Exhibit 10.1
CONFIDENTIAL TREATMENT REQUESTED
SANKYO CO., LTD.
- and -
CYCLACEL LIMITED
CS-682 LICENCE AGREEMENT

 

 

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TABLE OF CONTENTS

              Page  
 
       
1. DEFINITIONS
    1  
2. LICENCES
    11  
3. PAYMENTS
    13  
4. DEVELOPMENT AND COMMERCIALISATION
    18  
5. INTELLECTUAL PROPERTY — OWNERSHIP
    19  
6. INTELLECTUAL PROPERTY — PROSECUTION, MAINTENANCE AND ENFORCEMENT
    19  
7. WARRANTIES AND LIABILITY
    22  
8. CONFIDENTIALITY
    25  
9. TERM AND TERMINATION
    27  
10. EFFECTS OF TERMINATION
    28  
11. ASSIGNMENT/SUB-CONTRACTING
    29  
12. FORCE MAJEURE
    30  
13. GOVERNING LAW
    30  
14. JURISDICTION
    30  
15. WAIVER
    31  
16. SEVERANCE OF TERMS
    31  
17. ENTIRE AGREEMENT/VARIATIONS
    31  
18. NOTICES
    32  
19. COUNTERPARTS
    32  
20. THIS AGREEMENT NOT TO CONSTITUTE A PARTNERSHIP
    33  
21. COSTS
    33  
22. PUBLICITY
    33  
SCHEDULE 1 DEVELOPMENT PLAN
    35  
SCHEDULE 2 LICENSED MATERIALS
    36  
SCHEDULE 3 LICENSED PATENT RIGHTS
    1  
SCHEDULE 4 CNDAC PATENT RIGHTS
    1  
SCHEDULE 5 SUCCESSFUL COMPLETION CRITERIA
    1  
SCHEDULE 6 RETAINED TECHNICAL DATA
    1  
SCHEDULE 7 COMMITTED CLINICAL TRIALS
    1  
SCHEDULE 8 ADDRESSES FOR NOTICES
    2  
SCHEDULE 9 EXPERT’S DECISION
    3  

 

 

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Portions of this Exhibit were omitted and have been filed separately with the
Secretary of the Securities and Exchange Commission pursuant to the Company’s
application requesting confidential treatment under Rule 24b-2 of the Securities
Exchange Act of 1934.
THIS AGREEMENT is made on the Commencement Date
BETWEEN:

(1)  
SANKYO CO., LTD. a company incorporated in Japan whose principal place of
business is at 5-1 Nihonbashi-honcho 3-chome Chuo-ku Tokyo 103-8426 Japan
(“Sankyo”); and

(2)  
CYCLACEL LIMITED a company incorporated in England whose principal place of
business is at Dundee Technopole, James Lindsay Place, Dundee DD1 5JJ, UK
(“Cyclacel”).

WHEREAS:

(A)  
Sankyo owns certain Patent Rights and Know How (as defined herein) relating to a
nucleoside analogue known as CS-682 and is the non-exclusive licensee of certain
Patent Rights relating to CNDAC.

(B)  
Cyclacel is a biotechnology company specialising in the research and development
of products in the field of cancer.

(C)  
Cyclacel wishes to have an exclusive licence and non-exclusive sub-licence (as
appropriate) to the Patent Rights and Know How described in (A) above for the
purpose of developing, marketing and selling a product based on CS-682 within
the Territory and Sankyo is willing to grant Cyclacel such a licence on the
terms set out herein.

1.  
DEFINITIONS

  1.1  
In this Agreement the following definitions shall apply unless the context
requires otherwise:

  1.1.1  
“Affiliate” — any person, corporation, company, partnership, joint venture,
limited liability company and/or other entity which Controls, is Controlled by,
or is under common Control with a Party.

  1.1.2  
“Agreement” — this document including any and all schedules, appendices and
other addenda to it as may be added and/or amended from time to time in
accordance with the provisions of this Agreement.

  1.1.3  
“Blocking IP” — any and all intellectual property owned or controlled by a Third
Party (but not, subject to Clause 3.6, a Cyclacel Licensee) which would be
infringed by the development, manufacture, import, marketing, distribution, sale
or other disposal of Product.

  1.1.4  
“Business Day” — 9.30 am to 5.30 pm local time on a day other than a Saturday,
Sunday, corporate holiday of a Party, or public holiday in the UK or Japan.

 

 

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Portions of this Exhibit were omitted and have been filed separately with the
Secretary of the Securities and Exchange Commission pursuant to the Company’s
application requesting confidential treatment under Rule 24b-2 of the Securities
Exchange Act of 1934.

  1.1.5  
“Candidate” — the compound known as CS-682 and other compounds covered by
Licensed Patent Rights.

  1.1.6  
“CNDAC” — the compound 1-(2-C-cyano-2-deoxy-β-D-arabino-pentofurano-syl)
cytosine, or known as CNDAC.

  1.1.7  
“Clinical Trials” — means any or all of the Phase I Clinical Trials, Phase II
Clinical Trials or Phase III Clinical Trials.

  1.1.8  
“CNDAC Patent Rights” — any Patent Rights relating to inventions comprised in
the CNDAC Patent Rights listed in Schedule 4.

  1.1.9  
“Combination Product” — a product containing Product which also:

  (a)  
contains a therapeutically active ingredient that is not Licensed IP or CNDAC
Patent Rights; or

  (b)  
is administered through a therapeutically active administration technology that
is not Licensed IP or CNDAC Patent Rights; or

  (c)  
is administered in accordance with a diagnostic detection technology that is not
Licensed IP or CNDAC Patent Rights.

each of which shall be an “Other Element”.

  1.1.10  
“Commencement Date” — the date of execution of this Agreement by the Parties,
which is the latest date of signature below.

  1.1.11  
“Competent Authority” — any national or local agency, authority, department,
inspectorate, minister, ministry official, parliament or public or statutory
person (whether autonomous or not) of any government of any country having
jurisdiction over either any of the activities contemplated by this Agreement or
over the Parties, including the European Commission, The Court of First Instance
and the European Court of Justice.

  1.1.12  
“Confidential Information” — in the case of obligations on Cyclacel in relation
to Confidential Information, shall mean Know How and Material forming part of
Licensed IP and, in the case of each of Cyclacel and Sankyo, shall mean the
terms and conditions of this Agreement notwithstanding the provisions of Clause
22 and any other commercially sensitive information of a Party marked
“confidential” supplied or otherwise made available to them, including but not
limited to those Know How or Material disclosed by Sankyo to Cyclacel under the
Confidential Disclosure Agreement dated February 26, 2002 between the Parties
which relates to the subject matter hereof, or coming into their possession in
relation to the performance of this Agreement.

 

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Portions of this Exhibit were omitted and have been filed separately with the
Secretary of the Securities and Exchange Commission pursuant to the Company’s
application requesting confidential treatment under Rule 24b-2 of the Securities
Exchange Act of 1934.

  1.1.13  
“Control” — means the ownership either directly or indirectly of more than 50%
of the issued share capital or any other comparable equity or ownership interest
with respect to a business entity or the legal power to direct or cause the
direction of the general management and policies of the Party in question.

  1.1.14  
“CS-682” — the compound
1-(2-C-cyano-2-deoxy-β-D-arabino-pentofurano-syl)-N(4)-palmitoylcytosine.

  1.1.15  
“Cyclacel Licensee” — an entity or individual other than an Affiliate of
Cyclacel appointed by Cyclacel as a licensee pursuant to Clause 2.3.

  1.1.16  
“Development Plan” — the plan for the development of Candidate and resultant
Product by or on behalf of Cyclacel, an outline of which is attached as
Schedule 1, which plan may be updated or amended from time to time pursuant to
Clause 4.1.

  1.1.17  
“Disclosing Party” — a Party which discloses Confidential Information to another
Party.

  1.1.18  
“Documents” — reports, research notes, charts, graphs, comments, computations,
analyses, recordings, photographs, paper, notebooks, books, files, ledgers,
records, tapes, discs, diskettes, CD-ROM, computer information storage means and
any other media on which Know How can be permanently stored.
    1.1.19  
“EMEA” — European Medicines Evaluation Agency or any successor group thereto.
    1.1.20  
“European Union” the countries of the European Union from time to time.
    1.1.21  
“Exceptional Cause”

  (a)  
scientific or other technical cause outside Cyclacel’s or Cyclacel Licensee’s
reasonable control or arising through the activities of Third Parties including
any significant, unexpected technical problems experienced with the development
of Candidate including but not limited to chemical production of Candidate or
polymorphic form of Candidate or Product or significant, unexpected problems
which relate to the safety, efficacy or toxicology of Candidate, CNDAC or
Product;

 

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Portions of this Exhibit were omitted and have been filed separately with the
Secretary of the Securities and Exchange Commission pursuant to the Company’s
application requesting confidential treatment under Rule 24b-2 of the Securities
Exchange Act of 1934.

  (b)  
difficulty outside Cyclacel’s or Cyclacel Licensee’s reasonable control in
recruitment of patients into trial(s); or

  (c)  
any significant, unexpected change in the regulatory requirements in a country
concerning the development of Candidate or Product which comes into existence
after the Commencement Date, for example a new requirement for studies in
specific patient sub-groups.

  1.1.22  
“Excluded Territories” — [***]
    1.1.23  
“Expert’s Decision” — the mechanism set out in Schedule 9.

  1.1.24  
“FDA” — the U.S. Food and Drug Administration or any successor agency thereto.

  1.1.25  
“Force Majeure” — in relation to either Party, any event or circumstance which
is beyond the reasonable control of that Party which event or circumstance that
Party could not reasonably be expected to have taken into account at the date of
this Agreement and which results in or causes the failure of that Party to
perform any or all of its obligations under this Agreement including acts of
God, lightning, fire, storm, flood, earthquake, requirement for quarantine due
to infectious disease outbreak, accumulation of snow or ice, lack of water
arising from weather or environmental problems, asteroid or meteor activity,
strike, lockout or other industrial or student disturbance, act of the public
enemy, war declared or undeclared, threat of war, terrorist act, blockade,
revolution, riot, insurrection, civil commotion, public demonstration, sabotage,
act of vandalism, prevention from or hindrance in obtaining in any way
materials, energy or other supplies, explosion, fault or failure of plant or
machinery (which could not have been prevented by Good Industry Practice)
provided that lack of funds shall not be interpreted as a cause beyond the
reasonable control of that Party.

  1.1.26  
“Good Industry Practice” — in relation to any undertaking and any circumstance,
the exercise of that degree of skill diligence, prudence and foresight which
would reasonably and ordinarily be expected from a skilled and experienced
person engaged in the same type of undertaking under the same or similar
circumstances.

  1.1.27  
“Insolvency Event” — in relation to either Party or one of its Affiliates, means
any one of the following:

  (a)  
a notice shall have been issued to convene a meeting for the purpose of passing
a resolution to wind up that Party, or such a resolution shall have been passed.
For the avoidance of doubt a resolution for the solvent reconstruction or
reorganisation of that Party or for the purpose of inclusion of any part of the
share capital of that Party in the Official List of the London Stock Exchange or
in the list of the American Stock Exchange or quotation of the same on the
National Association of Securities Dealers Automated Quotation System or other
such recognised securities market shall not constitute an Insolvency Event; or

 

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Portions of this Exhibit were omitted and have been filed separately with the
Secretary of the Securities and Exchange Commission pursuant to the Company’s
application requesting confidential treatment under Rule 24b-2 of the Securities
Exchange Act of 1934.

  (b)  
a resolution shall have been passed by that Party’s directors to seek a winding
up, or an administration order or a petition for a winding up or administration
order shall have been presented against that Party and appeal proceedings have
not been commenced by that Party within seven (7) days from the date of such
petition or such an order shall have been made; or

  (c)  
a receiver, administrative receiver, receiver and manager, interim receiver,
custodian, sequestrator or similar officer is appointed in respect of that Party
or over a substantial part of its assets or any Third Party takes steps to
appoint such an officer in respect of that Party or an encumbrancer takes steps
to enforce or enforces its security; or

  (d)  
a proposal for a voluntary arrangement shall have been made in relation to that
Party under Part I Insolvency Act 1986; or

  (e)  
a step or event shall have been taken or arisen outside the United Kingdom which
is similar or analogous to any of the steps or events listed at (a) to (d) above
which shall include a Chapter XI filing in the USA; or

  (f)  
that Party takes any step outside the ordinary course of business (including
starting negotiations) with a view to readjustment, rescheduling or deferral of
any part of that Party’s indebtedness, or proposes or makes any general
assignment, composition or arrangement with or for the benefit of all or some of
that Party’s creditors or makes or suspends or threatens to suspend making
payments to all or some of that Party’s creditors or the Party submits to any
type of voluntary arrangement; or

  (g)  
where that Party is resident in the United Kingdom it is deemed to be unable to
pay its debts within the meaning of Section 123 Insolvency Act 1986.

