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AMENDED.

EXHIBIT 10.6

Execution Version

REVENUE PARTICIPATION AGREEMENT

 

BY AND BETWEEN

 

SUNESIS PHARMACEUTICALS, INC.

AND

 

RPI FINANCE TRUST

 

DATED AS OF MARCH 29, 2012

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TABLE OF CONTENTS

 

          Page  

PURCHASE, SALE AND ASSIGNMENT OF THE REVENUE PARTICIPATION RIGHT

     1   

Section 1.1

   Purchase, Sale and Assignment      1   

Section 1.2

   Purchase Price      2   

Section 1.3

   Warrants      2   

Section 1.4

   No Assumed Obligations, Etc      2   

Section 1.5

   Security Interest      2   

CLOSING

     4   

Section 2.1

   Closing      4   

Section 2.2

   Payment of Purchase Price      4   

REPRESENTATIONS AND WARRANTIES

     4   

Section 3.1

   Seller’s Representations and Warranties      4   

Section 3.2

   Buyer’s Representations and Warranties      10   

CONDITIONS TO CLOSING

     11   

Section 4.1

   Conditions to the Buyer’s Obligations      12   

Section 4.2

   Conditions to the Seller’s Obligations      13   

COVENANTS

     14   

Section 5.1

   DSMB Matters and Clinical Trial Results.      14   

Section 5.2

   Disclosures      16   

Section 5.3

   Payments Received In Error      16   

Section 5.4

   Participation Payments; Revenue Participation Reports      17   

Section 5.5

   Inspections and Audits of the Seller      18   

Section 5.6

   Intellectual Property Matters.      18   

Section 5.7

   Efforts to Complete Clinical Trial and Commercialize the Product      19   

Section 5.8

   Efforts to Consummate Transactions      19   

Section 5.9

   Further Assurances      19   

Section 5.10

   Dainippon Agreement and In-Licenses      19   

Section 5.11

   Manufacturing Agreements      20   

Section 5.12

   Out-Licenses.      21   

Section 5.13

   Security Interest      21   

Section 5.14

   Public Company Reporting Obligations      22   

INDEMNIFICATION

     22   

Section 6.1

   General Indemnity      22   

Section 6.2

   Limitations on Liability      23   

CONFIDENTIALITY

     23   

Section 7.1

   Confidentiality      23   

Section 7.2

   Authorized Disclosure      24   

TERMINATION

     24   

Section 8.1

   Grounds for Termination      25   

Section 8.2

   Automatic Termination      25   

Section 8.3

   Survival      25   

MISCELLANEOUS

     25   

Section 9.1

   Definitions      25   

Section 9.2

   Certain Interpretations      36   

Section 9.3

   Headings      37   

 

(i)

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Section 9.4

   Notices      37   

Section 9.5

   Expenses      38   

Section 9.6

   Assignment      38   

Section 9.7

   Amendment and Waiver.      39   

Section 9.8

   Entire Agreement      39   

Section 9.9

   No Third Party Beneficiaries      39   

Section 9.10

   Governing Law      39   

Section 9.11

   JURISDICTION; VENUE.      40   

Section 9.12

   Severability      40   

Section 9.13

   Specific Performance      40   

Section 9.14

   Trustee Capacity of Wilmington Trust Company      41   

Section 9.15

   Counterparts      41   

 

(ii)

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Index of Exhibits, Schedules and Annexes

 

Exhibit A:    Form of Warrant Exhibit B:    Rights and Remedies of the Buyer
Exhibit C:    Dainippon Agreement Exhibit D:    Manufacturing Agreements
Exhibit E:    Revenue Participation Report Exhibit F:    Collateral

 

Schedule 3.1(h)(i):    Other Agreements Schedule 3.1(h)(ii):    Sublicenses
Schedule 3.1(h)(iv):    Liens or Assignments Schedule 3.1(k)(iv):    List of
Patents Schedule 3.1(k)(v):    Infringement of Vosaroxin Patent Rights Schedule
9.1:    Compound Schedule A:    Vosaroxin Patent Rights

 

(iii)

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REVENUE PARTICIPATION AGREEMENT

This REVENUE PARTICIPATION AGREEMENT, dated as of March 29, 2012 (this
“Agreement”), is made and entered into by and between SUNESIS PHARMACEUTICALS,
INC., a Delaware corporation (the “Seller”), on the one hand, and RPI FINANCE
TRUST, a Delaware statutory trust (the “Buyer”), on the other hand.

W I T N E S S E T H:

WHEREAS, the Seller requires additional funding to develop and commercialize the
Product in the Territory and the Buyer desires to provide the Seller with such
additional funding; and

WHEREAS, the Buyer desires to purchase the Revenue Participation Right from the
Seller in exchange for providing the additional funding, and the Seller desires
to sell the Revenue Participation Right to the Buyer in exchange for receiving
the additional funding, subject to the terms and conditions of this Agreement.

NOW THEREFORE, in consideration of the representations, warranties, covenants
and agreements set forth herein and for good and valuable consideration, the
receipt and adequacy of which are hereby acknowledged, the Seller and the Buyer
hereby agree as follows:

ARTICLE 1

PURCHASE, SALE AND ASSIGNMENT OF THE REVENUE PARTICIPATION RIGHT

Section 1.1      Purchase, Sale and Assignment.  Upon the terms and subject to
the conditions of this Agreement:

(a)        Upon the occurrence of an Expansion of Enrollment Triggering Event or
a Terminate for Efficacy Triggering Event, the Seller agrees to sell, transfer,
assign and convey to the Buyer, and the Buyer agrees to purchase, acquire and
accept from the Seller, the Revenue Participation Right free and clear of all
Liens (except those Liens created in favor of the Buyer pursuant to this
Agreement).

(b)        Upon the occurrence of a Completion of the Study-as-Planned
Triggering Event and during the [ * ] Business Day period thereafter, or if the
Seller fails to comply with its obligations under Section 5.1(c) within the time
periods set forth therein, then during such longer period as shall be required
for the Seller to comply with such obligations, the Buyer shall have the option,
in the Buyer’s sole discretion, to deliver written notice to the Seller of the
Buyer’s intention to purchase, acquire and accept from the Seller, and upon the
exercise of such option by the Buyer, the Seller agrees to sell, transfer,
assign and convey to the Buyer, the Revenue Participation Right free and clear
of all Liens (except those Liens created in favor of the Buyer pursuant to this
Agreement).

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Section 1.2      Purchase Price.  At the Closing, the purchase price to be paid
to the Seller for the sale, transfer, assignment and conveyance of the Revenue
Participation Right to the Buyer is $25,000,000 in cash (the “Purchase Price”).

Section 1.3      Warrants.  As additional consideration for the Buyer’s
agreement to purchase, on the terms and conditions set forth in this Agreement,
the Revenue Participation Right at the Closing following an Expansion of
Enrollment Triggering Event, the Seller shall issue to the Buyer on the date
hereof two (2) warrants to purchase Sunesis common stock (each, a “Warrant” and
collectively, the “Warrants”), each in the form attached as Exhibit A hereto and
having the following principal terms:

(a)        Each Warrant shall entitle the Buyer to purchase up to 1,000,000
shares of the Seller’s common stock, $0.0001 par value per share (“Common
Stock”).

(b)        The per share exercise price of the first Warrant, exercisable for
1,000,000 shares of Common Stock, shall be equal to the greater of (i) 50% above
the Fair Market Value of the Seller’s Common Stock and (ii) the Spot Price.

(c)        The per share exercise price of the second Warrant, exercisable for
1,000,000 shares of Common Stock, shall be equal to the greater of (i) 100%
above the Fair Market Value of the Seller’s Common Stock and (ii) the Spot
Price.

(d)        Each of the Warrants shall expire five (5) years from the Closing
following an Expansion of Enrollment Triggering Event.

(e)        Neither Warrant shall be exercisable, in whole or in part, unless and
until the consummation of the Closing following an Expansion of Enrollment
Triggering Event. If the DSMB issues a DSMB Terminate for Efficacy Notice, a
DSMB Terminate for Futility Notice or a DSMB Continuation of the Study Notice,
then the Warrants shall terminate and be of no further force or effect.

Section 1.4      No Assumed Obligations, Etc.  Notwithstanding any provision in
this Agreement to the contrary, the Buyer is only agreeing, on the terms and
conditions set forth in this Agreement, to purchase, acquire and accept the
Revenue Participation Right and purchasing, acquiring and accepting the Warrants
and is not assuming any liability or obligation of the Seller of whatever
nature, whether presently in existence or arising or asserted hereafter, under
the Dainippon Agreement or otherwise.

Section 1.5      Security Interest. Subject to the Collateral Sharing Agreement:

(a)        Effective from and after the Closing, the Seller hereby grants to the
Buyer to secure the payment and performance in full of all of the Seller’s
obligations under this Agreement, including the payment of past and future
Participation Payments and if applicable, the NPV Value, a continuing security
interest in the Collateral, including the Product Collateral, wherever located,
whether now owned or hereafter acquired or arising, and all proceeds and
products thereof. The Seller represents, warrants, and covenants that the
security interest granted

 

2

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above shall, subject to Section 1.5(b) and Section 1.5(c), at all times continue
to be a perfected security interest in the Collateral, subject only to Permitted
Liens.

(b)        Effective immediately upon the Loan Repayment, (i) the Buyer’s Lien
in all of the Released Collateral shall be released without any further action
of any party and (ii) subject to Section 1.5(c), Buyer’s Lien in the Product
Collateral shall continue as a first priority security interest junior only to
Post-Security Interest Release Permitted Liens, provided that the Buyer agrees
to perfect such security interest as set forth in Section 1.5(e). At the
Seller’s expense, the Buyer shall, and hereby authorizes the Seller (or any
agent of the Seller) to prepare and file, at any time within [ * ] Business Days
following the Loan Repayment, all documents and take all other actions
reasonably requested by the Seller to evidence the release of Buyer’s Lien on
the Released Collateral.

(c)        Upon the earlier of (i) the occurrence of a Seller Lien Release
Triggering Event or (ii) the occurrence of an Acquiror Lien Release Triggering
Event, the Buyer’s Lien in all of the Collateral (or, if either (i) or (ii) in
this Section 1.5(c) occurs after the Loan Repayment, the Buyer’s Lien in all of
the Product Collateral) shall be released without any further action of any
party. At the Seller’s expense, the Buyer shall, and hereby authorizes the
Seller (or any agent of the Seller) to prepare and file, at any time within [ *
] Business Days following the occurrence of either (i) or (ii) in this
Section 1.5(c), all documents and take all other actions reasonably requested by
the Seller to evidence the release of the Buyer’s Lien on the Collateral (or, if
either (i) or (ii) in this Section 1.5(c) occurs after the Loan Repayment, to
evidence the release of the Buyer’s Lien in all of the Product Collateral).

(d)        Following the Seller’s failure to make full and prompt payment of any
portion of the Payment Stream when due, but in any event subject to
Section 5.4(c) (such failure, a “Payment Breach”), the Buyer shall be entitled
to exercise all rights and remedies available under this Agreement including,
without limitation, as set forth on Exhibit B which is hereby incorporated by
reference into this Section 1.5 with the same force and effect as if set forth
herein, but in any event subject to the terms of the Collateral Sharing
Agreement. In addition and without limiting the foregoing, effective
automatically upon the Seller failing to pay when due [ * ] consecutive
Participation Payments to the Buyer (subject to extension of the due dates under
Section 5.4(c)) (the date on which such second consecutive Participation Payment
was due and payable, the “Mandatory Repurchase Offer Date”), the Seller shall,
and shall be deemed to, have made an offer to the Buyer to repurchase the
Revenue Participation Right (the “NPV Termination Offer”) and to terminate this
Agreement for a repurchase price equal to the then net present value of the
Payment Stream (the “NPV Value”). The NPV Termination Offer shall be deemed to
have been accepted by the Buyer as of the Mandatory Repurchase Offer Date
unless, within [ * ] days following such date, the Buyer shall have delivered
written notice to the Seller declining the NPV Termination Offer. If the Buyer
shall not have so declined the NPV Termination Offer, the Seller shall pay the
NPV Value to the Buyer in cash, in a single payment, on the [ * ] calendar day
following the Mandatory Repurchase Offer Date. The foregoing repurchase shall be
on an “as is where is” basis without any express or implied representation or
warranty of any kind whatsoever by the Buyer, in its capacity as seller under
the foregoing repurchase. The parties hereto agree that the NPV Value shall be
determined based upon (i) an

 

3

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assumed discount rate of [ * ]% over the Prime Rate then in effect, (ii) the [ *
] of [ * ] and as [ * ] to [ * ], and (iii) [ * ] in the [ * ] for [ * ]. The
Seller shall, [ * ] of [ * ] of the [ * ] by the [ * ], deliver a confidential
copy of such [ * ] to Buyer for the sole purpose of documenting the NPV Value.

(e)        The Seller hereby authorizes the Buyer to file financing statements
or take any other action required to perfect the Buyer’s security interests
(i) in the Collateral other than the Product Collateral, at any time during
which the Collateral Sharing Agreement remains in effect, with notice to the
Seller, or (ii) in the Product Collateral, at any time following the first
Marketing Approval of the Product; in either case, in all appropriate
jurisdictions to perfect or protect the Buyer’s interest or rights hereunder,
including a notice that any disposition of the Collateral, except to the extent
permitted by the terms of this Agreement, by the Seller, or any other Person,
shall be deemed to violate the rights of the Buyer under the Code. The Seller
further agrees to procure, deliver or execute and deliver to the Buyer, from
time to time, all additional security agreements, instruments and documents,
including the Intellectual Property Security Agreement, each in form and
substance reasonably satisfactory to the Buyer, to perfect or protect the
Buyer’s security interests in the Collateral in accordance with this
Section 1.5(e).

 

ARTICLE 2

CLOSING

Section 2.1      Closing.  The Closing shall take place on the Business Day
after the date on which the conditions set forth in Article 4 have been
satisfied, or at such other place, time and date as the parties hereto may
mutually agree. Subject to the provisions of Article 8, failure to consummate
the sale, transfer, assignment and conveyance of the Revenue Participation Right
as provided in this Article 2 on the date determined pursuant to this
Section 2.1 shall not result in a termination of this Agreement and shall not
relieve either party hereto of any of its respective obligations hereunder.

