0000912057-01-533919.txt : 20011009
0000912057-01-533919.hdr.sgml : 20011009
ACCESSION NUMBER: 0000912057-01-533919
CONFORMED SUBMISSION TYPE: SC TO-T
PUBLIC DOCUMENT COUNT: 19
FILED AS OF DATE: 20010928
GROUP MEMBERS: BRISTOL-MYERS SQUIBB BIOLOGICS COMPANY
SUBJECT COMPANY:
COMPANY DATA:
COMPANY CONFORMED NAME: IMCLONE SYSTEMS INC/DE
CENTRAL INDEX KEY: 0000765258
STANDARD INDUSTRIAL CLASSIFICATION: BIOLOGICAL PRODUCTS (NO DIAGNOSTIC SUBSTANCES) [2836]
IRS NUMBER: 042834797
STATE OF INCORPORATION: DE
FISCAL YEAR END: 1231
FILING VALUES:
FORM TYPE: SC TO-T
SEC ACT: 1934 Act
SEC FILE NUMBER: 005-42743
FILM NUMBER: 1748519
BUSINESS ADDRESS:
STREET 1: 180 VARICK ST
CITY: NEW YORK
STATE: NY
ZIP: 10014
BUSINESS PHONE: 2126451405
MAIL ADDRESS:
STREET 1: 180 VARICK ST
CITY: NEW YORK
STATE: NY
ZIP: 10014
FILED BY:
COMPANY DATA:
COMPANY CONFORMED NAME: BRISTOL MYERS SQUIBB CO
CENTRAL INDEX KEY: 0000014272
STANDARD INDUSTRIAL CLASSIFICATION: PHARMACEUTICAL PREPARATIONS [2834]
IRS NUMBER: 220790350
STATE OF INCORPORATION: DE
FISCAL YEAR END: 1231
FILING VALUES:
FORM TYPE: SC TO-T
BUSINESS ADDRESS:
STREET 1: 345 PARK AVE
CITY: NEW YORK
STATE: NY
ZIP: 10154
BUSINESS PHONE: 2125464000
MAIL ADDRESS:
STREET 1: 345 PARK AVE
CITY: NEW YORK
STATE: NY
ZIP: 10154
FORMER COMPANY:
FORMER CONFORMED NAME: BRISTOL MYERS CO
DATE OF NAME CHANGE: 19891012
SC TO-T
1
a2059910zscto-t.txt
SC TO-T
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
SCHEDULE TO
TENDER OFFER STATEMENT UNDER SECTION 14(D)(1)
OR SECTION 13(E)(1) OF THE SECURITIES EXCHANGE ACT OF 1934
IMCLONE SYSTEMS INCORPORATED
(Name of Subject Company (Issuer))
BRISTOL-MYERS SQUIBB COMPANY
BRISTOL-MYERS SQUIBB BIOLOGICS COMPANY
(Names of Filing Persons (Offerors))
------------------------
COMMON STOCK, PAR VALUE $.001 PER SHARE
(Title of Class of Securities)
------------------------
45245W109
(CUSIP Number of Class of Securities)
------------------------
BRISTOL-MYERS SQUIBB COMPANY
345 PARK AVENUE
NEW YORK, NEW YORK 10154
TELEPHONE: (212) 546-4000
ATTENTION: CORPORATE SECRETARY
(Name, address and telephone number of person authorized to
receive notices and communications on behalf of filing persons)
COPIES TO:
SUSAN WEBSTER, ESQ.
CRAVATH, SWAINE & MOORE
825 EIGHTH AVENUE
NEW YORK, NEW YORK 10019-7475
TELEPHONE: (212) 474-1000
CALCULATION OF FILING FEE:
TRANSACTION VALUATION* AMOUNT OF FILING FEE**
$1,007,440,210 $201,488
* For purposes of calculating the filing fee only. This calculation assumes
the purchase of 14,392,003 shares of common stock of ImClone Systems
Incorporated at the tender offer price of $70.00 per share of common stock.
** The amount of the filing fee, calculated in accordance with Rule 0-11 of the
Securities Exchange Act of 1934, as amended, equals 1/50 of 1% of the
transaction valuation.
/ / Check the box if any part of the fee is offset as provided by
Rule 0-11(a)(2) and identify the filing with which the offsetting fee was
previously paid. Identify the previous filing by registration statement
number or the Form or Schedule and the date of its filing.
Amount Previously Paid:..................... N/A Filing Party:............................... N/A
Form or Registration No.:................... N/A Date Filed:................................. N/A
/ / Check the box if the filing relates to preliminary communications made
before the commencement of a tender offer.
Check the appropriate boxes below to designate any transactions to which the
statement relates:
/X/ THIRD-PARTY TENDER OFFER SUBJECT TO RULE 14D-1.
/ / ISSUER TENDER OFFER SUBJECT TO RULE 13E-4.
/ / GOING-PRIVATE TRANSACTION SUBJECT TO RULE 13E-3.
/ / AMENDMENT TO SCHEDULE 13D UNDER RULE 13D-2.
Check the following box if the filing is a final amendment reporting the
results of the tender offer: / /
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
This Tender Offer Statement on Schedule TO (this "SCHEDULE TO") relates to
the offer by Bristol-Myers Squibb Biologics Company, a Delaware corporation (the
"PURCHASER") and a wholly owned subsidiary of Bristol-Myers Squibb Company, a
Delaware corporation ("PARENT"), to purchase up to 14,392,003 of the outstanding
shares of common stock, par value $.001 per share (the "SHARES"), of ImClone
Systems Incorporated, a Delaware corporation (the "COMPANY"), at a purchase
price of $70.00 per Share, net to the seller in cash, without interest thereon,
upon the terms and subject to the conditions set forth in the Offer to Purchase
dated September 28, 2001 (the "OFFER TO PURCHASE"), and in the related Letter of
Transmittal, copies of which are filed with this Schedule TO as Exhibits
(a)(1)(A) and (a)(1)(C), respectively. This Schedule TO is being filed on behalf
of the Purchaser and Parent.
The information set forth in the Offer to Purchase, including the Schedule
thereto, is hereby incorporated by reference in answer to items 1 through 11 of
this Schedule TO, and is supplemented by the information specifically provided
herein.
ITEM 1. SUMMARY TERM SHEET.
The information set forth in the "SUMMARY TERM SHEET" in the Offer to
Purchase is incorporated herein by reference.
ITEM 2. SUBJECT COMPANY INFORMATION.
(a) The name of the subject company is ImClone Systems Incorporated, a
Delaware corporation. The Company's executive offices are located at 180 Varick
Street, New York, New York 10014, telephone: (212) 645-1405.
(b) The class of securities to which this statement relates is the Shares
(as defined above), of which 72,344,087 Shares were issued and outstanding as of
September 27, 2001.
(c) The information set forth in "THE TENDER OFFER--Section 6. Price Range
of the Shares; Dividends on the Shares" of the Offer to Purchase is incorporated
herein by reference.
ITEM 3. IDENTITY AND BACKGROUND OF FILING PERSON.
(a) This Tender Offer Statement is filed by Parent and the Purchaser. The
information set forth in "THE TENDER OFFER--Section 9. Certain Information
Concerning Parent and the Purchaser" of the Offer to Purchase and on Schedule I
thereto is incorporated herein by reference.
(b) The information set forth in "THE TENDER OFFER--Section 9. Certain
Information Concerning Parent and the Purchaser" of the Offer to Purchase and on
Schedule I thereto is incorporated herein by reference.
(c) The information set forth in "THE TENDER OFFER--Section 9. Certain
Information Concerning Parent and the Purchaser" of the Offer to Purchase and on
Schedule I thereto is incorporated herein by reference. During the last five
years, none of the Purchaser or Parent or, to the knowledge of the Purchaser or
Parent, any of the persons listed on Schedule I to the Offer to Purchase
(i) was convicted in a criminal proceeding (excluding traffic violations or
similar misdemeanors) or (ii) was a party to any judicial or administrative
proceeding (except for matters that were dismissed without sanction or
settlement) that resulted in a judgment, decree or final order enjoining the
person from future violations of, or prohibiting activities subject to, federal
or state securities laws, or a finding of any violation of such laws.
ITEM 4. TERMS OF THE TRANSACTION.
The information set forth in the Offer to Purchase is incorporated herein by
reference.
2
ITEM 5. PAST CONTACTS, TRANSACTIONS, NEGOTIATIONS AND AGREEMENTS.
(a) The information set forth in "THE TENDER OFFER--Section 11. Contacts and
Transactions with the Company; Background of the Offer" of the Offer to Purchase
is incorporated herein by reference. Except as disclosed above in this Item
5(a), during the past two years, there have been no transactions that would be
required to be disclosed under this Item 5(a) between any of the Purchaser or
Parent or, to the knowledge of the Purchaser or Parent, any of the persons
listed on Schedule I to the Offer to Purchase, and the Company or any of its
executive officers, directors or affiliates.
(b) The information set forth in "INTRODUCTION," "THE TENDER
OFFER--Section 11. Contacts and Transactions with the Company; Background of the
Offer" and "THE TENDER OFFER--Section 12. Purpose of the Offer; the Acquisition
Agreement; the Stockholder Agreement; the Commercial Agreement; the
Confidentiality Agreement; Plans for the Company" of the Offer to Purchase is
incorporated herein by reference. Except as set forth in "INTRODUCTION," "THE
TENDER OFFER--Section 11. Contacts and Transactions with the Company; Background
of the Offer" and "THE TENDER OFFER--Section 12. Purpose of the Offer; the
Acquisition Agreement; the Stockholder Agreement; the Commercial Agreement; the
Confidentiality Agreement; Plans for the Company" of the Offer to Purchase,
there have been no material contacts, negotiations or transactions during the
past two years which would be required to be disclosed under this Item 5(b)
between any of the Purchaser or Parent or any of their respective subsidiaries
or, to the knowledge of the Purchaser or Parent, any of those persons listed on
Schedule I to the Offer to Purchase and the Company or its affiliates concerning
a merger, consolidation or acquisition, a tender offer or other acquisition of
securities, an election of directors or a sale or other transfer of a material
amount of assets.
ITEM 6. PURPOSE OF THE TRANSACTION AND PLANS OR PROPOSALS.
(a), (c)(1), (4), (6) and (7) The information set forth in "INTRODUCTION,"
"THE TENDER OFFER--Section 11. Contacts and Transactions with the Company;
Background of the Offer" and "THE TENDER OFFER--Section 12. Purpose of the
Offer; the Acquisition Agreement; the Stockholder Agreement; the Commercial
Agreement; the Confidentiality Agreement; Plans for the Company" of the Offer to
Purchase is incorporated herein by reference.
(c) (2), (3) and (5) Not applicable.
ITEM 7. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
The information set forth in "THE TENDER OFFER--Section 10. Source and
Amount of Funds" of the Offer to Purchase is incorporated herein by reference.
ITEM 8. INTEREST IN SECURITIES OF THE SUBJECT COMPANY.
Not applicable.
ITEM 9. PERSONS/ASSETS, RETAINED, EMPLOYED, COMPENSATED OR USED.
The information set forth in "INTRODUCTION" and "THE TENDER
OFFER--Section 16. Fees and Expenses" of the Offer to Purchase is incorporated
herein by reference.
ITEM 10. FINANCIAL STATEMENTS.
Not applicable.
3
ITEM 11. ADDITIONAL INFORMATION.
(a) The information set forth in "THE TENDER OFFER--Section 12. Purpose of
the Offer; the Acquisition Agreement; the Stockholder Agreement; the Commercial
Agreement; the Confidentiality Agreement; Plans for the Company" and "THE TENDER
OFFER--Section 15. Certain Legal Matters" of the Offer to Purchase is
incorporated herein by reference.
(b) The information set forth in the Offer to Purchase and Letter of
Transmittal is incorporated herein by reference.
ITEM 12. EXHIBITS.
(a)(1)(A) Offer to Purchase dated September 28, 2001.
(a)(1)(B) Recommendation Statement on Schedule 14D-9 of the Company dated September 28, 2001
(incorporated by reference to Schedule 14D-9 filed with the Commission by the Company on
September 28, 2001).
(a)(1)(C) Letter of Transmittal.
(a)(1)(D) Notice of Guaranteed Delivery.
(a)(1)(E) Letter to Brokers, Dealers, Banks, Trust Companies and Other Nominees.
(a)(1)(F) Letter to Clients for use by Brokers, Dealers, Banks, Trust Companies and Other Nominees.
(a)(1)(G) Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9.
(a)(1)(H) Press Release issued by Parent on September 19, 2001.
(a)(1)(I) Summary Advertisement published September 28, 2001.
(a)(1)(J) Letter to Stockholders of the Company from the President and Chief Executive Officer of the
Company dated September 28, 2001.
(a)(1)(K) Form of Notice of Conditional Exercise.
(a)(1)(L) Instructions for Conditional Exercise.
(a)(1)(M) Memorandum to Eligible Option Holders.
(b) Not applicable.
(d)(1) Acquisition Agreement dated as of September 19, 2001, among Parent, the Purchaser and the
Company.
(d)(2) Stockholder Agreement dated as of September 19, 2001, among Parent, the Purchaser and the
Company.
(d)(3) Development, Promotion, Distribution and Supply Agreement dated as of September 19, 2001 among
Parent, E.R. Squibb & Sons, L.L.C. and the Company.*
(d)(4) Confidentiality Agreement dated May 19, 2001 between Parent and the Company.
(d)(5) Letter Agreement dated September 19, 2001 between Parent and Harlan W. Waksal, M.D.
(d)(6) Letter Agreement dated September 19, 2001 between Parent and Samuel D. Waksal, Ph.D.
(g) Not applicable.
(h) Not applicable.
------------------------
* Certain portions of this agreement have been omitted pursuant to an
application for confidential treatment filed with the Commission by Parent,
the Purchaser and the Company pursuant to Rule 24b-2, under the Exchange
Act.
4
SIGNATURES
After due inquiry and to the best of my knowledge and belief, I certify that
the information set forth in this statement is true, complete and correct.
Bristol-Myers Squibb Biologics Company
By: /s/ SANDRA LEUNG
-----------------------------------------
Name: Sandra Leung
Title: Vice President and Secretary
Bristol-Myers Squibb Company
By: /s/ FREDERICK S. SCHIFF
-----------------------------------------
Name: Frederick S. Schiff
Title: Senior Vice President and
Chief Financial Officer
Dated: September 28, 2001
INDEX TO EXHIBITS
(a)(1)(A) Offer to Purchase dated September 28, 2001.
(a)(1)(B) Recommendation Statement on Schedule 14D-9 of the Company dated September 28, 2001
(incorporated by reference to Schedule 14D-9 filed with the Commission by the Company on
September 28, 2001).
(a)(1)(C) Letter of Transmittal.
(a)(1)(D) Notice of Guaranteed Delivery.
(a)(1)(E) Letter to Brokers, Dealers, Banks, Trust Companies and Other Nominees.
(a)(1)(F) Letter to Clients for use by Brokers, Dealers, Banks, Trust Companies and Other Nominees.
(a)(1)(G) Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9.
(a)(1)(H) Press Release issued by Parent on September 19, 2001.
(a)(1)(I) Summary Advertisement published September 28, 2001.
(a)(1)(J) Letter to Stockholders of the Company from the President and Chief Executive Officer of the
Company dated September 28, 2001.
(a)(1)(K) Form of Notice of Conditional Exercise.
(a)(1)(L) Instructions for Conditional Exercise.
(a)(1)(M) Memorandum to Eligible Option Holders.
(b) Not applicable.
(d)(1) Acquisition Agreement dated as of September 19, 2001, among Parent, the Purchaser and the
Company.
(d)(2) Stockholder Agreement dated as of September 19, 2001, among Parent, the Purchaser and the
Company.
(d)(3) Development, Promotion, Distribution and Supply Agreement dated as of September 19, 2001
among Parent, E.R. Squibb & Sons, L.L.C. and the Company.*
(d)(4) Confidentiality Agreement dated May 19, 2001 between Parent and the Company.
(d)(5) Letter Agreement dated September 19, 2001 between Parent and Harlan W. Waksal, M.D.
(d)(6) Letter Agreement dated September 19, 2001 between Parent and Samuel D. Waksal, Ph.D.
(g) Not applicable.
(h) Not applicable.
------------------------
* Certain portions of this agreement have been omitted pursuant to an
application for confidential treatment filed with the Commission by Parent,
the Purchaser and the Company pursuant to Rule 24b-2, under the Exchange
Act.
EX-99.(A)(1)(A)
3
a2059910zex-99_a1a.txt
EXHIBIT 99.(A)(1)(A)
OFFER TO PURCHASE FOR CASH
UP TO 14,392,003 OUTSTANDING SHARES OF COMMON STOCK
OF
IMCLONE SYSTEMS INCORPORATED
AT
$70.00 NET PER SHARE
BY
BRISTOL-MYERS SQUIBB BIOLOGICS COMPANY,
A WHOLLY OWNED SUBSIDIARY OF
BRISTOL-MYERS SQUIBB COMPANY
THE OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00
MIDNIGHT,
NEW YORK CITY TIME, ON OCTOBER 26, 2001, UNLESS THE OFFER IS EXTENDED.
THE OFFER IS BEING MADE PURSUANT TO THE ACQUISITION AGREEMENT DATED AS OF
SEPTEMBER 19, 2001, AMONG BRISTOL-MYERS SQUIBB COMPANY, BRISTOL-MYERS SQUIBB
BIOLOGICS COMPANY AND IMCLONE SYSTEMS INCORPORATED. THE BOARD OF DIRECTORS OF
IMCLONE SYSTEMS INCORPORATED HAS APPROVED THE ACQUISITION AGREEMENT AND THE
TRANSACTIONS CONTEMPLATED THEREBY BY A UNANIMOUS VOTE OF THOSE DIRECTORS PRESENT
AND VOTING. ACCORDINGLY, THE BOARD OF DIRECTORS OF IMCLONE RECOMMENDS THAT THE
STOCKHOLDERS OF IMCLONE SYSTEMS INCORPORATED TENDER THEIR SHARES (AS DEFINED
HEREIN) IN THE OFFER. CERTAIN OFFICERS OF IMCLONE HAVE AGREED TO TENDER A
SUBSTANTIAL PORTION OF THEIR BENEFICIALLY OWNED SHARES IN THE OFFER.
THE OFFER IS NOT CONDITIONED UPON THE VALID TENDER OF ANY MINIMUM NUMBER OF
SHARES. IF MORE THAN 14,392,003 SHARES ARE VALIDLY TENDERED AND NOT WITHDRAWN,
THE PURCHASER WILL ACCEPT FOR PURCHASE 14,392,003 SHARES, ON A PRO RATA BASIS,
SUBJECT TO THE TERMS AND CONDITIONS HEREIN.
--------------------------
IMPORTANT
Any stockholder desiring to tender all or any portion of such stockholder's
Shares should either (1) complete and sign the Letter of Transmittal in
accordance with the instructions in the Letter of Transmittal, have such
stockholder's signature thereon guaranteed if required by Instruction 1 to the
Letter of Transmittal, mail or deliver the Letter of Transmittal and any other
required documents to Equiserve Trust Company, N.A. (the "DEPOSITARY") and
deliver the certificates for such Shares to the Depositary along with the Letter
of Transmittal or, in the case of a book-entry transfer effected pursuant to the
procedures described in Section 2, deliver an Agent's Message (as defined
herein) and any other required documents to the Depositary and deliver such
Shares pursuant to the procedures for book-entry transfer described in
Section 2, in each case prior to the expiration of the Offer, or (2) request
such stockholder's broker, dealer, bank, trust company or other nominee to
effect the transaction for such stockholder. A stockholder having Shares
registered in the name of a broker, dealer, bank, trust company or other nominee
must contact such broker, dealer, bank, trust company or other nominee if such
stockholder desires to tender such Shares.
A stockholder who desires to tender Shares and whose certificates for such
Shares are not immediately available or who cannot comply in a timely manner
with the procedure for book-entry transfer, or who cannot deliver all required
documents to the Depositary prior to the expiration of the Offer, may tender
such Shares by following the procedures for guaranteed delivery described in
Section 2.
The Shares eligible to be tendered in the Offer include Shares issuable upon
the conditional exercise of exercisable options to purchase Shares having
exercise prices of less than $70.00 per Share held by present or former
employees and directors of the Company ("Option Shares"), as described in
Section 2. A holder of such options who desires to tender Option Shares should
follow the instructions described in Section 2.
Questions and requests for assistance may be directed to Innisfree M&A
Incorporated (the "INFORMATION AGENT") or to Lehman Brothers Inc. at their
respective addresses and telephone numbers set forth on the back cover of this
Offer to Purchase. Additional copies of this Offer to Purchase, the Letter of
Transmittal, the Notice of Guaranteed Delivery or any other tender materials may
be obtained from the Information Agent or from brokers, dealers, banks, trust
companies or other nominees.
--------------------------
THE DEALER MANAGER FOR THE OFFER IS:
LEHMAN BROTHERS
September 28, 2001
TABLE OF CONTENTS
PAGE
--------
SUMMARY TERM SHEET.......................................... 1
INTRODUCTION................................................ 6
THE TENDER OFFER............................................ 8
1. Terms of the Offer.................................... 8
2. Procedures for Tendering Shares....................... 9
3. Withdrawal Rights..................................... 13
4. Acceptance for Payment and Payment.................... 14
5. Certain U.S. Federal Income Tax Consequences.......... 15
6. Price Range of the Shares; Dividends on the Shares.... 16
7. Effect of the Offer on the Market for the Shares;
Market Quotation; Exchange Act Registration; Margin
Regulations........................................... 17
8. Certain Information Concerning the Company............ 17
9. Certain Information Concerning Parent and the
Purchaser............................................... 18
10. Source and Amount of Funds............................ 18
11. Contacts and Transactions with the Company; Background
of the Offer............................................ 19
12. Purpose of the Offer; the Acquisition Agreement; the
Stockholder Agreement; the Commercial Agreement; the
Confidentiality Agreement; Plans for the Company...... 21
13. Dividends and Distributions........................... 36
14. Certain Conditions to the Offer....................... 36
15. Certain Legal Matters................................. 37
16. Fees and Expenses..................................... 38
17. Miscellaneous......................................... 39
SCHEDULE I--Directors and Executive Officers of Parent and
the Purchaser............................................. S-1
i
SUMMARY TERM SHEET
Bristol-Myers Squibb Biologics Company is offering to purchase up to
14,392,003 of the outstanding shares of common stock of ImClone Systems
Incorporated for $70.00 per share in cash. The following are some of the
questions you, as a stockholder of ImClone, may have and answers to those
questions. We urge you to read carefully the remainder of this offer to purchase
and the letter of transmittal because the information in this summary is not
complete. Additional important information is contained in the remainder of this
offer to purchase and the letter of transmittal.
WHO IS OFFERING TO BUY MY SHARES?
Our name is Bristol-Myers Squibb Biologics Company. We are a Delaware
corporation formed for the purpose of making a tender offer for up to 14,392,003
shares of common stock of ImClone Systems Incorporated. We are a wholly owned
subsidiary of Bristol-Myers Squibb Company, a Delaware corporation. See
"Introduction" and Section 9--"Certain Information Concerning Parent and the
Purchaser"--of this offer to purchase.
WHAT SHARES ARE BEING SOUGHT IN THE OFFER?
We are seeking to purchase up to 14,392,003 of the outstanding shares of
common stock of ImClone Systems Incorporated, including shares that may become
outstanding upon the exercise of options and other convertible securities to
acquire shares of ImClone common stock and shares issuable upon the conditional
exercise of exercisable options to purchase shares of ImClone common stock
having exercise prices of less than $70.00 per Share. We understand that current
and former directors and employees of ImClone who are holders of options to
acquire shares of ImClone common stock which are exercisable in accordance with
their terms will be given the opportunity to conditionally exercise these
options in connection with the tender offer. To the extent shares of ImClone
common stock which would be issued in respect of these conditionally exercised
options are not accepted in the tender offer (due to proration or otherwise),
these options will not be exercised. See "Introduction", Section 1--"Terms of
the Offer" and Section 2--"Procedures for Tendering Shares"--of this offer to
purchase.
HOW CAN I PARTICIPATE IN THE OFFER IF I HOLD OPTIONS TO ACQUIRE SHARES OF
IMCLONE COMMON STOCK?
Present or former employees and directors of ImClone who hold exercisable
options to purchase shares of ImClone common stock having exercise prices of
less than $70.00 per share may conditionally exercise any or all of those
options (that is, exercise them if and only to the extent that the underlying
shares are purchased in the offer) and tender the underlying shares by following
the special instructions and procedures for option holders described in
Section 2. In addition, holders of exercisable options having exercise prices of
less than $70.00 per share may exercise these options in advance of the
expiration of the offer and tender shares issued upon exercise by following the
instructions and procedures for tendering stockholders described in Section 2.
Holders of convertible securities other than these options may not conditionally
exercise their conversion rights in the offer.
HOW MUCH ARE YOU OFFERING TO PAY, WHAT IS THE FORM OF PAYMENT AND WILL I HAVE TO
PAY ANY FEES OR COMMISSIONS?
We are offering to pay $70.00 per share, net to you, in cash. If you are the
record owner of your shares and you tender your shares to us in the offer, you
will not have to pay brokerage fees or similar expenses. If you own your shares
through a broker or other nominee, and your broker tenders your shares on your
behalf, your broker or nominee may charge you a fee for doing so. You should
consult
1
your broker or nominee to determine whether any charges will apply. See
"Introduction" and Section 1--"Terms of the Offer"--of this offer to purchase.
WHAT HAPPENS IF MORE THAN 14,392,003 SHARES ARE TENDERED?
We are seeking to purchase up to 14,392,003 of the outstanding shares of
ImClone common stock. If more than that number of shares is validly tendered and
not withdrawn at the expiration of the offer, we will purchase shares on a pro
rata basis. This means that we will purchase from each tendering stockholder a
number of shares equal to the number of shares validly tendered and not
withdrawn by such stockholder multiplied by a proration factor. The proration
factor is equal to 14,392,003 (the number of shares we are offering to purchase)
divided by the total number of shares validly tendered (including shares
issuable in respect of conditionally exercised options) and not withdrawn by all
stockholders.
For example, if you tender 1,000 shares in the offer, and at the expiration
of the offer a total of 28,784,006 shares have been validly tendered and not
withdrawn and all of the conditions to the offer have been satisfied or waived,
we will purchase only 14,392,003 shares. Of the 1,000 shares that you tendered,
we will purchase 500 shares and 500 shares will be returned to you. See
Section 1--"Terms of the Offer"--of this offer to purchase.
WHEN WILL I KNOW HOW MANY OF MY SHARES WERE ACCEPTED FOR PAYMENT?
Because of the difficulty of determining the number of shares validly
tendered and not withdrawn (including shares issuable in respect of
conditionally exercised options), we do not expect that we will be able to
announce the final proration factor or commence payment for any shares purchased
pursuant to the offer until approximately four Nasdaq National Market trading
days after the expiration of the offer. The preliminary results of any proration
will be announced by press release as promptly as practicable after the time we
accept shares for payment pursuant to the offer. Stockholders may obtain such
preliminary information from the Information Agent and may be able to obtain
such information from their brokers. See Section 1--"Terms of the Offer"--of
this offer to purchase.
WHAT HAPPENS TO THE SHARES THAT ARE NOT ACCEPTED FOR PURCHASE?
If any tendered shares are not accepted for payment for any reason, the
certificates for such unpurchased shares will be returned, without expense, to
the tendering stockholder, or such other person as the tendering stockholder
specifies in the letter of transmittal. This includes any shares not accepted
for payment as a result of proration. Shares underlying conditionally exercised
options will not be issued unless they are accepted in the tender offer. If
these shares are not accepted in the tender offer, these options will not be
exercised. See Section 4--"Acceptance for Payment and Payment for Shares"--of
this offer to purchase.
DO YOU HAVE THE FINANCIAL RESOURCES TO MAKE PAYMENT?
Bristol-Myers Squibb Company, our parent company, will provide us with
sufficient funds to acquire up to 14,392,003 shares. Bristol-Myers Squibb
Company has obtained sufficient funds from commercial paper facilities and long
term debt financing. The offer is not conditioned upon any financing
arrangements. See Section 10--"Source and Amount of Funds"--of this offer to
purchase.
IS YOUR FINANCIAL CONDITION RELEVANT TO MY DECISION TO TENDER IN THE OFFER?
We do not think our financial condition is relevant to your decision whether
to tender shares and accept the offer because:
--the offer is being made solely for cash,
2
--the offer is not subject to any financing condition, and
-- Bristol-Myers Squibb Company is a public reporting company under
Section 13(a) or 15(d) of the Securities Exchange Act of 1934 that files
reports electronically on EDGAR.
HOW LONG DO I HAVE TO DECIDE WHETHER TO TENDER IN THE OFFER?
You will have at least until 12:00 midnight, New York City time, on
October 26, 2001, to tender your shares in the offer. Further, if you cannot
deliver everything that is required in order to make a valid tender by that
time, you may be able to use a guaranteed delivery procedure, which is described
later in this offer to purchase. See Section 1--"Terms of the Offer"--and
Section 2--"Procedures for Tendering Shares"--of this offer to purchase.
CAN THE OFFER BE EXTENDED AND UNDER WHAT CIRCUMSTANCES?
Subject to the terms of the acquisition agreement, we can extend the offer.
We have agreed in the acquisition agreement that we will extend the offer from
time to time until the conditions to our offer are satisfied, if on a scheduled
expiration date any of the conditions to our offer are not satisfied. However,
we may not, without the consent of ImClone, extend the offer beyond April 1,
2002 (provided that (1) if the applicable waiting period under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976 has not expired or been
terminated, or if the condition set forth in clause (a) of the first sentence of
Section 14--"Certain Conditions to the Offer"--of this offer to purchase has not
been satisfied due to the existence of an antitrust-related injunction, we or
ImClone may extend this date from time to time to a date no later than
September 30, 2002, (2) if the condition set forth in clause (a) of that
sentence has not been satisfied due to the existence of an injunction in
connection with a third party proposal to acquire more than 35% of ImClone, then
this date will be extended to the earlier to occur of September 30, 2002 and any
earlier date specified by ImClone at any time prior to September 30, 2002, and
(3) if the condition set forth in clause (f) of that sentence has not been
satisfied, then we or ImClone may extend this date from time to time to a date
no later than September 30, 2002). See Section 1--"Terms of the Offer"--of this
offer to purchase.
HOW WILL I BE NOTIFIED IF THE OFFER IS EXTENDED?
If we extend the offer, we will inform Equiserve Trust Company, N.A., the
depositary for the offer, of that fact and will make a public announcement of
the extension, not later than 9:00 a.m., New York City time, on the next
business day after the day on which the offer was scheduled to expire. See
Section 1--"Terms of the Offer"--of this offer to purchase.
WHAT ARE THE MOST SIGNIFICANT CONDITIONS TO THE OFFER?
There is no financing condition to the offer and the offer is not
conditioned upon the valid tender of any minimum number of shares. However we
are not obligated to purchase any tendered shares if the applicable waiting
period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 has not
expired or been terminated. The offer is also subject to a number of other
conditions. See Section 14--"Certain Conditions to the Offer"--of this offer to
purchase.
HOW DO I TENDER MY SHARES?
To tender shares (other than by conditional option exercise, for which
separate instructions will be delivered to eligible option holders by the
Company), you must deliver the certificates representing your shares, together
with a completed letter of transmittal and any other documents required, to
Equiserve Trust Company, N.A., the depositary for the offer, not later than the
time the tender offer expires. If your shares are held in street name, the
shares can be tendered by your nominee through The Depository Trust Company. If
you cannot deliver something that is required to be delivered to the
3
depositary by the expiration of the tender offer, you may get a little extra
time to do so by having a broker, a bank or other fiduciary that is a member of
the Securities Transfer Agents Medallion Program or other eligible institution
guarantee that the missing items will be received by the depositary within three
Nasdaq National Market trading days. For the tender to be valid, however, the
depositary must receive the missing items within that three trading day period.
See Section 2--"Procedures for Tendering Shares"--of this offer to purchase.
UNTIL WHAT TIME CAN I WITHDRAW PREVIOUSLY TENDERED SHARES?
You can withdraw shares at any time until the offer has expired and, if we
have not, by November 26, 2001, agreed to accept your shares for payment, you
can withdraw them at any time after such time until we accept shares for
payment. See Section 1--"Terms of the Offer"--and Section 3--"Withdrawal
Rights"--of this offer to purchase.
HOW DO I WITHDRAW PREVIOUSLY TENDERED SHARES?
To withdraw shares, you must deliver a written notice of withdrawal, or a
facsimile of one, with the required information to the depositary while you
still have the right to withdraw the shares. See Section 1--"Terms of the
Offer"--and Section 3--"Withdrawal Rights"--of this offer to purchase.
WHAT DOES THE IMCLONE BOARD OF DIRECTORS THINK OF THE OFFER?
We are making the offer pursuant to an acquisition agreement among us,
Bristol-Myers Squibb Company and ImClone Systems Incorporated. The ImClone Board
of Directors approved the acquisition agreement and our tender offer by a
unanimous vote of those directors present and voting. The Board of Directors of
ImClone recommends that stockholders tender their shares in the tender offer. In
addition, certain officers of ImClone have agreed to tender a substantial
portion of their beneficially owned shares in the offer. See the "Introduction"
to this offer to purchase.
ARE THERE OTHER TRANSACTIONS BETWEEN YOU AND IMCLONE?
Yes. We have entered into a stockholder agreement with ImClone and
Bristol-Myers Squibb Company, pursuant to which we, Bristol-Myers Squibb Company
and ImClone have agreed to various arrangements regarding, among other things,
the respective rights and obligations of Bristol-Myers Squibb Company, ImClone
and us with respect to Bristol-Myers Squibb Company's beneficial ownership of
shares. Additionally, ImClone, Bristol-Myers Squibb Company and E.R. Squibb &
Sons L.L.C., a wholly owned subsidiary of Bristol-Myers Squibb Company, have
entered into a commercial agreement pursuant to which ImClone, Bristol-Myers
Squibb Company and E.R. Squibb & Sons, L.L.C. will (a) co-develop and co-promote
the biologic pharmaceutical product IMC-C225 in the United States and Canada and
(b) co-develop and co-promote the biologic pharmaceutical product IMC-C225
(together with Merck KGaA) in Japan. See Section 12--"Purpose of the Offer; the
Acquisition Agreement; the Stockholder Agreement; the Commercial Agreement; the
Confidentiality Agreement; Plans for the Company"--of this offer to purchase.
IF I DECIDE NOT TO TENDER, HOW WILL THE OFFER AFFECT MY SHARES?
Our purchase of the shares will reduce the number of shares that might
otherwise trade publicly and may reduce the number of holders of the shares,
which could adversely affect the liquidity of the remaining shares held by the
public. However, after consummation of the offer, at least 80.1% of the
currently outstanding shares will continue to be held by persons other than us.
See Section 7--"Effect of the Offer on the Market for the Shares; Market
Quotation; Exchange Act Registration; Margin Securities"--of this offer to
purchase.
4
WHAT IS THE MARKET VALUE OF MY SHARES AS OF A RECENT DATE?
On September 18, 2001, the last trading day before ImClone and Bristol-Myers
Squibb Company announced that they had signed the acquisition agreement, the
last sale price of the shares reported on the Nasdaq National Market was $50.01
per share. On September 27, 2001, the last trading day before we commenced our
tender offer, the last sale price of the shares was $58.00 per share. We advise
you to obtain a recent quotation for shares of ImClone in deciding whether to
tender your shares. See Section 6--"Price Range of the Shares; Dividends"--of
this offer to purchase.
WHAT ARE THE TAX CONSEQUENCES TO ME OF THE TRANSACTION?
The sale of your shares pursuant to the offer, including pursuant to
conditional exercise procedures, will be a taxable event. See
Section 5--"Certain U.S. Federal Income Tax Consequences"--of this offer to
purchase.
TO WHOM CAN I TALK IF I HAVE QUESTIONS ABOUT THE TENDER OFFER?
You can call Innisfree M&A Incorporated at (888) 750-5834 (toll free) or
Lehman Brothers Inc. at (646) 351-4463 or (646) 351-4494. Innisfree M&A
Incorporated is acting as the information agent and Lehman Brothers is acting as
the dealer manager for our tender offer. See the back cover of this offer to
purchase.
5
To the Holders of Common Stock of
ImClone Systems Incorporated:
INTRODUCTION
Bristol-Myers Squibb Biologics Company, a Delaware corporation (the
"PURCHASER") and a wholly owned subsidiary of Bristol-Myers Squibb Company, a
Delaware corporation ("PARENT"), hereby offers to purchase up to 14,392,003 of
the outstanding shares of common stock, par value $.001 per share (including
shares issuable in respect of conditionally exercised options, the "SHARES"), of
ImClone Systems Incorporated, a Delaware corporation (the "COMPANY"), at a price
of $70.00 per Share, net to the seller in cash, without interest thereon (the
"OFFER PRICE"), upon the terms and subject to the conditions set forth in this
Offer to Purchase and in the related Letter of Transmittal (which, together with
any amendments or supplements hereto or thereto, collectively constitute the
"OFFER").
Tendering stockholders whose shares are registered in their own names and
who tender directly to the Depositary (as defined below) will not be obligated
to pay brokerage fees or commissions or, except as set forth in Instruction 6 of
the Letter of Transmittal, transfer taxes on the purchase of Shares pursuant to
the Offer. Stockholders who hold their Shares through banks or brokers should
check with such institutions as to whether they charge any service fees. The
Purchaser will pay all fees and expenses of Lehman Brothers, which is acting as
Dealer Manager (the "DEALER MANAGER"), Equiserve Trust Company, N.A., which is
acting as the Depositary (the "DEPOSITARY"), and Innisfree M&A Incorporated,
which is acting as the Information Agent (the "INFORMATION AGENT"), incurred in
connection with the Offer. See Section 16.
The Offer is being made pursuant to the Acquisition Agreement dated as of
September 19, 2001 (the "ACQUISITION AGREEMENT"), among Parent, the Purchaser
and the Company. The Acquisition Agreement is more fully described in
Section 12. In addition, certain officers of the Company have agreed to tender a
substantial portion of their beneficially owned Shares in the Offer.
THE BOARD OF DIRECTORS OF THE COMPANY HAS APPROVED THE ACQUISITION AGREEMENT
AND THE TRANSACTIONS CONTEMPLATED THEREBY BY A UNANIMOUS VOTE OF THOSE DIRECTORS
PRESENT AND VOTING. ACCORDINGLY, THE BOARD OF DIRECTORS OF THE COMPANY
RECOMMENDS THAT THE COMPANY'S STOCKHOLDERS TENDER THEIR SHARES IN THE OFFER. THE
FACTORS CONSIDERED BY THE BOARD OF DIRECTORS OF THE COMPANY IN ARRIVING AT ITS
DECISION TO APPROVE THE ACQUISITION AGREEMENT, THE OFFER AND THE OTHER
TRANSACTIONS CONTEMPLATED BY THE ACQUISITION AGREEMENT AND TO RECOMMEND THAT
STOCKHOLDERS OF THE COMPANY ACCEPT THE OFFER AND TENDER THEIR SHARES PURSUANT TO
THE OFFER ARE DESCRIBED IN THE COMPANY'S SOLICITATION/RECOMMENDATION STATEMENT
ON SCHEDULE 14D-9 (THE "SCHEDULE 14D-9"), WHICH HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION (THE "COMMISSION") AND IS BEING MAILED TO
STOCKHOLDERS OF THE COMPANY CONCURRENTLY HEREWITH.
MORGAN STANLEY & CO. INCORPORATED HAS ACTED AS THE COMPANY'S FINANCIAL
ADVISOR. THE OPINION OF MORGAN STANLEY TO THE BOARD OF DIRECTORS OF THE COMPANY,
DATED AS OF SEPTEMBER 19, 2001, TO THE EFFECT THAT, BASED ON AND SUBJECT TO THE
CONSIDERATIONS IN SUCH OPINION, AS OF SUCH DATE, THE CONSIDERATION TO BE
RECEIVED IN THE OFFER BY THE HOLDERS OF SHARES IS FAIR TO SUCH HOLDERS FROM A
FINANCIAL POINT OF VIEW, IS SET FORTH IN FULL AS AN ANNEX TO THE
SCHEDULE 14D-9. STOCKHOLDERS ARE URGED TO, AND SHOULD, CAREFULLY READ THE
SCHEDULE 14D-9 AND SUCH OPINION IN THEIR ENTIRETY.
THE OFFER IS CONDITIONED UPON (1) THE CONDITIONS TO THE PURCHASER'S
OBLIGATION TO PURCHASE SHARES IN THE OFFER SET FORTH IN THE ACQUISITION
AGREEMENT HAVING BEEN SATISFIED OR WAIVED AND (2) ANY WAITING PERIOD UNDER THE
HART-SCOTT-RODINO ANTITRUST IMPROVEMENTS ACT OF 1976, AS AMENDED (THE "HSR
ACT"), APPLICABLE TO THE PURCHASE OF SHARES PURSUANT TO THE OFFER HAVING EXPIRED
OR BEEN TERMINATED.
Concurrently with the execution of the Acquisition Agreement, (i) the
Company, Parent and the Purchaser entered into a Stockholder Agreement, which
sets forth certain rights and obligations of the
6
Company, Parent and the Purchaser and (ii) the Company, Parent and E.R.
Squibb & Sons, L.L.C., a limited liability company under the laws of Delaware
and a wholly owned subsidiary of Parent ("E.R. SQUIBB"), entered into a
Development, Promotion, Distribution and Supply Agreement, pursuant to which
Parent, E.R. Squibb and the Company will (a) co-develop and co-promote the
biologic pharmaceutical product IMC-C225 in the United States and Canada and
(b) co-develop and co-promote the biologic pharmaceutical product IMC-C225
(together with Merck KGaA) in Japan.
The Shares eligible to be tendered in the Offer include Shares issuable upon
the conditional exercise of exercisable options to purchase Shares having
exercise prices of less than $70.00 per Share held by present or former
employees and directors of the Company ("Option Shares"), as described in
Section 2. To the extent that Shares issuable in respect of conditionally
exercised options are not accepted by the Purchaser in the Offer (due to
proration or otherwise), these options will not be exercised.
Certain U.S. federal income tax consequences of the sale of Shares pursuant
to the Offer are described in Section 5.
Immediately following the consummation of the Offer, the Company will remain
a public company subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "EXCHANGE ACT"), and the Shares are
expected to continue to be listed for quotation on the Nasdaq National Market
System (the "NASDAQ NATIONAL MARKET").
THIS OFFER TO PURCHASE AND THE RELATED LETTER OF TRANSMITTAL CONTAIN
IMPORTANT INFORMATION AND SHOULD BE READ CAREFULLY AND IN THEIR ENTIRETY BEFORE
ANY DECISION IS MADE WITH RESPECT TO THE OFFER.
7
THE TENDER OFFER
1. TERMS OF THE OFFER
Upon the terms and subject to the conditions of the Offer (including, if the
Offer is extended or amended, the terms and conditions of any such extension or
amendment), the Purchaser will accept for payment and pay for up to 14,392,003
Shares validly tendered prior to the Expiration Date and not withdrawn in
accordance with Section 3. The term "EXPIRATION DATE" means 12:00 midnight, New
York City time, on October 26, 2001, unless and until the Purchaser shall have
extended the period of time during which the Offer is open in accordance with
the terms of the Acquisition Agreement, in which event the term "EXPIRATION
DATE" shall mean the latest time and date on which the Offer, as so extended by
the Purchaser, will expire.
If more than 14,392,003 Shares are validly tendered prior to the Expiration
Date and not properly withdrawn, the Purchaser will, upon the terms and subject
to the conditions of the Offer, accept such Shares for payment on a pro rata
basis, with adjustments to avoid purchases of fractional Shares, based upon the
number of Shares validly tendered prior to the Expiration Date and not properly
withdrawn. Because of the time required to determine the precise number of
Shares validly tendered and not withdrawn, if proration is required, the
Purchaser does not expect to announce the final results of proration until
approximately four trading days on the Nasdaq National Market after the
Expiration Date. Preliminary results of proration will be announced by press
release as promptly as practicable after the Expiration Date. Holders of Shares
may obtain such preliminary information from the Depositary, and also may be
able to obtain such preliminary information from their brokers.
The Purchaser will extend the Offer, and thereby delay acceptance for
payment of, and the payment for, any Shares, by giving oral or written notice of
such extension to the Depositary, if at the Expiration Date any of the
conditions to the Purchaser's obligation to purchase Shares are not satisfied,
until such time as such conditions are satisfied or waived. Each such extension
will be for a period of no more than ten business days, and the Purchaser may
not, without the consent of the Company, extend the Offer beyond April 1, 2002
(provided that (1) if the applicable waiting period under the HSR Act has not
expired or been terminated, or if the condition set forth in clause (a) of the
first sentence of Section 14--"Certain Conditions to the Offer"--of the Offer
has not been satisfied due to the existence of an antitrust-related injunction,
then we or the Company may extend this date from time to time to a date no later
than September 30, 2002, (2) if the condition set forth in clause (a) of that
sentence has not been satisfied due to the existence of an injunction in
connection with a third party proposal to acquire more than 35% of the Company,
then this date will be extended to the earlier to occur of September 30, 2002
and any earlier date specified by the Company at any time prior to
September 30, 2002, and (3) if the condition set forth in clause (f) of that
sentence has not been satisfied, then we or the Company may extend this date
from time to time to a date no later than September 30, 2002). The Purchaser
will also extend the Offer for any period required by any rule, regulation,
interpretation or position of the Commission or the staff thereof or any period
required by applicable law. UNDER NO CIRCUMSTANCES WILL INTEREST BE PAID ON THE
PURCHASE PRICE FOR TENDERED SHARES, REGARDLESS OF ANY EXTENSION OF OR AMENDMENT
TO THE OFFER OR ANY DELAY IN PAYING FOR SUCH SHARES. A subsequent offering
period will not be available in connection with the Offer.
The Purchaser expressly reserves the right (but shall not be obligated) to
waive any condition to the Offer, modify the terms of the Offer or increase the
Offer Price, by giving oral or written notice of such waiver or modification to
the Depositary, except that, without the consent of the Company, the Purchaser
shall not (i) increase or reduce the number of Shares subject to the Offer,
(ii) reduce the price per Share to be paid pursuant to the Offer, (iii) modify
or add to the conditions of the Offer, (iv) change the form of consideration
payable in the Offer or (v) otherwise amend the Offer in any manner adverse to
the holders of Shares.
8
Any extension, waiver, amendment or termination will be followed as promptly
as practicable by public announcement thereof. An announcement in the case of an
extension will be made no later than 9:00 a.m., Eastern time, on the next
business day after the previously scheduled Expiration Date. Without limiting
the manner in which the Purchaser may choose to make any public announcement,
subject to applicable law (including Rules 14d-4(d) and 14d-6(c) under the
Exchange Act, which require that material changes be promptly disseminated to
holders of Shares), the Purchaser will have no obligation to publish, advertise
or otherwise communicate any such public announcement other than by issuing a
release to the Dow Jones News Service. As used in this Offer to Purchase (other
than in Section 12), "BUSINESS DAY" has the meaning set forth in Rule 14d-1
under the Exchange Act.
If the Purchaser makes a material change in the terms of the Offer or the
information concerning the Offer or waives a material condition of the Offer,
the Purchaser will disseminate additional tender offer materials and extend the
Offer to the extent required by Rules 14d-4(d), 14d-6(c) and 14e-1 under the
Exchange Act. The minimum period during which an offer must remain open
following material changes in the terms of such offer or information concerning
such offer, other than a change in price or a change in the percentage of
securities sought, will depend upon the facts and circumstances then existing,
including the relative materiality of the changed terms or information. With
respect to a change in price or a change in the percentage of securities sought,
a minimum period of 10 business days is generally required to allow for adequate
dissemination to stockholders.
The Shares eligible to be tendered in the Offer include Shares issuable upon
the conditional exercise of exercisable options to purchase Shares having
exercise prices of less than $70.00 per Share held by present or former
employees and directors of the Company, as described in Section 2.
This Offer to Purchase, the related Letter of Transmittal and other relevant
materials will be mailed by the Company to record holders of Shares, and will be
furnished to brokers, dealers, banks, trust companies and similar persons whose
names, or the names of whose nominees, appear on the stockholder lists, or, if
applicable, who are listed as participants in a clearing agency's security
position listing, for subsequent transmittal to beneficial owners of Shares.
2. PROCEDURES FOR TENDERING SHARES
VALID TENDER. For a stockholder validly to tender Shares pursuant to the
Offer, (a) the certificates for tendered Shares, together with a Letter of
Transmittal, properly completed and duly executed, any required signature
guarantees and any other required documents, must, prior to the Expiration Date,
be received by the Depositary at one of its addresses set forth on the back
cover of this Offer to Purchase; (b) in the case of a transfer effected pursuant
to the book-entry transfer procedures described under "Book-Entry Transfer",
either a Letter of Transmittal, properly completed and duly executed, and any
required signature guarantees, or an Agent's Message (as defined below), and any
other required documents, must be received by the Depositary at one of such
addresses, such Shares must be delivered pursuant to the book-entry transfer
procedures described below and a Book-Entry Confirmation (as defined below) must
be received by the Depositary, in each case prior to the Expiration Date; or
(c) the tendering stockholder must, prior to the Expiration Date, comply with
the guaranteed delivery procedures described below under "Guaranteed Delivery".
The valid tender of Shares pursuant to one of the procedures described above
will constitute a binding agreement between the tendering stockholder and the
Purchaser upon the terms and subject to the conditions of the Offer.
THE METHOD OF DELIVERY OF SHARES, THE LETTER OF TRANSMITTAL AND ALL OTHER
REQUIRED DOCUMENTS, INCLUDING DELIVERY THROUGH THE BOOK-ENTRY TRANSFER FACILITY
(AS DEFINED BELOW), IS AT THE ELECTION AND RISK OF THE TENDERING STOCKHOLDER.
SHARES WILL BE DEEMED DELIVERED ONLY WHEN ACTUALLY RECEIVED BY THE DEPOSITARY
(INCLUDING, IN THE CASE OF A BOOK-ENTRY TRANSFER, BY BOOK-ENTRY CONFIRMATION).
IF DELIVERY IS
9
BY MAIL, REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY INSURED, IS
RECOMMENDED. IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ENSURE TIMELY
DELIVERY.
BOOK-ENTRY TRANSFER. The Depositary will establish an account with respect
to the Shares at The Depository Trust Company (the "BOOK-ENTRY TRANSFER
FACILITY") for purposes of the Offer within two business days after the date of
this Offer to Purchase. Any financial institution that is a participant of the
Book-Entry Transfer Facility's system may make book-entry delivery of Shares by
causing the Book-Entry Transfer Facility to transfer such Shares into the
Depositary's account in accordance with the Book-Entry Transfer Facility's
procedures for such transfer. However, although delivery of Shares may be
effected through book-entry transfer into the Depositary's account at the
Book-Entry Transfer Facility, the Letter of Transmittal, properly completed and
duly executed, with any required signature guarantees, or an Agent's Message,
and any other required documents, must be, in any case, received by the
Depositary at one of its addresses set forth on the back cover of this Offer to
Purchase prior to the Expiration Date for a valid tender of Shares by
book-entry. The confirmation of a book-entry transfer of Shares into the
Depositary's account at the Book-Entry Transfer Facility as described above is
referred to herein as a "BOOK-ENTRY CONFIRMATION". DELIVERY OF DOCUMENTS TO THE
BOOK-ENTRY TRANSFER FACILITY IN ACCORDANCE WITH THE BOOK-ENTRY TRANSFER
FACILITY'S PROCEDURES DOES NOT CONSTITUTE DELIVERY TO THE DEPOSITARY.
The term "AGENT'S MESSAGE" means a message, transmitted by the Book-Entry
Transfer Facility to, and received by, the Depositary and forming a part of a
Book-Entry Confirmation, which states that the Book-Entry Transfer Facility has
received an express acknowledgment from the participant in the Book-Entry
Transfer Facility tendering the Shares that such participant has received and
agrees to be bound by the terms of the Letter of Transmittal and that the
Purchaser may enforce such agreement against the participant.
SIGNATURE GUARANTEES. No signature guarantee is required on the Letter of
Transmittal if (a) the Letter of Transmittal is signed by the registered
holder(s) (which term, for purposes of this Section 2, includes any participant
in the Book-Entry Transfer Facility's system whose name appears on a security
position listing as the owner of the Shares) of Shares tendered therewith and
such registered holder has not completed either the box entitled "Special
Delivery Instructions" or the box entitled "Special Payment Instructions" on the
Letter of Transmittal or (b) such Shares are tendered for the account of a
financial institution (including most commercial banks, savings and loan
associations and brokerage houses) that is a participant in the Security
Transfer Agents Medallion Program, the New York Stock Exchange Medallion
Signature Guarantee Program or the Stock Exchange Medallion Program (such
participant, an "ELIGIBLE INSTITUTION"). In all other cases, all signatures on
the Letter of Transmittal must be guaranteed by an Eligible Institution. See
Instructions 1 and 5 to the Letter of Transmittal. If the certificates for
Shares are registered in the name of a person other than the signer of the
Letter of Transmittal, or if payment is to be made or certificates for Shares
not tendered or not accepted for payment are to be returned to a person other
than the registered holder of the certificates surrendered, the tendered
certificates must be endorsed or accompanied by appropriate stock powers, in
either case signed exactly as the name or names of the registered holders or
owners appear on the certificates, with the signatures on the certificates or
stock powers guaranteed as aforesaid. See Instructions 1 and 5 to the Letter of
Transmittal.
GUARANTEED DELIVERY. If a stockholder desires to tender Shares pursuant to
the Offer and such stockholder's certificates for Shares are not immediately
available or the book-entry transfer procedures cannot be completed on a timely
basis or time will not permit all required documents to reach the Depositary
prior to the Expiration Date, such stockholder's tender may be effected if all
the following conditions are met:
(a) such tender is made by or through an Eligible Institution;
10
(b) a properly completed and duly executed Notice of Guaranteed Delivery,
substantially in the form provided by the Company, is received by the
Depositary at one of its addresses set forth on the back cover of this Offer
to Purchase prior to the Expiration Date; and
(c) either (i) the certificates for tendered Shares together with a Letter of
Transmittal, properly completed and duly executed, and any required
signature guarantees, and any other required documents are received by the
Depositary at one of its addresses set forth on the back cover of this Offer
to Purchase within three trading days after the date of execution of such
Notice of Guaranteed Delivery or (ii) in the case of a book-entry transfer
effected pursuant to the book-entry transfer procedures described above
under "Book-Entry Transfer", either a Letter of Transmittal, properly
completed and duly executed, and any required signature guarantees, or an
Agent's Message, and any other required documents, is received by the
Depositary at one of such addresses, such Shares are delivered pursuant to
the book-entry transfer procedures above and a Book-Entry Confirmation is
received by the Depositary, in each case within three trading days after the
date of execution of such Notice of Guaranteed Delivery. A "TRADING DAY" is
any day on which the Nasdaq National Market operated by the National
Association of Securities Dealers, Inc. (the "NASD") is open for business.
The Notice of Guaranteed Delivery may be delivered by hand to the Depositary
or transmitted by telegram, facsimile transmission or mail to the Depositary and
must include a guarantee by an Eligible Institution in the form set forth in
such Notice of Guaranteed Delivery.
CONDITIONAL OPTION EXERCISES. The Shares eligible to be tendered in the
Offer include Shares issuable upon the conditional exercise of exercisable
options to purchase Shares having exercise prices of less than $70.00 per Share
held by present or former employees and directors of the Company. Such option
holders may conditionally exercise any or all of their eligible options by
executing and delivering to the Company a Notice of Conditional Exercise, which
will be provided to eligible option holders by the Company together with a
Memorandum to Eligible Option Holders and Instructions for Conditional Exercise.
Eligible option holders who elect to conditionally exercise options may not use
the Letter of Transmittal, and instead must use the Notice of Conditional
Exercise, to direct the tender of Option Shares. All Option Shares resulting
from a conditional exercise will be tendered in the Offer on behalf of the
option holder by the Company, as agent for the option holder. If an eligible
option holder chooses to conditionally exercise options in accordance with the
procedures described above and in the Instructions for Conditional Exercise, the
Option Shares will have been validly tendered in the Offer.
The exercise of such options will be "conditional" because the eligible
option holder will be deemed to exercise his or her option only if, and to the
extent that, the Purchaser actually accepts for payment and pays for the Option
Share underlying such option in the Offer. If Option Shares are accepted for
payment and paid for by the Purchaser pursuant to the Offer, the options in
respect of such Option Shares will have been irrevocably exercised. If and to
the extent the Option Shares underlying such options are not accepted for
payment and paid for by the Purchaser pursuant to the Offer (due to proration or
otherwise), these options will not be exercised.
The Purchaser has been informed by the Company that eligible option holders
will conditionally exercise options on a "cashless" basis with respect to Option
Shares purchased pursuant to the Offer. An eligible option holder will not be
required to pay cash for the exercise price upon conditional exercise. The
consideration received by the option holder whose Option Shares are purchased
pursuant to the Offer will be an amount per Option Share equal to the difference
between $70.00 and the exercise price relating to the Option Share so purchased
pursuant to the Offer, less applicable withholding taxes.
Holders of convertible securities other than the options described may not
conditionally exercise their conversions rights in the Offer.
11
Eligible option holders should read this Offer to Purchase, the related
Letter of Transmittal, the Memorandum to Eligible Option Holders, the Notice of
Conditional Exercise and the related Instructions for Conditional Exercise.
Eligible option holders who wish to conditionally exercise options and tender
Option Shares in the Offer should review the information, and must follow the
instructions, contained in the Memorandum to Eligible Option Holders and the
Instructions for Conditional Exercise.
In addition to the conditional exercise procedures described above, holders
of exercisable options to acquire Shares having exercise prices of less than
$70.00 per Share may exercise such options in advance of the Expiration Date and
tender Shares issued upon exercise by following the instructions and procedures
for tendering stockholders. Such exercise of options is not revocable,
regardless of whether any of the Shares issued upon such exercise and tendered
in the Offer are accepted for payment pursuant to the Offer.
Eligible option holders who also hold Shares directly and wish to tender
such Shares in the Offer must execute and deliver a Letter of Transmittal with
respect to such Shares in accordance with the instructions set forth in this
Offer to Purchase and the Letter of Transmittal.
NEITHER THE COMPANY NOR THE BOARD OF DIRECTORS OF THE COMPANY MAKES ANY
RECOMMENDATION AS TO WHETHER HOLDERS OF SUCH OPTIONS SHOULD EXERCISE OR REFRAIN
FROM EXERCISING (CONDITIONALLY OR OTHERWISE) SUCH OPTIONS IN ORDER TO TENDER
SHARES (INCLUDING OPTION SHARES) IN THE OFFER, SINCE THAT DECISION REQUIRES AN
ANALYSIS OF EACH INDIVIDUAL OPTION HOLDER'S SPECIFIC CIRCUMSTANCES. EACH HOLDER
OF SUCH OPTIONS IS URGED TO CONSULT HIS OR HER OWN TAX, FINANCIAL AND LEGAL
ADVISORS REGARDING THE U.S. FEDERAL, STATE, LOCAL AND FOREIGN TAX CONSEQUENCES
OF CONDITIONALLY EXERCISING HIS OR HER OPTIONS IN LIGHT OF HIS OR HER OWN
PARTICULAR CIRCUMSTANCES. EACH HOLDER OF SUCH OPTIONS IS URGED TO CONSIDER (IN
CONJUNCTION WITH HIS OR HER TAX, FINANCIAL AND LEGAL ADVISORS) THE FINANCIAL
IMPLICATIONS OF EXERCISING OPTIONS SIGNIFICANTLY IN ADVANCE OF THE EXPIRATION OF
THE OPTION TERM.
OTHER REQUIREMENTS. Notwithstanding any provision hereof, payment for
Shares accepted for payment pursuant to the Offer will in all cases be made only
after timely receipt by the Depositary of (a) certificates for (or a timely
Book-Entry Confirmation with respect to) such Shares, (b) a Letter of
Transmittal, properly completed and duly executed, with any required signature
guarantees (or, in the case of a book-entry transfer, an Agent's Message in lieu
of the Letter of Transmittal) and (c) any other documents required by the Letter
of Transmittal. Accordingly, tendering stockholders may be paid at different
times depending upon when certificates for Shares or Book-Entry Confirmations
with respect to Shares are actually received by the Depositary. UNDER NO
CIRCUMSTANCES WILL INTEREST BE PAID BY THE PURCHASER ON THE PURCHASE PRICE OF
THE SHARES, REGARDLESS OF ANY EXTENSION OF THE OFFER OR ANY DELAY IN MAKING SUCH
PAYMENT.
APPOINTMENT. By executing a Letter of Transmittal, or, in the case of a
book-entry transfer, by delivery of an Agent's Message in lieu of a Letter of
Transmittal, a tendering stockholder will irrevocably appoint designees of the
Purchaser as such stockholder's attorneys-in-fact and proxies in the manner set
forth in the Letter of Transmittal, each with full power of substitution, to the
full extent of such stockholder's rights with respect to the Shares tendered by
such stockholder and accepted for payment by the Purchaser and with respect to
any and all other Shares or other securities or rights issued or issuable in
respect of such Shares on or after September 28, 2001. All such proxies will be
considered coupled with an interest in the tendered Shares. Such appointment
will be effective when, and only to the extent that, the Purchaser accepts for
payment Shares tendered by such stockholder as provided herein. Upon the
effectiveness of such appointment, all prior powers of attorney, proxies and
consents given by such stockholder with respect to such Shares or other
securities or rights will, without further action, be revoked and no subsequent
powers of attorney, proxies, consents or revocations may be given (and, if
given, will not be effective). The designees of the Purchaser will thereby be
empowered to exercise all voting and other rights with respect to such Shares
and other securities or
12
rights in respect of any annual, special or adjourned meeting of the Company's
stockholders, actions by written consent in lieu of any such meeting or
otherwise, as they in their sole discretion deem proper. The Purchaser reserves
the right to require that, in order for Shares to be deemed validly tendered,
immediately upon the Purchaser's acceptance for payment of such Shares, the
Purchaser must be able to exercise full voting, consent and other rights with
respect to such Shares and other securities or rights, including voting at any
meeting of stockholders.
DETERMINATION OF VALIDITY. All questions as to the validity, form,
eligibility (including time of receipt) and acceptance of any tender of Shares
will be determined by the Purchaser in its sole discretion, which determination
will be final and binding. The Purchaser reserves the absolute right to reject
any or all tenders determined by it not to be in proper form or the acceptance
for payment of or payment for which may, in the opinion of the Purchaser, be
unlawful. The Purchaser also reserves the absolute right to waive any defect or
irregularity in the tender of any Shares of any particular stockholder whether
or not similar defects or irregularities are waived in the case of other
stockholders. No tender of Shares will be deemed to have been validly made until
all defects or irregularities relating thereto have been cured or waived. None
of the Purchaser, Parent, the Company, the Depositary, the Information Agent,
the Dealer Manager or any other person will be under any duty to give
notification of any defects or irregularities in tenders or incur any liability
for failure to give any such notification. The Purchaser's interpretation of the
terms and conditions of the Offer (including the Letter of Transmittal and the
instructions thereto and any other related documents thereto) will be final and
binding.
BACKUP WITHHOLDING. In order to avoid "backup withholding" of U.S. federal
income tax on payments of cash pursuant to the Offer, a stockholder surrendering
Shares in the Offer must, unless an exemption applies, provide the Depositary
with such stockholder's correct taxpayer identification number ("TIN") on a
Substitute Form W-9 and certify under penalties of perjury that such TIN is
correct and that such stockholder is not subject to backup withholding. If a
stockholder does not provide such stockholder's correct TIN or fails to provide
the certifications described above, the Internal Revenue Service (the "IRS") may
impose a penalty on such stockholder and payment of cash to such stockholder
pursuant to the Offer may be subject to backup withholding at a rate of up to
31%. All stockholders surrendering Shares pursuant to the Offer should complete
and sign the main signature form and the Substitute Form W-9 included as part of
the Letter of Transmittal to provide the information and certification necessary
to avoid backup withholding (unless an applicable exemption exists and is proved
in a manner satisfactory to the Purchaser and the Depositary). Certain
stockholders (including, among others, all corporations and certain foreign
individuals and entities) are not subject to backup withholding. Noncorporate
foreign stockholders should complete and sign the main signature form and a
Form W-8BEN, Certificate of Foreign Status of Beneficial Owner for United States
Tax Withholding, a copy of which may be obtained from the Depositary, in order
to avoid backup withholding. See Instruction 9 to the Letter of Transmittal.
3. WITHDRAWAL RIGHTS
Except as otherwise provided in this Section 3, tenders of Shares are
irrevocable. Shares tendered pursuant to the Offer may be withdrawn pursuant to
the procedures set forth below at any time prior to the Expiration Date and,
unless accepted for payment and paid for by the Purchaser pursuant to the Offer,
may also be withdrawn at any time after November 26, 2001.
For a withdrawal to be effective, a written or facsimile transmission notice
of withdrawal must be timely received by the Depositary at one of its addresses
set forth on the back cover of this Offer to Purchase and must specify the name
of the person having tendered the Shares to be withdrawn, the number of Shares
to be withdrawn and the name of the registered holder of the Shares to be
withdrawn, if different from the name of the person who tendered the Shares. If
certificates for Shares have been delivered or otherwise identified to the
Depositary, then, prior to the physical release of
13
such certificates, the serial numbers shown on such certificates must be
submitted to the Depositary and, unless such Shares have been tendered by an
Eligible Institution, any and all signatures on the notice of withdrawal must be
guaranteed by an Eligible Institution. If Shares have been tendered pursuant to
the book-entry transfer procedures described in Section 2, any notice of
withdrawal must also specify the name and number of the account at the
Book-Entry Transfer Facility to be credited with the withdrawn Shares and
otherwise comply with the Book-Entry Transfer Facility's procedures. Withdrawals
of tenders of Shares may not be rescinded, and any Shares properly withdrawn
will thereafter be deemed not validly tendered for purposes of the Offer.
However, withdrawn Shares may be retendered by again following one of the
procedures described in Section 2 at any time prior to the Expiration Date.
Option Shares tendered may only be withdrawn as set forth in the Memorandum
to Eligible Option Holders and the Instructions for Conditional Exercise.
All questions as to the form and validity (including time of receipt) of any
notice of withdrawal will be determined by the Purchaser in its sole discretion,
which determination will be final and binding. None of the Purchaser, Parent,
the Company, the Depositary, the Information Agent, the Dealer Manager or any
other person will be under any duty to give notification of any defects or
irregularities in any notice of withdrawal or incur any liability for failure to
give any such notification.
4. ACCEPTANCE FOR PAYMENT AND PAYMENT
Upon the terms and subject to the conditions of the Offer (including, if the
Offer is extended or amended, the terms and conditions of any such extension or
amendment), the Purchaser will accept for payment and will pay for up to
14,392,003 Shares validly tendered prior to the Expiration Date and not properly
withdrawn in accordance with Section 3, promptly after the Expiration Date. The
Purchaser, subject to the Acquisition Agreement, expressly reserves the right,
in its sole discretion, to delay acceptance for payment of or payment for Shares
in order to comply in whole or in part with any applicable law, including,
without limitation, the HSR Act. Any such delays will be effected in compliance
with Rule 14e-1(c) under the Exchange Act (relating to a bidder's obligation to
pay for or return tendered securities promptly after the termination or
withdrawal of such bidder's offer).
In all cases, payment for Shares accepted for payment pursuant to the Offer
will be made only after timely receipt by the Depositary of (a) the certificates
for such Shares, together with a Letter of Transmittal, properly completed and
duly executed, and any required signature guarantees or (b) in the case of a
transfer effected pursuant to the book-entry transfer procedures described in
Section 2, a Book-Entry Confirmation and either a Letter of Transmittal,
properly completed and duly executed, and any required signature guarantees, or
an Agent's Message, and any other required documents. Accordingly, tendering
stockholders may be paid at different times depending upon when certificates for
Shares or Book-Entry Confirmations with respect to Shares are actually received
by the Depositary. The per Share consideration paid to any stockholder pursuant
to the Offer will be the highest per Share consideration paid to any other
stockholder pursuant to the Offer.
For purposes of the Offer, the Purchaser will be deemed to have accepted for
payment, and thereby purchased, Shares validly tendered to the Purchaser and not
properly withdrawn as, if and when the Purchaser gives oral or written notice to
the Depositary of the Purchaser's acceptance for payment of such Shares. Payment
for Shares accepted for payment pursuant to the Offer will be made by deposit of
the purchase price therefor with the Depositary, which will act as an agent for
tendering stockholders for the purpose of receiving payment from the Purchaser
and transmitting payment to tendering stockholders whose Shares have been
accepted for payment. UNDER NO CIRCUMSTANCES WILL INTEREST BE PAID ON THE
PURCHASE PRICE FOR TENDERED SHARES, REGARDLESS OF ANY EXTENSION OF OR AMENDMENT
TO THE OFFER OR ANY DELAY IN PAYING FOR SUCH SHARES.
If the Purchaser is delayed in its acceptance for payment of or payment for
Shares or is unable to accept for payment or pay for Shares pursuant to the
Offer for any reason, then, without prejudice to
14
the Purchaser's rights under the Offer (but subject to compliance with
Rule 14e-1(c) under the Exchange Act (relating to a bidder's obligation to pay
for or return tendered securities promptly after the termination or withdrawal
of such bidder's offer) and the terms of the Acquisition Agreement (requiring
that the Purchaser pay for Shares accepted for payment as soon as practicable
after the Expiration Date)), the Depositary may, nevertheless, on behalf of the
Purchaser, retain tendered Shares, and such Shares may not be withdrawn except
to the extent tendering stockholders are entitled to do so as described in
Section 3.
If any tendered Shares are not accepted for payment pursuant to the terms
and conditions of the Offer because of an invalid tender, proration or
otherwise, the certificates for such Shares will be returned (and, if
certificates are submitted for more Shares than are tendered, new certificates
for the Shares not tendered will be sent) in each case without expense to the
tendering stockholder (or, in the case of Shares delivered by book-entry
transfer of such Shares into the Depositary's account at the Book-Entry Transfer
Facility pursuant to the book-entry transfer procedures described in Section 2,
such Shares will be credited to an account maintained at the Book-Entry Transfer
Facility), as promptly as practicable after the expiration or termination of the
Offer.
5. CERTAIN U.S. FEDERAL INCOME TAX CONSEQUENCES
The receipt of cash pursuant to the Offer will be a taxable transaction for
U.S. federal income tax purposes under the Internal Revenue Code of 1986, as
amended (the "CODE"), and may also be a taxable transaction under applicable
state, local or foreign income or other tax laws.
Generally, for U.S. federal income tax purposes, a tendering stockholder
will recognize gain or loss equal to the difference between the amount of cash
received by the stockholder pursuant to the Offer and the stockholder's
aggregate adjusted tax basis in the Shares tendered by the stockholder and
purchased pursuant to the Offer. Gain or loss will be calculated separately for
each block of Shares tendered and purchased pursuant to the Offer. If tendered
Shares are held by a tendering stockholder as capital assets, gain or loss
recognized by such stockholder will be capital gain or loss, which will be
long-term capital gain or loss if such stockholder's holding period for the
Shares exceeds one year. In the case of a tendering noncorporate stockholder,
long-term capital gains will be eligible for a maximum U.S. federal income tax
rate of 20%. In addition, there are limits on the deductibility of capital
losses.
Holders of options to acquire Shares who conditionally exercise their
options and thereby validly tender the Shares underlying those options in the
Offer and whose Shares are accepted for payment pursuant to the Offer will be
treated as receiving compensation income per Share sold equal to the excess of
$70.00 over the exercise price per Share of the relevant option. Such income
will be taxed to the option holder at ordinary income rates and will be subject
to withholding for income and employment taxes. In addition, such income will be
subject to the backup withholding rules described below and in Section 2.
A stockholder (other than certain exempt stockholders including, among
others, all corporations and certain foreign individuals) that tenders Shares
may be subject to backup withholding at a rate of up to 31% unless the
stockholder provides its TIN and certifies under penalty of perjury that such
TIN is correct (or properly certifies that it is awaiting a TIN) and certifies
as to no loss of exemption from backup withholding and otherwise complies with
the applicable requirements of the backup withholding rules. A stockholder that
does not furnish a required TIN or that does not otherwise establish a basis for
an exemption from backup withholding may be subject to a penalty imposed by the
IRS. See "Backup Withholding" under Section 2. Each stockholder should complete
and sign the Substitute Form W-9 included as part of the Letter of Transmittal
so as to provide the information and certification necessary to avoid backup
withholding.
If backup withholding applies to a stockholder, the Depositary is required
to withhold up to 31% from payments to such stockholder. Backup withholding is
not an additional tax. Rather, the amount of
15
the backup withholding can be credited against the U.S. federal income tax
liability of the person subject to the backup withholding, provided that the
required information is given to the IRS. If backup withholding results in an
overpayment of tax, a refund can be obtained by the stockholder by filing a U.S.
federal income tax return.
The foregoing discussion is based on the Code, regulations issued
thereunder, judicial decisions and administrative rulings, all of which are
subject to change, possibly with retroactive effect. The foregoing discussion
may not be applicable with respect to Shares received pursuant to the exercise
of employee stock options or otherwise as compensation or with respect to
holders of Shares who are subject to special tax treatment under the Code--such
as non-U.S. persons, insurance companies, dealers or brokers in securities or
currencies, tax-exempt organizations and financial institutions--and may not
apply to a holder of Shares in light of individual circumstances, such as
holding Shares as a hedge or as part of a hedging, straddle, conversion,
synthetic security, integrated investment or other risk-reduction transaction.
STOCKHOLDERS ARE URGED TO CONSULT THEIR OWN TAX ADVISORS TO DETERMINE THE
PARTICULAR TAX CONSEQUENCES TO THEM (INCLUDING THE APPLICATION AND EFFECT OF ANY
STATE, LOCAL OR FOREIGN INCOME AND OTHER TAX LAWS) OF THE OFFER.
6. PRICE RANGE OF THE SHARES; DIVIDENDS ON THE SHARES
The information set forth in this Section regarding the Company is derived
from or based upon public information, including the Company's Annual Report on
Form 10-K for the fiscal year ended December 31, 2000 (the "COMPANY 10-K"). The
Shares are listed for quotation on the Nasdaq National Market under the symbol
"IMCL". The following table sets forth, for each of the periods indicated, the
high and low sales prices per Share on the Nasdaq National Market. Share prices
shown are adjusted for the Company's 2-for-1 stock split effected in the form of
a dividend in October 2000. The Company has neither declared nor paid dividends
to holders of the Shares.
HIGH LOW
-------- --------
Year Ended December 31, 1999:
First Quarter............................................. $ 8.47 $ 4.38
Second Quarter............................................ $ 13.00 $ 7.75
Third Quarter............................................. $ 19.75 $ 10.66
Fourth Quarter............................................ $ 21.63 $ 8.13
Year Ended December 31, 2000:
First Quarter............................................. $ 85.99 $ 17.00
Second Quarter............................................ $ 52.41 $ 30.19
Third Quarter............................................. $ 62.94 $ 30.75
Fourth Quarter............................................ $ 69.13 $ 30.81
Year Ended December 31, 2001:
First Quarter............................................. $ 44.25 $ 23.38
Second Quarter............................................ $ 56.30 $ 26.50
Third Quarter (through September 27, 2001)................ $ 59.69 $ 40.80
On September 18, 2001, the last full trading day before the public
announcement of the execution of the Acquisition Agreement, the last reported
sales price of the Shares on the Nasdaq National Market was $50.01 per Share. On
September 27, 2001, the last full trading day before commencement of the Offer,
the last reported sales price of the Shares on the Nasdaq National Market was
$58.00 per Share. STOCKHOLDERS ARE URGED TO OBTAIN CURRENT MARKET QUOTATIONS FOR
THE SHARES.
16
7. EFFECT OF THE OFFER ON THE MARKET FOR THE SHARES; MARKET QUOTATION; EXCHANGE
ACT REGISTRATION; MARGIN REGULATIONS
MARKET FOR THE SHARES. The purchase of Shares pursuant to the Offer will
reduce the number of holders of Shares and the number of Shares that might
otherwise trade publicly and could adversely affect the liquidity and market
value of the remaining Shares held by the public.
MARKET QUOTATION. After the Offer, approximately 80.1% of the currently
outstanding Shares will continue to be held by persons other than the Purchaser,
and the Purchaser does not believe that its purchase of up to 14,392,003 Shares
pursuant to the Offer is likely to result in the Company's failure to meet the
requirements of the NASD for continued quotation on the Nasdaq National Market.
EXCHANGE ACT REGISTRATION. The Shares are currently registered under the
Exchange Act and, according to the Company, will continue to be registered
thereunder after the Offer. However, such registration may be terminated upon
application of the Company to the Commission if the Shares are neither listed on
a national securities exchange nor held by 300 or more holders of record.
Termination of registration of the Shares under the Exchange Act would reduce
the information required to be furnished by the Company to its stockholders and
to the Commission and would make certain provisions of the Exchange Act no
longer applicable to the Company, such as the short-swing profit-recovery
provisions of Section 16(b) of the Exchange Act and the requirement of
furnishing a proxy statement pursuant to Section 14(a) or 14(c) of the Exchange
Act in connection with stockholders' meetings and the related requirement of
furnishing an annual report to stockholders. Furthermore, the ability of
"affiliates" of the Company and persons holding "restricted securities" of the
Company to dispose of such securities pursuant to Rule 144 or 144A promulgated
under the Securities Act of 1933, as amended, may be impaired or eliminated.
MARGIN REGULATIONS. The Shares are currently "margin securities" under the
regulations of the Board of Governors of the Federal Reserve System (the
"FEDERAL RESERVE BOARD"), which has the effect, among other things, of allowing
brokers to extend credit on the collateral of the Shares. Following the Offer,
the Shares will continue to be "margin securities".
8. CERTAIN INFORMATION CONCERNING THE COMPANY
The Company is a Delaware corporation with its principal offices at 180
Varick Street, New York, New York 10014, telephone number (212) 645-1405.
According to the Company 10-K, the Company's principal business is the research
and development of therapeutic products for the treatment of cancer and
cancer-related disorders, and it concentrates on three strategies for treating
cancer: growth factor inhibitors, cancer vaccines and anti-angiogenesis
inhibitors therapeutics.
AVAILABLE INFORMATION. The Company is subject to the informational
requirements of the Exchange Act and, in accordance therewith, is required to
file reports and other information with the Commission relating to its business,
financial condition and other matters. Certain information as of particular
dates concerning the Company's directors and officers, their remuneration, stock
options and other matters, the principal holders of the Company's securities and
any material interest of such persons in transactions with the Company is
required to be disclosed in the Company's proxy statements distributed to the
Company's stockholders and filed with the Commission. Such reports, proxy
statements and other information should be available for inspection at the
public reference facilities of the Commission at 450 Fifth Street, N.W.,
Washington, DC 20549, and at the regional offices of the Commission located at
Northwestern Atrium Center, 500 West Madison Street, Suite 1400, Chicago, IL
60661. Copies of such information should be obtainable, by mail, upon payment of
the Commission's customary charges, by writing to the Commission's principal
office at 450 Fifth Street, N.W., Washington, DC 20549. The Commission also
maintains a Web site on the Internet at http://www.sec.gov/ that contains
reports, proxy and information statements and other information regarding
registrants that file electronically with the Commission.
17
Except as otherwise stated in this Offer to Purchase, the information
concerning the Company contained herein has been taken from or based upon
publicly available documents on file with the Commission and other publicly
available information. Although Parent and the Purchaser do not have any
knowledge that any such information is untrue, neither Parent nor the Purchaser
takes any responsibility for the accuracy or completeness of such information or
for any failure by the Company to disclose events that may have occurred and may
affect the significance or accuracy of any such information.
9. CERTAIN INFORMATION CONCERNING PARENT AND THE PURCHASER
The Purchaser, a Delaware corporation that is a wholly owned subsidiary of
Parent, was organized to acquire the Shares and has not conducted any unrelated
activities since its organization. The Purchaser's principal office is located
at Route 206 and Province Line Road, Princeton, New Jersey 08540, telephone
(609) 252-4000.
