Document:

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                                                                   EXHIBIT 10.34

CONFIDENTIAL AND PROPRIETARY

                                                                           LONZA

                                  MANUFACTURING

                               SERVICES AGREEMENT

                                     BETWEEN

                               LONZA BIOLOGICS ***

                                       AND

                          TRUBION PHARMACEUTICALS INC.

                                        1                 CONFIDENTIAL TREATMENT

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                        MANUFACTURING SERVICES AGREEMENT

THIS MANUFACTURING SERVICES AGREEMENT ("Agreement") is made effective as of
November 21, 2005, between Trubion Pharmaceuticals, Inc., a Delaware corporation
("Trubion"), and Lonza Biologics *** ("Lonza").

                                   BACKGROUND

Trubion is engaged in discovering, developing and commercializing novel
therapeutic products, including a proprietary Small Modular ImmunoPharmaceutical
(SMIP(TM)) known as TRU-015.

Lonza has the experience and expertise necessary to perform the manufacturing
and related services needed to manufacture this product for Trubion. Lonza's
affiliate, Lonza Biologics ***, previously manufactured this product for Trubion
pursuant to the January 2004 Agreement (defined below), and, pursuant to the
fifth amendment to the January 2004 Agreement, Lonza, as a subcontractor to
Lonza Biologics ***, assisted Lonza Biologics *** in manufacturing this product
for Trubion.

Trubion desires to enter into an agreement with Lonza for the manufacturing and
related services needed to manufacture this product for use in clinical trials
and, upon regulatory approval, for commercial use, and Lonza is willing and able
to perform such services, on the terms and conditions set forth in this
Agreement.

                                    AGREEMENT

NOW, THEREFORE, the Parties agree as follows:

                             SECTION 1. DEFINITIONS

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

     1.1 "Acceptance Date" has the meaning given in Section 4.4.

     1.2 "Acquisition Cost" means the actual invoiced price paid by a Party to
any Third Party for acquiring any materials or components used in the Services
performed hereunder, including, but not limited to, handling costs, and shipping
costs, duties and associated fees incurred and paid by such Party in connection
with the acquisition of such materials or components.

     1.3 "Additional Runs" has the meaning given in Section 4.1.

     1.4 "Affiliate" means any corporation or business entity of which a Party
owns directly or indirectly, fifty percent (50%) or more of the assets or
outstanding stock, or any corporation which a Party directly or indirectly
controls, or any parent corporation

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that owns, directly or indirectly, fifty percent (50%) or more of the assets or
outstanding stock of a Party or directly or indirectly controls a Party.

     1.5 "Assigned Inventions" has the meaning given in Section 13.1(b).

     1.6 "August 2003 Agreement" means that certain development and
manufacturing agreement dated August 12, 2003, between Trubion and LB ***, as
amended.

     1.7 "Batch" or "Lot" means the quantity of Bulk Drug produced from a single
Run.

     1.8 "Batch Records" means the manufacturing documentation which consists of
the master manufacturing formula, exception documentation,
deviations/discrepancies and additional documentation which have been processed
as part of the production record of the related Batch.

     1.9 "BLA" means the biologics license application filed or to be filed by
Trubion with the FDA for the Product, or any successor filing thereto, and any
supplements or amendments thereto.

     1.10 "Bulk Drug" means the bulk form of the Product which has been
manufactured by Lonza pursuant to this Agreement.

     1.11 "Bulk Drug Specifications" means the qualitative, quantitative,
functional and analytical specifications (including in-process specifications)
developed by or on behalf of Trubion that describe testing methods and
acceptance criteria for Bulk Drug and in-process Bulk Drug, as such
specifications may be amended from time to time by the Parties in accordance
with Section 6.2, including without limitation such amendments as may be
required to obtain or maintain approval from the FDA, EMEA, and other regulatory
authorities. A copy of the Bulk Drug Specifications, current as of the Effective
Date, is attached as Exhibit E. Bulk Drug Specifications are a type of
Specifications.

     1.12 "Business Coordinators" has the meaning given in Section 2.2(a).

     1.13 "Cancellation Fee" has the meaning given in Section 4.2(b).

     1.14 "cGMP" means the regulatory requirements for current good
manufacturing practices and general biologics products standards as promulgated
by the FDA under the FD&C Act, 21 C.F.R. Section 210 et seq. and under the PHS
Act, 21 C.F.R. Sections 600-610, and, as the context requires, the Guide to Good
Manufacturing Practices for Medicinal Products as promulgated under European
Directive 91/356/EEC, or the other applicable regulatory guidance documents
(including without limitation FDA's Guidance for Industry Q7A Good Manufacturing
Practice Guide For Active Pharmaceutical Ingredients, and, as the context
requires, Annex 18 to the European Union's Guide to Good Manufacturing
Practices) and current industry practices promulgated by other regulatory
authorities, as the same may be amended from time to time.

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     1.15 "Cell Line" means the proprietary cell line which expresses the
Product, ***.

     1.16 "Certificate of Analysis" means, for each Batch, a document prepared
by Lonza: (a) listing tests performed by Lonza or its permitted Subcontractors,
specifications, test date(s), and test results, and certifying the accuracy of
the foregoing; and (b) referring to the related Certificate of Compliance
prepared by Lonza. The Parties shall from time to time agree upon a format or
formats for the Certificate of Analysis to be used under this Agreement.

     1.17 "Certificate of Compliance" means, for each Batch, a document prepared
by Lonza: (a) listing the manufacturing date, unique Batch number, and quantity
of Bulk Drug in such Batch, and (b) certifying that such Batch was manufactured
in accordance with the related Bulk Drug Specifications (including without
limitation in-process specifications) and cGMP. The Parties shall from time to
time agree upon a format or formats for the Certificate of Compliance to be used
under this Agreement. The Certificate of Compliance will not be a separate
document; it will be included within the Certificate of Analysis.

     1.18 "Confidential Information" means Trubion Confidential Information or
Lonza Confidential Information, as the context requires.

     1.19 "Critical Raw Materials" has the meaning given in Section 6.2(b)(2).

     1.20 "Delivery Date" means a date for delivery of Bulk Drug and refers to
the delivery date that is set forth in a Delivery Schedule, as more particularly
described in Section 4.2.

     1.21 "Delivery Schedule" has the meaning given in Section 4.2(a).

     1.22 "Effective Date" means November 21, 2005, which is the effective date
of this Agreement.

     1.23 "EMEA" means the European Medicines Evaluation Agency, or any
successor agency.

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

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

     1.26 "Firm Order" means a binding order for Bulk Drug, as further described
in Section 4.2(a) below.

     1.27 "Force Majeure Event" has the meaning given in Section 19.1.

     1.28 "Indemnitee" has the meaning given in Section 15.3(a).

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     1.29 "Indemnitor" has the meaning given in Section 15.3(a).

     1.30 "January 2004 Agreement" means and refers to that certain development
and manufacturing services agreement dated January 8, 2004, between LB *** and
Trubion, as amended.

     1.31 "LB ***" means ***.

     1.32 "Legal Requirements" means all laws, rules, regulations, ordinances,
guidance, guidelines, and standards of any international, national, state, or
local governmental authority which are applicable to the circumstances in which
the term "Legal Requirements" is used herein, including without limitation (a)
cGMP, (b) the regulations and regulatory guidance promulgated by the FDA, and
(c) all laws and regulations requiring permits, licenses, filings or
certifications with respect to Lonza, the Lonza Facility, or the manufacture of
Bulk Drug or performance of other Services pursuant to this Agreement.

     1.33 "Lonza Confidential Information" means all technical and other
information, whether patented or unpatented, contained in or relating to Lonza
IP Rights, the Lonza Facility, the Lonza Improvements, the Lonza Process and/or
Lonza processes, methods, operations, technologies, forecasts and business
information (a) that is disclosed or supplied to Trubion or used on behalf of
Trubion by Lonza pursuant to this Agreement (or which were disclosed or supplied
to or used on behalf of Trubion by Lonza or LB *** or any other Lonza Affiliate
pursuant to the August 2003 Agreement or the January 2004 Agreement), in
writing, orally, or by inspection or observation, or (b) which Trubion or a
Trubion Affiliate or Trubion subcontractor obtains under this Agreement, or (c)
of which Trubion may become aware of through the presence of its employees or
agents at Lonza offices or at the Lonza Facility, and all of the foregoing
includes, without limitation, proprietary information, industrial information,
trade secrets, know-how, research, experimental methods and results, product
plans, products, services, customer lists, development plans, inventions,
processes, concepts, formulas, technology, ideas, designs, drawings, marketing,
finances, and other business and scientific plans and information and facility
layout and schematics.

     1.34 "Lonza Facility" or "Facility" means (a) Lonza's facility in
Portsmouth, New Hampshire, at which Lonza performs the Services hereunder (the
"Original Portsmouth Facility"), or (b) such other facility or facilities of
Lonza at which the Product is manufactured and the Services are performed, as
the context requires, provided, however, that Lonza's manufacture of the Product
and performance of Services may not be transferred from the Original Portsmouth
Facility to any other Lonza Facility or from one Facility to another Facility
without the prior written approval of Trubion in each case.

     1.35 "Lonza Improvements" has the meaning given in Section 13.1(a).

     1.36 "Lonza IP Rights" has the meaning given in Section 13.3.

     1.37 "Lonza Process" means Lonza's pre-existing proprietary manufacturing
process for proteins that Lonza used to manufacture Bulk Drug under the January
2004 Agreement

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and that Lonza intends to use to manufacture Bulk Drug under this Agreement, as
such process may be improved, changed or modified from time to time in
accordance with the terms of this Agreement. The Lonza Process is a part of the
Manufacturing Process.

     1.38 "Lot" has the same meaning as "Batch."

     1.39 "Manufacturing Documentation" means all documents and records
describing or otherwise related to the Manufacturing Process or any part of the
Manufacturing Process, including, without limitation, documents and records
consisting of or containing, Batch Records, and other related documentation,
data and analytical records, including without limitation deviations,
discrepancies, out-of-specifications, failures, investigations, batch-specific
environmental monitoring data, and process trend and variability data

     1.40 "Manufacturing Process" or "Process" means the production process for
the manufacture of the Bulk Drug from a Cell Line pursuant to this Agreement, as
such process may be improved, changed or modified from time to time in
accordance with this Agreement. The Manufacturing Process is composed of the
Lonza Process and Trubion Process.

     1.41 "Master Cell Bank" means Trubion's reference deposit or collection of
vials from the related Cell Line, and refers, as the context requires, to (a)
*** master cell bank constructed by *** January 2004 Agreement *** the related
Working Cell Bank, *** establish seed cultures of the Cell Line to initiate the
Manufacturing Process *** any ***.

     1.42 "Minimum Runs" has the meaning given in Section 4.1(a).

     1.43 "Non-Conforming Bulk Drug" means Bulk Drug that fails to conform to
the warranties set forth in Section 6.1(a) hereof.

     1.44 "Party" or "Parties" means Lonza and/or Trubion, as the context
requires.

     1.45 "Permits" means any and all licenses, franchises, permits, easements,
rights, consents, orders, approvals and other authorizations of or issued by any
applicable governmental entity.

     1.46 "PHS Act" means the Public Health Service Act, Biological Products, as
amended, and regulations promulgated thereunder from time to time.

     1.47 "Price" means the price for Lonza to perform Services hereunder, as
described with more particularity in Section 5.1 and Schedule 3. The term Price
includes Product Price.

     1.48 "Product" means the proprietary Small Modular ImmunoPharmaceutical
(SMIP(TM)) known as TRU-015, as more particularly described in Schedule 1 to
this Agreement, including any derivatives and improvements thereof; and, when
the context requires, the term "Product" also means and refers to any and all
tangible forms of the

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Product which are manufactured under this Agreement using the Process, including
without limitation all in-process intermediates, samples, derivatives, and
improvements thereof.

     1.49 "Product Price" means the price for Lonza to manufacture and supply
Bulk Drug hereunder, as described with more particularity in Section 5.1(a) and
Schedule 3. Product Price is a type of Price.

     1.50 "Quality Agreement" means the quality agreement between the Parties of
even date herewith which refers to this Agreement, a copy of which is attached
to this Agreement as Exhibit A.

     1.51 "Records" has the meaning given in Section 5.3.

     1.52 "Run" means a single fermentation start of the Manufacturing Process
***.

     1.53 "Services" means the manufacturing services and other services to be
performed by Lonza under this Agreement, as more particularly described in the
main body of this Agreement and in Schedule 2 to this Agreement.

     1.54 "Specifications" means the Bulk Drug Specifications, and/or any
specifications for materials or components of Bulk Drug, as the context
requires, as such specifications may be amended from time to time by Trubion,
including without limitation such amendments as may be required to obtain or
maintain approval from the FDA, EMEA, and other regulatory authorities.

     1.55 "Subcontractors" has the meaning given in Section 3.1(b).

     1.56 "Technical Coordinators" has the meaning given in Section 2.2(a).

     1.57 "Term" has the meaning given in Section 18.1.

     1.58 "Third Party" means any party other than Lonza, Trubion and their
respective Affiliates.

     1.59 "Third Party Vendors" has the meaning given in Section 6.2(b)(1).

     1.60 "Trubion Confidential Information" means the Cell Lines, Master Cell
Banks, Working Cell Banks, Trubion Materials, Manufacturing Documentation
(excluding any Lonza Confidential Information contained therein), Trubion
Process, and Product, and all technical and other information, whether patented
or unpatented, contained in or relating thereto and/or in or to Trubion IP
Rights, Assigned Inventions, or Trubion processes, methods, operations,
technologies, forecasts, business, research and development information, (a)
that is disclosed or supplied to Lonza or a Lonza Affiliate or Subcontractor by
or on behalf of Trubion pursuant to this Agreement (or which was disclosed or
supplied to Lonza or LB *** or any other Lonza Affiliate or Subcontractor by or
on behalf of Trubion pursuant to the August 2003 Agreement or the January 2004
Agreement), in writing, orally,

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or by inspection or observation, or (b) which Lonza or a Lonza Affiliate or
Subcontractor obtains under this Agreement, or (c) of which Lonza may become
aware of through the presence of its employees or agents at Trubion offices or
facilities or at other facilities that are involved in the manufacture of the
Product, and all of the foregoing includes, without limitation, proprietary
information, industrial information, trade secrets, know-how, research,
experimental methods and results, product plans, products, services, customer
lists, development plans, inventions, processes, concepts, formulas, technology,
ideas, designs, drawings, marketing, finances, and other business and scientific
plans and information and facility layout and schematics.

     1.61 "Trubion IP Rights" has the meaning given in Section 13.2.

     1.62 "Trubion Materials" has the meaning given in Section 12.1.

     1.63 "Trubion Process" means that portion of the Manufacturing Process not
composed of or included within the Lonza Process, and refers to Trubion's
proprietary manufacturing process for the manufacture of the Bulk Drug (which
includes without limitation the "Customer Process" as defined in the January
2004 Agreement), as such process may be improved, changed or modified from time
to time in accordance with the terms of this Agreement.

     1.64 "Working Cell Bank" means a vialed collection of serially
subcultivated cells generated by or on behalf of Trubion that is derived from
the *** and/or the ***, as the context requires. The Working Cell Bank is used
to establish seed cultures of the related Cell Line to initiate the
Manufacturing Process.

                       SECTION 2. GOOD FAITH; COORDINATORS

2.1 Good Faith Cooperation. Trubion shall (a) cooperate with Lonza to facilitate
its performance of Services hereunder, (b) deal honestly and in good faith with
Lonza, and (c) disclose any material information necessary for Lonza to perform
Services hereunder in a timely fashion, subject to the terms set forth herein.
Lonza shall, and shall cause its permitted Subcontractors to: (d) cooperate and
deal honestly and in good faith with Trubion with regard to all matters
hereunder, and (e) disclose any material information necessary for Trubion to
receive the full benefit of Lonza's Services, subject to the terms set forth
herein.

2.2 Coordinators.

     (a) Coordinators. Trubion and Lonza shall each appoint an authorized
business representative and a backup business representative ("Business
Coordinators"). In addition, Trubion and Lonza shall each appoint an authorized
technical representative and a backup technical representative ("Technical
Coordinators"). The initial Business Coordinators and Technical Coordinators are
listed on Exhibit B. Each Party may replace its respective Business Coordinators
and Technical Coordinators at any time and from time to time for any reason by
providing written notice thereof to the other Party.