Section 2.2      Payment of Purchase Price.  At the Closing, the Buyer shall
deliver (or cause to be delivered) payment of the Purchase Price to the Seller
by wire transfer of immediately available funds to one or more accounts
specified by the Seller.

ARTICLE 3

REPRESENTATIONS AND WARRANTIES

Section 3.1      Seller’s Representations and Warranties.  The Seller represents
and warrants to the Buyer that as of the date hereof:

(a)        Existence; Good Standing.  The Seller is a corporation duly
incorporated, validly existing and in good standing under the laws of the State
of Delaware. The Seller is duly licensed or qualified to do business and is in
corporate good standing in each jurisdiction in which the nature of the business
conducted by it or the character or location of the properties and

 

4

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assets owned, leased or operated by it makes such licensing or qualification
necessary, except where the failure to be so licensed or qualified and in
corporate good standing has not and would not reasonably be expected to have,
either individually or in the aggregate, a material adverse effect upon the
Seller, the Product, the Vosaroxin Product Rights, the Payment Stream or the
Revenue Participation Right.

(b)        Authorization.  The Seller has all requisite corporate power and
authority to execute, deliver and perform its obligations under this Agreement
and the other Transaction Documents. The execution, delivery and performance of
this Agreement and the other Transaction Documents, and the consummation of the
transactions contemplated hereby, have been duly authorized by all necessary
corporate action on the part of the Seller.

(c)        Enforceability.  Each of the Transaction Documents has been duly
executed and delivered by an authorized officer of the Seller and constitutes
the valid and binding obligation of the Seller, enforceable against the Seller
in accordance with its terms, except as may be limited by applicable Bankruptcy
Laws or by general principles of equity (whether considered in a proceeding in
equity or at law).

(d)        No Conflicts.  The execution, delivery and performance by the Seller
of each of the Transaction Documents and the consummation of the transactions
contemplated hereby and thereby do not and will not (i) contravene or conflict
with the certificate of incorporation or bylaws of the Seller, (ii) contravene
or conflict with or constitute a material default under any law binding upon or
applicable to the Seller or (iii) contravene or conflict with or constitute a
material default under any material contract, including the Loan and Security
Agreement, or other material agreement or Judgment binding upon or applicable to
the Seller.

(e)        Consents.  Except for the consents that have been obtained on or
prior to the Closing or filings required by the federal securities laws or stock
exchange rules, no consent, approval, license, order, authorization,
registration, declaration or filing with or of any Governmental Entity or other
Person is required to be done or obtained by the Seller in connection with
(i) the execution and delivery by the Seller of this Agreement and the other
Transaction Documents, (ii) the performance by the Seller of its obligations
under this Agreement and the other Transaction Documents or (iii) the
consummation by the Seller of any of the transactions contemplated by this
Agreement and the other Transaction Documents.

(f)        No Litigation.  The Seller is not a party to, and has not received
notice of, any action, suit, investigation or proceeding pending before any
Governmental Entity and, to the Knowledge of the Seller, no such action, suit,
investigation or proceeding has been threatened against the Seller, that,
individually or in the aggregate, would, if determined adversely, reasonably be
expected to prevent or adversely affect (i) the ability of the Seller to enter
into and to perform its obligations under each of the Transaction Documents,
(ii) the Seller’s rights in or to the Vosaroxin Product Rights or (iii) after
the Closing, the Buyer’s rights with respect to the Revenue Participation Right.

(g)        Compliance with Laws.  The Seller is not in violation of, and to the
Knowledge of the Seller, the Seller is not under investigation with respect to,
nor has the Seller

 

5

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been threatened to be charged with or given notice of any violation of, any law
or Judgment applicable to the Seller, which violation would reasonably be
expected to adversely affect the Seller’s rights in or to the Vosaroxin Product
Rights or, after the Closing, the Buyer’s rights with respect to the Revenue
Participation Right hereunder.

(h)        Dainippon Agreement.  Attached hereto as Exhibit C is a true, correct
and complete copy of the Dainippon Agreement.

(i)        No Other Agreements.  Except as set forth on Schedule 3.1(h)(i) of
the Disclosure Schedule, the Dainippon Agreement is the only agreement,
instrument, arrangement, waiver or understanding between the Seller (or any
Affiliate thereof), on the one hand, and Dainippon (or any predecessor or
Affiliate thereof), on the other hand, relating to the subject matter thereof,
and there are no other agreements, instruments, arrangements, waivers or
understandings between the Seller (or any Affiliate thereof), on the one hand,
and Dainippon (or any predecessor or Affiliate thereof), on the other hand, that
relate to the Vosaroxin Product Rights or any Product (including without
limitation, the development, commercialization or promotion thereof). A true,
correct and complete copy of each of the agreements, instruments, arrangements
or understandings set forth on Schedule 3.1(h)(i) of the Disclosure Schedule has
been provided by the Seller prior to the date hereof and is attached as an
Exhibit to the Disclosure Schedule. Except as set forth on Schedule 3.1(h)(i) of
the Disclosure Schedule, the Seller and Dainippon have not made or granted any
amendment or waiver of any provision of the Dainippon Agreement.

(ii)       Sublicenses.  Other than the Manufacturing Agreements and except as
set forth on Schedule 3.1(h)(ii) of the Disclosure Schedule, the Seller has not
entered into or executed a sublicense or other out-license with any other Person
in respect of the Vosaroxin Product Rights or a Product.

(iii)      Validity and Enforceability of Dainippon Agreement.  The Dainippon
Agreement is a valid and binding obligation of the Seller and Dainippon. The
Dainippon Agreement is enforceable against each of the parties thereto in
accordance with its terms, except as may be limited by applicable Bankruptcy
Laws or by general principles of equity (whether considered in a proceeding in
equity or at law). The Seller has not received any notice in connection with the
Dainippon Agreement challenging the validity, enforceability or interpretation
of any provision of such agreement.

(iv)      No Liens or Assignments by the Seller.  Except as set forth in
Schedule 3.1(h)(iv) of the Disclosure Schedule, the Seller has not, except for
Permitted Liens or as contemplated hereby, conveyed, assigned or in any other
way transferred or granted any liens upon or security interests with respect to
all or any portion of the Revenue Participation Right or the Collateral.

 

6

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(v)       No Termination.  The Seller has not (A) given Dainippon any notice of
termination of the Dainippon Agreement (whether in whole or in part) or any
notice expressing any intention or desire to terminate the Dainippon Agreement
or (B) received from Dainippon any notice of termination of the Dainippon
Agreement (whether in whole or in part) or any notice expressing any intention
or desire to terminate the Dainippon Agreement. To the Knowledge of the Seller,
no event has occurred that would give rise to the expiration or a right of
termination of the Dainippon Agreement pursuant to Article 22 thereof or
otherwise.

(vi)      No Breaches or Defaults.  There is and has been no material breach or
default under any provision of the Dainippon Agreement either by the Seller or,
to the Knowledge of the Seller, by Dainippon (or any predecessor thereof), and
there is no event that upon notice or the passage of time, or both, would
reasonably be expected to give rise to any breach or default either by the
Seller or, to the Knowledge of the Seller, by Dainippon (or any predecessor
thereof).

(vii)     Payments Made.  The Seller has made all payments to Dainippon required
under the Dainippon Agreement as of the date hereof.

(viii)    No Assignments by Dainippon.  The Seller has not consented to any
assignment by Dainippon of any of the Seller’s rights or obligations under the
Dainippon Agreement and, to the Knowledge of the Seller, Dainippon has not
assigned any of Dainippon’s rights or obligations under the Dainippon Agreement
to any Person.

(ix)      No Indemnification Claims.  The Seller has not notified Dainippon or
any other Person of any claims for indemnification under the Dainippon Agreement
nor has the Seller received any claims for indemnification under the Dainippon
Agreement, whether pursuant to Article 17 thereof or otherwise.

(x)       No Infringement.  The Seller has not received any written notice from,
or given any written notice to, Dainippon pursuant to Article 28 of the
Dainippon Agreement or otherwise, regarding any infringement of any of the
Vosaroxin Patent Rights. To the Knowledge of the Seller, but without inquiry, no
Third Party is making, using, selling, offering for sale, importing or exporting
anything in material violation of any of the Vosaroxin Patent Rights.

(i)        Manufacturing Agreements.  Attached hereto as Exhibit D are true,
correct and complete copies of the Manufacturing Agreements.

(i)        Validity and Enforceability of the Manufacturing Agreements.  The
Manufacturing Agreements are valid and binding obligations of the Seller and the
counterparties thereto. The Manufacturing Agreements are enforceable

 

7

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COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

 

against each of the parties thereto in accordance with their respective terms,
except as may be limited by applicable Bankruptcy Laws or by general principles
of equity (whether considered in a proceeding in equity or at law). The Seller
has not received any notice in connection with a Manufacturing Agreement
challenging the validity, enforceability or interpretation of any provision of
such agreement.

(ii)       No Breaches or Defaults.  There is and has been no material breach or
default under any provision of the Manufacturing Agreements either by the Seller
or, to the Knowledge of the Seller, by the respective counterparty (or any
predecessor thereof) thereto, and there is no event that upon notice or the
passage of time, or both, would reasonably be expected to give rise to any
breach or default either by the Seller or, to the Knowledge of the Seller, by
the respective counterparty to such agreement.

(iii)      Payments Made.  The Seller has made all payments to the respective
counterparty required under each Manufacturing Agreement as of the date hereof.

(iv)      No Amendments or Waivers.  The Seller and the respective counterparty
thereto have not made or granted any amendment or waiver of any provision of the
Manufacturing Agreements.

(v)       No Indemnification Claims.  The Seller has not notified the respective
counterparty to each Manufacturing Agreement or any other Person of any claims
for indemnification under the Manufacturing Agreements nor has the Seller
received any claims for indemnification under the Manufacturing Agreements,
whether pursuant to Article 6 of the AAI Manufacturing Agreement or Article 12
of the Albany Manufacturing Agreement, or otherwise.

(j)        Title to Revenue Participation Right.  Upon the Closing, the Buyer
will have acquired, subject to the terms and conditions set forth in this
Agreement and the Dainippon Agreement, good and marketable title to the Revenue
Participation Right, free and clear of all Liens (other than, subject to
Section 9.6, Liens created by the Buyer).

(k)        Intellectual Property.

(i)        The use and/or manufacture of the compound identified on Schedule 9.1
hereto is within the literal scope of at least one Valid Claim of at least each
of the Patents identified by a “ 1” on Schedule 3.1(k)(iv) of the Disclosure
Schedule.

(ii)       The manufacture of the Clinical Trial Product is within the literal
scope of at least one Valid Claim of at least each of the Patents identified by
a “2” on Schedule 3.1(k)(iv) of the Disclosure Schedule.

 

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COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

 

(iii)      The use of the Clinical Trial Product, together with cytarabine, in
the treatment of acute myelogenous leukemia is within the literal scope of at
least one Valid Claim of at least each of the Patents identified by a “3” on
Schedule 3.1(k)(iv) of the Disclosure Schedule.

(iv)      Schedule 3.1(k)(iv) of the Disclosure Schedule lists all of the
currently existing Patents included within the Vosaroxin Patent Rights. Except
as set forth on Schedule 3.1(k)(iv), the Seller is the registered owner of all
of the Vosaroxin Patent Rights. Schedule 3.1(k)(iv) of the Disclosure Schedule
specifies as to each listed patent or patent application (A) the jurisdictions
by or in which each such Vosaroxin Patent Right has issued as a patent or a
patent application has been filed, including the respective patent or
application numbers, and (B) any other Person owning or having an interest in
such Vosaroxin Patent Right, including the nature of such interest.

(v)        Except as set forth in Schedule 3.1(k)(v) of the Disclosure Schedule,
the Seller has not received written notice of, and is not a party to, any
pending, and to the Knowledge of the Seller there are no threatened,
litigations, interferences, reexaminations, oppositions or like procedures
involving any of the Vosaroxin Patent Rights.

(vi)      All of the issued patents within the Vosaroxin Patent Rights are in
full force and effect and have not lapsed, expired or otherwise terminated. The
Seller has not received any written notice relating to the lapse, expiration or
other termination of any of the issued patents within the Vosaroxin Patent
Rights or any written legal opinion that alleges that an issued patent within
any of the Vosaroxin Patent Rights is invalid or unenforceable.

(vii)     The Seller has not received any written notice that there is any, and,
to the Knowledge of the Seller, there is no, Person who is or claims to be an
inventor under any of the Vosaroxin Patent Rights who is not a named inventor
thereof.

(viii)    The Seller has not and, to the Knowledge of the Seller, Dainippon has
not received any written notice of any claim by any Person challenging
inventorship or ownership of, the rights of the Seller in and to, or the
patentability, validity or enforceability of, the Vosaroxin Patent Rights, or
asserting that the development, manufacture, importation, sale, offer for sale
or use of a Product infringes or will infringe such Person’s patents or other
intellectual property rights.

(ix)      To the Knowledge of the Seller, the discovery and development of the
Products did not and has not, as of the date hereof, infringed, violated or
misused any patent or other intellectual property rights.

 

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COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

 

(x)        (A) To the Knowledge of the Seller, no patent rights of any Person
(other than the Seller or Dainippon) issued as of the date hereof have been, or
are or will be infringed by the manufacture, use, offer for sale, importation,
sale or use of a Product, and (B) to the Knowledge of the Seller, but without
inquiry, no Person is infringing any of the Vosaroxin Patent Rights.

(xi)      The Seller or Dainippon has paid all maintenance fees, annuities and
like payments required as of the date hereof with respect to the Vosaroxin
Patent Rights.

(l)        Code Representation and Warranties.  The Seller’s exact legal name
is, and for the immediately preceding ten years has been, “Sunesis
Pharmaceuticals, Inc.” The Seller is, and for the prior ten years has been,
incorporated in the State of Delaware.

(m)      Brokers’ Fees.  There is no investment banker, broker, finder,
financial advisor or other intermediary who has been retained by or is
authorized to act on behalf of the Seller who might be entitled to any fee or
commission in connection with the transactions contemplated by this Agreement.

