\nBMS Schedule 13D…………………………………. 3.04
\nCommercial Arrangements…………………………… Recitals
\nCompany…………………………………………. Preamble
\nDemand Registration………………………………. 5.01
\nDilution Notice………………………………….. 3.04
\nERS…………………………………………….. Recitals
\nExceptional Stock Issuance Date……………………. 3.04
\nInspectors………………………………………. 5.04
\nOverall Dilution Option Period…………………….. 3.04
\nPiggyback Registration……………………………. 5.02
\nProhibited Actions……………………………….. 2.04
\nRecords…………………………………………. 5.04
\nRegistration Expenses…………………………….. 5.07
\nRegistration Statement……………………………. 5.01
\nRights-Reducing Stock Issuance Date………………… 3.04
\n<\/c><\/s><\/caption>\n<\/c><\/s><\/caption>\n<\/table>\n
ARTICLE 2
\n CORPORATE GOVERNANCE<\/p>\n
SECTION 2.01. COMPOSITION OF THE BOARD OF DIRECTORS. (a) The number of
\ndirectors comprising the Board of Directors immediately after the Effective Time
\nshall be increased to twelve.<\/p>\n
(b) Immediately after the Effective Time, the Company shall cause to
\nbe appointed to its Board of Directors two individuals to be designated by BMS
\nprior to the Effective Time, which individuals shall serve as BMS Directors in
\naccordance with the terms of this Section 2.01; PROVIDED that (i) if immediately
\nafter the Effective Time, BMS has the right to nominate only one BMS Director
\npursuant to this Section 2.01, the Company shall cause one individual designated
\nby BMS to be appointed to its Board of Directors, and such individual shall
\nserve as a BMS Director in accordance with the terms of this Section 2.01, and
\n(ii) if immediately after the Effective Time, BMS has no right to designate a
\nBMS Director pursuant to this Section 2.01, the Board shall not be required to
\ncause the appointment of any individual to the Board as a BMS Director. Subject
\nto the other provisions of this Section 2.01, such BMS Directors shall remain in
\noffice until the next election of directors (or any earlier termination,
\nresignation or removal). Following the Effective Time, all Directors in office
\nimmediately prior to the Effective Time shall remain in office until the next
\nelection of directors (or any earlier termination, resignation or removal).<\/p>\n
10<\/p>\n
(c) Except as otherwise provided herein, at all times from and after
\nthe Effective Time, but subject to Section 2.01(d), BMS shall have the right to
\ndesignate two BMS Directors for election at each annual meeting of the Company’s
\nstockholders. Any individual designated by BMS to serve as a BMS Director
\npursuant to this Section 2.01 shall be a senior officer or director of BMS. Each
\nindividual so designated shall, subject to applicable law, be recommended by the
\nBoard for election to the Board by the Company’s stockholders.<\/p>\n
(d) At all times from and after the Effective Time, if the Board is
\ncomprised of twelve members, BMS will have the right to have the Company
\nnominate two BMS Directors; PROVIDED that if at any time BMS’ Common Stock
\nInterest is less than 12.5% for a period of forty-five consecutive calendar
\ndays, thereafter BMS will only have the right to have the Company nominate one
\nBMS Director until such time as BMS’ Common Stock Interest is 12.5% or greater.
\nIn the event that the number of Directors is increased from twelve during any
\nperiod in which BMS has the right to have the Company nominate at least one BMS
\nDirector pursuant to this Section 2.01, BMS shall be entitled to designate a
\nnumber of BMS Directors equal to (i) the lesser of (A) BMS’ Common Stock
\nInterest or (B) the Standstill Interest, multiplied by (ii) the total number of
\nDirectors (rounded down to next lowest whole number in the case of fractions
\nless than .5 and rounded up to the next highest whole number in the case of
\nfractions of .5 or greater). Notwithstanding the foregoing, if the Company has
\nterminated the Commercial Arrangements pursuant to Section 13.2 of the
\nCommercial Arrangements, BMS shall have no right to have the Company nominate a
\nBMS Director, regardless of BMS’ Common Stock Interest.<\/p>\n
(e) Subject to applicable law, in the event that at any time after the
\nEffective Time, the number of BMS Directors differs from the number of Directors
\nthat BMS has the right to designate pursuant to this Section 2.01, (i) if the
\nnumber of BMS Directors exceeds such number, BMS shall promptly cause to resign,
\nand take all other action reasonably necessary to cause the prompt removal of,
\nthat number of BMS Directors as required to make the remaining number of BMS
\nDirectors conform to the number of BMS Directors that BMS has the right to
\nnominate pursuant to this Section 2.01 and (ii) if the number of BMS Directors
\nis less than such number, the Company shall promptly take all necessary action
\nto create sufficient vacancies on the Board of Directors to permit BMS to
\ndesignate the full number of BMS Directors which it is entitled to designate
\npursuant to this Section 2.01 (such action to include expanding the size of the
\nBoard of Directors or seeking the resignation or removal of Directors). The
\nCompany shall have the right to designate replacement Directors for the BMS
\nDirectors removed in accordance with clause (i) of the preceding sentence and
\nupon the creation of any vacancy pursuant to clause (ii) of the preceding
\nsentence BMS shall designate the<\/p>\n
11<\/p>\n
person to fill such vacancy in accordance with this Section 2.01 and, subject to
\napplicable law, the Board of Directors shall appoint each person so designated.<\/p>\n
(f) BMS shall have the right to designate any replacement for a BMS
\nDirector designated in accordance with this Section 2.01 by BMS at the
\ntermination of such Director’s term or upon death, resignation, retirement,
\ndisqualification, removal from office or other cause. Subject to applicable law,
\nthe Board of Directors shall appoint each person so designated.<\/p>\n
(g) Notwithstanding anything in this Agreement to the contrary, the
\nprovisions of Sections 2.01(a), (b), (c), (d) and (f) shall terminate
\nimmediately and have no further force or effect upon the occurrence of a BMS
\nDilution Event.<\/p>\n
SECTION 2.02. SOLICITATION AND VOTING OF SHARES. (a) The Company shall
\nuse all reasonable efforts to solicit from the stockholders of the Company
\neligible to vote for the election of Directors proxies in favor of the nominees
\ndesignated in accordance with Section 2.01; it being understood and agreed that
\nthe Company shall have satisfied its obligation under this Section 2.02(a) if it
\nuses the same efforts to solicit consents in favor of the nominees designated by
\nBMS as it uses to solicit consents in favor of all other nominees for the Board.<\/p>\n
(b) During the period in which BMS has the right to have the Company
\nnominate at least one BMS Director pursuant to Section 2.01, in any election of
\nDirectors or in any meeting of the stockholders of the Company called expressly
\nfor the removal of Directors (or any action by written consent for such
\npurposes), BMS, the Equity Holding Entity and all other Affiliates of BMS shall
\nvote all of their shares of Common Stock as follows: (i) with respect to BMS
\nDirectors, as BMS and its Affiliates shall determine, and (ii) with respect to
\nall remaining Directors, in the same proportion as the votes cast (whether for,
\nagainst or abstaining) by all stockholders of the Company (other than BMS and
\nits Affiliates).<\/p>\n
(c) BMS shall cause all shares of Common Stock beneficially owned by
\nit to be represented, in person or by proxy, at all meetings of the Company’s
\nstockholders, so that such shares of Common Stock may be counted for the purpose
\nof determining the presence of a quorum at such meetings.<\/p>\n
SECTION 2.03. COMMITTEES OF THE BOARD OF DIRECTORS. Subject to
\napplicable law, during the period in which (i) BMS has the right to have the
\nCompany nominate at least one BMS Director pursuant to Section 2.01 and (ii) at
\nleast one BMS Director is a member of the Board, one of the members of each
\ncommittee of the Board (other than any committee or committees of the Board
\nwhose mandate is limited to consideration of matters relating to (i) the
\nCompany’s<\/p>\n
12<\/p>\n