 

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Portions of this Exhibit were omitted and have been filed separately with the
Secretary of the Securities and Exchange Commission pursuant to the Company’s
application requesting confidential treatment under Rule 24b-2 of the Securities
Exchange Act of 1934.

  1.1.28  
“Know How” — technical and other information which is not in the public domain,
including information comprising or relating to concepts, discoveries, data,
designs, formulae, ideas, inventions, methods, models, assays, research plans,
procedures, designs for experiments and tests and results of experimentation and
testing (including results of research or development), processes (including
manufacturing processes, specifications and techniques), laboratory records,
chemical, pharmacological, toxicological, clinical, analytical and quality
control data, trial data, case report forms, data analyses, reports,
manufacturing data or summaries and information contained in submissions to and
information from ethical committees and regulatory authorities. Know How
includes Documents containing Know How and shall be deemed to include any rights
of action or intellectual property rights protecting such Know How. The fact
that an item is known to the public shall not be taken to preclude the
possibility that a compilation including the item, and/or a development relating
to the item, is not known to the public.

  1.1.29  
“Legal Requirement” — any present or future law, regulation, directive,
instruction, direction or rule of any Competent Authority or Regulatory
Authority including any amendment, extension or replacement thereof which is
from time to time in force.

  1.1.30  
“Licensed IP” — Licensed Patent Rights, Licensed Know How and Licensed
Materials.

  1.1.31  
“Licensed Know How” — any and all Know How owned by Sankyo relating to the
Candidate.

  1.1.32  
“Licensed Material” — any and all Material owned by Sankyo directly related to
the Candidate as set out in Schedule 2 as of the Commencement Date unless
otherwise specified therein.

  1.1.33  
“Licensed Patent Rights” — any Patent Rights owned by Sankyo relating to
inventions comprised in the Licensed Material or Licensed Know How, the Patent
Rights listed in Schedule 3 and any subsequent Patent Rights owned by Sankyo
directly relating to the inventions of CS-682 comprised in the Patent Rights to
be added to Schedule 3 in accordance with Clause 6.8. For avoidance of doubt,
Licensed Patent Rights exclude the CNDAC Patent Rights.
    1.1.34  
“Material” — any chemical or biological substances including any: -

  (a)  
organic or inorganic element or compound;

 

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Portions of this Exhibit were omitted and have been filed separately with the
Secretary of the Securities and Exchange Commission pursuant to the Company’s
application requesting confidential treatment under Rule 24b-2 of the Securities
Exchange Act of 1934.

  (b)  
nucleotide or nucleotide sequence including DNA and RNA sequence;
    (c)  
gene;

  (d)  
vector or construct including plasmids, phages or viruses;

  (e)  
host organism including bacteria, fungi, algae, protozoa and hybridomas;

  (f)  
eukaryotic or prokaryotic cell line or expression system or any development
strain or product of that cell line or expression system;

  (g)  
protein including any peptide or amino acid sequence, enzyme, antibody or
protein conferring target properties and any fragment of a protein or a peptide
enzyme or antibody;
    (h)  
drug or pro-drug;
    (i)  
assay or reagent; or

  (j)  
any other genetic or biologic material or microorganism.

  1.1.35  
“Marketing Authorisation” — any and all consents or other authorisations or
approvals required from a Regulatory Authority to market and sell a Product in
any country, but not any form of pricing or reimbursement approval.

  1.1.36  
“Net Sales” — with respect to Product in relation to which Marketing
Authorisation and, if necessary in such country in the Territory, pricing
approval has been granted by the appropriate Regulatory Authority or other
Competent Authority for any jurisdiction for at least one indication, the gross
total amount originally invoiced by Cyclacel, its Affiliates or Cyclacel
Licensees to Third Parties for Products in the Territory less:

  (a)  
quantity, trade and/or cash discounts actually granted;

  (b)  
amounts repaid or credited and allowances including cash, credit or free goods
allowances given by reason of chargebacks, retroactive price reductions
(provided that price adjustments may be retrospectively made for up to two (2)
consecutive fiscal years) or billing errors and rebates (including
government-mandated rebates), actually allowed or paid;

 

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Portions of this Exhibit were omitted and have been filed separately with the
Secretary of the Securities and Exchange Commission pursuant to the Company’s
application requesting confidential treatment under Rule 24b-2 of the Securities
Exchange Act of 1934.

  (c)  
amounts refunded or credited for Product which was rejected, spoiled, damaged,
outdated or returned;

  (d)  
freight, shipment and insurance costs incurred transporting Product to a Third
Party purchaser;

  (e)  
taxes, tariffs, customs duties and surcharges and other governmental charges
incurred in connection with the sale, exportation or importation of Product.

  (f)  
bad debt losses and costs for the recovery of such bad debts.

The transfer of Product by Cyclacel or one of its Affiliates to another
Affiliate or Cyclacel Licensee shall not be considered a sale. In such cases Net
Sales shall be determined based on the invoiced sale price by the Affiliate or
Cyclacel Licensee to the first Third Party trade purchaser, less the deductions
allowed under this Clause.
Upon the sale or other disposal of Product other than in a bona fide arms length
transaction exclusively for money or upon any use of Product for the purposes
which do not result in a disposal of that Product in consideration of sales
revenue customary in the country of sale, such other sale, disposal or use shall
be deemed to constitute a sale at the relevant open market price in that country
in which the sale, other disposal or use occurs, or, if that price is not
ascertainable, a reasonable price assessed on an arm’s length basis for the
goods or services provided in exchange for the supply. Disposal of Product for,
or use of Product in Clinical Trials for the purpose of obtaining a Marketing
Authorisation or pre-clinical trials or as free samples in quantities common in
the industry for this sort of Product shall not give rise to any deemed sale
under this Clause.
Such amounts shall be determined from the books and records of Cyclacel
maintained in accordance with GAAP (generally accepted accounting principles),
consistently applied.
For the avoidance of doubt it is declared and agreed that if the product can be
marketed and sold without pricing approval nothing in this definition requires
pricing approval for it to be classified as Product for the purposes of this
Agreement.

  1.1.37  
“Party or Parties” — Cyclacel or Sankyo or Cyclacel and Sankyo, as the case may
be.

 

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Portions of this Exhibit were omitted and have been filed separately with the
Secretary of the Securities and Exchange Commission pursuant to the Company’s
application requesting confidential treatment under Rule 24b-2 of the Securities
Exchange Act of 1934.

  1.1.38  
“Patent Rights” — patent applications and patents, author certificates, inventor
certificates or certifications of invention, applications for certificates of
invention, utility certificates, improvement patents and models and certificates
of addition and all foreign counterparts of them, including any divisions or
divisional applications and patents, refilings, renewals, continuations,
continuations-in-part, patents of addition, extensions (including patent term
extensions), reissues, substitutions, confirmations, registrations,
revalidations, request for continued examination, re-examinations or renewals
thereof, pipeline and administrative protections and additions, and any
equivalents of the foregoing in any and all countries of or to any of them
including foreign counterpart applications, as well as any supplementary
protection certificates and equivalent protection rights in respect of any of
them.

  1.1.39  
“Phase I Clinical Trial” — a human clinical trial normally conducted in healthy
volunteers or patients with the aim of establishing the pharmacokinetic,
pharmacodynamic and early safety profile of a product (alone or in combination
with another agent).

  1.1.40  
“Phase II Clinical Trial” — a human clinical trial where a product is tested in
a number of patients for the purpose of establishing preliminary data on the
efficacy and safety of a product.

  1.1.41  
“Phase III Clinical Trial” — a human clinical trial conducted in a sufficient
number of patients to establish safety or efficacy for one or more indication(s)
tested and required for the filing of a submission to obtain Marketing
Authorisation.

  1.1.42  
“Product” — a pharmaceutical product comprising the Candidate or otherwise
falling within a Valid Claim of the Licensed Patent Rights.
    1.1.43  
“Professors” — [***]

  1.1.44  
“Quarter” — each period of three months ending on 31 March, 30 June, 30
September or 31 December and “Quarterly” shall be construed accordingly.

  1.1.45  
“Recipient Party” — the Party which receives Confidential Information from the
other Party.

  1.1.46  
“Regulatory Authority” — shall mean any national, supranational, regional, state
or local regulatory agency, department, bureau, commission, council or other
governmental entity including the FDA and EMEA, in each country involved in the
granting of Marketing Authorisation for a Product.

 

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Portions of this Exhibit were omitted and have been filed separately with the
Secretary of the Securities and Exchange Commission pursuant to the Company’s
application requesting confidential treatment under Rule 24b-2 of the Securities
Exchange Act of 1934.

  1.1.47  
“Results” — Know How, Patent Rights and Materials arising from any research,
development or commercialisation activity undertaken by or on behalf of Cyclacel
in connection with this Agreement.

  1.1.48  
“Successful Completion” — shall mean that the Phase II Clinical Trial in
question has met the end points set out in Schedule 5.
    1.1.49  
“Territory” — the World excluding the Excluded Territories.

  1.1.50  
“Third Party” — any entity or individual other than Cyclacel or Sankyo or their
respective Affiliates.

  1.1.51  
“Valid Claim” — a claim of an issued and unexpired patent included within Patent
Rights, which has not been permanently revoked, held unenforceable or invalid by
a decision of a court or other governmental agency of competent jurisdiction,
un-appealable or un-appealed within the time allowed for appeal, and which has
not been admitted to be invalid or unenforceable through reissue or disclaimer
or otherwise.

  1.1.52  
“Year” — twelve (12) months commencing on 1 January and ending on 31 December.

  1.2  
In this Agreement:

  1.2.1  
Unless the context otherwise requires all references to a particular Clause,
Schedule or paragraph shall be a reference to that Clause, Schedule or
paragraph, in or to this Agreement as it may be amended from time to time
pursuant to this Agreement;

  1.2.2  
The table of contents and headings are inserted for convenience only and shall
be ignored in construing this Agreement;

  1.2.3  
Unless the contrary intention appears words importing the masculine gender shall
include the feminine and vice versa and words in the singular include the plural
and vice versa;

  1.2.4  
Unless the contrary intention appears words denoting persons shall include any
individual, partnership, company, corporation, joint venture, trust, association
(incorporated or not incorporated), organisation or other entity, in each case
whether or not having legal personality;

  1.2.5  
Reference to any statute, directive or regulation includes any modification or
re-enactment of that statute or regulation; and

  1.2.6  
References to the word “include” or “including” are to be construed without
limitation to the generality of the preceding words.

 

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Portions of this Exhibit were omitted and have been filed separately with the
Secretary of the Securities and Exchange Commission pursuant to the Company’s
application requesting confidential treatment under Rule 24b-2 of the Securities
Exchange Act of 1934.

2.  
LICENCES

  2.1  
Sankyo hereby grants to Cyclacel

  2.1.1  
an exclusive licence under the Licensed IP.

  2.1.2  
a non-exclusive, royalty-free terminable sub-licence under the CNDAC Patent
Rights which are licensed with a right to sub-license by the Professors to
Sankyo.

in each case to research, develop, make, have made, use, import, have imported,
market, have marketed, sell, offer for sale, have sold or otherwise dispose of
Candidate (or any constituent part of the same) and Product, for all indications
in the Territory.

  2.2  
The Parties [***] which requires [***] with Product in the [***] and thus [***].
Sankyo shall use its reasonable efforts [***].

  2.2.1  
[***] relation to the Candidate, Sankyo shall so notify Cyclacel in writing
[***] shall be [***] under the same commercial terms as set out in this
Agreement.

  2.2.2  
[***] in relation to the Candidate, Sankyo shall so notify [***] discuss in good
faith issues relating to [***] including but not limited to terms for the usage
of data generated by Cyclacel [***].

