**Exhibit 10.30**

 

5000 LITER SCALE MULTI-PRODUCT SUPPLY AGREEMENT

 

between

 

LONZA BIOLOGICS PLC

 

and

 

IMCLONE SYSTEMSINCORPORATED

 

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TABLE OF CONTENTS

 

 
| **ARTICLE** | ** ** | **TITLE**                                               | ** ** | ** ** |
|-------------|------------|---------------------------------------------------------|------------|------------|
|        |       |                                                    |       |       |
| 1           |       | Definitions                                             |       |       |
|        |       |                                                    |       |       |
| 2           |       | Term                                                    |       |       |
|        |       |                                                    |       |       |
| 3           |       | Supply by ImClone                                       |       |       |
|        |       |                                                    |       |       |
| 4           |       | Agreement to Supply                                     |       |       |
|        |       |                                                    |       |       |
| 5           |       | Order  Quantities and Ordering Procedures               |       |       |
|        |       |                                                    |       |       |
| 6           |       | Provision of the Services                               |       |       |
|        |       |                                                    |       |       |
| 7           |       | Delivery  and Transportation of Products; ImClone Tests |       |       |
|        |       |                                                    |       |       |
| 8           |       | Steering Committee                                      |       |       |
|        |       |                                                    |       |       |
| 9           |       | Process Changes                                         |       |       |
|        |       |                                                    |       |       |
| 10          |       | Shared Manufacturing                                    |       |       |
|        |       |                                                    |       |       |
| 11          |       | Regulatory  Support and Quality Assurance               |       |       |
|        |       |                                                    |       |       |
| 12          |       | Excess  Capacity                                        |       |       |
|        |       |                                                    |       |       |
| 13          |       | Price and Terms of  Payment                             |       |       |
|        |       |                                                    |       |       |
| 14          |       | Warranties,  Limitation of Liabilities, etc.            |       |       |
|        |       |                                                    |       |       |
| 15          |       | Limitations of Liability                                |       |       |
|        |       |                                                    |       |       |
| 16          |       | ImClone  Information, LB Information and Patent Rights  |       |       |
|        |       |                                                    |       |       |
| 17          |       | Termination                                             |       |       |
|        |       |                                                    |       |       |
| 18          |       | Force Majeure                                           |       |       |
|        |       |                                                    |       |       |
| 19          |       | Governing  Law, Jurisdiction and Enforceability         |       |       |
|        |       |                                                    |       |       |
| 20          |       | Miscellaneous                                           |       |       |

 

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ATTACHMENTS

 
| Attachment 1 — Final Product  Specifications |   |   |
|---------------------------------------------------|--------|--------|
| Attachment 2 — Tech Transfer                 |   |   |

 

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This Multi- Product SUPPLY AGREEMENT, dated as of March 17, 2005,is by and between LONZA BIOLOGICS PLC, an English corporation (“LB”), of 228Bath Road, Slough, Berkshire SL1 4DX, England, and IMCLONE SYSTEMSINCORPORATED, a Delaware corporation (“ImClone”), of 180 Varick Street, New York,NY 10014.

 

WITNESSETH:

 

WHEREAS, LB has available manufacturing capacity in the 5000 literscale; and

 

WHEREAS, ImClone has desire to utilize said existing capacity;

 

NOW, THEREFORE, the parties hereto agree as follows:

 

# 1.             Definitions.

#  

## 1.1.          Inthis Agreement, the following terms have the meanings set forth below:

##  

### 1.1.1.       “Affiliate”means any corporation, partnership, limited liability company or other entity,which directly or indirectly controls, is controlled by or is under commoncontrol with the relevant party to this Agreement, and “control” and itscorrelates means the ownership of more than fifty percent (50%) of the issuedvoting shares, or the legal power to direct or cause the direction of thegeneral management and policies, of the party in question.

###  

### 1.1.2.       “Agreement”means this Product Supply Agreement between LB and ImClone.

###  

### 1.1.3.       “Batch”means the quantity of total bulk purified Product (including samples takenduring the 5000 Liter Process) which is produced as a result of the completionof one operation of the 5000 Liter Process for the

 

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### Productin the 5000 Liter Manufacturing Suite in accordance with the Specifications andwith cGMP.

###  

### 1.1.4.       “BatchPrice” means the sum which is payable to LB for the performance of the Serviceswith respect to a Batch as determined pursuant to Article 13 hereto, whichfee compensates LB for, among other things:

###  

##### (i)            storageof the cell banks of the Cell Line during the term of this Agreement;

#####  

##### (ii)           preparationand maintenance of manufacturing documents for the manufacture of bulk Product;

#####  

##### (iii)          performanceof the cell culture phase of the 5000 Liter Process;

#####  

##### (iv)          performanceof the purification phase of the 5000 Liter Process;

#####  

##### (v)           analysisof Product according to the Specifications;

#####  

##### (vi)          review ofcompleted Batch records; and

#####  

##### (vii)         thecosts of operating the 5000 Liter Manufacturing Suite (including but notlimited to the use and operation of all equipment and supply of utilities);

#####  

(viii)        thecosts of all raw materials excluding purification resins, are included in theBatch Price set forth in Section 13.1.1.Purifcation resins shall be charged at cost to ImClone.

 

### 1.1.5.       This Section left intentionally blank.

###  

### 1.1.6.       “CellLine” means the cell line used in the manufacture of the Product then beingproduced, as the same may be amended from time to time in accordance with theprovisions of this Agreement.

 

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### 1.1.7.       “Certificateof Analysis” means a document certifying that LB has performed certain testsspecified and agreed to by both parties on each Batch of Product and containingthe results of those tests and whether or not the Batch of such Product meetsagreed upon specifications; and certifying that the Batch of such Product wasmanufactured in accordance with the approved process.

###  

### 1.1.8.       “cGMP”means current Good Manufacturing Practices as promulgated under and inaccordance with ICH Q7A GMP guidelines and the U.S. Federal Food, Drug andCosmetic Act, 21CFR (Parts 210, 211, 600 and 610) and the Guide to GoodManufacturing Practices for Medicinal Products as promulgated under EuropeanDirective 91/356/EEC, as appropriate.

###  

### 1.1.9.       ThisSection left intentionally blank.

###  

### 1.1.10.     “Deliver”or “Delivery” has the meaning ascribed to it in Section 7.1.

###  

### 1.1.11.     “DeliveryDate” means, with respect to a particular Batch, the date of issuance of a Certificateof Analysis by LB or the date on which a given Batch of Product, conforming tothe Specifications, is made available for Delivery to ImClone, EXW (ex-works)LB (NH)’s premises, whichever is later.

###  

### 1.1.12.     “EffectiveDate” means the date of this Agreement set forth in page 1.

###  

### 1.1.13.     “FermenterTrain” means two seed reactors (50L and 500L) and the production reactor (5000L).

###  

### 1.1.14.     This Section left intentionally blank.

 

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### 1.1.15.     “ImCloneInformation” means all know-how, technical information and other informationknown to, controlled by or owned by ImClone or its Affiliates from time to timeand not known to and at the free disposal of LB prior to its disclosure byImClone to LB or LB (NH) or their respective Affiliates and not freelyavailable in the public domain including, without limitation, the Cell Line, the5000 Liter Process, and the Product.

###  

### 1.1.16.     “ImCloneMaterials” means the materials supplied or to be supplied by ImClone to LB orLB (NH) or their respective Affiliates pursuant to Article 3 or suppliedpursuant to previous Services Agreements between the parties.  ImClone Materials shall include the Cell Lineand purification resins.  ImClone shallhave and shall retain all rights to ImClone Materials except as specificallyprovided in Section 3.3.

###  

### 1.1.17.     “ImClonePatent Rights” means all Patent Rights that are owned by or licensed to ImClonefrom time to time during the term hereof.

###  

### 1.1.18.     “ImCloneTests” means the tests that both parties have agreed will be carried out on theProduct following its receipt by ImClone, as modified from time to time bywritten agreement between the parties.

###  

### 1.1.19.     This Section left intentionally blank.

###  

### 1.1.20.     “5000Liter Manufacturing Suite” means the 5000 Liter cGMP manufacturing facility locatedat the LB (NH) Portsmouth, New Hampshire manufacturing site, which shallinclude two 5000 Liter (5000L) airlift fermenter and associated seed trains,harvest and purification equipment.

 

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### 1.1.21.     “5000Liter Process” means the process for the production of the Product from theCell Line, as such process is transferred from ImClone to LB under anappropriate Technology Transfer Agreement between the parties.

###  

### 1.1.22.     “Product”means any product made from a cell line and process which are compatible withmanufacture in the 5000 Liter Manufacturing Suite including the monoclonalantibody known as ERBITUXâ (cetuximab andformerly known as IMC-C225) (including any sample thereof).  ImClone shall notify LB of any change in theidentity or formulation of the then-current Product no later than six (6)months before the commencement of manufacture. Notwithstanding the foregoing,the Parties understand that any Product to be manufactured in the 5000 Litermanufacturing suite must have a process similar to the production Process forERBITUXâ, (i.e. similar fermentation time in theproduction reactor and a similar purification time.).  If the production process requires morefermentation time or additional purification time the Batch Price for theProduct will be adjusted accordingly. ImClone shall notify LB of the Productand any substitute product no later than six (6) months before the commencementof manufacture. Before commencement of the campaigns particulars of the Productwill be set out in Attachments to this Agreement as amended from time to timein accordance with this Agreement or any new formulation of such antibody.

###  

### 1.1.23.     “LB(NH)” means LB’s Affiliate, Lonza Biologics, Inc. of Portsmouth, New Hampshire.

 

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### 1.1.24.     “LBInformation” means all know-how, technical information and other informationknown to, owned by or controlled by LB or its Affiliates from time to time, andnot known to and at the free disposal of ImClone prior to its disclosure by LBto ImClone and not freely available in the public domain.

###  

### 1.1.25.     “LBPatent Rights” means all Patent Rights of which LB or any of its Affiliates isfrom time to time the owner during the term hereof.

###  

### 1.1.26.     “Outof Freeze” shall mean the date that the vial of Product cells is thawed tostart manufacture of a Batch.

###  

### 1.1.27.     This Section left intentionally blank.

###  

### 1.1.28.     This Section left intentionally blank.

###  

### 1.1.29.     This Section left intentionally blank.

###  

### 1.1.30.     “MinimumOrder” shall mean ***** Batches of the Product or, if a substitute product isused, such batch quantity as reasonably determined by the Steering Committee.

###  

### 1.1.31.     “PatentRights” means all patents and patent applications owned or licensed of any kindthroughout the world, including without limitation all substitutions,extensions, reissues, renewals, and inventor certificates, and patents issuingfrom applications (including provisionals, divisionals, continuations andcontinuations in part).

###  

### 1.1.32.     “Presidents”has the meaning ascribed to it in Section 8.3.

###  

### 1.1.33.     This Section left intentionally blank.

 

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### 1.1.34.     “ProducerPrice Index” or “PPI” means the Producer Price Index for PharmaceuticalPrescription Preparations, Prescription (“PPI” Series ID PCU 325412325412, asreported by the Bureau of Labor Statistics of the U.S. Department of Labor or,if such index is no longer available, such index by which it is replaced by theBureau of Labor Statistics or any successor U.S. agency issuing suchindices.  If such index is discontinuedand there is no direct successor index, the Steering Committee shall designatean appropriate index that approximates as closely as possible such Bureau ofLabor Statistics index.

###  

### 1.1.35.     “RawMaterials” means all materials, and supplies, which are purchased or used by LBin the performance of the Services.

###  

### 1.1.36.     This Section left intentionally blank.

###  

### 1.1.37.     “Services”means the services to be provided by LB which are the subject of thisAgreement, including without limitation, the services described in Article 4below and the provision of personnel and operation of relevant plant andequipment to accomplish those services.

###  

### 1.1.38.     This Section left intentionally blank.

###  

### 1.1.39.     “Specifications”means the specifications for each Product, as established before commencementof any campaign by ImClone and confirmed through designated batches as mutuallyagreed between Parties which specifications may be modified from time to timepursuant to Section 9.

###  

### 1.1.40.     “SteeringCommittee” means the committee established pursuant to Section 8.1.

 

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### 1.1.41.     “TestingLaboratories” means any third party instructed by LB to carry out tests on theImClone Materials or the Product.

###  

## 1.2.          Unlessthe context requires otherwise, references to the singular include the pluraland vice versa, references to Attachments are references to attachments to thisAgreement, and references to Articles and Sections are references to thearticles and sections of this Agreement.

##  

# 2.             Term.

#  

## 2.1.          ThisAgreement shall take effect as of the Effective Date and shall remain in effectuntil the delivery of the *****  batch,unless earlier terminated as provided for in Section 2.2 below or Article 16or extended under an amendment to this Agreement.

##  

## 2.2           Notwithstanding any terms in this Agreement to the contrary, the parties agree,that ImClone may terminate this Agreement upon six (6) months prior writtennotice, without any financial penalty, at any time after the completion of theMinimum Order.

##  

# 3.             Supply by ImClone.

#  

## 3.1.          Supplyof Cell Line and Reference standard. ImClone shall supply or cause to be supplied, sufficient purifiedreference standard for the Product and sufficient ampoules of the Cell Linefrom an appropriate cell bank for LB to provide the Services.

##  

## 3.2.          Supplyof other ImClone Materials.  ImCloneshall ensure the adequate and timely supply of further amounts of the ImCloneMaterials in sufficient quantity to facilitate LB’s performance of theServices.  LB must provide ImClone timelynotice, in writing, of its requirements for ImClone Materials.

 

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## 3.3.          Rightsin ImClone Information, ImClone Patent Rights and ImClone Materials.  ImClone hereby grants LB the non-exclusiveright to use the ImClone Information, the ImClone Patent Rights and the ImCloneMaterials solely for the purpose of LB performing Services for ImClone underthis Agreement.  Without prejudice to anyother rights vested in LB pursuant to pre-existing or future agreements betweenthe parties or their Affiliates, LB will not use the ImClone Information,ImClone Patent Rights or ImClone Materials (or any part thereof) for any otherpurpose without ImClone’s prior written consent.  Except as set forth in this Section 3.3,no licenses are granted to LB to use the ImClone Materials, the ImClone PatentRights or the ImClone Information, and no licenses shall arise or be deemed tohave arisen by default, estoppel or otherwise.

##  

## 3.4.          LBObligations regarding ImClone Materials. LB shall:

##  

### 3.4.1.       Atall times use all reasonable endeavors to keep the ImClone Materials and RawMaterials secure and safe from loss and damage in such manner as LB stores itsown materials of similar nature;

###  

### 3.4.2.       Notpart with possession of the ImClone Materials or the Product, save for thepurpose of tests at the Testing Laboratories or as directed by ImClone; and

###  

### 3.4.3.       Causeall Testing Laboratories to be subject to confidentiality and limited-useobligations no less onerous than those confidentiality and limited-useobligations imposed on LB under this Agreement.

###  

## 3.5.          NoOther License.  Without prejudice toLB’s right to receive payment of the Price hereunder or to LB’s own proprietaryrights in the LB Information and the LB Patent Rights, LB agrees that, exceptas expressly provided in Section 3.3 above, LB shall not by virtue

 

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## of this Agreementacquire any right, license or title in, or to, the ImClone Patent Rights, theImClone Information, the ImClone Materials, the 5000 Liter Process, or the Product.

##  

## 3.6.          ImCloneRepresentations and Warranties. Provided that the Product is IMC-C225, then ImClone represents andwarrants to LB as follows: (If a different product is to be produced, ImCloneagrees to make new representations and warranties regarding such product andboth parties agree to negotiate in good faith such new representations andwarranties with the goal that such new representations and warranties willsatisfy, whenever practicable, the intent of this Section 3.6.)

##  

### 3.6.1.       ImClonehas the corporate power and authority to enter into this Agreement;

###  

### 3.6.2.       Tothe best of ImClone’s knowledge and belief, ImClone has, and subject to Section 3.6.5below, shall at all times throughout the term of this Agreement have, the rightto supply the Cell Line, the other ImClone Materials and the ImCloneInformation to LB;

###  

### 3.6.3.       Anyof the Cell Line, the other ImClone Materials, ImClone Information and ImClonePatent Rights not owned by ImClone are licensed to ImClone under a licensewhich will permit their use by LB to perform the Services;

###  

### 3.6.4.       Tothe best of ImClone’s knowledge and belief, the use by LB of the Cell Line,other ImClone Materials, ImClone Information, ImClone Patent Rights and theLarge Scale Process (excluding any steps made or developed by LB) for theServices will not infringe any rights (including, without limitation, anyintellectual property rights) of any third party; and

 

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### 3.6.5.       Exceptas to alleged infringement actions disclosed on Schedule 3.6, ImClone willpromptly notify LB in writing if it is no longer entitled to supply the CellLine, other ImClone Materials, ImClone Information or the ImClone Patents forthe Services or if ImClone is aware that the use thereof infringes or isalleged to infringe any rights (including, without limitation, any intellectualproperty rights) of any third party.

###  

### 3.6.6.       ToImClone’s knowledge, ImClone has disclosed, and shall disclose, to LB allenvironmental requirements that ImClone is aware of or becomes aware of,without independent investigation by ImClone, which LB must comply with duringthe use of the 5000 Liter Process (excluding any steps made or developed byLB).

###  

## 3.7.          ImCloneIP Indemnification.  ImClone willindemnify, defend and hold harmless LB and its Affiliates against any loss,damage, costs and expenses of any nature (including reasonable fees anddisbursements of counsel and experts) incurred by LB or any Affiliate of LB orordered by a court of competent jurisdiction to be paid or payable by LB or anyAffiliate of LB, to the extent incurred as the result of (a) any breach of thewarranties set forth in Section 3.6 above or (b) any claims (collectively,“LB Claims”) alleging LB’s use of the Cell Line, other ImClone Materials, theImClone Information, ImClone Patent Rights or the 5000 Liter Process (otherthan steps or components which are or become part of the 5000 Liter Process byvirtue of contributions of LB) in the course of the Services, infringes or isalleged to infringe any rights (including without limitation any intellectualproperty rights) of a third party (whether or not ImClone knows or ought tohave known of such infringement or alleged infringement).  Any lost Batch Price shall be included in thelosses and damages resulting from any such breach or claim.  

 

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## It is hereby agreedthat LB shall notify ImClone as soon as is reasonably practicable of any claim,action or proceedings and shall at ImClone’s cost provide ImClone withreasonable assistance and relevant information to support ImClone to avoid,compromise or defend any such claim or action or proceedings.  Further, unless the same conflict with orprejudice LB’s proper business interests or might reasonably be expected to doso LB shall at ImClone’s cost take such action as ImClone may reasonably andproperly require to avoid, compromise or defend any such claim or action orproceedings. Nothing contained in this Section 3.7 shall oblige LB to takeany action or steps in its own name in defending any claim, action orproceedings.  The provisions of this Section 3.7shall be LB’s sole and exclusive remedy in connection with the mattersdescribed in clauses (a) and (b) above.

##  

## 3.8.          Survival.  The obligations of ImClone under Section 3.7shall survive the end of the term or earlier termination of this Agreement.

##  

# 4.             Agreement to Supply.

#  

## 4.1.          cGMPManufacture.  LB will, in accordancewith the terms of this Agreement, manufacture and Deliver (in accordance with Section 7.1)Batches of Product at 5000 liter scale in accordance with cGMP using the 5000Liter Process and the 5000 Liter Manufacturing Suite.  ImClone understands that as further definedin Section 4.3 additional product-specific development documentation andvalidation work may be required to support regulatory applications.

##  

## 4.1.1        ImCloneacknowledges and agrees to order the Minimum Order as defined herein, providedthat LB passes all relevant regulatory authority and cGMP Inspections of LB’sfacility to manufacture 5000L batches of Product.

 

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## 4.1.2        LBshall make commercially reasonable efforts to manufacture the Minimum Orderwithin approximately five (5) years from the Effective date of the Agreement. Acampaign shall consist of a minimum series of three (3) batches of a singleproduct. A minimum of ***** in the first year of the Agreement and a minimum of***** to commence in each subsequent year. The number of campaigns and thenumber of batches in each campaign shall be agreed between Parties prior to thecommencement of that calendar year.

##  

## 4.2.          LBSupply Obligations.  For each Batchof Product ordered by ImClone hereunder, LB will perform all Services necessaryto manufacture and Deliver the Product in accordance with cGMP, including:

##  

### 4.2.1.       Recoverampoules of the cell bank for the Cell Line and expand cultures to completeairlift fermentation at 5000 liter scale in the 5000 Liter Manufacturing Suite.  Each Batch shall be produced as one lot fromone ampoule of the cell bank provided by ImClone.

###  

### 4.2.2.       Clarifyculture supernatant and purify using the 5000-Liter Process

###  

### 4.2.3.       Testthe Product against the Specifications. Additional Product and in process samples may be taken at ImClone’srequest for further analysis. Alternatively, additional tests may be performed by LB at a price andunder terms and conditions to be agreed*.*

###  

### 4.2.4.       Reviewrequirements (if any) for 5000 Liter Process modifications in order to meet theSpecifications for manufacture of subsequent Batches 

 

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### andnotify ImClone of such proposed modifications. Any such 5000 Liter Process modifications are subject to Section 9.1.

###  

### 4.2.5.       UndertakecGMP review of lot documentation, define Product disposition, and issue a Certificateof Analysis.

###  

### 4.2.6.       Deliverthe Product to ImClone.

###  

### 4.2.7.       Uponthe FDA’s request, and at LB’s expense, conduct an FDA inspection of 5000 LiterManufacturing Suite seeking approval to manufacture the Product at LB’sfacility.

###  

### 4.2.8.       UponImClone’s request, LB shall permit an ImClone employee or representative to bepresent at LB’s facilities during the production of any Product by LB forImClone or any inspection relating to such Product.

###  

# 5.             Order Quantities and Order Procedures.

#  

## 5.1Minimum Orders

##  

## The MinimumOrder of ***** batches shall be scheduled by LB according to the freelyavailable capacity in the 5000L suite as mutually agreed by ImClone. The firstcampaign shall be scheduled to commence within 4 months of initiation of the techtransfer of the first Product. Initiation of the tech transfer for the first Productis expected to commence within 4 months of the Effective Date of thisAgreement.

##  

# 5.2 Additional Orders.

#  

## Anyorders required by ImClone in addition to the Minimum Order, shall be requestedin writing to LB on a (12)month rolling basis, from the Effective Date of the Agreement. Any such 

 

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## Additional orders shall be subject to LB’s freely available capacity inthe 5000L suite as determined solely by LB.

##  

## 5.3.          BindingOrder.  Not later than six (6) monthsprior to Out of Freeze of any campaign, ImClone shall confirm the actual numberof Batches it requires for manufacture. Upon LB’s acceptance of that confirmednumber of batches a “Binding Order” shall arise for that number of Batches.

##  

# 6.             Provision of the Services.

#  

## 6.1.          Diligence.  LB shall diligently carry out the Services ina professional and workman-like manner, consistent with industry standards forthe contract manufacturing of biologics.

##  

### 6.2.          This Section left intentionally blank.

###  

## 6.3.          Cancellations.

##  

##  ImClone may cancel batches under the MinimumOrder on written notice to LB subject to the following cancellation fees:

##  

## 6.3.1        ***** of the Batch Price for all suchBatches cancelled within 6 months of commencement date of the Batches.

##  

## 6.3.2        *****  of the Batch Price for all such Batchescancelled between the period seven (7) to twelve (12) months of commencementdate of the Batches.

##  

## 6.3.3        *****  of the Batch Price for all such Batchescancelled at greater than 12 months prior to the commencement date of the Batches.

##  

## 6.3.4        Forthe avoidance of doubt ImClone may not cancel any Batch that has commencedmanufacture

 

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## 6.3.5        Forthe avoidance of doubt for any Binding Order or Contract Order in excess of theMinimum Order, ImClone may cancel any batch upon six (6) months prior writtennotice, without any financial penalty, provided that the batch commencementdate for the canceled batch is at least six (6) months away.

##  

## 6.3.6        Notwithstandingthe foregoing, if ImClone cancels or reschedules a batch, LB will use goodfaith efforts to seek an alternative customer or customers to purchase thecapacity which is reserved for ImClone so as to mitigate ImClone’s obligationsunder the Agreement.  If LB is able tosell such capacity, ImClone’s obligation to compensate LB pursuant to Section 6.3shall be adjusted accordingly.

##  

## 6.4           Exceptas provided in this Article 6 or Section 17.4, ImClone shall not beentitled to cancel any unfulfilled part of the Services or to refuse to acceptthe Services on grounds of late performance, late delivery or failure toproduce the estimated quantities of Product for delivery.  LB shall not, except as provided in this Article 6,be liable for any loss, damage, costs or expenses of any nature, whether director consequential, occasioned by:

##  

### 6.4.1.       Anydelay in performance or delivery howsoever caused; or

###  

### 6.4.2.       Anyfailure to produce the estimated quantities or number of Batches of Product fordelivery.

###  

## 6.5.          This Section left intentionally blank

##  

## 6.6.          This Section left intentionally blank

##  

## 6.7.          TargetBatch Yield.  ImClone and LB eachacknowledge that, due to the unpredictable nature of biological processes, 5000Liter Process Product yield cannot be 

 

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## guaranteed and mayvary. The target per Batch yield of the modified 5000 Liter Process for theProduct will be established by agreement of the parties (the “Modified TargetBatch Yield”).  If any Batch of Product(the “Actual Batch Yield”) is less than ninety percent (90%) of the Current TargetBatch Yield or the Modified Target Batch Yield, as the case may be, (each a “YieldDeficiency”), ImClone and LB agree to adjust the Batch Price, on a pro-rata basis, to reflect suchYield Deficiency.  If a Yield Deficiencyexists ImClone shall be entitled to a cash payment (credited against the Priceof that Batch) in an amount equal to (a) the Batch Price multiplied by *****. Withregards to Products other than ERBITUX®, the parties agree that the targetbatch yield at the 5000 Liter Process will be at least 75% of the average yield ImClone generated from all cGMP batches at its 1000 liter facility scaled up to 5000liters.

##  

## 6.8.          SupplyFailure.  If a situation of ForceMajeure exists such that LB is unable (or the parties agree that there is noreasonable likelihood that LB will be able) to deliver to ImClone the MinimumOrder and such further Binding Orders as may arise such event shall constitutea “Supply Failure.”

##  

### 6.8.1.       Inaddition to ImClone’s remedy under Section 6.10, Supply Failure shallentitle ImClone to exercise the right to elect within a sixty (60) day periodto terminate this Agreement pursuant to Article 17.4.

###  

### 6.8.2.       Inthe event ImClone elects not to terminate but rather to treat the SupplyFailure as a Late Delivery, the provisions of Section 6.10 shall apply

###  

## 6.9.          Compliancewith Regulatory Requirements.  LBshall comply, at LB’s cost, with all regulatory requirements from time to time applicableto the Services and in accordance with the other applicable legal andregulatory requirements of the federal, state and local jurisdictions 

 

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## in which the 5000Liter Manufacturing Suite is located.  IfImClone requests LB to comply with any other legal or regulatory requirements,LB shall use reasonable commercial efforts to do so provided that:

##  

### 6.9.1.       ImCloneshall be responsible for informing LB in writing of the precise requirementswhich ImClone is requesting LB to observe;

###  

### 6.9.2.       Suchrequirements do not conflict with any mandatory requirements under the laws ofthe location of the manufacture of the Product;

###  

### 6.9.3.       LBshall be under no obligation to ensure that the information furnished byImClone pursuant to Section 6.9.1 complies with the applicablerequirements of any jurisdiction; and

###  

### 6.9.4.       Allcosts and expenses properly incurred by LB in complying with ImClone’s requestsregarding the requirements referred to in Sections 6.9.1 through 6.9.3 shall becharged to ImClone, in addition to the Price.

###  

## 6.10.        LateDelivery.

##  

### 6.10.1.     Wherea Batch has been ordered by ImClone pursuant to Section 5.2 and is subjectto an agreed date for delivery and LB fails to deliver said Batch by a datewhich is six (6) weeks after such date for delivery (subject to an extension oftime for such delivery which LB may become entitled to hereunder) principally dueto LB’s own fault, omission or unilateral scheduling change, ImClone shall beentitled to claim compensation for such late delivery.  The compensation to which ImClone shallbecome entitled shall be equivalent to five percent (5%) of the Price of theBatch in question multiplied by the number of weeks (or fractions of weeks), 

 

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### betweenthe date six (6) weeks after the date for the Batch in question and the nextdate upon which a Batch is notified to ImClone as being ready for delivery.

###  

### 6.10.2.     Limitationon Liability.  In no event shallcompensation pursuant to this Section 6.10 on any one Batch exceed thirty five percent (35%) of the Price of the Batch inquestion, irrespective of whether such damages accrue as a result of any singleevent or a series of events or as a consequence of delay to delivery of aprevious Batch.  Such liquidated damagesare a reasonable estimate of actual damages and do not represent a penalty.Notwithstanding the foregoing, where late delivery compensation has accrued ona particular Batch during a campaign,and as a consequence, other Batches ordered in the same campaign are also delayed, ImClone shall be entitled to claimcompensation in respect of such delay on no more than the first two (2) of such delayed Batches in any campaign.

###  

# 7.             Delivery and Transportation of Product; ImCloneTests.

#  

## 7.1.          Delivery.  The Product shall be delivered EXW (ex-worksas defined by Incoterms 2000) LB (NH)’s Portsmouth, New Hampshire manufacturingfacility (“Deliver,” “Delivery,” or “Delivered,” as appropriate).  LB shall issue to ImClone a Certificate ofAnalysis on or before the Delivery Date.

##  

## 7.2.          Packagingand Labeling.  Unless otherwiseagreed, LB will package and label Product in accordance with its standardoperating procedures.  ImClone willinform LB in writing in advance of any special packaging and labelingrequirements for the Product.  All 

 

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## additional costsand expenses incurred by LB in complying with such special requirements shallbe charged to ImClone in addition to the Price.

##  

## 7.3.          Loading,Insurance and Transportation. ImClone shall pick up the Product within fourteen (14) days after theDelivery Date.  Notwithstanding theDelivery of Product EXW, LB shall load the Product at LB’s expense onto thetrucks provided by ImClone, at ImClone’s expense.  At ImClone’s request and expense, LB will(acting as agent for ImClone) arrange for insurance to cover the Product after suchfourteen (14) day period.  At ImClone’s writtenrequest and expense, LB will (acting as agent for ImClone) arrange thetransportation of Product to a facility in the United States designated byImClone, together with insurance for the Price for the relevant Batch(es) of Product.All additional costs and expenses incurred by LB in arranging transportationand insurance shall be charged to ImClone in addition to the Price. In caseswhere ImClone has not requested LB to arrange for transportation of Product, LBwill provide reasonable cooperation with ImClone’s transportation agents incoordinating the collection of Product from LB (NH)’s Portsmouth, New Hampshirefacility.  Transportation of the Product,whether or not under any arrangements made by LB on behalf of ImClone, shall bemade at the sole risk and expense of ImClone. For the avoidance of doubt, theProduct will not be insured by LB after the above referenced fourteen (14) dayperiod unless otherwise arranged for.

##  

## 7.4.          Quarantineof Product.  At ImClone’s request, LBwill Deliver Product Batches in quarantine prior to delivery of the Certificateof Analysis.  Such request shall beaccompanied by ImClone’s written acknowledgement that the Batch has beenDelivered without the transmittal to ImClone of a Certificate of Analysis, thataccordingly the Batch cannot be administered to humans until transmittal of theCertificate of Analysis, and that ImClone nevertheless accepts full risk ofloss, title and ownership of the Batch when Delivered.  The Delivery of a Batch in 

 

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## quarantine shallbe subject to such testing requirements as LB or ImClone may reasonablyrequire, and the sixty (60) day period referred to in Section 7.6 shallrun from receipt in quarantine by ImClone of the relevant Batches.

##  

## 7.5.          Inspectionof Product.  Where LB has madearrangements for the transportation of Product under Section 7.3, LB shalluse its reasonable endeavors to notify ImClone by facsimile of shipment on thedate of dispatch.  ImClone shalldiligently examine the Product as soon as practicable after receipt.  Notice of all claims arising out of:

##  

### 7.5.1.       Damageto or total or partial loss of Product in transit shall be given in writing toLB and the carrier within five (5) business days of delivery; or

###  

### 7.5.2.       Failureof a shipment of Product to arrive shall be given in writing within ten (10)business days of the date on which the shipment was made, as stated in LB’snotice of shipment provided in accordance with the terms above to ImClone.

###  

ImClone shall makedamaged Product available for inspection and shall comply with the requirementsof any insurance policy covering the Product. LB shall offer ImClone all reasonable assistance, at ImClone’s cost, inpursuing any claims arising out of the transportation of Product, but LB’sresponsibility shall otherwise be limited by the EXW shipping term (Incoterms2000).

 

## 7.6.          Tests.  Promptly following receipt of a Batch of Product,or any sample intended to be representative thereof, ImClone shall carry outthe ImClone Tests.  If the ImClone Testsshow that the Product fails to meet the applicable Specifications, then ImCloneshall give LB written notice thereof within sixty (60) days from the date ofreceipt of the Batch or sample and shall, unless otherwise directed by LB,return the Batch or sample for further testing. In the 

 

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## absence of suchwritten notice, the Batch shall be deemed to have been accepted by ImClone asmeeting Specifications.  If LB agrees, orit is determined pursuant to Section 7.7, that the returned Batch orsample fails to meet Specifications and, to the extent that such failure is notdue (in whole or in part) to acts or omissions of ImClone or any third party after Delivery of such Batch, the Batch inquestion shall be regarded as not having been Delivered ImClone shall beentitled to a credit in respect of any Batch Price associated with such Batch.

##  

## 7.7.          Disputes.  If there is any dispute concerning whether aBatch meets the applicable Specifications and/or the reasons therefore, suchdispute shall be referred for decision to an independent expert (acting as anexpert and not as an arbitrator) to be appointed by agreement between LB andImClone or, in the absence of agreement by operation of the provisions of Section 19.2.  The costs of such independent expert shall beborne equally between LB and ImClone. The decision of such independent expert shall be in writing and, savefor manifest error on the face of the decision, shall be binding on both LB andImClone.

##  

# 8.             Steering Committee.

#  

## 8.1.          Compositionof Steering Committee.  Promptlyfollowing the Effective Date, LB and ImClone shall establish a SteeringCommittee.  The Steering Committee shallbe comprised of equal numbers of representatives of each party (not to exceedthree representatives of each party). ImClone’s representatives may include employees and representatives ofImClone’s commercial partner for such Product.

##  

## 8.2.          Functionof Steering Committee.  Withoutlimiting the functions of the Steering Committee set out elsewhere in thisAgreement, the role of the Steering Committee shall be to:

##  

### 8.2.1.       This Section left intentionally blank

 

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### 8.2.2.       Assessthe status of 5000 Liter Process and substitute Products for introduction intothe 5000 Liter Manufacturing Suite in connection with the Services and monitorthe status of operation of the 5000 Liter Manufacturing Suite;

###  

### 8.2.3.       This Section left intentionally blank

###  

### 8.2.4.       Resolvedisputes arising between the parties under this Agreement, as provided in Section 19.2,

###  

### 8.2.5.       Monitorthe progress of the Services;

###  

### 8.2.6.       AssistImClone in planning and assessing ImClone’s needs for future supply of Product;

###  

### 8.2.7.       Discussand recommend any changes to the 5000 Liter Process or Specifications, subjectto Article 9;

###  

### 8.2.8.       This Section left intentionally blank

###  

## 8.3.          Meetings.  The Steering Committee shall meet at suchtimes as the Steering Committee determines to resolve issues arising under andto perform its responsibilities under this Agreement, provided that theSteering Committee shall meet not less than two (2) times per calendar yearunless otherwise mutually agreed.  If anyissue to be determined by the Steering Committee is not resolved within thirty(30) days after submission of the relevant issue to the Steering Committee,such issue shall be referred for resolution to the President or the most seniormanufacturing officer of ImClone and the senior officer of LB Biologics Inc.(together, the “Presidents”).

##  

## 8.4.          Limitations.  The Steering Committee is not empowered toamend the terms of this Agreement.

 

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# 9.             Process Changes.

#  

## 9.1.          5000Liter Process.  LB shall notunreasonably refuse any written request from ImClone to make changes to the5000 Liter Process (for example, changes to the 5000 Liter Process which arerequired by the Product or an applicable regulatory authority or applicablelaws), but no change to the 5000 Liter Process shall be made except by anagreement in writing signed by the authorized representatives of bothparties.  Notwithstanding the foregoing,the parties agree to modify the 5000 Liter Process for ERBITUXâto ImClone’s new process known as the high titer process which has beenpreviously disclosed and discussed between the parties.

##  

## 9.2.          Specifications.  LB shall not unreasonably refuse any writtenrequest from ImClone to make changes to the Specifications (for example,changes to the Specifications that are required by an applicable regulatoryauthority or applicable laws), but no change to Specifications shall be madeexcept by an agreement in writing signed by the authorized representatives ofboth parties, as under the terms of the Quality Agreement.

##  

## 9.3.          Procedure.  Unless a party has designated an authorizedrepresentative by notice to the Steering Committee, changes to 5000 LiterProcess or Specifications must be approved in writing by an officer of theparty in question.

##  

## 9.4.          Adjustmentsresulting from Process and Specification Changes.  Any changes to the 5000 Liter Process or tothe Specifications shall be implemented on terms and conditions to be agreed,which may include, but not be limited to, additional development services (tobe performed on terms to be agreed upon in good faith), and reasonableadjustments (which may be upward or downward, as appropriate) to the BatchPrice payable for Services.

 

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# 10.           Shared Manufacturing.

#  

## 10.1.        Theparties intend that the Product produced pursuant to this Agreement which isapproved by the appropriate regulatory body for marketing or sale shall bemanufactured under a shared manufacturing arrangement as defined in “DraftGuidance for Industry – Co-operative Manufacturing Arrangements for LicensedBiologicals, Department of Health and Human Services, Food and DrugAdministration, CBER, August 1999”.  Alist of the responsibilities of each party under such an arrangement will beset forth in Attachment 1 to this Agreement.

##  

# 11.           Regulatory Support and Quality Assurance.

#  

## 11.1.        RegulatorySupport and Audits.  LB shall provideregulatory support to ImClone (or Bristol-Myers Squibb Company and its whollyowned subsidiaries (“BMS”) in cooperation with ImClone), including annualupdates to any drug master files, biologics licenses and other manufacturing ormarketing applications and approvals applicable to the Product and thepreparation for and hosting of inspections by the U.S. Food and DrugAdministration (or other regulatory authorities) or ImClone (or BMS, Merck KGaAor any other commercial partner in cooperation with ImClone, subject to thecompletion of appropriate CDAs between Parties) (in the case of ImClone’s orBMS’s inspections, at mutually convenient times).  ImClone shall be entitled to conduct, and thePrice has been calculated to include LB regulatory support for, one (1) audit(at a mutually convenient time) by ImClone personnel of up to three (3) daysprior to commencement of the Services and, thereafter, up to one (1) audit (ata mutually convenient time) by ImClone personnel of up to three (3) days eachon an annual basis while the Agreement is in effect.  In addition, LB shall permit, and the Pricehas been further calculated to include, (a) an ImClone employee or consultantlocated at the 5000 Liter Manufacturing Suite (i.e., a man-in-plant), and (b)Batch record audits of each Batch.*** ***Except as provided inSection 11.4, if additional regulatory support or ancillary developmentservices are required by ImClone an 

 

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## additional charge shall be made to ImClone at LB’sstandard rates for regulatory services and/or ancillary development servicesand for disbursements at the time the regulatory and/or ancillary developmentservices are performed.  LB shall informImClone of such charge and obtain ImClone’s written consent to such chargebefore providing such additional support. Notwithstanding anything to the contrary in the foregoing, LBacknowledges and agrees that at ImClone’s request such personnel of ImClone’scommercial partners may attend and participate in, on the same terms as ImClonepersonnel, any and all such scheduled audits and regulatory support providedpursuant to this Section 11.1 and that the Price has been calculated to includethese audits. No more than three (3) total personnel from ImClone and ImClone’scommercial partners involved in these audits at the LB site.

##  

## 11.2.        RegulatorySubmissions.  ImClone shall advise LBof any regulatory submissions regarding the Product which may require responsesfrom LB to questions from the regulatory authorities in a timely fashion,taking account of the amount of information LB is required to provide.

##  

## 11.3.        Amendments.  If LB is required to amend the way itmanufactures (such amendments being accomplished in accordance with Article 9)or tests the Product as a result of a change in any statutory or regulatoryrequirement after the Effective Date, it shall use all reasonable efforts tocomply with such requirement.  In thisevent the parties shall negotiate in good faith any appropriate revision to thePrice to reflect additional or lesser costs incurred by LB and any appropriaterevision to the time schedules for providing the Product.

##  

## 11.4.        AdditionalAudits.  If ImClone conducts an auditof the 5000 Liter Manufacturing Suite pursuant to its rights underSection 11.1 and, as a result of default on the part of LB, ImClone hasjust cause to conduct further audits in order to satisfy itself as to thematters of 

 

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## default in question, ImClone shall be entitled,without additional payment to LB, to conduct additional audits (at mutuallyconvenient times) in order to satisfy itself of the matters in question.

##  

## 12.           This Section left intentionally blank

##  

# 13.           Price and Terms of Payment.

#  

## 13.1.        Pricefor Services.  In consideration forthe performance of the Services, ImClone will pay LB the Price set forth below:

##  

### 13.1.1.     Thecurrent Batch Price shall be $ *****per Batch, to include those pilot Batches *****. For clarification the *****per Batch Price includes all the costs and charges associated with the relevantProduct tech transfer.

###  

Except asexpressly provided for by the terms and conditions of this Agreement, ImCloneshall not be obliged to make any further payments in respect of the Services.

 

13.2.        This section left intentionally blank.

 

13.3         LB shall have the right to adjust the batch Price in section 13.1.1 by:

 

13.3.1      an increase of ***** on the batch price foreach additional day required beyond day ***** in the 5000L Production Fermenterand a reduction of ***** on the batch price for each full day less than *****in the 5000L Production Fermenter.

 

13.3.2      an increase of ***** for each additional dayin the purification suite required beyond ***** and a reduction of ***** foreach day less than ***** in the purification suite.

 

### 13.4.        Itis understood between Parties that the estimated cost of the Bill of Material(BOM) is $225,000 per batch. In the event that the BOM exceeds $250,000, for 

 

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### any batch, thenthe additional cost for the BOM shall be charged to ImClone. In the event thatthe BOM is less than $200,000, for any batch, then the difference shall berefunded to ImClone in the final payment of that Batch.

###  

## 13.5.        BatchPrice Adjustments for Exceptional Items. The Batch Price shall be changed to reflect the costs of exceptionalitems incurred by LB in the performance of the Services that could notreasonably have been foreseen (for example extreme cost fluctuations of regionalutilities) excluding cost or expense items accounted for by adjustment of theBatch Price as a result of changes in the Producer Price Index.  These shall include, but not be limited tochanges in the Batch Price caused by mutually agreed alteration of a 5000 LiterProcess or Specifications, provided that, in each case, ImClone has received awritten estimate of the increase in costs and a reasonable demonstration of theitems of cost or expense in question. Such additional Batch Price changes shall be made as needed and agreedby the steering committee.

##  

## 13.6.        Paymentof Batch Price. ImClone shall pay LB the Batch Price against LB’s invoicestherefore, as follows:

##  

### 13.6.1.     LBshall invoice ImClone for FIFTY PERCENT(50%) of the Batch Price upon commencement of work (Out Of Freeze) on aBatch by recovery of an ampoule of the Cell Line from the working cell bank;and

###  

### 13.6.2.     LBshall invoice ImClone for THIRTYPERCENT (30%) of the Batch Price upon Bulk Fill.

###  

### 13.6.3.     LBshall invoice ImClone the final TWENTYPERCENT (20%) of the Batch Price upon Delivery of the Certificate of Analysis and making the Batch Recordsavailable for review, including LB’s final response to ImClone’s comments andquestions on the Batch Record for such Batch of 

 

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### Product.  Notwithstanding theforegoing ImClone agrees to present such comments and questions within 30 daysof receipt of such Batch Record summary.

###  

## 13.7.        This Section left intentionally blank

##  

13.8.        Pricefor Undelivered Product.  No BatchPrice shall be payable in respect of Services that do not result in Delivery(in accordance with Section 7.1) of a Batch of Product, unless otherwise agreedby the Steering Committee.

 

## 13.9.        This Section left intentionally blank

##  

## 13.10.      Taxes.  Unless otherwise indicated in writing by LB,all prices and charges are exclusive of any other taxes, levies, imposts,duties and fees of whatever nature imposed by or under the authority of anygovernment or public authority in respect of the Services and delivery ofProduct (other than taxes on LB’s income), which shall be paid by ImClone.

##  

## 13.11.      Invoices.  All invoices are strictly net and paymentmust be made within thirty (30) days of date of invoice.  Payment shall be made without deduction,set-off, lien or counterclaim of any nature. LB may defer production of further Batches if timely payment ofoutstanding invoices is not made within thirty (30) days of a second writtendemand (i.e., a written demand issued after failure to settle an invoice whichinvoice shall count as the first written demand) for payment to ImClone.  If either party disputes the validity of anyitem or part of an item included in an invoice, the matter may be referred tothe Steering Committee who shall resolve such dispute and may determine whetherpending resolution an extension of time for payment of such disputed item isappropriate.

##  

## 13.12.      Intereston Late Payments.  Interest on latepayments of invoices and other amounts from time to time owed by either partyto the other hereunder shall accrue at the rate of 

 

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## two percent (2%) above the U.S. prime rate from timeto time as quoted in *The Wall Street Journal.*

##  

# 14.           Warranties, Covenants, Limitation of Liability,etc.

#  

## 14.1.        LBRepresentations, Warranties and Covenants. LB represents, warrants and covenants to ImClone that:

##  

### 14.1.1.     theServices shall be performed in accordance with this Agreement;

###  

### 14.1.2.     theProduct delivered to ImClone pursuant to Services performed under thisAgreement shall meet Specifications when Delivered;

###  

### 14.1.3.     unencumberedtitle to all Product will be conveyed to ImClone upon Delivery;

###  

### 14.1.4.     LBhas the corporate power and authority to enter into this Agreement and that LBwill cause LB (NH) to honor the terms of this Agreement and guarantee theperformance of LB (NH) under this Agreement;

###  

### 14.1.5.     Tothe best of LB’s knowledge and belief, LB has the right to use the steps of5000 Liter Process made or developed by LB and has the right to use or supplythe LB Information and LB Patent Rights in performance of the Services forImClone and the use by LB of such 5000 Liter Process steps made or developed byLB, LB Information and LB Patent Rights will not infringe any rights(including, without limitation, any intellectual property rights) of any thirdparty;

###  

### 14.1.6.     TheLB Information and the LB Patent Rights are owned by LB or LB is otherwiseentitled to use them for the purposes of providing Services under thisAgreement and during the term of this Agreement LB shall not

 

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### do or causeanything to be done which would adversely affect their ownership or entitlementto use the same for those purposes;

###  

### 14.1.7.     LBwill notify ImClone in writing immediately if it knows or has reason to believethat it is no longer entitled to utilize the LB Information or the LB PatentRights or that the use by LB of the LB Information or the LB Patents Rights forServices infringes or is alleged to infringe any rights (including withoutlimitation, any intellectual or industrial property rights) vested in any thirdparty; and

###  

### 14.1.8.     LBhas and shall maintain, during the term of this Agreement, all governmentpermits, including but not limited to health, safety and environmental permits,necessary for the conduct of the Services.

###  

### 14.1.9.   -ToLB’s knowledge, LB has disclosed, and shall disclose, to ImClone allenvironmental requirements that LB is aware of or becomes aware of, withoutindependent investigation by LB, which ImClone must comply with during the useof the 5000 Liter Process (excluding any steps made or developed by ImClone).

###  

### 14.1.10.   THEWARRANTIES CONTAINED IN THIS AGREEMENT ARE EXPRESSLY IN LIEU OF AND EXCLUDE,AND LB HEREBY EXPRESSLY DISCLAIMS AND NEGATES, ALL OTHER WARRANTIES, EXPRESS ORIMPLIED, ARISING BY OPERATION OF LAW OR OTHERWISE, INCLUDING BUT NOT LIMITEDTO, IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS 

 

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### FOR A PARTICULARPURPOSE, EVEN IF THAT PURPOSE IS KNOWN TO LB.

###  

## 14.2.        Indemnificationby LB.  LB will indemnify, defend andhold harmless ImClone and its Affiliates against any loss, damage, costs andexpenses of any nature (including reasonable fees and disbursements of counseland experts) incurred by ImClone or any Affiliate of ImClone or ordered by acourt of competent jurisdiction to be paid or payable by ImClone or anyAffiliate of ImClone, to the extent incurred as the result of (a) any breach ofthe representations, warranties and covenants set forth in this Agreement or(b) any claims (collectively, “ImClone Claims”), alleging the use of LB PatentRights, or the LB information infringes or is alleged to infringe any rights(including without limitation any intellectual property rights) of a thirdparty (whether or not LB knows or ought to have known of such infringement oralleged infringement).  It is herebyagreed that ImClone shall notify LB as soon as is reasonably practicable of anyclaim, action or proceedings and shall at LB’s cost provide LB with reasonableassistance and relevant information to support LB to avoid, compromise ordefend any such claim or action or proceedings. Further, unless the same conflict with or prejudice ImClone’s properbusiness interests or might reasonably be expected to do so ImClone shall at LB’scost take such action as LB may reasonably and properly require to avoid,compromise or defend any such claim or action or proceedings.  Nothing contained in this Section 14.2 shalloblige ImClone to take any action or steps in its own name in defending anyclaim, action or proceedings.  Theprovisions of this Section 14.2 shall be ImClone’s sole and exclusive remedy,other than contractual remedies expressly set forth herein, in connection withthe matters described in clauses (a) and (b) above.

 

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## 14.3.        Indemnificationby ImClone.  ImClone shall indemnify,defend and hold LB and its Affiliates harmless against all claims, actions,costs, expenses (including reasonable legal fees and disbursements) or otherliabilities whatsoever of third parties to the extent incurred as a directresult of:

##  

### 14.3.1.     Anyproduct liability in respect of the Product, unless such liability is caused bythe negligent act or omission or willful misconduct of LB in the productionand/or supply of Product and the product defect resulting from LB’s negligentact or omission was not detected by the ImClone Tests; and

###  

### 14.3.2.     Anynegligent or willful act or omission of ImClone in relation to the use,processing, storage or sale of the Product, the application of the ImCloneTests or the marketing of the pharmaceutical product in which the Product isused.

###  

## 14.4.        Insurance.  LB shall obtain and maintain insurancecoverage of the types and in the amounts customary and consistent with industrystandards used in the contract biologics manufacturing industry.  Without limiting the foregoing, LB shallobtain and maintain insurance which covers business interruption.  LB agrees that it shall maintain professionalliability insurance in an amount not less than ten million dollars (10,000,000)per occurrence and aggregate on a claims made basis.  LB shall provide ImClone with evidence ofsuch insurance upon ImClone’s request and shall provide ImClone with writtennotice of cancellation of such insurance policy, not less than ten days priorto such cancellation.  ImClone shallobtain and maintain insurance coverage which is customary and consistent withbiopharmaceutical industry

 

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## standards. ImClone agrees that it shall maintain product liability insurance inamounts not less than ten million dollars (10,000,000) per occurrence andaggregate on a claims made basis. ImClone shall provide LB with evidence of such insurance upon LB’srequest and shall provide LB with written notice of cancellation of suchinsurance policy, not less than ten days prior to such cancellation.

##  

## 14.5.        Recalls.

##  

### 14.5.1.     IfImClone, in its discretion, recalls the Product (voluntarily or by order of aregulatory body) or is required to respond to inquiries of regulatory bodiesrelating to the Services hereunder, LB agrees to provide reasonable cooperationto ImClone at ImClone’s sole expense except to the extent of LB’s negligence orwillful misconduct.  Any assistance to beprovided by LB in response to inquiries of regulatory authorities shall beprovided on terms to be agreed at LB’s standard rates for providing suchassistance.

###  

### 14.5.2.     Subjectto the limitations of LB’s liability to ImClone set out in this Agreement, LBagrees to reimburse ImClone for reasonable, direct, documented expensesincurred by ImClone as a result of recall of a Product mandated by law or by anapplicable regulatory body, but only to the extent LB’s negligence or willfulmisconduct in performing the Services has caused such recall to be required andsuch recall could not have reasonably have been expected to have been preventedby ImClone’s application of the ImClone Tests or other product testing requiredby law to be undertaken by ImClone.

 

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# 15.           Limitations of Liability.

#  

## 15.1.        Limitationof Liability.  THE LIABILITY OF LB TOIMCLONE FOR ANY LOSS SUFFERED BY IMCLONE AS A DIRECT RESULT OF A BREACH OF THISAGREEMENT OR OF ANY OTHER LIABILITY ARISING OUT OF THIS AGREEMENT AND SERVICESPROVIDED THEREUNDER SHALL BE LIMITED TO THE PAYMENT OF DAMAGES WHICH SHALL NOTEXCEED $10,000,000 PER EVENT OR DIRECTLY CONNECTED SERIES OF EVENTS.  This limitation shall not apply if and to theextent such damages are caused by LB’s violation of any environmentalrequirements in the performance of the Services (unless such violation wascaused by a misrepresentation of ImClone), infringement by LB of anyintellectual property of any third person unless caused by a misrepresentationof ImClone hereunder, any claims by employees of LB, willful misconduct orintentional breach of this Agreement or willful misconduct in the performanceof the Services.

##  

## 15.2.        Disclaimerof Consequential Damages.  NEITHERIMCLONE NOR LB SHALL BE LIABLE FOR THE FOLLOWING LOSSES OR DAMAGES HOWSOEVERCAUSED (EVEN IF FORESEEABLE OR IN THE CONTEMPLATION OF LB OR IMCLONE):

##  

### 15.2.1.     LOSSOF PROFITS, BUSINESS OR REVENUE OF ANY PERSON OR PARTY; OR

###  

### 15.2.2.     SPECIAL,INDIRECT OR CONSEQUENTIAL LOSS OF ANY PERSON OR PARTY.

###  

## 15.3.        Survival.  The rights and obligations of ImClone and LBunder this Article 15 shall survive the termination of this Agreement.

 

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# 16.           ImClone Information, LB Information and PatentRights.

#  

## 16.1.        ConfidentialInformation.  ImClone acknowledgesthat LB Information and LB acknowledges that ImClone Information, ImCloneMaterials delivered pursuant to this Agreement are delivered subject toobligations of confidentiality.  Eachparty agrees to keep the other party’s Information and materials secret andconfidential, respect the other’s proprietary rights therein and not withoutthe other party’s prior written consent (i) disclose, (ii) use outside thescope of this Agreement or the Services Agreements or (iii) permit the LBInformation, the ImClone Information or the ImClone Material to be disclosed toany third party or used outside the scope of this Agreement, except asexpressly provided herein.

##  

## 16.2.        Disclosureto Affiliates, employees, etc. ImClone and LB shall grant access to confidential LB Information orconfidential ImClone Information only to those Affiliates, employees, andconsultants who have a clear and demonstrable need to know said information forthe performance of this Agreement and no others unless previously identified inwriting to and agreed to by LB and ImClone; and contractors who are subject tothe same obligations of confidentiality as LB and ImClone under appropriatesecrecy agreements.

##  

## 16.3.        ThirdParties.  LB and ImClone eachundertake not to disclose or permit to be disclosed to any third party, orotherwise make use of or permit to be made use of, any trade secrets orconfidential information relating to the technology, business affairs orfinances of the other, any Affiliate of the other, or of any suppliers, agents,distributors, licensees or other customers of the other which come into itspossession under this Agreement.

##  

## 16.4.        Exceptions.  The confidentiality obligations under thisArticle 16 shall not extend to any information which:

##  

### 16.4.1.     Isor becomes generally available to the public otherwise than by reason of abreach by the receiving party of the provisions of this Article 16;

 

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### 16.4.2.     Isknown to the receiving party prior to its receipt from the disclosing partyfree of any confidentiality obligation to any third party;

###  

### 16.4.3.     Issubsequently disclosed to the receiving party without being made subject to anobligation of confidence by a third party; or

###  

### 16.4.4.     Thereceiving party can demonstrate by competent evidence was independentlydiscovered by the receiving party or its employees without reference to anyinformation received from the other party hereto.

###  

Notwithstanding the foregoing, either LB or ImClonemay disclose confidential information to the extent such disclosure is requiredby applicable law, court order, statutory, regulatory, stock exchange orsimilar legislative requirement, provided that the party making such requireddisclosure notifies the other party as soon as possible to enable the partiesto obtain a protective order against such disclosure.

 

## 16.5.        NoLicense.  Each party acknowledgesthat, except as expressly provided herein or pursuant to a separate agreementbetween the parties existing now or entered into in the future, such partyshall not by virtue of this Agreement at any time have any right, title,license or interest in or to the LB Information, LB Patent Rights, ImCloneInformation, ImClone Material, or ImClone Patent Rights as the case may be, orany other intellectual property rights relating to the 5000 Liter Process whichare owned by the other party or its Affiliates or to which the other party orits Affiliates is otherwise entitled.

##  

# 17.           Termination.

#  

## 17.1 In the eventthat LB fails to comply with cGMP and is unable to continue to manufactureProduct under FDA regulations and should LB be unable or unwilling to resolvethe non-compliance and regain a state of compliance within 90 days of receivingnotice from the 

 

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## FDA of such non-compliance, or the parties reasonablyagree that LB will not be able to become compliant, then ImClone may, as itssole remedy, terminate this Agreement. In the event that such non-compliancehas not been resolved, for any reason, for 180 days from receiving notice fromthe FDA of such non-compliance, this Agreement shall terminate automatically,unless it is mutually agreed by both Parties in writing to extend the Agreementfor an additional specified time period.

##  

## 17.2.        TerminationWithout Cause.  ImClone shall beentitled to terminate this Agreement at any time without cause with 30 daysnotice in writing.  If ImClone terminatesthis Agreement pursuant to this Section 17.1, then within 30 days of receipt ofthe notice ImClone shall pay to LB the balance due of the Batch Price(s) forany undelivered or unordered batches required to make up the Minimum Order byImClone in accordance with Section 6.3.

##  

17.3.        ThisSection left intentionally blank.

 

17.4.        Terminationfor Cause.  LB and ImClone may eachterminate this Agreement, as their sole remedy, with 30 days notice in writingto the other upon the occurrence of any of the following events:

 

### 17.4.3.     Ifthe other materially breaches this Agreement, and (in the case of a breachcapable of remedy) such breach is not remedied within ninety (90) days of thereceipt by the other of notice identifying the breach and requiring its remedyor, if such breach is incapable of remedy within ninety (90) days, the otherparty fails to commence actions within such ninety (90) days to remedy suchbreach pursuant to a plan acceptable to the complaining party. In the event oftermination by LB pursuant to this 

 

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### Section 17.4.3,ImClone shall pay LB the termination fee as set forth in Section 17.1.; or

###  

### 17.4.4.     Ifthe other ceases for any reason to carry on business, dissolves, liquidates,winds up, or files or is petitioned into bankruptcy, liquidation,rehabilitation or dissolution or becomes insolvent or fails generally to payits debts or obligations or a petition is filed seeking the appointment of or

###  

## 17.5.        Effectof Termination Generally.  Upon thetermination of the Agreement for whatever reason:

##  

### 17.5.1.     LBshall promptly return all ImClone Information to ImClone (to the extent legalor regulatory requirements permit) and shall dispose of, or return to ImClonethe ImClone Materials and any materials derived therefrom, as directed byImClone;

###  

### 17.5.2.     ImCloneshall promptly return to LB (to the extent legal and regulatory requirementspermit) all LB Information it has received from LB;

###  

### 17.5.3.     Subjectto any rights granted to ImClone or LB as a result of any written agreementbetween the parties, ImClone shall not thereafter use or exploit the LB PatentRights or the LB Information in any way whatsoever and LB shall not thereafteruse or exploit the ImClone Patent Rights, the ImClone Information or theImClone Materials in any way whatsoever. No licenses shall arise or be deemed to have arisen hereunder either bydefault, estoppel or otherwise except as expressly set forth herein;

###  

### 17.5.4.     LBmay thereafter use or exploit the LB Patent Rights in any way whatsoeverwithout restriction;

 

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### 17.5.5.     LBand ImClone shall do all such acts and things and shall sign and execute allsuch deeds and documents as the other may reasonably require to evidence compliancewith this Section 17.5.

###  

## 17.7.        Survival.  The end of the term or prior termination ofthis Agreement for whatever reason shall not affect the accrued rights ofeither LB or ImClone arising under this Agreement and all provisions which bytheir terms survive the end of the term or prior termination of this Agreementshall remain in full force and effect, including without limitation Sections3.7,14, 15, 16, 17, 19 and 20.

##  

# 18.           Force Majeure.

#  

## 18.1.        Ifeither party is prevented or delayed in the performance of any of itsobligations under this Agreement by an Event of Force Majeure (as definedbelow) and shall give written notice thereof to the other, specifying thematters constituting an Event of Force Majeure and the period for which it isestimated that Event of Force Majeure will continue, that party shall beexcused from the performance or the punctual performance of such obligations,as the case may be, from the date of such notice for so long as such cause ofprevention or delay shall continue.

##  

## 18.2.        Forthe purposes of this Agreement, an “Event of Force Majeure” shall mean causesbeyond the reasonable control of either party or its Affiliates including,without limitation, acts of God (including but not limited to earthquake), lawsor regulations of any government or agency thereof, war, terrorism, civilcommotion, damage to or destruction of production facilities or materials,scientific or technical events, locusts, labor disturbances (whether or not anysuch labor disturbance is within the power of the affected party to settle),epidemic, and failure of suppliers, public utilities or common carriers.

 

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# 19.           Governing Law, Jurisdiction and Enforceability.

#  

## 19.1.        GoverningLaw.  The construction, validity,performance, and enforcement of this Agreement shall be governed by the laws ofState of New York, without giving effect to the principles of conflicts of lawthereof.

##  

## 19.2.        DisputeResolution.  In the event of thefailure on the part of any required representative of the parties hereto or theSteering Committee to resolve any matter required by this Agreement to beagreed, or in the event of any other dispute or claim arising between theparties under this Agreement, the parties shall attempt by good faithnegotiations to resolve such dispute or claim between them by reference to thePresidents, who shall negotiate in good faith during a period of not less thansixty (60) days to resolve such matter, dispute or claim.  In the event the parties are unable toresolve such dispute or claim within the required time, the dispute shall besettled by binding arbitration, in accordance with the Center for PublicResources Rules for Non-Administered Arbitration of Business Disputes, by threearbitrators, none of whom shall be appointed by parties.  The arbitrators shall be selected from theCPR Panels of Distinguished Neutrals and shall be attorneys with at leastfifteen (15) years experience in commercial law.  The arbitration shall be governed by theUnited States Arbitration Act, 9 U.S.C. §§ 1-16, and judgment upon the awardrendered by the arbitrators may be entered in any court having jurisdictionthereof.  The place of arbitration shallbe New York, New York.

##  

## 19.3.        Nowaiver.  No failure or delay on thepart of either LB or ImClone to exercise or enforce any rights conferred on itby the Agreement shall be construed or operate as a waiver thereof nor shallany single or partial exercise of any right, power or privilege or furtherexercise thereof operate so as to bar the exercise or enforcement thereof atany time or times thereafter.

 

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## 19.4.        Severability.  The illegality or invalidity of any provision(or any part thereof) of this Agreement shall not affect the legality, validityor enforceability of the remainder of its provisions or the other parts of suchprovision, as the case may be.

##  

# 20.           Miscellaneous.

#  

## 20.1.        Assignment.  Neither party shall be entitled to assignthis Agreement without the prior written consent of the other, which consentshall not be unreasonably withheld or delayed, except that both parties shallbe entitled without the prior written consent of the other to assign thisAgreement to an Affiliate or to any joint venture company of which that partyis the beneficial owner of more than fifty per cent (50%) of the issued votingshare capital thereof or to any company to which that party may transfersubstantially all of its assets provided that ImClone may assign this Agreementto BMS (or one of its subsidiaries) or any other commercial partner of ImClonefor any such Product without such consent. Any assignment not permitted by this Section 20.1 shall be void and ofno effect whatsoever.

##  

## 20.2.        Publicity.  The text of any press release or othercommunication to be published by or in the media concerning the subject matterof this Agreement shall require the prior written approval of LB and ImClone.

##  

## 20.3.        EntireAgreement.  This Agreement embodiesthe entire agreement and understanding between LB and ImClone relating to thesubject matter hereof and there are no promises, terms, conditions orobligations, oral or written, expressed on implied, other than those containedin this Agreement.  The terms of thisAgreement supersede all previous agreements and understandings between LB andImClone relating to the Services.

 

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## 20.4.        IndependentContractor.  Each party to thisAgreement acts as an independent contractor and nothing in this Agreement shallbe construed to create a relationship of partnership, principal and agent, orjoint venture between the parties.

##  

## 20.5.        Notices.  Any notice or other communication to be givenunder this Agreement shall be delivered personally or sent by first classpre-paid registered or certified mail, return receipt requested, nationallyrecognized courier service or facsimile transmission addressed as follows:

##  

If to ImClone, to:

 

ImClone SystemsIncorporated33 Chubb WayBranchburg, NJ  08876For the attention of: Legal Department. Facsimile: (908) 704-2719

 

with a copy to:

 

ImClone SystemsIncorporated33 Chubb WayBranchburg, NJ  08876

 

For the attentionof:  S. Joseph Tarnowski, Ph.D.Facsimile:  (908) 575-0503

 

If to LB, to:

 

Lonza Biologics plc228 Bath RoadSloughBerkshire SL1 4DXEnglandFor the attention of:  Company SecretaryFacsimile: (011) 44 1753 777001

 

with a copy to:

 

Lonza Biologics, Inc.101 International DrivePortsmouth, New Hampshire 03801-2833

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For the attention of: COOFacsimile: 001 603 610-5052

 

or to such other address as either party hereto mayhereafter notify the other in accordance with the provisions of this Section20.5.  All such notices or othercommunications shall be deemed to have been delivered as follows:

 

### 20.5.1.     Ifdelivered personally, at the time of such delivery;

###  

### 20.5.2.     Ifsent by registered or certified mail, five (5) business days (Saturdays,Sundays and public holidays excluded) after mailing;

###  

### 20.5.3.     Ifsent by facsimile, upon receipt of the transmission confirmation slip showingcompletion of the transmission;

###  

### 20.5.4.     Ifsent by courier service, two (2) days after being dispatched.

###  

## 20.6.        Headings.  The headings in this Agreement are forconvenience of reference only and shall not constitute part of this Agreement.

##  

## 20.7.        Counterparts.  This Agreement may be executed in severalcounterparts, each of which is an original but all of which shall constituteone instrument.

##  

## 20.8.        BindingEffect.  This Agreement shall bebinding upon and inure to the benefit of the parties hereto and theirrespective successors and permitted assigns.

 

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##  

IN WITNESSWHEREOF, the parties have caused this Agreement to be executed by their dulyauthorized representatives as of the date first above written.

 
|   |   | LONZA BIOLOGICS PLC          |
|--------|--------|------------------------------|
|   |   |                         |
|   |   |                         |
|   |   | By:                          |   |   |
|   |   |                         |
|   |   |                         | Name: |   |   |
|   |   |                         |   |
|   |   |                         | Title: |   |   |
|   |   |                         |
|   |   |                         |
|   |   | IMCLONE SYSTEMS INCORPORATED |
|   |   |                         |
|   |   |                         |
|   |   | By:                          |   |   |
|   |   |                         |
|   |   |                         | Name: |   |   |
|   |   |                         |   |
|   |   |                         |  Title: |   |   |
|        |        |                              |  |  |  |  |  |  |

 

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ATTACHMENT 1

 

Final ProductSpecifications

 

 

THE FINAL PRODCUT SPECIFICATIONS FOR EACH PRODUCTARE TO BE AGREED BETWEEN PARTIES PRIOR TO THE COMMENCEMENT OF GMP MANUFACTUREFOR EACH PRODUCT MANUFACTURED.

 

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ATTACHMENT 2

 

Tech Transfer

 

 

1. It is assumed that theProcess to be transferred is fully developed by ImClone and can be transferreddirectly to the 5000L suite. In the event that it is determined that additionalprocess development work is required to complete scale-up to LB’s facility, allsuch work shall be agreed in writing between Parties and shall be charged by LBat the rate of $ 175 per man hour.

 

2. It is agreed andunderstood that prior to commencing with the production of any GMP Batches thatat least one (1) GMP pilot Batch of each Product shall be successfullycompleted at the 5,000L scale and that such pilot Batch shall conform to allthose Specifications that are to be agreed between Parties for the subsequentGMP Batches.  Further, Parties shallagree that the yield of the pilot Batch is within the yield targets defined insection 6.7. In the event that the pilot Batch does not meet the yieldestimates, Parties shall investigate the reason and as necessary revise theyield estimate.

 

3. ImClone shall provide, asreasonably requested by LB, all manufacturing batch records, technical supportand such personnel of ImClone necessary to complete the timely and efficienttransfer of the Process to LB’s facility. 

 

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