at the Visp Facility or the Porrino Facility as
applicable (with the decision as to which facility to use being at Lonza’s
discretion), after the confirmation of Lonza Responsibility, and in any case as
soon as reasonably possible after confirmation of Lonza Responsibility.  Where
possible, such replacement Batch shall be manufactured as part of the next
Campaign. [*] acknowledges and agrees that [*]. [*] Raw Materials or Customer
Materials consumed in any Failed cGMP Batch for which Lonza Responsibility has
been established as set forth in this Clause 8.3.3, [*]. If Customer received a
refund for the Failed cGMP Batch (including a refund for the applicable Raw
Materials Fee) or did not pay in full for the Failed cGMP Batch (including the
applicable Raw Materials Fee), then it shall pay for the replacement cGMP Batch
in full together with the Raw Materials Fee for such replacement Batch. If
Customer wishes to use the Failed Batch for laboratory use (not for in vivo
purposes) then  the Parties shall discuss and agree an appropriate sum for which
Customer shall pay for such Failed Batch, this shall not reduce the obligation
on Customer to pay for any replacement Batches. For the avoidance of doubt, this
Clause 8.3.3 shall apply to failure to achieve Specification.

9Price and Payment and Changes

 

9.1

Prices.  Subject to Clause 9.8, pricing for the Services (including Batch
Prices) provided by Lonza are set out in Appendix B and based on the assumptions
and information set out in the applicable Stage of Work.

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brackets, is omitted because it is both (i) not material and (ii) would be
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9.2

The Batch Price is based on the current process. The Parties will negotiate a
revision to the Batch Price prior to implementing any process changes if the
process changes increase or decrease the Batch time.

 

9.3

Regulatory Payment.  

 

9.3.1

Lonza shall be solely responsible for all regulatory activities conducted by or
on behalf of Lonza under Clause 2.7 in connection with the Approval by the FDA,
EMA and MHLW, at its sole cost and expense.  On each achievement of each of the
Approvals by FDA, EMA and MHLW, Customer shall pay Lonza (for each Approval) the
sum of [*] ([*] in total if all approvals are achieved).

 

9.3.2

Customer shall reimburse Lonza for the equivalent regulatory activities to be
conducted by Lonza, if any, in connection with the approval by any other
Regulatory Authority agreed by the Parties.  Lonza shall issue an invoice for
such payment on a monthly basis for such activities conducted in the preceding
calendar month, and Customer shall pay such invoice within [*] of receipt of
such invoice.

 

9.4

Currency.  All payments for Services (including manufacture of Batches) provided
at the Visp Facility shall be invoiced and paid in [*], and all payments for
Services (including manufacture of Batches) provided at the Porrino Facility
shall be invoiced and paid in [*].

 

9.5

Equity.

 

9.5.1

First Tranche.  When Customer has received Porrino Approval and Lonza has
initiated technology transfer of the Gen 2 process to the Visp Facility, unless
Customer has terminated this Agreement under Clause 14.2.1(b)(i) on or before
such date, Lonza (or an Affiliate of Lonza) shall have the right to purchase, at
a purchase price per shares of one dollar USD ($1.00), the lesser of either: (i)
five hundred thousand (500,000) shares of Customer’s common stock; or (ii) the
maximum number of shares of Common Stock with an aggregate value that does not
exceed $15,000,000USD, such value calculated based on the average closing price
of Customer’s common stock as reported on the Nasdaq Global Select Market for
the twenty (20) trading days prior to the date that the First Tranche purchase
right is triggered (the “First Tranche Equity”).  The sale of the First Tranche
Equity shall be made pursuant to a Common Stock Purchase Agreement in the form
set forth in Appendix H.

 

9.5.2

Second Tranche. Immediately following first Approval of the Product from the
Visp Facility, Lonza (or an Affiliate of Lonza) shall have the right to
purchase, at a purchase price per shares of one dollar USD ($1.00), up to the
lesser of either: (i) five hundred thousand (500,000) shares of Customer’s
common stock; or (ii) the maximum number of shares of Common Stock with an
aggregate value that does not exceed $15,000,000USD, such value calculated based
on the average closing price of Customer’s common stock as reported on the
Nasdaq Global Select Market for the twenty (20) trading days prior to the date
that

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brackets, is omitted because it is both (i) not material and (ii) would be
competitively harmful if publicly disclosed.

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the Second Tranche purchase right is triggered(the “Second Tranche
Equity”).  The sale of the Second Tranche Equity shall be made pursuant to a
Common Stock Purchase Agreement in the form set forth in Appendix H. The precise
number of shares to be sold shall be calculated according to the average amount
of Product yielded from the Comparison Batches (as defined below) compared with
the Baseline Batches (as defined below), as follows:

Average amount of Product yielded in the Comparison Batches compared with the
average amount of Product yielded in the Baseline Batches.

 

Lonza’s entitlement to Second Tranche Equity shares.

[*] or greater

[*] of Second Tranche Equity shares

 

[*] or more, but less than [*]

 

 

[*] or more, but less than [*]

[*] of Second Tranche Equity shares

 

[*] of Second Tranche Equity shares

 

 

For example, if Lonza achieves [*] it would be entitled to [*] of the Second
Tranche Equity shares. If Lonza achieves [*] it would be entitled to [*] of the
Second Tranche Equity shares.

 

“Baseline Batches” shall mean the first [*] batches delivered from the Porrino
Facility under the 2014 Agreement, which shall include: (a) all of the
engineering batches; and (b) all of the process validation batches and such
number of cGMP Batches as needed to make up a total of [*] Batches.

“Comparison Batches” shall mean the first [*] Batches delivered from the Visp
Facility which shall include: (a) [*], all of the Engineering Batches; and (b)
all of the Process Validation Batches and such number of cGMP Batches as needed
to make up a total of [*] Batches.

Any [*] Batches shall be excluded from the calculation of the average yield from
the Baseline Batches or the average yield from the Comparison Batches and shall
not count towards the [*] Batches. Any [*] Batches, any Batch [*], or any
Batches [*] shall be excluded from the calculation of the average yields only if
[*].

 

9.5.3

In the event a Change of Control of Customer or an assignment (in accordance
with the terms of this Agreement) of this Agreement by Customer (other than to
an Affiliate of Customer) has occurred prior to Lonza earning the First Tranche
Equity

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brackets, is omitted because it is both (i) not material and (ii) would be
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and/or Second Tranche Equity in accordance with above, then if and when Lonza
earns entitlement to the First Tranche Equity and/or the Second Tranche Equity
in accordance with above, Lonza shall receive, in lieu of the First Tranche
Equity and/or Second Tranche Equity, as applicable, the monetary value of the
First Tranche Equity and/or the percentage to which Lonza is entitled pursuant
to Clause 9.5.2 of the Second Tranche Equity, with the value of such payments
(including the number of shares of Customer Common Stock included in the First
Tranche Equity and Second Tranche Equity) determined based on the average
closing price of Customer Common Stock on the Nasdaq Global Select Market for
the five (5) trading days prior to the consummation of such Change of Control or
assignment rather than the twenty (20) trading day periods set forth in Clauses
9.5.1 and 9.5.2.

 

9.6

Changes to Stages of Work, Manufacturing Process and Specifications.

 

9.6.1

If either Party identifies that:

 

(a)

a modification is required to a Stage of Work, or

 

(b)

an additional Stage of Work is required, or

 

(c)

Lonza needs to use any Raw Material which requires any special treatment,
handling or disposal, or

 

(d)

any changes are required to the technology transfer or the process validation
activities (notwithstanding any other provision in this Agreement).

the identifying Party will notify the other Party in writing as soon as
reasonably possible.  Lonza will provide Customer with a change request
containing a description of the required modifications and their effect on the
scope, any additional costs or fees (for clarity [*]), Price and timelines for
such Scope of Work or change, and will use reasonable efforts to do so within
[*] of receiving or providing such notice, as the case may be.  No such change
or change of scope will be effective unless and until it has been agreed to by
the Parties in writing. In addition in the case of (c) above, the Parties shall
agree whether Lonza is required to achieve the Specification and/or cGMP in
relation to the first Batch following such change.

 

9.6.2

Any change or modification to the Manufacturing Process or Specifications for or
in relation to the Product must be approved in advance by Customer and will be
made in accordance with the change control provisions of the applicable Quality
Agreement, provided that neither Party shall withhold its approval for any
change or modification required by a Regulatory Authority or Applicable Law.