  2.2.3  
Sankyo shall not grant any rights or licences in the Licensed IP or CNDAC Patent
Rights to any Third Party [***], or itself carry out any activities utilising
the Licensed IP or Sub-Licensed IP [***] which would or would be reasonably
expected to have an adverse impact upon the value or scope of the rights granted
to Cyclacel hereunder. [***].

  2.3  
The licences set out in Clause 2.1 shall include the right to grant
sub-licences. Save as otherwise provided in this Agreement, Cyclacel shall
procure that Cyclacel Licensees are bound by the same obligations, to the extent
practicable, as those hereunder, including, but not limited to the obligations
of confidentiality and non-use for unauthorised purpose. Cyclacel shall be
responsible to Sankyo for the acts and omissions, including breach of this
Agreement, of any Cyclacel Licensee provided that in the case of a Cyclacel
Licensee committing a material breach that would constitute a material breach of
this Agreement, Cyclacel shall have sixty (60) days to require such Cyclacel
Licensee to remedy the breach or to terminate its sub-licence before Cyclacel
shall be considered to have committed a material breach under Clause 9.3.1.
Cyclacel shall give Sankyo prompt notification of the identity of each Cyclacel
Licensee with whom it concludes a sub-licence.

 

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Portions of this Exhibit were omitted and have been filed separately with the
Secretary of the Securities and Exchange Commission pursuant to the Company’s
application requesting confidential treatment under Rule 24b-2 of the Securities
Exchange Act of 1934.

  2.4  
As soon as reasonably practicable following the Commencement Date and subject to
the provisions of Clause 3.2.2 Sankyo shall disclose, supply copies of, or
otherwise make available to Cyclacel the Licensed Materials and Documents
containing the Licensed Know How. In particular, and without limiting the
foregoing, Sankyo shall supply Cyclacel with quantities of the Candidate and
CNDAC as listed in Schedule 2 and all synthesis data and methods relating to the
Candidate. Cyclacel acknowledges that (i) save as set out in Clause 7.2 Sankyo
does not warrant the quality of any of the Licensed Materials, and (ii) Sankyo
has no further obligation to supply the Candidate and CNDAC in addition to the
quantities listed in Schedule 2. Unless Cyclacel requests transfer of any or all
of those capsules in writing after the Commencement Date, the Parties shall
execute a separate entrustment agreement with respect to the maintenance and
analysis of capsules on stability in Schedule 2, which sets forth that
(i) Cyclacel shall pay the expenses for entrustment to Sankyo and such expenses
shall not be subject to Clause 3.3.2, and that (ii) Sankyo shall perform the
analysis after the expiration dates for storage periods of such capsules on
stability. Cyclacel acknowledges that Sankyo would never be able to further
extend expiration dates of such capsules according to Sankyo’s standards. Sankyo
will transfer ownership of all formulated Candidate as listed in Schedule 2 and
the current drug master file of the Candidate to Cyclacel except for certain
amount retained by Sankyo necessary for the technology transfer or other
purposes, including, but not limited to, to comply with regulatory requirements.
Ownership, title and risk of all Licensed Materials provided under this Clause
2.4 shall be transferred from Sankyo to Cyclacel (i) at shipment if shipped by
Sankyo or its designee to Cyclacel, (ii) upon transfer of [***] in accordance
with Clause 7.4 or (iii) if Licensed Materials otherwise become available to
Cyclacel. Sankyo shall provide Cyclacel with all reasonable assistance requested
by Cyclacel in interpreting and understanding the Licensed IP and in the
transfer, including updating to the FDA, of [***] in accordance with Clause 7.4
at Cyclacel’s cost. Such assistance by Sankyo for the CMC technology transfer of
synthesis and internal process checks shall be deemed to be completed if either
of the following events occurs:

[***]
Sankyo shall maintain its copies of Documents containing the Licensed Know-How
for the lesser of eight (8) years or until requested by Cyclacel under Clause
2.7 or otherwise agreed by the Parties. Should Sankyo intend to dispose of the
Documents it shall so notify Cyclacel and Cyclacel will be entitled to take
ownership of such Documents at Cyclacel’s discretion and cost.

  2.5  
Sankyo shall at Cyclacel’s request execute or procure the execution of all such
deeds and documents as may be necessary or desirable to record any of the rights
granted to Cyclacel under this Agreement with any patent registry.

 

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Portions of this Exhibit were omitted and have been filed separately with the
Secretary of the Securities and Exchange Commission pursuant to the Company’s
application requesting confidential treatment under Rule 24b-2 of the Securities
Exchange Act of 1934.

  2.6  
Sankyo shall notify Cyclacel in the event that Sankyo generates any Patent
Rights or Know How relating to the Candidate or relating to CNDAC which also
relates to the Candidate and if Cyclacel so requests such Patent Rights or Know
How shall then automatically become part of the Licensed IP and shall be
licensed to Cyclacel on the same terms as set out herein.

  2.7  
Sankyo shall maintain those items of technical data listed in Schedule 6 and
shall make the same available to Cyclacel for use in connection with the
development or commercialisation of Product (including, without limitation, for
the purposes of cross-referencing or inclusion in regulatory filings relating to
Candidate or Product). Sankyo shall exert its reasonable efforts to make such
data available to Cyclacel within thirty (30) Business Days of the Commencement
Date or the date which such data become available to Sankyo.

  2.8  
Sankyo shall promptly inform Cyclacel of any significant developments of which
it becomes aware concerning any part of the Licensed IP or CNDAC Patent Rights
which are licensed by Sankyo to Cyclacel.

3.  
PAYMENTS

  3.1  
In consideration of the rights granted to Cyclacel under this Agreement Cyclacel
shall pay to Sankyo payments set out in this Clause 3.

  3.2  
Cyclacel shall pay to Sankyo a licence fee and costs comprised of the following:

  3.2.1  
[***] payable within thirty (30) days of the Commencement Date;

  3.2.2  
Sankyo’s reasonable costs incurred pursuant to Sankyo’s technology transfer
obligations under Clause 2.4 within 30 days of receipt of Sankyo’s Quarterly
invoice and those costs incurred to Sankyo and reimbursed by Cyclacel under
Clause 6.1 provided that in the event such amounts exceed [***] any amounts in
excess of [***] shall be creditable against the milestone payments set out in
Clause 3.3.1 and provided further that such costs in excess of [***] shall be
subject to an overall maximum of [***]. The Parties acknowledge that as of the
end of June 2003 Sankyo has incurred [***] in transferring Licensed Know How and
Licensed Materials to Cyclacel and that Sankyo has invoiced Cyclacel for such
amount. Notwithstanding the generality of the foregoing, Cyclacel agrees to pay
to Sankyo such [***] within thirty (30) days of the Commencement Date.

  3.3  
Cyclacel shall pay to Sankyo the following non-refundable payments, provided,
the milestone payments set out in Clauses 3.3.1 to 3.3.5 shall be payable in
relation to the first Product only.

  3.3.1  
subject to any set-off, if applied pursuant to Clause 3.2, [***] within thirty
(30) days of the Successful Completion of the first Phase II Clinical Trial for
Product;

 

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Portions of this Exhibit were omitted and have been filed separately with the
Secretary of the Securities and Exchange Commission pursuant to the Company’s
application requesting confidential treatment under Rule 24b-2 of the Securities
Exchange Act of 1934.

  3.3.2  
[***] within thirty (30) days of the commencement of the first Phase III
Clinical Trial for Product, provided, however: (a) if Cyclacel commenced the
first Phase III Clinical Trial for Product without the Successful Completion of
the first Phase II Clinical Trial for Product, the payment under Clause 3.3.1
above shall become also payable to Sankyo in addition to the payment under this
Clause 3.3.2 and; (b) in the event that Cyclacel is granted Marketing
Authorisation for Product in the USA, any country of the European Union or Japan
on the basis of any clinical trial results generated other than pursuant to a
formal Phase III Clinical Trial, the milestone payment under this Clause 3.3.2
shall become due and payable by Cyclacel at the same time.

  3.3.3  
[***] within thirty (30) days of the granting of the first Marketing
Authorisation and, if required in order to sell Product, pricing approval for
Product in the USA;

  3.3.4  
[***] within thirty (30) days of the granting of the first Marketing
Authorisation and, if required in order to sell Product, pricing approval for
Product in any country of the European Union;

  3.3.5  
[***] within thirty (30) days of the granting of the first Marketing
Authorisation and, if required in order to sell Product, pricing approval for
Product in Japan;
    3.3.6  
royalties applicable on Net Sales as follows:

  3.3.6.1  
[***] on annual Net Sales less than [***]
    3.3.6.2  
[***] on annual Net Sales greater than or equal to [***] and less than [***]
    3.3.6.3  
[***] on annual Net Sales greater than or equal to [***]

  3.4  
In the case of sales of Product by Cyclacel, its Affiliates or Cyclacel
Licensees in countries where such sale does not fall within a Valid Claim of a
Licensed Patent Right the royalty payable on Net Sales in such country shall be
[***] regardless of the volume of Net Sales in such country.

  3.5  
In the event a Third Party launches a generic product which directly competes
with the Product and does not infringe Licensed IP and the volume of sales of
Product are less than or equal to [***] of the total volume of sales of Product
plus all such competing generic products in such country as evidenced by data
compiled by IMS Health of 1499 Post Road, Fairfield, CT 06430, USA or, in the
event such data by IMS Health is not available or the Parties agree it is not
appropriate to use such data in such country, a similar market research agency
the royalty payments set out in Clauses 3.3.6.1 to 3.3.6.3 shall no longer be
payable to Sankyo on Net Sales in such country.

 

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--------------------------------------------------------------------------------

 

Portions of this Exhibit were omitted and have been filed separately with the
Secretary of the Securities and Exchange Commission pursuant to the Company’s
application requesting confidential treatment under Rule 24b-2 of the Securities
Exchange Act of 1934.

  3.6  
[***]

  3.7  
The royalties payable by Cyclacel hereunder shall be payable for the following
periods:

  3.7.1  
In those countries where at the time of first commercial sale in such county the
sale of Product falls within a Valid Claim of Licensed Patent Rights subsisting
in that country, royalties shall be payable until the latter of (i) the last to
expire of such Licensed Patent Rights in that country or (ii) the tenth (10th)
anniversary of the date of first commercial sale in that country;

  3.7.2  
In those countries where at the time of first commercial sale of Product in that
country the sale of Product does not fall within a Valid Claim of Licensed
Patent Rights subsisting in that country, royalties shall be payable until the
tenth (10th) anniversary of the date of first commercial sale in that country.

  3.8  
Disposal of reasonable quantities of Product for, or use of Product, in Clinical
Trials performed for the purpose of obtaining a Marketing Authorisation or
pre-clinical trials, or as free samples to be in quantities common in the
industry for this sort of Product shall not give rise to liability for payment
of a royalty under this Clause 3.

  3.9  
In the event that Product is sold as a Combination Product containing a
therapeutically active ingredient that is not Licensed IP or CNDAC Patent Rights
in a country, the Net Sales of the Product shall be determined by multiplying
[***]. In the event Cyclacel wishes to develop a Combination Product which
(1) is administered through a therapeutically active administration technology
that is not Licensed IP or CNDAC Patent Rights, (2) is administered in
accordance with a diagnostic detection technology that is not Licensed IP or
CNDAC Patent Rights or (3) otherwise depends for a significant part of its value
upon components which are not Licensed IP or CNDAC Patent Rights, then the
Parties shall separately discuss how to determine the Net Sales applicable for
such Combination Product. In the event the Parties fail to agree an applicable
Net Sales price for such combination product within sixty (60) days of
commencing such good faith discussions, such price shall be determined by a
reputable independent auditor appointed by agreement between the Parties or,
failing which, the President (or his or her nominee) for the time being of the
Institute of Chartered Accountants of England and Wales (or any successor body
thereto).

 

- 15 -

--------------------------------------------------------------------------------

 

Portions of this Exhibit were omitted and have been filed separately with the
Secretary of the Securities and Exchange Commission pursuant to the Company’s
application requesting confidential treatment under Rule 24b-2 of the Securities
Exchange Act of 1934.