(n)       Public Company Reporting Obligations.  The Seller has filed or
furnished (as applicable) with or to the SEC all registration statements, forms,
reports, certifications and other documents required to be filed or furnished by
the Seller with or to the SEC since the Seller became a SEC reporting company
(all such registration statements, forms, reports, certifications and other
documents (including those that the Seller may file or furnish after the date
hereof until the Closing) are referred to herein as the “Seller SEC Documents”).
All of the Seller SEC Documents are publicly available on the SEC’s EDGAR
system. The Seller SEC Documents (i) were filed or furnished on a timely basis,
(ii) at the time filed or furnished, were prepared in compliance as to form in
all material respects with the applicable requirements of the Securities Act of
1933, as amended, and the Securities Exchange Act of 1934, as amended, as the
case may be, and the rules and regulations of the SEC thereunder applicable to
such Seller SEC Documents, and (iii) did not at the time they were filed or
furnished contain any untrue statement of a material fact or omit to state a
material fact required to be stated in such Seller SEC Documents or necessary in
order to make the statements in such Seller SEC Documents, in the light of the
circumstances under which they were made, not misleading. The Seller’s financial
statements included within the Seller SEC Documents have been prepared in
accordance with accounting principles generally accepted in the United States
and such financial statements do not contain an untrue statement of a material
fact or omit to state a material fact required to be stated therein or necessary
to make the statements therein not misleading at the time made.

Section 3.2      Buyer’s Representations and Warranties.  The Buyer represents
and warrants to the Seller that as of the date hereof:

(a)      Existence; Good Standing.  The Buyer is a statutory trust duly
organized, validly existing and in good standing under the laws of the State of
Delaware.

 

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COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

 

(b)        Authorization.  The Buyer has the requisite trust right, power and
authority to execute, deliver and perform its obligations under this Agreement.
The execution, delivery and performance of this Agreement, and the consummation
of the transactions contemplated hereby, have been duly authorized by all
necessary action on the part of the Buyer.

(c)        Enforceability.  This Agreement has been duly executed and delivered
by an authorized person of the owner trustee of the Buyer and constitutes the
valid and binding obligation of the Buyer, enforceable against the Buyer in
accordance with its terms, except as may be limited by applicable Bankruptcy
Laws or by general principles of equity (whether considered in a proceeding in
equity or at law).

(d)        No Conflicts.  The execution, delivery and performance by the Buyer
of this Agreement do not and will not (i) contravene or conflict with the
organizational documents of the Buyer, (ii) contravene or conflict with or
constitute a default under any material provision of any law binding upon or
applicable to the Buyer or (iii) contravene or conflict with or constitute a
default under any material contract or other material agreement or Judgment
binding upon or applicable to the Buyer.

(e)        Consents.  No consent, approval, license, order, authorization,
registration, declaration or filing with or of any Governmental Entity or other
Person is required to be done or obtained by the Buyer in connection with
(i) the execution and delivery by the Buyer of this Agreement, (ii) the
performance by the Buyer of its obligations under this Agreement, other than the
filing of financing statement(s) in accordance with Section 1.5, or (iii) the
consummation by the Buyer of any of the transactions contemplated by this
Agreement.

(f)        No Litigation.  There is no action, suit, investigation or proceeding
pending or, to the knowledge of the Buyer, threatened before any Governmental
Entity to which the Buyer is a party that would, if determined adversely,
reasonably be expected to prevent or materially and adversely affect the ability
of the Buyer to perform its obligations under this Agreement.

(g)        Financing.  The Buyer has, and at the Closing will have, sufficient
cash on hand to pay the entire Purchase Price. The Buyer acknowledges that its
obligations under this Agreement are not contingent on obtaining financing.

(h)        Brokers’ Fees.  There is no investment banker, broker, finder,
financial advisor or other intermediary who has been retained by or is
authorized to act on behalf of the Buyer who might be entitled to any fee or
commission in connection with the transactions contemplated by this Agreement.

ARTICLE 4

CONDITIONS TO CLOSING

 

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Section 4.1      Conditions to the Buyer’s Obligations.  The obligations of the
Buyer to consummate the transactions contemplated hereunder on the Closing Date
are subject to the satisfaction or waiver, at or prior to the Closing Date, of
each of the following conditions precedent:

(a)        There shall have occurred a Completion of the Study-as-Planned
Triggering Event, an Expansion of Enrollment Triggering Event or a Terminate for
Efficacy Triggering Event.

(b)        In the event of an occurrence of a Completion of the Study-as-Planned
Triggering Event, within [ * ] Business Days of such occurrence or, if the
Seller fails to comply with its obligations under Section 5.1(c) within the time
periods set forth therein, then such longer period as shall be required for the
Seller to comply with such obligations, the Buyer shall have delivered a written
notice to the Seller electing to proceed with the Closing.

(c)        The Seller shall have complied with Section 5.1 of this Agreement.

(d)        The Seller and the Venture Lenders shall have executed all documents,
instruments and agreements required under the Loan and Security Agreement to
permit the transactions contemplated by this Agreement, and all such documents,
instruments and agreements shall be in full force and effect.

(e)        The Intellectual Property Security Agreement shall be in full force
and effect.

(f)        The Collateral Sharing Agreement shall be in full force and effect.

(g)        The Seller shall have delivered to the Buyer standard corporate
existence and authority opinions in respect of the Seller, enforceability
opinions on this Agreement, an opinion that this Agreement does not conflict
with the Dainippon Agreement or the Loan and Security Agreement and an opinion
as to the Buyer’s duly perfected security interest in the Collateral, each
opinion from counsel to the Seller and in a form previously agreed upon by the
Seller and the Buyer.

(h)        The Seller shall have performed and complied in all material respects
with all agreements, covenants, obligations and conditions required to be
performed and complied with by it under this Agreement at or prior to the
Closing Date, and the Buyer shall have received a certificate executed by a duly
authorized officer of the Seller on the Closing Date certifying on behalf of the
Seller to the effect of the foregoing.

(i)        The representations and warranties of the Seller contained in
Section 3.1 shall be true and correct in all material respects as of the Closing
Date as though made at and as of the Closing Date, except to the extent any such
representation or warranty expressly speaks as of a particular date, in which
case it shall be true and correct in all material respects as of such date;
provided, that to the extent that any such representation or warranty is
qualified by the term “material,” such representation or warranty (as so
written, including the term “material”) shall be

 

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AMENDED.

 

true and correct in all respects as of the Closing Date or such other date, as
applicable, and the Buyer shall have received a certificate executed by an
authorized officer of the Seller on the Closing Date certifying on behalf of the
Seller to the effect of the foregoing.

(j)        No event or events shall have occurred, or be reasonably likely to
occur, that, individually or in the aggregate, have had or would reasonably be
expected to result in (or, with the giving of notice, the passage of time or
otherwise, would result in) (i) a default by the Seller under the Loan and
Security Agreement or (ii) a material adverse effect on the business, operations
or financial condition of the Seller, including upon the Product, the Vosaroxin
Product Rights or the Payment Stream. The Buyer shall have received a
certificate executed by a duly authorized officer of the Seller on the Closing
Date certifying on behalf of the Seller to the effect of the foregoing.

(k)        There shall not have been issued and be in effect any Judgment of any
Governmental Entity enjoining, preventing or restricting the consummation of the
transactions contemplated by this Agreement.

(l)        There shall not have been instituted or be pending any action or
proceeding by any Governmental Entity or any other Person (i) challenging or
seeking to make illegal, to delay materially or otherwise directly or indirectly
to restrain or prohibit the consummation of the transactions contemplated
hereby, (ii) seeking to obtain material damages in connection with the
transactions contemplated hereby or (iii) seeking to restrain or prohibit the
Buyer’s purchase of the Payment Stream.

(m)        The Buyer shall have received a certificate of the Secretary or an
Assistant Secretary of the Seller, dated the Closing Date, certifying as to
(i) the incumbency of each officer of the Seller executing this Agreement and
the Security Agreement and (ii) the attached copies of the Seller’s certificate
of incorporation, bylaws and resolutions adopted by the Seller’s board of
directors authorizing the execution and delivery by the Seller of this Agreement
and the Security Agreement and the consummation by the Seller of the
transactions contemplated hereby and thereby.

(n)        The Buyer shall have received a valid, properly executed Internal
Revenue Service Form W-9 certifying that the Seller is exempt from U.S. federal
withholding Tax and “backup” withholding Tax.

Section 4.2      Conditions to the Seller’s Obligations.  The obligations of the
Seller to consummate the transactions contemplated hereunder on the Closing Date
are subject to the satisfaction or waiver, at or prior to the Closing Date, of
each of the following conditions precedent:

(a)        The Buyer shall have performed and complied in all material respects
with all agreements, covenants, obligations and conditions required to be
performed and complied with by it under this Agreement at or prior to the
Closing Date, and the Seller shall have received a certificate executed by a
duly authorized person of the owner trustee of the Buyer on the Closing Date
certifying on behalf of the Buyer to the effect of the foregoing.

 

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COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

 

(b)        There shall have occurred a Completion of the Study-as-Planned
Triggering Event, an Expansion of Enrollment Triggering Event or a Terminate for
Efficacy Triggering Event.

(c)        In the event of an occurrence of a Completion of the Study-as-Planned
Triggering Event, within [ * ] Business Days of such occurrence or, if the
Seller fails to comply with its obligations under Section 5.1(c) within the time
periods set forth therein, then such longer period as shall be required for the
Seller to comply with such obligations, the Buyer shall have delivered a written
notice to the Seller electing to proceed with the Closing.

(d)        The representations and warranties of the Buyer contained in
Section 3.2 shall be true and correct in all material respects as of the Closing
Date as though made at and as of the Closing Date, except to the extent any such
representation or warranty expressly speaks as of a particular date, in which
case it shall be true and correct in all material respects as of such date;
provided, that to the extent that any such representation or warranty is
qualified by the term “material,” such representation or warranty (as so
written, including the term “material”) shall be true and correct in all
respects as of the Closing Date or such other date, as applicable, and the
Seller shall have received a certificate executed by a duly authorized person of
the owner trustee of the Buyer on the Closing Date certifying on behalf of the
Buyer to the effect of the foregoing.

(e)        There shall not have been issued and be in effect any Judgment of any
Governmental Entity enjoining, preventing or restricting the consummation of the
transactions contemplated by this Agreement.

(f)        There shall not have been instituted or be pending any action or
proceeding by any Governmental Entity or any other Person (i) challenging or
seeking to make illegal, to delay materially or otherwise directly or indirectly
to restrain or prohibit the consummation of the transactions contemplated
hereby, (ii) seeking to obtain material damages in connection with the
transactions contemplated hereby or (iii) seeking to restrain or prohibit the
Buyer’s purchase of the Payment Stream.

(g)        The Seller shall have received a certificate of an authorized person
of the owner trustee of the Buyer, dated the Closing Date, certifying as to the
incumbency of the officers executing this Agreement on behalf of the Buyer.

(h)        The Seller shall have received a valid, properly executed Internal
Revenue Service Form W-8BEN certifying that the Buyer is exempt from U.S.
federal withholding Tax under a United States income Tax treaty, or other
appropriate form in order to avoid Tax withholding.

 

ARTICLE 5

COVENANTS

Section 5.1      DSMB Matters and Clinical Trial Results.

 

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AMENDED.

 

(a)        Within [ * ] Business Days of the Seller’s receipt of the DSMB
Notice, the Seller shall provide a true and complete copy thereof to the Buyer.

(b)        If the DSMB issues a DSMB Terminate for Efficacy Notice or a DSMB
Expansion of Enrollment Notice, the Seller agrees to provide the Buyer with
reasonable access to its personnel (including its officers and directors), the
Seller’s statistical services provider(s) for the Clinical Study, members of the
Clinical Study’s steering committee, members of the DSMB and the Seller’s
manufacturing contractors (collectively, the “Clinical Trial Experts”) to
discuss such DSMB Notice, the recommendation contained therein and the substance
thereof, in all cases during normal business hours and as may be reasonably
requested; provided, however, that, if the DSMB issues a DSMB Expansion of
Enrollment Notice, the Buyer shall not be entitled to receive, nor shall the
Seller be required to seek, information from the DSMB that would result in the
Clinical Trial becoming unblinded or that otherwise would be reasonably expected
to have a material adverse effect on the Clinical Trial.

(c)        If the DSMB issues a DSMB Continuation of the Study Notice, then:

(i)        Within [ * ] Business Days of the Seller’s receipt of the Clinical
Trial Completion Notice, the Seller shall provide a true and complete copy
thereof to the Buyer.

(ii)       Within [ * ] Business Days of the Buyer’s receipt of such copy of the
Clinical Trial Completion Notice, the Buyer shall provide an initial list of
Clinical Trial Experts to which the Buyer will seek access following the
Completion of the Study-as-Planned Triggering Event.

(iii)      Within [ * ] Business Days of the Seller’s receipt of the Clinical
Trial Results Analyses, the Seller shall provide a true and complete copy
thereof to the Buyer.

(iv)      During the [ * ] Business Day period following the satisfaction of the
Completion of the Study-as-Planned Triggering Event:

(1)        The Seller shall provide the Buyer access to (A) the clinical trial
results and data generated during the Clinical Trial, including all primary and
secondary endpoints and safety information, and all analyses thereof, including
minutes of meetings of the DSMB, (B) results and data from other clinical or
preclinical testing of the Clinical Trial Product, and all analyses thereof, in
the case of (A) and (B) solely to the extent then possessed by the Seller or to
which the Seller has access and in a format reasonably suitable for the Buyer’s
review ((A) and (B), the “Additional Product Information”).

(2)        The Seller shall promptly, but in any event within [ * ] Business
Days following its completion or receipt thereof, provide the Buyer with a copy
of (A) any formal analysis prepared by or for the Seller

 

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following the Completion of the Study-as-Planned Triggering Event relating to
whether the Clinical Trial achieved its primary and secondary endpoints and the
results and data supporting such determination and (B) all reports and formal
recommendations, if any, related to the unblinding analyses that are provided to
the Seller by the DSMB and the Clinical Study’s steering committee following the
Completion of the Study-as-Planned Triggering Event ((A) and (B) collectively,
the “Post-Trial Reports”).