Parent is a Delaware corporation with its principal office located at 345
Park Avenue, New York, New York 10154, telephone (212) 546-4000.
The name, citizenship, business address, present principal occupation or
employment and five-year employment history of each of the directors and
executive officers of the Purchaser and Parent are set forth in Schedule I
hereto.
Except as described in this Offer to Purchase, neither the Purchaser nor
Parent nor, to the knowledge of the Purchaser or Parent, any of the persons
listed in Schedule I or any associate or majority-owned subsidiary of the
Purchaser or Parent or any of the persons so listed, beneficially owns any
equity security of the Company, and neither the Purchaser nor Parent nor, to the
knowledge of the Purchaser or Parent, any of the other persons or entities
referred to above, or any of the respective directors, executive officers or
subsidiaries of any of the foregoing, has effected any transaction in any equity
security of the Company during the past 60 days.
Except as described in this Offer to Purchase or the Schedule TO filed by
the Purchaser and Parent with the Commission in connection with the Offer (the
"SCHEDULE TO"), (a) there have not been any contacts, transactions or
negotiations between the Purchaser or Parent, any of their respective
subsidiaries or, to the knowledge of the Purchaser or Parent, any of the persons
listed in Schedule I, on the one hand, and the Company or any of its directors,
officers or affiliates, on the other hand, that are required to be disclosed
pursuant to the rules and regulations of the Commission and (b) neither the
Purchaser nor Parent nor, to the knowledge of the Purchaser or Parent, any of
the persons listed in Schedule I has any contract, arrangement, understanding or
relationship with any person with respect to any securities of the Company.
Because the only consideration in the Offer is cash, and in view of the
absence of a financing condition and the amount of consideration payable in
relation to the financial capacity of Parent and its affiliates, and because
Parent is a public reporting company under Section 13(a) or 15(d) of the
Exchange Act that files reports electronically on EDGAR, the Purchaser believes
the financial condition of Parent and its affiliates is not material to a
decision by a holder of Shares whether to sell, tender or hold Shares pursuant
to the Offer.
10. SOURCE AND AMOUNT OF FUNDS
The Offer is not conditioned on any financing arrangements.
The total amount of funds required by the Purchaser to purchase 14,392,003
of the outstanding Shares pursuant to the Offer and to pay fees and expenses
related to the Offer is estimated to be approximately $1,010,000,000. Parent has
agreed in the Acquisition Agreement to provide the Purchaser with the necessary
funds to purchase Shares in the Offer. Parent has obtained all funds needed for
the Offer through commercial paper facilities and long term debt financings.
18
11. CONTACTS AND TRANSACTIONS WITH THE COMPANY; BACKGROUND OF THE OFFER
In the summer of 2000, the Company invited Parent to meet with
representatives of the Company and to conduct due diligence with a view to a
possible strategic transaction with the Company. After meeting with
representatives of the Company and conducting due diligence, Parent's management
determined not to pursue a strategic transaction with the Company at that time.
In early 2001, Parent conducted an extensive internal review of its
biologics business, and evaluated a number of opportunities to expand its
biologics capabilities. This review was completed in early April 2001, and, as a
result, the Company was identified as one of several candidates for potential
investment and/or collaboration. In particular, Parent determined that the
Company's IMC-C225 compound could sustain Parent's leadership position in
oncology, significantly contribute to Parent's corporate growth strategy and be
a significant step towards Parent becoming a leader in biologics.
In mid-April 2001, Mr. Brian Markison, Senior Vice President of Parent,
contacted Dr. Samuel Waksal, President and Chief Executive Officer of the
Company, through Lehman Brothers Inc., Parent's financial advisors, to determine
whether the Company would be interested in pursuing a strategic transaction with
Parent, potentially involving a significant equity investment in the Company by
Parent. Through Morgan Stanley & Co. Incorporated, the Company's financial
advisor, Dr. Waksal conveyed concern to Mr. Markison that Parent had conducted
due diligence in the summer of 2000 and not pursued a transaction, but agreed to
meet with Mr. Markison to discuss Parent's interest in the Company.
On May 3, 2001, Dr. Waksal, Mr. Markison and Mr. Peter Ringrose, Chief
Scientific Officer of Parent, met for lunch in New York City to discuss Parent's
interest in the Company. Mr. Markison assured Dr. Waksal that Parent was
interested in pursuing a strategic transaction to completion. Dr. Waksal
provided guidance regarding potential structures for a strategic transaction
that would be acceptable to the Company, including his preference that the
Company remain a publicly traded entity. Over the course of the discussion,
Mr. Markison and Dr. Waksal agreed to explore a possible transaction whereby
Parent would acquire a majority interest (between 51% and 80%) in the Company
for Parent common stock valued at $65.00 per Share in a transaction which would
be tax-free to the Company's stockholders, together with a separate agreement
providing for a commercial collaboration with respect to IMC-C225. During the
balance of the month of May, meetings and telephonic discussions took place
between Mr. Markison and other representatives of Parent, and Mr. Daniel Lynch,
Chief Financial Officer of the Company, and other representatives of the
Company, during which time the parties outlined elements of each company's
responsibilities in a potential commercial collaboration. On May 19, 2001,
Parent and the Company entered into the Confidentiality Agreement (as defined in
Section 12), and thereafter employees of Parent conducted preliminary due
diligence on the Company. On May 29, 2001, Mr. Richard J. Lane, President of
Parent's pharmaceutical business, and Dr. Waksal met for dinner in New York City
and further discussed the potential strategic transaction between the companies.
On June 1, 2001, Mr. Lane and Dr. Waksal met again to discuss a possible
transaction, including an outline of a transaction structure and governance
proposal prepared by Davis Polk & Wardwell, the Company's legal advisors,
regarding the acquisition by Parent of a majority stake in the Company.
At a regularly scheduled meeting of Parent's Board of Directors on June 5,
2001, Parent's management discussed the proposed transaction structure with
Parent's Board of Directors. After this Board meeting, Parent's management
decided to consider alternative transaction structures.
On June 5, 2001, Cravath, Swaine & Moore, Parent's legal advisors, delivered
a due diligence request list to the Company on behalf of Parent. On June 7,
2001, representatives of the Company and Parent met to discuss Parent's proposed
due diligence review of the Company. Shortly thereafter, employees of Parent and
representatives of Parent's legal and financial advisors conducted an extensive
due diligence review on the Company in the areas of clinical development, legal
matters, information
19
technology, marketing and sales, tax, finance, manufacturing, intellectual
property and regulatory affairs.
On June 7, 2001, Mr. Markison advised Mr. Lynch that Parent's management
wished to pursue other strategic alternatives to acquiring a majority interest
in the Company, including the acquisition of a minority interest in the Company.
In late June, Parent's management determined that the acquisition of a
controlling stake in the Company by Parent would have certain operational,
financial and legal consequences that were undesirable and would therefore not
be in Parent's best interests. Rather, Parent determined that the acquisition of
a minority interest in the Company, together with a separate commercial
agreement relating to the co-development, co-promotion and distribution of the
Company's IMC-C225 compound, would be a preferable structure for a potential
strategic transaction with the Company. Thereafter, Dr. Waksal was contacted by
Mr. Peter Dolan, Chief Executive Officer of Parent, and Mr. Lane, who confirmed
to Dr. Waksal that Parent was not interested in a transaction where Parent
acquired a majority interest in the Company and the Company remained a
publicly-traded entity. Mr. Dolan and Mr. Lane reaffirmed Parent's interest in
the Company and Parent's intent to consider other strategic structures that met
the economic and business objectives of both companies. Dr. Waksal stated that
he was willing to consider alternative proposals, but emphasized that he was not
interested in a commercial transaction that did not also include a significant
equity investment in the Company by Parent. Dr. Waksal also advised Parent that
he felt the Company's existing stockholders would benefit most if Parent
acquired an equity interest through a tender offer to the Company's existing
stockholders.
On June 26, 2001, representatives of Parent and the Company met, together
with each party's legal and financial advisors, at the offices of the Company.
At this meeting, Parent distributed to the Company and its advisors an outline
of a proposed commercial transaction for the co-development, co-promotion and
distribution of IMC-C225 and an equity structure which proposed an acquisition
of a 19.9% interest in the Company and included standstill, governance and other
terms. Dr. Waksal and others asked questions regarding some of the proposed
terms, and the parties agreed to meet again later that week. On June 28, 2001,
the Company, Parent, and their respective financial and legal advisors met to
further discuss terms of the equity and commercial transactions. At this
meeting, the Company distributed to Parent and its advisors a revised outline of
a proposed equity and commercial transaction structure.
During the end of June and the first two weeks of July, Parent, the Company
and their respective legal and financial advisors met several times to discuss
terms and conditions of a 19.9% equity investment and a commercial transaction
relating to IMC-C225. Outlines of proposed terms and conditions were exchanged
several times during this period. Also during this time, representatives of
Parent and the Company and their respective financial advisors discussed the
price at which Parent would offer to purchase the Shares.
On July 17, 2001, at a regularly scheduled meeting of Parent's Board of
Directors, Parent's management discussed the progress of the discussions with
Parent's Board.
On July 19 and July 20, telephonic discussions were held between Parent and
the Company to discuss outstanding issues relating to the effectiveness of the
commercial arrangements, the terms and conditions of Parent's tender offer for
the Shares, the terms of the standstill provisions to be included in the
Stockholder Agreement, Parent's ability to acquire additional shares of the
Company and certain other terms of the governance and commercial agreements. On
July 20, Parent and the Company agreed, on a preliminary basis, to a tender
offer price of $70.00 per Share. On July 23, 2001, Parent, the Company and their
respective advisors met at the offices of the Company's legal advisors and
discussed outstanding issues relating to the terms of the transactions. Also
during this time, a meeting was held at the offices of Kenyon & Kenyon, the
Company's outside intellectual property counsel, at which the parties reviewed
open issues relating to the Company's patents and other intellectual
20
property. On July 25, 2001, the parties agreed to non-binding indicative term
sheets relating to Parent's equity investment in the Company and the commercial
transaction relating to IMC-C225.
On July 30, 2001, Parent and the Company exchanged initial drafts of the
Acquisition Agreement, the Stockholder Agreement and the Commercial Agreement.
During the month of August, representatives of the Company and Parent met
several times, together with their respective legal and financial advisors, to
negotiate the terms of these definitive agreements. On August 7, 2001,
Mr. Lane, Mr. Markison, Dr. Waksal, Mr. Lynch and Dr. Harlan Waksal, Chief
Operating Officer of the Company, met for dinner in New York City to discuss the
progress of the negotiations. On August 15, Mr. Dolan, Mr. Lane, Dr. Samuel
Waksal, Dr. Harlan Waksal, Mr. Lynch and Dr. Andrew G. Bodnar, Vice President of
Medical and External Affairs of Parent, met for dinner in New York City to again
discuss the progress of the negotiations, as well as the commercial
collaboration relating to IMC-C225.
During the first two weeks of September, the parties and their respective
legal advisors continued to negotiate terms of the Acquisition Agreement, the
Stockholder Agreement and the Commercial Agreement. On September 11, 2001, the
Boards of Directors of Parent and the Company each were scheduled to meet to
consider the transaction. These meetings were cancelled due to the terrorist
attacks in New York City. During the week of September 10 through September 16,
the parties' respective legal advisors had several telephonic discussions to
finalize the terms of the agreements. On September 17, 2001, a rescheduled
telephonic meeting of the Board of Directors of Parent was held, at which
Parent's Board of Directors unanimously approved each of the Acquisition
Agreement, the Stockholder Agreement and the Commercial Agreement and the
transactions contemplated thereby.
A rescheduled telephonic meeting of the Company's Board of Directors was
held on September 19, 2001, on which Parent has been advised that
representatives of the Company's financial and legal advisors were present. At
this meeting, the Company's Board of Directors, by a unanimous vote of those
directors present and voting, approved the Acquisition Agreement, the
Stockholder Agreement and the Commercial Agreement and the transactions
contemplated thereby.
On September 19, 2001, Parent and the Company issued separate press releases
announcing the execution of the Acquisition Agreement, the Stockholder Agreement
and the Commercial Agreement.
During the Offer, Parent intends to have ongoing contacts with the Company
and its officers and directors.
12. PURPOSE OF THE OFFER; THE ACQUISITION AGREEMENT; THE STOCKHOLDER AGREEMENT;
THE COMMERCIAL AGREEMENT; THE CONFIDENTIALITY AGREEMENT; PLANS FOR THE
COMPANY
PURPOSE OF THE OFFER
The purpose of the Offer is to enable the Purchaser to acquire an equity
interest in the Company in connection with the Commercial Agreement described
below among Parent, E.R. Squibb and the Company.
ACQUISITION AGREEMENT
The following is a summary of the material terms of the Acquisition
Agreement. The summary is qualified in its entirety by reference to the
Acquisition Agreement, a copy of which has been filed with the SEC as
Exhibit (d)(1) to the Schedule TO. The Acquisition Agreement may be inspected
at, and copies may be obtained from, the same places and in the manner set forth
in Section 8 of this Offer to Purchase. The Acquisition Agreement should be read
in its entirety for a more complete description of the matters summarized below.
Defined terms used in the following summary and not defined in this Offer to
Purchase have the respective meanings assigned to those terms in the Acquisition
Agreement.
THE OFFER. The Acquisition Agreement provides that the Purchaser will
commence the Offer as promptly as practicable, but no later than October 3,
2001. Upon the terms and subject to satisfaction
21
or waiver of the conditions to the Offer set forth below, promptly after the
expiration of the Offer, the Purchaser will accept for payment, and pay for, all
Shares (including (i) all Shares issuable in respect of exercisable,
in-the-money options to acquire Shares which have been conditionally exercised
by present and former employees and directors of the Company for purposes of
participating in the Offer, and (ii) all Shares issued prior to the expiration
of the Offer upon the conversion of any convertible securities or upon the
exercise of any options or warrants) validly tendered and not withdrawn pursuant
to the Offer, but not in excess of 14,392,003 Shares (the "MAXIMUM NUMBER"). If
the number of Shares that are validly tendered and not withdrawn exceeds the
Maximum Number, the Purchaser will accept for purchase tendered Shares in an
amount equal to the Maximum Number, on a pro rata basis from each stockholder
who has validly tendered Shares pursuant to the Offer.
The Purchaser may waive any of the conditions to the Offer and modify the
terms of the Offer, except that, without the consent of the Company, the
Purchaser may not (i) increase or reduce the Maximum Number, (ii) reduce the
price per Share to be paid pursuant to the Offer, (iii) add to or modify any
conditions to the Offer, (iv) change the form of consideration payable in the
Offer or (v) otherwise amend the Offer in any manner adverse to the holders of
Shares.
The initial expiration date of the Offer shall be October 26, 2001. If any
of the conditions to the Offer are not satisfied or waived on the expiration
date of the Offer, the Purchaser will extend the Offer until such conditions are
satisfied or waived. Each extension of the Offer shall be for a period of not
more than ten business days. The Purchaser may not, without the Company's
consent, extend the Offer beyond the Termination Date (as defined below). The
Purchaser will also extend the Offer for any period required by any rule,
regulation, interpretation or position of the Commission or the staff thereof
applicable to the Offer or any period required by applicable law.
CONDITIONS TO THE OFFER. Subject to the terms of the Acquisition Agreement,
the Purchaser is not required to accept for payment any Shares and may terminate
the Offer in the cases set forth and described in Section 14--"Conditions to the
Offer"--of this Offer to Purchase.
ADDITIONAL SHARE ISSUANCE. If the number of Shares that the Purchaser
accepts for payment in the Offer is less than the Maximum Number, the Company
will issue and sell to the Purchaser, and the Purchaser will purchase from the
Company for cash, a number of Shares equal to the difference between the Maximum
Number and the number of Shares accepted for payment by the Purchaser in the
Offer at a price per Share of $70, net to the Company in cash (the "ADDITIONAL
SHARE ISSUANCE"). The Company's, Parent's and the Purchaser's obligations to
effect the Additional Share Issuance are subject to the following conditions:
- The applicable waiting period under the HSR Act shall have expired or been
terminated;
- There shall not have been any action taken, or any statute, rule,
regulation, injunction, judgment, order or decree enacted, entered,
enforced, promulgated, issued or deemed applicable to Parent, the
Purchaser, the Company or the Additional Share Issuance, by any court,
government or governmental authority or agency in the United States or any
state thereof, other than the application of the waiting period provisions
of the HSR Act to the Additional Share Issuance, that prohibits the
consummation of the Additional Share Issuance or imposes material
limitations on the ability of Parent or the Purchaser to acquire or hold,
or exercise full rights of ownership of, any Shares issued pursuant to the
Additional Share Issuance, including the right to vote such Shares on all
matters properly presented to the stockholders of the Company;
22
- The Purchaser shall have accepted for payment all Shares, subject to the
Maximum Number, validly tendered and not withdrawn in the Offer; and
- The Shares to be issued shall have been authorized for quotation on the
Nasdaq National Market upon official notice of issuance.
BOARD RECOMMENDATION. The Board of Directors of the Company has approved of
and consented to the Offer and has resolved to recommend that the Company's
stockholders accept the Offer and tender their Shares in the Offer. Such
recommendation may be modified or withdrawn by the Board of Directors of the
Company in the exercise of its fiduciary duties.
REPRESENTATIONS AND WARRANTIES. The Acquisition Agreement contains
representations and warranties by the Company with respect to the following:
- the corporate existence and powers of the Company;
- the corporate power and authority of the Company to enter into the
Acquisition Agreement and the Stockholder Agreement and to consummate the
transactions contemplated by those agreements;
- required governmental authorizations;
- the absence of conflicts, breaches or defaults triggered by the
Acquisition Agreement or the Stockholder Agreement;
- the capitalization of the Company;
- the accuracy of documents filed by the Company with the SEC;
- the Company's financial statements;
- the absence of undisclosed material liabilities;
- compliance with laws;
- the absence of material undisclosed litigation of the Company;
- the absence of certain material changes affecting the Company's business;
- intellectual property;
- actions taken to exempt the transactions contemplated by the Acquisition
Agreement from certain antitakeover laws; and
- the authorization and absence of restrictions on any Shares issuable to
the Purchaser by the Company under the Acquisition Agreement.
The Acquisition Agreement contains representations and warranties by Parent
with respect to the following:
- the corporate existence and powers of Parent and the Purchaser;
- the corporate power and authority of Parent and the Purchaser to enter
into the Acquisition Agreement and the Stockholder Agreement and to
consummate the transactions contemplated by those agreements;
- required governmental authorizations;
- the absence of conflicts, breaches or defaults triggered by the
Acquisition Agreement or the Stockholder Agreement;
- the availability of financing to consummate the transactions contemplated
by the Acquisition Agreement;
23
- no resale or distribution of Shares issuable to the Purchaser by the
Company under the Acquisition Agreement; and
- no prior ownership of Shares by Parent and its affiliates.
Certain representations and warranties of Parent and the Company are
qualified by "Material Adverse Effect," which is defined in the Acquisition
Agreement with respect to the Company as a material adverse effect on the
condition (financial or otherwise), business, assets (including the Company's
manufacturing facilities) or results of operations or prospects (including
prospects for the commercialization of IMC-C225) of the Company, except any such
effect resulting from or arising in connection with (i) the Acquisition
Agreement or the transactions contemplated thereby or the announcement thereof,
(ii) changes, circumstances or conditions (including changes in applicable laws,
rules and regulations) affecting the biotechnology industry in general, or
(iii) changes in general economic conditions or financial markets. With respect
to Parent, "Material Adverse Effect" means a material impairment of the ability
of Parent or the Purchaser to perform its obligations under or consummate the
transactions contemplated by the Acquisition Agreement, the Stockholder
Agreement or, in the case of Parent only, the Commercial Agreement, in
accordance with the terms thereof.
COVENANTS OF THE COMPANY. The Company may not take any Prohibited Action
(as defined below under "Stockholder Agreement") during the term of the
Acquisition Agreement without the consent of Parent.
In addition, the Acquisition Agreement provides that, during the term of the
Acquisition Agreement, the Company will not, nor will it authorize or permit any
subsidiary or any officer, director or employee of, or any investment banker,
attorney or other advisor or representative of the Company or any subsidiary of
the Company to, directly or indirectly, solicit, initiate or encourage the
submission of any public offer or proposal by a third party to acquire
beneficial ownership of more than 35% of the outstanding Shares.
COVENANTS OF PARENT AND THE COMPANY. The Acquisition Agreement also
contains agreements between the Company and Parent to take certain actions,
including: (i) using reasonable best efforts to do all things necessary, proper
or advisable to consummate the transactions contemplated by the Acquisition
Agreement, (ii) cooperating with one another in the preparation of the documents
relating to the Offer and the making of necessary filings, (iii) consulting one
another in the making of public announcements and (iv) providing notice to the
other party of certain events.
TERMINATION. The Acquisition Agreement may be terminated at any time:
- by mutual written agreement of the Company and Parent;
- by either the Company or Parent, if the Offer has not been consummated on
or before the Termination Date; PROVIDED that the Acquisition Agreement may
not be terminated by any party pursuant to this provision if, at the time
of termination, either:
(A) any of the events referred to in clause (a) of the first sentence of
Section 14--"Certain Conditions to the Offer"--of this Offer to Purchase
exist (other than (i) such events that exist as a result of action by the
U.S. Federal Trade Commission or the Antitrust Division of the U.S.
Department of Justice brought under antitrust laws (an "ANTITRUST
INJUNCTION"), or (ii) such events that relate to or arose in the context of
a bona fide public offer or proposal by a third party to acquire beneficial
ownership of more than 35% of the outstanding Shares (a "THIRD PARTY CHANGE
OF CONTROL INJUNCTION")); or
(B) any of the events referred to in clause (f) of the first sentence of
Section 14-- "Certain Conditions to the Offer"--of this Offer to Purchase
(the "MARKET FAILURE CONDITION") exist.
24
The right to terminate the Acquisition Agreement pursuant to this provision
is not available to any party whose failure to perform any of its obligations
under the Acquisition Agreement results in the failure of the Offer to be
consummated:
- by the Company, if the Purchaser shall have failed to commence the Offer
in the time required by the Acquisition Agreement;
- by Parent, if (i) any of the representations or warranties of the Company
contained in the Acquisition Agreement or the Commercial Agreement,
disregarding all qualifications and exceptions contained therein relating
to materiality or Material Adverse Effect, shall fail to be true and
correct as of the date made, other than such failures that would not have,
individually or in the aggregate, a Material Adverse Effect on the Company
(except for certain representations regarding the Company's
capitalization, which shall be true and correct in all material respects),
(ii) the Company shall have breached or failed to perform in any material
respect any of its obligations under the Acquisition Agreement, or
(iii) the Company shall have taken a Prohibited Action without the consent
of Parent after September 19, 2001, and in the cases of breaches of
representations, warranties and covenants, such breaches cannot be cured
or have not been cured within 30 days after notice;
- by the Company, if (i) any of the representations or warranties of Parent
contained in the Acquisition Agreement or the Commercial Agreement,
disregarding all qualifications and exceptions contained therein relating
to materiality or Material Adverse Effect, shall fail to be true and
correct as of the date made (or if expressly made as of an earlier date,
as of such date), other than for such failures that would not have,
individually or in the aggregate, a Material Adverse Effect on Parent, and
(ii) either Parent or the Purchaser has breached any obligation under the
Acquisition Agreement, the Stockholder Agreement or, in the case of Parent
only, the Commercial Agreement required to be performed on or prior to
such time and, in the cases of breaches of representations, warranties and
covenants, such breaches cannot be cured or have not been cured within
30 days after notice; or
- by either the Company or Parent, if:
- under the terms of the Acquisition Agreement, the Company, Parent and
the Purchaser are obligated to effect the Additional Share Issuance,
and the Additional Share Issuance is not consummated within 30 days
after the date on which the Purchaser has accepted for purchase Shares
tendered in the Offer;
- under the terms of the Acquisition Agreement, the Company, Parent and
the Purchaser are obligated to effect the Market Failure Share Issuance
(as defined below), and the Market Failure Share Issuance is not
consummated within 30 days after the termination of the Offer by either
party due to the failure of the Market Failure Condition; or
- under the terms of the Acquisition Agreement, the Company, Parent and
the Purchaser are obligated to effect the Open Market Top-Up Share
Issuance (as defined below), and the Open Market Top-Up Share Issuance
is not consummated within 30 days after the final day of the Open
Market Purchase Period (as defined below).
"Termination Date" means the earlier of (A) April 1, 2002; PROVIDED that if
on or before April 1, 2002, the Purchaser has not accepted for payment Shares
validly tendered and not withdrawn in the Offer and, at April 1, 2002 (i) the
applicable waiting period under the HSR Act shall not have expired or been
terminated or there exists an Antitrust Injunction, then such date may be
extended by either party from time to time to any date on or prior to
September 30, 2002 by notice in writing to the other party, (ii) there exists a
Third Party Change of Control Injunction, then such date shall be extended to
the earlier to occur of (a) September 30, 2002, and (b) such date prior to
September 30, 2002 as the Company shall determine in its sole discretion by
notice in writing to Parent at any time prior to September 30, 2002, or
(iii) there exists a failure of the Market Failure Condition, then such date may
25
be extended by either party from time to time to any date on or prior to
September 30, 2002 by notice in writing to the other party; and (B) the date
upon which any of the events referred to in Section 14--"Certain Conditions to
the Offer"--of this Offer to Purchase shall have become final and nonappealable.
MARKET FAILURE SHARE ISSUANCE. If at the Termination Date (as may be
extended pursuant to the terms of the Acquisition Agreement) the Purchaser has
not accepted for payment Shares tendered in the Offer and all conditions to the
Offer have been satisfied except for the Market Failure Condition, either party
may elect to terminate the Offer. Upon any such election, the Company will issue
and sell to the Purchaser, and the Purchaser will purchase from the Company for
cash, a number of Shares equal to the Maximum Number, at a price per Share of
$70, net to the Company in cash (the "MARKET FAILURE SHARE ISSUANCE").
The obligations of the Company, Parent and the Purchaser to complete the
Market Failure Share Issuance will be subject to the following conditions:
(i) the expiration or termination of the waiting period under the HSR Act,
(ii) no injunction or other governmental action prohibits the consummation of
the Market Failure Share Issuance or imposes material limitations on Parent's or
the Purchaser's ownership or voting rights with respect to the Shares to be
issued, (iii) the Shares to be issued have been authorized for listing on the
Nasdaq National Market, and (iv) the Offer has been terminated as described in
the preceding paragraph.
OPEN MARKET PURCHASE. If at the Termination Date (as may be extended
pursuant to the terms of the Acquisition Agreement) the Purchaser has not
accepted for payment Shares tendered in the Offer and there exists on that date
a failure of the condition specified in clause (a) of Section 14--"Certain
Conditions to the Offer"--of this Offer to Purchase that is not an Antitrust
Injunction or a Third Party Change of Control Injunction, either party may elect
to terminate the Offer. Upon any such election, the Purchaser shall, to the
fullest extent permitted by law and not prohibited by the terms of any
injunction or other governmental action, during the twelve-month period
commencing on the date immediately following the date on which the Offer is
terminated (the "OPEN MARKET PURCHASE PERIOD"), from time to time purchase in
transactions through the Nasdaq National Market or otherwise, a number of Shares
in the aggregate equal to the Maximum Number (the "OPEN MARKET PURCHASE");
provided, that the Purchaser's obligation to purchase Shares in the Open Market
Purchase shall terminate at the time the Purchaser has paid $1,000,000,000 in
the aggregate to purchase Shares in the Open Market Purchase.
If Parent and the Purchaser have complied with their obligations with
respect to the Open Market Purchase, and immediately following the Open Market
Purchase Period, Parent and its affiliates do not own at least 5% of the
then-outstanding Shares, subject to the conditions set forth below, the
Purchaser will purchase from the Company for cash, a number of Shares equal to
the difference between the number of Shares representing 5% of the Shares
outstanding immediately following the Open Market Purchase Period and the number
of Shares owned by Parent and its affiliates immediately following the Open
Market Purchase Period, at a price per Share equal to the average closing price
of the Shares on the Nasdaq National Market for the 30 Nasdaq trading days
ending on and including the last business day of the Open Market Purchase
Period, net to the Company in cash (the "OPEN MARKET TOP-UP SHARE ISSUANCE").
Within two business days following the end of the Open Market Purchase
Period, Parent will pay to the Company an amount equal to (A) the excess, if
any, of (1) $70.00, over (2) the average purchase price paid by the Purchaser
for all Shares acquired in the Open Market Purchase, multiplied by (B) the
number of Shares purchased by the Purchaser in the Open Market Purchase.
The respective obligations of the Company, Parent and the Purchaser to
complete the Open Market Top-Up Share Issuance will be subject to the following
conditions: (i) the expiration or termination of the waiting period under the
HSR Act, (ii) no injunction or other governmental action prohibits the
consummation of the Open Market Top-Up Share Issuance or imposes material
limitations on Parent's or the Purchaser's ownership or voting rights with
respect to the Shares to be issued, (iii) the Shares to be issued have been
authorized for listing on the Nasdaq National Market and (iv) the Offer has been
terminated as described above.
26
EFFECT OF TERMINATION. If the Acquisition Agreement is terminated then none
of the Company, Parent, nor the Purchaser will have any liability to the other
party, except for damages incurred as a result of breaches of representations,
warranties and covenants contained in the Acquisition Agreement.
STOCKHOLDER AGREEMENT
The following is a summary of the material terms of the Stockholder
Agreement. The summary is qualified in its entirety by reference to the
Stockholder Agreement, a copy of which has been filed with the SEC as
Exhibit (d)(2) to the Schedule TO. The Stockholder Agreement may be inspected
at, and copies may be obtained from, the same places and in the manner set forth
in Section 8 of this Offer to Purchase. The Stockholder Agreement should be read
in its entirety for a more complete description of the matters summarized below.
Defined terms used in the following summary and not defined in this document
have the respective meanings assigned to those terms in the Stockholder
Agreement. References in this description of the Stockholder Agreement to
Parent's ownership interest in the Company mean the ownership interest of Parent
and all of Parent's affiliates.
COMPOSITION OF THE BOARD OF DIRECTORS. Prior to completion of the
acquisition of Shares pursuant to the Acquisition Agreement, the Company's Board
of Directors will be increased from ten to twelve members. After completion of
the acquisition, Parent will have the right to have the Company nominate a
number of directors to the Board (each a "PARENT DIRECTOR") based upon Parent's
ownership interest in the Company. Any individual designated by Parent to serve
as a Parent Director will be a senior officer or director of Parent. Parent will
have the right to have the Company nominate:
- two Parent Directors if Parent's ownership interest is 12.5% or greater;
- one Parent Director if Parent's ownership interest is 5% or greater but
less than 12.5%; and
- no Parent Directors if Parent's ownership interest is less than 5%.
If the size of the Board of Directors of the Company is increased to a
number greater than twelve, the number of Parent Directors will be increased,
subject to rounding, such that the number of Parent Directors is proportionate
to the lesser of Parent's then-current ownership interest in the Company and
19.9%. Parent will have no right to have the Company nominate any Parent
Directors if (i) the Company has terminated the Commercial Agreement due to a
material breach by Parent or (ii) Parent's ownership interest in the Company
remains below 5% for 45 consecutive days.
VOTING OF SHARES. During the period in which Parent has the right to have
the Company nominate at least one Parent Director, Parent and its affiliates
will vote all of their Shares in the same proportion as the votes cast by all of
the Company's other stockholders with respect to the election or removal of
non-Parent Directors.
COMMITTEES OF THE BOARD OF DIRECTORS. During the period in which Parent has
the right to have the Company nominate at least one Parent Director, subject to
certain exceptions, one member of each committee of the Board will be a Parent
Director.
APPROVAL REQUIRED FOR CERTAIN ACTIONS. Until September 19, 2006, or, if
earlier, the occurrence of any of (i) a reduction in Parent's ownership interest
in the Company to below 5% for 45 consecutive days, (ii) a transfer or other
disposition of Shares by Parent or any of its affiliates such that Parent and
its affiliates own or have control over less than 75% of the maximum number of
Shares owned by Parent and its affiliates at any time after September 19, 2001,
(iii) an acquisition by a third party of more than 35% of the outstanding
Shares, (iv) a termination of the Commercial Agreement by Parent due to
significant regulatory or safety concerns regarding IMC-C225, or (v) a
termination of the
27
Commercial Agreement by the Company due to a material breach by Parent, the
Company will not do any of the following (each a "PROHIBITED ACTION") without
the consent of the Parent Directors:
- issue additional Shares or securities convertible into Shares in excess of
21,473,002 Shares in the aggregate, subject to appropriate adjustments for
any stock split, reverse stock split or other similar transactions
(certain issuances of Shares or securities convertible into Shares,
including Shares issued in connection with acquisitions and Shares issued
in respect of convertible securities outstanding as of September 19, 2001,
are not counted for purposes of this limitation);
- incur additional indebtedness if the total of (i) the principal amount of
indebtedness incurred since September 19, 2001 and then-outstanding, and
(ii) the net proceeds from the issuance of any redeemable preferred stock
then-outstanding, would exceed the amount of indebtedness for borrowed
money of the Company outstanding as of September 19, 2001 by more than
$500 million;
- acquire any business if the aggregate consideration for such acquisition,
when taken together with the aggregate consideration for all other
acquisitions consummated during the previous twelve months, is in excess
of 25% of the aggregate value of the Company at the time the Company
enters into the binding agreement relating to such acquisition;
- dispose of all or any substantial portion of the non-cash assets of the
Company;
- enter into non-competition agreements which would be binding on Parent,
its affiliates or any Parent Director;
- take certain actions that would have a discriminatory effect on Parent or
any of its affiliates as a stockholder of the Company; or
- issue capital stock with more than one vote per share.
LIMITATION ON ADDITIONAL PURCHASES OF SHARES AND OTHER ACTIONS. Subject to
the exceptions set forth below, until September 19, 2006, or, if earlier, the
occurrence of any of (i) an acquisition by a third party of more than 35% of the
outstanding Shares, (ii) the first anniversary of a reduction in Parent's
ownership interest in the Company to below 5% for 45 consecutive days, or
(iii) the Company taking a Prohibited Action without the consent of the Parent
Directors, neither Parent nor any of its affiliates will acquire beneficial
ownership of any Shares or take any of the following actions:
- encourage any proposal for a business combination with, or an acquisition
of Shares of, the Company;
- participate in the solicitation of proxies from holders of Shares;
- form or participate in any "group" (within the meaning of
Section 13(d)(3) of the Exchange Act) with respect to the Shares;
- enter into any voting arrangement with respect to the Shares; or
- seek any amendment or waiver to these restrictions.
The following are exceptions to the standstill restrictions described above:
- The Purchaser may acquire Shares pursuant to the Acquisition Agreement;
- The Purchaser may acquire beneficial ownership of Shares either in the
open market or from the Company pursuant to the option described below, so
long as, after giving effect to any such acquisition of Shares, Parent's
ownership interest would not exceed 19.9%;
- Parent may make a non-public proposal to the Board of Directors of the
Company to acquire Shares if the Company provides material non-public
information to a third party in connection with, or begins active
negotiation of, an acquisition by a third party of more than 35% of the
outstanding Shares. If a third party has publicly proposed an acquisition
of more than 35% of the outstanding Shares and the Company has provided
material non-public information to such
28
third party, or has begun active negotiation of such transaction, Parent
will have the right to make a public or non-public proposal to the Board
of Directors of the Company to acquire additional Shares, but may only
acquire beneficial ownership of any additional Shares in a transaction for
the acquisition of (i) 100% of the outstanding Shares, or (ii) the same
percentage of the outstanding Shares which the third party has proposed to
acquire. If the Company accepts Parent's proposal, Parent may acquire
additional Shares in accordance with the terms of such proposal. If the
Company rejects Parent's proposal and enters into an agreement with
respect to an acquisition by a third party of more than 35% of the
outstanding Shares, Parent may make public its proposal to the Board of
Directors of the Company to acquire additional Shares, but may only
acquire beneficial ownership of any additional Shares in a transaction for
the acquisition of (i) 100% of the outstanding Shares, or (ii) the same
percentage of the outstanding Shares which the third party has agreed to
acquire. Parent's right to make a proposal as described in this paragraph
is subject to the condition that the Parent Directors recuse themselves
from all consideration of an acquisition by a third party of more than 35%
of the outstanding Shares;
- Parent may acquire Shares if such acquisition has been approved by a
majority of the non-Parent Directors; and
- Parent may make non-public requests to the Board of Directors of the
Company to amend or waive any of the standstill restrictions described
above, but if the Company agrees to such request and Parent subsequently
makes a proposal for a business combination with the Company or an
acquisition of additional Shares, such proposal by Parent will provide for
an acquisition of all outstanding Shares and equity interests of the
Company at a premium of at least 25% to the prevailing market price of the
Shares.
Certain of the exceptions to the standstill provisions described above will
terminate upon the occurrence of: (i) a reduction in Parent's ownership interest
in the Company to below 5% for 45 consecutive days, (ii) a transfer or other
disposition of Shares by Parent or any of its affiliates such that Parent and
its affiliates own or have control over less than 75% of the maximum number of
Shares owned by Parent and its affiliates at any time after September 19, 2001,
(iii) a termination of the Commercial Agreement by Parent due to significant
regulatory or safety concerns regarding IMC-C225, or (iv) a termination of the
Commercial Agreement by the Company due to a material breach by Parent.
OPTION TO PURCHASE SHARES IN THE EVENT OF DILUTION. The Purchaser will have
the right to purchase additional Shares from the Company, pursuant to an option
granted to Parent by the Company in the event that Parent's ownership interest
is diluted (other than by any transfer or other disposition by Parent or any of
its affiliates). Parent can exercise this right:
- once per year;
- if the Company issues Shares in excess of 10% of the then-outstanding
Shares in one day; and
- if Parent's ownership interest is reduced to below 5% or 12.5%.
The per share price for Shares purchased pursuant to the option shall be
equal to the average closing price of the Shares on the Nasdaq National Market
for the 30 Nasdaq trading days ending on and including the date on which Parent
notifies the Company that it has elected to exercise the option.
The Purchaser's right to purchase additional Shares from the Company
pursuant to this option will terminate on September 19, 2006 or, if earlier,
upon the occurrence of (i) an acquisition by a third party of more than 35% of
the outstanding Shares, or (ii) the first anniversary of a reduction in Parent's
ownership interest in the Company to below 5% for 45 consecutive days.
TRANSFERS OF SHARES. Until September 19, 2004, neither Parent nor any of
its affiliates may transfer any Shares or enter into any arrangement that
transfers any of the economic consequences associated
29
with the ownership of Shares. After September 19, 2004, neither Parent nor any
of its affiliates may transfer any Shares or enter into any arrangement that
transfers any of the economic consequences associated with the ownership of
Shares, except (1) pursuant to the registration rights described below,
(2) pursuant to Rule 144 under the Securities Act of 1933, or (3) for hedging
transactions permitted by clause (iii) of the following sentence. Any transfer
made pursuant to the preceding sentence is subject to the following limitations:
(i) the transferee may not acquire beneficial ownership of more than 5% of the
then-outstanding Shares; (ii) no more than 10% of the total outstanding Shares
may be sold in any one registered underwritten public offering; and
(iii) neither Parent nor any of its affiliates may transfer Shares (except for
registered firm commitment underwritten public offerings pursuant to the
registration rights described below) or enter into hedging transactions in any
twelve-month period that would, individually or in the aggregate, have the
effect of reducing the economic exposure of Parent and its affiliates by the
equivalent of more than 10% of the maximum number of Shares beneficially owned
by Parent and its affiliates at any time after September 19, 2001.
Notwithstanding the foregoing, the Purchaser may transfer all but not less
than all of the Shares owned by it to Parent, E.R. Squibb or another wholly
owned subsidiary of Parent.
The transfer of Shares by Parent or any of its affiliates (other than
pursuant to the preceding paragraph) will not result in the transfer of any
rights of Parent or any of its affiliates under the Stockholder Agreement.
REGISTRATION RIGHTS. The Company has granted Parent customary registration
rights with respect to Shares owned by Parent or any of its affiliates. After
September 19, 2004, Parent may make up to three requests to have the Company
register Shares under the Securities Act of 1933. The Company will not be
obligated to effect more than one request in any twelve-month period. In
addition, the Company has granted Parent the right to have Shares owned by
Parent or any of its affiliates registered in certain circumstances where the
Company files a registration statement with respect to newly-issued Shares or
Shares that a third party is seeking to have registered. All registration fees
and expenses will be (i) divided equally between the Company and Parent with
respect to the first and second registrations requested by Parent, and
(ii) borne by Parent with respect to a third registration.
COMMERCIAL AGREEMENT
The following is a summary of the material terms of the Commercial
Agreement. The summary is qualified in its entirety by reference to the
Commercial Agreement, a copy of which has been filed with the Commission as
Exhibit (d)(3) to the Schedule TO. The Commercial Agreement may be inspected at,
and copies may be obtained from, the same places and in the manner set forth in
Section 8 of this Offer to Purchase. The Commercial Agreement should be read in
its entirety for a more complete description of the matters described below.
Defined terms used in the following summary and not defined in this document
have the respective meanings assigned to those terms in the Commerical
Agreement.
RIGHTS GRANTED TO E.R. SQUIBB. Pursuant to the Commercial Agreement, the
Company has granted to E.R. Squibb (i) the exclusive right to distribute, and
the co-exclusive right to develop and promote (together with the Company) any
prescription pharmaceutical product using the compound IMC-C225 (the "PRODUCT")
in the United States and Canada (collectively, "NORTH AMERICA"), (ii) the
co-exclusive right to develop, distribute and promote (together with the Company
and Merck KGaA and its affiliates) the Product in Japan, and (iii) the
non-exclusive right to use the Company's registered trademarks for the Product
in North America and Japan (collectively, the "TERRITORY") in connection with
the foregoing. In addition, the Company has agreed not to grant any right or
license to any third party or otherwise permit any third party to develop
IMC-C225 for animal health or any other application outside the human health
field without the prior consent of E.R. Squibb (which consent may not be
unreasonably withheld).
RIGHTS GRANTED TO THE COMPANY. Pursuant to the Commercial Agreement, E.R.
Squibb has granted to the Company and its affiliates a license, without the
right to grant sublicenses (other than to Merck
30
KGaA and its affiliates for use in Japan and to any third party for use outside
the Territory), to use solely for the purpose of developing, using,
manufacturing, promoting, distributing and selling IMC-C225 or the Product, any
process, know-how or other invention developed solely by E.R. Squibb or Parent
which has general utility in connection with other products or compounds in
addition to IMC-C225 or the Product ("E.R. SQUIBB INVENTIONS").
UP-FRONT AND MILESTONE PAYMENTS. The Commercial Agreement provides for
up-front and milestone payments by E.R. Squibb to the Company of $1.0 billion in
the aggregate, with $200 million payable upon signing of the Commercial
Agreement, $300 million payable upon acceptance by the United States Food and
Drug Administration (the "FDA") of the initial regulatory filing for the Product
and $500 million payable upon receipt of marketing approval from the FDA. All
such payments are non-refundable, except that the two milestone payments of
$300 million and $500 million are refundable in the event that the Company
terminates the Commercial Agreement pursuant to the Antitrust Termination Right
(as defined below).
DISTRIBUTION FEES. The Commercial Agreement provides that E.R. Squibb shall
pay the Company distribution fees based on a percentage of annual sales of the
Product (less customary deductions, such as for returns, customary discounts,
chargeback payments and rebates, shipping costs and sales taxes) ("NET SALES")
by E.R. Squibb in North America. The base distribution fee rate is 39% of Net
Sales in North America. Pursuant to the Commercial Agreement, this rate will
increase in the event that Net Sales exceed certain agreed levels.
In the event that a third party acquires more than a 35% ownership interest
in the Company at any time prior to (or announces such acquisition prior to and
consummates any time after) the earliest to occur of (i) September 19, 2006,
(ii) the date which is 45 days after any date on which Parent's ownership
interest in the Company is less than 5%, or (iii) a transfer or other
disposition of Shares by Parent or any of its affiliates such that Parent and
its affiliates own or have control over less than 75% of the maximum number of
Shares owned by Parent and its affiliates at any time after September 19, 2001,
the distribution fee payable by E.R. Squibb for North America shall be adjusted
to a flat rate of 39% of all future Net Sales.
The Commercial Agreement also provides that the distribution fees for the
sale of the Product in Japan by E.R. Squibb or the Company shall be equal to 50%
of operating profit or loss with respect to such sales for any calendar month.
In the event of an operating profit, E.R. Squibb shall pay the Company the
amount of such distribution fee, and in the event of an operating loss, the
Company shall credit E.R. Squibb the amount of such distribution fee.
DEVELOPMENT OF THE PRODUCT. The Commercial Agreement provides that the
Company is primarily responsible for conducting the clinical studies and other
regulatory and manufacturing matters necessary to support, prepare and file the
initial regulatory filing for the Product until such filing with the FDA is
completed. As soon as practicable after filing, the Company will transition such
clinical and other studies ongoing with respect to the Product which the parties
have agreed will be transferred from the Company's sole control to the control
of both parties. The clinical development plans agreed to by the parties
pursuant to the Commercial Agreement set forth the activities to be undertaken
by the parties for the purpose of obtaining marketing approvals, providing
market support and developing new indications and formulations of the Product.
After the transition of the clinical and other studies, each party will be
primarily responsible for performing the studies designated to it in the
clinical development plans. In North America, the Company and E.R. Squibb will
each be responsible for 50% of the cost of studies not required by the FDA or
other applicable regulatory agency, and E.R. Squibb will be responsible for 100%
of the cost of studies required by the FDA or other applicable regulatory
agency. E.R. Squibb and the Company will each be responsible for 50% of the cost
of all studies in Japan (whether required or not required by the applicable
regulatory agency). Except as otherwise agreed upon by the parties, the Company
will own all registrations for the Product. However,
31
E.R. Squibb will be primarily responsible for the regulatory activities in the
Territory after the Product has been registered in each country in the
Territory.
DISTRIBUTION AND PROMOTION OF THE PRODUCT. Pursuant to the Commercial
Agreement, E.R. Squibb has agreed to use all commercially reasonable efforts to
launch, promote and sell the Product in the Territory with the objective of
maximizing the sales potential of the Product and promoting the therapeutic
profile and benefits of the Product in the most commercially beneficial manner.
In connection with its responsibilities for distribution, marketing and sales of
the Product in the Territory, E.R. Squibb will perform all relevant functions,
including but not limited to the provision of all sales force personnel,
marketing (including all advertising and promotional expenditures), warehousing
and physical distribution of the Product. However, the Company has the right, at
its election and sole expense, to co-promote with E.R. Squibb the Product in the
Territory. If the Company exercises this co-promotion option, it is entitled (at
its sole expense) to have its sales force and medical liaison personnel
participate in the promotion of the Product consistent with the marketing plan
agreed upon by the parties, provided that E.R. Squibb will retain the exclusive
rights to sell and distribute the Product in North America. Except to the extent
the Company exercises the co-promotion option, E.R. Squibb will be responsible
for 100% of the distribution, sales and marketing costs in North America, and
E.R. Squibb and the Company will each be responsible for 50% of the
distribution, sales, marketing costs and other related costs and expenses in
Japan.
MANUFACTURE AND SUPPLY. The Commercial Agreement provides that the Company
will be responsible for the manufacture and supply of all requirements of
IMC-C225 in bulk form ("API") for clinical and commercial use in the Territory,
and that E.R. Squibb will purchase all of its requirements of API for commercial
use from the Company. The Company will supply API for clinical use at the
Company's fully burdened manufacturing cost, and will supply API for commercial
use at the Company's fully burdened manufacturing cost plus a mark-up of 10%.
The parties intend to negotiate the Company's use of the process development at
one of Parent's facilities for the support of a non-commercial supply of API.
Upon the expiration, termination or assignment of any existing agreements
between the Company and third party manufacturers, E.R. Squibb will be
responsible for processing API into the finished form of the Product.
MANAGEMENT. The parties have agreed to form the following committees for
purposes of managing their relationship and their respective rights and
obligations under the Commercial Agreement:
- a joint executive committee (the "JEC"), which will consist of certain
senior officers of each party. The JEC will be co-chaired by a
representative of each of the Company and Parent. The JEC will be
responsible for, among other things, managing and overseeing the
development and commercialization of IMC-C225 and the Product pursuant to
the terms of the Commercial Agreement, approving the annual budgets and
multi-year expense forecasts, and resolving disputes, disagreements and
deadlocks arising in the other committees;
- a product development committee (the "PDC"), which will consist of members
of senior management of each party with expertise in pharmaceutical drug
development and/or marketing. The PDC will be chaired by a representative
of the Company. The PDC will be responsible for, among other things,
managing and overseeing the development and implementation of the clinical
development plans, comparing actual versus budgeted clinical development
and regulatory expenses, and reviewing the progress of the registrational
studies;
- a joint commercialization committee (the "JCC"), which will consist of
members of senior management of each party with clinical experience and
expertise in marketing and sales. The JCC will be chaired by a
representative of Parent. The JCC will be responsible for, among other
things, overseeing the preparation and implementation of the marketing
plans, coordinating the sales efforts of E.R. Squibb and the Company, and
reviewing and approving the marketing and promotional plans for the
Product in the Territory; and
32
- a joint manufacturing committee (the "JMC"), which will consist of members
of senior management of each party with expertise in manufacturing. The
JMC will be chaired by a representative of the Company except where a
determination is made that a long term inability to supply API exists, in
which case the JMC will be co-chaired by representatives of E.R. Squibb
and the Company. The JMC will be responsible for, among other things,
overseeing and coordinating the manufacturing and supply of API and the
Product, and formulating and directing the manufacturing strategy for the
Product.
Any matter which is the subject of a deadlock (i.e., no consensus decision)
in the PDC, the JCC or the JMC will be referred to the JEC for resolution.
Subject to certain exceptions, deadlocks in the JEC will be resolved as follows:
(i) if the matter was also the subject of a deadlock in the PDC, by the
co-chairperson of the JEC designated by the Company, (ii) if the matter was also
the subject of a deadlock in the JCC, by the co-chairperson of the JEC
designated by Parent, or (iii) if the matter was also the subject of a deadlock
in the JMC, by the co-chairperson of the JEC designated by the Company. All
other deadlocks in the JEC will be resolved by arbitration.
RIGHT OF FIRST OFFER. If at any time prior to the earlier to occur of
September 19, 2006 and the first anniversary of the date which is 45 days after
any date on which Parent's ownership interest in the Company is less than 5%,
the Company decides to enter into a partnering arrangement with a third party
with respect to the Company's 2C6 anti-VEGF receptor monoclonal antibody (or any
humanized or chimeric version thereof or any substitute therefor) ("2C6"), the
Company must notify E.R. Squibb. If E.R. Squibb notifies the Company that it is
interested in such an arrangement, the Company will provide its proposed terms
to E.R. Squibb and the parties will negotiate in good faith for 90 days to
attempt to agree on the terms and conditions of such an arrangement. If the
parties do not reach agreement during this period, E.R. Squibb must propose the
terms of an arrangement which it is willing to enter into, and if the Company
rejects such terms it may enter into an agreement with a third party with
respect to such a partnering arrangement (provided that the terms of any such
agreement may not be more favorable to the third party than the terms proposed
by E.R. Squibb).
RIGHT OF FIRST NEGOTIATION. If, at any time during the Restricted Period
(as defined below), the Company is interested in establishing a partnering
relationship with a third party involving compounds or products not related to
IMC-C225, the Product or 2C6, the Company must notify E.R. Squibb and E.R.
Squibb will have 90 days, after receipt of written notice from the Company, to
enter into a non-binding heads of agreement with the Company with respect to
such a partnering relationship. In the event that E.R. Squibb and the Company do
not enter into a non-binding heads of agreement, the Company is free to
negotiate with third parties without further obligation to E.R. Squibb. The
"Restricted Period" means the period from September 19, 2001 until the earliest
to occur of (i) September 19, 2006; (ii) a reduction in Parent's ownership
interest in the Company to below 5% for 45 consecutive days; (iii) a transfer or
other disposition of Shares by Parent or any of its affiliates such that Parent
and its affiliates own or have control over less than 75% of the maximum number
of Shares owned by Parent and its affiliates at any time after September 19,
2001; (iv) an acquisition by a third party of more than 35% of the outstanding
Shares; (v) a termination of the Commercial Agreement by Parent due to
significant regulatory or safety concerns regarding IMC-C225; or (vi) a
termination of the Commercial Agreement by the Company due to a material breach
by Parent.
RESTRICTION ON COMPETING PRODUCTS. During the period from the date of the
Commercial Agreement until September 19, 2008, the parties have agreed not to,
directly or indirectly, develop or commercialize a competing product (defined as
a product which has as its only mechanism of action an antagonism of the EGF
receptor) in any country in the Territory. In the event that any party proposes
to commercialize a competing product or purchases or otherwise takes control of
a third party which has developed or commercialized a competing product, then
such party must either divest the competing product within 12 months or offer
the other party the right to participate in the commercialization and
development of the competing product on a 50/50 basis (provided that if the
33
parties cannot reach agreement with respect to such an arrangement, the
competing product must be divested within 12 months).
OWNERSHIP. The Commercial Agreement provides that the Company will own all
data and information concerning IMC-C225 and the Product and (except for the
E.R. Squibb Inventions) all processes, know-how and other inventions relating to
the Product and developed by either party or jointly by the parties. E.R. Squibb
will, however, have the right to use all such data and information, and all such
processes, know-how or other inventions, in order to fulfill its obligations
under the Commercial Agreement.
PRODUCT RECALLS. If E.R. Squibb is required by any regulatory authority to
recall the Product in any country in the Territory (or if the JCC determines
such a recall to be appropriate), then the Company and E.R. Squibb shall bear
the costs and expenses associated with such a recall (i) in North America, in
the proportion of 39% for the Company and 61% for E.R. Squibb and (ii) in Japan,
in the proportion for which each party is entitled to receive operating profit
or loss (unless the predominant cause for such a recall is the fault of either
party, in which case all such costs and expenses shall be borne by such party).
MANDATORY TRANSFER. Each of Parent and E.R. Squibb has agreed under the
Commercial Agreement that in the event it sells or otherwise transfers all or
substantially all of its pharmaceutical business or pharmaceutical oncology
business, it must also transfer to the transferee its rights and obligations
under the Commercial Agreement.
INDEMNIFICATION. Pursuant to the Commercial Agreement, each party has
agreed to indemnify the other for (i) its negligence, recklessness or wrongful
intentional acts or omissions, (ii) its failure to perform certain of its
obligations under the Commercial Agreement, and (iii) any breach of its
representations and warranties under the Commercial Agreement.
TERMINATION. Unless earlier terminated pursuant to the termination rights
discussed below, the Commercial Agreement expires with regard to the Product in
each country in the Territory on the later of September 19, 2018 and the date on
which the sale of the Product ceases to be covered by a validly issued or
pending patent in such country. The Commercial Agreement may be also be
terminated prior to such expiration as follows:
- by either party, in the event that the other party materially breaches any
of its material obligations under the Commercial Agreement and has not
cured such breach within 60 days;
- by E.R. Squibb, if the JEC determines that there exists a significant
concern regarding a regulatory or patient safety issue that would
seriously impact the long-term viability of the Product;
- by the Company, if (i) the Offer is not consummated on or before the
Termination Date and either (A) the waiting period under the HSR Act has
not expired or been terminated at such time or (B) there exists at such
time any injunction, judgment, order or decree as a result of any action
by the United States Federal Trade Commission or the Antitrust Division of
the United States Department of Justice prohibiting the consummation of
the Offer or imposing material limitations on the ability of Parent or the
Purchaser to acquire or hold, or exercise full rights of ownership of, any
Shares validly tendered and not withdrawn in the Offer (the "Antitrust
Termination Right"), or (ii) all of the conditions to the Offer are
satisfied but the Purchaser fails to purchase the Shares tendered in the
Offer; or
- by either party, in the event that the JEC does not approve additional
clinical studies that are required by the FDA in connection with the
submission of the initial regulatory filing within 90 days of receiving
the formal recommendation of the PDC concerning such additional clinical
studies.
34
LETTER AGREEMENTS
In connection with the Acquisition Agreement, each of Samuel D. Waksal,
Ph.D., President and Chief Executive Officer of the Company, and Harlan W.
Waksal, M.D., Executive Vice President and Chief Operating Officer of the
Company, entered into letter agreements with Parent (the "Tender Letter
Agreements"). Under the Tender Letter Agreements, each of Samuel D. Waksal,
Ph.D. and Harlan W. Waksal, M.D. agreed:
- to tender in the Offer and not withdraw a substantial portion of the
Shares beneficially owned by him, except where such tender would create
liability under Section 16(b) of the Exchange Act or where the Board of
Directors of the Company changes its recommendation with respect to the
Offer;
- in the event that the Board of Directors of the Company changes its
recommendation with respect to the Offer or a third party makes a bona
fide public offer or proposal to acquire beneficial ownership of more than
35% of the outstanding Shares, to tender in the Offer and not withdraw at
least 100,000 of the Shares beneficially owned by him; and
- not to sell or otherwise transfer or dispose of Shares beneficially owned
by him, except in the Offer or with the prior written consent of Parent if
such sale, transfer or other disposition would prevent him from performing
his obligations thereunder.
The Tender Letter Agreements terminate upon the earliest to occur of
(i) acceptance for payment of Shares in the Offer, (ii) termination of the
Acquisition Agreement pursuant to its terms, and (iii) termination of the Offer.
The above summary is qualified in its entirety by reference to the Tender
Letter Agreements, copies of which have been filed with the Commission as
Exhibits (d)(5) and (d)(6) to the Schedule TO. The Tender Letter Agreements may
be inspected at, and copies may be obtained from, the same places and in the
manner set forth in Section 8 of this Offer to Purchase. The Tender Letter
Agreements should be read in their entirety for a more complete description of
the matters summarized above.
CONFIDENTIALITY AGREEMENT
On May 19, 2001 the Company and Parent entered into a confidentiality
agreement (the "Confidentiality Agreement"). Under the terms of the
Confidentiality Agreement, the Company and Parent agreed to furnish to the other
party on a confidential basis certain information concerning their respective
businesses in connection with the evaluation of a possible transaction between
Parent and the Company. The Confidentiality Agreement also contains customary
standstill provisions.
The above summary is qualified in its entirety by reference to the
Confidentiality Agreement, a copy of which has been filed with the Commission as
Exhibit (d)(4) to the Schedule TO. The Confidentiality Agreement may be
inspected at, and copies may be obtained from, the same places and in the manner
set forth in Section 8 of this Offer to Purchase. The Confidentiality Agreement
should be read in its entirety for a more complete description of the matters
summarized above.
PLANS FOR THE COMPANY
Upon consummation of the Offer, the Purchaser and Parent expect that the
number of directors comprising the Board of Directors of the Company will be
increased from ten to twelve, and that Parent will designate two directors to be
appointed by the Company to its Board of Directors. Except as otherwise
described in this Offer to Purchase, Parent and the Purchaser have no current
plans or proposals that would relate to, or result in, any extraordinary
corporate transaction involving the Company, such as a merger, reorganization or
liquidation involving the Company or any of its subsidiaries, a sale or transfer
of a material amount of assets of the Company or any of its subsidiaries,
35
any change in the Company's capitalization or dividend policy or any other
material change in the Company's business, corporate structure or personnel.
Parent and its affiliates reserve the right to purchase, following consummation
or termination of this Offer, additional Shares from the Company, in the open
market or otherwise, subject in all cases to the terms and conditions of the
Acquisition Agreement and the Stockholder Agreement. Any additional purchases of
Shares could be at a price greater or less than the price to be paid for Shares
in the Offer.
APPRAISAL RIGHTS
Stockholders do not have appraisal rights as a result of the Offer.
13. DIVIDENDS AND DISTRIBUTIONS
According to the Company 10-K, the Company has not declared or paid any cash
dividends to date and has no present intention of declaring cash dividends in
the foreseeable future.
14. CERTAIN CONDITIONS TO THE OFFER
The Acquisition Agreement provides that notwithstanding any other provision
of the Offer, but subject to the terms of the Acquisition Agreement, the
Purchaser shall not be required to accept for payment any Shares and may
terminate the Offer if (i) prior to the Expiration Date of the Offer, the
applicable waiting period under the HSR Act shall not have expired or been
terminated, or (ii) at any time on or after September 19, 2001 and prior to
acceptance for payment of Shares by the Purchaser, any of the following
conditions exists which, in the good faith reasonable judgment of Parent, makes
it inadvisable to proceed with such acceptance for payment:
(a) there shall have been any action taken, or any statute, rule, regulation,
injunction, judgment, order or decree enacted, enforced, entered,
promulgated, issued or deemed applicable to Parent, the Purchaser, the
Company or the Offer, by any court, government or governmental authority or
agency in the United States or any state thereof, other than the application
of the waiting period provisions of the HSR Act to the Offer, that prohibits
the consummation of the Offer or imposes material limitations on the ability
of Parent or the Purchaser to acquire or hold, or exercise full rights of
ownership of, any Shares validly tendered and not withdrawn in the Offer,
including the right to vote such Shares on all matters properly presented to
the stockholders of the Company;
(b) the Company shall have breached or failed to perform in any material respect
any of its obligations under the Acquisition Agreement required to be
performed on or prior to such time;
(c) the Company shall have taken a Prohibited Action without the consent of
Parent after September 19, 2001;
(d) (i) any of the representations and warranties of the Company contained in
the Acquisition Agreement (other than the representations and warranties of
the Company set forth in Sections 4.05(a) and (b) of the Acquisition
Agreement) or the Commercial Agreement, disregarding all qualifications and
exceptions contained therein relating to materiality or Material Adverse
Effect, shall fail to be true and correct as of the date made (or if
expressly made as of an earlier date, as of such date), other than for such
failures to be true and correct that would not have, individually or in the
aggregate, a Material Adverse Effect on the Company, or (ii) the
representations and warranties of the Company set forth in Sections 4.05(a)
or (b) of the Acquisition Agreement shall fail to be true and correct in all
material respects as of the date made (or if expressly made as of an earlier
date, as of such date);
(e) the Acquisition Agreement shall have been terminated in accordance with its
terms; or
36
(f) there shall have occurred (i) any general suspension of trading in
securities on the Nasdaq National Market quotation system or (ii) a
declaration of a banking moratorium by federal or New York authorities or
(iii) any suspension of payments in respect of banks in the United States
that regularly participate in the market in loans to large corporations, in
each case which would prevent the acceptance for payment or the payment for
Shares accepted for payment in the Offer.
15. CERTAIN LEGAL MATTERS
GENERAL. Neither Parent nor the Purchaser is aware of any license or
regulatory permit that appears to be material to the business of the Company and
its subsidiaries, taken as a whole, that might be adversely affected by the
Purchaser's acquisition of Shares pursuant to the Offer, or of any approval or
other action by any federal, state or foreign governmental, administrative or
regulatory agency, other than the termination or expiration of all applicable
waiting periods under the HSR Act, that would be required or desirable for the
acquisition or ownership of Shares by the Purchaser as contemplated by this
Offer to Purchase. Should any such approval or other action be required or
desirable, Parent and the Purchaser currently contemplate that such approval or
other action will be sought. While the Purchaser does not presently intend to
delay the acceptance for payment of or payment for Shares tendered pursuant to
the Offer pending the outcome of any such matter, there can be no assurance that
any such approval or other action, if needed, would be obtained or would be
obtained without substantial conditions or that failure to obtain any such
approval or other action might not result in consequences adverse to the
business of the Company if such approvals were not obtained or such conditions
not complied with. If certain types of adverse action are taken with respect to
the matters discussed below, the Purchaser could decline to accept for payment
or pay for any Shares tendered pursuant to the Offer. See Section 14.
SECTION 203 OF THE DELAWARE ACT. Section 203 of the General Corporation Law
of the State of Delaware ("SECTION 203") prohibits a Delaware corporation such
as the Company from engaging in a Business Combination (defined as a variety of
transactions) with an Interested Stockholder (defined generally as a person that
is the beneficial owner of 15% or more of a corporation's outstanding voting
stock) for a period of three years following the time that such person became an
Interested Stockholder unless at least one of three exceptions are applicable.
In the event that the Purchaser acquires at least 10,848,243 Shares in the
Offer, the Purchaser would be deemed to be an Interested Stockholder. One of the
exceptions referred to above applies in cases where the board of directors of
the corporation, prior to the date a person became an Interested Stockholder,
approved either the Business Combination or the transaction that resulted in
such person becoming an Interested Stockholder. In the Acquisition Agreement the
Company has represented to Parent that it has adopted a resolution approving the
Offer for purposes of Section 203.
OTHER STATE TAKEOVER LAWS. Other than Section 203, neither Parent nor the
Purchaser is aware of any fair price, moratorium, control share acquisition or
other form of antitakeover statute, rule or regulation of any state or
jurisdiction that applies or purports to apply to the Offer. Except as described
in this Offer to Purchase, neither Parent nor the Purchaser has attempted to
comply with any state takeover statute or regulation in connection with the
Offer. Parent and the Purchaser reserve the right to challenge the validity or
applicability of any state law allegedly applicable to the Offer and nothing in
this Offer to Purchase nor any action taken in connection herewith is intended
as a waiver of that right. In the event that any state takeover statute is found
applicable to the Offer, the Purchaser might be unable to accept for payment or
pay for Shares tendered pursuant to the Offer or be delayed in continuing or
consummating the Offer. In such case, the Purchaser may not be obligated to
accept for payment or pay for any Shares tendered. See Section 14.
ANTITRUST. Under the provisions of the HSR Act applicable to the Offer, the
acquisition of Shares pursuant to the Offer may be consummated following the
expiration of a 15-calendar day waiting
37
period following the filing by Parent of a Notification and Report Form with
respect to the Offer, unless Parent receives a request for additional
information or documentary material from the Antitrust Division of the
Department of Justice (the "ANTITRUST DIVISION") or the United States Federal
Trade Commission (the "FTC"). This information was furnished to the Antitrust
Division and the FTC by the Purchaser on September 26, 2001. The Company is also
required to file a Notification and Report Form within ten days of the
Purchaser's filing. The Company filed this form with the Antitrust Division and
the FTC on September 28, 2001. If, within the initial 15-day waiting period,
either the Antitrust Division or the FTC requests additional information or
material from Parent concerning the Offer, the waiting period will be extended
and will expire at 11:59 p.m., New York City time, on the tenth calendar day
after the date of substantial compliance by Parent with such request. Only one
extension of the waiting period pursuant to a request for additional information
is authorized by the HSR Act. Thereafter, such waiting period may be extended
only by court order or with the consent of Parent. In practice, complying with a
request for additional information or material can take a significant amount of
time. In addition, if the Antitrust Division or the FTC raises substantive
issues in connection with a proposed transaction, the parties frequently engage
in negotiations with the relevant governmental agency concerning possible means
of addressing those issues and may agree to delay consummation of the
transaction while such negotiations continue.
The Antitrust Division and the FTC frequently scrutinize the legality under
the antitrust laws of transactions such as the Purchaser's proposed acquisition
of the Shares pursuant to the Offer. At any time before or after the Purchaser's
acquisition of Shares pursuant to the Offer, the Antitrust Division or the FTC
could take such action under the antitrust laws as it deems necessary or
desirable in the public interest, including seeking to enjoin the purchase of
Shares pursuant to the Offer or seeking the divestiture of Shares acquired by
the Purchaser or the divestiture of substantial assets of the Company or its
subsidiaries. Private parties may also bring legal action under the antitrust
laws under certain circumstances. There can be no assurance that a challenge to
the Offer on antitrust grounds will not be made or, if such a challenge is made,
of the result thereof.
16. FEES AND EXPENSES
Lehman Brothers is acting as Dealer Manager for the Offer and in addition is
providing certain financial advisory services to Parent in connection with the
Offer, for which services Lehman Brothers will receive customary compensation.
Parent has agreed to indemnify Lehman Brothers and certain related parties
against certain liabilities, including liabilities under the federal securities
laws, arising out of its engagement. In the ordinary course of business, Lehman
Brothers and its affiliates may actively trade or hold the securities of Parent
and the Company for their own account and for the accounts of customers and,
accordingly, may at any time hold a long or short position in such securities.
Parent has retained Innisfree M&A Incorporated to act as the Information
Agent and Equiserve Trust Company, N.A. to serve as the Depositary in connection
with the Offer. The Information Agent and the Depositary each will receive
reasonable and customary compensation for their services, be reimbursed for
certain reasonable out-of-pocket expenses and be indemnified against certain
liabilities and expenses in connection therewith, including certain liabilities
and expenses under the U.S. federal securities laws.
Parent and the Purchaser will not pay any fees or commissions to any broker
or dealer or other person (other than the Dealer Manager) in connection with the
solicitation of tenders of Shares pursuant to the Offer. Brokers, dealers,
banks, trust companies and other members will be reimbursed by Parent upon
request for customary mailing and handling expenses incurred by them in
forwarding material to their customers.
38
17. MISCELLANEOUS
The Offer is not being made to (nor will tenders be accepted from or on
behalf of) holders of Shares in any jurisdiction in which the making of the
Offer or the acceptance thereof would not be in compliance with the laws of such
jurisdiction. Neither Parent nor the Purchaser is aware of any jurisdiction in
which the making of the Offer or the acceptance thereof would not be in
compliance with the laws of such jurisdiction. To the extent Parent or the
Purchaser becomes aware of any state law that would limit the class of offerees
in the Offer, the Purchaser will amend the Offer and, depending on the timing of
such amendment, if any, will extend the Offer to provide adequate dissemination
of such information to holders of Shares prior to the expiration of the Offer.
In any jurisdiction the securities, blue sky or other laws of which require the
Offer to be made by a licensed broker or dealer, the Offer is being made on
behalf of the Purchaser by the Dealer Manager or one or more registered brokers
or dealers licensed under the laws of such jurisdiction.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATION ON BEHALF OF PARENT OR THE PURCHASER NOT CONTAINED HEREIN OR IN
THE LETTER OF TRANSMITTAL AND, IF GIVEN OR MADE, SUCH INFORMATION OR
REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED.
Parent and the Purchaser have filed with the Commission the Schedule TO
pursuant to Rule 14d-3 under the Exchange Act, together with exhibits,
furnishing certain additional information with respect to the Offer, and may
file amendments thereto. In addition, the Company has filed the Schedule 14D-9
pursuant to Rule 14d-9 under the Exchange Act, together with exhibits, setting
forth its recommendation with respect to the Offer and the reasons for such
recommendation and furnishing certain additional related information. Such
Schedules and any amendments thereto, including exhibits, should be available
for inspection and copies should be obtainable in the manner set forth in
Section 8 (except that such material will not be available at the regional
offices of the Commission).
BRISTOL-MYERS SQUIBB BIOLOGICS COMPANY
September 28, 2001
39
SCHEDULE I
DIRECTORS AND EXECUTIVE OFFICERS OF
PARENT AND THE PURCHASER
1. DIRECTORS AND EXECUTIVE OFFICERS OF PARENT. The name, citizenship, business
address, present principal occupation or employment and material
occupations, positions, offices or employment for the past five years of
each of the directors and executive officers of Parent are set forth below.
The business address of each such director or executive officer is
Bristol-Myers Squibb Company, 345 Park Avenue, New York, New York 10154.
NAME, POSITION WITH PARENT
AND CITIZENSHIP PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT AND EMPLOYMENT HISTORY
------------------------------------- -----------------------------------------------------------------
EXECUTIVE OFFICERS
Peter R. Dolan 1996 to 1997--President, Nutritionals and Medical Devices Group,
CHAIRMAN OF THE BOARD AND CHIEF a division of Parent
EXECUTIVE OFFICER 1997 to 1998--President, Pharmaceutical Group--Europe, a division
United States of Parent
1998 to 2000--Senior Vice President, Strategy and Organizational
Effectiveness, Corporate Staff of Parent
2000--President of Parent
2001 to present--Chairman of the Board and Chief Executive
Officer of Parent
Harrison M. Bains, Jr., 1988 to present--Vice President and Treasurer of Parent
VICE PRESIDENT AND TREASURER,
CORPORATE STAFF
United States
Andrew G. Bodnar, M.D. 1996 to 1998--Vice President, Medical and Legal Affairs,
VICE PRESIDENT, MEDICAL AND EXTERNAL Corporate Staff of Parent
AFFAIRS, CORPORATE STAFF 1998 to 1999--Vice President, Corporate Development, Worldwide
United States Medicines Group, a division of Parent
1999 to 2000--Vice President, Corporate Development, Worldwide
Medicines Group, a division of Parent
2000 to present--Vice President, Medical and External Affairs,
Corporate Staff of Parent
Donald J. Hayden, Jr. 1996 to 1997--Senior Vice President, Worldwide Franchise
EXECUTIVE VICE PRESIDENT, E-BUSINESS Management and Business Development, a division of Parent
AND STRATEGY, CORPORATE STAFF 1997 to 1998--President, Intercontinental, Worldwide Medicines
United States Group, a division of Parent
1998 to 2000--President, Worldwide Medicines Group, a division of
Parent.
2000 to present--Executive Vice President, e-Business and
Strategy, Corporate Staff of Parent
George P. Kooluris 1994 to present--Senior Vice President, Corporate Development,
SENIOR VICE PRESIDENT, CORPORATE Corporate Staff of Parent
DEVELOPMENT, CORPORATE STAFF
United States
Richard J. Lane 1996 to 1997--Senior Vice President, Marketing, U.S.
EXECUTIVE VICE PRESIDENT, CORPORATE Pharmaceuticals, a division of Parent
STAFF AND PRESIDENT, WORLDWIDE 1997 to 1998--President, U.S. Pharmaceuticals, a division of
MEDICINES Parent
United States 1998 to 2000--President, U.S. Medicines and Global Pharmaceutical
Group, a division of Parent
2000 to present--Executive Vice President, Corporate Staff of
Parent and President, Worldwide Medicines, a division of Parent
Sandra Leung 1996 to 1997--Assistant Counsel, Corporate Staff of Parent
SECRETARY AND HEAD OF THE OFFICE OF 1997 to 1999--Associate Counsel, Corporate Staff of Parent
CORPORATE CONDUCT, CORPORATE STAFF 1999 to present--Secretary and Head of the Office of Corporate
United States Conduct, Corporate Staff of Parent
S-1
NAME, POSITION WITH PARENT
AND CITIZENSHIP PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT AND EMPLOYMENT HISTORY
------------------------------------- -----------------------------------------------------------------
John L. McGoldrick 1996 to 1997--General Counsel and Senior Vice President,
EXECUTIVE VICE PRESIDENT AND GENERAL Corporate Staff of Parent
COUNSEL, CORPORATE STAFF AND 1997 to 1998--General Counsel and Senior Vice President, Law and
PRESIDENT, MEDICAL DEVICES GROUP Strategic Planning, Corporate Staff of Parent
United States 1998 to 2000--General Counsel and Senior Vice President,
Corporate Staff of Parent and President, Medical Devices Group, a
division of Parent
2000 to present--Executive Vice President and General Counsel of
Parent and President, Medical Devices Group, a division of Parent
Peter S. Ringrose, Ph.D 1996 to 1997--Senior Vice President, Worldwide Discovery and
CHIEF SCIENTIFIC OFFICER AND Medicinal Research Development, Europe of Pfizer Inc.
PRESIDENT, PHARMACEUTICAL RESEARCH 1997--2000--President, Pharmaceutical Research Institute, a
INSTITUTE division of Parent
United Kingdom 2000--present--Chief Scientific Office and President,
Pharmaceutical Research Institute
Stephen I. Sadove 1996 to 1997--President, Worldwide Beauty Care, a division of
SENIOR VICE PRESIDENT, CORPORATE Parent
STAFF AND PRESIDENT, WORLDWIDE BEAUTY 1998 to present--Senior Vice President, Corporate Staff of Parent
CARE and President, Worldwide Beauty Care, a division of Parent
United States
Frederick S. Schiff 1996 to 1997--Vice President and Controller, Corporate Staff of
SENIOR VICE PRESIDENT AND CHIEF Parent
FINANCIAL OFFICER, CORPORATE STAFF 1997 to 2000--Vice President, Financial Operations and
United States Controller, Corporate Staff of Parent
2000 to 2001--Senior Vice President, Financial Operations and
Controller, Corporate Staff of Parent
2001 to present--Senior Vice President and Chief Financial
Officer, Corporate Staff of Parent
Beth C. Seidenberg, M.D. 1996 to 1998--Senior Director, Clinical Pharmaceuticals, Merck &
SENIOR VICE PRESIDENT, CLINICAL Co., Inc.
DEVELOPMENT AND LIFE CYCLE 1998 to 2000--Vice President, Pulmonary-Immunology, Merck & Co.,
MANAGEMENT, PHARMACEUTICAL RESEARCH Inc.
INSTITUTE 2000 to present--Senior Vice President, Clinical Development and
United States Life Cycle Management, Pharmaceutical Research Institute, a
division of Parent
Elliot Sigal, M.D., Ph.D 1996 to 1997--Chief Executive Officer and Head of Research,
SENIOR VICE PRESIDENT, DRUG DISCOVERY Mercator Genetics
AND EXPLORATORY DEVELOPMENT, 1997 to 1999--Vice President, Applied Genomics, Pharmaceutical
PHARMACEUTICAL RESEARCH INSTITUTE Research Institute, a division of Parent
United States 1999 to 2001--Senior Vice President, Early Discovery and Applied
Technology, Pharmaceutical Research Institute, a division of
Parent
2001 to present--Senior Vice President, Drug Discovery and
Exploratory Development, Pharmaceutical Research Institute, a
division of Parent
John L. Skule 1996 to 1997--Vice President, Public Affairs, Corporate Staff of
SENIOR VICE PRESIDENT, CORPORATE AND Parent
ENVIRONMENTAL AFFAIRS, CORPORATE 1998 to present--Senior Vice President, Corporate and
STAFF Environmental Affairs, Corporate Staff of Parent
United States
Charles G. Tharp, Ph.D. 1996 to present--Senior Vice President, Human Resources,
SENIOR VICE PRESIDENT, HUMAN Corporate Staff of Parent
RESOURCES CORPORATE STAFF
United States
Curtis L. Tomlin 1996 to 1999--Vice President, Finance, Hercules Inc.
VICE PRESIDENT AND CONTROLLER, 1999 to 2000--Vice President, Auditing Services, Pharmacia &
CORPORATE STAFF Upjohn
United States 2000 to 2001--Vice President and Controller, Pharmacia
Corporation, Monsanto Division
2001 to present--Vice President and Controller, Corporate Staff
of Parent
DIRECTORS
Robert E. Allen Retired Chairman and Chief Executive Officer of AT&T Corp.
Lewis B. Campbell Chairman and Chief Executive Officer of Textron, Inc.
Vance D. Coffman Chairman and Chief Executive Officer of Lockheed Martin
Corporation
Peter R. Dolan Chairman and Chief Executive Officer of Parent
S-2
NAME, POSITION WITH PARENT
AND CITIZENSHIP PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT AND EMPLOYMENT HISTORY
------------------------------------- -----------------------------------------------------------------
Ellen V. Futter President of the American Museum of Natural History.
Louis V. Gerstner Chairman and Chief Executive Officer of IBM Corporation
Laurie H. Glimcher, M.D. Irene Heinz Given Professor of Immunology at the Harvard School
of Public Health
Leif Johansson President and Chief Executive Officer AB Volvo
James D. Robinson III Chairman and Chief Executive Officer of RRE Investors
Louis W. Sullivan, M.D. President of Morehouse School of Medicine
2. DIRECTORS AND EXECUTIVE OFFICERS OF THE PURCHASER. The name, citizenship,
business address, present principal occupation or employment and material
occupations, positions, offices or employment for the past five years of
each of the directors and executive officers of the Purchaser are set forth
below. The business address of each such director or executive officer is
Bristol-Myers Squibb Biologics Company, 345 Park Avenue, New York, New York
10154.
NAME, POSITION WITH THE PURCHASER
AND CITIZENSHIP PRESENT PRINCIPAL OCCUPATION OR EMPLOYMENT AND EMPLOYMENT HISTORY
------------------------------------- -----------------------------------------------------------------
EXECUTIVE OFFICERS
Richard J. Lane 1996 to 1997--Senior Vice President, Marketing, U.S.
PRESIDENT Pharmaceuticals, a division of Parent
United States 1997 to 1998--President, U.S. Pharmaceuticals, a division of
Parent
1998 to 2000--President, U.S. Medicines and Global Pharmaceutical
Group, a division of Parent
2000 to present--Executive Vice President, Corporate Staff of
Parent and President, Worldwide Medicines, a division of Parent
Harrison M. Bains, Jr. 1988 to present--Vice President and Treasurer of Parent
VICE PRESIDENT AND TREASURER
United States
Sandra Leung 1996 to 1997--Assistant Counsel, Corporate Staff of Parent
VICE PRESIDENT AND SECRETARY 1997 to 1999--Associate Counsel, Corporate Staff of Parent
United States 1999 to present--Secretary and Head of the Office of Corporate
Conduct, Corporate Staff of Parent
Joseph P. Nirschl 1996 to 1997--Vice President, New Brunswick Technical Operations
VICE PRESIDENT and Pharmaceutical Technology, a division of Parent
United States 1997 to 1998--Vice President, U.S. Manufacturing, a division of
Parent
1998 to present--Vice President, Worldwide Engineering, Worldwide
Medicines, a division of Parent
Frederick S. Schiff 1996 to 1997--Vice President and Controller, Corporate Staff of
VICE PRESIDENT Parent
United States 1997 to 2000--Vice President, Financial Operations and
Controller, Corporate Staff of Parent
2000 to 2001--Senior Vice President, Financial Operations and
Controller, Corporate Staff of Parent
2001 to present--Senior Vice President and Chief Financial
Officer, Corporate Staff of Parent
Eileen S. Silvers 1996 to present--Vice President, Taxes, Corporate Staff of Parent
VICE PRESIDENT
United States
DIRECTORS
Harrison M. Bains, Jr. See above.
Sandra Leung See above.
Eileen S. Silvers See above.
S-3
The Letter of Transmittal, certificates for Shares and any other required
documents should be sent or delivered by each stockholder of the Company or such
stockholder's broker, dealer, bank, trust company or other nominee to the
Depositary at one of its addresses set forth below.
THE DEPOSITARY FOR THE OFFER IS
EQUISERVE TRUST COMPANY, N.A.
BY MAIL: BY OVERNIGHT COURIER: BY HAND:
EquiServe Trust Company, N.A. EquiServe Trust Company, N.A. EquiServe Trust Company, N.A.
P.O. Box 43025 40 Campanelli Drive c/o Securities Transfer and
Providence, RI 02940-3025 Braintree, MA 02184 Reporting Services Inc.
Attn: EquiServe L.P. Attn: Corporate Action 100 William Street--Galleria
New York, NY 10038
Attn: EquiServe L.P.
Questions and requests for assistance may be directed to the Information
Agent or the Dealer Manager at their respective telephone numbers and locations
listed below. Additional copies of this Offer to Purchase, the Letter of
Transmittal, the Notice of Guaranteed Delivery or any other tender offer
materials may be obtained from the Information Agent. You may also contact your
broker, dealer, bank, trust company or other nominee for assistance concerning
the Offer.
THE INFORMATION AGENT FOR THE OFFER IS:
Innisfree M&A Incorporated
501 Madison Avenue, 20th Floor
New York, NY 10022
Banks and Brokers call collect: (212) 750-5833
All others call toll free: (888) 750-5834
THE DEALER MANAGER FOR THE OFFER IS:
LEHMAN BROTHERS
101 Hudson Street
Jersey City, NJ 07302
(646) 351-4463 or (646) 351-4494
EX-99.(A)(1)(C)
4
a2059910zex-99_a1c.txt
EXHIBIT 99.(A)(1)(C)
LETTER OF TRANSMITTAL
TO TENDER
SHARES OF COMMON STOCK
OF
IMCLONE SYSTEMS INCORPORATED
PURSUANT TO THE OFFER TO PURCHASE
DATED SEPTEMBER 28, 2001
BY
BRISTOL-MYERS SQUIBB BIOLOGICS COMPANY,
A WHOLLY OWNED SUBSIDIARY OF
BRISTOL-MYERS SQUIBB COMPANY
--------------------------------------------------------------------------------
THE OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00
MIDNIGHT, NEW YORK CITY TIME, ON OCTOBER 26, 2001, UNLESS THE OFFER IS
EXTENDED.
--------------------------------------------------------------------------------
THE DEPOSITARY FOR THE OFFER IS
EQUISERVE TRUST COMPANY, N.A.
BY MAIL: BY OVERNIGHT COURIER: BY HAND:
EquiServe Trust Company, N.A. EquiServe Trust Company, N.A. EquiServe Trust Company, N.A.
P.O. Box 43025 40 Campanelli Drive c/o Securities Transfer and
Providence, RI 02940-3025 Braintree, MA 02184 Reporting Services Inc.
Attn: EquiServe L.P. Attn: Corporate Action 100 William Street--Galleria
New York, NY 10038
Attn: EquiServe L.P.
DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS OTHER THAN AS SET FORTH
ABOVE WILL NOT CONSTITUTE A VALID DELIVERY TO THE DEPOSITARY. THE
INSTRUCTIONS SET FORTH IN THIS LETTER OF TRANSMITTAL SHOULD BE READ
CAREFULLY BEFORE THIS LETTER OF TRANSMITTAL IS COMPLETED.
------------------------------------------------------------------------------------------------------------------
DESCRIPTION OF SHARES TENDERED
------------------------------------------------------------------------------------------------------------------
NAME(S) AND ADDRESS(ES) OF REGISTERED HOLDER(S)
(PLEASE FILL IN, IF BLANK, EXACTLY AS NAME(S)
APPEAR(S) SHARES TENDERED
ON SHARE CERTIFICATE(S)) (ATTACH ADDITIONAL SIGNED LIST IF NECESSARY)
------------------------------------------------------------------------------------------------------------------
TOTAL NUMBER OF
SHARE SHARES REPRESENTED
CERTIFICATE BY SHARE NUMBER OF SHARES
NUMBER(S)* CERTIFICATE(S)* TENDERED**
-------------------------------------------------------------
-------------------------------------------------------------
-------------------------------------------------------------
-------------------------------------------------------------
-------------------------------------------------------------
-------------------------------------------------------------
Total Shares
------------------------------------------------------------------------------------------------------------------
* Need not be completed if transfer is made by book-entry transfer.
** Unless otherwise indicated, it will be assumed that all Shares described above are being tendered. See
Instruction 4. IF ANY OF THE CERTIFICATES REPRESENTING SHARES THAT YOU OWN HAVE BEEN LOST OR DESTROYED, SEE
INSTRUCTION 11.
------------------------------------------------------------------------------------------------------------------
This Letter of Transmittal is to be used either if certificates for Shares
(as defined below) are to be forwarded herewith or, unless an Agent's Message
(as defined in Section 2 of the Offer to Purchase (as defined below)) is
utilized, if delivery of Shares is to be made by book-entry transfer to an
account maintained by the Depositary at the Book-Entry Transfer Facility (as
defined in and pursuant to the procedures set forth in Section 2 of the Offer to
Purchase). Stockholders whose certificates for Shares are not immediately
available or who cannot deliver either the certificates for, or a Book-Entry
Confirmation (as defined in the Offer to Purchase) with respect to, their Shares
and all other documents required hereby to the Depositary prior to the
Expiration Date (as defined in the Offer to Purchase) must tender their Shares
in accordance with the guaranteed delivery procedures set forth in Section 2 of
the Offer to Purchase. See Instruction 2.
Delivery of documents to a Book-Entry Transfer Facility does not constitute
delivery to the Depositary.
If more than 14,392,003 shares are validly tendered prior to the Expiration
Date and not withdrawn, Bristol-Myers Squibb Biologics Company, a Delaware
corporation (the "Purchaser") and a wholly owned subsidiary of Bristol-Myers
Squibb Company, a Delaware corporation ("Parent"), will, upon the terms and
subject to the conditions of the Offer, accept such Shares for payment on a
pro-rata basis, with adjustments to avoid purchases of fractional Shares, based
upon the number of Shares validly tendered prior to the Expiration Date and not
withdrawn. Because of the time required to determine the precise number of
Shares validly tendered and not withdrawn, if proration is required, the
Purchaser does not expect to announce the final results of proration until
approximately four trading days on the Nasdaq National Market after the
Expiration Date. Preliminary results of proration will be announced by press
release as promptly as practicable after the Expiration Date. Holders of Shares
may obtain such preliminary information from the Information Agent, and also may
be able to obtain such preliminary information from their brokers.
/ / CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED BY
BOOK-ENTRY TRANSFER MADE TO AN ACCOUNT MAINTAINED BY THE
DEPOSITARY WITH THE BOOK-ENTRY TRANSFER FACILITY AND
COMPLETE THE FOLLOWING (ONLY PARTICIPANTS IN THE BOOK-ENTRY
TRANSFER FACILITY MAY DELIVER SHARES BY BOOK-ENTRY
TRANSFER):
Name of Tendering Institution
Account Number
Transaction Code Number
/ / CHECK HERE IF TENDERED SHARES ARE BEING DELIVERED PURSUANT
TO A NOTICE OF GUARANTEED DELIVERY PREVIOUSLY SENT TO THE
DEPOSITARY, ENCLOSE A PHOTOCOPY OF SUCH NOTICE OF GUARANTEED
DELIVERY AND COMPLETE THE FOLLOWING:
Name(s) of Registered Owner(s)
Date of Execution of Notice of Guaranteed Delivery
Name of Institution that Guaranteed Delivery
If delivered by book-entry transfer check box: / /
NOTE: SIGNATURES MUST BE PROVIDED BELOW
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY
Ladies and Gentlemen:
The undersigned hereby tenders to Bristol-Myers Squibb Biologics Company, a
Delaware corporation (the "Purchaser") and a wholly owned subsidiary of
Bristol-Myers Squibb Company, a Delaware corporation ("Parent"), the
above-described shares of common stock, par value $.001 per share (the
"Shares"), of ImClone Systems Incorporated, a Delaware corporation (the
"Company"), pursuant to the Purchaser's offer to purchase up to 14,392,003
Shares at a price of $70.00 per share, net to seller in cash, without interest
thereon, upon the terms and subject to the conditions set forth in the Offer to
Purchase dated September 28, 2001 (the "Offer to Purchase"), and this Letter of
Transmittal (which, together with any amendments or supplements thereto or
hereto, collectively constitute the "Offer"), receipt of which is hereby
acknowledged.
Upon the terms of the Offer, subject to, and effective upon, acceptance for
payment of, and payment for, the Shares tendered herewith in accordance with the
terms of the Offer, the undersigned hereby sells, assigns and transfers to, or
upon the order of, the Purchaser all right, title and interest in and to all the
Shares that are being tendered hereby (and any and all other Shares or other
securities or rights issued in respect thereof on or after September 28, 2001)
and irrevocably constitutes and appoints EquiServe Trust Company, N.A. (the
"Depositary"), the true and lawful agent and attorney-in-fact of the
undersigned, with full power of substitution (such power of attorney being
deemed to be an irrevocable power coupled with an interest), to the full extent
of the undersigned's rights with respect to such Shares (and any such other
Shares or securities or rights) (a) to deliver certificates for such Shares (and
any such other Shares or securities or rights) or transfer ownership of such
Shares (and any such other Shares or securities or rights) on the account books
maintained by the Book-Entry Transfer Facility together, in any such case, with
all accompanying evidences of transfer and authenticity to, or upon the order
of, the Purchaser, (b) to present such Shares (and any such other Shares or
securities or rights) for transfer on the Company's books and (c) to receive all
benefits and otherwise exercise all rights of beneficial ownership of such
Shares (and any such other Shares or securities or rights), all in accordance
with the terms of the Offer.
The undersigned hereby represents and warrants that the undersigned has full
power and authority to tender, sell, assign and transfer the tendered Shares
(and any and all other Shares or other securities or rights issued or issuable
in respect of such Shares on or after September 28, 2001) and, when the same are
accepted for payment by the Purchaser, the Purchaser will acquire good title
thereto, free and clear of all liens, restrictions, claims and encumbrances and
the same will not be subject to any adverse claim. The undersigned will, upon
request, execute any additional documents deemed by the Depositary or the
Purchaser to be necessary or desirable to complete the sale, assignment and
transfer of the tendered Shares (and any such other Shares or other securities
or rights).
All authority conferred or agreed to be conferred pursuant to this Letter of
Transmittal shall be binding upon the successors, assigns, heirs, executors,
administrators and legal representatives of the undersigned and shall not be
affected by, and shall survive, the death or incapacity of the undersigned.
Except as stated in the Offer to Purchase, this tender is irrevocable.
The undersigned hereby irrevocably appoints designees of the Purchaser and
each of them the attorneys-in-fact and proxies of the undersigned, each with
full power of substitution, to vote at any annual, special or adjourned meeting
of the Company's stockholders or otherwise in such manner as each such
attorney-in-fact and proxy or his or her substitute shall in his or her sole
discretion deem proper with respect to, to execute any written consent
concerning any matter as each such attorney-in-fact and proxy or his or her
substitute shall in his or her sole discretion deem proper with respect to, and
to otherwise act as each such attorney-in-fact and proxy or his or her
substitute shall in his sole discretion deem proper with respect to, the Shares
tendered hereby that have been accepted for payment by the Purchaser prior to
the time any such action is taken and with respect to which the undersigned is
entitled to vote (and any and all other Shares or other securities or rights
issued or issuable in respect of such Shares on or after September 28, 2001).
This appointment is effective when, and only to the extent that, the Purchaser
accepts for payment such Shares as provided in the Offer to Purchase. This power
of attorney and proxy are irrevocable and are granted in consideration of the
acceptance for payment of such Shares in accordance with the terms of the Offer.
Upon such acceptance for payment, all prior powers of attorney, proxies and
consents given by the undersigned with respect to such Shares (and any such
other Shares or securities or rights) will, without further action, be revoked
and no subsequent powers of attorney, proxies, consents or revocations may be
given (and, if given, will not be deemed effective) by the undersigned.
The undersigned understands that the valid tender of Shares pursuant to any
of the procedures described in Section 2 of the Offer to Purchase and in the
Instructions hereto will constitute a binding agreement between the undersigned
and the Purchaser upon the terms and subject to the conditions of the Offer.
The undersigned recognizes that, under certain circumstances sets forth in
the Offer to Purchase, the Purchaser may not be required to accept for payment
any of the Shares tendered hereby.
The undersigned understands that if more than 14,392,003 shares are validly
tendered prior to the expiration of the Offer and not validly withdrawn in
accordance with Section 3 of the Offer to Purchase, Shares so tendered and not
validly withdrawn shall be accepted for payment on a pro rata basis, with
appropriate adjustments to avoid the purchase of fractional Shares, according to
the number of Shares validly tendered and not withdrawn by the Expiration Date.
Unless otherwise indicated herein under "Special Payment Instructions",
please issue the check for the purchase price and/or return any certificates for
Shares not tendered or accepted for payment in the name(s) of the registered
holder(s) appearing under "Description of Shares Tendered". Similarly, unless
otherwise indicated under "Special Delivery Instructions", please mail the check
for the purchase price and/or return any certificates for Shares not tendered or
accepted for payment (and accompanying documents, as appropriate) to the
address(es) of the registered holder(s) appearing under "Description of Shares
Tendered". In the event that both the "Special Delivery Instructions" and the
"Special Payment Instructions" are completed, please issue the check for the
purchase price and/or return any certificates for Shares not tendered or
accepted for payment (and any accompanying documents, as appropriate) in the
name of, and deliver such check and/or return such certificates (and any
accompanying documents, as appropriate) to, the person or persons so indicated.
Please credit any Shares tendered herewith by book-entry transfer that are not
accepted for payment by crediting the account at the Book-Entry Transfer
Facility designated above. The undersigned recognizes that the Purchaser has no
obligation pursuant to the "Special Payment Instructions" to transfer any Shares
from the name of the registered holder thereof if the Purchaser does not accept
for payment any of the Shares so tendered.
/ / CHECK HERE IF ANY OF THE CERTIFICATES REPRESENTING SHARES THAT YOU OWN HAVE
BEEN LOST OR DESTROYED AND SEE INSTRUCTION 11.
NUMBER, CLASS AND SERIES OF SHARES REPRESENTED BY THE LOST OR DESTROYED
CERTIFICATES:
--------------------------
-----------------------------------------------------
SPECIAL PAYMENT INSTRUCTIONS
(SEE INSTRUCTIONS 1, 5, 6 AND 7)
To be completed ONLY if certificates for Shares not tendered or not
accepted for payment and/or the check for the purchase price of Shares
accepted for payment are to be be issued in the name of someone other than
the undersigned.
Issue / / Check
/ / Certificate(s) to:
Name _______________________________________________________________________
(PLEASE PRINT)
Address ____________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________
(INCLUDE ZIP CODE)
__________________________________________________________________________
(EMPLOYER IDENTIFICATION OR SOCIAL SECURITY NUMBER)
------------------------------------------------------------
------------------------------------------------------------
SPECIAL DELIVERY INSTRUCTIONS
(SEE INSTRUCTIONS 1, 5, 6 AND 7)
To be completed ONLY if certificates for Shares not tendered or not
accepted for payment and/or the check for the purchase price of Shares
accepted for payment are to be sent to someone other than the undersigned or
to the undersigned at an address other than that above.
Mail / / Check
/ / Certificate(s) to:
Name _______________________________________________________________________
(PLEASE PRINT)
Address ____________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________
(INCLUDE ZIP CODE)
__________________________________________________________________________
(EMPLOYER IDENTIFICATION OR SOCIAL SECURITY NUMBER)
-----------------------------------------------------
--------------------------------------------------------------------------------
SIGN HERE
(ALSO COMPLETE SUBSTITUTE FORM W-9 BELOW)
____________________________________________________________________________
____________________________________________________________________________
(SIGNATURE(S) OF STOCKHOLDER(S))
Dated: _______, 2001
(MUST BE SIGNED BY REGISTERED HOLDER(S) AS NAME(S) APPEAR(S) ON THE
CERTIFICATE(S) FOR THE SHARES OR ON A SECURITY POSITION LISTING OR BY
PERSON(S) AUTHORIZED TO BECOME REGISTERED HOLDER(S) BY CERTIFICATES AND
DOCUMENTS TRANSMITTED HEREWITH. IF SIGNATURE IS BY TRUSTEES, EXECUTORS,
ADMINISTRATORS, GUARDIANS, ATTORNEYS-IN-FACT, OFFICERS OF CORPORATIONS OR
OTHERS ACTING IN A FIDUCIARY OR REPRESENTATIVE CAPACITY, PLEASE PROVIDE THE
FOLLOWING INFORMATION AND SEE INSTRUCTION 5.)
Name(s) ____________________________________________________________________
____________________________________________________________________________
(PLEASE PRINT)
Capacity (full title) ______________________________________________________
Address ____________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________
(INCLUDE ZIP CODE)
Daytime Area Code and Telephone Number _____________________________________
Taxpayer Identification or Social Security Number __________________________
(SEE SUBSTITUTE FORM W-9)
GUARANTEE OF SIGNATURE(S)
(IF REQUIRED--SEE INSTRUCTIONS 1 AND 5)
Authorized Signature _______________________________________________________
Name _______________________________________________________________________
(PLEASE PRINT)
Title ______________________________________________________________________
Name of Firm _______________________________________________________________
Address ____________________________________________________________________
(INCLUDE ZIP CODE)
Daytime Area Code and Telephone Number _____________________________________
Dated: _______, 2001
--------------------------------------------------------------------------------
INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS OF THE OFFER
1. GUARANTEE OF SIGNATURES. No signature guarantee is required on this
Letter of Transmittal (a) if this Letter of Transmittal is signed by the
registered holder(s) (which term, for purposes of this Instruction, includes any
participant in the Book-Entry Transfer Facilities' system whose name appears on
a security position listing as the owner of the Shares) of Shares tendered
herewith, unless such registered holder(s) has completed either the box entitled
"Special Payment Instructions" or the box entitled "Special Delivery
Instructions" on this Letter of Transmittal or (b) if such Shares are tendered
for the account of a firm that is a member of the National Association of
Security Dealers or the Stock Exchange Medallion Program or by any other
"eligible guarantor institution", as such term is defined in Rule 17Ad-15 under
the Securities Exchange Act of 1934, as amended (each, an "Eligible
Institution"). In all other cases, all signatures on this Letter of Transmittal
must be guaranteed by an Eligible Institution. See Instruction 5.
2. REQUIREMENTS OF TENDER. This Letter of Transmittal is to be completed
by stockholders either if certificates are to be forwarded herewith or, unless
an Agent's Message (as defined below) is utilized, if delivery of Shares is to
be made pursuant to the procedures for book-entry transfer set forth in
Section 2 of the Offer to Purchase. For a stockholder validly to tender Shares
pursuant to the Offer, either (a) a Letter of Transmittal, properly completed
and duly executed, together with any required signature guarantees or, in the
case of a book-entry transfer, an Agent's Message, and any other required
documents, must be received by the Depositary at one of its addresses set forth
herein prior to the Expiration Date (as defined in the Offer to Purchase) and
either certificates for tendered Shares must be received by the Depositary at
one of such addresses or Shares must be delivered pursuant to the procedures for
book-entry transfer set forth herein (and a Book-Entry Confirmation (as defined
in the Offer to Purchase) must be received by the Depositary), in each case,
prior to the Expiration Date, or (b) the tendering stockholder must comply with
the guaranteed delivery procedures set forth below and in Section 2 of the Offer
to Purchase.
Stockholders whose certificates for Shares are not immediately available or
who cannot deliver their certificates and all other required documents to the
Depositary or complete the procedures for book-entry transfer prior to the
Expiration Date may tender their Shares by properly completing and duly
executing the Notice of Guaranteed Delivery pursuant to the guaranteed delivery
procedures set forth in Section 2 of the Offer to Purchase. Pursuant to such
procedures, (a) such tender must be made by or through an Eligible Institution,
(b) a properly completed and duly executed Notice of Guaranteed Delivery
substantially in the form provided by the Purchaser must be received by the
Depositary prior to the Expiration Date and (c) the certificates for all
tendered Shares in proper form for transfer (or a Book-Entry Confirmation with
respect to all such Shares), together with a Letter of Transmittal, properly
completed and duly executed, with any required signature guarantees, or, in the
case of a book-entry transfer, an Agent's Message, and any other required
documents, must be received by the Depositary within three trading days after
the date of execution of such Notice of Guaranteed Delivery as provided in
Section 2 of the Offer to Purchase. A "trading day" is any day on which the
Nasdaq National Market is open for business.
"Agent's Message" means a message transmitted by the Book-Entry Transfer
Facility to, and received by, the Depositary and forming a part of a Book-Entry
Confirmation, that states that such Book-Entry Transfer Facility has received an
express acknowledgment from the participant in such Book-Entry Transfer Facility
tendering the Shares that such participant has received and agrees to be bound
by the terms of the Letter of Transmittal and that the Purchaser may enforce
such agreement against such participant.
The method of delivery of Shares, this Letter of Transmittal and all other
required documents, including delivery through any Book-Entry Transfer Facility,
is at the election and risk of the tendering stockholder. Shares will be deemed
delivered only when actually received by the Depositary (including, in the case
of a book-entry transfer, by Book-Entry Confirmation). If delivery is by mail,
registered mail, with return receipt requested, properly insured, is
recommended. In all cases, sufficient time should be allowed to ensure timely
delivery.
Except as expressly provided in documents provided to holders of options to
purchase Shares, no alternative, conditional or contingent tenders will be
accepted and no fractional Shares will be purchased. All tendering stockholders,
by execution of this Letter of Transmittal, waive any right to receive any
notice of the acceptance of their Shares for payment.
3. INADEQUATE SPACE. If the space provided herein is inadequate, the
certificate numbers and/or the number of Shares should be listed on a separate
schedule attached hereto.
4. PARTIAL TENDERS (APPLICABLE TO CERTIFICATE STOCKHOLDERS ONLY). If fewer
than all the Shares evidenced by any certificate submitted are to be tendered,
fill in the number of Shares that are to be tendered in the box entitled "Number
of Shares Tendered". In any such case, new certificate(s) for the remainder of
the Shares that were evidenced by the old certificate(s) will be sent to the
registered holder, unless otherwise provided in the appropriate box on this
Letter of Transmittal, as soon as practicable after the acceptance of payment
of, and payment for the Shares tendered herewith. All Shares represented by
certificates delivered to the Depositary will be deemed to have been tendered
unless otherwise indicated.
5. SIGNATURES ON LETTER OF TRANSMITTAL, STOCK POWERS AND ENDORSEMENTS. If
this Letter of Transmittal is signed by the registered holder of the Shares
tendered hereby, the signature must correspond with the name as written on the
face of the certificate(s) without any change whatsoever.
If any of the Shares tendered hereby are owned of record by two or more
joint owners, all such owners must sign this Letter of Transmittal.
If any tendered Shares are registered in different names on several
certificates, it will be necessary to complete, sign and submit as many separate
Letters of Transmittal as there are different registrations of certificates.
If this Letter of Transmittal or any certificates or stock powers are signed
by trustees, executors, administrators, guardians, attorneys-in-fact, officers
of corporations or others acting in a fiduciary or representative capacity, such
persons should so indicate when signing, and proper evidence satisfactory to the
Purchaser of their authority so to act must be submitted.
When this Letter of Transmittal is signed by the registered owner(s) of the
Shares listed and transmitted hereby, no endorsements of certificates or
separate stock powers are required unless payment is to be made to or
certificates for Shares not tendered or accepted for payment are to be issued to
a person other than the registered owner(s). Signatures on such certificates or
stock powers must be guaranteed by an Eligible Institution.
If this Letter of Transmittal is signed by a person other than the
registered owner(s) of certificates listed, the certificates must be endorsed or
accompanied by appropriate stock powers, in either case signed exactly as the
name or names of the registered owner or owners appear on the certificates.
Signatures on such certificates or stock powers must be guaranteed by an
Eligible Institution.
6. STOCK TRANSFER TAXES. The Purchaser will pay any stock transfer taxes
with respect to the transfer and sale of Shares to it or its order pursuant to
the Offer. If, however, payment of the purchase price is to be made to, or if
certificates for Shares not tendered or accepted for payment are to be
registered in the name of, any person(s) other than the registered owner(s), or
if tendered certificates are registered in the name of any person(s) other than
the person(s) signing this Letter of Transmittal, the amount of any stock
transfer taxes (whether imposed on the registered owner(s) or such person(s))
payable on account of the transfer to such person(s) will be deducted from the
purchase price unless satisfactory evidence of the payment of such taxes or
exemption therefrom is submitted.
Except as provided in this Instruction 6, it will not be necessary for
transfer tax stamps to be affixed to the certificates listed in this Letter of
Transmittal.
7. SPECIAL PAYMENT AND DELIVERY INSTRUCTIONS. If a check is to be issued
in the name of, and/or certificates for Shares not accepted for payment are to
be returned to, a person other than the signer of this Letter of Transmittal or
if a check is to be sent and/or such certificates are to be returned to a person
other than the signer of this Letter of Transmittal or to an address other than
that shown above, the appropriate boxes on this Letter of Transmittal should be
completed.
8. WAIVER OF CONDITIONS. The Purchaser reserves the absolute right in its
sole discretion to waive any of the specified conditions of the Offer, in whole
or in part, in the case of any Shares tendered.
9. BACKUP WITHHOLDING. In order to avoid backup withholding of U.S.
federal income tax on payments of cash pursuant to the Offer, a stockholder
surrendering Shares in the Offer must, unless an exemption applies, provide the
Depositary with such stockholder's correct taxpayer identification number
("TIN") on Substitute Form W-9 below in this Letter of Transmittal and certify
under penalties of perjury that such TIN is correct and that such stockholder is
not subject to backup withholding. If a stockholder does not provide such
stockholder's correct TIN or fails to provide the certifications described
above, the Internal Revenue Service (the "IRS") may impose a $50 penalty on such
stockholder and payment of cash to such stockholder pursuant to the Offer may be
subject to backup withholding of up to 31%.
Backup withholding is not an additional tax. Rather, the amount of the
backup withholding can be credited against the Federal income tax liability of
the person subject to the backup withholding, provided that the required
information is given to the IRS. If backup withholding results in an overpayment
of tax, a refund can be obtained by the stockholder upon filing an income tax
return.
The stockholder is required to give the Depositary the TIN (I.E., social
security number or employer identification number) of the record owner of the
Shares. If the Shares are held in more than one name or are not in the name of
the actual owner, consult the enclosed "Guidelines for Certification of Taxpayer
Identification Number on Substitute Form W-9" for additional guidance on which
number to report.
The box in Part 3 of the Substitute Form W-9 may be checked if the tendering
stockholder has not been issued a TIN and has applied for a TIN or intends to
apply for a TIN in the near future. If the box in Part 3 is checked, the
stockholder or other payee must also complete the Certificate of Awaiting
Taxpayer Identification Number below in order to avoid backup withholding.
Notwithstanding that the box in Part 3 is checked and the Certificate of
Awaiting Taxpayer Identification Number is completed, the Depositary will
withhold up to 31% on all payments made prior to the time a properly certified
TIN is provided to the Depositary. However, such amounts will be refunded to
such stockholder if a TIN is provided to the Depositary within 60 days.
Certain stockholders (including, among others, all corporations and certain
foreign individuals and entities) are not subject to backup withholding.
Noncorporate foreign stockholders should complete and sign the main signature
form and a Form W-8, Certificate of Foreign Status, a copy of which may be
obtained from the Depositary, in order to avoid backup withholding. Stockholders
should consult their tax advisors about qualifying for exemption from backup
withholding and the procedure for obtaining such exemption. See the enclosed
"Guidelines for Certification of Taxpayer Identification Number on Substitute
Form W-9" for more instructions.
10. REQUESTS FOR ASSISTANCE OR ADDITIONAL COPIES. Questions and requests
for assistance may be directed to Innisfree M&A Incorporated (the "Information
Agent") or to Lehman Brothers Inc. (the "Dealer Manager") at their respective
addresses listed below. Additional copies of the Offer to Purchase, this Letter
of Transmittal, the Notice of Guaranteed Delivery and the Guidelines for
Certification of Taxpayer Identification Number on Substitute Form W-9 may be
obtained from the Information Agent or from brokers, dealers, banks, trust
companies or other nominees.
11. LOST, DESTROYED OR STOLEN CERTIFICATES. If any certificate
representing Shares has been lost, destroyed or stolen, the stockholder should
promptly notify the Depositary by checking the box immediately preceding the
special payment/special
delivery instructions and indicating the number of Shares so lost, destroyed or
stolen, or call the Depositary at 1-800-426-5523. The stockholder will then be
instructed by the Depositary as to the steps that must be taken in order to
replace the certificate. This Letter of Transmittal and related documents cannot
be processed until the procedures for replacing lost or destroyed certificates
have been followed.
IMPORTANT: THIS LETTER OF TRANSMITTAL TOGETHER WITH ANY SIGNATURE
GUARANTEES, OR, IN THE CASE OF A BOOK-ENTRY TRANSFER, AN AGENT'S MESSAGE, AND
ANY OTHER REQUIRED DOCUMENTS, MUST BE RECEIVED BY THE DEPOSITARY PRIOR TO THE
EXPIRATION DATE (AS DEFINED IN THE OFFER TO PURCHASE) AND EITHER CERTIFICATES
FOR TENDERED SHARES MUST BE RECEIVED BY THE DEPOSITARY OR SHARES MUST BE
DELIVERED PURSUANT TO THE PROCEDURES FOR BOOK-ENTRY TRANSFER, IN EACH CASE PRIOR
TO THE EXPIRATION DATE, OR THE TENDERING STOCKHOLDER MUST COMPLY WITH THE
PROCEDURES FOR GUARANTEED DELIVERY.
PAYER'S NAME: EQUISERVE TRUST COMPANY, N.A.
----------------------------------------------------------------------------------------------------------------------------
SUBSTITUTE PART 1 -- PLEASE PROVIDE YOUR TIN Social Security Number(s)
FORMW-9 IN THE BOX AT RIGHT AND CERTIFY BY OR ------------------------
DEPARTMENT OF THE TREASURY SIGNING AND DATING BELOW. Employer Identification Number
INTERNAL REVENUE SERVICE
-------------------------------------------------------------------------------
PART 2 -- Certification under penalties of perjury, I certify that (1) the
number shown on this form is my correct Taxpayer Identification Number (or I am
waiting for a number to be issued for me) and (2) I am not subject to backup
withholding because: (a) I am exempt from backup withholding or (b) I have not
been notified by the Internal Revenue Service (the "IRS") that I am subject to
PAYER'S REQUEST FOR TAXPAYER backup withholding as a result of a failure to report all interest or
IDENTIFICATION NUMBER (TIN) dividends, or (c) the IRS has notified me that I am no longer subject to backup
withholding.
-------------------------------------------------------------------------------
PART 3: Awaiting TIN / /
PART 4: Exempt TIN / /
-------------------------------------------------------------------------------
CERTIFICATION INSTRUCTIONS -- You must cross out item (2) in Part 2 above if
you have been notified by the IRS that you are subject to backup withholding
because of underreporting interest or dividends on your tax returns. However,
if after being notified by the IRS that you are subject to backup withholding,
you received another notification from the IRS stating that you are no longer
subject to backup withholding, do not cross out such item (2). If you are
exempt from backup withholding, check the box in Part 4 above.
Signature Date
----------------------------------------------------------------------------------------------------------------------------
NOTE: FAILURE TO COMPLETE AND RETURN THIS SUBSTITUTE FORM W-9 MAY RESULT IN
BACKUP WITHHOLDING OF UP TO 31% OF ANY PAYMENTS MADE TO YOU PURSUANT TO
THE OFFER. PLEASE REVIEW THE ENCLOSED GUIDELINES FOR CERTIFICATION OF
TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL
INFORMATION.
YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU CHECKED
THE BOX IN PART 3 OF SUBSTITUTE FORM W-9.
--------------------------------------------------------------------------------
CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER
I certify under penalties of perjury that a taxpayer identification
number has not been issued to me, and either (a) I have mailed or delivered
an application to receive a taxpayer identification number to the
appropriate Internal Revenue Service Center or Social Security
Administration Office or (b) I intend to mail or deliver an application in
the near future. I understand that if I do not provide a taxpayer
identification number to the Depositary, up to 31% percent of all reportable
payments made to me will be withheld, but will be refunded to me if I
provide a certified taxpayer identification number within 60 days.
Signature ____________________ Date ____________________
--------------------------------------------------------------------------------
The Letter of Transmittal, certificates for Shares and any other required
documents should be sent or delivered by each stockholder of the Company or such
stockholder's broker, dealer, bank, trust company or other nominee to the
Depositary at one of its addresses set forth below.
THE DEPOSITARY FOR THE OFFER IS
EquiServe Trust Company, N.A.
BY MAIL: BY OVERNIGHT COURIER: BY HAND:
EquiServe Trust Company, N.A. EquiServe Trust Company, N.A. EquiServe Trust Company, N.A.
P.O. Box 43025 40 Campanelli Drive c/o Securities Transfer and
Providence, RI 02940-3025 Braintree, MA 02184 Reporting Services Inc.
Attn: EquiServe L.P. Attn: Corporate Action 100 William Street--Galleria
New York, NY 10038
Attn: EquiServe L.P.
QUESTIONS AND REQUESTS FOR ASSISTANCE MAY BE DIRECTED TO THE INFORMATION
AGENT OR THE DEALER MANAGER AT THEIR RESPECTIVE TELEPHONE NUMBERS AND LOCATIONS
LISTED BELOW. ADDITIONAL COPIES OF THIS OFFER TO PURCHASE, THE LETTER OF
TRANSMITTAL, THE NOTICE OF GUARANTEED DELIVERY OR ANY OTHER TENDER OFFER
MATERIALS MAY BE OBTAINED FROM THE INFORMATION AGENT. YOU MAY ALSO CONTACT YOUR
BROKER, DEALER, BANK, TRUST COMPANY OR OTHER NOMINEE FOR ASSISTANCE CONCERNING
THE OFFER.
THE INFORMATION AGENT FOR THE OFFER IS:
[INNISFREE M&A INCORPORATED LOGO]
501 Madison Avenue, 20th Floor
New York, NY 10022
Banks and Brokers call collect: (212) 750-5833
All others call toll free: (888) 750-5834
THE DEALER MANAGER FOR THE OFFER IS:
LEHMAN BROTHERS
101 Hudson Street
Jersey City, NJ 07302
(646) 351-4463 or (646) 351-4494
EX-99.(A)(1)(D)
5
a2059910zex-99_a1d.txt
EXHIBIT 99.(A)(1)(D)
NOTICE OF GUARANTEED DELIVERY
FOR
TENDER OF SHARES OF COMMON STOCK
OF
IMCLONE SYSTEMS INCORPORATED
(NOT TO BE USED FOR SIGNATURE GUARANTEES)
As set forth in Section 2 of the Offer to Purchase (as defined below), this
form or one substantially equivalent hereto must be used to accept the Offer (as
defined below) if certificates representing shares of common stock, par value
$.001 per share (the "Shares") of ImClone Systems Incorporated, a Delaware
corporation (the "Company"), are not immediately available or if the procedures
for book-entry transfer cannot be completed on a timely basis or time will not
permit all required documents to reach the Depositary prior to the Expiration
Date (as defined in the Offer to Purchase). This form may be delivered by hand
to the Depositary or mail to the Depositary and must include a guarantee by an
Eligible Institution (as defined in the Offer to Purchase). See Section 2 of the
Offer to Purchase.
BY MAIL: BY OVERNIGHT COURIER: BY HAND:
EquiServe Trust Company, EquiServe Trust Company, N.A. EquiServe Trust Company,
N.A. 40 Campanelli Drive N.A.
P.O. Box 43025 Braintree, MA 02184 c/o Securities Transfer and
Providence RI 02940-3025 Attn: Corporate Action Reporting Services Inc.
Attn: EquiServe L.P. 100 William
Street--Galleria
New York, NY 10038
Attn: Equiserve L.P.
DELIVERY OF THIS NOTICE OF GUARANTEED DELIVERY TO AN ADDRESS OTHER THAN AS SET
FORTH ABOVE WILL NOT CONSTITUTE A VALID DELIVERY TO THE DEPOSITARY.
THIS FORM IS NOT TO BE USED TO GUARANTEE SIGNATURES. IF A SIGNATURE ON A
LETTER OF TRANSMITTAL IS REQUIRED TO BE GUARANTEED BY AN "ELIGIBLE INSTITUTION"
UNDER THE INSTRUCTIONS THERETO, SUCH SIGNATURE GUARANTEE MUST APPEAR IN THE
APPLICABLE SPACE PROVIDED IN THE SIGNATURE BOX ON THE LETTER OF TRANSMITTAL.
THE GUARANTEE ON THE REVERSE SIDE MUST BE COMPLETED.
Ladies and Gentlemen:
The undersigned hereby tenders to Bristol-Myers Squibb Biologics Company, a
Delaware corporation (the "Purchaser") and a wholly owned subsidiary of
Bristol-Myers Squibb Company, a Delaware corporation, upon the terms and subject
to the conditions set forth in the Offer to Purchase dated September 28, 2001
(the "Offer to Purchase"), and in the related Letter of Transmittal (which,
together with any amendments or supplements thereto, collectively constitute the
"Offer"), receipt of which is hereby acknowledged, the number of Shares set
forth below, all pursuant to the guaranteed delivery procedures set forth in
Section 2 of the Offer to Purchase.
Name(s) of Record Holder(s): Number of Shares
Certificate Nos. (if available)
PLEASE
PRINT
(Check box if Shares will be tendered by
book-entry transfer)
Address(es) / / EquiServe Trust Company, N.A.
Account Number at Book Entry Transfer
ZIP CODE Facility
Daytime Area Code and Tel. No. Dated
Signature(s)
2
GUARANTEE
(NOT TO BE USED FOR SIGNATURE
GUARANTEE)
The undersigned, a firm that is a member of the National
Association of Securities Dealers or the Stock Exchange
Medallion Program or an "eligible guarantor institution", as
such term is defined in Rule 17Ad-15 under the Securities
Exchange Act of 1934, as amended, hereby guarantees to
deliver to the Depositary either the certificates
representing the Shares tendered hereby, in proper form for
transfer, or a Book-Entry Confirmation (as defined in the
Offer to Purchase) with respect to such Shares, in any such
case together with a properly completed and duly executed
Letter of Transmittal, with any required signature
guarantees, or an Agent's Message (as defined in the Offer
to Purchase), and any other required documents, within three
Nasdaq National Market trading days (as defined in the
Letter of Transmittal) after the date hereof.
The Eligible Institution that completes this form must
communicate the guarantee to the Depositary and must deliver
the Letter of Transmittal and certificates for Shares to the
Depositary within the time period shown herein. Failure to
do so could result in a financial loss to such Eligible
Institution.
Name of Firm ___________________________________________________________________
Address(es) ____________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
ZIP CODE
Area Code and Tel. No. _________________________________________________________
________________________________________________________________________________
AUTHORIZED SIGNATURE
Name ___________________________________________________________________________
PLEASE TYPE OR PRINT
Title __________________________________________________________________________
Dated __________________________________________________________________________
NOTE: DO NOT SEND CERTIFICATES FOR SHARES WITH THIS NOTICE. CERTIFICATES FOR
SHARES SHOULD BE SENT WITH YOUR LETTER OF TRANSMITTAL.
EX-99.(A)(1)(E)
6
a2059910zex-99_a1e.txt
EXHIBIT 99(A)(1)(E)
OFFER TO PURCHASE FOR CASH
UP TO
14,392,003 OF THE OUTSTANDING SHARES OF COMMON STOCK
OF
IMCLONE SYSTEMS INCORPORATED
AT
$70.00 NET PER SHARE
BY
BRISTOL-MYERS SQUIBB BIOLOGICS COMPANY,
A WHOLLY OWNED SUBSIDIARY OF
BRISTOL-MYERS SQUIBB COMPANY
--------------------------------------------------------------------------------
THE OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00
MIDNIGHT, NEW YORK CITY TIME, ON OCTOBER 26, 2001, UNLESS THE OFFER IS
EXTENDED.
--------------------------------------------------------------------------------
September 28, 2001
To Brokers, Dealers, Banks,
Trust Companies and other Nominees:
We have been engaged by Bristol-Myers Squibb Biologics Company, a Delaware
corporation (the "PURCHASER") and a wholly owned subsidiary of Bristol-Myers
Squibb Company, a Delaware corporation ("PARENT"), to act as Dealer Manager in
connection with the Purchaser's offer to purchase up to 14,392,003 outstanding
shares of common stock, par value $.001 per share (the "SHARES") of ImClone
Systems Incorporated, a Delaware corporation (the "COMPANY"), at $70.00 per
share (the "OFFER PRICE"), net to the seller in cash, without interest thereon,
upon the terms and subject to the conditions set forth in the Offer to Purchase
dated September 28, 2001 (the "OFFER TO PURCHASE"), and in the related Letter of
Transmittal (which, together with any amendments or supplements thereto,
collectively constitute the "OFFER"). Please furnish copies of the enclosed
materials to those of your clients for whom you hold Shares registered in your
name or in the name of your nominee.
Enclosed herewith are copies of the following documents:
1. Offer to Purchase dated September 28, 2001;
2. Letter of Transmittal to be used by stockholders of the Company in
accepting the Offer;
3. A printed form of letter that may be sent to your clients for whose
account you hold shares in your name or in the name of a nominee, with
space provided for obtaining such clients' instructions with regard to
the Offer;
4. Notice of Guaranteed Delivery with respect to Shares;
5. Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9; and
6. Return envelope addressed to EquiServe Trust Company, N.A., as
Depositary.
THE OFFER IS CONDITIONED UPON (A) ANY WAITING PERIOD UNDER THE
HART-SCOTT-RODINO ANTITRUST IMPROVEMENTS ACT OF 1976, AS AMENDED, APPLICABLE TO
THE PURCHASE OF SHARES PURSUANT TO THE OFFER HAVING EXPIRED OR BEEN TERMINATED
AND (B) THE OTHER CONDITIONS TO THE PURCHASER'S OBLIGATION TO PURCHASE SHARES IN
THE OFFER SET FORTH IN THE ACQUISITION AGREEMENT HAVING BEEN SATISFIED OR
WAIVED.
We urge you to contact your clients promptly. Please note that the Offer and
withdrawal rights will expire at 12:00 midnight, New York City Time, on October
26, 2001, unless extended.
By unanimous vote of those directors present and voting, the Board of
Directors of the Company has approved the Acquisition Agreement (as defined
below) and the transactions contemplated thereby. Accordingly, the Board of
Directors of the Company recommends that stockholders of the Company tender
their Shares in the Offer.
The Offer is being made pursuant to the Acquisition Agreement dated as of
September 19, 2001 (the "ACQUISITION AGREEMENT"), among Parent, the Purchaser
and the Company.
The Offer is being made for up to 14,392,003 Shares. If more than 14,392,003
Shares are tendered and not withdrawn prior to the expiration of the Offer, then
tendered shares will be accepted for payment on a pro rata basis, as described
in the Offer to Purchase.
In all cases, payment for Shares accepted for payment pursuant to the Offer
will be made only after timely receipt by the Depositary of (a) certificates for
(or a timely Book-Entry Confirmation (as defined in the Offer to Purchase) with
respect to) such Shares, (b) a Letter of Transmittal, properly completed, and
duly executed, with any required signature guarantees, or, in the case of a
book-entry transfer effected pursuant to the procedure set forth in Section 2 of
the Offer to Purchase, an Agent's Message (as defined in the Offer to Purchase),
and (c) any other documents required by the Letter of Transmittal. Accordingly,
tendering stockholders may be paid at different times depending upon when
certificates for Shares or Book-Entry Confirmations with respect to Shares are
actually received by the Depositary. Under no circumstances will interest be
paid on the purchase price of the Shares to be paid by the Purchaser, regardless
of any extension of the Offer or any delay in making such payment.
The Purchaser and Parent will not pay any fees or commissions to any broker
or dealer or other person (other than the Dealer Manager as described in the
Offer to Purchase) in connection with the solicitation of tenders of Shares
pursuant to the Offer. You will be reimbursed by the Purchaser upon request for
customary mailing and handling expenses incurred by you in forwarding the
enclosed material to your customers.
Questions and requests for additional copies of the enclosed material may be
directed to the Innisfree M&A Incorporated (the "Information Agent") or the
Dealer Manager at their respective addresses and telephone numbers set forth on
the back cover of the enclosed Offer to Purchase.
Very truly yours,
LEHMAN BROTHERS
NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL RENDER YOU OR
ANY OTHER PERSON THE AGENT OF PARENT, THE PURCHASER, THE DEPOSITARY, THE
INFORMATION AGENT OR THE DEALER MANAGER OR AUTHORIZE YOU OR ANY OTHER PERSON TO
GIVE ANY INFORMATION OR MAKE ANY REPRESENTATION ON BEHALF OF ANY OF THEM WITH
RESPECT TO THE OFFER NOT CONTAINED IN THE OFFER TO PURCHASE OR THE LETTER OF
TRANSMITTAL.
EX-99.(A)(1)(F)
7
a2059910zex-99_a1f.txt
EXHIBIT 99.(A)(1)(F)
OFFER TO PURCHASE FOR CASH
UP TO
14,392,003 OF THE OUTSTANDING SHARES OF COMMON STOCK
OF
IMCLONE SYSTEMS INCORPORATED
AT
$70.00 NET PER SHARE
BY
BRISTOL-MYERS SQUIBB BIOLOGICS COMPANY,
A WHOLLY OWNED SUBSIDIARY OF
BRISTOL-MYERS SQUIBB COMPANY
--------------------------------------------------------------------------------
THE OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS WILL EXPIRE AT 12:00
MIDNIGHT, NEW YORK CITY TIME, ON OCTOBER 26, 2001, UNLESS THE OFFER IS
EXTENDED.
--------------------------------------------------------------------------------
September 28, 2001
To Our Clients:
Enclosed for your consideration is an Offer to Purchase dated September 28,
2001 (the "OFFER TO PURCHASE"), and the related Letter of Transmittal (which,
together with amendments or supplements thereto, collectively constitute the
"OFFER") relating to the Offer by Bristol-Myers Squibb Biologics Company, a
Delaware corporation (the "PURCHASER") and a wholly owned subsidiary of
Bristol-Myers Squibb Company, a Delaware corporation ("PARENT"), to purchase up
to 14,392,003 shares of common stock, par value $.001 per share ("SHARES") of
ImClone Systems Incorporated, a Delaware corporation, at $70.00 per Share, net
to the seller in cash, upon the terms and subject to the conditions set forth in
the Offer. This Offer is being made pursuant to the Acquisition Agreement, dated
September 19, 2001, among Parent, the Purchaser and the Company (the
"ACQUISITION AGREEMENT").
We (or our nominees) are the holder of record of Shares held by us for your
account. A tender of such Shares can be made only by us as the holder of record
and pursuant to your instructions. The Letter of Transmittal is furnished to you
for your information only and cannot be used to tender Shares held by us for
your account.
We request instructions as to whether you wish to tender any or all of the
Shares held by us for your account pursuant to the terms and conditions set
forth in the Offer.
Your attention is directed to the following:
1. The offer price is $70.00 per Share net to the seller in cash,
without interest thereon, upon the terms and subject to the conditions of
the Offer.
2. The Offer is being made for 14,392,003 Shares. If more than
14,392,003 shares are tendered and not withdrawn prior to the expiration of
the Offer, than tendered Shares will be accepted for payment on a pro rata
basis, as described in the Offer to Purchase.
3. By a unanimous vote of those directors present and voting, the Board
of Directors of the Company has approved the Acquisition Agreement and the
transactions contemplated thereby. Accordingly, the Board of Directors of
the Company recommends that stockholders of the Company tender their Shares
in the Offer.
4. THE OFFER, PRORATION PERIOD AND WITHDRAWAL RIGHTS EXPIRE AT 12:00
MIDNIGHT, NEW YORK CITY TIME, ON OCTOBER 26, 2001 (THE "EXPIRATION DATE"),
UNLESS THE OFFER IS EXTENDED BY THE PURCHASER, IN WHICH EVENT THE TERM
"EXPIRATION DATE" SHALL MEAN THE LATEST TIME AT WHICH THE OFFER, AS SO
EXTENDED BY THE PURCHASER, WILL EXPIRE.
5. The Offer is conditioned upon (a) any waiting period under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, applicable
to the purchase of Shares pursuant to the Offer having expired or been
terminated and (b) the other conditions to the Purchaser's obligations to
purchase shares in the Offer set forth in the Acquisition Agreement having
been satisfied or waived.
6. Any stock transfer taxes applicable to a sale of Shares to the
Purchaser will be borne by the Purchaser, except as otherwise provided in
Instruction 6 of the Letter of Transmittal.
7. Tendering stockholders will not be obligated to pay brokerage fees
or commissions to Lehman Brothers Inc., the dealer manager, or, except as
set forth in Instruction 6 of the Letter of Transmittal, transfer taxes on
the purchase of Shares by the Purchaser pursuant to the Offer. However,
federal income tax backup withholding at a rate of up to 31% may be
required, unless an exemption is provided or unless the required taxpayer
identification information is provided. See Instruction 9 of the Letter of
Transmittal.
Your instructions to us should be forwarded promptly to permit us to submit
a tender on your behalf prior to the Expiration Date.
If you wish to have us tender any of or all the Shares held by us for your
account, please so instruct us by completing, executing, detaching and returning
to us the instruction form on the detachable part hereof. An envelope to return
your instructions to us is enclosed. If you authorize the tender of your Shares,
all such Shares will be tendered unless otherwise specified on the detachable
part hereof. YOUR INSTRUCTIONS SHOULD BE FORWARDED TO US IN AMPLE TIME TO PERMIT
US TO SUBMIT A TENDER ON YOUR BEHALF PRIOR TO THE EXPIRATION DATE.
Payment for Shares accepted for payment pursuant to the Offer will in all
cases be made only after timely receipt by EquiServe Trust Company, N.A. (the
"Depositary") of (a) certificates for (or a timely Book-Entry Confirmation) (as
defined in the Offer to Purchase) with respect to such Shares, (b) a Letter of
Transmittal, properly completed and duly executed, with any required signature
guarantees, or, in the case of a book-entry transfer effected pursuant to the
procedures set forth in Section 2 of the Offer to Purchase, an Agent's Message
(as defined in Section 2 of the Offer to Purchase), and (c) any other documents
required by the Letter of Transmittal. Accordingly, tendering stockholders may
be paid at different times depending upon when certificates for Shares or
Book-Entry Confirmations with respect to Shares are actually received by the
Depositary. UNDER NO CIRCUMSTANCES WILL INTEREST BE PAID ON THE PURCHASE PRICE
OF THE SHARES TO BE PAID BY THE PURCHASER, REGARDLESS OF ANY EXTENSION OF THE
OFFER OR ANY DELAY IN MAKING SUCH PAYMENT.
The Offer is not being made to (nor will tenders be accepted from or on
behalf of) holders of Shares in any jurisdiction in which the making of the
Offer or the acceptance thereof would not be in compliance with the laws of such
jurisdiction. In any jurisdiction where the securities, blue sky or other laws
require the Offer to be made by a licensed broker or dealer, the Offer is being
made on behalf of the Purchaser by Lehman Brothers Inc., the dealer manager for
the Offer, or one or more registered brokers or dealers that are licensed under
the laws of such jurisdiction.
2
INSTRUCTIONS WITH RESPECT TO THE OFFER TO PURCHASE
FOR CASH UP TO 14,392,003 OUTSTANDING SHARES OF COMMON STOCK
OF IMCLONE SYSTEMS INCORPORATED
The undersigned acknowledge(s) receipt of your letter, the Offer to Purchase
of Bristol-Myers Squibb Biologics Company, dated September 28, 2001 (the "OFFER
TO PURCHASE"), and the related Letter of Transmittal relating to shares of
common stock, par value $.001 per share (the "SHARES"), of ImClone Systems
Incorporated, a Delaware corporation.
This will instruct you to tender the number of Shares indicated below held
by you for the account of the undersigned, on the terms and subject to the
conditions set forth in the Offer to Purchase and related Letter of Transmittal.
--------------------------------------------------------------------------------
Number of Shares to be Tendered(1): _________________ Shares
SIGN HERE
____________________________________________________________________________
SIGNATURE(S)
__________________________________________________________________________
PLEASE TYPE OR PRINT NAME(S)
__________________________________________________________________________
__________________________________________________________________________
PLEASE TYPE OR PRINT ADDRESS(ES)
__________________________________________________________________________
AREA CODE AND TELEPHONE NUMBER
__________________________________________________________________________
TAXPAYER IDENTIFICATION OR SOCIAL SECURITY NO.
DATED: ____, 2001
----------------------------
(1) Unless otherwise indicated, it will be assumed that all your Shares are
to be tendered.
--------------------------------------------------------------------------------
3
EX-99.(A)(1)(G)
8
a2059910zex-99_a1g.txt
EXHIBIT 99.(A)(1)(G)
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
GUIDELINES FOR DETERMINING THE PROPER IDENTIFICATION NUMBER TO GIVE THE
PAYER.--Social Security numbers have nine digits separated by two hyphens: E.G.,
000-00-0000. Employer identification numbers have nine digits separated by only
one hyphen: E.G., 00-0000000. The table below will help determine the number to
give the payer.
--------------------------------------------------
GIVE THE
FOR THIS TYPE OF SOCIAL SECURITY
ACCOUNT: NUMBER OF--
--------------------------------------------------
1. An individual's The individual
account
2. Two or more The actual owner of the
individuals (joint account or, if combined
account) funds, any one of the
individuals(1)
3. Husband and wife The actual owner of the
(joint account) account or, if joint
funds, either person(1)
4. Custodian account of The minor(2)
a minor (Uniform Gift
to Minors Act)
5. Adult and minor The adult or, if the
(joint account) minor is the only
contributor, the
minor(1)
6. Account in the name The ward, minor, or
of guardian or incompetent person(3)
committee for a
designated ward,
minor, or incompetent
person
7. a. The usual The grantor-trustee(1)
revocable savings
trust account
(grantor is also
trustee)
b. So-called trust The actual owner(1)
account that is not a
legal or valid trust
under State law
8. Sole proprietorship The owner(4)
account
--------------------------------------------------
GIVE THE EMPLOYER
IDENTIFICATION
FOR THIS TYPE OF ACCOUNT: NUMBER OF--
--------------------------------------------------
9. Sole proprietorship The owner(4)
account
10. A valid trust, The legal entity (Do not
estate, or pension furnish the identifying
trust number of the personal
representative or
trustee unless the legal
entity itself is not
designated in the
account title.)(5)
11. Corporate account The corporation
12. Religious, The organization
charitable, or
educational
organization account
13. Partnership account The partnership
held in the name of
the business
14. Association, club, The organization
or other tax-exempt
organization
15. A broker or The broker or nominee
registered nominee
16. Account with the The public entity
Department of
Agriculture in the
name of a public
entity (such as a
State or local
government, school
district, or prison)
that receives
agricultural program
payments
--------------------------------------------------------------------------------
(1) List first and circle the name of the person whose number you furnish.
(2) Circle the minor's name and furnish the minor's social security number.
(3) Circle the ward's, minor's or incompetent person's name and furnish such
person's social security number.
(4) Show the name of the owner but you may also enter your business or "doing
business as" name. You may use either your social security number or your
employer identification number (if you have one).
(5) List first and circle the name of the legal trust, estate, or pension trust.
NOTE: If no name is circled when there is more than one name, the number will
be considered to be that of the first name listed.
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
OBTAINING A NUMBER
If you don't have a taxpayer identification number or you don't know your
number, obtain Form SS-5, Application for a Social Security Number Card, or Form
SS-4, Application for Employer Identification Number, at the local office of the
Social Security Administration or the Internal Revenue Service ("IRS") and apply
for a number.
PAYEES EXEMPT FROM BACKUP WITHHOLDING
Payees specifically exempted from backup withholding on ALL payments include
the following:
- A corporation.
- A financial institution.
- An organization exempt from tax under section 501(a), or an individual
retirement plan.
- The United States or any agency or instrumentality thereof.
- A State, the District of Columbia, a possession of the United States, or
any subdivision or instrumentality thereof.
- A foreign government, a political subdivision of a foreign government, or
any agency or instrumentality thereof.
- An international organization or any agency, or instrumentality thereof.
- A registered dealer in securities or commodities registered in the United
States or a possession of the United States.
- A real estate investment trust.
- A common trust fund operated by a bank under section 584(a).
- An exempt charitable remainder trust, or a non-exempt trust described in
section 4947(a)(1).
- An entity registered at all times under the investment Company Act of
1940.
- A foreign central bank of issue.
Payments of dividends and patronage dividends not generally subject to
backup withholding include the following:
- Payments to nonresident aliens subject to withholding under section 1441.
- Payments to partnerships not engaged in a trade or business in the United
States and which have at least one nonresident alien partner.
- Payments of patronage dividends where the amount received is not paid in
money.
- Payments made by certain foreign organizations.
- Payments made to a nominee.
Payments of interest not generally subject to backup withholding include the
following:
- Payments of interest on obligations issued by individuals. Note: You may
be subject to backup withholding if this interest is $600 or more and is
paid in the course of the payer's trade or business and you have not
provided your correct taxpayer identification number to the payer.
- Payments of tax-exempt interest (including exempt-interest dividends under
section 852).
- Payment described in section 6049(b)(5) to nonresident aliens.
- Payments on tax-free covenant bonds under section 1451.
- Payments made by certain foreign organizations.
- Payments made to a nominee.
Exempt payees described above should file Form W-9 to avoid possible
erroneous backup withholding. FILE THIS FORM WITH THE PAYER, FURNISH YOUR
TAXPAYER IDENTIFICATION NUMBER, WRITE "EXEMPT" ON THE FACE OF THE FORM, AND
RETURN IT TO THE PAYER. IF THE PAYMENTS ARE INTEREST, DIVIDENDS, OR PATRONAGE
DIVIDENDS, ALSO SIGN AND DATE THE FORM.
Certain payments other than interest dividends, and patronage dividends,
that are not subject to information reporting are also not subject to backup
withholding. For details, see the regulations under sections 6041, 6041A(a),
6045, and 6050A.
PRIVACY ACT NOTICE.--Section 6109 requires most recipients of dividend,
interest, or other payments to give taxpayer identification numbers to payers
who must report the payments to IRS. IRS uses the numbers for identification
purposes. Payers must be given the numbers whether or not recipients are
required to file tax returns. Beginning January 1, 1984, payers must generally
withhold 31% of taxable interest, dividend, and certain other payments to a
payee who does not furnish a taxpayer identification number to a payer. Certain
penalties may also apply.
PENALTIES
(1) PENALTY FOR FAILURE TO FURNISH TAXPAYER IDENTIFICATION NUMBER.--If you fail
to furnish your taxpayer identification number to a payer, you are subject
to a penalty of $50 for each such failure unless your failure is due to
reasonable cause and not to willful neglect.
(2) CIVIL PENALTY FOR FALSE INFORMATION WITH RESPECT TO WITHHOLDING.--If you
make a false statement with no reasonable basis which results in no
imposition of backup withholding, you are subject to a penalty of $500.
(3) CRIMINAL PENALTY FOR FALSIFYING INFORMATION.--Falsifying certifications or
affirmations may subject you to criminal penalties including fines and/or
imprisonment.
FOR ADDITIONAL INFORMATION CONTACT YOUR TAX CONSULTANT OR THE INTERNAL
REVENUE SERVICE.
EX-99.(A)(1)(H)
9
a2059910zex-99_a1h.txt
EXHIBIT 99.(A)(1)(H)
Exhibit 99(a)(1)(H)
CONTACT: TRACY FUREY BRIAN HENRY TIMOTHY COST
BRISTOL-MYERS SQUIBB BRISTOL-MYERS SQUIBB BRISTOL-MYERS SQUIBB
PUBLIC AFFAIRS PUBLIC AFFAIRS INVESTOR RELATIONS
(609) 252-3208 (609) 252-3337 (212) 546-4103
FOR IMMEDIATE RELEASE
BRISTOL-MYERS SQUIBB AND IMCLONE SYSTEMS ENTER INTO LANDMARK COMMERCIALIZATION
AGREEMENT FOR IMPORTANT INVESTIGATIONAL CANCER DRUG IMC-C225
BRISTOL-MYERS SQUIBB TO ACQUIRE AN APPROXIMATE 20 PERCENT
EQUITY STAKE IN IMCLONE SYSTEMS
(PRINCETON, N.J., SEPTEMBER 19, 2001) -- Bristol-Myers Squibb Company (NYSE:
BMY) announced today that it has reached an agreement with ImClone Systems
(NASDAQ: IMCL) to co-develop and co-promote IMC-C225 in the United States,
Canada and Japan. IMC-C225 is an investigational drug designed to target and
block the Epidermal Growth Factor Receptor (EGFR), which is overexpressed on the
surface of certain cancer cells. The companies believe this investigational drug
already has great potential in the treatment of several cancers, including
colon, head and neck, pancreatic and non-small cell lung cancers. In February
2001, the U.S. Food and Drug Administration granted ImClone Systems a Fast Track
designation for IMC-C225 in the treatment of refractory colon cancer.
The transaction between Bristol-Myers Squibb and ImClone Systems comprises a
commercial agreement for the co-development and co-promotion of IMC-C225, as
well as the acquisition of an equity stake in ImClone Systems. Under the terms
of the commercial agreement, Bristol-Myers Squibb will pay ImClone Systems a
total of $1 billion in three cash payments for the achievement of the following
milestones: one upon the signing of the agreement, one upon the completion of
the Biologics License Application (BLA) submission with the FDA, and one upon
the marketing approval of IMC-C225 by the FDA. In addition, ImClone will receive
a significant share of product revenues. The term of the commercial agreement
runs through at least 2018.
"As the worldwide leader in cancer drug development, Bristol-Myers Squibb is
constantly searching for breakthrough medicines to help patients in need and
ImClone Systems' IMC-C225 represents one of the most important advances in
cancer medicine since the introduction of TAXOL(R) (paclitaxel) in 1991," said
Peter R. Dolan, chairman and chief executive officer, Bristol-Myers Squibb. "The
partnership with ImClone Systems demonstrates our continued commitment to
achieve our strategies for growth; focuses our efforts on medicines with
blockbuster potential; broadens our growth opportunities through aggressive
external development; and is a significant step towards becoming a leader in
biologics."
In addition to the commercial agreement, Bristol-Myers Squibb will acquire
approximately 14.4 million shares of ImClone Systems stock though a tender offer
made to ImClone Systems shareholders at a price of $70 per share. Bristol-Myers
Squibb estimates that the dilution from the transaction will be between $.05 and
$.07 in 2002, and $.05 and $.07 in 2003. Thereafter, the strategic agreement
that extends at least through 2018 will be accretive and incremental to the
revenue and EPS growth of the Company. This purchase indicates Bristol-Myers
Squibb's long-term interest in the ImClone's potential for growth in not only
oncology drug development, but also in its biotherapeutic capability, which is
highly complementary to Bristol-Myers Squibb's leadership in core therapeutic
areas such as oncology. This collaboration is the latest in a series of
strategic moves to further strengthen Bristol-Myers Squibb's medicines business,
which has been the focus of the company's Strategy for Growth to double sales,
earnings and earnings per share
-more-
between year-end 2000 and 2005. The acquisition is subject to clearance under
the Hart-Scott-Rodino Antitrust Improvements Act as well as other customary
conditions.
"Our partnership with Bristol-Myers Squibb is a landmark agreement within the
biopharmaceutical industry," stated Samuel D. Waksal, Ph.D., president and chief
executive officer of ImClone Systems Incorporated. "This agreement pairs the
pharmaceutical industry's premier oncology franchise with the leading
biotechnology company in the field of oncology which has developed a rich,
late-stage pipeline of biologic-based therapeutics. We believe that the strength
and vision of this agreement will provide a powerful added value for our
shareholders, as well as patients with cancer who may benefit from treatment
with IMC-C225."
ImClone Systems is studying IMC-C225 in a series of Phase II and Phase III
clinical trials. The company is conducting Phase II clinical studies of IMC-C225
in combination with standard therapies in patients with various stages of
colorectal cancer, pancreatic cancer, head and neck cancer, and non-small cell
lung cancer. In addition to the Phase II studies, the company is conducting a
Phase III clinical trial combining IMC-C225 with chemotherapy and another study
combining IMC-C225 with radiotherapy as first line treatments for head and neck
cancer.
A leader in oncology for the past 40 years, Bristol-Myers Squibb continues to
demonstrate its ongoing commitment to the field of fighting cancer. In addition
to currently marketed medicines such as TAXOL, the Company has a deep and
diverse portfolio of investigational compounds representing novel cytotoxic
therapies and a wide array of new approaches to cancer therapy, including
promising new drug candidates such as novel taxanes, epothilones, ras oncogene
pathway, and matrix metalloproteinase inhibitors that block growth of tumor
blood vessels.
Bristol-Myers Squibb is an $18 billion pharmaceutical and related health care
products company whose mission is to extend and enhance human life.
Bristol-Myers Squibb will conduct an analyst conference call on Wednesday,
September 19 at 1:00 P.M. (ET) to discuss the transaction. The call-in number is
913-981-5581. Investors may listen to the call by linking to the Webcast at
www.bms.com/ir. A replay of the call will be available through the close of
business, Wednesday, October 3, by calling 402-280-9013.
FOR BRISTOL-MYERS SQUIBB
CERTAIN STATEMENTS MADE IN THIS PRESS RELEASE, INCLUDING THE POSSIBLE SUCCESS OF
THE COMPANY'S BUSINESS AND ITS TECHNOLOGY GOALS, ARE FORWARD-LOOKING AND ARE
MADE PURSUANT TO THE SAFE HARBOR PROVISIONS OF THE SECURITIES LITIGATION REFORM
ACT OF 1995. SUCH STATEMENTS INVOLVE RISKS AND UNCERTAINTIES THAT MAY CAUSE THE
COMPANY'S ACTUAL RESULTS OR OUTCOMES TO BE MATERIALLY DIFFERENT FROM THOSE
ANTICIPATED AND DISCUSSED IN THIS PRESS RELEASE. FACTORS THAT MAY CAUSE SUCH A
DIFFERENCE INCLUDE, BUT ARE NOT LIMITED TO, THOSE RISKS AND UNCERTAINTIES
ASSOCIATED WITH THE REGULATORY APPROVAL OF THE COMPANY'S PROPRIETARY DRUGS, AND
OTHER RISKS INCLUDED IN THE COMPANY'S ANNUAL REPORT ON FORM 10-K AND IN THE
COMPANY'S OTHER FILINGS WITH THE SECURITIES AND EXCHANGE COMMISSION DURING THE
PAST 12 MONTH. WE UNDERTAKE NO OBLIGATION TO PUBLICLY UPDATE ANY FORWARD-LOOKING
STATEMENT, WHETHER AS A RESULT OF NEW INFORMATION, FUTURE EVENTS OR OTHERWISE.
THIS RELEASE DOES NOT CONSTITUTE AN OFFER TO PURCHASE, A SOLICITATION OF AN
OFFER TO PURCHASE, OR A SOLICITATION OF CONSENTS WITH RESPECT TO ANY SECURITIES.
ANY SUCH OFFER OR SOLICITATION WILL BE MADE ONLY BY MEANS OF THE OFFER TO
PURCHASE UNDER THE RULES AND REGULATIONS OF THE SECURITIES AND EXCHANGE
COMMISSION.
# # #
EX-99.(A)(1)(I)
10
a2059910zex-99_a1i.txt
EXHIBIT 99(A)(1)(I)
EXHIBIT 99(a)(1)(i)
This announcement is neither an offer to purchase nor a solicitation of an
offer to sell Shares (as defined below). The Offer (as defined below) is made
solely by the Offer to Purchase, dated September 28, 2001, and the related
Letter of Transmittal, and any amendments or supplements thereto. The Offer
is not being made to (nor will tenders be accepted from or on behalf of)
holders of Shares in any jurisdiction in which the making of the Offer or the
acceptance thereof would not be in compliance with the laws of such
jurisdiction. In any jurisdiction where the securities, blue sky or other
laws require the Offer to be made by a licensed broker or dealer, the Offer
will be deemed to be made on behalf of the Purchaser by Lehman Brothers Inc.
or by one or more registered brokers or dealers that are licensed under the
laws of such jurisdiction.
Notice of Offer to Purchase for Cash
Up to 14,392,003 Shares of Common Stock
of
ImClone Systems Incorporated
at
$70.00 Net Per Share
by
Bristol-Myers Squibb Biologics Company
(a wholly owned subsidiary of Bristol-Myers Squibb Company)
Bristol-Myers Squibb Biologics Company, a Delaware corporation (the
"Purchaser") and a wholly owned subsidiary of Bristol-Myers Squibb Company, a
Delaware corporation ("Parent"), is offering to purchase up to 14,392,003
shares ("Shares") of common stock, par value $.001 per share, of ImClone
Systems Incorporated, a Delaware corporation (the "Company"), at a price of
$70.00 per Share, net to the seller in cash (the "Offer Price"), upon the
terms and subject to the conditions set forth in the Offer to Purchase and in
the related Letter of Transmittal (which, together with any amendments or
supplements thereto, constitute the "Offer"). Shares to be purchased by the
Purchaser in the Offer include Shares tendered upon the conditional exercise
of exercisable options to purchase Shares having exercise prices below $70.00
per Share held by present or former employees and directors of the Company.
The Offer is being made pursuant to the Acquisition Agreement, dated as of
September 19, 2001 (the "Acquisition Agreement"), among the Purchaser, Parent
and the Company. The Acquisition Agreement was entered into in connection
with the transactions contemplated by the Development, Promotion,
Distribution and Supply Agreement, dated as of September 19, 2001 (the
"Commercial Agreement"), among Parent, E.R. Squibb & Sons, L.L.C., a limited
liability company under the laws of Delaware ("E.R. Squibb") and a wholly
owned subsidiary of Parent, and the Company. Pursuant to the Commercial
Agreement, Parent and E.R. Squibb were granted certain co-development,
co-promotion and distribution rights with respect to the Company's leading
product, and incurred certain obligations with respect to the co-development,
co-promotion and distribution of this product. In addition to the Acquisition
Agreement and the Commercial Agreement, Parent, the Purchaser and the Company
have entered into a Stockholder Agreement, dated as of September 19, 2001
(the "Stockholder Agreement"), pursuant to which
Parent, the Purchaser and the Company have agreed to various arrangements
regarding the respective rights and obligations of Parent, the Purchaser and
the Company with respect to, among other things, the ownership of Shares by
Parent and the Purchaser. The purpose of the Offer is to enable Parent and
the Purchaser to acquire a significant equity interest in the Company in
connection with the transactions contemplated by the Commercial Agreement.
After the completion of the purchase of 14,392,003 Shares pursuant to the
Offer, the Purchaser will own approximately 19.9% of the currently
outstanding Shares and will have the right to nominate two directors to the
twelve-member board of directors of the Company. The purpose of the Offer is
not to acquire or influence control of the business of the Company other than
to the extent contemplated by the Commercial Agreement and the Stockholder
Agreement and other than as is inherent in having the right to nominate two
of twelve directors to the board of directors. See Section 12, "Purpose of
the Offer; the Acquisition Agreement; the Stockholder Agreement; the
Commercial Agreement; the Confidentiality Agreement; Plans for the Company"
of the Offer to Purchase. THE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT
12:00 MIDNIGHT, NEW YORK CITY TIME, ON FRIDAY, OCTOBER 26, 2001, UNLESS THE
OFFER IS EXTENDED.
The Offer is conditioned upon (1) the conditions to the Purchaser's
obligation to purchase Shares in the Offer set forth in the Acquisition
Agreement having been satisfied or waived and (2) any waiting period under
the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the
"HSR Act"), applicable to the purchase of Shares pursuant to the Offer having
expired or been terminated. The Offer is not conditioned upon the valid
tender of any minimum number of Shares.
Upon the terms and subject to the conditions of the Offer, if more than
14,392,003 Shares are validly tendered and not properly withdrawn prior to
the Expiration Date (as defined below), the Purchaser will accept such Shares
for payment on a pro rata basis (with adjustments to avoid the purchase of
fractional Shares) from each stockholder who has validly tendered Shares in
the Offer based on the number of Shares validly tendered by each stockholder
prior to the Expiration Date and not properly withdrawn. In the event that
proration of tendered Shares is required, the Purchaser shall determine the
proration factor as soon as practicable following the Expiration Date.
Because of the time required to determine the precise number of Shares
validly tendered and not properly withdrawn prior to the Expiration Date, the
Purchaser does not expect that it will be able to announce the final results
of such proration or pay for any Shares until approximately four trading days
on the Nasdaq National Market after the Expiration Date. Stockholders may
obtain such preliminary information from EquiServe Trust Company, N.A. (the
"Depositary") and may be able to obtain such information from their broker.
THE BOARD OF DIRECTORS OF THE COMPANY HAS APPROVED THE ACQUISITION AGREEMENT
AND THE TRANSACTIONS CONTEMPLATED THEREBY BY A UNANIMOUS VOTE OF THOSE
DIRECTORS PRESENT AND VOTING, AND RECOMMENDS THAT STOCKHOLDERS ACCEPT THE
OFFER AND TENDER THEIR SHARES PURSUANT TO THE OFFER. CERTAIN OFFICERS OF THE
COMPANY HAVE AGREED TO TENDER A SUBSTANTIAL PORTION OF THEIR BENEFICIALLY
OWNED SHARES IN THE OFFER.
THE PURCHASER EXPRESSLY RESERVES THE RIGHT (BUT SHALL NOT BE OBLIGATED) TO
WAIVE ANY CONDITION TO THE OFFER, MODIFY THE TERMS OF THE OFFER OR INCREASE
THE OFFER PRICE, EXCEPT THAT, WITHOUT THE CONSENT OF THE COMPANY, THE
PURCHASER SHALL NOT (I) INCREASE OR REDUCE THE NUMBER OF SHARES SUBJECT TO
THE OFFER, (II) REDUCE THE PRICE PER SHARE TO BE PAID PURSUANT TO THE OFFER,
(III) MODIFY OR ADD TO THE CONDITIONS OF THE OFFER, (IV) CHANGE THE FORM OF
CONSIDERATION PAYABLE IN THE OFFER OR (V) OTHERWISE AMEND THE OFFER IN ANY
MANNER ADVERSE TO THE HOLDERS OF SHARES.
For purposes of the Offer, the Purchaser will be deemed to have accepted for
payment, and thereby purchased, Shares validly tendered to the Purchaser and
not withdrawn as, if and when the Purchaser gives oral or written notice to
the Depositary of the Purchaser's acceptance for payment of such Shares.
Payment for Shares accepted for payment pursuant to the Offer will be made by
deposit of the purchase price therefor with the Depositary, which will act as
agent for tendering stockholders for the purpose of receiving payment from
the Purchaser and transmitting payment to tendering stockholders whose shares
have been accepted for payment. In all cases, payment for Shares accepted for
payment pursuant to the Offer will be made only after timely receipt by the
Depositary of (a) certificates for such Shares ("Share Certificates"),
together with a Letter of Transmittal, properly completed and duly executed,
and any required signature guarantees, or, (b) in the case of a transfer
effected pursuant to the book-entry transfer procedures, a Book-Entry
Confirmation and either a Letter of Transmittal, properly completed and duly
executed, and any required signature guarantees, or an Agent's Message (as
defined in Section 2 of the Offer to Purchase), and any other required
documents. UNDER NO CIRCUMSTANCES WILL INTEREST BE PAID ON THE PURCHASE PRICE
FOR TENDERED SHARES, REGARDLESS OF ANY EXTENSION OF OR AMENDMENT TO THE OFFER
OR ANY DELAY IN PAYING FOR SUCH SHARES. The Purchaser will pay any stock
transfer taxes with respect to the transfer and sale of Shares to it or its
order pursuant to the Offer, except as otherwise provided in Instruction 6 of
the Letter of Transmittal, as well as any charges of the Depositary and
Innisfree M&A Incorporated (the "Information Agent").
The term "Expiration Date" means 12:00 midnight, New York City time, on
Friday, October 26, 2001, unless and until the Purchaser shall have extended
the period of time during which the Offer is open in accordance with the
terms of the Acquisition Agreement, in which event the term "Expiration Date"
shall mean the latest time and date on which the Offer, as so extended by the
Purchaser, will expire. The Purchaser will extend the Offer, and thereby
delay acceptance for payment of, and the payment for, any Shares, by giving
oral or written notice of such extension to the Depositary, if at the
Expiration Date any of the conditions to the Purchaser's obligation to
purchase Shares are not satisfied, until such time as such conditions are
satisfied or waived. Each such extension will be for a period of no more than
ten business days, and the Purchaser may not, without the consent of the
Company, extend the Offer beyond April 1, 2002 (provided that (1) if the
applicable waiting period under the HSR Act has not expired or been
terminated, or if the condition set forth in clause (a) of the first sentence
of Section 14 of the Offer to Purchase has not been satisfied
due to the existence of an antitrust-related injunction, then the Purchaser
or the Company may extend this date from time to time to a date no later than
September 30, 2002, (2) if the condition set forth in clause (a) of that
sentence has not been satisfied due to the existence of an injunction in
connection with a third party proposal to acquire more than 35% of the
Company, then this date will be extended to the earlier to occur of September
30, 2002 and any earlier date specified by the Company at any time prior to
September 30, 2002, and (3) if the condition set forth in clause (f) of that
sentence has not been satisfied, then the Purchaser or the Company may extend
this date from time to time to a date no later than September 30, 2002). The
Purchaser will also extend the Offer for any period required by any rule,
regulation, interpretation or position of the Securities and Exchange
Commission or the staff thereof applicable to the Offer or any period
required by applicable law. Any such extension will be followed by a public
announcement thereof no later than 9:00 a.m., New York City time, on the next
business day after the day on which the Offer was scheduled to expire. The
Purchaser will not make available a "subsequent offering period" (within the
meaning of Rule 14d-11 under the Securities Exchange Act of 1934, as amended
(the "Exchange Act")).
If the Purchaser is delayed in its acceptance for payment of or payment for
Shares or is unable to accept for payment or pay for Shares pursuant to the
Offer for any reason, then, without prejudice to the Purchaser's rights under
the Offer (but subject to compliance with Rule 14e-1(c) under the Exchange
Act (relating to a bidder's obligation to pay for or return tendered
securities promptly after the termination or withdrawal of such bidder's
offer) and the terms of the Acquisition Agreement (requiring that the
Purchaser pay for Shares accepted for payment as soon as practicable after
the Expiration Date)), the Depositary may, nevertheless, on behalf of the
Purchaser, retain tendered Shares, and such Shares may not be withdrawn
except to the extent tendering stockholders are entitled to do so as
described in Section 3 of the Offer to Purchase.
If any tendered Shares are not accepted for payment pursuant to the Offer
because of an invalid tender, proration or otherwise, the certificates for
such Shares will be returned (and, if certificates are submitted for more
Shares than are tendered, new certificates for the Shares not tendered will
be sent), in each case without expense to the tendering stockholder (or, in
the case of Shares delivered by book-entry transfer of such Shares into the
Depositary's account at the Book-Entry Transfer Facility pursuant to the
book-entry transfer procedures described in Section 2 of the Offer to
Purchase, such Shares will be credited to an account maintained at the
Book-Entry Transfer Facility), as promptly as practicable following the
expiration or termination of the Offer. Except as otherwise provided below,
tenders of Shares are irrevocable. Shares tendered pursuant to the Offer may
be withdrawn at any time prior to the Expiration Date and, unless accepted
for payment and paid for by the Purchaser pursuant to the Offer, may also be
withdrawn at any time after November 26, 2001 (or such later date as may
apply in case the Offer is extended). For a withdrawal to be effective, a
written or facsimile transmission notice of withdrawal must be timely
received by the Depositary at one of its addresses
set forth on the back cover of the Offer to Purchase. Any such notice of
withdrawal must specify the name of the person who tendered the Shares to be
withdrawn, the number of Shares to be withdrawn and the name of the
registered holder of the Shares to be withdrawn, if different from the name
of the person who tendered the Shares. If Share Certificates to be withdrawn
have been delivered or otherwise identified to the Depositary, then, prior to
the physical release of such certificates, the serial numbers shown on such
certificates must be submitted to the Depositary and, unless such Shares have
been tendered by an Eligible Institution (as defined in Section 2 of the
Offer to Purchase), any and all signatures on the notice of withdrawal must
be guaranteed by an Eligible Institution. If Shares have been tendered
pursuant to the procedures for book-entry transfer as set forth in Section 2
of the Offer to Purchase, any notice of withdrawal must also specify the name
and number of the account at the Book-Entry Transfer Facility to be credited
with the withdrawn Shares and otherwise comply with the Book-Entry Transfer
Facility's procedures.
Withdrawals of tenders of Shares may not be rescinded. Any Shares properly
withdrawn will be deemed not validly tendered for purposes of the Offer, but
may be retendered by again following one of the procedures described in
Section 2 of the Offer to Purchase at any time prior to the Expiration Date.
All questions as to the form and validity (including time of receipt) of
notices of withdrawal will be determined by the Purchaser in its sole
discretion, which determination will be final and binding.
The Offer to Purchase, the related Letter of Transmittal and other relevant
materials will be mailed by the Company to record holders of Shares, and will
be furnished to brokers, dealers, banks, trust companies and similar persons
whose names, or the names of whose nominees, appear on the Company's
stockholder lists, or, if applicable, who are listed as participants in a
clearing agency's security position listing, for subsequent transmittal to
beneficial owners of Shares.
The receipt of cash in the Offer will be a taxable transaction for U.S.
federal income tax purposes and may also be a taxable transaction under
applicable state, local or foreign income or other tax laws. Stockholders
should consult their own tax advisors about the particular effect the
proposed transactions will have on their Shares.
The information required to be disclosed by Rule 14d-6(d)(1) under the
Exchange Act is contained in the Offer to Purchase and is incorporated herein
by reference.
THE OFFER TO PURCHASE AND THE RELATED LETTER OF TRANSMITTAL CONTAIN IMPORTANT
INFORMATION WHICH SHOULD BE READ BEFORE ANY DECISION IS MADE WITH RESPECT TO
THE OFFER.
Questions and requests for assistance may be directed to the Information
Agent at the address and telephone number set forth below. Requests for
additional copies of the Offer to Purchase, the related Letter of Transmittal
may be directed to the Information Agent, or to brokers, dealers, banks or
trust companies. Such additional copies will be promptly furnished at the
Purchaser's expense. The Purchaser and Parent will not pay any fees or
commissions to any
broker or dealer or any other person (other than the Dealer Manager) for
soliciting tenders of Shares pursuant to the Offer.
The Information Agent for the Offer is:
InnisFree M&A Incorporated
501 Madison Avenue, 20th Floor
New York, New York 10022
Banks and Brokers Call Collect: (212) 750-5833
All Others Please Call Toll-Free: (888) 750-5834
The Dealer Manager for the Offer is:
Lehman Brothers
101 Hudson Street
Jersey City, NJ 07302
(646) 351-4463 or (646) 351-4494
September 28, 2001
EX-99.(A)(1)(J)
11
a2059910zex-99_a1j.txt
EXHIBIT 99(A)(1)(J)
Exhibit 99(a)(1)(J)
[ImClone logo]
ImClone Systems Incorporated
180 Varick Street
New York, NY 10014
September 28, 2001
Dear Stockholders:
I am pleased to inform you that on September 19, 2001, ImClone Systems
Incorporated entered into an acquisition agreement (the "Acquisition Agreement")
with Bristol-Myers Squibb Company and Bristol-Myers Squibb Biologics Company,
providing for the tender offer (the "Offer") by Bristol-Myers Squibb Biologics
Company to purchase up to 14,392,003 shares of ImClone common stock
(representing approximately 19.9% of the outstanding shares as of September 19,
2001) for $70.00 share, net to the seller in cash. In addition to the
Acquisition Agreement, ImClone and Bristol-Myers Squibb Company have entered
into a commercial agreement providing for the co-development and co- promotion
of IMC-C225, ImClone's principal investigational cancer drug, in the United
States, Canada and Japan.
YOUR BOARD OF DIRECTORS, AT A MEETING DULY CALLED AND HELD ON SEPTEMBER 19,
2001, BY A UNANIMOUS VOTE OF THOSE DIRECTORS PRESENT AND VOTING, (i) APPROVED
THE ACQUISITION AGREEMENT AND THE TRANSACTIONS CONTEMPLATED THEREBY AND (ii)
APPROVED OF AND CONSENTED TO THE OFFER. ACCORDINGLY, THE BOARD OF DIRECTORS
RECOMMENDS THAT STOCKHOLDERS ACCEPT THE OFFER AND TENDER THEIR SHARES PURSUANT
TO THE OFFER.
In arriving at its recommendation, the Board of Directors gave careful
consideration to a number of factors referred to in the attached Schedule 14D-9.
Among other things, the Board of Directors considered the written opinion, dated
September 19, 2001, of ImClone's financial advisor, Morgan Stanley & Co.
Incorporated, to the effect that, based on and subject to the considerations set
forth therein, as of such date, the $70.00 per share consideration to be
received by ImClone stockholders pursuant to the Offer is fair, from a financial
point of view, to such stockholders.
Accompanying this letter, in addition to the attached Schedule 14D-9
relating to the Offer, is the Offer to Purchase of Bristol-Myers Squibb
Biologics Company, together with related materials, including a Letter of
Transmittal to be used for tendering your shares. Completion of the tender offer
is subject to a number of conditions that are discussed in the Offer to
Purchase.
These documents set forth the terms and conditions of the Offer and provide
instructions as to how to tender your shares. We urge you to read the enclosed
materials carefully.
On behalf of the management and the Board of Directors of ImClone Systems
Incorporated, we thank you for your continued support.
Sincerely,
/s/ Samuel D. Waksal, Ph.D.
Samuel D. Waksal, Ph.D.
President and Chief Executive Officer
EX-99.(A)(1)(K)
12
a2059910zex-99_a1k.txt
EXHIBIT 99(A)(1)(K)
Exhibit 99(a)(1)(K)
NOTICE OF CONDITIONAL EXERCISE
(NOTE: PLEASE READ THE ACCOMPANYING INSTRUCTIONS FOR CONDITIONAL
EXERCISE CAREFULLY.)
Name
................................................
(Please Print)
Address
.............................................
........................................................
(Zip Code)
1. I hereby conditionally exercise exercisable options to purchase
shares of common stock, par value $0.001 per share (the "Shares"), of ImClone
Systems Incorporated, a Delaware corporation (the "Company") having exercise
prices of less than $70.00 per share for the amount of Shares set forth herein
(the "Option Shares").
My exercise of options hereunder is subject to the condition that any
options for Option Shares tendered but not purchased pursuant to the Offer
(whether due to proration or otherwise), shall be deemed not to have been
exercised and shall continue to be outstanding options. None of the options
underlying any of the Option Shares tendered has an exercise price of $70.00 or
greater.
2. I hereby elect as follows with respect to my options:
(Choose only one)
|_| I wish to conditionally exercise and tender Option Shares underlying
ALL of my exercisable options that have an exercise price of less than
$70.00 per Share.
|_| I wish to conditionally exercise and tender Option Shares underlying
_______ of my exercisable options that have an exercise price of less
than $70.00 per Share.
I understand that options will be conditionally exercised in the order
which I designate below:
1. Grant number __________; per share exercise price of $_____; being
conditionally exercised as to _____ shares.
2. Grant number __________; per share exercise price of $_____; being
conditionally exercised as to _____ shares.
3. Grant number __________; per share exercise price of $_____; being
conditionally exercised as to _____ shares.
4. Grant number __________; per share exercise price of $_____; being
conditionally exercised as to _____ shares.
5. Grant number __________; per share exercise price of $_____; being
conditionally exercised as to _____ shares.
6. Grant number __________; per share exercise price of $_____; being
conditionally exercised as to _____ shares.
Total Options: ______
ATTACH ADDITIONAL PAGE IF NEEDED.
2
SIGN HERE
....................................... ....................................
....................................... ....................................
Signature(s) of Option Holders Date
.......................................
.......................................
Name(s) - (please print)
................................................................................
................................................................................
Address (if different from that (Zip Code)
shown on the cover page)
.......................................
Daytime Telephone Number
.......................................
Social Security Number
3
EX-99.(A)(L)
13
a2059910zex-99_al.txt
EXHIBIT 99(A)(L)
Exhibit 99(a)(1)(L)
INSTRUCTIONS FOR CONDITIONAL EXERCISE
(NOTE: BEFORE COMPLETING THE NOTICE OF CONDITIONAL EXERCISE, YOU SHOULD READ THE
ACCOMPANYING MEMORANDUM TO ELIGIBLE OPTION HOLDERS, AS WELL AS THE OFFER TO
PURCHASE AND RELATED LETTER OF TRANSMITTAL.)
--------------------------------------------------------------------------------
THE NOTICE OF CONDITIONAL EXERCISE MUST BE RECEIVED BY IMCLONE SYSTEMS
INCORPORATED BEFORE 5:00 PM, NEW YORK CITY TIME, ON WEDNESDAY, OCTOBER 24,
2001, UNLESS THE OFFER IS EXTENDED. YOU MUST SIGN AND COMPLETE THE
ACCOMPANYING NOTICE OF CONDITIONAL EXERCISE FOR YOUR DIRECTION TO BE VALID.
--------------------------------------------------------------------------------
SEND THE NOTICE OF CONDITIONAL EXERCISE TO:
BY MAIL, OVERNIGHT COURIER OR BY HAND: BY FACSIMILE TRANSMISSION:
ImClone Systems Incorporated ImClone Systems Incorporated
Finance Department Finance Department
22 Chubb Way Facsimile: (908) 704-8256
Somerville, NJ 08876 Attn: Conditional Exercise Team
Attn: Conditional Exercise Team
DELIVERY OF THE NOTICE OF CONDITIONAL EXERCISE TO A PERSON OTHER THAN THE
COMPANY IN THE MANNER SET FORTH ABOVE WILL NOT CONSTITUTE A VALID DIRECTION.
By signing the Notice of Conditional Exercise, you acknowledge receipt of
the materials relating to the Offer to Purchase dated September 28, 2001 (the
"Offer to Purchase") and the related Letter of Transmittal with respect to the
offer by Bristol-Myers Squibb Biologics Company, a Delaware corporation
("Purchaser") and a wholly owned subsidiary of Bristol-Myers Squibb Company, a
Delaware corporation ("Parent"), to purchase up to 14,392,003 shares of common
stock, par value $0.001 per share (the "Shares"), of ImClone Systems
Incorporated, a Delaware corporation (the "Company"), at a price of $70.00 per
Share (the "Offer"). The number of Shares that Purchaser is offering to purchase
includes Shares issuable upon the conditional exercise of exercisable options to
purchase Shares having exercise prices of less than $70.00 per Share (the "Offer
Price") held by present or former employees and directors of the Company (the
"Option Shares"). The Offer is not being made for Option Shares if the exercise
price of the option is $70.00 per Share or greater.
1. You should complete the Notice of Conditional Exercise to conditionally
exercise eligible options and to tender the Option Shares that you are entitled
to receive upon such conditional exercise, pursuant to the terms and conditions
set forth in the Offer to Purchase furnished to you. By signing the Notice of
Conditional Exercise, you agree that if any Option Shares you validly tendered
are accepted for payment in the Offer, you will receive a cash payment equal to
(a) the number of Option Shares that are accepted for purchase, multiplied by
(b) the difference
between the Offer Price and the applicable option exercise price(s), less (c)
any taxes required to be withheld, and you further agree to be bound by the
terms and conditions set forth herein and in the Offer to Purchase.
2. By signing the Notice of Conditional Exercise, you acknowledge that the
Company is permitting you to conditionally exercise your options for the purpose
of allowing you to tender Option Shares in the Offer. Further, by signing the
Notice of Conditional Exercise, you acknowledge that if, and to the extent,
Purchaser purchases less than all of your Option Shares (due to proration or
otherwise), your remaining options will not be considered to have been exercised
and will remain outstanding options. In addition, you acknowledge that the order
of the options to be conditionally exercised will be as designated by you in the
Notice of Conditional Exercise. Finally, you acknowledge that if Option Shares
are accepted for payment and paid for by the Purchaser pursuant to the Offer,
the options in respect of such Options Shares will have been irrevocably
exercised.
3. Option Shares tendered pursuant to the Offer to Purchase may be
withdrawn at any time prior to 5:00 PM, New York City time, on October 24, 2001.
After that time, Option Shares may be withdrawn if they have not been accepted
for payment and paid for by Purchaser as provided in the Offer to Purchase at
any time after November 27, 2001. In order to withdraw Option Shares, an option
holder must submit a written or facsimile transmission notice of withdrawal so
that it is timely received by the Company at the address indicated above before
5:00 PM, New York City time, on October 24, 2001. Any such notice of withdrawal
must specify the name and social security number of the option holder who
tendered the Option Shares to be withdrawn and the number of Option Shares to be
withdrawn. All questions as to the form and validity (including time of receipt)
of notices of withdrawal will be determined by the Company, in its sole
discretion, which determination shall be final and binding. Neither the Company
nor any other person shall be under any duty to give notification of any defects
or irregularities in any notice of withdrawal or incur any liability for failure
to give any such notification. Any Option Shares properly withdrawn will
thereafter be deemed not tendered for purposes of the Offer. However, withdrawn
Option Shares may be retendered by the Expiration Date by again following the
procedures for properly tendering Option Shares.
The Notice of Conditional Exercise must be received by the Company
before 5:00 PM, New York City time, on Wednesday, October 24, 2001. You must
sign and complete the Notice of Conditional Exercise form for your direction to
be valid.
GENERAL TERMS AND CONDITIONS OF THE OFFER APPLICABLE TO OPTION SHARE TENDERS:
NOTE: BY SIGNING THE NOTICE OF CONDITIONAL EXERCISE, YOU ALSO AGREE TO THE
FOLLOWING TERMS AND CONDITIONS.
1. You will, upon request, execute and deliver any additional documents
deemed by the Company or the Depositary to be necessary or desirable to complete
the sale, assignment and transfer of the Option Shares tendered hereby and have
read, understand and agree with all of the terms of the Offer to Purchase.
2. Purchaser will pay any stock transfer taxes with respect to the sale and
transfer of any Option Shares to it or its order pursuant to the Offer to
Purchase. You understand that (a) the purchase price for Option Shares (less the
applicable option exercise price(s) and less any taxes required to be withheld)
will be paid to you (you cannot elect to have the purchase price paid to another
person); (b) you will be responsible for paying federal and state income taxes
arising from the sale of the Option Shares in the Offer (a portion of which may
be withheld as described in Instruction 3 below).
3. Under the U.S. federal income tax laws, the Company may be required to
withhold income and employment taxes from the amount of any payments made to
option holders pursuant to the Offer. See Section 5 of the Offer to Purchase.
2
4. The Company reserves the absolute right to reject any or all conditional
exercises of options it determines not to be in proper form or which may be
unlawful. The Company's interpretation of these Instructions for Tender of
Options will be final and binding on all parties. No conditional exercises of
options or tenders of Option Shares will be deemed to be properly made until all
defects and irregularities have been cured or waived. Neither the Company nor
any other person shall be under any duty to give notification of any defects or
irregularities in any notice of withdrawal or incur any liability for failure to
give any such notification.
5. Questions and requests for assistance or additional copies of the Offer
to Purchase and these Instructions for Conditional Exercise should be directed
to either the Company's Finance Department in New Jersey or the Company's Legal
Department in New York. You may also call Catherine Vaczy, Vice President, Legal
and Associate General Counsel of the Company at (646) 638-5032 or Kurt Elster,
Controller of the Company at (908) 541-8111.
3
EX-99.(A)(M)
14
a2059910zex-99_am.txt
EXHIBIT 99(A)(M)
Exhibit 99(a)(M)
MEMORANDUM TO ELIGIBLE OPTION HOLDERS
TO: Holders of Stock Options Described Below
DATE: September 28, 2001
RE: Tender of Option Shares in Tender Offer Referred to Below
The following questions and answers have been prepared for your
convenience. Please review this information together with the Offer to Purchase
and other documents you received along with this memorandum. If, after reviewing
the information provided, you have additional questions, please call either the
Company's Finance Department in New Jersey or the Company's Legal Department in
New York. You may also call Catherine Vaczy, Vice President, Legal and Associate
General Counsel of the Company, at (646) 638-5032 or Kurt Elster, Controller of
the Company, at (908) 541-8111.
1. WHAT IS THE OFFER?
Bristol-Myers Squibb Biologics Company, a Delaware corporation
("Purchaser") and a wholly owned subsidiary of Bristol-Myers Squibb Company, a
Delaware corporation ("Parent"), is offering to purchase up to 14,392,003 shares
of common stock, par value $0.001 per share (the "Shares"), of ImClone Systems
Incorporated (the "Company") at a price of $70.00 per Share (the "Offer"). The
Offer will be open until it expires at 12:00 midnight, New York City time, on
October 26, 2001 (the "Expiration Date"), unless it is otherwise extended by
Purchaser.
In connection with this Offer, present and former employees and directors
of the Company holding exercisable options to purchase Shares having exercise
prices of less than $70.00 per Share may conditionally exercise all or part of
such options and tender Shares issuable upon such conditional exercise (the
"Option Shares") in the Offer. The portion of your options with respect to any
Option Shares not accepted for payment and paid for by Purchaser (due to
proration or otherwise) will not be considered to have been exercised and will
continue to be outstanding options.
You must complete and deliver to the Company the Notice of Conditional
Exercise in order to tender any or all of your Option Shares resulting from a
conditional exercise of eligible options. This exercise of your options is
"conditional" because you will be deemed to exercise the option only if, and to
the
extent, that Purchaser actually accepts for payment and pays for the Option
Shares in the Offer.
The Offer, which is subject to a number of other conditions, is described
in the Offer to Purchase dated September 28, 2001, and related Letter of
Transmittal included in this package. Please read these documents carefully,
together with the following materials:
o Instructions for Conditional Exercise.
o Notice of Conditional Exercise.
NEITHER THE COMPANY NOR THE BOARD OF DIRECTORS OF THE COMPANY MAKES ANY
RECOMMENDATION AS TO WHETHER HOLDERS OF SUCH OPTIONS SHOULD EXERCISE OR REFRAIN
FROM EXERCISING (CONDITIONALLY OR OTHERWISE) SUCH OPTIONS IN ORDER TO TENDER
SHARES (INCLUDING OPTION SHARES) IN THE OFFER, SINCE THAT DECISION REQUIRES AN
ANALYSIS OF EACH INDIVIDUAL OPTION HOLDER'S SPECIFIC CIRCUMSTANCES. EACH HOLDER
OF SUCH OPTIONS IS URGED TO CONSULT HIS OR HER OWN TAX, FINANCIAL AND LEGAL
ADVISORS REGARDING THE U.S. FEDERAL, STATE, LOCAL AND FOREIGN TAX CONSEQUENCES
OF CONDITIONALLY EXERCISING HIS OR HER OPTIONS IN LIGHT OF HIS OR HER OWN
PARTICULAR CIRCUMSTANCES. EACH HOLDER OF SUCH OPTIONS IS URGED TO CONSIDER (IN
CONJUNCTION WITH HIS OR HER TAX, FINANCIAL AND LEGAL ADVISORS) THE FINANCIAL
IMPLICATIONS OF EXERCISING OPTIONS SIGNIFICANTLY IN ADVANCE OF THE EXPIRATION OF
THE OPTION TERM.
You must carefully follow the instructions below and in the enclosed
Instructions for Conditional Exercise and Notice of Conditional Exercise if you
want to conditionally exercise options and tender Option Shares in the Offer.
Failure to follow such instructions may invalidate your attempted tender of
Option Shares in the Offer.
2. MUST I ACTUALLY EXERCISE MY OPTIONS IN ORDER TO PARTICIPATE IN THE
OFFER?
No. As a holder of exercisable options you may "conditionally" exercise
all or part of your exercisable options having exercise prices of less than
$70.00 per share and tender the Option Shares you would be entitled to receive
upon such exercise.
This exercise of options is "conditional" because you are deemed to
exercise the option only if, and to the extent that, Purchaser actually accepts
for payment and pays for the underlying Option Shares in the Offer.
2
3. DO I HAVE TO PAY THE EXERCISE PRICE OR WITHHOLDING TAXES WITH CASH?
No. In order to facilitate your participation in the Offer, the Company is
allowing you to conditionally exercise your options without paying the exercise
price in cash at the time of exercise. This is called a "cashless exercise".
This means that your options will be conditionally exercised and the Option
Shares will be tendered, and the amount of cash you receive for each Option
Share purchased pursuant to the Offer will equal the difference between $70.00
and the option exercise price per Share, less withholding taxes. You do not need
to send any money with your Notice of Conditional Exercise.
4. WILL ALL OF THE OPTION SHARES THAT I TENDER BE PURCHASED IN THE
OFFER?
In the Offer, Purchaser is offering to purchase up to 14,392,003 Shares
(including Option Shares). If more than this number of Shares is tendered,
Purchaser will purchase Shares on a pro rata basis. This means that Purchaser
will not purchase all of the Option Shares you tender under these circumstances.
The number of Shares that will be tendered in the Offer cannot be determined at
this time. If, after taking into account proration, Purchaser purchases only a
portion of your Option Shares, your remaining options relating to Option Shares
will not be considered to have been exercised and will continue to be
outstanding. If less than 14,392,003 Shares (including Option Shares) are
tendered in the Offer, Purchaser will purchase all of the Option Shares you
tender.
EXAMPLE: If you conditionally exercise options to purchase 2,000 Shares in
the Offer, and at the expiration of the Offer a total of 28,784,006 Shares
(including Option Shares) have been validly tendered and not withdrawn and all
of the conditions to the Offer have been satisfied or waived, Purchaser will
purchase only 14,392,003 Shares. Of your 2,000 Option Shares tendered, 1,000
Option Shares will be purchased by Purchaser. The remaining options to purchase
1,000 Shares will not be considered to have been exercised and will continue to
be outstanding options.
5. HOW WILL I KNOW IF MY OPTION SHARES HAVE BEEN PURCHASED AND WHEN
WILL I BE PAID?
After the Offer expires, all validly tendered Shares (including validly
tendered Option Shares) will be tabulated. Purchaser anticipates that this will
take approximately four trading days after the expiration of the Offer. You can
receive preliminary information regarding the number of your Option Shares that
were purchased in the Offer by contacting the Information Agent at the numbers
set forth on the back cover of the Offer to Purchase. Once the proration factor
is
3
determined, options will be exercised to the extent that the related Option
Shares are purchased in the Offer; these Option Shares will be delivered to the
Depositary. The Depositary will send funds to the Company for disbursement to
holders of Option Shares that were purchased in the Offer. The Company will
disburse to you the purchase price of all of your Option Shares purchased in the
Offer, less the applicable exercise price or prices and applicable withholding
taxes, promptly thereafter.
6. DO I HAVE TO CONDITIONALLY EXERCISE ALL OR PART OF MY OPTIONS?
No. You may elect to conditionally exercise in full, in part or not at
all. If you conditionally exercise in full or in part, the number of options
ultimately exercised and the number of Option Shares purchased in the Offer will
depend on the proration factor, as described above.
7. WILL I BE TAXED ON THE MONEY I RECEIVE?
You should read Section 5, "Certain U.S. Federal Income Tax Consequences",
of the Offer to Purchase for information regarding the tax consequences of your
receipt of money in exchange for your Option Shares.
8. WHAT WILL HAPPEN TO ANY OPTIONS I STILL HOLD AFTER THE OFFER?
If, after taking into account proration, Purchaser does not purchase all
of your Option Shares, the remaining options will not be considered to have been
exercised and will continue to be outstanding options.
9. HOW DO I TENDER MY OPTION SHARES IN THE OFFER?
The only way that you can conditionally exercise options and tender Option
Shares in the Offer is by completing the Notice of Conditional Exercise, signing
the form, and returning it to the Company. The Notice of Conditional Exercise
must be received by the Company before 5:00 P.M., New York City time, on
Wednesday, October 24, 2001.
On this form, you will conditionally exercise part or all of your
eligible options and tender your Option Shares in the Offer.
10. WHAT IF I HOLD ACTUAL SHARES OF THE COMPANY IN ADDITION TO MY STOCK
OPTIONS?
If you have actual Shares in your possession (or at a brokerage firm), you
may tender those Shares as well. In this case, you may have received two or more
4
sets of Offer materials. You should be careful to follow the separate directions
that apply to Shares and Option Shares.
11. CAN I CHANGE MY MIND AND WITHDRAW OPTION SHARES THAT I DIRECTED TO
BE TENDERED?
Yes, but only if you perform the following steps:
o You must send a signed notice of withdrawal to the Company, and it
must be received by the Company before 5:00 PM, New York City time,
on October 24, 2001.
o The notice of withdrawal must be in writing. You may fax your notice
of withdrawal to the Company's Finance Department, Attn: Conditional
Exercise Team, at (908) 704-8256.
The withdrawal procedures are described in the Instructions for
Conditional Exercise. You must follow these instructions carefully.
You are entitled to conditionally exercise eligible options and retender
Option Shares after withdrawal, provided that all resubmitted materials are
completed properly and delivered on time in accordance with the instructions
applicable to the original submission.
12. WHAT DO I DO IF I HAVE ANY QUESTIONS ABOUT THE TENDER OFFER?
If you have questions about the Offer or need help in properly responding
to the Offer, you may call either the Company's Finance Department in New Jersey
or the Company's Legal Department in New York. You may also call Catherine
Vaczy, Vice President, Legal and Associate General Counsel of the Company, at
(646) 638-5032 or Kurt Elster, Controller of the Company, at (908) 541-8111.
******
This memorandum is intended to help you understand the Offer and how
options will be handled in the Offer. The Offer to Purchase and Letter of
Transmittal contain the legal terms of the Offer, and are controlling. We urge
you to carefully read these documents, which explain the Offer in detail.
5
EX-99.(D)(1)
15
a2059910zex-99_d1.txt
EXHIBIT 99.(D)(1)
EXHIBIT 99(d)(1)
ACQUISITION AGREEMENT
dated as of
September 19, 2001
among
IMCLONE SYSTEMS INCORPORATED,
BRISTOL-MYERS SQUIBB COMPANY
and
BRISTOL-MYERS SQUIBB BIOLOGICS COMPANY
TABLE OF CONTENTS
------------
PAGE
ARTICLE 1
DEFINITIONS
SECTION 1.01. DEFINITIONS................................................1
ARTICLE 2
THE OFFER
SECTION 2.01. THE OFFER..................................................6
SECTION 2.02. COMPANY ACTION.............................................8
SECTION 2.03. COMPANY DISCLOSURE DOCUMENTS...............................8
SECTION 2.04. BMS DISCLOSURE DOCUMENTS...................................9
ARTICLE 3
ADDITIONAL SHARE ACQUISITIONS
SECTION 3.01. ADDITIONAL SHARE ISSUANCE.................................10
SECTION 3.02. MARKET FAILURE SHARE ISSUANCE.............................11
SECTION 3.03. OPEN MARKET PURCHASE......................................13
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
SECTION 4.01. CORPORATE EXISTENCE AND POWER.............................15
SECTION 4.02. CORPORATE AUTHORIZATION...................................16
SECTION 4.03. GOVERNMENTAL AUTHORIZATION................................16
SECTION 4.04. NON-CONTRAVENTION.........................................16
SECTION 4.05. CAPITALIZATION............................................17
SECTION 4.06. SEC FILINGS...............................................18
SECTION 4.07. FINANCIAL STATEMENTS......................................18
SECTION 4.08. NO UNDISCLOSED MATERIAL LIABILITIES.......................18
SECTION 4.09. COMPLIANCE WITH LAWS......................................19
SECTION 4.10. LITIGATION................................................19
SECTION 4.11. ABSENCE OF CERTAIN CHANGES................................19
SECTION 4.12. INTELLECTUAL PROPERTY.....................................19
SECTION 4.13. ANTITAKEOVER STATUTES.....................................19
SECTION 4.14. ISSUED SHARES.............................................20
ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF BMS
SECTION 5.01. CORPORATE EXISTENCE AND POWER.............................20
SECTION 5.02. CORPORATE AUTHORIZATION...................................20
PAGE
SECTION 5.03. GOVERNMENTAL AUTHORIZATION................................20
SECTION 5.04. NON-CONTRAVENTION.........................................21
SECTION 5.05. FINANCING.................................................21
SECTION 5.06. INVESTMENT IN SHARES ACQUIRED PURSUANT TO THE SHARE
ISSUANCE............................................................21
SECTION 5.07. NO OWNERSHIP OF SHARES....................................21
ARTICLE 6
COVENANTS OF THE COMPANY
SECTION 6.01. CONDUCT OF THE COMPANY....................................22
SECTION 6.02. NO SOLICITATION...........................................22
ARTICLE 7
COVENANTS OF BMS AND THE COMPANY
SECTION 7.01. REASONABLE BEST EFFORTS...................................22
SECTION 7.02. CERTAIN FILINGS...........................................24
SECTION 7.03. PUBLIC ANNOUNCEMENTS......................................24
SECTION 7.04. NOTICES OF CERTAIN EVENTS.................................24
ARTICLE 8
TERMINATION
SECTION 8.01. TERMINATION...............................................25
SECTION 8.02. EFFECT OF TERMINATION.....................................27
ARTICLE 9
MISCELLANEOUS
SECTION 9.01. NOTICES...................................................28
SECTION 9.02. SURVIVAL..................................................29
SECTION 9.03. AMENDMENTS; NO WAIVERS....................................29
SECTION 9.04. EXPENSES..................................................29
SECTION 9.05. SUCCESSORS AND ASSIGNS....................................29
SECTION 9.06. GOVERNING LAW.............................................29
SECTION 9.07. JURISDICTION..............................................29
SECTION 9.08. WAIVER OF JURY TRIAL......................................30
SECTION 9.09. COUNTERPARTS; EFFECTIVENESS; BENEFIT......................30
SECTION 9.10. ENTIRE AGREEMENT..........................................30
SECTION 9.11. CAPTIONS..................................................30
SECTION 9.12. SEVERABILITY..............................................30
SECTION 9.13. SPECIFIC PERFORMANCE......................................31
SECTION 9.14. ADDITIONAL COVENANT OF BMS................................31
ii
ANNEXES
Annex I Conditions to the Offer
iii
ACQUISITION AGREEMENT
ACQUISITION AGREEMENT dated as of September 19, 2001 (this
"AGREEMENT"), among IMCLONE SYSTEMS INCORPORATED, a Delaware corporation (the
"COMPANY"), BRISTOL-MYERS SQUIBB COMPANY, a Delaware corporation ("BMS") and
BRISTOL-MYERS SQUIBB BIOLOGICS COMPANY, a Delaware corporation and a wholly
owned subsidiary of BMS ("ACQUISITION SUB").
WHEREAS, each of the Boards of Directors of the Company, BMS and
Acquisition Sub has approved this Agreement and the transactions contemplated
hereby;
WHEREAS, simultaneously with the execution of this Agreement, the
Company, BMS and Acquisition Sub are entering into a Stockholder Agreement (the
"STOCKHOLDER AGREEMENT"), pursuant to which, among other things, the Company,
BMS and Acquisition Sub have established certain governance arrangements between
the Company, BMS and Acquisition Sub; and
WHEREAS, simultaneously with the execution of this Agreement, the
Company, BMS and E.R. Squibb & Sons, L.L.C., a limited liability company formed
under the laws of Delaware and a wholly owned subsidiary of BMS ("ERS") are
entering into a Development, Promotion, Distribution and Supply Agreement (the
"COMMERCIAL ARRANGEMENTS"), pursuant to which, among other things, the Company,
BMS and ERS will co-develop and co-promote the biologic pharmaceutical product
IMC-C225 in the United States, Canada and Japan.
NOW, THEREFORE, in consideration of the respective representations,
warranties, covenants, agreements and conditions contained herein, the parties
hereto hereby agree as follows:
ARTICLE 1
DEFINITIONS
SECTION 1.01. DEFINITIONS. (a) The following terms, as used herein,
have the following meanings:
"AFFILIATE" of any Person means any other Person directly or indirectly
controlling, controlled by or under common control with such Person; PROVIDED
that for purposes of this Agreement, neither the Company nor any of its
Subsidiaries shall be deemed an Affiliate of BMS or Acquisition Sub. For the
purposes of this definition, "CONTROL" when used with respect to any Person,
means the possession, directly or indirectly, of the power to direct or cause
the direction of the management and policies of such Person, whether through the
ownership of voting securities, by contract or otherwise; and the terms
"CONTROLLING" and "CONTROLLED" have meanings correlative to the foregoing.
"ANTITRUST INJUNCTION" means any of the events referred to in paragraph
(a) of Annex I as a result of action by the United States Federal Trade
Commission or the Antitrust Division of the United States Department of Justice
brought under any Antitrust Law.
"BUSINESS DAY" means a day other than Saturday, Sunday or other day on
which commercial banks in New York, New York are authorized or required by law
to close.
"CLOSING" means (i) if the number of Shares that are validly tendered
and not withdrawn at the time of acceptance for payment by Acquisition Sub upon
expiration of the Offer is equal to or greater than the Maximum Number, the
acceptance for payment by Acquisition Sub of Shares in the Offer, (ii) if the
number of Shares that are accepted for payment by Acquisition Sub upon
expiration of the Offer is less than the Maximum Number, the consummation of the
Additional Share Issuance (unless Acquisition Sub shall have accepted Shares for
payment in the Offer and this Agreement is terminated pursuant to Section
8.01(f)(i), in which case "Closing" shall mean the acceptance for payment by
Acquisition Sub of Shares in the Offer), (iii) if the Offer is terminated
pursuant to Section 3.02(a), the consummation of the Market Failure Share
Issuance, (iv) if the Offer is terminated pursuant to Section 3.03(a) and,
immediately following the Open Market Purchase Period, BMS and its Affiliates
shall own at least 5% of the then-outstanding Shares, the consummation of the
Open Market Purchase, or (v) if the Offer is terminated pursuant to Section
3.03(a) and the Open Market Purchase has been consummated, and immediately
following the Open Market Purchase Period, BMS and its Affiliates shall not own
at least 5% of the then- outstanding Shares, the consummation of the Open Market
Top-Up Share Issuance (unless this Agreement is terminated pursuant to Section
8.01(f)(iii), in which case "Closing" shall mean the last day of the Open Market
Purchase Period), as the case may be.
"COMPANY OPTIONS" means options to purchase Shares held by present or
former employees and directors of the Company.
"CONFIDENTIALITY AGREEMENT" means the letter agreement, dated May 19,
2001, between the Company and BMS.
2
"DELAWARE LAW" means the General Corporation Law of the State of
Delaware.
"HSR ACT" means the Hart-Scott-Rodino Antitrust Improvements Act of
1976.
"INTELLECTUAL PROPERTY RIGHT" means any patent, patent right,
trademark, trademark right, trade name, trade name right, service mark, service
mark right, copyright and other proprietary intellectual property right.
"ISSUED SHARES" means the Additional Issued Shares, the Market Failure
Issued Shares or the Open Market Top-Up Issued Shares, as the case may be.
"KNOWLEDGE" of the Company shall mean the knowledge, after reasonable
inquiry, of Samuel Waksal, Ph.D., Harlan Waksal, M.D., Daniel Lynch or John
Landes.
"MARKET FAILURE CONDITION" means the condition to the Offer set forth
in paragraph (f) in Annex I to this Agreement.
"MATERIAL ADVERSE EFFECT" means, (A) with respect to the Company, a
material adverse effect on the condition (financial or otherwise), business,
assets (including the Company's manufacturing facilities) or results of
operations or prospects (including prospects for the commercialization of the
Compound (as defined in the Commercial Arrangements)) of the Company, except any
such effect resulting from or arising in connection with (i) this Agreement or
the transactions contemplated hereby or the announcement hereof, (ii) changes,
circumstances or conditions (including changes in applicable laws, rules and
regulations) affecting the biotechnology industry in general, or (iii) changes
in general economic conditions or financial markets, and (B) with respect to
BMS, a material impairment of the ability of BMS or Acquisition Sub to perform
its obligations under or consummate the transactions contemplated by this
Agreement, the Stockholder Agreement or, in the case of BMS only, the Commercial
Arrangements, in accordance with the terms hereof and thereof.
"MERCK AGREEMENT" means the Development and License Agreement, dated
December 14, 1998, between the Company and Merck KgaA, as amended and modified
as of the date of this Agreement.
"NON-THIRD PARTY CHANGE OF CONTROL INJUNCTION" means any of the events
referred to in paragraph (a) of Annex I that is not a Third Party Change of
Control Injunction or an Antitrust Injunction.
3
"1933 ACT" means the Securities Act of 1933.
"1934 ACT" means the Securities Exchange Act of 1934.
"PERSON" means an individual, corporation, partnership, limited
liability company, association, trust or other entity or organization, including
a government or political subdivision or an agency or instrumentality thereof.
"SEC" means the Securities and Exchange Commission.
"SHARE ISSUANCE" means the Additional Share Issuance, the Market
Failure Share Issuance or the Open Market Top-Up Share Issuance, as the case may
be.
"SHARES" means the shares of common stock, $0.001 par value, of the
Company.
"SUBSIDIARY" means, with respect to any Person, any entity of which
securities or other ownership interests having ordinary voting power to elect a
majority of the board of directors or other persons performing similar functions
are at any time directly or indirectly owned by such Person.
"TERMINATION DATE" means the earlier of (A) April 1, 2002; PROVIDED
that if on or before April 1, 2002, Acquisition Sub has not accepted for payment
Shares validly tendered and not withdrawn pursuant to the Offer and, at April 1,
2002 (i) the applicable waiting period under the HSR Act shall not have expired
or been terminated or there exists an Antitrust Injunction, then such date may
be extended by either party from time to time to any date on or prior to
September 30, 2002 by notice in writing to the other party, (ii) there exists a
Third Party Change of Control Injunction, then such date shall be extended to
the earlier to occur of (a) September 30, 2002, and (b) such date prior to
September 30, 2002 as the Company shall determine in its sole discretion by
notice in writing to BMS at any time prior to September 30, 2002, or (iii) there
exists a failure of the Market Failure Condition, then such date may be extended
by either party from time to time to any date on or prior to September 30, 2002
by notice in writing to the other party; and (B) the date upon which any of the
events referred to in paragraph (a) of Annex I shall have become final and
nonappealable.
"THIRD PARTY CHANGE OF CONTROL INJUNCTION" means any of the events
referred to in paragraph (a) of Annex I that relates to or arose in the context
of a Third Party Change of Control Offer.
4
"THIRD PARTY CHANGE OF CONTROL OFFER" means a bona fide public offer or
proposal by any Person (other than BMS and its Affiliates) to acquire beneficial
ownership (as such term is defined in the Stockholder Agreement) of more than
35% of the outstanding Shares.
Any reference in this Agreement to a statute shall be to such statute,
as amended from time to time, and to the rules and regulations promulgated
thereunder.
(b) Each of the following terms is defined in the Section set forth
opposite such term:
TERM SECTION
---- -------
Acquisition Sub........................................... Preamble
Additional Issued Shares.................................. 3.01
Additional Share Issuance ................................ 3.01
Agreement................................................. Preamble
Antitrust Law............................................. 7.01
Average Purchase Price.................................... 3.03
Average Trading Price..................................... 3.03
BMS....................................................... Preamble
Commercial Arrangements................................... Recitals
Company................................................... Preamble
Company Board............................................. 2.02
Company Disclosure Documents.............................. 2.03
Company SEC Documents..................................... 4.06
Company Securities........................................ 4.05
Convertible Notes ........................................ 4.05
DOJ....................................................... 7.01
ERS....................................................... Recitals
FTC....................................................... 7.01
GAAP...................................................... 4.07
HSR Filing................................................ 7.01
Market Failure Issued Shares.............................. 3.02
Market Failure Share Issuance............................. 3.02
Maximum Number............................................ 2.01
Offer..................................................... 2.01
Offer Documents........................................... 2.01
Offer Price .............................................. 2.01
Open Market Purchase...................................... 3.03
Open Market Purchase Period............................... 3.03
Open Market Top-Up Issued Shares.......................... 3.03
Open Market Top-Up Share Issuance......................... 3.03
5
TERM SECTION
---- -------
Schedule TO............................................... 2.01
Schedule 14D-9............................................ 2.02
Stockholder Agreement..................................... Recitals
ARTICLE 2
THE OFFER
SECTION 2.01. THE OFFER. (a) As promptly as practicable after the date
hereof, but in no event later than ten Business Days after the date hereof,
Acquisition Sub shall commence an offer (the "OFFER") to purchase for cash
14,392,003 Shares (which shall include, for purposes of this Agreement, (i) all
Shares issuable in respect of exercisable, in-the-money Company Options which
have been "conditionally exercised" by the holder thereof for purposes of
participating in the Offer, and (ii) all Shares issued prior to the expiration
of the Offer upon the conversion of any convertible securities or upon the
exercise of any options or warrants) (such number of Shares, the "MAXIMUM
NUMBER") at a price of $70.00 per Share, net to the seller in cash (such price,
as may hereafter be increased, the "OFFER PRICE"). The obligation of Acquisition
Sub to accept for payment any Shares tendered pursuant to the Offer shall be
subject only to the conditions set forth in Annex I hereto. The initial
expiration date of the Offer shall be the twentieth Business Day following the
commencement of the Offer (determined under Rule 14d-1(g)(3) promulgated under
the 1934 Act). Acquisition Sub expressly reserves the right to waive any of the
conditions to the Offer, modify the terms of the Offer, and increase the Offer
Price; PROVIDED that, without the consent of the Company, Acquisition Sub shall
not (i) increase or reduce the Maximum Number, (ii) reduce the price per Share
to be paid pursuant to the Offer, (iii) add to the conditions set forth in Annex
I or modify any condition set forth in Annex I, (iv) change the form of
consideration payable in the Offer, or (v) otherwise amend the Offer in any
manner adverse to the holders of Shares. Acquisition Sub shall extend the Offer
for any period required by any rule, regulation, interpretation or position of
the SEC or the staff thereof applicable to the Offer or any period required by
applicable law. If any of the conditions to the Offer is not satisfied or waived
on any scheduled expiration date of the Offer, Acquisition Sub shall extend the
Offer from time to time until such conditions are satisfied or waived; PROVIDED
that (i) each such extension of the Offer shall be for a period of not more than
ten Business Days, and (ii) Acquisition Sub shall not, without the prior written
consent of the Company, extend the Offer beyond the Termination Date. Subject to
the foregoing and upon the terms and subject to the conditions of the Offer,
Acquisition Sub shall accept
6
for payment and pay for, as promptly as practicable after the expiration of the
Offer, all Shares validly tendered and not withdrawn (including if no Shares are
validly tendered and not withdrawn), but not in excess of the Maximum Number.
(b) As soon as practicable on the date of commencement of the Offer,
BMS and Acquisition Sub shall file with the SEC a Tender Offer Statement on
Schedule TO (the "SCHEDULE TO") with respect to the Offer (such Schedule TO and
such documents included therein pursuant to which the Offer will be made,
together with any supplements or amendments thereto, the "OFFER DOCUMENTS").
BMS, Acquisition Sub and the Company each agrees promptly to correct any
information provided by it for use in the Offer Documents if and to the extent
that such information shall have become false or misleading in any material
respect. BMS and Acquisition Sub agree to take all steps necessary to cause the
Schedule TO as so corrected to be filed with the SEC. BMS and Acquisition Sub
shall deliver or cause to be delivered to the Company, or such other Person as
the Company shall designate, the Offer Documents (and any amendments thereto) as
so corrected, in such quantities as shall be necessary for dissemination to all
holders of Shares and Company Options. The Company shall, at its expense, cause
the Offer Documents (and any amendments thereto) to be disseminated to holders
of Shares and Company Options, in each case as and to the extent required by
applicable federal securities laws. The Company and its counsel shall be given
an opportunity to review and comment on the Offer Documents prior to their being
filed with the SEC or disseminated to the holders of Shares and Company Options.
BMS and Acquisition Sub shall provide the Company and its counsel with any
comments or other communications, whether written or oral, that BMS, Acquisition
Sub or its counsel may receive from time to time from the SEC or its staff with
respect to the Offer Documents promptly after receipt of such comments or other
communications.
(c) Each certificate for Shares issued to Acquisition Sub representing
Shares accepted for purchase and paid for by Acquisition Sub in the Offer shall
bear a legend in substantially the following form:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO
RESTRICTIONS ON TRANSFER AS SET FORTH IN THE STOCKHOLDER
AGREEMENT, DATED SEPTEMBER 19, 2001, AMONG IMCLONE SYSTEMS
INCORPORATED, BRISTOL-MYERS SQUIBB COMPANY AND BRISTOL-MYERS
SQUIBB BIOLOGICS COMPANY, A COPY OF WHICH MAY BE OBTAINED FROM
THE CORPORATE
7
SECRETARY OF IMCLONE SYSTEMS
INCORPORATED.
SECTION 2.02. COMPANY ACTION. (a) The Company hereby approves of and
consents to the Offer and represents that its Board of Directors (the "COMPANY
BOARD"), at a meeting duly called and held, has resolved to recommend acceptance
of the Offer by the holders of Shares; PROVIDED, that the Company Board may
withdraw, modify or amend such recommendation in exercise of its fiduciary
duties.
(b) As soon as practicable on the day that the Offer is commenced, the
Company shall file with the SEC and promptly thereafter disseminate to holders
of Shares and Company Options, in each case as and to the extent required by
applicable federal securities laws, a Solicitation/Recommendation Statement on
Schedule 14D-9 (together with any amendments or supplements thereto, the
"SCHEDULE 14D-9") that, subject to the Company Board's right to withdraw, modify
or amend such recommendation in exercise of its fiduciary duties, shall reflect
the recommendation of the Company Board referred to above. Each of the Company,
BMS and Acquisition Sub agrees promptly to correct any information provided by
it for use in the Schedule 14D-9 if and to the extent that it shall have become
false or misleading in any material respect. The Company agrees to take all
steps necessary to cause the Schedule 14D-9 as so corrected to be filed with the
SEC and to be disseminated to holders of Shares and Company Options, in each
case as and to the extent required by applicable federal securities laws. BMS
and its counsel shall be given an opportunity to review and comment on the
Schedule 14D-9 prior to its being filed with the SEC. The Company shall provide
BMS and its counsel with any comments or other communications, whether written
or oral, that the Company or its counsel may receive from time to time from the
SEC or its staff with respect to the Schedule 14D-9 (and any amendments thereto)
promptly after receipt of such comments or other communications.
SECTION 2.03. COMPANY DISCLOSURE DOCUMENTS. The Company agrees that:
(a) Each document required to be filed by the Company with the SEC or
required to be distributed or otherwise disseminated by the Company to the
Company's stockholders in connection with the transactions contemplated by this
Agreement (the "COMPANY DISCLOSURE DOCUMENTS"), including the Schedule 14D-9,
and any amendments or supplements thereto, when filed, distributed or
disseminated, as applicable, will comply as to form in all material respects
with the applicable requirements of the 1934 Act.
8
(b) No Company Disclosure Document, at the time of the filing of such
Company Disclosure Document or any supplement or amendment thereto, at the time
of any distribution or dissemination thereof and at the time of the consummation
of the Offer, will contain any untrue statement of a material fact or omit to
state any material fact necessary in order to make the statements made therein,
in the light of the circumstances under which they were made, not misleading;
PROVIDED that this Section 2.03(b) will not apply to statements or omissions
included in the Company Disclosure Documents based upon information furnished to
the Company in writing by BMS specifically for use therein.
(c) The information with respect to the Company or any of its
Subsidiaries that the Company furnishes to BMS in writing specifically for use
in the Offer Documents, at the time of the filing thereof or any supplement or
amendment thereto, at the time of any distribution or dissemination thereof and
at the time of the consummation of the Offer, will not contain any untrue
statement of a material fact or omit to state any material fact necessary in
order to make the statements made therein, in the light of the circumstances
under which they were made, not misleading.
SECTION 2.04. BMS DISCLOSURE DOCUMENTS. BMS agrees that:
(a) The information with respect to BMS, Acquisition Sub and any other
Subsidiaries of BMS that BMS furnishes to the Company in writing specifically
for use in any Company Disclosure Document will not contain any untrue statement
of a material fact or omit to state any material fact necessary in order to make
the statements made therein, in the light of the circumstances under which they
were made, not misleading at the time of the filing of such Company Disclosure
Document or any supplement or amendment thereto, at the time of any distribution
or dissemination thereof and at the time of the consummation of the Offer.
(b) The Offer Documents, when filed, distributed or disseminated, as
applicable, will comply as to form in all material respects with the applicable
requirements of the 1934 Act and, at the time of the filing thereof, at the time
of any distribution or dissemination thereof and at the time of the consummation
of the Offer, will not contain any untrue statement of a material fact or omit
to state any material fact necessary to make the statements made therein, in the
light of the circumstances under which they were made, not misleading; PROVIDED
that this Section 2.04(b) will not apply to statements or omissions included in
the Offer Documents based upon information furnished to BMS in writing by the
Company specifically for use therein.
9
ARTICLE 3
ADDITIONAL SHARE ACQUISITIONS
SECTION 3.01. ADDITIONAL SHARE ISSUANCE. (a) Subject to the conditions
set forth in Section 3.01(d), if the number of shares that Acquisition Sub
accepts for payment is less than the Maximum Number, the Company shall issue and
sell to Acquisition Sub, and Acquisition Sub shall purchase from the Company for
cash, a number of shares equal to the difference between (i) the Maximum Number,
and (ii) the number of Shares accepted for payment by Acquisition Sub in the
Offer (the "ADDITIONAL ISSUED SHARES"), at a price per Share equal to the Offer
Price, net to the Company in cash (the "ADDITIONAL SHARE ISSUANCE").
(b) The certificate representing any Shares to be purchased by
Acquisition Sub pursuant to the Additional Share Issuance shall bear a legend in
substantially the following form:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO
RESTRICTIONS ON TRANSFER AS SET FORTH IN THE STOCKHOLDER
AGREEMENT, DATED SEPTEMBER 19, 2001, AMONG IMCLONE SYSTEMS
INCORPORATED, BRISTOL-MYERS SQUIBB COMPANY AND BRISTOL-MYERS
SQUIBB BIOLOGICS COMPANY, A COPY OF WHICH MAY BE OBTAINED FROM
THE CORPORATE SECRETARY OF IMCLONE SYSTEMS INCORPORATED.
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND
MAY BE REOFFERED OR SOLD ONLY IF SO REGISTERED OR IF AN
EXEMPTION FROM SUCH REGISTRATION IS AVAILABLE.
(c) Subject to the conditions set forth in Section 3.01(d), as soon as
practicable following the acceptance for payment of Shares in the Offer by
Acquisition Sub, the parties hereto shall cause the Additional Share Issuance to
be effected. Delivery of certificates representing the Additional Issued Shares
by the Company shall be made against payment of the purchase price therefor by
wire transfer in immediately available funds to such account of the Company as
the
10
Company shall communicate to BMS at least two Business Days prior to the
consummation of the Additional Share Issuance. The certificates for the Shares
to be purchased pursuant to the Additional Share Issuance shall be registered in
the name of Acquisition Sub. Delivery of such certificates and payment of the
purchase price therefor shall be made at the offices of Davis Polk & Wardwell,
450 Lexington Avenue, New York, New York 10017 or at such other place as the
parties shall mutually agree, on such date and at such time as the parties shall
mutually agree, but in any event subject to the first sentence of this Section
3.01(c).
(d) The respective obligations of the Company, BMS and Acquisition Sub
to effect the Additional Share Issuance shall be subject to the satisfaction of
the following conditions:
(i) The applicable waiting period under the HSR Act shall
have expired or been terminated;
(ii) There shall not have been any action taken, or any
statute, rule, regulation, injunction, judgment, order or
decree enacted, entered, enforced, promulgated, issued or
deemed applicable to BMS, Acquisition Sub, the Company or the
Additional Share Issuance, by any court, government or
governmental authority or agency in the United States or any
state thereof, other than the application of the waiting
period provisions of the HSR Act to the Additional Share
Issuance, that prohibits the consummation of the Additional
Share Issuance or imposes material limitations on the ability
of BMS or Acquisition Sub to acquire or hold, or exercise full
rights of ownership of, any Shares issued pursuant to the
Additional Share Issuance, including the right to vote such
Shares on all matters properly presented to the stockholders
of the Company;
(iii) Acquisition Sub shall have accepted for payment all
Shares, subject to the Maximum Number, which were validly
tendered and not withdrawn pursuant to the Offer; and
(iv) The Additional Issued Shares shall have been authorized
for listing on the Nasdaq National Market upon official notice
of issuance.
SECTION 3.02. MARKET FAILURE SHARE ISSUANCE. (a) If at the Termination
Date, Acquisition Sub has not accepted for payment Shares validly tendered and
not withdrawn pursuant to the Offer and, at such time, all conditions to the
Offer
11
have been satisfied except for the Market Failure Condition, then either party
may elect to terminate the Offer by written notice to the other party. Upon any
such election, BMS and Acquisition Sub shall take all action necessary to
terminate the Offer and, subject to the conditions set forth in Section 3.02(d),
the Company shall issue and sell to Acquisition Sub, and Acquisition Sub shall
purchase from the Company for cash, a number of Shares equal to the Maximum
Number (the "MARKET FAILURE ISSUED SHARES"), at a price per Share equal to the
Offer Price, net to the Company in cash (the "MARKET FAILURE SHARE ISSUANCE").
(b) The certificate representing any Shares to be purchased by
Acquisition Sub pursuant to the Market Failure Share Issuance shall bear the
legend in substantially the form set forth in Section 3.01(b).
(c) Subject to the conditions set forth in Section 3.02(d), as soon as
practicable following the termination of the Offer pursuant to Section 3.02(a),
the parties hereto shall cause the Market Failure Share Issuance to be effected.
Delivery of certificates representing the Market Failure Issued Shares by the
Company shall be made against payment of the purchase price therefor by wire
transfer in immediately available funds to such account of the Company as the
Company shall communicate to BMS at least two Business Days prior to the
consummation of the Market Failure Share Issuance. The certificates for the
Shares to be purchased pursuant to the Market Failure Share Issuance shall be
registered in the name of Acquisition Sub. Delivery of such certificates and
payment of the purchase price therefor shall be made at the offices of Davis
Polk & Wardwell, 450 Lexington Avenue, New York, New York 10017 or at such other
place as the parties shall mutually agree, on such date and at such time as the
parties shall mutually agree, but in any event subject to the first sentence of
this Section 3.02(c).
(d) The respective obligations of the Company, BMS and Acquisition Sub
to effect the Market Failure Share Issuance shall be subject to the satisfaction
of the following conditions:
(i) The applicable waiting period under the HSR Act shall
have expired or been terminated;
(ii) There shall not have been any action taken, or any
statute, rule, regulation, injunction, judgment, order or
decree enacted, entered, enforced, promulgated, issued or
deemed applicable to BMS, Acquisition Sub, the Company or the
Market Failure Share Issuance, by any court, government or
governmental authority or agency in the United States or any
state thereof, other than the application of the waiting
period provisions of the HSR Act to the
12
Market Failure Share Issuance, that prohibits the consummation
of the Market Failure Share Issuance or imposes material
limitations on the ability of BMS or Acquisition Sub to
acquire or hold, or exercise full rights of ownership of, any
Shares issued pursuant to the Market Failure Share Issuance,
including the right to vote such Shares on all matters
properly presented to the stockholders of the Company;
(iii) The Market Failure Issued Shares shall have been
authorized for listing on the Nasdaq National Market upon
official notice of issuance; and
(iv) The Offer shall have been terminated in accordance with
Section 3.02(a).
SECTION 3.03. OPEN MARKET PURCHASE. (a) If at the Termination Date,
Acquisition Sub has not accepted for payment Shares validly tendered and not
withdrawn pursuant to the Offer, and there exists on such date a Non-Third Party
Change of Control Injunction, then either party may elect to terminate the Offer
by written notice to the other party. Upon any such election, BMS and
Acquisition Sub shall take all action necessary to terminate the Offer and, to
the fullest extent permitted by law and not prohibited by the terms of any
statute, rule, regulation, injunction, judgment, order or decree by any court,
government or governmental authority or agency in the United States or any state
thereof, during the twelve- month period commencing on the date immediately
following the Termination Date (the "OPEN MARKET PURCHASE PERIOD"), Acquisition
Sub shall from time to time purchase, in transactions through the Nasdaq
National Market or otherwise, a number of Shares in the aggregate equal to the
Maximum Number (the "OPEN MARKET PURCHASE"); PROVIDED, that Acquisition Sub's
obligation to purchase Shares in the Open Market Purchase shall terminate at the
time Acquisition Sub has paid $1,000,000,000 in the aggregate to purchase Shares
in the Open Market Purchase.
(b) If BMS and Acquisition Sub have complied with their obligations
under Section 3.03(a), and immediately following the Open Market Purchase Period
BMS and its Affiliates shall not own at least 5% of the then-outstanding Shares,
subject to the conditions set forth in Section 3.03(f), the Company shall issue
and sell to Acquisition Sub, and Acquisition Sub shall purchase from the Company
for cash, a number of shares (the "OPEN MARKET TOP-UP ISSUED SHARES") equal to
the difference between (i) the number of Shares representing 5% of the Shares
outstanding immediately following the Open Market Purchase Period, and (ii) the
number of Shares owned by BMS and its Affiliates immediately following the Open
Market Purchase Period, at a price per Share
13
equal to the Average Trading Price, net to the Company in cash (the "OPEN MARKET
TOP-UP SHARE ISSUANCE"). For purposes of this Section 3.03(b), "AVERAGE TRADING
PRICE" means the average closing price of the Shares on the Nasdaq National
Market for the thirty Nasdaq trading days ending on and including the last
Business Day of the Open Market Purchase Period.
(c) In consideration of the Company's agreement to facilitate
Acquisition Sub's acquisition of Shares pursuant to the Open Market Purchase and
its agreement to grant Acquisition Sub the right to acquire the Open Market
Top-Up Issued Shares, promptly (but in no event later than two Business Days)
following the end of the Open Market Purchase Period, BMS shall (i) pay to the
Company, by wire transfer of immediately available funds to such account of the
Company as the Company shall communicate to BMS prior to the end of the Open
Market Purchase Period, an amount equal to (A) the excess, if any, of (1)
$70.00, over (2) the average purchase price paid by Acquisition Sub for all
Shares acquired in the Open Market Purchase (the "AVERAGE PURCHASE PRICE"),
multiplied by (B) the number of Shares purchased by Acquisition Sub in the Open
Market Purchase; it being understood and agreed that, if the Average Purchase
Price is equal to or exceeds $70.00, no amount shall be payable by BMS pursuant
to this sentence, and (ii) provide the Company with a reasonably detailed
accounting of BMS's calculation of the Average Purchase Price, together with
such documentation and records as the Company shall reasonably request in order
to verify such calculation.
(d) The certificate representing any Shares to be purchased by
Acquisition Sub pursuant to the Open Market Top-Up Share Issuance shall bear the
legend in substantially the form set forth in Section 3.01(b).
(e) Subject to the conditions set forth in Section 3.03(f), as promptly
as practicable following the end of the Open Market Purchase Period, the parties
hereto shall cause the Open Market Top-Up Share Issuance to be effected.
Delivery of certificates representing the Open Market Top-Up Issued Shares by
the Company shall be made against payment of the purchase price therefor by wire
transfer in immediately available funds to such account of the Company as the
Company shall communicate to BMS at least two Business Days prior to the
consummation of the Open Market Top-Up Share Issuance. The certificates for the
Shares to be purchased pursuant to the Open Market Top-Up Share Issuance shall
be registered in the name of Acquisition Sub. Delivery of such certificates and
payment of the purchase price therefor shall be made at the offices of Davis
Polk & Wardwell, 450 Lexington Avenue, New York, New York 10017 or at such other
place as the parties shall mutually agree, on such date and at such time as the
parties shall mutually agree, but in any event subject to the first sentence of
this Section 3.03(e).
14
(f) The respective obligations of the Company, BMS and Acquisition Sub
to effect the Open Market Top-Up Share Issuance shall be subject to the
following conditions:
(i) The applicable waiting period under the HSR Act shall
have expired or been terminated;
(ii) There shall not have been any action taken, or any
statute, rule, regulation, injunction, judgment, order or
decree enacted, entered, enforced, promulgated, issued or
deemed applicable to BMS, Acquisition Sub, the Company or the
Open Market Top-Up Share Issuance, by any court, government or
governmental authority or agency in the United States or any
state thereof, other than the application of the waiting
period provisions of the HSR Act to the Open Market Top-Up
Share Issuance, that prohibits the consummation of the Open
Market Top-Up Share Issuance or imposes material limitations
on the ability of BMS or Acquisition Sub to acquire or hold,
or exercise full rights of ownership of, any Shares issued
pursuant to the Open Market Top-Up Share Issuance, including
the right to vote such Shares on all matters properly
presented to the stockholders of the Company;
(iii) The Open Market Top-Up Issued Shares shall have been
authorized for listing on the Nasdaq National Market upon
official notice of issuance; and
(iv) The Offer shall have been terminated in accordance with
Section 3.03(a).
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to BMS that, except as set forth in
the disclosure letter previously delivered by the Company to BMS:
SECTION 4.01. CORPORATE EXISTENCE AND POWER. The Company is a
corporation duly incorporated, validly existing and in good standing under the
laws of the State of Delaware and has all corporate powers and all governmental
licenses, authorizations, permits, consents and approvals required to own, lease
or otherwise hold its properties and assets and to carry on its business as now
conducted, except for those licenses, authorizations, permits, consents and
15
approvals the absence of which would not have, individually or in the aggregate,
a Material Adverse Effect on the Company. The Company is duly qualified to do
business as a foreign corporation and is in good standing in each jurisdiction
where such qualification is necessary, except for those jurisdictions where
failure to be so qualified would not have, individually or in the aggregate, a
Material Adverse Effect on the Company or materially impair the ability of the
Company to consummate the transactions contemplated by this Agreement and the
Stockholder Agreement.
SECTION 4.02. CORPORATE AUTHORIZATION. The execution, delivery and
performance by the Company of this Agreement and the Stockholder Agreement and
the consummation by the Company of the transactions contemplated hereby and
thereby are within the Company's corporate powers and have been duly authorized
by all necessary corporate action on the part of the Company. The Company has
duly executed and delivered each of this Agreement and the Stockholder
Agreement, and each of this Agreement and the Stockholder Agreement constitutes
a valid and binding agreement of the Company.
SECTION 4.03. GOVERNMENTAL AUTHORIZATION. The execution, delivery and
performance by the Company of this Agreement and the Stockholder Agreement and
the consummation by the Company of the transactions contemplated hereby and
thereby require no action, consent, approval, authorization, permit or order by
or in respect of, or filing, declaration or registration with, any governmental
authority or agency in the United States or any state thereof, other than (i)
compliance with any applicable requirements of the HSR Act, (ii) compliance with
any applicable requirements of the 1933 Act, the 1934 Act and any other
applicable securities or takeover laws, (iii) compliance with the rules and
regulations of the National Association of Securities Dealers and the Nasdaq
National Market, and (iv) any actions or filings the absence of which would not
have, individually or in the aggregate, a Material Adverse Effect on the Company
or materially impair the ability of the Company to consummate the transactions
contemplated by this Agreement and the Stockholder Agreement.
SECTION 4.04. NON-CONTRAVENTION. The execution, delivery and
performance by the Company of this Agreement and the Stockholder Agreement and
the consummation by the Company of the transactions contemplated hereby and
thereby do not and will not (i) contravene, conflict with, or result in any
violation or breach of any provision of the certificate of incorporation or
bylaws of the Company, (ii) assuming compliance with the matters referred to in
Section 4.03, contravene, conflict with, or result in a violation or breach of
any provision of any applicable law, statute, ordinance, rule, regulation,
judgment, injunction, order or decree, or (iii) require any consent or other
action by any Person under, constitute a default under, or cause or permit the
termination, cancellation,
16
acceleration or other change of any right or obligation or the loss of any
benefit to which the Company or any of its Subsidiaries is entitled under any
provision of any agreement or other instrument binding upon the Company or any
of its Subsidiaries or any license, franchise, permit, certificate, approval or
other similar authorization affecting, or relating in any way to, the assets or
business of the Company and its Subsidiaries except for such contraventions,
conflicts and violations referred to in clause (ii) and for such failures to
obtain any such consent or other action, defaults, terminations, cancellations,
accelerations, changes or losses referred to in clause (iii) that would not
have, individually or in the aggregate, a Material Adverse Effect on the Company
or materially impair the ability of the Company to consummate the transactions
contemplated by this Agreement and the Stockholder Agreement.
SECTION 4.05. CAPITALIZATION. (a) The authorized capital stock of the
Company consists of 120,000,000 shares of common stock, par value $0.001 per
share, and 4,000,000 shares of preferred stock, par value $1.00 per share. As of
September 18, 2001, there were outstanding (i) 72,324,224 Shares, (ii) no shares
of preferred stock, (iii) options issued under the Company's stock option plans
to purchase an aggregate of 9,211,276 Shares (of which options to purchase, an
aggregate of 3,518,862 Shares were exercisable), and (iv) $240,000,000 principal
amount of notes ("CONVERTIBLE NOTES") convertible into an aggregate of
approximately 4,356,508 Shares. As of September 18, 2001, 956,473 Shares were
reserved for issuance pursuant to the Company's employee stock purchase plan.
All outstanding shares of capital stock of the Company have been duly authorized
and validly issued and are fully paid and nonassessable.
(b) Except (w) as set forth in Article 3 of this Agreement, this
Section 4.05 and Section 3.04 of the Stockholder Agreement, (x) for Shares
issuable to Merck KGaA pursuant to the Merck Agreement, (y) for changes since
September 18, 2001 resulting from the exercise of options or warrants
outstanding on such date (or granted subsequent to such date as described in
clause (z) below), the conversion of Convertible Notes or the issuance of Shares
pursuant to the Company's employee stock purchase plan, and (z) up to 2,450,000
stock options granted subsequent to September 18, 2001, there are no issued or
outstanding (i) shares of capital stock or voting securities of the Company,
(ii) securities of the Company convertible into or exchangeable for shares of
capital stock or voting securities of the Company, or (iii) options or other
rights to acquire from the Company or other obligation of the Company to issue,
any capital stock, voting securities or securities convertible into or
exchangeable for capital stock or voting securities of the Company (the items in
clauses (i), (ii) and (iii) being referred to collectively as the "COMPANY
SECURITIES"). There are no outstanding obligations of the Company or any of its
Subsidiaries to repurchase, redeem or otherwise acquire any of the Company
Securities.
17
(c) No outstanding shares of capital stock of the Company have been
issued in violation of any purchase option, right of first refusal, preemptive
right, subscription right or any similar right under any provision of Delaware
Law, the certificate of incorporation or by-laws of the Company or any contract
to which the Company is bound, except for such violations which would not have,
individually or in the aggregate, a Material Adverse Effect on the Company.
SECTION 4.06. SEC FILINGS. (a) The Company has filed all reports,
schedules, forms, statements and other documents required to be filed by the
Company with the SEC between December 31, 2000 and the date of this Agreement
(the "COMPANY SEC DOCUMENTS"). As of its filing date, each Company SEC Document
complied as to form in all material respects with the applicable requirements of
the 1933 Act and the 1934 Act, as the case may be, and the rules and regulations
of the SEC promulgated thereunder applicable to such Company SEC Document.
(b) As of its filing date, each Company SEC Document filed pursuant to
the 1934 Act did not contain any untrue statement of a material fact or omit to
state any material fact necessary in order to make the statements made therein,
in the light of the circumstances under which they were made, not misleading.
SECTION 4.07. FINANCIAL STATEMENTS. The audited consolidated financial
statements and unaudited consolidated interim financial statements of the
Company included in the Company SEC Documents fairly present, in conformity with
generally accepted accounting principles ("GAAP") applied on a consistent basis
(except as may be indicated in the notes thereto), the consolidated financial
position of the Company and its consolidated Subsidiaries as of the dates
thereof and their consolidated results of operations and cash flows for the
periods then ended (subject to normal year-end adjustments in the case of any
unaudited interim financial statements).
SECTION 4.08. NO UNDISCLOSED MATERIAL LIABILITIES. Neither the Company
nor any Subsidiary has any liabilities or obligations of any nature required by
GAAP to be set forth on a consolidated balance sheet of the Company and its
consolidated subsidiaries or in the notes thereto, other than:
(a) liabilities or obligations disclosed in the Company SEC Documents;
(b) liabilities and obligations incurred in the ordinary course of
business since December 31, 2000; and
18
(c) liabilities or obligations that would not have, individually or in
the aggregate, a Material Adverse Effect on the Company.
SECTION 4.09. COMPLIANCE WITH LAWS. Except as disclosed in the Company
SEC Documents, the Company and each of its Subsidiaries is in compliance with
and, to the knowledge of the Company, have not been charged with or given
written notice of any violation of, any applicable laws, except for failures to
comply or violations that would not have, individually or in the aggregate, a
Material Adverse Effect on the Company or materially impair the ability of the
Company to consummate the transactions contemplated by this Agreement and the
Stockholder Agreement.
SECTION 4.10. LITIGATION. Except as disclosed in the Company SEC
Documents, there is no action, suit or proceeding pending against or, to the
knowledge of the Company, threatened against or affecting, the Company or any
Subsidiary of the Company that would have, individually or in the aggregate, a
Material Adverse Effect on the Company, nor is there any judgment outstanding
against the Company or any Subsidiary of the Company that would have a Material
Adverse Effect on the Company or materially impair the ability of the Company to
consummate the transactions contemplated by this Agreement and the Stockholder
Agreement.
SECTION 4.11. ABSENCE OF CERTAIN CHANGES. Except as disclosed in the
Company SEC Documents, from December 31, 2000 to the date of this Agreement, the
business of the Company and its Subsidiaries has been conducted in the ordinary
course and during such period there has not been any event, effect or
development that has had, individually or in the aggregate, a Material Adverse
Effect on the Company or would materially impair the ability of the Company to
consummate the transactions contemplated by this Agreement and the Stockholder
Agreement.
SECTION 4.12. INTELLECTUAL PROPERTY. Except as disclosed in the Company
SEC Documents, no claims are pending or, to the knowledge of the Company,
threatened that the Company or any Subsidiary of the Company is infringing or
otherwise adversely affecting the rights of any Person with respect to any
Intellectual Property Right, except for such claims that would not have,
individually or in the aggregate, a Material Adverse Effect on the Company or
would not materially impair the ability of the Company to consummate the
transactions contemplated by this Agreement and the Stockholder Agreement.
SECTION 4.13. ANTITAKEOVER STATUTES. The Company has taken all action
necessary to exempt the Offer, any Share Issuance, this Agreement and the
19
transactions contemplated hereby from the restrictions of Section 203 of
Delaware Law.
SECTION 4.14. ISSUED SHARES. When issued to Acquisition Sub pursuant to
the terms of this Agreement, the Issued Shares will be duly authorized, validly
issued, fully paid and non-assessable and will be free and clear of encumbrances
or liens of any kind, other than restrictions imposed by applicable securities
laws and the Stockholder Agreement.
ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF BMS
BMS represents and warrants to the Company that:
SECTION 5.01. CORPORATE EXISTENCE AND POWER. Each of BMS and
Acquisition Sub is a corporation duly incorporated, validly existing and in good
standing under the laws of the State of Delaware and has all corporate powers
and all governmental licenses, authorizations, permits, consents and approvals
required to own, lease or otherwise hold its properties and assets and to carry
on its business as now conducted, except for those licenses, authorizations,
permits, consents and approvals the absence of which would not have,
individually or in the aggregate, a Material Adverse Effect on BMS. Since the
date of its incorporation, Acquisition Sub has not engaged in any activities
other than in connection with this Agreement and the Stockholder Agreement. All
of the issued and outstanding shares of capital stock of Acquisition Sub are
owned by one or more subsidiaries of BMS, each of which is wholly owned by BMS.
SECTION 5.02. CORPORATE AUTHORIZATION. The execution, delivery and
performance by BMS and Acquisition Sub of this Agreement and the Stockholder
Agreement and the consummation by BMS and Acquisition Sub of the transactions
contemplated hereby and thereby are within the corporate powers of BMS and
Acquisition Sub and have been duly authorized by all necessary corporate action
on the part of BMS and Acquisition Sub. BMS and Acquisition Sub have duly
executed and delivered each of this Agreement and the Stockholder Agreement, and
each of this Agreement and the Stockholder Agreement constitutes a valid and
binding agreement of BMS and Acquisition Sub.
SECTION 5.03. GOVERNMENTAL AUTHORIZATION. The execution, delivery and
performance by BMS and Acquisition Sub of this Agreement and the Stockholder
Agreement and the consummation by BMS and Acquisition Sub of the
transactions contemplated hereby and thereby require no action, consent,
20
approval, authorization, permit or order by or in respect of, or filing,
declaration or registration with, any governmental authority or agency in the
United States or any state thereof, other than (i) compliance with any
applicable requirements of the HSR Act, (ii) compliance with any applicable
requirements of the 1933 Act, the 1934 Act and any other applicable securities
or takeover laws and (iii) any actions or filings the absence of which would not
have, individually or in the aggregate, a Material Adverse Effect on BMS.
SECTION 5.04. NON-CONTRAVENTION. The execution, delivery and
performance by BMS and Acquisition Sub of this Agreement and the Stockholder
Agreement and the consummation by BMS and Acquisition Sub of the transactions
contemplated hereby and thereby do not and will not (i) contravene, conflict
with, or result in any violation or breach of any provision of the certificate
of incorporation or bylaws of BMS or Acquisition Sub, (ii) assuming compliance
with the matters referred to in Section 5.03, contravene, conflict with, or
result in any violation or breach of any provision of any applicable law,
statute, ordinance, rule, regulation, judgment, injunction, order or decree or
(iii) require any consent or other action by any Person under, constitute a
default under, or cause or permit the termination, cancellation, acceleration or
other change of any right or obligation or the loss of any benefit to which BMS
or Acquisition Sub is entitled under any provision of any agreement or other
instrument binding upon BMS or Acquisition Sub, except for such contraventions,
conflicts and violations referred to in clause (ii) and for such failures to
obtain consent or other action, defaults, terminations, cancellations,
accelerations, changes or losses referred to in clause (iii) that would not
have, individually or in the aggregate, a Material Adverse Effect on BMS.
SECTION 5.05. FINANCING. BMS has, and as of the Closing will have,
sufficient cash, available lines of credit or other sources of immediately
available funds to enable Acquisition Sub to purchase all of the Shares to be
acquired in the Offer and any Share Issuance and to pay all related fees and
expenses pursuant to the Offer and any Share Issuance.
SECTION 5.06. INVESTMENT IN SHARES ACQUIRED PURSUANT TO THE SHARE
ISSUANCE. Acquisition Sub is acquiring the Shares to be purchased pursuant to
any Share Issuance for its own account and for investment purposes only and not
with a view to the resale or distribution of such Shares.
SECTION 5.07. NO OWNERSHIP OF SHARES. Neither BMS nor any of its
Affiliates directly or indirectly beneficially owns any Shares.
21
ARTICLE 6
COVENANTS OF THE COMPANY
The Company agrees that:
SECTION 6.01. CONDUCT OF THE COMPANY. From the date hereof until the
Closing, the Company will not take any Prohibited Action (as defined in the
Stockholder Agreement) without the consent of BMS.
SECTION 6.02. NO SOLICITATION. The Company shall not, nor shall it
authorize or permit any Subsidiary of the Company or any officer, director or
employee of, or any investment banker, attorney or other advisor or
representative of the Company or any Subsidiary of the Company to, directly or
indirectly, solicit, initiate or encourage the submission of, any Third-Party
Change of Control Offer.
ARTICLE 7
COVENANTS OF BMS AND THE COMPANY
The parties hereto agree that:
SECTION 7.01. REASONABLE BEST EFFORTS. (a) Subject to the terms and
conditions of this Agreement, the Company and BMS will use their reasonable best
efforts to take, or cause to be taken, all actions and to do, or cause to be
done, all things necessary, proper or advisable under applicable laws and
regulations to consummate the transactions contemplated by this Agreement
including, without limitation, using their reasonable best efforts to cause the
conditions to the Offer to be satisfied as soon as reasonably possible and,
subject to the terms and conditions of this Agreement, consummating the Offer
and, if necessary, any Share Issuance as soon as possible after such conditions
are satisfied or waived. In furtherance and not in limitation of the foregoing,
each of BMS and the Company agrees to make an appropriate filing of a
Notification and Report Form pursuant to the HSR Act (an "HSR FILING") with
respect to the transactions contemplated hereby as promptly as practicable and
in any event within ten Business Days of the date hereof and to supply as
promptly as practicable any additional information and documentary material that
may be requested pursuant to the HSR Act and to take all other actions necessary
to cause the expiration or termination of the applicable waiting periods under
the HSR Act as soon as practicable.
22
(b) In connection with the efforts referenced in Section 7.01(a) to
obtain all requisite approvals and authorizations for the transactions
contemplated by this Agreement under the HSR Act or any other Antitrust Law,
each of BMS and the Company shall use its reasonable best efforts to cooperate
in all respects with each other in connection with any filing or submission and
in connection with any investigation or other inquiry, including any proceeding
initiated by a private party, keep the other party informed in all material
respects of any material communication received by such party from, or given by
such party to, the Federal Trade Commission (the "FTC"), the Antitrust Division
of the Department of Justice (the "DOJ") or any other governmental authority and
of any material communication received or given in connection with any
proceeding by a private party, in each case regarding any of the transactions
contemplated hereby and permit the other party to review any material
communication given by it to, and consult with each other in advance of any
meeting or conference with, the FTC, the DOJ or any such other governmental
authority or private party. Subject to the Confidentiality Agreement, and any
attorney-client, work product or other privilege, each of the parties hereto
will coordinate and cooperate fully with the other parties hereto in exchanging
such information and providing such assistance as such other parties may
reasonably request in connection with the foregoing and in seeking early
termination of any applicable waiting periods under the HSR Act. For purposes of
this Agreement, "ANTITRUST LAW" means the Sherman Act, the Clayton Act, the HSR
Act, the Federal Trade Commission Act, and all other federal, state and foreign,
if any, statutes, rules, regulations, orders, decrees, administrative and
judicial doctrines and other laws that are designed or intended to prohibit,
restrict or regulate actions having the purpose or effect of monopolization or
restraint of trade or lessening of competition through merger or acquisition.
(c) In furtherance and not in limitation of the covenants of the
parties contained in Section 7.01(a) and 7.01(b), each of BMS and the Company
shall use its reasonable best efforts to resolve such objections, if any, as may
be asserted with respect to the transactions contemplated hereby under any
Antitrust Law. In connection with the foregoing, if any administrative or
judicial action or proceeding, including any proceeding by a private party, is
instituted (or threatened to be instituted) challenging any transaction
contemplated by this Agreement as violative of any Antitrust Law, each of BMS
and the Company shall cooperate in all respects with each other and use its
respective reasonable best efforts to contest and resist any such action or
proceeding and to have vacated, lifted, reversed or overturned any decree,
judgment, injunction or other order, whether temporary, preliminary or
permanent, that is in effect and that prohibits, prevents or restricts
consummation of the transactions contemplated by this Agreement.
23
(d) If any objections are asserted with respect to the transactions
contemplated hereby under any Antitrust Law or if any suit is instituted by any
government authority or any private party challenging any of the transactions
contemplated hereby as violative of any Antitrust Law, each of BMS and the
Company shall use its reasonable best efforts to resolve such objections or
challenge as such governmental authority or private party may have to such
transactions under such Antitrust Law so as to permit consummation of the
transactions contemplated by this Agreement.
SECTION 7.02. CERTAIN FILINGS. The Company and BMS shall cooperate with
one another (i) in connection with the preparation of the Company Disclosure
Documents and the Offer Documents, (ii) in determining whether any action by or
in respect of, or filing with, any governmental body, agency, official, or
authority is required, or any actions, consents, approvals or waivers are
required to be obtained from parties to any material contracts, in connection
with the consummation of the transactions contemplated by this Agreement, and
(iii) in taking such actions or making any such filings, furnishing information
required in connection therewith or with the Company Disclosure Documents or the
Offer Documents and seeking timely to obtain any such actions, consents,
approvals or waivers.
SECTION 7.03. PUBLIC ANNOUNCEMENTS. The Company and BMS will issue
separate press releases promptly after the execution of this Agreement, each in
the form previously agreed between the Company and BMS, and thereafter BMS and
the Company will consult with each other before issuing any press release or
making any public statement with respect to this Agreement, the Stockholder
Agreement or the transactions contemplated hereby or thereby and, except as may
be required by applicable law or any listing agreement with any national
securities exchange or automated quotation system, will not issue any such press
release or make any such public statement prior to such consultation.
SECTION 7.04. NOTICES OF CERTAIN EVENTS. Each of the Company and BMS
shall promptly notify the other party of:
(a) any notice or other communication from any Person alleging that
the consent of such Person is or may be required in connection with the
transactions contemplated by this Agreement or the Stockholder Agreement;
(b) any notice or other communication from any governmental or
regulatory agency or authority in connection with the transactions contemplated
by this Agreement or the Stockholder Agreement; and
24
(c) any failure of a condition set forth in paragraph (b), (c) or (d)
of Annex I to this Agreement of which the Company has actual knowledge;
PROVIDED, that no such notification shall affect the representations, warranties
or obligations of the parties or the conditions to the obligations of the
parties under this Agreement, the Stockholder Agreement or the Commercial
Arrangements.
ARTICLE 8
TERMINATION
SECTION 8.01. TERMINATION. This Agreement may be terminated at any
time:
(a) by mutual written agreement of the Company and BMS;
(b) by either the Company or BMS, if the Offer has not been consummated
on or before the Termination Date; PROVIDED that this Agreement may not be
terminated by any party pursuant to this Section 8.01(b) if, at the time of
termination, either (A) there exists a Non-Third Party Change of Control
Injunction, or (B) the Market Failure Condition is not satisfied; PROVIDED
FURTHER, that the right to terminate this Agreement pursuant to this Section
8.01(b) shall not be available to any party whose failure to perform any of its
obligations under this Agreement results in the failure of the Offer not to be
so consummated;
(c) by the Company, if Acquisition Sub shall have failed to commence
the Offer in the time required by this Agreement;
(d) by BMS, if (i) any of the representations or warranties of the
Company contained in this Agreement (other than the representations and
warranties set forth in Sections 4.05(a) and (b) hereof) or the Commercial
Arrangements, disregarding all qualifications and exceptions contained therein
relating to materiality or Material Adverse Effect, shall fail to be true and
correct as of the date made (or if expressly made as of an earlier date, as of
such date), other than for such failures to be true and correct that would not
have, individually or in the aggregate, a Material Adverse Effect on the
Company, (ii) the representations and warranties of the Company set forth in
Sections 4.05(a) and (b) hereof shall fail to be true and correct in all
material respects as of the date made, (iii) the Company shall have breached or
failed to perform in any material respect any of its obligations under the
Acquisition Agreement required to be performed on or prior to such time, or (iv)
the Company shall have taken a Prohibited Action without the consent of BMS
after the date of this Agreement; PROVIDED that such breach of representation or
warranty or breach or failure to
25
perform such obligation cannot be or has not been cured within 30 days after the
giving of written notice to the Company of such breach or failure to perform;
PROVIDED FURTHER, that BMS may not terminate this Agreement under this Section
8.01(d) if either BMS or Acquisition Sub is then in breach of or has failed to
perform in any material respect any of its obligations hereunder or under the
Stockholder Agreement or, in the case of BMS only, under the Commercial
Arrangements;
(e) by the Company, if (i) any of the representations or warranties of
BMS contained in this Agreement or the Commercial Arrangements, disregarding all
qualifications and exceptions contained therein relating to materiality or
Material Adverse Effect, shall fail to be true and correct as of the date made
(or if expressly made as of an earlier date, as of such date), other than for
such failures to be true and correct that would not have, individually or in the
aggregate, a Material Adverse Effect on BMS, and (ii) either BMS or Acquisition
Sub shall have breached or failed to perform in any material respect any of its
obligations under this Agreement, the Stockholder Agreement or, in the case of
BMS only, the Commercial Arrangements required to be performed on or prior to
such time; PROVIDED that such breach of representation or warranty or breach or
failure to perform such obligation cannot be or has not been cured within 30
days after the giving of written notice to BMS of such breach or failure to
perform; PROVIDED FURTHER, that the Company may not terminate this Agreement
under this Section 8.01(e) if it is then in breach of or has failed to perform
in any material respect any of its obligations hereunder or under the Commercial
Arrangements or the Stockholder Agreement; or
(f) by either the Company or BMS, if:
(i) under the terms of this Agreement, subject to the
satisfaction of the conditions set forth in Section 3.01(d),
the Company, BMS and Acquisition Sub are obligated to effect
the Additional Share Issuance, and the Additional Share
Issuance is not consummated within thirty days after the date
on which Acquisition Sub has accepted for purchase Shares
tendered in the Offer; PROVIDED that the right to terminate
this Agreement pursuant to this Section 8.01(f)(i) shall not
be available to any party whose failure to perform any of its
obligations under this Agreement results in the failure of the
Additional Share Issuance not to be so consummated;
(ii) under the terms of this Agreement, subject to the
satisfaction of the conditions set forth in Section 3.02(d),
the Company, BMS and Acquisition Sub are obligated to effect
the
26
Market Failure Share Issuance, and the Market Failure Share
Issuance is not consummated within thirty days after the
termination of the Offer by either party pursuant to Section
3.02(a); PROVIDED that the right to terminate this Agreement
pursuant to this Section 8.01(f)(ii) shall not be available to
any party whose failure to perform any of its obligations
under this Agreement results in the failure of the Market
Failure Share Issuance not to be so consummated; or
(iii) under the terms of this Agreement, subject to the
satisfaction of the conditions set forth in Section 3.03(f),
the Company, BMS and Acquisition Sub are obligated to effect
the Open Market Top-Up Share Issuance, and the Open Market
Top- Up Share Issuance is not consummated within thirty days
after the final day of the Open Market Purchase Period;
PROVIDED that the right to terminate this Agreement pursuant
to this Section 8.01(f)(iii) shall not be available to any
party whose failure to perform any of its obligations under
this Agreement results in the failure of the Open Market
Top-Up Share Issuance not to be so consummated.
The party desiring to terminate this Agreement pursuant to this Section 8.01
(other than pursuant to Section 8.01(a)) shall give notice of such termination
to the other party.
SECTION 8.02. EFFECT OF TERMINATION. If this Agreement is terminated
pursuant to Section 8.01, this Agreement shall become void and of no effect with
no liability on the part of any party (or any stockholder, director, officer,
employee, agent, consultant or representative of such party) to the other party
hereto, PROVIDED that such termination shall not relieve a party hereto from any
liability for damages incurred or suffered by the other party as a result of the
failure of such party's representations and warranties hereunder to be true or
the failure of such party to perform any covenant hereunder. The provisions of
Sections 3.03(c), 8.02, 9.04, 9.06, 9.07 and 9.08 shall survive any termination
hereof pursuant to Section 8.01.
27
ARTICLE 9
MISCELLANEOUS
SECTION 9.01. NOTICES. All notices, requests and other communications
to any party hereunder shall be in writing (including facsimile transmission)
and shall be given,
if to the Company, to:
ImClone Systems Incorporated
180 Varick Street, 7th Floor
New York, New York 10014
Attn: John Landes, Esq.
General Counsel
Fax: (212) 645-2054
with a copy to:
Davis Polk & Wardwell
450 Lexington Avenue
New York, New York 10017
Fax: (212) 450-4800
Attn: Phillip R. Mills, Esq.
if to BMS or Acquisition Sub, to:
Bristol-Myers Squibb Company
345 Park Avenue
New York, New York 10154
Attn: General Counsel
Fax: (212) 546-4020
with a copy to:
Cravath, Swaine & Moore
Worldwide Plaza
825 Eighth Avenue
New York, New York 10019
Fax: (212) 474-3700
Attn: Susan Webster, Esq.
or such other address or facsimile number as such party may hereafter specify
for the purpose by notice to the other parties hereto. All such notices,
requests and
28
other communications shall be deemed received on the date of receipt by the
recipient thereof if received prior to 5 p.m. in the place of receipt and such
day is a Business Day in the place of receipt. Otherwise, any such notice,
request or communication shall be deemed not to have been received until the
next succeeding Business Day in the place of receipt.
SECTION 9.02. SURVIVAL. The representations and warranties and
agreements contained herein and in any certificate or other writing delivered
pursuant hereto shall not survive the Closing, except for the agreements set
forth in the final sentence of Section 2.01(a) and Sections 3.03(c), 9.04, 9.05,
9.06, 9.07 and 9.08.
SECTION 9.03. AMENDMENTS; NO WAIVERS. (a) Any provision of this
Agreement may be amended or waived prior to the Closing if, but only if, such
amendment or waiver is in writing and is signed, in the case of an amendment, by
each party to this Agreement or, in the case of a waiver, by each party against
whom the waiver is to be effective.
(b) No failure or delay by any party in exercising any right, power or
privilege hereunder shall operate as a waiver thereof nor shall any single or
partial exercise thereof preclude any other or further exercise thereof or the
exercise of any other right, power or privilege. The rights and remedies herein
provided shall be cumulative and not exclusive of any rights or remedies
provided by law.
SECTION 9.04. EXPENSES. All costs and expenses incurred in connection
with this Agreement shall be paid by the party incurring such cost or expense.
SECTION 9.05. SUCCESSORS AND ASSIGNS. The provisions of this Agreement
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns, PROVIDED that no party may assign, delegate
or otherwise transfer any of its rights or obligations under this Agreement
without the consent of each other party hereto.
SECTION 9.06. GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York, without regard
to the conflicts of laws rules of such state.
SECTION 9.07. JURISDICTION. Any suit, action or proceeding seeking to
enforce any provision of, or based on any matter arising out of or in connection
with, this Agreement or the transactions contemplated hereby may be brought in
any federal court located in the State of New York or, to the extent no such
federal court has jurisdiction over such action, suit or proceeding, any New
York state court, and each of the parties hereby consents to the jurisdiction of
such courts
29
(and of the appropriate appellate courts therefrom) in any such suit, action or
proceeding and irrevocably waives, to the fullest extent permitted by law, any
objection that it may now or hereafter have to the laying of the venue of any
such suit, action or proceeding in any such court or that any such suit, action
or proceeding brought in any such court has been brought in an inconvenient
form. Process in any such suit, action or proceeding may be served on any party
anywhere in the world, whether within or without the jurisdiction of any such
court. Without limiting the foregoing, each party agrees that service of process
on such party as provided in Section 9.01 shall be deemed effective service of
process on such party.
SECTION 9.08. WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO HEREBY
IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING
ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED
HEREBY.
SECTION 9.09. COUNTERPARTS; EFFECTIVENESS; BENEFIT. This Agreement may
be signed in any number of counterparts, each of which shall be an original,
with the same effect as if the signatures thereto and hereto were upon the same
instrument. This Agreement shall become effective when each party hereto shall
have received counterparts hereof signed by all of the other parties hereto. No
provision of this Agreement is intended to confer any rights, benefits,
remedies, obligations, or liabilities hereunder upon any Person other than the
parties hereto and their respective successors and assigns.
SECTION 9.10. ENTIRE AGREEMENT. This Agreement, the disclosure letter
referred to in Article 4, the Confidentiality Agreement, the Commercial
Arrangements and the Stockholder Agreement constitute the entire agreement
between the parties with respect to the subject matter of this Agreement and
supersede all prior agreements and understandings, both oral and written,
between the parties with respect to the subject matter of this Agreement.
SECTION 9.11. CAPTIONS. The captions herein are included for
convenience of reference only and shall be ignored in the construction or
interpretation hereof.
SECTION 9.12. SEVERABILITY. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction or
other authority to be invalid, void or unenforceable, the remainder of the
terms, provisions, covenants and restrictions of this Agreement shall remain in
full force and effect and shall in no way be affected, impaired or invalidated
so long as the economic or legal substance of the transactions contemplated
hereby is not affected in any
30
manner materially adverse to any party. Upon such a determination, the parties
shall negotiate in good faith to modify this Agreement so as to effect the
original intent of the parties as closely as possible in an acceptable manner in
order that the transactions contemplated hereby be consummated as originally
contemplated to the fullest extent possible.
SECTION 9.13. SPECIFIC PERFORMANCE. The parties hereto agree that
irreparable damage would occur if any provision of this Agreement were not
performed in accordance with the terms hereof and that the parties shall be
entitled to an injunction or injunctions to prevent breaches of this Agreement
or to enforce specifically the performance of the terms and provisions hereof in
any federal court located in the State of New York or, to the extent no such
federal court has jurisdiction over such proceeding, any New York state court,
in addition to any other remedy to which they are entitled at law or in equity.
SECTION 9.14. ADDITIONAL COVENANT OF BMS. BMS shall take all action
necessary to cause Acquisition Sub to perform its obligations under this
Agreement and to consummate the transactions contemplated hereby on the terms
and conditions set forth in this Agreement, including without limitation,
providing to Acquisition Sub all funds required by it to purchase all of the
Shares to be acquired in the Offer and any Share Issuance.
31
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective authorized officers as of the day and year
first above written.
IMCLONE SYSTEMS INCORPORATED
By: /s/ Samuel D. Waskal, Ph.D.
------------------------------------------
Name: Samuel D. Waskal, Ph.D.
Title: President and Chief Executive
Officer
BRISTOL-MYERS SQUIBB COMPANY
By: /s/ Brian Markison
------------------------------------------
Name: Brian Markison
Title: Senior Vice President - External
Affairs, Worldwide Medicines
Group
BRISTOL-MYERS SQUIBB BIOLOGICS
COMPANY
By: /s/ Sandra Leung
------------------------------------------
Name: Sandra Leung
Title: Corporate Secretary
32
ANNEX I
Notwithstanding any other provision of the Offer, but subject to the terms of
the Acquisition Agreement, Acquisition Sub shall not be required to accept for
payment any Shares and may terminate the Offer, if (i) prior to the expiration
date of the Offer, the applicable waiting period under the HSR Act shall not
have expired or been terminated, or (ii) at any time on or after September 19,
2001 and prior to the acceptance for payment of Shares by Acquisition Sub, any
of the following conditions exists:
(a) there shall have been any action taken, or any statute, rule,
regulation, injunction, judgment, order or decree enacted, enforced, entered,
promulgated, issued or deemed applicable to BMS, Acquisition Sub, the Company or
the Offer, by any court, government or governmental authority or agency in the
United States or any state thereof, other than the application of the waiting
period provisions of the HSR Act to the Offer, that prohibits the consummation
of the Offer or imposes material limitations on the ability of BMS or
Acquisition Sub to acquire or hold, or exercise full rights of ownership of, any
Shares validly tendered and not withdrawn in the Offer, including the right to
vote such Shares on all matters properly presented to the stockholders of the
Company;
(b) the Company shall have breached or failed to perform in any
material respect any of its obligations under the Acquisition Agreement required
to be performed on or prior to such time;
(c) the Company shall have taken a Prohibited Action without the
consent of BMS after the date of the Acquisition Agreement;
(d) (i) any of the representations and warranties of the Company
contained in the Acquisition Agreement (other than the representations and
warranties of the Company set forth in Sections 4.05(a) and (b) of the
Acquisition Agreement) or the Commercial Arrangements, disregarding all
qualifications and exceptions contained therein relating to materiality or
Material Adverse Effect, shall fail to be true and correct as of the date made
(or if expressly made as of an earlier date, as of such date), other than for
such failures to be true and correct that would not have, individually or in the
aggregate, a Material Adverse Effect on the Company, or (ii) the representations
and warranties of the Company set forth in Sections 4.05(a) or (b) of the
Acquisition Agreement shall fail to be true and correct in all material respects
as of the date made (or if expressly made as of an earlier date, as of such
date);
(e) the Acquisition Agreement shall have been terminated in accordance
with its terms; or
(f) there shall have occurred (i) any general suspension of trading in
securities on the Nasdaq National Market quotation system or (ii) a declaration
of a banking moratorium by federal or New York authorities or (iii) any
suspension of payments in respect of banks in the United States that regularly
participate in the market in loans to large corporations, in each case which
would prevent the acceptance for payment or the payment for Shares accepted for
payment in the Offer,
which, in the good faith reasonable judgment of BMS in any
such case makes it inadvisable to proceed with such acceptance for payment.
2
EX-99.(D)(2)
16
a2059910zex-99_d2.txt
EXHIBIT 99.(D)(2)
EXHIBIT 99(d)(2)
STOCKHOLDER AGREEMENT
dated as of
September 19, 2001
among
BRISTOL-MYERS SQUIBB COMPANY,
BRISTOL-MYERS SQUIBB BIOLOGICS COMPANY
and
IMCLONE SYSTEMS INCORPORATED
TABLE OF CONTENTS
------------
PAGE
ARTICLE 1
DEFINITIONS
SECTION 1.01. DEFINITIONS......................................................................1
ARTICLE 2
CORPORATE GOVERNANCE
SECTION 2.01. COMPOSITION OF THE BOARD OF DIRECTORS...........................................10
SECTION 2.02. SOLICITATION AND VOTING OF SHARES...............................................12
SECTION 2.03. COMMITTEES OF THE BOARD OF DIRECTORS............................................12
SECTION 2.04. BMS APPROVAL REQUIRED FOR CERTAIN ACTIONS.......................................13
ARTICLE 3
LIMITATIONS ON ADDITIONAL PURCHASES OF COMMON STOCK AND OTHER
ACTIONS
SECTION 3.01. PURCHASES OF COMMON STOCK.......................................................15
SECTION 3.02. ADDITIONAL LIMITATIONS..........................................................15
SECTION 3.03. STANDSTILL EXCEPTIONS...........................................................16
SECTION 3.04. BMS DILUTION OPTION.............................................................18
ARTICLE 4
TRANSFER RESTRICTIONS
SECTION 4.01. TRANSFER OF COMMON STOCK........................................................21
SECTION 4.02. TRANSFER OF SHARES OF THE EQUITY HOLDING ENTITY.................................22
ARTICLE 5
REGISTRATION RIGHTS
SECTION 5.01. REGISTRATION....................................................................23
SECTION 5.02. PIGGYBACK REGISTRATION..........................................................23
SECTION 5.03. REDUCTION OF OFFERING...........................................................24
SECTION 5.04. REGISTRATION PROCEDURES.........................................................24
SECTION 5.05. CONDITIONS TO OFFERINGS.........................................................26
SECTION 5.06. ADDITIONAL CONDITIONS...........................................................27
SECTION 5.07. REGISTRATION EXPENSES...........................................................28
SECTION 5.08. INDEMNIFICATION; CONTRIBUTION...................................................28
SECTION 5.09. RULE 144........................................................................31
SECTION 5.10. LOCKUP..........................................................................31
ARTICLE 6
MISCELLANEOUS
SECTION 6.01. NOTICES.........................................................................32
SECTION 6.02. AMENDMENTS; WAIVERS.............................................................33
SECTION 6.03. SUCCESSORS AND ASSIGNS..........................................................33
SECTION 6.04. CAPTIONS........................................................................33
SECTION 6.05. SEVERABILITY....................................................................33
SECTION 6.06. SPECIFIC PERFORMANCE............................................................33
SECTION 6.07. GOVERNING LAW...................................................................34
SECTION 6.08. JURISDICTION....................................................................34
SECTION 6.09. WAIVER OF JURY TRIAL............................................................34
SECTION 6.10. COUNTERPARTS; EFFECTIVENESS; BENEFIT............................................34
SECTION 6.11. ENTIRE AGREEMENT................................................................34
SECTION 6.12. EXPENSES........................................................................35
SECTION 6.13. ADDITIONAL COVENANT OF BMS......................................................35
ii
STOCKHOLDER AGREEMENT
STOCKHOLDER AGREEMENT dated as of September 19, 2001 (this "AGREEMENT")
among BRISTOL-MYERS SQUIBB COMPANY, a Delaware corporation ("BMS"),
BRISTOL-MYERS SQUIBB BIOLOGICS COMPANY, a Delaware corporation and a wholly
owned subsidiary of BMS ("ACQUISITION SUB"), and IMCLONE SYSTEMS INCORPORATED, a
Delaware corporation (the "COMPANY").
WHEREAS, each of the Boards of Directors of BMS, Acquisition Sub and
the Company has approved this Agreement and the transactions contemplated
hereby;
WHEREAS, simultaneously with the execution of this Agreement, the
Company, BMS and Acquisition Sub are entering into an Acquisition Agreement (the
"ACQUISITION AGREEMENT"), pursuant to which, among other things, BMS and
Acquisition Sub shall commence a tender offer to acquire shares of the Company's
common stock; and
WHEREAS, simultaneously with the execution of this Agreement, the
Company, BMS and E.R. Squibb & Sons, L.L.C., a limited liability company formed
under the laws of Delaware and a wholly owned subsidiary of BMS ("ERS") are
entering into a Development, Promotion, Distribution and Supply Agreement (the
"COMMERCIAL ARRANGEMENTS"), pursuant to which, among other things, the Company,
BMS and ERS will co-develop and co-promote the biologic pharmaceutical product
IMC-C225 in the United States, Canada and Japan.
NOW, THEREFORE, in consideration of the respective representations,
warranties, covenants, agreements and conditions herein, the parties hereto
hereby agree as follows:
ARTICLE 1
DEFINITIONS
SECTION 1.01. DEFINITIONS. (a) The following terms, as used herein,
have the following meanings:
"AFFILIATE" of any Person means any other Person directly or indirectly
controlling, controlled by or under common control with such Person; PROVIDED
that for purposes of this Agreement, neither the Company nor any of its
Subsidiaries shall be deemed an Affiliate of BMS or the Equity Holding Entity.
For the purposes of this definition, "CONTROL" when used with respect to any
Person, means the possession, directly or indirectly, of the power to direct or
cause the direction of the management and policies of such Person, whether
through the ownership of voting securities, by contract or otherwise; and the
terms "CONTROLLING" and "CONTROLLED" have meanings correlative to the foregoing.
"BMS DILUTION EVENT" means (a) the date which is forty-five calendar
days after any date after the Effective Time on which BMS' Common Stock Interest
is less than 5%; PROVIDED that if the Equity Holding Entity acquires shares of
Common Stock within such forty-five calendar day period so that, at any time
prior to the end of such forty-five calendar day period, BMS' Common Stock
Interest is equal to or greater than 5%, then a BMS Dilution Event shall not be
deemed to have occurred on such date, or (b) Acquisition Sub not acquiring 5% or
more of the outstanding Common Stock in the Initial Acquisition; PROVIDED that,
for purposes of Section 3.03(b)(i) of this Agreement, the term "BMS' Beneficial
Interest" shall be substituted for the term "BMS' Common Stock Interest" in this
definition of BMS Dilution Event.
"BMS DIRECTOR" means a Director who is designated for such position by
BMS in accordance with Section 2.01.
"BMS RIGHT OF FIRST NEGOTIATION" means the rights granted to BMS
pursuant to Section 3.6 of the Commercial Arrangements.
"BMS RIGHT OF FIRST OFFER" means the rights granted to BMS pursuant to
Section 3.5 of the Commercial Arrangements.
"BMS SELL-DOWN" means a direct or indirect transfer, sale or other
disposition by BMS or any of its Affiliates of shares of Common Stock
(including, without limitation, any pledge of or encumbrance on shares of Common
Stock) or any Hedging Transaction entered into by BMS or any of its Affiliates,
the result of which is that BMS and its Affiliates own or have voting power over
less than, or have reduced their economic exposure to less than the equivalent
of, 75% of the maximum number of shares of Common Stock beneficially owned by
BMS and its Affiliates at any time from the Effective Time through the time
immediately prior to such transfer, sale or other disposition or transaction.
"BMS' BENEFICIAL INTEREST" means, for any date, the percentage of
Common Stock, determined on the basis of the number of shares of Common Stock
then outstanding (i.e., determined on a primary basis), that is beneficially
owned by BMS on such date.
2
"BMS' COMMON STOCK INTEREST" means, for any date, the percentage of (i)
shares of outstanding Common Stock owned by BMS and its Affiliates on such date
and over which BMS or any of its Affiliates exercises full voting control and
bears the full economic risk, plus any shares of Common Stock with respect to
which BMS has delivered a BMS Dilution Option Exercise Notice but which the
Equity Holding Entity has not yet acquired; PROVIDED that if BMS does not pay
the purchase price for shares of Common Stock for which it has delivered a BMS
Dilution Option Exercise Notice in accordance with the provisions of Section
3.04 of this Agreement, then such shares will not be included in such
calculation, to (ii) the total number of shares of Common Stock then outstanding
(i.e., determined on a primary basis).
"BMS' ENDING DILUTION PERIOD INTEREST" means, with respect to any
Dilution Period, the BMS Common Stock Interest as of the last day of such
Dilution Period.
"BMS' GREATEST DILUTION PERIOD INTEREST" means, with respect to any
Dilution Period, the percentage equivalent of the Net Fraction which is the
greatest (but in any event not greater than the Standstill Interest) on any day
during the applicable Dilution Period. The "NET FRACTION" for any day shall be
equal to the fraction set forth in clause (a) below less each fraction set forth
in clause (b) below:
(a) the fraction
(i) the numerator of which is the sum of (w) the number of
shares of outstanding Common Stock owned by the Equity Holding Entity
at such date (the "DETERMINATION DATE") and over which the Equity
Holding Entity exercised full voting control and bore the full economic
risk as of the Determination Date and (x) any shares with respect to
which at the Determination Date either (A) a previous BMS Dilution
Option may be, but has not been, exercised by BMS (whether or not the
Company shall have provided a Dilution Notice to BMS with respect to
such previous BMS Dilution Option), if any, or (B) a previous BMS
Dilution Option has been exercised by BMS but the shares subject to
such BMS Dilution Option shall not have been purchased by the Equity
Holding Entity, if any; PROVIDED that, in the case of clause (A), if
BMS does not exercise such previous BMS Dilution Option on or prior to
the thirtieth day after receipt from the Company of the Dilution Notice
with respect to such previous BMS Dilution Option, or, in the case of
clauses (A) and (B), BMS shall have exercised such previous BMS
Dilution Option but the Equity Holding Entity shall have failed to
purchase such shares in accordance
3
with the provisions of Section 3.04(e), such shares shall not be
included in such calculation; and
(ii) the denominator of which is the sum of (y) the total number of
shares of Common Stock outstanding (i.e., determined on a primary
basis) as of the Determination Date and (z) any shares included in the
calculation of the numerator pursuant to clause (i)(x) above, if any,
LESS,
(b) for each sale, transfer or other disposition (including, without
limitation, any pledge of or encumbrance on shares of Common Stock) or Hedging
Transaction entered into by the Equity Holding Entity, in each case, which is
consummated or entered into after the Determination Date, the fraction
(i) the numerator of which is the number of shares sold,
transferred or otherwise disposed of or subject to such Hedging
Transaction, and
(ii) the denominator of which is the total number of shares of
Common Stock outstanding at the time of such sale, transfer,
disposition or Hedging Transaction.
A Person shall be deemed to "BENEFICIALLY OWN", and shall be deemed the
"BENEFICIAL OWNER" of, any securities:
(a) which such Person or any of its Affiliates, directly or
indirectly, beneficially owns (as determined pursuant to Rule 13d-3
under the Exchange Act as in effect on the date hereof);
(b) which such Person or any of its Affiliates, directly or
indirectly, has:
(i) the right to acquire (whether such right is
exercisable immediately or only upon the occurrence of certain
events or the passage of time or both) pursuant to any
agreement, arrangement or understanding (whether or not in
writing) or otherwise; PROVIDED that shares of Common Stock
that the Equity Holding Entity may acquire pursuant to the BMS
Dilution Option shall not be deemed beneficially owned by the
Equity Holding Entity until BMS shall have delivered a BMS
Dilution Option Exercise Notice with respect to such shares;
or
(ii) the right to vote (whether such right is
exercisable immediately or only upon the occurrence of certain
events or the
4
passage of time or both) pursuant to any agreement,
arrangement or understanding (whether or not in writing) or
otherwise; PROVIDED that a Person shall not be deemed to
"beneficially own" or be the "beneficial owner" of any
security under this clause (ii) as a result of an agreement,
arrangement or understanding to vote such security if such
agreement, arrangement or understanding (A) arises solely from
a revocable proxy or consent given in response to a public
proxy or consent solicitation made pursuant to, and in
accordance with, the applicable rules and regulations under
the Exchange Act and (B) is not also then reportable by such
Person on Schedule 13D under the Exchange Act (or any
comparable or successor report); or
(c) which are beneficially owned, directly or indirectly, by
any other Person (or any Affiliate thereof) with which such Person or
any of its Affiliates has any agreement, arrangement or understanding
(whether or not in writing) for the purpose of acquiring, holding,
voting (except pursuant to a revocable proxy as described in
subparagraph(b)(ii) immediately above) or disposing of any such
securities;
PROVIDED that neither the Company nor any of its Subsidiaries shall be
deemed Affiliates of BMS for purposes of this definition.
"BOARD" or "BOARD OF DIRECTORS" means the Board of Directors of the
Company, except where the context requires otherwise.
"BUSINESS DAY" means any day except a Saturday, Sunday or other day on
which commercial banks in the City of New York are authorized by law to close.
"CODE" means the Internal Revenue Code of 1986.
"COMMON STOCK" means the common stock, $.001 par value, of the Company.
"COMMON STOCK EQUIVALENTS" means any securities of the Company
exercisable or exchangeable for or convertible into shares of Common Stock,
whether exercisable, exchangeable or convertible immediately or only upon the
occurrence of certain events or the passage of time or both.
"COMPANY AGGREGATE VALUE" means, for any date, the aggregate market
capitalization of the Company plus the aggregate indebtedness of the Company
plus the fair value of any outstanding preferred stock of the Company.
5
"COMPANY AVERAGE CLOSING PRICE" means the average closing price of the
Common Stock on the Nasdaq for the thirty Nasdaq trading days ending on and
including the date which is the fifth Nasdaq trading day prior to the date on
which the existence of any Complying Proposal is made public.
"COMPLYING PROPOSAL" means a proposal by BMS to acquire all, but not
less than all, of the then-outstanding shares of Common Stock and Common Stock
Equivalents not owned by the Equity Holding Entity for a price or consideration
per share not less than 125% of the Company Average Closing Price, the
consideration for which may be cash or common stock of BMS; PROVIDED that if BMS
proposes consideration in the form of BMS common stock, in whole or in part,
then (i) upon issuance to holders of Common Stock and Common Stock Equivalents,
such common stock of BMS shall be listed on the same securities exchanges as all
other outstanding common stock of BMS, and (ii) the acquisition shall be
structured so as to qualify as a "reorganization" under Section 368 of the Code
or as an exchange described in Section 351 of the Code or any successor
provision thereto or any other provision of the Code which would enable the
acquisition to be tax-free to the Company's stockholders.
"DETERMINATION DATE" has the meaning set forth in the definition of
"BMS' Greatest Dilution Period Interest".
"DIRECTOR" means a member of the Board of Directors.
"DILUTION REFERENCE DATE" means any (i) Annual Dilution Reference Date,
(ii) Exceptional Stock Issuance Date or (iii) Rights-Reducing Stock Issuance
Date.
"DILUTION PERIOD" means (i) with respect to the initial Dilution
Period, the period beginning on the Effective Time and ending upon the first
Dilution Reference Date thereafter and (ii) with respect to all subsequent
Dilution Periods, the period beginning on the day following the immediately
preceding Dilution Reference Date and ending on the immediately following
Dilution Reference Date.
"EFFECTIVE TIME" means the time of the Closing (as defined in the
Acquisition Agreement), unless "Closing" is defined by clause (iv) of the
definition of Closing, in which case "Effective Time" shall mean the date on
which BMS' Common Stock Interest is first equal to or greater than 5%.
"EQUITY HOLDING ENTITY" means Acquisition Sub or, upon any transfer by
Acquisition Sub pursuant to Section 4.01(d) of the shares of Common Stock
6
owned by Acquisition Sub, the transferee of Acquisition Sub (or, upon any
subsequent transfer pursuant to Section 4.01(d), the transferee of such
transferee).
"EXCHANGE ACT" means the Securities Exchange Act of 1934.
"FIRST COMMERCIAL SALE" has the meaning set forth in the Commercial
Arrangements.
"HEDGING TRANSACTION" means any forward, futures, swap, call, put,
short sale or other hedging arrangement entered into by any Person or any of its
Affiliates that transfers all or a portion of the economic risk or benefit
associated with the ownership of Common Stock.
"HSR ACT" means the Hart-Scott-Rodino Antitrust Improvements Act of
1976.
"INITIAL ACQUISITION" means the acquisition by Acquisition Sub of
shares of Common Stock pursuant to (i) the Offer and, if consummated, the
Additional Share Issuance, (ii) the Market Failure Share Issuance, or (iii) the
Open Market Purchase and, if consummated, the Open Market Top-Up Share Issuance
(as such terms are defined in the Acquisition Agreement).
"INITIAL TRIGGER DATE" means the later to occur of (i) the date which
is the third anniversary of the Signing Date, and (ii) the date which is the
second anniversary of the First Commercial Sale; PROVIDED that if the date
referred to in clause (ii) occurs after the date which is forty-two months after
the Signing Date, the Initial Trigger Date shall be the date which is forty-two
months after the Signing Date.
"INSTITUTIONAL PURCHASER" means a Person described in Rule 13d-1(b)(1)
promulgated under the Exchange Act (other than any such Person who acquires
Common Stock as part of such Person's market-making or broker-dealer
activities).
"MERCK AGREEMENT" means the Development and License Agreement, dated
December 14, 1998, between the Company and Merck KgaA, as amended and modified
as of the date of this Agreement.
"NASDAQ" means the National Association of Securities Dealers
Automated Quotation System.
"NET FRACTION" has the meaning set forth in the definition of "BMS'
Greatest Dilution Period Interest".
7
"OUTSTANDING CONVERTIBLE SECURITIES" means (a) any securities of the
Company outstanding as of September 18, 2001 that are convertible into or
exercisable or exchangeable for shares of Common Stock, and any options or other
rights to acquire from the Company or other obligation of the Company to issue,
shares of Common Stock, in each case outstanding or existing as of September 18,
2001, including without limitation shares issuable (A) to Merck KGaA pursuant to
the Merck Agreement, (B) as a result of the exercise of options or warrants
outstanding as of September 18, 2001, (C) upon conversion of the Company's
outstanding 5 1/2% Convertible Notes due March 1, 2005, or (D) pursuant to the
Company's employee stock purchase plan, and (b) any shares issued after
September 18, 2001 in connection with any hiring, retention, compensation,
incentivization, retirement, termination or severance arrangements for
employees, officers, directors and consultants of the Company and its
Affiliates, whether or not the obligation exists as of September 18, 2001, and
any option, stock award or warrant issued in the ordinary course of business.
"PERSON" means an individual or a corporation, partnership,
association, trust, or any other entity or organization, including a government
or political subdivision or an agency or instrumentality thereof.
"REGISTRABLE SECURITIES" means all shares of Common Stock held by the
Equity Holding Entity; PROVIDED, that such securities shall cease to be
Registrable Securities when (i) a registration statement relating to such
securities shall have been declared effective by the SEC and such securities
shall have been disposed of pursuant to such registration statement, or (ii)
such securities have been disposed of pursuant to Rule 144 promulgated under the
Securities Act or may be disposed of pursuant to Rule 144(k) promulgated under
the Securities Act.
"RESTRICTED PERIOD" means the period from the Signing Date until the
earliest to occur of (i) the fifth anniversary of the Signing Date, (ii) a BMS
Dilution Event, (iii) a BMS Sell-Down, (iv) the consummation of a Third-Party
Change of Control Transaction, (v) a termination of the Commercial Arrangements
by BMS pursuant to Section 13.3 of the Commercial Arrangements, or (vi) a
termination of the Commercial Arrangements by the Company pursuant to Section
13.2 of the Commercial Arrangements.
"SEC" means the Securities and Exchange Commission.
"SECURITIES ACT" means the Securities Act of 1933.
"SIGNING DATE" means the date of this Agreement.
8
"STANDSTILL INTEREST" means, for any date, 19.9% of the
then-outstanding shares of Common Stock.
"STANDSTILL PERIOD" means the period from the Signing Date until the
Standstill Termination Date.
"STANDSTILL TERMINATION DATE" means the earliest to occur of: (i) the
date which is the fifth anniversary of the Signing Date; (ii) the date on which
a Third- Party Change of Control Transaction is consummated; (iii) the first
anniversary of a BMS Dilution Event; and (iv) the date on which a Prohibited
Action is taken by the Company during the Restricted Period without the consent
of the BMS Directors.
"SUBSIDIARY" means, with respect to any Person, any corporation or
other entity of which a majority of the capital stock or other ownership
interests having ordinary voting power to elect a majority of the board of
directors or other persons performing similar functions are at the time directly
or indirectly owned by such Person.
"THIRD-PARTY CHANGE OF CONTROL TRANSACTION" means an acquisition of
beneficial ownership of more than 35% of the outstanding Common Stock by a
third-party other than BMS or any Affiliate of BMS.
"UNDERWRITER" means a securities dealer who purchases any Registrable
Securities as a principal in connection with a distribution of such Registrable
Securities and not as part of such dealer's market-making activities.
Any reference in this Agreement to a statute shall be to such statute,
as amended from time to time, and to the rules and regulations promulgated
thereunder.
(b) Each of the following terms is defined in the Section set forth
opposite each term:
TERM SECTION
---- -------
Acquisition Agreement................................... Recitals
Acquisition Sub......................................... Preamble
Annual Dilution Reference Date.......................... 3.04
BMS..................................................... Preamble
BMS Dilution Option..................................... 3.04
BMS Dilution Option Exercise Notice..................... 3.04
BMS Dilution Option Shares.............................. 3.04
9
TERM SECTION
---- -------
BMS Schedule 13D........................................ 3.04
Commercial Arrangements................................. Recitals
Company................................................. Preamble
Demand Registration..................................... 5.01
Dilution Notice......................................... 3.04
ERS..................................................... Recitals
Exceptional Stock Issuance Date......................... 3.04
Inspectors.............................................. 5.04
Overall Dilution Option Period.......................... 3.04
Piggyback Registration.................................. 5.02
Prohibited Actions...................................... 2.04
Records................................................. 5.04
Registration Expenses................................... 5.07
Registration Statement.................................. 5.01
Rights-Reducing Stock Issuance Date..................... 3.04
ARTICLE 2
CORPORATE GOVERNANCE
SECTION 2.01. COMPOSITION OF THE BOARD OF DIRECTORS. (a) The number of
directors comprising the Board of Directors immediately after the Effective Time
shall be increased to twelve.
(b) Immediately after the Effective Time, the Company shall cause to
be appointed to its Board of Directors two individuals to be designated by BMS
prior to the Effective Time, which individuals shall serve as BMS Directors in
accordance with the terms of this Section 2.01; PROVIDED that (i) if immediately
after the Effective Time, BMS has the right to nominate only one BMS Director
pursuant to this Section 2.01, the Company shall cause one individual designated
by BMS to be appointed to its Board of Directors, and such individual shall
serve as a BMS Director in accordance with the terms of this Section 2.01, and
(ii) if immediately after the Effective Time, BMS has no right to designate a
BMS Director pursuant to this Section 2.01, the Board shall not be required to
cause the appointment of any individual to the Board as a BMS Director. Subject
to the other provisions of this Section 2.01, such BMS Directors shall remain in
office until the next election of directors (or any earlier termination,
resignation or removal). Following the Effective Time, all Directors in office
immediately prior to the Effective Time shall remain in office until the next
election of directors (or any earlier termination, resignation or removal).
10
(c) Except as otherwise provided herein, at all times from and after
the Effective Time, but subject to Section 2.01(d), BMS shall have the right to
designate two BMS Directors for election at each annual meeting of the Company's
stockholders. Any individual designated by BMS to serve as a BMS Director
pursuant to this Section 2.01 shall be a senior officer or director of BMS. Each
individual so designated shall, subject to applicable law, be recommended by the
Board for election to the Board by the Company's stockholders.
(d) At all times from and after the Effective Time, if the Board is
comprised of twelve members, BMS will have the right to have the Company
nominate two BMS Directors; PROVIDED that if at any time BMS' Common Stock
Interest is less than 12.5% for a period of forty-five consecutive calendar
days, thereafter BMS will only have the right to have the Company nominate one
BMS Director until such time as BMS' Common Stock Interest is 12.5% or greater.
In the event that the number of Directors is increased from twelve during any
period in which BMS has the right to have the Company nominate at least one BMS
Director pursuant to this Section 2.01, BMS shall be entitled to designate a
number of BMS Directors equal to (i) the lesser of (A) BMS' Common Stock
Interest or (B) the Standstill Interest, multiplied by (ii) the total number of
Directors (rounded down to next lowest whole number in the case of fractions
less than .5 and rounded up to the next highest whole number in the case of
fractions of .5 or greater). Notwithstanding the foregoing, if the Company has
terminated the Commercial Arrangements pursuant to Section 13.2 of the
Commercial Arrangements, BMS shall have no right to have the Company nominate a
BMS Director, regardless of BMS' Common Stock Interest.
(e) Subject to applicable law, in the event that at any time after the
Effective Time, the number of BMS Directors differs from the number of Directors
that BMS has the right to designate pursuant to this Section 2.01, (i) if the
number of BMS Directors exceeds such number, BMS shall promptly cause to resign,
and take all other action reasonably necessary to cause the prompt removal of,
that number of BMS Directors as required to make the remaining number of BMS
Directors conform to the number of BMS Directors that BMS has the right to
nominate pursuant to this Section 2.01 and (ii) if the number of BMS Directors
is less than such number, the Company shall promptly take all necessary action
to create sufficient vacancies on the Board of Directors to permit BMS to
designate the full number of BMS Directors which it is entitled to designate
pursuant to this Section 2.01 (such action to include expanding the size of the
Board of Directors or seeking the resignation or removal of Directors). The
Company shall have the right to designate replacement Directors for the BMS
Directors removed in accordance with clause (i) of the preceding sentence and
upon the creation of any vacancy pursuant to clause (ii) of the preceding
sentence BMS shall designate the
11
person to fill such vacancy in accordance with this Section 2.01 and, subject to
applicable law, the Board of Directors shall appoint each person so designated.
(f) BMS shall have the right to designate any replacement for a BMS
Director designated in accordance with this Section 2.01 by BMS at the
termination of such Director's term or upon death, resignation, retirement,
disqualification, removal from office or other cause. Subject to applicable law,
the Board of Directors shall appoint each person so designated.
(g) Notwithstanding anything in this Agreement to the contrary, the
provisions of Sections 2.01(a), (b), (c), (d) and (f) shall terminate
immediately and have no further force or effect upon the occurrence of a BMS
Dilution Event.
SECTION 2.02. SOLICITATION AND VOTING OF SHARES. (a) The Company shall
use all reasonable efforts to solicit from the stockholders of the Company
eligible to vote for the election of Directors proxies in favor of the nominees
designated in accordance with Section 2.01; it being understood and agreed that
the Company shall have satisfied its obligation under this Section 2.02(a) if it
uses the same efforts to solicit consents in favor of the nominees designated by
BMS as it uses to solicit consents in favor of all other nominees for the Board.
(b) During the period in which BMS has the right to have the Company
nominate at least one BMS Director pursuant to Section 2.01, in any election of
Directors or in any meeting of the stockholders of the Company called expressly
for the removal of Directors (or any action by written consent for such
purposes), BMS, the Equity Holding Entity and all other Affiliates of BMS shall
vote all of their shares of Common Stock as follows: (i) with respect to BMS
Directors, as BMS and its Affiliates shall determine, and (ii) with respect to
all remaining Directors, in the same proportion as the votes cast (whether for,
against or abstaining) by all stockholders of the Company (other than BMS and
its Affiliates).
(c) BMS shall cause all shares of Common Stock beneficially owned by
it to be represented, in person or by proxy, at all meetings of the Company's
stockholders, so that such shares of Common Stock may be counted for the purpose
of determining the presence of a quorum at such meetings.
SECTION 2.03. COMMITTEES OF THE BOARD OF DIRECTORS. Subject to
applicable law, during the period in which (i) BMS has the right to have the
Company nominate at least one BMS Director pursuant to Section 2.01 and (ii) at
least one BMS Director is a member of the Board, one of the members of each
committee of the Board (other than any committee or committees of the Board
whose mandate is limited to consideration of matters relating to (i) the
Company's
12
relationship with BMS, (ii) any transaction with BMS, or (iii) any Third-Party
Change of Control Transaction) shall be a BMS Director. Committees of the Board
may consist of any number of members, as determined by the Board. Where
applicable, each BMS Director serving on a committee of the Board shall satisfy
independent director criteria in order to be eligible to serve on such
committee. Each committee of the Board will hold regularly scheduled meetings
and each member of a committee shall receive reasonable prior notice of and may
attend in person or by telephone any regular or special committee meeting.
SECTION 2.04. BMS APPROVAL REQUIRED FOR CERTAIN ACTIONS. During the
Restricted Period, the Company will not do any of the following (each, a
"PROHIBITED ACTION") without the consent of the BMS Directors:
(a) Issue Common Stock (or securities convertible into, or exercisable
or exchangeable for, Common Stock) in excess of 21,473,002 shares in the
aggregate, subject to appropriate adjustment for any stock split, reverse stock
split or other similar transactions; PROVIDED that for purposes of this
paragraph (a), the issuance of options and other securities convertible into, or
exercisable or exchangeable for, Common Stock will be deemed issuances of shares
of Common Stock (in the amount of shares into which such securities are
exercisable, convertible or exchangeable) at the time such options and other
securities are issued, and the subsequent issuance of Common Stock upon the
exercise, conversion or exchange thereof shall not be subject to the limitations
set forth in this paragraph (a); PROVIDED further that the following shall not
be subject to the limitations set forth in this paragraph (a):
(i) the issuance of Common Stock (or securities convertible
into, or exercisable or exchangeable for, Common Stock) in connection
with any acquisition that is otherwise permitted under Section 2.04(c)
below,
(ii) the issuance of Common Stock upon the conversion,
exercise or exchange of options and other securities convertible into,
or exercisable or exchangeable for, Common Stock outstanding as of the
close of business on the Signing Date,
(iii) the issuance of Common Stock (or securities convertible
into, or exercisable or exchangeable for, Common Stock) on a PRO RATA
basis to all stockholders of the Company; and
(iv) the issuance of any capital stock of the Company pursuant
to the Merck Agreement, the Acquisition Agreement or Section 3.04 of
this Agreement;
13
(b) Incur any indebtedness for borrowed money or issue any preferred
stock if the total of (i) the principal amount of indebtedness incurred since
the Signing Date and then-outstanding, and (ii) the net proceeds from the
issuance after September 18, 2001 of any redeemable preferred stock
then-outstanding would exceed the amount of indebtedness for borrowed money
outstanding as of the Signing Date by more than $500 million; PROVIDED that, in
the case of any indebtedness issued at a discount to its face value of greater
than 5%, for the purposes of this paragraph (b), the principal amount of such
indebtedness will be the gross proceeds received by the Company from such
issuance; and PROVIDED further that the following shall not be subject to the
limitations set forth in this paragraph (b):
(i) indebtedness for borrowed money incurred in connection
with any acquisition that is otherwise permitted under Section 2.04(c)
below;
(ii) inter-company indebtedness, including (i) indebtedness
between the Company and any of its wholly-owned Subsidiaries, and (ii)
indebtedness between any wholly-owned Subsidiaries of the Company; and
(iii) the issuance of any capital stock of the Company
pursuant to the Merck Agreement;
(c) Acquire any business, the aggregate consideration for which, when
taken together with the aggregate consideration for all other such acquisitions
consummated during the previous twelve months (it being acknowledged and agreed
that the calculation of aggregate consideration under this paragraph (c) shall
include any assumption of indebtedness in connection with any such acquisition),
is in excess of 25% of the Company Aggregate Value at the time the Company
enters into the binding agreement relating to such acquisition;
(d) Enter into any non-competition agreement which would be binding on
BMS or its Affiliates or any BMS Director, either at the time entered into or at
the time at which BMS acquires, directly or indirectly, 100% of the outstanding
Common Stock;
(e) Dispose of all or any substantial portion of the non-cash assets of
the Company, PROVIDED that any licensing, product development or marketing
arrangement entered into after the Company has complied with the BMS Right of
First Offer or the BMS Right of First Negotiation, as applicable, shall not be
subject to this limitation;
14
(f) Enter into any transaction or adopt any corporate action (including
any amendment to the Company's certificate of incorporation or by-laws (other
than those amendments approved by the Company's stockholders which are not
recommended by the Board)), other than those contemplated by this Agreement, the
Acquisition Agreement or the Commercial Arrangements and other than those
imposed on each other holder of Common Stock, which would (i) impose limitations
on the legal rights of BMS or any of its Affiliates as a stockholder of the
Company, (ii) deny any benefit to BMS or any of its Affiliates, proportionately
as a holder of Common Stock, that is made available to other holders of Common
Stock, or (iii) otherwise materially adversely discriminate against BMS or any
of its Affiliates as a stockholder of the Company; and
(g) Issue shares of any class of capital stock with more than one vote
per share, other than any class of stock (i) the shares of which are convertible
into Common Stock, and (ii) for which the number of votes per share of such
class does not exceed the number of votes per share of the class of stock into
which it is convertible.
ARTICLE 3
LIMITATIONS ON ADDITIONAL PURCHASES OF COMMON STOCK AND OTHER
ACTIONS
SECTION 3.01. PURCHASES OF COMMON STOCK. Except for the acquisition of
shares of Common Stock pursuant to the Acquisition Agreement, subject to the
exceptions set forth in Section 3.03, during the Standstill Period, BMS and the
Equity Holding Entity shall not, and BMS shall not permit its Affiliates to,
directly or indirectly, acquire or make a proposal to acquire beneficial
ownership of any shares of Common Stock from the Company or any other person or
entity.
SECTION 3.02. ADDITIONAL LIMITATIONS. Subject to the exceptions set
forth in Section 3.03, during the Standstill Period, BMS and the Equity Holding
Entity shall not, and BMS shall not permit its Affiliates to:
(a) make, or take any action to solicit, initiate or encourage, any
offer or proposal for, or any indication of interest in, a merger or other
business combination involving the Company or any Subsidiary of the Company or
the acquisition of any equity interest in, or a substantial portion of the
assets of, the Company or any Subsidiary of the Company;
(b) "solicit", or become a "participant" in any "solicitation" of, any
"proxy" (as such terms are defined in Regulation 14A under the Exchange Act)
15
from any holder of Common Stock in connection with any vote on any matter, or
agree or announce its intention to vote with any Person undertaking a
"solicitation";
(c) form, join or in any way participate in a "group" (within the
meaning of Section 13(d)(3) of the Exchange Act) with respect to any Common
Stock;
(d) grant any proxies with respect to any Common Stock to any Person
(other than as recommended by the Board) or deposit any Common Stock in a voting
trust or enter into any other arrangement or agreement with respect to the
voting thereof; or
(e) request, propose or otherwise seek any amendment or waiver of the
provisions of Article 3.
SECTION 3.03. STANDSTILL EXCEPTIONS. (a) Notwithstanding Sections 3.01
and 3.02, but subject to the provisions of Section 3.03(b) and Section 3.03(c):
(i) during the Standstill Period but after the Effective Time,
the Equity Holding Entity may acquire beneficial ownership of
additional shares of Common Stock (A) in the open market, or (B) in
accordance with the terms of Section 3.04, if after giving effect to
any acquisition of beneficial ownership of additional shares of Common
Stock pursuant to clause (A) or (B), BMS' Beneficial Interest would not
exceed the Standstill Interest;
(ii) if, during the Standstill Period, the Company provides
material non-public information to a third-party in connection with, or
begins active negotiation of, a Third-Party Change of Control
Transaction, the Company shall promptly, and in any event within 2
Business Days, deliver written notice to BMS to such effect, which
notice shall to the extent known by the Company set forth the
percentage of Common Stock which the third-party is seeking to acquire
pursuant to the Third-Party Change of Control Transaction, and BMS
shall have the right to make a non-public proposal to the Board to
acquire additional shares of Common Stock; PROVIDED that (i) BMS shall
not be required (whether by applicable law or otherwise) to publicly
disclose, or to amend, modify or supplement any existing public
disclosure because of, the making of such proposal, and (ii) BMS shall
not publicly disclose such proposal; PROVIDED FURTHER that
notwithstanding the foregoing, if a third-party has publicly proposed a
Third-Party Change of Control Transaction and the Company has provided
material non-public information to such third-party in connection
therewith, or has begun active negotiation of such Third-Party Change
of
16
Control Transaction, BMS shall have the right to make a public or non-
public proposal to acquire additional shares of Common Stock, subject
to the proviso in the penultimate sentence of this paragraph. If the
Company accepts such BMS proposal, BMS or the Equity Holding Entity may
acquire additional shares of Common Stock in accordance with the terms
of such proposal. If the Company rejects such BMS proposal and enters
into an agreement with respect to a Third-Party Change of Control
Transaction, BMS may make a public proposal to acquire additional
shares of Common Stock; PROVIDED that BMS may only acquire beneficial
ownership of any additional shares of Common Stock in a transaction for
the acquisition of (i) 100% of the outstanding shares of Common Stock,
or (ii) the same percentage of the outstanding shares of Common Stock
which a third-party has agreed to acquire in the Third-Party Change of
Control Transaction. Notwithstanding the foregoing, BMS' right to make
any proposal and to acquire additional shares of Common Stock pursuant
to this clause (ii) is subject to the condition that the BMS Directors
recuse themselves from any and all consideration of a Third-Party
Change of Control Transaction by the Board or any committee thereof;
(iii) during the Standstill Period, BMS may acquire beneficial
ownership of Common Stock if such acquisition has been approved by a
majority of the Directors that are not BMS Directors; and
(iv) during the Standstill Period, BMS shall be permitted to
make non-public requests to the Board to amend or waive any of the
limitations set forth in Sections 3.01 or 3.02, which requests the
Company may accept or reject in its sole discretion; PROVIDED that (i)
BMS shall not be required (whether by applicable law or otherwise) to
publicly disclose, or to amend, modify or supplement any existing
public disclosure because of, the making of such request, and (ii) BMS
shall not publicly disclose such request; PROVIDED FURTHER that if the
Company agrees to any such request, and thereafter in connection with
such amendment or waiver BMS makes a proposal for a merger or business
combination, or a proposal for an acquisition of shares of Common Stock
such that, after giving effect to such acquisition, BMS' Beneficial
Interest would exceed the Standstill Interest, BMS agrees that any such
proposal shall be a Complying Proposal.
(b) Notwithstanding the provisions of Section 3.03(a):
(i) to the extent that the Standstill Period is still in
effect, the exceptions set forth in clauses (i) through (iv) of Section
3.03(a) shall terminate (if not already terminated) upon the earlier to
occur of a BMS
17
Dilution Event or the termination of the Commercial Arrangements by the
Company pursuant to Section 13.2 of the Commercial Arrangements; and
(ii) to the extent that the Standstill Period is still in
effect, the exception set forth in Section 3.03(a)(ii) shall terminate
(if not already terminated) upon the earlier to occur of a BMS
Sell-Down or the termination of the Commercial Arrangements by BMS
pursuant to Section 13.3 of the Commercial Arrangements; PROVIDED that
if the exception set forth in Section 3.03(a)(ii) is terminated in
accordance with this clause (ii), BMS shall be permitted to make a
proposal to the Company to acquire Common Stock, but only after an
agreement with respect to a Third-Party Change of Control Transaction
has been publicly announced by the Company.
(c) Notwithstanding anything in this Article 3 to the contrary, nothing
shall prohibit the Board from taking any action, or refraining from taking any
action, if the Board reasonably believes that taking such action or refraining
from taking such action, as the case may be, is necessary in order to comply
with its fiduciary duties.
SECTION 3.04. BMS DILUTION OPTION. (a) During the period in which the
Equity Holding Entity has the right to acquire additional shares of Common Stock
pursuant to Section 3.03(a)(i) or, if the Standstill Period is terminated
pursuant to clause (iv) of the definition of Standstill Termination Date and
none of the events referred to in clauses (ii) or (iii) of the definition of
Standstill Termination Date has occurred, the period ending on the fifth
anniversary of the Signing Date (in either case, the "OVERALL DILUTION OPTION
PERIOD"), the Company shall deliver a written notice to BMS of the occurrence of
a Dilution Reference Date (the "DILUTION NOTICE") within 15 days after (i) the
last date of each calendar year beginning with calendar year 2002 and the last
date of the Overall Dilution Option Period (each such date, an "ANNUAL DILUTION
REFERENCE DATE"), (ii) any date on which the Company has issued shares of Common
Stock not in respect of Outstanding Convertible Securities and where the number
of shares issued pursuant to such issuance represents more than 10% of the
shares of Common Stock outstanding as of the close of business on the
immediately preceding Business Day (each such date, an "EXCEPTIONAL STOCK
ISSUANCE DATE"), and (iii) any date on which the Company has issued shares of
Common Stock that has the effect of reducing BMS' Common Stock Interest below 5%
or 12.5% where BMS' Common Stock Interest at the close of business on the
immediately preceding Business Day was equal to or greater than 5% or 12.5%,
respectively (each such date, a "RIGHTS-REDUCING STOCK ISSUANCE DATE"). Each
Dilution Notice shall specify the number of shares of Common Stock outstanding
on the relevant Dilution Reference Date, the number of shares of Common Stock
issued
18
by the Company since the previous Dilution Reference Date (or, in the case of
the first Dilution Notice, since September 18, 2001) and, in the case of an
Exceptional Stock Issuance Date, a description of the transaction which gave
rise to such Exceptional Stock Issuance Date. In addition, each party shall
promptly provide the other with such additional information as such party may
reasonably request in order to enable the parties to determine the number of
shares of Common Stock subject to each BMS Dilution Option. For purposes of
determining whether a Rights-Reducing Stock Issuance Date has occurred or will
occur pursuant to clause (iii) above, the parties hereto agree that, unless
otherwise certified in writing to the Company by BMS (i) the Company shall be
entitled to rely upon information set forth in the Schedule 13D to be filed on
or after the date hereof by BMS with respect to its beneficial ownership of
shares of Common Stock, as the same may be amended from time to time (the "BMS
SCHEDULE 13D"), and (ii) the Company shall assume that the number of shares of
Common Stock "beneficially owned" by BMS as set forth in the BMS Schedule 13D is
the number of "shares of outstanding Common Stock owned by BMS and its
Affiliates on such date and over which BMS or any of its Affiliates exercises
full voting control and bears the full economic risk" for purposes of the
definition of "BMS' Common Stock Interest".
(b) For each Dilution Period, if BMS' Ending Dilution Period Interest
is less than BMS' Greatest Dilution Period Interest, BMS shall have the option
(the "BMS DILUTION OPTION") to purchase (through the Equity Holding Entity) from
the Company a number of shares of Common Stock equal to (i) the percentage which
is the difference between BMS' Greatest Dilution Period Interest and BMS' Ending
Dilution Period Interest, multiplied by (ii) the number of outstanding shares of
Common Stock as of the last day of such Dilution Period.
(c) BMS may exercise the BMS Dilution Option, in whole or in part, by
delivery to the Company of written notice of exercise within 30 days of receipt
of a Dilution Notice (the "BMS DILUTION OPTION EXERCISE NOTICE"), which notice
shall specify the number of shares of Common Stock to be purchased by BMS and
which shall be irrevocable and binding on both parties upon receipt thereof by
the Company.
(d) The per share price for shares of Common Stock purchased by BMS and
issued to the Equity Holding Entity pursuant to the BMS Dilution Option ("BMS
DILUTION OPTION SHARES") shall be equal to the average closing price of the
Common Stock on the Nasdaq for the thirty Nasdaq trading days ending on and
including the date on which the BMS Dilution Option Exercise Notice is delivered
to the Company.
19
(e) Delivery of certificates representing BMS Dilution Option Shares by
the Company shall be made against payment of the purchase price therefor by wire
transfer of immediately available funds to such account of the Company as the
Company shall communicate to BMS. The certificates for the BMS Dilution Option
Shares shall be registered in the name of the Equity Holding Entity. Delivery of
such certificates and payment of the purchase price therefor shall be at such
place and on such date as the parties shall mutually agree, but in no event
later than ten Business Days after receipt by the Company of the BMS Dilution
Option Exercise Notice (or such later date on which any required filings,
consents or approvals have been made or received, as the case may be).
(f) To the extent any issuance of shares of Common Stock pursuant to
the BMS Dilution Option requires any action by or in respect of, filing with, or
consent of, any governmental body, agency, official or authority (including,
without limitation, filings required under the HSR Act and the rules and
regulations of the Nasdaq), the parties hereto will use their reasonable best
efforts to take, or cause to be taken, all actions and to do, or cause to be
done, all things necessary, proper or advisable under applicable laws and
regulations to consummate the issuance of shares of Common Stock pursuant to the
BMS Dilution Option.
(g) Any failure by BMS to exercise a BMS Dilution Option shall not
affect BMS' right to exercise any subsequent BMS Dilution Option in connection
with any subsequent Dilution Notice in accordance with the terms set forth
above.
(h) Each certificate evidencing BMS Dilution Option Shares shall bear a
legend in substantially the following form:
THE SECURITIES REPRESENTED BY THIS
CERTIFICATE ARE SUBJECT TO RESTRICTIONS
ON TRANSFER AS SET FORTH IN THE
STOCKHOLDER AGREEMENT, DATED SEPTEMBER
19, 2001, AMONG IMCLONE SYSTEMS
INCORPORATED, BRISTOL-MYERS SQUIBB
COMPANY AND BRISTOL-MYERS SQUIBB
BIOLOGICS COMPANY, A COPY OF WHICH MAY BE
OBTAINED FROM THE CORPORATE SECRETARY OF
IMCLONE SYSTEMS INCORPORATED.
THE SHARES REPRESENTED BY THIS
CERTIFICATE HAVE NOT BEEN REGISTERED
20
UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, AND MAY BE REOFFERED OR SOLD
ONLY IF SO REGISTERED OR IF AN EXEMPTION
FROM SUCH REGISTRATION IS AVAILABLE.
ARTICLE 4
TRANSFER RESTRICTIONS
SECTION 4.01. TRANSFER OF COMMON STOCK. (a) Subject to Section 4.01(d),
prior to the Initial Trigger Date, BMS and the Equity Holding Entity shall not,
and BMS shall cause its Affiliates not to, directly or indirectly, transfer,
sell or otherwise dispose of, or pledge or otherwise encumber, any shares of
Common Stock or enter into a Hedging Transaction.
(b) Subject to Section 4.01(d), after the Initial Trigger Date, BMS and
the Equity Holding Entity shall not, and BMS shall cause its Affiliates not to,
directly or indirectly, transfer, sell or otherwise dispose of, or pledge or
otherwise encumber, any shares of Common Stock or enter into a Hedging
Transaction, except (i) pursuant to its registration rights set forth in Article
5, (ii) pursuant to Rule 144 promulgated under the Securities Act, or (iii)
pursuant to a Hedging Transaction that is permitted under paragraph (c)(iii) of
this Section.
(c) Any transfer, sale or disposition pursuant to Section 4.01(b) shall
be subject to the following limitations:
(i) no shares of Common Stock may be transferred, sold or
pledged to any Person (other than an Institutional Purchaser) or group
(within the meaning of Section 13(d)(3) of the Exchange Act) if, after
giving effect to such sale, such Person or group would beneficially own
(or, in the case of a registered firm commitment underwritten public
offering, if the lead Underwriter believes after reasonable inquiry
such person or group would own) more than 5% of the then outstanding
shares of Common Stock;
(ii) no more than 10% of the total outstanding Common Stock
may be sold in any one registered firm commitment underwritten public
offering made in accordance with Article 5; and
(iii) neither BMS nor any of its Affiliates will in any
twelve-month period pledge, otherwise encumber, enter into a Hedging
21
Transaction or, except for transactions that are registered firm
commitment underwritten public offerings made in accordance with
Article 5 hereof, transfer, sell or otherwise dispose of, any shares of
Common Stock, the effect of which, individually or in the aggregate,
would be to reduce the economic exposure by BMS or its Affiliates by
the equivalent of more than 10% of the maximum number of shares of
Common Stock beneficially owned by BMS and its Affiliates at any time
after the Signing Date.
(d) Notwithstanding the foregoing, Acquisition Sub may at any time
transfer all but not less than all of the shares of Common Stock owned by
Acquisition Sub to any one of (i) BMS, (ii) ERS or (iii) a wholly owned
subsidiary of ERS; PROVIDED that, in the case of transfers pursuant to clause
(ii) or (iii) above, such transferee is a direct wholly owned subsidiary of BMS
or is wholly owned by one or more subsidiaries of BMS, each of which is wholly
owned by BMS; PROVIDED FURTHER that prior to any transfer pursuant to this
Section 4.01(d), such transferee shall have agreed in writing to be bound by the
terms of this Agreement pursuant to documentation reasonably satisfactory to the
Company; PROVIDED FURTHER that no transfer pursuant to this Section 4.01(d)
shall relieve any transferor from any liability for damages incurred or suffered
by the Company as a result of any breach of this Agreement by such transferor.
Upon any such transfer, the transferee shall be the Equity Holding Entity under
this Agreement, and shall thereafter have the rights of transfer granted to
Acquisition Sub under this Section 4.01(d).
(e) Purported transfers, sales or dispositions of, or Hedging
Transactions with respect to, Common Stock that are not in compliance with
Article 4 shall be of no force and effect.
(f) Notwithstanding anything herein to the contrary, the transfer, sale
or disposition of, or Hedging Transactions with respect to, shares of Common
Stock by BMS or any of its Affiliates (other than pursuant to Section 4.01(d))
shall not result in the transfer of any rights of BMS or the Equity Holding
Entity under this Agreement.
SECTION 4.02. TRANSFER OF SHARES OF THE EQUITY HOLDING ENTITY. BMS
agrees that, from the date hereof until such date after the Effective Time on
which BMS no longer beneficially owns any shares of Common Stock, BMS will
maintain its direct, or indirect through one or more wholly owned subsidiaries
of BMS, ownership of 100% of the outstanding capital stock of the Equity Holding
Entity and will not transfer, sell, assign or otherwise dispose of, or pledge or
otherwise encumber, any shares of capital stock of the Equity Holding Entity or
22
any subsidiary of BMS which directly or indirectly owns any shares of capital
stock of the Equity Holding Entity.
ARTICLE 5
REGISTRATION RIGHTS
SECTION 5.01. REGISTRATION. (a) The Company agrees that, at any time
after the Initial Trigger Date, upon the request of BMS (a "DEMAND
REGISTRATION"), it will file a registration statement (a "REGISTRATION
STATEMENT") under the Securities Act as to the number of shares of Registrable
Securities specified in such request; PROVIDED that (i) the Company shall not be
required to file more than three Registration Statements that become effective
and remain effective for the period referred to in Section 5.01(b), (ii) the
Company shall not be obligated to effect more than one Demand Registration in
any twelve-month period, (iii) the Registrable Securities for which a Demand
Registration has been requested by BMS shall have a value (based on the average
closing price per share of Common Stock for ten trading days preceding the
delivery of BMS' request) of not less that $100,000,000 (or, if less, all of the
shares of Common Stock then held by the Equity Holding Entity), and (iv) the
Company shall not be required to file a shelf registration statement pursuant to
Rule 415 of the Securities Act under this Section 5.01.
(b) The Company agrees to use its reasonable best efforts (i) to have
any registration of the Registrable Securities declared effective as promptly as
practicable after the filing thereof, and (ii) to keep such registration
statement effective for a period (up to three months) sufficient to complete the
distribution of the Registrable Securities. The Company further agrees to
supplement or make amendments to the Registration Statement, if required (i) to
respond to the comments of the SEC, if any, (ii) by the registration form
utilized by the Company for such registration or by the instructions applicable
to such registration form, (iii) by the Securities Act or the rules and
regulations thereunder, or (iv) by BMS (or any Underwriter for BMS) with respect
to information concerning BMS or such Underwriter or the plan of distribution to
be utilized with respect to the Registrable Securities. The Company agrees to
furnish to BMS copies of any such supplement or amendment prior to its being
used or filed with the SEC.
(c) In the event an offering of shares of Registrable Securities is a
fully- underwritten firm commitment offering, BMS shall select the lead
Underwriter and any additional Underwriters in connection with the offering from
a list of
23
nationally-recognized investment banks reasonably agreed to between the
Company and BMS.
SECTION 5.02. PIGGYBACK REGISTRATION. If the Company proposes to file a
registration statement under the Securities Act with respect to an offering of
Common Stock (i) for the Company's own account (other than a registration
statement on S-4 or S-8 or shelf registration statement (or any substitute form
that may be adopted by the SEC)) or (ii) for the account of any of its holders
of Common Stock, then the Company shall give written notice of such proposed
filing to BMS as soon as practicable (but in no event less than 10 days before
the anticipated filing date), and such notice shall offer BMS the opportunity to
register such number of shares of Registrable Securities as BMS may request on
the same terms and conditions as the Company's or such holder's Common Stock (a
"PIGGYBACK REGISTRATION").
SECTION 5.03. REDUCTION OF OFFERING. Notwithstanding anything contained
herein, if the lead Underwriter of an offering described in Section 5.01 or
Section 5.02 delivers a written opinion to the Company that the size of the
offering that BMS, the Company and any other Persons intend to make is such that
the success of the offering would be materially and adversely affected, then the
number of shares of Common Stock to be offered for the account of BMS shall be
reduced to the extent necessary to reduce the total amount of securities to be
included in such offering to the amount recommended by such lead Underwriter;
PROVIDED, that (a) priority in the case of a Demand Registration pursuant to
Section 5.01 shall be (i) first, the securities offered for the account of BMS,
(ii) second, securities offered by the Company for its own account, and (iii)
third, pro rata among any other securities of the Company requested to be
registered pursuant to a contractual right of registration; (b) priority in the
case of a registration initiated by the Company for its own account pursuant to
Section 5.02 shall be (i) first, securities offered by the Company for its own
account, (ii) second, pro rata among any other securities of the Company
requested to be registered pursuant to a contractual right of registration
(including securities requested to be registered by BMS pursuant to Section
5.02); and (c) priority in a registration initiated by the Company for the
account of a holder (other than the Equity Holding Entity) pursuant to Section
5.02 shall be (i) first, securities offered for the account of such holder, (ii)
second, securities offered by the Company for its own account, and (iii) third,
pro rata among any other securities of the Company requested to be registered
pursuant to a contractual right of registration (including securities requested
to be registered by BMS pursuant to Section 5.02).
SECTION 5.04. REGISTRATION PROCEDURES. Subject to the provisions of
Section 5.01 hereof, in connection with the registration of Registrable
Securities hereunder, the Company will as promptly as practicable:
24
(a) furnish to BMS, prior to the filing of a Registration Statement,
copies of such Registration Statement as is proposed to be filed, and thereafter
such number of copies of such Registration Statement, each amendment and
supplement thereto (in each case including all exhibits thereto and documents
referred to therein), the prospectus included in such Registration Statement
(including each preliminary prospectus), any and all transmittal letters or
other correspondence with the SEC and such other documents in such quantities as
BMS may reasonably request from time to time in order to facilitate the
disposition of the Registrable Securities;
(b) use all reasonable efforts to register or qualify the Registrable
Securities under such other securities or blue sky laws of such jurisdiction as
BMS reasonably requests and do any and all other acts and things as may be
reasonably necessary or advisable to enable BMS to consummate the disposition in
such jurisdictions of the Registrable Securities; PROVIDED that the Company will
not be required to (i) qualify generally to do business in any jurisdiction
where it would not otherwise be required to qualify but for this Section
5.04(b), (ii) subject itself to taxation in any such jurisdiction or (iii)
consent to general service of process in any such jurisdiction;
(c) notify BMS, at any time when a prospectus relating thereto is
required to be delivered under the Securities Act, of the happening of any event
as a result of which the prospectus included in such Registration Statement or
amendment contains an untrue statement of a material fact or omits to state any
material fact required to be stated therein or necessary to make the statements
therein not misleading, and the Company will prepare a supplement or amendment
to such prospectus so that, as thereafter delivered to the purchasers of the
Registrable Securities, such prospectus will not contain an untrue statement of
a material fact or omit to state any material fact required to be stated therein
or necessary to make the statements therein not misleading;
(d) use its reasonable efforts to cause the Registrable Securities to
be registered with or approved by such other governmental agencies or
authorities as may be necessary by virtue of the business and operations of the
Company to enable BMS to consummate the disposition of the Registrable
Securities; PROVIDED that the Company will not be required to (i) qualify
generally to do business in any jurisdiction where it would not otherwise be
required to qualify but for this Section 5.04(d), (ii) subject itself to
taxation in any such jurisdiction or (iii) consent to general service of process
in any such jurisdiction;
(e) enter into customary agreements (including an underwriting
agreement in customary form) and take such other actions as are reasonably
25
required in order to expedite or facilitate the disposition of the Registrable
Securities;
(f) make available for inspection by BMS, any underwriter
participating in any disposition pursuant to such registration, and any
attorney, accountant or other agent retained by BMS or any such underwriter
(collectively, the "INSPECTORS"), all financial and other records, pertinent
corporate documents and properties of the Company (collectively, the "RECORDS")
as shall be reasonably necessary to enable them to exercise their due diligence
responsibility, and cause the officers, directors and employees of the Company
to supply all information reasonably requested by any such Inspector in
connection with such registration; PROVIDED that (i) Records and information
obtained hereunder shall be used by such persons only to exercise their due
diligence responsibility and (ii) Records or information which the Company
determines, in good faith, to be confidential shall not be disclosed by the
Inspectors unless (x) the disclosure of such Records is necessary to avoid or
correct a material misstatement or omission in the Registration Statement or (y)
the release of such Records or information is ordered pursuant to a subpoena or
other order from a court or governmental authority of competent jurisdiction.
(g) use all reasonable efforts to obtain a comfort letter from the
independent public accountants for the Company in customary form and covering
such matters of the type customarily covered by comfort letters as BMS
reasonably requests;
(h) otherwise use all reasonable efforts to comply with all applicable
rules and regulations of the SEC, and make generally available to its security
holders, as soon as reasonably practicable, an earnings statement covering a
period of twelve months, beginning within three months after the effective date
of the registration, which earnings statement shall satisfy the provisions of
Section 11(a) of the Securities Act and Rule 158 thereunder; and
(i) use all reasonable efforts to cause all Registrable Securities to
be listed on each securities exchange or automated quotation system on which
similar securities issued by the Company are listed.
SECTION 5.05. CONDITIONS TO OFFERINGS. The obligations of the Company
to take the actions contemplated by Sections 5.01, 5.02 and 5.04 with respect to
an offering of Registrable Securities shall be subject to the following
conditions:
(i) BMS and the Equity Holding Entity shall conform to all
applicable requirements of the Securities Act and the Exchange Act with
respect to the offering and sale of securities; and
26
(ii) BMS shall advise each Underwriter through which any of
the Registrable Securities are offered that the Registrable Securities
are part of a distribution that is subject to the prospectus delivery
requirements of the Securities Act.
The Company may require BMS to furnish to the Company such information
regarding BMS or the distribution of the Registrable Securities as the Company
may from time to time reasonably request in writing, in each case only as
required by the Securities Act or the rules and regulations thereunder or under
state securities or blue sky laws.
BMS agrees that, upon receipt of any notice from the Company of the
happening of any event of the kind described in Section 5.04(c) hereof, BMS will
forthwith discontinue disposition of Registrable Securities pursuant to the
registration covering such shares of Common Stock until BMS' receipt of the
copies of the supplemented or amended prospectus contemplated by Section 5.04(c)
hereof and, if so directed by the Company, will promptly deliver to the Company
all copies (other than any permanent file copies then in BMS' possession) of the
most recent prospectus covering such Registrable Securities at the time of
receipt of such notice.
SECTION 5.06. ADDITIONAL CONDITIONS. (a) The Company's obligations
pursuant to Sections 5.01 and 5.02 shall be suspended if (i) the fulfillment of
such obligations would require the Company to make a disclosure that would, in
the reasonable good faith judgment of the Company's board of directors, be
detrimental to the Company and premature, (ii) the Company has filed a
registration statement with respect to securities to be distributed in an
underwritten public offering and it is advised by its lead or managing
underwriter that an offering by BMS of the Registrable Securities would
materially adversely affect the distribution of such equity securities, or (iii)
the fulfillment of such obligations would require the Company to prepare audited
financial statements not required to be prepared for the Company to comply with
its obligations under the Exchange Act as of any date not coincident with the
last day of any fiscal year of the Company. Such obligations shall be reinstated
(x) in the case of clause (i) above, upon the making of such disclosure by the
Company (or, if earlier, when such disclosure would either no longer be
necessary for the fulfillment of such obligations or no longer be detrimental),
(y) in the case of clause (ii) above, upon the conclusion of any period during
which the Company would not, pursuant to the terms of its underwriting
arrangements, be permitted to sell the Registrable Securities for its own
account and (z) in the case of clause (iii) above, as soon as it would no longer
be necessary to prepare such financial statements to comply with the Securities
Act.
27
(b) The number of shares of Registrable Securities to be registered
pursuant to Section 5.01 for an offering that is not a fully-underwritten firm
commitment offering shall be reduced to the extent that the Company is advised
in writing by an investment banker of national standing that the sale of all
shares of Common Stock requested to be registered by BMS would materially and
adversely affect the market price of the Common Stock.
SECTION 5.07. REGISTRATION EXPENSES. All fees and expenses incident to
the performance of or compliance with this Article 5 by the Company, including,
without limitation, all fees and expenses of compliance with securities or blue
sky laws (including reasonable fees and disbursements of counsel in connection
with blue sky qualifications of the Registrable Securities), rating agency fees,
printing expenses, messenger and delivery expenses, any registration or filing
fees payable under any federal or state securities or blue sky laws, the fees
and expenses incurred in connection with any listing of the securities to be
registered on any securities exchange or automated quotation system, fees and
disbursements of counsel for the Company and its independent certified public
accountants (including the expenses of any comfort letters required by or
incident to such performance), securities acts liability insurance (if the
Company elects to obtain such insurance), the reasonable fees and expenses of
any special experts retained by the Company in connection with such registration
and the fees and expenses of other persons retained by the Company (all such
expenses being herein called "REGISTRATION EXPENSES"), will be (i) divided
equally between the Company and BMS with respect to the first and second Demand
Registrations and (ii) borne by BMS with respect to a third Demand Registration;
it being understood and agreed that BMS will bear all fees and expenses incurred
by it in connection with any registration pursuant to this Article 5 (including,
without limitation, underwriting fees, discounts and commissions, transfer
taxes, and fees and expenses of its counsel).
SECTION 5.08. INDEMNIFICATION; CONTRIBUTION. (a) INDEMNIFICATION BY THE
COMPANY. The Company agrees to indemnify, to the fullest extent permitted by
law, BMS, its directors and officers and each person who controls BMS (within
the meaning of either the Securities Act or the Exchange Act) against any and
all losses, claims, damages, liabilities and expenses (including reasonable
attorneys' fees) caused by any untrue or alleged untrue statement of material
fact contained in any Registration Statement, prospectus or preliminary
prospectus (each as amended and or supplemented, if the Company shall have
furnished any amendments or supplements thereto), or any omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein (in the case of a prospectus, in the
light of the circumstances under which they were made) not misleading, PROVIDED
that the Company shall not be required to indemnify BMS or its officers,
directors or controlling persons
28
for any losses, claims, damages, liabilities or expenses resulting from any such
untrue statement or omission if such untrue statement or omission is made in
reliance on and in conformity with any information with respect to BMS or such
other parties furnished to the Company by BMS or such other parties expressly
for use therein. In connection with an underwritten offering, the Company will
indemnify each Underwriter, the officers and directors of such Underwriter, and
each person who controls such Underwriter (within the meaning of either the
Securities Act or Exchange Act) to the same extent as provided above with
respect to the indemnification of BMS; PROVIDED that such Underwriter agrees to
indemnify the Company to the same extent as provided below with respect to the
indemnification of the Company by BMS.
(b) INDEMNIFICATION BY BMS. In connection with any registration in
which BMS is participating, BMS will furnish to the Company in writing such
information and affidavits with respect to BMS as the Company reasonably
requests for use in connection with any such registration, prospectus, or
preliminary prospectus and agrees to indemnify the Company, its directors, its
officers who sign the Registration Statement and each person, if any, who
controls the Company (within the meaning of either the Securities Act or of the
Exchange Act) to the same extent as the foregoing indemnity from the Company to
BMS, but only with respect to information relating to BMS furnished to the
Company in writing by BMS expressly for use in the Registration Statement, the
prospectus, any amendment or supplement thereto, or any preliminary prospectus.
(c) CONDUCT OF INDEMNIFICATION PROCEEDINGS. In case any proceeding
(including any governmental investigation) shall be instituted involving any
person in respect of which indemnity may be sought pursuant to Section 5.08(a)
or (b), such person (hereinafter called the indemnified party) shall promptly
notify the person against whom such indemnity may be sought (hereinafter called
the indemnifying party) in writing and the indemnifying party, upon request of
the indemnified party, shall retain counsel reasonably satisfactory to the
indemnified party to represent the indemnified party and any others the
indemnifying party may designate in such proceeding and shall pay the fees and
disbursements of such counsel related to such proceeding. In any such
proceeding, any indemnified party shall have the right to retain its own
counsel, but the fees and expenses of such counsel shall be at the expense of
such indemnified party unless (i) the indemnifying party and the indemnified
party shall have mutually agreed to the retention of such counsel or (ii) the
named parties to any such proceeding (including any impleaded parties) include
both the indemnifying party and the indemnified party and the indemnified party
shall have been advised by counsel that representation of both parties by the
same counsel would be inappropriate due to actual or potential differing
interests between them. It is understood that the indemnifying party shall not,
in connection with any proceeding or related
29
proceedings in the same jurisdiction, be liable for the fees and expenses of
more than one separate firm (in addition to any local counsel) for all such
indemnified parties, and that all such fees and expenses shall be reimbursed as
they are incurred. In the case of any such separate firm for the indemnified
parties, such firm shall be designated in writing by the indemnified parties.
The indemnifying party shall not be liable for any settlement of any proceeding
effected without its written consent, but if settled with such consent or if
there be a final judgment for the plaintiff, the indemnifying party agrees to
indemnify the indemnified party from and against any loss or liability by reason
of such settlement or judgment. Notwithstanding the foregoing sentence, if at
any time an indemnified party shall have requested an indemnifying party to
reimburse the indemnified party for fees and expenses of counsel as contemplated
by the third sentence of this Section 5.08(c), the indemnifying party agrees
that it shall be liable for any settlement of any proceeding effected without
its written consent if (i) such settlement in entered into more than 30 days
after receipt by such indemnifying party of the aforesaid request and (ii) such
indemnifying party shall not have reimbursed the indemnified party in accordance
with such request or reasonably objected in writing, on the basis of the
standards set forth herein, to the propriety of such reimbursement prior to the
date of such settlement. No indemnifying party shall, without the prior written
consent of the indemnified party, effect any settlement of any pending or
threatened proceeding in respect of which any indemnified party is or could have
been a party and indemnity could have been sought hereunder by such indemnified
party, unless such settlement includes an unconditional release of such
indemnified party from all liability on claims that are the subject matter of
such proceeding.
(d) CONTRIBUTION. If the indemnification provided for in this Section
5.08 from the indemnifying party is unavailable to an indemnified party
hereunder in respect of any losses, claims, damages, liabilities or expenses
referred to in this Section 5.08, then the indemnifying party, in lieu of
indemnifying such indemnified party, shall contribute to the amount paid or
payable by such indemnified party as a result of such losses, claims, damages,
liabilities or expenses in such proportion as is appropriate to reflect the
relative fault of the indemnifying party and indemnified parties in connection
with the actions which resulted in such losses, claims, damages, liabilities or
expenses, as well as any other relevant equitable considerations. The relative
fault of such indemnifying party and indemnified parties shall be determined by
reference to, among other things, whether any action in question, including any
untrue or alleged untrue statement of a material fact or omission or alleged
omission to state a material fact, has been made by, or relates to information
supplied by, such indemnifying party or indemnified parties, and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such action. The amount paid or payable by a party as a result of the
losses, claims,
30
damages, liabilities and expenses referred to above shall be deemed to include,
subject to the limitations set forth in Section 5.08(c), any legal or other fees
or expenses reasonably incurred by such party in connection with any
investigation or proceeding.
The parties hereto agree that it would not be just and equitable if
contribution pursuant to this Section 5.08(d) were determined by PRO RATA
allocation or by any other method of allocation which does not take into account
the equitable considerations referred to in this Section 5.08(d). No person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the Securities Act) shall be entitled to contribution from any person who was
not guilty of such fraudulent misrepresentation.
If indemnification is available under this Section 5.08, the
indemnifying parties shall indemnify each indemnified party to the full extent
provided in Sections 5.08(a) and (b) without regard to the relative fault of
said indemnifying party or indemnified party or any other equitable
consideration provided for in this Section 5.08(d).
SECTION 5.09. RULE 144. The Company agrees that it will file the
reports required to be filed by it under the Securities Act and the Exchange Act
and the rules and regulations adopted by the SEC thereunder, and it will take
such further action as BMS reasonably may request, all to the extent required
from time to time to enable BMS to sell Common Stock within the limitation of
the exemptions provided by (a) Rule 144 under the Securities Act, as such Rule
may be amended from time to time, or (b) any similar rule or regulation
hereafter adopted by the SEC. Upon the request of BMS, the Company will deliver
to BMS a written statement as to whether it has complied with such requirements.
SECTION 5.10. LOCKUP. If and to the extent requested by the managing
underwriters of an underwritten public offering of equity securities of the
Company, the Company, BMS and the Equity Holding Entity agree not to effect, and
to cause their respective Affiliates not to effect, except as part of such
registration, any offer, sale, pledge, transfer or other distribution or
disposition or any agreement with respect to the foregoing, of the issue being
registered or a similar security of the Company, or any securities convertible
into or exchangeable or exercisable for such securities, including a sale
pursuant to Rule 144, during the seven day period prior to and during such
period that the lead Underwriter may reasonably request, no greater than 90
days, beginning on the effective date of such registration.
31
ARTICLE 6
MISCELLANEOUS
SECTION 6.01. NOTICES. All notices, requests and other communications
to any party hereunder shall be in writing (including facsimile transmission)
and shall be given,
if to the Company, to:
ImClone Systems Incorporated
180 Varick Street, 7th Floor
New York, New York 10014
Attn: John Landes, Esq.
General Counsel
Fax: (212) 645-2054
with a copy to:
Davis Polk & Wardwell
450 Lexington Avenue
New York, New York 10017
Attn: Phillip R. Mills, Esq.
Fax: (212) 450-4800
if to BMS or Acquisition Sub, to:
Bristol-Myers Squibb Company
345 Park Avenue
New York, New York 10154
Attn: General Counsel
Fax: (212) 546-4020
with a copy to:
Cravath, Swaine & Moore
Worldwide Plaza
825 Eighth Avenue
New York, NY 10019
Attn: Susan Webster, Esq.
Fax: (212) 474-3700
or such other address or facsimile number as such party may hereafter specify
for the purpose by notice to the other parties hereto. All such notices,
requests and
32
other communications shall be deemed received on the date of receipt by the
recipient thereof if received prior to 5 p.m. in the place of receipt and such
day is a Business Day in the place of receipt. Otherwise, any such notice,
request or communication shall be deemed not to have been received until the
next succeeding Business Day in the place of receipt.
SECTION 6.02. AMENDMENTS; WAIVERS. (a) Any provision of this Agreement
may be amended or waived if, but only if, such amendment or waiver is in writing
and is signed, in the case of an amendment, by each party to this Agreement or,
in the case of a waiver, by each party against whom the waiver is to be
effective.
(b) No failure or delay by any party in exercising any right, power or
privilege hereunder shall operate as a waiver thereof nor shall any single or
partial exercise thereof preclude any other or further exercise thereof or the
exercise of any other right, power or privilege. The rights and remedies herein
provided shall be cumulative and not exclusive of any rights or remedies
provided by law.
SECTION 6.03. SUCCESSORS AND ASSIGNS. The provisions of this Agreement
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns, provided that, except as provided in Section
4.01(d), no party may assign, delegate or otherwise transfer any of its rights
or obligations under this Agreement without the consent of each other party
hereto.
SECTION 6.04. CAPTIONS. The captions herein are included for
convenience of reference only and shall be ignored in the construction or
interpretation hereof.
SECTION 6.05. SEVERABILITY. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction or
other authority to be invalid, void or unenforceable, the remainder of the
terms, provisions, covenants and restrictions of this Agreement shall remain in
full force and effect and shall in no way be affected, impaired or invalidated
so long as the economic or legal substance of the transactions contemplated
hereby is not affected in any manner materially adverse to any party. Upon such
a determination, the parties shall negotiate in good faith to modify this
Agreement so as to effect the original intent of the parties as closely as
possible in an acceptable manner in order that the transactions contemplated
hereby be consummated as originally contemplated to the fullest extent possible.
SECTION 6.06. SPECIFIC PERFORMANCE. The parties hereto agree that
irreparable damage would occur if any provision of this Agreement were not
performed in accordance with the terms hereof and that the parties shall be
33
entitled to an injunction or injunctions to prevent breaches of this Agreement
or to enforce specifically the performance of the terms and provisions hereof in
any federal court located in the State of New York or, to the extent no such
federal court has jurisdiction over such proceeding, any New York state court,
in addition to any other remedy to which they are entitled at law or in equity.
SECTION 6.07. GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York, without regard
to the conflicts of laws rules of such state.
SECTION 6.08. JURISDICTION. Any suit, action or proceeding seeking to
enforce any provision of, or based on any matter arising out of or in connection
with, this Agreement or the transactions contemplated hereby may be brought in
any federal court located in the State of New York or, to the extent no such
federal court has jurisdiction over such action, suit or proceeding, any New
York state court, and each of the parties hereby consents to the jurisdiction of
such courts (and of the appropriate appellate courts therefrom) in any such
suit, action or proceeding and irrevocably waives, to the fullest extent
permitted by law, any objection that it may now or hereafter have to the laying
of the venue of any such suit, action or proceeding in any such court or that
any such suit, action or proceeding brought in any such court has been brought
in an inconvenient form. Process in any such suit, action or proceeding may be
served on any party anywhere in the world, whether within or without the
jurisdiction of any such court. Without limiting the foregoing, each party
agrees that service of process on such party as provided in Section 6.01 shall
be deemed effective service of process on such party.
SECTION 6.09. WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO HEREBY
IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING
ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED
HEREBY.
SECTION 6.10. COUNTERPARTS; EFFECTIVENESS; BENEFIT. This Agreement may
be signed in any number of counterparts, each of which shall be an original,
with the same effect as if the signatures thereto and hereto were upon the same
instrument. This Agreement shall become effective when each party hereto shall
have received counterparts hereof signed by all of the other parties hereto. No
provision of this Agreement is intended to confer any rights, benefits,
remedies, obligations, or liabilities hereunder upon any Person other than the
parties hereto and their respective successors and assigns.
34
SECTION 6.11. ENTIRE AGREEMENT. This Agreement, the Confidentiality
Agreement, the Commercial Arrangements, the Acquisition Agreement and the
disclosure letter referred to in Article 4 of the Acquisition Agreement
constitute the entire agreement between the parties with respect to the subject
matter of this Agreement and supersede all prior agreements and understandings,
both oral and written, between the parties with respect to the subject matter of
this Agreement.
SECTION 6.12. EXPENSES. Except as otherwise provided herein, all costs
and expenses incurred in connection with this Agreement shall be paid by the
party incurring such cost or expense.
SECTION 6.13. ADDITIONAL COVENANT OF BMS. BMS shall take all action
necessary to cause the Equity Holding Entity to perform its obligations under
this Agreement, including without limitation, providing funding to the Equity
Holding Entity to the extent necessary for the Equity Holding Entity to fulfill
its obligations hereunder.
35
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
BRISTOL-MYERS SQUIBB COMPANY
By: /s/ Brian Markison
------------------------------------------------
Name: Brian Markison
Title: Senior Vice President - External Affairs,
Worldwide Medicines Group
BRISTOL-MYERS SQUIBB BIOLOGICS
COMPANY
By: /s/ Sandra Leung
------------------------------------------------
Name: Sandra Leung
Title: Corporate Secretary
IMCLONE SYSTEMS INCORPORATED
By: /s/ Samuel D. Waskal, Ph.D.
------------------------------------------------
Name: Samuel D. Waskal, Ph.D.
Title: President and Chief Executive Officer
EX-99.(D)(3)
17
a2059910zex-99_d3.txt
EXHIBIT (D)(3)
EXHIBIT 99(d)(3)
[NOTE: CERTAIN PORTIONS OF THIS DOCUMENT HAVE BEEN MARKED TO INDICATE THAT
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR SUCH PORTIONS BY BRISTOL-MYERS
SQUIBB COMPANY, BRISTOL-MYERS SQUIBB BIOLOGICS COMPANY AND IMCLONE SYSTEMS
INCORPORATED. THESE PORTIONS HAVE BEEN MARKED WITH TWO ASTERISKS ENCLOSED IN
BRACKETS (i.e., [**]). THE CONFIDENTIAL PORTIONS HAVE BEEN OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.]
DEVELOPMENT, PROMOTION,
DISTRIBUTION AND SUPPLY AGREEMENT
AMONG
E. R. SQUIBB & SONS, LLC,
BRISTOL-MYERS SQUIBB COMPANY,
AND
IMCLONE SYSTEMS INCORPORATED
DATED AS OF
SEPTEMBER 19, 2001
Confidential treatment requested by Bristol-Myers Squibb Company, Bristol-Myers
Squibb Biologics Company and ImClone Systems Incorporated.
TABLE OF CONTENTS
-----------------
PAGE
----
1. DEFINITIONS............................................................2
1.1 ACCELERATED ARBITRATION PROVISIONS...............................2
1.2 ACQUIRING PARTY..................................................2
1.3 ACQUISITION AGREEMENT............................................2
1.4 ACQUISITION SUBSIDIARY...........................................2
1.5 AFFILIATE........................................................2
1.6 ALLIANCE MANAGER.................................................2
1.7 ALLOCABLE OVERHEAD...............................................2
1.8 ALLOWABLE FAILURE RATE...........................................2
1.9 ANTITRUST INJUNCTION.............................................2
1.10 API..............................................................2
1.11 AUDITED PARTY....................................................2
1.12 AUDITING PARTY...................................................2
1.13 BASE CASE PROJECTIONS............................................3
1.14 BLA FILING DATE..................................................3
1.15 BMS..............................................................3
1.16 BMS DILUTION EVENT...............................................3
1.17 BMS SELL-DOWN....................................................3
1.18 BREACHING PARTY..................................................3
1.19 CLINICAL BUDGET..................................................3
1.20 CLINICAL DEVELOPMENT PLAN........................................3
1.21 COMMITTEE........................................................3
1.22 COMMON STOCK.....................................................3
1.23 COMPANY..........................................................3
1.24 COMPANY SEC DOCUMENTS............................................3
1.25 CGMP.............................................................3
1.26 COMPETING PRODUCT................................................3
1.27 COMPOUND.........................................................3
1.28 CONFIDENTIAL INFORMATION.........................................3
1.29 CO-PROMOTION OPTION..............................................4
1.30 CO-PROMOTION PROBLEM.............................................4
1.31 COST OF GOODS SOLD...............................................4
1.32 CRITICAL ISSUE...................................................4
1.33 CURRENT FORECAST.................................................4
1.34 DEVELOPMENT COSTS................................................4
1.35 DISTRIBUTION COSTS...............................................4
1.36 DISTRIBUTION FEE.................................................4
1.37 EFFECTIVE DATE...................................................4
1.38 EQUITY AGREEMENTS................................................4
1.39 ERS..............................................................4
-i-
Confidential treatment requested by Bristol-Myers Squibb Company, Bristol-Myers
Squibb Biologics Company and ImClone Systems Incorporated.
1.40 ERS INVENTIONS...................................................4
1.41 ERS OBLIGATIONS..................................................4
1.42 ERS PROPOSED TERMS...............................................4
1.43 FDA..............................................................4
1.44 FIELD............................................................4
1.45 FINANCE COMMITTEE................................................4
1.46 FINANCIAL APPENDIX...............................................5
1.47 FINISHED PRODUCT................................................5
1.48 FIRST COMMERCIAL SALE............................................5
1.49 FIRST OFFER TERMINATION DATE.....................................5
1.50 FULLY BURDENED MANUFACTURING COST................................5
1.51 GAAP.............................................................5
1.52 GENERAL AND ADMINISTRATIVE COSTS.................................5
1.53 GROSS PROFIT.....................................................5
1.54 INABILITY TO SUPPLY..............................................5
1.55 IND..............................................................5
1.56 INDEMNITEE.......................................................5
1.57 INFRINGEMENT.....................................................5
1.58 INDICATIVE MARKETING BUDGET......................................5
1.59 INITIAL REGULATORY FILING........................................5
1.60 INVENTION........................................................5
1.61 JOINT COMMERCIALIZATION COMMITTEE OR JCC.........................6
1.62 JOINT EXECUTIVE COMMITTEE OR JEC.................................6
1.63 JOINT MANUFACTURING COMMITTEE OR JMC.............................6
1.64 KNOW-HOW.........................................................6
1.65 KNOWLEDGE OF THE COMPANY.........................................6
1.66 LETTER OF INTENT.................................................6
1.67 LONG-TERM INABILITY TO SUPPLY....................................6
1.68 LOW CASE PROJECTIONS.............................................6
1.69 MANUFACTURING STANDARDS..........................................6
1.70 MARKETING BUDGET.................................................6
1.71 MARKETING COSTS..................................................6
1.72 MARKETING PLANS..................................................6
1.73 MERCK AGREEMENT..................................................7
1.74 MERCK ENTITIES...................................................7
1.75 NET SALES........................................................7
1.76 NON-ACQUIRING PARTY..............................................7
1.77 NON-BREACHING PARTY..............................................7
1.78 NON-REGISTRATIONAL STUDIES.......................................7
1.79 NORTH AMERICA....................................................7
1.80 NUMBER OF DAYS TO MAKE PAYMENT...................................7
1.81 OFFER............................................................7
1.82 OPERATING PROFIT OR LOSS.........................................7
1.83 OTHER COMPOUND...................................................7
1.84 OTHER OPERATING INCOME/EXPENSE...................................7
-ii-
Confidential treatment requested by Bristol-Myers Squibb Company, Bristol-Myers
Squibb Biologics Company and ImClone Systems Incorporated.
1.85 PARTNERING RELATIONSHIPS.........................................7
1.86 PARTY............................................................7
1.87 PATENTS..........................................................7
1.88 PERSON...........................................................8
1.89 PRODUCT..........................................................8
1.90 PRODUCT DEVELOPMENT COMMITTEE OR PDC.............................8
1.91 PROPOSED TERMS...................................................8
1.92 Q1, Q2, Q3 AND Q4................................................8
1.93 REGISTRATION.....................................................8
1.94 REGISTRATION APPLICATION.........................................8
1.95 REGISTRATIONAL STUDIES...........................................8
1.96 REGULATORY AUTHORITY.............................................8
1.97 RESTRICTED PERIOD................................................8
1.98 SALES COSTS......................................................8
1.99 SALES FORCE GUIDELINES...........................................8
1.100 SHARES...........................................................8
1.101 SHORT-TERM INABILITY TO SUPPLY...................................9
1.102 SPECIFICATIONS...................................................9
1.103 STOCKHOLDER AGREEMENT............................................9
1.104 SUBSIDIARY.......................................................9
1.105 SUMMARY CLINICAL DEVELOPMENT PLAN................................9
1.106 TECHNOLOGY.......................................................9
1.107 TERMINATION DATE.................................................9
1.108 TERRITORY........................................................9
1.109 TESTING METHODS..................................................9
1.110 THIRD PARTY......................................................9
1.111 THIRD PARTY CHANGE OF CONTROL TRANSACTION........................9
1.112 THIRD PARTY MANUFACTURER.........................................9
1.113 TRADEMARKS.......................................................9
1.114 UNITED STATES OR U.S.............................................9
1.115 VALID CLAIM.....................................................10
2. MANAGEMENT............................................................10
2.1 JOINT EXECUTIVE COMMITTEE.......................................10
2.2 FINANCE COMMITTEE...............................................12
2.3 PRODUCT DEVELOPMENT COMMITTEE...................................13
2.4 JOINT COMMERCIALIZATION COMMITTEE...............................14
2.5 JOINT MANUFACTURING COMMITTEE...................................16
2.6 MINUTES OF COMMITTEE MEETINGS...................................17
2.7 TERM............................................................18
2.8 EXPENSES........................................................18
2.9 ALLIANCE MANAGERS...............................................18
3. GRANT OF RIGHTS.......................................................19
3.1 RIGHTS GRANTED TO ERS...........................................19
3.2 RESTRICTIONS ON THE COMPANY.....................................19
3.3 LICENSE TO ERS INVENTIONS.......................................19
-iii-
Confidential treatment requested by Bristol-Myers Squibb Company, Bristol-Myers
Squibb Biologics Company and ImClone Systems Incorporated.
3.4 TRADEMARKS; LOGOS...............................................19
3.5 RIGHT OF FIRST OFFER TO ERS REGARDING THE OTHER COMPOUND........20
3.6 RIGHT OF FIRST NEGOTIATION OF ERS REGARDING PARTNERING
TRANSACTIONS....................................................21
3.7 NEGOTIATION OF SERVICES.........................................21
3.8 RESTRICTIONS ON COMPETING PRODUCTS..............................22
3.9 THE COMPANY'S RIGHT TO DEVELOP AND MARKET PRODUCTS..............22
4. DEVELOPMENT AND REGULATORY MATTERS....................................23
4.1 EXCHANGE OF DATA AND KNOW-HOW...................................23
4.2 PRODUCT REGISTRATIONS...........................................24
4.3 SCOPE OF CLINICAL DEVELOPMENT PLANS AND CLINICAL BUDGET.........24
4.4 TRANSITION OF CLINICAL STUDIES..................................26
4.5 CONDUCT OF CLINICAL DEVELOPMENT PLANS...........................26
4.6 FUNDING OF CLINICAL DEVELOPMENT PLANS...........................27
4.7 IT SUPPORT......................................................28
4.8 DELAY OF INITIAL REGULATORY FILING..............................28
4.9 SUSPENSION OF CLINICAL DEVELOPMENT ACTIVITIES...................29
4.10 LIABILITY.......................................................29
5. DISTRIBUTION AND PROMOTION............................................29
5.1 GENERALLY.......................................................29
5.2 SCOPE OF MARKETING BUDGET.......................................29
5.3 ERS RESPONSIBILITIES; RIGHTS....................................30
5.4 MARKETING PLANS.................................................30
5.5 PROMOTIONAL MATERIALS AND ACTIVITIES............................30
5.6 THE COMPANY'S CO-PROMOTION RIGHT................................31
5.7 DISTRIBUTION AND MARKETING COSTS................................32
6. PAYMENTS..............................................................32
6.1 UPFRONT PAYMENTS TO THE COMPANY.................................32
6.2 MILESTONE PAYMENTS TO THE COMPANY...............................33
6.3 DISTRIBUTION FEES FOR NORTH AMERICA.............................33
6.4 REDUCTION IN DISTRIBUTION FEE FOR NORTH AMERICA.................34
6.5 DISTRIBUTION FEES FOR JAPAN.....................................34
6.6 ALLOCATION OF SALES.............................................34
7. PAYMENTS AND REPORTS..................................................34
7.1 PAYMENTS........................................................34
7.2 REPORTS.........................................................34
7.3 MODE OF PAYMENT.................................................35
7.4 RECORDS RETENTION...............................................35
7.5 AUDIT REQUEST...................................................35
7.6 COST OF AUDIT...................................................35
7.7 NO NON-MONETARY CONSIDERATION FOR SALES.........................36
7.8 TAXES...........................................................36
8. MANUFACTURE AND SUPPLY...............................................36
8.1 SUPPLY OBLIGATIONS..............................................36
8.2 SUPPLY OF API; PROCESSING OF FINISHED PRODUCT...................37
8.3 FORECASTS.......................................................37
-iv-
Confidential treatment requested by Bristol-Myers Squibb Company, Bristol-Myers
Squibb Biologics Company and ImClone Systems Incorporated.
8.4 ORDERS FOR API..................................................37
8.5 DELIVERY........................................................38
8.6 PURCHASE PRICE..................................................39
8.7 CONFORMITY; SPECIFICATIONS; QUALITY CONTROL.....................39
8.8 ACCEPTANCE/REJECTION; INTERIM REPLACEMENT.......................40
8.9 THIRD PARTY MANUFACTURERS.......................................42
8.10 INVENTORY MANAGEMENT............................................43
8.11 SHORTAGE OF SUPPLY..............................................43
8.12 INABILITY TO SUPPLY.............................................43
9. OWNERSHIP; PATENTS; TRADEMARKS........................................45
9.1 OWNERSHIP.......................................................45
9.2 MAINTENANCE OF THE PATENTS......................................45
9.3 PATENT ENFORCEMENT..............................................46
9.4 INFRINGEMENT ACTION BY THIRD PARTIES............................47
10. PUBLICATION; CONFIDENTIALITY..........................................49
10.1 NOTIFICATION....................................................49
10.2 REVIEW..........................................................49
10.3 CONFIDENTIALITY; EXCEPTIONS.....................................49
10.4 EXCEPTIONS TO OBLIGATION........................................50
10.5 LIMITATIONS ON USE..............................................50
10.6 REMEDIES........................................................50
11. REPRESENTATIONS AND WARRANTIES........................................50
11.1 REPRESENTATIONS AND WARRANTIES OF THE PARTIES...................50
11.2 REPRESENTATIONS AND WARRANTIES OF THE COMPANY...................51
11.3 REPRESENTATIONS AND WARRANTIES OF ERS AND BMS...................52
11.4 REPRESENTATIONS AND WARRANTIES OF BMS..........................52
12. RECALL; INDEMNIFICATION...............................................52
12.1 INVESTIGATION; RECALL...........................................52
12.2 INDEMNIFICATION BY ERS AND BMS..................................52
12.3 INDEMNIFICATION BY THE COMPANY..................................53
12.4 NOTICE OF INDEMNIFICATION.......................................53
12.5 COMPLETE INDEMNIFICATION........................................53
13. TERM; TERMINATION.....................................................53
13.1 TERM............................................................53
13.2 TERMINATION FOR CAUSE...........................................54
13.3 TERMINATION BY ERS..............................................54
13.4 TERMINATION BY THE COMPANY......................................54
13.5 TERMINATION IN CONNECTION WITH ADDITIONAL STUDIES...............55
13.5 EFFECT OF EXPIRATION OR TERMINATION.............................55
13.6 ACCRUED RIGHTS; SURVIVING OBLIGATIONS...........................55
14. FORCE MAJEURE.........................................................55
14.1 EVENTS OF FORCE MAJEURE.........................................55
15. ADDITIONAL COVENANTS OF BMS AND BMS GUARANTEE.........................56
15.1 ADDITIONAL COVENANTS OF BMS.....................................56
15.2 BMS GUARANTEE...................................................56
-v-
Confidential treatment requested by Bristol-Myers Squibb Company, Bristol-Myers
Squibb Biologics Company and ImClone Systems Incorporated.
16. MISCELLANEOUS.........................................................56
16.1 RELATIONSHIP OF PARTIES.........................................56
16.2 ASSIGNMENT......................................................56
16.3 BOOKS AND RECORDS...............................................57
16.4 FURTHER ACTIONS.................................................57
16.5 NOTICE..........................................................57
16.6 USE OF NAME.....................................................58
16.7 PUBLIC ANNOUNCEMENTS............................................58
16.8 WAIVER..........................................................59
16.9 COMPLIANCE WITH LAW.............................................59
16.10 SEVERABILITY....................................................59
16.11 AMENDMENT.......................................................59
16.12 GOVERNING LAW...................................................59
16.13 ARBITRATION.....................................................59
16.14 ENTIRE AGREEMENT................................................60
16.15 PARTIES IN INTEREST.............................................61
16.16 DESCRIPTIVE HEADINGS............................................61
16.17 COUNTERPARTS....................................................61
EXHIBIT 1.13 BASE CASE PROJECTIONS..........................................63
EXHIBIT 1.46 FINANCIAL APPENDIX.............................................64
EXHIBIT 1.68 LOW CASE PROJECTIONS...........................................70
EXHIBIT 1.87 PATENTS........................................................71
EXHIBIT 2.1 JOINT EXECUTIVE COMMITTEE AND ALLIANCE MANAGERS.................72
EXHIBIT 4.3(A) CLINICAL BUDGET..............................................73
EXHIBIT 4.3(B) SUMMARY CLINICAL DEVELOPMENT PLAN FOR 2001-2004..............74
EXHIBIT 5.2(A) MARKETING BUDGET FOR 2001-2004...............................75
EXHIBIT 5.2(B) INDICATIVE MARKETING BUDGET FOR 2005-2017....................76
EXHIBIT 8.12(B)(i) BASE CASE CLINICAL SUPPLY AMOUNT.........................77
EXHIBIT 8.12(B)(ii) BASE CASE COMMERCIAL SUPPLY AMOUNT......................78
-vi-
Confidential treatment requested by Bristol-Myers Squibb Company, Bristol-Myers
Squibb Biologics Company and ImClone Systems Incorporated.
DEVELOPMENT, PROMOTION,
DISTRIBUTION AND SUPPLY AGREEMENT
THIS DEVELOPMENT, PROMOTION, DISTRIBUTION AND SUPPLY AGREEMENT (this
"AGREEMENT"), dated as of September 19, 2001, is entered into by and among E. R.
SQUIBB & SONS, LLC, a limited liability company organized and existing under the
laws of the State of Delaware, having offices located at Route 206 & Province
Line Road, Princeton, New Jersey ("ERS"), BRISTOL-MYERS SQUIBB COMPANY, a
corporation organized and existing under the laws of the State of Delaware,
having offices located at Route 206 & Province Line Road, Princeton, New Jersey
("BMS") and IMCLONE SYSTEMS INCORPORATED, a corporation organized under the laws
of the State of Delaware, having offices located at 180 Varick Street, New York,
New York 10014 (the "COMPANY").
PRELIMINARY STATEMENTS
A. The Company owns, and/or has exclusive rights to, the Patents and
Know-How in existence as of the Effective Date relating to the Compound.
B. ERS and the Company desire to collaborate on the development and
commercialization of Products using the Compound for application in the Field.
C. ERS wishes to: (i) obtain the exclusive right to distribute, and the
co-exclusive right to develop and promote (together with the Company), the
Products in North America; (ii) obtain the co-exclusive right to develop,
distribute and promote (together with the Company and the Merck Entities), the
Products in Japan; and (iii) use the Company's registered trademarks for the
Products in the Territory in connection with the foregoing, and the Company
desires to grant such rights to ERS, on the terms and conditions set forth in
this Agreement.
D. ERS also wishes to purchase from the Company, and the Company wishes to
supply to ERS, ERS's entire bulk requirements of API, on the terms and
conditions set forth in this Agreement.
E. Simultaneously with the execution of this Agreement, the Company, BMS
and Bristol-Myers Squibb Biologics Company, a Delaware corporation and wholly
owned subsidiary of BMS ("ACQUISITION SUBSIDIARY"), are entering into an
Acquisition Agreement (the "ACQUISITION AGREEMENT"), pursuant to which, among
other things, BMS and Acquisition Subsidiary shall commence a tender offer to
acquire approximately 19.9% of the Company's outstanding Common Stock.
F. Simultaneously with the execution of this Agreement, the Company, BMS
and Acquisition Subsidiary are entering into a Stockholder Agreement (the
"STOCKHOLDER AGREEMENT", and together with the Acquisition Agreement, the
"EQUITY AGREEMENTS"), pursuant to which, among other things, the Company, BMS
and Acquisition Subsidiary have established certain governance arrangements
among the Company, BMS and Acquisition Subsidiary.
Confidential treatment requested by Bristol-Myers Squibb Company, Bristol-Myers
Squibb Biologics Company and ImClone Systems Incorporated.
NOW, THEREFORE, in consideration of the foregoing preliminary statements
and the mutual agreements and covenants set forth herein, the Parties hereby
agree as follows:
1. DEFINITIONS.
As used in this Agreement, the following terms shall have the meanings set
forth in this Section 1 unless context dictates otherwise:
1.1 "ACCELERATED ARBITRATION PROVISIONS" shall have the meaning assigned
to such term in Section 16.13(b).
1.2 "ACQUIRING PARTY" shall have the meaning assigned to such term in
Section 3.8.
1.3 "ACQUISITION AGREEMENT" shall have the meaning assigned to such term
in the preliminary statements.
1.4 "ACQUISITION SUBSIDIARY" shall have the meaning assigned to such term
in the preliminary statements.
1.5 "AFFILIATE" of any Person means any other Person directly or
indirectly controlling, controlled by or under common control with such Person;
PROVIDED that for purposes of this Agreement, neither the Company nor any of its
Subsidiaries shall be deemed an Affiliate of ERS or BMS. For the purposes of
this definition, "control" when used with respect to any Person, means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of such Person, whether through the
ownership of voting securities, by contract or otherwise; and the terms
"CONTROLLING" and "CONTROLLED" have meanings correlative to the foregoing.
1.6 "ALLIANCE MANAGER" shall have the meaning assigned to such term in
Section 2.9.
1.7 "ALLOCABLE OVERHEAD" shall have the meaning assigned to such term in
the Financial Appendix.
1.8 "ALLOWABLE FAILURE RATE" shall have the meaning assigned to such term
in Section 8.8(c).
1.9 "ANTITRUST INJUNCTION" shall have the meaning assigned to such term in
the Acquisition Agreement.
1.10 "API" shall mean any Compound, in bulk form, for use as an active
ingredient in the manufacture of Finished Products.
1.11 "AUDITED PARTY" shall have the meaning assigned to such term in
Section 7.5.
1.12 "AUDITING PARTY" shall have the meaning assigned to such term in
Section 7.5.
1.13 "BASE CASE PROJECTIONS" shall mean those base case financial
projections for the Products for each of calendar years 2005 through 2017
attached to this Agreement as EXHIBIT 1.13.
1.14 "BLA FILING DATE" shall have the meaning assigned to such term in
Section 4.1.
1.15 "BMS" shall have the meaning assigned to such term in the
introductory paragraph.
2
Confidential treatment requested by Bristol-Myers Squibb Company, Bristol-Myers
Squibb Biologics Company and ImClone Systems Incorporated.
1.16 "BMS DILUTION EVENT" shall have the meaning assigned to such term in
the Stockholder Agreement.
1.17 "BMS SELL-DOWN" shall have the meaning assigned to such term in the
Stockholder Agreement.
1.18 "BREACHING PARTY" shall have the meaning assigned to such term in
Section 13.2(a).
1.19 "CLINICAL BUDGET" shall have the meaning assigned to such term in
Section 4.3(a).
1.20 "CLINICAL DEVELOPMENT PLAN" shall mean the definitive clinical
development plan approved by the PDC pursuant to Section 4.3(b), and each
subsequent definitive clinical development plan approved by the PDC pursuant to
Section 4.3(e).
1.21 "COMMITTEE" shall mean any of the JEC, the PDC, the JCC, the JMC and
the Finance Committee and, when used in the plural, shall mean all of them or
more than one of them, as the case may be.
1.22 "COMMON STOCK" shall mean the common stock, $.001 par value, of the
Company.
1.23 "COMPANY" shall have the meaning assigned to such term in the
introductory paragraph.
1.24 "COMPANY SEC DOCUMENTS" shall have the meaning assigned to such term
in the Acquisition Agreement.
1.25 "cGMP" shall mean current Good Manufacturing Practice as defined in
Parts 210 and 211 of Title 21 of the U.S. Code of Federal Regulations, as may be
amended from time to time, or any successor thereto.
1.26 "COMPETING PRODUCT" shall mean a product which has as its only
mechanism of action an antagonism of the EGF receptor.
1.27 "COMPOUND" shall mean the compound known as IMC-C225, including
without limitation all fully humanized or human version thereof, and all
analogs, derivatives and/or improvements of any of the foregoing.
1.28 "CONFIDENTIAL INFORMATION" shall have the meaning assigned to such
term in Section 10.3.
1.29 "CO-PROMOTION OPTION" shall have the meaning assigned to such term in
Section 5.6.
1.30 "CO-PROMOTION PROBLEM" shall have the meaning assigned to such term
in Section 5.6(e).
1.31 "COST OF GOODS SOLD" shall have the meaning assigned to such term in
the Financial Appendix.
1.32 "CRITICAL ISSUE" shall mean any matter that is subject to the
decision-making authority of any Committee that is material and would cause a
significant delay or inability to be responsive which would have a material
adverse consequence to the clinical development, distribution, promotion or sale
of the Products.
1.33 "CURRENT FORECAST" shall have the meaning assigned to such term in
Section 8.4.
3
Confidential treatment requested by Bristol-Myers Squibb Company, Bristol-Myers
Squibb Biologics Company and ImClone Systems Incorporated.
1.34 "DEVELOPMENT COSTS" shall have the meaning assigned to such term in
the Financial Appendix.
1.35 "DISTRIBUTION COSTS" shall have the meaning assigned to such term in
the Financial Appendix.
1.36 "DISTRIBUTION FEE" shall mean the fees to be paid by ERS to the
Company pursuant to Sections 6.3 and 6.5 in consideration for the rights granted
to ERS by the Company with respect to North America and Japan, respectively.
1.37 "EFFECTIVE DATE" shall mean the date set forth in the introductory
paragraph of the Agreement.
1.38 "EQUITY AGREEMENTS" shall have the meaning assigned to such term
in the preliminary statements.
1.39 "ERS" shall have the meaning assigned to such term in the
introductory paragraph.
1.40 "ERS INVENTIONS" shall have the meaning assigned to such term in
Section 9.1.
1.41 "ERS OBLIGATIONS" shall have the meaning assigned to such term in
Section 15.2.
1.42 "ERS PROPOSED TERMS" shall have the meaning assigned to such term in
Section 3.5(c).
1.43 "FDA" shall mean the United States Food and Drug Administration, or
any successor thereto.
1.44 "FIELD" shall mean all pharmaceutical applications for human health.
1.45 "FINANCE COMMITTEE" shall have the meaning assigned to such term in
Section 2.1(b)(vii).
1.46 "FINANCIAL APPENDIX" shall mean EXHIBIT 1.46 attached to this
Agreement.
1.47 "FINISHED PRODUCT" shall mean any formulation or dosage of Product in
finished form, including, without limitation, any product labeling or other
package inserts or materials required by the applicable Regulatory
Authority(ies) and, when used in the plural, shall mean all formulations and
dosages of Product in finished form, including, without limitation, all product
labeling and other package inserts and materials required by the applicable
Regulatory Authority(ies).
1.48 "FIRST COMMERCIAL SALE" shall mean the first sale of a Product to a
Third Party by ERS or its Affiliates in any country in the Territory after all
Registrations required to permit such sale have been granted, or such sale is
otherwise permitted, by the Regulatory Authority in such country.
1.49 "FIRST OFFER TERMINATION DATE" shall mean the earlier to occur of (i)
the date which is the fifth anniversary of the Effective Date, and (ii) the date
which is the first anniversary of a BMS Dilution Event.
1.50 "FULLY BURDENED MANUFACTURING COST" shall have the meaning assigned
to such term in the Financial Appendix.
4
Confidential treatment requested by Bristol-Myers Squibb Company, Bristol-Myers
Squibb Biologics Company and ImClone Systems Incorporated.
1.51 "GAAP" shall mean generally accepted accounting principles in the
United States, consistently applied by the Party at issue.
1.52 "GENERAL AND ADMINISTRATIVE COSTS" shall have the meaning assigned to
such term in the Financial Appendix.
1.53 "GROSS PROFIT" shall have the meaning assigned to such term in the
Financial Appendix.
1.54 "INABILITY TO SUPPLY" shall have the meaning assigned to such term in
Section 8.12(b).
1.55 "IND" shall mean any filing made with the Regulatory Authority in any
country in the Territory for initiating clinical trials in such country, with
respect to a Product.
1.56 "INDEMNITEE" shall have the meaning assigned to such term in Section
12.4.
1.57 "INFRINGEMENT" shall have the meaning assigned to such term in
Section 9.3(a).
1.58 "INDICATIVE MARKETING BUDGET" shall mean the indicative marketing
budget attached as EXHIBIT 5.2(B).
1.59 "INITIAL REGULATORY FILING" shall mean the completed and submitted
initial Registration Application for the initial Product with the FDA.
1.60 "INVENTION" shall mean any new or useful process, manufacture,
compound, composition of matter, improvements, discoveries, claims, formulae,
processes, trade secrets, technologies and know-how (including confidential data
and Confidential Information), to the extent relating to, derived from and
useful for the manufacture, use or sale of a Compound or a Product (including,
without limitation, the formulation, delivery or use thereof in the Field),
including, without limitation, synthesis, preparation, recovery and purification
processes and techniques, control methods and assays, chemical data,
toxicological and pharmacological data and techniques, clinical data, medical
uses, product forms and product formulations and specifications, whether
patentable or unpatentable, that (except for purposes of the definitions of
Know-How and Patents set forth herein in Sections 1.64 and 1.87, respectively)
is conceived or first reduced to practice or demonstrated to have utility during
the term of this Agreement.
1.61 "JOINT COMMERCIALIZATION COMMITTEE" OR "JCC" shall have the meaning
assigned to such term in Section 2.4(a).
1.62 "JOINT EXECUTIVE COMMITTEE" OR "JEC" shall have the meaning assigned
to such term in Section 2.1(a).
1.63 "JOINT MANUFACTURING COMMITTEE" OR "JMC" shall have the meaning
assigned to such term in Section 2.5(a).
1.64 "KNOW-HOW" shall mean any and all unpatented Inventions that are
generated, owned or controlled by the Company at any time before or during the
term of this Agreement to the extent relating to, derived from and useful for
the manufacture of Finished Products from API, manufacture of API, or the use or
sale of the Compounds or the Products in the Field in any country in the
Territory.
1.65 "KNOWLEDGE OF THE COMPANY" shall mean the knowledge, after reasonable
inquiry, of Samuel Waksal, Ph.D., Harlan Waksal, M.D., Daniel Lynch or John
Landes.
5
Confidential treatment requested by Bristol-Myers Squibb Company, Bristol-Myers
Squibb Biologics Company and ImClone Systems Incorporated.
1.66 "LETTER OF INTENT" shall have the meaning assigned to such term in
Section 3.5(b).
1.67 "LONG-TERM INABILITY TO SUPPLY" shall have the meaning assigned to
such term in Section 8.12(d).
1.68 "LOW CASE PROJECTIONS" shall mean those low case financial
projections for the Products for each of calendar years 2005 through 2017
attached to this Agreement as EXHIBIT 1.68.
1.69 "MANUFACTURING STANDARDS" shall mean, with respect to the API or any
Finished Product, cGMP and such additional manufacturing specifications or
standards as may be established by mutual agreement of the Company and ERS from
time to time.
1.70 "MARKETING BUDGET" shall mean the definitive marketing budget
attached as EXHIBIT 5.2(A) and each subsequent marketing budget approved by the
JCC in accordance with Section 5.2(c).
1.71 "MARKETING COSTS" shall have the meaning assigned to such term in the
Financial Appendix.
1.72 "MARKETING PLANS" shall have the meaning assigned to such term in
Section 5.4.
1.73 "MERCK AGREEMENT" shall mean that certain Development and License
Agreement entered into by the Company and Merck KGaA on December 14, 1998, as
amended and modified as of the date of this Agreement.
1.74 "MERCK ENTITIES" shall mean Merck KGaA and its permitted affiliates,
successors and assigns under the Merck Agreement.
1.75 "NET SALES" shall have the meaning assigned to such term in the
Financial Appendix.
1.76 "NON-ACQUIRING PARTY" shall have the meaning assigned to such term in
Section 3.8(b).
1.77 "NON-BREACHING PARTY" shall have the meaning assigned to such term in
Section 13.2(b).
1.78 "NON-REGISTRATIONAL STUDIES" shall have the meaning assigned to such
term in Section 4.3(b).
1.79 "NORTH AMERICA" shall mean Canada and the United States.
1.80 "NUMBER OF DAYS TO MAKE PAYMENT" shall mean (i) until the end of
calendar year 2002, [**] days, (ii) during calendar year 2003, [**] days [**],
as determined by the JCC prior to the end of calendar year 2002 making use of
the previous 12 months data available as of October 31, 2002 and (iii) beginning
with calendar year 2004 and thereafter, [**] days [**], as determined by the JCC
prior to the end of each preceding calendar year making use of 12 months data
available as of the end of the month of October of such preceding calendar year.
1.81 "OFFER" shall have the meaning assigned to such term in the
Acquisition Agreement.
1.82 "OPERATING PROFIT OR LOSS" shall have the meaning assigned to such
term in the Financial Appendix.
6
Confidential treatment requested by Bristol-Myers Squibb Company, Bristol-Myers
Squibb Biologics Company and ImClone Systems Incorporated.
1.83 "OTHER COMPOUND" shall mean that compound known as 2C6 anti-VEGF
receptor monoclonal antibody (or any human, humanized or chimeric version
thereof, or any substitute therefor).
1.84 "OTHER OPERATING INCOME/EXPENSE" shall have the meaning assigned to
such term in the Financial Appendix.
1.85 "PARTNERING RELATIONSHIPS" shall have the meaning assigned to such
term in Section 3.6.
1.86 "PARTY" shall mean the Company, ERS, or BMS, as the case may be, and,
when used in the plural, shall mean the Company, ERS, and BMS.
1.87 "PATENTS" shall mean the patents and patent applications set forth on
EXHIBIT 1.87, together with any patents that may issue therefrom in any country
in the Territory, and any other patents or patent applications in any country in
the Territory owned by or exclusively licensed to the Company during the term of
this Agreement that cover any Inventions to the extent relating to, derived from
and useful for the manufacture, use or sale of the Compounds or the Products in
the Field in any country in the Territory, including any and all extensions,
renewals, continuations, continuations-in-part, divisions, patents-of-additions,
reissues, supplementary protection certificates or foreign counterparts of any
of the foregoing.
1.88 "PERSON" shall mean an mean an individual or a corporation,
partnership, association, trust, or any other entity or organization, including
a government or political subdivision or an agency or instrumentality thereof.
1.89 "PRODUCT" shall mean any prescription pharmaceutical product
comprising a Compound, including any strength and packaging configuration of the
final finished dosage form presentation, and any line extension thereof and,
when used in the plural, shall mean all prescription pharmaceutical products
comprising Compounds, including all strengths and packaging configurations of
the final finished dosage form presentations, and any line extensions thereof.
1.90 "PRODUCT DEVELOPMENT COMMITTEE" OR "PDC" shall have the meaning
assigned to such term in Section 2.3(a).
1.91 "PROPOSED TERMS" shall have the meaning assigned to such term in
Section 3.5(b).
1.92 "Q1," "Q2," "Q3," AND "Q4" shall have the meaning assigned to such
term in Section 8.3.
1.93 "REGISTRATION" shall mean, with respect to each country in the
Territory, approval of the Registration Application for any Product filed in
such country, including, where applicable outside of the United States, pricing
or reimbursement approval by the Regulatory Authority in such country.
1.94 "REGISTRATION APPLICATION" shall mean a Biologics License Application
under the United States Federal Food, Drug and Cosmetics Act and the regulations
promulgated thereunder, or a comparable filing for Registration in a country, in
each case with respect to a Product for application in the Field in the
Territory.
1.95 "REGISTRATIONAL STUDIES" shall have the meaning assigned to such term
in Section 4.3(b).
7
Confidential treatment requested by Bristol-Myers Squibb Company, Bristol-Myers
Squibb Biologics Company and ImClone Systems Incorporated.
1.96 "REGULATORY AUTHORITY" shall mean the FDA in the U.S., and any health
regulatory authority(ies) in any country in the Territory that is a counterpart
to the FDA and holds responsibility for granting regulatory marketing approval
for a Product in such country, and any successor(s) thereto.
1.97 "RESTRICTED PERIOD" shall have the meaning assigned to such term in
the Stockholder Agreement.
1.98 "SALES COSTS" shall have the meaning assigned to such term in the
Financial Appendix.
1.99 "SALES FORCE GUIDELINES" shall have the meaning assigned to such term
in Section 5.6(d).
1.100 "SHARES" shall mean shares of Common Stock.
1.101 "SHORT-TERM INABILITY TO SUPPLY" shall have the meaning assigned to
such term in Section 8.12(c).
1.102 "SPECIFICATIONS" shall mean, with respect to API, the specifications
for such API as agreed upon by the Company and ERS, in consideration of the
regulatory requirements in each country in the Territory, as may be amended from
time to time.
1.103 "STOCKHOLDER AGREEMENT" shall have the meaning assigned to such term
in the preliminary statements.
1.104 "SUBSIDIARY" means, with respect to any Person, any corporation or
other entity of which a majority of the capital stock or other ownership
interests having ordinary voting power to elect a majority of the board of
directors or other persons performing similar functions are at the time directly
or indirectly owned by such Person.
1.105 "SUMMARY CLINICAL DEVELOPMENT PLAN" shall mean the summary clinical
development plan attached as EXHIBIT 4.3(B), and each subsequent summary
clinical development plan approved by the PDC pursuant to Section 4.3(d).
1.106 "TECHNOLOGY" shall mean the Valid Claims and Know-How, collectively.
1.107 "TERMINATION DATE" shall have the meaning assigned to such term in
the Acquisition Agreement.
1.108 "TERRITORY" shall mean the United States, Canada and Japan.
1.109 "TESTING METHODS" shall have the meaning assigned to such term in
Section 8.7(c).
1.110 "THIRD PARTY" shall mean any Person who or which is neither a Party
nor an Affiliate of a Party.
1.111 "THIRD PARTY CHANGE OF CONTROL TRANSACTION" shall have the meaning
assigned to such term in the Stockholder Agreement.
1.112 "THIRD PARTY MANUFACTURER" shall mean Third Parties who have been
engaged by the Company to perform services or supply facilities or goods
(including, without limitation, the API and/or Finished Product) in connection
with the manufacture, testing and/or packaging of the API and/or Finished
Product by the Company.
8
Confidential treatment requested by Bristol-Myers Squibb Company, Bristol-Myers
Squibb Biologics Company and ImClone Systems Incorporated.
1.113 "TRADEMARKS" shall mean the trademarks registered to the Company for
the marketing of the Products in any country in the Territory, and the
trademarks selected by the JCC for use in the marketing of the Products in any
country in the Territory.
1.114 "UNITED STATES" or "U.S." shall mean the United States of America,
including its possessions and territories.
1.115 "VALID CLAIM" shall mean any claim of any Patents issued or pending
in a country in the Territory relating to, derived from or useful for the use
and sale of the Compounds or the Products in the Field, which claim has not been
held invalid or unenforceable by decision of a court or other governmental
agency of competent jurisdiction, unappealable or unappealed within the time
allowed for appeal, and which is not admitted to be invalid through disclaimer
or otherwise not admitted by the Company to be invalid.
2. MANAGEMENT.
2.1 JOINT EXECUTIVE COMMITTEE.
(a) MEMBERS; OFFICERS. Immediately after the Effective Date, the
Parties shall establish a joint executive committee (the "JOINT EXECUTIVE
COMMITTEE" or "JEC"), which shall consist of six members, three members from
each of the Company and BMS. The initial members of the JEC are set forth on
EXHIBIT 2.1. Each of the Company and BMS may replace any or all of its
representatives on the JEC at any time upon written notice to the other in
accordance with Section 16.5 of this Agreement. Such representatives shall at
all times include each such Party's [**] and most senior pharmaceutical
business officer and one other senior officer of each such Party. Any
member of the JEC may designate a substitute to temporarily attend and
perform the functions of that member at any meeting of the JEC. The Company and
BMS each may, in its discretion, invite non-member representatives of such Party
to attend meetings of the JEC. The JEC shall be co-chaired by a representative
of each of the Company and BMS. The co-chairpersons shall appoint a secretary of
the JEC, and such secretary shall serve for such term as designated by the
co-chairpersons. The initial co-chairpersons and the initial secretary are
designated on EXHIBIT 2.1.
(b) RESPONSIBILITIES. The JEC shall perform the following functions:
(i) manage and oversee the development and commercialization
of the Compounds and Products pursuant to the terms of this Agreement;
(ii) review and approve the annual budgets and multi-year
expense forecasts formulated by the PDC;
(iii) at each meeting of the JEC, review a comparison of
actual expenses to the budgeted expenses for the year-to-date, as current as
practicable to a date immediately prior to the date of the meeting;
(iv) review and evaluate the progress of the other Committees;
(v) review and approve "go/no-go" decisions and other matters
referred to the JEC by any other Committee;
9
Confidential treatment requested by Bristol-Myers Squibb Company, Bristol-Myers
Squibb Biologics Company and ImClone Systems Incorporated.
(vi) review and, if determined to be necessary, reallocate
spending between the Clinical Budget and the relevant Marketing Budget;
(vii) establish and empower a finance committee, which shall
consist of an equal number of representatives from each of the Company and BMS
(the "FINANCE COMMITTEE") to advise the JEC and make recommendations to the JEC,
for the areas it has responsibility as provided in Section 2.2, for which the
JEC has decision making authority;
(viii) at least once each year, meet with each of the other
Committees (which meetings do not need to include all of the other Committees at
the same meeting);
(ix) in accordance with the procedures established in Section
2.1(d), resolve disputes, disagreements and deadlocks unresolved by the other
Committees;
(x) determine, in response to the PDC's findings regarding a
material delay of an Initial Regulatory Filing, whether or not it is in the best
interest of the Parties to go forward with the conduct of any additional
clinical studies required by the FDA; and
(xi) have such other responsibilities as may be assigned to
the JEC pursuant to this Agreement or as may be mutually agreed upon by the
Parties from time to time.
(c) MEETINGS. The JEC shall meet in person at least three times
during every calendar year, and more frequently as the Company and BMS deem
appropriate or as required to resolve disputes, disagreements or deadlocks in
the other Committees, on such dates, and at such places and times, as such
Parties shall agree. Meetings of the JEC that are held in person shall alternate
between the offices of the Company and BMS, or such other place as such Parties
may agree. The members of the JEC also may convene or be polled or consulted
from time to time by means of telecommunications, video conferences, electronic
mail or correspondence, as deemed necessary or appropriate.
(d) DECISION-MAKING.
(i) The JEC may make decisions with respect to any subject
matter that is subject to the JEC's decision-making authority and functions as
set forth in Section 2.1(b). Except as specified in Section 2.1(d)(ii), (iii) or
(iv), all decisions of the JEC shall be made by unanimous vote or written
consent, with the Company and BMS each having, collectively, one vote in all
decisions. The JEC shall use reasonable best efforts to resolve the matters
within its roles and functions or otherwise referred to it.
(ii) With respect to any Critical Issue, if the JEC cannot
reach consensus within five business days after the matter has been brought to
the JEC's attention, the matter shall be referred on the sixth business day: (A)
if the matter is the subject of a deadlock arising in the PDC and is not the
subject of Section 4.8 or 4.9, to the co-chairperson of the JEC designated by
the Company for resolution, provided that any decision made by the
co-chairperson of the JEC designated by the Company may not increase the
Clinical Budget for any one year by more than [**]; (B) if the matter is the
subject of a deadlock arising in the JCC (other than a matter under Section
2.4(b)(xiv) with respect to Trademarks), to the co-chairperson of the JEC
designated by BMS for resolution, provided that any decision made by the
co-chairperson of the JEC designated by BMS may only increase or decrease the
overall amount of the relevant Marketing Budget within the ranges
10
Confidential treatment requested by Bristol-Myers Squibb Company, Bristol-Myers
Squibb Biologics Company and ImClone Systems Incorporated.
provided in and otherwise in accordance with Section 5.2; (C) if the matter is
under Section 2.4(b)(xiv) with respect to Trademarks and is the subject of a
deadlock arising in the JCC, to the co-chairperson of the JEC designated by the
Company for resolution; and (D) except as provided in Section 8.12(f), if the
matter is the subject of a deadlock arising in the JMC, to the co-chairperson of
the JEC designated by the Company for resolution. In the event that the
co-chairperson designated to resolve a dispute under this Section 2.1(d)(ii) is
not immediately available, then such matter shall be referred to the senior
executive officer of such Party in the area to which the matter relates and who
has been designated by such Party for such resolution.
(iii) With respect to all other matters that are subject to
the JEC's decision-making authority, if the JEC cannot reach consensus within 20
business days after it has met and attempted to reach such consensus, the matter
shall be referred on the twenty-first business day: (A) if the matter is the
subject of a deadlock arising in the PDC and is not the subject of Section 4.8
or 4.9, to the co-chairperson of the JEC designated by the Company for
resolution, provided that any decision made by the co-chairperson of the Company
may not increase the Clinical Budget for any one year by more than [**]; (B) if
the matter is the subject of a deadlock arising in the JCC (other than a matter
under Section 2.4(b)(xiv) with respect to Trademarks), to the co-chairperson of
the JEC designated by BMS for resolution, provided that any decision made by the
co-chairperson of BMS may not increase or decrease the overall amount of the
relevant Marketing Budget within the ranges provided in and otherwise in
accordance with Section 5.2; (C) if the matter is under Section 2.4(b)(xiv) with
respect to Trademarks and is the subject of a deadlock arising in the JCC, to
the co-chairperson of the JEC designated by the Company for resolution; and (D)
except as provided in Section 8.12(f), if the matter is the subject of a
deadlock arising in the JMC, to the co-chairperson of the JEC designated by the
Company for resolution.
(iv) In the event of a deadlock of the JEC with respect to a
Critical Issue that is not resolved pursuant to clause (ii) and the matters
underlying such deadlock fall into the class of disputes that may be arbitrated
by the Parties in accordance with Section 16.13, then such matters shall be
resolved pursuant to the Accelerated Arbitration Provisions of Section 16.13(b).
In the event of a deadlock of the JEC with respect to any other matters that are
not resolved pursuant to clause (iii) and such matters fall into the class of
disputes that may be arbitrated by the Parties in accordance with Section 16.13,
then such matters shall be resolved pursuant to Section 16.13(a).
(v) For all purposes under this Agreement, any decision made
pursuant to this Section 2.1(d) shall be deemed to be the decision of the JEC.
2.2 FINANCE COMMITTEE. The Finance Committee shall perform the following
functions:
(a) clarify questions and ambiguities arising from the use or
application, as appropriate, in the relevant Territory of the accounting terms
used in this Agreement, including without limitation, Fully Burdened
Manufacturing Costs, Net Sales, Cost of Goods Sold, Development Costs,
Distribution Costs, Marketing Costs, Sales Costs, General and Administrative
Expense, Other Operating Income/Expense, Gross Profit and Operating Profit or
Loss;
(b) set up systems necessary to capture such costs and profits or
losses (including, without limitation, developing the methodology to be used to
determine Other Operating Income/Expense in accordance with the Financial
Appendix);
(c) establish parameters and mechanisms for management and financial
reporting;
11
Confidential treatment requested by Bristol-Myers Squibb Company, Bristol-Myers
Squibb Biologics Company and ImClone Systems Incorporated.
(d) assist in reviewing manufacturing and marketing options;
(e) assist in developing and overseeing allocation of the Clinical
Budget and the Marketing Budgets for each of the Clinical Development Plans and
Marketing Plans, respectively, and reviewing the actual expenditure of such
allocated funds to ensure consistency with such Clinical Development Plans and
Marketing Plans;
(f) have such other responsibilities as may be assigned by the JEC
to the Finance Committee pursuant to this Agreement or as may be mutually agreed
upon by the Parties from time to time.
2.3 PRODUCT DEVELOPMENT COMMITTEE.
(a) MEMBERS; OFFICERS. Immediately after the Effective Date, the
Parties shall establish a product development committee (the "PRODUCT
DEVELOPMENT COMMITTEE" or "PDC"), which shall consist of an equal number of
representatives from each of the Company and BMS, up to a maximum total of eight
members on such Committee. Each of the Company and BMS may replace any or all of
its representatives on the PDC at any time upon written notice to the other in
accordance with Section 16.5 of this Agreement. Such representatives shall
include individuals within the senior management of each such Party, and those
representatives of each such Party shall, individually or collectively, have
expertise in pharmaceutical drug development and/or marketing. Any member of the
PDC may designate a substitute to temporarily attend and perform the functions
of that member at any meeting of the PDC. The Company and BMS each may, in its
discretion, invite non-member representatives of such Party to attend meetings
of the PDC. The PDC shall be chaired by a representative of the Company. The
secretary of the PDC shall be a representative of BMS.
(b) RESPONSIBILITIES. The PDC shall perform the following functions:
(i) manage and oversee the implementation of the Clinical
Development Plans, except the Non-Registrational Studies;
(ii) review and approve each subsequent summary clinical
development plan in accordance with Section 4.3(d);
(iii) review and approve each subsequent clinical development
plan in accordance with Section 4.3(e);
(iv) review and approve any amendments or modifications of the
Clinical Development Plans or the Clinical Budget;
(v) at each meeting of the PDC, review a comparison of actual
clinical development and regulatory expenses to the budgeted expenses in the
Clinical Budget for the year-to-date, as current as practicable to a date
immediately prior to the date of the meeting;
(vi) review and evaluate progress of the Registrational
Studies; PROVIDED that the PDC shall not have authority to make any
determination that any Party is in breach of this Agreement;
12
Confidential treatment requested by Bristol-Myers Squibb Company, Bristol-Myers
Squibb Biologics Company and ImClone Systems Incorporated.
(vii) review and approve all compassionate use of Products;
(viii) review and approve the joint publication strategy
together with the JCC;
(ix) review and approve "go/no-go" decisions; and
(x) have such other responsibilities as may be assigned to the
PDC pursuant to this Agreement or as may be mutually agreed upon by the Parties
from time to time.
(c) MEETINGS. The PDC shall meet in person at least once during
every calendar quarter, and more frequently as the Company and BMS deem
appropriate or as reasonably requested by either such Party, on such dates, and
at such places and times, as such Parties shall agree. Meetings of the PDC that
are held in person shall alternate between the offices of the Company and BMS,
or such other place as such Parties may agree. The members of the PDC also may
convene or be polled or consulted from time to time by means of
telecommunications, video conferences, electronic mail or correspondence, as
deemed necessary or appropriate.
(d) DECISION-MAKING. The PDC may make decisions with respect to any
subject matter that is subject to the PDC's decision-making authority and
functions as set forth in Section 2.3(b). All decisions of the PDC shall be made
by unanimous vote or written consent, with the Company and BMS each having,
collectively, one vote in all decisions. If, with respect to a Critical Issue
that is subject to the PDC's decision-making authority, the PDC cannot reach
consensus within five business days after it has first met and attempted to
reach such consensus, the matter shall be referred on the sixth business day to
the Joint Executive Committee for resolution. If, with respect to any other
matter that is subject to the PDC's decision-making authority, the PDC cannot
reach consensus within 20 days after it has first met and attempted to reach
such consensus, the matter shall be referred on the twenty-first day to the
Joint Executive Committee for resolution. For all purposes under this Agreement,
any decision made pursuant to this Section 2.3(d) shall be deemed to be the
decision of the PDC.
2.4 JOINT COMMERCIALIZATION COMMITTEE.
(a) MEMBERS; OFFICERS. Immediately after the Effective Date, the
Parties shall establish a joint commercialization committee (the "JOINT
COMMERCIALIZATION COMMITTEE" or "JCC"), which shall consist of an equal number
of representatives from each of the Company and BMS, up to a maximum total of
eight members on such Committee. Each of the Company and BMS may replace any or
all of its representatives on the JCC at any time upon written notice to the
other in accordance with Section 16.5 of this Agreement. Such representatives
shall include individuals within the senior management of each such Party, and
those representatives of each such Party shall, individually or collectively,
have clinical experience and expertise in marketing and sales. Any member of the
JCC may designate a substitute to temporarily attend and perform the functions
of that member at any meeting of the JCC. The Company and BMS each may, in its
discretion, invite non-member representatives of such Party to attend meetings
of the JCC. The JCC shall be chaired by a representative of BMS. The secretary
of the JCC shall be a representative of the Company.
(b) RESPONSIBILITIES. The JCC shall perform the following functions:
(i) oversee the preparation and implementation of the
Marketing Plans;
13
Confidential treatment requested by Bristol-Myers Squibb Company, Bristol-Myers
Squibb Biologics Company and ImClone Systems Incorporated.
(ii) oversee and coordinate the sales efforts of ERS and the
Company;
(iii) review and approve Marketing Plans;
(iv) discuss the state of the markets for Products in the
Territory and opportunities and issues concerning the commercialization of the
Products, including consideration of marketing and promotional strategy,
marketing research plans, labeling, Product positioning and Product profile
issues, to determine in which countries in the Territory to launch Products, the
priority for same and the amount and kind of marketing and selling effort
appropriate, in accordance with the Marketing Plans;
(v) review and approve Non-Registrational Studies, taking into
consideration the appropriateness in the context of the overall marketing and
promotional strategy for the Products;
(vi) review and approve all pricing decisions and managed care
contracting strategies, in accordance with the Marketing Plans;
(vii) review and approve all indigent care use of Products;
(viii) periodically review sales mix of Products sold by ERS
through various customer channels;
(ix) review and approve allocations within the Marketing
Budgets, from time to time;
(x) review and approve each subsequent marketing budget in
accordance with Section 5.2(c);
(xi) review data and reports arising from and generated in
connection with the commercialization of the Products, including, but not
limited to the Marketing Plans, Marketing Budgets and sales forecasts;
(xii) at each meeting of the JCC, review a comparison of
actual sales and marketing expenses to the budgeted expenses in the relevant
Marketing Budget for the year-to-date, as current as practicable to a date
immediately prior to the date of the meeting;
(xiii) review and approve the general guidelines applicable to
particular Products to be followed by ERS in its development of promotional
materials and promotional activities to be used by ERS and the Company in the
promotion of such Products (such guidelines to be consistent with the then
current Marketing Plan applicable to such Products);
(xiv) consider and select Trademarks to be used for the
marketing and sale of the Products in each country in the Territory;
(xv) review and approve the joint publication strategy
together with the PDC;
14
Confidential treatment requested by Bristol-Myers Squibb Company, Bristol-Myers
Squibb Biologics Company and ImClone Systems Incorporated.
(xvi) evaluate and determine the existence or non-existence of
a Co-Promotion Problem referred to the JCC in accordance with Section 5.6(e);
and
(xvii) have such other responsibilities as may be assigned to
the JCC pursuant to this Agreement or as may be mutually agreed upon by the
Parties from time to time.
(c) MEETINGS. The JCC shall meet in person at least once during
every calendar quarter, and more frequently as the Company and BMS deem
appropriate or as reasonably requested by either such Party, on such dates, and
at such places and times, as such Parties shall agree. Meetings of the JCC that
are held in person shall alternate between the offices of the Company and BMS,
or such other place as such Parties may agree. The members of the JCC also may
convene or be polled or consulted from time to time by means of
telecommunications, video conferences, electronic mail or correspondence, as
deemed necessary or appropriate.
(d) DECISION-MAKING. The JCC may make decisions with respect to any
subject matter that is subject to the JCC's decision-making authority and
functions as set forth in Section 2.4(b). All decisions of the JCC shall be made
by unanimous vote or written consent, with the Company and BMS each having,
collectively, one vote in all decisions. If, with respect to a Critical Issue
that is subject to the JCC's decision-making authority, the JCC cannot reach
consensus within five business days after it has first met and attempted to
reach such consensus, the matter shall be referred on the sixth business day to
the Joint Executive Committee for resolution. If, with respect to any other
matter that is subject to the JCC's decision-making authority, the JCC cannot
reach consensus within 20 days after it has first met and attempted to reach
such consensus, the matter shall be referred on the twenty-first day to the
Joint Executive Committee for resolution. For all purposes under this Agreement,
any decision made pursuant to this Section 2.4(d) shall be deemed to be the
decision of the JCC.
2.5 JOINT MANUFACTURING COMMITTEE.
(a) MEMBERS; OFFICERS. Immediately after the Effective Date, the
Parties shall establish a joint manufacturing committee (the "JOINT
MANUFACTURING COMMITTEE" or "JMC"), which shall consist of an equal number of
representatives from each of the Company and BMS, up to a maximum total of eight
members on such Committee. Each of the Company and BMS may replace any or all of
its representatives on the JMC at any time upon written notice to the other in
accordance with Section 16.5 of this Agreement. Such representatives shall be
comprised of members of senior management of each such Party with expertise in
manufacturing. Any member of the JMC may designate a substitute to temporarily
attend and perform the functions of that member at any meeting of the JMC. The
Company and BMS each may, in its discretion, invite non-member representatives
of such Party to attend meetings of the JMC. Except as provided in Section
8.12(f), the JMC shall be chaired by a representative of the Company. The
secretary of the JMC shall be a representative of BMS.
(b) RESPONSIBILITIES. The JMC shall perform the following functions:
(i) oversee and coordinate the manufacturing and supply of API
and Finished Products;
15
Confidential treatment requested by Bristol-Myers Squibb Company, Bristol-Myers
Squibb Biologics Company and ImClone Systems Incorporated.
(ii) formulate and direct the manufacturing strategy for the
Products, including, without limitation, bulk drug production, formulation,
filling and finishing of the Products, and approve facilities to be used for
such manufacture and production;
(iii) evaluate and determine the existence of a Long-Term
Inability to Supply referred to the JMC in accordance with Section 8.12(e); and
(iv) have such other responsibilities as may be assigned to
the JMC pursuant to this Agreement or as may be mutually agreed upon by the
Parties from time to time.
(c) MEETINGS. The JMC shall meet in person at least once during
every calendar quarter, and more frequently as the Company and BMS deem
appropriate or as reasonably requested by either such Party, on such dates, and
at such places and times, as such Parties shall agree. Meetings of the JMC that
are held in person shall alternate between the offices of the Company and BMS,
or such other place as such Parties may agree. The members of the JMC also may
convene or be polled or consulted from time to time by means of
telecommunications, video conferences, electronic mail or correspondence, as
deemed necessary or appropriate.
(d) DECISION-MAKING. The JMC may make decisions with respect to any
subject matter that is subject to the JMC's decision-making authority and
functions as set forth in Section 2.5(b). All decisions of the JMC shall be made
by unanimous vote or written consent, with the Company and BMS each having,
collectively, one vote in all decisions. If, with respect to a Critical Issue
that is subject to the JMC's decision-making authority, the JMC cannot reach
consensus within five business days after it has first met and attempted to
reach such consensus, the matter shall be referred on the sixth business day to
the Joint Executive Committee for resolution. If, with respect to any other
matter that is subject to the JMC's decision-making authority, the JMC cannot
reach consensus within 20 days after it has first met and attempted to reach
such consensus, the matter shall be referred on the twenty-first day to the
Joint Executive Committee for resolution. For all purposes under this Agreement,
any decision made pursuant to this Section 2.5(d) shall be deemed to be the
decision of the JMC.
2.6 MINUTES OF COMMITTEE MEETINGS.
(a) Subject to Section 2.6(b), definitive minutes of all Committee
meetings shall be finalized no later than 30 days after the meeting to which the
minutes pertain, as follows:
(i) Within ten days after a Committee meeting, the secretary
of such Committee shall prepare and distribute to all members of such Committee
and each Alliance Manager draft minutes of the meeting. Such minutes shall
provide a list of any actions, decisions or determinations approved by such
Committee and a list of any issues yet to be resolved, either within such
Committee or through the relevant escalation process.
(ii) The Alliance Managers shall then have ten days after
receiving such draft minutes to collect comments thereon from the members of its
Party and provide them to the secretary of such Committee.
(iii) Upon the expiration of such second ten-day period, the
Alliance Managers and the secretary of such Committee shall have an additional
ten days to discuss each
16
Confidential treatment requested by Bristol-Myers Squibb Company, Bristol-Myers
Squibb Biologics Company and ImClone Systems Incorporated.
other's comments and finalize the minutes. The secretary and chairperson(s) of
such Committee shall each sign and date the final minutes. The signature of such
chairperson(s) and secretary upon the final minutes shall indicate each Party's
assent to the minutes.
(b) If at any time during the preparation and finalization of
Committee meeting minutes, the secretary of such Committee and the Alliance
Managers do not agree on any issue with respect to the minutes, such issue shall
be resolved as provided in Section 2.3(d), 2.4(d) or 2.5(d), as the case may be.
The decision resulting from the foregoing process shall be recorded by the
secretary in amended finalized minutes for said meeting. All other issues in the
minutes that are not subject to the foregoing process shall be finalized within
the 30-day period as provided in Section 2.6(a).
2.7 TERM. Each Committee shall exist until the termination or expiration
of this Agreement, or for such longer period as necessary to perform the
remaining responsibilities assigned to it under this Agreement.
2.8 EXPENSES. Each Party shall be responsible for all travel and related
costs and expenses for its members and other representatives to attend meetings
of, and otherwise participate on, a Committee.
2.9 ALLIANCE MANAGERS. Each of the Company, on the one hand, and BMS and
ERS collectively, on the other hand, shall appoint one senior representative who
possesses a general understanding of clinical, regulatory, manufacturing and
marketing issues to act as its respective alliance manager for this relationship
(each, an "ALLIANCE MANAGER"). The initial Alliance Managers are set forth on
EXHIBIT 2.1. Each of the Company, on the one hand, and BMS and ERS collectively,
on the other hand, may replace its respective Alliance Manager at any time upon
written notice to the other in accordance with Section 16.5 of this Agreement.
Any Alliance Manager may designate a substitute to temporarily perform the
functions of that Alliance Manager. Each Alliance Manager shall be charged with
creating and maintaining a collaborative work environment within and among the
Committees. Each Alliance Manager will also be responsible for:
(a) Coordinating the relevant functional representatives of the
Parties, in developing and executing strategies and plans for the Products in an
effort to ensure consistency and efficiency within the Territory;
(b) providing a single point of communication for seeking consensus
both internally within the respective Party's organizations and together
regarding key strategy and plan issues;
(c) identifying and raising cross-country, cross-Party and/or
cross-functions disputes to the appropriate Committee in a timely manner; and
(d) planning and coordinating: (i) cooperative efforts in the
Territory; and (ii) internal and external communications.
The Alliance Managers shall be entitled to attend meetings of any of the
Committees, but shall not have, or be deemed to have, any rights or
responsibilities of a member of any Committee. Each Alliance Manager may bring
any matter to the attention of any Committee where such Alliance Manager
reasonably believes that such matter requires such attention.
17
Confidential treatment requested by Bristol-Myers Squibb Company, Bristol-Myers
Squibb Biologics Company and ImClone Systems Incorporated.
3. GRANT OF RIGHTS.
3.1 RIGHTS GRANTED TO ERS. Subject to the terms and conditions of this
Agreement, the Company hereby grants to ERS:
(a) An exclusive right to distribute, and a co-exclusive right
(together with the Company) to develop and promote, the Products in North
America.
(b) A co-exclusive right to develop, distribute and promote
(together with the Company and the Merck Entities, in the case of the Merck
Entities pursuant to the Merck Agreement) the Products in Japan.
3.2 RESTRICTIONS ON THE COMPANY. The Company shall not, and shall not
grant any rights or licenses to any Third Party or otherwise permit any Third
Party to, develop the Compounds for animal health or any other application
outside the Field without the prior written consent of ERS, which shall not be
unreasonably withheld.
3.3 LICENSE TO ERS INVENTIONS. ERS hereby grants to the Company and its
Affiliates a [**] license, without the right to grant sublicenses (other than to
the Merck Entities for use in Japan and to any Person for use outside the
Territory), to use any ERS Inventions and any patents owned or controlled by ERS
solely to the extent related to any ERS Inventions, solely for the purpose of
developing, using, manufacturing, distributing, promoting and selling Compounds
and Products in the Field; PROVIDED, HOWEVER the license granted under this
Section 3.3 expressly [**] the right of (i) [**] to [**], directly or
indirectly, any Compound or Product distributed or sold by [**], or (ii) [**],
directly or indirectly, any Compound or Product distributed or sold by such
[**].
3.4 TRADEMARKS; LOGOS.
(a) The Company hereby grants ERS the non-exclusive right to use the
Trademarks in the Territory in connection with the Products, subject to the
provisions of this Agreement and for the term hereof. Solely in connection with
ERS's promotion, distribution and sale of Products in the Territory, ERS shall
market the Products throughout the Territory under the applicable Trademarks for
the relevant country in the Territory. The use of the Trademarks by ERS shall be
subject to the prior review and approval of the JCC as set forth in this Section
3.4.
(b) ERS shall permit duly authorized representatives of the Company
to inspect, on the premises of ERS, at all reasonable times, the Products, ERS's
quality control records, and ERS's facilities used in or relating to the
manufacture, distribution or sale of the Products to insure compliance with cGMP
and the quality control standards set forth in the applicable Registration
Application.
(c) Whenever ERS uses the Trademarks in advertising or in any other
manner in connection with the Products, ERS shall clearly indicate the Company's
ownership of the Trademarks. At least ten business days prior to ERS's use of
the Trademarks, ERS shall provide the JCC with samples of all literature and
advertising using the Trademarks prepared by or for ERS and intended to be used
by ERS for approval of such use by the JCC. If no objection is received from the
JCC within five business days of receipt by the JCC of such samples, ERS may use
the Trademarks in the manner used in the samples submitted to the JCC for
approval. When using the
18
Confidential treatment requested by Bristol-Myers Squibb Company, Bristol-Myers
Squibb Biologics Company and ImClone Systems Incorporated.
Trademarks under this Agreement, ERS undertakes to comply with all laws
pertaining to trademarks in force at any time in the Territory.
(d) If necessary in any country in the Territory to permit ERS to
use the Trademarks, the Company shall make application to register ERS as a
permitted user or registered user of the Trademarks and, if necessary, or if
requested by the Company, ERS undertakes to join in such application and to take
such action as may be necessary or requested by the Company to implement such
application or retain, enforce or defend the Trademarks. If necessary in any
country in the Territory to maintain the Company's rights in the Trademarks, ERS
shall enter into a registered user agreement or permitted user agreement
regulating its use of the Trademarks.
(e) ERS acknowledges that the Company is the owner of the
Trademarks. ERS shall not at any time do, cause to be done, or permit any act or
thing inconsistent with, contesting or in any way impairing or tending to impair
such ownership. ERS agrees that all use of the Trademarks by ERS shall inure to
the benefit of and be on behalf of the Company. ERS acknowledges that nothing in
this Agreement shall give ERS any right, title or interest in the Trademarks
other than the right to use the Trademarks in accordance with this Agreement.
ERS agrees that it will not challenge the title or ownership of the Company to
the Trademarks or attack or contest the validity of the Trademarks.
(f) The Company shall register and maintain, or cause to be
registered and maintained, in consultation with ERS, the Trademarks in the
Territory during the term of this Agreement at the Company's sole expense. If
any Party learns of any actual, alleged or threatened unauthorized use or other
infringement of the Trademarks by others in the Territory, such Party agrees to
promptly notify the other Parties of such unauthorized use or other
infringement. The Company shall use reasonable efforts to retain, enforce or
defend the Trademarks.
(g) To the extent permitted by law, all labeling, packaging,
literature, promotional material and advertising for any Product to be marketed,
distributed or sold in any country in the Territory shall contain the Company's
name and logo with comparable prominence as the name and logo used by ERS. To
the extent practicable, or as required by applicable law to protect the
Trademarks, ERS shall include on any material bearing any Trademarks an
acknowledgement that such Trademark is the property of the Company.
3.5 RIGHT OF FIRST OFFER TO ERS REGARDING THE OTHER COMPOUND. During the
period of time commencing on the Effective Date and ending on the First Offer
Termination Date, ERS shall have, and the Company hereby grants to ERS, a right
of first offer to enter into a partnering arrangement with the Company for the
Other Compound, as follows:
(a) In the event that the Company is interested in seeking any Third
Party partnering arrangement with respect to the Other Compound (whether by
granting a license or other rights to a Third Party), the Company shall give
written notice thereof to ERS, together with any and all materials and relevant
information and data regarding the Other Compound that the Company has in its
possession or control. ERS shall have 30 days after receipt of such written
notice and all such information and data to decide whether or not it is
interested in entering into negotiations for such a partnering arrangement with
the Company for the Other Compound.
(b) If ERS notifies the Company in writing within such 30-day period
that it is interested in negotiating such a partnering arrangement, the Company
shall provide ERS with written notice of its proposed material terms and
conditions of such arrangement ("PROPOSED TERMS"). The Proposed Terms shall
include all material terms and conditions of such arrangement, including,
19
Confidential treatment requested by Bristol-Myers Squibb Company, Bristol-Myers
Squibb Biologics Company and ImClone Systems Incorporated.
without limitation, the scope of the proposed arrangement, the financial terms
and any technology or compound QUID PRO QUO. ERS and the Company shall promptly
commence good faith negotiations (including a review of all relevant data and
information of clinical significance relating to the Other Compound), for a
period of up to 90 days after ERS receives such Proposed Terms from the Company,
in an effort to reach mutually acceptable material terms and conditions for such
arrangement, which material terms and conditions shall be set forth in a written
letter of intent ("LETTER OF Intent"). During such 90-day period, the Company
shall not negotiate with any Third Party a potential partnering arrangement with
such Third Party with respect to the Other Compound.
(c) If, despite each of ERS's and the Company's good faith efforts,
the Company and ERS are not able to agree on such material terms and conditions
and do not execute a Letter of Intent by the end of such 90-day period, ERS
shall provide to the Company (within five business days) a written notice
setting forth the terms ERS will agree to for such arrangement (the "ERS
PROPOSED TERMS"). The Company shall then have 15 days to accept or reject the
ERS Proposed Terms. If the Company declines to accept the ERS Proposed Terms
within such 15-day period, then the Company may enter into negotiations with any
Third Party regarding the Other Compound, PROVIDED, HOWEVER, that the terms and
conditions of any agreement with a Third Party shall be no more favorable, in
the aggregate, to such Third Party than the ERS Proposed Terms.
3.6 RIGHT OF FIRST NEGOTIATION OF ERS REGARDING PARTNERING TRANSACTIONS.
At any time during the Restricted Period, ERS shall have, and the Company hereby
grants to ERS, a right of first negotiation to enter into a partnering
arrangement with the Company (including, without limitation, any co-development,
co-promotion, research and development, commercialization or intellectual
property license agreement, joint venture, partnership, or other partnering
relationship) involving compounds or products not directly relating to the Other
Compound, to the extent involving the out-licensing of any of intellectual
property or know-how owned by the Company or to which the Company has an
exclusive license ("PARTNERING RELATIONSHIP").
(a) In the event that the Company is interested in establishing a
such Partnering Relationship with a Third Party, the Company shall give written
notice thereof to ERS, together with any and all materials and relevant
information and data regarding the subject matter of such proposed Partnering
Relationships that the Company has in its possession or control.
(b) With respect to each such Partnering Relationship, ERS shall
have 90 days after receipt of such written notice and all such information and
data to enter into a non-binding heads of agreement with the Company containing
the proposed material terms of an agreement regarding such Partnering
Relationship. During such 90-day time period, the Company shall not negotiate
such a Partnering Relationship with any Third Party. In the event that ERS and
the Company do not enter into a non-binding heads of agreement as aforesaid, the
Company shall be free to proceed to negotiate with Third Parties as it deems
appropriate without any further obligation to ERS.
3.7 NEGOTIATION OF SERVICES. As soon as reasonably practicable after the
Effective Date, the Parties will negotiate in good faith the Company's access to
ERS's and BMS's research and development services, including medicinal
chemistry, high throughput screening, genomics, etc., and the extent to which
and terms on which such services will be made available to the Company.
3.8 RESTRICTIONS ON COMPETING PRODUCTS. Except as permitted by this
Section 3.8, during the period from the Effective Date to the seventh
anniversary of the Effective Date, each Party agrees not to, and to cause its
Affiliates not to, directly or indirectly, develop or commercialize a Competing
Product in any country in the Territory. In the event that a Party (an
"ACQUIRING PARTY") proposes to develop or commercialize a Competing Product or
purchases or otherwise takes control of a Third Party which has developed or
commercialized (and is continuing to produce or sell), or is developing
20
Confidential treatment requested by Bristol-Myers Squibb Company, Bristol-Myers
Squibb Biologics Company and ImClone Systems Incorporated.
or commercializing, a Competing Product (directly or indirectly), in any such
case within the Territory, the Acquiring Party shall, at its option, either:
(a) divest, or cause its applicable Affiliate to divest, the
Competing Product within 12 months after such event; or
(b) offer to the Company (in the case of BMS or ERS) or ERS (in the
case of the Company), (the "NON-ACQUIRING PARTY"), the right to: (i) participate
in 50% of the Acquiring Party's rights and obligations in connection with the
development and commercialization of the Competing Product; or (ii) acquire 50%
of the Acquiring Party's interest in the Competing Product at a valuation which
is in proportion to the price paid by the Acquiring Party for the Competing
Product. In such event, such Parties shall conduct good faith discussions
regarding the terms of such arrangement. In the event that such Parties do not
reach agreement on such terms, or the Non-Acquiring Party declines to
participate or acquire such an interest in the Competing Product, then the
Acquiring Party shall be required to divest, or cause its applicable Affiliate
to divest, the Competing Product within 12 months after such event.
3.9 THE COMPANY'S RIGHT TO DEVELOP AND MARKET PRODUCTS.
(a) In the event that the Company believes that ERS is not
adequately performing its obligations and responsibilities under the relevant
Clinical Development Plan or the Marketing Plan, the Company shall provide ERS
with written notice of such claim including specification of the respects in
which the Company believes ERS is not meeting such obligations and
responsibilities with reasonable particularity. The PDC or the JCC, as the case
may be, shall promptly meet to discuss such claims. If the PDC or the JCC, as
the case may be, does not reach a consensus decision, then the matter shall be
referred to the JEC for resolution, provided that Sections 2.1(d)(ii), (iii) and
(iv) shall not apply with respect to such matter. If the JEC does not reach
consensus decision on the matter, then the Company may submit the matter to
arbitration pursuant to the Accelerated Arbitration Provisions set forth in
Section 16.13(b).
(b) If a determination is made pursuant to Section 3.9(a), by the
PDC, the JCC, the JEC or the arbitrators, as the case may be, that ERS has
failed to adequately perform such obligations and responsibilities, then the
Company may perform such obligations and responsibilities to the extent it
reasonably deems appropriate. The Company's performance of such obligations and
responsibilities pursuant to this Section shall be reasonably consistent with
the scope of performance of such obligations and responsibilities contemplated
to be performed by ERS in the relevant Clinical Development Plan or Marketing
Plan, as the case may be.
(c) Provided that the performance by the Company is in accordance
with the scope of such performance contemplated by Section 3.9(b), ERS shall
reimburse the Company for all of the Company's Development Costs, Distribution
Costs, Sales Costs, Marketing Costs and Other Operating Income/Expense, as the
case may be, incurred by the Company with respect to such actions. In addition,
if the Company elected to commence performance of such obligations and
responsibilities prior to a determination being made pursuant to Section 3.9(a),
and such determination is that ERS has failed to adequately perform such
obligations and responsibilities, then ERS shall reimburse the Company for all
such costs incurred by the Company prior to the date of such determination, but
only for such costs incurred by the Company that were necessary to satisfy the
performance obligations and responsibilities that it is determined ERS failed to
adequately provide.
21
Confidential treatment requested by Bristol-Myers Squibb Company, Bristol-Myers
Squibb Biologics Company and ImClone Systems Incorporated.
(d) If such failure to perform is in connection with ERS's
obligations and responsibilities in Japan, then ERS shall have the right to
include any amount paid to the Company pursuant to this Section as Development
Costs, Distribution Costs, Sales Costs, Marketing Costs and/or Other Operating
Income/Expense, as the case may be, for purposes of calculating Operating Profit
or Loss.
(e) In no event shall ERS be obligated pursuant to this Section to
reimburse the Company for any costs incurred by the Company pursuant to this
Section 3.9 unless: (i) the relevant Committee reaches a consensus decision, or
the arbitrators find, that ERS failed to adequately perform such obligations and
responsibilities; or (ii) ERS otherwise consents in writing. The rights of the
Company under this Agreement shall not be affected in any way by the Company's
waiver or failure to take action pursuant to this Section 3.9. Any rights
provided to the Company pursuant to this Section shall be in addition to any
other rights or remedies available to the Company under this Agreement, at law
or in equity.
4. DEVELOPMENT AND REGULATORY MATTERS.
4.1 EXCHANGE OF DATA AND KNOW-HOW.
(a) The Parties acknowledge that the Company is in the process of
conducting clinical studies on the Product necessary to make the Initial
Regulatory Filing. Therefore, until the Initial Regulatory Filing is made (the
"BLA FILING DATE"), the Company shall be primarily responsible for conducting
the clinical studies and all other regulatory matters, manufacturing matters
and/or pre-clinical studies necessary to support, prepare and file the Initial
Regulatory Filing until the BLA Filing Date, and the Company shall use all
commercially reasonable efforts necessary to make the Initial Regulatory Filing.
During such period, the Company shall keep ERS informed as to the status of such
efforts, shall permit ERS to review and comment on the Initial Regulatory Filing
during its preparation, and shall consult with ERS regarding the preparation of
the Initial Regulatory Filing.
(b) Promptly after the Effective Date, the Company shall deliver to
ERS copies of all relevant and material data, studies and other written
materials in the Company's possession as of the Effective Date relating to the
Compounds and Products, including any such materials relating to Patents and
Know-How.
(c) During the term of this Agreement: (i) each Party shall provide
to the other Parties any material data or other information relating to the
Compounds and Products, including any such information relating to Patents and
Know-How, from time to time as such data and information is developed or
acquired by such Party; and (ii) each of the Parties shall deliver to the other
Parties all data and dossiers relating to the Compounds or any Product and
results from any studies being conducted by or on behalf of either of such
Parties in connection therewith promptly after such data and/or dossiers become
available.
(d) All such data and information exchanged or required to be
exchanged by the Parties pursuant to this Section 4.1 shall be owned by the
Company, whether in the Company's possession or control as of the Effective Date
or developed by any Party during the term of this Agreement. The Company hereby
grants BMS and ERS the right to use all such data and information for all
purposes necessary to allow BMS and ERS to perform each of their obligations
under this Agreement.
22
Confidential treatment requested by Bristol-Myers Squibb Company, Bristol-Myers
Squibb Biologics Company and ImClone Systems Incorporated.
4.2 PRODUCT REGISTRATIONS. Except as otherwise mutually agreed by the
Company and BMS, the Company shall own all Registrations in each country in the
Territory.
4.3 SCOPE OF CLINICAL DEVELOPMENT PLANS AND CLINICAL BUDGET.
(a) A clinical budget containing the budget for the conduct of the
Clinical Development Plans for the development of Compounds and Products for
calendar years 2001 through and including 2017, on a calendar year-by-calendar
year basis, is attached to this Agreement as EXHIBIT 4.3(A) (such budget, as
modified from time to time pursuant to this Agreement, the "CLINICAL BUDGET").
(b) A Summary Clinical Development Plan for calendar years 2001
through 2004 is attached to this Agreement as EXHIBIT 4.3(B). As soon as
reasonably possible after the Effective Date, the PDC shall meet to develop,
finalize and approve the definitive clinical development plan for the Compounds
and the Products for calendar years 2001 through 2004 based on the Summary
Clinical Development Plan for such period. Such Clinical Development Plan shall
include: (i) a plan for the rapid and orderly transition, after the BLA Filing
Date, of those clinical and other studies ongoing with respect to the Compounds
and Products which are identified in the initial Clinical Development Plan as
being transferred to ERS from the Company's sole control to the control of ERS
and the Company, as determined by the PDC in conformity with all applicable
regulatory requirements and consistent with Section 4.1; (ii) the allocation and
transition of regulatory strategy and responsibility for the Products; (iii) the
research and development activities of any or all of the Parties under this
Agreement for the development of Compounds and Products for calendar years 2001,
2002, 2003 and 2004, including the allocation of resources between the Company
and ERS, which shall be consistent with the Clinical Budget for such period;
(iv) "go/no go" decision criteria for each stage of development of a Product;
(v) target Product profiles; and (vi) timelines for scientific, medical,
regulatory and other activities to be undertaken by the Parties for the purpose
of obtaining Registrations for the Products in each country in the Territory,
providing marketing support and developing new indications and formulations for
the Products. Every Clinical Development Plan for the relevant period shall
comprise two components: (1) those clinical studies required for approval of new
indications, other labeling changes or for any other purpose under an IND (e.g.,
Phase I through Phase III studies (the "REGISTRATIONAL STUDIES"); and (2) those
studies undertaken post-launch which are not Registrational Studies (e.g., Phase
IV studies) ("NON-REGISTRATIONAL STUDIES"). The PDC shall use all commercially
reasonable efforts to finalize and approve the initial Clinical Development Plan
no later than 90 days after the Effective Date.
(c) Prior to Registration in any country in the Territory, the
Parties intend that the Company will be primarily responsible for implementing
the regulatory strategy for the Products in such country developed by the PDC.
The Parties intend that ERS will be primarily responsible for regulatory
activities in a country in the Territory after Registration in such country,
comprising regulatory compliance, worldwide safety surveillance, adverse event
reporting and all other necessary support services.
(d) At least 12 months prior to the end of the last calendar year
for which a Clinical Development Plan has been approved (I.E., prior to the end
of 2004, 2008 and 2012, respectively), the PDC shall develop, finalize and
approve a summary clinical development plan for the Compounds and the Products
for the four (or, in the case of the last such period, five) calendar years next
succeeding such calendar year, comparable in scope and detail to the Summary
Clinical Development Plan attached as EXHIBIT 4.3(B) (I.E., for the period from
2005 through and including 2008, 2009 through and including 2012, 2013 through
and including 2017) (each such approved summary clinical development plan is a
Summary Clinical Development Plan).
23
Confidential treatment requested by Bristol-Myers Squibb Company, Bristol-Myers
Squibb Biologics Company and ImClone Systems Incorporated.
(e) At least six months prior to the end of the last calendar year
for which a Clinical Development Plan has been approved (I.E., prior to the end
of 2004, 2008 and 2012, respectively), the PDC shall develop, finalize and
approve a definitive clinical development plan for the Compounds and the
Products for the four calendar years (or, in the case of the last such period,
five calendar years) next succeeding such calendar year, containing the
information described in Section 4.3(b)(ii) through (vi) for the relevant period
(I.E., for the period from 2005 through and including 2008, 2009 through and
including 2012, 2013 through and including 2017) based on the Summary Clinical
Development Plan for such period (each such approved definitive clinical
development plan is a Clinical Development Plan); provided, however, that the
Clinical Budget for each such calendar year shall be no less than the amount set
forth in the Clinical Budget attached as EXHIBIT 4.3(A) with respect to such
calendar year, except that:
(i) if Net Sales of Products for the calendar year immediately
preceding such calendar year are less than the [**] for the immediately
preceding calendar year, but more than the [**] for the immediately preceding
calendar year, then the Clinical Budget for the calendar year in question shall
be no less than an amount equal to [**] of the amount set forth in the initial
Clinical Budget for the calendar year in question, determined on a [**] based
upon the actual [**] for the calendar year immediately preceding the calendar
year in question and the [**] and [**], such that if the actual Net Sales were
equal to the Low Case Projections, the amount would be equal [**] and if [**]
were equal to the [**], the amount would be equal to [**] or
(ii) if Net Sales of Products for the calendar year
immediately preceding such calendar year are less than the [**] for the
immediately preceding calendar year, then the Clinical Budget for the calendar
year in question shall be no less than an amount equal to [**] of the amount set
forth in the initial Clinical Budget for the calendar year in question.
(f) As of the Effective Date, each of the Parties believes that the
Clinical Budget provides for sufficient funds to complete the execution of the
Clinical Development Plans that are to be developed by the Parties in accordance
with this Section 4.3. ERS shall provide sufficient funds to complete the
execution of the Clinical Development Plans provided they are developed in
accordance with this Section 4.3 (even if such funding is in excess of the
Clinical Budget). Any change to any Clinical Development Plan after the
development thereof in accordance with this Section 4.3 must be approved by the
PDC, provided that any such change that (i) alters the number of patients being
studied under the Clinical Development Plan or the type and/or phase of such
studies, or (ii) increases the amount of funding necessary to complete a
Clinical Development Plan as a result of any change to (A) the timing of entry
of such patients into studies under such Clinical Development Plan, or (B) the
procedures to be conducted in such studies, in each such case shall relieve ERS
of the funding obligation set forth in the immediately preceding sentence with
regard to such revised Clinical Development Plan only to the extent that such
revised Clinical Development Plan requires funding which exceeds the Clinical
Budget (after taking into account any increase in the Clinical Budget in
accordance with Sections 2.1(d)(ii) or (iii)).
4.4 TRANSITION OF CLINICAL STUDIES. As soon as practicable after the BLA
Filing Date, and consistent with the transition plan adopted by the PDC and
contained in the initial Clinical Development Plan, the Company shall transition
such clinical and other studies ongoing with respect to the Products which have
been identified in such Clinical Development Plan as being transferred to ERS in
such transition plan from the Company's sole control to the control of the
Party(ies) set forth in the initial Clinical Development Plan. Thereafter, ERS
shall be primarily responsible for performing such studies designated therefor
in the Clinical Development Plans through completion, and the Company shall be
primarily responsible for performing such studies designated therefor in the
Clinical Development Plans through completion. During the transition period, the
Company shall continue to be involved in the ongoing clinical studies in order
to assure an orderly transfer of responsibility.
24
Confidential treatment requested by Bristol-Myers Squibb Company, Bristol-Myers
Squibb Biologics Company and ImClone Systems Incorporated.
4.5 CONDUCT OF CLINICAL DEVELOPMENT PLANS. Under the auspices of, and
subject to review and approval by, the PDC, the Parties shall have the following
responsibilities relating to the conduct of the Clinical Development Plans:
(a) Each of ERS and the Company shall be responsible for the
preparation of all protocols and the conduct of all Registrational Studies and
Non-Registrational Studies for which such Party is designated as the Party
responsible for such studies in the Clinical Development Plans. Each such Party
shall submit all protocols for Registrational Studies to the PDC and, in the
case of the Non-Registrational Studies, to the JCC, for its or their approval,
as the case may be.
(b) Each of ERS and the Company shall be responsible for preparing
all Regulatory Applications necessary or desirable to register the Products in
all countries in the Territory for which such Party is designated as the Party
responsible for such preparation in the Clinical Development Plans. The Company
shall be responsible for filing all Regulatory Applications (whether prepared by
the Company or ERS) and, thereafter, to conduct all communications with the
Regulatory Authorities during the registration process (provided that, if ERS is
the responsible Party for the preparation of such Regulatory Application, it
will work with the Company with respect to all such regulatory activities). Each
such Party shall submit all proposed filings to the PDC for its approval. The
other such Party shall provide all technical data and support necessary to
assist the responsible Party to prepare such Regulatory Applications. The
responsible Party shall keep the PDC informed as to the status of such efforts,
permit the PDC to review any revisions to any filings or communications with
Regulatory Authorities during their preparation, and shall confer with the PDC
regarding the preparation of such filings and communications and the
registration process. During such process, such Parties shall collaborate and
cooperate in the preparation and filing of all documents necessary therefor and
all regulatory interactions and compliance with Regulatory Authorities in the
Territory. All regulatory activities (including without limitation adverse event
reporting) to be performed by ERS in accordance with this Agreement and the
Clinical Development Plans shall be conducted on behalf of the Company. The
Company shall appoint ERS as its agent for regulatory compliance and all other
regulatory activities for which ERS is responsible.
(c) The Company shall supply all API necessary and/or desirable for
all studies to be conducted pursuant to the Clinical Development Plans,
including, without limitation all Registrational Studies and Non-Registrational
Studies. Such API shall be supplied in accordance with, in all material
respects, the Specifications, in accordance with cGMP, and in accordance with
forecasts therefor provided by the PDC at least 180 days prior to the
anticipated delivery date for each shipment thereof. Such API shall be supplied
at the Company's Fully Burdened Manufacturing Cost. The Company's obligation to
supply API for Non-Registrational Studies shall be subject, first, to fulfilling
all requirements for API for the supply of Products for commercial sales
pursuant to Section 8. Except as otherwise provided in this Section 4.5(c), all
of the provisions of Section 8, to the extent applicable, shall apply to the
supply of API for all such clinical studies (including the reference to the
relevant payment terms contained in Section 7).
(d) In connection with performing its obligations pursuant to the
Clinical Development Plans, each of ERS and the Company shall use all
commercially reasonable efforts to perform such responsibilities diligently,
with the objective of maximizing the sales potential of the Products and
promoting the therapeutic profile and benefits of the Products in the most
commercially beneficial manner. Without limiting the generality of the
foregoing, each such Party shall:
(i) cooperate with the other Party to implement the Clinical
Development Plans, and such other activities that, from time to time, the PDC
decides are necessary for the commercial success of the Products;
25
Confidential treatment requested by Bristol-Myers Squibb Company, Bristol-Myers
Squibb Biologics Company and ImClone Systems Incorporated.
(ii) use commercially reasonable efforts to perform the work
set out for such Party to perform in the Clinical Development Plans;
(iii) conduct all work pursuant to the Clinical Development
Plans in good scientific manner, and in compliance in all material respects with
all requirements of applicable laws, rules and regulations, and all other
requirements of any applicable cGMP, good laboratory practice and current good
clinical practice to attempt to achieve the objectives of the Clinical
Development Plans efficiently and expeditiously; and
(iv) maintain records, in sufficient detail and in good
scientific manner, which shall be complete and accurate and shall fully and
properly reflect all work done and results achieved in connection with the
Clinical Development Plans in the form required under all applicable laws and
regulations. The other such Party shall have the right, during normal business
hours and upon reasonable prior written notice, to inspect and copy all such
records at its own expense, so long as doing so is not unreasonably disruptive.
The other such Party shall maintain such records and information contained
therein in confidence in accordance with Section 10 and shall not use such
records or information except to the extent otherwise permitted by this
Agreement.
4.6 FUNDING OF CLINICAL DEVELOPMENT PLANS.
(a) From and after the Effective Date, each of the Company and ERS
shall be responsible for the Development Costs listed below its name in the
following table:
-------------------------------------------------------------------------------
THE COMPANY ERS
-------------------------------------------------------------------------------
North 50% of the Development Costs 50% of the Development Costs
America for the Non-Registrational for the Non-Registrational
Studies. Studies, and
100% of the Development
Costs for the Registrational
Studies.
-------------------------------------------------------------------------------
Japan 50% of the Development Costs 50% of the Development Costs
for each of the for each of the
Registrational Studies and Registrational Studies and
the Non-Registrational the Non-Registrational
Studies. Studies.
-------------------------------------------------------------------------------
4.7 IT SUPPORT. From and after the Effective Date, ERS shall provide
software and technical assistance to the Company which are reasonably necessary
to enable the Company to fulfill its obligations under this Agreement by
allowing the Company's information systems to communicate and exchange data with
ERS's and BMS's information systems to a degree and in a manner mutually agreed
upon by the Parties. Such software and technical assistance will enable secure
information flow among the Parties with respect to clinical, regulatory,
manufacturing, marketing and sales information. It is understood that such
software and technical assistance shall not include providing any hardware
necessary for the Company to permit such information flow or incurring the costs
associated with such hardware by ERS. ERS and BMS shall be responsible for all
costs they incur in connection with providing the foregoing software and
technical assistance to the Company, which
26
Confidential treatment requested by Bristol-Myers Squibb Company, Bristol-Myers
Squibb Biologics Company and ImClone Systems Incorporated.
shall include, without limitation, ERS's and BMS's internal costs of providing
information technology personnel to provide such software and technical
assistance and all applicable allocable overhead. Each of the Parties shall be
responsible for their respective internal information technology maintenance
costs associated with or arising from the foregoing, which shall include,
without limitation, each such Party's internal costs of providing information
technology personnel to provide such maintenance and all applicable allocable
overhead. This Section 4.7 is not intended to address software or hardware
upgrades unilaterally undertaken by the Company without ERS's consent after the
foregoing communication and data exchange systems have been established. In the
event that the Parties cannot agree with respect to any of the foregoing, such
matter shall be referred to the relevant Committee for resolution.
4.8 DELAY OF INITIAL REGULATORY FILING. In the event that Registration of
the Initial Regulatory Filing is denied or is materially delayed by the FDA,
then the PDC shall (a) immediately meet to discuss in good faith a reassessment
of the relevant Clinical Development Plan to address the FDA's objections and
questions, (b) immediately give the JEC notice of such developments, (c) from
time to time as additional such developments arise, promptly give the JEC notice
of such additional developments, and (d) keep the JEC reasonably informed of the
PDC's deliberations regarding all such developments. As used in this Section
4.8, a material delay is a delay arising from a requirement set forth by the FDA
that the Company conduct additional clinical studies not conducted in connection
with the submission of the Initial Regulatory Filing. In the event of a material
delay, the PDC shall apply its sound scientific, commercial and regulatory
judgment with all deliberate speed to determine whether or not it is in the best
interest of both of ERS and the Company to go forward with the conduct of any
additional clinical studies required by the FDA. Upon reaching such
determination, the PDC shall make a formal recommendation of its conclusions to
the JEC and shall await direction from the JEC regarding what, if any, further
action is to be taken with respect to such matters. Upon receiving the approval
of the JEC to undertake the additional clinical studies required by the FDA, the
PDC shall be authorized to, and is hereby directed to, redirect (without
increasing) the existing overall Clinical Budget as necessary to undertake such
studies and to cause such studies to be undertaken.
4.9 SUSPENSION OF CLINICAL DEVELOPMENT ACTIVITIES. Any Party shall have
the right to immediately suspend the relevant clinical development activities
with respect to a Product or Compound for a particular indication, formulation
or dosage form in the event that such Party, in good faith, determines that
there exists significant and urgent concerns relating to patient safety with
respect to such clinical studies. The Party making the determination to suspend
such clinical activities shall notify the other Parties in writing immediately
of any such suspension and the reasons therefor. The PDC shall then promptly
determine what actions should be taken with respect to such clinical activities.
Once a determination is made by the PDC with respect to the appropriate actions
to be taken, the PDC shall review and re-evaluate the relevant Clinical
Development Plan and the Clinical Budget and make any changes necessary to
implement such actions.
4.10 LIABILITY. Each Party shall be responsible for, and hereby assumes,
any and all risks of personal injury or property damage attributable to the
negligent or willful acts or omissions of such Party or its Affiliates, and
their respective directors, officers, employees and agents and for the
Registrational Studies and the Non-Registrational Studies that the Party is
responsible for conducting and the other responsibilities of such Party pursuant
to this Section 4.
27
Confidential treatment requested by Bristol-Myers Squibb Company, Bristol-Myers
Squibb Biologics Company and ImClone Systems Incorporated.
5. DISTRIBUTION AND PROMOTION.
5.1 GENERALLY. ERS shall use all commercially reasonable efforts to
launch, promote and sell the Products in each country in the Territory (without
regard to other products of BMS and its Subsidiaries) and to perform such
responsibilities diligently, with the objective of maximizing the sales
potential of the Products and promoting the therapeutic profile and benefits of
the Products in the most commercially beneficial manner.
5.2 SCOPE OF MARKETING BUDGET.
(a) The Marketing Budget for the marketing and sales of Products in
each country in the Territory for calendar years 2001 through 2004 is attached
to this Agreement as EXHIBIT 5.2(A).
(b) The Indicative Marketing Budget for the marketing and sales of
Products in each country in the Territory for calendar years 2005 through and
including 2017 is attached to this Agreement as EXHIBIT 5.2(B).
(c) At least 12 months prior to the end of the last calendar year
for which a Marketing Budget has been approved (I.E., prior to the end of 2004,
2008 and 2012, respectively), the JCC shall develop, finalize and approve a
marketing budget for the Products for the four calendar years (or, in the case
of the last such period, five calendar years) next succeeding such calendar
year, comparable in scope and detail to the Marketing Budget attached as EXHIBIT
5.2(A) (I.E., for the period from 2005 through and including 2008, 2009 through
and including 2012, 2013 through and including 2017), on a calendar
year-by-calendar year basis (each such approved marketing budget is a Marketing
Budget); provided, however, that such marketing budget for each such calendar
year shall be no less than the amount set forth in the Indicative Marketing
Budget with respect to such calendar year, except that:
(i) if Net Sales of Products for the calendar year immediately
preceding such calendar year are less than the [**] for the immediately
preceding calendar year, but more than the [**] for the immediately preceding
calendar year, then the Marketing Budget for the calendar year in question shall
be no less than an amount equal to [**] of the amount set forth in the initial
Marketing Budget for the calendar year in question, determined on [**] based
upon [**] for the calendar year immediately preceding the calendar year in
question and the [**] and [**], such that if the actual Net Sales were equal to
the [**], the amount would be equal to [**] and if the actual Net Sales were
equal to the [**], the amount would be equal to [**]; or
(ii) if Net Sales of Products for the calendar year
immediately preceding such calendar year are less [**] for the immediately
preceding calendar year, then the Marketing Budget for the calendar year in
question shall be no less than an amount equal to [**] of the amount set forth
in the initial Marketing Budget for the calendar year in question.
5.3 ERS RESPONSIBILITIES; RIGHTS.
(a) Except as provided in Section 5.5 and subject to the overall
direction and control of the JCC, ERS, either itself and/or by and through its
Affiliates shall be responsible for, and shall have the rights granted under
Section 3.1.
28
Confidential treatment requested by Bristol-Myers Squibb Company, Bristol-Myers
Squibb Biologics Company and ImClone Systems Incorporated.
(b) In connection with its responsibilities for distribution,
marketing and sales of the Products in the Territory, ERS shall provide all
sales force (including, without limitation, sales administration and training),
order entry, customer service, reimbursement management, medical affairs,
medical information, marketing (including all advertising and promotional
expenditures), warehousing, physical distribution, invoicing, credit and
collections, production forecasting and other related facilities and services
necessary or desirable for such distribution, marketing and sales.
5.4 MARKETING PLANS. In accordance with the direction provided by the JCC,
ERS shall prepare proposed-marketing and promotional plans for each of the
Products and for each country in the Territory, which shall include plans
related to the prelaunch, launch, promotion and sales of the Product and which
shall include but not be limited to pricing strategy, sales targets, forecasts
for the number of sales representatives, copies of promotional materials, a
summary of Phase IV clinical studies and a reasonably descriptive overview of
the marketing and advertising campaigns proposed to be conducted (the "MARKETING
PLANS"). The Marketing Plans shall be designed to be consistent with the
Marketing Budget for such calendar year. ERS shall provide copies of the
proposed Marketing Plans to the Company for the Company's review and comment as
soon as practicable after preparation and as frequently as may be required based
upon ERS's usual marketing campaign cycles, but in no case less that once each
calendar year during the term of this Agreement. ERS shall in good faith give
due consideration to comments received from the Company on any such Marketing
Plan, and will provide the Company with a copy of the final Marketing Plan as
soon as it is available. The Parties intend and expect that the Marketing Plan
for each calendar year will be finalized no later than the first day of December
of the immediately preceding calendar year. Any such final Marketing Plan may be
reviewed and revised in accordance with ERS's usual internal practices, provided
that the Company shall be provided copies of the proposed revisions, and given
the same opportunity to comment and consideration as provided to the Company for
the initial Marketing Plans.
5.5 PROMOTIONAL MATERIALS AND ACTIVITIES. The Company shall be entitled to
participate (through the JCC) in the planning of promotional materials and
promotional activities with respect to the Products in the Territory. All
promotional materials and promotional activities shall be developed by ERS, with
input from the Company, following the general guidelines established by the JCC
and consistent with the then current Marketing Plan applicable to the Products
being promoted. Such activities may include symposia, key opinion leader events,
and similar such events. Prior to finalizing such promotional materials and
promotional activities, ERS shall include the Company in its internal
circulation of information regarding such promotional materials and events
during the development of such promotional materials and any event related
materials and upon the finalization of such materials.
5.6 THE COMPANY'S CO-PROMOTION RIGHT. The Company shall have the right, at
its election and at its sole expense, at any time during the term of the
Agreement, to promote any or all Products in the Territory (the "Co-Promotion
Option").
(a) In the event that the Company exercises its Co-Promotion Option,
the Company shall be entitled, at its sole expense, to have its sales force and
medical liaison personnel participate in the promotion of the Products in the
Territory. In such event, the JCC shall determine the targets, roles and
assignments of the Company's and ERS's sales representatives within such selling
effort in a manner generally consistent with the then current Marketing Plan. In
order to exercise the Co-Promotion Option, the Company must give ERS written
notice of such exercise at least six months prior to the date the Company
intends to begin its co-promotion activities.
(b) The Company will be included in, and be allowed to participate
in, all promotional activities being conducted by ERS pursuant to the then
current Marketing Plan,
29
Confidential treatment requested by Bristol-Myers Squibb Company, Bristol-Myers
Squibb Biologics Company and ImClone Systems Incorporated.
including participation in symposia, key opinion leader events, and the like.
ERS shall provide the Company's sales force with all promotional materials and
support services to the same extent available to ERS's sales force. The Company
shall reimburse ERS for ERS's incremental costs and expenses associated with
providing such materials and services to the Company's sales force.
(c) Should the Company exercise its Co-Promotion Option, it is
understood that ERS will retain the exclusive rights to sell and distribute the
Products in North America, so that the Company's right and obligation to promote
would be in the nature of a co-promotion arrangement in which the Company
promotes such Products, but sales continue to be made by ERS.
(d) ERS has provided the Company a copy of the Code of Conduct for
Sales Representatives, Sales Force Management and Others Promoting USPG
Pharmaceuticals dated December 17, 1998 (the "SALES FORCE GUIDELINES") governing
the professional conduct of its sales representatives. From time to time when
such Sales Force Guidelines are to be updated or changed, ERS (i) shall provide
the Company a reasonable opportunity to comment on such proposed Sales Force
Guidelines, (ii) shall give reasonable consideration to any comments made by the
Company regarding such proposed Sales Force Guidelines, and (iii) shall provide
the final updated or changed versions of the same to the Company upon being
finalized. In undertaking its co-promotion activities, the Company shall use its
reasonable efforts to ensure that its sales force personnel abide by all such
Sales Force Guidelines, as they are updated or changed in accordance with this
Section 5.6(d) from time to time, including promptly disciplining any sales
representatives violating such Sales Force Guidelines. the Company may use the
information and/or materials disclosed by ERS to the Company in connection with
such Sales Force Guidelines only for the purpose of performing its co-promotion
activities in accordance with this Agreement. ERS shall, at all times, maintain
ownership (copyright and otherwise) of all information and/or materials
comprising the Sales Force Guidelines.
(e) In the event that ERS reasonably believes the Company has (i)
materially failed to competently co-promote the Product(s), (ii) materially
failed to promote the Product(s) consistent with the direction provided by the
JCC and/or then current Marketing Plan, or (iii) experienced a pattern of
violating any Sales Force Guidelines, applicable laws, and/or applicable
regulations in connection with its promotion of the Product(s), where there is a
reasonable chance of reoccurrence of one or more of the violations comprising
such pattern, where such violations (to the degree such violations are not due
to the Company's lawful use of promotional materials approved by the JCC), when
taken in the aggregate, exceed BMS's and its Subsidiaries's collective history
of such violations in the applicable time period (each a "CO-PROMOTION
PROBLEM"), then ERS shall provide the Company with written notice of such claim
including specification of the respects in which ERS believes such a
Co-Promotion Problem has occurred with reasonable particularity. The JCC shall
promptly meet to discuss such claims and to determine whether or not such a
Co-Promotion Problem has occurred. If the JCC does not reach a consensus
decision, then the matter shall be referred to the JEC for resolution, provided
that Sections 2.1(d)(ii), (iii) and (iv) shall not apply with respect to such
matter. If the JEC does not reach consensus decision on the matter, then ERS may
submit the matter to arbitration pursuant to the Accelerated Arbitration
Provisions set forth in Section 16.13(b).
(f) Upon reaching a determination that a Co-Promotion Problem has
occurred pursuant to Section 5.6(e), the JCC, the JEC, or the arbitrators, as
the case may be, reaching such determination must order the suspension of all of
the Company's rights to co-promote Products under this Section 5.6 for a period
of time which shall last for a minimum of three months but shall not exceed six
months. Upon the receipt of such an order, the Company shall suspend all
activities relating to its co-promotion of Products for the period of time
specified in such order.
30
Confidential treatment requested by Bristol-Myers Squibb Company, Bristol-Myers
Squibb Biologics Company and ImClone Systems Incorporated.
5.7 DISTRIBUTION AND MARKETING COSTS. From and after the Effective Date,
each of the Company and ERS shall be responsible for those Distribution Costs,
Sales Costs, Marketing Costs, General and Administrative Costs, and/or Other
Operating Income/Expense listed below its name in the following table, as
applicable in North America and/or Japan:
-------------------------------------------------------------------------------
THE COMPANY ERS
----------- ---
-------------------------------------------------------------------------------
NORTH 0% of the Distribution 100% of the Distribution
AMERICA Costs, Sales Costs and Costs, Sales Costs and
------- Marketing Costs. Marketing Costs.
-------------------------------------------------------------------------------
JAPAN 50% of the Distribution 50% of the Distribution
----- Costs, Sales Costs, Costs, Sales Costs,
Marketing Costs, General Marketing Costs, General
and Administrative and Administrative Costs,
Costs, and Other and Other Operating
Operating Income/Expense. Income/Expense.
-------------------------------------------------------------------------------
6. PAYMENTS.
6.1 UPFRONT PAYMENTS TO THE COMPANY. As partial consideration to the
Company for the rights granted to ERS under this Agreement, ERS shall pay to the
Company a non-refundable, non-creditable up-front payment of $200,000,000, on
the date hereof.
6.2 MILESTONE PAYMENTS TO THE COMPANY.
(a) As further consideration to the Company for the rights granted
to ERS under this Agreement, ERS shall pay to the Company the following
non-refundable and non-creditable milestone payments upon the first occurrence
of each event set forth below with respect to the Products:
-------------------------------------------------------------------------------
MILESTONE EVENT MILESTONE PAYMENT
--------------- -----------------
-------------------------------------------------------------------------------
Upon the earlier of: (i) the written
acceptance by the FDA of the complete
filing with the FDA of a Registration
Application for a Product, or (ii) $300,000,000
expiration of the statutory period (60
days) without receipt of a notice of
non-acceptance from the FDA regarding a
Registration Application for a Product.
-------------------------------------------------------------------------------
Upon receipt of the written
Registration for a Product in $500,000,000
the US from the FDA.
-------------------------------------------------------------------------------
31
Confidential treatment requested by Bristol-Myers Squibb Company, Bristol-Myers
Squibb Biologics Company and ImClone Systems Incorporated.
The Party who receives the written acceptance, or the Registration,
as the case may be, from the FDA for a milestone event shall be responsible for
promptly informing the other Parties when such milestone has been achieved. The
payments required pursuant to this Section 6.2(a) shall be paid within 30 days
after the earlier to occur of: (i) ERS receiving the written acceptance, or the
Registration, as the case may be, from the FDA for a milestone event, or (ii)
the Company notifying ERS of the achievement of the relevant milestone.
(b) In the event that the Company terminates this Agreement pursuant
to clause (i) or (ii) of Section 13.4, all payments made by ERS to the Company
pursuant to Section 6.2(a) shall be refunded by the Company, without interest,
within 30 days after such termination.
6.3 DISTRIBUTION FEES FOR NORTH AMERICA. As further consideration to the
Company for the rights granted to ERS in North America under this Agreement, and
subject to Section 6.4, ERS shall pay to the Company a Distribution Fee for
North America equal to the sum of a percentage of annual Net Sales of the
Products in North America as follows:
(a) 39% of that portion of Net Sales in North America in the
relevant calendar year that is less than or equal to [**];
(b) [**] of that portion of Net Sales in North America in the
relevant calendar year that is greater than [**] and less than or equal to [**];
and
(c) [**] of that portion of Net Sales in North America in the
relevant calendar year that is greater than [**].
6.4 REDUCTION IN DISTRIBUTION FEE FOR NORTH AMERICA. In the event that a
Third Party Change of Control Transaction is announced and consummated prior to,
or announced prior to and consummated after, the earliest to occur of (i) the
fifth anniversary of the Effective Date, (ii) a BMS Dilution Event, and (iii) a
BMS Sell-Down; the Distribution Fee for North America shall be adjusted,
commencing in the calendar month in which such Third Party Change of Control
Transaction is consummated, and continuing until the expiration or termination
of this Agreement, to be equal to 39% of Net Sales of the Products in North
America.
6.5 DISTRIBUTION FEES FOR JAPAN. As further consideration to the Company
for the rights granted to ERS in Japan under this Agreement, the Company's
Distribution Fee for Japan shall be equal to the sum of 50% of Operating Profit
or Loss from the sale of Products in Japan. Such amount shall be paid to the
Company or credited to ERS, as the case may be, in accordance with Section 7.
6.6 ALLOCATION OF SALES. ERS shall allocate or reallocate sales of
Products to Net Sales received in a specific calendar month or calendar year in
accordance with ERS's usual and customary sales allocation practices that ERS
applies to its other therapeutic oncology products.
7. PAYMENTS AND REPORTS.
7.1 PAYMENTS. Beginning the Number of Days to Make Payment after the end
of the calendar month in which the First Commercial Sale is made in the
Territory and for each calendar month thereafter (no later than the Number of
Days to Make Payment after the end of such calendar month),
32
Confidential treatment requested by Bristol-Myers Squibb Company, Bristol-Myers
Squibb Biologics Company and ImClone Systems Incorporated.
ERS shall submit a statement, which shall set forth the amount of Net Sales in
North America and Operating Profit or Loss in Japan, Product-by-Product, during
such month, and the calculation of Distribution Fees due on such Net Sales in
North America and on such Operating Profit or Loss in Japan, for such month.
Each such statement shall be accompanied by the payment, if any, due to the
Company or shall indicate that a credit is being issued to ERS. Any amounts
credited to ERS may, in ERS's sole discretion, be set off against to
correspondingly reduce any amount due the Company.
7.2 REPORTS. Beginning with the month in which the First Commercial Sale
is made in the Territory and for each month thereafter, (a) ERS shall submit on
the fifth business day following the close of such month (closed in accordance
with ERS's then standard practices), a net sales report regarding such month's
Net Sales in the United States; (b) ERS shall submit on the twentieth business
day following the close of such month (closed in accordance with ERS's then
standard practices), a net sales report regarding such month's Net Sales in
Canada; and (c) each of ERS and the Company shall submit to the other on the
twentieth business day following the close of such month (closed in accordance
with such Party's own then standard practices), an expense report separately
detailing, for such month, such Party's Development Costs for Registrational and
Non-Registrational Studies in each of North America and Japan, and Operating
Profit and Loss detailed and broken down into its constituent components in
accordance with the Financial Appendix. Such reports are to be made in support
of the payments to be made pursuant to this Agreement and in accordance with the
Financial Appendix. For the avoidance of doubt, the Parties shall also fulfill
any additional reporting requirements, if any, set forth elsewhere in this
Agreement.
7.3 MODE OF PAYMENT. ERS shall make all payments required under this
Agreement as directed by the Company from time to time in U.S. Dollars. Whenever
conversion of payments from any foreign currency shall be required, such
conversion shall be at the rate of exchange used by ERS for its own financial
reporting purposes at such time without taking into account the effect of any
hedging transactions by ERS or its Affiliates.
7.4 RECORDS RETENTION. ERS, the Company and each such Party's respective
Affiliates shall keep complete and accurate records pertaining to the sale of
Products and the Product-by-Product and Product-consolidated calculation of Net
Sales in North America, Net Sales in Japan and Operating Profit or Loss in
Japan, including without limitation the determination of Fully Burdened
Manufacturing Cost of API and of Finished Product, Development Costs,
Distribution Costs, Sales Costs, Marketing Costs, General and Administrative
Costs and Other Operating Income/Expense for a period of three calendar years
after the year in which such sales or costs occurred, and in sufficient detail
to permit the Company to confirm the accuracy of each of the foregoing and of
the aggregate Distribution Fees provided by ERS under this Agreement.
7.5 AUDIT REQUEST. During the term of this Agreement and for a period of
three years thereafter, at the request and expense of any Party (the "AUDITING
PARTY"), the Company (in the case of a request by BMS or ERS) or ERS and BMS (in
the case of a request by the Company), (the "AUDITED PARTY"), and its Affiliates
shall permit an independent, certified public accountant appointed by the
Auditing Party and reasonably acceptable to the Audited Party, at reasonable
times and upon reasonable notice but not more often than two times each calendar
year, to examine such records as may be necessary to determine the correctness
of any report or payment made under this Agreement, to determine the consistency
of actual expenditures versus the budgeted expenditures set forth in the
Clinical Budget and/or any Marketing Budget, as the case may be, or obtain
information as to the determination of Fully Burdened Manufacturing Cost of API
(including, without limitation, the records of when during API production API
batches failed, the cost and nature of such failures), the determination of
Fully Burdened Manufacturing Cost of processing API into
33
Confidential treatment requested by Bristol-Myers Squibb Company, Bristol-Myers
Squibb Biologics Company and ImClone Systems Incorporated.
Finished Product, and the aggregate Net Sales, Operating Profit or Loss and
Distribution Fees payable for any calendar month, including without limitation,
Development Costs, Distribution Costs, Sales Costs, Marketing Costs, General and
Administrative Costs and Other Operating Income/Expense. Results of any such
examination shall be made available to all Parties except that said independent,
certified public accountant shall verify to the Auditing Party such amounts and
shall disclose no other information revealed in such audit.
7.6 COST OF AUDIT. The Auditing Party shall bear the full cost of the
performance of any audit requested by the Auditing Party except as hereinafter
set forth. If, as a result of any inspection of the books and records of the
Audited Party and/or its Affiliates, it is shown that payments made by ERS to
the Company under this Agreement were less than the amount which should have
been paid, then ERS shall make all payments required to be made to eliminate any
discrepancy revealed by said inspection within 30 days after the Company's
demand therefor. Furthermore, if the payments made were less than 95% of the
amount that should have been paid during the period in question, ERS shall also
reimburse the Company for the reasonable costs of such audit; PROVIDED, HOWEVER,
that no such reimbursement of such audit costs shall be made in the event such
audit determines that, in the period in question, the Company misstated the
financial data it reported to ERS pursuant to Section 7.1 and the Financial
Appendix by such an amount as to cause an increase in the underpayment by ERS
great enough to trigger the threshold set forth above, without which ERS would
be within such threshold. In the event that the audit shows that an overpayment
has been made by ERS, such amounts shall be deducted from Distribution Fees owed
to the Company. If such overpayment amounts have not been settled by such
deductions from Distribution Fees within one year from the date originally
overpaid, then the Company shall make all payments required to be made to ERS to
eliminate any such overpayment. Furthermore, if (i) the overpayment made was
more than 105% of the amount that should have been paid during the period in
question and (ii) the costs invoiced by the Company were more than 105% of the
audited costs during the period in question, then the Company shall also
reimburse ERS for the reasonable costs of such audit; PROVIDED, HOWEVER, that no
such reimbursement of such audit costs shall be made in the event such audit
determines that, in the period in question, ERS misstated the financial data it
reported to the Company pursuant to Section 7.1 and the Financial Appendix by
such an amount as to cause an increase in the costs invoiced by the Company
and/or the overpayment by ERS great enough to trigger the thresholds set forth
above, without which the Company would be within such thresholds.
7.7 NO NON-MONETARY CONSIDERATION FOR SALES. Without the prior written
consent of the Company, ERS and its Affiliates shall not accept or solicit any
non-monetary consideration of the sale of the Products. Subject to the
applicable oversight and approval responsibilities of the PDC and the JCC set
forth in Sections 2.3(b)(vii) and 2.4(b)(vii), the use by ERS and its Affiliates
of a commercially reasonable amount of the Products for promotional sampling,
compassionate use and indigent care shall not violate this Section 7.7.
7.8 TAXES. In the event that ERS is required to withhold any tax to the
tax or revenue authorities in any country in the Territory regarding any payment
to the Company due to the laws of such country, such amount shall be deducted
from the payment to be made by ERS, and ERS shall promptly notify the Company of
such withholding and, within a reasonable amount of time after making such
deduction, furnish the Company with copies of any tax certificate or other
documentation evidencing such withholding. Each Party agrees to cooperate with
the other Parties in claiming exemptions from such deductions or withholdings
under any agreement or treaty from time to time in effect.
34
Confidential treatment requested by Bristol-Myers Squibb Company, Bristol-Myers
Squibb Biologics Company and ImClone Systems Incorporated.
8. MANUFACTURE AND SUPPLY.
8.1 SUPPLY OBLIGATIONS. Under the auspices of, and subject to review and
approval by, the JMC, and except as mutually agreed by ERS and the Company, the
Parties shall have the following responsibilities relating to the manufacture
and supply of API and Finished Products:
(a) Commencing on the Effective Date, and thereafter during the term
of this Agreement, the Company (or its Affiliates) shall be responsible for the
manufacture or supply of all requirements of API for clinical and commercial use
in the Territory pursuant to this Agreement.
(b) Prior to expiration, termination or assignment (pursuant to
Section 8.9) of any existing agreement between the Company and a Third Party
Manufacturer for the manufacture of Finished Products, the Company shall be the
Party responsible for processing the API into Finished Products pursuant to such
agreement. Commencing upon the expiration, termination or assignment (pursuant
to Section 8.9) of any existing agreement between the Company and a Third Party
Manufacturer for the manufacture of Finished Products, ERS shall become and
thereafter shall remain the Party responsible for processing the API into
Finished Products.
8.2 SUPPLY OF API; PROCESSING OF FINISHED PRODUCT.
(a) Commencing on the commercial launch of Product and thereafter
during the term of this Agreement, subject to the terms and conditions of this
Section 8, the Company shall supply ERS with all of ERS's requirements for API
for commercial use in the Territory pursuant to this Agreement (which shall be
deemed to include all of the requirements of ERS's Affiliates), and ERS shall
purchase from the Company all of such requirements for API. ERS shall place
orders for the requirements of its Affiliates, and either have the Company ship
directly to such Affiliates or to ERS for its reshipment to such Affiliates.
(b) Except to the extent that the Company is responsible for
processing API into Finished Products pursuant to Section 8.1(b), ERS (or its
Affiliates) shall be responsible for processing the API into Finished Product,
including, without limitation, all product labeling and other package inserts
and materials required by the applicable Regulatory Authorities. The responsible
party shall use commercially reasonable efforts to ensure that all services,
facilities and goods used in connection with such manufacture comply with the
applicable Manufacturing Standards in effect from time to time.
(c) ERS and the Company shall cooperate in good faith and shall
establish the Specifications for this Agreement. In order to facilitate
manufacture of the API and the Finished Products, as ERS and the Company deem
appropriate, such Parties shall cooperate in good faith with Third Parties to
establish Specifications and Manufacturing Standards for this Agreement that
conform to the extent practicable to the specifications and standards applicable
to the Company's manufacture of the API and products containing the API for such
Third Parties, and the Company shall use all reasonable efforts to cause such
Third Parties to do the same.
(d) The Parties intend that the Company will use BMS's Hopewell
facility to provide certain services in connection with establishing a
non-commercial supply of API. As soon as reasonably practicable after the
Effective Date, BMS and the Company will negotiate in good faith the Company's
use of BMS's process development and analytical services at BMS's Hopewell
facility for the support of pre-clinical and clinical supplies of API for use in
the development of Products, and the extent to which and terms on which such
services will be made available to the Company.
35
Confidential treatment requested by Bristol-Myers Squibb Company, Bristol-Myers
Squibb Biologics Company and ImClone Systems Incorporated.
8.3 FORECASTS. Commencing 12 months prior to the anticipated commercial
launch of the Product in any country in the Territory, no later than 180 days
prior to the first day of each calendar quarter ("Q1"), ERS shall provide the
Company with a non-binding (except with respect to Q1), good faith rolling
forecast of estimated quantities in kilograms and anticipated delivery schedules
for API for the following 12-month period (I.E., Q1 and the next three calendar
quarters ("Q2," "Q3" and "Q4," respectively)), by calendar quarters. The
quantity indicated for Q1 shall be considered a firm order, in accordance with
Section 8.4. Such forecasts shall be revised and updated quarterly, including
firm orders for the next succeeding quarter.
8.4 ORDERS FOR API.
(a) Together with each forecast provided under Section 8.3 (the
"CURRENT FORECAST"), ERS shall place its firm order on a quarterly basis with
the Company, setting forth kilograms, delivery dates and shipping instructions
with respect to each shipment of API for delivery in Q1. The Company shall
accept such orders from ERS, subject to the other terms and conditions of this
Agreement, to the extent such quantity of API is: (i) no more than the least of:
(A) the quantity thereof reflected in the Current Forecast for Q1; (B) 110% of
the quantity thereof reflected for Q2 in the forecast that next preceded the
Current Forecast; and (C) 125% of the quantity thereof reflected for Q3 in the
forecast that next preceded the forecast referred to in clause (i)(B); and (ii)
no less than the greatest of: (A) the quantity thereof reflected in the Current
Forecast for Q1; (B) 90% of the quantity thereof reflected for Q2 in the
forecast that next preceded the Current Forecast; and (C) 75% of the quantity
thereof reflected for Q3 in the forecast that next preceded the forecast
referred to in clause (ii)(B). ERS's orders shall be made pursuant to purchase
orders which are in a form mutually acceptable to the ERS and the Company, to
the extent that such form is not inconsistent with the terms of this Agreement.
(b) The Company shall not be obligated to accept orders for Q1 to
the extent the quantity of API ordered exceeds the foregoing limitations, but
shall use good faith efforts to fill such orders for such excess quantities from
available supplies. In the event that the Company, despite the use of good faith
efforts, is unable to supply such excess quantities to ERS, such inability to
supply shall not constitute a breach of the Company's obligations under this
Section 8 or a Short-Term Inability to Supply or Long-Term Inability to Supply.
The Company shall use all reasonable efforts to notify ERS within ten days after
receipt of an order of the Company's ability to fill any amounts of such orders
in excess of the quantities that the Company is obligated to supply. ERS shall
notify the Company as soon as possible of an increase in ERS's requirements for
API materially in excess of the limits set forth in Section 8.4(a).
(c) In the event that ERS submits orders for API with respect to any
Q1 for less than the minimum quantity of API that ERS is required to purchase
under this Section 8, the Company nevertheless shall have the right to supply
and ship to ERS (in accordance with the shipping instructions most recently
supplied by ERS), and ERS shall have the obligation to purchase and accept from
the Company, such minimum quantity of API. ERS shall notify the Company as soon
as possible of a decrease in ERS's requirements for API materially below the
limits set forth in Section 8.4(a). In the event of such a decrease, the Company
shall use all reasonable efforts, but shall not be required, to reduce
accordingly the orders for API that the Company has placed with its Third Party
Manufacturers or to allocate to other purchasers API that ERS would have
purchased but for such decrease.
8.5 DELIVERY. With respect to exact shipping dates, the Company shall use
all reasonable commercial efforts to ship or cause to be shipped quantities of
API that the Company is obligated to supply pursuant to Section 8.4 on the dates
specified in ERS's purchase orders submitted and accepted in accordance with
Section 8.4. Notwithstanding any Incoterm that may be specified on
36
Confidential treatment requested by Bristol-Myers Squibb Company, Bristol-Myers
Squibb Biologics Company and ImClone Systems Incorporated.
ERS's API purchase order, all API to be delivered pursuant to this Agreement
shall be delivered in accordance with this Section 8.5, suitably packed in bulk
containers for shipment, and marked for shipment to the final destination point
indicated in ERS's purchase order. The shipping packaging used in connection
with such API deliveries shall be in accordance with cGMP with respect to
protection of the API during transportation, taking into consideration the
mode(s) of transport ERS has elected to use for each such shipment, the final
destination point of each such shipment and reasonable expectations regarding
shipment time duration and possible delays associated therewith. Transportation
of API may be made by rail, road, air, sea, inland waterway or by a combination
of such modes of transport. The Company will deliver or cause to be delivered
all API, cleared for export (if applicable based on the final destination point
and expected travel route indicated in ERS's purchase order), to the carrier
nominated by ERS at a point selected by the Company. If such delivery occurs at
the Company's or a Third Party's premises, the Company or such Third Party shall
be responsible for loading. If delivery occurs at any other place, the Company
or such Third Party shall not be responsible for unloading. If ERS nominates a
Person other than a carrier to receive the API, the Company shall be deemed to
have fulfilled its obligation to deliver the API when the API is delivered to
that Person. Title and risk of loss shall transfer to ERS upon delivery to the
carrier or Person designated by ERS.
8.6 PURCHASE PRICE.
(a) The purchase price for all API supplied by the Company to ERS
pursuant to this Section 8 for commercial use in North America shall be the
Company's Fully Burdened Manufacturing Cost for such API plus a mark-up of 10%;
provided, however process development, process improvement, scale-up, recovery,
and qualification lots costs (although components of Fully Burdened
Manufacturing Cost) shall not be subject to the mark-up of 10%.
(b) For all API supplied by the Company to ERS pursuant to this
Section 8 for commercial use in Japan, the Company's Fully Burdened
Manufacturing Cost for such API shall be included in the calculation of
Operating Profit or Loss, pursuant to the Financial Appendix. Similarly, ERS's
Fully Burdened Manufacturing Cost for the processing API into Finished Product
for commercial use in Japan shall be included in the calculation of Operating
Profit or Loss, pursuant to the Financial Appendix.
(c) For API supplied to ERS for the clinical studies and for
commercial use in North America, the Company shall submit invoices to ERS for
API promptly after shipment. Payments shall be made by ERS within 60 days after
ERS's receipt of the invoice. ERS has no obligation to pay for any shipment of
API that (i) ERS and the Company agree does not to meet the Specifications
and/or Manufacturing Standards, or (ii) in accordance with Section 8.8(b), ERS
has found not to meet the Specifications and/or Manufacturing Standards while
such findings have not been contradicted by independent laboratory testing. Upon
the Company's receipt of a notice from ERS claiming that a shipment of API does
not meet the Specifications and/or applicable Manufacturing Standards, the time
period for payment of such shipment or such batch shall toll until such time as
such non-conformity questions regarding such shipment or such batch are resolved
in accordance with Section 8.8. All relevant terms of Section 7 with respect to
payments of Distribution Fees shall apply to the payment of invoices for the
supply of API.
(d) Once the Company begins manufacturing API itself, it shall use
its commercially reasonable efforts to reduce the Fully Burdened Manufacturing
Cost of manufacturing API itself to an amount equal to or less than [**] before
the end of calendar year [**]. The foregoing sentence shall apply only to API
for the initial Product, and not to any other Products or line extensions. If,
in order to achieve the reduction referred to in the first sentence of this
Section 8.6(d), the Company reasonably determines that it must change the cell
line and/or manufacturing process for the Product,
37
Confidential treatment requested by Bristol-Myers Squibb Company, Bristol-Myers
Squibb Biologics Company and ImClone Systems Incorporated.
the JMC shall approve such change and ERS shall assume all costs of any testing,
qualification, scale-up, regulatory filings, and additional clinical trials
which are reasonably necessary to support such changes in addition to, and not
as part of, the Development Costs assumed elsewhere in this Agreement. In the
event that the Company does not achieve the target Fully Burdened Manufacturing
Cost set forth in the first sentence of this Section 8.6(d), any excess of Fully
Burdened Manufacturing Cost above such target cost shall be [**] by ERS and the
Company, after the end of calendar year [**].
8.7 CONFORMITY; SPECIFICATIONS; QUALITY CONTROL
(a) All quantities of API supplied by the Company pursuant to this
Section 8 will comply in all material respects with the Specifications and
applicable Manufacturing Standards and shall adhere in all material respects to
all applicable governmental laws and regulations relating to the manufacture,
sale and shipment of each shipment of API at the time it is shipped by the
Company hereunder.
(b) Changes to the Specifications shall be made only by the JMC.
(c) The Company shall conduct, or cause to be conducted, quality
control testing of API prior to shipment, in accordance with the Specifications
and applicable Manufacturing Standards as are in effect from time to time and
such other quality control testing procedures adopted by the JMC from time to
time (collectively, the "TESTING METHODS"). Initially and until decided
otherwise by the JMC, the Testing Methods shall include all FDA required release
testing and the Company shall undertake all such tests. The Company shall retain
records pertaining to such testing. Each shipment of API hereunder shall be
accompanied by a certified quality control protocol and certificate of analysis
for each lot of API therein as well as such customs and other documentation as
is necessary or appropriate.
(d) ERS shall have the right, at reasonable times and upon
reasonable notice, to inspect all facilities at which API is manufactured
pursuant to this Section 8 for compliance with cGMP, subject to existing
agreements with Third Party Manufacturers.
(e) All units of Finished Product manufactured pursuant to this
Agreement will comply in all material respects with the applicable Manufacturing
Standards and specifications for Finished Products determined by the JMC and
shall adhere in all material respects to all applicable governmental laws and
regulations relating to the manufacture, sale and shipment of each Finished
Product at the time it is manufactured and distributed hereunder.
(f) The Party responsible for processing the API into Finished
Products (either ERS or the Company to the extent that the Company is
responsible for processing API into Finished Products pursuant to Section
8.1(b)) shall conduct, or cause to be conducted, quality control testing of each
Finished Product prior to shipment, in accordance with the applicable
Manufacturing Standards and specifications for Finished Products determined by
the JMC, as are in effect from time to time and such other quality control
testing procedures adopted by the JMC from time to time. Such Party shall retain
records pertaining to such testing.
8.8 ACCEPTANCE/REJECTION; INTERIM REPLACEMENT.
(a) ERS may test or cause to be tested API supplied under this
Section 8 in accordance with ERS's customary procedures within 30 days of its
receipt at ERS's plant or that of
38
Confidential treatment requested by Bristol-Myers Squibb Company, Bristol-Myers
Squibb Biologics Company and ImClone Systems Incorporated.
its designee. ERS or its designee shall have the right to reject any shipment of
API made to it under this Agreement that does not meet the Specifications and
applicable Manufacturing Standards in any material respects when received by it
at such destination when tested in accordance with the Testing Methods. All
claims by ERS of non-conforming API shall be deemed waived unless made by ERS in
writing and received by the Company within such 30-day period.
(b) All claims of non-conforming API shall be accompanied by a
report of analysis (including a sample of the API from the batch analyzed) of
the allegedly non-conforming API that shall have been made by ERS or its
designee, using the Testing Methods. The Company shall promptly undertake its
own analysis of such sample after receiving such claim and report from ERS. If,
after its own analysis, the Company does not confirm such non-conformity, the
JMC shall agree to retest the shipment or otherwise in good faith attempt to
agree upon a settlement of the issue. In the event that the JMC cannot resolve
the issue, the JMC shall submit the disputed API to an independent testing
laboratory, to be agreed upon by the JMC, for testing in accordance with the
Testing Methods. Notwithstanding Section 16.13, the findings of such laboratory
shall be binding on the Parties, absent manifest error. Expenses of such
independent testing shall be borne by either ERS or the Company depending on
which such Party is adversely affected by such findings. In the event that any
API shipment or batch thereof is ultimately agreed or found NOT to meet the
Specifications and/or applicable Manufacturing Standards, the Company agrees to
replace such shipment or batch with conforming API and pay for all reasonable
out of pocket expenses incurred by ERS and the Company in connection with
shipping and/or storing such replacement API and storing the non-conforming API.
Such replacement shipment of API shall be treated as a new, additional shipment
of API (that will be separately invoiced by the Company) for all purposes,
including measuring its conformity to the Specifications and applicable
Manufacturing Standards and ERS's payment for such additional shipment. ERS
shall return any such rejected shipment to the Company if so instructed by the
Company, at the Company's expense. In the event that any API shipment or batch
thereof is ultimately agreed or found to meet the Specifications and applicable
Manufacturing Standards, ERS shall accept and pay for such shipment or batch in
accordance with Section 8.6(c).
(c) Within 30 business days following December 31st of each calendar
year after the first shipment of API by the Company in the Territory (or upon
such other times agreed to by the Finance Committee), the Finance Committee
shall undertake a series of calculations to determine the amount, if any, of
overpayment by ERS to the Company of Fully Burdened Manufacturing Cost for API
during the preceding calendar year, as follows:
(i) The Finance Committee shall review and determine the
following information regarding the previous calendar year's production of API:
------------------------------------------------------------------------
Total Number of All Batches = total number of all (including successful,
failed and non-conforming batches) API batches manufactured by the Company
or attempted to be manufactured by the Company
------------------------------------------------------------------------
Total Number of Failed Batches = total number of all failed or
non-conforming API batches manufactured by the Company or attempted to be
manufactured by the Company
------------------------------------------------------------------------
------------------------------------------------------------------------
39
Confidential treatment requested by Bristol-Myers Squibb Company, Bristol-Myers
Squibb Biologics Company and ImClone Systems Incorporated.
------------------------------------------------------------------------
Total Cost of Failed Batches = total cost of all failed or non-conforming
API batches manufactured by the Company or attempted to be manufactured by
the Company (as such are reported as part of Fully Burdened Manufacturing
Cost for API during such calendar year)
------------------------------------------------------------------------
(ii) The Finance Committee shall undertake the following
calculations:
------------------------------------------------------------------------
Average Cost Per Failed Batch = Total Cost of Failed Batches/
Total Number of Failed Batches
------------------------------------------------------------------------
Allowable Number of Failures = Total Number of All Batches X Allowable
Failure Rate applicable to the calendar year under review
------------------------------------------------------------------------
Number of Excess Failed Batches = Total Number of Failed Batches -
Allowable Number of Failures
------------------------------------------------------------------------
(iii) If the Number of Excess Failed Batches is greater than
zero, then the Finance Committee shall undertake the following calculation:
------------------------------------------------------------------------
Amount of Overpayment = Average Cost Per Failed Batch X Number of
Excess Failed Batches
------------------------------------------------------------------------
If the Number of Excess Failed Batches is greater than zero, the Company shall
reimburse ERS for the Amount of Overpayment within 3 business days after the
completion of the calculation of such amount. Prior to receiving any such
payment, ERS may elect to credit any such amount due against any payment owed to
the Company under this Agreement. For purposes of such determinations, the
"ALLOWABLE FAILURE RATE" for the manufacture of API, in the aggregate, in
calendar years 2001 and 2002 shall be [**]; in calendar years 2003 and 2004, the
"ALLOWABLE FAILURE RATE" for the manufacture of API shall be [**]; and in
calendar year 2005 and in all subsequent calendar years, the "ALLOWABLE FAILURE
RATE" for the manufacture of API shall be [**]. In the event the Finance
Committee does not agree on the Amount of Overpayment, such matter shall be
referred to the JEC for resolution.
(d) Upon the Company's receipt of a claim that a shipment or batch
thereof of API does not meet the Specifications and/or applicable Manufacturing
Standards, the Company shall use commercially reasonable efforts to replace such
shipment or batch thereof with an additional shipment of API that does conform
to such standards as soon as practicable.
8.9 THIRD PARTY MANUFACTURERS. The Parties acknowledge and agree that the
Company currently obtains Finished Products through written contractual
arrangements with Third Party
40
Confidential treatment requested by Bristol-Myers Squibb Company, Bristol-Myers
Squibb Biologics Company and ImClone Systems Incorporated.
Manufacturers. Upon the execution and delivery of this Agreement, the Company
shall use commercially reasonable efforts to assign all such written contracts
to ERS, and upon such assignment, the Company shall and hereby does represent
and warrant that, as of the Effective Date, to the knowledge of the Company it
is not in breach under any such contracts and that data and information provided
to ERS by the Company relating to such contracts is accurate and complete in all
material respects and contains no material errors or omissions. If any of such
contracts are not assigned (after the Company's use of commercially reasonable
efforts to secure their assignment under such contracts), ERS will reimburse the
Company for the cost of producing Finished Product. The JMC shall prepare a
strategy and transition plan for transitioning the production of Finished
Products from such Third Party Manufacturers to ERS, which shall provide for a
reasonably sufficient amount of time for ERS to be able to manufacture all of
its requirements of Finished Products. The JMC may, from time to time, determine
that the Company may use Third Party Manufacturers to supply all or some of the
API it is required to supply to ERS under this Agreement.
8.10 INVENTORY MANAGEMENT ERS shall maintain inventory of Finished Product
and API in accordance with ERS's usual and customary inventory management
practices that ERS applies to its other therapeutic oncology products.
8.11 SHORTAGE OF SUPPLY.
(a) The Company shall notify ERS: (i) as promptly as possible, but
in no event more than ten days after the Company's receipt of a firm order from
ERS as provided in Section 8.4, or (ii) immediately upon becoming aware that the
Company is unable to supply the quantity of API to ERS that the Company is
required to supply hereunder, if the Company is unable to supply such quantities
of API. In such event, the Company shall implement all commercially reasonable
efforts to remedy such shortage, including through the use of Third Party
Manufacturers for all or a portion of such quantities of API, as determined are
necessary by the JMC.
(b) In the event that the Company is unable to supply both ERS's
requirements of API and the Company's and Third Parties' requirements for the
API due to FORCE MAJEURE or otherwise, the Company shall allocate the API that
the Company has in inventory and that the Company is able to produce among the
quantities of all such requirements, so that ERS receives at least its
proportionate share of such available supplies, as determined from reasonable
forecasts (taking into consideration past sales and sales performance against
forecast) and orders, for the API.
8.12 INABILITY TO SUPPLY.
(a) In the event of any Short-Term Inability to Supply or Long-Term
Inability to Supply, ERS shall be entitled in proportion to the supply shortfall
to delay the incurrence of the Development Costs and/or the Distribution Costs,
Sales Costs and/or Marketing Costs for the relevant period, until such
Short-Term Inability to Supply or Long-Term Inability to Supply ends. The
Clinical Budget and/or the relevant Marketing Budget shall be adjusted
accordingly. Any issues relating to the application of this provision shall be
subject to review by the relevant Committee, and any resolution of such matters
shall require a consensus decision by such Committee, not subject to the
tie-break mechanisms of the relevant Sections of this Agreement.
(b) An "INABILITY TO SUPPLY" shall mean: (i) with respect to the
supply of API for Registrational Studies or Non-Registrational Studies, the
Company's failure for any reason, including without limitation FORCE MAJEURE
reasons or otherwise, to supply ERS with quantities of API meeting the
Specifications and Manufacturing Standards equal to at least [**] of the
quantity of API set forth in the applicable time period on EXHIBIT 8.12(B)(I);
and (ii) with respect to the supply of API for commercial sales, the Company's
failure for any reason, including without limitation
41
Confidential treatment requested by Bristol-Myers Squibb Company, Bristol-Myers
Squibb Biologics Company and ImClone Systems Incorporated.
FORCE MAJEURE reasons or otherwise, to supply ERS with quantities of API meeting
the Specifications and Manufacturing Standards equal to at least [**] of the
quantity of API set forth in the applicable time period on EXHIBIT 8.12(B)(ii).
(c) A "SHORT-TERM INABILITY TO SUPPLY" is an Inability to Supply
that is reasonably expected to continue for no more than a six-month period of
time.
(d) A "LONG-TERM INABILITY TO SUPPLY" shall mean any Inability to
Supply that is reasonably expected to exceed or actually exceeds a six-month
period of time.
(e) In the event that ERS believes that any Long-Term Inability to
Supply exists, ERS shall provide the Company with written notice of such claim
and the JMC shall promptly meet to discuss such claims and to determine whether
the alleged Long-Term Inability to Supply exists and whether it is due solely to
a FORCE MAJEURE event. If the JMC does not reach a consensus decision in its
deliberations regarding such claims, then the matter shall be referred to the
JEC for resolution, provided that Sections 2.1(d)(ii), (iii) and (iv) shall not
apply with respect to such matter. If the JEC does not reach consensus decision
on the matter, then ERS may submit the matter to arbitration pursuant to the
Accelerated Arbitration Provisions set forth in Section 16.13(b). The Parties
shall reasonably and promptly cooperate with the JMC, JEC, and arbitrators, as
the case may be, during their proceedings regarding such claims.
(f) If a determination is made pursuant to Section 8.12(e), by the
JMC, the JEC, or the arbitrators, as the case may be, that a Long-Term Inability
to Supply exists, the JEC shall re-evaluate the Clinical Development Plans,
Marketing Plans, Clinical Budget and/or the Marketing Budgets in view of such
Long-Term Inability to Supply. If a determination is made pursuant to Section
8.12(e), by the JMC, the JEC, or the arbitrators, as the case may be, that a
Long-Term Inability to Supply exists and is not due solely to a FORCE MAJEURE
event, then: (i) for so long as such Long-Term Inability to Supply continues,
the JMC shall be co-chaired by representatives of ERS and the Company and
matters that are the subject of a deadlock arising in the JMC shall be resolved
in accordance with the Accelerated Arbitration Provisions of Section 16.13(b);
(ii) the Company shall reasonably cooperate with ERS to establish an alternative
supply, including locating qualified third party manufacturers and sources of
materials; and (iii) the JMC shall (with the understanding that the goal of the
Parties shall be to transition the manufacture and supply of API back to the
Company as soon as practicable, to the extent that such Long-Term Inability to
Supply ceases to exist) authorize the taking of one or more the following
actions to make up for the API supply shortfall, in the order of preference
listed below, and with the understanding that performance of API supply
obligations and responsibilities under each of the actions listed below shall be
reasonably consistent with the scope of performance of such obligations and
responsibilities contemplated to be performed by the Company as the primary
source of API supply:
first, make use of the internal capacity of BMS
and/or ERS to fill the API supply shortfall;
second, contract with a third party manufacturer to
fill the API supply shortfall; and
third, take such other actions as may be necessary for purposes of
filling the API supply shortfall.
42
Confidential treatment requested by Bristol-Myers Squibb Company, Bristol-Myers
Squibb Biologics Company and ImClone Systems Incorporated.
(g) The Company shall reimburse ERS for all reasonable out-of-pocket
costs incurred in connection with making up for a shortfall in API supply
pursuant to Section 8.12(f); provided, however that such reimbursable costs
shall not include the costs of purchasing API from a third party manufacturer or
the costs of purchasing any component used to manufacture API for purposes of
calculating Fully Burdened Manufacturing Cost as defined in Exhibit 1.35 (as
applied to ERS) other than those directly relating to the startup of biologic
operation for the Product, including any efficiency, activity and spending
variances from standards as well as any underabsorbed overhead expenses incurred
during such startup, including, without limitation, capital investments
undertaken by ERS that are authorized by the JMC which relate to ERS's use,
dedication, expansion, and/or creation of ERS's internal capability to supply
API. The rights of ERS pursuant to this Section 8.12 shall not be affected in
any way by ERS's waiver or failure to take action with respect to any previous
failure by the Company. Any rights provided to ERS pursuant to this Section
shall be in addition to any other rights or remedies available to ERS at law or
in equity.
(h) If a determination is made pursuant to Section 8.12(e), by the
JMC, the JEC, or the arbitrators, as the case may be, that a Long-Term Inability
to Supply exists and is due solely to a FORCE MAJEURE event, then the JMC shall
meet to determine how to rectify such Long-Term Inability to Supply. If the JMC
does not reach a consensus decision, then the matter shall be referred to the
JEC for resolution, provided that Sections 2.1(d)(ii), (iii) and (iv) shall not
apply with respect to such matter. If the JEC does not reach consensus decision
on the matter, then any Party may submit the matter to arbitration pursuant to
the Accelerated Arbitration Provisions set forth in Section 16.13(b). The
Parties shall reasonably and promptly cooperate with the JMC, JEC, and
arbitrators, as the case may be, during their proceedings regarding such
Long-Term Inability to Supply.
(i) In the event that ERS or a third party manufacturer is to supply
API in accordance with Section 8.12(f), the Company shall fully cooperate with
ERS or such third party manufacturer, as the case may be, and take all actions
necessary to qualify them as a manufacturer of API, including, without
limitation: (i) providing them with copies of all documentation within the
Company's possession and control that is reasonably necessary for them to
manufacture API; (ii) providing such technical assistance as is reasonably
necessary to enable them to manufacture API in accordance with the
Specifications and the applicable Manufacturing Standards; and (iii) to the
extent that ERS or a third party manufacturer supplies API pursuant to Section
8.12(f), ERS shall be relieved of its obligation to purchase from the Company
such quantities of API.
9. OWNERSHIP; PATENTS; TRADEMARKS.
9.1 OWNERSHIP. All Inventions developed by any Party or jointly by the
Company, ERS, and/or BMS shall be owned by the Company, except for Inventions
developed solely by ERS and/or BMS which have general utility in connection with
other products and/or compounds in addition to the Compounds and/or Products, in
which case ERS shall own such Inventions ("ERS INVENTIONS"). To the extent
necessary to effectuate the foregoing, ERS shall take any action reasonably
necessary to effectuate the Company's ownership pursuant to the foregoing. The
Company shall have all right, title and interest in and to the Patents,
Know-How, and Trademarks, whether in existence on the Effective Date or
developed during the term of this Agreement, subject to the rights granted to
ERS and BMS pursuant to this Agreement.
43
Confidential treatment requested by Bristol-Myers Squibb Company, Bristol-Myers
Squibb Biologics Company and ImClone Systems Incorporated.
9.2 MAINTENANCE OF THE PATENTS.
(a) The Company shall have full responsibility for, and shall
control the preparation and prosecution of, all patent applications and the
maintenance of all patents relating to the Technology (including the Patents)
throughout the Territory. In connection therewith, the Company shall generally
consult with ERS on all future filings with respect to the Patents and the
prosecution and maintenance of such Patents, including where appropriate or
reasonably requested by ERS, providing copies to ERS of any such filings made
to, and written communications received from, any patent office relating, in
whole or in part, to the Patents. The Company shall pay all costs and expenses
of filing, prosecuting and maintaining the Patents and the patents covering
Inventions arising from the Technology. ERS shall have full responsibility for,
and shall control the preparation and prosecution of, all patent applications
and the maintenance of all patents relating to ERS Inventions throughout the
Territory. In connection therewith, ERS shall generally consult with the Company
on all future filings with respect to such patents and the prosecution and
maintenance of such patents, including where appropriate or reasonably requested
by the Company, providing copies to the Company of any such filings made to, and
written communications received from, any patent office relating, in whole or in
part, to such patents. ERS shall pay all costs and expenses of filing,
prosecuting and maintaining patents covering ERS Inventions. Notwithstanding the
foregoing, the Company shall not have the right to file patent applications or
maintain patents for ERS Inventions, regardless of whether such ERS Inventions
relate to the Technology. Upon a determination by the PDC that a patent
application should be filed for an Invention relating to a Product that the PDC
intends to commercialize in a particular country, the Company shall, at it sole
cost and expense, file patent applications for such Invention in such country.
(b) Each Party agrees to cooperate with the other Parties to execute
all lawful papers and instruments, to make all rightful oaths and declarations
and to provide consultation and assistance as may be necessary in the
preparation, prosecution, maintenance and enforcement of all such patents and
patent applications pursuant to this Agreement.
9.3 PATENT ENFORCEMENT.
(a) If any Party learns of an infringement, unauthorized use,
misappropriation or ownership claim or threatened infringement or other such
claim (any of the foregoing, an "INFRINGEMENT") by a Third Party with respect to
any Technology or any Trademark within the Territory, such Party shall promptly
notify the other Parties and shall provide such other Parties with available
evidence of such infringement.
(b) The Company shall have the first right, but not the duty, to
institute patent or trademark infringement actions against Third Parties
based on any Technology or Trademark in the Territory. If the Company does
not institute an infringement proceeding against an offending Third Party
within 180 days of learning of such infringement or, in the event that a
Third Party files a paragraph IV certification relating to any Patent
pursuant to 21 U.S.C. Section 355(j)(2)(A)(vii)(IV) of the Hatch/Waxman Act
(or any successor statute), if the Company does not institute an infringement
proceeding against such Third Party within 30 days of receipt of notice of
such paragraph IV certification, ERS shall have the right, but not the duty,
to institute such an action with respect to any infringement by such Third
Party; provided that ERS may not enter into any settlement, consent judgment
or other voluntary final disposition of such action which adversely effects
any Technology or Trademark without the prior written consent of the Company,
which will not be unreasonably withheld. The costs and expenses of any such
action (including fees of attorneys and other professionals) shall be borne
by the Party instituting the action, or, if the Parties elect to cooperate
44
Confidential treatment requested by Bristol-Myers Squibb Company, Bristol-Myers
Squibb Biologics Company and ImClone Systems Incorporated.
in instituting and maintaining such action, such costs and expenses shall be
borne by the Parties in such proportions as they may agree in writing. Each
Party shall execute all necessary and proper documents, take such actions as
shall be appropriate to allow the other Party(ies) to institute and prosecute
such infringement actions and shall otherwise cooperate in the institution and
prosecution of such actions (including, without limitation, consenting to being
named as a nominal party thereto). Each Party prosecuting any such infringement
actions shall keep the other Parties reasonably informed as to the status of
such actions. Any award paid by Third Parties as a result of such an
infringement action (whether by way of settlement or otherwise) shall be applied
first to reimburse the Parties for all costs and expenses incurred by the
Parties with respect to such action on a pro rata basis and, if after such
reimbursement any funds shall remain from such award, they shall be allocated as
follows: (i) if the Company has instituted and maintained such action alone, the
Company shall be entitled to retain such remaining funds; (ii) if ERS and/or BMS
has instituted and maintained such action alone, ERS and/or BMS, as the case may
be, shall be entitled to retain such remaining funds; or (iii) if the Parties
have cooperated in instituting and maintaining such action, the Parties shall
allocate such remaining funds between themselves in the same proportion as they
have agreed to bear the expenses of instituting and maintaining such action.
(c) ERS shall have the first right, but not the duty, to
institute patent infringement actions against Third Parties based on the use
of ERS Inventions which are used in the development, use, manufacture,
distribution, promotion and/or sale of Compounds and/or Products in the
Field. If ERS does not institute an infringement proceeding against an
offending Third Party within 180 days of learning of such infringement or, in
the event that a Third Party files a paragraph IV certification relating to
any ERS Inventions pursuant to 21 U.S.C. Section 355(j)(2)(A)(vii)(IV) of the
Hatch/Waxman Act (or any successor statute), if ERS does not institute an
infringement proceeding against such Third Party within 30 days of receipt of
notice of such paragraph IV certification, the Company shall have the right,
but not the duty, to institute such an action with respect to any
infringement by such Third Party; provided that the Company may not enter
into any settlement, consent judgment or other voluntary final disposition of
such action which adversely effects any ERS Inventions without the prior
written consent of ERS, which will not be unreasonably withheld. The costs
and expenses of any such action (including fees of attorneys and other
professionals) shall be borne by the Party instituting the action, or, if the
Parties elect to cooperate in instituting and maintaining such action, such
costs and expenses shall be borne by the Parties in such proportions as they
may agree in writing. Each Party shall execute all necessary and proper
documents, take such actions as shall be appropriate to allow the other
Party(ies) to institute and prosecute such infringement actions and shall
otherwise cooperate in the institution and prosecution of such actions
(including, without limitation, consenting to being named as a nominal party
thereto). Each Party prosecuting any such infringement actions shall keep the
other Party(ies) reasonably informed as to the status of such actions. Any
award paid by Third Parties as a result of such an infringement action
(whether by way of settlement or otherwise) shall be applied first to
reimburse the Parties for all costs and expenses incurred by the Parties with
respect to such action on a pro rata basis and, if after such reimbursement
any funds shall remain from such award, they shall be allocated as follows:
(i) if ERS and/or BMS has instituted and maintained such action alone, ERS
and/or BMS, as the case may be, shall be entitled to retain such remaining
funds; (ii) if the Company has instituted and maintained such action alone,
the Company shall be entitled to retain such remaining funds; or (iii) if the
Parties have cooperated in instituting and maintaining such action, the
Parties shall allocate such remaining funds between themselves in the same
proportion as they have agreed to bear the expenses of instituting and
maintaining such action.
9.4 INFRINGEMENT ACTION BY THIRD PARTIES.
(a) In the event of the institution or threatened institution of any
suit by a Third Party against ERS for patent or trademark infringement involving
the manufacture, use, distribution, sale
45
Confidential treatment requested by Bristol-Myers Squibb Company, Bristol-Myers
Squibb Biologics Company and ImClone Systems Incorporated.
or marketing of a Product in the Territory, ERS shall promptly notify the
Company in writing of such suit. Unless otherwise covered by Section 12.3(c),
the Company shall be required to diligently defend such suit at its own expense
shall control the defense of such action and, subject to Section 9.4(c), shall
be responsible for all damages incurred as a result thereof and shall indemnify
ERS in connection therewith. ERS hereby agrees to assist and cooperate with the
Company, at the Company's reasonable request and expense, in the defense of any
suit related to the Technology or Trademark (including, without limitation,
consenting to being named as a nominal party thereto). During the pendency of
such action and thereafter, ERS shall continue to make all payments due under
this Agreement. If the Company finally prevails and receives an award from such
Third Party as a result of such action (whether by way of judgment, award,
decree, settlement or otherwise), such award shall be retained entirely by the
Company.
(b) In the event of the institution or threatened institution of any
suit by a Third Party against ERS for patent infringement involving the ERS
Inventions which are used in the development, use, manufacture, distribution,
promotion and/or sale of Compounds and/or Products in the Field, ERS shall
promptly notify the Company in writing of such suit. ERS shall be required to
diligently defend such suit at its own expense, shall control the defense of
such action and shall be responsible for all payment of damages incurred as a
result thereof (or payment of any license fees incurred in connection with any
license obtained by the Parties from such Third Party); provided that (A) to the
extent that such suit relates to ERS Inventions used solely by the Company, the
Company shall diligently defend such suit at its own expense, shall control the
defense of such action and shall be responsible for all payment of damages
incurred as a result thereof (or payment of any license fees incurred in
connection with any license obtained by the Company from such Third Party) and
(B) to the extent that such suit relates to ERS Inventions used by both ERS and
the Company, the Parties shall cooperate in the defense of such action and shall
be responsible for payment of damages incurred as a result thereof (or payment
of any license fees incurred in connection with any license obtained by the
Parties from such Third Party) on a basis which is proportionate to their
relative usage of such ERS Inventions. In the event that a Party is solely
responsible for defending an action involving ERS Inventions, the other
Party(ies) shall assist and cooperate with such Party, at such Party's
reasonable request and expense. If a Party which is solely responsible for
defending an action involving ERS Inventions finally prevails and receives an
award from such Third Party as a result of such action (whether by way of
judgment, award, decree, settlement or otherwise), such award shall be retained
entirely by such Party. If the Parties cooperate in the defense of an action
involving ERS Inventions pursuant to (B) above and such Parties finally prevail
and receive an award from such Third Party as a result of such action (whether
by way of judgment, award, decree, settlement or otherwise), such award shall be
shared on an equitable basis by the Parties.
(c) Unless otherwise covered by Section 12.3(c), (A) in the event
that the PDC determines that a license under Third Party patents or trademarks
should be obtained to avoid infringement of such Third Party patents or
trademarks in order to make, have made, use or sell any Product in any
country(ies) in North America or in Japan, or royalties should be paid to such
Third Party in respect of sales of such Products in such country(ies) in North
America or in Japan (provided that the Parties agree for the purposes of this
Section 9.4(c), that the PDC shall be deemed to have determined that licenses
obtained prior to the execution of this Agreement that are held by the Company
should have been so obtained), or (B) if the Company or ERS finally loses and is
required to pay damages or an award to a Third Party as a result of an action
commenced under Section 9.4(a) (whether by way of judgment, award, decree,
settlement or otherwise); then: (i) the Distribution Fees due from ERS to the
Company pursuant to Sections 6.3 with respect to rights in North America shall
be increased by an amount equal to [**] of any royalties or damages attributable
to Net Sales in North America, up to a maximum increase equal to: (1) [**] of
Net Sales of Products in North America during any calendar quarter during
calendar years 2002 through and including 2006; and (2) [**] of Net Sales of
Products in North America during any calendar quarter following 2006; and (ii)
with respect to rights in Japan, the Company shall be entitled to allocate an
amount
46
Confidential treatment requested by Bristol-Myers Squibb Company, Bristol-Myers
Squibb Biologics Company and ImClone Systems Incorporated.
equal to any royalties or damages attributable to Net Sales in Japan against
Cost of Goods Sold (in accordance with the Financial Appendix) up to a maximum
amount equal to: (1) [**] of Net Sales of Products in Japan during any calendar
quarter during calendar years 2002 through and including 2006; and (2) [**] of
Net Sales of Products in the Japan during any calendar quarter following 2006.
10. PUBLICATION; CONFIDENTIALITY
10.1 NOTIFICATION. The Parties recognize that each may wish to publish the
results of their work relating to the subject matter of this Agreement. However,
the Parties also recognize the importance of acquiring patent protection.
Consequently, subject to any applicable laws or regulations obligating any Party
to do otherwise, any proposed publication by any Party shall comply with this
Section 10. All publications, whether written or oral, shall be prepared in
accordance with the joint publication strategy established and approved by the
PDC. At least 45 days before a manuscript is to be submitted to a publisher, the
publishing Party will provide the PDC with a copy of the manuscript. If the
publishing Party wishes to make an oral presentation, it will provide the PDC
with a summary of such presentation at least 30 days before such oral
presentation and, if an abstract is to be published, 30 days before such
abstract is to be submitted. Any oral presentation, including any question
period, shall not include any Confidential Information unless the Parties
otherwise mutually agree in writing in advance of such oral presentation.
10.2 REVIEW. The PDC will review the manuscript, abstract, text or any
other material provided to it under Section 10.1 to determine whether patentable
subject matter is disclosed. The PDC will notify the publishing Party within 30
days of receipt of the proposed publication if the PDC, in good faith,
determines that patentable subject matter is or may be disclosed, or if the PDC,
in good faith, believes Confidential Information is or may be disclosed. If it
is determined by the PDC that patent applications should be filed, the
publishing Party shall delay its publication or presentation for a period not to
exceed 60 days from the PDC's receipt of the proposed publication or
presentation to allow time for the filing of patent applications covering
patentable subject matter. In the event that the delay needed to complete the
filing of any necessary patent application will exceed the 60-day period, the
PDC will discuss the need for obtaining an extension of the publication delay
beyond the 60-day period. If it is determined in good faith by the PDC that
Confidential Information or proprietary information is being disclosed, the
Parties will consult in good faith to arrive at an agreement on mutually
acceptable modifications to the proposed publication or presentation to avoid
such disclosure.
10.3 CONFIDENTIALITY; EXCEPTIONS. Except to the extent expressly
authorized by this Agreement or otherwise agreed in writing, the Parties agree
that, during the term of this Agreement and for ten years thereafter, the
receiving Party, its Affiliates and its licensees shall, and shall ensure that
their respective employees, officers, directors and other representatives shall,
keep completely confidential and not publish or otherwise disclose and not use
for any purpose any information furnished to it or them by the disclosing Party,
its Affiliates or its licensees or developed under or in connection with this
Agreement, except to the extent that it can be established by the receiving
Party by competent proof that such information: (i) was already known to the
receiving Party, other than under an obligation of confidentiality, at the time
of disclosure by the disclosing Party; (ii) was generally available to the
public or otherwise part of the public domain at the time of its disclosure to
the receiving Party; (iii) became generally available to the public or was
otherwise part of the public domain after its disclosure and other than through
any act or omission of the receiving Party in breach of this Agreement; or (iv)
was disclosed to the receiving Party, other than under an obligation of
confidentiality, by a Third Party who had no obligation to the disclosing Party
not to disclose such information to others (all such information to which none
of the foregoing exceptions applies, shall be deemed "CONFIDENTIAL
INFORMATION").
47
Confidential treatment requested by Bristol-Myers Squibb Company, Bristol-Myers
Squibb Biologics Company and ImClone Systems Incorporated.
10.4 EXCEPTIONS TO OBLIGATION. The restrictions contained in Section 10.3
shall not apply to Confidential Information that: (i) is submitted by the
recipient to governmental authorities to facilitate the issuance of
Registrations for the Product, provided that reasonable measures shall be taken
to assure confidential treatment of such information; (ii) is provided by the
recipient to Third Parties under confidentiality provisions at least as
stringent as those in this Agreement, for consulting, manufacturing development,
manufacturing, external testing, or marketing trials; or (iii) is otherwise
required to be disclosed in compliance with applicable laws or regulations or
order by a court or other regulatory body having competent jurisdiction;
provided that if a Party is required to make any such disclosure of disclosing
Party's Confidential Information such Party will, except where impracticable for
necessary disclosures (for example, to physicians conducting studies or to
health authorities), give reasonable advance notice to the disclosing Party of
such disclosure requirement and, except to the extent inappropriate in the case
of patent applications, will use its best efforts to secure confidential
treatment of such Confidential Information required to be disclosed.
10.5 LIMITATIONS ON USE. Each Party shall use, and cause each of its
Affiliates and its licensees to use, any Confidential Information obtained by
such Party from the disclosing Party, its Affiliates or its licensees, pursuant
to this Agreement or otherwise, solely in connection with the activities or
transactions contemplated hereby.
10.6 REMEDIES. Each Party shall be entitled, in addition to any other
right or remedy it may have, at law or in equity, to an injunction, without the
posting of any bond or other security, enjoining or restraining the disclosing
Party, its Affiliates and/or its licensees from any violation or threatened
violation of this Section 10.
11. REPRESENTATIONS AND WARRANTIES.
11.1 REPRESENTATIONS AND WARRANTIES OF THE PARTIES. Each Party represents
and warrants to each of the other Parties, as of the Effective Date, that:
(a) Such Party is duly organized, validly existing and in good
standing under the laws of the jurisdiction of its incorporation and has full
corporate power and authority to enter into this Agreement and to carry out the
provisions hereof;
(b) Such Party has taken all corporate action necessary to authorize
the execution and delivery of this Agreement and the performance of its
obligations under this Agreement and has full power and authority to enter into
this Agreement and perform its obligations under this Agreement; and
(c) This Agreement has been duly executed by such Party and
constitutes a valid and legally binding obligation of such Party, enforceable in
accordance with its terms, subject to and limited by: (i) applicable bankruptcy,
insolvency, reorganization, moratorium, and other laws generally applicable to
creditors' rights; and (ii) judicial discretion in the availability of equitable
relief.
(d) Such Party is not required to obtain the consent, approval,
order, or authorization of any Third Party, or complete any registration,
qualification, designation, declaration or filing with, any federal, state,
local, or provincial governmental authority, in connection with the execution
and delivery of this Agreement and the performance by such Party of its
obligations under this
48
Confidential treatment requested by Bristol-Myers Squibb Company, Bristol-Myers
Squibb Biologics Company and ImClone Systems Incorporated.
Agreement, including, without limitation, the grant of rights to the other
Parties pursuant to this Agreement, or such Party has done so (with respect to
the Company, including, without limitation, that all consents, approvals and
authorizations required pursuant to the Merck Agreement have been secured by the
Company); and
(e) The execution and delivery of this Agreement, and the
performance by such other Party of its obligations under this Agreement,
including without limitation the grant of rights to the other Parties pursuant
to this Agreement, will not: (i) conflict with, nor result in any violation of
or default under any such instrument, judgment, order, writ, decree, contract or
provision; (ii) give rise to any event that results in the creation of any lien,
charge or encumbrance upon any assets of such Party or the suspension,
revocation, impairment, forfeiture or non-renewal of any material permit,
license, authorization or approval that applies to such Party, its business or
operations or any of its assets or properties; or (iii) conflict with any rights
granted by such Party to any Third Party or breach any obligation that such
Party has to any Third Party.
11.2 REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company represents
and warrants to each of ERS and BMS, as of the Effective Date, that, except as
disclosed in Company SEC Documents or in the disclosure letter previously
delivered by the Company to BMS:
(a) The Company is the owner of, or has exclusive rights to, all of
the Patents and Trademarks in existence on the Effective Date, and has the
exclusive right to grant the rights granted under this Agreement therefor. To
the knowledge of the Company, all of the Patents and Trademarks are valid, in
full force and effect and have been maintained to date, and are not the subject
of any interference or opposition proceedings;
(b) To the knowledge of the Company, the Company (i) is not aware of
any asserted or unasserted claims, interferences, oppositions or demands of any
Third Party against the Technology or the Trademarks in existence as of the
Effective Date; and (ii) to the knowledge of the Company, the Parties' practice
of any invention claimed in the Patents or the exercise of any rights to the
Technology or the Trademarks as contemplated by this Agreement will not infringe
any patent or other intellectual property right of any Third Party;
(c) To the knowledge of the Company, the Company has rights to all
of the Know-How in existence on the Effective Date and the right to grant all
rights with respect thereto granted to ERS pursuant to this Agreement;
(d) To the knowledge of the Company, ERS's use of the Compounds and
the Products in the Field, in accordance with the terms of this Agreement, would
not infringe upon or conflict with any patent or other proprietary rights in the
Territory of any Third Party; and
(e) To the knowledge of the Company, all of the data and information
provided to ERS or BMS by the Company relating to the Technology and the
Trademarks is accurate and complete in all material respects and contains no
material errors or omissions.
11.3 REPRESENTATIONS AND WARRANTIES OF ERS AND BMS. Only to the extent the
Company's representations and warranties set forth in Section 11.2(e) are true
and correct, each of BMS and ERS represents and warrants to the Company, as of
the Effective Date, that it has utilized its own scientific, marketing and
distribution expertise and experience to analyze and evaluate both the
49
Confidential treatment requested by Bristol-Myers Squibb Company, Bristol-Myers
Squibb Biologics Company and ImClone Systems Incorporated.
scientific and commercial value of the Compound and Product and has solely
relied on such analysis and evaluations in deciding to enter into this
Agreement.
11.4 REPRESENTATIONS AND WARRANTIES OF BMS . BMS represents and warrants
to the Company, as of the Effective Date, that ERS is a wholly owned subsidiary
of BMS and that ERS owns or controls all or substantially all of BMS's
pharmaceutical business in the U.S.
12. RECALL; INDEMNIFICATION.
12.1 INVESTIGATION; RECALL. In the event that the Regulatory Authority in
any country in the Territory shall allege or prove that a Product does not
comply with applicable rules and regulations in such country, ERS shall notify
the Company immediately. The JCC shall conduct any appropriate investigation and
shall make a determination as to the disposition of any such matter. If ERS is
required or if the JCC should deem it appropriate to recall any Product, the
Company and ERS shall bear the costs and expenses associated with such recall,
in North America in the proportion of 39% for the Company and 61% for ERS, and
in Japan in the proportion for which such Party is entitled to receive Operating
Profit or Loss, as the case may be, unless: (i) the predominant cause of such
recall results from or also constitutes the Company's breach of its
representation and/or warranty set forth in Section 11.2(e) and/or ERS's
reliance upon such breached representation and/or warranty, or unless the
predominant cause of such recall results from the Company's willful wrongdoing
or negligence, in each such case the Company shall bear all costs and expenses
associated with such recall; or (ii) the predominant cause of such recall
results from ERS's willful wrongdoing or negligence, in which case ERS shall
bear all costs and expenses associated with such recall.
12.2 INDEMNIFICATION BY ERS AND BMS. ERS and BMS shall indemnify, defend
and hold harmless the Company and its Affiliates, and their respective
directors, officers, employees and agents, from and against any and all
liabilities, damages, losses, costs and expenses (including the reasonable fees
of attorneys and other professionals) to the extent arising out of or resulting
from:
(a) negligence, recklessness or wrongful intentional acts or
omissions of ERS or its Affiliates, and their respective directors, officers,
employees and agents, in connection with the work performed by ERS or BMS under
the Clinical Development Plans or the fulfillment of ERS's or BMS's obligations
under the Marketing Plans;
(b) any manufacture, use, distribution or sale of the Products by
ERS or its Affiliates or due to any negligence, recklessness, or wrongful
intentional acts or omissions by or strict liability of, ERS or its Affiliates
and their respective directors, officers, employees and agents.; or
(c) any breach of any representation or warranty made by ERS or BMS
under Sections 11.1, 11.3 or 11.4.
12.3 INDEMNIFICATION BY THE COMPANY. The Company shall indemnify, defend
and hold harmless ERS, BMS and their respective Affiliates, and their respective
directors, officers, employees and agents, from and against any and all
liabilities, damages, losses, costs and expenses (including the reasonable fees
of attorneys and other professionals) to the extent arising out of or resulting
from:
50
Confidential treatment requested by Bristol-Myers Squibb Company, Bristol-Myers
Squibb Biologics Company and ImClone Systems Incorporated.
(a) negligence, recklessness or wrongful intentional acts or
omissions of the Company or its Affiliates, and their respective directors,
officers, employees and agents, in connection with the Company's fulfillment of
its obligations under the Clinical Development Plans or the fulfillment of the
Company's rights or obligations under the Marketing Plans;
(b) failure of API to meet the Specifications and/or applicable
Manufacturing Standards or use of Products or promotion of Products not in
conformity with Product labeling, by the Company or its Affiliates, or due to
any negligence, recklessness or wrongful intentional acts or omissions by, or
strict liability of, the Company or its Affiliates, and their respective
directors, officers, employees and agents; or
(c) any breach of any representation or warranty made by the Company
under Section 11.1 or 11.2.
12.4 NOTICE OF INDEMNIFICATION. In the event that any Person (an
"Indemnitee") entitled to indemnification under Section 12.2 or 12.3 is seeking
such indemnification, such Indemnitee shall inform the indemnifying Party of the
claim as soon as reasonably practicable after such Indemnitee receives notice of
such claim, shall permit the indemnifying Party to assume direction and control
of the defense of the claim (including the sole right to settle it at the sole
discretion of the indemnifying Party, provided that such settlement does not
impose any obligation on, or otherwise adversely affect, the Indemnitee or any
of the other Parties) and shall cooperate as requested (at the expense of the
indemnifying Party) in the defense of the claim.
12.5 COMPLETE INDEMNIFICATION. As the Parties intend complete
indemnification, all costs and expenses incurred by an Indemnitee in connection
with enforcement of Sections 12.2 and 12.3 shall also be reimbursed by the
indemnifying Party.
13. TERM; TERMINATION.
13.1 TERM. This Agreement shall become effective as of the Effective Date
and, unless earlier terminated pursuant to the other provisions of this Section
13, shall expire as follows:
(a) As to each Product in each country in the Territory, this
Agreement shall expire on the later of: (i) the seventeenth (17th) anniversary
of the Effective Date, or (ii) the date on which the sale of such Product ceases
to be covered by Valid Claim in such country.
(b) This Agreement shall expire in its entirety upon the expiration
of this Agreement with respect to all Products in all countries in the Territory
pursuant to Section 13.1(a).
13.2 TERMINATION FOR CAUSE.
(a) The Company may, without prejudice to any other remedies
available to it at law or in equity, terminate this Agreement in the event that
either BMS or ERS (as used in this subsection, the "BREACHING PARTY") shall have
materially breached or defaulted in the performance of any of its material
obligations hereunder, and such default shall have continued for 60 days after
written notice thereof was provided to the Breaching Party by the Company (or,
if such default cannot be cured within such 60-day period, if the Breaching
Party does not commence and diligently
51
Confidential treatment requested by Bristol-Myers Squibb Company, Bristol-Myers
Squibb Biologics Company and ImClone Systems Incorporated.
continue actions to cure such default during such 60-day period). Any such
termination shall become effective at the end of such 60-day period unless the
Breaching Party has cured any such breach or default prior to the expiration of
such 60-day period (or, if such default cannot be cured within such 60-day
period, if the Breaching Party has commenced and diligently continued actions to
cure such default). The right of the Company to terminate this Agreement, as
provided in this Section 13.2(a) shall not be affected in any way by its waiver
or failure to take action with respect to any previous default.
(b) ERS or BMS (as used in this subsection, the "NON-BREACHING
PARTY") may, without prejudice to any other remedies available to them at law or
in equity, terminate this Agreement in the event the Company shall have
materially breached or defaulted in the performance of any of its material
obligations hereunder, and such default shall have continued for 60 days after
written notice thereof was provided to the Company by the Non-Breaching Party
(or, if such default cannot be cured within such 60-day period, if the Company
does not commence and diligently continue actions to cure such default during
such 60-day period). Any such termination shall become effective at the end of
such 60-day period unless the Company has cured any such breach or default prior
to the expiration of such 60-day period (or, if such default cannot be cured
within such 60-day period, if the Company has commenced and diligently continued
actions to cure such default). The right of either ERS or BMS to terminate this
Agreement, as provided in this Section 13.2(b) shall not be affected in any way
by such Party's waiver or failure to take action with respect to any previous
default.
13.3 TERMINATION BY ERS. ERS shall have the right, upon six months' prior
written notice to the Company setting forth the reasons therefor, to have the
JEC determine whether or not there exists a significant concern regarding a
regulatory or patient safety issue that would seriously impact the long term
viability of all Products. If the JEC can not reach agreement regarding such a
question, then the matter shall be resolved in accordance with the Accelerated
Arbitration Provisions of Section 16.13(b). The Agreement shall immediately
terminate upon a finding by the JEC or arbitrators, as the case may be, that
there exists a significant concern regarding a regulatory or patient safety
issue that would seriously impact the long term viability of all Products.
13.4 TERMINATION BY THE COMPANY. The Company shall have the right to
terminate this Agreement effective immediately if: (i) (A) the Offer is not
consummated on or before the Termination Date and (B) as of the Termination Date
the waiting period applicable to the Offer under the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended shall not have expired or been terminated,
or (ii) (A) the Offer is not consummated on or before the Termination Date and
(B) there exists on the Termination Date an Antitrust Injunction; or (iii) BMS
and Acquisition Subsidiary shall have failed to commence the Offer in the time
required by the Acquisition Agreement; or (iv) all of the conditions to the
Offer set forth in the Acquisition Agreement shall have been satisfied and
Acquisition Subsidiary shall have failed to accept for payment or pay for Shares
tendered in the Offer as required by the terms of the Acquisition Agreement.
13.5 TERMINATION IN CONNECTION WITH ADDITIONAL STUDIES. If, pursuant to
Section 4.8, the PDC does not receive the approval of the JEC to undertake the
additional clinical studies required by the FDA within 90 days of making its
formal recommendation of its conclusions to the JEC, then any Party may
terminate this Agreement effective immediately upon giving the other Parties
notice of such termination.
13.6 EFFECT OF EXPIRATION OR TERMINATION. If this Agreement expires
pursuant to its terms or is terminated by any Party pursuant to this Section 13,
in addition to any other remedies available
52
Confidential treatment requested by Bristol-Myers Squibb Company, Bristol-Myers
Squibb Biologics Company and ImClone Systems Incorporated.
to the Parties at law or in equity: (i) ERS and BMS shall promptly transfer to
the Company copies of all data, reports, records and materials in their
possession or control that relate to the Products and return to the Company all
relevant records and materials in their possession or control containing
Confidential Information of the Company (provided that ERS and BMS may keep one
copy of such Confidential Information of the Company for archival purposes
only); (ii) ERS and BMS shall transfer to the Company, or shall cause its
designee(s) to transfer to the Company, ownership of all INDs, Registration
Applications, Registrations and other regulatory filings made or filed for such
Products (to the extent that any are held in ERS's, BMS's or such designee(s)'s
name), if permitted by applicable laws and regulations; and (iii) the Company
shall promptly return to ERS all relevant records and materials in the Company's
possession or control containing Confidential Information of ERS or BMS
(provided that the Company may keep one copy of such Confidential Information of
ERS and BMS for archival purposes only).
13.7 ACCRUED RIGHTS; SURVIVING OBLIGATIONS.
(a) Termination, relinquishment or expiration of this Agreement for
any reason shall be without prejudice to any rights that shall have accrued to
the benefit of any Party prior to such termination, relinquishment or
expiration. Such termination, relinquishment or expiration shall not relieve any
Party from obligations which are expressly indicated to survive termination or
expiration of this Agreement. All obligations which are not expressly indicated
to survive termination or expiration of this Agreement shall terminate upon the
termination or expiration of this Agreement.
(b) All of the Parties' rights and obligations under, and/or the
provisions contained in, Sections 1, 3.3(unless ERS or BMS terminates this
Agreement pursuant to Section 13.2(b)), 4.10, 6.2(b), 7, 9.1, 9.3, 9.4, 10.3,
10.4, 10.5, 10.6, 12, 13.6, 13.7, 15.2 (only to the extent ERS's obligations
under this Agreement survive termination), and 16 shall survive termination,
relinquishment or expiration of this Agreement.
14. FORCE MAJEURE.
14.1 EVENTS OF FORCE MAJEURE. None of the Parties shall be held liable or
responsible to the other Parties nor be deemed to be in default under, or in
breach of any provision of, this Agreement for failure or delay in fulfilling or
performing any obligation of this Agreement when such failure or delay is due to
FORCE MAJEURE, and without the fault or negligence of the Party so failing or
delaying. For purposes of this Agreement, FORCE MAJEURE is defined as causes
beyond the control of the Party, including, without limitation, acts of God;
acts, regulations, or laws of any government; war; civil commotion; destruction
of production facilities or materials by fire, flood, earthquake, explosion or
storm; labor disturbances; epidemic; and failure of public utilities or common
carriers. In such event the Company or ERS, as the case may be, shall
immediately notify the other Parties of such inability and of the period for
which such inability is expected to continue. The Party giving such notice shall
thereupon be excused from such of its obligations under this Agreement as it is
thereby disabled from performing for so long as it is so disabled and the 30
days thereafter. To the extent possible, each Party shall use reasonable efforts
to minimize the duration of any FORCE MAJEURE.
15. ADDITIONAL COVENANTS OF BMS AND BMS GUARANTEE.
15.1 ADDITIONAL COVENANTS OF BMS. BMS hereby agrees that for so long as
ERS is a party to this Agreement (and ERS's rights and obligations under this
Agreement have not been assigned in accordance with Section 16.2), ERS will
remain a wholly owned subsidiary of BMS. Each of
53
Confidential treatment requested by Bristol-Myers Squibb Company, Bristol-Myers
Squibb Biologics Company and ImClone Systems Incorporated.
BMS and ERS hereby agree that in the event that BMS or ERS sells, assigns or
otherwise transfers all or substantially all of the pharmaceutical business or
pharmaceutical oncology business (or control thereof) held by BMS or ERS to any
other Person, all of BMS's and ERS's, as the case may be, rights and obligations
under this Agreement shall be included in such transfer and the transferee shall
agree in writing to be bound by the terms of this Agreement in form and
substance satisfactory to the Company (and such transfer shall otherwise be in
accordance with Section 16.2).
15.2 BMS GUARANTEE. BMS hereby irrevocably and unconditionally guarantees
to the Company the prompt and full discharge by ERS of all of ERS's covenants,
agreements, obligations and liabilities under this Agreement including, without
limitation, the due and punctual payment of all amounts which are or may become
due and payable by ERS hereunder when and as the same shall become due and
payable (collectively, the "ERS OBLIGATIONS"), in accordance with the terms
hereof. BMS acknowledges and agrees that, with respect to all ERS Obligations to
pay money, such guaranty shall be a guaranty of payment and performance and not
of collection and shall not be conditioned or contingent upon the pursuit of any
remedies against ERS. If ERS shall default in the due and punctual performance
of any ERS Obligation, including the full and timely payment of any amount due
and payable pursuant to any ERS Obligation, BMS will forthwith perform or cause
to be performed such ERS Obligation and will forthwith make full payment of any
amount due with respect thereto at its sole cost and expense.
16. MISCELLANEOUS.
16.1 RELATIONSHIP OF PARTIES. Nothing in this Agreement is intended or
shall be deemed to constitute a partnership, agency, employer-employee or joint
venture relationship between the Parties. No Party shall incur any debts or make
any commitments for the other, except to the extent, if at all, specifically
provided herein.
16.2 ASSIGNMENT. No Party shall be entitled to assign its rights or
delegate its obligations hereunder without the express written consent of the
other Parties hereto, except that (i) ERS may assign its rights and transfer its
duties hereunder, without the consent of the Company, (A) to a directly or
indirectly wholly-owned subsidiary of BMS, or (B) to the extent that such rights
and duties solely relate to Japan, to a directly or indirectly majority-owned
subsidiary of BMS (provided that, in the case of (A) and (B), such subsidiary
remains so owned, BMS guarantees the obligations of such subsidiary under this
Agreement in form and substance satisfactory to the Company, and no such
assignment shall relieve BMS or ERS of any of its obligations under this
Agreement), (ii) each of BMS and ERS may assign its rights and transfer its
duties hereunder, without the consent of the Company to any assignee of all or
substantially all of BMS's business (or that portion of its overall business of
which this Agreement is a part (E.G. all of its pharmaceutical business, its
pharmaceutical oncology business)) or in the event of BMS's merger,
consolidation or involvement in a similar transaction; provided that, in the
case of (i) or (ii), the assignee agrees in writing to be bound by the terms of
this Agreement; and (iii) the Company may assign its rights and transfer its
duties hereunder, without the consent of ERS or BMS, to (A) a directly or
indirectly wholly-owned subsidiary of the Company (provided that such subsidiary
remains so owned, the Company guarantees the obligations of such subsidiary
under this Agreement in form and substance satisfactory to BMS, and no such
assignment shall relieve the Company of any of its obligations under this
Agreement), or (B) to any assignee of all or substantially all of its business
(or that portion of its overall business of which this Agreement is a part (E.G.
all of its pharmaceutical business, its pharmaceutical oncology business)) or in
the event of the Company's merger, consolidation or involvement in a similar
transaction, subject to Section 6.4; provided that, in the case of (A) or (B),
the assignee agrees in writing to be bound by the terms of this Agreement. No
assignment or transfer shall be valid or effective unless done in accordance
with this Section 16.2.
54
Confidential treatment requested by Bristol-Myers Squibb Company, Bristol-Myers
Squibb Biologics Company and ImClone Systems Incorporated.
16.3 BOOKS AND RECORDS. Any books and records to be maintained under this
Agreement by a Party or its Affiliates shall be maintained in accordance with
GAAP.
16.4 FURTHER ACTIONS. Solely to the extent necessary to allow any Party to
use it rights and perform its obligations under this Agreement, each Party
hereby grants to the other Parties and their Affiliates the rights to use the
Patents, Know-How and ERS Inventions (as applicable) in the Territory in
accordance with this Agreement. Each Party shall execute, acknowledge and
deliver such further instruments, and do all such other acts, as may be
necessary or appropriate in order to carry out the purposes and intent of this
Agreement.
16.5 NOTICE.
(a) Any notice, request or other communication required or permitted
to be given under or in connection with this Agreement shall be deemed to have
been sufficiently given if in writing and personally delivered or sent by
certified mail (return receipt requested), facsimile transmission (receipt
verified), or overnight express courier service (signature required), prepaid,
to the Party for which such notice is intended, at the address set forth for
such Party below:
In the case of the Company, to:
ImClone Systems Incorporated
180 Varick Street
New York, New York 10014
Attention: John B. Landes, General Counsel
Facsimile No: (1 212) 645-2770
Telephone No.:(1 212) 645-1405
With a copy to:
Davis Polk Wardwell
450 Lexington Avenue
New York, NY 10017
Attention: Phillip R. Mills, Esq.
Facsimile No: (1 212) 450-4800
Telephone No.:(1 212) 450-4000
In the case of BMS or ERS, to:
Bristol-Myers Squibb Company
P.O. Box 4000
Route 206 & Province Line Road
Princeton, NJ 08543-4000 USA
Attention: Vice President and Senior Counsel,
Pharmaceutical Research Institute, and
55
Confidential treatment requested by Bristol-Myers Squibb Company, Bristol-Myers
Squibb Biologics Company and ImClone Systems Incorporated.
Worldwide Franchise Management and
Business Development
Facsimile: (1 609) 252-4232
Attention: Vice President, Alliance Management
Facsimile: (1 609) 252-7235
or to such other address for such Parties as it shall have specified by
like notice to the other Parties, provided that notices of a change of address
shall be effective only upon receipt thereof. Except where the express language
of this Agreement indicates that BMS (and not ERS) is to be given notice,
delivered materials and information or consulted with, notice given to, delivery
of materials and information to or consultations with ERS hereunder shall be
deemed to have been given, delivered, and made, as the case may be, with each of
BMS and ERS. If delivered personally or by facsimile transmission, the date of
delivery shall be deemed to be the date on which such notice or request was
given. If sent by overnight express courier service, the date of delivery shall
be deemed to be the next business day after such notice or request was deposited
with such service. If sent by certified mail, the date of delivery shall be
deemed to be the third business day after such notice or request was deposited
with the U.S. Postal Service.
16.6 USE OF NAME. Except as otherwise provided herein, the Company, on the
one hand, and ERS and BMS, on the other hand, shall not have any right, express
or implied, to use in any manner the name or other designation of the other or
any other trade name, trademark or logos of the other (including, without
limitation, the Trademarks) for any purpose in connection with the performance
of this Agreement.
16.7 PUBLIC ANNOUNCEMENTS. Except as permitted by Section 10.4, none of
the Parties shall make any public announcement concerning this Agreement or the
subject matter hereof without first consulting with the other Parties and
providing such Party with a reasonable opportunity to comment on such proposed
public announcement.
16.8 WAIVER. A waiver by any Party of any of the terms and conditions of
this Agreement in any instance shall not be deemed or construed to be a waiver
of such term or condition for the future, or of any subsequent breach hereof.
All rights, remedies, undertakings, obligations and agreements contained in this
Agreement shall be cumulative and none of them shall be in limitation of any
other remedy, right, undertaking, obligation or agreement of any Party.
16.9 COMPLIANCE WITH LAW. Nothing in this Agreement shall be deemed to
permit a Party to export, reexport or otherwise transfer any Product sold under
this Agreement without compliance with applicable laws.
16.10 SEVERABILITY. When possible, each provision of this Agreement will
be interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this Agreement is held to be prohibited by or invalid
under applicable law, such provision will be ineffective only to the extent of
such prohibition or invalidity, without invalidating the remainder of this
Agreement.
56
Confidential treatment requested by Bristol-Myers Squibb Company, Bristol-Myers
Squibb Biologics Company and ImClone Systems Incorporated.
16.11 AMENDMENT. No amendment, modification or supplement of any
provisions of this Agreement shall be valid or effective unless made in writing
and signed by a duly authorized officer of each Party.
16.12 GOVERNING LAW. This Agreement shall be governed by and interpreted
in accordance with the laws of the State of New York without regard to conflicts
of law principles.
16.13 ARBITRATION.
(a) Except as expressly otherwise provided in this Agreement, any
dispute arising out of or relating to the interpretation of any provisions of
this Agreement or the failure of any Party to perform or comply with any
obligations or conditions applicable to such Party pursuant to this Agreement
shall be finally settled by arbitration under the then current commercial
arbitration rules of the American Arbitration Association in accordance with the
terms set forth in this Section 16.13(a):
(i) The place of arbitration of any dispute shall be New York,
New York. Such arbitration shall be conducted by three arbitrators, one
appointed by each of ERS and the Company and the third selected by the first two
appointed arbitrators. Each arbitrator shall be a person with relevant
experience in the pharmaceutical industry. ERS and the Company shall instruct
such arbitrators to render a determination of any such dispute within four
months after the appointment of the third arbitrator.
(ii) Any award rendered by the arbitrators shall be final and
binding upon the Parties. Judgment upon any award rendered may be entered in any
court having jurisdiction, or application may be made to such court for a
judicial acceptance of the award and an order of enforcement, as the case may
be. Each Party shall pay its own expenses of arbitration, and the expenses of
the arbitrators shall be equally shared between ERS and the Company unless the
arbitrators assess as part of their award all or any part of the arbitration
expenses of a Party or Parties (including reasonable attorneys' fees) against
the other Party or Parties, as the case may be.
(iii) This Section 16.13(a) shall not prohibit a Party from
seeking injunctive relief from a court of competent jurisdiction in the event of
a breach or prospective breach of this Agreement by any other Party which would
cause irreparable harm to the first Party.
(b) Whenever a dispute arising out of or relating to the
interpretation of any provisions of this Agreement or the failure of any Party
to perform or comply with any obligations or conditions applicable to such Party
pursuant to this Agreement arises and such dispute is expressly designated as
one to be resolved through the Accelerated Arbitration Provisions, then such
dispute shall be finally settled by arbitration under the then current expedited
procedures applicable to the then current commercial arbitration rules of the
American Arbitration Association in accordance with the terms set forth in this
subsection (b) (the "ACCELERATED ARBITRATION PROVISIONS"):
(i) The place of arbitration of any dispute shall be New York,
New York. Such arbitration shall be conducted by three arbitrators, one
appointed by each of ERS and the Company and the third selected by the first two
appointed arbitrators. Each arbitrator shall be a
57
Confidential treatment requested by Bristol-Myers Squibb Company, Bristol-Myers
Squibb Biologics Company and ImClone Systems Incorporated.
person with relevant experience in the pharmaceutical industry. ERS and the
Company shall instruct such arbitrators to render a determination of any such
dispute within 15 business days after the appointment of the third arbitrator.
ERS and the Company must make their respective appointments within five business
days of notice being given to a Party by the other Parties of its intention to
resolve such dispute through these arbitration provisions. Such appointed
arbitrators must select the third arbitrator within five business days of the
last to occur of their respective appointments. The dispute shall be resolved by
submission of documents unless the arbitration panel determines that an oral
hearing is necessary. The arbitration panel shall, within the overall 15
business day time constraint, determine what shall be conclusively deemed to be
fair and appropriate deadlines for submitting documents and dates, if any, of
oral hearings.
(ii) Any award rendered by the arbitrators shall be final and
binding upon the Parties. Judgment upon any award rendered may be entered in any
court having jurisdiction, or application may be made to such court for a
judicial acceptance of the award and an order of enforcement, as the case may
be. Each Party shall pay its own expenses of arbitration, and the expenses of
the arbitrators shall be equally shared between ERS and the Company unless the
arbitrators assess as part of their award all or any part of the arbitration
expenses of a Party or Parties (including reasonable attorneys' fees) against
the other Party or Parties, as the case may be.
(iii) This Section 16.13(b) shall not prohibit a Party from
seeking injunctive relief from a court of competent jurisdiction in the event of
a breach or prospective breach of this Agreement by any other Party which would
cause irreparable harm to the first Party.
16.14 ENTIRE AGREEMENT. This Agreement, the disclosure letter referenced
in Section 11.2, the Confidentiality Agreement (as defined in the Acquisition
Agreement), the Acquisition Agreement and the Stockholder Agreement constitute
the entire agreement among the Parties with respect to the subject matter of
this Agreement and supersede all prior agreements and understandings, both oral
and written, among the Parties with respect to the subject matter of this
Agreement.
16.15 PARTIES IN INTEREST. All of the terms and provisions of this
Agreement shall be binding upon, inure to the benefit of and be enforceable by
the Parties hereto and their respective permitted successors and assigns.
16.16 DESCRIPTIVE HEADINGS. The descriptive headings of this Agreement are
for convenience only, and shall be of no force or effect in construing or
interpreting any of the provisions of this Agreement.
16.17 COUNTERPARTS. This Agreement may be executed simultaneously in any
number of counterparts, any one of which need not contain the signature of more
than one Party but all such counterparts taken together shall constitute one and
the same agreement.
***
58
Confidential treatment requested by Bristol-Myers Squibb Company, Bristol-Myers
Squibb Biologics Company and ImClone Systems Incorporated.
IN WITNESS WHEREOF, each of the Parties has caused this Agreement to be
executed by its duly authorized representative as of the day and year first
above written.
IMCLONE SYSTEMS INCORPORATED
By: /s/ Samuel D. Waksal
---------------------------------------
Name: Samuel D. Waksal
-------------------------------------
Title: President & Chief Executive Officer
------------------------------------
E. R. SQUIBB & SONS, LLC
By: /s/ Charles Linzner
---------------------------------------
Name: Charles Linzner
-------------------------------------
Title: Vice President & Senior Counsel-
External Development/PRI
------------------------------------
BRISTOL-MYERS SQUIBB COMPANY
By: /s/ Brian Markison
---------------------------------------
Name: Brian Markison
-------------------------------------
Title: Senior Vice President-
External Affairs,
Worldwide Medicines Group
------------------------------------
59
Confidential treatment requested by Bristol-Myers Squibb Company, Bristol-Myers
Squibb Biologics Company and ImClone Systems Incorporated.
EXHIBIT 1.13
BASE CASE PROJECTIONS
---------------------
[**]
60
Confidential treatment requested by Bristol-Myers Squibb Company, Bristol-Myers
Squibb Biologics Company and ImClone Systems Incorporated.
EXHIBIT 1.46
FINANCIAL APPENDIX
------------------
This provides the definitions of certain financial terms applicable to the
Parties for purposes of the Agreement; PROVIDED, HOWEVER, that the definition of
"FULLY BURDENED MANUFACTURING COSTS" shall apply to ERS or the Company to the
extent it manufactures any Product (or component thereof) under the Agreement
and the definition of "DEVELOPMENT COSTS" shall apply to the development work of
the Parties under the Agreement. All capitalized terms used herein without
definition shall have the meanings ascribed thereto in the Agreement, unless
otherwise expressly provided herein. References in this Exhibit 1.46 to a
"PARTY" or "PARTIES" shall be construed to mean ERS or the Company, as the case
may be, and in every case shall be deemed to include the Party's Affiliates
under the Agreement.
PRINCIPLES OF REPORTING
The presentation of results of operations of ERS in North America will
be based on ERS's financial information for each Product presented separately by
Product and on a consolidated basis across all Products in the reporting format
depicted as follows:
---------------------------------------------------------------------------------
NORTH AMERICA TOTAL
---------------------------------------------------------------------------------
NET SALES OF [PRODUCT NAME/ALL PRODUCTS]
---------------------------------------------------------------------------------
The presentation of results of operations of the Parties in Japan will be
based on each Party's respective financial information for each Product
presented separately, by Party and by Product, and on a consolidated basis, by
Party (across all Products), by Product (across the Parties) and across all
Products and the Parties, in the reporting format depicted as follows:
---------------------------------------------------------------------------------
[**] ERS THE COMPANY TOTAL
---------------------------------------------------------------------------------
[**]
---------------------------------------------------------------------------------
[**]
---------------------------------------------------------------------------------
[**]
---------------------------------------------------------------------------------
[**]
---------------------------------------------------------------------------------
[**]
---------------------------------------------------------------------------------
[**]
---------------------------------------------------------------------------------
[**]
---------------------------------------------------------------------------------
[**]
---------------------------------------------------------------------------------
[**]
---------------------------------------------------------------------------------
[**]
---------------------------------------------------------------------------------
It is the intention of the Parties that the interpretation of these
definitions will be consistent with GAAP.
If necessary, a Party will make the appropriate adjustments to the
financial information it supplies under the Agreement to conform to the above
format of reporting results of operation.
61
Confidential treatment requested by Bristol-Myers Squibb Company, Bristol-Myers
Squibb Biologics Company and ImClone Systems Incorporated.
FREQUENCY OF REPORTING
The fiscal year will be a calendar year.
Reports of results compared to budget shall be made to the relevant
Committee on a quarterly basis and on a year-to-date basis, for the entire
Territory. After approval by the appropriate Committee as to amounts, such
Committee shall forward the report to the JEC for its approval.
ERS will be responsible for the preparation of consolidated reporting for
Japan, calculation of the profit/loss sharing and determination of the cash
settlement. ERS will provide the Finance Committee within 30 business days or
receipt of each Party's financial information, a statement showing the
consolidated results and calculations of the sharing of Operating Profit or Loss
in Japan and cash settlement required in a format agreed to by the Parties.
DEFINITIONS
"ALLOCABLE OVERHEAD" means costs directly related to the [**] including,
but not limited to, those which are attributable to [**]. Allocable Overhead
shall not include any costs attributable to [**] including, by way of example,
[**].
"COST OF GOODS SOLD" means Fully Burdened Manufacturing Costs (as defined
below) of each Party relating to Finished Product for sales in [**].
"DEVELOPMENT COSTS"
(a) In each of North America and Japan, "DEVELOPMENT COSTS" means the
development costs incurred by each Party with respect to a Product in North
America or Japan, as the case may be, from the Effective Date of the Agreement
through the later of (i) the date of Registration (including thereafter costs to
maintain or expand such Registration) of such Product in the Field in North
America or Japan, as the case may be, or (ii) the date of termination of
development efforts of such Product in the Field for which Registration is
sought, as applicable in North America or Japan. Such costs shall comprise those
costs required to obtain, maintain and/or expand the relevant authorization
and/or ability to manufacture, formulate, fill, use, ship, sell and/or
distribute such Product in commercial quantities to Third Parties in North
America or Japan, as the case may be.
(b) In each of North America and Japan, "DEVELOPMENT COSTS" shall include,
without limitation, costs of research or development including costs of studies
on the toxicological, pharmacokinetical, metabolical or clinical aspects of a
Product conducted internally or by individual investigators or consultants
necessary for the purpose of obtaining, maintaining and/or expanding marketing
approval of a Product, costs for preparing, submitting, reviewing or developing
data or information for the purpose of submission to a governmental authority to
obtain, maintain and/or expand marketing approval of a Product, and applicable
Allocable Overhead.
(c) In each of North America and Japan, "DEVELOPMENT COSTS" shall also
include, without
62
Confidential treatment requested by Bristol-Myers Squibb Company, Bristol-Myers
Squibb Biologics Company and ImClone Systems Incorporated.
limitation, expenses for data management, statistical designs and studies,
document preparation, and other administration expenses associated with the
clinical testing program or post-marketing studies required to maintain product
approvals.
(d) In determining Development Costs chargeable under the Agreement, each
Party will use its respective project accounting systems and will review and
approve its respective project accounting systems and methodologies with the
other Parties.
"DISTRIBUTION COSTS" means the costs, including applicable Allocable
Overhead, specifically identifiable to the distribution of a Product in North
America or Japan, as the case may be, by a Party including customer services,
collection of data about sales to hospitals and other end users, order entry,
billing, shipping, bad debt, credit and collection and other such activities.
"FULLY BURDENED MANUFACTURING COSTS" of an item or items, including,
without limitation, API or a Finished Product (in bulk or finished product form,
as the case may be) means 100% of a Party's fully burdened manufacturing cost
(as defined in the Party's generally accepted accounting policies consistently
applied) which shall comprise the sum of:
(a) FOR API:
COST OF RAW MATERIALS
The purchase unit cost of raw materials multiplied by [**] including
[**] and any [**].
DIRECT LABOR AND ALLOCABLE OVERHEAD COSTS
The cost of direct labor and manufacturing overhead resources
consumed in the production process.
Costs will include any efficiency, activity and spending variances
from standards as well as any underabsorbed overhead expenses incurred
during the startup of the biologic operation for the Product or caused by
subsequent evolution of the Product's volumes sold in North America or
Japan, as the case may be, including, without limitation, process
development, process improvement, scale-up, recovery, and qualification
lots costs.
Manufacturing overhead includes the following costs:
Normal depreciation of building, machinery and equipment
Plant management
Plant services and utilities
Plant maintenance
Quality control at all stages
63
Confidential treatment requested by Bristol-Myers Squibb Company, Bristol-Myers
Squibb Biologics Company and ImClone Systems Incorporated.
Freight and storage costs at all stages
Cost accounting and data processing services
Any taxes and duties other than VAT and income tax
(b) FOR THE PROCESSING OF API INTO FINISHED PRODUCT:
COST OF RAW MATERIALS
The purchase unit cost of any materials and packaging components
necessary to make the finished goods (including, without limitation, the
API) multiplied by the actual quantity consumed in the manufacturing
process including any usage variance and any write-offs caused by
obsolescence, accident and book-to-physical differences.
DIRECT LABOR AND OVERHEAD COSTS
The cost of direct labor and overhead resources consumed in the
manufacturing process.
Such costs will include any efficiency, activity and spending
variances from standards as well as any unabsorbed overhead expenses
caused by the start up of the dedicated manufacturing operation and/or by
the evolution of the Product sales volume in North America or Japan, as
the case may be.
The manufacturing overhead will include:
The normal depreciation of fixed assets
The plant management
The plant common services and utilities
The plant maintenance
The quality control at all stages
The freight and storage costs at all stages
The cost accounting and data processing services
Any taxes and duties other than VAT and income tax
"GENERAL AND ADMINISTRATIVE COSTS" means costs chargeable to the Products
relating to Product sales efforts of a Party in Japan equal to a portion of Net
Sales set by the Finance Committee. The Finance Committee shall determine such
portion by calculating ERS's general and administrative cost budget relating to
Japan [**].
"GROSS PROFIT" means Net Sales in Japan less Cost of Goods Sold in Japan,
for sales of Product by any Party to Third Parties in Japan.
"MARKETING COSTS"
64
Confidential treatment requested by Bristol-Myers Squibb Company, Bristol-Myers
Squibb Biologics Company and ImClone Systems Incorporated.
For purposes of this definition of Marketing Costs, the "APPLICABLE
REGION" shall mean (i) Japan, when "MARKETING COSTS" is used in reference to
payments that are to be made in connection with Product sales in Japan, or (ii)
the Territory, when "MARKETING COSTS" is used in reference to the Marketing
Budget.
(a) "MARKETING COSTS" means the direct or accrued costs of marketing,
promotion, advertising, Product promotional materials, professional education,
product related public relations, relationships with opinion leaders and
professional societies, market research (before and after product approval),
healthcare economics studies, post-marketing studies not required to maintain
product approvals, and other similar activities, relating to Product sales
efforts of a Party in the Applicable Region and approved by the JCC. Such costs
of a Party will include [**].
(b) "MARKETING COSTS" shall also include, without limitation, activities
related to [**].
(c) "MARKETING COSTS" will specifically exclude the costs of activities
which [**].
"NET SALES" means the gross amount invoiced for sales of a Product by ERS
or its Affiliates, in arm's length sales to Third Parties, commencing with the
First Commercial Sale, less the following deductions from such gross amounts
which are actually incurred, allowed, accrued or specifically allocated (ERS
shall use commercially reasonable efforts to reconcile such amounts invoiced and
deducted annually):
(a) credits or allowances for damaged products, returns or rejections of
Products and price adjustments;
(b) normal and customary trade, cash and quantity discounts, allowances
and credits;
(c) chargeback payments and rebates (or the equivalent thereof) granted to
managed health care organizations or to federal, state/provincial, local and
other governments, including their agencies, or to trade customers;
(d) any invoiced freight, postage, shipping, insurance and other
transportation charges (excluding such charges that are included in Distribution
Costs); and
(e) sales, value-added (to the extent not refundable in accordance with
applicable law), and excise taxes, tariffs and duties, and other taxes directly
related to the sale (but not including taxes assessed against the income derived
from such sale).
Net Sales shall not include sales among ERS and its Affiliates, but shall
arise upon the sale by ERS or its Affiliates to unrelated Third Parties, such as
end users, wholesalers and retailers. Net Sales, as set forth in this
definition, shall be calculated applying, in accordance with GAAP, the standard
accounting practices ERS customarily applies to other products sold by it.
"OPERATING PROFIT OR LOSS" means Net Sales in Japan of all Products less
the following items with respect to each Product sold in Japan or relating to
Product sales efforts of a Party in Japan, all for a given period: [**].
"OTHER OPERATING INCOME/EXPENSE" means other operating income or expense
from or to
65
Confidential treatment requested by Bristol-Myers Squibb Company, Bristol-Myers
Squibb Biologics Company and ImClone Systems Incorporated.
Third Parties, relating to the manufacture or sales of Products by a Party in
Japan or Product sales efforts of a Party in Japan, which is not part of the
primary business activity being conducted by the Parties under this Agreement,
but is considered and approved by the Finance Committee or the JEC as income or
expense for purposes of this activity and is limited to the following, each of
which is to be related to manufacturing or selling Products by a Party in Japan
or Product sales efforts of a Party in Japan:
[**]
The methodology used to determine the amount of each item set forth above shall
be developed by the Finance Committee.
"SALES COSTS" means costs, including Allocable Overhead, approved by the
JCC with the Marketing Budgets, incurred by the Parties or for their account and
specifically identifiable to the sales efforts of Products to all markets in
North America or Japan, as the case may be, including the managed care market.
(a) "SALES COSTS" shall include, without limitation, costs associated with
sales representatives for Products in North America or Japan, as the case may
be, including compensation, benefits and travel, supervision and training of
such sales representatives, sales meetings, and other sales related expenses.
(b) "SALES COSTS" will not include the start-up costs associated with any
Party's sales force relating to that Party's sales efforts in North America or
Japan, as the case may be, including recruiting, relocation and other similar
costs. the Company's sales costs shall not be included in profit/loss
calculations.
66
Confidential treatment requested by Bristol-Myers Squibb Company, Bristol-Myers
Squibb Biologics Company and ImClone Systems Incorporated.
EXHIBIT 1.68
LOW CASE PROJECTIONS
--------------------
[**]
67
Confidential treatment requested by Bristol-Myers Squibb Company, Bristol-Myers
Squibb Biologics Company and ImClone Systems Incorporated.
EXHIBIT 1.87
PATENTS
-------
TITLE: Hybrid Cell Lines That Produce Monoclonal Antibodies
to Epidermal Growth Factor Receptor
INVENTOR(S): Mendelsohn et al.
US PATENT NO.: 4,943,533
PRIORITY DATE: March 9, 1987
TITLE: Monoclonal Antibodies Specific to Human Epidermal
Growth Factor Receptor and Therapeutic Methods of Employing
Same
INVENTOR(S): Schlessinger et al.
US PATENT NO.: 6,217,866
PRIORITY DATE: September 15, 1988
CA PATENT NO: 1,340,417
JP SERIAL NO: 237397/1989
TITLE: Antibody and Antibody Fragments for Inhibiting the Growth
of Tumors
INVENTOR(S): Goldstein et al.
US SERIAL NO.: 08/973,065
PRIORITY DATE: June 7, 1995
CA SERIAL NO: 2,222,231
JP SERIAL NO: 9-502046
TITLE: Treatment of Human Tumors with Radiation and
Inhibitors of Growth Factor Receptor Tyrosine Kinases
INVENTOR(S): Waksal et al.
US SERIAL NO.: 09/312,286
PRIORITY DATE: May 15, 1998
CA SERIAL NO: 2,332,331
JP SERIAL NO: 2000-549641
TITLE: Treatment of Refractory Human Tumors with Epidermal
Growth Factor Receptor Antagonists
INVENTOR(S): Harlan W. Waksal
US SERIAL NOS.: 09/374,028; 09/840,146
PRIORITY DATE: May 14, 1999
PCT APPL: PCT/US00/11756
PCT FILED: May 1, 2000, to be nationalized in Canada and Japan
November 14, 2001
Confidential treatment requested by Bristol-Myers Squibb Company, Bristol-Myers
Squibb Biologics Company and ImClone Systems Incorporated.
EXHIBIT 2.1
JOINT EXECUTIVE COMMITTEE AND ALLIANCE MANAGERS
-----------------------------------------------
INITIAL JOINT EXECUTIVE COMMITTEE MEMBERS DESIGNATED BY BMS:
------------------------------------------------------------
[**]
INITIAL ALLIANCE MANAGER DESIGNATED BY BMS AND ERS:
---------------------------------------------------
[**]
INITIAL JOINT EXECUTIVE COMMITTEE MEMBERS DESIGNATED BY THE COMPANY:
--------------------------------------------------------------------
[**]
INITIAL ALLIANCE MANAGER DESIGNATED BY THE COMPANY:
---------------------------------------------------
[**]
Confidential treatment requested by Bristol-Myers Squibb Company, Bristol-Myers
Squibb Biologics Company and ImClone Systems Incorporated.
EXHIBIT 4.3(A)
CLINICAL BUDGET
---------------
[**]
Confidential treatment requested by Bristol-Myers Squibb Company, Bristol-Myers
Squibb Biologics Company and ImClone Systems Incorporated.
EXHIBIT 4.3(B)
SUMMARY CLINICAL DEVELOPMENT PLAN FOR 2001-2004
-----------------------------------------------
[**]
Confidential treatment requested by Bristol-Myers Squibb Company, Bristol-Myers
Squibb Biologics Company and ImClone Systems Incorporated.
EXHIBIT 5.2(A)
MARKETING BUDGET FOR 2001-2004
------------------------------
[**]
Confidential treatment requested by Bristol-Myers Squibb Company, Bristol-Myers
Squibb Biologics Company and ImClone Systems Incorporated.
EXHIBIT 5.2(B)
INDICATIVE MARKETING BUDGET FOR 2005-2017
-----------------------------------------
[**]
Confidential treatment requested by Bristol-Myers Squibb Company, Bristol-Myers
Squibb Biologics Company and ImClone Systems Incorporated.
EXHIBIT 8.12(B)(I)
BASE CASE CLINICAL SUPPLY AMOUNT
--------------------------------
[**]
Confidential treatment requested by Bristol-Myers Squibb Company, Bristol-Myers
Squibb Biologics Company and ImClone Systems Incorporated.
EXHIBIT 8.12(B)(II)
BASE CASE COMMERCIAL SUPPLY AMOUNT
----------------------------------
[**]
EX-99.(D)(4)
18
a2059910zex-99_d4.txt
EXHIBIT 99(D)(4)
Exhibit 99(d)(4)
May 19, 2001
ImClone Systems Incorporated
180 Varick Street
New York, NY 10014
Attention: John B. Landes
General Counsel
Ladies and Gentlemen:
In connection with the mutual consideration of a possible transaction
(hereinafter "Transaction") involving ImClone Systems Incorporated and/or its
subsidiaries or affiliates (the "Company") and Bristol-Myers Squibb Company
and/or its subsidiaries or affiliates, each party hereto may make available to
the other party (or may have previously made available to the other party after
May 19, 2000) certain proprietary and confidential information concerning its
businesses, financial condition, operations, and assets and liabilities and/or
the business, financial condition, operations, and assets and liabilities of
certain of its subsidiaries or affiliate. As a condition to such information
being made available to the receiving party and its directors, officers,
employees, agents, advisors or affiliates (including, without limitation,
attorneys, accountants, consultants, bankers and financial advisors)
(collectively, "Representatives"), the receiving party agrees to treat any such
proprietary and confidential information concerning the disclosing party
(whether prepared by the disclosing party, its Representatives or otherwise)
which is furnished after the date hereof or was previously furnished after May
19, 2000, in each case by or on behalf of the disclosing party and which is
proprietary and confidential at the time of disclosure (said information herein
collectively referred to as the "Evaluation Material") in accordance with the
provisions of this letter agreement, and to take or abstain from taking certain
other actions hereinafter set forth.
Each party hereto agrees that it shall, and shall cause its
Representatives to, use the Evaluation Material of the disclosing party solely
for the purpose of evaluating a Transaction, keep the Evaluation Material of the
disclosing party confidential, and not disclose such Evaluation Material to any
other person; provided, however, that (i) the receiving party may make any
disclosure of such information to which the disclosing party gives its prior
written consent and
John B. Landes, Esq.
May 19, 2001
Page 2
(ii) any of such information may be disclosed by the
receiving party to its Representatives who need to know such information for the
purpose of evaluating a Transaction between the parties, who shall keep such
information confidential. In any event, each party shall be responsible for any
breach of this letter agreement by any of its Representatives and each party
agrees, at its sole expense, to take all reasonable measures to restrain its
Representatives from prohibited or unauthorized disclosure of the Evaluation
Material.
Each party hereto agrees that, without the prior written consent of the
other, it and its Representatives will not disclose to any person the fact that
Evaluation Material has been exchanged, or that discussions or negotiations are
taking place concerning a Transaction involving the parties or any of their
subsidiaries or affiliates, unless advised by counsel that such disclosure is
required by law and then only with as much prior written notice to the other
party as is practical under the circumstances. The term "person" as used in this
letter agreement shall be broadly interpreted to include the media and any
corporation, partnership, group, individual or other entity.
If either party hereto decides that it does not wish to proceed with
the Transaction it will promptly inform the other party of that decision. In
that case, or at any time upon the request of either party for any reason, each
party will promptly return to the other all written Evaluation Materials (and
all copies thereof) previously furnished to it or its Representatives by or on
behalf of the other party pursuant hereto and will destroy all portions of any
notes, analyses, compilations, or other documents prepared by or for the
receiving party that contain, reveal or reflect such Evaluation Material. Upon
written request, the return and destruction of the Evaluation Material pursuant
to this paragraph shall be confirmed in writing to the disclosing party by the
receiving party. Notwithstanding the return or destruction of the other party's
Evaluation Material, each party and its Representatives will continue to be
bound by the obligations of confidentiality and nondisclosure hereunder.
Each party hereto acknowledges that neither party nor any of its
Representatives makes any representation or warranty as to the accuracy or
completeness of the Evaluation Material and neither party shall have any
liability to the other party or to any of its Representatives relating to or
resulting from the use of the other party's Evaluation Material in connection
with the evaluation of a Transaction.
The term "Evaluation Material" as used in this letter agreement does
not include information which (i) is or becomes generally available to the
public or in the public domain other than as a result of a disclosure by the
receiving party or its Representatives, (ii) was within the possession of the
receiving party prior to its being furnished by or on behalf of the disclosing
party pursuant hereto, provided that the source of such information was not
known by the receiving party to be
John B. Landes, Esq.
May 19, 2001
Page 3
bound by a confidentiality agreement with or other contractual, legal
or fiduciary obligation of confidentiality to the disclosing party or any other
party with respect to such information, (iii) becomes available to the receiving
party on a non-confidential basis from a source other than the disclosing party
or any of its Representatives, provided that such source is not known by the
receiving party after due inquiry to be bound by a confidentiality agreement
with the disclosing party or any party with respect to such information, or (iv)
is derived or developed by the receiving party without violating any of its
obligations hereunder.
We agree that, for a period of one year from the date of this letter
agreement, none of our officers, directors or employees who has knowledge of
this letter agreement or the matters contemplated hereby will directly or
indirectly solicit for employment or hire any officer, director or employee of
the Company with whom we have had contact or who became known to us in
connection with our consideration of a Transaction; provided, however, that we
shall not be precluded from hiring any such person who (i) initiates discussions
regarding such employment without direct or indirect solicitation by us or (ii)
responds to any public advertisement placed by us in a newspaper or a journal of
general circulation.
You agree that, for a period of one year from the date of this letter
agreement, none of your officers, directors or employees who has knowledge of
this letter agreement or the matters contemplated hereby will directly or
indirectly solicit for employment or hire any officer, director or employee of
Bristol-Myers Squibb Company and/or its subsidiaries or affiliates with whom you
have had contact or who became known to you in connection with your
consideration of a Transaction; provided, however, that you shall not be
precluded from hiring any such person who (i) initiates discussions regarding
such employment without direct or indirect solicitation by you or (ii) responds
to any public advertisement placed by you in a newspaper or a journal of general
circulation.
We agree that, for a period of two years from the date of this letter
agreement, neither we nor any of our affiliates or Representatives will, without
the prior written consent of the Company or its Board of Directors: (i) acquire,
offer to acquire, or agree to acquire, directly or indirectly by purchase or
otherwise, any voting securities or direct or indirect rights to acquire any
voting securities of the Company, or any assets of the Company; (ii) offer to
enter into any merger, business combination, recapitalization, restructuring or
other extraordinary transaction involving the Company; (iii) make, or in any way
participate in, directly or indirectly, any "solicitation" of "proxies" (as such
terms are used in the rules of the Securities Exchange Commission) to vote, or
seek to advise or influence any person or entity with respect to the voting of,
any voting securities of the Company, (iv) make or cause the Company to make any
public announcement with respect to, or submit a proposal for, or offer of (with
or without conditions) any extraordinary transaction involving the Company or
its securities or assets; (v) form, join or in any way participate in a
John B. Landes, Esq.
May 19, 2001
Page 4
"group" (as defined in Section 13(d)(3) of the Securities Exchange Act
of 1934, as amended) in connection with any of the foregoing, (vi) otherwise
act, alone or in concert with others, to seek to control or influence the
management or the policies of the Company or (vii) request the Company or any of
its Representatives, directly or indirectly, to amend or waive any provision of
this paragraph. We will promptly advise the Company of any inquiry or proposal
made to us with respect to any of the foregoing. Notwithstanding the provisions
of the foregoing paragraph, (i) the acquisition of any of the Company's
securities, businesses or assets by any assets by any person not controlled by
us (E.G., employee retirement plan), or (ii) contact by us with any successor in
interest to the Company, its securities (in a transaction of the type
contemplated by this letter agreement), businesses or assets regarding such
successor's interests, shall not constitute a breach of this paragraph.
This letter agreement constitutes the entire agreement between the
parties with respect to the subject matter hereof and supersedes in its entirety
the letter agreement between the parties hereto dated May 19, 2000. The parties
agree that unless and until a definitive agreement regarding a Transaction
between the parties has been executed and delivered, neither party will be under
any legal obligation of any kind whatsoever with respect to such a Transaction
by virtue of this letter agreement or any other oral or written expression of
interest and each party hereby waives, in advance, any claims (including,
without limitation, claims for breach of contract), except with respect to the
matters specifically agreed to herein. Without limiting the generality of the
foregoing, the parties agree that each party reserves the right, in its sole
discretion, to reject any and all proposals made by the other party with regard
to a Transaction between the parties and to terminate discussions and
negotiations at any time.
The parties hereto acknowledge that remedies at law may be inadequate
to protect us against any actual or threatened breach of this letter agreement
by the other party or by their Representatives, and, without prejudice to any
other rights and remedies otherwise available to the parties, agree that each of
the parties shall be entitled to seek injunctive relief. In the event of
litigation relating to this letter agreement, the prevailing party following a
final, nonappealable court decision shall be entitled to reimbursement by the
other party of its reasonable costs and expenses (including, without limitation,
reasonable legal fees and expenses) incurred in connection with such litigation.
This letter agreement shall be governed by and construed in accordance
with the laws of the State of New York. This letter agreement shall be binding
on and inure to the benefit of each party's successors and assigns, but may not
be assigned without the prior written consent of the other party. No failure or
delay by either party in exercising any right, power or privilege hereunder
shall operate as a waiver thereof, nor shall any single or partial exercise
thereof preclude any other or further exercise thereof or any other right, power
or privilege hereunder. No amendment
John B. Landes, Esq.
May 19, 2001
Page 5
or modification of this letter agreement shall be effective unless set
forth in a written instrument executed by each party hereto. Except as otherwise
expressly provided herein, all obligations, rights and privileges under this
letter agreement shall terminate five (5) years from the date hereof.
Please confirm your agreement with the foregoing by signing and
returning one copy of this letter agreement to the undersigned.
Very truly yours,
BRISTOL-MYERS SQUIBB COMPANY
By: /s/ BRIAN A.MARKISON
------------------------------
Brian A. Markison
Senior Vice President - External
Development
Accepted and agreed to as of the date first written above:
IMCLONE SYSTEMS INCORPORATED
By: /s/ JOHN B. LANDES
------------------
John B. Landes
General Counsel
EX-99.(D)(5)
19
a2059910zex-99_d5.txt
EXHIBIT 99.(D)(5)
EXHIBIT 99(d)(5)
IMCLONE SYSTEMS INCORPORATED
180 VARICK STREET
NEW YORK, NEW YORK 10014
September 19, 2001
Brian Markison
Senior Vice President-External Affairs
Bristol-Myers Squibb Company
345 Park Avenue
New York, New York 10154
Dear Brian:
Bristol-Myers Squibb Company, a Delaware corporation ("BMS"), ImClone
Systems Incorporated, a Delaware corporation (the "Company") and Bristol-Myers
Squibb Biologics Company, a Delaware corporation and a wholly owned subsidiary
of BMS ("Acquisition Sub"), are entering into an Acquisition Agreement, dated
the date hereof (the "Acquisition Agreement"), pursuant to which BMS and
Acquisition Sub agree to make a partial tender offer (the "Offer") for
outstanding shares of common stock, par value $0.001 per share, of the Company,
at $70.00 per share net to the seller in cash (the "Offer Price"). I am a
stockholder of the Company and enter into this letter agreement, at BMS'
request, in connection with the Acquisition Agreement.
Except as set forth herein, all capitalized terms used in this letter
agreement but not defined in this letter agreement shall have the meanings given
such terms in the Acquisition Agreement. For purposes of this letter agreement,
the term "Owned Shares" means the number of Shares of which I am the beneficial
owner on that date hereof, other than (i) any Shares that are owned by or held
for the benefit of any trust, foundation or other Person of which I am a trustee
or fiduciary and (ii) any Shares beneficially owned by me by virtue of Common
Stock Equivalents (as defined in the Stockholder Agreement) beneficially owned
by me.
I confirm my agreement with you as follows:
1. Except as provided in paragraph 2, I agree to validly tender (or to
cause the record owner of such Shares to validly tender), pursuant to and in
accordance with the terms of the Offer, a substantial portion of the Owned
Shares, and to not withdraw such Shares, except following termination of this
letter agreement pursuant to paragraph 5; PROVIDED, HOWEVER, that nothing in
this letter agreement shall require me to take any action which would create any
liability under Section 16(b) of the Exchange Act. I acknowledge and agree that
BMS's obligation to accept for payment and pay for such Shares is subject to the
terms and conditions of the Offer.
2. Notwithstanding anything contained in this letter agreement, if the
board of directors of the Company changes its recommendation with respect to the
Offer or if
there is Third Party Change of Control Offer, the number of Shares required to
be validly tendered and not withdrawn in the Offer shall be limited to 100,000.
3. I agree, subject to the proviso in paragraph 1, not to sell or
otherwise transfer or dispose of any of the Owned Shares, or any interest in any
of the Owned Shares, other than (i) pursuant to the Offer or (ii) with your
prior written consent, if such sale, transfer or disposition would prevent me
from performing my obligations under this letter agreement.
4. Nothing herein shall be construed to require me, or any Person
controlled by me, to take any action or fail to take any action in violation of
any applicable law.
5. This letter agreement shall terminate upon the earlier of (i)
acceptance for payment of the Shares validly tendered and not withdrawn in the
Offer, (ii) termination of the Acquisition Agreement pursuant to its terms,
(iii) termination of the Offer or (iv) the failure of BMS and Acquisition Sub to
commence the Offer in the time required by the Acquisition Agreement.
6. This letter agreement will be governed by and construed in
accordance with the laws of the State of New York without giving effect to the
conflicts of laws principles that would otherwise apply thereunder.
Please confirm that the foregoing correctly states the understanding
between us by signing and returning to me a counterpart hereof.
Very truly yours,
By: /s/ Harlan W. Waksal, M.D.
------------------------------
Harlan W. Waksal, M.D.
Confirmed and agreed to on
the date first above written:
BRISTOL-MYERS SQUIBB COMPANY
By: Brian Markison
---------------------------------------
Title: Senior Vice President -
---------------------------------------
External Affairs, Worldwide
---------------------------------------
Medicines Group
EX-99.(D)(6)
20
a2059910zex-99_d6.txt
EXHIBIT 99.(D)(6)
EXHIBIT 99(d)(6)
IMCLONE SYSTEMS INCORPORATED
180 VARICK STREET
NEW YORK, NEW YORK 10014
September 19, 2001
Brian Markison
Senior Vice President-External Affairs
Bristol-Myers Squibb Company
345 Park Avenue
New York, New York 10154
Dear Brian:
Bristol-Myers Squibb Company, a Delaware corporation ("BMS"), ImClone
Systems Incorporated, a Delaware corporation (the "Company") and Bristol-Myers
Squibb Biologics Company, a Delaware corporation and a wholly owned subsidiary
of BMS ("Acquisition Sub"), are entering into an Acquisition Agreement, dated
the date hereof (the "Acquisition Agreement"), pursuant to which BMS and
Acquisition Sub agree to make a partial tender offer (the "Offer") for
outstanding shares of common stock, par value $0.001 per share, of the Company,
at $70.00 per share net to the seller in cash (the "Offer Price"). I am a
stockholder of the Company and enter into this letter agreement, at BMS'
request, in connection with the Acquisition Agreement.
Except as set forth herein, all capitalized terms used in this letter
agreement but not defined in this letter agreement shall have the meanings given
such terms in the Acquisition Agreement. For purposes of this letter agreement,
the term "Owned Shares" means the number of Shares of which I am the beneficial
owner on that date hereof, other than (i) any Shares that are owned by or held
for the benefit of any trust, foundation or other Person of which I am a trustee
or fiduciary and (ii) any Shares beneficially owned by me by virtue of Common
Stock Equivalents (as defined in the Stockholder Agreement) beneficially owned
by me.
I confirm my agreement with you as follows:
1. Except as provided in paragraph 2, I agree to validly tender (or to
cause the record owner of such Shares to validly tender), pursuant to and in
accordance with the terms of the Offer, a substantial portion of the Owned
Shares, and to not withdraw such Shares, except following termination of this
letter agreement pursuant to paragraph 5; PROVIDED, HOWEVER, that nothing in
this letter agreement shall require me to take any action which would create any
liability under Section 16(b) of the Exchange Act. I acknowledge and agree that
BMS's obligation to accept for payment and pay for such Shares is subject to the
terms and conditions of the Offer.
2. Notwithstanding anything contained in this letter agreement, if the
board of directors of the Company changes its recommendation with respect to the
Offer or if
there is Third Party Change of Control Offer, the number of Shares required to
be validly tendered and not withdrawn in the Offer shall be limited to 100,000.
3. I agree, subject to the proviso in paragraph 1, not to sell or
otherwise transfer or dispose of any of the Owned Shares, or any interest in any
of the Owned Shares, other than (i) pursuant to the Offer or (ii) with your
prior written consent, if such sale, transfer or disposition would prevent me
from performing my obligations under this letter agreement.
4. Nothing herein shall be construed to require me, or any Person
controlled by me, to take any action or fail to take any action in violation of
any applicable law.
5. This letter agreement shall terminate upon the earlier of (i)
acceptance for payment of the Shares validly tendered and not withdrawn in the
Offer, (ii) termination of the Acquisition Agreement pursuant to its terms,
(iii) termination of the Offer or (iv) the failure of BMS and Acquisition Sub to
commence the Offer in the time required by the Acquisition Agreement.
6. This letter agreement will be governed by and construed in
accordance with the laws of the State of New York without giving effect to the
conflicts of laws principles that would otherwise apply thereunder.
Please confirm that the foregoing correctly states the understanding
between us by signing and returning to me a counterpart hereof.
Very truly yours,
By: /s/ Samuel D. Waksal, Ph.D.
-------------------------------
Samuel D. Waksal, Ph.D.
Confirmed and agreed to on
the date first above written:
BRISTOL-MYERS SQUIBB COMPANY
By: Brian Markison
---------------------------------------
Title: Senior Vice President -
---------------------------------------
External Affairs, Worldwide
---------------------------------------
Medicines Group