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Engagement Letter - Hambrecht & Quist LLC and ImClone Systems Inc.

Hambrecht & Quist LLC

February 26, 1996


The Board of Directors
ImClone Systems Incorporated
180 Varick Street
New York, NY 10014


Hambrecht & Quist LLC ('Hambrecht & Quist') would be pleased to act as financial
advisor  to  ImClone  Systems  Incorporated  ('ImClone  ' or the  'Company')  in
connection  with ongoing  financial  strategies and tactics,  included,  but not
limited to financings. Pursuant to this engagement, Hambrecht & Quist will:

     (i)  review  with  members  of  management  the  Company's   financial  and
          strategic plans; and

     (ii) advise the Company with respect to financings.

As  compensation  for Hambrecht & Quist's  services,  the Company  agrees to pay
Hambrecht & Quist a fee of $ 310,000.

The Company  agrees that  Hambrecht & Quist is entitled to rely upon all reports
and public filings of the Company (and its affiliates) and information  supplied
to it by or on behalf of the Company  (whether written or oral), and Hambrecht & Quist shall not in any respect be responsible  for the accuracy or  completeness
of any such report, public filing or information or have an obligation to verify
the same.

Hambrecht  & Quist  hereby  agrees  that  it  will  not  disclose  confidential
information  received from the Company (or its affiliates) to others (other than
our employees,  agents,  accountants,  attorneys,  and other advisors) except as
contemplated by this engagement or as such disclosure may be required by law. At
the conclusion of our engagement hereunder,  we will return to you all copies of
any   documentary   confidential   information   that  you  have   duly   marked
'confidential' and that are at the time in our possession.  For purposes of this
agreement,  'confidential information' shall mean information provided by you to
us that is not otherwise available to us from sources outside of the Company (or
its  affiliates),  and any  such  information  shall  cease  to be  confidential
information  when it becomes  generally  available,  or comes to our  attention,
through  other  sources  that do not, to our  awareness  at the time,  involve a
violation of this or any similar agreement.

The  Company  agrees  to  indemnify  Hambrecht  & Quist in  accordance  with the
Standard Form of Indemnification Agreement, set forth as Exhibit A hereto.

This  agreement  shall have a term of one year from the date hereof,  except for
the  indemnification  provisions  above,  which will  continue in full force and
effect in accordance with their terms.

Any  advice,  written or oral,  rendered by  Hambrecht & Quist  pursuant to this
letter may not be disclosed publicly without its prior written consent except as
required by law or regulation or in response to any  information  request of the
Securities  and Exchange  Commission.  The Company agrees that Hambrecht & Quist
has the right to place  advertisements  in financial  and other  newspapers  and
journals at its own expense describing its services to the Company hereunder.

This agreement  constitutes  the entire  agreement and  understanding  among the
parties hereto and supersedes any and all prior  agreements and  understandings,
oral or written, relating to the subject matter hereof.

This agreement shall be governed by and construed in accordance with the laws of
the State of New York,  without  giving  effect to the State's  conflict of laws

If the foregoing  correctly sets forth the  understanding  between us, please so
indicate on the enclosed copies of this letter and return two original copies to
us for our files.

                                            Very truly yours,

                                            HAMBRECHT & QUIST LLC

                                            By: /s/Dennis J. Purcell

Agreed to and accepted:


By:    /s/Samuel D. Waksal
Title: President and Chief Executive Officer
Date:  March 7, 1997

                                                                       Exhibit A

                              HAMBRECHT & QUIST LLC

                   Standard Form of Indemnification Agreement

In connection  with the services which Hambrecht & Quist has agreed to render to
the Company  hereunder,  the Company shall (A)  indemnify  Hambrecht & Quist and
hold it  harmless  to the fullest  extent  permitted  by law against any losses,
claims,  damages or liabilities to which Hambrecht & Quist may become subject in
connection with (i) its use of information that is inaccurate in any respect (as
a result of misrepresentation,  omission,  failure to update, or otherwise) that
is provided to Hambrecht & Quist by the Company, its representatives,  agents or
advisers,  regardless  of whether  Hambrecht  & Quist  should have known of such
inaccuracy,  or (ii) any other aspect of its rendering such services, unless and
to the extent it is finally  judicially  determined  that such  losses,  claims,
damages or  liabilities  relating  thereto arise out of the gross  negligence or
willful misconduct of Hambrecht & Quist, and (B) reimburse Hambrecht & Quist for
any  legal  or other  expenses  reasonably  incurred  by it in  connection  with
investigating,  preparing to defend or defending any  lawsuits,  claims or other
proceedings  arising in any manner out of or in connection  with its performance
of  its  duties  hereunder.  If  for  any  reason  the  foregoing  indemnity  is
unavailable  to  Hambrecht  & Quist or  insufficient  to hold  Hambrecht & Quist
harmless,  then the Company  shall  contribute  to the amount paid or payable by
Hambrecht & Quist as a result of such claims,  liabilities,  losses,  damages or
expenses in such  proportion as is  appropriate to reflect not only the relative
benefits  received by the  Company on the one hand and  Hambrecht & Quist on the
other but also the relative fault of the Company and Hambrecht & Quist,  as well
as any relevant equitable considerations. Notwithstanding the provisions of this
agreement,  the  aggregate  contribution  of  Hambrecht  & Quist to all  claims,
liabilities,  losses,  damages and expenses  shall not exceed the amount of fees
actually  received  by  Hambrecht  & Quist  pursuant  to its  engagement  by the
Company.  It is hereby further agreed that the relative  benefits to the Company
on the one hand and  Hambrecht  & Quist on the other  hand with  respect  to the
transactions contemplated in this engagement letter shall be deemed to be in the
same proportion as (i) the total value of the transaction bears to (ii) the fees
paid to Hambrecht & Quist with respect to such transactions.  The Company agrees
that  the  indemnification  and  reimbursement  commitments  set  forth  in this
agreement  shall apply whether or not Hambrecht & Quist is a formal party to any
such lawsuits or other proceedings, that Hambrecht & Quist is entitled to retain
separate  counsel of its choice in  connection  with any of the matters to which
such  commitments  relate,  that such  commitments  shall be in  addition to any
liability  that the  Company  may have to  Hambrecht  & Quist at  common  law or
otherwise,  and that such  commitments  shall extend upon the terms set forth in
this agreement to any controlling person, director,  officer, employee, agent or
affiliate  of  Hambrecht  & Quist  and shall  survive  any  termination  of this
agreement.  Hambrecht & Quist will not, without the prior written consent of the
Company,  settle or  compromise  or consent to the entry of any  judgment in any
pending or  threatened  claim,  action,  suit or  proceeding in respect of which
indemnification may be sought hereunder,  unless such settlement,  compromise or
consent  includes an  unconditional  release of the Company  from all  liability
arising out of such claim, action, suit or proceeding.

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