  3.10  
Cyclacel shall, and shall procure that its Affiliates and Cyclacel Licensees
shall, keep true and accurate records and books of account containing all data
necessary for the calculation of the amounts payable by it to Sankyo pursuant to
this Agreement. Those records and books of account shall be kept for seven
(7) years following the end of Year to which they relate and shall, upon
reasonable notice having been given by Sankyo or its nominee, be open on
Business Days for examination, under the terms of confidentiality contained in
this Agreement, by an independent firm of accountants appointed by agreement
between the Parties or between Cyclacel and Sankyo’s nominee (as appropriate)
or, failing such agreement within twenty-eight (28) days, by the President (or
his or her nominee) for the time being of the Institute of Chartered Accountants
of England and Wales (or any successor body thereto). Such examination shall
take place not later than five (5) years following the expiration of the period
to which it relates and there shall be no more than one such examination per
year. Such independent accountant shall provide a written report of his findings
to each of Cyclacel and Sankyo in which he certifies the moneys due to Sankyo in
respect of the period under review. If such examination demonstrates that
Cyclacel has underpaid royalties due to Sankyo, Cyclacel shall make a balancing
payment within thirty (30) days. The cost of the examination, review and
certification shall be the responsibility of Cyclacel if Cyclacel is shown to
have underestimated the monies payable to Sankyo in any period being reviewed by
more than [***] and the responsibility of Sankyo otherwise.

  3.11  
Cyclacel shall make the royalty payments due to Sankyo under this Clause 3 at
Quarterly intervals. Within thirty (30) days of the end of each Quarter after
first commercial sale in any country, Cyclacel shall prepare a statement which
shall show on a Product by Product and a country by country basis for the
previous Quarter all monies due to Sankyo under Clause 3 and shall, if
applicable, contain Cyclacel’s reasonable estimate of any amounts deductible
pursuant to Clauses 3.4 and 3.5. That statement shall include details of the
particular Product description including to the extent it requires use of
Combination Product, sales of the Product and the royalty amount payable for
each country in the Territory. Cyclacel shall pay the royalty due under Clause
3.3.6 within thirty (30) days of issuance of such statement. Within thirty (30)
days of the end of the final Quarter of each Year Cyclacel shall carry out a
reconciliation in relation to the royalty payments made and the royalty rate
applied during the previous Year and, if applicable, shall apply the formula set
out in Clause 3.6. If such reconciliation demonstrates that Cyclacel has
underpaid royalties due to Sankyo it shall make a balancing payment within
thirty (30) days and if it is demonstrated that Cyclacel has overpaid royalties
due to Sankyo, Sankyo shall make a payment to Cyclacel of a balancing refund
within thirty (30) days.

 

- 16 -

--------------------------------------------------------------------------------

 

Portions of this Exhibit were omitted and have been filed separately with the
Secretary of the Securities and Exchange Commission pursuant to the Company’s
application requesting confidential treatment under Rule 24b-2 of the Securities
Exchange Act of 1934.

  3.12  
If Sankyo give notice to Cyclacel within ten (10) Business Days of the receipt
of any statement provided pursuant to Clause 3.11 that it does not accept it,
that statement shall be reviewed and certified by an independent accountant
appointed by agreement between the Parties or, in default of agreement within
twenty eight (28) days, by the President (or his or her nominee) for the time
being of the Institute of Chartered Accountants of England and Wales (or any
successor body thereto). Cyclacel shall make available all books and records
required for the purpose of that review and certification and the statements so
certified shall be final and binding between the Parties. The cost of the
examination, review and certification shall be the responsibility of Cyclacel if
Cyclacel is shown to have underestimated the monies payable to Sankyo in any
period being reviewed by more than [***] and the responsibility of Sankyo
otherwise. Following any such certification under Clause 3.10 or this Clause
3.12 the Parties shall forthwith make any adjustments necessary in respect of
the monies already paid to Sankyo in relation to the period in question.

  3.13  
Where Product is sold in a currency other than US dollars the rate of exchange
to be used for converting such other currency into US dollars shall be the
Telegraphic Transfer Middle (T.T.M.) rate at which such other currency can be
sold for US dollars at the Bank of England in London at the close of business on
the last working date for the period for which payment is to be made.

  3.14  
If any sums are unpaid by Cyclacel on the dates specified in this Clause then
Sankyo shall be entitled to charge Cyclacel interest on the amount unpaid at the
rate of [***] per annum above the prevailing Bank of England base lending rate
from time to time until payment in full is made.

  3.15  
Royalties or other payments payable under this Clause shall be payable hereunder
without any deduction or set-off save that if any law, regulation or treaty
requires a withholding of income taxes on any milestone, royalty payments or
other payments due to Sankyo, such taxes will be deducted for such payment and
paid to the appropriate taxing authorities. Certificates of such tax payments
shall be delivered to Sankyo along with the balance of the milestone, royalty
payment or other payments.

  3.16  
All payments made to Sankyo under the Agreement shall be made by telegraphic
transfer to the account of Sankyo Co. Ltd. at:

[***]
or any other bank account that may be notified by Sankyo to Cyclacel from time
to time.

 

- 17 -

--------------------------------------------------------------------------------

 

Portions of this Exhibit were omitted and have been filed separately with the
Secretary of the Securities and Exchange Commission pursuant to the Company’s
application requesting confidential treatment under Rule 24b-2 of the Securities
Exchange Act of 1934.

4.  
DEVELOPMENT AND COMMERCIALISATION

  4.1  
Cyclacel shall use commercially reasonable endeavours to pursue the development
and commercialisation of Product. For the purposes of this Clause 4 such
reasonable endeavours shall mean those efforts to develop and commercialise
Product which are at least the same as the efforts used by Cyclacel in relation
to the development and commercialisation of other Cyclacel pharmaceutical
products under similar commercial circumstances that have similar commercial
value and development status to the Product. Cyclacel shall carry out such
development in accordance with the key elements of the Development Plan which
plan may be updated and/or amended from time to time by Cyclacel and Cyclacel
shall provide Sankyo with a copy of any such updated or amended plan.

  4.2  
Without limiting the generality of the foregoing Cyclacel shall use its
reasonable endeavours [***]. If Cyclacel, its Affiliates or Cyclacel Licensees
have not [***] then provided such failure is not due to an Exceptional Cause
Sankyo shall be entitled to notify Cyclacel that it intends to terminate this
Agreement, Cyclacel shall have sixty (60) days to reply to Sankyo’s notification
and demonstrate that such failure was due to an Exceptional Cause. In the event
that the Parties agree that no such Exceptional Cause has been demonstrated then
Sankyo will have the right to terminate this Agreement upon thirty (30) days
written notice. [***]. The Parties shall, no later the fifth (5th) anniversary
of the Commencement Date discuss, in good faith and review such time periods
and, if appropriate, extend such period to [***].

  4.3  
Cyclacel shall within thirty (30) days of each anniversary of the Commencement
Date provide Sankyo with a written summary of the progress which Cyclacel, its
Affiliates and/or Cyclacel Licensees has made against the Development Plan in
the previous twelve (12) month period. In addition, Cyclacel shall provide
Sankyo within seven (7) months of each annual written report with a brief update
of such progress, which update may be given in writing by facsimile or by
e-mail.

  4.4  
In the event that Cyclacel decides to appoint a Third Party, or if Cyclacel
receives an offer from a Third Party, in either case to develop and/or
commercialise Product solely in Japan or in Japan as part of a multi-territory
sub-licence, it shall so notify Sankyo which notification shall not be made
prior to the first Successful Completion of a [***] Clinical Trial or the
decision by Cyclacel or a Cyclacel Licensee to initiate [***] Clinical Trials
and shall be accompanied by (i) details of the terms upon which Cyclacel is
prepared to offer for the appointment of a Third Party licensee and (ii) the
data and evidence on which Cyclacel or Cyclacel Licensee made such decision.
Sankyo shall notify Cyclacel within [***] of receipt of the Cyclacel
notification whether Sankyo wishes to develop and/or commercialise Product in
Japan. If Sankyo notifies Cyclacel that it does wish to develop and/or
commercialise Product in Japan the Parties shall meet and negotiate in good
faith the terms of appointment of Sankyo as Cyclacel Licensee in Japan. If
Sankyo notifies Cyclacel that it does not wish to develop and/or commercialise
Product in Japan or, in the case where Sankyo has notified Cyclacel that it does
wish to develop and/or commercialise Product in Japan but the Parties have
failed to agree terms within [***] of commencing negotiations, then Cyclacel
shall be free to appoint a Third Party to develop and/or commercialise Product
in Japan provided that such appointment shall be on terms no more favourable
than those terms which Cyclacel was prepared to offer Sankyo. For the avoidance
of doubt if Cyclacel receives an offer at any time by a Third Party to
commercialise Product on a worldwide basis, Cyclacel shall notify such Third
Party that Sankyo has a first refusal right of Marketing in Japan and Cyclacel
shall propose to such Third Party to accept such condition. In such case, the
conditions imposed under this Clause will be accelerated and Cyclacel will serve
notification to Sankyo who will respond in accordance with the provisions
herein. [***].

 

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--------------------------------------------------------------------------------

 

Portions of this Exhibit were omitted and have been filed separately with the
Secretary of the Securities and Exchange Commission pursuant to the Company’s
application requesting confidential treatment under Rule 24b-2 of the Securities
Exchange Act of 1934.

5.  
INTELLECTUAL PROPERTY — OWNERSHIP

  5.1  
Sankyo owns the Licensed IP and during the period of this Agreement shall not
assign, transfer, mortgage, charge or otherwise dispose of or encumber the same
without the prior written consent of Cyclacel.
    5.2  
Any and all Results shall vest in and be owned by Cyclacel.

6.  
INTELLECTUAL PROPERTY — PROSECUTION, MAINTENANCE AND ENFORCEMENT

  6.1  
Sankyo shall at its own cost and expense file, prosecute and maintain Licensed
Patent Rights, including for the avoidance of doubt all annuity and renewal fees
and shall be responsible for the conduct of any claims or proceedings relating
to the Licensed Patent Rights, including any interference or opposition
proceedings. Sankyo shall keep Cyclacel and/or Cyclacel’s nominated patent
attorney fully and promptly informed of such filing, prosecution and maintenance
of the Licensed Patent Rights including, without limitation, providing Cyclacel
and/or Cyclacel’s nominated patent attorney with copies of all correspondence
with any patent office and shall give Cyclacel the right to comment thereon
prior to any response being made to any such patent office. Sankyo shall ensure
that copies of all such patent office correspondence provided to Cyclacel for
comment shall be provided no less that sixty (60) days prior to the expiry of
any patent office deadline for response (if applicable) and Cyclacel shall
ensure that it provides Sankyo with its comments on such correspondence not less
than thirty (30) days prior to the expiry of any such patent office deadline for
response. Without limiting the generality of the foregoing obligation to keep
Cyclacel fully and promptly informed, Cyclacel may itself or through its patent
attorney make a written request to Sankyo or Sankyo’s nominated patent attorney
not more than once per Quarter for a progress report on the filing, prosecution
and maintenance of the Licensed Patent Rights during the previous Quarter and a
summary of the anticipated activities for the next Quarter. Notwithstanding this
Clause 6.1, Cyclacel shall pay the costs and expenses of such filing,
prosecution and maintenance upon Sankyo’s Quarterly invoice prior to its payment
of the first applicable milestone under Clauses 3.3.3, 3.3.4 or 3.3.5 and
thereafter such costs shall be borne by Sankyo, except that such costs borne by
Cyclacel after its payment of the Phase III entry milestone under 3.3.2, will be
creditable against the first applicable milestone under Clauses 3.3.3, 3.3.4 or
3.3.5.

 

- 19 -

--------------------------------------------------------------------------------

 

Portions of this Exhibit were omitted and have been filed separately with the
Secretary of the Securities and Exchange Commission pursuant to the Company’s
application requesting confidential treatment under Rule 24b-2 of the Securities
Exchange Act of 1934.

  6.2  
If Sankyo fails to prosecute or maintain the Licensed Patent Rights or any part
thereof it must notify Cyclacel in writing at least thirty (30) days prior to
the expiry of any material deadline for the taking of any steps in such action,
proceeding or prosecution and thereafter Cyclacel may in its sole discretion
prosecute or maintain the Licensed Patent Rights or any part thereof. If
Cyclacel decides to prosecute or maintain the Licensed Patent Rights or any part
thereof it shall do so at its own cost and expense and Sankyo shall promptly
arrange for its patent attorneys to transfer to Cyclacel all relevant papers,
files and other documents.