 

9.7

Taxes. Unless otherwise indicated in writing by Lonza, all Prices and charges
are exclusive of any value added tax (VAT) and/or any other applicable taxes,
levies, import duties and fees of whatever nature imposed by or under the
authority of

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brackets, is omitted because it is both (i) not material and (ii) would be
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any government or public authority and all of any such charges applicable to the
Services shall be paid by Customer.

 

9.8

Invoicing.  Unless otherwise stated in this Agreement, Lonza shall issue
invoices to Customer as follows: (a) [*] of the Batch Price of the applicable
Batch(es) upon commencement thereof; and (b) the remaining [*] of the Batch
Price of such Batch(es) upon Lonza’s Release of the applicable
Batch(es).  Charges for the Raw Materials Fee for each Batch shall be invoiced
upon the Release of each Batch as an itemized invoice (to the extent possible
and subject always to any duties of confidentiality which Lonza may have with
any Third Party) setting forth each individual Raw Material and the respective
costs thereof, provided that the Raw Materials Fee for any Raw Materials that
expire (e.g., safety stock) shall be invoiced on such expiry, and except for
charges for Resins, media and feeds which shall be invoiced by Lonza upon
placement of purchase orders for such Resins, media and feeds by Lonza at
cost.  All invoices are strictly net and payment for amounts not subject to a
bona fide dispute must be made within [*] of Customer’s receipt of the
applicable invoice. When sending payment to Lonza, the Customer shall quote the
relevant invoice in its remittance advice.  

 

9.9

Payment Default.  If there is a default of payment of any undisputed invoice on
the due date, interest shall accrue on any amount overdue at the lesser of: (i)
[*] per annum above the London Interbank Offered Rate (LIBOR); or (ii) the
maximum rate allowable by applicable law, interest to accrue on a day to day
basis until full payment. If payment is not received by the due date, Lonza
shall notify Customer (a “Notification”). Save for a bona fide dispute and if
such sum is not paid within [*] of a Notification, and without prejudice to any
of its accrued rights, Lonza shall be entitled to suspend the provision of
Services and/or Release of Product until all overdue amounts have been paid in
full (including interest for late payments). Lonza shall not act unreasonably in
enforcing the provisions of this Clause 9.9.  

 

9.10

Other Price Adjustments.

 

(a)

On [*] starting on [*], and not more than [*], Lonza may increase the Price
(including the Batch Price) for Services performed in the Visp Facility by the
greater of: (a) [*]; and (b) (in respect of Services and Batch manufacture at
the Visp Facility) the percentage increase of the [*] (or any successor index)
as compared to the immediately preceding calendar year, or (in respect of
Services and Batch manufacture at the Porrino Facility) the percentage increase
of the [*] (or any successor index) as compared to the immediately preceding
calendar year; provided that the Price may not increase by more than [*] over
the Price for the immediately preceding calendar year.  The new Price reflecting
such adjustment shall be effective for any Batch [*] to Customer of the Price
adjustment.

 

(b)

In addition to the right to increase the Price as set out in Clause 9.10(a),
Lonza shall have the right to increase the Price to the extent resulting from
[*]. The Parties shall, prior to a change being implemented, discuss and use
reasonable endeavours to agree any change to the Price to the extent resulting
from [*] which [*], save that [*]. To the extent [*] and [*], Lonza shall [*] in
a reasonable manner [*].

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brackets, is omitted because it is both (i) not material and (ii) would be
competitively harmful if publicly disclosed.

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10Intellectual Property

 

10.1

Neither Party nor their Affiliates will, as a result of this Agreement, acquire
any right, title, or interest in any Background Intellectual Property of the
other Party or any of its Affiliates.

 

10.2

Subject to Clauses 10.1 and 10.3, Customer shall own all right, title, and
interest in and to any and all Intellectual Property (to the extent that [*] and
[*] or [*]) that Lonza and/or its Affiliates, the External Laboratories or other
contractors or agents of Lonza develops, conceives, invents, first reduces to
practice or makes, solely or jointly with Customer or others, in the course of
the performance of the Services, that [*] and/or [*] (collectively, the “New
Customer Intellectual Property”).  For avoidance of doubt, “New Customer
Intellectual Property” shall include any material, processes or other items that
solely embody, or that are solely claimed or covered by, any of the foregoing
Intellectual Property, [*].

 

10.3

Notwithstanding Clause 10.2 and subject to the license granted in Clause 10.5,
Lonza shall own all right, title and interest in Intellectual Property that
Lonza and/or its Affiliates, the External Laboratories or other contractors or
agents of Lonza, solely or jointly with Customer, develops, conceives, invents,
or first reduces to practice or makes in the course of performance of the
Services that: (i) [*]; or (ii) [*] (“New [*] Intellectual Property”).  For
avoidance of doubt, “New [*] Intellectual Property” shall include any material,
processes or other items that embody, or that are claimed or covered by, any of
the foregoing Intellectual Property.

 

10.4

Lonza hereby assigns to Customer all of its right, title and interest in any New
Customer Intellectual Property.  Lonza shall execute, and shall require its
personnel as well as its Affiliates, External Laboratories or other contractors
or agents and their personnel involved in the performance of the Services to
execute, any documents reasonably required to confirm Customer’s ownership of
the New Customer Intellectual Property, and any documents required to apply for,
maintain and enforce any patent or other right in the New Customer Intellectual
Property.

 

10.5

Subject to the terms and conditions herein, Lonza hereby grants to Customer a
non-exclusive, world-wide, fully paid-up, irrevocable, transferable license,
including the right to grant sublicenses, under the New [*] Intellectual
Property, to [*] (but for the avoidance of doubt, such license shall not permit
any of these activities for any product other than the Product).  Any such
sub-licencees shall be bound by written agreement to maintain the
confidentiality of such New [*] Intellectual Property.

 

10.6

Subject to the terms and conditions of this Agreement, Customer hereby grants
Lonza, its Affiliates, the External Laboratories and sub-contractors the
non-exclusive right to use the Customer Information, Customer Background
Intellectual Property (including the Cell Lines), New Customer Intellectual
Property and or any other Intellectual Property or Information supplied by or on
behalf of Customer, during the Term solely for the purpose of fulfilling Lonza’s
obligations under this Agreement.

 

10.7

During the Term and thereafter, provided that Lonza has not terminated this
Agreement pursuant to Clause 14.2.2(a) (Material Breach) or Clause 14.2.2(b)
(Bankruptcy), Customer will have the right, upon terms to be mutually agreed by
the Parties, including confidentiality terms at least as restrictive as such
terms in this Agreement, to transfer the Manufacturing Process to itself and/or
any Third Party(ies) [*] for the manufacture of that Product (but no other
product)], and use

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brackets, is omitted because it is both (i) not material and (ii) would be
competitively harmful if publicly disclosed.

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(by itself or through such Third Party(ies)) such Manufacturing Process so
transferred for the manufacture of Andexanet alfa (and, Lonza shall grant a
licence subject to the following proviso); provided however to the extent that
such technology transfer [*], such technology transfer shall be subject to (i)
[*] and (ii) [*]. Lonza shall provide reasonably necessary documents (including
the Product specific batch records and release reports, technology transfer
guidance and summary report and process protocols) to complete such technology
transfer and Customer shall reimburse Lonza for any activities at the agreed
rates (based on a full-time employee rate for such support) and expenses
reasonably incurred in connection with such transfer.  If Portola assigns this
Agreement pursuant to Clause 16.4, then the transfer of Manufacturing Process to
such assignee, or a Third Party of such assignee, shall be [*]. Inter alia, [*].
The Parties hereby acknowledge and agree that, subject always to the terms of
this Clause 10.7, as of the Effective Date, [*].

11Warranties

 

11.1

Lonza represents, warrants and covenants that:

 

11.1.1

it has the full power and right to enter into this Agreement and that there are
no outstanding agreements or requirements that would prevent it from complying
with the provisions of this Agreement;

 

11.1.2

the execution and delivery of this Agreement by Lonza has been authorized by all
requisite corporate or company action and this Agreement is and will remain a
valid and binding obligation of Lonza, enforceable in accordance with its terms,
subject to laws of general application relating to bankruptcy, insolvency and
the relief of debtors;

 

11.1.3

the Services will be performed with requisite care, skill and diligence, by
individuals who are appropriately trained and qualified; and in accordance with
Applicable Law and generally accepted industry standards.

