DEVELOPMENT, PROMOTION,
DISTRIBUTION AND SUPPLY AGREEMENT
AMONG
E. R. SQUIBB & SONS, LLC,
BRISTOL-MYERS SQUIBB COMPANY,
AND
IMCLONE SYSTEMS INCORPORATED
DATED AS OF
September 19, 2001
<PAGE>
Confidential treatment requested by Bristol-Myers Squibb Company, Bristol-Myers
Squibb Biologics Company and ImClone Systems Incorporated.
TABLE OF CONTENTS
Page
1. DEFINITIONS...........................................................2
1.1 Accelerated Arbitration Provisions...........................2
1.2 Acquiring Party..............................................2
1.3 Acquisition Agreement........................................2
1.4 Acquisition Subsidiary.......................................2
1.5 Affiliate....................................................2
1.6 Alliance Manager.............................................2
1.7 Allocable Overhead...........................................2
1.8 Allowable Failure Rate.......................................2
1.9 Antitrust Injunction.........................................2
1.10 API..........................................................2
1.11 Audited Party................................................2
1.12 Auditing Party...............................................2
1.13 Base Case Projections........................................2
1.14 BLA Filing Date..............................................2
1.15 BMS..........................................................2
1.16 BMS Dilution Event...........................................3
1.17 BMS Sell-Down................................................3
1.18 Breaching Party..............................................3
1.19 Clinical Budget..............................................3
1.20 Clinical Development Plan....................................3
1.21 Committee....................................................3
1.22 Common Stock.................................................3
1.23 Company......................................................3
1.24 Company SEC Documents........................................3
1.25 cGMP.........................................................3
1.26 Competing Product............................................3
1.27 Compound.....................................................3
1.28 Confidential Information.....................................3
1.29 Co-Promotion Option..........................................3
1.30 Co-Promotion Problem.........................................3
1.31 Cost of Goods Sold...........................................3
1.32 Critical Issue...............................................3
1.33 Current Forecast.............................................3
1.34 Development Costs............................................4
1.35 Distribution Costs...........................................4
1.36 Distribution Fee.............................................4
1.37 Effective Date...............................................4
1.38 Equity Agreements............................................4
1.39 ERS..........................................................4
-i-
<PAGE>
Confidential treatment requested by Bristol-Myers Squibb Company, Bristol-Myers
Squibb Biologics Company and ImClone Systems Incorporated.
1.40 ERS Inventions...............................................4
1.41 ERS Obligations..............................................4
1.42 ERS Proposed Terms...........................................4
1.43 FDA..........................................................4
1.44 Field........................................................4
1.45 Finance Committee............................................4
1.46 Financial Appendix...........................................4
1.47 Finished Product............................................4
1.48 First Commercial Sale........................................4
1.49 First Offer Termination Date.................................4
1.50 Fully Burdened Manufacturing Cost............................4
1.51 GAAP.........................................................5
1.52 General and Administrative Costs.............................5
1.53 Gross Profit.................................................5
1.54 Inability to Supply..........................................5
1.55 IND..........................................................5
1.56 Indemnitee...................................................5
1.57 infringement.................................................5
1.58 Indicative Marketing Budget..................................5
1.59 Initial Regulatory Filing....................................5
1.60 Invention....................................................5
1.61 Joint Commercialization Committee or JCC.....................5
1.62 Joint Executive Committee or JEC.............................5
1.63 Joint Manufacturing Committee or JMC.........................5
1.64 Know-How.....................................................5
1.65 knowledge of the Company.....................................5
1.66 Letter of Intent.............................................6
1.67 Long-Term Inability to Supply................................6
1.68 Low Case Projections.........................................6
1.69 Manufacturing Standards......................................6
1.70 Marketing Budget.............................................6
1.71 Marketing Costs..............................................6
1.72 Marketing Plans..............................................6
1.73 Merck Agreement..............................................6
1.74 Merck Entities...............................................6
1.75 Net Sales....................................................6
1.76 Non-Acquiring Party..........................................6
1.77 Non-Breaching Party..........................................6
1.78 Non-Registrational Studies...................................6
1.79 North America................................................6
1.80 Number of Days to Make Payment...............................6
1.81 Offer........................................................6
1.82 Operating Profit or Loss.....................................6
1.83 Other Compound...............................................7
1.84 Other Operating Income/Expense...............................7
ii
<PAGE>
Confidential treatment requested by Bristol-Myers Squibb Company, Bristol-Myers
Squibb Biologics Company and ImClone Systems Incorporated.
1.85 Partnering Relationships.....................................7
1.86 Party........................................................7
1.87 Patents......................................................7
1.88 Person.......................................................7
1.89 Product......................................................7
1.90 Product Development Committee or PDC.........................7
1.91 Proposed Terms...............................................7
1.92 Q1, Q2, Q3 and Q4............................................7
1.93 Registration.................................................7
1.94 Registration Application.....................................7
1.95 Registrational Studies.......................................7
1.96 Regulatory Authority.........................................8
1.97 Restricted Period............................................8
1.98 Sales Costs..................................................8
1.99 Sales Force Guidelines.......................................8
1.100 Shares.......................................................8
1.101 Short-Term Inability to Supply...............................8
1.102 Specifications...............................................8
1.103 Stockholder Agreement........................................8
1.104 Subsidiary...................................................8
1.105 Summary Clinical Development Plan............................8
1.106 Technology...................................................8
1.107 Termination Date.............................................8
1.108 Territory....................................................8
1.109 Testing Methods..............................................8
1.110 Third Party..................................................8
1.111 Third Party Change of Control Transaction....................8
1.112 Third Party Manufacturer.....................................8
1.113 Trademarks...................................................9
1.114 United States or U.S.........................................9
1.115 Valid Claim..................................................9
2. MANAGEMENT............................................................9
2.1 Joint Executive Committee....................................9
2.2 Finance Committee...........................................11
2.3 Product Development Committee...............................12
2.4 Joint Commercialization Committee...........................13
2.5 Joint Manufacturing Committee...............................15
2.6 Minutes of Committee Meetings...............................16
2.7 Term........................................................17
2.8 Expenses....................................................17
2.9 Alliance Managers...........................................17
3. GRANT OF RIGHTS......................................................18
3.1 Rights Granted to ERS.......................................18
3.2 Restrictions on the Company.................................18
3.3 License to ERS Inventions...................................18
iii
<PAGE>
Confidential treatment requested by Bristol-Myers Squibb Company, Bristol-Myers
Squibb Biologics Company and ImClone Systems Incorporated.
3.4 Trademarks; Logos...........................................18
3.5 Right of First Offer to ERS Regarding the Other Compound....19
3.6 Right of First Negotiation of ERS Regarding Partnering
Transactions.............................................20
3.7 Negotiation of Services.....................................20
3.8 Restrictions on Competing Products..........................20
3.9 The Company's Right to Develop and Market Products..........21
4. DEVELOPMENT AND REGULATORY MATTERS...................................22
4.1 Exchange of Data and Know-How...............................22
4.2 Product Registrations.......................................22
4.3 Scope of Clinical Development Plans and Clinical Budget.....23
4.4 Transition of Clinical Studies..............................24
4.5 Conduct of Clinical Development Plans.......................25
4.6 Funding of Clinical Development Plans.......................26
4.7 IT Support..................................................26
4.8 Delay of Initial Regulatory Filing..........................27
4.9 Suspension of Clinical Development Activities...............27
4.10 Liability...................................................27
5. DISTRIBUTION AND PROMOTION...........................................28
5.1 Generally...................................................28
5.2 Scope of Marketing Budget...................................28
5.3 ERS Responsibilities; Rights................................28
5.4 Marketing Plans.............................................29
5.5 Promotional Materials and Activities........................29
5.6 The Company's Co-Promotion Right............................29
5.7 Distribution and Marketing Costs............................31
6. PAYMENTS.............................................................31
6.1 Upfront Payments to the Company.............................31
6.2 Milestone Payments to the Company...........................31
6.3 Distribution Fees for North America.........................32
6.4 Reduction in Distribution Fee for North America.............32
6.5 Distribution Fees for Japan.................................32
6.6 Allocation of Sales.........................................32
7. PAYMENTS AND REPORTS.................................................32
7.1 Payments....................................................32
7.2 Reports.....................................................33
7.3 Mode of Payment.............................................33
7.4 Records Retention...........................................33
7.5 Audit Request...............................................33
7.6 Cost of Audit...............................................34
7.7 No Non-Monetary Consideration for Sales.....................34
7.8 Taxes.......................................................34
8. MANUFACTURE AND SUPPLY..............................................35
8.1 Supply Obligations..........................................35
8.2 Supply of API; Processing of Finished Product...............35
8.3 Forecasts...................................................36
iv
<PAGE>
Confidential treatment requested by Bristol-Myers Squibb Company, Bristol-Myers
Squibb Biologics Company and ImClone Systems Incorporated.
8.4 Orders for API..............................................36
8.5 Delivery....................................................36
8.6 Purchase Price..............................................37
8.7 Conformity; Specifications; Quality Control.................38
8.8 Acceptance/Rejection; Interim Replacement...................38
8.9 Third Party Manufacturers...................................40
8.10 Inventory Management........................................41
8.11 Shortage of Supply..........................................41
8.12 Inability to Supply.........................................41
9. OWNERSHIP; PATENTS; TRADEMARKS.......................................43
9.1 Ownership...................................................43
9.2 Maintenance of the Patents..................................43
9.3 Patent Enforcement..........................................44
9.4 Infringement Action by Third Parties........................45
10. PUBLICATION; CONFIDENTIALITY.........................................47
10.1 Notification................................................47
10.2 Review......................................................47
10.3 Confidentiality; Exceptions.................................47
10.4 Exceptions to Obligation....................................47
10.5 Limitations on Use..........................................48
10.6 Remedies....................................................48
11. REPRESENTATIONS AND WARRANTIES.......................................48
11.1 Representations and Warranties of the Parties...............48
11.2 Representations and Warranties of the Company...............49
11.3 Representations and Warranties of ERS and BMS...............49
11.4 Representations and Warranties of BMS......................50
12. RECALL; INDEMNIFICATION..............................................50
12.1 Investigation; Recall.......................................50
12.2 Indemnification by ERS and BMS..............................50
12.3 Indemnification by the Company..............................50
12.4 Notice of Indemnification...................................51
12.5 Complete Indemnification....................................51
13. TERM; TERMINATION....................................................51
13.1 Term........................................................51
13.2 Termination for Cause.......................................51
13.3 Termination by ERS..........................................52
13.4 Termination by the Company..................................52
13.5 Termination in Connection With Additional Studies...........52
13.5 Effect of Expiration or Termination.........................52
13.6 Accrued Rights; Surviving Obligations.......................53
14. FORCE MAJEURE........................................................53
14.1 Events of Force Majeure.....................................53
15. ADDITIONAL COVENANTS OF BMS AND BMS GUARANTEE........................53
15.1 Additional Covenants of BMS.................................53
15.2 BMS Guarantee...............................................54
v
<PAGE>
Confidential treatment requested by Bristol-Myers Squibb Company, Bristol-Myers
Squibb Biologics Company and ImClone Systems Incorporated.
16. MISCELLANEOUS........................................................54
16.1 Relationship of Parties.....................................54
16.2 Assignment..................................................54
16.3 Books and Records...........................................54
16.4 Further Actions.............................................55
16.5 Notice......................................................55
16.6 Use of Name.................................................56
16.7 Public Announcements........................................56
16.8 Waiver......................................................56
16.9 Compliance with Law.........................................56
16.10 Severability................................................56
16.11 Amendment...................................................56
16.12 Governing Law...............................................56
16.13 Arbitration.................................................57
16.14 Entire Agreement............................................58
16.15 Parties in Interest.........................................58
16.16 Descriptive Headings........................................58
16.17 Counterparts................................................58
Exhibit 1.13 BASE CASE PROJECTIONS.......................................60
Exhibit 1.46 FINANCIAL APPENDIX..........................................61
Exhibit 1.68 LOW CASE PROJECTIONS........................................67
Exhibit 1.87 PATENTS.....................................................68
Exhibit 2.1 JOINT EXECUTIVE COMMITTEE AND ALLIANCE MANAGERS.............69
Exhibit 4.3(A) CLINICAL BUDGET.............................................70
Exhibit 4.3(B) SUMMARY CLINICAL DEVELOPMENT PLAN FOR 2001-2004.............71
Exhibit 5.2(A) MARKETING BUDGET FOR 2001-2004..............................72
Exhibit 5.2(B) INDICATIVE MARKETING BUDGET FOR 2005-2017...................73
Exhibit 8.12(B)(i)BASE CASE CLINICAL SUPPLY AMOUNT............................74
Exhibit 8.12(B)(ii)BASE CASE COMMERCIAL SUPPLY AMOUNT.........................75
vi
<PAGE>
Confidential treatment requested by Bristol-Myers Squibb Company, Bristol-Myers
Squibb Biologics Company and ImClone Systems Incorporated.
DEVELOPMENT, PROMOTION,
DISTRIBUTION AND SUPPLY AGREEMENT
THIS DEVELOPMENT, PROMOTION, DISTRIBUTION AND SUPPLY AGREEMENT (this
"Agreement"), dated as of September 19, 2001, is entered into by and among E.
R. SQUIBB & SONS, LLC, a limited liability company organized and existing under
the laws of the State of Delaware, having offices located at Route 206 &
Province Line Road, Princeton, New Jersey ("ERS"), BRISTOL-MYERS SQUIBB
COMPANY, a corporation organized and existing under the laws of the State of
Delaware, having offices located at Route 206 & Province Line Road, Princeton,
New Jersey ("BMS") and IMCLONE SYSTEMS INCORPORATED, a corporation organized
under the laws of the State of Delaware, having offices located at 180 Varick
Street, New York, New York 10014 (the "Company").
PRELIMINARY STATEMENTS
A. The Company owns, and/or has exclusive rights to, the Patents and
Know-How in existence as of the Effective Date relating to the Compound.
B. ERS and the Company desire to collaborate on the development and
commercialization of Products using the Compound for application in the Field.
C. ERS wishes to: (i) obtain the exclusive right to distribute, and
the co-exclusive right to develop and promote (together with the Company), the
Products in North America; (ii) obtain the co-exclusive right to develop,
distribute and promote (together with the Company and the Merck Entities), the
Products in Japan; and (iii) use the Company's registered trademarks for the
Products in the Territory in connection with the foregoing, and the Company
desires to grant such rights to ERS, on the terms and conditions set forth in
this Agreement.
D. ERS also wishes to purchase from the Company, and the Company
wishes to supply to ERS, ERS's entire bulk requirements of API, on the terms
and conditions set forth in this Agreement.
E. Simultaneously with the execution of this Agreement, the Company,
BMS and Bristol-Myers Squibb Biologics Company, a Delaware corporation and
wholly owned subsidiary of BMS ("Acquisition Subsidiary"), are entering into an
Acquisition Agreement (the "Acquisition Agreement"), pursuant to which, among
other things, BMS and Acquisition Subsidiary shall commence a tender offer to
acquire approximately 19.9% of the Company's outstanding Common Stock.
F. Simultaneously with the execution of this Agreement, the Company,
BMS and Acquisition Subsidiary are entering into a Stockholder Agreement (the
"Stockholder Agreement", and together with the Acquisition Agreement, the
"Equity Agreements"), pursuant to which, among other things, the Company, BMS
and Acquisition Subsidiary have established certain governance arrangements
among the Company, BMS and Acquisition Subsidiary.
<PAGE>
Confidential treatment requested by Bristol-Myers Squibb Company, Bristol-Myers
Squibb Biologics Company and ImClone Systems Incorporated.
NOW, THEREFORE, in consideration of the foregoing preliminary
statements and the mutual agreements and covenants set forth herein, the
Parties hereby agree as follows:
1. DEFINITIONS.
As used in this Agreement, the following terms shall have the meanings
set forth in this Section 1 unless context dictates otherwise:
1.1 "Accelerated Arbitration Provisions" shall have the meaning
assigned to such term in Section 16.13(b).
1.2 "Acquiring Party" shall have the meaning assigned to such term in
Section 3.8.
1.3 "Acquisition Agreement" shall have the meaning assigned to such
term in the preliminary statements.
1.4 "Acquisition Subsidiary" shall have the meaning assigned to such
term in the preliminary statements.
1.5 "Affiliate" of any Person means any other Person directly or indirectly
controlling, controlled by or under common control with such Person; provided
that for purposes of this Agreement, neither the Company nor any of its
Subsidiaries shall be deemed an Affiliate of ERS or BMS. For the purposes of
this definition, "control" when used with respect to any Person, means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of such Person, whether through the
ownership of voting securities, by contract or otherwise; and the terms
"controlling" and "controlled" have meanings correlative to the foregoing.
1.6 "Alliance Manager" shall have the meaning assigned to such term in
Section 2.9.
1.7 "Allocable Overhead" shall have the meaning assigned to such term
in the Financial Appendix.
1.8 "Allowable Failure Rate" shall have the meaning assigned to such
term in Section 8.8(c).
1.9 "Antitrust Injunction" shall have the meaning assigned to such
term in the Acquisition Agreement.
1.10 "API" shall mean any Compound, in bulk form, for use as an active
ingredient in the manufacture of Finished Products.
1.11 "Audited Party" shall have the meaning assigned to such term in
Section 7.5.
1.12 "Auditing Party" shall have the meaning assigned to such term in
Section 7.5.
1.13 "Base Case Projections" shall mean those base case financial
projections for the Products for each of calendar years 2005 through 2017
attached to this Agreement as Exhibit 1.13.
1.14 "BLA Filing Date" shall have the meaning assigned to such term in
Section 4.1.
1.15 "BMS" shall have the meaning assigned to such term in the
introductory paragraph.
2
<PAGE>
Confidential treatment requested by Bristol-Myers Squibb Company, Bristol-Myers
Squibb Biologics Company and ImClone Systems Incorporated.
1.16 "BMS Dilution Event" shall have the meaning assigned to such term
in the Stockholder Agreement.
1.17 "BMS Sell-Down" shall have the meaning assigned to such term in
the Stockholder Agreement.
1.18 "Breaching Party" shall have the meaning assigned to such term in
Section 13.2(a).
1.19 "Clinical Budget" shall have the meaning assigned to such term in
Section 4.3(a).
1.20 "Clinical Development Plan" shall mean the definitive clinical
development plan approved by the PDC pursuant to Section 4.3(b), and each
subsequent definitive clinical development plan approved by the PDC pursuant to
Section 4.3(e).
1.21 "Committee" shall mean any of the JEC, the PDC, the JCC, the JMC
and the Finance Committee and, when used in the plural, shall mean all of them
or more than one of them, as the case may be.
1.22 "Common Stock" shall mean the common stock, $.001 par value, of
the Company.
1.23 "Company" shall have the meaning assigned to such term in the
introductory paragraph.
1.24 "Company SEC Documents" shall have the meaning assigned to such
term in the Acquisition Agreement.
1.25 "cGMP" shall mean current Good Manufacturing Practice as defined
in Parts 210 and 211 of Title 21 of the U.S. Code of Federal Regulations, as
may be amended from time to time, or any successor thereto.
1.26 "Competing Product" shall mean a product which has as its only
mechanism of action an antagonism of the EGF receptor.
1.27 "Compound" shall mean the compound known as IMC-C225, including
without limitation all fully humanized or human version thereof, and all
analogs, derivatives and/or improvements of any of the foregoing.
1.28 "Confidential Information" shall have the meaning assigned to
such term in Section 10.3.
1.29 "Co-Promotion Option" shall have the meaning assigned to such
term in Section 5.6.
1.30 "Co-Promotion Problem" shall have the meaning assigned to such
term in Section 5.6(e).
1.31 "Cost of Goods Sold" shall have the meaning assigned to such term
in the Financial Appendix.
1.32 "Critical Issue" shall mean any matter that is subject to the
decision-making authority of any Committee that is material and would cause a
significant delay or inability to be responsive which would have a material
adverse consequence to the clinical development, distribution, promotion or
sale of the Products.
1.33 "Current Forecast" shall have the meaning assigned to such term
in Section 8.4.
3
<PAGE>
Confidential treatment requested by Bristol-Myers Squibb Company, Bristol-Myers
Squibb Biologics Company and ImClone Systems Incorporated.
1.34 "Development Costs" shall have the meaning assigned to such term
in the Financial Appendix.
1.35 "Distribution Costs" shall have the meaning assigned to such term
in the Financial Appendix.
1.36 "Distribution Fee" shall mean the fees to be paid by ERS to the
Company pursuant to Sections 6.3 and 6.5 in consideration for the rights
granted to ERS by the Company with respect to North America and Japan,
respectively.
1.37 "Effective Date" shall mean the date set forth in the
introductory paragraph of the Agreement.
1.38 "Equity Agreements" shall have the meaning assigned to such term
in the preliminary statements.
1.39 "ERS" shall have the meaning assigned to such term in the
introductory paragraph.
1.40 "ERS Inventions" shall have the meaning assigned to such term in
Section 9.1.
1.41 "ERS Obligations" shall have the meaning assigned to such term in
Section 15.2.
1.42 "ERS Proposed Terms" shall have the meaning assigned to such term
in Section 3.5(c).
1.43 "FDA" shall mean the United States Food and Drug Administration,
or any successor thereto.
1.44 "Field" shall mean all pharmaceutical applications for human
health.
1.45 "Finance Committee" shall have the meaning assigned to such term
in Section 2.1(b)(vii).
1.46 "Financial Appendix" shall mean Exhibit 1.46 attached to this
Agreement.
1.47 "Finished Product" shall mean any formulation or dosage of
Product in finished form, including, without limitation, any product labeling
or other package inserts or materials required by the applicable Regulatory
Authority(ies) and, when used in the plural, shall mean all formulations and
dosages of Product in finished form, including, without limitation, all product
labeling and other package inserts and materials required by the applicable
Regulatory Authority(ies).
1.48 "First Commercial Sale" shall mean the first sale of a Product to
a Third Party by ERS or its Affiliates in any country in the Territory after
all Registrations required to permit such sale have been granted, or such sale
is otherwise permitted, by the Regulatory Authority in such country.
1.49 "First Offer Termination Date" shall mean the earlier to occur of
(i) the date which is the fifth anniversary of the Effective Date, and (ii) the
date which is the first anniversary of a BMS Dilution Event.
1.50 "Fully Burdened Manufacturing Cost" shall have the meaning
assigned to such term in the Financial Appendix.
4
<PAGE>
Confidential treatment requested by Bristol-Myers Squibb Company, Bristol-Myers
Squibb Biologics Company and ImClone Systems Incorporated.
1.51 "GAAP" shall mean generally accepted accounting principles in the
United States, consistently applied by the Party at issue.
1.52 "General and Administrative Costs" shall have the meaning
assigned to such term in the Financial Appendix.
1.53 "Gross Profit" shall have the meaning assigned to such term in
the Financial Appendix.
1.54 "Inability to Supply" shall have the meaning assigned to such
term in Section 8.12(b).
1.55 "IND" shall mean any filing made with the Regulatory Authority in
any country in the Territory for initiating clinical trials in such country,
with respect to a Product.
1.56 "Indemnitee" shall have the meaning assigned to such term in
Section 12.4.
1.57 "infringement" shall have the meaning assigned to such term in
Section 9.3(a).
1.58 "Indicative Marketing Budget" shall mean the indicative marketing
budget attached as Exhibit 5.2(B).
1.59 "Initial Regulatory Filing" shall mean the completed and
submitted initial Registration Application for the initial Product with the
FDA.
1.60 "Invention" shall mean any new or useful process, manufacture,
compound, composition of matter, improvements, discoveries, claims, formulae,
processes, trade secrets, technologies and know-how (including confidential
data and Confidential Information), to the extent relating to, derived from and
useful for the manufacture, use or sale of a Compound or a Product (including,
without limitation, the formulation, delivery or use thereof in the Field),
including, without limitation, synthesis, preparation, recovery and
purification processes and techniques, control methods and assays, chemical
data, toxicological and pharmacological data and techniques, clinical data,
medical uses, product forms and product formulations and specifications,
whether patentable or unpatentable, that (except for purposes of the
definitions of Know-How and Patents set forth herein in Sections 1.64 and 1.87,
respectively) is conceived or first reduced to practice or demonstrated to have
utility during the term of this Agreement.
1.61 "Joint Commercialization Committee" or "JCC" shall have the
meaning assigned to such term in Section 2.4(a).
1.62 "Joint Executive Committee" or "JEC" shall have the meaning
assigned to such term in Section 2.1(a).
1.63 "Joint Manufacturing Committee" or "JMC" shall have the meaning
assigned to such term in Section 2.5(a).
1.64 "Know-How" shall mean any and all unpatented Inventions that are
generated, owned or controlled by the Company at any time before or during the
term of this Agreement to the extent relating to, derived from and useful for
the manufacture of Finished Products from API, manufacture of API, or the use
or sale of the Compounds or the Products in the Field in any country in the
Territory.
1.65 "knowledge of the Company" shall mean the knowledge, after
reasonable inquiry, of Samuel Waksal, Ph.D., Harlan Waksal, M.D., Daniel Lynch
or John Landes.
5
<PAGE>
Confidential treatment requested by Bristol-Myers Squibb Company, Bristol-Myers
Squibb Biologics Company and ImClone Systems Incorporated.
1.66 "Letter of Intent" shall have the meaning assigned to such term
in Section 3.5(b).
1.67 "Long-Term Inability to Supply" shall have the meaning assigned
to such term in Section 8.12(d).
1.68 "Low Case Projections" shall mean those low case financial
projections for the Products for each of calendar years 2005 through 2017
attached to this Agreement as Exhibit 1.68.
1.69 "Manufacturing Standards" shall mean, with respect to the API or
any Finished Product, cGMP and such additional manufacturing specifications or
standards as may be established by mutual agreement of the Company and ERS from
time to time.
1.70 "Marketing Budget" shall mean the definitive marketing budget
attached as Exhibit 5.2(A) and each subsequent marketing budget approved by the
JCC in accordance with Section 5.2(c).
1.71 "Marketing Costs" shall have the meaning assigned to such term in
the Financial Appendix.
1.72 "Marketing Plans" shall have the meaning assigned to such term in
Section 5.4.
1.73 "Merck Agreement" shall mean that certain Development and License
Agreement entered into by the Company and Merck KGaA on December 14, 1998, as
amended and modified as of the date of this Agreement.
1.74 "Merck Entities" shall mean Merck KGaA and its permitted
affiliates, successors and assigns under the Merck Agreement.
1.75 "Net Sales" shall have the meaning assigned to such term in the
Financial Appendix.
1.76 "Non-Acquiring Party" shall have the meaning assigned to such
term in Section 3.8(b).
1.77 "Non-Breaching Party" shall have the meaning assigned to such
term in Section 13.2(b).
1.78 "Non-Registrational Studies" shall have the meaning assigned to
such term in Section 4.3(b).
1.79 "North America" shall mean Canada and the United States.
1.80 "Number of Days to Make Payment" shall mean (i) until the end of
calendar year 2002, [**] days, (ii) during calendar year 2003, [**] days [**],
as determined by the JCC prior to the end of calendar year 2002 making use of
the previous 12 months data available as of October 31, 2002 and (iii)
beginning with calendar year 2004 and thereafter, [**] days [**], as determined
by the JCC prior to the end of each preceding calendar year making use of 12
months data available as of the end of the month of October of such preceding
calendar year.
1.81 "Offer" shall have the meaning assigned to such term in the
Acquisition Agreement.
1.82 "Operating Profit or Loss" shall have the meaning assigned to
such term in the Financial Appendix.
6
<PAGE>
Confidential treatment requested by Bristol-Myers Squibb Company, Bristol-Myers
Squibb Biologics Company and ImClone Systems Incorporated.
1.83 "Other Compound" shall mean that compound known as 2C6 anti-VEGF
receptor monoclonal antibody (or any human, humanized or chimeric version
thereof, or any substitute therefor).
1.84 "Other Operating Income/Expense" shall have the meaning assigned
to such term in the Financial Appendix.
1.85 "Partnering Relationships" shall have the meaning assigned to
such term in Section 3.6.
1.86 "Party" shall mean the Company, ERS, or BMS, as the case may be,
and, when used in the plural, shall mean the Company, ERS, and BMS.
1.87 "Patents" shall mean the patents and patent applications set
forth on Exhibit 1.87, together with any patents that may issue therefrom in
any country in the Territory, and any other patents or patent applications in
any country in the Territory owned by or exclusively licensed to the Company
during the term of this Agreement that cover any Inventions to the extent
relating to, derived from and useful for the manufacture, use or sale of the
Compounds or the Products in the Field in any country in the Territory,
including any and all extensions, renewals, continuations,
continuations-in-part, divisions, patents-of-additions, reissues, supplementary
protection certificates or foreign counterparts of any of the foregoing.
1.88 "Person" shall mean an mean an individual or a corporation,
partnership, association, trust, or any other entity or organization, including
a government or political subdivision or an agency or instrumentality thereof.
1.89 "Product" shall mean any prescription pharmaceutical product
comprising a Compound, including any strength and packaging configuration of
the final finished dosage form presentation, and any line extension thereof
and, when used in the plural, shall mean all prescription pharmaceutical
products comprising Compounds, including all strengths and packaging
configurations of the final finished dosage form presentations, and any line
extensions thereof.
1.90 "Product Development Committee" or "PDC" shall have the meaning
assigned to such term in Section 2.3(a).
1.91 "Proposed Terms" shall have the meaning assigned to such term in
Section 3.5(b).
1.92 "Q1," "Q2," "Q3," and "Q4" shall have the meaning assigned to
such term in Section 8.3.
1.93 "Registration" shall mean, with respect to each country in the
Territory, approval of the Registration Application for any Product filed in
such country, including, where applicable outside of the United States, pricing
or reimbursement approval by the Regulatory Authority in such country.
1.94 "Registration Application" shall mean a Biologics License
Application under the United States Federal Food, Drug and Cosmetics Act and
the regulations promulgated thereunder, or a comparable filing for Registration
in a country, in each case with respect to a Product for application in the
Field in the Territory.
1.95 "Registrational Studies" shall have the meaning assigned to such
term in Section 4.3(b).
7
<PAGE>
Confidential treatment requested by Bristol-Myers Squibb Company, Bristol-Myers
Squibb Biologics Company and ImClone Systems Incorporated.
1.96 "Regulatory Authority" shall mean the FDA in the U.S., and any
health regulatory authority(ies) in any country in the Territory that is a
counterpart to the FDA and holds responsibility for granting regulatory
marketing approval for a Product in such country, and any successor(s) thereto.
1.97 "Restricted Period" shall have the meaning assigned to such term
in the Stockholder Agreement.
1.98 "Sales Costs" shall have the meaning assigned to such term in the
Financial Appendix.
1.99 "Sales Force Guidelines" shall have the meaning assigned to such
term in Section 5.6(d).
1.100 "Shares" shall mean shares of Common Stock.
1.101 "Short-Term Inability to Supply" shall have the meaning assigned
to such term in Section 8.12(c).
1.102 "Specifications" shall mean, with respect to API, the
specifications for such API as agreed upon by the Company and ERS, in
consideration of the regulatory requirements in each country in the Territory,
as may be amended from time to time.
1.103 "Stockholder Agreement" shall have the meaning assigned to such
term in the preliminary statements.
1.104 "Subsidiary" means, with respect to any Person, any corporation
or other entity of which a majority of the capital stock or other ownership
interests having ordinary voting power to elect a majority of the board of
directors or other persons performing similar functions are at the time
directly or indirectly owned by such Person.
1.105 "Summary Clinical Development Plan" shall mean the summary
clinical development plan attached as Exhibit 4.3(B), and each subsequent
summary clinical development plan approved by the PDC pursuant to Section
4.3(d).
1.106 "Technology" shall mean the Valid Claims and Know-How,
collectively.
1.107 "Termination Date" shall have the meaning assigned to such term
in the Acquisition Agreement.
1.108 "Territory" shall mean the United States, Canada and Japan.
1.109 "Testing Methods" shall have the meaning assigned to such term
in Section 8.7(c).
1.110 "Third Party" shall mean any Person who or which is neither a
Party nor an Affiliate of a Party.
1.111 "Third Party Change of Control Transaction" shall have the
meaning assigned to such term in the Stockholder Agreement.
1.112 "Third Party Manufacturer" shall mean Third Parties who have
been engaged by the Company to perform services or supply facilities or goods
(including, without limitation, the API and/or Finished Product) in connection
with the manufacture, testing and/or packaging of the API and/or Finished
Product by the Company.
8
<PAGE>
Confidential treatment requested by Bristol-Myers Squibb Company, Bristol-Myers
Squibb Biologics Company and ImClone Systems Incorporated.
1.113 "Trademarks" shall mean the trademarks registered to the Company
for the marketing of the Products in any country in the Territory, and the
trademarks selected by the JCC for use in the marketing of the Products in any
country in the Territory.
1.114 "United States" or "U.S." shall mean the United States of
America, including its possessions and territories.
1.115 "Valid Claim" shall mean any claim of any Patents issued or
pending in a country in the Territory relating to, derived from or useful for
the use and sale of the Compounds or the Products in the Field, which claim has
not been held invalid or unenforceable by decision of a court or other
governmental agency of competent jurisdiction, unappealable or unappealed
within the time allowed for appeal, and which is not admitted to be invalid
through disclaimer or otherwise not admitted by the Company to be invalid.
2. MANAGEMENT.
2.1 Joint Executive Committee.
(a) Members; Officers. Immediately after the Effective Date, the
Parties shall establish a joint executive committee (the "Joint Executive
Committee" or "JEC"), which shall consist of six members, three members from
each of the Company and BMS. The initial members of the JEC are set forth on
Exhibit 2.1. Each of the Company and BMS may replace any or all of its
representatives on the JEC at any time upon written notice to the other in
accordance with Section 16.5 of this Agreement. Such representatives shall at
all times include each such Party's [**] and most senior pharmaceutical
business officer and one other senior officer of each such Party. Any member of
the JEC may designate a substitute to temporarily attend and perform the
functions of that member at any meeting of the JEC. The Company and BMS each
may, in its discretion, invite non-member representatives of such Party to
attend meetings of the JEC. The JEC shall be co-chaired by a representative of
each of the Company and BMS. The co-chairpersons shall appoint a secretary of
the JEC, and such secretary shall serve for such term as designated by the
co-chairpersons. The initial co-chairpersons and the initial secretary are
designated on Exhibit 2.1.
(b) Responsibilities. The JEC shall perform the following
functions:
(i) manage and oversee the development and commercialization
of the Compounds and Products pursuant to the terms of this Agreement;
(ii) review and approve the annual budgets and multi-year
expense forecasts formulated by the PDC;
(iii) at each meeting of the JEC, review a comparison of
actual expenses to the budgeted expenses for the year-to-date, as current as
practicable to a date immediately prior to the date of the meeting;
(iv) review and evaluate the progress of the other
Committees;
(v) review and approve "go/no-go" decisions and other
matters referred to the JEC by any other Committee;
9
<PAGE>
Confidential treatment requested by Bristol-Myers Squibb Company, Bristol-Myers
Squibb Biologics Company and ImClone Systems Incorporated.
(vi) review and, if determined to be necessary, reallocate
spending between the Clinical Budget and the relevant Marketing Budget;
(vii) establish and empower a finance committee, which shall
consist of an equal number of representatives from each of the Company and BMS
(the "Finance Committee") to advise the JEC and make recommendations to the
JEC, for the areas it has responsibility as provided in Section 2.2, for which
the JEC has decision making authority;
(viii) at least once each year, meet with each of the other
Committees (which meetings do not need to include all of the other Committees
at the same meeting);
(ix) in accordance with the procedures established in
Section 2.1(d), resolve disputes, disagreements and deadlocks unresolved by the
other Committees;
(x) determine, in response to the PDC's findings regarding a
material delay of an Initial Regulatory Filing, whether or not it is in the
best interest of the Parties to go forward with the conduct of any additional
clinical studies required by the FDA; and
(xi) have such other responsibilities as may be assigned to
the JEC pursuant to this Agreement or as may be mutually agreed upon by the
Parties from time to time.
(c) Meetings. The JEC shall meet in person at least three times
during every calendar year, and more frequently as the Company and BMS deem
appropriate or as required to resolve disputes, disagreements or deadlocks in
the other Committees, on such dates, and at such places and times, as such
Parties shall agree. Meetings of the JEC that are held in person shall
alternate between the offices of the Company and BMS, or such other place as
such Parties may agree. The members of the JEC also may convene or be polled or
consulted from time to time by means of telecommunications, video conferences,
electronic mail or correspondence, as deemed necessary or appropriate.
(d) Decision-making.
(i) The JEC may make decisions with respect to any subject
matter that is subject to the JEC's decision-making authority and functions as
set forth in Section 2.1(b). Except as specified in Section 2.1(d)(ii), (iii)
or (iv), all decisions of the JEC shall be made by unanimous vote or written
consent, with the Company and BMS each having, collectively, one vote in all
decisions. The JEC shall use reasonable best efforts to resolve the matters
within its roles and functions or otherwise referred to it.
(ii) With respect to any Critical Issue, if the JEC cannot
reach consensus within five business days after the matter has been brought to
the JEC's attention, the matter shall be referred on the sixth business day:
(A) if the matter is the subject of a deadlock arising in the PDC and is not
the subject of Section 4.8 or 4.9, to the co-chairperson of the JEC designated
by the Company for resolution, provided that any decision made by the
co-chairperson of the JEC designated by the Company may not increase the
Clinical Budget for any one year by more than [**]; (B) if the matter is the
subject of a deadlock arising in the JCC (other than a matter under Section
2.4(b)(xiv) with respect to Trademarks), to the co-chairperson of the JEC
designated by BMS for resolution, provided that any decision made by the
co-chairperson of the JEC designated by BMS may only increase or decrease the
overall amount of the relevant Marketing Budget within the ranges provided in
10
<PAGE>
Confidential treatment requested by Bristol-Myers Squibb Company, Bristol-Myers
Squibb Biologics Company and ImClone Systems Incorporated.
and otherwise in accordance with Section 5.2; (C) if the matter is under
Section 2.4(b)(xiv) with respect to Trademarks and is the subject of a deadlock
arising in the JCC, to the co-chairperson of the JEC designated by the Company
for resolution; and (D) except as provided in Section 8.12(f), if the matter is
the subject of a deadlock arising in the JMC, to the co-chairperson of the JEC
designated by the Company for resolution. In the event that the co-chairperson
designated to resolve a dispute under this Section 2.1(d)(ii) is not
immediately available, then such matter shall be referred to the senior
executive officer of such Party in the area to which the matter relates and who
has been designated by such Party for such resolution.
(iii) With respect to all other matters that are subject to
the JEC's decision-making authority, if the JEC cannot reach consensus within
20 business days after it has met and attempted to reach such consensus, the
matter shall be referred on the twenty-first business day: (A) if the matter is
the subject of a deadlock arising in the PDC and is not the subject of Section
4.8 or 4.9, to the co-chairperson of the JEC designated by the Company for
resolution, provided that any decision made by the co-chairperson of the
Company may not increase the Clinical Budget for any one year by more than
[**]; (B) if the matter is the subject of a deadlock arising in the JCC (other
than a matter under Section 2.4(b)(xiv) with respect to Trademarks), to the
co-chairperson of the JEC designated by BMS for resolution, provided that any
decision made by the co-chairperson of BMS may not increase or decrease the
overall amount of the relevant Marketing Budget within the ranges provided in
and otherwise in accordance with Section 5.2; (C) if the matter is under
Section 2.4(b)(xiv) with respect to Trademarks and is the subject of a deadlock
arising in the JCC, to the co-chairperson of the JEC designated by the Company
for resolution; and (D) except as provided in Section 8.12(f), if the matter is
the subject of a deadlock arising in the JMC, to the co-chairperson of the JEC
designated by the Company for resolution.
(iv) In the event of a deadlock of the JEC with respect to a
Critical Issue that is not resolved pursuant to clause (ii) and the matters
underlying such deadlock fall into the class of disputes that may be arbitrated
by the Parties in accordance with Section 16.13, then such matters shall be
resolved pursuant to the Accelerated Arbitration Provisions of Section
16.13(b). In the event of a deadlock of the JEC with respect to any other
matters that are not resolved pursuant to clause (iii) and such matters fall
into the class of disputes that may be arbitrated by the Parties in accordance
with Section 16.13, then such matters shall be resolved pursuant to Section
16.13(a).
(v) For all purposes under this Agreement, any decision made
pursuant to this Section 2.1(d) shall be deemed to be the decision of the JEC.
2.2 Finance Committee. The Finance Committee shall perform the following
functions:
(a) clarify questions and ambiguities arising from the use or
application, as appropriate, in the relevant Territory of the accounting terms
used in this Agreement, including without limitation, Fully Burdened
Manufacturing Costs, Net Sales, Cost of Goods Sold, Development Costs,
Distribution Costs, Marketing Costs, Sales Costs, General and Administrative
Expense, Other Operating Income/Expense, Gross Profit and Operating Profit or
Loss;
(b) set up systems necessary to capture such costs and profits or
losses (including, without limitation, developing the methodology to be used to
determine Other Operating Income/Expense in accordance with the Financial
Appendix);
(c) establish parameters and mechanisms for management and
financial reporting;
11
<PAGE>
Confidential treatment requested by Bristol-Myers Squibb Company, Bristol-Myers
Squibb Biologics Company and ImClone Systems Incorporated.
(d) assist in reviewing manufacturing and marketing options;
(e) assist in developing and overseeing allocation of the
Clinical Budget and the Marketing Budgets for each of the Clinical Development
Plans and Marketing Plans, respectively, and reviewing the actual expenditure
of such allocated funds to ensure consistency with such Clinical Development
Plans and Marketing Plans;
(f) have such other responsibilities as may be assigned by the
JEC to the Finance Committee pursuant to this Agreement or as may be mutually
agreed upon by the Parties from time to time.
2.3 Product Development Committee.
(a) Members; Officers. Immediately after the Effective Date, the
Parties shall establish a product development committee (the "Product
Development Committee" or "PDC"), which shall consist of an equal number of
representatives from each of the Company and BMS, up to a maximum total of
eight members on such Committee. Each of the Company and BMS may replace any or
all of its representatives on the PDC at any time upon written notice to the
other in accordance with Section 16.5 of this Agreement. Such representatives
shall include individuals within the senior management of each such Party, and
those representatives of each such Party shall, individually or collectively,
have expertise in pharmaceutical drug development and/or marketing. Any member
of the PDC may designate a substitute to temporarily attend and perform the
functions of that member at any meeting of the PDC. The Company and BMS each
may, in its discretion, invite non-member representatives of such Party to
attend meetings of the PDC. The PDC shall be chaired by a representative of the
Company. The secretary of the PDC shall be a representative of BMS.
(b) Responsibilities. The PDC shall perform the following
functions:
(i) manage and oversee the implementation of the Clinical
Development Plans, except the Non-Registrational Studies;
(ii) review and approve each subsequent summary clinical
development plan in accordance with Section 4.3(d);
(iii) review and approve each subsequent clinical
development plan in accordance with Section 4.3(e);
(iv) review and approve any amendments or modifications of
the Clinical Development Plans or the Clinical Budget;
(v) at each meeting of the PDC, review a comparison of
actual clinical development and regulatory expenses to the budgeted expenses in
the Clinical Budget for the year-to-date, as current as practicable to a date
immediately prior to the date of the meeting;
(vi) review and evaluate progress of the Registrational
Studies; provided that the PDC shall not have authority to make any
determination that any Party is in breach of this Agreement;
12
<PAGE>
Confidential treatment requested by Bristol-Myers Squibb Company, Bristol-Myers
Squibb Biologics Company and ImClone Systems Incorporated.
(vii) review and approve all compassionate use of Products;
(viii) review and approve the joint publication strategy
together with the JCC;
(ix) review and approve "go/no-go" decisions; and
(x) have such other responsibilities as may be assigned to
the PDC pursuant to this Agreement or as may be mutually agreed upon by the
Parties from time to time.
(c) Meetings. The PDC shall meet in person at least once during
every calendar quarter, and more frequently as the Company and BMS deem
appropriate or as reasonably requested by either such Party, on such dates, and
at such places and times, as such Parties shall agree. Meetings of the PDC that
are held in person shall alternate between the offices of the Company and BMS,
or such other place as such Parties may agree. The members of the PDC also may
convene or be polled or consulted from time to time by means of
telecommunications, video conferences, electronic mail or correspondence, as
deemed necessary or appropriate.
(d) Decision-making. The PDC may make decisions with respect to
any subject matter that is subject to the PDC's decision-making authority and
functions as set forth in Section 2.3(b). All decisions of the PDC shall be
made by unanimous vote or written consent, with the Company and BMS each
having, collectively, one vote in all decisions. If, with respect to a Critical
Issue that is subject to the PDC's decision-making authority, the PDC cannot
reach consensus within five business days after it has first met and attempted
to reach such consensus, the matter shall be referred on the sixth business day
to the Joint Executive Committee for resolution. If, with respect to any other
matter that is subject to the PDC's decision-making authority, the PDC cannot
reach consensus within 20 days after it has first met and attempted to reach
such consensus, the matter shall be referred on the twenty-first day to the
Joint Executive Committee for resolution. For all purposes under this
Agreement, any decision made pursuant to this Section 2.3(d) shall be deemed to
be the decision of the PDC.
2.4 Joint Commercialization Committee.
(a) Members; Officers. Immediately after the Effective Date, the
Parties shall establish a joint commercialization committee (the "Joint
Commercialization Committee" or "JCC"), which shall consist of an equal number
of representatives from each of the Company and BMS, up to a maximum total of
eight members on such Committee. Each of the Company and BMS may replace any or
all of its representatives on the JCC at any time upon written notice to the
other in accordance with Section 16.5 of this Agreement. Such representatives
shall include individuals within the senior management of each such Party, and
those representatives of each such Party shall, individually or collectively,
have clinical experience and expertise in marketing and sales. Any member of
the JCC may designate a substitute to temporarily attend and perform the
functions of that member at any meeting of the JCC. The Company and BMS each
may, in its discretion, invite non-member representatives of such Party to
attend meetings of the JCC. The JCC shall be chaired by a representative of
BMS. The secretary of the JCC shall be a representative of the Company.
(b) Responsibilities. The JCC shall perform the following
functions:
(i) oversee the preparation and implementation of the
Marketing Plans;
13
<PAGE>
Confidential treatment requested by Bristol-Myers Squibb Company, Bristol-Myers
Squibb Biologics Company and ImClone Systems Incorporated.
(ii) oversee and coordinate the sales efforts of ERS and the
Company;
(iii) review and approve Marketing Plans;
(iv) discuss the state of the markets for Products in the
Territory and opportunities and issues concerning the commercialization of the
Products, including consideration of marketing and promotional strategy,
marketing research plans, labeling, Product positioning and Product profile
issues, to determine in which countries in the Territory to launch Products,
the priority for same and the amount and kind of marketing and selling effort
appropriate, in accordance with the Marketing Plans;
(v) review and approve Non-Registrational Studies, taking
into consideration the appropriateness in the context of the overall marketing
and promotional strategy for the Products;
(vi) review and approve all pricing decisions and managed
care contracting strategies, in accordance with the Marketing Plans;
(vii) review and approve all indigent care use of Products;
(viii) periodically review sales mix of Products sold by ERS
through various customer channels;
(ix) review and approve allocations within the Marketing
Budgets, from time to time;
(x) review and approve each subsequent marketing budget in
accordance with Section 5.2(c);
(xi) review data and reports arising from and generated in
connection with the commercialization of the Products, including, but not
limited to the Marketing Plans, Marketing Budgets and sales forecasts;
(xii) at each meeting of the JCC, review a comparison of
actual sales and marketing expenses to the budgeted expenses in the relevant
Marketing Budget for the year-to-date, as current as practicable to a date
immediately prior to the date of the meeting;
(xiii) review and approve the general guidelines applicable
to particular Products to be followed by ERS in its development of promotional
materials and promotional activities to be used by ERS and the Company in the
promotion of such Products (such guidelines to be consistent with the then
current Marketing Plan applicable to such Products);
(xiv) consider and select Trademarks to be used for the
marketing and sale of the Products in each country in the Territory;
(xv) review and approve the joint publication strategy
together with the PDC;
14
<PAGE>
Confidential treatment requested by Bristol-Myers Squibb Company, Bristol-Myers
Squibb Biologics Company and ImClone Systems Incorporated.
(xvi) evaluate and determine the existence or non-existence
of a Co-Promotion Problem referred to the JCC in accordance with Section
5.6(e); and
(xvii) have such other responsibilities as may be assigned
to the JCC pursuant to this Agreement or as may be mutually agreed upon by the
Parties from time to time.
(c) Meetings. The JCC shall meet in person at least once during
every calendar quarter, and more frequently as the Company and BMS deem
appropriate or as reasonably requested by either such Party, on such dates, and
at such places and times, as such Parties shall agree. Meetings of the JCC that
are held in person shall alternate between the offices of the Company and BMS,
or such other place as such Parties may agree. The members of the JCC also may
convene or be polled or consulted from time to time by means of
telecommunications, video conferences, electronic mail or correspondence, as
deemed necessary or appropriate.
(d) Decision-making. The JCC may make decisions with respect to
any subject matter that is subject to the JCC's decision-making authority and
functions as set forth in Section 2.4(b). All decisions of the JCC shall be
made by unanimous vote or written consent, with the Company and BMS each
having, collectively, one vote in all decisions. If, with respect to a Critical
Issue that is subject to the JCC's decision-making authority, the JCC cannot
reach consensus within five business days after it has first met and attempted
to reach such consensus, the matter shall be referred on the sixth business day
to the Joint Executive Committee for resolution. If, with respect to any other
matter that is subject to the JCC's decision-making authority, the JCC cannot
reach consensus within 20 days after it has first met and attempted to reach
such consensus, the matter shall be referred on the twenty-first day to the
Joint Executive Committee for resolution. For all purposes under this
Agreement, any decision made pursuant to this Section 2.4(d) shall be deemed to
be the decision of the JCC.
2.5 Joint Manufacturing Committee.
(a) Members; Officers. Immediately after the Effective Date, the
Parties shall establish a joint manufacturing committee (the "Joint
Manufacturing Committee" or "JMC"), which shall consist of an equal number of
representatives from each of the Company and BMS, up to a maximum total of
eight members on such Committee. Each of the Company and BMS may replace any or
all of its representatives on the JMC at any time upon written notice to the
other in accordance with Section 16.5 of this Agreement. Such representatives
shall be comprised of members of senior management of each such Party with
expertise in manufacturing. Any member of the JMC may designate a substitute to
temporarily attend and perform the functions of that member at any meeting of
the JMC. The Company and BMS each may, in its discretion, invite non-member
representatives of such Party to attend meetings of the JMC. Except as provided
in Section 8.12(f), the JMC shall be chaired by a representative of the
Company. The secretary of the JMC shall be a representative of BMS.
(b) Responsibilities. The JMC shall perform the following
functions:
(i) oversee and coordinate the manufacturing and supply of
API and Finished Products;
15
<PAGE>
Confidential treatment requested by Bristol-Myers Squibb Company, Bristol-Myers
Squibb Biologics Company and ImClone Systems Incorporated.
(ii) formulate and direct the manufacturing strategy for the
Products, including, without limitation, bulk drug production, formulation,
filling and finishing of the Products, and approve facilities to be used for
such manufacture and production;
(iii) evaluate and determine the existence of a Long-Term
Inability to Supply referred to the JMC in accordance with Section 8.12(e); and
(iv) have such other responsibilities as may be assigned to
the JMC pursuant to this Agreement or as may be mutually agreed upon by the
Parties from time to time.
(c) Meetings. The JMC shall meet in person at least once during
every calendar quarter, and more frequently as the Company and BMS deem
appropriate or as reasonably requested by either such Party, on such dates, and
at such places and times, as such Parties shall agree. Meetings of the JMC that
are held in person shall alternate between the offices of the Company and BMS,
or such other place as such Parties may agree. The members of the JMC also may
convene or be polled or consulted from time to time by means of
telecommunications, video conferences, electronic mail or correspondence, as
deemed necessary or appropriate.
(d) Decision-making. The JMC may make decisions with respect to
any subject matter that is subject to the JMC's decision-making authority and
functions as set forth in Section 2.5(b). All decisions of the JMC shall be
made by unanimous vote or written consent, with the Company and BMS each
having, collectively, one vote in all decisions. If, with respect to a Critical
Issue that is subject to the JMC's decision-making authority, the JMC cannot
reach consensus within five business days after it has first met and attempted
to reach such consensus, the matter shall be referred on the sixth business day
to the Joint Executive Committee for resolution. If, with respect to any other
matter that is subject to the JMC's decision-making authority, the JMC cannot
reach consensus within 20 days after it has first met and attempted to reach
such consensus, the matter shall be referred on the twenty-first day to the
Joint Executive Committee for resolution. For all purposes under this
Agreement, any decision made pursuant to this Section 2.5(d) shall be deemed to
be the decision of the JMC.
2.6 Minutes of Committee Meetings.
(a) Subject to Section 2.6(b), definitive minutes of all
Committee meetings shall be finalized no later than 30 days after the meeting
to which the minutes pertain, as follows:
(i) Within ten days after a Committee meeting, the secretary
of such Committee shall prepare and distribute to all members of such Committee
and each Alliance Manager draft minutes of the meeting. Such minutes shall
provide a list of any actions, decisions or determinations approved by such
Committee and a list of any issues yet to be resolved, either within such
Committee or through the relevant escalation process.
(ii) The Alliance Managers shall then have ten days after
receiving such draft minutes to collect comments thereon from the members of
its Party and provide them to the secretary of such Committee.
(iii) Upon the expiration of such second ten-day period, the
Alliance Managers and the secretary of such Committee shall have an additional
ten days to discuss each other's comments and finalize the minutes. The
secretary and chairperson(s) of such Committee shall each sign and date the
final minutes. The signature of such chairperson(s) and secretary upon the
final minutes shall indicate each Party's assent to the minutes.
16
<PAGE>
Confidential treatment requested by Bristol-Myers Squibb Company, Bristol-Myers
Squibb Biologics Company and ImClone Systems Incorporated.
(b) If at any time during the preparation and finalization of
Committee meeting minutes, the secretary of such Committee and the Alliance
Managers do not agree on any issue with respect to the minutes, such issue
shall be resolved as provided in Section 2.3(d), 2.4(d) or 2.5(d), as the case
may be. The decision resulting from the foregoing process shall be recorded by
the secretary in amended finalized minutes for said meeting. All other issues
in the minutes that are not subject to the foregoing process shall be finalized
within the 30-day period as provided in Section 2.6(a).
2.7 Term. Each Committee shall exist until the termination or
expiration of this Agreement, or for such longer period as necessary to perform
the remaining responsibilities assigned to it under this Agreement.
2.8 Expenses. Each Party shall be responsible for all travel and
related costs and expenses for its members and other representatives to attend
meetings of, and otherwise participate on, a Committee.
2.9 Alliance Managers. Each of the Company, on the one hand, and BMS
and ERS collectively, on the other hand, shall appoint one senior
representative who possesses a general understanding of clinical, regulatory,
manufacturing and marketing issues to act as its respective alliance manager
for this relationship (each, an "Alliance Manager"). The initial Alliance
Managers are set forth on Exhibit 2.1. Each of the Company, on the one hand,
and BMS and ERS collectively, on the other hand, may replace its respective
Alliance Manager at any time upon written notice to the other in accordance
with Section 16.5 of this Agreement. Any Alliance Manager may designate a
substitute to temporarily perform the functions of that Alliance Manager. Each
Alliance Manager shall be charged with creating and maintaining a collaborative
work environment within and among the Committees. Each Alliance Manager will
also be responsible for:
(a) Coordinating the relevant functional representatives of the
Parties, in developing and executing strategies and plans for the Products in
an effort to ensure consistency and efficiency within the Territory;
(b) providing a single point of communication for seeking
consensus both internally within the respective Party's organizations and
together regarding key strategy and plan issues;
(c) identifying and raising cross-country, cross-Party and/or
cross-functions disputes to the appropriate Committee in a timely manner; and
(d) planning and coordinating: (i) cooperative efforts in the
Territory; and (ii) internal and external communications.
The Alliance Managers shall be entitled to attend meetings of any of
the Committees, but shall not have, or be deemed to have, any rights or
responsibilities of a member of any Committee. Each Alliance Manager may bring
any matter to the attention of any Committee where such Alliance Manager
reasonably believes that such matter requires such attention.
17
<PAGE>
Confidential treatment requested by Bristol-Myers Squibb Company, Bristol-Myers
Squibb Biologics Company and ImClone Systems Incorporated.
3. GRANT OF RIGHTS.
3.1 Rights Granted to ERS. Subject to the terms and conditions of this
Agreement, the Company hereby grants to ERS:
(a) An exclusive right to distribute, and a co-exclusive right
(together with the Company) to develop and promote, the Products in North
America.
(b) A co-exclusive right to develop, distribute and promote
(together with the Company and the Merck Entities, in the case of the Merck
Entities pursuant to the Merck Agreement) the Products in Japan.
3.2 Restrictions on the Company. The Company shall not, and shall not
grant any rights or licenses to any Third Party or otherwise permit any Third
Party to, develop the Compounds for animal health or any other application
outside the Field without the prior written consent of ERS, which shall not be
unreasonably withheld.
3.3 License to ERS Inventions. ERS hereby grants to the Company and
its Affiliates a [**] license, without the right to grant sublicenses (other
than to the Merck Entities for use in Japan and to any Person for use outside
the Territory), to use any ERS Inventions and any patents owned or controlled
by ERS solely to the extent related to any ERS Inventions, solely for the
purpose of developing, using, manufacturing, distributing, promoting and
selling Compounds and Products in the Field; provided, however the license
granted under this Section 3.3 expressly [**] the right of (i) [**] to [**],
directly or indirectly, any Compound or Product distributed or sold by [**], or
(ii) [**], directly or indirectly, any Compound or Product distributed or sold
by such [**].
3.4 Trademarks; Logos.
(a) The Company hereby grants ERS the non-exclusive right to use
the Trademarks in the Territory in connection with the Products, subject to the
provisions of this Agreement and for the term hereof. Solely in connection with
ERS's promotion, distribution and sale of Products in the Territory, ERS shall
market the Products throughout the Territory under the applicable Trademarks
for the relevant country in the Territory. The use of the Trademarks by ERS
shall be subject to the prior review and approval of the JCC as set forth in
this Section 3.4.
(b) ERS shall permit duly authorized representatives of the
Company to inspect, on the premises of ERS, at all reasonable times, the
Products, ERS's quality control records, and ERS's facilities used in or
relating to the manufacture, distribution or sale of the Products to insure
compliance with cGMP and the quality control standards set forth in the
applicable Registration Application.
(c) Whenever ERS uses the Trademarks in advertising or in any
other manner in connection with the Products, ERS shall clearly indicate the
Company's ownership of the Trademarks. At least ten business days prior to
ERS's use of the Trademarks, ERS shall provide the JCC with samples of all
literature and advertising using the Trademarks prepared by or for ERS and
intended to be used by ERS for approval of such use by the JCC. If no objection
is received from the JCC within five business days of receipt by the JCC of
such samples, ERS may use the Trademarks in the manner used in the samples
submitted to the JCC for approval. When using the Trademarks
18
<PAGE>
Confidential treatment requested by Bristol-Myers Squibb Company, Bristol-Myers
Squibb Biologics Company and ImClone Systems Incorporated.
under this Agreement, ERS undertakes to comply with all laws pertaining to
trademarks in force at any time in the Territory.
(d) If necessary in any country in the Territory to permit ERS to
use the Trademarks, the Company shall make application to register ERS as a
permitted user or registered user of the Trademarks and, if necessary, or if
requested by the Company, ERS undertakes to join in such application and to
take such action as may be necessary or requested by the Company to implement
such application or retain, enforce or defend the Trademarks. If necessary in
any country in the Territory to maintain the Company's rights in the
Trademarks, ERS shall enter into a registered user agreement or permitted user
agreement regulating its use of the Trademarks.
(e) ERS acknowledges that the Company is the owner of the
Trademarks. ERS shall not at any time do, cause to be done, or permit any act
or thing inconsistent with, contesting or in any way impairing or tending to
impair such ownership. ERS agrees that all use of the Trademarks by ERS shall
inure to the benefit of and be on behalf of the Company. ERS acknowledges that
nothing in this Agreement shall give ERS any right, title or interest in the
Trademarks other than the right to use the Trademarks in accordance with this
Agreement. ERS agrees that it will not challenge the title or ownership of the
Company to the Trademarks or attack or contest the validity of the Trademarks.
(f) The Company shall register and maintain, or cause to be
registered and maintained, in consultation with ERS, the Trademarks in the
Territory during the term of this Agreement at the Company's sole expense. If
any Party learns of any actual, alleged or threatened unauthorized use or other
infringement of the Trademarks by others in the Territory, such Party agrees to
promptly notify the other Parties of such unauthorized use or other
infringement. The Company shall use reasonable efforts to retain, enforce or
defend the Trademarks.
(g) To the extent permitted by law, all labeling, packaging,
literature, promotional material and advertising for any Product to be
marketed, distributed or sold in any country in the Territory shall contain the
Company's name and logo with comparable prominence as the name and logo used by
ERS. To the extent practicable, or as required by applicable law to protect the
Trademarks, ERS shall include on any material bearing any Trademarks an
acknowledgement that such Trademark is the property of the Company.
3.5 Right of First Offer to ERS Regarding the Other Compound. During
the period of time commencing on the Effective Date and ending on the First
Offer Termination Date, ERS shall have, and the Company hereby grants to ERS, a
right of first offer to enter into a partnering arrangement with the Company
for the Other Compound, as follows:
(a) In the event that the Company is interested in seeking any
Third Party partnering arrangement with respect to the Other Compound (whether
by granting a license or other rights to a Third Party), the Company shall give
written notice thereof to ERS, together with any and all materials and relevant
information and data regarding the Other Compound that the Company has in its
possession or control. ERS shall have 30 days after receipt of such written
notice and all such information and data to decide whether or not it is
interested in entering into negotiations for such a partnering arrangement with
the Company for the Other Compound.
(b) If ERS notifies the Company in writing within such 30-day
period that it is interested in negotiating such a partnering arrangement, the
Company shall provide ERS with written notice of its proposed material terms
and conditions of such arrangement ("Proposed Terms"). The Proposed Terms shall
include all material terms and conditions of such arrangement, including,
19
<PAGE>
Confidential treatment requested by Bristol-Myers Squibb Company, Bristol-Myers
Squibb Biologics Company and ImClone Systems Incorporated.
without limitation, the scope of the proposed arrangement, the financial terms
and any technology or compound quid pro quo. ERS and the Company shall promptly
commence good faith negotiations (including a review of all relevant data and
information of clinical significance relating to the Other Compound), for a
period of up to 90 days after ERS receives such Proposed Terms from the
Company, in an effort to reach mutually acceptable material terms and
conditions for such arrangement, which material terms and conditions shall be
set forth in a written letter of intent ("Letter of Intent"). During such
90-day period, the Company shall not negotiate with any Third Party a potential
partnering arrangement with such Third Party with respect to the Other
Compound.
(c) If, despite each of ERS's and the Company's good faith
efforts, the Company and ERS are not able to agree on such material terms and
conditions and do not execute a Letter of Intent by the end of such 90-day
period, ERS shall provide to the Company (within five business days) a written
notice setting forth the terms ERS will agree to for such arrangement (the "ERS
Proposed Terms"). The Company shall then have 15 days to accept or reject the
ERS Proposed Terms. If the Company declines to accept the ERS Proposed Terms
within such 15-day period, then the Company may enter into negotiations with
any Third Party regarding the Other Compound, provided, however, that the terms
and conditions of any agreement with a Third Party shall be no more favorable,
in the aggregate, to such Third Party than the ERS Proposed Terms.
3.6 Right of First Negotiation of ERS Regarding Partnering
Transactions. At any time during the Restricted Period, ERS shall have, and the
Company hereby grants to ERS, a right of first negotiation to enter into a
partnering arrangement with the Company (including, without limitation, any
co-development, co-promotion, research and development, commercialization or
intellectual property license agreement, joint venture, partnership, or other
partnering relationship) involving compounds or products not directly relating
to the Other Compound, to the extent involving the out-licensing of any of
intellectual property or know-how owned by the Company or to which the Company
has an exclusive license ("Partnering Relationship").
(a) In the event that the Company is interested in establishing a
such Partnering Relationship with a Third Party, the Company shall give written
notice thereof to ERS, together with any and all materials and relevant
information and data regarding the subject matter of such proposed Partnering
Relationships that the Company has in its possession or control.
(b) With respect to each such Partnering Relationship, ERS shall
have 90 days after receipt of such written notice and all such information and
data to enter into a non-binding heads of agreement with the Company containing
the proposed material terms of an agreement regarding such Partnering
Relationship. During such 90-day time period, the Company shall not negotiate
such a Partnering Relationship with any Third Party. In the event that ERS and
the Company do not enter into a non-binding heads of agreement as aforesaid,
the Company shall be free to proceed to negotiate with Third Parties as it
deems appropriate without any further obligation to ERS.
3.7 Negotiation of Services. As soon as reasonably practicable after
the Effective Date, the Parties will negotiate in good faith the Company's
access to ERS's and BMS's research and development services, including
medicinal chemistry, high throughput screening, genomics, etc., and the extent
to which and terms on which such services will be made available to the
Company.
3.8 Restrictions on Competing Products. Except as permitted by this
Section 3.8, during the period from the Effective Date to the seventh
anniversary of the Effective Date, each Party agrees not to, and to cause its
Affiliates not to, directly or indirectly, develop or commercialize a Competing
Product in any country in the Territory. In the event that a Party (an
"Acquiring Party") proposes to develop or commercialize a Competing Product or
purchases or otherwise takes control of a Third Party which has developed or
commercialized (and is continuing to produce or sell), or is developing
20
<PAGE>
Confidential treatment requested by Bristol-Myers Squibb Company, Bristol-Myers
Squibb Biologics Company and ImClone Systems Incorporated.
or commercializing, a Competing Product (directly or indirectly), in any such
case within the Territory, the Acquiring Party shall, at its option, either:
(a) divest, or cause its applicable Affiliate to divest, the
Competing Product within 12 months after such event; or
(b) offer to the Company (in the case of BMS or ERS) or ERS (in
the case of the Company), (the "Non-Acquiring Party"), the right to: (i)
participate in 50% of the Acquiring Party's rights and obligations in
connection with the development and commercialization of the Competing Product;
or (ii) acquire 50% of the Acquiring Party's interest in the Competing Product
at a valuation which is in proportion to the price paid by the Acquiring Party
for the Competing Product. In such event, such Parties shall conduct good faith
discussions regarding the terms of such arrangement. In the event that such
Parties do not reach agreement on such terms, or the Non-Acquiring Party
declines to participate or acquire such an interest in the Competing Product,
then the Acquiring Party shall be required to divest, or cause its applicable
Affiliate to divest, the Competing Product within 12 months after such event.
3.9 The Company's Right to Develop and Market Products.
(a) In the event that the Company believes that ERS is not
adequately performing its obligations and responsibilities under the relevant
Clinical Development Plan or the Marketing Plan, the Company shall provide ERS
with written notice of such claim including specification of the respects in
which the Company believes ERS is not meeting such obligations and
responsibilities with reasonable particularity. The PDC or the JCC, as the case
may be, shall promptly meet to discuss such claims. If the PDC or the JCC, as
the case may be, does not reach a consensus decision, then the matter shall be
referred to the JEC for resolution, provided that Sections 2.1(d)(ii), (iii)
and (iv) shall not apply with respect to such matter. If the JEC does not reach
consensus decision on the matter, then the Company may submit the matter to
arbitration pursuant to the Accelerated Arbitration Provisions set forth in
Section 16.13(b).
(b) If a determination is made pursuant to Section 3.9(a), by the
PDC, the JCC, the JEC or the arbitrators, as the case may be, that ERS has
failed to adequately perform such obligations and responsibilities, then the
Company may perform such obligations and responsibilities to the extent it
reasonably deems appropriate. The Company's performance of such obligations and
responsibilities pursuant to this Section shall be reasonably consistent with
the scope of performance of such obligations and responsibilities contemplated
to be performed by ERS in the relevant Clinical Development Plan or Marketing
Plan, as the case may be.
(c) Provided that the performance by the Company is in accordance
with the scope of such performance contemplated by Section 3.9(b), ERS shall
reimburse the Company for all of the Company's Development Costs, Distribution
Costs, Sales Costs, Marketing Costs and Other Operating Income/Expense, as the
case may be, incurred by the Company with respect to such actions. In addition,
if the Company elected to commence performance of such obligations and
responsibilities prior to a determination being made pursuant to Section
3.9(a), and such determination is that ERS has failed to adequately perform
such obligations and responsibilities, then ERS shall reimburse the Company for
all such costs incurred by the Company prior to the date of such determination,
but only for such costs incurred by the Company that were necessary to satisfy
the performance obligations and responsibilities that it is determined ERS
failed to adequately provide.
21
<PAGE>
Confidential treatment requested by Bristol-Myers Squibb Company, Bristol-Myers
Squibb Biologics Company and ImClone Systems Incorporated.
(d) If such failure to perform is in connection with ERS's
obligations and responsibilities in Japan, then ERS shall have the right to
include any amount paid to the Company pursuant to this Section as Development
Costs, Distribution Costs, Sales Costs, Marketing Costs and/or Other Operating
Income/Expense, as the case may be, for purposes of calculating Operating
Profit or Loss.
(e) In no event shall ERS be obligated pursuant to this Section
to reimburse the Company for any costs incurred by the Company pursuant to this
Section 3.9 unless: (i) the relevant Committee reaches a consensus decision, or
the arbitrators find, that ERS failed to adequately perform such obligations
and responsibilities; or (ii) ERS otherwise consents in writing. The rights of
the Company under this Agreement shall not be affected in any way by the
Company's waiver or failure to take action pursuant to this Section 3.9. Any
rights provided to the Company pursuant to this Section shall be in addition to
any other rights or remedies available to the Company under this Agreement, at
law or in equity.
4. DEVELOPMENT AND REGULATORY MATTERS.
4.1 Exchange of Data and Know-How.
(a) The Parties acknowledge that the Company is in the process of
conducting clinical studies on the Product necessary to make the Initial
Regulatory Filing. Therefore, until the Initial Regulatory Filing is made (the
"BLA Filing Date"), the Company shall be primarily responsible for conducting
the clinical studies and all other regulatory matters, manufacturing matters
and/or pre-clinical studies necessary to support, prepare and file the Initial
Regulatory Filing until the BLA Filing Date, and the Company shall use all
commercially reasonable efforts necessary to make the Initial Regulatory
Filing. During such period, the Company shall keep ERS informed as to the
status of such efforts, shall permit ERS to review and comment on the Initial
Regulatory Filing during its preparation, and shall consult with ERS regarding
the preparation of the Initial Regulatory Filing.
(b) Promptly after the Effective Date, the Company shall deliver
to ERS copies of all relevant and material data, studies and other written
materials in the Company's possession as of the Effective Date relating to the
Compounds and Products, including any such materials relating to Patents and
Know-How.
(c) During the term of this Agreement: (i) each Party shall
provide to the other Parties any material data or other information relating to
the Compounds and Products, including any such information relating to Patents
and Know-How, from time to time as such data and information is developed or
acquired by such Party; and (ii) each of the Parties shall deliver to the other
Parties all data and dossiers relating to the Compounds or any Product and
results from any studies being conducted by or on behalf of either of such
Parties in connection therewith promptly after such data and/or dossiers become
available.
(d) All such data and information exchanged or required to be
exchanged by the Parties pursuant to this Section 4.1 shall be owned by the
Company, whether in the Company's possession or control as of the Effective
Date or developed by any Party during the term of this Agreement. The Company
hereby grants BMS and ERS the right to use all such data and information for
all purposes necessary to allow BMS and ERS to perform each of their
obligations under this Agreement.
4.2 Product Registrations. Except as otherwise mutually agreed by the
Company and BMS, the Company shall own all Registrations in each country in the
Territory.
22
<PAGE>
Confidential treatment requested by Bristol-Myers Squibb Company, Bristol-Myers
Squibb Biologics Company and ImClone Systems Incorporated.
4.3 Scope of Clinical Development Plans and Clinical Budget.
(a) A clinical budget containing the budget for the conduct of
the Clinical Development Plans for the development of Compounds and Products
for calendar years 2001 through and including 2017, on a calendar
year-by-calendar year basis, is attached to this Agreement as Exhibit 4.3(A)
(such budget, as modified from time to time pursuant to this Agreement, the
"Clinical Budget").
(b) A Summary Clinical Development Plan for calendar years 2001
through 2004 is attached to this Agreement as Exhibit 4.3(B). As soon as
reasonably possible after the Effective Date, the PDC shall meet to develop,
finalize and approve the definitive clinical development plan for the Compounds
and the Products for calendar years 2001 through 2004 based on the Summary
Clinical Development Plan for such period. Such Clinical Development Plan shall
include: (i) a plan for the rapid and orderly transition, after the BLA Filing
Date, of those clinical and other studies ongoing with respect to the Compounds
and Products which are identified in the initial Clinical Development Plan as
being transferred to ERS from the Company's sole control to the control of ERS
and the Company, as determined by the PDC in conformity with all applicable
regulatory requirements and consistent with Section 4.1; (ii) the allocation
and transition of regulatory strategy and responsibility for the Products;
(iii) the research and development activities of any or all of the Parties
under this Agreement for the development of Compounds and Products for calendar
years 2001, 2002, 2003 and 2004, including the allocation of resources between
the Company and ERS, which shall be consistent with the Clinical Budget for
such period; (iv) "go/no go" decision criteria for each stage of development of
a Product; (v) target Product profiles; and (vi) timelines for scientific,
medical, regulatory and other activities to be undertaken by the Parties for
the purpose of obtaining Registrations for the Products in each country in the
Territory, providing marketing support and developing new indications and
formulations for the Products. Every Clinical Development Plan for the relevant
period shall comprise two components: (1) those clinical studies required for
approval of new indications, other labeling changes or for any other purpose
under an IND (e.g., Phase I through Phase III studies (the "Registrational
Studies"); and (2) those studies undertaken post-launch which are not
Registrational Studies (e.g., Phase IV studies) ("Non-Registrational Studies").
The PDC shall use all commercially reasonable efforts to finalize and approve
the initial Clinical Development Plan no later than 90 days after the Effective
Date.
(c) Prior to Registration in any country in the Territory, the
Parties intend that the Company will be primarily responsible for implementing
the regulatory strategy for the Products in such country developed by the PDC.
The Parties intend that ERS will be primarily responsible for regulatory
activities in a country in the Territory after Registration in such country,
comprising regulatory compliance, worldwide safety surveillance, adverse event
reporting and all other necessary support services.
(d) At least 12 months prior to the end of the last calendar year
for which a Clinical Development Plan has been approved (i.e., prior to the end
of 2004, 2008 and 2012, respectively), the PDC shall develop, finalize and
approve a summary clinical development plan for the Compounds and the Products
for the four (or, in the case of the last such period, five) calendar years
next succeeding such calendar year, comparable in scope and detail to the
Summary Clinical Development Plan attached as Exhibit 4.3(B) (i.e., for the
period from 2005 through and including 2008, 2009 through and including 2012,
2013 through and including 2017) (each such approved summary clinical
development plan is a Summary Clinical Development Plan).
(e) At least six months prior to the end of the last calendar
year for which a Clinical Development Plan has been approved (i.e., prior to
the end of 2004, 2008 and 2012, respectively),
23
<PAGE>
Confidential treatment requested by Bristol-Myers Squibb Company, Bristol-Myers
Squibb Biologics Company and ImClone Systems Incorporated.
the PDC shall develop, finalize and approve a definitive clinical development
plan for the Compounds and the Products for the four calendar years (or, in the
case of the last such period, five calendar years) next succeeding such
calendar year, containing the information described in Section 4.3(b)(ii)
through (vi) for the relevant period (i.e., for the period from 2005 through
and including 2008, 2009 through and including 2012, 2013 through and including
2017) based on the Summary Clinical Development Plan for such period (each such
approved definitive clinical development plan is a Clinical Development Plan);
provided, however, that the Clinical Budget for each such calendar year shall
be no less than the amount set forth in the Clinical Budget attached as Exhibit
4.3(A) with respect to such calendar year, except that:
(i) if Net Sales of Products for the calendar year
immediately preceding such calendar year are less than the [**] for the
immediately preceding calendar year, but more than the [**] for the immediately
preceding calendar year, then the Clinical Budget for the calendar year in
question shall be no less than an amount equal to [**] of the amount set forth
in the initial Clinical Budget for the calendar year in question, determined on
a [**] based upon the actual [**] for the calendar year immediately preceding
the calendar year in question and the [**] and [**], such that if the actual
Net Sales were equal to the Low Case Projections, the amount would be equal
[**] and if [**] were equal to the [**], the amount would be equal to [**] or
(ii) if Net Sales of Products for the calendar year
immediately preceding such calendar year are less than the [**] for the
immediately preceding calendar year, then the Clinical Budget for the calendar
year in question shall be no less than an amount equal to [**] of the amount
set forth in the initial Clinical Budget for the calendar year in question.
(f) As of the Effective Date, each of the Parties believes that
the Clinical Budget provides for sufficient funds to complete the execution of
the Clinical Development Plans that are to be developed by the Parties in
accordance with this Section 4.3. ERS shall provide sufficient funds to
complete the execution of the Clinical Development Plans provided they are
developed in accordance with this Section 4.3 (even if such funding is in
excess of the Clinical Budget). Any change to any Clinical Development Plan
after the development thereof in accordance with this Section 4.3 must be
approved by the PDC, provided that any such change that (i) alters the number
of patients being studied under the Clinical Development Plan or the type
and/or phase of such studies, or (ii) increases the amount of funding necessary
to complete a Clinical Development Plan as a result of any change to (A) the
timing of entry of such patients into studies under such Clinical Development
Plan, or (B) the procedures to be conducted in such studies, in each such case
shall relieve ERS of the funding obligation set forth in the immediately
preceding sentence with regard to such revised Clinical Development Plan only
to the extent that such revised Clinical Development Plan requires funding
which exceeds the Clinical Budget (after taking into account any increase in
the Clinical Budget in accordance with Sections 2.1(d)(ii) or (iii)).
4.4 Transition of Clinical Studies. As soon as practicable after the
BLA Filing Date, and consistent with the transition plan adopted by the PDC and
contained in the initial Clinical Development Plan, the Company shall
transition such clinical and other studies ongoing with respect to the Products
which have been identified in such Clinical Development Plan as being
transferred to ERS in such transition plan from the Company's sole control to
the control of the Party(ies) set forth in the initial Clinical Development
Plan. Thereafter, ERS shall be primarily responsible for performing such
studies designated therefor in the Clinical Development Plans through
completion, and the Company shall be primarily responsible for performing such
studies designated therefor in the Clinical Development Plans through
completion. During the transition period, the Company shall continue to be
involved in the ongoing clinical studies in order to assure an orderly transfer
of responsibility.
24
<PAGE>
Confidential treatment requested by Bristol-Myers Squibb Company, Bristol-Myers
Squibb Biologics Company and ImClone Systems Incorporated.
4.5 Conduct of Clinical Development Plans. Under the auspices of, and
subject to review and approval by, the PDC, the Parties shall have the
following responsibilities relating to the conduct of the Clinical Development
Plans:
(a) Each of ERS and the Company shall be responsible for the
preparation of all protocols and the conduct of all Registrational Studies and
Non-Registrational Studies for which such Party is designated as the Party
responsible for such studies in the Clinical Development Plans. Each such Party
shall submit all protocols for Registrational Studies to the PDC and, in the
case of the Non-Registrational Studies, to the JCC, for its or their approval,
as the case may be.
(b) Each of ERS and the Company shall be responsible for
preparing all Regulatory Applications necessary or desirable to register the
Products in all countries in the Territory for which such Party is designated
as the Party responsible for such preparation in the Clinical Development
Plans. The Company shall be responsible for filing all Regulatory Applications
(whether prepared by the Company or ERS) and, thereafter, to conduct all
communications with the Regulatory Authorities during the registration process
(provided that, if ERS is the responsible Party for the preparation of such
Regulatory Application, it will work with the Company with respect to all such
regulatory activities). Each such Party shall submit all proposed filings to
the PDC for its approval. The other such Party shall provide all technical data
and support necessary to assist the responsible Party to prepare such
Regulatory Applications. The responsible Party shall keep the PDC informed as
to the status of such efforts, permit the PDC to review any revisions to any
filings or communications with Regulatory Authorities during their preparation,
and shall confer with the PDC regarding the preparation of such filings and
communications and the registration process. During such process, such Parties
shall collaborate and cooperate in the preparation and filing of all documents
necessary therefor and all regulatory interactions and compliance with
Regulatory Authorities in the Territory. All regulatory activities (including
without limitation adverse event reporting) to be performed by ERS in
accordance with this Agreement and the Clinical Development Plans shall be
conducted on behalf of the Company. The Company shall appoint ERS as its agent
for regulatory compliance and all other regulatory activities for which ERS is
responsible.
(c) The Company shall supply all API necessary and/or desirable
for all studies to be conducted pursuant to the Clinical Development Plans,
including, without limitation all Registrational Studies and Non-Registrational
Studies. Such API shall be supplied in accordance with, in all material
respects, the Specifications, in accordance with cGMP, and in accordance with
forecasts therefor provided by the PDC at least 180 days prior to the
anticipated delivery date for each shipment thereof. Such API shall be supplied
at the Company's Fully Burdened Manufacturing Cost. The Company's obligation to
supply API for Non-Registrational Studies shall be subject, first, to
fulfilling all requirements for API for the supply of Products for commercial
sales pursuant to Section 8. Except as otherwise provided in this Section
4.5(c), all of the provisions of Section 8, to the extent applicable, shall
apply to the supply of API for all such clinical studies (including the
reference to the relevant payment terms contained in Section 7).
(d) In connection with performing its obligations pursuant to the
Clinical Development Plans, each of ERS and the Company shall use all
commercially reasonable efforts to perform such responsibilities diligently,
with the objective of maximizing the sales potential of the Products and
promoting the therapeutic profile and benefits of the Products in the most
commercially beneficial manner. Without limiting the generality of the
foregoing, each such Party shall:
(i) cooperate with the other Party to implement the Clinical
Development Plans, and such other activities that, from time to time, the PDC
decides are necessary for the commercial success of the Products;
25
<PAGE>
Confidential treatment requested by Bristol-Myers Squibb Company, Bristol-Myers
Squibb Biologics Company and ImClone Systems Incorporated.
(ii) use commercially reasonable efforts to perform the work
set out for such Party to perform in the Clinical Development Plans;
(iii) conduct all work pursuant to the Clinical Development
Plans in good scientific manner, and in compliance in all material respects
with all requirements of applicable laws, rules and regulations, and all other
requirements of any applicable cGMP, good laboratory practice and current good
clinical practice to attempt to achieve the objectives of the Clinical
Development Plans efficiently and expeditiously; and
(iv) maintain records, in sufficient detail and in good
scientific manner, which shall be complete and accurate and shall fully and
properly reflect all work done and results achieved in connection with the
Clinical Development Plans in the form required under all applicable laws and
regulations. The other such Party shall have the right, during normal business
hours and upon reasonable prior written notice, to inspect and copy all such
records at its own expense, so long as doing so is not unreasonably disruptive.
The other such Party shall maintain such records and information contained
therein in confidence in accordance with Section 10 and shall not use such
records or information except to the extent otherwise permitted by this
Agreement.
4.6 Funding of Clinical Development Plans.
(a) From and after the Effective Date, each of the Company and
ERS shall be responsible for the Development Costs listed below its name in the
following table:
<TABLE>
<S> <C> <C>
------------------ ----------------------------------------------- --------------------------------------------
The Company ERS
------------------ ----------------------------------------------- --------------------------------------------
North America 50% of the Development Costs for the 50% of the Development Costs for the
Non-Registrational Studies. Non-Registrational Studies, and
100% of the Development Costs for the
Registrational Studies.
------------------ ----------------------------------------------- --------------------------------------------
Japan 50% of the Development Costs for each of 50% of the Development Costs for each of
the Registrational Studies and the the Registrational Studies and the
Non-Registrational Studies. Non-Registrational Studies.
------------------ ----------------------------------------------- --------------------------------------------
</TABLE>
4.7 IT Support. From and after the Effective Date, ERS shall provide
software and technical assistance to the Company which are reasonably necessary
to enable the Company to fulfill its obligations under this Agreement by
allowing the Company's information systems to communicate and exchange data
with ERS's and BMS's information systems to a degree and in a manner mutually
agreed upon by the Parties. Such software and technical assistance will enable
secure information flow among the Parties with respect to clinical, regulatory,
manufacturing, marketing and sales information. It is understood that such
software and technical assistance shall not include providing any hardware
necessary for the Company to permit such information flow or incurring the
costs associated with such hardware by ERS. ERS and BMS shall be responsible
for all costs they incur in connection with providing the foregoing software
and technical assistance to the Company, which
26
<PAGE>
Confidential treatment requested by Bristol-Myers Squibb Company, Bristol-Myers
Squibb Biologics Company and ImClone Systems Incorporated.
shall include, without limitation, ERS's and BMS's internal costs of providing
information technology personnel to provide such software and technical
assistance and all applicable allocable overhead. Each of the Parties shall be
responsible for their respective internal information technology maintenance
costs associated with or arising from the foregoing, which shall include,
without limitation, each such Party's internal costs of providing information
technology personnel to provide such maintenance and all applicable allocable
overhead. This Section 4.7 is not intended to address software or hardware
upgrades unilaterally undertaken by the Company without ERS's consent after the
foregoing communication and data exchange systems have been established. In the
event that the Parties cannot agree with respect to any of the foregoing, such
matter shall be referred to the relevant Committee for resolution.
4.8 Delay of Initial Regulatory Filing. In the event that Registration
of the Initial Regulatory Filing is denied or is materially delayed by the FDA,
then the PDC shall (a) immediately meet to discuss in good faith a reassessment
of the relevant Clinical Development Plan to address the FDA's objections and
questions, (b) immediately give the JEC notice of such developments, (c) from
time to time as additional such developments arise, promptly give the JEC
notice of such additional developments, and (d) keep the JEC reasonably
informed of the PDC's deliberations regarding all such developments. As used in
this Section 4.8, a material delay is a delay arising from a requirement set
forth by the FDA that the Company conduct additional clinical studies not
conducted in connection with the submission of the Initial Regulatory Filing.
In the event of a material delay, the PDC shall apply its sound scientific,
commercial and regulatory judgment with all deliberate speed to determine
whether or not it is in the best interest of both of ERS and the Company to go
forward with the conduct of any additional clinical studies required by the
FDA. Upon reaching such determination, the PDC shall make a formal
recommendation of its conclusions to the JEC and shall await direction from the
JEC regarding what, if any, further action is to be taken with respect to such
matters. Upon receiving the approval of the JEC to undertake the additional
clinical studies required by the FDA, the PDC shall be authorized to, and is
hereby directed to, redirect (without increasing) the existing overall Clinical
Budget as necessary to undertake such studies and to cause such studies to be
undertaken.
4.9 Suspension of Clinical Development Activities. Any Party shall
have the right to immediately suspend the relevant clinical development
activities with respect to a Product or Compound for a particular indication,
formulation or dosage form in the event that such Party, in good faith,
determines that there exists significant and urgent concerns relating to
patient safety with respect to such clinical studies. The Party making the
determination to suspend such clinical activities shall notify the other
Parties in writing immediately of any such suspension and the reasons therefor.
The PDC shall then promptly determine what actions should be taken with respect
to such clinical activities. Once a determination is made by the PDC with
respect to the appropriate actions to be taken, the PDC shall review and
re-evaluate the relevant Clinical Development Plan and the Clinical Budget and
make any changes necessary to implement such actions.
4.10 Liability. Each Party shall be responsible for, and hereby
assumes, any and all risks of personal injury or property damage attributable
to the negligent or willful acts or omissions of such Party or its Affiliates,
and their respective directors, officers, employees and agents and for the
Registrational Studies and the Non-Registrational Studies that the Party is
responsible for conducting and the other responsibilities of such Party
pursuant to this Section 4.
27
<PAGE>
Confidential treatment requested by Bristol-Myers Squibb Company, Bristol-Myers
Squibb Biologics Company and ImClone Systems Incorporated.
5. DISTRIBUTION AND PROMOTION.
5.1 Generally. ERS shall use all commercially reasonable efforts to
launch, promote and sell the Products in each country in the Territory (without
regard to other products of BMS and its Subsidiaries) and to perform such
responsibilities diligently, with the objective of maximizing the sales
potential of the Products and promoting the therapeutic profile and benefits of
the Products in the most commercially beneficial manner.
5.2 Scope of Marketing Budget.
(a) The Marketing Budget for the marketing and sales of Products
in each country in the Territory for calendar years 2001 through 2004 is
attached to this Agreement as Exhibit 5.2(A).
(b) The Indicative Marketing Budget for the marketing and sales
of Products in each country in the Territory for calendar years 2005 through
and including 2017 is attached to this Agreement as Exhibit 5.2(B).
(c) At least 12 months prior to the end of the last calendar year
for which a Marketing Budget has been approved (i.e., prior to the end of 2004,
2008 and 2012, respectively), the JCC shall develop, finalize and approve a
marketing budget for the Products for the