  6.3  
If either Party learns of any infringement or threatened infringement by a Third
Party of Licensed IP then such Party shall promptly notify the other Party and
shall provide such other Party with available evidence of such infringement.

  6.4  
In the event of an infringement of the Licensed IP Cyclacel shall have the first
right to bring any action or proceedings in accordance with the following:

  6.4.1  
Sankyo shall have the right to join as a co-plaintiff and be separately
represented by counsel of its own choice and at its own reasonable cost and
expense;

  6.4.2  
Sankyo shall otherwise at Cyclacel’s reasonable request and sole expense,
provide Cyclacel with reasonable assistance in relation to such action or
proceedings;

  6.4.3  
if Cyclacel succeeds in any proceedings whether at trial or by way of
settlement, Cyclacel shall be entitled to retain such award of costs and damages
made in such proceedings or settlement sum after having reimbursed Sankyo for
its costs and expenses incurred in assisting with the proceedings, subject to
Clause 6.4.1 where Cyclacel and Sankyo shall be equally entitled to retain such
award. If Cyclacel should lose such proceedings then Cyclacel shall on demand
reimburse Sankyo its costs and expenses incurred in assisting with the
proceedings;

  6.4.4  
if Cyclacel fails to take any such proceedings Sankyo may give Cyclacel notice
requiring Cyclacel to take such proceedings jointly with Sankyo within thirty
(30) days of the date of the notice and if Cyclacel fails to do so Sankyo shall
be entitled to do so at its own cost and expense and Cyclacel shall provide all
necessary assistance to Sankyo in relation to such proceedings including lending
its name to such proceedings as a co-plaintiff. If Cyclacel does not join with
Sankyo in taking part in such proceedings Cyclacel shall not be entitled to be
separately represented in such circumstances and Sankyo shall have sole conduct
of such proceedings including the right to settle them. If Sankyo succeeds in
any such proceedings it shall be entitled to retain the whole of any award of
costs and damages made or settlement sum paid. If Cyclacel joins with Sankyo in
taking part in such joint proceedings Cyclacel shall be entitled to be
separately represented in such circumstances and Sankyo shall jointly conduct
such proceedings with Cyclacel including the right to settle them. If Sankyo and
Cyclacel succeed in any such proceedings they shall share equally any award of
costs and damages made or settlement sum paid.

 

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Portions of this Exhibit were omitted and have been filed separately with the
Secretary of the Securities and Exchange Commission pursuant to the Company’s
application requesting confidential treatment under Rule 24b-2 of the Securities
Exchange Act of 1934.

  6.5  
If during the term of this Agreement either Party receives any notice, claim or
proceedings from any Third Party alleging infringement of that Third Party’s
intellectual property or know how as a result of either Party’s activities in
relation to this Agreement or use and exploitation of the Licensed IP the Party
receiving that notice shall:

  6.5.1  
forthwith notify the other Party of such notice, claim or proceedings;

  6.5.2  
make no admission of liability without the prior consent of the other Party;

  6.5.3  
subject to Clause 6.6.1 below Cyclacel shall conduct the defence of such claims
or proceedings, including the right to settle them which shall include taking a
licence from such Third Party, and Sankyo shall at Cyclacel’s cost and expense
co-operate with Cyclacel and its legal counsel and be available at Cyclacel’s
reasonable request to assist in such proceedings. Cyclacel shall keep Sankyo and
its legal counsel fully and promptly informed at all times as to the status of
Cyclacel’s defence.

  6.6  
Whilst Cyclacel conducts the defence of such claim or proceedings:

  6.6.1  
Cyclacel shall be responsible for and shall have conduct of such claims or
proceedings but shall fully consult with Sankyo in defending or settling such
claim or proceedings and Cyclacel shall not consent to any settlement, order or
judgment requiring Sankyo to pay costs, damages or provide other relief without
the written consent of Sankyo;

  6.6.2  
if any such proceedings are settled by way of licence, then to the extent any
royalties payable to a Third Party under such licence relate to Blocking IP they
shall be deducted from the royalties payable by Cyclacel to Sankyo to the same
extent and in the same manner as set out in Clause 3.6.

 

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Portions of this Exhibit were omitted and have been filed separately with the
Secretary of the Securities and Exchange Commission pursuant to the Company’s
application requesting confidential treatment under Rule 24b-2 of the Securities
Exchange Act of 1934.

  6.7  
At Cyclacel’s request and expense Sankyo shall promptly take all necessary steps
to facilitate any application for a supplementary protection certificate
extension of term or its equivalent, for any of the Licensed Patent Rights.

  6.8  
Within sixty (60) days after each Year-end, Sankyo shall provide Cyclacel with a
report describing the status of the Licensed Patent Rights and Cyclacel shall
provide Sankyo with a report describing the status of the any Patent Rights
owned by Cyclacel under Clause 5.2. Such reports shall include, at a minimum,
the patent country, patent and application numbers, filing date, issue date,
expiration date and any other relevant information, and shall be used to update
Schedule 3.

     
Sankyo’s report shall be sent to:
  Cyclacel Limited
 
  Dundee Technopole
 
  James Lindsay Place
 
  Dundee DD1 5JJ
 
  UK
 
  Attention: Chief Executive Officer
 
  Telephone: +44 1382 206062
 
  Facsimile: +44 1382 206067
 
   
Cyclacel’s report shall be sent to:
  Sankyo Company, Limited
 
  [***]

7.  
WARRANTIES AND LIABILITY

  7.1  
Each Party represents and warrants to the other Party that:

  7.1.1  
it has the corporate power and authority and the legal right to enter into this
Agreement and that this Agreement is a legal and valid obligation binding upon
such Party and enforceable in accordance with its terms. The execution, delivery
and performance of the Agreement by such Party does not conflict with any
agreement, instrument or understanding, oral or written, to which it is or by
which it is bound, nor violate any law or regulation of any court, governmental
body or administrative or other agency having jurisdiction over it;

  7.1.2  
it has not, and during the term of the Agreement will not, without the prior
written consent of the other Party grant any rights to any Third Party that
would conflict with the rights granted to the other Party hereunder;

  7.1.3  
it has the right to grant the licenses granted or to be granted herein;

  7.1.4  
it is a corporation duly organised, validly existing and in good standing under
the laws of the jurisdiction in which it is incorporated; and

  7.1.5  
the execution and delivery of this Agreement and the performance of such Party’s
obligations do not constitute a default or require any consent under any other
contractual obligation of such Party.

 

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Portions of this Exhibit were omitted and have been filed separately with the
Secretary of the Securities and Exchange Commission pursuant to the Company’s
application requesting confidential treatment under Rule 24b-2 of the Securities
Exchange Act of 1934.

  7.2  
Sankyo hereby warrants and undertakes that at the Commencement Date:

  7.2.1  
it owns absolutely, co-owns or has the right to licence the Licensed IP and the
CNDAC Patent Rights sufficient to grant the licences granted herein;

  7.2.2  
it has obtained from each and every inventor of the Licensed Patent Rights an
assignment of all rights such inventors may have in the Licensed Patent Rights
and save as otherwise disclosed to Cyclacel in writing it has not partially
assigned, licensed, mortgaged, charged or otherwise disposed of or encumbered
its right, title or interest in the same;

  7.2.3  
it has disclosed to Cyclacel all information relating to the Licensed IP and
CNDAC Patent Rights and any therapeutic use of the Candidate which has been
generated by Sankyo or Third Parties, provided that in the case of Third Parties
the disclosure of such information is not prohibited under any confidentiality
obligations; and

  7.2.4  
it has disclosed to Cyclacel the identity of the Third Parties which have
generated the information described in Clause 7.2.3; and

  7.2.5  
it has not granted to any other party any licence to research, develop or
commercialise the Candidate or CNDAC or any other compound falling within a
Valid Claim of the Licensed Patent Rights or the CNDAC Patent Rights.

  7.2.6  
it has manufactured the “samples of any capsules in storage”, which is
identified in Schedule 2, under GMP and it had obtained from [***] a statement
that [***] has stored the same under GMP.

  7.3  
Save as is expressly stated in Clause 7.1 or 7.2 NO REPRESENTATION, CONDITION OR
WARRANTY WHATSOEVER IS MADE OR GIVEN, EITHER EXPRESSED OR IMPLIED, BY OR ON
BEHALF OF CYCLACEL OR SANKYO. THERE ARE NO EXPRESS OR IMPLIED WARRANTIES OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, OR THAT THE USE OF THE
CANDIDATE WILL NOT INFRINGE ANY PATENT, COPYRIGHT, TRADEMARK, OR OTHER
PROPRIETARY RIGHTS. ALL CONDITIONS AND WARRANTIES WHETHER ARISING BY OPERATION
OF LAW OR OTHERWISE ARE HEREBY EXPRESSLY EXCLUDED INCLUDING ANY CONDITIONS AND
WARRANTIES TO THE EFFECT THAT ANY OF THE LICENSED IP IS VALID OR ENFORCEABLE.

 

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Portions of this Exhibit were omitted and have been filed separately with the
Secretary of the Securities and Exchange Commission pursuant to the Company’s
application requesting confidential treatment under Rule 24b-2 of the Securities
Exchange Act of 1934.

  7.4  
Cyclacel shall have the control of and be responsible for all Clinical Trials
conducted in relation to Product after execution of this Agreement including
such ongoing Clinical Trials described in Schedule 7 and shall be the sponsor of
such trials and in such capacity, shall, notwithstanding its indemnity rights
under Clause 7.5, be responsible for the initial payment of any compensation due
to any participants in such trials who suffer death or bodily injury pursuant to
any legal rights or applicable industry guidelines. If it has not already done
so prior to the Commencement Date, Sankyo shall submit to the FDA an Annual
Update, including Information Amendment, to [***] detailing an extension to the
shelf-life of Product and shall transfer [***] for such ongoing Clinical Trial
to Cyclacel. In the event that the FDA does not accept an extension to the shelf
life of Product for use in such ongoing Clinical Trials Cyclacel’s obligations
hereunder in relation to such ongoing Clinical Trials shall be suspended until
such time as the FDA has accepted the use of Product in such trials. Cyclacel
(i) shall continue to conduct such ongoing Clinical Trial after the Commencement
Date in compliance with the Phase I protocol provided by Sankyo, (ii) shall not
amend or alter such protocol and (iii) shall not terminate such ongoing Clinical
Trial at least until the end of December 2003 for ethical reasons unless
otherwise terminated in accordance with the protocol.

  7.5  
Subject to the provisions of Clause 7.6 Sankyo shall be responsible for and
shall indemnify Cyclacel and its directors, officers, servants and agents
(collectively “the Indemnified Party”) against any and all liability, loss,
damage, cost and expense (including legal costs) incurred or suffered by the
Indemnified Party as a result of a breach of warranty by Sankyo under Clauses
7.1 or 7.2 or as a result of Sankyo’s activities in relation to the development
of Candidate or Product prior to the Commencement Date of this Agreement. An
Indemnified Party that intends to claim indemnification under this Clause 7.5
shall promptly notify Sankyo of any Third Party claim in respect of which the
Indemnified Party intends to claim that indemnification. The Indemnified Party
shall not compromise or settle the claim prior to any such notice. Sankyo may
assume and control the defence of any such Third Party claim, provided however,
that an Indemnified Party shall have the right to retain its own counsel at its
own cost and expense, if representation of that Indemnified Party by the counsel
retained by Sankyo would be inappropriate due to actual or potential differing
interests between the Indemnified Party and any other party represented by that
counsel in the proceedings. The Indemnified Party shall co-operate with Sankyo
and its legal representatives in the investigation of any matter covered by this
indemnification.

 

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Portions of this Exhibit were omitted and have been filed separately with the
Secretary of the Securities and Exchange Commission pursuant to the Company’s
application requesting confidential treatment under Rule 24b-2 of the Securities
Exchange Act of 1934.

  7.6  
Cyclacel shall be responsible for and shall indemnify Sankyo and its Affiliates,
directors, officers, servants and agents (collectively “the Indemnified Party”)
against any and all liability, loss, damage, cost and expense (including legal
costs) incurred or suffered by the Indemnified Party as a result of any claim
brought against Sankyo or its Affiliates by a Third Party which arises

  7.6.1  
as a result of the activities by Cyclacel or its Affiliates, Cyclacel Licensees,
agents or distributors under this Agreement in relation to the development or
commercialisation of the Product being a claim that use of any Product has
caused death or bodily injury; or

  7.6.2  
as a result of a breach of warranty by Cyclacel under Clause 7.1.