relationship with BMS, (ii) any transaction with BMS, or (iii) any Third-Party
\nChange of Control Transaction) shall be a BMS Director. Committees of the Board
\nmay consist of any number of members, as determined by the Board. Where
\napplicable, each BMS Director serving on a committee of the Board shall satisfy
\nindependent director criteria in order to be eligible to serve on such
\ncommittee. Each committee of the Board will hold regularly scheduled meetings
\nand each member of a committee shall receive reasonable prior notice of and may
\nattend in person or by telephone any regular or special committee meeting.<\/p>\n
SECTION 2.04. BMS APPROVAL REQUIRED FOR CERTAIN ACTIONS. During the
\nRestricted Period, the Company will not do any of the following (each, a
\n“PROHIBITED ACTION”) without the consent of the BMS Directors:<\/p>\n
(a) Issue Common Stock (or securities convertible into, or exercisable
\nor exchangeable for, Common Stock) in excess of 21,473,002 shares in the
\naggregate, subject to appropriate adjustment for any stock split, reverse stock
\nsplit or other similar transactions; PROVIDED that for purposes of this
\nparagraph (a), the issuance of options and other securities convertible into, or
\nexercisable or exchangeable for, Common Stock will be deemed issuances of shares
\nof Common Stock (in the amount of shares into which such securities are
\nexercisable, convertible or exchangeable) at the time such options and other
\nsecurities are issued, and the subsequent issuance of Common Stock upon the
\nexercise, conversion or exchange thereof shall not be subject to the limitations
\nset forth in this paragraph (a); PROVIDED further that the following shall not
\nbe subject to the limitations set forth in this paragraph (a):<\/p>\n
(i) the issuance of Common Stock (or securities convertible
\n into, or exercisable or exchangeable for, Common Stock) in connection
\n with any acquisition that is otherwise permitted under Section 2.04(c)
\n below,<\/p>\n
(ii) the issuance of Common Stock upon the conversion,
\n exercise or exchange of options and other securities convertible into,
\n or exercisable or exchangeable for, Common Stock outstanding as of the
\n close of business on the Signing Date,<\/p>\n
(iii) the issuance of Common Stock (or securities convertible
\n into, or exercisable or exchangeable for, Common Stock) on a PRO RATA
\n basis to all stockholders of the Company; and<\/p>\n
(iv) the issuance of any capital stock of the Company pursuant
\n to the Merck Agreement, the Acquisition Agreement or Section 3.04 of
\n this Agreement;<\/p>\n
13<\/p>\n
(b) Incur any indebtedness for borrowed money or issue any preferred
\nstock if the total of (i) the principal amount of indebtedness incurred since
\nthe Signing Date and then-outstanding, and (ii) the net proceeds from the
\nissuance after September 18, 2001 of any redeemable preferred stock
\nthen-outstanding would exceed the amount of indebtedness for borrowed money
\noutstanding as of the Signing Date by more than $500 million; PROVIDED that, in
\nthe case of any indebtedness issued at a discount to its face value of greater
\nthan 5%, for the purposes of this paragraph (b), the principal amount of such
\nindebtedness will be the gross proceeds received by the Company from such
\nissuance; and PROVIDED further that the following shall not be subject to the
\nlimitations set forth in this paragraph (b):<\/p>\n
(i) indebtedness for borrowed money incurred in connection
\n with any acquisition that is otherwise permitted under Section 2.04(c)
\n below;<\/p>\n
(ii) inter-company indebtedness, including (i) indebtedness
\n between the Company and any of its wholly-owned Subsidiaries, and (ii)
\n indebtedness between any wholly-owned Subsidiaries of the Company; and<\/p>\n
(iii) the issuance of any capital stock of the Company
\n pursuant to the Merck Agreement;<\/p>\n
(c) Acquire any business, the aggregate consideration for which, when
\ntaken together with the aggregate consideration for all other such acquisitions
\nconsummated during the previous twelve months (it being acknowledged and agreed
\nthat the calculation of aggregate consideration under this paragraph (c) shall
\ninclude any assumption of indebtedness in connection with any such acquisition),
\nis in excess of 25% of the Company Aggregate Value at the time the Company
\nenters into the binding agreement relating to such acquisition;<\/p>\n
(d) Enter into any non-competition agreement which would be binding on
\nBMS or its Affiliates or any BMS Director, either at the time entered into or at
\nthe time at which BMS acquires, directly or indirectly, 100% of the outstanding
\nCommon Stock;<\/p>\n
(e) Dispose of all or any substantial portion of the non-cash assets of
\nthe Company, PROVIDED that any licensing, product development or marketing
\narrangement entered into after the Company has complied with the BMS Right of
\nFirst Offer or the BMS Right of First Negotiation, as applicable, shall not be
\nsubject to this limitation;<\/p>\n
14<\/p>\n
(f) Enter into any transaction or adopt any corporate action (including
\nany amendment to the Company’s certificate of incorporation or by-laws (other
\nthan those amendments approved by the Company’s stockholders which are not
\nrecommended by the Board)), other than those contemplated by this Agreement, the
\nAcquisition Agreement or the Commercial Arrangements and other than those
\nimposed on each other holder of Common Stock, which would (i) impose limitations
\non the legal rights of BMS or any of its Affiliates as a stockholder of the
\nCompany, (ii) deny any benefit to BMS or any of its Affiliates, proportionately
\nas a holder of Common Stock, that is made available to other holders of Common
\nStock, or (iii) otherwise materially adversely discriminate against BMS or any
\nof its Affiliates as a stockholder of the Company; and<\/p>\n
(g) Issue shares of any class of capital stock with more than one vote
\nper share, other than any class of stock (i) the shares of which are convertible
\ninto Common Stock, and (ii) for which the number of votes per share of such
\nclass does not exceed the number of votes per share of the class of stock into
\nwhich it is convertible.<\/p>\n
ARTICLE 3
\n LIMITATIONS ON ADDITIONAL PURCHASES OF COMMON STOCK AND OTHER
\n ACTIONS<\/p>\n
SECTION 3.01. PURCHASES OF COMMON STOCK. Except for the acquisition of
\nshares of Common Stock pursuant to the Acquisition Agreement, subject to the
\nexceptions set forth in Section 3.03, during the Standstill Period, BMS and the
\nEquity Holding Entity shall not, and BMS shall not permit its Affiliates to,
\ndirectly or indirectly, acquire or make a proposal to acquire beneficial
\nownership of any shares of Common Stock from the Company or any other person or
\nentity.<\/p>\n
SECTION 3.02. ADDITIONAL LIMITATIONS. Subject to the exceptions set
\nforth in Section 3.03, during the Standstill Period, BMS and the Equity Holding
\nEntity shall not, and BMS shall not permit its Affiliates to:<\/p>\n
(a) make, or take any action to solicit, initiate or encourage, any
\noffer or proposal for, or any indication of interest in, a merger or other
\nbusiness combination involving the Company or any Subsidiary of the Company or
\nthe acquisition of any equity interest in, or a substantial portion of the
\nassets of, the Company or any Subsidiary of the Company;<\/p>\n
(b) “solicit”, or become a “participant” in any “solicitation” of, any
\n“proxy” (as such terms are defined in Regulation 14A under the Exchange Act)<\/p>\n
15<\/p>\n
from any holder of Common Stock in connection with any vote on any matter, or
\nagree or announce its intention to vote with any Person undertaking a
\n“solicitation”;<\/p>\n
(c) form, join or in any way participate in a “group” (within the
\nmeaning of Section 13(d)(3) of the Exchange Act) with respect to any Common
\nStock;<\/p>\n
(d) grant any proxies with respect to any Common Stock to any Person
\n(other than as recommended by the Board) or deposit any Common Stock in a voting
\ntrust or enter into any other arrangement or agreement with respect to the
\nvoting thereof; or<\/p>\n
(e) request, propose or otherwise seek any amendment or waiver of the
