Document:

Exhibit 10.2

 

Isolagen, Inc.

102 Pickering Way

Exton, PA 
19341

 

April 6, 2005

 

Mr. Todd Greenspan

 

Re:  Offer of Employment

 

Dear Mr. Greenspan:

 

On behalf of
Isolagen, Inc., I am pleased to offer you the position of Director of
Finance, Corporate Controller.  The terms
of this employment offer are as follows:

 

	
  Salary

  	
   

  	
  $145,000 per annum

  
	
   

  	
   

  	
   

  
	
  Title

  	
   

  	
  Director of Finance, Corporate Controller

  
	
   

  	
   

  	
   

  
	
  Benefits

  	
   

  	
  You will be eligible for the Company sponsored employee benefits
  described in the Employee Handbook.

  
	
   

  	
   

  	
   

  
	
  Responsibilities

  	
   

  	
  Report to Martin E. Schmieg, Senior Vice President and Chief
  Financial Officer

  
	
   

  	
   

  	
   

  
	
  Stock Options

  	
   

  	
  50,000 executive stock options of Isolagen, Inc. at $4.45 per
  share (stock price as of close of Start Date) in which one-third of the shares
  vest on the first year anniversary of your start date, one-third of the
  shares vest on the second anniversary of your start date, and one-third of
  the shares vest on the third anniversary of your start date.

  
	
   

  	
   

  	
   

  
	
  Target Bonus

  	
   

  	
  30%

  
	
   

  	
   

  	
   

  
	
  Vacation

  	
   

  	
  You will be entitled to three weeks vacation

  
	
   

  	
   

  	
   

  
	
  Start Date

  	
   

  	
  Starting on or before May 4, 2005

  

 

This offer of employment is conditioned upon the Company’s receipt of a
complete background review and Directors and Officers Questionnaire, the
results of which are acceptable to the Company. 
In addition, your employment will be subject to the terms of the Company’s
Employee Handbook and the Company’s Proprietary Information and Inventions
Assignment Agreement.

 

	
    Sincerely,

  
	
   

  
	
   

  	
   

  
	
    Martin E. Schmieg

  
	
   

  
	
    ACCEPTED:

  
	
   

  
	
   

  	
   

  
	
    Todd J. GreenspanExhibit 10.30

 

5000 LITER SCALE MULTI-
PRODUCT SUPPLY AGREEMENT

 

between

 

LONZA BIOLOGICS PLC

 

and

 

IMCLONE SYSTEMS
INCORPORATED

 

 

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

  	
   

  	
   

  

 

[*****] REPRESENTS CONFIDENTIAL PORTION WHICH
HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.  CONFIDENTIAL TREATMENT HAS
BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.

 

2

 

ATTACHMENTS

 

	
  Attachment 1 — Final Product
  Specifications

  	
   

  	
   

  
	
  Attachment 2 — Tech Transfer

  	
   

  	
   

  

 

[*****] REPRESENTS CONFIDENTIAL PORTION WHICH
HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.  CONFIDENTIAL TREATMENT HAS
BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.

 

3

 

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

 

W I  T  N
E  S  S  E  T  H:

 

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

 

WHEREAS, ImClone has desire to utilize said existing capacity;

 

NOW, THEREFORE, the parties hereto agree as follows:

 

1.             Definitions.

 

1.1.          In
this 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 common
control with the relevant party to this Agreement, and “control” and its
correlates means the ownership of more than fifty percent (50%) of the issued
voting shares, or the legal power to direct or cause the direction of the
general 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 taken
during the 5000 Liter Process) which is produced as a result of the completion
of one operation of the 5000 Liter Process for the

 

[*****] REPRESENTS CONFIDENTIAL PORTION WHICH
HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.  CONFIDENTIAL TREATMENT HAS
BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.

 

4

 

Product
in the 5000 Liter Manufacturing Suite in accordance with the Specifications and
with cGMP.

 

1.1.4.       “Batch
Price” means the sum which is payable to LB for the performance of the Services
with respect to a Batch as determined pursuant to Article 13 hereto, which
fee compensates LB for, among other things:

 

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

 

(ii)           preparation
and maintenance of manufacturing documents for the manufacture of bulk Product;

 

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

 

(iv)          performance
of the purification phase of the 5000 Liter Process;

 

(v)           analysis
of Product according to the Specifications;

 

(vi)          review of
completed Batch records; and

 

(vii)         the
costs of operating the 5000 Liter Manufacturing Suite (including but not
limited to the use and operation of all equipment and supply of utilities);

 

(viii)        the
costs of all raw materials excluding purification resins, are included in the
Batch 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.       “Cell
Line” means the cell line used in the manufacture of the Product then being
produced, as the same may be amended from time to time in accordance with the
provisions of this Agreement.

 

[*****] REPRESENTS CONFIDENTIAL PORTION WHICH
HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.  CONFIDENTIAL TREATMENT HAS
BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.

 

5

 

1.1.7.       “Certificate
of Analysis” means a document certifying that LB has performed certain tests
specified and agreed to by both parties on each Batch of Product and containing
the results of those tests and whether or not the Batch of such Product meets
agreed upon specifications; and certifying that the Batch of such Product was
manufactured in accordance with the approved process.

 

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

 

1.1.9.       This
Section left intentionally blank.

 

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

 

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

 

1.1.12.     “Effective
Date” means the date of this Agreement set forth in page 1.

 

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

 

1.1.14.     This Section left intentionally blank.

 

[*****] REPRESENTS CONFIDENTIAL PORTION WHICH
HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.  CONFIDENTIAL TREATMENT HAS
BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.

 

6

 

1.1.15.     “ImClone
Information” means all know-how, technical information and other information
known to, controlled by or owned by ImClone or its Affiliates from time to time
and not known to and at the free disposal of LB prior to its disclosure by
ImClone to LB or LB (NH) or their respective Affiliates and not freely
available in the public domain including, without limitation, the Cell Line, the
5000 Liter Process, and the Product.

 

1.1.16.     “ImClone
Materials” means the materials supplied or to be supplied by ImClone to LB or
LB (NH) or their respective Affiliates pursuant to Article 3 or supplied
pursuant to previous Services Agreements between the parties.  ImClone Materials shall include the Cell Line
and purification resins.  ImClone shall
have and shall retain all rights to ImClone Materials except as specifically
provided in Section 3.3.

 

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

 

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

 

1.1.19.     This Section left intentionally blank.

 

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

 

[*****] REPRESENTS CONFIDENTIAL PORTION WHICH
HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.  CONFIDENTIAL TREATMENT HAS
BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.

 

7

 

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

 

1.1.22.     “Product”
means any product made from a cell line and process which are compatible with
manufacture in the 5000 Liter Manufacturing Suite including the monoclonal
antibody known as ERBITUXâ (cetuximab and
formerly known as IMC-C225) (including any sample thereof).  ImClone shall notify LB of any change in the
identity 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 Liter
manufacturing suite must have a process similar to the production Process for
ERBITUXâ, (i.e. similar fermentation time in the
production reactor and a similar purification time.).  If the production process requires more
fermentation time or additional purification time the Batch Price for the
Product will be adjusted accordingly. ImClone shall notify LB of the Product
and any substitute product no later than six (6) months before the commencement
of manufacture. Before commencement of the campaigns particulars of the Product
will be set out in Attachments to this Agreement as amended from time to time
in 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.

 

[*****] REPRESENTS CONFIDENTIAL PORTION WHICH
HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.  CONFIDENTIAL TREATMENT HAS
BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.

 

8

 

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

 

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

 

1.1.26.     “Out
of Freeze” shall mean the date that the vial of Product cells is thawed to
start 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.     “Minimum
Order” shall mean ***** Batches of the Product or, if a substitute product is
used, such batch quantity as reasonably determined by the Steering Committee.

 

1.1.31.     “Patent
Rights” means all patents and patent applications owned or licensed of any kind
throughout the world, including without limitation all substitutions,
extensions, reissues, renewals, and inventor certificates, and patents issuing
from applications (including provisionals, divisionals, continuations and
continuations in part).

 

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

 

1.1.33.     This Section left intentionally blank.

 

[*****] REPRESENTS CONFIDENTIAL PORTION WHICH
HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.  CONFIDENTIAL TREATMENT HAS
BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.

 

9

 

1.1.34.     “Producer
Price Index” or “PPI” means the Producer Price Index for Pharmaceutical
Prescription Preparations, Prescription (“PPI” Series ID PCU 325412325412, as
reported 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 the
Bureau of Labor Statistics or any successor U.S. agency issuing such
indices.  If such index is discontinued
and there is no direct successor index, the Steering Committee shall designate
an appropriate index that approximates as closely as possible such Bureau of
Labor Statistics index.

 

1.1.35.     “Raw
Materials” means all materials, and supplies, which are purchased or used by LB
in 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 this
Agreement, including without limitation, the services described in Article 4
below and the provision of personnel and operation of relevant plant and
equipment 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 commencement
of any campaign by ImClone and confirmed through designated batches as mutually
agreed between Parties which specifications may be modified from time to time
pursuant to Section 9.

 

1.1.40.     “Steering
Committee” means the committee established pursuant to Section 8.1.

 

[*****] REPRESENTS CONFIDENTIAL PORTION WHICH
HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.  CONFIDENTIAL TREATMENT HAS
BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.

 

10

 

1.1.41.     “Testing
Laboratories” means any third party instructed by LB to carry out tests on the
ImClone Materials or the Product.

 

1.2.          Unless
the context requires otherwise, references to the singular include the plural
and vice versa, references to Attachments are references to attachments to this
Agreement, and references to Articles and Sections are references to the
articles and sections of this Agreement.

 

2.             Term.

 

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

 

2.2           Not
withstanding any terms in this Agreement to the contrary, the parties agree,
that ImClone may terminate this Agreement upon six (6) months prior written
notice, without any financial penalty, at any time after the completion of the
Minimum Order.

 

3.             Supply by ImClone.

 

3.1.          Supply
of Cell Line and Reference standard. 
ImClone shall supply or cause to be supplied, sufficient purified
reference standard for the Product and sufficient ampoules of the Cell Line
from an appropriate cell bank for LB to provide the Services.

 

3.2.          Supply
of other ImClone Materials.  ImClone
shall ensure the adequate and timely supply of further amounts of the ImClone
Materials in sufficient quantity to facilitate LB’s performance of the
Services.  LB must provide ImClone timely
notice, in writing, of its requirements for ImClone Materials.

 

[*****] REPRESENTS CONFIDENTIAL PORTION WHICH
HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.  CONFIDENTIAL TREATMENT HAS
BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.

 

11

 

3.3.          Rights
in ImClone Information, ImClone Patent Rights and ImClone Materials.  ImClone hereby grants LB the non-exclusive
right to use the ImClone Information, the ImClone Patent Rights and the ImClone
Materials solely for the purpose of LB performing Services for ImClone under
this Agreement.  Without prejudice to any
other rights vested in LB pursuant to pre-existing or future agreements between
the parties or their Affiliates, LB will not use the ImClone Information,
ImClone Patent Rights or ImClone Materials (or any part thereof) for any other
purpose 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 Patent
Rights or the ImClone Information, and no licenses shall arise or be deemed to
have arisen by default, estoppel or otherwise.

 

3.4.          LB
Obligations regarding ImClone Materials. 
LB shall:

 

3.4.1.       At
all times use all reasonable endeavors to keep the ImClone Materials and Raw
Materials secure and safe from loss and damage in such manner as LB stores its
own materials of similar nature;

 

3.4.2.       Not
part with possession of the ImClone Materials or the Product, save for the
purpose of tests at the Testing Laboratories or as directed by ImClone; and

 

3.4.3.       Cause
all Testing Laboratories to be subject to confidentiality and limited-use
obligations no less onerous than those confidentiality and limited-use
obligations imposed on LB under this Agreement.

 

3.5.          No
Other License.  Without prejudice to
LB’s right to receive payment of the Price hereunder or to LB’s own proprietary
rights in the LB Information and the LB Patent Rights, LB agrees that, except
as expressly provided in Section 3.3 above, LB shall not by virtue

 

[*****] REPRESENTS CONFIDENTIAL PORTION WHICH
HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.  CONFIDENTIAL TREATMENT HAS
BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.

 

12

 

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

 

3.6.          ImClone
Representations and Warranties. 
Provided that the Product is IMC-C225, then ImClone represents and
warrants to LB as follows: (If a different product is to be produced, ImClone
agrees to make new representations and warranties regarding such product and
both parties agree to negotiate in good faith such new representations and
warranties with the goal that such new representations and warranties will
satisfy, whenever practicable, the intent of this Section 3.6.)

 

3.6.1.       ImClone
has the corporate power and authority to enter into this Agreement;

 

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

 

3.6.3.       Any
of the Cell Line, the other ImClone Materials, ImClone Information and ImClone
Patent Rights not owned by ImClone are licensed to ImClone under a license
which will permit their use by LB to perform the Services;

 

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

 

[*****] REPRESENTS CONFIDENTIAL PORTION WHICH
HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.  CONFIDENTIAL TREATMENT HAS
BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.

 

13

 

3.6.5.       Except
as to alleged infringement actions disclosed on Schedule 3.6, ImClone will
promptly notify LB in writing if it is no longer entitled to supply the Cell
Line, other ImClone Materials, ImClone Information or the ImClone Patents for
the Services or if ImClone is aware that the use thereof infringes or is
alleged to infringe any rights (including, without limitation, any intellectual
property rights) of any third party.

 

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

 

3.7.          ImClone
IP Indemnification.  ImClone will
indemnify, defend and hold harmless LB and its Affiliates against any loss,
damage, costs and expenses of any nature (including reasonable fees and
disbursements of counsel and experts) incurred by LB or any Affiliate of LB or
ordered by a court of competent jurisdiction to be paid or payable by LB or any
Affiliate of LB, to the extent incurred as the result of (a) any breach of the
warranties 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, the
ImClone Information, ImClone Patent Rights or the 5000 Liter Process (other
than steps or components which are or become part of the 5000 Liter Process by
virtue of contributions of LB) in the course of the Services, infringes or is
alleged to infringe any rights (including without limitation any intellectual
property rights) of a third party (whether or not ImClone knows or ought to
have known of such infringement or alleged infringement).  Any lost Batch Price shall be included in the
losses and damages resulting from any such breach or claim.  

 

[*****] REPRESENTS CONFIDENTIAL PORTION WHICH
HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.  CONFIDENTIAL TREATMENT HAS
BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.

 

14

 

It is hereby agreed
that LB shall notify ImClone as soon as is reasonably practicable of any claim,
action or proceedings and shall at ImClone’s cost provide ImClone with
reasonable 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 or
prejudice LB’s proper business interests or might reasonably be expected to do
so LB shall at ImClone’s cost take such action as ImClone may reasonably and
properly require to avoid, compromise or defend any such claim or action or
proceedings. Nothing contained in this Section 3.7 shall oblige LB to take
any action or steps in its own name in defending any claim, action or
proceedings.  The provisions of this Section 3.7
shall be LB’s sole and exclusive remedy in connection with the matters
described in clauses (a) and (b) above.

 

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

 

4.             Agreement to Supply.

 

4.1.          cGMP
Manufacture.  LB will, in accordance
with 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 5000
Liter Process and the 5000 Liter Manufacturing Suite.  ImClone understands that as further defined
in Section 4.3 additional product-specific development documentation and
validation work may be required to support regulatory applications.

 

4.1.1        ImClone
acknowledges and agrees to order the Minimum Order as defined herein, provided
that LB passes all relevant regulatory authority and cGMP Inspections of LB’s
facility to manufacture 5000L batches of Product.

 

[*****] REPRESENTS CONFIDENTIAL PORTION WHICH
HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.  CONFIDENTIAL TREATMENT HAS
BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.

 

15

 

4.1.2        LB
shall make commercially reasonable efforts to manufacture the Minimum Order
within approximately five (5) years from the Effective date of the Agreement. A
campaign shall consist of a minimum series of three (3) batches of a single
product. 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 the
number of batches in each campaign shall be agreed between Parties prior to the
commencement of that calendar year.

 

4.2.          LB
Supply Obligations.  For each Batch
of Product ordered by ImClone hereunder, LB will perform all Services necessary
to manufacture and Deliver the Product in accordance with cGMP, including:

 

4.2.1.       Recover
ampoules of the cell bank for the Cell Line and expand cultures to complete
airlift fermentation at 5000 liter scale in the 5000 Liter Manufacturing Suite.  Each Batch shall be produced as one lot from
one ampoule of the cell bank provided by ImClone.

 

4.2.2.       Clarify
culture supernatant and purify using the 5000-Liter Process

 

4.2.3.       Test
the Product against the Specifications. 
Additional Product and in process samples may be taken at ImClone’s
request for further analysis. 
Alternatively, additional tests may be performed by LB at a price and
under terms and conditions to be agreed.

 

4.2.4.       Review
requirements (if any) for 5000 Liter Process modifications in order to meet the
Specifications for manufacture of subsequent Batches 

 

[*****] REPRESENTS CONFIDENTIAL PORTION WHICH
HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.  CONFIDENTIAL TREATMENT HAS
BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.

 

16

 

and
notify ImClone of such proposed modifications. 
Any such 5000 Liter Process modifications are subject to Section 9.1.

 

4.2.5.       Undertake
cGMP review of lot documentation, define Product disposition, and issue a Certificate
of Analysis.

 

4.2.6.       Deliver
the Product to ImClone.

 

4.2.7.       Upon
the FDA’s request, and at LB’s expense, conduct an FDA inspection of 5000 Liter
Manufacturing Suite seeking approval to manufacture the Product at LB’s
facility.

 

4.2.8.       Upon
ImClone’s request, LB shall permit an ImClone employee or representative to be
present at LB’s facilities during the production of any Product by LB for
ImClone or any inspection relating to such Product.

 

5.             Order Quantities and Order Procedures.

 

5.1
Minimum Orders

 

The Minimum
Order of ***** batches shall be scheduled by LB according to the freely
available capacity in the 5000L suite as mutually agreed by ImClone. The first
campaign shall be scheduled to commence within 4 months of initiation of the tech
transfer of the first Product. Initiation of the tech transfer for the first Product
is expected to commence within 4 months of the Effective Date of this
Agreement.

 

5.2 Additional Orders.

 

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

 

[*****] REPRESENTS CONFIDENTIAL PORTION WHICH
HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.  CONFIDENTIAL TREATMENT HAS
BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.

 

17

 

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

 

5.3.          Binding
Order.  Not later than six (6) months
prior to Out of Freeze of any campaign, ImClone shall confirm the actual number
of Batches it requires for manufacture. Upon LB’s acceptance of that confirmed
number 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 in
a professional and workman-like manner, consistent with industry standards for
the contract manufacturing of biologics.

 

6.2.          This Section left intentionally blank.

 

6.3.          Cancellations.

 

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

 

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

 

6.3.2        *****  of the Batch Price for all such Batches
cancelled between the period seven (7) to twelve (12) months of commencement
date of the Batches.

 

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

 

6.3.4        For
the avoidance of doubt ImClone may not cancel any Batch that has commenced
manufacture

 

[*****] REPRESENTS CONFIDENTIAL PORTION WHICH
HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.  CONFIDENTIAL TREATMENT HAS
BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.

 

18

 

6.3.5        For
the avoidance of doubt for any Binding Order or Contract Order in excess of the
Minimum Order, ImClone may cancel any batch upon six (6) months prior written
notice, without any financial penalty, provided that the batch commencement
date for the canceled batch is at least six (6) months away.

 

6.3.6        Notwithstanding
the foregoing, if ImClone cancels or reschedules a batch, LB will use good
faith efforts to seek an alternative customer or customers to purchase the
capacity which is reserved for ImClone so as to mitigate ImClone’s obligations
under the Agreement.  If LB is able to
sell such capacity, ImClone’s obligation to compensate LB pursuant to Section 6.3
shall be adjusted accordingly.

 

6.4           Except
as provided in this Article 6 or Section 17.4, ImClone shall not be
entitled to cancel any unfulfilled part of the Services or to refuse to accept
the Services on grounds of late performance, late delivery or failure to
produce 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 direct
or consequential, occasioned by:

 

6.4.1.       Any
delay in performance or delivery howsoever caused; or

 

6.4.2.       Any
failure to produce the estimated quantities or number of Batches of Product for
delivery.

 

6.5.          This Section left intentionally blank

 

6.6.          This Section left intentionally blank 

 

6.7.          Target
Batch Yield.  ImClone and LB each
acknowledge that, due to the unpredictable nature of biological processes, 5000
Liter Process Product yield cannot be 

 

[*****] REPRESENTS CONFIDENTIAL PORTION WHICH
HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.  CONFIDENTIAL TREATMENT HAS
BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.

 

19

 

guaranteed and may
vary. The target per Batch yield of the modified 5000 Liter Process for the
Product will be established by agreement of the parties (the “Modified Target
Batch Yield”).  If any Batch of Product
(the “Actual Batch Yield”) is less than ninety percent (90%) of the Current Target
Batch Yield or the Modified Target Batch Yield, as the case may be, (each a “Yield
Deficiency”), ImClone and LB agree to adjust the Batch Price, on a pro-rata basis, to reflect such
Yield Deficiency.  If a Yield Deficiency
exists ImClone shall be entitled to a cash payment (credited against the Price
of that Batch) in an amount equal to (a) the Batch Price multiplied by *****. With
regards to Products other than ERBITUX®, the parties agree that the target
batch 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 5000
liters.

 

6.8.          Supply
Failure.  If a situation of Force
Majeure exists such that LB is unable (or the parties agree that there is no
reasonable likelihood that LB will be able) to deliver to ImClone the Minimum
Order and such further Binding Orders as may arise such event shall constitute
a “Supply Failure.”

 

6.8.1.       In
addition to ImClone’s remedy under Section 6.10, Supply Failure shall
entitle ImClone to exercise the right to elect within a sixty (60) day period
to terminate this Agreement pursuant to Article 17.4.

 

6.8.2.       In
the event ImClone elects not to terminate but rather to treat the Supply
Failure as a Late Delivery, the provisions of Section 6.10 shall apply

 

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

 

[*****] REPRESENTS CONFIDENTIAL PORTION WHICH
HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.  CONFIDENTIAL TREATMENT HAS
BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.

 

20

 

in which the 5000
Liter Manufacturing Suite is located.  If
ImClone 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.       ImClone
shall be responsible for informing LB in writing of the precise requirements
which ImClone is requesting LB to observe;

 

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

 

6.9.3.       LB
shall be under no obligation to ensure that the information furnished by
ImClone pursuant to Section 6.9.1 complies with the applicable
requirements of any jurisdiction; and

 

6.9.4.       All
costs and expenses properly incurred by LB in complying with ImClone’s requests
regarding the requirements referred to in Sections 6.9.1 through 6.9.3 shall be
charged to ImClone, in addition to the Price.

 

6.10.        Late
Delivery.

 

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

 

[*****] REPRESENTS CONFIDENTIAL PORTION WHICH
HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.  CONFIDENTIAL TREATMENT HAS
BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.

 

21

 

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

 

6.10.2.     Limitation
on Liability.  In no event shall
compensation pursuant to this Section 6.10 on any one Batch exceed thirty five percent (35%) of the Price of the Batch in
question, irrespective of whether such damages accrue as a result of any single
event or a series of events or as a consequence of delay to delivery of a
previous Batch.  Such liquidated damages
are a reasonable estimate of actual damages and do not represent a penalty.
Notwithstanding the foregoing, where late delivery compensation has accrued on
a particular Batch during a campaign,
and as a consequence, other Batches ordered in the same campaign are also delayed, ImClone shall be entitled to claim
compensation 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; ImClone
Tests.

 

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

 

7.2.          Packaging
and Labeling.  Unless otherwise
agreed, LB will package and label Product in accordance with its standard
operating procedures.  ImClone will
inform LB in writing in advance of any special packaging and labeling
requirements for the Product.  All 

 

[*****] REPRESENTS CONFIDENTIAL PORTION WHICH
HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.  CONFIDENTIAL TREATMENT HAS
BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.

 

22

 

additional costs
and expenses incurred by LB in complying with such special requirements shall
be 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 the
Delivery Date.  Notwithstanding the
Delivery of Product EXW, LB shall load the Product at LB’s expense onto the
trucks 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 such
fourteen (14) day period.  At ImClone’s written
request and expense, LB will (acting as agent for ImClone) arrange the
transportation of Product to a facility in the United States designated by
ImClone, together with insurance for the Price for the relevant Batch(es) of Product.
All additional costs and expenses incurred by LB in arranging transportation
and insurance shall be charged to ImClone in addition to the Price. In cases
where ImClone has not requested LB to arrange for transportation of Product, LB
will provide reasonable cooperation with ImClone’s transportation agents in
coordinating the collection of Product from LB (NH)’s Portsmouth, New Hampshire
facility.  Transportation of the Product,
whether or not under any arrangements made by LB on behalf of ImClone, shall be
made at the sole risk and expense of ImClone. For the avoidance of doubt, the
Product will not be insured by LB after the above referenced fourteen (14) day
period unless otherwise arranged for.

 

7.4.          Quarantine
of Product.  At ImClone’s request, LB
will Deliver Product Batches in quarantine prior to delivery of the Certificate
of Analysis.  Such request shall be
accompanied by ImClone’s written acknowledgement that the Batch has been
Delivered without the transmittal to ImClone of a Certificate of Analysis, that
accordingly the Batch cannot be administered to humans until transmittal of the
Certificate of Analysis, and that ImClone nevertheless accepts full risk of
loss, title and ownership of the Batch when Delivered.  The Delivery of a Batch in 

 

[*****] REPRESENTS CONFIDENTIAL PORTION WHICH
HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.  CONFIDENTIAL TREATMENT HAS
BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.

 

23

 

quarantine shall
be subject to such testing requirements as LB or ImClone may reasonably
require, and the sixty (60) day period referred to in Section 7.6 shall
run from receipt in quarantine by ImClone of the relevant Batches.

 

7.5.          Inspection
of Product.  Where LB has made
arrangements for the transportation of Product under Section 7.3, LB shall
use its reasonable endeavors to notify ImClone by facsimile of shipment on the
date of dispatch.  ImClone shall
diligently examine the Product as soon as practicable after receipt.  Notice of all claims arising out of:

 

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

 

7.5.2.       Failure
of 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’s
notice of shipment provided in accordance with the terms above to ImClone.

 

ImClone shall make
damaged Product available for inspection and shall comply with the requirements
of any insurance policy covering the Product. 
LB shall offer ImClone all reasonable assistance, at ImClone’s cost, in
pursuing any claims arising out of the transportation of Product, but LB’s
responsibility shall otherwise be limited by the EXW shipping term (Incoterms
2000).

 

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

 

[*****] REPRESENTS CONFIDENTIAL PORTION WHICH
HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.  CONFIDENTIAL TREATMENT HAS
BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.

 

24

 

absence of such
written notice, the Batch shall be deemed to have been accepted by ImClone as
meeting Specifications.  If LB agrees, or
it is determined pursuant to Section 7.7, that the returned Batch or
sample fails to meet Specifications and, to the extent that such failure is not
due (in whole or in part) to acts or omissions of ImClone or any third party after Delivery of such Batch, the Batch in
question shall be regarded as not having been Delivered ImClone shall be
entitled to a credit in respect of any Batch Price associated with such Batch.

 

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

 

8.             Steering Committee.

 

8.1.          Composition
of Steering Committee.  Promptly
following the Effective Date, LB and ImClone shall establish a Steering
Committee.  The Steering Committee shall
be comprised of equal numbers of representatives of each party (not to exceed
three representatives of each party). 
ImClone’s representatives may include employees and representatives of
ImClone’s commercial partner for such Product.

 

8.2.          Function
of Steering Committee.  Without
limiting the functions of the Steering Committee set out elsewhere in this
Agreement, the role of the Steering Committee shall be to:

 

8.2.1.       This Section left intentionally blank

 

[*****] REPRESENTS CONFIDENTIAL PORTION WHICH
HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.  CONFIDENTIAL TREATMENT HAS BEEN REQUESTED
WITH RESPECT TO THE OMITTED PORTIONS.

 

25

 

8.2.2.       Assess
the status of 5000 Liter Process and substitute Products for introduction into
the 5000 Liter Manufacturing Suite in connection with the Services and monitor
the status of operation of the 5000 Liter Manufacturing Suite;

 

8.2.3.       This Section left intentionally blank

 

8.2.4.       Resolve
disputes arising between the parties under this Agreement, as provided in Section 19.2,

 

8.2.5.       Monitor
the progress of the Services;

 

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

 

8.2.7.       Discuss
and recommend any changes to the 5000 Liter Process or Specifications, subject
to Article 9;

 

8.2.8.       This Section left intentionally blank

 

8.3.          Meetings.  The Steering Committee shall meet at such
times as the Steering Committee determines to resolve issues arising under and
to perform its responsibilities under this Agreement, provided that the
Steering Committee shall meet not less than two (2) times per calendar year
unless otherwise mutually agreed.  If any
issue 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 senior
manufacturing officer of ImClone and the senior officer of LB Biologics Inc.
(together, the “Presidents”).

 

8.4.          Limitations.  The Steering Committee is not empowered to
amend the terms of this Agreement.

 

[*****] REPRESENTS CONFIDENTIAL PORTION WHICH
HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.  CONFIDENTIAL TREATMENT HAS
BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.

 

26

 

9.             Process Changes.

 

9.1.          5000
Liter Process.  LB shall not
unreasonably refuse any written request from ImClone to make changes to the
5000 Liter Process (for example, changes to the 5000 Liter Process which are
required by the Product or an applicable regulatory authority or applicable
laws), but no change to the 5000 Liter Process shall be made except by an
agreement in writing signed by the authorized representatives of both
parties.  Notwithstanding the foregoing,
the parties agree to modify the 5000 Liter Process for ERBITUXâ
to ImClone’s new process known as the high titer process which has been
previously disclosed and discussed between the parties.

 

9.2.          Specifications.  LB shall not unreasonably refuse any written
request from ImClone to make changes to the Specifications (for example,
changes to the Specifications that are required by an applicable regulatory
authority or applicable laws), but no change to Specifications shall be made
except by an agreement in writing signed by the authorized representatives of
both parties, as under the terms of the Quality Agreement.

 

9.3.          Procedure.  Unless a party has designated an authorized
representative by notice to the Steering Committee, changes to 5000 Liter
Process or Specifications must be approved in writing by an officer of the
party in question.

 

9.4.          Adjustments
resulting from Process and Specification Changes.  Any changes to the 5000 Liter Process or to
the Specifications shall be implemented on terms and conditions to be agreed,
which may include, but not be limited to, additional development services (to
be performed on terms to be agreed upon in good faith), and reasonable
adjustments (which may be upward or downward, as appropriate) to the Batch
Price payable for Services.

 

[*****] REPRESENTS
CONFIDENTIAL PORTION WHICH HAS BEEN OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION. 
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED
PORTIONS.

 

27

 

10.           Shared Manufacturing.

 

10.1.        The
parties intend that the Product produced pursuant to this Agreement which is
approved by the appropriate regulatory body for marketing or sale shall be
manufactured under a shared manufacturing arrangement as defined in “Draft
Guidance for Industry – Co-operative Manufacturing Arrangements for Licensed
Biologicals, Department of Health and Human Services, Food and Drug
Administration, CBER, August 1999”.  A
list of the responsibilities of each party under such an arrangement will be
set forth in Attachment 1 to this Agreement.

 

11.           Regulatory Support and Quality Assurance.

 

11.1.        Regulatory
Support and Audits.  LB shall provide
regulatory support to ImClone (or Bristol-Myers Squibb Company and its wholly
owned subsidiaries (“BMS”) in cooperation with ImClone), including annual
updates to any drug master files, biologics licenses and other manufacturing or
marketing applications and approvals applicable to the Product and the
preparation for and hosting of inspections by the U.S. Food and Drug
Administration (or other regulatory authorities) or ImClone (or BMS, Merck KGaA
or any other commercial partner in cooperation with ImClone, subject to the
completion of appropriate CDAs between Parties) (in the case of ImClone’s or
BMS’s inspections, at mutually convenient times).  ImClone shall be entitled to conduct, and the
Price 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) days
prior to commencement of the Services and, thereafter, up to one (1) audit (at
a mutually convenient time) by ImClone personnel of up to three (3) days each
on an annual basis while the Agreement is in effect.  In addition, LB shall permit, and the Price
has been further calculated to include, (a) an ImClone employee or consultant
located at the 5000 Liter Manufacturing Suite (i.e., a man-in-plant), and (b)
Batch record audits of each Batch.  Except as provided in
Section 11.4, if additional regulatory support or ancillary development
services are required by ImClone an 

 

[*****] REPRESENTS
CONFIDENTIAL PORTION WHICH HAS BEEN OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION. 
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.

 

28

 

additional charge shall be made to ImClone at LB’s
standard rates for regulatory services and/or ancillary development services
and for disbursements at the time the regulatory and/or ancillary development
services are performed.  LB shall inform
ImClone of such charge and obtain ImClone’s written consent to such charge
before providing such additional support. 
Notwithstanding anything to the contrary in the foregoing, LB
acknowledges and agrees that at ImClone’s request such personnel of ImClone’s
commercial partners may attend and participate in, on the same terms as ImClone
personnel, any and all such scheduled audits and regulatory support provided
pursuant to this Section 11.1 and that the Price has been calculated to include
these audits. No more than three (3) total personnel from ImClone and ImClone’s
commercial partners involved in these audits at the LB site.

 

11.2.        Regulatory
Submissions.  ImClone shall advise LB
of any regulatory submissions regarding the Product which may require responses
from 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 it
manufactures (such amendments being accomplished in accordance with Article 9)
or tests the Product as a result of a change in any statutory or regulatory
requirement after the Effective Date, it shall use all reasonable efforts to
comply with such requirement.  In this
event the parties shall negotiate in good faith any appropriate revision to the
Price to reflect additional or lesser costs incurred by LB and any appropriate
revision to the time schedules for providing the Product.

 

11.4.        Additional
Audits.  If ImClone conducts an audit
of the 5000 Liter Manufacturing Suite pursuant to its rights under
Section 11.1 and, as a result of default on the part of LB, ImClone has
just cause to conduct further audits in order to satisfy itself as to the
matters of 

 

[*****] REPRESENTS
CONFIDENTIAL PORTION WHICH HAS BEEN OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION. 
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED
PORTIONS.

 

29

 

default in question, ImClone shall be entitled,
without additional payment to LB, to conduct additional audits (at mutually
convenient 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.        Price
for Services.  In consideration for
the performance of the Services, ImClone will pay LB the Price set forth below:

 

13.1.1.     The
current 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 relevant
Product tech transfer.

 

Except as
expressly provided for by the terms and conditions of this Agreement, ImClone
shall 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 for
each additional day required beyond day ***** in the 5000L Production Fermenter
and 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 day
in the purification suite required beyond ***** and a reduction of ***** for
each day less than ***** in the purification suite.

 

13.4.        It
is 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 

 

[*****] REPRESENTS
CONFIDENTIAL PORTION WHICH HAS BEEN OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION. 
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED
PORTIONS.

 

30

 

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

 

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

 

13.6.        Payment
of Batch Price. ImClone shall pay LB the Batch Price against LB’s invoices
therefore, as follows:

 

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

 

13.6.2.     LB
shall invoice ImClone for THIRTY
PERCENT (30%) of the Batch Price upon Bulk Fill.

 

13.6.3.     LB
shall invoice ImClone the final TWENTY
PERCENT (20%) of the Batch Price upon Delivery of the Certificate of Analysis and making the Batch Records
available for review, including LB’s final response to ImClone’s comments and
questions on the Batch Record for such Batch of 

 

[*****] REPRESENTS CONFIDENTIAL
PORTION WHICH HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION.  CONFIDENTIAL
TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.

 

31

 

Product.  Notwithstanding the
foregoing ImClone agrees to present such comments and questions within 30 days
of receipt of such Batch Record summary.

 

13.7.        This Section left intentionally blank

 

13.8.        Price
for Undelivered Product.  No Batch
Price 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 agreed
by 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 any
government or public authority in respect of the Services and delivery of
Product (other than taxes on LB’s income), which shall be paid by ImClone.

 

13.11.      Invoices.  All invoices are strictly net and payment
must 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 of
outstanding invoices is not made within thirty (30) days of a second written
demand (i.e., a written demand issued after failure to settle an invoice which
invoice shall count as the first written demand) for payment to ImClone.  If either party disputes the validity of any
item or part of an item included in an invoice, the matter may be referred to
the Steering Committee who shall resolve such dispute and may determine whether
pending resolution an extension of time for payment of such disputed item is
appropriate.

 

13.12.      Interest
on Late Payments.  Interest on late
payments of invoices and other amounts from time to time owed by either party
to the other hereunder shall accrue at the rate of 

 

[*****] REPRESENTS
CONFIDENTIAL PORTION WHICH HAS BEEN OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION. 
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED
PORTIONS.

 

32

 

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

 

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

 

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

 

14.1.1.     the
Services shall be performed in accordance with this Agreement;

 

14.1.2.     the
Product delivered to ImClone pursuant to Services performed under this
Agreement shall meet Specifications when Delivered;

 

14.1.3.     unencumbered
title to all Product will be conveyed to ImClone upon Delivery;

 

14.1.4.     LB
has the corporate power and authority to enter into this Agreement and that LB
will cause LB (NH) to honor the terms of this Agreement and guarantee the
performance of LB (NH) under this Agreement;

 

14.1.5.     To
the best of LB’s knowledge and belief, LB has the right to use the steps of
5000 Liter Process made or developed by LB and has the right to use or supply
the LB Information and LB Patent Rights in performance of the Services for
ImClone and the use by LB of such 5000 Liter Process steps made or developed by
LB, LB Information and LB Patent Rights will not infringe any rights
(including, without limitation, any intellectual property rights) of any third
party;

 

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

 

[*****] REPRESENTS
CONFIDENTIAL PORTION WHICH HAS BEEN OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION. 
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED
PORTIONS.

 

33

 

do or cause
anything to be done which would adversely affect their ownership or entitlement
to use the same for those purposes;

 

14.1.7.     LB
will notify ImClone in writing immediately if it knows or has reason to believe
that it is no longer entitled to utilize the LB Information or the LB Patent
Rights or that the use by LB of the LB Information or the LB Patents Rights for
Services infringes or is alleged to infringe any rights (including without
limitation, any intellectual or industrial property rights) vested in any third
party; and

 

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

 

14.1.9.   -To
LB’s knowledge, LB has disclosed, and shall disclose, to ImClone all
environmental requirements that LB is aware of or becomes aware of, without
independent investigation by LB, which ImClone must comply with during the use
of the 5000 Liter Process (excluding any steps made or developed by ImClone).

 

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

 

[*****] REPRESENTS
CONFIDENTIAL PORTION WHICH HAS BEEN OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION. 
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED
PORTIONS.

 

34

 

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

 

14.2.        Indemnification
by LB.  LB will indemnify, defend and
hold harmless ImClone and its Affiliates against any loss, damage, costs and
expenses of any nature (including reasonable fees and disbursements of counsel
and experts) incurred by ImClone or any Affiliate of ImClone or ordered by a
court of competent jurisdiction to be paid or payable by ImClone or any
Affiliate of ImClone, to the extent incurred as the result of (a) any breach of
the representations, warranties and covenants set forth in this Agreement or
(b) any claims (collectively, “ImClone Claims”), alleging the use of LB Patent
Rights, or the LB information infringes or is alleged to infringe any rights
(including without limitation any intellectual property rights) of a third
party (whether or not LB knows or ought to have known of such infringement or
alleged infringement).  It is hereby
agreed that ImClone shall notify LB as soon as is reasonably practicable of any
claim, action or proceedings and shall at LB’s cost provide LB with reasonable
assistance and relevant information to support LB to avoid, compromise or
defend any such claim or action or proceedings. 
Further, unless the same conflict with or prejudice ImClone’s proper
business interests or might reasonably be expected to do so ImClone shall at LB’s
cost 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 shall
oblige ImClone to take any action or steps in its own name in defending any
claim, action or proceedings.  The
provisions of this Section 14.2 shall be ImClone’s sole and exclusive remedy,
other than contractual remedies expressly set forth herein, in connection with
the matters described in clauses (a) and (b) above.

 

[*****] REPRESENTS
CONFIDENTIAL PORTION WHICH HAS BEEN OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION. 
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED
PORTIONS.

 

35

 

14.3.        Indemnification
by 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 other
liabilities whatsoever of third parties to the extent incurred as a direct
result of:

 

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

 

14.3.2.     Any
negligent or willful act or omission of ImClone in relation to the use,
processing, storage or sale of the Product, the application of the ImClone
Tests or the marketing of the pharmaceutical product in which the Product is
used.

 

14.4.        Insurance.  LB shall obtain and maintain insurance
coverage of the types and in the amounts customary and consistent with industry
standards used in the contract biologics manufacturing industry.  Without limiting the foregoing, LB shall
obtain and maintain insurance which covers business interruption.  LB agrees that it shall maintain professional
liability 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 of
such insurance upon ImClone’s request and shall provide ImClone with written
notice of cancellation of such insurance policy, not less than ten days prior
to such cancellation.  ImClone shall
obtain and maintain insurance coverage which is customary and consistent with
biopharmaceutical industry

 

[*****] REPRESENTS
CONFIDENTIAL PORTION WHICH HAS BEEN OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION. 
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED
PORTIONS.

 

36

 

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

 

14.5.        Recalls.

 

14.5.1.     If
ImClone, in its discretion, recalls the Product (voluntarily or by order of a
regulatory body) or is required to respond to inquiries of regulatory bodies
relating to the Services hereunder, LB agrees to provide reasonable cooperation
to ImClone at ImClone’s sole expense except to the extent of LB’s negligence or
willful misconduct.  Any assistance to be
provided by LB in response to inquiries of regulatory authorities shall be
provided on terms to be agreed at LB’s standard rates for providing such
assistance.

 

14.5.2.     Subject
to the limitations of LB’s liability to ImClone set out in this Agreement, LB
agrees to reimburse ImClone for reasonable, direct, documented expenses
incurred by ImClone as a result of recall of a Product mandated by law or by an
applicable regulatory body, but only to the extent LB’s negligence or willful
misconduct in performing the Services has caused such recall to be required and
such recall could not have reasonably have been expected to have been prevented
by ImClone’s application of the ImClone Tests or other product testing required
by law to be undertaken by ImClone.

 

[*****] REPRESENTS
CONFIDENTIAL PORTION WHICH HAS BEEN OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION. 
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED
PORTIONS.

 

37

 

15.           Limitations of Liability.

 

15.1.        Limitation
of Liability.  THE LIABILITY OF LB TO
IMCLONE FOR ANY LOSS SUFFERED BY IMCLONE AS A DIRECT RESULT OF A BREACH OF THIS
AGREEMENT OR OF ANY OTHER LIABILITY ARISING OUT OF THIS AGREEMENT AND SERVICES
PROVIDED THEREUNDER SHALL BE LIMITED TO THE PAYMENT OF DAMAGES WHICH SHALL NOT
EXCEED $10,000,000 PER EVENT OR DIRECTLY CONNECTED SERIES OF EVENTS.  This limitation shall not apply if and to the
extent such damages are caused by LB’s violation of any environmental
requirements in the performance of the Services (unless such violation was
caused by a misrepresentation of ImClone), infringement by LB of any
intellectual property of any third person unless caused by a misrepresentation
of ImClone hereunder, any claims by employees of LB, willful misconduct or
intentional breach of this Agreement or willful misconduct in the performance
of the Services.

 

15.2.        Disclaimer
of Consequential Damages.  NEITHER
IMCLONE NOR LB SHALL BE LIABLE FOR THE FOLLOWING LOSSES OR DAMAGES HOWSOEVER
CAUSED (EVEN IF FORESEEABLE OR IN THE CONTEMPLATION OF LB OR IMCLONE):

 

15.2.1.     LOSS
OF 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 LB
under this Article 15 shall survive the termination of this Agreement.

 

[*****] REPRESENTS
CONFIDENTIAL PORTION WHICH HAS BEEN OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION. 
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED
PORTIONS.

 

38

 

16.           ImClone Information, LB Information and Patent
Rights.

 

16.1.        Confidential
Information.  ImClone acknowledges
that LB Information and LB acknowledges that ImClone Information, ImClone
Materials delivered pursuant to this Agreement are delivered subject to
obligations of confidentiality.  Each
party agrees to keep the other party’s Information and materials secret and
confidential, respect the other’s proprietary rights therein and not without
the other party’s prior written consent (i) disclose, (ii) use outside the
scope of this Agreement or the Services Agreements or (iii) permit the LB
Information, the ImClone Information or the ImClone Material to be disclosed to
any third party or used outside the scope of this Agreement, except as
expressly provided herein.

 

16.2.        Disclosure
to Affiliates, employees, etc. 
ImClone and LB shall grant access to confidential LB Information or
confidential ImClone Information only to those Affiliates, employees, and
consultants who have a clear and demonstrable need to know said information for
the performance of this Agreement and no others unless previously identified in
writing to and agreed to by LB and ImClone; and contractors who are subject to
the same obligations of confidentiality as LB and ImClone under appropriate
secrecy agreements.

 

16.3.        Third
Parties.  LB and ImClone each
undertake not to disclose or permit to be disclosed to any third party, or
otherwise make use of or permit to be made use of, any trade secrets or
confidential information relating to the technology, business affairs or
finances of the other, any Affiliate of the other, or of any suppliers, agents,
distributors, licensees or other customers of the other which come into its
possession under this Agreement.

 

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

 

16.4.1.     Is
or becomes generally available to the public otherwise than by reason of a
breach by the receiving party of the provisions of this Article 16;

 

[*****] REPRESENTS
CONFIDENTIAL PORTION WHICH HAS BEEN OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION. 
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED
PORTIONS.

 

39

 

16.4.2.     Is
known to the receiving party prior to its receipt from the disclosing party
free of any confidentiality obligation to any third party;

 

16.4.3.     Is
subsequently disclosed to the receiving party without being made subject to an
obligation of confidence by a third party; or

 

16.4.4.     The
receiving party can demonstrate by competent evidence was independently
discovered by the receiving party or its employees without reference to any
information received from the other party hereto.

 

Notwithstanding the foregoing, either LB or ImClone
may disclose confidential information to the extent such disclosure is required
by applicable law, court order, statutory, regulatory, stock exchange or
similar legislative requirement, provided that the party making such required
disclosure notifies the other party as soon as possible to enable the parties
to obtain a protective order against such disclosure.

 

16.5.        No
License.  Each party acknowledges
that, except as expressly provided herein or pursuant to a separate agreement
between the parties existing now or entered into in the future, such party
shall 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, ImClone
Information, ImClone Material, or ImClone Patent Rights as the case may be, or
any other intellectual property rights relating to the 5000 Liter Process which
are owned by the other party or its Affiliates or to which the other party or
its Affiliates is otherwise entitled.

 

17.           Termination.

 

17.1 In the event
that LB fails to comply with cGMP and is unable to continue to manufacture
Product under FDA regulations and should LB be unable or unwilling to resolve
the non-compliance and regain a state of compliance within 90 days of receiving
notice from the 

 

[*****] REPRESENTS
CONFIDENTIAL PORTION WHICH HAS BEEN OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION. 
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED
PORTIONS.

 

40

 

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

 

17.2.        Termination
Without Cause.  ImClone shall be
entitled to terminate this Agreement at any time without cause with 30 days
notice in writing.  If ImClone terminates
this Agreement pursuant to this Section 17.1, then within 30 days of receipt of
the notice ImClone shall pay to LB the balance due of the Batch Price(s) for
any undelivered or unordered batches required to make up the Minimum Order by
ImClone in accordance with Section 6.3.

 

17.3.        This
Section left intentionally blank.

 

17.4.        Termination
for Cause.  LB and ImClone may each
terminate this Agreement, as their sole remedy, with 30 days notice in writing
to the other upon the occurrence of any of the following events:

 

17.4.3.     If
the other materially breaches this Agreement, and (in the case of a breach
capable of remedy) such breach is not remedied within ninety (90) days of the
receipt by the other of notice identifying the breach and requiring its remedy
or, if such breach is incapable of remedy within ninety (90) days, the other
party fails to commence actions within such ninety (90) days to remedy such
breach pursuant to a plan acceptable to the complaining party. In the event of
termination by LB pursuant to this 

 

[*****] REPRESENTS
CONFIDENTIAL PORTION WHICH HAS BEEN OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION. 
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED
PORTIONS.

 

41

 

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

 

17.4.4.     If
the 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 pay
its debts or obligations or a petition is filed seeking the appointment of or

 

17.5.        Effect
of Termination Generally.  Upon the
termination of the Agreement for whatever reason:

 

17.5.1.     LB
shall promptly return all ImClone Information to ImClone (to the extent legal
or regulatory requirements permit) and shall dispose of, or return to ImClone
the ImClone Materials and any materials derived therefrom, as directed by
ImClone;

 

17.5.2.     ImClone
shall promptly return to LB (to the extent legal and regulatory requirements
permit) all LB Information it has received from LB;

 

17.5.3.     Subject
to any rights granted to ImClone or LB as a result of any written agreement
between the parties, ImClone shall not thereafter use or exploit the LB Patent
Rights or the LB Information in any way whatsoever and LB shall not thereafter
use or exploit the ImClone Patent Rights, the ImClone Information or the
ImClone Materials in any way whatsoever. 
No licenses shall arise or be deemed to have arisen hereunder either by
default, estoppel or otherwise except as expressly set forth herein;

 

17.5.4.     LB
may thereafter use or exploit the LB Patent Rights in any way whatsoever
without restriction;

 

[*****] REPRESENTS
CONFIDENTIAL PORTION WHICH HAS BEEN OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION. 
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED
PORTIONS.

 

42

 

17.5.5.     LB
and ImClone shall do all such acts and things and shall sign and execute all
such deeds and documents as the other may reasonably require to evidence compliance
with this Section 17.5.

 

17.7.        Survival.  The end of the term or prior termination of
this Agreement for whatever reason shall not affect the accrued rights of
either LB or ImClone arising under this Agreement and all provisions which by
their terms survive the end of the term or prior termination of this Agreement
shall remain in full force and effect, including without limitation Sections
3.7,14, 15, 16, 17, 19 and 20.

 

18.           Force Majeure.

 

18.1.        If
either party is prevented or delayed in the performance of any of its
obligations under this Agreement by an Event of Force Majeure (as defined
below) and shall give written notice thereof to the other, specifying the
matters constituting an Event of Force Majeure and the period for which it is
estimated that Event of Force Majeure will continue, that party shall be
excused from the performance or the punctual performance of such obligations,
as the case may be, from the date of such notice for so long as such cause of
prevention or delay shall continue.

 

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

 

[*****] REPRESENTS
CONFIDENTIAL PORTION WHICH HAS BEEN OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION. 
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED
PORTIONS.

 

43

 

19.           Governing Law, Jurisdiction and Enforceability.

 

19.1.        Governing
Law.  The construction, validity,
performance, and enforcement of this Agreement shall be governed by the laws of
State of New York, without giving effect to the principles of conflicts of law
thereof.

 

19.2.        Dispute
Resolution.  In the event of the
failure on the part of any required representative of the parties hereto or the
Steering Committee to resolve any matter required by this Agreement to be
agreed, or in the event of any other dispute or claim arising between the
parties under this Agreement, the parties shall attempt by good faith
negotiations to resolve such dispute or claim between them by reference to the
Presidents, who shall negotiate in good faith during a period of not less than
sixty (60) days to resolve such matter, dispute or claim.  In the event the parties are unable to
resolve such dispute or claim within the required time, the dispute shall be
settled by binding arbitration, in accordance with the Center for Public
Resources Rules for Non-Administered Arbitration of Business Disputes, by three
arbitrators, none of whom shall be appointed by parties.  The arbitrators shall be selected from the
CPR Panels of Distinguished Neutrals and shall be attorneys with at least
fifteen (15) years experience in commercial law.  The arbitration shall be governed by the
United States Arbitration Act, 9 U.S.C. §§ 1-16, and judgment upon the award
rendered by the arbitrators may be entered in any court having jurisdiction
thereof.  The place of arbitration shall
be New York, New York.

 

19.3.        No
waiver.  No failure or delay on the
part of either LB or ImClone to exercise or enforce any rights conferred on it
by the Agreement shall be construed or operate as a waiver thereof nor shall
any single or partial exercise of any right, power or privilege or further
exercise thereof operate so as to bar the exercise or enforcement thereof at
any time or times thereafter.

 

[*****] REPRESENTS
CONFIDENTIAL PORTION WHICH HAS BEEN OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION. 
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED
PORTIONS.

 

44

 

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

 

20.           Miscellaneous.

 

20.1.        Assignment.  Neither party shall be entitled to assign
this Agreement without the prior written consent of the other, which consent
shall not be unreasonably withheld or delayed, except that both parties shall
be entitled without the prior written consent of the other to assign this
Agreement to an Affiliate or to any joint venture company of which that party
is the beneficial owner of more than fifty per cent (50%) of the issued voting
share capital thereof or to any company to which that party may transfer
substantially all of its assets provided that ImClone may assign this Agreement
to BMS (or one of its subsidiaries) or any other commercial partner of ImClone
for any such Product without such consent. 
Any assignment not permitted by this Section 20.1 shall be void and of
no effect whatsoever.

 

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

 

20.3.        Entire
Agreement.  This Agreement embodies
the entire agreement and understanding between LB and ImClone relating to the
subject matter hereof and there are no promises, terms, conditions or
obligations, oral or written, expressed on implied, other than those contained
in this Agreement.  The terms of this
Agreement supersede all previous agreements and understandings between LB and
ImClone relating to the Services.

 

[*****] REPRESENTS
CONFIDENTIAL PORTION WHICH HAS BEEN OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION. 
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED
PORTIONS.

 

45

 

20.4.        Independent
Contractor.  Each party to this
Agreement acts as an independent contractor and nothing in this Agreement shall
be construed to create a relationship of partnership, principal and agent, or
joint venture between the parties.

 

20.5.        Notices.  Any notice or other communication to be given
under this Agreement shall be delivered personally or sent by first class
pre-paid registered or certified mail, return receipt requested, nationally
recognized courier service or facsimile transmission addressed as follows:

 

If to ImClone, to:

 

ImClone Systems
Incorporated

33 Chubb Way

Branchburg, NJ  08876

For the attention of: Legal Department. 

Facsimile: (908) 704-2719

 

with a copy to:

 

ImClone Systems
Incorporated

33 Chubb Way

Branchburg, NJ  08876

 

For the attention
of:  S. Joseph Tarnowski, Ph.D.

Facsimile:  (908) 575-0503

 

If to LB, to:

 

Lonza Biologics plc

228 Bath Road

Slough

Berkshire SL1 4DX

England

For the attention of:  Company Secretary

Facsimile: (011) 44 1753 777001

 

with a copy to:

 

Lonza Biologics, Inc.

101 International Drive

Portsmouth, New Hampshire 03801-2833

[*****] REPRESENTS
CONFIDENTIAL PORTION WHICH HAS BEEN OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION. 
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED
PORTIONS.

 

46

 

For the attention of: COO

Facsimile: 001 603 610-5052

 

or to such other address as either party hereto may
hereafter notify the other in accordance with the provisions of this Section
20.5.  All such notices or other
communications shall be deemed to have been delivered as follows:

 

20.5.1.     If
delivered personally, at the time of such delivery;

 

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

 

20.5.3.     If
sent by facsimile, upon receipt of the transmission confirmation slip showing
completion of the transmission;

 

20.5.4.     If
sent by courier service, two (2) days after being dispatched.

 

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

 

20.7.        Counterparts.  This Agreement may be executed in several
counterparts, each of which is an original but all of which shall constitute
one instrument.

 

20.8.        Binding
Effect.  This Agreement shall be
binding upon and inure to the benefit of the parties hereto and their
respective successors and permitted assigns.

 

[*****] REPRESENTS
CONFIDENTIAL PORTION WHICH HAS BEEN OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION. 
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED
PORTIONS.

 

47

 

IN WITNESS
WHEREOF, the parties have caused this Agreement to be executed by their duly
authorized representatives as of the date first above written.

 

	
   

  	
   

  	
  LONZA BIOLOGICS PLC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  IMCLONE SYSTEMS INCORPORATED

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   Title:

  	
   

  	
   

  
									

 

[*****] REPRESENTS
CONFIDENTIAL PORTION WHICH HAS BEEN OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION. 
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED
PORTIONS.

 

48

 

ATTACHMENT 1

 

Final Product
Specifications

 

 

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

 

[*****] REPRESENTS
CONFIDENTIAL PORTION WHICH HAS BEEN OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION. 
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED
PORTIONS.

 

49

 

ATTACHMENT 2

 

Tech Transfer

 

 

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

 

2. It is agreed and
understood that prior to commencing with the production of any GMP Batches that
at least one (1) GMP pilot Batch of each Product shall be successfully
completed at the 5,000L scale and that such pilot Batch shall conform to all
those Specifications that are to be agreed between Parties for the subsequent
GMP Batches.  Further, Parties shall
agree that the yield of the pilot Batch is within the yield targets defined in
section 6.7. In the event that the pilot Batch does not meet the yield
estimates, Parties shall investigate the reason and as necessary revise the
yield estimate.

 

3. ImClone shall provide, as
reasonably requested by LB, all manufacturing batch records, technical support
and such personnel of ImClone necessary to complete the timely and efficient
transfer of the Process to LB’s facility. 

 

[*****] REPRESENTS
CONFIDENTIAL PORTION WHICH HAS BEEN OMITTED AND FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION. 
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED
PORTIONS.

 

50

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