Document:

EX-10.1 SERVICES AGREEMENT DATED JULY 23, 2004

 

Exhibit 10.1

Confidential Materials omitted and filed separately with the

Securities and Exchange Commission. Asterisks denote omissions.

SERVICES

AGREEMENT

between

LONZA BIOLOGICS PLC

and

TRANSKARYOTIC THERAPIES, INC.

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THIS AGREEMENT is made the 23 day of            July, 2004

BETWEEN

	1.	 	LONZA BIOLOGICS PLC, the registered office of which is at 228 Bath Road,
Slough, Berkshire SL1 4DX, England (“LB”) and
	 
	2.	 	TRANSKARYOTIC THERAPIES, INC. of 700 Main Street, Cambridge, MA 02139,
USA, (“Customer”).

WHEREAS

	A.	 	Customer is the proprietor of a gene-activated erythropoietin protein
known as GA-EPO, and of related cell lines, cell banks and materials and
information and improvements thereto; and
	 
	B.	 	LB has the expertise in the evaluation and production of proteins for
therapeutic use; and
	 
	C.	 	LB manufactured GA-EPO [**];
	 
	D.	 	The Customer has recently reacquired from Aventis rights outside of the
United States to GA-EPO;
	 
	E.	 	The Customer desires to have LB manufacture GA-EPO at its Slough Facility
and LB desires to manufacture GA-EPO at the Slough Facility;
	 
	F.	 	Customer wishes to contract LB for Services relating to GA-EPO as
described in this Agreement, and
	 
	G.	 	LB is prepared to perform such Services for Customer on the terms and
conditions set out herein.

NOW IT IS AGREED AS FOLLOWS:

	1.	 	The following terms shall have the following meanings unless the context
requires otherwise:

	 	 	 
	“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 to this Agreement. “Control” means the
ownership of more than fifty per cent (50%) of the issued share
capital or the legal power to direct or cause the direction of the
general management and policies of the party in question;
	 
	 	 
	“Agreement”

	 	means this agreement incorporating Schedules 1 (Product
Specification), 2 (Services), 3 (Price and Terms of Payment), 4
(Timeline), and 5 (Anticipated

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	 	Changes in Process), as amended or varied
from time to time by written agreement of
the parties;
	 
	 	 
	“Aventis”

	 	means Aventis Pharmaceuticals, Inc., and its predecessors,
including Hoechst Marion Roussel Inc., Affiliates, successors in
title and lawful assigns;
	 
	 	 
	“Batch”

	 	means the total Product obtained from one fermentation and
associated purification using the Process and carried out in
accordance with cGMP;
	 
	 	 
	“Binding Order”

	 	has the meaning ascribed to it at Clause 4.13 below;
	 
	 	 
	“Campaign”

	 	has the meaning ascribed at Clause 4.11 below;
	 
	 	 
	“Cell Line”

	 	means the cell line, particulars of which are set out in
Schedule 1 [**];
	 
	 	 
	“cGMP”

	 	means Good Manufacturing Practices and General Biologics Products
Standards as promulgated under the Guide to Good Manufacturing
Practices for Medicinal Products as promulgated under European
Directive 91/356/EEC, as in effect from time to time and, to the
extent that Product is intended for use in the United States, the US
Federal Food Drug and Cosmetic Act at 21CFR (Chapters 210, 211, 600
and 610). For the avoidance of doubt, LB’s operational quality
standards are defined in internal cGMP policy documents;
	 
	 	 
	“cGMP Product”

	 	means Product which is required under Schedule 2 to
be manufactured in accordance with cGMP and any commercial Batches;
	 
	 	 
	“Customer”

	 	means Transkaryotic Therapies, Inc. and its Affiliates,
successors in title and lawful assigns;
	 
	 	 
	“Customer Information”

	 	means all technical and other information relating
to the Cell Line, the Process (except to the extent that Aventis
retains rights to such information) (including for the avoidance of
doubt improvements or modifications thereto from time to time) and
the Product (except to the extent that Aventis retains rights to such
information), including technical and other information generated by
LB on behalf of Customer [**] (except to the extent that Aventis
retains rights to such information). For the avoidance of doubt,
Customer Information shall include (i) all technical and other
information owned by, or licensed to, the Customer, (ii) all
Product-specific know-how, including process improvements (regardless
of which Party created it or when it was created (except to the
extent that Aventis retains rights to such know-how)), and (iii) all
Process-specific know-how and documentation, (except to the extent
that Aventis retains rights to such information) including standard
operating procedures related to the Product, batch records,
analytical protocols, assays,

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	 	media preparation, reagent preparation,
validation techniques, growth conditions,
and certificates of analysis related to the
Product;
	 
	 	 
	“Customer Materials”

	 	means all materials owned or licensed by Customer,
and all material in LB’s possession relating to the Process or the
Product. For purposes of clarity, Customer Materials shall include
the Cell Line, and any other cell line, cell bank, assay, media,
reagents, validation materials, reference standard, or raw material
relating to the Process or the Product, and the progeny or ancestors
thereof;
	 
	 	 
	“Customer Patent Rights”

	 	means all patents and patent applications of any
kind throughout the world that are necessary or useful in performance
of the Services excluding the LB Patent Rights;
	 
	 	 
	“Deliver”,
“Delivered” or
“Delivery”

	 	has the meaning given to it in Clause 4.1;
	 
	 	 
	“LB”

	 	means Lonza Biologics plc and its Affiliates, successors in
title and lawful assigns;
	 
	 	 
	“LB Know-How”

	 	means all technical and other information known to LB
from time to time and applicable to the manufacture of biologics
generally other than information in the public domain;
	 
	 	 
	“LB Patent Rights”

	 	means all patents and patent applications of any
kind throughout the world and applicable to the manufacture of
biologics generally that LB is the owner of or is entitled to use,
other than rights obtained from Customer [**];
	 
	 	 
	“LOI”

	 	means the Letter of Intent between the parties dated 28th
April 2004;
	 
	 	 
	“Party”

	 	means either LB or Customer, as the case may be;
	 
	 	 
	“Portsmouth Facility”

	 	means LB’s facility in Portsmouth, New Hampshire,
USA;
	 
	 	 
	“PPI”

	 	means the percentage increase in the then most current
published United Kingdom Government statistics for the United Kingdom
Retail Price Index;
	 
	 	 
	“Price”

	 	means the price specified in Schedule 3 for the Services;
	 
	 	 
	“Process”

	 	means the process for the cell culture production and
purification of the Product, including any improvements or
modifications thereto;
	 
	 	 
	“Product”

	 	means all or any part of the product manufactured using the
Process (including any sample thereof), the particulars of which are
set out in Schedule 1 and including all derivatives thereof [**];

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	“Services”

	 	means all or any part of the services the subject of the
Agreement (including, without limitation, cell culture evaluation,
purification evaluation, master, working and extended cell bank
creation, and sample and bulk production, and all required testing,
support and release activities, and all assays, reference standards,
stability studies, technical reports, validation studies, and other
reports required for the registration and maintenance of the
Product), including those activities set out in Schedule 2. For the
purposes of clarity, the Services include (i) all activities and
documentation necessary or advisable to register the Slough Facility
as a manufacturing site for the Product with all applicable
regulatory authorities, including activities related to follow-up
work required to respond to questions from the regulatory authorities
(ii) all activities and documentation necessary or advisable to
maintain the registration of the Slough Facility as a manufacturing
site for the Product with all applicable regulatory authorities, and
(iii) all activities and documentation necessary or advisable to
release the Product in accordance with applicable regulations,
including cGMP regulations;
	“Slough Facility”

	 	means LB’s facility at Slough, Berkshire, England;
	 
	 	 
	“Specification”

	 	means the specification for Product, particulars of which
are set out in Schedule 1, as it may be amended from time to time by
written agreement of LB and the Customer;
	 
	 	 
	“Stage”

	 	means a stage of the Services as set out in Schedule 2;
	 
	 	 
	“Terms of Payment”

	 	means the terms of payment specified in Schedule 3;
	 
	 	 
	“Testing Laboratories”

	 	means any third party instructed by LB to carry out
tests on the Cell Line or the Product.

	 	 	References to the singular number include the plural and vice versa,
references to Clauses and Schedules are references to clauses and
schedules to this Agreement.

2. Customer Obligations, Warranties and Indemnities

	2.1	 	Absent a good faith dispute, Customer shall pay the Price set out in
Schedule 3 for provision of the Services together with any additional
costs and expenses that fall due under this Agreement in accordance with
the Terms of Payment.
	 
	2.2	 	Immediately following the date of this Agreement, to the extent that
Customer [**] has not already done so, the Customer shall supply to LB the
Customer Information, together with full details of any hazards relating
to the Cell Line and/or the Customer Materials, their storage and use.
Property rights, including real and intellectual property rights, in the
Cell Line and/or the Customer Materials and/or the Customer Information
are and shall be fully vested in the Customer.

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	2.3	 	The Customer hereby grants LB the non-exclusive right to use the Cell
Line, the Customer Materials and the Customer Information for the purpose
of performing the Services under this Agreement. The Customer also grants
LB a non-exclusive right to use LB Know-How (to the extent such LB
Know-How is Customer Information).
	 
	2.4	 	The Customer represents to LB that, as of the date hereof:

	 	2.4.1	 	Customer has the right to enter into this Agreement;
	 
	 	2.4.2	 	Customer has the right to (i) supply the Customer Materials
and Customer Information to be provided by Customer after the date
hereof, and (ii) permit LB’s use of all other Customer Materials and
Customer Information, in each case, for the purpose of the
performance of LB’s obligations under this Agreement;
	 
	 	2.4.3	 	Any Customer Materials not owned by Customer are licensed to
Customer under a license which will permit their use by LB to perform
its obligations under this Agreement; and
	 
	 	2.4.4	 	to the best of Customer’s knowledge and belief, having made
due and careful enquiry, the use by LB of the Customer Materials and
Customer Information for performance of LB’s obligations under this
Agreement and in accordance with this Agreement (including without
limitation the manufacture of the Product) will not infringe any
valid intellectual property rights of any third party.

	 	 	In addition, Customer warrants that it will promptly notify LB in writing
if (a) there is any material change in the ability of the Customer to make
the representations in this Clause 2.4 and (b) it receives or is notified
of a claim from a third party that the Customer Materials or that the use
by LB thereof for the performance of LB’s obligations under this Agreement
infringes any intellectual property rights of such third party.
	 
	2.5	 	The Parties hereto acknowledge that there currently exist proceedings
brought by Kirin Amgen Inc. and others against Customer and others
(including LB in some actions) in both England (action numbers HC1999 No.
02916, HC1999 No. 02917, HC1999 No. 03241 and HC 2001 No. 3284) and the
United States (collectively, the “Existing Proceedings”) relating to
Product and the Cell Line and certain other Customer Materials. The
Parties further acknowledge that LB may be accused of or found to infringe
third party intellectual property rights in the performance of its
obligations under this Agreement and the LOI and may be liable in damages
or by injunction (both interim and final) to such third parties on a
standard or punitive basis under the Existing Proceedings or new
proceedings or to any other party. In consideration of the Parties
entering into the Agreement for the development and manufacture of Product
and the above liability factors having been taken into consideration,
Customer hereby irrevocably undertakes to LB, without limitation, to
indemnify on demand and hold harmless LB in respect of any and all losses,
claims, costs, fines, damages or expenses of any nature which LB incurs or
suffers and for which LB is not able to recover under an existing and
enforceable indemnity from a third party, including Aventis, whether
foreseeable or not, direct or otherwise, which LB may incur, become liable
for or suffer under the Existing Proceedings, or under any other
proceedings or claims (anywhere in the world) arising out of or incidental
to:

	 	2.5.1	 	any breach of the warranties given by the Customer under
Clause 2.4 above;
	 
	 	2.5.2	 	any claims alleging or finding LB’s manufacture, storage or
export of Product and/or use of the Customer Materials infringes any
intellectual property rights vested in any third party (whether or
not Customer or LB knows or ought to have known about the same); and
	 
	 	2.5.3	 	any detriment or additional loss caused to LB under the
Existing Proceedings as a result of LB’s performance of the Services
hereunder or under the LOI which LB

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	 	 	 	incurs or suffers and for which LB is not able to recover under an
existing and enforceable indemnity from a third party, including
Aventis;

	 	 	provided, however, that LB does not transfer from, or use at, any facility
in the United States, including the Portsmouth Facility, any raw,
in-process or finished material related to the manufacture or testing of
the Product without Customer’s prior written permission (other than the
transfer of documentation which does not require permission of Customer).
For purposes of clarity, LB acknowledges that the transfer of any cell
lines, cell banks, or Product from anywhere in the United States,
including the Portsmouth Facility, to the Slough Facility, or the use of
any such materials anywhere in the United States, may violate an existing
court order or representation made to a court in the United States or the
United Kingdom, and LB agrees that it will not so transfer such items
without prior written permission of the Customer. Notwithstanding
anything to the contrary herein, Customer shall not be required to
indemnify LB (i) to the extent any loss is caused to LB by the use in the
United States or transfer of any raw, in-process or finished material
related to the manufacture or testing of the Product from any site within
the United States to any person or place without having first sought and
obtained Customer’s written consent, (ii) to the extent that LB does not
comply with Customer’s instructions, provided such instructions are given
in good faith and capable of being discharged by LB, do not require LB to
act in contravention of the Existing Proceedings or otherwise illegally,
or to act in breach of the Agreement or any other agreement or arrangement
to which LB might be party, or (iii) to the extent that any claim of
infringement is based on LB’s own processes as opposed to the Customer
Materials, Customer Information, the Product, or a combination of the
Customer Materials, Customer Information, Product and LB’s proprietary
processes. Customer shall also indemnify LB in accordance with the terms
and conditions of this Clause 2.5 to the extent that LB is required to
indemnify any testing laboratory approved by Customer to perform services
in connection with the manufacture of the Product hereunder; provided,
that such indemnity does not exceed the scope of items that LB would be
indemnified for hereunder had it performed such services itself.
	 
	2.6	 	The Customer shall further indemnify, hold harmless and maintain LB
promptly indemnified against all claims, actions, costs, expenses
(including court costs and legal fees on a full indemnity basis) or other
liabilities whatsoever in respect of:

	 	2.6.1	 	any product liability in respect of Product, except to the
extent that such liability is caused by the negligent act or omission
or willful misconduct of LB in the production and/or supply of
Product; and
	 
	 	2.6.2	 	any negligent or willful act or omission of the Customer in
relation to the use, processing, storage or sale of the Product.

	2.7	 	Except as set forth in Clause 2.5, in no event shall Customer be liable
hereunder for any special, indirect or consequential loss, whether arising
at contract or at law and irrespective of fault or negligence. For
purposes of clarity, it is the intention of Customer and LB that Customer
indemnify LB for all damages, whether direct or indirect, awarded against
LB for the benefit of a third party in an intellectual property
infringement action related to LB’s manufacture of Product and/or use of
the Customer Materials, or to any other activity carried out by LB at
Customer’s request in accordance with this Agreement, and it is the intent
of Customer and LB that Customer not be responsible for LB’s special,
indirect or consequential damages in any other circumstance. For purposes
of clarity, it is the intention of the Parties that Customer indemnify LB
for any special, indirect or consequential damages that LB is forced to
pay a third party, including any such payment in connection with the
Existing Proceedings, whether such third party is a person, corporation or
a governmental entity. It is not the intention of the Parties that
Customer would be liable under any circumstances for any special, indirect
or consequential damages which LB itself suffers.

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	2.8	 	Customer shall obtain and maintain product liability insurance with a
reputable and solvent insurance provider in the amount of US$ 10 million
per event or linked events. Customer shall ensure that LB’s interest
shall be noted on the product liability insurance policy and Customer
shall supply LB with a copy of such insurance policy on reasonable request
and shall not terminate or amend (other than amending to increase the
level of cover) such policy without prior written notice to LB.
	 
	2.9	 	In the event that Customer or LB receive notice of a claim which gives
rise to liability under this Agreement, it shall promptly notify the other
party in general terms of such claim (provided however, that failure to
notify shall not relieve either Party of its obligations under this
Agreement except to the extent such failure prejudices such Party). In
the event any proceedings are commenced (or the Existing Proceedings
escalated as a result of LB’s performance of its obligations under the
Agreement) making it apparent that it will not be possible to complete
the Services for legal reasons, then either Party may initiate the
discussions referenced in Clause 8.1 and if such discussions do not result
in an agreement between the Parties, then either Party may terminate this
Agreement pursuant to Clause 8.1.
	 
	2.10	 	In the event that LB requests indemnification under clause 2.5 or 2.6
above it shall:

	 	2.10.1	 	not prejudice any defense or claim or attempt to settle or
compromise such claim other than (i) with the prior written consent
of Customer, such consent not to be unreasonably withheld or delayed,
or (ii) at LB’s own discretion and its own cost; provided, however,
that no settlement requiring any admission by Customer or that
imposes any obligation or restriction on Customer or causes Customer
prejudice shall be made without Customer’s prior written consent,
such consent to be at Customer’s absolute discretion;
	 
	 	2.10.2	 	subject to LB’s rights under clause 2.11 and to Customer’s
obligations under clause 2.12, allow Customer to have exclusive, sole
control of, and responsibility for the costs of, the conduct of the
negotiations and proceedings, including any counterclaim, any
settlement, and/or judgements related thereto. If Customer does not
notify LB of its intention to take such control at least seven (7)
days prior to the date an answer is due in such action, LB shall have
the right to control its own defense and counterclaim and Customer
shall be responsible for all reasonable costs associated therewith
and shall at its own expense cooperate as reasonably requested by LB
in the conduct of any such action;
	 
	 	2.10.3	 	co-operate as reasonably requested by Customer in the conduct of
any claim (and counterclaim) and Customer shall be responsible for
all reasonable costs associated therewith.

	2.11	 	No settlement requiring any admission by LB or that imposes any
obligation or restriction on LB or causes LB prejudice shall be made
without LB’s prior written consent, such consent to be at LB’s absolute
discretion.
	 
	2.12	 	Where Customer takes control of any proceedings, it shall diligently and
properly prosecute and defend LB on its behalf, subject to LB’s other
rights from any such claims using resources equal to that it would use in
the case of defending itself including the use of recognized and respected
attorneys with leading reputations in the relevant area of law concerned
with such claim, who shall jointly represent Customer and LB. In such an
event, LB shall have the right, at LB’s expense, to hire independent
counsel, who shall not appear as counsel in the case, to work with and
observe the counsel hired by Customer to represent jointly Customer and
LB. Customer shall retain full control over prosecution of the
proceedings, but shall allow full access to and grant full cooperation
with the independent counsel for the duration of the proceedings so long
as such access does not violate any protective or other court order.
[**].

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	2.13	 	In the event that proceedings are commenced against LB (or in the case of
Existing Proceedings become escalated) as a result of performance of LB’s
obligations under this Agreement, LB shall not be liable to Customer in
the event that LB suspends the performance of its obligations hereunder
(which it shall be entitled to do) pursuant to a court order.
Additionally, LB shall not be liable to Customer in the event that LB
suspends the performance of its obligations hereunder (which it shall be
entitled to do) pursuant to a good faith and reasonable recommendation
from Customer’s or LB’s attorneys, or in agreement with the Customer. LB
shall not suspend the performance of its obligations under this Agreement
without first discussing such potential suspension with Customer.
Customer and LB shall be entitled to terminate this Agreement pursuant to
Clause 8.1 in the event that LB suspends performance pursuant to this
Clause 2.13.
	 
	2.14	 	The obligations of LB and the Customer under this Clause 2 shall survive
the termination for whatever reason of the Agreement for the length of the
applicable statute of limitations on a territory-by-territory basis. For
the avoidance of doubt, once a claim for indemnification is invoked in a
jurisdiction, it is in effect until full and final determination of the
claim.

3. Provision of the Services

	3.1	 	LB shall diligently carry out the Services and shall use all reasonable
efforts to achieve the estimated timescales described in Schedule 4
hereto. LB shall use all reasonable efforts to schedule the manufacture
of Product in accordance with the Customer’s timelines; provided, however,
that unless otherwise agreed with the Customer in no event shall LB
commence any Stage [**], subject to Clause 9 below. LB and the Customer
shall use sound and professional principles and practices in the planning
and performance of Services under this Agreement in accordance with
normally accepted industry standards, and the performance will reflect
LB’s best professional knowledge, skill and judgment. Where Customer
requests LB to re-schedule any Stage, LB shall use all reasonable efforts
to accommodate such request and shall inform Customer as soon as
reasonably practicable of the time and cost implications of such
re-scheduling. LB does not guarantee that it will be able to accommodate
any request to re-schedule a Stage. It is understood that the Stages set
forth in Schedule 2 are not in chronological order, and many stages will
be concurrent with one another, as described more fully in Schedule 4
hereto. Before commencing each Stage, LB and the Customer shall produce
and sign a concept sheet which describes the activities to be taken during
such Stage in detail. Once the concept sheet is signed, LB will commence
the Stage, keep the Customer apprised of its progress in that Stage in
weekly progress reports, and give the Customer an opportunity to comment
on significant decisions related to the implementation of that Stage;
provided, however, that in the event that the Customer has not commented
on such decision within ten days of being asked to do so by LB, LB shall
proceed using its best judgement. LB shall not delay implementation of a
Stage based on the failure to obtain a signature on any document other
than (i) a concept sheet, as described above or (ii) the signature of a
Customer representative if required by a regulatory authority.
	 
	3.2	 	LB shall manufacture cGMP Product to meet the Specification; provided
that there shall be [**] cGMP Product manufactured [**] agreed to or
requested by Customer so long as LB notifies Customer in advance [**].
For the purposes of clarity, LB shall [**] suitable for registration of LB
as the manufacturer of the Product (whether or not registration is
actually awarded). In respect of each Campaign, LB will deliver an
average of at least [**] of Product per Batch less all samples taken from
such Batches for routine tests and studies associated with the performance
of the Batch; provided, however [**] Product per Batch over the initial
[**] less all samples taken from such Batches for use in tests and studies
associated with future Batch production. LB shall also maintain
appropriate samples as required by cGMP and other regulations, including
for required stability testing. LB shall permit a representative of
Customer to be present in accordance with the Quality

Page 9 of 44

 

	 	 	Agreement during the performance of the Services for purposes of
monitoring but LB shall at all times remain responsible for such
performance. LB and the Customer have agreed to implement certain changes
to the Process, including those set forth on Schedule 5, and LB and the
Customer will use their reasonable efforts to implement such changes as
promptly as practicable, consistent with the overall goal of bringing the
Product to market as quickly as possible.
	 
	3.3	 	LB acknowledges the importance of timely performance of all of its
obligations hereunder, and that any delay can have significant financial
consequences to Customer and medical consequences to patients utilizing
the Product. Therefore, LB undertakes to use all reasonable efforts to
complete all of its obligations hereunder in a timely manner and in
accordance with the schedules agreed upon by Customer and LB. However,
the timescales set down for the performance of the Services (including
without limitation the dates for production and Delivery of Product) and
the quantities of Product for Delivery set out in Schedule 2 are estimated
only to the extent that they may be affected by the unpredictable nature
of the biological processes involved in the Services. Notwithstanding
the foregoing, LB agrees to deliver all Product in accordance with the
timing set forth in the relevant Binding Order.
	 
	3.4	 	Without prejudice to LB’s obligations under Clauses 3.1 and 3.2 and
absent the negligence, bad faith, or willful misconduct of LB, the
Customer shall not be entitled to cancel any unfulfilled part of the
Services or to refuse to accept the Services on grounds of (a) late
performance, (b) late delivery or (c) failure to produce the estimated
quantities of Product for Delivery; provided, however, that in the case of
(a) or (b), if, due primarily to the fault or negligence, bad faith or
willful misconduct of LB, Product is manufactured or delivered more than
[**] months after the scheduled manufacture or delivery date, as the case
may be, then Customer shall have the right to terminate this Agreement
pursuant to Clause 8.5.1. LB shall not be liable for any loss, damage,
costs or expenses of any nature, whether direct or consequential,
occasioned by:

	 	3.4.1	 	any delay in performance or Delivery to the extent that such
delay is a result of the unpredictable nature of the biological
processes involved in the Services (as opposed to any lack of
diligence on the part of LB); or
	 
	 	3.4.2	 	any failure to produce the estimated quantities of Product for
Delivery to the extent that such failure is a result of the
unpredictable nature of the biological processes involved in the
Services (as opposed to any negligence or willful misconduct on the
part of LB).

	 	 	Provided that if a significant failure to produce the agreed estimated
quantities (if any) of Product for Delivery arises due to negligence, bad
faith or willful misconduct by LB, the Parties shall agree on a
commercially reasonable mechanism by which to compensate Customer.
	 
	3.5	 	LB shall comply with all applicable regulatory requirements applicable to
the Services, including the International Committee for Harmonisation, any
requirements imposed by the EMEA, and those requirements set out in
Schedule 2.
	 
	3.6	 	LB hereby undertakes not to use the Cell Line, the Customer Materials or
the Customer Information (or any part thereof) for any purpose other than
the performance of the Services.
	 
	3.7	 	LB shall:

	 	3.7.1	 	at all times use all reasonable endeavours to keep the Cell
Line and/or the Customer Materials secure and safe from loss and
damage in such manner as LB stores its own material of similar
nature;

Page 10 of 44

 

	 	3.7.2	 	not part with possession of the Cell Line and/or the Customer
Materials or the Product, save for the purpose of tests at the
Testing Laboratories and the storage of the Cell Bank at a second
secure location to be chosen with the consent of the Customer, and
subject to any legal requirement imposed on LB by the Existing
Proceedings or any other legal proceedings; and
	 
	 	3.7.3	 	procure that all Testing Laboratories are subject to
obligations of confidence substantially in the form of those
obligations of confidence imposed on LB under this Agreement.

	3.8	 	Customer shall have the right to substitute one or more other products
(each, an “Alternate Product”) for the Product, and the terms of this
Agreement shall apply to such Alternate Product as if it were the Product;
provided, however that the price paid for the manufacture of such
Alternate Product shall be adjusted as described in Schedule 3 hereto. In
the event that the development or manufacture is delayed for any reason,
including without limitation, pursuant to an injunction, then Customer may
substitute an Alternate Product with the Product for the period of such
delay. An Alternate Product shall not include any product that would
present a risk to (a) the operation of the Slough Facility as a site where
many third-party biological products are manufactured, or (b) any of LB’s
employees.
	 
	3.9	 	Customer and LB shall enter into a Quality Agreement in a form to be
agreed by the Parties. The Quality Agreement shall describe their
respective responsibilities related to maintaining the quality of the
Product. It is understood that Lonza is primarily responsible for the
release of the purified bulk Product to the Customer for further
processing, including the maintenance of quality systems and ensuring the
quality of the Product in accordance with cGMP.
	 
	3.10	 	LB grants Customer the right to audit or to appoint third parties
reasonably acceptable to LB to audit, under applicable confidentiality
provisions, at any reasonable time, the facilities employed, raw materials
purchased on Customer’s behalf and the invoices for same, in-process and
finished Product inventory, inventory of materials purchased on Customer’s
behalf and the financial and other documentation utilized by LB in
tracking services and materials purchased on Customer’s behalf, in each
case, to the extent that it relates the Product or the Process. Customer
will endeavor to notify LB at least twenty (20) days in advance of such an
audit by Customer and thirty (30) days in advance of such an audit by a
third party. Customer shall promptly report to LB with respect to any
issues discovered by such audits (including without limitation failures to
comply with batch records and cGMP), and LB shall use its commercially
reasonable efforts to remedy such issues as soon as possible. To the
extent that the results of any such audit are disputed, the Parties agree
to engage a mutually acceptable public accounting firm to perform such
audit.
	 
	3.11	 	LB shall permit inspections of LB’s facilities by governmental authorities
(such as the United States of America Food and Drug Administration and
equivalent European and Japanese regulatory authorities or other
regulatory authorities from countries in which Customer anticipates filing
or has filed a marketing registration) for any registration or pending
registration for manufacturing of bulk purified Product. Customer
reserves the right to be present at all such inspections and to review and
consult on any response to adverse or objectionable observations or
findings cited by any regulatory authority prior to submission with such
regulatory authority; provided, however, that with respect to any
Product-specific observation or pre-approval inspection, Customer must
approve any such response in advance, such approval not to be unreasonably
withheld. LB shall report to Customer with respect to any issues
discovered by such audits (including without limitation failures to comply
with batch records and cGMP), and LB shall use its reasonable commercial
efforts to remedy any issues arising from such audit as soon as possible
and Customer shall approve such remedy in advance, such approval not to be
unreasonably withheld.

Page 11 of 44

 

	3.12	 	In the event that LB is found by any regulatory authority to have failed
to comply with regulatory requirements related to the Slough Facility or
which may affect the manufacture of the Product, LB shall so notify
Customer in writing within [**] days after learning of such failure and
shall explain in writing to Customer the steps that it is taking to
prevent such failure from occurring again in the future.
	 
	3.13	 	It is the intention of LB and the Customer that the Customer be able to
recreate the Process as described in any governmental registration of the
Product at another facility at any time. For the avoidance of doubt,
Customer Information, Customer Materials, and the Process are owned and
shall continue to be owned by the Customer. The Customer shall also own
all non-fixed assets, such as columns, paid for by the Customer. The
provisions of this Clause 3.13 shall survive termination of this
Agreement.
	 
	3.14	 	In the event that the Customer commences transfer of the Process to a
third party, then the Customer shall so notify LB in writing. LB shall
assist in such transfer as reasonably requested by the Customer, at
Customer’s cost at a rate of [**] per hour, [**]. The provisions of this
Clause 3.14 shall survive termination of this Agreement.
	 
	3.15	 	In the event that the Customer receives a bona fide offer from a contract
manufacturing organization to manufacture the Product, then the Customer
shall give LB [**] days notice prior to accepting such bona fide offer,
and LB shall have a right to enter into an agreement to manufacture the
Product on substantially the same terms as contained in such bona fide
offer.

	4.	 	Delivery, Transportation of Product, Customer Tests, Forecasting and
Ordering
	 
	4.1	 	Product shall be Delivered EXW (ex-works) LB premises (as defined by
Incoterms 2000) which means (a) when LB places Product at the disposal of
Customer at LB’s premises not cleared for export and not loaded onto any
collecting vehicle and (b) risk and title to Product pass to Customer upon
Delivery (“Deliver,” “Delivery,” or “Delivered,” as appropriate). Subject
to Clause 4.2, LB shall deliver to Customer the Certificate of Analysis
and any other required documentation not later than the date of Delivery.
Transportation of Product, whether or not under any arrangements made by
LB on behalf of Customer, shall be made at the sole risk and expense of
the Customer.
	 
	4.2	 	At Customer’s request, LB will Deliver Product in quarantine prior to
delivery of the Certificate of Analysis. Such request shall be
accompanied by Customer’s written acknowledgement that the Product has
been Delivered without the transmittal to Customer of a Certificate of
Analysis, that accordingly the Product cannot be administered to humans
until transmittal of the Certificate of Analysis, and that Customer
nevertheless accepts full risk of loss, title and ownership of the
Product. The Delivery of Product in quarantine shall be subject to such
testing requirements as LB may reasonably require, and the [**] day period
referred to in Clause 4.8 shall run from Delivery in quarantine by
Customer of the Product.
	 
	4.3	 	Unless otherwise agreed, LB shall package and label Product for Delivery
in accordance with its standard operating procedures. LB shall provide
Customer with a copy of its standard operating procedures for shipping and
provide Customer an adequate opportunity to review it before shipping any
Product. It shall be the responsibility of the Customer to inform LB in
writing in advance of any special packaging and labeling requirements for
Product. All additional costs and expenses reasonably incurred by LB in
complying with such special requirements shall be charged to the Customer
in addition to the Price.
	 
	4.4	 	If requested in writing by the Customer, LB will (acting as agent for
Customer) arrange for insurance of Product whilst held by LB after
Delivery (awaiting transportation) for a maximum of fourteen (14) days on
terms equivalent to those under which LB insures

Page 12 of 44

 

	 	 	product prior to Delivery. All additional costs and expenses reasonably
incurred by LB in arranging such insurance shall be charged to the
Customer in addition to the Price.
	 
	4.5	 	If requested in writing by the Customer, LB will (acting as agent of the
Customer for such purpose) arrange the transportation of Product from LB’s
premises to the destination indicated by the Customer together with
insurance cover for Product in transit at its invoiced value. All
additional costs and expenses reasonably incurred by LB in arranging such
transportation and insurance shall be charged to the Customer in addition
to the Price.
	 
	4.6	 	Where LB has made arrangements for the transportation of Product, the
Customer shall diligently examine the Product as soon as practicable after
receipt. Notice of all claims (time being of the essence) arising out of:

	 	4.6.1	 	visible damage to or total or partial loss of Product in
transit shall be given in writing to LB and the carrier within [**]
working days of receipt by Customer or its designee; or
	 
	 	4.6.2	 	non-Delivery shall be given in writing to LB within [**] days
after the date of LB’s dispatch notice.

	4.7	 	The Customer shall make damaged Product and associated packaging
materials available for inspection and shall comply with the requirements
of any insurance policy covering the Product notified by LB to the
Customer in writing. LB shall offer the Customer all reasonable
assistance (at the cost and expense of the Customer) in pursuing any
claims arising out of the transportation of Product.
	 
	4.8	 	Promptly following receipt of Product or any sample thereof, the Customer
may carry out any of the tests outlined or referred to in the
Specification set out in Schedule 1. Subject to the first sentence of
Clause 3.2, if such tests show that the Product fails to meet
Specification, the Customer shall give LB written notice thereof within
[**] days from the date of Delivery and shall return a portion of such
Product to LB’s premises sufficient to allow LB to conduct further
testing. In the absence of such written notice Product shall be deemed to
have been accepted by the Customer as meeting Specification. Subject to
the first sentence of Clause 3.2, if Customer has reasonably demonstrated
that Product returned to LB fails to meet Specification and that such
failure is not due to acts or omissions of the Customer or any third party
after Delivery, LB shall at Customer’s discretion refund that part of the
Price that relates to the production of such Product or replace such
Product at LB’s own cost and expense. In the event Customer requires LB
to replace such Product, LB shall use all reasonable endeavours to do so
with the minimum delay having regard to its commitments to third parties
in the timing of such replacement.
	 
	4.9	 	Subject to the first sentence of Clause 3.2, if there is any dispute
concerning whether Product returned to LB fails to meet Specification or
whether such failure is due to acts or omissions of the Customer or any
third party after Delivery, such dispute shall be referred for decision to
an independent expert (acting as an expert and not as an arbitrator) to be
appointed by agreement between LB and the Customer or, in the absence of
agreement by the President for the time being of the Association of the
British Pharmaceutical Industry. The costs of such independent expert
shall be borne by the Party against whom such independent expert rules.
The decision of such independent expert shall be in writing and, save for
manifest error on the face of the decision, shall be binding on both LB
and the Customer.
	 
	4.10	 	The provisions of Clauses 4.8 and 4.9 shall be the sole remedy available
to the Customer in respect of Product that fails to meet Specification.
	 
	4.11	 	Customer shall order commercial Product in campaigns (each, a “Campaign”)
of at least [**] Batches. The Customer shall place a Binding Order for at
least [**] per calendar year

Page 13 of 44

 

	 	 	(beginning in calendar year [**]) unless the Agreement is terminated prior
to [**] of such calendar year, in which case such minimum order
requirement shall not apply to such calendar year. [**].
	 	 	 
	 
	4.12	 	Customer shall provide LB with a [**] forecast (the “Forecast”) of
Customer’s expected requirements [**] Product to be delivered in each of
the next [**] calendar quarters. The first Forecast will be delivered to
LB no later than [**]. Customer shall update the Forecast quarterly based
on calendar quarters. LB agrees to notify Customer in advance of
accepting any bona fide order for manufacturing capacity received by it
from a third party which would limit LB’s ability to fulfill Customer’s
requirements as described in the Forecast. Customer shall have [**] days
upon receipt of such notification to place a Binding Order (as defined
below) with respect to the manufacturing capacity that LB proposes to sell
to such third party. If Customer fails to place a Binding Order during
such [**] day period, then LB may accept such order from such third party.
	 
	 	 	For example, if the Customer includes in the Forecast a desire for [**]
Batches during calendar quarters 6, 7 and 8 of the Forecast and LB has a
bona fide offer which, if accepted, would only allow LB to produce [**]
Batches for the Customer during such calendar quarters, then LB shall
notify the Customer of the bona fide offer in advance of accepting such
bona fide offer, and the Customer may place Binding Orders for up to the
[**] Batches which were Forecast for such calendar quarters. In the event
that the Customer does not submit such Binding Order within [**] days of
receiving such notice from LB, LB may accept such bona fide offer.
	 
	4.13	 	Customer may from time to time submit an order (a “Binding Order”) for
the Customer’s required number of Campaigns and number of Batches per
Campaign [**]) for Product to be Delivered in a given calendar quarter.
LB agrees to accept each Binding Order submitted by Customer; provided,
however, that LB shall not be required to accept a Binding Order submitted
to LB after [**] if such Binding Order requires LB to [**] of the date of
the Binding Order.
	 
	4.14	 	Bulk Product delivered to the Customer by LB shall expire [**] from the
date of Delivery to the Customer or its designee.
	 
	5.	 	Price and Terms of Payment
	 
	5.1	 	Unless otherwise indicated in writing by LB, all prices and charges are
exclusive of Value Added Tax or of any other applicable taxes, levies,
imposts, duties and fees of whatever nature imposed by or under the
authority of any government or public authority, which shall be paid by
the Customer (other than taxes on LB’s income). Invoices will be sent in
accordance with Schedule 3, and all invoices for commercial Product shall
be sent no earlier than the Delivery of Product to the Customer. The cost
of raw materials and third party testing shall be invoiced to the Customer
on a monthly basis as such costs are incurred in the manufacture of
Product. All invoices are strictly net and absent a good faith dispute,
payment must be made within [**] days of date of receipt of invoice by
Customer. In the event a Binding Order is cancelled by the Customer, LB
shall invoice the Customer on the dates LB would have invoiced the
Customer had the Product been manufactured in accordance with such Binding
Order.
	 
	5.2	 	In default of payment on due date:

	 	5.2.1	 	interest shall accrue on any amount overdue at the rate of
four percent (4%) above the base lending rate from time to time of
National Westminster Bank plc, interest to accrue on a day to day
basis both before and after judgment; and
	 
	 	5.2.2	 	LB shall, at its sole discretion, and without prejudice to any
other of its accrued rights, be entitled to suspend the provision of
the Services or to treat this Agreement

Page 14 of 44

 

	 	 	 	as repudiated on not less than [**] days’ prior notice in writing to
Customer given at any time thereafter.

	5.3	 	The Price in respect of each Batch produced on or after [**], shall be
increased on each January 1 by the PPI then current on such January 1. In
addition, alterations shall be made to the Price where unanticipated
exceptional items of cost or expense (excluding items accounted for in the
PPI) caused by mutually agreed alteration of the Process or the
Specification as established at the Effective Date; provided the Customer
agrees with LB’s written estimate of the costs and a reasonable
demonstration of the items of cost or expense in question in advance.
	 
	5.4	 	Subject to the provisions of Schedule 3, upon the completion of the
second commercial Campaign, [**] between the Parties.
	 
	6.	 	LB Warranties and Indemnity
	 
	6.1	 	LB warrants that:

	 	6.1.1	 	the Services shall be performed in accordance with Clauses 3.1 and 3.2;
	 
	 	6.1.2	 	unencumbered title to Product will be conveyed to Customer upon Delivery;
	 
	 	6.1.3	 	as of the date of this Agreement, the LB Know-How (except to
the extent that such LB Know-How is Customer Information) and LB
Patent Rights are owned by LB or LB is otherwise entitled to use them
for the purposes of providing Services under this Agreement and
during the term of this Agreement LB shall not do or cause anything
to be done which would adversely affect their ownership or
entitlement to use the same for those purposes;
	 
	 	6.1.4	 	LB has the right to enter into this Agreement;
	 
	 	6.1.5	 	Other than those issues in the Existing Proceedings, as of the
date of this Agreement to the best of LB’s knowledge and belief,
having made due and careful enquiry, the use by LB of the Process
(excluding any modifications or steps made or developed by Customer,
the Customer Materials, Customer Information and Customer Patent
Rights) and LB Patent Rights and LB Know-How for the performance of
the Services as provided herein will not infringe any rights
(including without limitation any intellectual or industrial property
rights) vested in any third party; and
	 
	 	6.1.6	 	LB will notify Customer in writing immediately if it receives
or is notified of a claim from a third party that the use by LB of
the Process and/or the LB Know-How or the LB Patent Rights for
Services infringes any intellectual property rights vested in such
third party.

	 	 	In addition, LB warrants that it will promptly notify the Customer in
writing if there is any material change in the ability of LB to make the
representations in this Clause 6.1.
	 
	6.2	 	Clause 6.1 is in lieu of all conditions, warranties and statements in
respect of the Services and/or the Product whether expressed or implied by
statute, custom of the trade or otherwise (including but without
limitation any such condition, warranty or statement relating to the
description or quality of the Product, its fitness or suitability for a
particular purpose or use under any conditions whether or not known to LB)
and any such condition, warranty or statement is hereby excluded.

Page 15 of 44

 

	6.3	 	LB shall indemnify, hold harmless and maintain Customer promptly
indemnified against all claims, actions, costs, expenses (including court
costs and legal fees on a full indemnity basis) or other liabilities
whatsoever in respect of:

	 	6.3.1	 	any breach of the warranties given by LB in Clause 6.1;
	 
	 	6.3.2	 	any product liability to the extent that such liability is
caused by the negligent act or omission or willful misconduct of LB
in the production and/or supply of Product;
	 
	 	6.3.3	 	any negligent or willful act or omission of LB in relation to
the manufacture, use, processing, storage, packing or sale of the
Product;
	 
	 	6.3.4	 	any claims alleging or finding LB’s use of LB Know-How or LB
Patent Rights infringes any intellectual property rights vested in
any third party (whether or not Customer or LB knows or ought to have
known about the same); and
	 
	 	6.3.5	 	LB’s transfer or use of any raw, in-process or finished
material related to the manufacture or testing of the Product from
the United States, including the Portsmouth Facility, to the Slough
Facility, or to any other person or place, or the use of any such
materials in the United States, in violation of any court order from,
or any representation made to, a court in the United Kingdom or the
United States or to the extent that any claim of infringement is
based on LB’s own processes as opposed to the Customer Materials,
Customer Information, the Product, or a combination of the Customer
Materials, Customer Information, Product and LB’s proprietary
processes.

	 	 	In the event that the Customer requests indemnification under this clause
6.3, it shall be subject to equivalent obligations as those imposed on LB
under clauses 2.10 and 2.11 above, mutatis mutandis.
	 
	6.4	 	LB shall not be liable for any special, indirect, or consequential
damages awarded to Customer, whether arising at contract or at law and
irrespective of fault or negligence.
	 
	6.5	 	Without prejudice to the terms of Clauses 4.6, 4.10, 6.3, 6.4 and 6.6,
the liability of LB for any loss or damage suffered by the Customer as a
result of any breach of this Agreement or of any other liability of LB
(including misrepresentation and negligence) in respect of the Services
(including without limitation the production and/or supply of the Product)
shall be limited to the payment by LB of damages which shall not exceed
(a) ten million pounds sterling (£10,000,000) or (b) where this Agreement
is terminated by either party, an amount equal to the amount of the Price
received by LB from the Customer prior to such termination, always subject
to an upper limit of ten million pounds sterling (£10,000,000). However,
the foregoing limitation shall not apply in the case of (a) breach of
Clause 7 (Confidentiality) by LB, or (b) grossly negligent or
intentionally wrongful acts or omissions of LB.
	 
	6.6	 	Nothing contained in this Agreement shall purport to exclude or restrict
any liability for death or personal injury resulting directly from
negligence or willful misconduct by LB in carrying out the Services or any
liability for breach of the implied undertakings of LB as to title.
	 
	6.7	 	The obligations of the LB and the Customer under this Clause 6 shall
survive the termination for whatever reason of the Agreement.
	 
	7.	 	Confidentiality
	 
	7.1	 	The Customer acknowledges that LB Know-How (except to the extent that LB
Know-How is Customer Information) and LB acknowledges that Customer
Information and Customer Materials with which it is supplied by the other
pursuant to the Agreement is supplied,

Page 16 of 44

 

	 	 	subject to Clause 7.5, in circumstances imparting an obligation of
confidence and each agrees to keep such LB Know-How or such Customer
Information and Customer Materials secret and confidential and to respect
the other’s proprietary rights therein and not at any time for any reason
whatsoever to disclose or permit such LB Know-How or LB Information or
such Customer Information to be disclosed to any third party save as
expressly provided herein.
	 
	7.2	 	The Customer and LB shall each procure that all their respective
employees, consultants, contractors and persons for whom it is responsible
having access to confidential LB Know-How or LB Information or
confidential Customer Information or Customer Materials shall be subject
to the same obligations of confidence as the principals pursuant to
Clauses 7.1 and 7.3 and shall be bound by secrecy agreements in support of
such obligations.
	 
	7.3	 	LB and the Customer each undertake not to disclose or permit to be
disclosed to any third party (including any contractors or consultants not
previously approved in writing by LB, such approval not to be unreasonably
withheld or delayed), or otherwise make use of or permit to be made use of
(a) any trade secrets or confidential information relating to the
technology, business affairs or finances of the other, any subsidiary,
holding company or subsidiary or any such holding company of the other,
or of any suppliers, agents, distributors, licensees or other customers of
the other which comes into its possession under this Agreement or (b) the
commercial terms of this Agreement except to the extent that the same is
required to be disclosed pursuant to subpoena, court order, judicial
process or otherwise by law, including without limitation, the rules and
regulations promulgated by the United States Securities and Exchange
Commission; provided the Receiving Party provides prompt notice to the
Disclosing Party of such requirement in order to give the Disclosing Party
an opportunity to timely seek a protective order or other appropriate
judicial relief. In the event the Disclosing Party is unable to obtain a
protective order or other appropriate judicial relief, the Receiving Party
shall disclose only that portion of the Disclosing Party’s Confidential
Information which is legally required to be disclosed, and ensure that all
such Confidential Information of the Disclosing Party shall be redacted to
the fullest extent permitted by law prior to such disclosure and that the
Disclosing Party shall be given an opportunity to review the Confidential
Information prior to its disclosure. LB acknowledges that Customer may
decide to license some or all of the rights to the Product to a third
party and LB agrees that Customer may disclose confidential information
hereunder to such third party provided that such disclosures are subject
to confidentiality provisions substantially similar to the confidentiality
provisions contained herein.
	 
	7.4	 	The obligations of confidence referred to in this Clause 7 shall not
extend to any information which:

	 	7.4.1	 	is or becomes generally available to the public otherwise than
by reason of a breach by the Receiving Party of the provisions of
this Clause 7;
	 
	 	7.4.2	 	is known to the Receiving Party and is at its free disposal
prior to its receipt from the Disclosing Party, as demonstrated by
written evidence;
	 
	 	7.4.3	 	is subsequently disclosed to the Receiving Party without being
made subject to an obligation of confidence by a third party;
	 
	 	7.4.4	 	LB or the Customer may be required to disclose under any
statutory, regulatory or similar legislative requirement, subject to
the imposition of obligations of secrecy wherever possible in that
relation; or
	 
	 	7.4.5	 	is developed by any servant or agent of the Receiving Party
without access to or use or knowledge of the information by the
Disclosing Party.

	7.5	 	The Customer acknowledges that:

Page 17 of 44

 

	 	7.5.1	 	without prejudice to any other rights and remedies that the
parties may have, the parties agree that the Confidential Information
is valuable and that damages may not be an adequate remedy for any
breach of the provisions of Clauses 7.1, 7.2, 7.3 and 7.4. The
parties agree that the relevant party will be entitled without proof
of special damage to the remedies of an injunction and other
equitable relief for any actual or threatened breach by the other
party; and
	 
	 	7.5.2	 	Customer shall not at any time have any right, title, licence
or interest in or to LB Know-How (except to the extent that LB
Know-How is Customer Information) or the LB Patent Rights which are
vested in LB or to which LB is otherwise entitled other than as
provided herein.

	7.6	 	LB acknowledges that, other than as provided herein, LB shall not at any
time have any right, title, licence or interest in or to the Customer
Information, Customer Patent Rights, Customer Materials or any other
intellectual property rights vested in Customer or to which the Customer
is entitled. For the purposes of clarity, property in the Product, and in
any related cell line, cell bank and/or materials and/or information and
all improvements thereto which were made or developed by LB [**],
including any cell line, cell bank and/or materials and/or information and
other rights applicable to the manufacture of Product and which were
assigned to LB [**] therein, or owned by Aventis at the time or previously
licensed to LB [**], shall be vested in the Customer. LB and Customer
[**]. In addition, Customer understands that LB has a number of existing
agreements [**]. The Parties agree that [**] and [**] under such
agreements. Furthermore, Customer acknowledges and agrees that [**] this
Agreement. For purposes of clarity, Customer acknowledges and agrees that
it [**] under, any such agreements.
	 
	7.7	 	The obligations of LB and the Customer under this Clause 7 shall survive
the termination for whatever reason of the Agreement.
	 
	7.8	 	Nothing contained herein shall prevent the Customer from disclosing to
Aventis such LB information as may be required under Customer’s agreement
with Aventis or as may be necessary in the event that Aventis desires
Customer to manufacture (or have manufactured) Product for use by
Aventis.
	 
	8.	 	Termination
	 
	8.1	 	If it becomes apparent to either LB or the Customer at any stage in the
provision of the Services that it will not be possible to complete the
Services for legal, scientific or technical reasons, a [**] day period
shall be allowed for good faith discussion and attempts to resolve such
problems. If such problems are not resolved within such period, LB and
the Customer shall each have the right to terminate the Agreement
forthwith by notice in writing. In the event of such termination, the
Customer shall pay to LB a termination sum [**] prior to notice of such
termination [**] for any stage of the Services which is in process at the
date of notice of termination) and all expenses reasonably incurred by LB
in winding down the Services and giving effect to such termination,
including the costs of terminating any commitments entered into under the
Agreement, [**]. In effecting such termination, LB shall wind down its
operations as efficiently as possible, subject to Customer’s instructions
with respect to completion of any on-going stages, steps or processes and
in accordance with Schedule 3.
	 
	8.2	 	Customer may in its sole discretion terminate the Services at any time
for any reason by giving not less than [**] days’ notice in writing to LB.
In the event of termination pursuant to this Clause 8.2 and subject to
Clauses 8.4 and 8.5 the Customer shall pay LB a termination sum calculated
in accordance with the principles of Clause 8.1 above plus, in the event

Page 18 of 44

 

	 	 	notice to terminate Services pursuant to this Clause 8.2 is issued to LB
[**] for which Customer [**], Customer shall pay LB a sum equal to [**]
[**], which payment shall fall due to LB [**]; provided, however, that to
the extent requested by Customer, LB shall perform Services related to an
Alternate Product during such period. For clarity, Customer shall own all
raw materials and services for which it has paid.
	 
	8.3	 	To the extent that LB is able to sell any of the plant time reserved by
Customer’s Binding Order but not used by Customer to a third party, then
for that portion of the plant time which is sold to a third party, (a)
Customer shall [**] of the [**] to be performed during such period if not
previously paid or (b) if previously paid LB shall refund to the Customer
[**] percent ([**]%) of the price previously paid for such Binding Orders.
For clarity, Customer shall [**] of the costs of the Services [**]
Customer may identify third parties interested in using such plant time.
	 
	8.4	 	For the avoidance of doubt, activities relating to [**].
	 
	8.5	 	The parties may each terminate the Agreement forthwith by notice in
writing to the other party upon the occurrence of any of the following
events:

	 	8.5.1	 	if the other commits a material breach of the Agreement (which
shall include a breach of the warranties set out in Clauses 2 and 6
respectively) which in the case of a breach capable of remedy is not
remedied within [**] days of the receipt by the other of notice
identifying the breach and requiring its remedy; or
	 
	 	8.5.2	 	if the other ceases for any reason to carry on business or
convenes a meeting of its creditors or has a receiver or manager
appointed in respect of all or any part of its assets or is the
subject of an application for an administration order or of any
proposal for a voluntary arrangement or enters into liquidation
(whether compulsorily or voluntarily) or undergoes any analogous act
or proceedings under foreign law.

	8.6	 	At the request of Customer, at any time and for whatever reason,
including in connection with termination of this Agreement:

	 	8.6.1	 	LB shall promptly return to the Customer all Customer
Information and shall dispose of or return to the Customer Product
(except to the extent that the Customer has not paid LB invoices
related to such Product) and the Customer Materials and any materials
therefrom, as directed by the Customer; and
	 
	 	8.6.2	 	LB shall transfer, at Customer’s cost, the Process and all
technology associated therewith (including standard operating
procedures and other documentation related to assays and reagents
used in connection with the Process or the Product) other than LB
Patent Rights, to the Customer (or such third party as Customer may
designate) in a timely and efficient manner in order to enable
Customer or its designee to prepare to manufacture and/or commence
manufacturing the Product as quickly and efficiently as possible; and
	 
	 	8.6.3	 	LB shall grant the Customer an exclusive, perpetual,
worldwide, royalty-free, sublicensable license to use LB Patent
Rights for use exclusively with respect to the Cell Line, the Process
and the Product; and
	 
	 	8.6.4	 	LB and the Customer shall do all such acts and things and
shall sign and execute all such deeds and documents as the other may
reasonably require to evidence compliance with this Clause 8.6.

	 	 	The provisions of the Clause 8.6 shall survive termination of this
Agreement.

Page 19 of 44

 

	8.7	 	Termination of this Agreement for whatever reason shall not affect the
accrued rights of either LB or the Customer arising under or out of this
Agreement and all provisions which are expressed to survive the Agreement
shall remain in full force and effect.
	 
	8.8	 	Customer hereby grants to LB, following termination of this Agreement, an
exclusive, perpetual, worldwide, royalty-free, sublicensable license to
use LB Know-How (to the extent such LB Know-How is Customer Information)
for use other than with respect to the Cell Line, the Process or the
Product. The provisions of this Clause 8.8 shall survive termination of
this Agreement.
	 
	9.	 	Force Majeure
	 
	9.1	 	If either Party is prevented or delayed in the performance of any of its
obligations under the Agreement by Force Majeure and shall give written
notice thereof to the other Party specifying the matters constituting
Force Majeure together with such evidence as such Party reasonably can
give and specifying the period for which it is estimated that such
prevention or delay will continue, such Party 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.
	 
	9.2	 	The expression “Force Majeure” shall be deemed to include any cause
affecting the performance of this Agreement arising from or attributable
to perils of navigation, floods, fire, storms, epidemics, acts of god,
locusts, earthquakes, explosions, hostilities, civil commotion, war
(declared or undeclared), orders, requisitions, regulations or acts of any
government or governmental authority, whether de jure or de facto or any
official purporting to act under the authority of any such government,
insurrections, failure or slowdown of public utilities, inability to
procure raw materials or other circumstances or conditions of a similar
nature, quarantine or custom restrictions, strikes, lockouts or any other
labor difficulty at suppliers of goods, raw materials and/or excipients.
	 
	10.	 	Governing Law, Jurisdiction and Enforceability
	 
	10.1	 	The construction, validity and performance of the Agreement shall be
governed by the laws of England, and LB and the Customer submit to the
non-exclusive jurisdiction of the Courts of England and Wales.
	 
	10.2	 	No failure or delay on the part of either LB or the Customer to exercise
or enforce any rights conferred on it by the Agreement shall be construed
or operate as a waiver thereof nor shall any single or partial exercise of
any right, power or privilege or further exercise thereof operate so as to
bar the exercise or enforcement thereof at any time or times thereafter.
	 
	10.3	 	The illegality or invalidity of any provision (or any part thereof) of
this Agreement shall not affect the legality, validity or enforceability
of the remainder of its provisions or the other parts of such provision as
the case may be.
	 
	11.	 	Notices
	 
	11.1	 	Any notice or other communication to be given under this Agreement shall
be delivered personally or sent by facsimile transmission, or if facsimile
transmission is not available, by first class pre-paid post addressed as
follows:

	 	 	 	 	 
	 

	 	11.1.1 If to Lonza Biologics to:
	 	Lonza Biologics plc
	

	 	 	 	228 Bath Road
	

	 	 	 	Slough
	

	 	 	 	Berkshire SL1 4DX
	

	 	 	 	England

Page 20 of 44

 

	 	 	 	 	 
	

	 	 	 	Facsimile: 01753 777001
	

	 	  For the attention of:
	 	The Head of Legal Services
	 
	 	 	 	 
	

	 	  With a copy to:
	 	The Site Director at the same address
	 
	 	 	 	 
	

	 	11.1.2 If to the Customer to:
	 	Transkaryotic Therapies Inc
	

	 	 	 	700 Main Street
	

	 	 	 	Cambridge
	

	 	 	 	MA 02139
	

	 	 	 	USA
	

	 	 	 	Facsimile: 617-503-0330
	

	 	  For the attention of:
	 	Senior Vice President, Manufacturing
	 
	 	 	 	 
	

	 	  With a copy to:
	 	Transkaryotic Therapies Inc
	

	 	 	 	700 Main Street
	

	 	 	 	Cambridge
	

	 	 	 	MA 02139
	

	 	 	 	USA
	

	 	 	 	Facsimile: 617-349-0550
	

	 	  For the attention of:
	 	General Counsel

or to such other destination as either party hereto may hereafter
notify to the other in accordance with the provisions of this Clause 11.

	11.2	 	All such notices or other communications shall be deemed to have been served as follows:

	 	11.2.1	 	if delivered personally, at the time of such delivery;
	 
	 	11.2.2	 	if sent by facsimile, upon receipt of the transmission confirmation
slip showing completion of the transmission;
	 
	 	11.2.3	 	if sent by first class pre-paid post, ten (10) business days
(Saturdays, Sundays and Bank or other public holidays excluded) after
being placed in the post.

	12.	 	Miscellaneous
	 
	12.1	 	Neither party shall be entitled to assign, transfer, charge or in any way
make over the benefit and/or the burden of this Agreement without the
prior written consent of the other which consent shall not be unreasonably
withheld or delayed, save that either Party shall be entitled without the
prior written consent of the other to assign, transfer, charge,
sub-contract, deal with or in any other manner make over the benefit
and/or burden of this Agreement to any company with which such Party may
merge or to any company to which such Party may transfer its assets and
undertakings.
	 
	12.2	 	The text of any press release or other communication to be published by
or in the media concerning the subject matter of the Agreement shall
require the prior written approval of LB and the Customer.
	 
	12.3	 	The Agreement embodies the entire understanding of LB and the Customer
and there are no promises, terms, conditions or obligations, oral or
written, expressed on implied, other than those contained in the
Agreement. The terms of the Agreement shall supersede all previous
agreements, including the LOI, (if any) which may exist or have existed
between LB and the Customer relating to the Services.

Page 21 of 44

 

	12.4	 	The parties to this Agreement do not intend that any term hereof should
be enforceable by virtue of the Contracts (Rights of Third Parties) Act
1999 by any person who is not a party to this Agreement.
	 
	12.5	 	No variation of or addition to this Agreement or any part thereof shall
be effective unless in writing and signed on behalf of both parties.
Notwithstanding the above the parties hereby confirm that amendments to
the Specification shall be effective if reduced to writing and signed by
the quality and/or regulatory representative of both parties, which
quality and/or regulatory representative shall be nominated from time to
time by each party

Page 22 of 44

 

AS WITNESS the hands of the duly authorised representatives of the parties
hereto the day and year first above written.

	 	 	 	 	 
	Signed for and on behalf of

	 	/s/Gerhard F. Klement	 	 
	

	 	
 	 	 
	LONZA BIOLOGICS PLC
	 	 	 	 
	

	 	COO
	 	TITLE
	

	 	
 	 	 
	Signed for and on behalf of

	 	/s/Michael J. Astrue, Esq.	 	 
	

	 	
 	 	 
	TRANSKARYOTIC THERAPIES INC
	 	 	 	 
	

	 	President and Chief Executive Officer
	 	TITLE
	

	 	
 	 	 

Page 23 of 44

 

SCHEDULE 1

“Cell Line” shall mean the [**]

“Product” shall mean the [**].

A. SPECIFICATION FOR BULK PURIFIED DRUG SUBSTANCE

	 	 	 	 	 	 	 
	 	 	 	 	Method	 	 
	Test No.
	 	Criterion
	 	(LB SOP number)
	 	Specification

	1.

	 	Characteristics	 	 	 	 
	1.1

	 	[**]
	 	[**]
	 	[**]
	1.2

	 	[**]
	 	[**]
	 	[**]
	1.3

	 	[**]
	 	[**]
	 	[**]
	1.4

	 	[**]
	 	[**]
	 	[**]
	2.

	 	Identity	 	 	 	 
	1.5

	 	[**]
	 	[**]
	 	[**]

Page 24 of 44

 

	 	 	 	 	 	 	 
	 	 	 	 	Method	 	 
	Test No.
	 	Criterion
	 	(LB SOP number)
	 	Specification

	3.

	 	Purity	 	 	 	 
	1.6

	 	[**]
	 	[**]
	 	[**]
	1.7

	 	[**]
	 	[**]
	 	[**]
	1.8

	 	[**]
	 	[**]
	 	[**]

	4.	 	Impurities

	 	 	 	 	 	 	 
	Test No.
	 	Criterion
	 	Method (LB SOP number)
	 	Specification

	1.9

	 	[**]
	 	[**]
	 	[**]
	1.10

	 	[**]
	 	[**]
	 	[**]
	1.11

	 	[**]
	 	[**]
	 	[**]
	1.12

	 	[**]
	 	[**]
	 	[**]
	1.13

	 	[**]
	 	[**]
	 	[**]
	1.14

	 	[**]
	 	[**]
	 	[**]

Page 25 of 44

 

	 	 	 	 	 	 	 
	Test No.
	 	Criterion
	 	Method (LB SOP number)
	 	Specification

	5.

	 	Safety	 	 	 	 
	1.15

	 	[**]
	 	[**]
	 	[**]
	1.16

	 	[**]
	 	[**]
	 	[**]
	6.	 	Sample from production fermenter on each day of harvest
	1.17

	 	[**]
	 	[**]
	 	[**]
	1.18

	 	[**]
	 	[**]
	 	[**]

	7.	 	Storage and shipping information
	 
	 	 	[**]

Bottling of Bulk Product:

Primary containers: Polypropylene bottle (screw cap, autoclavable)

Denominations:

[**]

[**]

[**]

[**]

For the calculation of the total fill volume it is assumed
that 1g of liquid ~ 1ml.

Product Storage Conditions: Store Product at 5 ±3°C.

Shipment Temperature: Product shipped at greater than 0°C and below
or equal to +10°C.

Customer samples (removed during the middle of dispensing):

To be agreed during the work programme. 500mL, 125mL and 30mL
Nalgenes are available. 1ml Nunc cryotubesTM can be used but
there is no shipping validation.

Page 26 of 44

 

SCHEDULE 2

CONTENTS

	1	 	Activities to be undertaken by LB

	 	1	 	Stage 1 — [**]
	 
	 	2	 	Stage 2 — [**]
	 
	 	3	 	Stage 3 — [**]
	 
	 	4	 	Stage 4 — [**]
	 
	 	5	 	Stage 5 — [**]
	 
	 	6	 	Stage 6 — [**]
	 
	 	7	 	Stage 7 — [**]
	 
	 	8	 	Stage 8 — [**]
	 
	 	9	 	Stage 9 — [**]
	 
	 	10	 	Stage 10 — [**]
	 
	 	11	 	Stage 11 — [**]
	 
	 	12	 	Stage 12 — [**]
	 
	 	13	 	Stage 13 — [**]
	 
	 	14	 	Stage 14 — [**]
	 
	 	15	 	Stage 15 — [**]
	 
	 	16	 	Stage 16 — [**]
	 
	 	17	 	Stage 17 — [**]
	 
	 	18	 	Stage 18 — [**]
	 
	 	19	 	Stage 19 — [**]
	 
	 	20	 	Stage 20 — [**]
	 
	 	21	 	Stage 21 — [**]
	 
	 	22	 	Stage 22 — [**]
	 
	 	23	 	Stage 23 — [**]
	 
	 	24	 	Stage 24 — [**]

Page 27 of 44

 

	1	 	Activities to be undertaken by LB

	1	 	Stage 1 — [**]

	 	1.1	 	Objectives

1.1.1 [**]

1.1.2 [**]

1.1.3 [**]

1.1.4 [**]

1.1.5 [**]

	 	1.2	 	Activities

1.2.1 [**]

1.2.2 [**]

1.2.3 [**]

1.2.4 [**]

	 	1.3	 	Timescale

This Stage shall commence [**] and will be complete [**].

It is estimated that this Stage shall be complete [**]

Page 28 of 44

 

	2	 	Stage 2 — [**]

	 	2.1	 	Objectives

2.1.1 [**]

	 	2.2	 	Activities

2.2.1 [**]

	 	2.3	 	Timescale

This Stage can commence [**]. This Stage shall be complete [**].

It is expected that this Stage shall be complete approximately [**].

	3	 	Stage 3 — [**]

	 	3.1	 	Objectives

3.1.1 [**]

3.1.2 [**]

3.1.3 [**]

3.1.4 [**]

	 	3.2	 	Activities

3.2.1 [**]

3.2.2 [**]

3.2.3 [**]

3.2.4 [**]

3.2.5 [**]

3.2.6 [**]

3.2.7 [**]

	 	3.3	 	Timescale

This Stage can commence [**] and shall be complete [**].

It is estimated that this Stage shall be complete [**].

	 	4	 	Stage 4 — Purification Process Trial

	 	4.1	 	Objectives

4.1.1 [**]

4.1.2 [**]

	 	4.2	 	Activities

4.2.1 [**]

4.2.2 [**]

4.2.3 [**]

4.2.4 [**]

4.2.5 [**]

4.2.6 [**]

4.2.7 [**]

Page 29 of 44

 

	 	4.3	 	Timescale

This Stage can commence [**] and shall be complete [**].

It is estimated that this Stage shall be complete [**].

	5	 	Stage 5 — [**]

	 	5.1	 	Objectives

5.1.1 [**]

5.1.2 [**]

5.1.3 [**]

	 	5.2	 	Activities

5.2.1 [**]

5.2.2 [**]

5.2.3 [**]

5.2.4 [**]

Note [**]

5.2.5 [**]

5.2.6 [**]

	 	5.3	 	Timescale

This Stage can commence [**] and shall be complete [**].

It is expected that this Stage shall be complete approximately [**].

Page 30 of 44

 

	6	 	Stage 6 — [**]

	 	6.1	 	Objectives

6.1.1 [**]

6.1.2 [**]

	 	6.2	 	Activities

6.2.1 [**]

6.2.2 [**]

6.2.3 [**]

6.2.4 [**]

6.2.5 [**]

6.2.6 [**]

	 	6.3	 	Timescale

This Stage can commence [**]. This Stage shall be complete [**].

It is expected that this Stage shall be complete approximately [**].

Page 31 of 44

 

	7	 	Stage 7 — [**]

	 	7.1	 	Objectives

7.1.1 [**]

	 	7.2	 	Activities

7.2.1 [**]

7.2.2 [**]

7.2.3 [**]

	 	7.3	 	Timescale

This Stage can commence upon [**] and shall be complete upon [**].

It is expected that this Stage shall be complete approximately [**].

	8	 	Stage 8 — [**]

	 	8.1	 	Objective

8.1.1 [**]

8.1.2 [**]

	 	8.2	 	Activities

8.2.1 [**]

8.2.2 [**]

8.2.3 [**]

8.2.4 [**]

8.2.5 [**]

8.2.6 [**]

8.2.7 [**]

8.2.8 [**]

	 	8.3	 	Timescale

This Stage will commence upon [**]and shall be complete upon release of the facility.

It is estimated that this Stage shall be complete [**]

	9	 	Stage 9 — [**]

	 	9.1	 	Objective

9.1.1 [**]

	 	9.2	 	Activities

9.2.1 [**]

	 	9.3	 	Timescale

This Stage will commence [**].

It is estimated that this Stage shall be complete four [**]

Page 32 of 44

 

	10	 	Stage 10 — [**]

	 	10.1	 	Objective

10.1.1 [**]

	 	10.2	 	Activities

Sub-Stage A: First Engineering Batch

10.2.1 [**]

10.2.2 [**]

10.2.3 [**]

10.2.4 [**]

10.2.5 [**]

Sub-Stage B: Second Engineering Batch

10.2.1 [**]

	 	10.3	 	Timescale

This Stage may commence [**].

Each batch will be complete upon summary report issue estimated to be [**].

	11	 	Stage 11 — [**]

	 	11.1	 	Objective

11.1.1 [**]

	 	11.2	 	Activities

11.2.1 [**]

11.2.2 [**]

11.2.3 [**]

	 	11.3	 	Timescale

This Stage can commence upon [**]

It is expected that this Stage shall be complete approximately [**]

	12	 	Stage 12 — [**]

	 	12.1	 	Objectives

12.1.1 [**]

	 	12.2	 	Activities

[**]

12.2.1 [**]

12.2.2 [**]

12.2.3 [**]

12.2.4 [**]

12.2.5 [**]

12.2.6 [**]

Note:

[**]

Page 33 of 44

 

12.2.7 [**]

[**]

12.2.8 [**]

Note:

	 	12.3	 	Timescale

This Stage may commence [**].

Each batch will be complete [**]. It is estimated that
Product will be delivered [**]. It is estimated that this
shipment could occur[**].

	13	 	Stage 13 — Process Limits Data Review

	 	13.1	 	Objectives

13.1.1 [**]

	13.2	 	Activities

13.2.1 [**]

13.2.2 [**]

Note:

13.2.3 [**]

	13.3	 	Timeline

This Stage can commence [**].

Stage will be complete [**] estimated to be [**].

	14	 	Stage 14 — [**]

	 	14.1	 	Objectives

14.1.1 [**]

14.1.2 [**]

	14.2	 	Activities

[**]

14.2.1 [**]

Note: [**]

14.2.2 [**]

14.2.3 [**]

14.2.4 [**]

14.2.5 [**]

Note: [**]

[**]

14.2.6 [**]

Note: [**]

14.2.7 [**]

14.2.8 [**]

14.2.9 [**]

14.2.10 [**]

14.2.11 [**]

Note: [**]

Page 34 of 44

 

	 	14.3	 	Timescale

Sub-Stage A shall be complete with the issue of the final
report of activities (14.2.5). It is estimated that this
report will be issued [**].

Sub-Stage B shall be complete upon issue of the audited report
of activities to the Customer. It is estimated that this
report shall be issued [**]

	15	 	Stage 15 — [**]

	 	15.1	 	Objectives

15.1.1 [**]

	 	15.2	 	Activities

15.2.1 [**]

Note: [**]

15.2.2 [**]

Note: [**]

15.2.3 [**]

	 	15.3	 	Timescale

This Stage can commence as soon as Product is available and
will be complete on issue of the final report of activities
and it is estimated that this will be issued [**].

	16	 	Stage 16 — [**]

	 	16.1	 	Objectives

16.1.1 [**]

16.1.2 [**]

	 	16.2	 	Activities

16.2.1 [**]

16.2.2 [**]

Note:

16.2.3 [**]

16.2.4 [**]

16.2.5[**]

16.2.6 [**]

16.2.7 [**]

Note:[**]

	 	16.3	 	Timescale

This Stage shall commence [**]

This Stage shall be completed [**].

It is estimated that this [**] will be [**] .

	17	 	Stage 17 — [**]

	 	17.1	 	Objectives

17.1.1 [**]

17.1.2 [**]

	 	17.2	 	Activities

17.2.1 [**]

17.2.2 [**]

Page 35 of 44

 

17.2.3 [**]

	 	 	 
	TEST
	 	BioReliance Protocol

	[**]

	 	[**]
	[**]

	 	[**]

17.2.4 [**]

	 	 	 
	TEST
	 	METHOD

	[**]

	 	[**]
	[**]

	 	[**]

17.2.5 [**]

	 	 	 
	TEST
	 	BioReliance Protocol

	[**]

	 	[**]
	[**]

	 	[**]

	 	17.3	 	Timescale
	 
	 	 	 	This Stage can commence as soon as the relevant cell stocks
have been prepared. This Stage will be complete on [**] and it
is estimated that this will be [**].

	18	 	Stage 18 — [**]

	 	18.1	 	Objective
	 
	 	 	 	18.1.1[**]
	 
	 	18.2	 	Activities
	 
	 	 	 	18.2.1[**]
	 
	 	 	 	18.2.2[**]
	 
	 	 	 	Note:[**]
	 
	 	 	 	18.2.3[**]
	 
	 	 	 	Note:[**]
	 
	 	 	 	18.2.4[**]
	 
	 	 	 	18.2.5[**]
	 
	 	 	 	18.2.6[**]
	 
	 	18.3	 	Timescale
	 
	 	 	 	This Stage can commence [**]. This Stage shall be complete [**].
The interim report of results will be issued within [**].
The final report will be issued within [**].

	19	 	Stage 19 — [**]

	 	19.1	 	Objectives
	 
	 	 	 	19.1.1[**]
	 
	 	 	 	19.1.2[**]
	 
	 	 	 	19.1.3[**]
	 
	 	19.2	 	Activities
	 
	 	 	 	19.2.1[**]
	 
	 	 	 	Note:[**]
	 
	 	 	 	19.2.2[**]
	 
	 	 	 	19.2.3[**]
	 
	 	 	 	19.2.4[**]

Page 36 of 44

 

Note:

19.2.5[**]

19.2.6[**]

	 	19.3	 	Timescale
	 
	 	 	 	This Stage can commence as soon as [**] and will be complete [**]
Note: [**]

	20	 	Stage 20 — [**]

	 	20.1	 	Objectives
	 
	 	 	 	20.1.1[**]
	 
	 	20.2	 	Activities
	 
	 	 	 	20.2.1[**]
	 
	 	 	 	20.2.2[**]
	 
	 	 	 	20.2.3[**]
	 
	 	 	 	20.2.4[**]
	 
	 	 	 	Note:[**]
	 
	 	20.3	 	Timescale
	 
	 	 	 	This Stage shall be complete [**]. It is estimated that this Stage will be complete [**].

	21	 	Stage 21 — [**]

	 	21.1	 	Objectives
	 
	 	 	 	21.1.1[**]
	 
	 	 	 	21.1.2[**]
	 
	 	21.2	 	Activities
	 
	 	 	 	21.2.1[**]
	 
	 	 	 	21.2.2[**]
	 
	 	21.3	 	Timescale
	 
	 	 	 	The provision of services under this stage can commence [**]

	22	 	Stage 22 — [**]

	 	22.1	 	Objectives
	 
	 	 	 	22.1.1[**]
	 
	 	22.2	 	Activities
	 
	 	 	 	22.2.1[**]
	 
	 	 	 	22.2.2[**]
	 
	 	 	 	22.2.3[**]
	 
	 	 	 	22.2.4[**]
	 
	 	 	 	22.2.5[**]
	 
	 	 	 	22.2.6[**]

Page 37 of 44

 

	 	22.3	 	Timescale
	 
	 	 	 	This Stage can commence [**]
	 
	 	 	 	It is estimated that this Stage will be complete approximately [**]

	23	 	Stage 23 — [**]

	 	23.1	 	Objectives
	 
	 	 	 	23.1.1[**]
	 
	 	23.2	 	Activities
	 
	 	 	 	23.2.1[**]
	 
	 	 	 	Note:[**]
	 
	 	 	 	23.2.2[**]
	 
	 	 	 	23.2.3[**]
	 
	 	 	 	23.2.4[**]
	 
	 	 	 	23.2.5[**]
	 
	 	 	 	23.2.6[**]
	 
	 	23.3	 	Timescale
	 
	 	 	 	This Stage can commence as soon as the relevant materials are
available. This Stage shall be complete upon issue of the
summary report to the Customer.
	 
	 	 	 	It is expected that this Stage shall be complete approximately
[**].

	24	 	Stage 24 — [**]

	 	24.1	 	Objectives
	 
	 	 	 	24.1.1[**]
	 
	 	24.2	 	Activities
	 
	 	 	 	24.2.1[**]
	 
	 	 	 	24.2.2[**]
	 
	 	 	 	24.2.3[**]
	 
	 	 	 	24.2.4[**]
	 
	 	 	 	24.2.5[**]
	 
	 	 	 	24.2.6[**]
	 
	 	24.3	 	Timescale
	 
	 	 	 	This Stage can commence as soon as the relevant materials are
available. This Stage shall be complete upon issue of the
summary report to the Customer.
	 
	 	 	 	It is expected that this Stage shall be complete approximately
[**].

	25	 	Stage 25 — [**]

	 	25.1	 	Objective
	 
	 	 	 	25.1.1[**]
	 
	 	25.2	 	Activities
	 
	 	 	 	25.2.1[**]
	 
	 	 	 	Note:

Page 38 of 44

 

25.2.2[**]

25.2.3[**]

25.2.4[**]

25.2.5[**]

25.2.6[**]

25.2.7[**]

Note:

	 	25.3	 	Timescale
	 
	 	 	 	This Stage will be complete on issue of the final report of
activities and it is estimated that this will be issued [**]

	26	 	Stage 26 — [**]

	 	26.1	 	Objectives
	 
	 	 	 	26.1.1[**]
	 
	 	26.2	 	Activities
	 
	 	 	 	26.2.1[**]
	 
	 	 	 	Note:
	 
	 	 	 	26.2.2[**]
	 
	 	 	 	Note:
	 
	 	 	 	26.2.3[**]
	 
	 	 	 	26.2.4[**]
	 
	 	 	 	26.2.5[**]
	 
	 	26.3	 	Timescale
	 
	 	 	 	The stage will be complete upon issue of the final reports of
activities to the Customer. It is estimated that this will be
complete [**]

Page 39 of 44

 

SCHEDULE 3

PRICE AND PAYMENT TERMS

	1.	 	For capital improvements to the Slough Facility, Customer shall pay
LB’s [**]. Such amount shall be paid in full within [**] days of
execution of this Agreement. Customer shall be credited all amounts
paid to LB prior to the date hereof for such capital improvements. The
Customer shall own all non-fixed assets such as columns paid for by the
Customer.
	 
	2.	 	For Stages 1 through 4 described in Schedule 2 hereof, Customer shall
pay LB [**] Except as described in paragraph 5 below, this price is
all-inclusive for such Stages. Such amount was previously paid or
invoiced and due for payment by the Customer to Lonza.
	 
	3.	 	For all development, manufacturing, analytical and registration
activities (including documentation) required to have the manufacture of
the Product at the Slough Facility approved for the commercial sale of
the Product, including without limitation, those activities described in
Stages 5 through 25 as described in Schedule 2 hereof, Customer shall
pay LB [**] Except as described in paragraph 5 below, this price is
all-inclusive for such activities. Such amount will be paid in four
installments as follows:

	 	a.	 	Installment 1: [**] to be paid within [**] days of
signing this Agreement
	 
	 	b.	 	Installment 2: [**] to be invoiced to Customer by LB
upon commencement of the [**]Batch described in Stage 12 as
described on Schedule 2.
	 
	 	c.	 	Installment 3: [**] to be invoiced to Customer by LB
upon successful completion, testing and release of [**]
consistency Batches suitable for registration in Stage 12 as
described on Schedule 2.
	 
	 	d.	 	Installment 4: [**] to be invoiced to Customer by LB
upon completion of all work and delivery of all documentation
required for registration and acceptance thereof by Customer.

For purposes of clarity, it is expected that development, manufacturing,
analytical and registration activities shall include the manufacture of at
least [**] Batches, at least [**] of which shall meet Specifications and
be suitable for registration purposes, and that such activities shall
include, among other things, all required testing, release activities,
stability studies, technical reports, reference standards, validation
studies, reports and other work required for the registration and
maintenance of the Product; provided, however, that if there is a
substantial change in the regulatory requirements applicable to the
approval of biologics, the Parties shall negotiate in good faith an
appropriate revision to the scope and price of Services to be provided
hereunder.

In the event that the performance of any of the activities described in
this Clause 3 of Schedule 3 are prohibited or significantly delayed for
legal reasons, the Customer shall either:

	 	(a)	 	terminate the Agreement, in which case the Customer
will pay LB [**] and [**] (determined as the work performed, as
determined by agreement of the Parties, divided by the total
work to be performed, [**] less any amounts already paid
pursuant to this Clause 3 of Schedule 3; or
	 
	 	(b)	 	delay implementation of the Services described in
the Clause 3 of Schedule 3, in which case the Customer will pay
LB [**] (determined as the work performed, as determined by
agreement of the Parties, divided by the total work to be
performed, times [**] less any amounts already paid pursuant to
this Clause 3 of Schedule 3. In such event, at the request of
the Customer, LB agrees to commence any work which was so
delayed within [**].

	4.	 	For each Batch (other than any batches required for registration of
the Product and the Batches described in Stages 1 through 25, which
shall be included in the price described in paragraph 3 above), Customer
shall pay [**] per Batch. This price shall include all Services
performed by LB, including release testing, documentation, and
preparation and delivery of the Certificate of Analysis.

Page 40 of 44

 

Except as described in paragraph 5 below, this price is all-inclusive. LB
guarantees that it will deliver an average of at least [**] of Product per
Batch for each Campaign. The Parties agree that after the first two
commercial Campaigns, the Parties shall [**]. The Customer agrees to
order a minimum of [**] for production in [**] unless the Customer
terminates commercial development of the Product, in which case such
minimum order shall not be applicable.

	5.	 	In addition to the other costs described in this Schedule 3, LB shall
send Customer an invoice (together with all relevant third party
invoices) for any of the following purchased by LB, with prior approval
of Customer, in connection with the performance of its activities under
the Agreement:

	 	a.	 	[**]
	 
	 	b.	 	[**]
	 
	 	c.	 	[**]

	6.	 	In the event that Customer requires LB to delay development or
manufacturing for any reason, including without limitation the issuance
of an injunction, and Customer elects not to terminate this Agreement,
Customer shall pay [**] per month for each month of delay. Customer may
require that LB develop or manufacture an Alternate Product during such
delay for no additional cost; provided, however, that if the development
or manufacture of the Alternate Product requires substantially greater
labor than would have been expended by LB to manufacture a commercial
Batch of Product, then Customer shall pay for such additional labor at a
price of [**] per annual full time employee (“FTE”), pro rated for the
amount of time actually worked.

Whether in the course of terminating this Agreement or otherwise, Customer
may require LB to develop or manufacture one or more Alternate Products in
place of Binding Orders for the Product at no additional cost; provided,
however, that if the development or manufacture of the Alternate Product
requires substantially greater labor than would have been expended by LB
to comply with such Binding Orders, then Customer shall pay for such
additional labor at a price of [**] per annual FTE.

The Customer must pre-authorize in writing any work performed which would
require additional payment pursuant to this paragraph 6. No additional
payment may be requested by LB unless the total scope of the Services for
such Alternate Product exceeds the total scope of Services that would have
been required with the Product.

Page 41 of 44

 

SCHEDULE 4

ANTICIPATED TIMING

THIS PAGE INTENTIONALLY LEFT BLANK

Page 42 of 44

 

Graphic depicting the stages of services and timeframes for completion has been

deleted and filed separately with the Securities and Exchange Commission.

Page 43 of 44

 

SCHEDULE 5

ANTICIPATED CHANGES TO THE PROCESS

	1.	 	[**]
	 
	2.	 	[**].
	 
	3.	 	[**].
	 
	4.	 	[**]
	 
	5.	 	[**]

Page 44 of 44<PAGE>

                                                                    Exhibit 10.1

                          TEXTRON FINANCIAL CORPORATION
                   AMENDMENT NO.1 TO 364-DAY CREDIT AGREEMENT

      AMENDMENT dated as of July 26, 2004 to the 364-Day Credit Agreement dated
as of July 28, 2003 (as heretofore amended, the "CREDIT AGREEMENT") among
TEXTRON FINANCIAL CORPORATION (the "BORROWER"), the BANKS party thereto (the
"BANKS") and JPMORGAN CHASE BANK, as Administrative Agent (the "ADMINISTRATIVE
AGENT").

                              W I T N E S S E T H :

      WHEREAS, the parties hereto desire to amend the Credit Agreement as set
forth herein;

      NOW, THEREFORE, the parties hereto agree as follows:

      Section 1. Defined Terms; References. Unless otherwise specifically
defined herein, each term used herein that is defined in the Credit Agreement
has the meaning assigned to such term in the Credit Agreement. Each reference to
"hereof", "hereunder", "herein" and "hereby" and each other similar reference
and each reference to "this Agreement" and each other similar reference
contained in the Credit Agreement shall, after this Amendment becomes effective,
refer to the Credit Agreement as amended hereby.

      Section 2. Amendments.

      (a)   The definition of "Termination Date" in Section 1.01 of the Credit
Agreement is amended by changing the date specified therein from "July 26, 2004"
to "July 25, 2005".

      (b)   The definition of "Syndication Agent" in Section 1.01 of the Credit
Agreement is amended by deleting "Bank One, NA" and adding "Barclays Bank PLC",
and changing "Deutsche Bank AG New York Branch" to "Deutsche Bank Securities
Inc."

      (c)   Section 4.04(a) of the Credit Agreement is amended by changing the
reference to the date "December 28, 2002" to "January 3, 2004" and the reference
to "Borrower's 2002 Annual Report" to "Borrower's 2003 Annual Report".

      (d)   Sections 4.04(b) and 4.04(c) of the Credit Agreement are amended by
changing each reference to the date "March 31, 2003" to "March 31, 2004".

      (e)   Section 9.12 of the Credit Agreement is amended and restated in its
entirety to read as follows:

      USA Patriot Act. Each Bank hereby notifies the Borrower that pursuant to
      the requirements of the USA Patriot Act, Title III of Pub. L. 107-56
      (signed into law October 26, 2001) (the "ACT"), it is required to obtain,
      verify and record information that identifies the Borrower, which
      information includes the name and address of the Borrower and other
      information that will allow such Bank to identify the Borrower in
      accordance with the Act.

      Section 3. Changes in Commitments. With effect from and including the
Amendment Effective Date, (i) the Commitment of each Bank shall be the amount
set forth opposite the name of such Bank in the Commitment Schedule attached
hereto and (ii) the Commitment Schedule attached hereto shall replace the
Commitment Schedule attached to the Credit Agreement. On the Amendment Effective
Date, any Bank party to the Credit Agreement which is not listed in the
Commitment Schedule attached hereto (each, an "EXITING BANK") shall cease to be
a Bank party to the Credit Agreement, and all accrued fees and other amounts
payable under the Credit Agreement for the account of each Exiting Bank shall be
due and payable on such date; provided that the provisions of Sections 8.03,
8.04 and 9.03 of the Credit Agreement shall continue to inure to the benefit of
each Exiting Bank after the Amendment Effective Date.

      Section 4. Changes in Pricing Schedule. The Pricing Schedule attached to
the Credit Agreement (the "EXISTING PRICING SCHEDULE") is deleted and replaced
by the Pricing Schedule attached to this Amendment (the "NEW PRICING SCHEDULE").
The New Pricing Schedule shall apply to interest and fees accruing under the
Credit Agreement on and after the date hereof. The Existing Pricing Schedule
shall continue to apply to interest and fees accruing under the Credit Agreement
prior to the date hereof.

                                       29
<PAGE>

      Section 5. Representations of Borrower. The Borrower represents and
warrants that (i) the representations and warranties of the Borrower set forth
in Article 4 of the Credit Agreement will be true on and as of the Amendment
Effective Date and (ii) no Event of Default will have occurred and be continuing
on such date.

      Section 6. Effect of Amendments. Except as expressly set forth herein, the
amendments contained herein shall not constitute a waiver or amendment of any
term or condition of the Credit Agreement, and all such terms and conditions
shall remain in full force and effect and are hereby ratified and confirmed in
all respects.

      Section 7. Governing Law. This Amendment shall be governed by and
construed in accordance with the laws of the State of New York.

      Section 8. Counterparts. This Amendment may be signed in any number of
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument.

      Section 9. Effectiveness. This Amendment shall become effective as of the
date hereof (the "AMENDMENT EFFECTIVE DATE"), subject to satisfaction of the
following conditions:

            (a)   the Administrative Agent shall have received from each of the
      Borrower and the Banks a counterpart hereof signed by such party or
      facsimile or other written confirmation (in form satisfactory to the
      Administrative Agent) that such party has signed a counterpart hereof; and

            (b)   the Administrative Agent shall have received an opinion of the
      General Counsel or Assistant General Counsel of the Borrower dated as of
      the Amendment Effective Date, in form and substance satisfactory to the
      Administrative Agent.

                                       30
<PAGE>

      IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed as of the date first above written.

                                        TEXTRON FINANCIAL CORPORATION

                                        By: /s/ Brian F. Lynn
                                            -----------------------------------
                                            Title: Senior VP and Treasurer

                                        Administrative Agent

                                        JPMORGAN CHASE BANK

                                        By: /s/ Randolph Cates
                                            ------------------------------------
                                            Title: Vice President

                                        BANK OF AMERICA, N.A.

                                        By: /s/ John W. Pocalyko
                                            ------------------------------------
                                            Title: Managing Director

                                        BARCLAYS BANK PLC

                                        By: /s/ John Giannone
                                            ------------------------------------
                                            Title: Director

                                        CITIBANK, N.A.

                                        By: /s/ Diane Pockaj
                                            ------------------------------------
                                            Title: Director

                                        DEUTSCHE BANK AG NEW YORK BRANCH

                                        By: /s/ Christopher Hall
                                            ------------------------------------
                                            Title:  Managing Director

                                        By: /s/ William W. McGinty
                                            ------------------------------------
                                            Title: Director

                                        THE BANK OF TOKYO-MITSUBISHI, LTD.,
                                            NEW YORK BRANCH

                                        By: /s/ Christian Giordano
                                            ------------------------------------
                                            Title: Authorized Signatory

                                       31
<PAGE>

                                        CREDIT SUISSE FIRST BOSTON, acting
                                           through its Cayman Islands Branch

                                        By: /s/ Jay Chall
                                            ------------------------------------
                                            Title: Director

                                        By: /s/ Denise L. Alvarez
                                            ------------------------------------
                                            Title: Associate

                                        HSBC BANK USA, NATIONAL ASSOCIATION

                                        By: /s/ Christopher M. Samms
                                            ------------------------------------
                                            Title: Officer # 9426,
                                                   Senior Vice President

                                        MERRILL LYNCH BANK USA

                                        By: /s/ Louis Alder
                                            ------------------------------------
                                            Title:  Director

                                        UBS LOAN FINANCE LLC

                                        By: /s/ Wilfred V. Saint
                                            ------------------------------------
                                            Title: Director
                                                   Banking Products Services, US

                                        By: /s/ Doris Mesa
                                            ------------------------------------
                                            Title: Associate Director
                                                   Banking Products Services, US

                                        WACHOVIA BANK, N.A.

                                        By: /s/ Nathan R. Rantala
                                            ------------------------------------
                                            Title: Vice President

                                        HARRIS NESBITT FINANCING, INC.

                                        By: /s/ Brian L. Banke
                                            ------------------------------------
                                            Title: Managing Director

                                       32
<PAGE>

                                        ROYAL BANK OF CANADA

                                        By: /s/ Howard Lee
                                            ------------------------------------
                                            Title: Authorized Signatory

                                        THE BANK OF NOVA SCOTIA

                                        By: /s/ Todd S. Meller
                                            ------------------------------------
                                            Title: Managing Director

                                        THE BANK OF NEW YORK

                                        By: /s/ Kenneth P. Sneider
                                            ------------------------------------
                                            Title:  Vice President

                                        BNP PARIBAS

                                        By: /s/ Richard Pace
                                            ------------------------------------
                                            Title:  Managing Director

                                        By: /s/ Manette Baudon
                                            ------------------------------------
                                            Title: Vice President

                                        SOCIETE GENERALE

                                        By: /s/ Ambrish D. Thanawala
                                            ------------------------------------
                                            Title: Director

                                        SUNTRUST BANK

                                        By: /s/ William C. Humphries
                                            ------------------------------------
                                            Title: Managing Director

                                       33
<PAGE>

                               COMMITMENT SCHEDULE

Bank                                                              Commitment
----                                                              ----------

JPMorgan Chase Bank                                              $ 43,333,000
Bank of America, N.A.                                            $ 35,000,000
Barclays Bank PLC                                                $ 35,000,000
Citibank, N.A.                                                   $ 35,000,000
Deutsche Bank AG New York Branch                                 $ 35,000,000
The Bank of Tokyo-Mitsubishi, Ltd., New York Branch              $ 30,000,000
Credit Suisse First Boston, acting through                       $ 30,000,000
   its Cayman Islands Branch
HSBC Bank USA, National Association                              $ 30,000,000
Merrill Lynch Bank USA                                           $ 30,000,000
UBS Loan Finance LLC                                             $ 30,000,000
Wachovia Bank, N.A.                                              $ 30,000,000
Harris Nesbitt Financing, Inc.                                   $ 23,333,000
Royal Bank of Canada                                             $ 23,333,000
The Bank of Nova Scotia                                          $ 23,333,000
The Bank of New York                                             $ 16,667,000
BNP Paribas                                                      $ 16,667,000
Societe Generale                                                 $ 16,667,000
SunTrust Bank                                                    $ 16,667,000
TOTAL                                                            $500,000,000

                                       34
<PAGE>

                                PRICING SCHEDULE

      Each of "FACILITY FEE RATE" and "EURO-DOLLAR MARGIN" means, for any date,
the rate set forth below in the row opposite such term and in the row
corresponding to the "UTILIZATION" at such date and under the column
corresponding to the "PRICING LEVEL" at such date; provided that the Euro-Dollar
Margin for any day on or after the Termination Date will be the applicable rate
set forth below plus 15 basis points:

<TABLE>
<CAPTION>
                                        Level I    Level II     Level III      Level IV     Level V      Level VI
                                        -------    --------     ---------      --------     -------      --------
<S>                                     <C>         <C>           <C>           <C>          <C>          <C>

Facility Fee Rate                       0.050%      0.060%        0.070%        0.100%       0.125%       0.150%
Euro-Dollar Margin
Utilization (smaller or equal) 50%      0.175%      0.190%        0.280%        0.350%       0.500%       0.600%
Utilization (bigger) 50%                0.275%      0.290%        0.380%        0.450%       0.600%       0.700%
</TABLE>

      For purposes of this Schedule, the following terms have the following
meanings, subject to the concluding paragraph of this Schedule:

      "LEVEL I PRICING" applies at any date if, at such date, the Borrower's
long-term debt is rated (i) A+ or higher by S&P or (ii) A1 or higher by Moody's.

      "LEVEL II PRICING" applies at any date if, at such date, (i) (A) the
Borrower's long-term debt is rated A or higher by S&P or (B) A2 or higher by
Moody's and (ii) Level I Pricing does not apply.

      "LEVEL III PRICING" applies at any date if, at such date, (i) (A) the
Borrower's long-term debt is rated A- or higher by S&P or (B) A3 or better by
Moody's and (ii) neither Level I Pricing nor Level II Pricing applies.

      "LEVEL IV PRICING" applies at any date, if at such date, (i) (A) the
Borrower's long-term debt is rated BBB+ or higher by S&P or (B) Baa1 or higher
by Moody's and (ii) none of Level I Pricing, Level II Pricing and Level III
Pricing applies.

      "LEVEL V PRICING" applies at any date if, at such date, (i) (A) the
Borrower's long-term debt is rated BBB or higher by S&P or (B) Baa2 or higher by
Moody's and (ii) none of Level I Pricing, Level II Pricing, Level III and Level
IV Pricing applies.

      "LEVEL VI PRICING" applies at any date if, at such date, no other Pricing
Level applies.

      "MOODY'S" means Moody's Investors Service, Inc.

      "PRICING LEVEL" refers to the determination of which of Level I, Level II,
Level III, Level IV, Level V or Level VI applies at any date.

      "S&P" means Standard & Poor's Ratings Services, a division of The
McGraw-Hill Companies, Inc.

      "UTILIZATION" means, at any date, the percentage equivalent of a fraction
(i) the numerator of which is the aggregate outstanding principal amount of
loans under the facility at such date (after giving effect to any borrowing or
payment on such date) and (ii) the denominator of which is the aggregate amount
of the commitments under the facility at such date (after giving effect to any
reduction on such date). If for any reason any loans remain outstanding after
termination of the commitments under the facility, Utilization shall be deemed
to be 100%.

      The credit ratings to be utilized for purposes of this Schedule are those
assigned to the senior unsecured long-term debt securities of the Borrower
without third-party enhancement (other than the Textron Inc. Support Agreement),
and any rating assigned to any other debt security of the Borrower shall be
disregarded. The rating in effect at any date is that in effect at the close of
business of such date.

      If the Borrower is split-rated and the ratings differential is one level,
the higher of the two ratings will apply (e.g. A+/A2 results in Level I Pricing
and A-/Baa1 results in Level III Pricing). If the Borrower is split-rated and
the ratings differential is two levels or more, the average of the two ratings
(or the higher of two intermediate ratings) shall be used (e.g. A+/Baa1 results
in Level II Pricing and A/BBB results in Level III Pricing).

                                       35

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