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     (b) Responsibility of Coordinators. The Business Coordinators shall be
responsible for communications, other than legal notices, between the Parties
related to forecasts, Firm Orders and deliveries of Bulk Drug hereunder, and
other matters related thereto. The Technical Coordinators shall be responsible
for communications, other than legal notices, between the Parties in matters of
manufacturing, project management, and compliance with respect to Bulk Drug and
other matters related thereto.

     (c) Communications. Unless otherwise agreed by the Parties, the Business
Coordinators and the Technical Coordinators will meet semi-annually in person or
via teleconference to review matters arising under this Agreement. In addition,
both the Business Coordinators and the Technical Coordinators will be available
on a regular basis for consultation at other pre-arranged times during the
course of the Term. Additional modes or methods of communication and decision
making may be implemented as set forth herein and as agreed upon by the Parties
from time to time.

         SECTION 3. SUPPLY OF DRUG PRODUCT AND PERFORMANCE OF SERVICES

3.1 Supply of Bulk Drug and Performance of Services; Subcontractors.

     (a) Supply of Bulk Drug and Performance of Services. Lonza shall, and shall
cause all permitted Subcontractors to, perform all Services provided under this
Agreement, including without limitation the manufacture of Bulk Drug: (a) in a
professional manner and in accordance with high standards of care and diligence
consistent with industry practices, (b) in compliance with the terms and
conditions of this Agreement, including without limitation the related exhibits
and schedules attached hereto, (c) in compliance with all applicable Legal
Requirements, (d) in compliance with standard operating procedures, and with
protocols agreed upon by Trubion and Lonza from time to time, (e) in compliance
with all reasonable direction and requests of Trubion, and (f) in an efficient
manner using its best efforts to meet the related schedule(s) and objective(s),
including without limitation the target yields for the Runs. In particular,
Lonza agrees to manufacture Bulk Drug in conformity with the Specifications
applicable thereto (including without limitation in-process specifications) and
in compliance with cGMP and all other applicable Legal Requirements, and to
deliver Bulk Drug in accordance with the schedule related thereto. In the event
of a conflict between or among any of the standards set forth in this Section
3.1(a), Lonza shall be required to comply with the most stringent standard.

     (b) Subcontractors. Lonza shall not subcontract to its Affiliates or to
Third Parties (in such capacity, "Subcontractors") any Services that Lonza is
obligated to perform under this Agreement without, in each case, Trubion's prior
written approval, in its sole discretion. If Lonza proposes use of
Subcontractors for particular Services, Trubion may require access to such
Subcontractors for audit purposes. If Trubion preapproves a Subcontractor in
writing, (1) Lonza shall cause such Subcontractor to be subject to the terms of
this Agreement and Lonza shall enter into an agreement with such Subcontractor
that contains confidentiality and non-use terms at least as strict as those set
forth in Section 16 of this Agreement, as well as any other terms necessary to
ensure that Lonza meets its obligations under this Agreement, and (2) no such
subcontracting by Lonza shall relieve Lonza of and Lonza shall remain primarily
liable for its obligations under this Agreement.

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3.2 Raw Materials. Except for the Cell Lines, *** which have been and shall
continue to be supplied by or on behalf of Trubion to Lonza for use in
performing the Services, Lonza shall at its cost and expense purchase all
materials and components necessary to perform the Services and provide all
necessary personnel, materials, facilities, equipment and other resources
required to perform the Services. In particular, Lonza shall procure, maintain
and store sufficient amounts of raw materials and components as required for the
Runs, including safety stocks, and shall perform testing and evaluation of such
materials and components as set forth in the Quality Agreement or agreed upon in
writing by the Parties, and the cost and expense for such materials and
components and the testing and evaluation of such materials and components shall
be deemed included in the Prices shown on Schedule 3 hereto. *** Lonza shall
procure, maintain, store and use raw materials and components in a professional
manner and in accordance with high standards of care and diligence consistent
with industry practices, including ensuring adequate supply and setting proper
time schedules, and, in particular, Lonza shall ensure the efficient use of and
proper storage and proper cleaning of all resins used to manufacture Bulk Drug.
See Section 6.2(b)(2) for provisions regarding "Critical Raw Materials".

3.3 ***.

     (a) Trubion may, at its option, require that Lonza use the *** to initiate
the Manufacturing Process. In such case (i) Trubion shall deliver the *** to
Lonza in accordance with the terms of Section 12, and (ii) Lonza shall procure,
engineer, install, scale-up, test and validate the equipment and systems
necessary to conduct the Manufacturing Process ***, perform all required process
validation and, when instructed to do so by Trubion, shall use the *** and
related Cell Line, *** and related Cell Line, to initiate the Manufacturing
Process. Prior to any such procurement, engineering, scaling up, testing and
validation of equipment or process, Lonza will provide Trubion with an estimate
of the reasonable and necessary expenses that would be incurred by Lonza for
such required procurement, engineering, scaling up, testing and validation of
equipment or process, and the Parties shall agree on a related budget and work
plan. Thereafter, if such procurement, engineering, scaling up, testing and
validation of equipment or process is performed, Trubion will reimburse Lonza
for the reasonable and necessary expenses as agreed upon in advance and incurred
by Lonza as a result of such procurement, engineering, scaling up, testing and
validation of equipment or process.

     (b) With respect only to the first Run ***: (i) Lonza agrees to manufacture
such first Run in conformity with the target Specifications applicable thereto
(including without limitation in-process specifications), with an emphasis on
the safety of the Bulk Drug resulting from such first Run for use in human
clinical testing and with pass/fail testing for analytical methods relating to
safety, and in compliance with cGMP and all other applicable Legal Requirements,
and to deliver such first Run Bulk Drug in accordance with the schedule related
thereto, and (ii) in the event that the Bulk Drug resulting from such first Run
is Non-Conforming Bulk Drug, Lonza shall, notwithstanding anything seemingly to
the contrary in Section 8.1(c), have no liability to Trubion for such
nonconformity under Section 8.1(c) unless it is determined by agreement of the
Parties (or in the absence of such agreement, by a mutually acceptable qualified
independent

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Third Party whose fees shall be paid by the non-prevailing Party) that the
nonconformity was caused by the negligence or greater culpability of Lonza. The
second and all subsequent Runs ***, and all Runs using ***, shall be subject to
the standard terms of Section 8.1 and shall not be subject to the special terms
set forth in this Section 3.3(b).

3.4 ***.

              SECTION 4. RUNS; FIRM ORDERS; DELIVERIES; ACCEPTANCE

4.1 Minimum Runs; Additional Runs.

     (a) Lonza shall perform the number of Runs described in Exhibit C
(collectively, the "Minimum Runs"), in accordance with the schedule set forth
therein or such other schedule as may be agreed to by the Parties. Any runs
required by Trubion in addition to the Minimum Runs shall be requested in
writing to Lonza. Any such runs (collectively, the "Additional Runs") shall be
*** solely determined by Lonza and shall be performed in accordance with a
schedule agreed to by the Parties.

     (b) For each of the Minimum Runs, not less than *** prior to the initial
estimated out-of-freeze date referred to in Exhibit C for such Run (the "Initial
Estimated OOF Date"), Lonza shall, confirm in writing to Trubion the updated
estimated out-of-freeze date for such Run ("Updated Estimated OOF Date"), which
must be a date that is *** than the Initial Estimated OOF Date for such Run. A
similar confirmation procedure shall apply to the Additional Runs, if any.

     (c) If the Updated Estimated OOF Date is *** than the Initial Estimated OOF
Date for such Run, then Trubion may, in its discretion, (i) cancel the related
Run without penalty, in which case there shall be no Cancellation Fee assessed
against Trubion for such cancelled Run, or (ii) proceed with the related Run, in
which case the Product Price for the related Run shall be reduced by *** of the
Product Price for the related Run.

     (d) If the actual out-of-freeze date is more than *** than the Updated
Estimated OOF Date for such Run, then Trubion may, in its discretion, (i) cancel
the related Run without penalty, in which case there shall be no Cancellation
Fee assessed against Trubion for such cancelled Run, or (ii) proceed with the
related Run, in which case the Product Price for the related Run shall be
reduced by *** of the Product Price for the related Run.

     (e) The Product Price reductions described in this Section 4.1 are
additive; for example, under the appropriate circumstances outlined above, the
Product Price may be reduced by *** under Section 4.1(c) and by an additional
*** under Section 4.1(d).

4.2 Firm Orders; Delivery Schedule; Cancellation; Cancellation Fees.

     (a) Firm Orders; Delivery Schedule. The Minimum Runs and any Additional
Runs shall constitute firm orders (each, a "Firm Order"). The number of Firm
Orders shall be binding upon the Parties and, subject to Section 4.2(b) below,
cannot be changed except upon mutual written consent of the Parties. In
connection with each Firm Order, the Parties shall work together in good faith
to determine the related release date, delivery date and shipping

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schedule and shall establish a written "Delivery Schedule" for the related Run.
The delivery date respectively set forth in the Delivery Schedule will be the
"Delivery Date" for such Run, unless the Parties agree on an alternative
delivery date, and such date shall be the date on which Lonza shall deliver such
Bulk Drug to Trubion in accordance with Section 4.5 hereof, provided, however,
that for purposes of Section 8.1, the "Delivery Date" for any particular Bulk
Drug shall be the actual date on which such Bulk Drug is delivered to Trubion's
designated carrier in accordance with Section 4.5 hereof.

     (b) Cancellation; Cancellation Fees. Notwithstanding the terms of Section
4.2(a), and subject to the terms of Section 4.3(c) and Section 18.3(c), Trubion
may cancel any Run upon payment of the related cancellation fee ("Cancellation
Fee"), without further penalty. Cancellation Fees shall be calculated in
accordance with the following provisions:

          (1) With respect to all Runs ***, the Cancellation Fee for a cancelled
Run shall be calculated as follows: if Trubion provides written notice of
cancellation to Lonza at least *** prior to the Initial Estimated OOF Date for a
Run, there shall be no Cancellation Fee; if Trubion provides written notice of
cancellation to Lonza between *** prior to the Initial Estimated OOF Date for a
Run, the related Cancellation Fee shall be *** of the Price for the cancelled
Run; and if Trubion provides written notice of cancellation to Lonza *** prior
to the Initial Estimated OOF Date for a Run or at any time during a Run, the
Cancellation Fee shall be *** of the Price for the cancelled Run; and

          (2) *** the Cancellation Fee for a cancelled Run shall be calculated
as follows: if Trubion provides written notice of cancellation to Lonza at least
*** to the Initial Estimated OOF Date for a Run, there shall be no Cancellation
Fee; if Trubion provides written notice of cancellation to Lonza between ***
prior to the Initial Estimated OOF Date for a Run, the related Cancellation Fee
shall be *** of the Price for the cancelled Run; and if Trubion provides written
notice of cancellation to Lonza less *** prior to the Initial Estimated OOF Date
for a Run or at any time during a Run, the Cancellation Fee shall be *** of the
Price for the cancelled Run.

For purposes of this Agreement, the out-of-freeze date for a Run is the date
***.

In the event a Firm Order is cancelled by Trubion as contemplated by this
Section 4.2(b) and a Cancellation Fee is payable in connection therewith, Lonza
shall make all reasonable efforts to mitigate its losses with respect to
cancelled Runs and shall promptly notify Trubion of any such mitigation, and
Trubion's obligation to pay a Cancellation Fee with respect to any cancelled Run
shall be reduced (and any Cancellation Fee paid by Trubion to Lonza shall be
promptly refunded) to the extent that Lonza mitigates its losses in this regard.
Such mitigation includes, without limitation, the performance of one or more
runs during the time period reserved for such cancelled Run, and the acceptance
of substitutions requested by Trubion in accordance with Section 3.4.

4.3 Deliveries.

     (a) Filling Firm Orders. Lonza shall promptly manufacture all Firm Orders
of Bulk Drug in accordance with the related schedule set forth in Exhibit C,
and, subject to Section

                                    Page 12

<PAGE>

4.3(b) below and in accordance with Section 4.5 hereof, shall promptly deliver
and ship Bulk Drug in accordance with Trubion's instructions and the specified
Delivery Dates applicable thereto.

     (b) Notification of Manufacturing or Delivery Delays. If there is any delay
or anticipated delay in manufacture, shipment or delivery of the Bulk Drug that
will fill a Firm Order, which delay shall be determined with reference to the
Initial Estimated OOF Date, and the initial estimated release date set forth in
Exhibit C, and the related Delivery Date applicable thereto, Lonza shall (1)
immediately notify Trubion as to the reason for the delay and provide an
indication of the duration of the delay, and (2) use its best efforts to
allocate to Trubion as many resources as are available to meet the schedule for
Firm Orders hereunder. In addition, Lonza shall promptly notify Trubion when
such delay is over.

     (c) Manufacturing or Delivery Delays. If a manufacturing, shipment or
delivery delay exceeds *** beyond the applicable release date or Delivery Date
set forth in the related Delivery Schedule, Trubion may, in its discretion, (i)
cancel the related Run without penalty, in which case there shall be no
Cancellation Fee assessed against Trubion for such cancelled Run, or (ii)
proceed with the related Run, in which case the Product Price for the related
Run shall be reduced ***.

4.4 Samples; Acceptance. Lonza shall deliver to Trubion or its designee samples
(including, as requested by Trubion, in-process samples) of all Batches
manufactured under this Agreement, as and when Batches are manufactured and
otherwise in accordance with the Quality Agreement and applicable written
processes and procedures approved by both Parties, to enable Trubion or its
designee to test the Bulk Drug as described in Section 11 of this Agreement and
the Quality Agreement. Lonza shall also provide the related consolidated Batch
Record and other Batch documentation described in the Quality Agreement for each
Batch of Bulk Drug as soon as possible after each such Batch is manufactured.
Upon receipt of samples of a particular Batch of Bulk Drug together with the
related consolidated Batch Record and other Batch documentation, Trubion or its
designee may inspect and perform testing on such samples and review the Batch
Record and other batch documentation for each such Batch, in good faith and as
soon as reasonably practicable, and, in the absence of an investigation of such
Batch pursuant to the Quality Agreement or Section 8.1 hereof, such testing and
review shall be completed within *** after Trubion's receipt of samples of such
Batch together with the related consolidated Batch Record and other Batch
documentation. Any investigation shall be initiated and conducted in accordance
with Trubion's applicable standard operating procedure.

Subject to Trubion's rights to make claims under Section 8 hereof, a Batch shall
be deemed to have been accepted by Trubion on the date (the "Acceptance Date")
on which the first of the following events occurs: (a) the receipt by Lonza of
written notice from Trubion that such Batch has been released by Trubion
pursuant to applicable release testing standard operating procedures or
protocols, as described in the Quality Agreement, and (b) the failure of Trubion
to issue a notice of investigation or rejection in accordance with Section 8
hereof and within *** after Trubion's receipt of samples of such Batch together
with the related consolidated Batch Record and other Batch documentation.

                                    Page 13
<PAGE>

4.5 Delivery Terms; Storage.

     (a) Lonza shall deliver Bulk Drug to Trubion's designated carrier ex-works
(as defined in Incoterms 2000) at the Lonza Facility in Portsmouth, New
Hampshire. Title to and risk of loss of Bulk Drug shall be and remain with Lonza
until Lonza places the Bulk Drug at the disposal of Trubion's designated carrier
at the Lonza Facility, at which time title to and risk of loss for the Bulk Drug
shall transfer to Trubion. At Trubion's expense, Trubion shall, or Lonza shall,
at the request of Trubion, at Trubion's expense and in accordance with Trubion's
instructions, arrange for shipment of Bulk Drug via Trubion's designated carrier
from Lonza's Facility to a designee specified by Trubion and insurance coverage
for Bulk Drug while in transit at its invoiced value. All additional reasonable
costs and expenses incurred by Lonza in arranging such transportation and
insurance shall be charged to Trubion in addition to the Price, provided that
Lonza has obtained Trubion's prior written consent to incurring such additional
costs and expenses. Trubion shall be responsible for obtaining all appropriate
approvals and consents of any governmental authority necessary for the
transportation and shipment of the Bulk Drug according to Trubion's
instructions, and Lonza shall not transport or ship Bulk Drug until Trubion
informs Lonza that it has obtained all such approvals and consents. Lonza shall
comply with all applicable Legal Requirements regarding the packaging of Bulk
Drug suitable for transportation.

     (b) Notwithstanding anything seemingly to the contrary in Section 9.2(a) or
elsewhere in this Agreement, the Parties agree that, at Trubion's request, on a
Batch by Batch basis, Lonza shall deliver Batches of Bulk Drug to Trubion in
quarantine prior to Lonza's delivery of the related Certificate of Analysis and
Certificate of Compliance.

     (c) Storage. At the request of Trubion, Lonza shall store particular Lots
of Bulk Drug at the Lonza Facility for *** at no additional cost. Lonza shall
store all Bulk Drug under conditions that comply with the applicable
Specifications, any applicable requirements set forth in the Quality Agreement,
and any other reasonable written instructions of Trubion.

                           SECTION 5. PRICES; PAYMENT

5.1 Product Price; Price.

     (a) Product Price. For each Batch manufactured in accordance with this
Agreement, Trubion shall pay the amount respectively set forth in Schedule 3 for
such Batch, in accordance with the payment schedule set forth therein, provided
that the related Bulk Drug is manufactured in compliance with this Agreement and
cGMP and conforms to the related Specifications and the warranties set forth in
Section 6.1(a). Such amount shall be the "Product Price". As set forth in
Schedule 3, the Product Price for each Batch is ***, and the invoice for the ***
installment cannot be issued until Lonza has issued the Certificate of Analysis
and Certificate of Compliance for the related Batch. ***.

     (b) Price. For all other Services performed under this Agreement, Trubion
shall pay the amount respectively set forth in Schedule 3 for those Services, in
accordance with the payment schedule set forth therein, including without
limitation and as appropriate the

                                     Page 14

<PAGE>

completion of the related Services and Trubion's receipt and acceptance of the
related deliverables. Such amount shall be the "Price" for such Services.

     (c) Price Adjustment.

          (1) For each Batch, Lonza shall have the right to increase the related
Product Price as follows: (i) an increase of *** in the Product Price for such
Batch for each additional ***; and/or (ii) an increase of *** in the Product
Price for such Batch for each additional ***. The Product Price is based on the
assumption that the Manufacturing Process takes ***in the ***. When the
Manufacturing Process has been refined, Trubion may request and Lonza will
entertain Trubion's request for a reduction in Product Price in the event the
refined Manufacturing Process ***.

          (2) ***, beginning April 1, 2007, the Product Price for each Run
manufactured after *** shall be adjusted to an amount that is equal to the
Product Price then in effect, increased or decreased, as appropriate, by the
percent change in the PPI during the ***. For the purposes of this Section
5.1(c)(2), "Producer Price Index" or "PPI" means the Producer Price Index for
Pharmaceutical Prescription Preparation, Prescription ("PPI" Series ID PCU
325412325412), as reported by the Bureau of Labor Statistics of the U.S.
Department of Labor in its PPI Detailed Report, or, if such index is no longer
available, such index by which it is replaced by the Bureau of Labor Statistics
or any successor U.S. agency issuing such indices. If such index is discontinued
and there is no direct successor index, the Business Coordinators shall
designate an appropriate index that approximates as close as possible such
Bureau of Labor Statistics index.

5.2 Payment Due Dates. Invoices may be issued in accordance with the payment
schedule respectively set forth in Schedule 3, and amounts due under any invoice
shall be due and payable in U.S. currency within *** after receipt of such
invoice. Each invoice shall reference the Services performed and, if
appropriate, the date performed, deliverables delivered, the date the
deliverables were delivered, and the amount due. Past due amounts shall bear
interest ***. For the avoidance of doubt, the Parties acknowledge that the due
date for payment of the Product Price is determined in accordance with the terms
of this Section 5 and is not calculated with reference to the related Acceptance
Date.

5.3 Commercial Audit. For at least *** after final payment under this Agreement
(or for such longer period of time as may be required by applicable Legal
Requirements), Lonza shall maintain complete and accurate books, records,
documents, and other evidence of costs, expenses and allowances which are either
(a) related to costs and expenses incurred by Lonza which are reimbursable by
Trubion under this Agreement, or (b) related to Cancellation Fees and Lonza's
related mitigation efforts ("Records"). Trubion, or its independent public
accountants of recognized national standing selected by Trubion and reasonably
acceptable to Lonza, shall have a right to examine and audit only those Records
defined above associated with this Agreement, once annually, upon at least ***
prior written notice. For the avoidance of doubt, the Parties acknowledge that
this Section 5.3 does not give Trubion any rights to examine Lonza's or any of
its Affiliates' financial records beyond those associated with this Agreement.

                                     Page 15

<PAGE>

               SECTION 6. LONZA PRODUCT WARRANTIES; SPECIFICATIONS

6.1 Warranties and Covenants by Lonza.

     (a) Warranties. Lonza hereby warrants and covenants that:

          (1) the Services shall be performed in accordance with this Agreement;
and

          (2) the Bulk Drug shall conform to the Bulk Drug Specifications,
including without limitation in-process specifications; and

          (3) the Bulk Drug shall be manufactured and the related Services shall
be performed in compliance with (i) the applicable requirements of cGMP and the
applicable batch records and written processes and procedures agreed upon by the
Parties; and (ii) all applicable Legal Requirements, including without
limitation the FD&C Act and the PHS Act, and, among other things, all Bulk Drug
supplied hereunder (x) shall not be adulterated or misbranded by Lonza within
the meaning of the FD&C Act or comparable law, and (y) shall not be an article
that may not be introduced into interstate commerce under the provisions of
Sections 404 or 505 of the FD&C Act or comparable law; and

          (4) all Bulk Drug supplied hereunder shall be transferred free and
clear of any liens or encumbrances of any kind arising through Lonza or its
Affiliates or their respective agents.

     In addition, Lonza hereby warrants that it owns or lawfully controls its
Facility, and that it has sufficient manufacturing capacity to enable Lonza to
manufacture Bulk Drug throughout the Term of this Agreement in accordance with
this Agreement, including without limitation the manufacturing schedule for the
Minimum Runs, and Lonza covenants that it shall maintain its Facility in
accordance with cGMP and other applicable Legal Requirements, in such condition
as will allow Lonza to manufacture the Bulk Drug in compliance with cGMP and in
conformance with the Bulk Drug Specifications.

     (b) Disclaimer by Lonza. THE WARRANTIES EXPRESSLY SET FORTH IN THIS
AGREEMENT ARE IN LIEU OF ALL OTHER WARRANTIES, AND, EXCEPT FOR THE WARRANTIES
EXPRESSLY SET FORTH IN THIS AGREEMENT, ALL OTHER WARRANTIES, BOTH EXPRESS AND
IMPLIED, ARE EXPRESSLY DISCLAIMED, INCLUDING WITHOUT LIMITATION ANY WARRANTY OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.

6.2 Specification and Manufacturing Process Changes. Except as otherwise set
forth to the contrary in the Quality Agreement, the Parties agree as follows:

     (a) Specification and Process Changes. In the event that (i) Trubion is
required to change Bulk Drug Specifications or a Manufacturing Process pursuant
to applicable Legal Requirements or in response to the order or request of a
governmental authority or regulatory

                                     Page 16

<PAGE>

body, or (ii) Trubion wishes to change Bulk Drug Specifications or a
Manufacturing Process, the following provisions will apply:

          (1) Trubion shall promptly advise Lonza in writing of any such
change(s), and Lonza shall promptly advise Trubion as to scheduling and/or
Product Price adjustments, if any, which may result from such change(s). The
notification and approval procedure shall be in accordance with the Quality
Agreement and with written processes and procedures (i.e., change control
procedures) agreed upon by Trubion and Lonza from time to time.

          (2) Prior to implementation of such change(s), Trubion and Lonza agree
to negotiate in good faith in an attempt to reach agreement on (i) the new
Product Price, if any, for any Bulk Drug manufactured under this Agreement by
Lonza which embodies such change(s), giving due consideration to the effect of
such change(s) on Lonza's direct manufacturing costs for Bulk Drug, and (ii) any
other amendments to this Agreement which may be necessitated by such changes
(e.g., an adjustment to the manufacturing schedule).

          (3) Prior to implementation of such change(s), Lonza will provide
Trubion with an estimate of the reasonable and necessary expenses that would be
incurred by Lonza as a result of the implementation of any such change(s). If
such change(s) are implemented, Trubion will reimburse Lonza for the reasonable
and necessary expenses as agreed upon in advance and incurred by Lonza as a
result of any such change(s).

          (4) If any such change(s) to the Bulk Drug Specifications or a
Manufacturing Process renders obsolete or unusable any raw materials, components
or supplies used to manufacture Bulk Drug, and to the extent such materials may
not be either returned to the appropriate vendor for a credit or utilized by
Lonza for its other manufacturing operations, Trubion shall purchase from Lonza,
at Lonza's Acquisition Cost, that amount of inventory so rendered obsolete or
unusable, not to exceed the amount of such raw materials, components or supplies
which would have been required for Lonza to manufacture and supply the total
quantity of Bulk Drug specified in Firm Orders currently pending and not yet
filled hereunder.

          (5) Lonza shall use best efforts to accommodate changes described in
Section 6.2(a)(i) hereof as soon as practicable after notice thereof, and shall
use best efforts to accomplish such changes within ***, unless otherwise agreed
upon by the Parties or required by an applicable regulatory authority. Lonza
shall use reasonable efforts to accommodate changes described in Section
6.2(a)(ii) hereof in light of, among other considerations, Lonza's facilities
and resource constraints, current operations and commercial goals. Lonza shall
cooperate with Trubion in good faith to implement all agreed upon changes to the
Bulk Drug Specifications or Manufacturing Process in accordance with the agreed
upon schedule.

          (6) The notification and formal approval procedure for those changes
to the Bulk Drug Specifications or Manufacturing Process approved by the Parties
under this Section shall be in accordance with the Quality Agreement and written
processes and

                                     Page 17

<PAGE>

procedures (i.e., change control procedures) agreed upon in writing by the
Parties from time to time.

     (b) Changes by Lonza; Trubion's Raw Material Rights.

          (1) Lonza shall not change any of the Specifications or the
Manufacturing Process or any test method or procedures for manufacturing Bulk
Drug without the prior written approval of Trubion. The procedure for deviation
and change control approval shall be in accordance with the change control
procedure described in the Quality Agreement, as well as any additional written
processes and procedures agreed upon by Lonza and Trubion from time to time.
Lonza shall not change any Subcontractor or any vendor or supplier of raw
materials, analytical reagents or components used in the manufacture or testing
of Bulk Drug (collectively, "Third Party Vendors"), except as permitted under
written processes and procedures agreed upon by Trubion and Lonza or with the
prior written consent of Trubion.

          (2) In accordance with the Quality Agreement, Trubion shall have the
right (a) to review *** used under this Agreement to manufacture Bulk Drug, and
(b) to approve *** of all Critical Raw Materials (defined below), including
excipients, and of all raw materials and components of animal or human origin,
all to the extent used under this Agreement to manufacture Bulk Drug. Trubion
shall provide a written list to Lonza of those certain raw materials and
components which shall constitute and be deemed to be "Critical Raw Materials"
for purposes of this Agreement, and shall update the list from time to time as
appropriate. Each version of the written list of the Critical Raw Materials
shall be jointly agreed to by Trubion and Lonza. The initial list of Critical
Raw Materials is attached to this Agreement as Exhibit D. Raw materials of and
components of animal or human origin shall be avoided when possible.

     (c) Lonza Responsibility. Except as expressly set forth in this Section 6,
and except for amounts payable for Services in accordance with Section 5.1,
Trubion shall have no obligation to make any payment to Lonza (other than
payment of the related Price or Product Price) or reimburse Lonza for any
expenses incurred by Lonza which are related to enabling Lonza to manufacture
Bulk Drug in conformance with then-current Specifications and in compliance with
cGMP and other Legal Requirements.

                        SECTION 7. PACKAGING AND LABELING

7.1 In General. Lonza shall package and label Bulk Drug according to the
Specifications and packaging procedures mutually agreed upon by the Parties in
writing and in accordance with applicable Legal Requirements.

                                SECTION 8. CLAIMS

8.1 Claims.

     (a) Notice of Claims. In the event that any Bulk Drug is Non-Conforming
Bulk Drug, Trubion may reject the same by giving written notice thereof to Lonza
(1) within the later of (i) *** after the applicable Acceptance Date for such
Bulk Drug, and (ii) *** after

                                     Page 18

<PAGE>

such Bulk Drug is delivered to Trubion in accordance with Section 4.5, for
matters that were not readily ascertainable by the release testing of the
related samples and review of the related consolidated Batch Record and other
Batch documentation described in Section 4.4, or (2) in the case of a latent
defect, within *** after discovery of such latent defect, but in no case later
than *** after delivery to Trubion in accordance with Section 4.5, which notice
shall specify the manner in which such Bulk Drug is non-conforming and shall be
accompanied by any test results or reports evidencing such non-conformity.
Alternatively, rather than initially issuing a notice of rejection, Trubion may
give written notice to Lonza within the time period set forth in this Section
8.1(a) of Trubion's decision to investigate whether a potentially nonconforming
shipment should be rejected, which investigation shall, unless otherwise agreed
by Lonza and Trubion, be completed within the time period set forth in this
Section 8.1(a).

     (b) No Lonza Liability. If it is determined by agreement of the Parties (or
in the absence of such agreement, by a mutually acceptable qualified independent
Third Party whose fees shall be paid by the non-prevailing Party) that either
(1) there is no nonconformity, in which case Trubion shall pay to Lonza the
Purchase Price for such Bulk Drug, or (2) there is nonconformity but the
nonconformity is due to damage or contamination of such Bulk Drug caused by
Trubion or its agent(s) subsequent to delivery of such Bulk Drug by Lonza to
Trubion in accordance with Section 4.5, in which case Lonza shall have no
liability to Trubion with respect thereto and Trubion shall be liable for the
Purchase Price for such Bulk Drug and Trubion shall pay any unpaid amount of the
Purchase Price for such Bulk Drug to Lonza in accordance with the terms of
Section 5.1. The Parties agree that for purposes of this Section 8.1, neither
Party shall be considered an "employee or agent" of the other Party.

     (c) Lonza Liability; Replacement of Product. If it is determined by
agreement of the Parties (or in the absence of such agreement, by a mutually
acceptable qualified independent Third Party whose fees shall be paid by the
non-prevailing Party) that the nonconformity is not due to damage or
contamination of such Bulk Drug caused by Trubion or its agent(s) subsequent to
delivery of such Bulk Drug by Lonza to Trubion in accordance with Section 4.5,
Lonza shall, at Trubion's option, either (1) replace such Nonconforming Bulk
Drug with conforming Bulk Drug as soon as possible and shall use best efforts to
commence manufacturing of the replacement Run within *** of Trubion's request
for a replacement Run, and at no additional cost to Trubion, or (2) refund to
Trubion the Purchase Price that Trubion paid for the Nonconforming Bulk Drug.
***. In addition, Lonza shall be liable to Trubion for the value of ***, based
on Trubion's Acquisition Cost, to the extent *** have been rendered unusable or
the life span of *** has been shortened. The terms of this Section 8.1(c) are,
***, subject to the terms of Section 3.3(b).

     (d) Disposition of Nonconforming Product; Cooperation in Investigations. In
any case where Trubion expects to make a claim against Lonza with respect to
damaged or otherwise nonconforming Bulk Drug, Trubion shall not dispose of such
Bulk Drug without written authorization and instructions of Lonza either to
dispose of or return to Lonza such Bulk Drug. Upon written request by Trubion,
Lonza agrees to promptly give Trubion such authorization and instructions. Each
Party shall act in good faith and shall cooperate with the

                                     Page 19

<PAGE>

other Party and with any mutually acceptable qualified independent Third Party
in connection with an investigation as to the existence of or source of any
nonconformity of Bulk Drug supplied under this Agreement. For the avoidance of
doubt, the Parties agree that, in connection with any claim of nonconformity
related to a latent defect, Lonza shall be entitled to assert, if valid and
appropriate, a defense of impossibility. At the request of Trubion, Lonza will
provide all Nonconforming Bulk Drug to Trubion, at no cost to Trubion (except
for shipping and delivery expenses), in accordance with the delivery terms set
forth in Section 4.5, and Trubion may make whatever further use of such Product
as it shall determine, provided, however, that Trubion agrees that (i) such
Product shall not be used in humans, (ii) the warranties provided in this
Agreement shall not apply to such Product, and (iii) the disclaimer of
warranties set forth in Section 6.1(b) of this Agreement shall apply to such
Product and Trubion assumes all risks associated with Trubion's use of such
Product.

               SECTION 9. MANUFACTURING AUDITS; REGULATORY MATTERS

9.1 Manufacturing Audits. Trubion shall have the right to perform, directly or
through its representatives, *** standard cGMP compliance audit per *** (up to
*** per calendar year), and additional For Cause Audits, all in accordance with
the audit provisions set forth in the Quality Agreement. During the standard
audits, personnel of Trubion or its representatives shall have access only to
those areas that are directly related to the performance of Lonza's obligations
under this Agreement, including the manufacture, testing, storage and shipping
of Bulk Drug. No more than a reasonable number of representatives shall be
permitted on Lonza's premises for any such audit, and, at Lonza's option, each
representative shall be accompanied by a Lonza employee at all times while on
Lonza's premises. Lonza shall use its best efforts to ensure that Trubion has
similar audit and access rights to Lonza's suppliers.

9.2 Certificate of Compliance; Manufacturing Issues; Records; Complaints.

     (a) Certificate of Compliance; Manufacturing Issues. As soon as possible
after manufacture, and, unless otherwise agreed by Trubion, in any event by not
later than the date of each shipment of Bulk Drug, Lonza shall furnish to
Trubion the related Batch Record and the other Batch documents required under
the Quality Agreement, including without limitation a Certificate of Analysis
(including the Certificate of Compliance contained therein), environmental
monitoring summaries, and a summary (in a format to be agreed upon by the
Parties) of any deviations or investigations that occurred during the
manufacturing or testing of the Bulk Drug that is part of such shipment. Without
limitation of the foregoing, Lonza acknowledges that in order to avoid a delay
of the subsequent filling and finishing of the Bulk Drug, Trubion requires that
the Certificate of Analysis and Certificate of Compliance be furnished as soon
as possible after manufacture and, therefore, Lonza covenants that it shall
furnish the Certificate of Analysis and the Certificate of Compliance for each
Batch of Bulk Drug as soon as possible after Lonza has the information it needs
to complete such certificates.

     (b) Records. Lonza shall maintain all of its manufacturing and analytical
records, records of shipments of Bulk Drug and validation data relating to Bulk
Drug for the time periods required by applicable Legal Requirements, including
without limitation the

                                     Page 20

<PAGE>

requirements of the FDA. Lonza agrees that, in response to any complaint, or in
the defense by Trubion of any litigation, hearing, regulatory proceeding or
investigation relating to Bulk Drug, Lonza shall use reasonable efforts to make
available to Trubion during normal business hours and upon reasonable prior
written notice, such records and such Lonza employees as may be reasonably
necessary to permit the effective response to, defense of, or investigation of
such matters, subject to appropriate confidentiality protections. ***.

     (c) Product Complaints. Trubion shall have responsibility for reporting any
complaints relating to the Product to the FDA and any other regulatory
authorities, including without limitation complaints relating to the manufacture
of the Product and adverse drug experience reports. Trubion shall maintain
complaint files in accordance with cGMP. Lonza shall provide Trubion with a copy
of any complaints received by Lonza with respect to the Product in accordance
with the Quality Agreement and written processes and procedures to be agreed
upon by the Parties from time to time. Trubion shall have responsibility for
responding to all complaints, and for promptly providing Lonza with a copy of
any responses to complaints relating to the manufacture of the Product. Lonza
shall promptly respond to requests from Trubion for information in Lonza's
possession that is necessary for Trubion to respond to complaints arising out of
the manufacture of the Bulk Drug. Additional procedures for complaint reporting
and responses are set forth in the Quality Agreement.

9.3 Regulatory Correspondence.

     (a) Notification to Other Parties of Regulatory Correspondence. Each Party
shall immediately (and in any event, within at least three (3) business days of
the date of receipt of notice) notify the other Party in writing of, and shall
provide the other Party with copies of, any correspondence and other
documentation received or prepared by such Party in connection with any of the
following events: (1) receipt of a regulatory letter, Warning Letter, or similar
item, from the FDA, EMEA or any other regulatory authority directed to the
manufacture, packaging, and/or storage of Bulk Drug, or in connection with any
general cGMP inspection applicable to the Lonza Facility or any other facility
associated with any of Lonza's Services hereunder; (2) any recall, market
withdrawal or correction of any Batch of Bulk Drug or resulting Product; and (3)
any regulatory comments related to the manufacture of Bulk Drug or resulting
Product requiring a response or action by a Party.

     (b) Regulatory Correspondence Requiring a Lonza Response. In the event that
Lonza receives any regulatory letter or comments from any federal, state, local,
or foreign regulatory authority directed to its manufacture of Bulk Drug
requiring a response or action by Lonza, including, but not limited to, receipt
of a Form 483 (Inspectional Observations) or a Warning Letter, Trubion promptly
will provide Lonza with any data or information required by Lonza in preparing
any response relating to Lonza's manufacture of Bulk Drug, and will cooperate
fully with Lonza in preparing such response. Except to the extent prohibited by
Legal Requirements, Lonza shall provide Trubion with a copy of each such
response for Trubion's review and comment prior to Lonza's submission of its
detailed written response. Lonza shall give all due consideration to any Trubion
comments to each such proposed Lonza response, provided Trubion timely responds.
Likewise, in the event Trubion receives any regulatory letter or comments from
any federal, state or local regulatory authority directed to the manufacture of
Bulk Drug at the Lonza Facility requiring a response or action by Trubion,
including, but not

                                     Page 21

<PAGE>

limited to, receipt of a Form 483 (Inspectional Observations) or a Warning
Letter, Lonza will promptly provide Trubion with relevant data or information
sufficient for Trubion to prepare any response related to the manufacture of
Bulk Drug and will cooperate fully with Trubion in preparing such response.
Except to the extent prohibited by Legal Requirements, Trubion shall provide
Lonza with a copy of each such response for Lonza's review and comment prior to
Trubion's submission of its detailed written response. Trubion shall give all
due consideration to any Lonza comments to each such proposed Trubion response,
provided Lonza timely responds.

9.4 Inspections; Non-Compliance; Failure to Manufacture.

     (a) Inspections. In the event that the Lonza Facility is inspected by, or
Lonza is notified that the Lonza Facility will be inspected by, representatives
of any federal, state, local, or foreign regulatory agency directed to Lonza's
manufacture of Bulk Drug or performance of Services hereunder, Lonza shall
notify Trubion promptly and at least within twenty-four (24) hours upon learning
of such inspection, and shall supply Trubion with copies of any correspondence
or portions of correspondence which relate to Bulk Drug and/or Services, as well
as any other documents reasonably requested by Trubion. Trubion may send, at its
own expense, representatives to the Lonza Facility to participate in any portion
of such inspection directed to Bulk Drug and/Services; and Trubion shall send,
upon the request and at the expense of Lonza, representatives to the Lonza
Facility to participate in any portion of such inspection directed to Bulk Drug
and/Services.

     (b) Non-Compliance; Failure to Manufacture. In the event that any
regulatory agency shall determine, as a result of an inspection described in
Section 9.4(a) above, that Lonza is not in compliance with applicable Legal
Requirements or otherwise not in compliance with cGMP with respect to the
manufacture of Bulk Drug or performance of Services, Lonza shall at its expense
use best efforts to cure such non-compliance as soon as practicable. In the
event that Lonza is unable to manufacture Bulk Drug for a particular period of
time because of the action of a regulatory agency, then, except in the event of
Trubion's negligence or more culpable act or omission, the provisions of Section
19 hereof shall apply, provided, however, that it is understood that Lonza's
inability to manufacture Bulk Drug for the reasons set forth in this Section 9.4
shall not automatically be deemed a Force Majeure Event if Lonza's inability to
manufacture was caused by Lonza's negligent or more culpable act or omission.

                               SECTION 10. RECALLS

10.1 Recalls. Trubion shall notify Lonza promptly (and in any event within three
(3) business days of receipt of written notice) if any Lot of Bulk Drug produced
hereunder is alleged or proven to be the subject of a recall, market withdrawal
or correction. Trubion and Lonza shall cooperate in the handling and disposition
of such recall, market withdrawal or correction; provided, however, that in the
event of a disagreement as to any matters related to such recall, market
withdrawal or correction, other than the determination of who shall bear the
costs as set forth in the immediately following sentence, Trubion shall have
final authority with respect to such matters, which authority shall be exercised
reasonably and in good faith. Trubion shall bear the cost of all recalls, market
withdrawals or corrections of Bulk Drug, unless and to the extent such recall,
market withdrawal or correction shall have

                                     Page 22

<PAGE>

been the result of Lonza's breach of Section 3.1, Section 6.1(a) or Section 14.2
hereof, or the result of Lonza's negligent or more culpable act or omission, in
which case Lonza shall upon substantiation bear the cost of such recall, market
withdrawal or correction, subject always to the terms of Sections 15.5 and 15.6
below. Trubion or its agent shall in all events be responsible for conducting
any recalls, market withdrawals or corrections with respect to the Product.
Additional procedures related to recalls of Bulk Drug are set forth in the
Quality Agreement.

      SECTION 11. QUALITY ASSURANCE; QUALITY CONTROL; VALIDATION; STABILITY

11.1 Quality Agreement; Responsibility for Quality Assurance and Quality
Control.

     (a) Technical issues concerning quality assurance, quality control, and
validation related to Bulk Drug and the Services performed hereunder are
addressed in the Quality Agreement. The Parties shall review the Quality
Agreement at least annually and shall revise it or make any necessary amendments
thereto. Such amendments or revisions shall become effective, and considered a
part of this Agreement, upon execution by all of the Parties. In the event of
any conflict or inconsistency between the terms of this Agreement and the
Quality Agreement, the terms of this Agreement shall control.

     (b) Responsibility for quality assurance and quality control of Bulk Drug
shall be allocated between Trubion and Lonza as set forth in the Quality
Agreement and in written processes and procedures agreed upon in writing by
Trubion and Lonza from time to time. In general, (a) Lonza shall be responsible
for performing certain in-process testing and selected acceptance testing on
Bulk Drug as set forth in the Quality Agreement, and (b) Trubion shall be
responsible for all final acceptance testing and authorizing final release of
all Bulk Drug. In the event the Parties disagree about whether a Batch should be
released, the dispute shall be resolved in compliance with the provisions set
forth in Section 8.1 hereof and shall be resolved either by agreement of the
Parties, or, in the absence of such agreement, by a mutually acceptable
qualified independent Third Party whose fees shall be paid by the non-prevailing
Party.

                                     Page 23

<PAGE>

11.2 Validation of Lonza Facility; Utilities and Equipment. Lonza shall maintain
cGMP validation status of the Lonza Facility, as well as the utilities and
equipment used in the manufacture of Bulk Drug at the Lonza Facility, and shall
make relevant validation reports applicable thereto (which may be redacted to
remove information not related to the manufacture of Bulk Drug) available to
Trubion for review at Lonza's Facility, at Trubion's reasonable request.

11.3 Validation of Manufacturing Process. If and as requested by Trubion, Lonza
shall assist Trubion with the maintenance of the cGMP validation status of the
Manufacturing Process as implemented by Lonza. Lonza shall provide to Trubion,
at Trubion's reasonable request, copies of documentation related to the
validation of the Manufacturing Process, as implemented by Lonza, and validation
reports applicable thereto, on a frequency and in a format to be agreed upon by
Lonza and Trubion.

11.4 Change Control. Lonza shall notify Trubion in advance of any planned
changes to the Lonza Facility, utilities, equipment or processes used by Lonza
in its performance under this Agreement, including those relating to the
manufacturing, storage, testing, packaging, shipping and cleaning procedures
that are used by Lonza in the manufacture of Bulk Drug under this Agreement, and
all such changes shall occur in accordance with and pursuant to written change
control procedures agreed upon by Lonza and Trubion and as set forth in the
Quality Agreement. In accordance with such written change control procedures and
the Quality Agreement, Lonza shall obtain Trubion's prior written consent to any
of the foregoing planned changes that may affect any of the regulatory
submissions related to the Product and/or supply of the Product. Section 6.2 of
this Agreement sets forth the notification and approval procedure for changes to
the Bulk Drug Specifications or the Manufacturing Process.

11.5 Stability. Trubion or its designee shall be responsible for conducting all
necessary stability testing to comply with cGMP and other applicable regulatory
guidelines. Such stability testing shall include testing to validate the lead
times for shipment, the shelf life of Bulk Drug, and the Bulk Drug
Specifications applicable to shipment, storage and handling of Bulk Drug. Lonza
shall prepare all stability samples, and shall sublot stability samples and
package and ship stability samples to Trubion, all in accordance with timelines,
protocols and procedures agreed upon by Lonza and Trubion and as set forth in
the Quality Agreement.

11.6 Person in the Plant. As further described in the Quality Agreement, Trubion
shall have the right to designate up to *** representatives of Trubion to be
present at any one time in the Lonza Facility during normal business hours
during the Term of this Agreement to observe the Runs and observe Lonza's
performance of the Services under this Agreement. While at the Facility, such
representative of Trubion shall be restricted to such areas as are directly
relevant to the manufacture of the Bulk Product and such other areas as may be
otherwise authorized by Lonza, and shall comply with all applicable Lonza
policies and procedures and may, at Lonza's option, be escorted by Lonza
personnel.

                                     Page 24

<PAGE>

                 SECTION 12. LONZA'S OBLIGATIONS AS MANUFACTURER

12.1 Control of Cell Lines and Cell Banks. ***. Lonza shall maintain all
portions of the Cell Lines, Master Cell Banks and Working Cell Banks that it has
created or received, or that it creates or receives, in safe and secure storage,
under its control in the ***, and shall not transfer or permit the transfer of
any of the foregoing to any Lonza Affiliate or any Third Party unless such
transfer is specifically authorized in advance and in writing by Trubion.
Trubion may, upon request, and from time to time, review the relevant portions
of Lonza's disaster recovery plan, and, in the event that Trubion determines
that Lonza's disaster recovery plan is not sufficient for Trubion's purposes,
the Parties shall negotiate in good faith to determine additional disaster
recovery procedures, including, without limitation, storage of back-up portions
of the Cell Lines, Master Cell Banks and Working Cell Banks in additional Lonza
Facilities. Lonza shall comply with all applicable Legal Requirements, including
without limitation applicable FDA regulatory requirements, relating to general
safety in handling the Cell Lines, Master Cell Banks, Working Cell Banks and any
raw materials and components used in manufacturing Bulk Drug. Lonza shall not
use the Trubion Process, Cell Lines, related reference standards, Master Cell
Banks, Working Cell Banks or any other raw materials, intermediates or active
pharmaceutical ingredients supplied by or on behalf of Trubion to Lonza or its
Affiliates pursuant to this Agreement, the August 2003 Agreement or the January
2004 Agreement (all of the foregoing, collectively, and including all
improvements and enhancements thereto and any derivatives thereof, the "Trubion
Materials") for any purpose whatsoever other than the performance of its
obligations under this Agreement, including without limitation to manufacture
and supply Bulk Drug to Trubion. As between the Parties, Trubion is the sole and
exclusive owner of all Trubion Materials, and all right, title and interest in
and to the Trubion Materials shall, as between the Parties, remain vested in
Trubion. Risk of loss to the Product and any tangible Trubion Materials shall
transfer to Lonza upon delivery to Lonza or its Subcontractor.

12.2 Manufacturing Capabilities; LB ***.

     (a) [intentionally deleted]

     (b) ***

12.3 Compliance with Law. Lonza shall have all applicable Permits required to
perform the Services hereunder. In particular, Lonza shall maintain the
regulatory licenses required to manufacture Bulk Drug under this Agreement.

12.4 [intentionally deleted]

12.5 Storage Facilities. Lonza shall provide sufficient and suitable storage
facilities that meet the Bulk Drug Specifications for Bulk Drug and raw
materials and components.

12.6 Regulatory Documentation.

     (a) Lonza shall provide Trubion in a timely manner with a copy of any Lonza
manufacturing and control records for Bulk Drug which are required for any
regulatory filings with respect to the Product, which records shall be in
Lonza's standard formats unless

                                     Page 25

<PAGE>

otherwise agreed upon by the Parties, and which records may include without
limitation Lonza's protocols, standard operating procedures and other written
processes and procedures, equipment specifications, and licenses and drug master
files, provided, however, that Trubion acknowledges that it may be permitted to
cross-reference rather than have copies of certain proprietary documents of
Lonza which are required for submission to regulatory authorities with respect
to the Product. Employees, consultants, agents or contractors of Trubion or
Trubion's Affiliates shall have the right to reference or submit the foregoing
to the applicable regulatory authorities in support of a BLA or other regulatory
filing related to the Product, or otherwise in support of Trubion's efforts to
develop, conduct clinical trials for, formulate, manufacture, test, seek
regulatory approval for, market, commercialize, make, have made, use, sell,
import, and distribute the Product, and Lonza shall, upon the request of and at
the expense of Trubion, assist Trubion in creating joint-use documents for these
purposes.

     (b) Lonza shall provide Trubion promptly at the end of each annual
reporting period for the Product (as calculated consistent with appropriate
regulations and guidelines) with such information as is reasonably requested in
writing by Trubion for the preparation of the annual report with respect to the
manufacturing and control of the Product for such annual reporting period.

12.7 Manufacturing Data. Upon request, Lonza shall provide Trubion with the
process and manufacturing documentation for each Batch, in Lonza's standard
format or in such other format as may be agreed by the Parties, including
without limitation copies of applicable Batch Records and other related
documentation, data and analytical records, including without limitation
deviations, discrepancies, out-of-specifications, failures, investigations,
batch-specific environmental monitoring data, and any particular documentation
or data listed in Schedule 2 hereto, and all other documentation reasonably
requested by Trubion related to such Batch, including without limitation process
data. In addition, Lonza shall collect data on the yield from each Batch, as
well as the date of manufacture of each such Batch, and make reports of the same
available to Trubion upon request in Lonza's standard format or in such other
format as may be agreed by the Parties. Lonza shall retain such manufacturing
data in accordance with applicable Legal Requirements.

12.8 Retention and Reserve Samples. Lonza shall isolate, identify and, subject
to Section 18.3 hereof, retain retention and reserve samples of all raw
materials and components and in-process production steps used in the production
of Bulk Drug as may be required by written processes and procedures to be agreed
upon in writing by Lonza and Trubion from time to time.

12.9 Analytical Testing. Except as otherwise contemplated by this Agreement or
expressly set forth in the Quality Agreement, Lonza shall not perform any
analytical testing on Bulk Drug unless agreed to by Lonza and Trubion.

12.10 Accurate Documentation. Each Party shall use diligent efforts to ensure
all records and documentation provided to the other Party in connection with the
manufacture of Bulk Drug shall be accurate in all material respects.

                                     Page 26
<PAGE>

12.11 Quality. Lonza shall perform its obligations related to quality assurance,
quality control, and validation in accordance with the terms of this Agreement
and the Quality Agreement.

12.12 Notice of Material Events. Lonza shall notify Trubion promptly and within
at least three (3) business days of any actual or anticipated events which will
or may have a material adverse effect on the Product or Lonza's ability to
manufacture Bulk Drug or perform Services under this Agreement, including
without limitation any quality, performance or safety problems related to
Lonza's development, manufacture, packaging, storage and/or shipping of a Third
Party's product or otherwise in connection with the Lonza Facility or any other
facility associated with any of Lonza's Services hereunder.

12.13 Computerized Systems. Lonza shall ensure that its computerized systems
comply with industry standards, as such standards are updated from time to time,
and any applicable Legal Requirements, including without limitation with respect
to system dependability (including completeness, accuracy, reliability and
consistent intended performance) and system controls (including contingency
plans, such as alternative recording methods in case of system unavailability,
and including data backup, storage and recovery plans sufficient to protect
against data loss and to ensure data quality and integrity).

                                    Page 27

<PAGE>

            SECTION 13. OWNERSHIP OF INTELLECTUAL PROPERTY; LICENSES

13.1 Ownership of Intellectual Property.

     (a) As between the Parties, Lonza shall own all right, title and interest
in and to any and all inventions and discoveries that are conceived or reduced
to practice solely by Lonza or its employees or agents in the course of or
resulting from the Services or this Agreement, and all patent rights and other
intellectual property rights and industrial property rights therein ("Lonza
Improvements"), except as specifically set forth in Section 13.1(b).

     (b) As between the Parties, Trubion shall own all Trubion Confidential
Information and all patent rights and other intellectual property rights and
industrial property rights therein, and all patent rights and other intellectual
property rights and industrial property rights in and to the Cell Lines, the
Master Cell Banks, the Working Cell Banks, the other Trubion Materials, the
Product, the Trubion Process, and the Manufacturing Documentation (subject to
the proviso at the end of this sentence), and any and all improvements or
enhancements made to and derivatives of any of the foregoing, whether such
improvements, enhancements or derivatives were invented, discovered or developed
solely by Lonza or its employees or agents or jointly with Trubion or its
employees or agents; provided, however, that with respect to the Manufacturing
Documentation, Trubion shall not own any Lonza Confidential Information or any
portion thereof that is contained in the Manufacturing Documentation, which in
lieu of being owned by Trubion shall be licensed to Trubion under Section 13.3
below.

In addition, notwithstanding anything seemingly to the contrary in Section
13.1(a), as between the Parties, Trubion shall own all right, title and interest
in and to:

(i) any Lonza Improvements that relate to, and

(ii) any and all other inventions and discoveries that are conceived or reduced
to practice by Lonza or its employees or agents, solely or jointly with others,
in the course of or resulting from the Services or this Agreement, or resulting
from the use of Trubion Confidential Information, that relate to

the Cell Lines, the Master Cell Banks, the Working Cell Banks, the other Trubion
Materials, the Product, the Trubion Process and/or the Manufacturing
Documentation (subject to the proviso at the end of this sentence) or to any
uses thereof, and all patent rights and other intellectual property rights and
industrial property rights therein (all of the foregoing are collectively
referred to as the "Assigned Inventions"); provided, however, that with respect
to the Manufacturing Documentation, Trubion shall not own any Lonza Confidential
Information or any portion thereof that is contained in the Manufacturing
Documentation, which in lieu of being owned by Trubion shall be licensed to
Trubion under Section 13.3 below.

     (c) As between the Parties, Lonza shall own all Lonza Confidential
Information; provided, however, that notwithstanding anything herein to the
contrary, and irrespective of

                                    Page 28

<PAGE>

whether any Lonza Confidential Information is utilized with respect to Lonza's
performance pursuant to this Agreement or to any improvements or enhancements
made to the Trubion Confidential Information, the Cell Lines, the Master Cell
Banks, the Working Cell Banks, the other Trubion Materials, the Product, the
Trubion Process, and/or the Manufacturing Documentation (subject to the proviso
at the end of this sentence), Trubion shall be the sole and exclusive owner of
the Trubion Confidential Information, the Cell Lines, the Master Cell Banks, the
Working Cell Banks, the other Trubion Materials, the Product, the Trubion
Process and the Manufacturing Documentation (subject to the proviso at the end
of this sentence), and all improvements and enhancements thereto, and any
derivatives thereof; provided, however, that with respect to the Manufacturing
Documentation, Trubion shall not own any Lonza Confidential Information or any
portion thereof that is contained in the Manufacturing Documentation, which in
lieu of being owned by Trubion shall be licensed to Trubion under Section 13.3
below.

     (d) Lonza shall disclose to Trubion fully and promptly (***) all Assigned
Inventions. Lonza shall make and maintain accurate written records of such
Assigned Inventions, and provide the same to Trubion upon request. Lonza shall
assign and transfer, and hereby assigns and transfers, to Trubion and its
successors and assigns, without further consideration, Lonza's entire right,
title and interest in and to all Assigned Inventions, including without
limitation any copyrights and registrations and renewals therefore, any
inventions, any United States, international and foreign patent applications
filed on such inventions, and the right to apply for all such patent
applications in Lonza's name or in the name of Trubion. The Parties acknowledge
that all Assigned Inventions that are original works of authorship made by Lonza
within the scope of the Services it provides under this Agreement are "works
made for hire," as that term is defined in the United States Copyright Act (17
U.S.C. Section 101); however, to the extent such works are deemed not to be
works made for hire, Lonza shall assign and transfer, and hereby assigns and
transfers, to Trubion and its successors and assigns, without further
consideration, Lonza's entire right, title and interest in and to such works and
the intellectual property rights therein. Lonza shall provide all required or
requested assistance to Trubion to permit Trubion to obtain and enforce the full
benefits, enjoyment, rights and title throughout the world in the Assigned
Inventions, including without limitation the review and execution of
applications for patents and/or copyrights, assignments confirming ownership by
Trubion, declarations, powers of attorney, and other documents, and assistance
or cooperation in legal proceedings.

     (e) The Parties agree that for purposes of this Section 13, neither Party
shall be considered an "employee or agent" of the other Party.

     (f) ***.

13.2 License to Lonza. During the Term (and subject to early termination in
accordance with Section 18 hereof), Trubion hereby grants to Lonza a
royalty-free, non-exclusive license under any and all intellectual property
rights and industrial property rights which are owned or controlled by Trubion
and which are necessary for Lonza to perform its obligations under this
Agreement, including without limitation all rights necessary to the use of the
Trubion Materials, the Trubion Process, and/or the Trubion Confidential
Information (such rights are

                                    Page 29

<PAGE>

collectively defined as the "Trubion IP Rights") for the sole and limited
purpose of Lonza's performance of its obligations under this Agreement,
including without limitation to manufacture and supply Bulk Drug to Trubion.

13.3 License to Trubion. Lonza hereby grants to Trubion a royalty-free,
non-exclusive, world-wide, irrevocable and transferable license, with the right
to grant and authorize sublicenses, under any and all intellectual property
rights and industrial property rights which are owned or controlled by Lonza,
including without limitation all Lonza Improvements and also including without
limitation all rights necessary to the use of the Lonza Manufacturing Process
and/or the Lonza Confidential Information (such rights are collectively defined
as the "Lonza IP Rights"), to use the Lonza IP Rights, alone or in combination
with any of the Trubion IP Rights, to develop, conduct clinical trials for,
formulate, manufacture, test, seek regulatory approval for, market,
commercialize, make, have made, use, sell, import, and distribute the Product.
Notwithstanding anything in this Section 13.3 seemingly to the contrary, Trubion
shall have no right to exercise the license rights granted in this Section 13.3
to manufacture the Product at a Trubion facility or at a Third Party facility
that is not owned or operated by Lonza or its Affiliates, unless and until the
Technology Transfer fee described in Section 13.4 has been paid.

The Lonza Process in effect as of the date of this Agreement bears ***. In the
event that Lonza solely invents or discovers (other than in the course of or
resulting from the Services or this Agreement) improvements or enhancements to
or derivatives of the Lonza Process in effect as of the date of this Agreement,
and it customarily charges its customers a royalty for such intellectual
property rights, then such inventions or discoveries shall be offered to Trubion
but shall not be incorporated into the Process unless and until the Parties have
agreed in writing on the license or royalty fee payable for such intellectual
property.

13.4 Technology Transfer. The Parties intend that the Process shall be fully
portable by Trubion. ***

13.5 No Other Rights. Except as expressly provided in this Agreement, no right
or license, either express or implied, under any intellectual property right or
industrial property right or to any information, materials or technology, is
granted hereunder under this Agreement, whether by virtue of the disclosure of
Confidential Information under this Agreement or otherwise.

13.6 Survival. The terms of this Section 13 shall survive the expiration or
termination of this Agreement, and shall be binding upon and inure to the
benefit of the successors and assigns of the Parties. The Parties will continue
to cooperate with each other to perfect and enforce the rights granted in this
Section 13.

                   SECTION 14. REPRESENTATIONS AND WARRANTIES

14.1 Trubion. Trubion hereby represents and warrants to Lonza that:

                                    Page 30

<PAGE>

     (a) to the best of Trubion's knowledge and belief, Trubion is free to
supply to Lonza the Trubion Material (including without limitation the Cell
Lines, the Master Cell Banks, and the Working Cell Banks), the Trubion
Confidential Information and all other information to be supplied by Trubion to
Lonza under this Agreement, and, to the best of Trubion's knowledge and belief,
Trubion has the legal right to grant Lonza the licenses set forth in Section
13.2 of this Agreement;

     (b) Trubion has the corporate power and authority and the legal right to
enter into this Agreement and to perform its obligations hereunder;

     (c) Trubion has taken all necessary corporate action to authorize the
execution and delivery of this Agreement and the performance of its obligations
hereunder. This Agreement has been duly executed and delivered on behalf of
Trubion, and constitutes a legal, valid, binding obligation, enforceable against
Trubion in accordance with its terms; and

     (d) Trubion is in compliance with all applicable Legal Requirements; and

     (e) any documentation and records provided to Lonza by Trubion relating to
this Agreement shall be accurate in all material respects.

14.2 Lonza. Lonza hereby represents and warrants, and, as appropriate,
covenants, to Trubion that:

     (a) to the best of Lonza's knowledge and belief, Lonza is free to supply to
Trubion the Lonza Confidential Information and all other information to be
supplied by Lonza to Trubion under this Agreement, and, to the best of Lonza's
knowledge and belief, Lonza has the legal right to grant Trubion the rights set
forth in Section 13.1(b) of this Agreement and the licenses set forth in Section
13.3 of this Agreement; Lonza has not, as of the Effective Date, entered into,
and Lonza shall not in the future enter into, any obligation that would not
permit or would prohibit or prevent Lonza from granting the rights and licenses
set forth in Section 13 of this Agreement;

     (b) Lonza owns or lawfully controls the Lonza Facility, and has sufficient
facilities and equipment, as well as a sufficient number of employees with such
expertise and experience, as is necessary or appropriate to perform the Services
in accordance with the terms hereof;

     (c) the Lonza Facility, and all the processes used in producing Bulk Drug
and performing the Services, shall be in accordance with cGMP and shall enable
Lonza to maintain in good standing all related Permits;

     (d) any documentation and records provided to Trubion by Lonza relating to
the Services shall be accurate in all material respects;

     (e) Lonza has the corporate power and authority and the legal right to
enter into this Agreement and to perform its obligations hereunder; Lonza has
not, as of the Effective Date,

                                    Page 31

<PAGE>

entered into, and Lonza shall not in the future enter into, any obligation that
would not permit Lonza to perform or would prohibit or prevent Lonza from
performing its obligations under this Agreement, including, for the avoidance of
doubt, the granting of the rights and licenses set forth in Section 13;

     (f) Lonza has taken all necessary corporate action on its part to authorize
the execution and delivery of this Agreement and the performance of its
obligations hereunder. This Agreement has been duly executed and delivered on
behalf of Lonza, and constitutes a legal, valid, binding obligation, enforceable
against Lonza in accordance with its terms; and

     (g) Lonza is in compliance with all applicable Legal Requirements.

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

                                    Page 32

<PAGE>

                           SECTION 15. INDEMNIFICATION

15.1 Indemnification by Trubion. Subject to and except to the extent of any
indemnification from Lonza pursuant to Section 15.2 below, Trubion shall hold
harmless, indemnify, and defend Lonza, its Affiliates, and their respective
directors, officers, employees and agents, from and against any and all actions,
causes of action, liabilities, claims, suits, judgments, liens, awards and
damages, of any kind and nature, and expenses, costs of litigation and counsel
fees related thereto or incident to establishing the right to indemnification,
to the extent resulting from or arising out of (a) any claim, lawsuit or other
action by a Third Party arising out of the manufacture, use, handling,
distribution, marketing or sale of the Product, (b) any breach of the terms of
this Agreement, including without limitation any breach of warranty, or (c)
Trubion's negligent or more culpable acts or omissions.

15.2 Indemnification by Lonza. Subject to and except to the extent of any
indemnification from Trubion pursuant to Section 15.1 above, Lonza shall hold
harmless, indemnify, and defend Trubion, its Affiliates, and their respective
directors, officers, employees and agents, from and against any and all actions,
causes of action, liabilities, claims, suits, judgments, liens, awards and
damages, of any kind and nature, and expenses, costs of litigation and counsel
fees related thereto or incident to establishing the right to indemnification,
to the extent resulting from or arising out of (a) any breach of the terms of
this Agreement, including without limitation any breach of warranty, or (b)
Lonza's negligent or more culpable acts or omissions.

15.3 Indemnification Procedures.

     (a) Identification of Indemnitor and Indemnitee. An "Indemnitor" means
Trubion with respect to Section 15.1 hereof, and Lonza with respect to Section
15.2 hereof. An "Indemnitee" means any of Lonza, its Affiliates, and their
respective directors, officers, employees and agents with respect to Section
15.1 hereof, and any of Trubion, its Affiliates, and their respective directors,
officers, employees and agents with respect to Section 15.2 hereof.

     (b) Indemnification Procedures. An Indemnitee which intends to claim
indemnification under Section 15.1 or 15.2 hereof shall promptly notify the
Indemnitor in writing of any claim, lawsuit or other action in respect of which
the Indemnitee, its Affiliates, or any of their respective directors, officers,
employees and agents intend to claim such indemnification. The Indemnitee shall
permit, and shall cause its Affiliates and their respective directors, officers,
employees and agents to permit, the Indemnitor, at its discretion, to settle any
such claim, lawsuit or other action and agrees to the complete control of such
defense or settlement by the Indemnitor; provided, however, that such settlement
does not adversely affect the Indemnitee's rights hereunder or impose any
obligations on the Indemnitee in addition to those set forth herein in order for
it to exercise such rights. No such claim, lawsuit or other action shall be
settled without the prior written consent of the Indemnitor and the Indemnitor
shall not be responsible for any legal fees or other costs incurred other than
as provided herein. The Indemnitee, its Affiliates and their respective
directors, officers, employees and agents shall cooperate fully with the
Indemnitor and its legal representatives in the investigation and defense of any
claim, lawsuit or other action

                                    Page 33

<PAGE>

covered by this indemnification. The Indemnitee shall have the right, but not
the obligation, to be represented by counsel of its own selection at the
Indemnitor's expense.

15.4 Survival of Indemnification Obligations. The provisions of this Section 15
shall survive the termination or expiration of this Agreement.

15.5 Disclaimer of Consequential Damages. Subject to the second sentence of this
Section 15.5, in no event shall either Party be liable to the other Party for
incidental, indirect, special, punitive or consequential damages arising from or
related to breach of this Agreement. The foregoing disclaimer of damages shall
not apply in the case of (a) breach of Section 16 (Confidentiality), (b)
personal injury or death, or (c) grossly negligent or intentionally wrongful
acts or omissions.

15.6 Limitation of Liability. Subject to the second and third sentences of this
Section 15.6, in no event shall Lonza's liability to Trubion for direct damages
arising from or related to breach of this Agreement exceed the greater of (x)
***, and (y) the total maximum aggregate sum payable under this Agreement by
Trubion. The foregoing limitation of liability shall not apply in the case of
(a) breach of Section 16 (Confidentiality), (b) personal injury or death, or (c)
grossly negligent or intentionally wrongful acts or omissions. The foregoing
limitation of liability shall also not apply to claims, lawsuits or other
actions by Third Parties for which Lonza is obligated to indemnify Trubion
pursuant to Section 15.2 (Indemnification by Lonza), provided, however, that,
with respect to such claims, lawsuits or other actions, in no event shall
Lonza's liability to Trubion exceed *** multiplied by the greater of (x) ***,
and (y) the total maximum aggregate sum payable under this Agreement by Trubion.

                           SECTION 16. CONFIDENTIALITY

16.1 Confidentiality Obligations.

     (a) Lonza Confidentiality Obligations. Lonza shall not disclose Trubion
Confidential Information to any Third Party other than

          (1) its employees, consultants, Affiliates, agents or contractors who
are legally bound by similar obligations of confidentiality and non-use and who
have a need to know such information in order to perform their duties in
carrying out Lonza's obligations under this Agreement and/or the Quality
Agreement, or in order to provide direction to Trubion or Lonza regarding their
respective obligations under this Agreement, or

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

     (b) Trubion Confidentiality Obligations. Trubion shall not disclose any
Lonza Confidential Information to any Third Party other than

          (1) its employees, consultants, Affiliates, agents or contractors who
are legally bound by similar obligations of confidentiality and non-use and who
have a need to know such information in order to perform their duties in
carrying out Trubion's obligations under

                                    Page 34

<PAGE>

this Agreement and/or the Quality Agreement, or in order to support Trubion's
efforts to develop, conduct clinical trials for, formulate, manufacture, test,
package, seek regulatory approval for, market, commercialize, make, have made,
use, sell, import, and distribute the Product, or

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

     (c) Responsibility. Each Party shall be responsible for any breach, by such
Party, its Affiliates, or the employees, consultants, agents or contractors of
such Party or such Party's Affiliates, of the confidentiality and nonuse
obligations that are imposed under this Agreement with respect to the other
Party's Confidential Information.

16.2 Terms of Agreement Are Confidential. Subject to Sections 16.1, 16.3, 16.4
and 17.1 hereof, and except for any disclosure as is deemed necessary, in the
reasonable judgment of the responsible Party, to comply with applicable Legal
Requirements with respect to regulatory reporting or disclosure obligations, no
Party shall, without the prior written consent of the other Party, disclose in
any manner to any Third Party the terms and conditions of this Agreement.

16.3 Exclusions. The obligations of confidentiality and nonuse applicable to
Lonza with respect to Trubion Confidential Information and to Trubion with
respect to Lonza Confidential Information shall not apply to any information
which:

     (a) at the time of disclosure, is known publicly or thereafter becomes
known publicly through no fault of the recipient, its Affiliates or agents;

     (b) becomes available to the recipient from a Third Party which is not
legally prohibited from disclosing such information, provided such information
was not acquired directly or indirectly from the disclosing Party;

     (c) was developed by the recipient independently of information obtained
from the disclosing Party as evidenced by written records;

     (d) was already known to the recipient before receipt from the disclosing
Party, as shown by its prior written records, provided that such information was
not acquired directly or indirectly from the disclosing Party; or

     (e) is released with the prior written consent of the Party that had
originally disclosed such information to the other Party hereunder.

16.4 Notification of Mandatory Disclosure.

     (a) Notification and Consultation. In the event that a Party (in such case,
the "Notifying Party") believes it is required by applicable Legal Requirements,
including without limitation applicable statute or regulation (including the
rules and regulations of any national stock exchange on which such Party's
securities are traded, but subject to Section

                                    Page 35

<PAGE>

17.1 below), or by judicial or administrative process, to disclose any part of
the other Party's (in such case, the "Notified Party") Confidential Information
which has been disclosed under this Agreement, the Notifying Party shall (1)
promptly notify the Notified Party of each such requirement and identify the
documents so required thereby, so that the Notified Party may seek an
appropriate protective order or other remedy and/or waive compliance by the
Notifying Party with the provisions of this Agreement, and (2) consult with the
Notified Party on the advisability of taking legally available steps to resist
or narrow the scope of such requirement.

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

16.5 No Licenses; Maintenance of Confidentiality; Nonuse Obligations.

     (a) No Licenses. Except as expressly provided in Section 13 hereof, no
right or license, either express or implied, under any intellectual property
right or industrial property right is granted hereunder under this Agreement,
whether by virtue of the disclosure of Confidential Information under this
Agreement or otherwise.

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

     (c) Nonuse Obligations. Trubion Confidential Information shall not be
utilized by Lonza for any purpose other than performing its obligations under
this Agreement or the Quality Agreement, without first obtaining Trubion's prior
written consent to each such other utilization. Lonza Confidential Information
shall not be utilized by Trubion except when necessary for the limited purposes
of production, testing, storage, sale or quality of the Product or regulatory or
compliance issues related to the Product (subject to any applicable restrictions
set forth in this Agreement), and except as otherwise expressly permitted under
this Agreement or the Quality Agreement, without in each case first obtaining
Lonza's prior written consent to each such other utilization.

16.6 Survival of Confidentiality Obligations. The provisions of this Section 16
shall survive the termination or expiration of this Agreement in perpetuity.

16.7 Relationship to August 2003 Agreement and January 2004 Agreement.
Information disclosed under the August 2003 Agreement or the January 2004
Agreement shall be deemed disclosed under this Agreement, and, if such
information otherwise meets the definition of

                                    Page 36

<PAGE>

Confidential Information set forth in this Agreement, then such information
shall be deemed Confidential Information (either Trubion Confidential
Information or Lonza Confidential Information, as the context requires) and
shall be subject to the terms of this Agreement.

                    SECTION 17. PRESS RELEASES; USE OF NAMES

17.1 Press Releases; SEC filings. If either Party desires to issue a press
release or other public statement or announcement concerning this Agreement and
the subject matter hereof, it must first obtain the other Party's written
approval of the proposed release or announcement; provided that such approval
shall not be unreasonably withheld if such disclosure is required pursuant to
the disclosure requirements of the Securities and Exchange Commission ("SEC") or
the national securities exchange or other stock market on which such Party's
securities are traded ("Exchange"). Without limiting the generality of the
foregoing, each Party agrees that the other Party will have no less than five
(5) business days to review and provide comment regarding any such proposed
press release or publicity, unless a shorter review time is agreed to by both
Parties or required by law or rules of such an Exchange. In the event that one
Party reasonably concludes that a given disclosure is required by law and the
other Party would prefer not to make such disclosure, then the Party seeking
such disclosure shall either (i) limit said disclosure to address the concerns
of the other Party, or (ii) provide a written opinion from counsel stating that
such disclosure is required by law. With respect to complying with the
disclosure requirements of the SEC, in connection with any required SEC filing
of this Agreement, the filing Party shall seek confidential treatment of
portions of this Agreement from the SEC and shall provide the other Party with a
reasonable opportunity to review any such proposed filing. Each Party agrees
that it will obtain its own legal advice with regard to its compliance with
securities laws and regulations, and will not rely on any statements made by the
other Party relating to such securities laws and regulations.

17.2 Use of Names. No Party shall make use of the name of the other Party in any
advertising or promotional material, or otherwise, in connection with this
Agreement or any related agreements, without the prior written consent of the
other Party in each case, except that Trubion may disclose Lonza's name and the
names of Lonza's Affiliates and the existence of this Agreement to Trubion's
current and potential employees, directors, shareholders, investors, partners,
consultants, Affiliates, agents and contractors, and Lonza may disclose
Trubion's name and the existence of this Agreement for internal business
purposes only to its employees, directors and professional advisers.

                          SECTION 18. TERM; TERMINATION

18.1 Term. Unless sooner terminated pursuant to the terms of this Agreement, the
term of this Agreement shall commence upon the Effective Date and shall continue
until December 31, 2010 (the "Term"). The Term may be extended by mutual written
agreement of the Parties.

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<PAGE>

18.2 Termination. This Agreement may be terminated prior to the expiration date
set forth in Section 18.1 above as follows:

     (a) Material Breach.

          (1) Lonza Material Breach. This Agreement may be terminated in its
entirety by Trubion upon written notice to Lonza in the event of a material
breach by Lonza which is not cured within *** from written notice to Lonza
specifying in reasonable detail the nature of such breach.

          (2) Trubion Material Breach. This Agreement may be terminated in its
entirety by Lonza upon written notice to Trubion in the event of a material
breach by Trubion which is not cured within *** from written notice to Trubion
specifying in reasonable detail the nature of such breach (*** in case of
nonpayment of amounts which are then due and payable).

     (b) Mutual Agreement. This Agreement may be terminated in its entirety at
any time upon mutual written agreement among all the Parties.

     (c) Withdrawal of Product. This Agreement may be terminated by Trubion upon
at least *** prior written notice to Lonza if:

     1. Trubion does not file the BLA for the Product; or

     2. Trubion files the BLA for the Product and it is not accepted by the FDA;
or

     3. Trubion files the BLA for the Product, it is accepted by the FDA, and
Trubion subsequently withdraws the BLA.

     (d) Lonza Facility. This Agreement may be terminated in its entirety by
Trubion upon at least *** prior written notice to Lonza if Lonza or its
Affiliates cease to own or otherwise lawfully control any Lonza Facility
required to the extent necessary to perform the Services in accordance with the
terms hereof.

     (e) Force Majeure. This Agreement may be terminated in its entirety by
Trubion upon at least *** prior written notice in the event that a Force Majeure
Event has, in accordance with Section 19.4 hereof, continued for a consecutive
***. In addition, in the case of a Force Majeure Event affecting Trubion which
has continued for a consecutive *** period, Lonza shall, in accordance with
Section 19.4 hereof, have the right to terminate this Agreement in its entirety
upon at least *** prior written notice to Trubion.

     (f) Judicial Action. This Agreement may be terminated by Trubion upon at
least *** prior written notice to Lonza if any Third Party takes any action,
including, but not limited to, the enforcement of a patent, the result of which
is to prevent (i.e., the grant of a preliminary or permanent injunction) or
materially inhibit (i) Lonza's ability to manufacture and supply Bulk Drug ,
(ii) Trubion from purchasing Bulk Drug from Lonza hereunder,

                                    Page 38

<PAGE>

and/or (iii) Trubion or its designee from using, distributing, offering for
sale, or selling Bulk Drug; provided, however, that unless such Third Party
action is caused directly by acts or omissions of Lonza, then the termination
rights set forth in this Section 18.2(f) are subject to payment by Trubion of
any Cancellation Fees payable in accordance with Section 4.2(b) and Section
18.3(c).

     (g) Insolvency or Bankruptcy.

          (1) Lonza Insolvency. This Agreement may be terminated by Trubion upon
at least *** prior written notice thereof if Lonza becomes insolvent, makes an
assignment for the benefit of creditors, is the subject of proceedings in
voluntary or involuntary bankruptcy instituted on behalf of or against Lonza, or
has a receiver or trustee appointed for all or substantially all of its
property, provided that in the case of an involuntary bankruptcy proceeding such
right to terminate shall only become effective if Lonza consents to the
involuntary bankruptcy or such proceeding is not dismissed within *** after the
filing thereof.

          (2) Trubion Insolvency. This Agreement may be terminated by Lonza upon
at least *** prior written notice thereof to Trubion if Trubion becomes
insolvent, makes an assignment for the benefit of creditors, is the subject of
proceedings in voluntary or involuntary bankruptcy instituted on behalf of or
against Trubion, or has a receiver or trustee appointed for all or substantially
all of its property, provided that in the case of an involuntary bankruptcy
proceeding such right to terminate shall only become effective if Trubion
consents to the involuntary bankruptcy or such proceeding is not dismissed
within *** after the filing thereof.

     (h) For Convenience. This Agreement may be terminated by Trubion at its
convenience, for any reason or for no reason, upon at least *** prior written
notice to Lonza.

18.3 Consequences of Termination.

     (a) Payment of Amounts Due; Cumulative Remedies. Expiration or termination
of this Agreement for any reason shall not exempt either Party from paying to
the other Party any amounts due to such Party and outstanding at the time of
such expiration or termination. Except as expressly stated otherwise herein,
remedies under this Agreement are cumulative, and nothing in this Agreement
shall prevent either Party, in the case of a material breach (after expiration
of applicable cure period and notice periods), from terminating this Agreement
and seeking to enforce its rights under this Agreement.

     (b) Purchase of Bulk Drug. Upon expiration or termination of this Agreement
for any reason, whichever is sooner (but in the case of termination, only if
directed by the terminating Party in the notice of termination), Lonza shall
manufacture and Trubion shall purchase in accordance with the provisions hereof,
any and all amounts of Bulk Drug which are subject to outstanding Firm Orders
issued hereunder prior to the date on which notice of such termination is given,
or prior to the expiration date, as applicable.

     (c) Cancellation of Firm Orders. Upon termination of this Agreement in its
entirety by Trubion pursuant to Section 18.2(a)(1), (d), (e), (f) or (g)(1)
hereof, Trubion may, in its

                                    Page 39

<PAGE>

sole discretion, cancel, in whole or in part, any outstanding Firm Orders and
shall have no obligation to pay any Cancellation Fees (except as otherwise
required under and in accordance with the terms of Section 18.2(f)) or other
amounts related to such cancelled Firm Orders.

     (d) Transitional Manufacturing Obligations. In the event of termination of
this Agreement by either Party, other than termination by Lonza pursuant to
Section 18.2(a)(2) or 18.2(g)(2) hereof or termination by Trubion pursuant to
Section 18.2(e), Lonza shall, at Trubion's written request, continue to provide
Services hereunder to Trubion until such time as a new production site for Bulk
Drug has been approved by the FDA, EMEA, and/or other applicable regulatory
authorities; provided, however, (i) unless otherwise agreed, Lonza shall not be
required to provide Services longer than one (1) year after the effective date
of such termination; (ii) in the event Trubion engages Lonza to provide Services
pursuant to this Section 18.3(d), Section 18.3(c) shall have no force or effect
with respect to the Services for which Lonza has been engaged; and (iii) Trubion
shall be required to purchase any inventory of conforming Bulk Drug in
accordance with Section 18.3(b) above, regardless of the reason for termination
of this Agreement.

     (e) Return of Confidential Information.

          (1) Return of Trubion Confidential Information. Upon expiration or
termination of this Agreement, Lonza shall, unless otherwise directed by
Trubion, promptly (i) return or, at Trubion's election, destroy all quantities
of Trubion Material, including without limitation all Cell Lines, Master Cell
Banks, Working Cell Banks, and all other Trubion Material, and all portions of
the foregoing, with any such return or destruction to be certified in writing to
Trubion by an authorized Lonza officer, (ii) deliver all Manufacturing
Documentation to Trubion, (iii) return all Trubion Confidential Information to
Trubion, except for a single copy and/or sample which may be retained for
documentation purposes only and which shall remain subject to the obligations of
nonuse and confidentiality set forth in this Agreement, and (iv) deliver to
Trubion all Bulk Drug (provided Trubion has paid the related Product Price for
such Bulk Drug) and any retention and reserve samples being held by Lonza
pursuant to this Agreement, provided that Lonza may retain one set of such
samples for documentation purposes only, and provided, further, that, with
respect to any such retained samples, the obligations of nonuse and
confidentiality set forth in this Agreement shall apply indefinitely.

          (2) Return of Lonza Confidential Information. Upon expiration or
termination of this Agreement in its entirety, and at Lonza's written request,
Trubion shall promptly return all Lonza Confidential Information to Lonza,
except for a single copy and/or sample which may be retained by Trubion for
documentation purposes only and which shall remain subject to the obligations of
nonuse and confidentiality set forth in this Agreement.

                                    Page 40
<PAGE>

     (f) Survival; Accrued Rights and Obligations. The terms of Sections 4.2(b),
5, 6.1, 6.2(c), 8, 9.2(b) and (c), 9.3, 10, 11.1, 12.1, 12.6(a), 12.7, 13, 14,
15, 16, 17, 18.3, 19.4, 20, 21.1, and 23 will survive the expiration or
termination of this Agreement for the period set forth therein, or, if no period
is set forth therein, then indefinitely. Except as otherwise expressly set forth
herein, any termination or expiration of this Agreement shall be without
prejudice to any right which shall have accrued to the benefit of either Party
and shall not relieve either Party of any obligation which has accrued prior to
the effective date of such termination or expiration, which obligations shall
remain in full force and effect for the period provided therein or, if no period
is provided therein, then such obligations shall remain in full force and effect
indefinitely.

                            SECTION 19. FORCE MAJEURE

19.1 Effects of Force Majeure. No Party shall be in breach of this Agreement if
there is any failure of performance under this Agreement occasioned by any
reason beyond the control and without the fault or negligence of the Party
affected thereby, including without limitation an act of God, fire, act of
government or state, war, civil commotion, insurrection, terrorism, embargo,
prevention from or hindrance in obtaining energy or other utilities, labor
disputes of whatever nature or any other reason beyond the control and without
the fault or negligence of the Party affected thereby (a "Force Majeure Event").
Such excuse shall continue as long as the Force Majeure Event continues. Upon
cessation of such Force Majeure Event, the affected Party shall promptly resume
performance hereunder.

19.2 Notice of Force Majeure. Each Party agrees to give the other Party prompt
written notice of the occurrence of any Force Majeure Event, the nature thereof,
and the extent to which the affected Party will be unable fully to perform its
obligations hereunder. Each Party further agrees to use reasonable efforts to
correct the Force Majeure Event as quickly as possible and to give the other
Party prompt written notice when it is again fully able to perform such
obligations.

19.3 Allocation of Capacity. If, as a result of a Force Majeure Event, Lonza at
any time is unable fully to supply outstanding Firm Orders for Bulk Drug, Lonza
shall use reasonable efforts to equitably allocate its available resources and
production capacity among Trubion and Lonza's other customers, as the case may
be, taking into consideration the respective requirements of each during a
reasonable time period prior to the allocation, as well as such requirements
during the allocation period.

19.4 Termination. If, as a result of a Force Majeure Event affecting Lonza,
Lonza is unable fully to perform its obligations under this Agreement for any
consecutive period of ***, then, unless the Parties mutually agree in writing
upon a shorter time period, Trubion shall have the right to terminate this
Agreement, upon providing written notice thereof to Lonza, and such termination
shall be effective *** from the effective date of such notice. If, as a result
of a Force Majeure Event affecting Trubion, Trubion is unable fully to perform
its obligations under this Agreement for any consecutive period of ***, then,
unless the Parties mutually agree in writing upon a shorter time period, Lonza
shall have the right to terminate this Agreement, upon providing written notice
thereof to Trubion, and such termination shall be effective *** from the

                                     Page 41

<PAGE>

effective date of such notice. If this Agreement is terminated by Trubion
pursuant to this Section 19.4, then upon Trubion's written request, Lonza will
provide reasonable assistance to Trubion in locating an alternative manufacturer
for the Product. Trubion shall reimburse Lonza for its reasonable costs incurred
in rendering such assistance.

                              SECTION 20. INSURANCE

20.1 Lonza Insurance Coverage Required. During the Term and for an additional
*** thereafter as may be necessary to cover claims associated with Bulk Drug
supplied by Lonza hereunder, Lonza shall obtain, pay for, and keep in full force
and effect insurance coverage as follows:

     (a) Commercial General Liability Insurance. Lonza, at its sole expense,
shall secure and maintain in force, commercial general liability insurance
written on a claims made basis with combined bodily injury, property damage and
personal injury liability limits of not less than *** per occurrence with
separate *** general and products/completed operations annual aggregate limits.
Coverage shall be provided for, but not limited to, premises-operations,
independent contractors, products/completed operations, blanket contractual
liability, broad form property damage, personal and advertising injury and cross
liability (or severability of interests clause).

     (b) Workers' Compensation Insurance. Lonza shall, at its sole expense,
secure and maintain in force, workers' compensation and employers liability
insurance. Coverage shall include a broad form all states endorsement. Statutory
workers' compensation limits shall be provided together with at least the
following employers liability limits:

          (1) *** each accident, bodily injury by accident;

          (2) *** annual aggregate bodily injury by disease; and

          (3) *** each employee, bodily injury by disease.

     Lonza's umbrella and excess liability policies shall be structured to
provide limits in excess of the above employers liability limits. Lonza shall
also carry and maintain in force at all times relevant hereto such other
insurance as is required by applicable Legal Requirements for the conduct of its
business.

20.2 Trubion Liability Insurance. During the Term and thereafter as may be
necessary to cover claims associated with Bulk Drug supplied by Lonza hereunder,
Trubion shall obtain, pay for, and keep in full force and effect with one or
more reputable insurance carriers commercial general liability insurance in an
amount not less than *** per occurrence, plus an umbrella policy of not less
than ***, and products/clinical trials liability insurance in an amount not less
than ***. Trubion shall also carry and maintain in force at all times relevant
hereto such other insurance as is required by applicable Legal Requirements for
the conduct of its business.

                                     Page 42

<PAGE>

20.3 Additional Insurance Requirements. The following additional requirements
shall apply.

     (a) Deductibles. Each Party shall be permitted to maintain reasonable
deductibles or self insured retentions. Each Party shall upon the other Party's
request provide notice of its deductibles or self insured retentions. Each Party
shall remain responsible for all payments in connection with that Party's
deductibles or self insured retention levels, and neither the other Party nor
the other Party's insurance shall not be called upon to pay or contribute to any
such deductible or self insured retention payments.

     (b) Cancellation. With respect to the insurance policies required
hereunder, if a Party's insurance policy is cancelled, materially and adversely
altered, or not renewed, such Party shall promptly and within at least *** of
such event notify the other Party.

     (c) [intentionally deleted]

     (d) Insurer Integrity. Each Party shall purchase insurance coverage from
insurers reasonably acceptable to the other Party and with good financial
integrity and shall be rated no less than A- VII by A.M. Best's insurance rating
service.

     (e) Certificates. Each Party shall deliver to the other Party certificates
evidencing the existence and continuation of the insurance policies required
hereunder from time to time upon the other Party's request.

     (f) Waiver of Subrogation. All policies to be maintained by the Parties
hereunder shall contain a waiver of the insurer's rights to subrogate against
the other Party.

                             SECTION 21. ASSIGNMENT

21.1 Assignment. This Agreement shall be binding upon the successors and assigns
of the Parties and the name of a Party appearing herein shall be deemed to
include the names of its successors and assigns. No Party may assign its
interest under this Agreement without the prior written consent of the other
Party; provided, however, that either Party may assign its interest under this
Agreement, without the prior written consent of the other Party, to a successor
of the assigning Party's business by reason of merger, sale of all or
substantially all of its assets or other form of acquisition, so long as such
successor agrees in writing to assume all of the obligations of the assigning
Party under this Agreement. Any purported assignment without a required consent
shall be void. No assignment shall relieve any Party of responsibility for the
performance of any obligation which accrued prior to the effective date of such
assignment.

                                     Page 43

<PAGE>

                         SECTION 22. DISPUTE RESOLUTION

22.1 Dispute Resolution. The Parties recognize that a bona fide dispute as to
certain matters may from time to time arise during the term of this Agreement
which relates to a Party's rights and/or obligations hereunder. In the event of
the occurrence of such a dispute, any Party may, by written notice to the other
Parties, have such dispute referred to their respective officers designated
below, or their successors, for attempted resolution by good faith negotiations
within thirty (30) days after such notice is received. The original designated
officers are as follows:

     For Trubion - Peter A. Thompson, MD, President and CEO

     For Lonza - ***

     In the event the designated officers are not able to resolve such dispute
within such thirty (30)-day period, or such other period of time as the Parties
may mutually agree in writing, each Party shall have the right to pursue any and
all remedies available at law or in equity.

22.2 Exclusions. Section 22.1 above shall not apply to any disputes arising
under Section 16 (Confidentiality) or to disputes relating to a Party's
intellectual property. In addition, disputes regarding nonconformity of Bulk
Drug will be referred, first, to the officers designated above and then, in the
event such officers are unable to resolve such dispute, to a mutually acceptable
qualified independent Third Party whose fees shall be paid by the non-prevailing
Party, in accordance with the terms of Section 8.1(b) and (c).

                [the remainder of this page intentionally blank]

                                     Page 44

<PAGE>

                            SECTION 23. MISCELLANEOUS

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

     If to Lonza:    ***

     with a copy to: ***

     If to Trubion:  Trubion Pharmaceuticals, Inc.
                     2401 Fourth Avenue, Suite 1050
                     Seattle, WA 98121
                     Attention: Legal Department
                     Facsimile: (206) 838-0503

     with a copy to: Trubion Pharmaceuticals, Inc.
                     2401 Fourth Avenue, Suite 1050
                     Seattle, WA 98121
                     Attention: Dale Scott
                     Facsimile: (206) 838-0503

23.2 Applicable Law. This Agreement shall be governed by and construed in
accordance with the internal substantive laws of the State of New York (without
reference to the choice of law rules of such state).

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<PAGE>

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

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

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

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

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

23.8 Counterparts. This Agreement and any amendments hereto may be executed in
any number of counterparts, each of which shall be deemed an original and all of
which shall constitute the same instrument. This Agreement may be executed by
facsimile or original, and a facsimile signature shall be deemed to be and shall
be as effective as an original signature.

23.9 Entirety; Amendments. This Agreement, including any exhibits and schedules
attached hereto and referenced herein, constitutes the full understanding of the
Parties and is the final and complete expression of their agreement with respect
to the specific subject matter hereof. The terms of the January 2004 Agreement
continue in force and are not affected by this Agreement. No terms, conditions,
understandings or agreements purporting to modify, vary, or supplement the terms
of this Agreement shall be binding unless it is hereafter made in writing and
signed by each of the Parties. No modification to this Agreement shall be
effected by the acknowledgment or acceptance of any purchase order or shipping
instruction forms or similar documents containing terms or conditions at
variance with or in addition to those set forth herein.

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<PAGE>

23.10 Preference. Unless otherwise specifically provided to the contrary in any
exhibit or schedule to this Agreement, in the event of a conflict between the
main body of this Agreement and the exhibits and schedules hereto, the terms of
the main body of this Agreement shall control. And, unless otherwise
specifically provided to the contrary in the Quality Agreement, in the event of
a conflict between this Agreement and the Quality Agreement, the terms of this
Agreement shall control.

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

TRUBION PHARMACEUTICALS, INC.           LONZA BIOLOGICS ***

By: /s/ Peter A. Thompson               By: ***
    ---------------------------------       ------------------------------------
Name: Peter A. Thompson, M.D.           Name: ***
Title: President & CEO                  Title ***

                                     Page 47

<PAGE>

                          EXHIBIT A - QUALITY AGREEMENT

                                [to be attached]

                                     Page 48

<PAGE>

                            EXHIBIT B - COORDINATORS

                                     TRUBION

<TABLE>
<S>                                       <C>
Trubion's Primary Business Coordinator    ***

Trubion's Backup Business Coordinator     ***

Trubion's Primary Technical Coordinator   ***

Trubion's Backup Technical Coordinator    ***
</TABLE>

                                      LONZA

<TABLE>
<S>                                       <C>
Lonza's Primary Business Coordinator      ***

Lonza's Backup Business Coordinator       ***

Lonza's Primary Technical Coordinator     ***

Lonza's Backup Technical Coordinator      ***
</TABLE>

                                     Page 49
<PAGE>

                                    EXHIBIT C

                 SCHEDULE FOR MINIMUM RUNS/BATCHES AT *** SCALE

<TABLE>
<CAPTION>
                             INITIAL ESTIMATED OOF      INITIAL ESTIMATED      LB TO PROVIDE UPDATED
        NO. OF BATCHES PER      DATE (AS OF THE      RELEASE DATE (AS OF THE   ESTIMATED OOF DATE ON
 RUNS        CAMPAIGN           EFFECTIVE DATE)           EFFECTIVE DATE             OR BEFORE
-----   ------------------   ---------------------   -----------------------   ---------------------
<S>     <C>                  <C>                     <C>                       <C>
 1-2            ***                   ***                      ***                      ***
 3-7            ***                   ***                      ***                      ***
 8-15           ***                   ***                      ***                      ***
16-23           ***                   ***                      ***                      ***
24-31           ***                   ***                      ***                      ***
</TABLE>

*    OOF = out of freeze. The date of removal of the vial of cells from frozen
     storage for fermentation.

                                     Page 50

<PAGE>

                                    EXHIBIT D

                     INITIAL LIST OF CRITICAL RAW MATERIALS

                                       ***

                                     Page 51

<PAGE>

                                    EXHIBIT E

                        COPY OF BULK DRUG SPECIFICATIONS
                       (CURRENT AS OF THE EFFECTIVE DATE)

                                 [see attached]

                                     Page 52

<PAGE>

14 CERTIFICATE OF ANALYSIS

<TABLE>
<S>                            <C>
Lot Number:                    ____________
Product:                       TRU-015
                               (Part Number 174303)
Trubion Code:                  BLD
Cell Line:                     ***
Fermenter ID:                  ____________
Date of Manufacture:           ____________
Lot Size:                      kg (actual drug substance g)
Number of containers filled:   __________ x 1L __________ x 125 mL
Final Formulation Buffer:      ***
***
</TABLE>

                                     Page 53

<PAGE>

                       SCHEDULE 1 - DESCRIPTION OF PRODUCT

DESCRIPTION OF PRODUCT.

For purposes of the Agreement, the term "Product" means the proprietary Small
Modular ImmunoPharmaceutical (SMIP(TM)) known as TRU-015.

                                     Page 54

<PAGE>

                      SCHEDULE 2 - DESCRIPTION OF SERVICES

*** Runs described in Exhibit C, and the other manufacturing services and other
services to be performed by Lonza under the Agreement, as more particularly
described in the main body of the Agreement.

                                     Page 55

<PAGE>

                  SCHEDULE 3 - PRICES AND SCHEDULE OF PAYMENTS

                                  PRODUCT PRICE

Product Price.

The Product Price for Runs at the *** fermentation scale, through ***, shall be
calculated as follows:

     -    For campaigns of *** Batch, the Product Price is *** per Batch;

     -    For campaigns of *** Batches, the Product Price is *** per Batch;

     -    For campaigns of *** Batches, the Product Price is *** per Batch; and

     -    For campaigns of *** Batches, the Product Price is *** per Batch.

***

Payment Terms.

The Product Price is payable as follows:

     -    *** upon Out of Freeze of the Batch; and

     -    *** upon issue of the Certificate of Analysis and Certificate of
          Compliance for the Batch.

Cancellation Fees for a Run are payable as follows:

     -    *** on the Updated Estimated Out of Freeze Date for such Run (or, if
          none, the Initial Estimated Out of Freeze Date for such Run); and

     -    *** on the initial estimated release date referred to in Exhibit C for
          such Run.

                                     Page 56

<PAGE>

              SCHEDULE 4 - COMMERCIAL TERMS FOR TECHNOLOGY TRANSFER

OUTLINE OF TERMS FOR THE TECHNOLOGY TRANSFER OF THE PROCESS FOR MANUFACTURE OF
PRODUCT TO TRUBION OR TO A THIRD PARTY

This Schedule 4 is the Schedule that is referred to in Section 13.4 of the
Manufacturing Services Agreement ("Manufacturing Services Agreement") between
LONZA BIOLOGICS *** ("Lonza") and TRUBION PHARMACEUTICALS, INC. ("Trubion")
related to the Technology Transfer of the Manufacturing Process from time to
time to Trubion or its designee. This Schedule 4 sets forth some additional
commercial terms for any Technology Transfer. All capitalized terms used but not
defined in this Schedule 4 shall have the meanings given in the Manufacturing
Services Agreement.

PROCESS KNOW HOW, MATERIALS AND SERVICES

1. DOCUMENTATION; INFORMATION

          1.1 PROCESS DOCUMENTATION/PROCESS KNOW HOW.

     The following information and Process Know How and (subject to Section 2.2
     below) all pertinent information necessary or useful to manufacture the
     Product and to support regulatory filings for the Product will be made
     available to Trubion or its Third Party designee for use in accordance with
     the terms of the Manufacturing Services Agreement and the Technology
     Transfer Agreement.

FOR THE AVOIDANCE OF DOUBT, THE PROCESS KNOW HOW LISTED BELOW HAS BEEN PREPARED
FOR USE BY LONZA TO ASSIST WITH THE OPERATION OF THE PROCESS AT LONZA'S
PREMISES. NO WARRANTIES ARE GIVEN WITH REGARD TO THE FITNESS FOR USE OF THE
PROCESS KNOW HOW IN QUESTION BY ANY OTHER PARTY OR AT ANY OTHER PREMISES.

               ***

          1.2 DEVELOPMENT REPORTS

          Trubion may distribute internally and/or to the Third Party copies of
          all Product related development reports previously provided by Lonza
          to Trubion under the Manufacturing Services Agreement. Such reports
          should be used for the purposes permitted under the Manufacturing
          Services Agreement or the Technology Transfer Agreement only and are
          subject to the qualifications made in respect of the same pursuant to
          the Manufacturing Services Agreement. No additional information will
          be provided with respect to the above mentioned development reports.

          1.3 ANALYTICAL METHODS

               ***.

2. MATERIALS

                                     Page 57

<PAGE>

          2.1 ***

          2.2 ***

          2.3 .***

3.  CONSULTANCY

          3.1 Lonza will make resources available to assemble documentation and
          materials for the Technology Transfer as outlined in the Manufacturing
          Agreement, this Schedule 4 and the Technology Transfer Agreement, and
          use all reasonable endeavours to answer any questions raised by the
          Third Party or Trubion regarding these documents or materials.

          3.2 Lonza will make resources available to the Third Party and/or
          Trubion for at least *** face-to-face meetings for the additional
          review of specific documentation relating to the manufacture of
          Product at Lonza. The Third Party and/or Trubion will provide Lonza
          with a full agenda and *** written notice prior to requesting such a
          meeting with Lonza. Lonza will make all reasonable efforts to
          accommodate a meeting within the timeframe specified but cannot
          guarantee availability of specific staff. All costs (flights, hotels,
          subsistence etc) incurred by Lonza personnel to attend these meeting
          (if not at Lonza's premises) will be paid by Trubion, subject to the
          terms of Section 4 below.

          3.3 If requested by Trubion, Lonza will make resources available at
          Trubion's or the Third Party's facility for the review of specific
          documents and monitoring of operation of the Process at Trubion's or
          the Third Party's facility.

          3.4 Lonza will consider favourably any request from Trubion or the
          Third Party for additional information over that provided as set out
          in the Technology Transfer Agreement. Terms for this additional
          information shall be agreed between the Parties before the information
          is provided. In those cases where no additional technology transfer
          fee is requested, the effort involved in transferring the information
          will still be considered as consultancy and billed accordingly.

          3.5 Lonza will provide up to a total of *** (or FTE's: full time
          equivalents) to support the services detailed in the Manufacturing
          Services Agreement, this Schedule 4, and the Technology Transfer
          Agreement. Irrespective of the total FTE's supplied, in no event shall
          the consultancy services detailed herein be available more than ***
          following completion of the Technology Transfer services. Further
          provision of consultancy services beyond such date shall be subject to
          terms and conditions to be agreed.

4. PRICE

                                     Page 58

<PAGE>

          4.1 The Price for the first Technology Transfer shall not exceed ***.
          The Price shall to a large extent be contingent upon the scope of
          activities carried out and the type and value of Lonza's proprietary
          intellectual property provided through the Technology Transfer.

          4.2 The Price for a second and any further Technology Transfers in
          relation to the Product will be reduced to an amount which will
          compensate Lonza for its reasonable costs and expenses (including
          consultancy time) related to the Technology Transfer services and
          activities.

          4.3 The Prices set forth above are the total amount that Trubion will
          be obligated to pay for the Technology Transfer, and the Prices
          include all fees and expenses for the transfer of information
          (including the Process Know How), technology, documentation and
          materials, and the performance of all technical assistance,
          consultancy and other services and activities related to the
          Technology Transfer and described in the Manufacturing Services
          Agreement, this Schedule 4 and/or the Technology Transfer Agreement,
          except for reasonable out-of-pocket expenses (airfare, lodging, meal
          and ground transportation expenses) incurred by Lonza during
          out-of-town travel, which will be reimbursed by Trubion subject to the
          terms of Section 4.4 below.

          4.4 All travel must be preapproved by Trubion in writing in order for
          the related travel expenses to be eligible for reimbursement. Trubion
          will not pay any mark-up or overhead charge for expense reimbursement.
          In addition, travel expenses incurred by Lonza are subject to the
          following limitations:

               (i) Airfare shall be based on coach class of travel and shall be
          based on the lowest logical airfare available without consideration of
          frequent flyer mileage or other perquisites offered to the traveler.

               (ii) Lodging shall be based on a single room in a moderately or
          mid-priced business class hotel or motel. The expense of suites or
          luxury accommodations shall not be reimbursed.

               (iii) Meal expenses during out-of-town travel shall be reimbursed
          if they are reasonable and appropriate for the particular location.
          Expenses for alcoholic beverages, lavish meals and entertainment shall
          not be reimbursed.

               (iv) Automobile rental expenses during out-of-town travel shall
          be reimbursed based on the rental rate of compact or mid-size
          automobile. Automobile rentals of luxury, sport or sport utility
          vehicles shall not be reimbursed.

          Lonza shall use reasonable efforts to minimize travel expenses
          incurred in performing the Services. Such efforts will include without
          limitation purchasing airfare at least fourteen (14) days in advance
          of expected travel, when feasible, and limiting travel where
          appropriate by coordinating activities to combine efforts on single
          trips.

                                     Page 59

<PAGE>

                [the remainder of this page intentionally blank]

                                     Page 60exv10w44

 

Exhibit 10.44

RESTRICTED STOCK AWARD AGREEMENT

          THIS AGREEMENT (the “Agreement”) is made effective as of [GRANT DATE] (the “Grant Date”),
between ITC Holdings Corp., a Michigan corporation (hereinafter called the “Company”), and [NAME],
a member of the Board who is not an employee of the Company, hereinafter referred to as the
“Grantee”. Capitalized terms not otherwise defined herein shall have the same meanings as in the
Plan (as defined below).

          WHEREAS, the Company desires to grant the Grantee shares of Common Stock, pursuant to the
terms and conditions of this Agreement (the “Restricted Stock Award”) and the Amended and Restated
2003 Stock Purchase and Option Plan for Key Employees of the Company and Its Subsidiaries (the
“Plan”) (the terms of which are hereby incorporated by reference and made a part of this
Agreement).

          WHEREAS, the Board has determined that it would be to the advantage and best interest of the
Company and its shareholders to grant the shares of Common Stock provided for herein to the Grantee
in connection with the director compensation policy for members of the Board that are not employees
of the Company, and has advised the Company thereof and instructed the undersigned officer to grant
said Restricted Stock Award;

          NOW, THEREFORE, in consideration of the mutual covenants herein contained and other good and
valuable consideration, receipt of which is hereby acknowledged, the parties hereto do hereby agree
as follows:

          1. Grant of the Restricted Stock. Subject to the terms and conditions of the Plan and
the additional terms and conditions set forth in this Agreement, the Company hereby grants to the
Grantee                     1            shares of Common Stock (hereinafter called the “Restricted Stock”).
The Restricted Stock shall vest and become nonforfeitable in accordance with Section 2 hereof.

          2. Vesting.

          The Restricted Stock shall become 100% vested and nonforfeitable upon the earliest to occur of
(i) the three year anniversary of the Grant Date, (ii) the date the Grantee ceases to be a member
of the Board other than due to removal from the Board for cause, and (iii) a Change of Ownership.

          If, prior to the Restricted Stock becoming 100% vested and nonforfeitable pursuant to Section
2(a) hereof, the Grantee is removed as a member of the Board for cause, the Grantee shall forfeit
the Restricted Stock without consideration therefor.

          3. Certificates.

          (a) Certificates evidencing the Restricted Stock shall be issued by the Company and shall be
registered in the Grantee’s name on the stock transfer books of the Company promptly after the date
hereof, but shall remain in the physical custody of the Company or its

 

			
	1	 	Number of shares to be determined by dividing
$45,000 by the closing price per share of Common Stock reported on the New York
Stock Exchange for the Grant Date.

1

 

designee at all times prior to the vesting of such Restricted Stock pursuant to Section 2.
The Grantee hereby acknowledges and agrees that the Company shall retain custody of such
certificate or certificates until the restrictions imposed by Section 2 on the Common Stock granted
hereunder lapse. As a condition to the receipt of this Restricted Stock Award, the Grantee shall
deliver to the Company a stock power, duly endorsed in blank, relating to the Restricted Stock. No
certificates shall be issued for fractional shares.

          (b) As soon as practicable following the vesting of the Restricted Stock pursuant to Section
2, certificates for the Restricted Stock which shall have vested shall be delivered to the Grantee
or to the Grantee’s legal guardian or representative along with the stock powers relating thereto.

          4. Rights as a Stockholder. The Grantee shall be the record owner of the Restricted
Stock unless or until such Restricted Stock is forfeited pursuant to Section 2 hereof or is
otherwise sold or disposed of as permitted under Section 6 of this Agreement, and as record owner
shall be entitled to all rights of a common stockholder of the Company (including, without
limitation, the payment of any dividends on the shares of Restricted Stock).

          5. Legend on Certificates. The Restricted Shares shall contain a legend stating that
they are subject to transfer restrictions and shall be subject to such stop transfer orders and
other restrictions as the Board may deem reasonably advisable under the Plan or the rules,
regulations, and other requirements of the Securities and Exchange Commission, any stock exchange
upon which such Restricted Shares are listed, any applicable federal or state laws and the
Company’s Articles of Incorporation and Bylaws, and the Committee may cause a legend or legends to
be put on any such certificates to make appropriate reference to such restrictions.

          6. Transferability. The Restricted Stock may not, at any time prior to becoming
vested pursuant to Section 2 or thereafter, be transferred, sold, assigned, pledged, hypothecated
or otherwise disposed of unless such transfer, sale, assignment, pledge, hypothecation or other
disposition complies with the provisions of this Agreement.

          7. Securities Laws. The Company may require the Grantee to make or enter into such
written representations, warranties and agreements as the Committee may reasonably request in order
to comply with applicable securities laws or with this Agreement. The granting of the Restricted
Stock hereunder shall be subject to all applicable laws, rules and regulations and to such
approvals of any governmental agencies as may be required.

          8. Grantee’s Continued Service on the Board. Nothing contained in this Agreement or
in any other agreement entered into by the Company and the Grantee guarantees that the Grantee will
continue to serve as a member of the Board for any specified period of time.

          9. Change in Capitalization. If, prior to the time the restrictions imposed by
Section 2 on the Restricted Stock granted hereunder lapse, the Company shall be reorganized,
recapitalized or restructured, consolidated or merged with another corporation, or otherwise
undergo a significant corporate event, (a) the Restricted Stock may be adjusted or cancelled and
(b) any stock, securities or other property exchangeable for Common Stock pursuant to such
reorganization, recapitalization, restructuring, consolidation, merger or other corporate event,
shall be deposited with the Company and shall become subject to the restrictions and conditions of
this Agreement to the same extent as if it had been the original property granted hereby, all
pursuant to Sections 8 and 9 of the Plan.

2

 

          10. Payment of Taxes. The Grantee shall have full responsibility, and the Company
shall have no responsibility, for satisfying any liability for any federal, state or local income
or other taxes required by law to be paid with respect to such Restricted Stock, including upon the
vesting of the Restricted Stock. In connection with the foregoing, the Grantee may, at his or her
option, elect to recognize the fair value of the Restricted Stock upon the Grant Date pursuant to
Section 83 of the Internal Revenue Code of 1986, as amended. The Grantee is hereby advised to seek
his own tax counsel regarding the taxation of the grant of Restricted Stock made hereunder.

          11. Limitation on Obligations. The Company’s obligation with respect to the
Restricted Stock granted hereunder is limited solely to the delivery to the Grantee of shares of
Common Stock on the date when such shares are due to be delivered hereunder, and in no way shall
the Company become obligated to pay cash in respect of such obligation. This Restricted Stock
Award shall not be secured by any specific assets of the Company or any of its Subsidiaries, nor
shall any assets of the Company or any of its subsidiaries be designated as attributable or
allocated to the satisfaction of the Company’s obligations under this Agreement. In addition, the
Company shall not be liable to the Grantee for damages relating to any delays in issuing the share
certificates to him (or his designated entities), any loss of the certificates, or any mistakes or
errors in the issuance of the certificates or in the certificates themselves.

          12. Notices. Any notice to be given under the terms of this Agreement to the Company
shall be addressed to the Company in care of its Secretary, and any notice to be given to the
Grantee shall be addressed to him at the address given beneath his signature hereto. By a notice
given pursuant to this Section 12, either party may hereafter designate a different address for
notices to be given to him. Any notice that is required to be given to the Grantee shall, if the
Grantee is then deceased, be given to the Grantee’s personal representative if such representative
has previously informed the Company of his status and address by written notice under this Section
12. Any notice shall have been deemed duly given when enclosed in a properly sealed envelope or
wrapper addressed as aforesaid, deposited (with postage prepaid) in a post office or branch post
office regularly maintained by the United States Postal Service

          13. Governing Law. The laws of the State of Michigan shall govern the interpretation,
validity and performance of the terms of this Agreement regardless of the law that might be applied
under principles of conflicts of laws.

          14. Restricted Stock Award Subject to Plan. The Restricted Stock Award shall be
subject to all terms and provisions of the Plan, to the extent applicable to the Restricted Stock.
In the event of any conflict between this Agreement and the Plan, the terms of the Plan shall
control.

          15. Signature in Counterparts. This Agreement may be signed in counterparts, each of
which shall be an original, with the same effect as if the signatures thereto and hereto were upon
the same instrument.

[Continued on next page.]

3

 

     IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the Grant Date.

	 	 	 	 	 	 	 
	 	 	ITC HOLDINGS CORP.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	 	 	 
	 

	 	 	 	 
	 	 
	 
	 	 	 	 	 	 
	 

	 	Name:	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	Title:	 	 	 	 
	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	GRANTEE	 	 
	 
	 	 	 	 	 	 
	 	 	 
	 	 
	 

	 	[NAME]	 	 	 	 

4

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