 

11.1.4

it has requisite authority to fulfill its obligations under this Agreement [*];

 

11.1.5

as of the date of this Agreement and to the best of its knowledge, the conduct
and provision of Services will not infringe or misappropriate any patent, trade
secret or other proprietary or Intellectual Property rights of any Third Party;
provided that it shall not be a breach of this warranty to the extent such
infringement arises as a result of the use of Customer Background Intellectual
Property, Customer Materials, the Cell Line, Customer Information, and/or any
other information or Intellectual Property provided by or on behalf of Customer,
or the combination of any of the aforementioned with any Lonza Background
Intellectual Property or Lonza Information and it will promptly notify Customer
in writing should it become aware of any claims asserting such violation;

 

11.1.6

save as otherwise set out in this Agreement and save in relation to Engineering
Batches: at the time of Release to Customer, the Product manufactured as part of
a cGMP Batch under this

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brackets, is omitted because it is both (i) not material and (ii) would be
competitively harmful if publicly disclosed.

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Agreement: (a) will have been manufactured in accordance with cGMP and the
applicable Quality Agreement, and Specifications; (b) will not be adulterated or
misbranded, as determined under any Applicable Law; and (c) will not have been
produced in violation of any applicable provisions of the United States Fair
Labor Standards Act, as amended; and

 

11.1.7

[*].

 

11.2

Customer represents, warrants and covenants that:

 

11.2.1

it has the full power and right to enter into this Agreement and that there are
no outstanding agreements, assignments, licenses, encumbrances or rights held by
other parties, private or public, that would prevent it from complying with the
provisions of this Agreement;

 

11.2.2

the execution and delivery of this Agreement by Customer has been authorized by
all requisite corporate or company action and this Agreement is and will remain
a valid and binding obligation of Customer, enforceable in accordance with its
terms, subject to laws of general application relating to bankruptcy, insolvency
and the relief of debtors;

 

11.2.3

as of the date of this Agreement and to the best of Customer’s knowledge,
Customer has all the rights:

 

(a)

related to Product to permit Lonza and its Affiliates, Lonza’s subcontractors
and/or External Laboratories to perform the Services and to use the Customer’s
Cell Line, Customer Materials, Customer Information, Customer’s Background
Intellectual Property, and/or any other information or Intellectual Property
provided by or on behalf of Customer, without infringing the intellectual
property rights of a Third Party;

 

(b)

necessary to provide to Lonza the Customer’s Cell Line, Customer Materials,
Customer Information, Customer’s Background Intellectual property, and/or any
other information or Intellectual Property provided by or on behalf of Customer
and to permit Lonza, Lonza’s Affiliates, Lonza’s subcontractors and/or External
Laboratories to perform the Services without infringing the Intellectual
Property rights of any Third Party;

 

11.2.4

as of the date of this Agreement and to the best of Customer’s knowledge, the
use by Lonza and Lonza’s Affiliates and/or by the External Laboratories or any
subcontractor of Customer’s Cell Line, Customer Materials, Customer Information
and Customer’s Background Intellectual Property for the Services (including
without limitation the manufacture of the Product) as contemplated in this
Agreement will not infringe or misappropriate any Intellectual Property rights
of any Third Party; and

 

 

11.2.5

Customer will promptly notify Lonza in writing if it receives or is notified of
a formal written claim from a Third Party that Customer Information, the Cell
Line, Customer Materials and/or Customer Background Intellectual Property or

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brackets, is omitted because it is both (i) not material and (ii) would be
competitively harmful if publicly disclosed.

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Lonza’s use thereof as part of in the Services infringes or misappropriates any
Intellectual Property or other rights of any Third Party.

 

11.3

DISCLAIMER:  THE WARRANTIES AND CONDITIONS EXPRESSLY SET FORTH IN THIS AGREEMENT
ARE IN LIEU OF ALL OTHER WARRANTIES AND CONDITIONS, AND ALL OTHER WARRANTIES AND
CONDITIONS, BOTH EXPRESS AND IMPLIED, ARE EXPRESSLY DISCLAIMED, INCLUDING
WITHOUT LIMITATION ANY WARRANTY OR CONDITION OF MERCHANTABILITY OR FITNESS FOR A
PARTICULAR PURPOSE.  

12Indemnification and Liability

12.1

Indemnification by Lonza.  Subject to Clauses 12.4 and 12.5, Lonza shall
indemnify the Customer, its Affiliates, and their respective officers, employees
and agents (each of the foregoing a “Customer Indemnitee” and, collectively,
“Customer Indemnitees”) for any Losses that such Customer Indemnitee(s) may
suffer as a result of any Third Party claim arising out of: (a) any breach of
Lonza’s representations, warranties or covenants under Clause 11.1 of this
Agreement; (b) the negligence or wilful misconduct of any Lonza Indemnitee (as
defined in Clause 12.2); or (c) any allegation of Intellectual Property
infringement caused by the provision of Services, other than to the extent such
infringement arises as a result of: (i) the combination of Lonza Background
Intellectual Property with Customer Background Intellectual Property, Customer
Materials, Customer’s Cell Line, Customer Information, and/or any other
information or Intellectual Property provided by or on behalf of Customer; or
(ii) the use by Lonza, its Affiliates, Lonza Indemnitees, sub-contractors or
External Laboratories of the Cell Line, any Customer Information, Customer
Material, Customer Background Intellectual property, and/or any other
information or Intellectual Property supplied by or on behalf of Customer;
except in each case ((a), (b) and (c)), to the extent that such Losses resulted
from the negligence, intentional misconduct or breach of this Agreement by any
Customer Indemnitees.

12.2

Indemnification by Customer.  Subject to Clauses 12.4 and 12.5, Customer shall
indemnify Lonza, its Affiliates, and their respective officers, employees and
agents (each of the foregoing a “Lonza Indemnitee” and, collectively, “Lonza
Indemnitees”) from and against any Losses that such Lonza Indemnitee(s) may
suffer as a result of any Third Party claim arising out of: (a) any breach of
Customer’s representations, warranties or covenants under Clause 11.2 of this
Agreement; (b) the negligence or wilful misconduct of any Customer Indemnitees;
(c) the use, sale, or distribution of the Product, including any claims of
product liability; (d) the negligence or intentional misconduct of any Customer
Indemnitee; or (e) any allegation of Intellectual Property infringement caused
by the supply to Lonza of, or by Lonza’s use or a Lonza Indemnitee’s use or the
use by a Lonza Affiliate, sub-contractor or External Laboratory of: the Cell
Line, Customer Background Intellectual Property, Customer Materials,  Customer
Information, and/or any other information or Intellectual Property supplied by
or on behalf of Customer; except, in each case, to the extent that such Losses
resulted from the negligence, intentional misconduct or breach of this Agreement
by any Lonza Indemnitees.

12.3

Indemnification Procedure.  If the Party to be indemnified intends to claim
indemnification under this Clause 12, it shall promptly notify the indemnifying
Party in writing of such claim.  The indemnitor shall have the right to control
the defense and/or settlement thereof; provided, however, that any Indemnitee
shall have the right to retain its own counsel at its own expense.  The
Indemnitee, its employees and agents, shall reasonably cooperate with the
indemnitor, at the indemnitor’s expense, in the investigation of any liability
covered by this Clause 12.  The failure to deliver prompt

37

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brackets, is omitted because it is both (i) not material and (ii) would be
competitively harmful if publicly disclosed.

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written notice to the indemnitor of any claim, to the extent prejudicial to its
ability to defend such claim, shall relieve the indemnitor of any obligation to
the Indemnitee under this Clause 12. The Party seeking indemnification shall not
settle or agree to settle any claim for which it will seek indemnification from
the other Party without the prior written consent of indemnifying Party.

12.4

DISCLAIMER OF CERTAIN DAMAGES.  EXCEPT FOR BREACHES OF A PARTY’S OBLIGATIONS
UNDER CLAUSE 13, IN NO EVENT SHALL EITHER PARTY OR ITS AFFILIATES BE LIABLE TO
THE OTHER PARTY OR THE OTHER PARTY’S AFFILIATES OR INDEMNITEES (WHETHER IN
CONTRACT, TORT, NEGLIGENCE, BREACH OF STATUTORY DUTY, UNDER ANY INDEMNITY OR
OTHERWISE) FOR ANY LOST PROFITS, LOST BUSINESS OR LOST REVENUES OR FOR ANY
INCIDENTAL, INDIRECT, SPECIAL, PUNITIVE OR CONSEQUENTIAL LOSSES OR DAMAGES,
ARISING FROM OR RELATED TO THIS AGREEMENT.