An Indemnified Party that intends to claim indemnification under this Clause 7.6
shall promptly notify Cyclacel of any Third Party claim in respect of which the
Indemnified Party intends to claim the indemnification. The Indemnified Party
shall not compromise or settle the claim prior to any such notice. Cyclacel may
assume and control the defence of any such Third Party claim, provided however,
that an Indemnified Party shall have the right to retain its own counsel at its
own cost and expense, if representation of that Indemnified Party by the counsel
retained by Cyclacel would be inappropriate due to actual or potential differing
interests between the Indemnified Party and any other party represented by that
counsel in the proceedings. The Indemnified Party shall co-operate with Cyclacel
and its legal representatives in the investigation of any matter covered by this
indemnification.

  7.7  
Subject to the indemnities in Clauses 7.5 and 7.6 neither Party shall be liable
to the other in contract, tort, negligence, breach of statutory duty or
otherwise for any loss, damage, costs or expenses of any nature whatsoever
incurred or suffered by the other or its Affiliates:

  7.7.1  
of a direct nature where the same is a loss of turnover, profits, business or
goodwill; or

  7.7.2  
an indirect or consequential nature including any indirect or consequential
economic loss or other indirect or consequential loss of turnover, profits,
business or goodwill.

8.  
CONFIDENTIALITY

  8.1  
Subject to Clause 8.6, each of the Parties undertakes and agrees to:

  8.1.1  
only use the Confidential Information for the purposes envisaged under this
Agreement and not to use the same for any other purpose whatsoever;

  8.1.2  
ensure that only those of their officers, consultants, employees (including
without limitation directors), sublicensees, Affiliates and such third parties
who are directly concerned with the carrying out of this Agreement have access
to the Confidential Information on a strictly applied “need to know” basis and
are informed of the secret and confidential nature of it;

 

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Portions of this Exhibit were omitted and have been filed separately with the
Secretary of the Securities and Exchange Commission pursuant to the Company’s
application requesting confidential treatment under Rule 24b-2 of the Securities
Exchange Act of 1934.

  8.1.3  
keep the Confidential Information secret and confidential and not directly or
indirectly to disclose or permit to be disclosed, make available or permit to be
made available the same to any Third Party for any reason without the prior
written consent of the Disclosing Party (except as set out in the Development
Plan and then under equivalent confidentiality provisions);
    8.1.4  
clearly identify the Confidential Information as confidential.

  8.2  
The obligations of confidentiality referred to in Clause 8.1 shall not extend to
any Confidential Information which:

  8.2.1  
is or becomes generally available to the public otherwise than by reason of
breach by a Recipient Party of the provisions of that Clause; or

  8.2.2  
is known to the Recipient Party and is at its free disposal prior to its receipt
from the Disclosing Party in circumstances where the Recipient Party holds
evidence that it has not been derived from access to the Disclosing Party’s
Confidential Information; or

  8.2.3  
is mutually agreed in writing by the Parties to no longer be confidential; or

  8.2.4  
is subsequently disclosed to the Recipient Party without obligations of
confidentiality by a Third Party owing no such obligations to the Disclosing
Party in respect of that Confidential Information; or

  8.2.5  
is required by a Legal Requirement to be disclosed and then only (subject to
Clause 8.3) when prompt written notice of this requirement has been given to the
Disclosing Party so that it may, if so advised, seek appropriate relief to
prevent such disclosure provided always that in such circumstances such
disclosure shall be only to the extent so required and shall be subject to prior
consultation with the Disclosing Party with a view to agreeing timing and
content of such disclosure.

  8.3  
The requirement under Clause 8.2.5 to notify the Disclosing Party when
Confidential Information is required to be disclosed pursuant to Legal
Requirement shall not apply when such disclosure is required as part of any
regulatory submission or approval process.

 

- 26 -

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Portions of this Exhibit were omitted and have been filed separately with the
Secretary of the Securities and Exchange Commission pursuant to the Company’s
application requesting confidential treatment under Rule 24b-2 of the Securities
Exchange Act of 1934.

  8.4  
All Confidential Information disclosed by the Disclosing Party to the Recipient
Party shall remain the property of the Disclosing Party subject to the use or
disposal of Materials pursuant to the Development Plan. In the event that a
court or Competent Authority assumes partial or complete control over the assets
of a Recipient Party based on the insolvency or bankruptcy of that Party, the
Recipient Party shall:

  8.4.1  
promptly notify such court or Competent Authority:

  (a)  
that Confidential Information received from the Disclosing Party under this
Agreement remains the property of the Disclosing Party; and

  (b)  
of the confidentiality obligations under this Agreement; and

  8.4.2  
to the extent permitted by law, take all steps necessary or desirable to
maintain the confidentiality and security of the Disclosing Party’s Confidential
Information and to ensure that the court or Competent Authority maintains that
Confidential Information in confidence in accordance with this Agreement.

  8.5  
The Parties agree that the obligations of confidentiality set out in this Clause
8 shall continue to apply following the expiration or termination of this
Agreement for so long as there is Confidential Information which is not the
subject of Clause 8.2.

  8.6  
Sankyo acknowledges and agrees that Cyclacel shall be free to publish the
results arising pursuant to the exercise of its rights and licences under this
Agreement. Such publication may also include Licensed Know How comprising data
related to the Candidate and the development thereof provided that Cyclacel
shall give Sankyo prior written notice of any publication containing such
Licensed Know How and Sankyo shall have thirty (30) days to comment upon the
same. Cyclacel shall consider any comments from Sankyo in good faith. Cyclacel
shall be free to publish the Licensed Know How relating to the Candidate and/or
its development following such thirty (30) day period.

  8.7  
Results published under Clause 8.6, will be considered to be covered by Clause
8.2.3 in respect of future publications and Clause 8.6 will no longer apply.

9.  
TERM AND TERMINATION

  9.1  
This Agreement shall commence on the Commencement Date and shall continue in
force until no payments are due hereunder or until termination under this Clause
9 whichever is the earlier.

  9.2  
Cyclacel may terminate this Agreement at any time upon six (6) months’ (upon
twelve (12) months’ if after Product launch) written notice to Sankyo for
technical, scientific, efficacy, safety or commercial reasons.

 

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Portions of this Exhibit were omitted and have been filed separately with the
Secretary of the Securities and Exchange Commission pursuant to the Company’s
application requesting confidential treatment under Rule 24b-2 of the Securities
Exchange Act of 1934.

  9.3  
Cyclacel on the one hand and Sankyo on the other hand (the “Terminating Party”)
shall have the right to terminate this Agreement upon giving thirty (30) days’
written notice of termination to the other (the “Defaulting Party”) upon the
occurrence of any of the following events at any time during this Agreement:

  9.3.1  
the Defaulting Party committing a material breach of this Agreement which in the
case of a breach capable of remedy shall not have been remedied within thirty
(30) days, or sixty (60) days in case of breach by Cyclacel Licensee as
permitted under Clause 2.3, of the receipt by it of a notice identifying the
breach and requiring its remedy. The Parties acknowledge that non-payment of
sums due by Cyclacel may amount to a material breach having regard to the level
of non-payment and the reasons given by Cyclacel for such non-payment. The
Parties agree that any notification of material breach pursuant to this Clause
9.3 shall be sent to the chief executive officer of the Defaulting Party;

  9.3.2  
if an Insolvency Event occurs in relation to the Defaulting Party.

10.  
EFFECTS OF TERMINATION

  10.1  
Upon termination of this Agreement by Sankyo pursuant to Clause 4.2 or Clause
9.3 or by Cyclacel pursuant to Clause 9.2:

  10.1.1  
the licences granted by Sankyo pursuant to Clause 2 under the Licensed IP, and
CNDAC Patent Rights shall terminate;

  10.1.2  
if Sankyo so requests in writing, Cyclacel shall immediately deliver up to
Sankyo the Licensed IP, CNDAC Patent Rights and Documents containing or making
any reference to the Licensed IP or CNDAC Patent Rights as soon as reasonably
practicable. Within sixty (60) days of such termination, the Parties shall
negotiate and agree a separate Termination Agreement in regard to the transfer
of ownership and return to Sankyo of all regulatory submissions, and documents
filed with a Regulatory Authority for the Product in the Territory. The Parties
shall cooperate in order to provide the appropriate notice and documentation to
the Regulatory Authority for each submission as required by applicable law; and

  10.1.3  
if Sankyo wishes to obtain an exclusive licence to the Cyclacel Results it shall
so notify Cyclacel and Cyclacel shall grant to Sankyo an exclusive, worldwide,
sub-licensable licence to the Cyclacel Results the commercial terms of which
shall be negotiated in good faith by the Parties, having regard to the
(i) length of time this Agreement has been in force, (ii) the development
efforts expended by Cyclacel, and (iii) the cause of termination. In the event
the Parties fail to agree the terms of such licence within sixty (60) days of
the date upon which Cyclacel receives written notice from Sankyo that it wishes
to obtain such a licence, the matter shall be referred to Expert’s Decision for
resolution, whilst such exclusive license shall be temporarily granted to Sankyo
during such period.

 

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Portions of this Exhibit were omitted and have been filed separately with the
Secretary of the Securities and Exchange Commission pursuant to the Company’s
application requesting confidential treatment under Rule 24b-2 of the Securities
Exchange Act of 1934.

  10.2  
In no event shall termination of this Agreement:

(i) relieve the Parties of any liability arising out of events occurring before
the effective date of such termination.
(ii) affect the continued operation or enforcement of any provision of this
Agreement which by its express terms is to survive termination.
(iii) release either Party from the obligation to pay any amounts that become
due on or before the effective date of termination.

  10.3  
Upon termination of this Agreement by Sankyo pursuant to Clause 9.3 and at the
request of any Cyclacel Licensee Sankyo shall enter into a direct licensing
arrangement with such Cyclacel Licensee on terms substantially similar to those
contained herein save that any licence granted by Sankyo to such Cyclacel
Licensee shall be consistent with the terms of the licence granted by Cyclacel
in relation to field, territory, exclusivity/non-exclusivity, whether there is a
right to sub-license, and payment provisions and provided that: (i) such
sub-licensee is in good standing under and in compliance with all material terms
and conditions of the sublicence agreement and this Agreement; (ii) should
Sankyo’s ongoing direct costs related to such sublicense including but not
limited to IP costs under Clause 6.1, not be fully reimbursed by revenue from
such sublicensee on an annual basis then Sankyo can require that such
sublicensee reimburse Sankyo’s costs, such reimbursement to be credited against
future revenue payable to Sankyo by such sublicensee; and (iii) Sankyo’s
obligations under such sublicense agreement are no greater than those under this
Agreement.

11.  
ASSIGNMENT/SUB-CONTRACTING

  11.1  
Neither this Agreement nor any interest hereunder shall be assignable by either
Cyclacel or by Sankyo without the written consent of the other, such consent not
to be unreasonably withheld, provided however that any Party may assign this
Agreement to any corporation with which it may merge or consolidate, or to which
it may transfer all or substantially all of its assets to which this Agreement
relates, subject to obtaining a direct deed of undertaking from such corporation
addressed to the other Parties agreeing to be bound by all the terms of this
Agreement.

 

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Portions of this Exhibit were omitted and have been filed separately with the
Secretary of the Securities and Exchange Commission pursuant to the Company’s
application requesting confidential treatment under Rule 24b-2 of the Securities
Exchange Act of 1934.

12.  
FORCE MAJEURE

  12.1  
If a Party (the “Affected Party”) is unable to carry out any of its obligations
under this Agreement due to Force Majeure this Agreement shall remain in effect
but the Affected Party’s relevant obligations under this Agreement and the
corresponding obligations of the other Party (“Non-Affected Party”) under this
Agreement, shall be suspended for a period equal to the circumstance of Force
Majeure provided that:

  12.1.1  
the suspension of performance is of no greater scope than is required by the
Force Majeure;

  12.1.2  
the Affected Party immediately gives the Non-Affected Party prompt written
notice describing the circumstance of Force Majeure, including the nature of the
occurrence and its expected duration, and continues to furnish regular reports
during the period of Force Majeure and notifies the Non-Affected Party
immediately of the cessation of the Force Majeure;

  12.1.3  
the Affected Party uses all reasonable efforts to remedy its inability to
perform and to mitigate the effects of the circumstance of Force Majeure; and

  12.1.4  
a soon as practicable after the event which constitutes Force Majeure the
Parties discuss how best to continue their operations as far as possible in
accordance with this Agreement.

13.  
GOVERNING LAW

  13.1  
The validity, construction and interpretation of this Agreement and any
determination of the performance which it requires shall be governed by the laws
of England.

14.  
JURISDICTION

  14.1  
In the event of any material dispute concerning rights or obligations under this
Agreement then the Parties shall comply with the following procedure: the Chief
Executive Officer of Cyclacel and the President of Sankyo or its nominee shall
be notified in writing of the dispute by either Party. The Chief Executive
Officer of Cyclacel and the President of Sankyo or their nominees shall meet to
resolve the dispute in good faith. If such resolution is not reached within
sixty (60) days of such written notice, then the dispute shall be referred to
the non-exclusive jurisdiction of the courts of England and Wales.

 

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Portions of this Exhibit were omitted and have been filed separately with the
Secretary of the Securities and Exchange Commission pursuant to the Company’s
application requesting confidential treatment under Rule 24b-2 of the Securities
Exchange Act of 1934.

15.  
WAIVER

  15.1  
Save as expressly provided in this Agreement neither Party shall be deemed to
have waived any of its rights or remedies whatsoever unless the waiver is made
in writing, signed by a duly authorised representative of that Party and may be
given subject to any conditions thought fit by the grantor. Unless otherwise
expressly stated any waiver shall be effective only in the instance and for the
purpose for which it is given.

  15.2  
No delay or failure of any Party in exercising or enforcing any of its rights or
remedies whatsoever shall operate as a waiver of those rights or remedies or so
as to preclude or impair the exercise or enforcement of those rights or
remedies. No single or partial exercise or enforcement of any right or remedy by
any Party shall preclude or impair any other or further exercise or enforcement
of that right or remedy by that Party.

16.  
SEVERANCE OF TERMS

  16.1  
If the whole or any part of this Agreement is or becomes or is declared illegal,
invalid or unenforceable in any jurisdiction for any reason (including both by
reason of the provisions of any legislation and also by reason of any decision
of any court or Competent Authority which either has jurisdiction over this
Agreement or has jurisdiction over any of the Parties):

  16.1.1  
in the case of the illegality, invalidity or un-enforceability of the whole of
this Agreement it shall terminate in relation to the jurisdiction in question;
or

  16.1.2  
in the case of the illegality, invalidity or un-enforceability of part of this
Agreement that part shall be severed from this Agreement in the jurisdiction in
question and that illegality, invalidity or un-enforceability shall not in any
way whatsoever prejudice or affect the remaining parts of this Agreement which
shall continue in full force and effect provided that the said remaining parts
continue to satisfy the commercial intentions of the Parties and provided that
the remaining parts do constitute a substantial part of this Agreement.

17.  
ENTIRE AGREEMENT/VARIATIONS

  17.1  
This Agreement constitutes the entire agreement and understanding between the
Parties and supersedes all prior oral or written understandings, arrangements,
representations or agreements between them relating to the subject matter of
this Agreement. The Parties acknowledge that no claims shall arise in respect of
any understandings, arrangements, representations or agreements so superseded.
No director, employee or agent of any Party is authorised to make any
representation or warranty to another Party not contained in this Agreement, and
each Party acknowledges that it has not relied on any such oral or written
representations or warranties. Nothing in this Agreement removes or overrides
any right of action by any Party in respect of any fraudulent misrepresentation,
fraudulent concealment or other fraudulent action.

  17.2  
No variation, amendments, modification or supplement to this Agreement shall be
valid unless agreed in writing in the English language and signed by a duly
authorised representative of each Party.

 

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Portions of this Exhibit were omitted and have been filed separately with the
Secretary of the Securities and Exchange Commission pursuant to the Company’s
application requesting confidential treatment under Rule 24b-2 of the Securities
Exchange Act of 1934.

18.  
NOTICES

  18.1  
Any notice or other communication given pursuant to or made under or in
connection with the matters contemplated by this Agreement shall be in writing
in the English language and shall be delivered by hand or by courier or shall be
sent by post or recorded delivery to the address of the recipient set out in
Schedule 8 or as specified by the recipient from time to time in accordance with
Clause 18.3. Notices sent by fax or E-Mail shall not be valid of themselves and
must be confirmed in hard copy form by hand or by recorded delivery.
    18.2  
Any notice given pursuant to this Clause shall be deemed to have been received:

  18.2.1  
if delivered by hand or by courier, at the time of delivery; or
    18.2.2  
if sent by recorded delivery, at the time of delivery.

  18.3  
A Party may notify the other Parties to this Agreement of a change of its name,
relevant addressee, address or facsimile number for the purposes of
    18.4  
8 provided that such notification shall only be effective on:

  18.4.1  
the date specified in the notification as the date on which the change is to
take place; or

  18.4.2  
if no date is specified or the date specified is less than five (5) clear
Business Days after the date on which the notice is given, the date falling five
(5) clear Business Days after notice of any such change has been given.

  18.5  
For the avoidance of doubt, the Parties agree that the provisions of this Clause
shall not apply in relation to the service of Service Documents (as defined in
Clause 18.5).

  18.6  
“Service Document” means a writ, summons, order, judgement or other document
related to or in connection with any Court proceeding, cause, matter or action
arising out of or connected in any way with this Agreement.

19.  
COUNTERPARTS

  19.1  
This Agreement may be executed in any number of counterparts and by the Parties
on separate counterparts, each of which when so executed shall be an original of
this Agreement, and all of which shall together constitute one and the same
instrument. Complete sets of counterparts shall be lodged with each Party.

 

- 32 -

--------------------------------------------------------------------------------

 

Portions of this Exhibit were omitted and have been filed separately with the
Secretary of the Securities and Exchange Commission pursuant to the Company’s
application requesting confidential treatment under Rule 24b-2 of the Securities
Exchange Act of 1934.

20.  
THIS AGREEMENT NOT TO CONSTITUTE A PARTNERSHIP

  20.1  
Nothing in this Agreement and no action taken by the Parties pursuant to this
Agreement shall constitute or be deemed to constitute a partnership,
association, joint venture or other co-operative entity between the Parties and
neither Party shall have any authority to bind the other in any way except as
provided in this Agreement.

21.  
COSTS

  21.1  
Each Party shall bear its own costs, legal fees and other expenses incurred in
the negotiation, preparation, execution and implementation of this Agreement and
the documents referred to herein unless otherwise set forth in this Agreement.

22.  
PUBLICITY

  22.1  
No public announcements or other disclosure to third parties concerning the
financial or other terms of this Agreement shall be made, whether directly or
indirectly, by either Party to this Agreement, except as may be legally required
or as may be required for recording purposes, without first obtaining the
approval of the other Party and agreement upon the nature and text of such
announcement or disclosure, with the exception that:

  22.1.1  
a Party may disclose the full terms of this Agreement to its investment bankers,
lawyers, accountants and other professional advisors or a Third Party seeking to
invest in, lend funds to acquire or merge with or be acquired by such Party
without the other Party’s prior approval provided that such disclosure is made
under terms of confidentiality whether express or implied; and

  22.1.2  
a Party may disclose the terms of this Agreement to any securities exchange or
regulatory authority or government body to which either Party is subject or
submits, wherever situated, including (without limitation) the US Securities
Exchange Commission, the London Stock Exchange or the Panel on Take-overs and
Mergers, if and to the extent required by the force of law provided that it
takes advantage of all provisions to keep confidential as many terms of this
Agreement as possible.

 

- 33 -

--------------------------------------------------------------------------------

 

Portions of this Exhibit were omitted and have been filed separately with the
Secretary of the Securities and Exchange Commission pursuant to the Company’s
application requesting confidential treatment under Rule 24b-2 of the Securities
Exchange Act of 1934.

  22.2  
In respect of those public announcements and disclosures not permitted by Clause
22.1 the Party desiring to make any such public announcement or other disclosure
shall inform the other Party of the proposed announcements or disclosure in
reasonably sufficient time prior to public release, and shall provide the other
Party with a written copy thereof, in order to allow such Party to comment upon
such announcement or disclosure, which comments shall be provided by such other
Party within five (5) Business Days. The Parties shall jointly develop press
releases and information materials that can be used by either Party for
presentations to financial advisers, the UK Stock Exchange, and similar
recipients.

IN WITNESS WHEREOF the Parties have executed this Agreement as of the
Commencement Date.

         
SIGNED by
  )    
for and on behalf of
  )   Takashi Shoda, President and Representative Director
SANKYO CO. LTD.
  )    
Date:
  )    
 
       
SIGNED by
  )    
for and on behalf of
  )   Spiro Rombotis, Chief Executive Officer
CYCLACEL LIMITED
  )    
Date:
  )    

 

- 34 -

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Portions of this Exhibit were omitted and have been filed separately with the
Secretary of the Securities and Exchange Commission pursuant to the Company’s
application requesting confidential treatment under Rule 24b-2 of the Securities
Exchange Act of 1934.
SCHEDULE 1
DEVELOPMENT PLAN
[***]

 

- 35 -

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Portions of this Exhibit were omitted and have been filed separately with the
Secretary of the Securities and Exchange Commission pursuant to the Company’s
application requesting confidential treatment under Rule 24b-2 of the Securities
Exchange Act of 1934.
SCHEDULE 2
LICENSED MATERIALS
[***]

 

- 36 -

--------------------------------------------------------------------------------

 

Portions of this Exhibit were omitted and have been filed separately with the
Secretary of the Securities and Exchange Commission pursuant to the Company’s
application requesting confidential treatment under Rule 24b-2 of the Securities
Exchange Act of 1934.
SCHEDULE 3
LICENSED PATENT RIGHTS
Patent Rights owned by Sankyo
A. Licensed Patent Rights

     
[*] (Crystal of CS-682)
  Publication No. WO 02/064609 A1 (22.08.2002)
Crystal of pyrimidine nucleoside derivative
   

                                  Country   Appln. No.   Appln. Date   Patent
No.     Patent Date     Expiry Date  
 
                               
PCT
  [*]   06/02/2002                        
Australia
  [*]                            
Brazil
  [*]                            
Canada
  [*]                            
China
  [*]                            
Colombia
  [*]                            
Czech Republic
  [*]                            
EPC
  [*]                             Austria, Belgium, Switzerland & Liechtenstein,
Cyprus, Germany, Denmark, Spain, Finland, France, Great Britain, Greece,
Ireland, Italy, Luxembourg, Monaco, Netherlands, Portugal, Sweden, Turkey,

[*]
  [*]                            
Hungary
  [*]                            
[*]
  [*]                            
Israel
  [*]                            
India
  [*]                            
Korea
  [*]                            
Mexico
  [*]                            
[*]
  [*]                            
New Zealand
  [*]                            
[*]
  [*]                            
[*]
  [*]                            
Russia
  [*]                            
[*]
  [*]                            
[*]
  [*]                            
U. S. A.
  [*]                            
[*]
  [*]                            
[*]
  [*]                            
Japan
  [*]   [*]                        

 

 

--------------------------------------------------------------------------------

 

Portions of this Exhibit were omitted and have been filed separately with the
Secretary of the Securities and Exchange Commission pursuant to the Company’s
application requesting confidential treatment under Rule 24b-2 of the Securities
Exchange Act of 1934.
B. Licensed Patent Rights
[*] (CS-682)
Pyrimidine nucleoside derivatives having anti-tumor activity, their preparation
and use

                      Country   Appln. No.   Appln. Date   Patent No.   Patent
Date   Expiry Date
 
                   
Australia
  [*]   30/09/1992   654212   15/02/1995   [*]
Brazil (pipeline)
  [*]   13/05/1997   PI 1100621-8   07/12/1999   [*]
Canada
  [*]   29/09/1992            
China
  [*]   30/09/1992   92113067.8   03/08/1996   [*]
Czech Republic
  [*]   30/09/1992   289477   29/11/2001   [*]
EPC
  92308904.9   30/09/1992   0536936   14/08/1996   [*] Austria, Belgium,
Switzerland & Liechtenstein, Germany, Denmark, Spain, France, Great Britain,
Greece, Ireland, Italy, Luxembourg, Monaco, Netherlands, Portugal, Sweden

Finland
  [*]   [*]   105556   15/09/2000   [*]
Hong Kong
  [*]       2042/96   14/08/1996   [*]
Hungary
  [*]   30/09/1992   [*]   [*]   [*]
Hungary (pipeline)
  [*]   [*]   211851   13/08/1996   [*]
Indonesia
  [*]   [*]   ID0002812   22/06/1998   [*]
Israel
  [*]   [*]   103301   14/10/1997   [*]
Korea
  [*]   [*]   255491   15/02/2000   [*]
Mexico
  [*]   [*]            
Norway
  [*]   [*]   179675   27/11/1996   [*]
New Zealand
  [*]   [*]   244574   14/06/1994   [*]
[*]
  [*]   [*]            
Russian Fed.
  [*]   [*]   2085557   27/07/1997   [*]
Thailand
  [*]   [*]   9368   [*]   [*]
Taiwan
  [*]   [*]   [*]   [*]   29/09/2012
U. S. A.
  [*]   [*]   [*]        
U. S. A.
  [*]   [*]   5691319   25/11/1997   25/11/2014
South Africa
  [*]   [*]   [*]   [*]   [*]
Japan
  [*]   [*]   2569251   03/10/1996   [*]

 

- 2 -

--------------------------------------------------------------------------------

 

Portions of this Exhibit were omitted and have been filed separately with the
Secretary of the Securities and Exchange Commission pursuant to the Company’s
application requesting confidential treatment under Rule 24b-2 of the Securities
Exchange Act of 1934.
SCHEDULE 4
CNDAC PATENT RIGHTS
C. CNDAC Patent Rights

      [*]   2002. 8.30 (CNDAC: Active form of CS-682)     Pyrimidine nucleoside
derivatives    

                      Country   Appln. No.   Appln. Date   Patent No.   Patent
Date   Expiry Date
 
                   
[*]
  [*]   [*]   [*]   [*]   [*]
[*]
  [*]   [*]   [*]   [*]   [*]
 
      [*]            
[*]
  [*]   [*]   [*]   [*]   [*]
[*]
  [*]   [*]   [*]   [*]   [*]
[*]
  [*]   [*]   [*]   [*]   [*]
[*]
  [*]   [*]   [*]   [*]   [*]
[*]
  [*]   [*]   [*]        
U. S. A.
  [*]   [*]   5616567   01/04/1997   01/04/2014
U. S. A.
  [*]   [*]   5654420   05/08/1997   05/08/2014
[*]
  [*]   [*]   [*]   [*]   [*]

 

 

--------------------------------------------------------------------------------

 

Portions of this Exhibit were omitted and have been filed separately with the
Secretary of the Securities and Exchange Commission pursuant to the Company’s
application requesting confidential treatment under Rule 24b-2 of the Securities
Exchange Act of 1934.
SCHEDULE 5
SUCCESSFUL COMPLETION CRITERIA
[***]

 

 

--------------------------------------------------------------------------------

 

Portions of this Exhibit were omitted and have been filed separately with the
Secretary of the Securities and Exchange Commission pursuant to the Company’s
application requesting confidential treatment under Rule 24b-2 of the Securities
Exchange Act of 1934.
SCHEDULE 6
RETAINED TECHNICAL DATA
[***]

 

 

--------------------------------------------------------------------------------

 

Portions of this Exhibit were omitted and have been filed separately with the
Secretary of the Securities and Exchange Commission pursuant to the Company’s
application requesting confidential treatment under Rule 24b-2 of the Securities
Exchange Act of 1934.
SCHEDULE 7
COMMITTED CLINICAL TRIALS
[***]

 

 

--------------------------------------------------------------------------------

 

Portions of this Exhibit were omitted and have been filed separately with the
Secretary of the Securities and Exchange Commission pursuant to the Company’s
application requesting confidential treatment under Rule 24b-2 of the Securities
Exchange Act of 1934.
SCHEDULE 8
ADDRESSES FOR NOTICES
Cyclacel
Chief Executive Officer
Dundee Technopole
James Lindsay Place
Dundee DD1 5JJ
UK
Tel: +44 1382 206062
Fax: +44 1382 206067
Sankyo Co., Ltd.
Director, Licensing Department
5-1 Nihonbashi-honcho 3-chome,
Chuo-ku, Tokyo 103-8426
JAPAN
Tel: [***]
Fax: [***]

 

- 2 -

--------------------------------------------------------------------------------

 

Portions of this Exhibit were omitted and have been filed separately with the
Secretary of the Securities and Exchange Commission pursuant to the Company’s
application requesting confidential treatment under Rule 24b-2 of the Securities
Exchange Act of 1934.
SCHEDULE 9
EXPERT’S DECISION

1  
In the event the Parties fail to agree upon an appropriate level of
consideration pursuant to Clause 10.1.3, the matter shall be determined by an
expert (“Expert”) which Expert shall be suitably qualified to determine that
particular matter and who shall be nominated jointly by the Parties or, failing
agreement between the Parties within twenty (20) business days of a written
request by either Party to the other seeking to initiate the Expert’s decision
procedure, either Party may request the International Chamber of Commerce
(Paris) to nominate the Expert.

2  
The Parties shall within fourteen (14) days of the appointment of the Expert
file written submissions setting out their respective view on appropriate levels
of consideration and appropriate accompanying documents.

3  
In determining the matter referred pursuant to Clause 10.1.3 the Expert shall
take into account (i) the length of time this Agreement has been in force,
(ii) the development efforts expended by Cyclacel; and (iii) the cause of
termination of the Agreement.
  4  
In all cases the terms of appointment of the Expert by whomsoever appointed
shall include:

  4.1  
a commitment by the Parties to share equally the Expert’s fee;

  4.2  
a requirement on the Expert to act fairly as between the Parties and according
to the principles of natural justice;

  4.3  
a requirement on the Expert to hold professional indemnity insurance both then
and for three years following the date of his determination;

  4.4  
a commitment by the Parties to supply to the Expert all such assistance,
documents and information as he or she may require for the purpose of his or her
determination.

  4.5  
a commitment by the Parties that all negotiations connected with the dispute
shall be conducted in confidence and without prejudice to the rights of the
Parties in any future proceedings.

 

- 3 -

--------------------------------------------------------------------------------

 

Portions of this Exhibit were omitted and have been filed separately with the
Secretary of the Securities and Exchange Commission pursuant to the Company’s
application requesting confidential treatment under Rule 24b-2 of the Securities
Exchange Act of 1934.

5  
The Expert’s decision shall be final and binding on the Parties (save in the
case of negligence or manifest error).

6  
The Parties expressly acknowledge and agree that they do not intend the
reference to the Expert to constitute an arbitration within the scope of any
arbitration legislation, the Expert’s decision is not a quasi judicial procedure
and the Parties shall have no right of appeal against the Expert’s decision
provided always that this shall not be construed as waiving any rights the
Parties might have against the Expert for breaching his or her terms of
appointment or otherwise being negligent.

 

- 4 -

--------------------------------------------------------------------------------

 

Portions of this Exhibit were omitted and have been filed separately with the
Secretary of the Securities and Exchange Commission pursuant to the Company’s
application requesting confidential treatment under Rule 24b-2 of the Securities
Exchange Act of 1934.

     
(SANKYO LOGO) [c17919c1791901.gif]
  Licensing Department
SANKYO CO., LTD.
3-5-1, Nihonbashi Honcho, Chuo-ku, Tokyo, 103-8476, Japan
Phone: 81-3-5255-7084, Fax: 81-3-5255-7086

Spiro Rombotis
Chief Executive Officer
Cyclacel Limited
Dundee Technopole
James Lindsay Place
Dundee, DD1 5JJ
Scotland, United Kingdom

Re:   
Amendment to CS-682 License Agreement
Between Sankyo Co., Ltd. and Cyclacel Limited

Dear Mr. Rombotis,
As per your request, this letter is to confirm that we have agreed to amend the
CS-682 License Agreement as follows:

1.  
Clause 2.1.2 of CS-682 License Agreement is hereby amended by deleting the word
“terminable” from that Clause. As amended, the said Clause shall read as
follows:

  2.1.2  
a non-exclusive, royalty-free sub-license under the CNDAC Patent Rights which
are licensed with a right to sub-license by the Professors to Sankyo.

2.  
Cyclacel agrees to be responsible for and to indemnify Sankyo and its
Affiliates, directors, officers, servants and agents (collectively “the
Indemnified Party”) against any and all liability, loss, damage, cost and
expense (including legal costs) incurred or suffered by the Indemnified Party as
a result of claim brought against Sankyo or its Affiliates by a Third Party
which arises as a result of the activities by Cyclacel or its Affiliates,
Cyclacel Licensees, agents or distributors under the CS-682 License Agreement in
relation to the deletion of “terminable” from Clause 2.1.2 thereof.

3.  
Sankyo agrees that in the event that Cyclacel’s ability to exercise the said
sub-license is jeopardized or lost it will cooperate with Cyclacel, upon
Cyclacel’s request and at Cyclacel’s expenses, in taking any steps which Sankyo
considers reasonably required to preserve or restore the said sub-license and
the rights granted under the CS-682 License Agreement.

4.  
Notwithstanding with the items above, Cyclacel hereby acknowledges that Sankyo
does not amend its warranty as set forth in CS-682 License Agreement with
respect to CNDAC Patent Rights.

5.  
This Amendment supersedes all prior oral or written understandings,
arrangements, representations or agreements, if any, between the parties
relating to the subject matter of this Amendment to the extent that they
conflict with this Amendment.

6.  
The validity, construction and interpretation of this Amendment to CS-682
License Agreement and any determination of the performance which it requires
shall be governed by the laws of England.

 

 

--------------------------------------------------------------------------------

 

Portions of this Exhibit were omitted and have been filed separately with the
Secretary of the Securities and Exchange Commission pursuant to the Company’s
application requesting confidential treatment under Rule 24b-2 of the Securities
Exchange Act of 1934.
These agreements are made in consideration of the mutual covenants contained
herein. Could you please indicate your agreement by countersigning at the space
indicated below and returning this agreement to the undersigned.

            Sincerely yours and agreed,
      /s/ Akira Morita       Akira Morita    Corporate Officer,
Director, Licensing Department
Date: April 28, 2004     

     
AGREED:
   
 
   
/s/ Spiro Rombotis
   
 
Spiro Rombotis
   
Chief Executive Officer
   
Date: 28 April 2004
   

 

- 2 -

--------------------------------------------------------------------------------

 

Portions of this Exhibit were omitted and have been filed separately with the
Secretary of the Securities and Exchange Commission pursuant to the Company’s
application requesting confidential treatment under Rule 24b-2 of the Securities
Exchange Act of 1934.

     
(SANKYO LOGO) [c17919c1791901.gif]
  Licensing Department
SANKYO CO., LTD.
3-5-1, Nihonbashi Honcho, Chuo-ku, Tokyo, 103-8476, Japan
Phone: 81-3-5255-7084, Fax: 81-3-5255-7086

1st April, 2004

     
Dr. Spiro Rombotis
   
Chief Executive Officer
   
Cylacel
   
Dundee Technopole
   
James Lindsay Place
   
Dundee DD1 5JJ
  Tel: +44 1382 206062
U K
  Fax: +44 1382 206067

Re: Territory of the CS-682 Licensing Agreement
Dear Dr. Rombotis;
I am happy to inform you that, in accordance with Clause 2.2.1 of the CS-682
License Agreement dated 10th September 2003 (the “Agreement”) the license set
out in Clause 2.1 of the Agreement is hereby extended to the “Excluded
Territories” under the same commercial terms as set out in the Agreement.
[***]
This letter agreement is to amend the Agreement in accordance with Clause 17.2
thereof. Please sign two copies of this letter agreement and send one copy to us
for our record.

            Sincerely yours,
      /s/ Akira Morita       Akira Morita      Corporate Officer,
Director, Licensing Department     

     
Agreed and acknowledged this:
   
 
   
/s/ Spiro Rombotis
   
 
Spiro Rombotis
   
Chief Executive Officer
   
Date: