Section 10.1, the Patties shall conduct an investigation of such non-conformance in accordance with each Pattys standard operating procedures relating to same. In the event that, after such investigation and retesting, if any, LONZA does not confirm such non-conformity, the parties shall agree to conduct an audit of the investigation relating to such Clinical Batch or otherwise in a good faith attempt to agree upon a settlement of the issue. In the event that the parties cannot resolve the issue, a qualified and independent arbitrator selected jointly by LONZA and PROTEON shall review the matter and provide a written decision that shall, save for manifest error on the face of the decision, be binding on both LONZA and PROTEON. If it is determined pursuant to this Section 10.2 that the Clinical Batch is Conforming Drug Substance, then LONZA shall have no liability to PROTEON with respect to such Clinical Batch, and PROTEON shall pay for such Clinical Batch and for the fees associated with any dispute regarding the Clinical Batch shall be treated in all other respects under this Agreement as though it conformed with all of the warranties set forth in Section 14.2.1 of this Agreement.
10.3 LONZA Liability for Non-Conforming Drug Substance; Replacement. If PROTEON issues a notice of rejection of a Clinical Batch pursuant to Section 10.1 or revokes its acceptance of a Clinical Batch pursuant to Section 10.1 and the Parties or a qualified and independent arbitrator selected using the procedure specified in Section 102 determine that such Batch is Non-Conforming Drug Substance, then LONZA shall, as soon as it is commercially practicable to do so, replace such Non-Conforming Drug Substance with Conforming Drug Substance (the Replacement Drug Substance). Delivery of Replacement Drug Substance shall be at no additional charge to PROTEON. Notwithstanding anything to the contrary contained herein, delivery of Replacement Drug Substance shall be PROTEONs sole remedy with respect to the Drug Substance, and in furtherance thereof PROTEON waives all other remedies at law or in equity. LONZA shall pay for the fees associated with any dispute regarding a Clinical Batch that is determined to be Nonconforming Drug Substance.
10.4 Cooperation in Investigations; Disposition of Non-Conforming Drug Substance. Each Party shall act in good faith and shall cooperate with the other Party, with any qualified independent Third-Party laboratory in connection with an investigation, and with the arbitrator, as to the existence of or source of nonconformity with respect to a Clinical Batch supplied under this Agreement. In testing the Batch, any independent Third-Party laboratory shall use analytical testing methods as agreed upon by the Parties. At PROTEONS election, LONZA shall either (i) dispose of any Non-Conforming Drug Substance in accordance with all relevant laws, rules and regulations with respect to such disposal, at LONZAs cost if LONZA was liable for the nonconformity in accordance with Section 10.3 and at PROTEONs cost if LONZA was not liable for the nonconformity in accordance with Section 10.2, or (ii) deliver the Non-Conforming Drug Substance to PROTEON in accordance with Section 5.1.
10.5 Replacement Clinical Batches. In addition to its obligations under Section 10.3 with respect to production and delivery of Replacement Drug Substance, LONZA will, upon PROTEONs request and at PROTEONs expense, use Commercially Reasonable Efforts to produce additional Clinical Batches in cases where a Clinical Batch is not Non-Conforming Drug Substance but where such Clinical Batch does not satisfy PROTEONs requirements.
* CONFIDENTIAL TREATMENT REQUESTED. OMITTED PORTIONS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 PROMULGATED UNDER THE SECURITIES ACT OF 1933, AS AMENDED.