\nprovisions of Article 3.<\/p>\n
SECTION 3.03. STANDSTILL EXCEPTIONS. (a) Notwithstanding Sections 3.01
\nand 3.02, but subject to the provisions of Section 3.03(b) and Section 3.03(c):<\/p>\n
(i) during the Standstill Period but after the Effective Time,
\n the Equity Holding Entity may acquire beneficial ownership of
\n additional shares of Common Stock (A) in the open market, or (B) in
\n accordance with the terms of Section 3.04, if after giving effect to
\n any acquisition of beneficial ownership of additional shares of Common
\n Stock pursuant to clause (A) or (B), BMS’ Beneficial Interest would not
\n exceed the Standstill Interest;<\/p>\n
(ii) if, during the Standstill Period, the Company provides
\n material non-public information to a third-party in connection with, or
\n begins active negotiation of, a Third-Party Change of Control
\n Transaction, the Company shall promptly, and in any event within 2
\n Business Days, deliver written notice to BMS to such effect, which
\n notice shall to the extent known by the Company set forth the
\n percentage of Common Stock which the third-party is seeking to acquire
\n pursuant to the Third-Party Change of Control Transaction, and BMS
\n shall have the right to make a non-public proposal to the Board to
\n acquire additional shares of Common Stock; PROVIDED that (i) BMS shall
\n not be required (whether by applicable law or otherwise) to publicly
\n disclose, or to amend, modify or supplement any existing public
\n disclosure because of, the making of such proposal, and (ii) BMS shall
\n not publicly disclose such proposal; PROVIDED FURTHER that
\n notwithstanding the foregoing, if a third-party has publicly proposed a
\n Third-Party Change of Control Transaction and the Company has provided
\n material non-public information to such third-party in connection
\n therewith, or has begun active negotiation of such Third-Party Change
\n of<\/p>\n
16<\/p>\n
Control Transaction, BMS shall have the right to make a public or non-
\n public proposal to acquire additional shares of Common Stock, subject
\n to the proviso in the penultimate sentence of this paragraph. If the
\n Company accepts such BMS proposal, BMS or the Equity Holding Entity may
\n acquire additional shares of Common Stock in accordance with the terms
\n of such proposal. If the Company rejects such BMS proposal and enters
\n into an agreement with respect to a Third-Party Change of Control
\n Transaction, BMS may make a public proposal to acquire additional
\n shares of Common Stock; PROVIDED that BMS may only acquire beneficial
\n ownership of any additional shares of Common Stock in a transaction for
\n the acquisition of (i) 100% of the outstanding shares of Common Stock,
\n or (ii) the same percentage of the outstanding shares of Common Stock
\n which a third-party has agreed to acquire in the Third-Party Change of
\n Control Transaction. Notwithstanding the foregoing, BMS’ right to make
\n any proposal and to acquire additional shares of Common Stock pursuant
\n to this clause (ii) is subject to the condition that the BMS Directors
\n recuse themselves from any and all consideration of a Third-Party
\n Change of Control Transaction by the Board or any committee thereof;<\/p>\n
(iii) during the Standstill Period, BMS may acquire beneficial
\n ownership of Common Stock if such acquisition has been approved by a
\n majority of the Directors that are not BMS Directors; and<\/p>\n
(iv) during the Standstill Period, BMS shall be permitted to
\n make non-public requests to the Board to amend or waive any of the
\n limitations set forth in Sections 3.01 or 3.02, which requests the
\n Company may accept or reject in its sole discretion; PROVIDED that (i)
\n BMS shall not be required (whether by applicable law or otherwise) to
\n publicly disclose, or to amend, modify or supplement any existing
\n public disclosure because of, the making of such request, and (ii) BMS
\n shall not publicly disclose such request; PROVIDED FURTHER that if the
\n Company agrees to any such request, and thereafter in connection with
\n such amendment or waiver BMS makes a proposal for a merger or business
\n combination, or a proposal for an acquisition of shares of Common Stock
\n such that, after giving effect to such acquisition, BMS’ Beneficial
\n Interest would exceed the Standstill Interest, BMS agrees that any such
\n proposal shall be a Complying Proposal.<\/p>\n
(b) Notwithstanding the provisions of Section 3.03(a):<\/p>\n
(i) to the extent that the Standstill Period is still in
\n effect, the exceptions set forth in clauses (i) through (iv) of Section
\n 3.03(a) shall terminate (if not already terminated) upon the earlier to
\n occur of a BMS<\/p>\n
17<\/p>\n
Dilution Event or the termination of the Commercial Arrangements by the
\n Company pursuant to Section 13.2 of the Commercial Arrangements; and<\/p>\n
(ii) to the extent that the Standstill Period is still in
\n effect, the exception set forth in Section 3.03(a)(ii) shall terminate
\n (if not already terminated) upon the earlier to occur of a BMS
\n Sell-Down or the termination of the Commercial Arrangements by BMS
\n pursuant to Section 13.3 of the Commercial Arrangements; PROVIDED that
\n if the exception set forth in Section 3.03(a)(ii) is terminated in
\n accordance with this clause (ii), BMS shall be permitted to make a
\n proposal to the Company to acquire Common Stock, but only after an
\n agreement with respect to a Third-Party Change of Control Transaction
\n has been publicly announced by the Company.<\/p>\n
(c) Notwithstanding anything in this Article 3 to the contrary, nothing
\nshall prohibit the Board from taking any action, or refraining from taking any
\naction, if the Board reasonably believes that taking such action or refraining
\nfrom taking such action, as the case may be, is necessary in order to comply
\nwith its fiduciary duties.<\/p>\n
SECTION 3.04. BMS DILUTION OPTION. (a) During the period in which the
\nEquity Holding Entity has the right to acquire additional shares of Common Stock
\npursuant to Section 3.03(a)(i) or, if the Standstill Period is terminated
\npursuant to clause (iv) of the definition of Standstill Termination Date and
\nnone of the events referred to in clauses (ii) or (iii) of the definition of
\nStandstill Termination Date has occurred, the period ending on the fifth
\nanniversary of the Signing Date (in either case, the “OVERALL DILUTION OPTION
\nPERIOD”), the Company shall deliver a written notice to BMS of the occurrence of
\na Dilution Reference Date (the “DILUTION NOTICE”) within 15 days after (i) the
\nlast date of each calendar year beginning with calendar year 2002 and the last
\ndate of the Overall Dilution Option Period (each such date, an “ANNUAL DILUTION
\nREFERENCE DATE”), (ii) any date on which the Company has issued shares of Common
\nStock not in respect of Outstanding Convertible Securities and where the number
\nof shares issued pursuant to such issuance represents more than 10% of the
\nshares of Common Stock outstanding as of the close of business on the
\nimmediately preceding Business Day (each such date, an “EXCEPTIONAL STOCK
\nISSUANCE DATE”), and (iii) any date on which the Company has issued shares of
\nCommon Stock that has the effect of reducing BMS’ Common Stock Interest below 5%
\nor 12.5% where BMS’ Common Stock Interest at the close of business on the
\nimmediately preceding Business Day was equal to or greater than 5% or 12.5%,
\nrespectively (each such date, a “RIGHTS-REDUCING STOCK ISSUANCE DATE”). Each
\nDilution Notice shall specify the number of shares of Common Stock outstanding
\non the relevant Dilution Reference Date, the number of shares of Common Stock
\nissued<\/p>\n
18<\/p>\n
by the Company since the previous Dilution Reference Date (or, in the case of
\nthe first Dilution Notice, since September 18, 2001) and, in the case of an
\nExceptional Stock Issuance Date, a description of the transaction which gave
\nrise to such Exceptional Stock Issuance Date. In addition, each party shall
\npromptly provide the other with such additional information as such party may
\nreasonably request in order to enable the parties to determine the number of
\nshares of Common Stock subject to each BMS Dilution Option. For purposes of
\ndetermining whether a Rights-Reducing Stock Issuance Date has occurred or will
\noccur pursuant to clause (iii) above, the parties hereto agree that, unless
\notherwise certified in writing to the Company by BMS (i) the Company shall be
\nentitled to rely upon information set forth in the Schedule 13D to be filed on
\nor after the date hereof by BMS with respect to its beneficial ownership of
\nshares of Common Stock, as the same may be amended from time to time (the “BMS
\nSCHEDULE 13D”), and (ii) the Company shall assume that the number of shares of
\nCommon Stock “beneficially owned” by BMS as set forth in the BMS Schedule 13D is
\nthe number of “shares of outstanding Common Stock owned by BMS and its
\nAffiliates on such date and over which BMS or any of its Affiliates exercises
\nfull voting control and bears the full economic risk” for purposes of the
\ndefinition of “BMS’ Common Stock Interest”.<\/p>\n
(b) For each Dilution Period, if BMS’ Ending Dilution Period Interest
\nis less than BMS’ Greatest Dilution Period Interest, BMS shall have the option
\n(the “BMS DILUTION OPTION”) to purchase (through the Equity Holding Entity) from
\nthe Company a number of shares of Common Stock equal to (i) the percentage which
\nis the difference between BMS’ Greatest Dilution Period Interest and BMS’ Ending
\nDilution Period Interest, multiplied by (ii) the number of outstanding shares of
\nCommon Stock as of the last day of such Dilution Period.<\/p>\n
(c) BMS may exercise the BMS Dilution Option, in whole or in part, by
\ndelivery to the Company of written notice of exercise within 30 days of receipt
\nof a Dilution Notice (the “BMS DILUTION OPTION EXERCISE NOTICE”), which notice
\nshall specify the number of shares of Common Stock to be purchased by BMS and
\nwhich shall be irrevocable and binding on both parties upon receipt thereof by
\nthe Company.<\/p>\n
(d) The per share price for shares of Common Stock purchased by BMS and
\nissued to the Equity Holding Entity pursuant to the BMS Dilution Option (“BMS
\nDILUTION OPTION SHARES”) shall be equal to the average closing price of the
\nCommon Stock on the Nasdaq for the thirty Nasdaq trading days ending on and
\nincluding the date on which the BMS Dilution Option Exercise Notice is delivered
\nto the Company.<\/p>\n
19<\/p>\n
(e) Delivery of certificates representing BMS Dilution Option Shares by
\nthe Company shall be made against payment of the purchase price therefor by wire
\ntransfer of immediately available funds to such account of the Company as the
\nCompany shall communicate to BMS. The certificates for the BMS Dilution Option
\nShares shall be registered in the name of the Equity Holding Entity. Delivery of
\nsuch certificates and payment of the purchase price therefor shall be at such
\nplace and on such date as the parties shall mutually agree, but in no event
\nlater than ten Business Days after receipt by the Company of the BMS Dilution
\nOption Exercise Notice (or such later date on which any required filings,
\nconsents or approvals have been made or received, as the case may be).<\/p>\n
(f) To the extent any issuance of shares of Common Stock pursuant to
\nthe BMS Dilution Option requires any action by or in respect of, filing with, or
\nconsent of, any governmental body, agency, official or authority (including,
\nwithout limitation, filings required under the HSR Act and the rules and
\nregulations of the Nasdaq), the parties hereto will use their reasonable best
\nefforts to take, or cause to be taken, all actions and to do, or cause to be
\ndone, all things necessary, proper or advisable under applicable laws and
\nregulations to consummate the issuance of shares of Common Stock pursuant to the
\nBMS Dilution Option.<\/p>\n
(g) Any failure by BMS to exercise a BMS Dilution Option shall not
\naffect BMS’ right to exercise any subsequent BMS Dilution Option in connection
\nwith any subsequent Dilution Notice in accordance with the terms set forth
\nabove.<\/p>\n
(h) Each certificate evidencing BMS Dilution Option Shares shall bear a
\nlegend in substantially the following form:<\/p>\n
THE SECURITIES REPRESENTED BY THIS
\n CERTIFICATE ARE SUBJECT TO RESTRICTIONS
\n ON TRANSFER AS SET FORTH IN THE
\n STOCKHOLDER AGREEMENT, DATED SEPTEMBER
\n 19, 2001, AMONG IMCLONE SYSTEMS
\n INCORPORATED, BRISTOL-MYERS SQUIBB
\n COMPANY AND BRISTOL-MYERS SQUIBB
\n BIOLOGICS COMPANY, A COPY OF WHICH MAY BE
\n OBTAINED FROM THE CORPORATE SECRETARY OF
\n IMCLONE SYSTEMS INCORPORATED.<\/p>\n
THE SHARES REPRESENTED BY THIS
\n CERTIFICATE HAVE NOT BEEN REGISTERED<\/p>\n
20<\/p>\n
UNDER THE SECURITIES ACT OF 1933, AS
\n AMENDED, AND MAY BE REOFFERED OR SOLD
\n ONLY IF SO REGISTERED OR IF AN EXEMPTION
\n FROM SUCH REGISTRATION IS AVAILABLE.<\/p>\n
ARTICLE 4
\n TRANSFER RESTRICTIONS<\/p>\n
SECTION 4.01. TRANSFER OF COMMON STOCK. (a) Subject to Section 4.01(d),
\nprior to the Initial Trigger Date, BMS and the Equity Holding Entity shall not,
\nand BMS shall cause its Affiliates not to, directly or indirectly, transfer,
\nsell or otherwise dispose of, or pledge or otherwise encumber, any shares of
\nCommon Stock or enter into a Hedging Transaction.<\/p>\n
(b) Subject to Section 4.01(d), after the Initial Trigger Date, BMS and
\nthe Equity Holding Entity shall not, and BMS shall cause its Affiliates not to,
\ndirectly or indirectly, transfer, sell or otherwise dispose of, or pledge or
\notherwise encumber, any shares of Common Stock or enter into a Hedging
\nTransaction, except (i) pursuant to its registration rights set forth in Article
\n5, (ii) pursuant to Rule 144 promulgated under the Securities Act, or (iii)
\npursuant to a Hedging Transaction that is permitted under paragraph (c)(iii) of
\nthis Section.<\/p>\n
(c) Any transfer, sale or disposition pursuant to Section 4.01(b) shall
\nbe subject to the following limitations:<\/p>\n
(i) no shares of Common Stock may be transferred, sold or
\n pledged to any Person (other than an Institutional Purchaser) or group
\n (within the meaning of Section 13(d)(3) of the Exchange Act) if, after
\n giving effect to such sale, such Person or group would beneficially own
\n (or, in the case of a registered firm commitment underwritten public
\n offering, if the lead Underwriter believes after reasonable inquiry
\n such person or group would own) more than 5% of the then outstanding
\n shares of Common Stock;<\/p>\n
(ii) no more than 10% of the total outstanding Common Stock
\n may be sold in any one registered firm commitment underwritten public
\n offering made in accordance with Article 5; and<\/p>\n
(iii) neither BMS nor any of its Affiliates will in any
\n twelve-month period pledge, otherwise encumber, enter into a Hedging<\/p>\n
21<\/p>\n
Transaction or, except for transactions that are registered firm
\n commitment underwritten public offerings made in accordance with
\n Article 5 hereof, transfer, sell or otherwise dispose of, any shares of
\n Common Stock, the effect of which, individually or in the aggregate,
\n would be to reduce the economic exposure by BMS or its Affiliates by
\n the equivalent of more than 10% of the maximum number of shares of
\n Common Stock beneficially owned by BMS and its Affiliates at any time
\n after the Signing Date.<\/p>\n
(d) Notwithstanding the foregoing, Acquisition Sub may at any time
\ntransfer all but not less than all of the shares of Common Stock owned by
\nAcquisition Sub to any one of (i) BMS, (ii) ERS or (iii) a wholly owned
\nsubsidiary of ERS; PROVIDED that, in the case of transfers pursuant to clause
\n(ii) or (iii) above, such transferee is a direct wholly owned subsidiary of BMS
\nor is wholly owned by one or more subsidiaries of BMS, each of which is wholly
\nowned by BMS; PROVIDED FURTHER that prior to any transfer pursuant to this
\nSection 4.01(d), such transferee shall have agreed in writing to be bound by the
\nterms of this Agreement pursuant to documentation reasonably satisfactory to the
\nCompany; PROVIDED FURTHER that no transfer pursuant to this Section 4.01(d)
\nshall relieve any transferor from any liability for damages incurred or suffered
\nby the Company as a result of any breach of this Agreement by such transferor.
\nUpon any such transfer, the transferee shall be the Equity Holding Entity under
\nthis Agreement, and shall thereafter have the rights of transfer granted to
\nAcquisition Sub under this Section 4.01(d).<\/p>\n
(e) Purported transfers, sales or dispositions of, or Hedging
\nTransactions with respect to, Common Stock that are not in compliance with
\nArticle 4 shall be of no force and effect.<\/p>\n
(f) Notwithstanding anything herein to the contrary, the transfer, sale
\nor disposition of, or Hedging Transactions with respect to, shares of Common
\nStock by BMS or any of its Affiliates (other than pursuant to Section 4.01(d))
\nshall not result in the transfer of any rights of BMS or the Equity Holding
\nEntity under this Agreement.<\/p>\n
SECTION 4.02. TRANSFER OF SHARES OF THE EQUITY HOLDING ENTITY. BMS
\nagrees that, from the date hereof until such date after the Effective Time on
\nwhich BMS no longer beneficially owns any shares of Common Stock, BMS will
\nmaintain its direct, or indirect through one or more wholly owned subsidiaries
\nof BMS, ownership of 100% of the outstanding capital stock of the Equity Holding
\nEntity and will not transfer, sell, assign or otherwise dispose of, or pledge or
\notherwise encumber, any shares of capital stock of the Equity Holding Entity or<\/p>\n
22<\/p>\n
any subsidiary of BMS which directly or indirectly owns any shares of capital
\nstock of the Equity Holding Entity.<\/p>\n
ARTICLE 5
\n REGISTRATION RIGHTS<\/p>\n
SECTION 5.01. REGISTRATION. (a) The Company agrees that, at any time
\nafter the Initial Trigger Date, upon the request of BMS (a “DEMAND
\nREGISTRATION”), it will file a registration statement (a “REGISTRATION
\nSTATEMENT”) under the Securities Act as to the number of shares of Registrable
\nSecurities specified in such request; PROVIDED that (i) the Company shall not be
\nrequired to file more than three Registration Statements that become effective
\nand remain effective for the period referred to in Section 5.01(b), (ii) the
\nCompany shall not be obligated to effect more than one Demand Registration in
\nany twelve-month period, (iii) the Registrable Securities for which a Demand
\nRegistration has been requested by BMS shall have a value (based on the average
\nclosing price per share of Common Stock for ten trading days preceding the
\ndelivery of BMS’ request) of not less that $100,000,000 (or, if less, all of the
\nshares of Common Stock then held by the Equity Holding Entity), and (iv) the
\nCompany shall not be required to file a shelf registration statement pursuant to
\nRule 415 of the Securities Act under this Section 5.01.<\/p>\n
(b) The Company agrees to use its reasonable best efforts (i) to have
\nany registration of the Registrable Securities declared effective as promptly as
\npracticable after the filing thereof, and (ii) to keep such registration
\nstatement effective for a period (up to three months) sufficient to complete the
\ndistribution of the Registrable Securities. The Company further agrees to
\nsupplement or make amendments to the Registration Statement, if required (i) to
\nrespond to the comments of the SEC, if any, (ii) by the registration form
\nutilized by the Company for such registration or by the instructions applicable
\nto such registration form, (iii) by the Securities Act or the rules and
\nregulations thereunder, or (iv) by BMS (or any Underwriter for BMS) with respect
\nto information concerning BMS or such Underwriter or the plan of distribution to
\nbe utilized with respect to the Registrable Securities. The Company agrees to
\nfurnish to BMS copies of any such supplement or amendment prior to its being
\nused or filed with the SEC.<\/p>\n
(c) In the event an offering of shares of Registrable Securities is a
\nfully- underwritten firm commitment offering, BMS shall select the lead
\nUnderwriter and any additional Underwriters in connection with the offering from
\na list of<\/p>\n
23<\/p>\n
nationally-recognized investment banks reasonably agreed to between the
\nCompany and BMS.<\/p>\n
SECTION 5.02. PIGGYBACK REGISTRATION. If the Company proposes to file a
\nregistration statement under the Securities Act with respect to an offering of
\nCommon Stock (i) for the Company’s own account (other than a registration
\nstatement on S-4 or S-8 or shelf registration statement (or any substitute form
\nthat may be adopted by the SEC)) or (ii) for the account of any of its holders
\nof Common Stock, then the Company shall give written notice of such proposed
\nfiling to BMS as soon as practicable (but in no event less than 10 days before
\nthe anticipated filing date), and such notice shall offer BMS the opportunity to
\nregister such number of shares of Registrable Securities as BMS may request on
\nthe same terms and conditions as the Company’s or such holder’s Common Stock (a
\n“PIGGYBACK REGISTRATION”).<\/p>\n
SECTION 5.03. REDUCTION OF OFFERING. Notwithstanding anything contained
\nherein, if the lead Underwriter of an offering described in Section 5.01 or
\nSection 5.02 delivers a written opinion to the Company that the size of the
\noffering that BMS, the Company and any other Persons intend to make is such that
\nthe success of the offering would be materially and adversely affected, then the
\nnumber of shares of Common Stock to be offered for the account of BMS shall be
\nreduced to the extent necessary to reduce the total amount of securities to be
\nincluded in such offering to the amount recommended by such lead Underwriter;
\nPROVIDED, that (a) priority in the case of a Demand Registration pursuant to
\nSection 5.01 shall be (i) first, the securities offered for the account of BMS,
\n(ii) second, securities offered by the Company for its own account, and (iii)
\nthird, pro rata among any other securities of the Company requested to be
\nregistered pursuant to a contractual right of registration; (b) priority in the
\ncase of a registration initiated by the Company for its own account pursuant to
\nSection 5.02 shall be (i) first, securities offered by the Company for its own
\naccount, (ii) second, pro rata among any other securities of the Company
\nrequested to be registered pursuant to a contractual right of registration
\n(including securities requested to be registered by BMS pursuant to Section
\n5.02); and (c) priority in a registration initiated by the Company for the
\naccount of a holder (other than the Equity Holding Entity) pursuant to Section
\n5.02 shall be (i) first, securities offered for the account of such holder, (ii)
\nsecond, securities offered by the Company for its own account, and (iii) third,
\npro rata among any other securities of the Company requested to be registered
\npursuant to a contractual right of registration (including securities requested
\nto be registered by BMS pursuant to Section 5.02).<\/p>\n
SECTION 5.04. REGISTRATION PROCEDURES. Subject to the provisions of
\nSection 5.01 hereof, in connection with the registration of Registrable
\nSecurities hereunder, the Company will as promptly as practicable:<\/p>\n
24<\/p>\n
(a) furnish to BMS, prior to the filing of a Registration Statement,
\ncopies of such Registration Statement as is proposed to be filed, and thereafter
\nsuch number of copies of such Registration Statement, each amendment and
\nsupplement thereto (in each case including all exhibits thereto and documents
\nreferred to therein), the prospectus included in such Registration Statement
\n(including each preliminary prospectus), any and all transmittal letters or
\nother correspondence with the SEC and such other documents in such quantities as
\nBMS may reasonably request from time to time in order to facilitate the
\ndisposition of the Registrable Securities;<\/p>\n
(b) use all reasonable efforts to register or qualify the Registrable
\nSecurities under such other securities or blue sky laws of such jurisdiction as
\nBMS reasonably requests and do any and all other acts and things as may be
\nreasonably necessary or advisable to enable BMS to consummate the disposition in
\nsuch jurisdictions of the Registrable Securities; PROVIDED that the Company will
\nnot be required to (i) qualify generally to do business in any jurisdiction
\nwhere it would not otherwise be required to qualify but for this Section
\n5.04(b), (ii) subject itself to taxation in any such jurisdiction or (iii)
\nconsent to general service of process in any such jurisdiction;<\/p>\n
(c) notify BMS, at any time when a prospectus relating thereto is
\nrequired to be delivered under the Securities Act, of the happening of any event
\nas a result of which the prospectus included in such Registration Statement or
\namendment contains an untrue statement of a material fact or omits to state any
\nmaterial fact required to be stated therein or necessary to make the statements
\ntherein not misleading, and the Company will prepare a supplement or amendment
\nto such prospectus so that, as thereafter delivered to the purchasers of the
\nRegistrable Securities, such prospectus will not contain an untrue statement of
\na material fact or omit to state any material fact required to be stated therein
\nor necessary to make the statements therein not misleading;<\/p>\n
(d) use its reasonable efforts to cause the Registrable Securities to
\nbe registered with or approved by such other governmental agencies or
\nauthorities as may be necessary by virtue of the business and operations of the
\nCompany to enable BMS to consummate the disposition of the Registrable
\nSecurities; PROVIDED that the Company will not be required to (i) qualify
\ngenerally to do business in any jurisdiction where it would not otherwise be
\nrequired to qualify but for this Section 5.04(d), (ii) subject itself to
\ntaxation in any such jurisdiction or (iii) consent to general service of process
\nin any such jurisdiction;<\/p>\n
(e) enter into customary agreements (including an underwriting
\nagreement in customary form) and take such other actions as are reasonably<\/p>\n
25<\/p>\n
required in order to expedite or facilitate the disposition of the Registrable
\nSecurities;<\/p>\n
(f) make available for inspection by BMS, any underwriter
\nparticipating in any disposition pursuant to such registration, and any
\nattorney, accountant or other agent retained by BMS or any such underwriter
\n(collectively, the “INSPECTORS”), all financial and other records, pertinent
\ncorporate documents and properties of the Company (collectively, the “RECORDS”)
\nas shall be reasonably necessary to enable them to exercise their due diligence
\nresponsibility, and cause the officers, directors and employees of the Company
\nto supply all information reasonably requested by any such Inspector in
\nconnection with such registration; PROVIDED that (i) Records and information
\nobtained hereunder shall be used by such persons only to exercise their due
\ndiligence responsibility and (ii) Records or information which the Company
\ndetermines, in good faith, to be confidential shall not be disclosed by the
\nInspectors unless (x) the disclosure of such Records is necessary to avoid or
\ncorrect a material misstatement or omission in the Registration Statement or (y)
\nthe release of such Records or information is ordered pursuant to a subpoena or
\nother order from a court or governmental authority of competent jurisdiction.<\/p>\n
(g) use all reasonable efforts to obtain a comfort letter from the
\nindependent public accountants for the Company in customary form and covering
\nsuch matters of the type customarily covered by comfort letters as BMS
\nreasonably requests;<\/p>\n
(h) otherwise use all reasonable efforts to comply with all applicable
\nrules and regulations of the SEC, and make generally available to its security
\nholders, as soon as reasonably practicable, an earnings statement covering a
\nperiod of twelve months, beginning within three months after the effective date
\nof the registration, which earnings statement shall satisfy the provisions of
\nSection 11(a) of the Securities Act and Rule 158 thereunder; and<\/p>\n
(i) use all reasonable efforts to cause all Registrable Securities to
\nbe listed on each securities exchange or automated quotation system on which
\nsimilar securities issued by the Company are listed.<\/p>\n
SECTION 5.05. CONDITIONS TO OFFERINGS. The obligations of the Company
\nto take the actions contemplated by Sections 5.01, 5.02 and 5.04 with respect to
\nan offering of Registrable Securities shall be subject to the following
\nconditions:<\/p>\n
(i) BMS and the Equity Holding Entity shall conform to all
\n applicable requirements of the Securities Act and the Exchange Act with
\n respect to the offering and sale of securities; and<\/p>\n
26<\/p>\n
(ii) BMS shall advise each Underwriter through which any of
\n the Registrable Securities are offered that the Registrable Securities
\n are part of a distribution that is subject to the prospectus delivery
\n requirements of the Securities Act.<\/p>\n
The Company may require BMS to furnish to the Company such information
\nregarding BMS or the distribution of the Registrable Securities as the Company
\nmay from time to time reasonably request in writing, in each case only as
\nrequired by the Securities Act or the rules and regulations thereunder or under
\nstate securities or blue sky laws.<\/p>\n
BMS agrees that, upon receipt of any notice from the Company of the
\nhappening of any event of the kind described in Section 5.04(c) hereof, BMS will
\nforthwith discontinue disposition of Registrable Securities pursuant to the
\nregistration covering such shares of Common Stock until BMS’ receipt of the
\ncopies of the supplemented or amended prospectus contemplated by Section 5.04(c)
\nhereof and, if so directed by the Company, will promptly deliver to the Company
\nall copies (other than any permanent file copies then in BMS’ possession) of the
\nmost recent prospectus covering such Registrable Securities at the time of
\nreceipt of such notice.<\/p>\n
SECTION 5.06. ADDITIONAL CONDITIONS. (a) The Company’s obligations
\npursuant to Sections 5.01 and 5.02 shall be suspended if (i) the fulfillment of
\nsuch obligations would require the Company to make a disclosure that would, in
\nthe reasonable good faith judgment of the Company’s board of directors, be
\ndetrimental to the Company and premature, (ii) the Company has filed a
\nregistration statement with respect to securities to be distributed in an
\nunderwritten public offering and it is advised by its lead or managing
\nunderwriter that an offering by BMS of the Registrable Securities would
\nmaterially adversely affect the distribution of such equity securities, or (iii)
\nthe fulfillment of such obligations would require the Company to prepare audited
\nfinancial statements not required to be prepared for the Company to comply with
\nits obligations under the Exchange Act as of any date not coincident with the
\nlast day of any fiscal year of the Company. Such obligations shall be reinstated
\n(x) in the case of clause (i) above, upon the making of such disclosure by the
\nCompany (or, if earlier, when such disclosure would either no longer be
\nnecessary for the fulfillment of such obligations or no longer be detrimental),
\n(y) in the case of clause (ii) above, upon the conclusion of any period during
\nwhich the Company would not, pursuant to the terms of its underwriting
\narrangements, be permitted to sell the Registrable Securities for its own
\naccount and (z) in the case of clause (iii) above, as soon as it would no longer
\nbe necessary to prepare such financial statements to comply with the Securities
\nAct.<\/p>\n
27<\/p>\n
(b) The number of shares of Registrable Securities to be registered
\npursuant to Section 5.01 for an offering that is not a fully-underwritten firm
\ncommitment offering shall be reduced to the extent that the Company is advised
\nin writing by an investment banker of national standing that the sale of all
\nshares of Common Stock requested to be registered by BMS would materially and
\nadversely affect the market price of the Common Stock.<\/p>\n
SECTION 5.07. REGISTRATION EXPENSES. All fees and expenses incident to
\nthe performance of or compliance with this Article 5 by the Company, including,
\nwithout limitation, all fees and expenses of compliance with securities or blue
\nsky laws (including reasonable fees and disbursements of counsel in connection
\nwith blue sky qualifications of the Registrable Securities), rating agency fees,
\nprinting expenses, messenger and delivery expenses, any registration or filing
\nfees payable under any federal or state securities or blue sky laws, the fees
\nand expenses incurred in connection with any listing of the securities to be
\nregistered on any securities exchange or automated quotation system, fees and
\ndisbursements of counsel for the Company and its independent certified public
\naccountants (including the expenses of any comfort letters required by or
\nincident to such performance), securities acts liability insurance (if the
\nCompany elects to obtain such insurance), the reasonable fees and expenses of
\nany special experts retained by the Company in connection with such registration
\nand the fees and expenses of other persons retained by the Company (all such
\nexpenses being herein called “REGISTRATION EXPENSES”), will be (i) divided
\nequally between the Company and BMS with respect to the first and second Demand
\nRegistrations and (ii) borne by BMS with respect to a third Demand Registration;
\nit being understood and agreed that BMS will bear all fees and expenses incurred
\nby it in connection with any registration pursuant to this Article 5 (including,
\nwithout limitation, underwriting fees, discounts and commissions, transfer
\ntaxes, and fees and expenses of its counsel).<\/p>\n
SECTION 5.08. INDEMNIFICATION; CONTRIBUTION. (a) INDEMNIFICATION BY THE
\nCOMPANY. The Company agrees to indemnify, to the fullest extent permitted by
\nlaw, BMS, its directors and officers and each person who controls BMS (within
\nthe meaning of either the Securities Act or the Exchange Act) against any and
\nall losses, claims, damages, liabilities and expenses (including reasonable
\nattorneys’ fees) caused by any untrue or alleged untrue statement of material
\nfact contained in any Registration Statement, prospectus or preliminary
\nprospectus (each as amended and or supplemented, if the Company shall have
\nfurnished any amendments or supplements thereto), or any omission or alleged
\nomission to state therein a material fact required to be stated therein or
\nnecessary to make the statements therein (in the case of a prospectus, in the
\nlight of the circumstances under which they were made) not misleading, PROVIDED
\nthat the Company shall not be required to indemnify BMS or its officers,
\ndirectors or controlling persons<\/p>\n
28<\/p>\n
for any losses, claims, damages, liabilities or expenses resulting from any such
\nuntrue statement or omission if such untrue statement or omission is made in
\nreliance on and in conformity with any information with respect to BMS or such
\nother parties furnished to the Company by BMS or such other parties expressly
\nfor use therein. In connection with an underwritten offering, the Company will
\nindemnify each Underwriter, the officers and directors of such Underwriter, and
\neach person who controls such Underwriter (within the meaning of either the
\nSecurities Act or Exchange Act) to the same extent as provided above with
\nrespect to the indemnification of BMS; PROVIDED that such Underwriter agrees to
\nindemnify the Company to the same extent as provided below with respect to the
\nindemnification of the Company by BMS.<\/p>\n
(b) INDEMNIFICATION BY BMS. In connection with any registration in
\nwhich BMS is participating, BMS will furnish to the Company in writing such
\ninformation and affidavits with respect to BMS as the Company reasonably
\nrequests for use in connection with any such registration, prospectus, or
\npreliminary prospectus and agrees to indemnify the Company, its directors, its
\nofficers who sign the Registration Statement and each person, if any, who
\ncontrols the Company (within the meaning of either the Securities Act or of the
\nExchange Act) to the same extent as the foregoing indemnity from the Company to
\nBMS, but only with respect to information relating to BMS furnished to the
\nCompany in writing by BMS expressly for use in the Registration Statement, the
\nprospectus, any amendment or supplement thereto, or any preliminary prospectus.<\/p>\n
(c) CONDUCT OF INDEMNIFICATION PROCEEDINGS. In case any proceeding
\n(including any governmental investigation) shall be instituted involving any
\nperson in respect of which indemnity may be sought pursuant to Section 5.08(a)
\nor (b), such person (hereinafter called the indemnified party) shall promptly
\nnotify the person against whom such indemnity may be sought (hereinafter called
\nthe indemnifying party) in writing and the indemnifying party, upon request of
\nthe indemnified party, shall retain counsel reasonably satisfactory to the
\nindemnified party to represent the indemnified party and any others the
\nindemnifying party may designate in such proceeding and shall pay the fees and
\ndisbursements of such counsel related to such proceeding. In any such
\nproceeding, any indemnified party shall have the right to retain its own
\ncounsel, but the fees and expenses of such counsel shall be at the expense of
\nsuch indemnified party unless (i) the indemnifying party and the indemnified
\nparty shall have mutually agreed to the retention of such counsel or (ii) the
\nnamed parties to any such proceeding (including any impleaded parties) include
\nboth the indemnifying party and the indemnified party and the indemnified party
\nshall have been advised by counsel that representation of both parties by the
\nsame counsel would be inappropriate due to actual or potential differing
\ninterests between them. It is understood that the indemnifying party shall not,
\nin connection with any proceeding or related<\/p>\n
29<\/p>\n
proceedings in the same jurisdiction, be liable for the fees and expenses of
\nmore than one separate firm (in addition to any local counsel) for all such
\nindemnified parties, and that all such fees and expenses shall be reimbursed as
\nthey are incurred. In the case of any such separate firm for the indemnified
\nparties, such firm shall be designated in writing by the indemnified parties.
\nThe indemnifying party shall not be liable for any settlement of any proceeding
\neffected without its written consent, but if settled with such consent or if
\nthere be a final judgment for the plaintiff, the indemnifying party agrees to
\nindemnify the indemnified party from and against any loss or liability by reason
\nof such settlement or judgment. Notwithstanding the foregoing sentence, if at
\nany time an indemnified party shall have requested an indemnifying party to
\nreimburse the indemnified party for fees and expenses of counsel as contemplated
\nby the third sentence of this Section 5.08(c), the indemnifying party agrees
\nthat it shall be liable for any settlement of any proceeding effected without
\nits written consent if (i) such settlement in entered into more than 30 days
\nafter receipt by such indemnifying party of the aforesaid request and (ii) such
\nindemnifying party shall not have reimbursed the indemnified party in accordance
\nwith such request or reasonably objected in writing, on the basis of the
\nstandards set forth herein, to the propriety of such reimbursement prior to the
\ndate of such settlement. No indemnifying party shall, without the prior written
\nconsent of the indemnified party, effect any settlement of any pending or
\nthreatened proceeding in respect of which any indemnified party is or could have
\nbeen a party and indemnity could have been sought hereunder by such indemnified
\nparty, unless such settlement includes an unconditional release of such
\nindemnified party from all liability on claims that are the subject matter of
\nsuch proceeding.<\/p>\n
(d) CONTRIBUTION. If the indemnification provided for in this Section
\n5.08 from the indemnifying party is unavailable to an indemnified party
\nhereunder in respect of any losses, claims, damages, liabilities or expenses
\nreferred to in this Section 5.08, then the indemnifying party, in lieu of
\nindemnifying such indemnified party, shall contribute to the amount paid or
\npayable by such indemnified party as a result of such losses, claims, damages,
\nliabilities or expenses in such proportion as is appropriate to reflect the
\nrelative fault of the indemnifying party and indemnified parties in connection
\nwith the actions which resulted in such losses, claims, damages, liabilities or
\nexpenses, as well as any other relevant equitable considerations. The relative
\nfault of such indemnifying party and indemnified parties shall be determined by
\nreference to, among other things, whether any action in question, including any
\nuntrue or alleged untrue statement of a material fact or omission or alleged
\nomission to state a material fact, has been made by, or relates to information
\nsupplied by, such indemnifying party or indemnified parties, and the parties’
\nrelative intent, knowledge, access to information and opportunity to correct or
\nprevent such action. The amount paid or payable by a party as a result of the
\nlosses, claims,<\/p>\n
30<\/p>\n
damages, liabilities and expenses referred to above shall be deemed to include,
\nsubject to the limitations set forth in Section 5.08(c), any legal or other fees
\nor expenses reasonably incurred by such party in connection with any
\ninvestigation or proceeding.<\/p>\n
The parties hereto agree that it would not be just and equitable if
\ncontribution pursuant to this Section 5.08(d) were determined by PRO RATA
\nallocation or by any other method of allocation which does not take into account
\nthe equitable considerations referred to in this Section 5.08(d). No person
\nguilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
\nthe Securities Act) shall be entitled to contribution from any person who was
\nnot guilty of such fraudulent misrepresentation.<\/p>\n
If indemnification is available under this Section 5.08, the
\nindemnifying parties shall indemnify each indemnified party to the full extent
\nprovided in Sections 5.08(a) and (b) without regard to the relative fault of
\nsaid indemnifying party or indemnified party or any other equitable
\nconsideration provided for in this Section 5.08(d).<\/p>\n
SECTION 5.09. RULE 144. The Company agrees that it will file the
\nreports required to be filed by it under the Securities Act and the Exchange Act
\nand the rules and regulations adopted by the SEC thereunder, and it will take
\nsuch further action as BMS reasonably may request, all to the extent required
\nfrom time to time to enable BMS to sell Common Stock within the limitation of
\nthe exemptions provided by (a) Rule 144 under the Securities Act, as such Rule
\nmay be amended from time to time, or (b) any similar rule or regulation
\nhereafter adopted by the SEC. Upon the request of BMS, the Company will deliver
\nto BMS a written statement as to whether it has complied with such requirements.<\/p>\n
SECTION 5.10. LOCKUP. If and to the extent requested by the managing
\nunderwriters of an underwritten public offering of equity securities of the
\nCompany, the Company, BMS and the Equity Holding Entity agree not to effect, and
\nto cause their respective Affiliates not to effect, except as part of such
\nregistration, any offer, sale, pledge, transfer or other distribution or
\ndisposition or any agreement with respect to the foregoing, of the issue being
\nregistered or a similar security of the Company, or any securities convertible
\ninto or exchangeable or exercisable for such securities, including a sale
\npursuant to Rule 144, during the seven day period prior to and during such
\nperiod that the lead Underwriter may reasonably request, no greater than 90
\ndays, beginning on the effective date of such registration.<\/p>\n
31<\/p>\n
ARTICLE 6
\n MISCELLANEOUS<\/p>\n
SECTION 6.01. NOTICES. All notices, requests and other communications
\nto any party hereunder shall be in writing (including facsimile transmission)
\nand shall be given,<\/p>\n
if to the Company, to:<\/p>\n
ImClone Systems Incorporated
\n 180 Varick Street, 7th Floor
\n New York, New York 10014
\n Attn: John Landes, Esq.
\n General Counsel
\n Fax: (212) 645-2054<\/p>\n
with a copy to:<\/p>\n
Davis Polk & Wardwell
\n 450 Lexington Avenue
\n New York, New York 10017
\n Attn: Phillip R. Mills, Esq.
\n Fax: (212) 450-4800<\/p>\n
if to BMS or Acquisition Sub, to:<\/p>\n
Bristol-Myers Squibb Company
\n 345 Park Avenue
\n New York, New York 10154
\n Attn: General Counsel
\n Fax: (212) 546-4020<\/p>\n
with a copy to:<\/p>\n
Cravath, Swaine & Moore
\n Worldwide Plaza
\n 825 Eighth Avenue
\n New York, NY 10019
\n Attn: Susan Webster, Esq.
\n Fax: (212) 474-3700<\/p>\n
or such other address or facsimile number as such party may hereafter specify
\nfor the purpose by notice to the other parties hereto. All such notices,
\nrequests and<\/p>\n
32<\/p>\n
other communications shall be deemed received on the date of receipt by the
\nrecipient thereof if received prior to 5 p.m. in the place of receipt and such
\nday is a Business Day in the place of receipt. Otherwise, any such notice,
\nrequest or communication shall be deemed not to have been received until the
\nnext succeeding Business Day in the place of receipt.<\/p>\n
SECTION 6.02. AMENDMENTS; WAIVERS. (a) Any provision of this Agreement
\nmay be amended or waived if, but only if, such amendment or waiver is in writing
\nand is signed, in the case of an amendment, by each party to this Agreement or,
\nin the case of a waiver, by each party against whom the waiver is to be
\neffective.<\/p>\n
(b) No failure or delay by any party in exercising any right, power or
\nprivilege hereunder shall operate as a waiver thereof nor shall any single or
\npartial exercise thereof preclude any other or further exercise thereof or the
\nexercise of any other right, power or privilege. The rights and remedies herein
\nprovided shall be cumulative and not exclusive of any rights or remedies
\nprovided by law.<\/p>\n
SECTION 6.03. SUCCESSORS AND ASSIGNS. The provisions of this Agreement
\nshall be binding upon and inure to the benefit of the parties hereto and their
\nrespective successors and assigns, provided that, except as provided in Section
\n4.01(d), no party may assign, delegate or otherwise transfer any of its rights
\nor obligations under this Agreement without the consent of each other party
\nhereto.<\/p>\n
SECTION 6.04. CAPTIONS. The captions herein are included for
\nconvenience of reference only and shall be ignored in the construction or
\ninterpretation hereof.<\/p>\n
SECTION 6.05. SEVERABILITY. If any term, provision, covenant or
\nrestriction of this Agreement is held by a court of competent jurisdiction or
\nother authority to be invalid, void or unenforceable, the remainder of the
\nterms, provisions, covenants and restrictions of this Agreement shall remain in
\nfull force and effect and shall in no way be affected, impaired or invalidated
\nso long as the economic or legal substance of the transactions contemplated
\nhereby is not affected in any manner materially adverse to any party. Upon such
\na determination, the parties shall negotiate in good faith to modify this
\nAgreement so as to effect the original intent of the parties as closely as
\npossible in an acceptable manner in order that the transactions contemplated
\nhereby be consummated as originally contemplated to the fullest extent possible.<\/p>\n
SECTION 6.06. SPECIFIC PERFORMANCE. The parties hereto agree that
\nirreparable damage would occur if any provision of this Agreement were not
\nperformed in accordance with the terms hereof and that the parties shall be<\/p>\n
33<\/p>\n
entitled to an injunction or injunctions to prevent breaches of this Agreement
\nor to enforce specifically the performance of the terms and provisions hereof in
\nany federal court located in the State of New York or, to the extent no such
\nfederal court has jurisdiction over such proceeding, any New York state court,
\nin addition to any other remedy to which they are entitled at law or in equity.<\/p>\n
SECTION 6.07. GOVERNING LAW. This Agreement shall be governed by and
\nconstrued in accordance with the laws of the State of New York, without regard
\nto the conflicts of laws rules of such state.<\/p>\n
SECTION 6.08. JURISDICTION. Any suit, action or proceeding seeking to
\nenforce any provision of, or based on any matter arising out of or in connection
\nwith, this Agreement or the transactions contemplated hereby may be brought in
\nany federal court located in the State of New York or, to the extent no such
\nfederal court has jurisdiction over such action, suit or proceeding, any New
\nYork state court, and each of the parties hereby consents to the jurisdiction of
\nsuch courts (and of the appropriate appellate courts therefrom) in any such
\nsuit, action or proceeding and irrevocably waives, to the fullest extent
\npermitted by law, any objection that it may now or hereafter have to the laying
\nof the venue of any such suit, action or proceeding in any such court or that
\nany such suit, action or proceeding brought in any such court has been brought
\nin an inconvenient form. Process in any such suit, action or proceeding may be
\nserved on any party anywhere in the world, whether within or without the
\njurisdiction of any such court. Without limiting the foregoing, each party
\nagrees that service of process on such party as provided in Section 6.01 shall
\nbe deemed effective service of process on such party.<\/p>\n
SECTION 6.09. WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO HEREBY
\nIRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING
\nARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED
\nHEREBY.<\/p>\n
SECTION 6.10. COUNTERPARTS; EFFECTIVENESS; BENEFIT. This Agreement may
\nbe signed in any number of counterparts, each of which shall be an original,
\nwith the same effect as if the signatures thereto and hereto were upon the same
\ninstrument. This Agreement shall become effective when each party hereto shall
\nhave received counterparts hereof signed by all of the other parties hereto. No
\nprovision of this Agreement is intended to confer any rights, benefits,
\nremedies, obligations, or liabilities hereunder upon any Person other than the
\nparties hereto and their respective successors and assigns.<\/p>\n
34<\/p>\n
SECTION 6.11. ENTIRE AGREEMENT. This Agreement, the Confidentiality
\nAgreement, the Commercial Arrangements, the Acquisition Agreement and the
\ndisclosure letter referred to in Article 4 of the Acquisition Agreement
\nconstitute the entire agreement between the parties with respect to the subject
\nmatter of this Agreement and supersede all prior agreements and understandings,
\nboth oral and written, between the parties with respect to the subject matter of
\nthis Agreement.<\/p>\n
SECTION 6.12. EXPENSES. Except as otherwise provided herein, all costs
\nand expenses incurred in connection with this Agreement shall be paid by the
\nparty incurring such cost or expense.<\/p>\n
SECTION 6.13. ADDITIONAL COVENANT OF BMS. BMS shall take all action
\nnecessary to cause the Equity Holding Entity to perform its obligations under
\nthis Agreement, including without limitation, providing funding to the Equity
\nHolding Entity to the extent necessary for the Equity Holding Entity to fulfill
\nits obligations hereunder.<\/p>\n
35<\/p>\n
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
\nof the date first above written.<\/p>\n
BRISTOL-MYERS SQUIBB COMPANY<\/p>\n
By: \/s\/ Brian Markison
\n ————————————————
\n Name: Brian Markison
\n Title: Senior Vice President – External Affairs,
\n Worldwide Medicines Group<\/p>\n
BRISTOL-MYERS SQUIBB BIOLOGICS
\n COMPANY<\/p>\n
By: \/s\/ Sandra Leung
\n ————————————————
\n Name: Sandra Leung
\n Title: Corporate Secretary<\/p>\n
IMCLONE SYSTEMS INCORPORATED<\/p>\n
By: \/s\/ Samuel D. Waskal, Ph.D.
\n ————————————————
\n Name: Samuel D. Waskal, Ph.D.
\n Title: President and Chief Executive Officer<\/p>\n","protected":false},"template":"","meta":{"_acf_changed":false,"_stopmodifiedupdate":true,"_modified_date":"","_cloudinary_featured_overwrite":false},"corporate_contracts_companies":[6948,7835],"corporate_contracts_industries":[9405,9407],"corporate_contracts_types":[9629,9633],"class_list":["post-43937","corporate_contracts","type-corporate_contracts","status-publish","hentry","corporate_contracts_companies-bristol-myers-squibb-co","corporate_contracts_companies-imclone-inc","corporate_contracts_industries-drugs__biotech","corporate_contracts_industries-drugs__pharma","corporate_contracts_types-securities","corporate_contracts_types-securities__shareholder"],"acf":[],"_links":{"self":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts\/43937","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts"}],"about":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/types\/corporate_contracts"}],"wp:attachment":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/media?parent=43937"}],"wp:term":[{"taxonomy":"corporate_contracts_companies","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_companies?post=43937"},{"taxonomy":"corporate_contracts_industries","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_industries?post=43937"},{"taxonomy":"corporate_contracts_types","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_types?post=43937"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}