12.5

LIMITATION OF LIABILITY.  SUBJECT TO CLAUSES 12.6 AND 12.7, THE TOTAL AGGREGATE
LIABILITY OF EACH PARTY AND ITS AFFILIATES ARISING FROM THIS AGREEMENT (WHETHER
IN CONTRACT, TORT, NEGLIGENCE, BREACH OF STATUTORY DUTY, UNDER ANY INDEMNITY OR
OTHERWISE) SHALL NOT EXCEED, IN THE AGGREGATE, AN AMOUNT EQUAL TO [*] AND [*].
PROVIDED THAT, NOTWITHSTANDING THE FOREGOING, A PARTY’S AND ITS AFFILIATES’
AGGREGATE LIABILITY UNDER CLAUSE 12.1 OR 12.2, AS APPLICABLE, TOGETHER WITH A
PARTY’S AND ITS AFFILIATES’ AGGREGATE LIABILITY UNDER CLAUSE 12.1 OR 12.2, OF
THE 2014 AGREEMENT, AS APPLICABLE, SHALL NOT EXCEED IN THE AGGREGATE
[*].  CUSTOMER’S OBLIGATION TO PAY THE PRICE OR ANY CANCELLATION FEE OR
TERMINATION FEE SHALL NOT COUNT TOWARDS THIS LIMITATION OF LIABILITY (WHICH FOR
CLARITY SHALL MEAN ANY SUCH PAYMENT BY CUSTOMER SHALL NOT REDUCE THE LIMITATION
OF LIABILITY WHICH SHALL REMAIN AS SET OUT ABOVE IN THIS CLAUSE 12.5). FOR THE
FURTHER AVOIDANCE OF DOUBT, THE AGGREGATE LIMITS SHALL BE SHARED BY A PARTY AND
ALL OF ITS AFFILIATES AND SHALL NOT BE CONSTRUED AS A SEPARATE LIMIT FOR EACH
MEMBER OF THE LONZA GROUP OF COMPANIES AND SHALL NOT BE CONSTRUED AS A SEPARATE
LIMIT FOR EACH MEMBER OF THE GROUP OF COMPANIES TO WHICH THE CUSTOMER BELONGS.

12.6

Nothing shall limit or reduce Customer’s obligation to pay invoices or the
Cancellation Fees or Termination Fees or to make payments under clause 9.5.3.

12.7

Nothing in this Agreement shall exclude or limit the liability of either Party
or their Affiliates for gross negligence or intentional misconduct, for fraud,
for death or personal injury, a breach of Clause 13, or for any other liability
that cannot be excluded or limited as a matter of the governing law of this
Agreement.

13Confidentiality

13.1

A Party receiving the other Party’s and/or any of the other Party’s Affiliates’
Confidential Information (the “Receiving Party”) agrees to strictly keep secret
any and all such Confidential Information received during the Term from or on
behalf of the other Party (the “Disclosing Party”) using at least the same level
of measures as it uses to protect its own Confidential Information, but in any
case at least reasonable efforts.  Confidential Information shall include the
terms of this Agreement, information disclosed in any form including but not
limited to in writing, orally, graphically or in electronic or other form to the
Receiving Party, observed by the Receiving Party or its employees, agents,
consultants, or representatives, or otherwise learned by the

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brackets, is omitted because it is both (i) not material and (ii) would be
competitively harmful if publicly disclosed.

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Receiving Party under this Agreement, which the Receiving Party knows or
reasonably should know is confidential or proprietary.

13.2

Notwithstanding the foregoing, Receiving Party may disclose to any courts and/or
other authorities Confidential Information of the Disclosing Party which is
required pursuant to applicable governmental or administrative or public law,
rule, regulation or order.  In such case the Receiving Party will, to the extent
legally permitted, inform the other Party promptly in writing and reasonably
cooperate with the Disclosing Party in seeking to minimize the extent of
Confidential Information which is required to be disclosed to the courts and/or
authorities and/or in seeking a protective order.

13.3

The obligation to maintain confidentiality under this Agreement does not apply
to Confidential Information of the Disclosing Party, which:

 

13.3.1

at the time of disclosure was publicly available through no breach of this
Agreement by the Receiving Party; or

 

13.3.2

becomes publicly available after the time of disclosure other than as a result
of a breach of this Agreement by the Receiving Party; or

 

13.3.3

as the Receiving Party can establish by competent proof, was rightfully in its
possession at the time of disclosure by the Disclosing Party and had not been
received from or on behalf of Disclosing Party; or

 

13.3.4

is supplied to a Receiving Party by a Third Party which was not in breach of an
obligation of confidentiality to Disclosing Party or any Third Party; or

 

13.3.5

is developed by the Receiving Party independently from and without use of the
Disclosing Party’s Confidential Information, as evidenced by competent evidence.

13.4

The Receiving Party will use the Disclosing Party’s Confidential Information
only for the purposes of this Agreement and will not make any use of the
Disclosing Party’s Confidential Information for its own separate benefit or the
benefit of any Third Party including, without limitation, with respect to
research or product development or any reverse engineering or similar testing.

13.5

Each Party will restrict the disclosure of Confidential Information to the
officers, employees, consultants, under a duty of confidentiality, and
representatives of itself and its Affiliates who have been informed of the
confidential nature of the Confidential Information and who have a need to know
such Confidential Information for the purpose of this Agreement.  Prior to
disclosure to such persons, the Receiving Party shall bind its and its
Affiliates’ officers, employees, consultants and representatives to
confidentiality and non-use obligations no less stringent than those set forth
herein.  The Receiving Party shall notify the Disclosing Party as promptly as
practicable of any unauthorized use or disclosure of the Confidential
Information. Lonza may disclose Customer’s Confidential Information to its
Affiliates, sub-contractors and External Laboratories, to the JV Entity and the
Contract Facility for the purposes of the Services provided that such
sub-contractors and External Laboratories are bound by written obligation of
confidentiality and non-use at least as stringent as those contained in this
Agreement. The Receiving Party shall at all times be responsible for any breach
or

39

[*] = Certain confidential information contained in this document, marked by
brackets, is omitted because it is both (i) not material and (ii) would be
competitively harmful if publicly disclosed.

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misuse of the other Party’s Confidential Information by any person to whom the
Receiving Party discloses it.

13.6

Customer may disclose the terms of this Agreement to any actual or potential
partner with which it enters into any form of partnering arrangement, provided
that: (i) such disclosure is solely for the purpose of such Third Party
evaluating a partnering arrangement with Customer; (ii) it redacts the financial
terms of this Agreement (but Customer shall have the right to disclose the Batch
Prices to any bona fide potential or actual partner who would bear and/or share
the Batch Prices for the Product, provided that Customer notifies Lonza in
confidence of the identity(ies) of such partner(s) receiving such Batch Prices
information); (iii) it enters into a confidentiality agreement with such Third
Party on terms no less onerous and no less protective than those contained in
this Clause 13; and (iv) it shall at all times be responsible for any breach of
confidentiality by such Third Party.

13.7

The Receiving Party shall at all times be fully liable for any and all breaches
of the confidentiality obligations in this Clause 13 by any of its Affiliates or
the officers, employees, consultants and representatives of itself or its
Affiliates.

13.8

Each Party hereto expressly agrees that any breach or threatened breach of the
undertakings of confidentiality provided under this Clause 13 by a Party may
cause irreparable harm to the Disclosing Party and that money damages may not
provide a sufficient remedy to the Disclosing Party for any breach or threatened
breach.  In the event of any breach and/or threatened breach, then, in addition
to all other remedies available at law or in equity, the Disclosing Party shall
be entitled to seek injunctive relief and any other relief deemed appropriate by
the Disclosing Party.

13.9

Neither Party shall provide access to any sharepoint site or intranet site
established for the purpose of exchanging data and information in relation to
this Agreement to any Third Party without: (a) the prior written consent of the
other Party; and (b) such Third Party entering into a separate confidentiality
agreement with such other Party in a form reasonably agreed by such other Party.

13.10

Neither Party may use or disclose any Confidential Information of the other
Party or any of their Affiliates in any patent application.

14Term and Termination

14.1

Term.  This Agreement shall commence on the Effective Date and shall end on the
tenth anniversary of the date of Porrino Approval, unless terminated earlier as
provided herein, or extended by mutual written agreement of the Parties (the
“Term”).

14.2

Termination.  This Agreement may be terminated as follows:

 

14.2.1

by Customer:

 

(a)

by providing no less than [*] prior written notice, such written notice to be
issued not earlier than the [*] (for clarity if this Agreement was terminated
pursuant to this Clause 14.2.1(a) the earliest date on which it would terminate
would be [*]). During such notice period Customer shall continue to be bound by
the obligation to place Purchase Orders for the Minimum Order under Clause 7.1.1
and pay for such Firm Orders;

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brackets, is omitted because it is both (i) not material and (ii) would be
competitively harmful if publicly disclosed.

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(b)

by immediate written notice if Customer decides to permanently: (i) discontinue
the development or the seeking of marketing approval of Andexanet alfa; or (ii)
withdraw Andexanet alfa from all markets; or

 

(c)

by providing not less than [*] prior written notice if, as set forth in Clause
7.1.3, the Parties are unable to agree to reasonable business terms with respect
to the Adjusted Minimum Order within [*] of initiating such negotiations, and
during such notice period only (and not for any period after the effective date
of termination) Customer shall not be obligated to place any further Purchase
Orders in respect of any period after the date on which the Agreement shall have
terminated and shall not be bound by its obligations to place new Purchase
Orders for the Minimum Orders in respect of any period after the date on which
notice to terminate the Agreement has been given (either affirmatively or
automatically) under Clause 7.1.1 (but for the avoidance of doubt, Customer
shall remain liable for the all Firm Orders (including Minimum Orders) during
such [*] notice period; or

 

14.2.2

by either Party:

 

(a)

if the other Party commits a material breach of this Agreement and fails to cure
such breach to the reasonable satisfaction of the non-breaching Party within [*]
([*] for non-payment) following written notification of such breach from the
non-breaching Party to the breaching Party; provided, however, that such [*]
period shall be extended as agreed by the Parties (but in any event, no more
than [*]) if the identified breach is incapable of cure within [*] and if the
breaching Party provides a plan and timeline to cure the breach, promptly
commences efforts to cure the breach and diligently prosecutes such cure (it
being understood that this extended period shall be unavailable for any breach
regarding non-payment);

 

(b)

immediately by written notification, if the other Party becomes insolvent, is
dissolved or liquidated, has an administrator appointed, makes a general
assignment for the benefit of its creditors, or files or has filed against it, a
petition in bankruptcy or has a receiver appointed for a substantial part of its
assets;

 

(c)

immediately by written notification for any persisting force majeure event as
described in Clause 15.1; or

 

14.2.3

By either Party upon written notice to the other Party if Porrino Approval is
not obtained by [*].

14.3

Effect of Termination.  

 

14.3.1

Termination by Lonza under Clause 14.2.2(a) or 14.2.2(b).  Upon termination of
this Agreement by Lonza under Clause 14.2.2(a) (Material Breach) or 14.2.2(b)
(Bankruptcy), subject to Lonza’s obligations under Clause 0 and Clause 0,
Customer shall pay to Lonza: (a) Termination Fees of [*] in effect on the
notification date of such termination, plus Customer shall pay the Raw Materials
Fee in

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brackets, is omitted because it is both (i) not material and (ii) would be
competitively harmful if publicly disclosed.

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respect thereof to the extent that Lonza cannot use them for another customer
project and any non-cancellable commitments of subcontractors and External
Laboratories; (b) for all Services provided but not paid as of the effective
date of termination (including a pro-rata proportion of the Price for any stage
of the Services which is in progress at the date of the termination); and (c) in
addition, in the event of such termination, Customer shall pay to Lonza an early
Termination Fee of [*], in accordance with the following schedule: Customer will
pay the early termination fee of [*], beginning on the effective date of
termination and [*] thereafter until all payments [*] are received by Lonza.  

 

14.3.2

Termination by Customer under Clause 14.2.2(a)-(c), or by Lonza under Clause
14.2.2(c).  Upon termination of this Agreement by Customer under Clause
14.2.2(a)-(c), or by Lonza under Clause 14.2.2(c), all Firm Orders shall be
deemed cancelled without any Cancellation Fees or early termination fees and
Customer shall have no further obligation to Lonza under this Agreement, except
that Customer shall pay to Lonza: (a) for all Services provided but not paid as
of the effective date of termination (including a pro-rata proportion of the
Price for any stage of the Services which is in progress at the date of the
termination); and (b) the applicable Raw Materials Fee for any Raw Materials
paid for by Lonza and the costs of any non-cancellable commitments of
subcontractors and External Laboratories and either (i) used in the provision of
such Services, or (ii) purchased specifically for the provision of such Services
and which Lonza cannot return for credit or use for any other customers; and (c)
all expenses reasonably incurred by Lonza in giving effect to such termination,
in each case after reasonable efforts to mitigate all such expenses, including
the costs of terminating any non-cancellable commitments entered into under the
Agreement that cannot be cancelled despite reasonable efforts to do so or cannot
be re-purposed for other customers.

 

14.3.3

Termination by Customer under Clause 14.2.1.  Upon termination of this Agreement
by Customer under Clause 14.2.1, subject to Lonza’s obligations under Clause
14.6.1 and Clause 14.6.4, Customer shall pay Lonza Termination Fees of [*] in
effect on the notification date of such termination (including Firm Orders for
Batches), plus any applicable Raw Materials Fee and any non-cancellable
commitments of subcontractors and External Laboratories. Customer shall also pay
for all Services provided but not paid as of the effective date of termination
(including a pro-rata proportion of the Price for any stage of the Services
which is in progress at the date of the termination);

 

14.3.4

Termination under Clause 14.2.3. Upon termination of this Agreement by Customer
under Clause 14.2.3, the terms of the 2014 Agreement shall continue to apply for
the duration of the term of that agreement and Clauses 3 and 6 of the 2014
Agreement shall be deemed re-instated and shall be applicable to Customer’s
demand for Batches.

14.4Not used.

14.5

Not used.

14.6

Effect of Termination Applicable to All Terminations:

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brackets, is omitted because it is both (i) not material and (ii) would be
competitively harmful if publicly disclosed.

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14.6.1

Lonza will, upon termination of the Agreement, (a) at Customer’s instruction and
subject to the provisions of Clause 10.7, conduct technology transfer in
accordance with Clause 10.7, and (b) promptly cease or take reasonable steps to
cease performance of the applicable Services and will take all reasonable steps
to mitigate the out-of-pocket expenses incurred in connection therewith. In
particular, Lonza will use its reasonable efforts to:

 

(a)

immediately cancel, to the greatest extent possible, any Third Party obligations
in relation to this Agreement;

 

(b)

promptly inform Customer of any irrevocable commitments made in connection with
this Agreement prior to termination;

 

(c)

to the extent possible or practicable, promptly return to the vendor for a
refund all unused, unopened materials in Lonza’s possession that are related to
this Agreement; provided, that Customer will have the option, but not the
obligation, to take possession of any such materials (subject to Customer paying
Lonza in full for such items);

 

(d)

promptly inform Customer of the cost of any remaining unused, unreturnable
materials ordered pursuant to this Agreement, and, subject to Customer paying
Lonza the applicable Raw Materials Fee for them in full, either deliver such
materials to Customer (or its designee) or properly dispose of them, as
instructed by Customer; and

 

(e)

perform only those services and activities mutually agreed upon by Customer and
Lonza as being necessary or advisable in connection with the close-out of this
Agreement.

 

14.6.2

Return of Materials/Confidential Information.  Upon termination or expiration of
this Agreement, Receiving Party agrees to return or destroy promptly (and
certify such destruction) on Disclosing Party’s request all written or tangible
Confidential Information of the Disclosing Party, except that: (a) one (1) copy
of such Confidential Information may be kept by the Receiving Party in its
confidential files for record keeping purposes only; and (b) the Receiving Party
may continue to use such Confidential Information as reasonably necessary to
continue to exercise any rights of the Receiving Party that survive such
expiration or termination. Subject to the previous provisions of this Clause
14.6.2, Lonza will also promptly return all Customer Materials, retained
samples, data, Customer reports and other property, information and know-how in
recorded form that was provided by Customer, or developed in the performance of
the Services (provided that Customer has paid for them or commits to pay for
them), that are owned by or licensed to Customer.

 

14.6.3

Payment Reconciliation.  Within [*] after termination of this Agreement or any
Stage of Work, as applicable, Lonza will provide to Customer a written statement
of all work performed by it in connection therewith, a summary of the costs
associated with that work, and a final invoice.  If Customer has pre-paid to
Lonza more

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brackets, is omitted because it is both (i) not material and (ii) would be
competitively harmful if publicly disclosed.

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than the amount in a final invoice then Lonza agrees to promptly refund that
money to Customer, or to credit the excess payment toward another existing or
future Stage of Work, at the election of Customer.

 

14.6.4

Replacement Project.  Lonza will use commercially reasonable efforts to secure a
new project to fill the manufacturing space  with another Customer biologics
project or with a Third Party customer project for each cancelled Batch in the
event of any termination of this Agreement, and to the extent successful (and to
the extent such replacement project fits within the time slot as that vacated by
Customer), then the Termination Fee shall be waived.

 

14.6.5

Survival.  Notwithstanding anything else in this Agreement, expiration or
termination of this Agreement for any reason will not relieve either Party of
any liabilities, rights or obligations accruing prior to such expiration or
termination.  Further, the provisions of Clauses 1 (Definitions); 2.8.4
(Customer use of Batches), 2.10.3, 2.10.4 (Handling and Ownership of Customer
Materials); 6.1 (Insurance); 8.1 (Delivery); 8.2 (Storage); 8.3 (with respect to
any Batch Released during the Term); 9.4 (Currency); 9.7 (Taxes); 9.9 (Payment
Default); 10 (Intellectual Property); 11 (Warranties); 12 (Indemnification and
Liability); 13 (Confidentiality); 14.3, 14.4, 14.6 (Effects of Termination); 15
(Force Majeure); and 16 (Miscellaneous) will survive any termination or
expiration of this Agreement.  

15Force Majeure

 

15.1

If Lonza or any of its Affiliates is prevented or delayed in the performance of
any of its obligations under the Agreement by Force Majeure and gives written
notice thereof to Customer specifying the matters constituting Force Majeure
together with such evidence as Lonza reasonably can give and specifying the
period for which it is estimated that such prevention or delay will continue,
Lonza shall be excused from the performance or the punctual performance of such
obligations as the case may be from the date of such notice for so long as such
cause of prevention or delay shall continue.  Provided that, if such Force
Majeure persists for a period of [*], either Party may terminate this Agreement
in accordance with Clause 14.2.2(c).

 

15.2

“Force Majeure” shall be deemed to include any reason or cause beyond Lonza’s
reasonable control affecting the performance by Lonza or its Affiliates of its
obligations under the Agreement, including, but not limited to, any cause
arising from or attributable to acts of God, strike, lockouts, labour troubles,
restrictive governmental orders or decrees, riots, insurrection, war,
interruption of energy supplies, or terrorists acts.

16Miscellaneous

 

16.1

Publicity. Except to the extent required by applicable law or the rules of any
stock exchange or listing entity, neither Party will make any public statements
or releases concerning this Agreement or the transactions contemplated by this
Agreement, or use the other Party’s name in any form of advertising, promotion
or publicity, without obtaining the prior written consent of the other Party,
which consent will not be unreasonably withheld or delayed, provided that any
statement

44

[*] = Certain confidential information contained in this document, marked by
brackets, is omitted because it is both (i) not material and (ii) would be
competitively harmful if publicly disclosed.

--------------------------------------------------------------------------------

 

required by applicable law or the rules of any stock exchange or listing entity,
shall be provided to the other party for comment prior to it being made, and the
terms of this Agreement or any other document relating to the Services shall not
be disclosed until each Party has redacted any confidential or proprietary
information from it, to the extent permitted by law.  Upon the execution of this
Agreement, Lonza has the right to issue a mutually agreed press release
regarding the execution of this Agreement.

 

16.2

Severability.  If any provision hereof is or becomes at any time illegal,
invalid or unenforceable in any respect, neither the legality, validity nor
enforceability of the remaining provisions hereof shall in any way be affected
or impaired thereby.  The Parties hereto undertake to substitute any illegal,
invalid or unenforceable provision by a provision, which is as far as possible,
reflects the original intent of the Parties.

 

16.3

Amendments.  Modifications and/or amendments of this Agreement must be in
writing and signed by the Parties.

 

16.4

Use of Affiliates / Assignment. Lonza may instruct one or more of its Affiliates
to perform any of Lonza’s obligations contained in this Agreement (save that
Lonza shall not require Customer’s consent in respect of the Contract Facility
and this entity may perform some or all of the Services without the need for
Lonza to seek Customer’s prior consent), but Lonza shall remain fully
responsible in respect of those obligations. Such Affiliates of Lonza shall also
have the rights set out in this Agreement solely to the extent that they are
required in order to perform the obligations of Lonza. Subject thereto, neither
Party may assign its interest under this Agreement without the prior written
consent of the other Party, such consent not to be unreasonably withheld,
conditioned or delayed, provided, however that: (a) either Party may assign this
Agreement without the consent of the other Party to (i) any Affiliate of such
Party or (ii) any Third Party in connection with the sale or transfer (by
whatever method) of all or substantially all of the business related to the
subject matter of this agreement; provided, further, that such Affiliate or
Third Party, as applicable, acknowledges and assumes in writing all of the
assigning Party’s obligations under the Agreement; and (b) Lonza shall be
entitled to sell, assign and/or transfer its trade receivables resulting from
this Agreement without the consent of the Customer.  For purposes of this Clause
16.4, the terms “assign” and “assignment” shall include, without limitation
(i) the sale, exchange, transfer or issuance of fifty percent (50%) or more of
the outstanding stock of such Party to an Affiliate of such Party or an
unrelated entity or natural person, (ii) the sale or transfer or other
disposition of all or substantially all of the assets of the Party or the line
of business or Product to which this Agreement relates, and (iii) a merger,
consolidation, acquisition or other form of business combination.  Following a
change of control of either Party, this Agreement shall continue to be binding
on such Party. Any purported assignment in violation of the foregoing 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. Subject to the foregoing, this Agreement shall bind and inure to the
benefit of the respective Parties and their successors and permitted assigns.

 

16.5

Notice.  All notices must be written and sent to the address of the Party first
set forth above.  All notices must be given: (a) by personal delivery, with
receipt acknowledged; or (b) by prepaid recognized next business day delivery
service.  Notices will be effective upon receipt or at a later date stated in
the notice.

45

[*] = Certain confidential information contained in this document, marked by
brackets, is omitted because it is both (i) not material and (ii) would be
competitively harmful if publicly disclosed.

--------------------------------------------------------------------------------

 

16.6

Third Party Rights. Save in respect of indemnities, limitations and exclusions
of liability or any other rights granted to Affiliates which shall accrue to
their benefit, the Parties do not intend that any term of this Agreement should
be enforceable by any person who is not a Party to it.

 

16.7

Governing Law/Jurisdiction.  This Agreement is governed in all respects by the
laws [*], without regard to any conflicts of laws principals that would result
in the application of the laws of another jurisdiction.  

 

16.8

Entire Agreement.  This Agreement contains the entire agreement between the
Parties as to the subject matter hereof and supersedes all prior and
contemporaneous agreements with respect to the subject matter hereof.  For
clarity, the 2014 Agreement is independent of this Agreement and shall survive
on its own terms and conditions.  This Agreement may be executed in any number
of counterparts, each of which shall be deemed to be an original, and all of
which together shall constitute one and the same document.  Each party
acknowledges that an original signature or a copy thereof transmitted by
facsimile or by .pdf shall constitute an original signature for purposes of this
Agreement.

 

16.9

Rights of Third Parties. The Parties do not intend that any term of this
Agreement should be enforceable by any person who is not a Party to it.

 

[Remainder of page left blank intentionally]

 

46

[*] = Certain confidential information contained in this document, marked by
brackets, is omitted because it is both (i) not material and (ii) would be
competitively harmful if publicly disclosed.

--------------------------------------------------------------------------------

 

 

IN WITNESS WHEREOF, each of the Parties hereto has caused this Agreement to be
executed by its duly authorized representative effective as of the date written
above.

LONZA AG

By:

Name

Title

By:

Name

Title

PORTOLA PHARMACEUTICALS, INC.

By:

Name

Title

 

[*] = Certain confidential information contained in this document, marked by
brackets, is omitted because it is both (i) not material and (ii) would be
competitively harmful if publicly disclosed.

--------------------------------------------------------------------------------

 

Appendix A

Cell Line

The Cell Line known as [*] expressing the Product.

 

48

[*] = Certain confidential information contained in this document, marked by
brackets, is omitted because it is both (i) not material and (ii) would be
competitively harmful if publicly disclosed.

--------------------------------------------------------------------------------

 

Appendix B

Batch Price and Minimum Order

Batch Prices – Visp

Batch Type

Price

Engineering Batch

[*]

 

Process Validation Batch

[*]

 

cGMP Batch (other than Process Validation Batches)

[*]

 

Note: All Prices are subject to review in accordance with Clause 9.

 

 

Batch Prices – Porrino

 

Batch prices for Porrino are as set forth in the 2014 Agreement and Firm Orders
thereunder.

 

[*]

 

 

Minimum Order

 

[*]

 

Portola Forecast [*] (All batch numbers below listed in [*]), based upon [*]

 

Andexxa estimated demand

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

Minimum Order*

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

Low

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

High

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

 

*[*]

In accordance with Clause 2.14 - Lonza [*].

49

[*] = Certain confidential information contained in this document, marked by
brackets, is omitted because it is both (i) not material and (ii) would be
competitively harmful if publicly disclosed.

--------------------------------------------------------------------------------

 

Appendix C

 

Bill of Materials

 

For information purposes only, set out below is the estimated Bill of Materials
as of 27July2015. The Bill of Materials for this Agreement shall be based on
this, but shall be updated on completion of the Engineering Batch and again on
completion of the Process Performance Qualification batches and thereafter as
may be mutually agreed by the Parties.

 

Item

Material Description

Estimated Qty per run

UoM

[*]

[*]

[*]

[*]

50

[*] = Certain confidential information contained in this document, marked by
brackets, is omitted because it is both (i) not material and (ii) would be
competitively harmful if publicly disclosed.

--------------------------------------------------------------------------------

 

Appendix D

 

[Reserved]

51

[*] = Certain confidential information contained in this document, marked by
brackets, is omitted because it is both (i) not material and (ii) would be
competitively harmful if publicly disclosed.

--------------------------------------------------------------------------------

 

Appendix E

 

Stages of Work

 

[*]

52

[*] = Certain confidential information contained in this document, marked by
brackets, is omitted because it is both (i) not material and (ii) would be
competitively harmful if publicly disclosed.

--------------------------------------------------------------------------------

 

Appendix F

 

Estimated Visp Facility Construction and Validation Timeline

[*]

 

53

[*] = Certain confidential information contained in this document, marked by
brackets, is omitted because it is both (i) not material and (ii) would be
competitively harmful if publicly disclosed.

--------------------------------------------------------------------------------

 

Appendix G

 

Certain Process Validation Activities

 

 

 

[*] = Certain confidential information contained in this document, marked by
brackets, is omitted because it is both (i) not material and (ii) would be
competitively harmful if publicly disclosed.

--------------------------------------------------------------------------------

 

 

Appendix H

 

Form Common Stock Purchase Agreement

 

portola pharmaceuticals, inc.

COMMON STOCK PURCHASE AGREEMENT

 

This COMMON STOCK PURCHASE AGREEMENT (this “Agreement”) is made as of
[___________] (the “Effective Date”) by and between Portola Pharmaceuticals, a
Delaware corporation (the “Company”), and Lonza AG (the “Purchaser”).

RECITALS

WHEREAS, the Company and the Purchaser have entered into that certain
Manufacturing Services Agreement, dated _______, 2017 (the “Services
Agreement”);

WHEREAS, pursuant to Section 9.5 of the Services Agreement, the Company has
agreed to issue and sell to Purchaser 500,000 shares of the Company’s Common
Stock from the Company at a per share purchase equal to $1.00 upon the
achievement of the criteria set forth in Section [9.5.1][9.5.2] of the Services
Agreement; and

WHEREAS, subject to the terms and conditions set forth in this Agreement, the
Company desires to issue and sell to the Purchaser, and the Purchaser desires to
purchase from the Company, 500,000 shares of the Company’s common stock, $0.001
par value per share (the “Shares”).

 

AGREEMENT

NOW, THEREFORE, in consideration of the foregoing premises and the mutual
covenants contained in this Agreement, and for other good and valuable
consideration, the receipt and adequacy of which are hereby acknowledged, the
Company and the Purchaser hereby agree as follows:

Purchase and Sale of Stock.

Sale and Issuance of Common Stock.  On the basis of the representations and
warranties herein, and upon the terms and subject to the conditions hereof, the
Purchaser agrees to purchase from the Company and the Company agrees to issue
and sell to the Purchaser the Shares at the price of $1.00 per share. The Shares
shall be of the same class of common stock of the Company as is authorized and
outstanding as of the date of this Agreement, with such rights, preferences and
privileges as set forth in the Company’s Amended and Restated Certificate of
Incorporation, as filed with the Delaware Secretary of State and as an exhibit
to Customer’s Annual Report on Form 10-K filed with the U.S. Securities and
Exchange Commission on March 1, 2017.

Closing.  Subject to the satisfaction or waiver of the conditions set forth
herein, the purchase and sale of the Shares pursuant to this Agreement (the
“Closing”) shall take place at the

[*] = Certain confidential information contained in this document, marked by
brackets, is omitted because it is both (i) not material and (ii) would be
competitively harmful if publicly disclosed.

--------------------------------------------------------------------------------

 

offices of the Company within three business days following the date hereof (the
date on which the Closing actually takes place is referred to herein as the
“Closing Date”).  At such time, the Company shall cause its transfer agent to
deliver to the Purchaser a certificate representing the Shares against payment
therefor, which payment shall be made in U.S. dollars by wire transfer of
immediately available funds to an account designated by the Company.  

Representations and Warranties of the Company.  The Company hereby represents
and warrants to the Purchaser as of the Effective Date as follows:

Organization, Good Standing and Qualification.  The Company is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Delaware and has all requisite corporate power and authority to carry
on its business.  The Company is duly qualified to transact business as a
corporation and is in good standing in each jurisdiction in which the failure so
to qualify would have a material adverse effect upon the Company’ ability to
perform its obligations under this Agreement.

Authorization; Due Execution. Assuming the accuracy of the Purchaser’s
representation in Section 3.6 below, the Company has the requisite corporate
power and authority to enter into this Agreement and to perform its obligations
under the terms of this Agreement, and all corporate action on the part of the
Company, its officers, directors and stockholders necessary for the
authorization, execution and delivery of this Agreement has been taken.  This
Agreement has been duly authorized, executed and delivered by the Company and,
upon due execution and delivery by the Purchaser of this Agreement, this
Agreement will be a valid and binding agreement of the Company, enforceable
against the Company in accordance with its terms, except as enforceability may
be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting creditors’ rights generally or by equitable principles.

Valid Issuance of Stock.  The Shares, when issued, sold and delivered in
accordance with the terms hereof and of the Services Agreement for the
consideration and on the terms and conditions set forth herein and in the
Services Agreement, will be duly and validly authorized and issued, fully paid
and nonassessable and, based in part upon the representations of the Purchaser
in this Agreement, will be issued in compliance with all applicable federal and
state securities laws or applicable exemptions therefrom.  

Governmental Consents. No consent, approval, order or authorization of, or
registration, qualification, designation, declaration or filing with, any
federal, state, local or provincial governmental authority on the part of the
Company is required in connection with the consummation of the transactions
contemplated by this Agreement, except for such approvals or consents as may be
required under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as
amended, and such other notices required or permitted to be filed with certain
state and federal securities commissions after the Effective Date, which notices
will be filed on a timely basis.

No Conflict. The Company’s execution, delivery and performance of this Agreement
does not (i) violate any provision of the Company’s Certificate of Incorporation
or Bylaws, each as amended as of the Effective Date (copies of which have been
filed with the Securities and Exchange Commission (the “SEC”)), (ii) violate any
provision of any order, writ, judgment, injunction, decree, determination or
award to which the Company is a party or by which it is bound,

[*] = Certain confidential information contained in this document, marked by
brackets, is omitted because it is both (i) not material and (ii) would be
competitively harmful if publicly disclosed.

--------------------------------------------------------------------------------

 

(iii) conflict with, result in a breach of or constitute a default under any
provision of any material agreement or instrument to which the Company is a
party and by which it is bound that is filed with the SEC or (iv) to the
Company’s knowledge, any law, rule or regulation currently in effect having
applicability to the Company.

Representations and Warranties of the Purchaser.  The Purchaser hereby
represents and warrants to the Company as of the Effective Date as follows:

Authorization; Due Execution.  The Purchaser has the requisite power and
authority to enter into this Agreement and to perform its obligations under the
terms of this Agreement.  All action on the part of the Purchaser necessary for
the authorization, execution and delivery of this Agreement has been
taken.  This Agreement has been duly authorized, executed and delivered by the
Purchaser, and, upon due execution and delivery by the Company, this Agreement
will be a valid and binding agreement of the Purchaser, enforceable against the
Purchaser in accordance with its terms, except as enforceability may be limited
by bankruptcy, insolvency, reorganization, moratorium or similar laws affecting
creditors’ rights generally or by equitable principles.

Purchase Entirely for Own Account. The Shares purchased by the Purchaser will be
acquired for investment for the Purchaser’s own account, not as a nominee or
agent, and not with a view to the immediate resale or distribution of any part
thereof, and the Purchaser has no present intention of selling, granting any
participation in, or otherwise distributing the same (provided that this shall
not prevent the Purchaser from selling, granting any participation in, or
otherwise distributing the same in the future in accordance with the
requirements of the Securities Act (as defined below)).  The Purchaser does not
have any contract, undertaking, agreement or arrangement with any person other
than an affiliate of the Purchaser to sell, transfer or grant participation to
such person or to any third person, with respect to the Shares, if issued.

Disclosure of Information. The Purchaser has received all the information that
it has requested and that it considers necessary or appropriate for deciding
whether to enter into this Agreement and to acquire the Shares.  The Purchaser
has had an opportunity to ask questions and receive answers from the Company
regarding the terms and conditions of the offering of the Shares.

Investment Experience. The Purchaser acknowledges that it is able to fend for
itself, can bear the economic risk of its investment and has such knowledge and
experience in financial or business matters that it is capable of evaluating the
merits and risks of the investment in the Shares.  The Purchaser has not been
organized solely for the purpose of acquiring the Shares.

Accredited Investor. The Purchaser is an “accredited investor” as such term is
defined in Rule 501 of Regulation D under the Securities Act of 1933, as amended
(the “Securities Act”).

Nasdaq Limitation.  The issuance of the Shares to the Purchaser will not result
in the Purchaser beneficially owning, immediately following the issuance, in
excess of 19.99% of the outstanding Common Stock or voting power of the Company.

[*] = Certain confidential information contained in this document, marked by
brackets, is omitted because it is both (i) not material and (ii) would be
competitively harmful if publicly disclosed.

--------------------------------------------------------------------------------

 

Restrictions on Transfer

Rule 144.  The Purchaser understands that the Shares will not be registered
under the Securities Act by reason of a specific exemption therefrom and
acknowledges and agrees that the Shares to be purchased hereunder are
“restricted securities” as defined in Rule 144 under the Securities Act as in
effect from time to time and must be held indefinitely unless they are
subsequently registered under the Securities Act or an exemption from such
registration is available.  The Purchaser has been advised or is aware of the
provisions of Rule 144, which permits limited resale of shares purchased in a
private placement subject to the satisfaction of certain conditions, including,
among other things:  the availability of certain current public information
about the Company, the resale occurring following the required holding period
under Rule 144 and the number of shares being sold during any three-month period
not exceeding specified limitations. The Purchaser further understands that
after the prescribed holding period as set forth in the in the Securities Act
(as defined below), such restrictions on its rights to sell the Shares may
expire (in accordance with Section 4.3 below).

Restrictive Legend.  The Purchaser acknowledges and agrees that each certificate
representing the Shares purchased hereunder shall be stamped or otherwise
imprinted with a legend substantially similar to the following (in addition to
any legend required under applicable state securities laws):

THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE “ACT”), AND MAY NOT BE OFFERED, SOLD OR OTHERWISE
TRANSFERRED, ASSIGNED, PLEDGED OR HYPOTHECATED UNLESS AND UNTIL REGISTERED UNDER
THE ACT OR UNLESS THE COMPANY HAS RECEIVED AN OPINION OF COUNSEL SATISFACTORY TO
THE COMPANY AND ITS COUNSEL THAT SUCH REGISTRATION IS NOT REQUIRED.

Legend Removal.  The Company will instruct its transfer agent not to register
the transfer of the Shares (or any portion thereof) unless the conditions
specified in the foregoing legend(s) are satisfied, until such time as a
transfer is made, pursuant to the terms of this Agreement, and in compliance
with Rule 144 under the Securities Act or pursuant to a registration statement
or, if the opinion of counsel referred to above is to the further effect that
such legend is not required in order to establish compliance with any provisions
of the Securities Act or this Agreement, until such opinion of counsel
(satisfactory to the Company and its counsel) has been received by the Company.
Notwithstanding the foregoing, the Company will act reasonably in requesting the
removal of the restrictive legend after the Purchaser has satisfied the
requirements of the Securities Act and provide the opinion described above if
requested.

Miscellaneous.

Successors and Assigns.  This Agreement may not be assigned by either party
without the prior written consent of the other party. Subject to the preceding
sentence, this Agreement will be binding upon the parties and their respective
successors and assigns.

[*] = Certain confidential information contained in this document, marked by
brackets, is omitted because it is both (i) not material and (ii) would be
competitively harmful if publicly disclosed.

--------------------------------------------------------------------------------

 

Governing Law.  This Agreement shall be governed by, and construed and enforced
in accordance with, the laws of the State of Delaware, excluding conflict of
laws principles that would cause the application of laws of any other
jurisdiction.  

Counterparts; Facsimile.  This Agreement may be executed in counterparts, each
of which shall be deemed an original, but all of which together shall constitute
one and the same instrument.  Facsimile and electronic (PDF) signatures shall be
as effective as original signatures.

Titles and Subtitles.  The titles and subtitles used in this Agreement are used
for convenience only and are not to be considered in construing or interpreting
this Agreement.

Notices.  All notices required or permitted hereunder shall be in writing and
shall be deemed effectively given: (i) upon personal delivery to the party to be
notified; (ii) when sent by confirmed facsimile or email if sent during normal
business hours of the recipient, and if sent other than during normal business
hours of the recipient, on the next business day; (iii) five calendar days after
having been sent by registered or certified mail, return receipt requested,
postage prepaid; or (iv) one business day after deposit with a nationally
recognized overnight courier, specifying next day delivery, with written
verification of receipt.  All communications shall be sent to the other party
hereto at such party’s mailing address, facsimile number or email address set
forth on the signature page hereto, or at such other mailing address, facsimile
number or email address as such party may designate by 10 days’ advance written
notice to the other party hereto.

Finder’s Fee.  Each party represents that it neither is nor will be obligated
for any finder’s fee or commission in connection with this transaction.  

Amendments and Waivers.  Any term of this Agreement may be amended and the
observance of any term of this Agreement may be waived (either generally or in a
particular instance and either retroactively or prospectively), only with the
written consent of both the Company and the Purchaser.

Severability.  If one or more provisions of this Agreement are held to be
unenforceable under applicable law, such provision(s) shall be excluded from
this Agreement and the balance of the Agreement shall be interpreted as if such
provision(s) were so excluded and shall be enforceable in accordance with its
terms.

Entire Agreement.  This Agreement and the other documents referred to herein
constitute the entire agreement among the parties and no party shall be liable
or bound to any other party in any manner by any warranties, representations, or
covenants except as specifically set forth herein or therein.

 

[Signature Page Follows]

 

[*] = Certain confidential information contained in this document, marked by
brackets, is omitted because it is both (i) not material and (ii) would be
competitively harmful if publicly disclosed.

--------------------------------------------------------------------------------

 

In Witness Whereof, the parties hereto have executed this Agreement as of the
date first written above.

Portola Pharmaceuticals, Inc.

By:

Mardi C. Dier

Executive Vice President and Chief Financial Officer

 

Address:  Portola Pharmaceuticals, Inc.

270 East Grand Avenue

South San Francisco, California  94080

Attn: Chief Financial Officer

Facsimile: [*]

Email: [*]

 

 

Lonza AG

By:

Name:

Title:

Address:  Lonza Sales AG

Münchensteinerstrasse 38

CH-4002 Basel

Switzerland

Attn:

 

Facsimile:

Email: