UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-Q/A1
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1997
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ____________ to ___________
Commission file number 0-19612
IMCLONE SYSTEMS INCORPORATED
(Exact name of registrant as specified in its charter)
DELAWARE 04-2834797
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
180 VARICK STREET, NEW YORK, NY 10014
(Address of principal executive offices) (Zip Code)
(212) 645-1405
Registrant's telephone number, including area code
Not Applicable
Former name, former address and former fiscal year, if changed since last report
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes __X__ No __
Applicable only to corporate issuers:
Indicate the number of shares outstanding of each of the registrant's classes of
common stock, as of the latest practicable date.
Class Outstanding as of November 12, 1997
Common Stock, par value $.001 24,201,830 Shares
<PAGE>
PART II - OTHER INFORMATION
Item 6 - Exhibits and Reports on Form 8-K
(a) Exhibits (numbered in accordance with Item 601 of Regulation S-K)
Exhibit No. Description
----------- -----------
10.76* Collaborative Research and License Agreement
between the Company and CombiChem, Inc. dated
October 10 1997.
27.1 Financial Data Schedule
(b) Reports on Form 8-K:
None.
* Certain confidential portions of this Exhibit are omitted by redacting a
portion of the text (the "Mark"). It has been filed separately with the
Secretary of the Commission without the Mark pursuant to an Application
Requesting Confidential Treatment.
Page 2
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this amended report to be signed on its behalf by the
undersigned thereunto duly authorized.
IMCLONE SYSTEMS INCORPORATED
(Registrant)
Date: February 11, 1998 By /s/ Carl S. Goldfischer
----------------------------------
Carl S. Goldfischer
Vice President , Finance and Chief
Financial Officer
Page 3
COLLABORATIVE RESEARCH AND LICENSE AGREEMENT
BETWEEN
COMBICHEM, INC.
AND
IMCLONE SYSTEMS INCORPORATED
October 10, 1997
<PAGE>
COLLABORATIVE RESEARCH AND LICENSE AGREEMENT
THIS COLLABORATIVE RESEARCH AND LICENSE AGREEMENT (the "Agreement") is
entered into and made effective as of October 10, 1997 (the "Effective Date"),
by and between COMBICHEM, INC., a Delaware corporation having its principal
offices at 9050 Camino Santa Fe, San Diego, California ("CombiChem"), and
IMCLONE SYSTEMS INCORPORATED, a Delaware corporation having its principal
offices located at 180 Varick Street, 7th Floor, New York, New York ("ImClone").
WHEREAS, CombiChem has developed and owns certain drug discovery technology
and intellectual property rights, including but not necessarily limited to
chemical library design software, multi-parallel synthesis and purification
methods, chemical libraries suitable for biological screening assays and
medicinal chemistry (collectively, "CombiChem Technology");
WHEREAS, ImClone desires to utilize CombiChem Technology for its drug
discovery activities under ImClone know-how concerning the identification and
characterization of novel small molecule inhibitors for development as
therapeutics for treatment of human disease in the area of oncology;
WHEREAS, the parties wish to collaborate in a Research Program against
Collaboration Target(s) ("Collaboration");
WHEREAS, for purposes of the Collaboration, the Parties intend to focus on
up to *** Collaboration Targets per *** related to ImClone's Areas of Interest;
NOW, THEREFORE, the Parties agree as follows:
1. DEFINITIONS
1.1 "Abandoned Compound" shall have the meaning set forth in Section 3.1.
1.2 "Abandoned Target" shall have the meaning set forth in Section 3.1.
1.3 "Active Compound(s)" means a compound (or compounds) which
(a) (i) is selected by either Party under the Research Program from
Collaboration Compounds, or
(ii) is derived from a Collaboration Compound; and
(b) shows In Vitro Activity.
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
1
<PAGE>
1.4 "Additional Target(s)" means a Target that is added to the
Collaboration in accordance with Section 4.2.
1.5 "Affiliate" of a Party means any corporation or other business entity
controlled by, controlling or under common control with, such Party. For this
purpose "control" shall mean direct or indirect beneficial ownership of more
than fifty percent (50%) of the voting securities or income interest in such
corporation or other business, or if not meeting the preceding requirements, any
company owned or controlled by or owning or controlling such Party at the
maximum control or ownership right permitted in the country where such company
exists.
1.6 "Areas of Interest" shall include *** *** .
1.7 "Collaboration" has the meaning set forth in the preamble.
1.8 "Collaboration Compound(s)" means a compound (or compounds) which (a)
is synthesized following the Effective Date for screening against a
Collaboration Target under the Research Program, (b) is a pre-existing CombiChem
Compound which CombiChem desires to designate as a Collaboration Compound, or
(iii) is a pre-existing ImClone Compound which ImClone desires to designate as a
Collaboration Compound.
1.9 "Collaboration Target(s)" means either an Initial Target or an
Additional Target.
1.10 "CombiChem Compound" means a chemical compound that is proprietary to
CombiChem, or whose use or manufacture is proprietary to CombiChem.
1.11 "CombiChem Technology" has the meaning set forth in the preamble.
1.12 "Confidential Information" includes, but is not limited to,
(a) all information and materials received by either Party from the
other Party pursuant to this Agreement;
(b) all information and materials developed in the course of the
Collaboration; and
(c) the material financial terms of this Agreement.
1.13 "Development Compound(s)" means a compound ( or compounds) which
(a) (i) is a Lead Compound or (ii) is derived from a Lead Compound;
and
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
2
<PAGE>
(b) are determined by ImClone to be appropriate for preclinical
studies for the purpose of IND filing by ImClone.
1.14 "Due Diligence" means the use of the resources of ImClone or its
licensees or CombiChem in a manner which is consistent with the exercise of
prudent scientific and business judgment as applied to other programs of ImClone
or CombiChem, as the case may be, targeting products aimed at markets or patient
groups of similar sizes and of similar scientific and commercial potential. With
respect to any Development Compound, "Due Diligence" shall also require ImClone
or its licensees to conduct all necessary preclinical studies and to file an IND
for such Development Compound within *** from the date upon which ImClone has
designated such Development Compound from any Lead Compound or its derivatives.
1.15 "Exclusivity Period" means the Research Period plus twelve (12)
months. .
1.16 "Field" means all therapeutic indications of human disease for the
Collaboration Target.
1.17 "First Commercial Sale" of a Product shall mean the first sale for use
or consumption of such Product in a country after required marketing and pricing
approval has been granted by the governing health regulatory authority of such
country. Sale to an Affiliate or licensee shall not constitute a First
Commercial Sale unless the Affiliate or licensee is the end user of the Product.
1.18 "FTE" means full time equivalent with respect to employees of
CombiChem.
1.19 "ImClone Compound" means a chemical compound that is proprietary to
ImClone, or whose use or manufacture is proprietary to ImClone.
1.20 "Inactive Compound(s)" means a Collaboration Compound(s) which does
not have the In Vitro Activity required for an Active Compound.
1.21 "In Vitro Activity" shall mean the observation of *** *** .
1.22 "Initial Target" shall have the meaning set forth in Section 4.1
hereof.
1.23 "Lead Compound(s)" means a compound (or compounds) which
(a) is selected from an Active Compound(s) by the RMC under the
Research Program, or
(b) is derived from Active Compound(s) and is selected by the RMC.
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
3
<PAGE>
1.24 "Net Sales" means the gross sales invoiced by ImClone or its
Affiliates or licensees for Products to non-Affiliated Third Parties less actual
deductions of returns (including withdrawals and recalls), rebates (price
reductions, including Medicaid and similar types of rebates e.g. chargebacks),
volume (quantity) discounts, discounts granted at the time of invoicing, the
cost of transport, insurance, delivery, sales taxes and other taxes (other than
income taxes) directly linked to and included in the gross sales amount, as
computed on a product-by-product basis for the countries concerned, whereby the
amount of such sales in foreign currencies is converted into United States
dollars at the exchange rate of the last business day for each calendar month as
reported by Citibank, N.A. (New York).
1.25 "Patent" means, (a) valid and enforceable Letters Patent, including
any extension (including Supplemental Protection Certificate), registration,
confirmation, reissue, continuation, divisionals, continuation-in-part,
reexamination or renewal thereof, or (b) pending applications for any of the
foregoing.
1.26 "Payments" shall have the meaning set forth in Section 9.3
1.27 "Party" means CombiChem or ImClone, as the case may be, including
their respective Affiliates, permitted successors and assigns.
1.28 "Product(s)" means any product containing a Development Compound with
such compound as the active ingredient and which is granted regulatory approval
by the governing health regulatory authority of the applicable country for
marketing in the Field.
1.29 "Project Team" shall have the meaning set forth in Section 2.1(c).
1.30 "Research Management Committee" or" RMC" has the meaning set forth in
Article 6 below.
1.31 "Research Period" means the initial twenty-four (24) month term of the
Collaboration, which can be extended in accordance with Section 7.1 below.
1.32 "Research Plan" means the mutually-agreed research plan for the
Collaboration attached hereto as Appendix A.
1.33 "Research Program" means the research to be conducted as part of the
Collaboration under the Research Plan, and shall include, without limitation,
the activities and items set forth in Sections 2.1 and 2.2 of this Agreement.
1.34 "Returned Compound" shall have the meaning set forth in Section 9.2.
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
4
<PAGE>
1.35 "Royalty Term" means, in the case of any Product, in any country, the
period of time commencing on the First Commercial Sale and ending upon the later
of (a) fifteen (15) years from the date of First Commercial Sale in such
country; or (b) the expiration of the last-to-expire Patent resulting from the
Research Program filed in the Field with claims covering that Product in the
relevant country.
1.36 "Target" means a biomolecular entity that a small molecule is screened
against in order to determine whether the small molecule demonstrates relevant
activity.
1.37 "Territory" means the entire world.
1.38 "Third Party" means an entity other than CombiChem or ImClone or their
respective Affiliates.
1.39 "Universal Informer Library" shall mean CombiChem's proprietary
Universal Informer Library of compounds.
2. RESEARCH COLLABORATION
2.1 CombiChem Responsibilities. CombiChem shall with Due Diligence conduct
the following activities under the Research Program in accordance with the terms
of this Agreement and as more fully described in the Research Plan:
(a) During the Research Period, CombiChem shall (i) review data and
information regarding the Collaboration Targets provided by
ImClone; (ii) based on such data and information and using the
CombiChem Technology, design informative compound libraries; and
(iii) supply all lead chemistries and synthesize compounds as
provided in Section 5.3 below.
(b) During the Research Period, CombiChem shall keep ImClone informed
of its activities performed in connection with the Collaboration,
including, without limitation, providing ImClone with data and
information regarding Collaboration Compounds prior to the
meetings of the Research Management Committee.
(c) Subject to Article 4 and at all times during the Research Period,
CombiChem shall dedicate a project team of five (5) FTEs
comprised of synthetic and analytical chemists, compound control
scientists, and a computational scientist (the "Project Team") to
conduct all of its activities in connection with the
Collaboration; provided, however, that the RMC may at any time
during the Research Period substitute employees for the FTEs
described above; provided, further, that
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
5
<PAGE>
ImClone may request that CombiChem expand its Project Team by
adding additional FTEs to work on the Collaboration at the rate
and in the manner specified in Section 8.2(b).
2.2 ImClone Responsibilities. ImClone shall with Due Diligence provide
CombiChem with the following resources under the Research Program as more fully
described in the Research Plan:
(a) ImClone shall provide CombiChem with support and assistance
useful or necessary for the conduct of the Research Program,
including providing data and information (including leads and/or
screening hits to the extent available) relating to Collaboration
Targets, certain chemistries useful in compound synthesis,
information concerning assay methods and screening data.
(b) During the Research Period, ImClone shall provide CombiChem with
data and information regarding Collaboration Compounds and the
Collaboration Target assays developed by ImClone under the
Research Program prior to the meetings of the Research Management
Committee.
(c) During the Exclusivity Period and with Due Diligence, ImClone
shall screen Collaboration Compounds for In Vitro and, where
appropriate, in vivo activity against the Collaboration Target.
(d) During the Exclusivity Period and with Due Diligence, ImClone
shall (i) screen Lead Compounds, (ii) endeavor to determine
Development Compounds, and (iii) develop Products.
2.3 Research Plan. The Parties hereby agree that the Research Program shall
be carried out in accordance with the Research Plan which is attached hereto as
Appendix A. At the direction of the RMC, the Research Program shall involve the
use of CombiChem's Universal Informer Library in order to initiate CombiChem's
discovery process with the objective of identifying Lead Compounds with respect
to a specific Collaboration Target. The Research Management Committee shall
review the Research Plan on an ongoing basis and may make changes to the
Research Plan so long as such changes are mutually agreed to by CombiChem and
ImClone.
2.4 Annual Reports. Following the first IND filing through First Commercial
Sale, ImClone shall provide CombiChem with an annual report summarizing
ImClone's activities in developing Development Compounds.
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
6
<PAGE>
2.5 Third Party Licenses. Each Party shall be solely responsible for any
Third Party license fees required to perform its obligations under this
Agreement subject to Section 8.4. Any agreements between a Party and a Third
Party shall in all material respects permit performance under this Agreement.
3. EXCLUSIVITY
3.1 Collaboration Target Exclusivity. So long as ImClone or its licensee is
proceeding with Due Diligence, CombiChem shall not work on a Collaboration
Target with any Third Parties. In the event that ImClone or its licensee fails
to exercise Due Diligence with respect to, or notifies CombiChem that it has
abandoned work on, any Collaboration Target (an "Abandoned Target") and any
Collaboration Compound, other than an ImClone Compound which is subject to the
rights of a Third Party licensor, associated with such Collaboration Target
(together with all derivatives of such Collaboration Compound, an "Abandoned
Compound"), then, (a) such Abandoned Target shall not be subject to any
provision hereunder, and (b) such Abandoned Compound shall be available to
CombiChem for any purpose thereafter.
3.2 Active Compounds.
(a) Following the designation of any Collaboration Compound as an Active
Compound, such Active Compound shall be exclusively available to ImClone during
the Research Period. Following the expiration of the Research Period, Active
Compounds with respect to which ImClone fails to proceed with Due Diligence
shall be deemed to be Inactive Compounds for all purposes hereunder; provided,
that any Active Compound which is the subject of claim(s) under a pending Patent
shall continue to be treated as an Active Compound during the Exclusivity Period
so long as ImClone exercises Due Diligence with respect to any Collaboration
Compound.
(b) Prior to the existence of Patent(s) in accordance with Section 5.2,
ImClone shall have exclusive rights in all intellectual property relating to
Active Compounds, their use, and method of manufacture so long as ImClone
continues to show Due Diligence under this Agreement; provided, however, that
ImClone acknowledges and agrees that CombiChem reserves the right to assign or
grant exclusive rights, including rights to Active Compounds, to a third party
collaborator who first identifies a novel compound, a novel use of a compound,
or a novel method of manufacturing a compound, to the extent CombiChem is
obligated to do so under its existing contractual obligations. Upon notice by
ImClone that it intends to file a Patent application with respect to any Active
Compound, Lead Compound, Development Compound or Product, CombiChem shall
promptly inform ImClone whether CombiChem has the power to grant the exclusive
rights in accordance with this Section 3.2 and the assignments in accordance
with Section 5.2; provided, however, that under no circumstances CombiChem will
grant assurances to ImClone to the effect that any Active Compound, Lead
Compound, Development Compound or Product is not covered under the patent claims
of Third Parties wherein such claims are not the direct result of a
collaboration between the Third Party and CombiChem.
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
7
<PAGE>
3.3 Inactive Compounds/Returned Compounds. Subject to Section 9.4, Inactive
Compounds and Returned Compounds shall be available to both Parties for any
purpose.
4. TARGETS
4.1 Initial Targets. During the Research Period, ImClone may designate up
to *** Collaboration Targets per *** under the Research Program. During the
initial *** *** of the Research Program, subject to the Research Plan it is
anticipated that the Collaboration shall initially focus on up to *** Targets as
follows: **** *** (collectively, the "Initial Targets"). With
respect to Collaboration Targets, the RMC will determine whether to continue to
pursue work against designated Collaboration Targets and will prioritize the
activities of the Project Team against such Collaboration Targets. In the event
that the results of the initial screening activities of ImClone with respect to
the Initial Targets specified in Section 4.1 *** ***
which shall determine whether such Targets are suitable for designation as
Additional Targets. Subject to the dispute resolution mechanism provided for in
Article 6, ImClone shall have the right to make a final determination as to
whether to continue or pursue work against any Collaboration Target if the
respective Chief Executive Officers of CombiChem and ImClone are unable to
resolve any dispute concerning the same. In addition, ImClone's right to
designate or substitute a Target (including those Additional Targets set forth
in Section 4.2) relating to ImClone's Areas of Interest shall be subject to the
written notice and approval requirements specified in Section 4.2(b).
4.2 Additional Targets.
(a) Within ninety (90) days prior to the commencement of the second
12-month period of the Research Program, ImClone may add up to *** relating to
ImClone's Areas of Interest to the Collaboration by notifying CombiChem in
writing that it wishes to designate such Target(s) as Additional Target(s); it
being understood that the Project Team shall be obligated to simultaneously work
on no more than *** Collaboration Targets as directed by the RMC.
(b) If CombiChem has already committed to working on a proposed Additional
Target or has delivered a term sheet to any Third Party and remains in
discussions to enter into a binding agreement with such Third Party with respect
to the proposed Target at the time of notification, CombiChem shall inform
ImClone that such proposed Additional Target is not available. Otherwise, the
RMC shall establish the specific scientific achievements (to be mutually agreed
between CombiChem and ImClone) for such Target and the same shall be designated
as an Additional Target for the Collaboration and subject to the terms
(including the commercial terms) of this Agreement.
4.3 Expansion of Project Team. Notwithstanding the provisions of Sections
4.1 and 4.2, ImClone may request that CombiChem expand its Project Team during
the Research Period
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
8
<PAGE>
in order to accelerate work on Collaboration Targets and/or to add additional
Target(s). In such event, the RMC shall promptly confer as to the appropriate
number of FTEs to be added to Project Team to work on the Collaboration at a
cost to ImClone as specified in Section 2.1(c).
5. COLLABORATION COMPOUNDS
5.1 Pre-Existing Compounds. ImClone shall have no rights to any
pre-existing CombiChem Compound unless and until such compound is designated as
a Collaboration Compound by CombiChem. Additionally, CombiChem may decline to
synthesize a particular compound or library of compounds by reason of existing
Patents or contractual obligations. CombiChem shall have no rights to any
pre-existing ImClone Compound which is not utilized in the Research Program.
5.2 Intellectual Property Rights; Assignment to ImClone. Subject to Section
3.2(b) above, ImClone shall have the right and responsibility at ImClone's
expense to file, maintain and prosecute Patents relating to Active Compounds,
Lead Compounds, Development Compounds and Products, their use, and their methods
of manufacture. At ImClone's request, CombiChem shall assign all its right,
title and interest in such Patents to ImClone. If ImClone fails to so file,
maintain or prosecute such Patent, CombiChem shall have the right to request
ImClone to do so. If ImClone elects not to file, maintain or prosecute such
Patent, CombiChem shall have the right to take over such filing, maintenance or
prosecution of such Patent, at its sole expense, and ImClone shall assign all
intellectual property rights it may have in the Active Compound, Lead Compound,
Development Compound or Product to CombiChem.
5.3 Supply of Collaboration Compounds. Aliquots of *** of any
Collaboration Compound that has been synthesized will be prepared and given to
ImClone. CombiChem shall replenish that amount upon ImClone's reasonable
request. CombiChem shall maintain aliquots of any Collaboration Compound that
has been synthesized by CombiChem. CombiChem shall also provide ImClone with
additional requirements of samples at CombiChem's cost.
6. RESEARCH MANAGEMENT COMMITTEE
The design, review and conduct of the Research Program will be coordinated
by the Research Management Committee, which will meet regularly on a
mutually-agreeable schedule. The Research Management Committee may establish and
amend or revise the Research Plan as necessary to reflect the scientific
progress and work performed under the Research Program, such amendments to be
mutually agreed to by ImClone and CombiChem. The Research Management Committee
will consist of an equal number of members from ImClone and CombiChem and will
include appropriate representatives from ImClone and CombiChem as mutually
agreed. The co-chairs of the Research Management Committee will initially be the
Vice President, Chemistry of CombiChem and the Vice President for Research of
ImClone and subsequently may change as mutually-agreed upon by the Parties.
Decisions of the Research Management Committee shall be by
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
9
<PAGE>
consensus. If a decision is not reached by the RMC with respect to management of
the Research Program, the dispute will be referred to the co-chairs of the RMC.
If the co-chairs of the RMC are unable to resolve the dispute, the dispute will
be referred to the respective Chief Executive Officers of CombiChem and ImClone.
7. RESEARCH PERIOD; TERMINATION OF RESEARCH PROGRAM
7.1 Research Period: Option to Extend the Research Period. The initial term
of the Collaboration shall be the Research Period, subject to extension upon
mutual agreement. To extend the Research Period, ImClone must notify CombiChem
no later than ninety (90) days prior to the then-current expiration date and the
Parties shall negotiate in good faith the terms and conditions of any such
extension.
7.2 Termination of Research Program.
(a) The Research Program may be terminated by a Party for the material
breach by the other Party of obligations under the Research Program by giving
the breaching party notice of the breach and of the intent of the non-breaching
Party to terminate the Research Program unless the breach is cured within ninety
(90) days of notification. The non-breaching Party may terminate the Research
Program following such ninety (90) day period by providing the breaching party
with ninety (90) days' prior written notice that the Research Program is
terminated, and the Research Program shall be terminated on the 90th day
following such date.
(b) Within thirty (30) days prior to the one (1) year anniversary of this
Agreement, ImClone and CombiChem senior and scientific management personnel
shall meet to review the status of the Collaboration. If, based upon such
review, the status of the Collaboration is satisfactory to ImClone, ImClone
shall make the Second Research Payment described in Section 8.2 to CombiChem on
or before the one (1) year anniversary of this Agreement; provided, however,
that ImClone may, in its discretion, make such Second Research Payment at any
time prior to the date which is the one (1) year anniversary of this Agreement.
If however, based upon such review, the status of the Collaboration is
unsatisfactory to ImClone, ImClone may terminate the Research Program by
providing 90-days' prior written notice to CombiChem that the Research Program
shall be terminated. Upon receipt of such notice by CombiChem, ImClone shall
have no further obligation to make the Second Research Payment to CombiChem (if
such payment has not already been made to CombiChem), and the Research Program
shall be terminated on the 90th day following such date.
(c) CombiChem shall, within thirty (30) days following the effective date
of termination under Section 7.2(a) or 7.2(b), pay to ImClone such amount as is
calculated by taking ***
***
*** shall be based upon *** . Any amount due by
CombiChem under this Section 7.2(c) may be in the form, at CombiChem's
discretion, of
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
10
<PAGE>
***
***
*** .
8. CONSIDERATION
8.1 Equity Purchase. Upon execution of this Agreement, ImClone shall
purchase 1,000,000 shares (on a pre-split basis and subject to adjustment) of
Common Stock of CombiChem at a per share purchase price equal to $2.00 per share
for an aggregate purchase price of U.S. $2 million, pursuant to the terms of
that certain Common Stock Purchase Agreement, dated as of the Effective Date, by
and between CombiChem and ImClone (together with all ancillary agreements
thereto, the "Stock Purchase Agreement"). In the event that CombiChem closes an
initial public offering of its common stock at a sales price per share to the
public (the "IPO Price") which is less than $2.50 per share (on a pre-split
basis), then, upon the closing of such initial public offering, CombiChem shall
issue to ImClone, without further consideration other than the purchase price
paid by ImClone pursuant to the Stock Purchase Agreement, such additional number
of shares of CombiChem common stock equal to:
2,000,000
-------------- -1,000,000
Adjusted Price
wherein the "Adjusted Price" = the IPO Price X .80 if the IPO Price is less than
$2.50 per share. All shares of CombiChem common stock issued pursuant to this
Section 8.1 shall be deemed to be "Shares" within the meaning of the Stock
Purchase Agreement.
8.2 Program Funding.
(a) ImClone shall support CombiChem's efforts in conducting the Research
Program by making a payment upon the execution of this Agreement in the sum of
U.S. $0.5 million as direct research support.. In addition, subject to Section
7.2(b), ImClone shall make a payment (the "Second Research Payment") to
CombiChem prior to October 10, 1998 in the amount of U.S. $0.5 million in the
form either, at ImClone's discretion, of (i) cash, or (ii) stock equal to the
quotient obtained by dividing (i) U.S. $0.5 million by (ii) the average of the
last reported sales price of the ImClone common stock as quoted on the National
Market System of the National Association of Securities Dealer's Automated
Quotation System during the thirty (30) consecutive trading days ending on the
day prior to delivery of such shares (the "ImClone Price Per Share").
(b) In the event that the Project Team is expanded in accordance with
Section 4.3, ImClone shall make payments, in cash, to CombiChem, at a per annum
rate of U.S. *** payable quarterly in advance of the work to be
performed by such additional FTE(s).
(c) Any shares of ImClone common stock issued to CombiChem under this
Section 8.2 shall be restricted securities under the Securities Act of 1933, as
amended, and shall
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
11
<PAGE>
be issued pursuant to a stock issuance agreement between ImClone and CombiChem
which shall contain provisions for representations and warranties equivalent to,
and registration rights and indemnification (and such other relevant provisions)
with respect to the shares of ImClone common stock issued thereunder no less
favorable than, those contained in the Stock Purchase Agreement.
8.3 Milestone Payments. Within thirty (30) days of the occurrence of a
development milestone triggered by the activities of ImClone as shown on
Appendix B, ImClone shall pay CombiChem the related milestone payment in U.S.
dollars as set forth on Appendix B. Alternatively, in the event that ImClone
shall outlicense the Patents covering any Product, CombiChem shall be entitled
to the payments set forth in Section 9.3 in lieu of any payments pursuant to
this Section 8.3.
8.4 Royalties.
(a) Direct Sales by ImClone
(i) Subject to Section 8.4(c), during the Royalty Term, ImClone will
pay CombiChem a running royalty of *** of Net Sales of Products sold by
ImClone or its Affiliates in all countries in the Territory. Each payment
of royalties shall be accompanied by a report of Net Sales of Products in
sufficient detail to permit confirmation of the accuracy of the royalty
payment made.
(ii) The royalties owed under Section 8.4(a)(i) shall not be reduced
in accordance with Sections 8.4(c)(i) through 8.4(c)(iii) in an amount
which results in a royalty payable to CombiChem of less than *** of Net
Sales for Products sold directly by ImClone or its Affiliate.
(b) Sales by ImClone's Licensees
In the event that ImClone outlicenses Active Compounds, Lead
Compounds, Development Compounds and resulting Products are sold by
ImClone's licensees in any country in the Territory, ImClone's royalty
payable to CombiChem shall be as follows:
ImClone Royalty from Outlicensing CombiChem Royalty due to Outlicensing
- --------------------------------- -------------------------------------
Greater than *** (1) *** of ImClone royalty, but no greater
than ***
(2) Subject to reduction as outlined in
Sections 8(c)(i) through 8(c)(iii),
but such reductions shall not reduce
CombiChems royalty below *** except as
otherwise provide in Section 8.4(c)(iii).
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
12
<PAGE>
Less than or equal to *** (1) *** of ImClone royalty and not subject
to reduction as outlined in Sections
8(c)(i) and and 8(c)(ii).
(c) Royalty Reductions
(i) In any country in which Patents do not include a valid issued patent
covering a Product sold by ImClone or its licensee, and/or where a generic
equivalent has been approved for sale and is being sold in such country, the
royalty provided for in Section 8.4(a)(i) and in Section 8.4(b), as indicated
therein, shall be reduced by *** .
(ii) In any country in which ImClone pays a Third Party royalty for patents
and related technology in order to sell a Product, *** of such Third Party
royalty shall be *** the royalty payment owed by ImClone to CombiChem in
accordance with Section 8.4(a)(i) and Section 8.4(b), as indicated therein.
During the Research Period, the RMC will make the determination whether to
include any Third Party royalty-bearing patents and related technology in the
Collaboration. After the Research Period, ImClone shall, in its discretion, make
the determination whether to enter into any agreements with respect to Third
Party royalty-bearing patents and related technology for purposes of this
Agreement.
(iii) In any country in which CombiChem receives any Additional Payments in
respect of payments received by ImClone which are treated as an advance against
royalties due ImClone from its licensee, such Additional Payments shall be ***
the royalties provided for in Section 8.4(b) that are derived from such
licensee.
8.5 Manner and Place of Payment. Royalty payments and reports for Net Sales
of Products shall be calculated in local currencies and reported for each
calendar quarter. All royalty payments owed under this Agreement shall be made
by wire transfer to the bank account to be designated by CombiChem within thirty
(30) days following the end of each such calendar quarter.
8.6 Records and Audit. During the term of this Agreement and for a period
of five (5) years thereafter, ImClone shall keep complete and accurate records
pertaining to the sale or other disposition of Products in sufficient detail to
permit CombiChem to confirm the accuracy of all payments due hereunder.
CombiChem shall have the right to cause an independent certified public
accounting firm reasonably acceptable to ImClone to audit such records to
confirm ImClone's Net Sales for the preceding year. Any information obtained
during such audit shall be treated as Confidential Information. Such audits may
be exercised during normal business hours of ImClone no more than once each
year. CombiChem shall bear the full cost of such audit unless such audit
discloses a variance of more than five percent (5%) in ImClone's favor from the
amount of the Net Sales reported by ImClone for such audited period. In such
case, ImClone shall bear the fill cost of such audit.
8.7 Taxes. All income and other taxes levied on account of the royalties
and other payments accruing to CombiChem under this Agreement shall be paid by
CombiChem,
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
13
<PAGE>
including taxes levied thereon as income to CombiChem. If provision is made in
law or regulation for withholding, such tax shall be deducted from the royalty
or other payment made by ImClone to the proper taxing authority and a receipt of
payment of the tax secured and promptly delivered to CombiChem. Each Party
agrees to assist the other Party in claiming exemption from such deductions or
withholdings under any double taxation or similar agreement or treaty from time
to tune in force.
9. LICENSE GRANTS; OUTLICENSE
9.1 CombiChem License Grant to ImClone. Subject to the terms and conditions
of this Agreement, CombiChem hereby grants to ImClone an exclusive worldwide
license, with the right to sublicense, to use such CombiChem Technology as is
necessary to make, have made, use, have used, sell, have sold and import
Collaboration Compounds or Products in the Territory. Such license shall remain
exclusive in relation to each Collaboration Compound and/or Product so long as
ImClone or its licensee continues to develop and commercialize such
Collaboration Compound and/or Product containing such Collaboration Compound
against a Collaboration Target with Due Diligence.
9.2 ImClone License Grant to CombiChem. Subject to the terms and conditions
of this Agreement and following the failure of ImClone or its licensee to
develop and commercialize with Due Diligence a Lead Compound, a Development
Compound or Product, as the case may be, (collectively, and together with all
Abandoned Compounds, "Returned Compound"), ImClone shall grant to CombiChem an
exclusive license (exclusive even as to ImClone and its Affiliates), with the
right to sublicense, under those ImClone Patents and know-how which are
resulting from the Research Program and related exclusively to the Returned
Compound to make, have made, use, have used, sell, have sold and import such
Returned Compound in the Territory.
9.3 ImClone Outlicense. ImClone shall have a right to outlicense the
Patents covering the Product to a Third Party subject to CombiChem's right to
receive (a) royalties as provided in Section 8.4(b), and (b) additional payments
("Additional Payments") such that CombiChem has received, as of each Payment
Date, the greater of (i) the cumulative amount due CombiChem by ImClone upon the
attainment of the milestones set forth in Appendix B by ImClone' s licensee, or
(ii) the cumulative amount equal to *** of the
***
***
***
***
*** but excluding, to the extent reasonable and customary, all
***
*** (collectively, the royalties described in clause (a and
the payments described in clause (b) of this sentence, the "Payments") received
by ImClone from such Third Party in connection with such license. The royalty
Payments described in clause (a) of the preceding sentence shall be remitted to
CombiChem within thirty (30) days after receipt by ImClone
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
14
<PAGE>
of such Payments from its licensee. The Additional Payments described in clause
(b) of the preceding sentence shall be paid to CombiChem within thirty (30) days
following each date (a "Payment Date") upon which any milestone designated in
Appendix B is achieved and/or ImClone receives a payment (as described above)
from its licensee. As an express condition of any such outlicense, any such
licensee shall be required to agree in writing to be bound by royalty reporting
and recordkeeping and inspection provisions consistent with those contained in
this Agreement. In addition, CombiChem shall have the right to receive all audit
reports relating to sales of Products of ImClone's licensees, and to cause
ImClone or its successor to have an independent certified public accounting firm
audit such licensees records on the same terms as those specified in Section
8.6. All payments shall be made by wire transfer to such bank account designated
by CombiChem. Failure of such licensee to make any milestone or royalty payment
in respect of such Product shall not relieve ImClone of its obligations to make
royalty and milestone payments to CombiChem hereunder.
9.4 Rights to Inactive Compounds/Returned Compounds. No provision of this
Agreement shall prevent either Party from making, having made, using, having
used, selling, having sold, or importing Inactive Compounds, products containing
Inactive Compounds, Returned Compounds or products containing Returned Compounds
or screening Inactive Compounds and Returned Compounds against any target other
than the Collaboration Targets. In the event that either ImClone or CombiChem
(the "Contracting Party") shall enter into a binding agreement with a Third
Party to develop, market and/or sell any product containing any Inactive
Compound or Returned Compound as an active ingredient (a "Third Party
Transaction"), then the other Party hereto (the "Other Party") shall be entitled
to *** of *** by the Contracting Party from such Third Party in respect of such
Third Party Transactions. All such payments shall be sent by wire transfer to
such bank account designated by the Other Party within thirty (30) days after
the Contracting Party's receipt of such payments and shall be subject to the
recording and auditing provisions of Section 8.6.
9.5 Miscellaneous License. In addition to any other rights granted by
either Party in accordance with this Article 9, each Party grants to the other
party a non-exclusive license without the right to grant sublicenses, under any
intellectual property rights the granting Party has the power to grant in order
for the other Party to carry out its rights and obligations under this Agreement
including, but not necessarily limited to, conducting the Research Program and
manufacturing, developing, selling and importing Products.
10. TERM AND TERMINATION
10.1 Term. The term of this Agreement shall commence upon the Effective
Date of this Agreement, and shall expire on the expiration of the last royalty
obligation under this Agreement, except as provided hereunder.
10.2 Termination by ImClone or CombiChem. Subject to Section 7.2, if either
Party materially breaches this Agreement and fails to remedy that breach within
ninety (90) days of receiving written notice thereof from the other Party, or
enters into any arrangement of composition
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
15
<PAGE>
with its creditors or goes into liquidation, insolvency, bankruptcy,
receivership or reorganization proceedings, whether voluntarily or compulsorily
which is not dismissed within ninety (90) days, then the other Party may at any
time, by notice in writing or by telefax, terminate this Agreement.
10.3 After Termination.
(a) Upon any termination of the Research Program under Section 7.2(a) due
to a material breach of this Agreement by ImClone, ImClone's rights pursuant to
Sections 3.1, 3.2, 5.3, 9.1, 9.3 and 9.5 shall immediately cease, and all rights
granted hereunder with respect to Targets and Collaboration Compounds, Active
Compounds, Lead Compounds, Development Compounds, or Products shall immediately
revert to CombiChem without further obligation to ImClone. ImClone's rights
pursuant to Section 5.2 and 9.3 above that accrue prior to such termination
shall be retained by ImClone. ImClone may make, use, sell and import Active
Compounds, Lead Compounds, Development Compounds or Products under rights
retained by ImClone pursuant to this Section 10.3(a) so long as ImClone
continues to satisfy all of its royalty, milestone, and Payment obligations in
accordance with Sections 8.3, 8.4, 9.3 and 9.4.
(b) Upon any termination of the Research Program under Section 7.2(a) due
to a material breach of this Agreement by CombiChem with respect to a
Collaboration Compound, Active Compound, Lead Compound, Development Compound or
Product, all of ImClone's rights pursuant to Sections 3.1, 3.2, 5.2, 5.3, 9.1,
9.3 and 9.5 shall be retained by ImClone. ImClone may make, use, sell or import
Active Compounds, Lead Compounds, Development Compounds and Products with
respect to which ImClone is not in material breach under rights retained by
ImClone pursuant to this Section 10.3(b) so long as ImClone continues to satisfy
all of its royalty, milestone, and Payment obligations in accordance with
Sections 8.3, 8.4, 9.3 and 9.4, except that ImClone shall not be required to
satisfy such obligations with respect to any Collaboration Compound, Active
Compound, Lead Compound, Development Compound or Product with respect to which
CombiChem is in material breach.
(c) If ImClone materially breaches this Agreement following the Research
Period with respect to an Active Compound, Lead Compound, Development Compound
or Product for any reason including, but not limited to, failing to satisfy its
royalty, milestone and Payment obligations pursuant to Sections 8.3, 8.4, 9.3
and 9.4, ImClone shall not make, use, sell or import Active Compounds, Lead
Compounds, Development Compounds or Products with respect to which ImClone is in
material breach. ImClone shall retain the right to make, use, sell and import
Active Compounds, Lead Compounds, Development Compounds or Products with respect
to which ImClone is not in material breach so long as ImClone continues to
satisfy all of its royalty, milestone, and Payment obligations in accordance
with Sections 8.3, 8.4, 9.3 and 9.4.
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
16
<PAGE>
(d) If CombiChem materially breaches this Agreement following the Research
Period for any reason including, but not limited to, failing to satisfy its
confidentiality and warranty obligations under Articles 11 and 19, ImClone shall
have the right to make, use, sell or import Active Compounds, Lead Compounds,
Development Compounds and Products with respect to which ImClone is not in
material breach so long as ImClone continues to satisfy all of its royalty,
milestone, and Payment obligations in accordance with Sections 8.3, 8.4, 9.3 and
9.4.
(e) Upon any expiration or earlier termination of this Agreement for any
reason, ImClone shall not be entitled to any refund of any payments made to
CombiChem hereunder except as provided in Section 7.2(c).
10.4 Effect of Termination on Licensees. In the event of any termination of
this Agreement pursuant to this Article 10 where such termination shall not have
been caused by the action or inaction on the part of any respective licensee of
ImClone or CombiChem, or by any breach by such licensee of its obligations under
its licensee from ImClone or CombiChem, as appropriate, such termination of this
Agreement shall be without prejudice to the rights of each non-breaching
licensee and such licensee shall be deemed to be a direct licensee hereunder.
11. CONFIDENTIAL INFORMATION
11.1 Nondisclosure. During the term of the Collaboration and for a period
of five (5) years after termination thereof, each Party will maintain all
Confidential Information in trust and confidence and will not disclose any
Confidential Information to any third party for any purpose except (i) as
expressly authorized by this Agreement, or (ii) as required by law or court
order, or (iii) to its consultants, subcontractors or agents who need to know to
accomplish the purposes of this Agreement. Each Party may use such Confidential
Information only to the extent required to accomplish the purposes of this
Agreement. Each Party will use at least the same standard of care as it uses to
protect proprietary or confidential information of its own to ensure that its
Affiliates, employees, agents, consultants and other representatives do not
disclose or make any unauthorized use of the Confidential Information. Each
Party will promptly notify the other upon discovery of any unauthorized use or
disclosure of the Confidential Information. Confidential Information is
understood to include, but not necessarily to be limited to, the structures of
chemical compounds and the identification of chemical compounds as Collaboration
Compounds, Active Compounds, Inactive Compounds, Lead Compounds, Development
Compounds, or Products.
11.2 Exceptions. Confidential Information shall not include any information
which the receiving Party can prove by competent evidence: (a) is now, or
hereafter becomes, through no act or failure to act on the part of the receiving
Party, generally known or available; (b) is known by the receiving Party at the
time of receiving such information, as evidenced by its records; (c) is
hereafter disclosed to the receiving Party by a Third Party, as a matter of
right and without restriction on disclosure; (d) is independently developed by
the receiving Party without the aid, application or use of Confidential
Information; (e) is the subject of a written permission to disclose provided by
the disclosing Party; or (f) is necessary to obtain regulatory approval for a
Product, or
17
<PAGE>
patent protection with respect to Active Compounds, Lead Compounds, Development
Compounds, or Products, and the uses and methods of manufacturing thereof.
12. PUBLICATIONS AND PUBLIC STATEMENTS
12.1 Publications. Each Party shall be permitted to publish any
information, except Confidential Information, relating to the Research Program
as long as the Party has the prior written permission of the other Party. Such
permission shall be approved or disapproved within twenty-one (21) days of
written request for permission. Such permission shall not be unreasonably
withheld.
12.2 Public Statements. Neither Party shall use the name of the other Party
in any public statement, prospectus, annual report or press release or other
public communication (collectively "Public Statements") without the prior
written approval of the other Party, which may not be unreasonably withheld or
delayed; provided, however, that both Parties shall endeavor in good faith to
give the other Party a minimum of two (2) business days to review such Public
Statements; provided, further, that, upon approval of any such Public Statement,
both Parties may disclose to third parties the information contained in such
Public Statement without the further approval of the other; and provided,
further, that if a Party does not approve such Public Statement, either Party
may still use the name of the other Party in any Public Statement without the
prior written approval of the other Party, if such Party is advised by counsel
that such disclosure is required to comply with applicable law.
13. INDEMNIFICATION
13.1 EACH PARTY HEREBY AGREES TO SAVE, DEFEND AND HOLD THE OTHER PARTY AND
ITS OFFICERS, DIRECTORS, EMPLOYEES, CONSULTANTS AND AGENTS HARMLESS FROM AND
AGAINST ANY AND ALL SUITS, CLAIMS, ACTIONS, DEMANDS, LIABILITIES, EXPENSES AND
LOSSES, INCLUDING REASONABLE LEGAL EXPENSES AND ATTORNEYS' FEES ("LOSSES")
RESULTING DIRECTLY OR INDIRECTLY FROM ANY ACTIVITY PERFORMED BY THE INDEMNIFYING
PARTY PURSUANT TO THIS AGREEMENT, INCLUDING BUT NOT NECESSARILY LIMITED TO THE
MANUFACTURE, DEVELOPMENT, USE, HANDLING, STORAGE, SALE OR OTHER DISPOSITION OF
CHEMICAL AGENTS, COLLABORATION COMPOUNDS, ACTIVE COMPOUNDS, LEAD COMPOUNDS,
DEVELOPMENT COMPOUNDS OR PRODUCTS BY SUCH PARTY, ITS AFFILIATES OR LICENSEES
except to the extent such Losses result from the gross negligence or willful
misconduct of the Party claiming a right of indemnification under this Article
13.
13.2 Indemnification.
(a) Subject to Section 13.2(c) below, ImClone shall hold CombiChem and its
officers, directors, employees, consultants, and agents harmless from and
against any and all losses resulting from the infringement of any Patent of a
Third Party due to the performance by
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
18
<PAGE>
ImClone of any activity contemplated hereunder, including, but not necessarily
limited to, ImClone's responsibilities under Section 2.2 above, developing
Products, and selling Products.
(b) Subject to Section 13.2(c) below, CombiChem shall hold ImClone and its
officers, directors, employees, consultants, and agents harmless from and
against any and all losses resulting from the infringement of any Patent of a
Third Party due to the performance by CombiChem of any activity contemplated
hereunder, including, but not necessarily limited to, CombiChem's
responsibilities under Section 2.1 above.
(c) The indemnity provided in Sections 13.2(a) and 13.2(b) above shall not
apply where the loss is due to the breach by the indemnified Party of a warranty
made in Article 19.
13.3 Procedures. If either Party seeks indemnification under this Article
13, it shall inform the other Party of a claim as soon as reasonable practicable
after it receives notice of the claim, shall permit the other Party to assume
direction and control of the defense of the claim (including the right to settle
me claim solely of the other Party), and shall give reasonable cooperation (at
the expense of the other Party) in the defense of the claim.
14. ASSIGNABILITY
This Agreement may not be assigned by either Party without the prior
written consent of the other Party; provided, however, that either Party may
assign this Agreement, in whole or in part, to an Affiliate or to a successor of
a Party in connection with the merger, consolidation or sale of all or
substantially all of such Party's assets or that portion of its business
pertaining to the subject matter of this Agreement.
15. DISPUTE RESOLUTION PROCEDURES
15.1 Senior Executives Discussions. If a decision is not reached by the
RMC, the dispute will be resolved as set forth in Article 6 above. If a dispute
arises between CombiChem and ImClone with respect to matters other than the
management of the Research Program, either during or after the Research Period,
such dispute will be referred to the appropriate senior management in the area
of the dispute. If such senior management are unable to resolve such dispute,
such dispute will be referred to the Chief Executive Officers of CombiChem and
ImClone. If such officers are unable to reach an agreement within thirty (30)
days following the initiation of discussions between them, such dispute shall be
settled by arbitration as described in Section 15.2 below.
15.2 Binding Arbitration. If the parties have not been able to resolve the
dispute as provided in Section 15.1 above, the dispute shall be finally settled
by binding arbitration. Any arbitration hereunder shall be conducted under rules
of the American Arbitration Association. The arbitration shall be conducted
before one (1) arbitrator chosen by mutual agreement of the Parties. If the
Parties cannot agree on the choice of the arbitrator within a period of thirty
(30) days after
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
19
<PAGE>
submission, then the arbitrator shall be appointed by the Court of Arbitration
of the American Arbitration Association. Any such arbitration shall be held in a
mutually agreeable location; provided, however that if the parties cannot so
agree, the location(s) for such arbitration(s) shall alternate between San
Diego, California and New York, New York, with the first such arbitration to be
located in San Diego, California. The arbitrators shall have the authority to
grant specific performance, and to allocate between the parties the costs of
arbitration in such equitable manner as he or she may determine. The arbitral
award (i) shall be final and binding upon the parties; and (ii) may be entered
in any court of competent jurisdiction.
15.3 Injunctive Relief. Nothing contained in this Article 15 or any other
provisions of this Agreement shall be construed to limit or preclude a Party
from bringing any action in any court of competent jurisdiction for injunctive
or other provisional relief to compel the other Party to comply with its
obligations hereunder before or during the pendency of arbitration proceedings.
16. NOTICES
Any notice required or permitted to be given hereunder shall be deemed
sufficient if sent by facsimile letter or overnight courier, or delivered by
hand to ImClone or CombiChem at the respective addresses and facsimile numbers
as set forth below or at such other address and facsimile number as either Party
hereto may designate. If sent by facsimile letter, notice shall be deemed given
when the transmission is completed if the sender has a confirmed transmission
report. If a confirmed transmission report does not exist, then the notice will
be deemed given when the notice is actually received by the person to whom it is
sent. If delivered by overnight courier, notice shall be deemed given when it
has been signed for. If delivered by hand, notice shall be deemed given when
received.
if to CombiChem, to: CombiChem, Inc.
9050 Camino Santa Fe San Diego, California 92121
Attention: President
Fax number: (619) 530-9998
with a copy to: Brobeck, Phleger & Harrison LLP
550 South Hope Street, 21st Floor
Los Angeles, California 90071
Attention: Laurie A. Allen, Esq.
Fax number: (213) 239-1324
if to ImClone, to: ImClone Systems Incorporated
180 Varick Street
New York, New York 10014
Attn: Vice President, Business Development
Fax number: (212) 645-2054
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
20
<PAGE>
with a copy to: Hoffmann and Baron
350 Jericho Turnpike
Jericho, New York 11753
Attn: Irving N. Feit, Esq.
Fax number: (516) 822-3582
17. SURVIVAL
The provisions of Sections 2.5, 5.1, 5.2, 7.2(c),10.3, 10.4, and Articles
1, 3, 8, 9, 11, 12, 13, 14, 15, 16, 18 and this Article 17 shall survive
termination of this Agreement in addition to those provisions which by their
terms survive.
18. ADDITIONAL TERMS
18.1 Entire Agreement. This Agreement and the Common Stock Purchase
Agreement constitute the entire understanding between the Parties with respect
to the subject matter hereto and supersedes and replaces all previous
negotiations, understandings, representations, writings and contract provisions
and rights relating hereof. The Parties agree that all services provided
hereunder shall be subject to and governed by the terms and provisions set forth
herein, and none of the terms and conditions contained on any proposal, purchase
order, invoice or other writing shall have any effect or change the provisions
of this Agreement.
18.2 Amendment; No Waiver. No provision of this Agreement may be amended,
revoked or waived except by a writing signed and delivered by an authorized
officer of each Party. Any waiver on the part of either Party of any breach or
any fight or interest hereunder shall not imply the waiver of any subsequent
breach or waiver of any other right or interest.
18.3 Validity. The invalidity or unenforceability of any provision of this
Agreement shall not affect the validity or enforceability of any other provision
of this Agreement, each of which shall remain in full force and effect. In
addition, should the invalidity or unenforceability of any provision of this
Agreement cause an unintended result or result in any unfairness to either
Party, then ImClone and CombiChem shall promptly meet and negotiate in good
faith to modify or amend this Agreement to change such result or to eliminate
such unfairness.
18.4 Headings. The descriptive headings are inserted for convenience of
reference only and are not intended to be part of or to affect the meaning of or
interpretation of this Agreement.
18.5 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, and all of which
together shall be deemed to be one and the same instrument.
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
21
<PAGE>
18.6 Governing Law. This Agreement shall be governed by and construed and
enforced in accordance with the laws of the State of California, without regard
to conflicts of laws principles.
19. WARRANTY
Each Party warrants that it has the power to grant all of the rights
granted and make such required assignments, and to assume all of the obligations
required, under this Agreement. If, at the time a Patent application is to be
filed by ImClone with respect to any Active Compound, Lead Compound, Development
Compound or Products, CombiChem informs ImClone that CombiChem has the power to
grant the exclusive rights to such Active Compound, Lead Compound, Development
Compound or Products, and to assign such Patents related thereto, to ImClone in
accordance with Sections 3.2 and 5.2 above, CombiChem further warrants that, in
fact, as of such date, it has such power subject to the proviso that under no
circumstances does CombiChem warrant to ImClone that its rights in any Active
Compound, Lead Compound, Development Compound or Products are exclusive to the
extent such Active Compound, Lead Compound, Development Compound or Products may
be covered under the patent claims of Third Parties wherein such claims are not
the direct result of a collaboration between the Third Party and CombiChem.
IN WITNESS WHEREOF, the parties have executed this Agreement to be
effective as of the Effective Date.
COMBICHEM, INC. IMCLONE SYSTEMS INCORPORATED
By: /s/ Vicente Anido By: /s/ Carl S. Goldfischer
- ---------------------- ----------------------------
Its: President and CEO Its: CFO
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
22
<PAGE>
Appendix A
***
***
***
***
***
***
***
***
***
***
***
***
***
***
***
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
<PAGE>
Appendix B
Milestone Payments
(Triggered by Activities of ImClone or Its Licensees)
Development Milestone Milestone Payment
***
*** U.S. ***
*** U.S. ***
***
*** U.S. ***
***
*** U.S. ***
***
*** __________________
Total U.S. ***
legal\highriver\combicon.doc
*** Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