(3)        The Seller shall provide the Buyer with reasonable access to the
Clinical Trial Experts to discuss the Clinical Trial Results Analyses, the
Additional Product Information and the Post-Trial Reports and the Buyer’s
interpretations of all of the foregoing, in all cases during normal business
hours and as soon as reasonably practicable after, but in any event (A) for
requests by the Buyer made in accordance with Section 5.1(c)(ii), within [ * ]
Business Days after the Completion of the Study-as-Planned Triggering Event and
(B) for all other requests by the Buyer, including follow-up requests, within [
* ] Business Days after, Buyer’s notice to the Seller requesting such access.

(d)        From and after the date hereof, the Seller shall consult with the
Buyer in connection with the preparation and submission of any written response
to the DSMB and the Seller shall provide copies of any material correspondence
between the Seller and the DSMB to the Buyer, as soon as practicable and in any
event not less than [ * ] Business Days following such delivery or receipt.

Section 5.2      Disclosures.  Except for a press release previously approved in
form and substance by the Seller and the Buyer or any other public announcement
using substantially the same text as such press release, neither the Buyer nor
the Seller shall, and each party hereto shall cause its respective
Representatives, Affiliates and Affiliates’ Representatives not to, issue a
press release or other public announcement or otherwise make any public
disclosure with respect to this Agreement or the subject matter hereof without
the prior written consent of the other party hereto (which consent shall not be
unreasonably withheld or delayed), except as may be required by applicable law
or stock exchange rule (in which case the party hereto required to make the
press release or other public announcement or disclosure shall, to the extent
practicable, allow the other party hereto reasonable time to comment on such
press release or other public announcement or disclosure in advance of such
issuance).

Section 5.3      Payments Received In Error.

(a)        If the Buyer becomes entitled to any payment from any other Person,
including any Permitted Licensee, pursuant to the terms of this Agreement and
such payment is nevertheless made to the Seller, the Seller shall pay over to
the Buyer, promptly (and in any event within [ * ] Business Days) after the
receipt thereof, the amount of such payment received by wire transfer to an
account designated in writing by the Buyer. In such event, the Seller shall
(i) until paid to the Buyer, hold such payment received in trust for the benefit
of the Buyer and

 

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(ii) have no right, title or interest in such payment and shall not pledge or
otherwise grant any security interest therein.

(b)        If the Seller becomes entitled to any payment from any other Person,
including any Permitted Licensee, and such payment is nevertheless made to the
Buyer, the Buyer shall pay over to the Seller, promptly (and in any event within
[ * ] Business Days) after the receipt thereof, the amount of such payment
received by wire transfer to an account designated in writing by the Seller. In
such event, the Buyer shall (i) until paid to the Seller, hold such payment
received in trust for the benefit of the Seller and (ii) have no right, title or
interest in such payment and shall not pledge or otherwise grant any security
interest therein.

Section 5.4      Participation Payments; Revenue Participation Reports.

(a)        The Seller shall pay to the Buyer the Participation Payments on Net
Sales for each calendar quarter promptly, but in any event (i) with respect to
Net Sales by a Third Party licensee of the Seller, within [ * ] Business Days
after Seller’s receipt from such licensee of royalty payments on account of such
Net Sales, provided that (A) the Seller shall use commercially reasonable
efforts to collect all such royalty payments when due and (B) the Seller shall
pay to the Buyer simultaneously with a Participation Payment in respect of Net
Sales under a license agreement, interest of [ * ]% over the Prime Rate on such
Participation Payment(s) accruing from the [ * ] calendar day after the end of
such calendar quarter, and (ii) with respect to Net Sales by the Seller or its
Affiliate, no later than [ * ] calendar days after the end of such calendar
quarter.

(b)        The Seller shall make all payments required to be made by it to the
Buyer pursuant to this Agreement in U.S. dollars by wire transfer of immediately
available funds, without set-off, reduction or deduction or withholding for or
on account of any Taxes (provided that the Buyer has provided to the Seller the
appropriate form referenced in Section 4.2(h) hereof), to the bank account
designated in writing from time to time by the Buyer.

(c)        If the Seller fails, or expects to fail, to satisfy any of its
payment obligations owed to the Buyer pursuant to this Agreement when such
obligations are due, the Seller shall send a notice to the Buyer (a “Late
Payment Notice”) disclosing such failure or expected failure. If the Seller
sends a Late Payment Notice to the Buyer, the Seller’s failure to satisfy any of
its payment obligations during a calendar year will not be considered a breach
of this Agreement and the Buyer hereby agrees not to exercise its remedies under
this Agreement until the Seller has been delinquent in its payment obligations
for an aggregate of [ * ] calendar days in such calendar year. Notwithstanding
the foregoing, a late fee of [ * ]% over the Prime Rate will accrue on all
unpaid amounts from the date such obligations were due. The imposition and
payment of a late fee shall not constitute a waiver of the Buyer’s rights with
respect to such payment default.

(d)        Prior to or simultaneously with each payment of the Participation
Payments, the Seller shall deliver a written report setting forth in reasonable
detail, the calculation of the Participation Payments payable to the Buyer for
such calendar quarter identifying, on a country-by-country basis, the Products
sold by the Seller and its Affiliates and

 

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any licensees, and the calculation of all deductions from gross sales to
determine Net Sales and Participation Payments due to the Buyer (the “Revenue
Participation Report”). The Revenue Participation Report shall be in
substantially the form attached to this Agreement as Exhibit E.

Section 5.5      Inspections and Audits of the Seller.  Following the Closing,
upon reasonable prior written notice and during normal business hours, the Buyer
may cause an inspection and/or audit by an independent public accounting firm
reasonably acceptable to the Seller to be made of the Seller’s books of account
for the three calendar years prior to the audit, no more frequently than once
per calendar year, for the purpose of determining the correctness of
Participation Payments made under this Agreement. Upon the Buyer’s request, the
Seller shall exercise any rights it may have to cause an inspection and/or audit
by an independent public accounting firm to be made of any Third Party
licensee’s books of account for the purpose of determining the correctness of
Participation Payments made under this Agreement. All of the expenses of any
inspection or audit requested by the Buyer hereunder (including the fees and
expenses of such independent public accounting firm designated for such purpose)
shall be borne by (i) the Buyer, if the independent public accounting firm
determines that Participation Payments previously paid were incorrect by an
amount less than or equal to [ * ]% of the Participation Payments actually paid
or (ii) the Seller, if the independent public accounting firm determines that
Participation Payments previously paid were incorrect by an amount greater than
[ * ]% of the Participation Payments actually paid. Any such accounting firm
shall not disclose the Seller’s or its licensee’s confidential information to
the Buyer, except to the extent such disclosure is either necessary to determine
the correctness of Participation Payments or otherwise would be included in a
Revenue Participation Report. All information obtained by the Buyer as a result
of any such inspection or audit shall be Confidential Information subject to
Article 7.

Section 5.6      Intellectual Property Matters.

(a)        The Seller shall promptly inform the Buyer of any suspected
infringement by a Third Party of any Vosaroxin Patent Right, and the Seller
shall notify Dainippon of suspected infringement of any Vosaroxin Patent Right
in accordance with Section 12.02 of the Dainippon Agreement. The Seller shall
provide to the Buyer a copy of any written notice of any suspected infringement
of the Vosaroxin Patent Rights delivered or received by the Seller under
Section 12.02 of the Dainippon Agreement or otherwise, as well as copies of
material correspondence related thereto, as soon as practicable and in any event
not more than [ * ] Business Days following such delivery or receipt.

(b)        Prior to initiating, or permitting the initiation of, an enforcement
action regarding any suspected infringement by a Third Party of any Vosaroxin
Patent Right, the Seller shall provide the Buyer with written notice of such
enforcement action.

(c)        If the Seller recovers monetary damages from a Third Party in an
action brought for such Third Party’s infringement of any of the Vosaroxin
Patent Rights, where such damages, whether in the form of judgment or
settlement, result from such infringement of such Vosaroxin Patent Rights, such
recovery will be allocated first to the reimbursement of any expenses incurred
by the Seller or Dainippon or a Permitted Licensee in such litigation, and any
remaining amounts will be treated as Net Sales by the Seller. All costs and
expenses (including

 

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attorneys’ fees and expenses) incurred by a party hereto in connection with any
enforcement action shall be borne by such party.

(d)        Prior to abandoning any of the Vosaroxin Patent Rights in a Major
Country for which the Seller is responsible for prosecution, the Seller shall
provide the Buyer with written notice of, and consult with the Buyer regarding,
such contemplated abandonment.

Section 5.7      Efforts to Complete Clinical Trial and Commercialize the
Product.  Subject to the terms and conditions of this Agreement, the Seller will
use its commercially reasonable efforts to take, or cause to be taken, all
actions and to do, or cause to be done, all things reasonably necessary to
promptly complete the Clinical Trial and commercialize a Product.

Section 5.8      Efforts to Consummate Transactions.  Subject to the terms and
conditions of this Agreement, each of the Seller and the Buyer will use its
commercially reasonable efforts to take, or cause to be taken, all actions and
to do, or cause to be done, all things reasonably necessary under applicable law
to consummate the transactions contemplated by this Agreement. Each of the Buyer
and the Seller agrees to execute and deliver such other documents, certificates,
agreements and other writings and to take such other actions as may be
reasonably necessary in order to consummate or implement expeditiously the
transactions contemplated by this Agreement.

Section 5.9      Further Assurances.  After the Closing, the Seller and the
Buyer agree to execute and deliver such other documents, certificates,
agreements and other writings and to take such other actions as may be
reasonably necessary in order to give effect to the transactions contemplated by
this Agreement.

Section 5.10    Dainippon Agreement and In-Licenses.

(a)        The Seller shall not send any material written notice or
correspondence to Dainippon relating to, or involving, the Product, the
Vosaroxin Patent Rights or the Dainippon Agreement and that could reasonably be
expected to adversely affect the Revenue Participation Right in any material
respect unless the Seller provides the Buyer with [ * ] days prior written
notice of such communication and consults with the Buyer regarding the contents
thereof. Promptly following the receipt by the Seller of any report, notice or
correspondence under the Dainippon Agreement that could reasonably be expected
to adversely affect the Revenue Participation Right in any material respect, the
Seller shall furnish a copy of such notice or correspondence to the Buyer.

(b)        The Seller shall provide the Buyer with [ * ] days prior written
notice and consult with the Buyer in connection therewith, prior to executing or
agreeing to execute any proposed amendment, supplement, modification or waiver
(a “Modification”) of any provision of the Dainippon Agreement that could
reasonably be expected to adversely affect the Revenue Participation Right in
any material respect. Subject to the foregoing, promptly, and in any event
within [ * ] Business Days, following receipt by the Seller of a fully executed
Modification to the Dainippon Agreement, the Seller shall furnish a copy of such
Modification to the Buyer.

 

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AMENDED.

 

(c)        The Seller shall comply in all material respects with its obligations
under the Dainippon Agreement and shall not take any action or forego any action
that would reasonably be expected to constitute a material breach thereof.
Promptly, and in any event within [ * ] Business Days, after receipt of any
(written or oral) notice from Dainippon or its Affiliates of an alleged breach
by the Seller under the Dainippon Agreement, the Seller shall give notice
thereof to the Buyer, including delivering the Buyer a copy of any such written
notice. The Seller shall use its reasonable best efforts to cure any breaches by
it under the Dainippon Agreement and shall give written notice to the Buyer upon
curing any such breach.

(d)        Promptly (and in any event within [ * ] Business Days) after the
Seller becomes aware of, or comes to believe in good faith that there has been,
a breach of the Dainippon Agreement by Dainippon, the Seller shall provide
notice of such breach to the Buyer. In addition, the Seller shall provide to the
Buyer a copy of any written notice of breach or alleged breach of the Dainippon
Agreement delivered by the Seller to Dainippon as soon as practicable and in any
event not less than [ * ] Business Days following such delivery.

(e)        In the case of any breach by Dainippon referred to in the foregoing
Section 5.10(d), the Seller shall consult with the Buyer regarding the timing,
manner and conduct of any enforcement of Dainippon’s obligations under the
Dainippon Agreement.

(f)        The Seller shall provide the Buyer with the same reports, meeting
privileges, forecasts, regulatory updates and other deliverables mutatis
mutandis as those provided to Dainippon pursuant to Sections 5.01, 5.02, 5.04,
6.04(ii), 9.03 and 9.04 of the Dainippon Agreement.

Section 5.11    Manufacturing Agreements.

(a)        The Seller shall comply in all material respects with its obligations
under the Manufacturing Agreements and shall not take any action or forego any
action that would reasonably be expected to constitute a material breach
thereof. Promptly, and in any event within [ * ] Business Days, after receipt of
any (written or oral) notice from each of the parties thereto or their
Affiliates of an alleged breach by the Seller under a Manufacturing Agreement,
the Seller shall give notice thereof to the Buyer, including delivering the
Buyer a copy of any such written notice. The Seller shall use its reasonable
best efforts to cure any breaches by it under the Manufacturing Agreement and
shall give written notice to the Buyer upon curing any such breach.

(b)        Promptly (and in any event within [ * ] Business Days) after the
Seller becomes aware of, or comes to believe in good faith that there has been,
a breach of either of the Manufacturing Agreements by the counterparty thereto,
the Seller shall provide notice of such breach to the Buyer. In addition, the
Seller shall provide to the Buyer a copy of any written notice of breach or
alleged breach of the Manufacturing Agreement delivered by the Seller to the
counterparty thereto as soon as practicable and in any event not less than [ * ]
Business Days following such delivery. In the case of a breach by a counterparty
to the Manufacturing

 

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Agreements, the Seller shall consult with the Buyer regarding the timing, manner
and conduct of any enforcement of such counterparty’s obligations under the
Manufacturing Agreement.

(c)        Promptly, and in any event within [ * ] Business Days, following
receipt by the Seller of a fully executed Modification to either of the
Manufacturing Agreements, the Seller shall furnish a copy of such Modification
to the Buyer.

Section 5.12    Out-Licenses.

(a)        Subject to compliance with this Section 5.12, the Seller may license
(but not assign or otherwise convey title to, except pursuant to Section 9.6)
all or a portion of the Vosaroxin Product Rights to a Third Party (a “Permitted
Licensee”) to develop, manufacture, promote, market, use, sell, offer for sale,
import or distribute Product(s) in all or any portion of the Territory without
the Buyer’s prior written consent (any such license, a “Permitted License”).

(b)        The Seller shall provide to the Buyer copies of near-final draft term
sheets related to any license contemplated by Section 5.12(a) of rights in a
Major Country or any Modification thereof at least [ * ] Business Days prior to
the execution thereof. If the Seller and such potential Third Party licensee do
not execute a term sheet prior to exchanging draft definitive transaction
documents relating to any license contemplated by Section 5.12(a) or any
Modification thereof, then the Seller shall promptly (and in any event within [
* ] Business Days) provide to the Buyer a copy of such initially exchanged draft
transaction documents or such Modification. The Seller shall promptly (and in
any event within [ * ] Business Days) provide to the Buyer copies of all final
term sheets and final transaction documents related to any license contemplated
by Section 5.12(a) or any Modification thereof.

(c)        The Seller hereby agrees (i) to cause any license contemplated by
Section 5.12(a) to [ * ] that are consistent in all material respects with [ * ]
and (ii) to cause any license contemplated by Section 5.12(a) to [ * ] on terms
and conditions consistent in all material respects with [ * ]. The Seller
further agrees to use commercially reasonable efforts (i) to cause any license
contemplated by Section 5.12(a) to require the Third Party licensee thereto to [
* ] that are consistent in all material respects with [ * ] and (ii) to cause
any license contemplated by Section 5.12(a) to [ * ] on terms and conditions
consistent in all material respects with [ * ].

(d)        Any license contemplated by Section 5.12(a) shall provide that each
of the foregoing obligations and restrictions set forth in Section 5.12(a) shall
be included in any sublicense granted thereunder, unless otherwise agreed by
Buyer in writing.

Section 5.13    Security Interest.

(a)        Until the Loan Repayment, the Seller shall not create, incur, assume
or permit to exist any Lien on any of the Collateral or any Excluded
Intellectual Property, except for (i) the security interest granted to the Buyer
under this Agreement, (ii) Permitted Licenses to Permitted Licensees and
(iii) Permitted Liens.

 

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(b)        After the Loan Repayment, the Seller shall not create, incur, assume
or permit to exist any Lien on any of the Product Collateral, except for
(i) subject to Section 1.5(b) and Section 1.5(c), the security interest granted
to the Buyer under this Agreement, (ii) Permitted Licenses to Permitted
Licensees and (iii) Permitted Liens (other than Liens contemplated by clause
(d) of Permitted Liens).

(c)        Subject to Section 1.5(c), until the first to occur of a Seller Lien
Release Triggering Event or Acquiror Lien Release Triggering Event, if the
Seller shall acquire a commercial tort claim (as defined in the Code), the
Seller shall promptly notify the Buyer in a writing signed by the Seller of the
general details thereof (and further details as may be required by the Buyer)
and grant to the Buyer in such writing a security interest therein and in the
proceeds thereof, all upon the terms of this Agreement (and subject to the terms
of the Collateral Sharing Agreement), with such writing to be in form and
substance reasonably satisfactory to the Buyer.

(d)        Until the first to occur of a Seller Lien Release Triggering Event or
Acquiror Lien Release Triggering Event, the Seller shall not (i) liquidate or
dissolve or (ii) without at least [ * ] days’ prior written notice to the Buyer:
(A) [ * ], including [ * ] (unless such [ * ] less than [ * ] in [ * ]),
(B) change its jurisdiction of organization, (C) change its organizational
structure or type, (D) change its legal name, or (E) change any organizational
number (if any) assigned by its jurisdiction of organization.

Section 5.14    Public Company Reporting Obligations.  From the date hereof
until the Closing, the Seller SEC Documents (i) will be filed or furnished on a
timely basis, (ii) at the time filed or furnished, will be prepared in
compliance as to form in all material respects with the applicable requirements
of the Securities Act of 1933, as amended, and the Securities Exchange Act of
1934, as amended, as the case may be, and the rules and regulations of the SEC
thereunder applicable to such Seller SEC Documents, and (iii) will not at the
time they are filed or furnished contain any untrue statement of a material fact
or omit to state a material fact required to be stated in such Seller SEC
Documents or necessary in order to make the statements in such Seller SEC
Documents, in the light of the circumstances under which they were made, not
misleading. From the date hereof until the Closing, the Seller’s financial
statements included within the Seller SEC Documents will be prepared in
accordance with accounting principles generally accepted in the United States
and such financial statements will not contain an untrue statement of a material
fact or omit to state a material fact required to be stated therein or necessary
to make the statements therein not misleading.

 

ARTICLE 6

INDEMNIFICATION

Section 6.1      General Indemnity.  From and after the Closing:

(a)        the Seller hereby agrees to indemnify, defend and hold harmless the
Buyer and its Affiliates and its and their directors, managers, trustees,
officers, agents and employees

 

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(the “Buyer Indemnified Parties”) from, against and in respect of all Losses
suffered or incurred by the Buyer Indemnified Parties to the extent arising out
of or resulting from (i) any breach of any of the representations or warranties
(in each case, when made) of the Seller in this Agreement and (ii) any breach of
any of the covenants or agreements of the Seller in this Agreement; and

(b)        the Buyer hereby agrees to indemnify, defend and hold harmless the
Seller and its Affiliates and its and their directors, officers, agents and
employees (the “Seller Indemnified Parties”) from, against and in respect of all
Losses suffered or incurred by the Seller Indemnified Parties to the extent
arising out of or resulting from (i) any breach of any of the representations or
warranties (in each case, when made) of the Buyer in this Agreement or (ii) any
breach of any of the covenants or agreements of the Buyer in this Agreement.

Section 6.2      Limitations on Liability.  No party hereto shall be liable for
any consequential, punitive, special or incidental damages under this Article 6
(and no claim for indemnification hereunder shall be asserted) as a result of
any breach or violation of any covenant or agreement of such party (including
under this Article 6) in or pursuant to this Agreement.

ARTICLE 7

CONFIDENTIALITY

Section 7.1      Confidentiality.  Except to the extent expressly authorized by
this Agreement or otherwise agreed in writing by the parties, the parties hereto
agree that, for the term of this Agreement and for [ * ] years thereafter, each
party (the “Disclosing Party”) shall keep confidential and shall not publish or
otherwise disclose and shall not use for any purpose other than as provided for
in this Agreement (which includes the exercise of any rights or the performance
of any obligations hereunder) any information furnished to it by or on behalf of
the other party (the “Non-disclosing Party”) pursuant to this Agreement or the
Mutual Non-Disclosure Agreement between Buyer and Seller dated as of [ * ] (the
“Confidentiality Agreement”) (such information, “Confidential Information” of
the Non-disclosing Party) except for that portion of such information that:

(a)        was already known to the Disclosing Party, other than under an
obligation of confidentiality, at the time of disclosure by the Non-disclosing
Party;

(b)        was generally available to the public or otherwise part of the public
domain at the time of its disclosure to the Disclosing Party;

(c)        became generally available to the public or otherwise part of the
public domain after its disclosure and other than through any act or omission of
the Disclosing Party in breach of this Agreement;

(d)        is independently developed by the Disclosing Party or any of its
Affiliates without the use of the Confidential Information; or

 

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(e)        is subsequently disclosed to the Disclosing Party on a
non-confidential basis by a Third Party without obligations of confidentiality
with respect thereto.

Section 7.2      Authorized Disclosure.  Either party may disclose Confidential
Information to the extent such disclosure is reasonably necessary in the
following situations:

(a)        prosecuting or defending litigation;

(b)        complying with applicable laws and regulations, including regulations
promulgated by securities exchanges;

(c)        complying with a valid order of a court of competent jurisdiction or
other Governmental Entity;

(d)        for regulatory, Tax or customs purposes;

(e)        for audit purposes;

(f)        disclosure to its Affiliates, directors, managers, trustees,
officers, employees and agents only on a need-to-know basis and solely in
connection with the performance of this Agreement or oversight of the
transactions contemplated hereby, provided that each disclosee must be bound by
customary obligations of confidentiality and non-use prior to any such
disclosure;

(g)        upon the prior written consent of the Non-disclosing Party; or

(h)        disclosure to its investors and other sources of funding, including
debt financing, and their respective accountants, financial advisors and other
professional representatives, provided, that such disclosure shall be made only
to the extent customarily required to consummate such investment or financing
transaction and that each disclosee must be bound by customary obligations of
confidentiality and non-use prior to any such disclosure.

Notwithstanding the foregoing, in the event the Disclosing Party is required to
make a disclosure of the Non-disclosing Party’s Confidential Information
pursuant to Sections 7.2(a), (b), (c) or (d), it will, except where
impracticable, give reasonable advance notice to the Non-disclosing Party of
such disclosure and use reasonable efforts to secure confidential treatment of
such information. For clarity, any use or disclosure of Confidential Information
disclosed under the Confidentiality Agreement that is authorized under this
Article 7 shall not be restricted by, or be deemed a violation of, the
Confidentiality Agreement. In any event, Buyer shall not file any patent
application based upon or using the Confidential Information of Seller provided
hereunder.

ARTICLE 8

TERMINATION

 

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Section 8.1        Grounds for Termination.  This Agreement may be terminated:

(a)        by mutual written agreement of the Buyer and the Seller; or

(b)        by the Buyer upon notice in writing to the Seller delivered after [ *
] but before [ * ], if by such date the Interim Analysis shall not have been
completed for any reason or the DSMB shall not have delivered the DSMB Notice to
the Seller.

Section 8.2      Automatic Termination.

(a)        This Agreement shall automatically terminate, without any further
action by the parties hereto, if the DSMB issues a DSMB Terminate for Futility
Notice.

(b)        Unless earlier terminated as provided in Section 8.1, after Closing,
this Agreement shall continue in full force and effect until [ * ] days after
such time as the Seller (or any other applicable Third Party) is no longer
obligated to make any payments under this Agreement, at which point this
Agreement shall automatically terminate, except with respect to any rights that
shall have accrued prior to such termination.

Section 8.3      Survival.  Notwithstanding anything to the contrary in this
Article 8, the following provisions shall survive termination of this Agreement:
Section 5.2 (Disclosures), Article 7 (Confidentiality) and Article 9
(Miscellaneous). Termination of the Agreement shall not relieve any party of
liability in respect of breaches under this Agreement by any party on or prior
to termination.

ARTICLE 9

MISCELLANEOUS

Section 9.1      Definitions.  The following terms, as used herein, shall have
the following meanings:

“AAI Manufacturing Agreement” means the Master Services Agreement, dated as of
November 3, 2003, by and between Sunesis Pharmaceuticals, Inc. and AAIPharma
Services Corp., as amended on September 11, 2006, May 2, 2008 and November 3,
2009.

“Acquiror Lien Release Triggering Event” means the occurrence of each of the
following: (i) any Person acquires directly or indirectly the beneficial
ownership of any voting security of the Seller and immediately after such
acquisition such Person is, directly or indirectly, the beneficial owner of
voting securities representing more than fifty percent (50%) of the total voting
power of all of the then-outstanding voting securities of the Seller; [ * ].

“Additional Product Information” is defined in Section 5.1(c)(iv)(1).

“Affiliate” means, with respect to any particular Person, any other Person
directly or indirectly controlling, controlled by or under common control with
such particular Person.

 

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COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

 

“Agreement” is defined in the preamble.

“Albany Manufacturing Agreement” means the Master Services Agreement, dated as
of January 1, 2010, by and between Albany Molecular Research, Inc. and Sunesis
Pharmaceuticals, Inc.

“Amendment No. 1 to the Loan and Security Agreement” means that First Amendment
to Loan and Security Agreement, dated as of the date hereof, among the Venture
Lenders and Sunesis Pharmaceuticals, Inc.

“Bankruptcy Event” means (i) any proceeding instituted by or against the Seller
seeking to adjudicate it as bankrupt or insolvent or seeking liquidation,
winding up, reorganization, arrangement, adjustment, protection, relief,
composition of it or its debts or any similar order, in each case under any
Bankruptcy Law, in each case for it or for any substantial part of its property
and, in the case of any such proceedings instituted against (but not by or with
the consent of) the Seller, either such proceedings shall remain undismissed or
unstayed for a period of [ * ] days or more or any action sought in such
proceedings shall occur or (ii) the Seller shall take any corporate or similar
action or any other action to authorize any action described in clause
(i) above.

“Bankruptcy Laws” means, collectively, bankruptcy, insolvency, reorganization,
moratorium, fraudulent conveyance, fraudulent transfer or other similar laws
affecting the enforcement of creditors’ rights generally.

“Business Day” means any day other than (i) a Saturday or Sunday or (ii) a day
on which banking institutions located in New York are permitted or required by
applicable law or regulation to remain closed.

“Buyer” is defined in the preamble.

“Buyer Indemnified Parties” is defined in Section 6.1(a).

“Buyer’s Remedy Expenses” means all of the Buyer’s costs and expenses (including
reasonable attorneys’ fees and expenses, as well as appraisal fees, fees
incurred on account of lien searches, inspection fees, and filing fees) in
connection with exercising its rights and remedies under Exhibit B of this
Agreement.

“Clinical Trial” means the Phase 3, Randomized, Controlled, Double-Blind,
Multinational Clinical Study of the Efficacy and Safety of Vosaroxin and
Cytarabine Versus Placebo and Cytarabine in Patients With First Relapsed or
Refractory Acute Myeloid Leukemia (VALOR), as described in the clinical study
protocol therefor dated as of August 31, 2010, and any amendments thereto.

“Clinical Trial Completion Notice” means the notice sent by the Seller’s
applicable Third Party contractor that [ * ] have occurred in the Clinical
Trial.

 

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[ * ]  =  CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

 

“Clinical Trial Experts” is defined in Section 5.1(b).

“Clinical Trial Product” means the Product as used in the Clinical Trial.

“Clinical Trial Results Analyses” means (i) all study unblinding analyses
prepared by or for the Seller upon unblinding of the Clinical Trial, providing
analysis of whether the Clinical Trial achieved its primary and secondary
endpoints and the results and data supporting such determination and possessed
by the Seller as of the Completion of the Study-as-Planned Triggering Event and
(ii) all reports and recommendations related to the unblinding analyses that
have been provided to the Seller by the DSMB or the Clinical Trial’s steering
committee as of the Completion of the Study-as-Planned Triggering Event.

“Closing” means the closing of the sale, transfer, assignment and conveyance of
the Revenue Participation Right hereunder.

“Closing Date” means the date on which the Closing occurs pursuant to
Section 2.1.

“Code” means the Uniform Commercial Code, as the same may, from time to time, be
enacted and in effect in the State of New York; provided, that, to the extent
that the Code is used to define any term herein or in any other Transaction
Document and such term is defined differently in different Articles or Divisions
of the Code, the definition of such term contained in Article or Division 9
shall govern; provided further, that in the event that, by reason of mandatory
provisions of law, any or all of the attachment, perfection, or priority of, or
remedies with respect to, the Buyer’s Lien on any Collateral is governed by the
Uniform Commercial Code in effect in a jurisdiction other than the State of New
York, the term “Code” shall mean the Uniform Commercial Code as enacted and in
effect in such other jurisdiction solely for purposes of the provisions thereof
relating to such attachment, perfection, priority, or remedies and for purposes
of definitions relating to such provisions.

“Collateral” is defined in Exhibit F.

“Collateral Agent” means Oxford Finance LLC, in its capacity as Collateral Agent
under (and as defined in) the Loan and Security Agreement.

“Collateral Sharing Agreement” means the Collateral Sharing Agreement, dated as
of the date hereof, by and between the Buyer and Collateral Agent and
acknowledged and agreed by the Seller.

“Combination Product” means any Product that includes at least one additional
active ingredient other than the compound identified in Schedule 9.1 hereto.
Drug delivery vehicles, adjuvants, and excipients shall not be deemed to be
“active ingredients”, except in the case where such delivery vehicle, adjuvant,
or excipient is recognized as an active ingredient in accordance with 21 C.F.R.
210.3(b)(7).

“Commercialization” means any and all activities directed to the manufacture,
distribution, marketing, detailing, promotion, selling and securing of
reimbursement of any

 

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[ * ]  =  CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

 

product after Marketing Approval has been obtained (including without limitation
making, using, importing, selling and offering for sale any product), and shall
include post-Marketing Approval studies, post-launch marketing, promoting,
detailing, marketing research, distributing, customer service, selling a
product, importing, exporting or transporting a product for sale, and regulatory
compliance with respect to the foregoing. When used as a verb, “Commercialize”
shall mean to engage in Commercialization.

“Common Stock” is defined in Section 1.3(a).

“Completion of the Study-as-Planned Triggering Event” means the occurrence of
each of the following: [ * ].

“Confidential Information” is defined in Section 7.1.

“Confidentiality Agreement” is defined in Section 7.2.

“Control Agreement” means any control agreement entered into among the
depository institution at which the Seller maintains a “deposit account” (used
herein as defined in the Code) or the securities intermediary or commodity
intermediary at which the Seller maintains a “securities account” (used herein
as defined in the Code) or a commodity account” (used herein as defined in the
Code), the Seller, and the Buyer pursuant to which the Buyer obtains control
(used herein within the meaning of the Code) over such deposit account,
securities account or commodity account.

“Dainippon” means Dainippon Sumitomo Pharma Co., Ltd., successor to Dainippon
Pharmaceutical Co., Ltd.

“Dainippon Agreement” means the License Agreement, dated as of October 14, 2003,
by and between the Seller and Dainippon.

“Data and Safety Monitoring Board” or “DSMB” means the independent advisory data
and safety monitoring board for vosaroxin protocol [ * ], a Phase 3, Randomized,
Controlled, Double-Blind, Multinational Clinical Study of the Efficacy and
Safety of Vosaroxin and Cytarabine Versus Placebo and Cytarabine in Patients
With First Relapsed or Refractory Acute Myeloid Leukemia (VALOR), established
pursuant to the DSMB Charter.

“Disclosing Party” is defined in Section 7.1.

“Disclosure Schedule” means the Disclosure Schedule, dated as of the date
hereof, delivered to the Buyer by the Seller concurrently with the execution of
this Agreement.

“DSMB Charter” means the Data And Safety Monitoring Board Charter, Protocol [ *
], VALOR, dated as of November 10, 2010.

“DSMB Continuation of the Study Notice” means the DSMB Meeting Recommendations
Report, as described in [ * ] setting forth the recommendation of the DSMB
following completion of the Interim Analysis to continue the Clinical Trial
without any Expansion of

 

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[ * ]  =  CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

 

Enrollment.

“DSMB Expansion of Enrollment Notice” means the DSMB Meeting Recommendations
Report, as described in [ * ] setting forth the recommendation of the DSMB
following completion of the Interim Analysis for an Expansion of Enrollment.

“DSMB Notice” means, as applicable, (i) a DSMB Continuation of the Study Notice,
(ii) a DSMB Expansion of Enrollment Notice, (iii) a DSMB Terminate for Efficacy
Notice or (iv) a DSMB Terminate for Futility Notice.

“DSMB Terminate for Efficacy Notice” means the DSMB Meeting Recommendations
Report, as described in [ * ] setting forth the recommendation of the DSMB
following completion of the Interim Analysis to terminate the Clinical Trial for
efficacy.

“DSMB Terminate for Futility Notice” means the DSMB Meeting Recommendations
Report, as described in [ * ] setting forth the recommendation of the DSMB
following completion of the Interim Analysis to terminate the Clinical Trial for
futility.

“Excluded Intellectual Property” is defined in Exhibit F.

“Expansion of Enrollment” means increasing accrual and extending observations
beyond the prespecified events in the protocol for the Clinical Trial.

“Expansion of Enrollment Triggering Event” means the occurrence of each of the
following: (i) the DSMB shall have issued a DSMB Expansion of Enrollment
Notice;[ * ].

“Fair Market Value of the Seller’s Common Stock” means $2.32, which is the
average closing price of the Seller’s Common Stock on the NASDAQ Capital Market
over the 20 trading days ending on the second full trading day prior to the date
hereof.

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

“FFDCA” means the Federal Food, Drug, and Cosmetic Act.

“Final Clinical Trial Press Release” means the Seller’s first public
announcement of the final results of the completed Clinical Trial, including
whether the Clinical Trial achieved its primary and secondary endpoints with
respect to the Clinical Trial Product.

“First Commercial Sale” means, with respect to any Product, the first sale for
use or consumption by the general public of such Product in any country after
Marketing Approval of such Product has been granted, or such marketing and sale
is otherwise permitted, by the regulatory authority of such country.

“Generic Product” means, with respect to a Product and country, a pharmaceutical
product that (a) contains the same active pharmaceutical ingredients as such
Product and is approved by the applicable Governmental Entities in such country
on an expedited or abbreviated basis after the expiration of any and all data
and marketing exclusivity rights for such Product in such country in a manner
that relied on or incorporated data submitted by the

 

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[ * ]  =  CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

 

Seller or its Affiliate or licensee in connection with the Marketing Approval
for such Product in such country; and (b) is sold in such country by a Third
Party that did not purchase such product in a chain of distribution that
included any of the Seller or its Affiliates or licensees.

“Governmental Entity” means any: (i) nation, principality, republic, state,
commonwealth, province, territory, county, municipality, district or other
jurisdiction of any nature; (ii) federal, state, local, municipal, foreign or
other government; (iii) governmental or quasi-governmental authority of any
nature (including any governmental division, subdivision, department, agency,
bureau, branch, office, commission, council, board, instrumentality, officer,
official, representative, organization, unit, body or other entity and any
court, arbitrator or other tribunal); (iv) multi-national organization or body;
or (v) individual, body or other entity exercising, or entitled to exercise, any
executive, legislative, judicial, administrative, regulatory, police, military
or taxing authority or power of any nature.

“Group Companies” means collectively, (i) any Person, (ii) any subsidiary of
such Person and (iii) any parent entities of such Person.

“Improvements” means any improvement, invention or discovery relating to the
compound identified on Schedule 9.1 hereto and/or the Product including
formulation of the Product and any and all derivatives of the compound
identified on Schedule 9.1 hereto.

“Insolvency Proceeding” means any proceeding by or against the Seller (or its
successors or assigns) under the United States Bankruptcy Code, or any other
bankruptcy or insolvency law, which proceeding is not stayed or terminated
within [ * ] days of initiation, including assignments for the benefit of
creditors, compositions, extensions generally with its creditors, or proceedings
seeking reorganization, arrangement, or other relief.

“Intellectual Property Security Agreement” means the Intellectual Property
Security Agreement, dated as of the date hereof, by and between the Buyer and
the Seller.

“Interim Analysis” means the Interim Efficacy Analysis, as described in
Section 5.3 of the DSMB Charter.

“Judgment” means any judgment, order, writ, injunction, citation, award or
decree of any nature.

“Knowledge of the Seller” means the actual knowledge of [ * ], [ * ], [ * ] and
[ * ], after due inquiry.

“Late Payment Notice” is defined in Section 5.4(c).

“Lien” means any mortgage, lien, pledge, participation interest, charge, adverse
claim, security interest, encumbrance or restriction of any kind, including any
restriction on use, transfer or exercise of any other attribute of ownership of
any kind.

“Loan and Security Agreement” means the Loan and Security Agreement, dated as of
October 18, 2011, among the Venture Lenders and Sunesis Pharmaceuticals, Inc.,
as amended by

 

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[ * ]  =  CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

 

Amendment No. 1 to the Loan and Security Agreement as the same may from time to
time be amended, amended and restated, supplemented, modified, replaced,
substituted, renewed or refinanced in accordance with the terms of this
Agreement and the Collateral Sharing Agreement.

“Loan Repayment” means the indefeasible payment in full, in cash, of all
obligations owing under the Loan and Security Agreement, the termination of all
commitments of the Venture Lenders under the Loan and Security Agreement and the
release of all Liens in favor of the Venture Lenders.

“Loss” means any and all Judgments, damages, losses, claims, costs, liabilities
and expenses, including reasonable fees and out-of-pocket expenses of counsel;
provided, however, that “Loss” shall not include any consequential, punitive,
special or incidental damages.

“Major Country” means any of [ * ] or [ * ].

“Mandatory Repurchase Offer Date” is defined in Section 1.5(d).

“Manufacturing Agreements” means, collectively, the AAI Manufacturing Agreement
and the Albany Manufacturing Agreement.

“Market Capitalization” means in the case of the Seller or an acquiring Person
of the Seller or such acquiring Person’s ultimate parent entity, as the case may
be, the product of (i) the average closing price of such Person’s common equity
during any thirty (30) consecutive trading days, as reported by the primary
exchange on which such common equity trades and (ii) the average aggregate
number of shares of such common equity outstanding during such thirty
(30) consecutive trading days, based upon the records maintained by such
Person’s transfer agent or registrar.

“Marketing Approval” means the approval of an NDA by the FDA necessary for the
Commercialization of a pharmaceutical product in the United States (or, in a
country other than the United States, the equivalent necessary approval(s) by
applicable Governmental Entities for reimbursement and Commercialization of a
pharmaceutical product in such country).

“Modification” is defined in Section 5.10(b).

“NDA” means a new drug application (as such term is used under the FFDCA), a
biologic license application (as such term is used under the FFDCA), or other
applicable pharmaceutical, biologic, or device approval submission to the FDA
for Marketing Approval (or, in a country other than the U.S., the equivalent
necessary submissions to the applicable Governmental Entity for Marketing
Approval).

“Net Sales” means the gross amount invoiced for sales of a Product by the Seller
or its Affiliates or any licensee of the Seller or the Seller’s Affiliates to a
Third Party (excluding any sales among the Seller, its Affiliates and any
licensee of the Seller or the Seller’s Affiliates) less the following amounts,
to the extent actually incurred or accrued, related to such Product:

 

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[ * ]  =  CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

 

[ * ]

With respect to sales of Product invoiced in U.S. dollars, Net Sales shall be
determined in U.S. dollars. With respect to sales of Product invoiced in a
currency other than U.S. dollars, Net Sales shall be determined by translating
the currencies at which the sales are made into U.S. dollars, with each such
translation calculated as follows: (i) if the sale is covered by Third Party
license agreement to which the Seller is a party, then at such rates of exchange
utilized in such Third Party license agreement; or (ii) if there is no agreed
upon rate of exchange in such Third Party license agreement or the sale is not
covered by a Third Party license agreement to which the Seller is a party
(including any sale by the Seller or the Seller’s Affiliates in any country in
which sales are not invoiced in U.S. dollars), at rates of exchange determined
by calculating the quarterly business day average of the published rates of
exchange for such non-U.S. dollar currencies as quoted by the Wall Street
Journal.

Net Sales shall not include transfers of Products for use in clinical trials,
development or other transactions that are not a full commercial sale, and no
payment shall be due hereunder with respect to such transfers.

Net Sales for any Combination Product shall be calculated on a
country-by-country basis by multiplying actual Net Sales of such Combination
Product by the fraction A/B, where A is the weighted average price paid for the
Product contained in such Combination Product if such Product is sold separately
in finished form in such country, and B is the weighted average invoice price
paid for such Combination Product in such country, provided that if the weighted
average invoice price paid for such Combination Product is greater than the
combined weighted average prices of all active ingredients (including Product)
contained in such Combination Product, Net Sales for such Combination Product
shall be calculated by multiplying actual Net Sales of such Combination Product
by the fraction A/(A+B) where “A” is the weighted average invoice price of the
Product contained in such Combination Product, and “B” is the combined weighted
average prices of all of the active ingredients other than Product contained in
such Combination Product. If the Product contained in such Combination Product
is not sold separately in finished form in such country, the Seller and the
Buyer shall determine Net Sales for such Product by mutual agreement based on
the relative contribution of such Product and each such other active ingredient
in such Combination Product in accordance with the above formula, and shall take
into account in good faith any applicable allocations and calculations that may
have been made for the same period in other countries.

[ * ]

“Non-disclosing Party” is defined in Section 7.1.

“NPV Termination Offer” is defined in Section 1.5(d).

“NPV Value” is defined in Section 1.5(d).

“Participation Payment” means, for each quarter, an amount payable to the Buyer
equal to the sum of the Net Sales during such quarter of each Product in each
country, worldwide, during the Payment Period for such Product and such country,
multiplied by the Revenue Participation Rate.

 

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[ * ]  =  CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

 

“Patents” means all patents and patent applications existing as of the date of
this Agreement and all patent applications filed hereafter, including any
continuation, continuation-in-part, division, provisional or any substitute
applications, any patent issued with respect to any of the foregoing patent
applications, any reissue, reexamination, renewal or patent term extension or
adjustment (including any supplementary protection certificate) of any such
patent, and any confirmation patent or registration patent or patent of addition
based on any such patent, and all foreign counterparts of any of the foregoing.

“Payment Breach” is defined in Section 1.5(d).

“Payment Period” means, on a Product-by-Product and country-by-country basis,
the period beginning on and including the date of First Commercial Sale, and
ending on the later of: (a) the expiration of the last to expire of (i) the
Patents set forth on Schedule 3.1(k)(iv) of the Disclosure Schedule as issued or
pending in a country, (ii) any continuation, continuation-in-part, division,
provisional or any substitute application or patent issuing therefrom or foreign
counterpart thereof, that has the benefit of the same priority date as any
Patent included in the foregoing clause (i), and (iii) any certificates,
reissues, reexaminations, patent term extensions or adjustments (including any
supplementary protection certificates) or other governmental actions which
extend the expiration of any Patent included in the foregoing clauses (i) or
(ii); (b) 10 years from the date of First Commercial Sale of such Product in
such country; and (c) the expiration of all applicable periods of data, market
or other regulatory exclusivity in such country with respect to such Product
(such as those periods listed in the FDA’s Orange Book or periods under national
implementations of Article 10.1(a)(iii) of Directive 2001/EC/83, and equivalents
in other countries). For clarity, the Payment Period shall not be extended by
any new patent application filed after the date of this Agreement containing a
Valid Claim for any Improvement (i.e., the Payment Period under subsection
(a) shall remain limited to the expiration of the Patents included in the
foregoing clauses (a)(i), (ii) or (iii) even if a Patent, other than a Patent
included in the foregoing clauses (a)(i), (ii) or (iii), for an Improvement
claims the Product).

“Payment Stream” means all Participation Payments payable in respect of
worldwide Net Sales of Products.

“Permitted License” is defined in Section 5.12(a).

“Permitted Licensee” is defined in Section 5.12(a).

“Permitted Liens” means (a) Liens for Taxes not yet delinquent or Liens for
Taxes being contested in good faith and by appropriate proceedings for which
adequate reserves have been established; (b) Liens in respect of property or
assets imposed by law which were incurred in the ordinary course of business,
such as supplier’s, carriers’, warehousemen’s, distributors’, wholesaler’s,
materialmen’s and mechanic’s Liens and other similar Liens arising in the
ordinary course of business which are not delinquent or remain payable without
penalty or are subject to a right of set-off or which are being contested in
good faith and by appropriate proceedings; (c) Liens granted pursuant to the
license contained in Article 2 of the AAI Manufacturing Agreement and Article 3
of the Albany Manufacturing Agreement; and (d) Liens secured under

 

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[ * ]  =  CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

 

the Loan and Security Agreement.

“Person” means any individual, firm, corporation, company, partnership, limited
liability company, trust, joint venture, association, estate, trust,
Governmental Entity or other entity, enterprise, association or organization.

“Post-Security Interest Release Permitted Liens” means (a) Liens for Taxes not
yet delinquent or Liens for Taxes being contested in good faith and by
appropriate proceedings for which adequate reserves have been established;
(b) Liens in respect of property or assets imposed by law which were incurred in
the ordinary course of business, such as supplier’s, carriers’, warehousemen’s,
distributors’, wholesaler’s, materialmen’s and mechanic’s Liens and other
similar Liens arising in the ordinary course of business which are not
delinquent or remain payable without penalty or are subject to a right of
set-off or which are being contested in good faith and by appropriate
proceedings; and (c) licenses to intellectual property.

“Post-Trial Reports” is defined in Section 5.1(c)(iv)(2).

“Prime Rate” means the prime rate published by The Wall Street Journal, from
time to time, as the prime rate.

“Product” means (a) a pharmaceutical product containing the compound identified
on Schedule 9.1 hereto, or (b) the Seller’s product candidate named or formerly
named vosaroxin or voreloxin or [ * ]. For clarification, Product shall include
any Combination Product and Improvements.

“Product Collateral” means the Seller’s interest in those Vosaroxin Product
Rights owned or licensed by the Seller and any proceeds thereof, including all
accounts and general intangibles resulting from the sale or license of Products
by the Seller.

“Purchase Price” is defined in Section 1.2.

“Released Collateral” means Collateral that is not the Product Collateral or
proceeds of the Product Collateral.

“Representative” means, with respect to any Person, (i) any direct or indirect
member or partner of such Person and (ii) any manager, director, officer,
employee, agent, advisor or other representative (including attorneys,
accountants, consultants, lenders and potential lenders, investors, bankers and
financial advisers) of such Person.

“Revenue Participation Rate” means (i) in the case of the Closing following a
Completion of the Study-as-Planned Triggering Event or a Terminate for Efficacy
Triggering Event, 3.6%, or (ii) in the case of the Closing following an
Expansion of Enrollment Triggering Event, 6.75%; provided, however, that if
following the introduction of a Generic Product in any country, the aggregate
Net Sales of the Product in any calendar quarter in such country are less than [
* ]% of the Net Sales of the Product in the corresponding (i.e., first, second,
third or fourth of a calendar year) calendar quarter in such country in the [ *
] calendar quarter period

 

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[ * ]  =  CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

 

immediately prior to such generic entry, then the Revenue Participation Rate
identified in clauses (i) and (ii) used to determine the Participation Payment
for such country shall be reduced to [ * ] percent ([ * ]%) of such Revenue
Participation Rate for each calendar quarter during which there is a Generic
Product marketed in such country.

“Revenue Participation Report” is defined in Section 5.4(d).

“Revenue Participation Right” means collectively all of the Buyer’s rights to
receive the Payment Stream.

“SEC” means the Securities and Exchange Commission.

“Seller” is defined in the preamble.

“Seller Indemnified Parties” is defined in Section 6.1(b).

“Seller Lien Release Triggering Event” means the occurrence of each of the
following: [ * ].

“Seller SEC Documents” is defined in Section 3.1(n).

“Spot Price” means $2.48, which is the closing price of the Seller’s Common
Stock on the full trading day immediately prior to the date hereof.

“Tax” or “Taxes” means any federal, state, local or foreign income, gross
receipts, license, payroll, employment, excise, severance, occupation, premium,
windfall profits, environmental, customs duties, capital stock, franchise,
profits, withholding, social security, unemployment, disability, real property,
personal property, abandoned property, value added, alternative or add-on
minimum, estimated or other tax of any kind whatsoever, including any interest,
penalty or addition thereto, whether disputed or not.

“Terminate for Efficacy Triggering Event” means the occurrence of each of the
following: (i) the DSMB shall have issued a DSMB Terminate for Efficacy Notice;
[ * ].

“Territory” means the entire world.

“Third Party” means any Person that is not the Seller or the Seller’s
Affiliates.

“Transaction Documents” means this Agreement and the Warrants.

“Valid Claim” means any claim contained in (a) an issued and unexpired patent
included within the Vosaroxin Patent Rights which has not been held
unenforceable, unpatentable or invalid by a decision of a court or
administrative or other governmental authority or agency of competent
jurisdiction, unappealable or unappealed within the time allowed for appeal, and
which has not been admitted to be invalid or unenforceable through abandonment,
reissue, disclaimer or otherwise, or (b) a patent application included within
the Vosaroxin Patent Rights, provided that the claim at issue has been under
examination for less than [ * ] years in any country in the Territory.

 

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[ * ]  =  CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

 

“Venture Lenders” means collectively, Oxford Finance LLC, Silicon Valley Bank
and Horizon Technology Finance Corporation.

“Vosaroxin Patent Rights” means any and all Patents in the Territory which are
owned or controlled by the Seller or under which the Seller is or may become
empowered to grant licenses, the subject matter of which is necessary or useful
in use and/or manufacture of the compound identified on Schedule 9.1 hereto or
development, manufacture, use, marketing, promotion, sale or distribution of any
Product, and shall be the Patents set forth in Schedule A, as well as any
existing or future Patents covering any Improvements. The Vosaroxin Patent
Rights include all provisional applications, divisionals, continuations and
continuations in part and non-US counterparts of or to any patents or patent
applications set forth in Schedule A, as well as certificates, reissues,
reexaminations, extensions or adjustments (including any supplementary
protection certificates) or other governmental actions which extend any of the
subject matter of a patent, and any substitutions, confirmations, registrations
or additions of or to any of the patents or patent applications listed in
Schedule A, as well as any existing or future Patents covering any Improvement.
The Seller shall use reasonable efforts to update Schedule A from time to time
as reasonably necessary, at least once a year during the term of this Agreement,
including in the event of registration or expiration of any of the Vosaroxin
Patent Rights.

“Vosaroxin Product Rights” means any and all of the following, as they exist
throughout the world: (A) Vosaroxin Patent Rights; (B) rights in registered and
unregistered trademarks, service marks, trade names, trade dress, logos,
packaging design, slogans and Internet domain names, and registrations and
applications for registration of any of the foregoing, in each case, as related
to a Product; (C) copyrights in both published and unpublished works, including
without limitation all compilations, databases and computer programs, manuals
and other documentation and all copyright registrations and applications, and
all derivatives, translations, adaptations and combinations of the above, in
each case, as related to a Product; (D) rights in know-how, trade secrets,
confidential or proprietary information, research in progress, algorithms, data,
databases, data collections, designs, processes, procedures, methods, protocols,
materials, formulae, drawings, schematics, blueprints, flow charts, models,
strategies, prototypes, techniques, and the results of experimentation and
testing, including samples, in each case, as specifically related to a Product;
(E) any and all other intellectual property rights and/or proprietary rights
specifically relating to any of the foregoing; (F) claims of infringement and
misappropriation against Third Parties relating to a Product; and (G) regulatory
filings, submissions and approvals related to a Product.

“Warrant” is defined in Section 1.3.

Section 9.2      Certain Interpretations.  Except where expressly stated
otherwise in this Agreement, the following rules of interpretation apply to this
Agreement:

(a)        “either” and “or” are not exclusive and “include,” “includes” and
“including” are not limiting and shall be deemed to be followed by the words
“without limitation”;

 

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(b)        “extent” in the phrase “to the extent” means the degree to which a
subject or other thing extends, and such phrase does not mean simply “if”;

(c)        “hereof,” “hereto,” “herein” and “hereunder” and words of similar
import when used in this Agreement refer to this Agreement as a whole and not to
any particular provision of this Agreement;

(d)        references to a Person are also to its permitted successors and
assigns;

(e)        definitions are applicable to the singular as well as the plural
forms of such terms;

(f)        references to an “Article”, “Section” or “Exhibit” refer to an
Article or Section of, or an Exhibit to, this Agreement, and references to a
“Schedule” refer to the corresponding part of the Disclosure Schedule;

(g)        references to “$” or otherwise to dollar amounts refer to the lawful
currency of the United States; and

(h)        references to a law include any amendment or modification to such law
and any rules and regulations issued thereunder, whether such amendment or
modification is made, or issuance of such rules and regulations occurs, before
or after the date of this Agreement.

Section 9.3      Headings.  The table of contents and the descriptive headings
of the several Articles and Sections of this Agreement and the Exhibits and
Schedules are for convenience only, do not constitute a part of this Agreement
and shall not control or affect, in any way, the meaning or interpretation of
this Agreement.

Section 9.4      Notices.  All notices and other communications under this
Agreement shall be in writing and shall be by facsimile, courier service or
personal delivery to the following addresses, or to such other addresses as
shall be designated from time to time by a party hereto in accordance with this
Section 9.4:

If to the Seller, to it at:

Sunesis Pharmaceuticals, Inc.

395 Oyster Point Boulevard

Suite 400

South San Francisco, CA 94080

Attention:  Chief Executive Officer

Facsimile:  (650) 266-3501

with a copy to:

Glen Y. Sato

Cooley LLP

 

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AMENDED.

 

3175 Hanover St.

Palo Alto, CA 94304

Facsimile: (650) 849-7400

If to the Buyer, to it at:

RPI Finance Trust

c/o Wilmington Trust Company

Rodney Square North

1100 North Market Street

Wilmington, Delaware 19890-0001

Attention:  Corporate Trust Administration

Facsimile:  (302) 636-4140

with a copy to:

RP Management, LLC

110 E. 59th Street, Suite 3300

New York, New York 10022

Attention:  Pablo Legorreta

Facsimile:  (212) 883-2260

with another copy to:

Goodwin | Procter LLP

Exchange Place

53 State Street

Boston, Massachusetts 02109

Attention:  Arthur R. McGivern

Facsimile:  (617) 523-1231

All notices and communications under this Agreement shall be deemed to have been
duly given (i) when delivered by hand, if personally delivered, (ii) when sent,
if sent by facsimile, with an acknowledgement of sending being produced by the
sending facsimile machine or (iii) one Business Day following sending within the
United States by overnight delivery via commercial one-day overnight courier
service.

Section 9.5      Expenses.  Except as otherwise provided herein, all fees, costs
and expenses (including any legal, accounting and banking fees) incurred in
connection with the preparation, negotiation, execution and delivery of this
Agreement and to consummate the transactions contemplated hereby shall be paid
by the party hereto incurring such fees, costs and expenses.

Section 9.6      Assignment.  This Agreement shall be binding upon, inure to the
benefit of and be enforceable by, the parties hereto and their respective
permitted successors and assigns. The Seller may not assign this Agreement
without the Buyer’s prior written consent except in connection with a sale of
all or substantially all of the assets of the Seller or to a buyer

 

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of all or substantially all of the assets of the Seller related to the Product,
including, without limitation, this Agreement, the Dainippon Agreement and the
Vosaroxin Product Rights, and provided (i) the successor entity expressly
assumes in writing to the Buyer all of the Seller’s rights and obligations under
this Agreement and (ii) the successor entity executes and delivers to Dainippon
written notice pursuant to Section 22.05 of the Dainippon Agreement stating that
such successor entity agrees to use the same commercially reasonable diligent
efforts in developing and/or marketing the “products” (as defined in the
Dainippon Agreement) and delivers to the Buyer a copy of such notice. The Buyer
may assign this Agreement provided that any such assignee agrees in writing to
be bound by Article 7 of this Agreement; provided that prior to any Acquiror
Lien Release Triggering Event or Seller Lien Release Triggering Event, without
the Seller’s prior written consent (such consent not to be unreasonably
withheld), the Buyer may assign only (i) the Buyer’s right, title and interest
in and to the Payment Stream and (ii) the Buyer’s continuing security interest
granted by the Seller to the Buyer pursuant to Section 1.5 hereof. Any permitted
successor or assign of Buyer shall be subject to the Collateral Sharing
Agreement. Any purported assignment in violation of this Section 9.6 shall be
null and void.

Section 9.7      Amendment and Waiver.

(a)        This Agreement may be amended, modified or supplemented only in a
writing signed by each of the parties hereto. Any provision of this Agreement
may be waived only in a writing signed by the party hereto granting such waiver.

(b)        No failure or delay on the part of any party hereto in exercising any
right, power or remedy hereunder shall operate as a waiver thereof, nor shall
any single or partial exercise of any such right, power or remedy preclude any
other or further exercise thereof or the exercise of any other right, power or
remedy. No course of dealing between the parties hereto shall be effective to
amend, modify, supplement or waive any provision of this Agreement.

Section 9.8      Entire Agreement.  This Agreement, the Exhibits annexed hereto,
the Disclosure Schedule and the Warrants constitute the entire understanding
between the parties hereto with respect to the subject matter hereof and
supersede all other understandings and negotiations with respect thereto. As of
the date hereof, the Confidentiality Agreement is hereby terminated without
further force and effect, superseded by Article 7 of this Agreement and all
obligations between the parties relating to confidentiality shall be governed by
Article 7 of this Agreement.

Section 9.9      No Third Party Beneficiaries.  This Agreement is for the sole
benefit of the Seller and the Buyer and their permitted successors and assigns
and nothing herein expressed or implied shall give or be construed to give to
any Person, other than the parties hereto and such successors and assigns, any
legal or equitable rights hereunder.

Section 9.10      Governing Law.  This Agreement shall be governed by, and
construed in accordance with, the laws of the State of New York without giving
effect to any choice or conflict of law provision or rule that would cause the
application of the laws of any other jurisdiction.

 

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AMENDED.

 

Section 9.11    JURISDICTION; VENUE.

(a)        EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY
SUBMITS, FOR ITSELF AND ITS RESPECTIVE PROPERTY AND ASSETS, TO THE EXCLUSIVE
JURISDICTION OF ANY NEW YORK STATE COURT OR FEDERAL COURT OF THE UNITED STATES
OF AMERICA SITTING IN NEW YORK COUNTY, NEW YORK, AND ANY APPELLATE COURT
THEREOF, IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS
AGREEMENT, OR FOR RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT IN RESPECT THEREOF,
AND THE BUYER AND THE SELLER HEREBY IRREVOCABLY AND UNCONDITIONALLY AGREE THAT
ALL CLAIMS IN RESPECT OF ANY SUCH ACTION OR PROCEEDING MAY BE HEARD AND
DETERMINED IN ANY SUCH NEW YORK STATE COURT OR, TO THE FULLEST EXTENT PERMITTED
BY APPLICABLE LAW, IN SUCH FEDERAL COURT. THE BUYER AND THE SELLER HEREBY AGREE
THAT A FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND
MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER
MANNER PROVIDED BY APPLICABLE LAW. EACH OF THE BUYER AND THE SELLER HEREBY
SUBMITS TO THE EXCLUSIVE PERSONAL JURISDICTION AND VENUE OF SUCH NEW YORK STATE
AND FEDERAL COURTS. THE BUYER AND THE SELLER AGREE, TO THE FULLEST EXTENT
PERMITTED BY APPLICABLE LAW, THAT PROCESS MAY BE SERVED ON THE BUYER OR THE
SELLER IN THE SAME MANNER THAT NOTICES MAY BE GIVEN PURSUANT TO SECTION 9.4
HEREOF.

(b)        EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY
WAIVES, TO THE FULLEST EXTENT IT MAY LEGALLY AND EFFECTIVELY DO SO, ANY
OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY ACTION
OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT IN ANY NEW YORK STATE
OR FEDERAL COURT. EACH OF THE BUYER AND THE SELLER HEREBY IRREVOCABLY WAIVES, TO
THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, THE DEFENSE OF AN INCONVENIENT
FORUM TO THE MAINTENANCE OF SUCH ACTION OR PROCEEDING IN ANY SUCH COURT.

Section 9.12    Severability.  If any term or provision of this Agreement shall
for any reason be held to be invalid, illegal or unenforceable in any situation
in any jurisdiction, then, to the extent that the economic and legal substance
of the transactions contemplated hereby is not affected in a manner that is
materially adverse to either party hereto, all other terms and provisions of
this Agreement shall nevertheless remain in full force and effect and the
enforceability and validity of the offending term or provision shall not be
affected in any other situation or jurisdiction.

Section 9.13    Specific Performance.  Each of the parties acknowledges and
agrees that the other party would be damaged irreparably in the event any of the
provisions of this Agreement are not performed in accordance with their specific
terms or otherwise are

 

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AMENDED.

 

breached or violated. Accordingly, each of the parties agrees that, without
posting bond or other undertaking, the other party will be entitled to an
injunction or injunctions to prevent breaches or violations of the provisions of
this Agreement and to enforce specifically this Agreement and the terms and
provisions hereof in any action, suit or other proceeding instituted in any
court of the United States or any state thereof having jurisdiction over the
parties and the matter in addition to any other remedy to which it may be
entitled, at law or in equity. Each party further agrees that, in the event of
any action for specific performance in respect of such breach or violation, it
will not assert the defense that a remedy at law would be adequate.

Section 9.14    Trustee Capacity of Wilmington Trust Company.  Notwithstanding
anything contained herein to the contrary, it is expressly understood and agreed
by the parties hereto that (i) this Agreement is executed and delivered by
Wilmington Trust Company, not individually or personally but solely in its
trustee capacity, in the exercise of the powers and authority conferred and
vested in it under the Amended and Restated Trust Agreement dated as of
August 9, 2011, among State Street Custodial Services (Ireland) Limited, as
Trustee of Royalty Pharma Select, and Wilmington Trust Company, as owner trustee
of the Buyer, (ii) each of the representations, undertakings and agreements
herein made on the part of the Buyer is made and intended not as a personal
representation, undertaking and agreement by Wilmington Trust Company but is
made and intended for the purpose of binding only the Buyer and (iii) under no
circumstances shall Wilmington Trust Company be personally liable for the
payment of any indebtedness or expenses of the Buyer or be liable for the breach
or failure of any obligation, representation, warranty or covenant made or
undertaken by the Buyer under this Agreement or any related documents.

Section 9.15    Counterparts.  This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement. Copies of executed
counterparts transmitted by telecopy, facsimile or other similar means of
electronic transmission, including “PDF,” shall be considered original executed
counterparts, provided receipt of such counterparts is confirmed.

Section 9.16    Relationship of Parties.  The relationship between the Buyer and
the Seller is solely that of purchaser and seller, and neither the Buyer nor the
Seller has any fiduciary or other special relationship with the other party or
any of its Affiliates. This Agreement is not a partnership or similar agreement,
and nothing contained herein or in any other Transaction Document shall be
deemed to constitute the Buyer and the Seller as a partnership, an association,
a joint venture or any other kind of entity or legal form for any purposes,
including any Tax purposes. The Buyer and the Seller agree that they shall not
take any inconsistent position with respect to such treatment in a filing with
any Governmental Entity.

[Signature Page Follows]

 

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AMENDED.

 

IN WITNESS WHEREOF, the parties hereto have caused this Revenue Participation
Agreement to be executed and delivered by their respective representatives
thereunto duly authorized as of the date first above written.

 

SUNESIS PHARMACEUTICALS, INC. By:  

/s/ Eric Bjerkholt

  Name: Eric Bjerkholt   Title: Sr. VP & CFO RPI FINANCE TRUST By:   Wilmington
Trust Company, not in its individual capacity but solely in its capacity as
owner trustee By:  

/s/ Yvette L. Howell

  Name: Yvette L. Howell   Title: Assistant Vice President

 

 

[SIGNATURE PAGE TO THE REVENUE PARTICIPATION AGREEMENT]

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AMENDED.

 

Exhibit A

Form of Warrant

THIS WARRANT AND THE SHARES ISSUABLE HEREUNDER HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR THE SECURITIES LAWS OF
ANY STATE AND, EXCEPT AND PURSUANT TO THE PROVISIONS OF ARTICLE 5 BELOW, MAY NOT
BE OFFERED, SOLD OR OTHERWISE TRANSFERRED, PLEDGED OR HYPOTHECATED UNLESS AND
UNTIL REGISTERED UNDER SAID ACT AND APPLICABLE STATE SECURITIES LAW OR, IN THE
OPINION OF LEGAL COUNSEL IN FORM AND SUBSTANCE SATISFACTORY TO THE ISSUER OF
THESE SECURITIES, SUCH OFFER, SALE OR TRANSFER, PLEDGE OR HYPOTHECATION IS
EXEMPT FROM REGISTRATION.

WARRANT TO PURCHASE STOCK

 

Company:   SUNESIS PHARMACEUTICALS, INC., a Delaware corporation (the “Company”)
Number of Shares:   [                                 ], subject to adjustment
in accordance with Article 2 below Class of Stock:   Common Stock of the
Company, par value $0.0001 per share (the “Common Stock”) Warrant Price:  
$[            ] per share Issue Date:   March 29, 2012 Expiration Date:   The
5th anniversary after the Closing following an Expansion of Enrollment
Triggering Event (each as defined in the Participation Agreement)
Revenue Participation Agreement:   This Warrant is issued in connection with the
Revenue Participation Agreement, dated as of March 29, 2012, by and between the
Company and RPI Finance Trust (as amended from time to time, the “Participation
Agreement”).

THIS WARRANT CERTIFIES THAT, for good and valuable consideration, including,
without limitation, the mutual promises contained in the Participation
Agreement, RPI Finance Trust (“Royalty Pharma,” together with any registered
holder from time to time of this Warrant or any holder of the shares issuable or
issued upon exercise of this Warrant, “Holder”) is entitled to purchase the
number of fully paid and nonassessable shares of Common Stock (the “Shares”) at
the Warrant Price, all as set forth above and as adjusted pursuant to Article 2
of this Warrant, subject to the provisions and upon the terms and conditions set
forth in this Warrant.

ARTICLE 1. EXERCISE.

1.1 Method of Exercise. Holder may exercise this Warrant in whole or in part by
delivering a duly executed Notice of Exercise in substantially the form attached
as Appendix 1 to

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the principal office of the Company. Unless Holder is exercising the conversion
right set forth in Article 1.2, Holder shall also deliver to the Company a
check, wire transfer (to an account designated by the Company), or other form of
payment acceptable to the Company for the aggregate Warrant Price for the Shares
being purchased.

1.2 Conversion Right. In lieu of exercising this Warrant as specified in Article
1.1, Holder may from time to time convert this Warrant, in whole or in part,
into a number of Shares determined by dividing (a) the aggregate fair market
value of the Shares or other securities otherwise issuable upon exercise of this
Warrant minus the aggregate Warrant Price of such Shares by (b) the fair market
value of one Share. The fair market value of the Shares shall be determined
pursuant to Article 1.3.

1.3 Fair Market Value. The fair market value of each Share shall be the closing
price of a share of Common Stock reported on the NASDAQ Capital Market for the
business day immediately before Holder delivers its Notice of Exercise to the
Company.

1.4 Delivery of Certificate and New Warrant. Promptly after Holder exercises or
converts this Warrant and, if applicable, the Company receives payment of the
aggregate Warrant Price, the Company shall deliver to Holder certificates for
the Shares acquired and, if this Warrant has not been fully exercised or
converted and has not expired, a new Warrant exercisable for the number of
shares of Common Stock remaining available for purchase under this Warrant.

1.5 Replacement of Warrants. On receipt of evidence reasonably satisfactory to
the Company of the loss, theft, destruction or mutilation of this Warrant and,
in the case of loss, theft or destruction, on delivery of an indemnity agreement
reasonably satisfactory in form and amount to the Company or, in the case of
mutilation on surrender and cancellation of this Warrant, the Company shall
execute and deliver, in lieu of this Warrant, a new warrant of like tenor.

1.6 Treatment of Warrant Upon Acquisition of Company.

1.6.1 “Acquisition”. For the purpose of this Warrant, “Acquisition” means any
sale, license, or other disposition of all or substantially all of the assets of
the Company, or any reorganization, consolidation, or merger of the Company
where the holders of the Company’s securities immediately before the transaction
beneficially own less than 50% of the outstanding voting securities of the
surviving entity immediately after the transaction.

1.6.2 Treatment of Warrant at Acquisition.

A) Upon the written request of the Company, Holder agrees that, in the event of
an Acquisition that is not an asset sale and in which the consideration is cash,
Marketable Securities (as defined below), or a combination thereof, either
(a) Holder shall exercise its conversion or purchase right under this Warrant
and such exercise will be deemed effective immediately prior to the consummation
of such Acquisition or (b) if Holder elects not to exercise the Warrant, this
Warrant will expire upon the consummation of such Acquisition. The Company shall
provide the Holder with written notice of its request relating to the foregoing
(together with such reasonable information as the Holder may request in
connection with such contemplated

 

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Acquisition giving rise to such notice), which is to be delivered to Holder not
less than [ * ] days prior to the closing of the proposed Acquisition.

B) Upon the written request of the Company, Holder agrees that, in the event of
an Acquisition that is an “arms length” sale of all or substantially all of the
Company’s assets (and only its assets) to a third party that is not an Affiliate
(as defined below) of the Company (a “True Asset Sale”), either (a) Holder shall
exercise its conversion or purchase right under this Warrant and such exercise
will be deemed effective immediately prior to the consummation of such
Acquisition or (b) if Holder elects not to exercise the Warrant, this Warrant
will continue until the Expiration Date if the Company continues as a going
concern following the closing of any such True Asset Sale. The Company shall
provide Holder with written notice of its request relating to the foregoing
(together with such reasonable information as Holder may request in connection
with such contemplated Acquisition giving rise to such notice), which is to be
delivered to Holder not less than [ * ] days prior to the closing of the
proposed Acquisition.

C) Upon the closing of any Acquisition other than those particularly described
in subsections (A) and (B) above, the successor entity shall assume this
Warrant, and shall succeed to, and be substituted for (so that from and after
the date of such Acquisition, the provisions of this Warrant referring to the
“Company” shall refer instead to the successor entity), and may exercise every
right and power of the Company and shall assume all of the obligations of the
Company under this Warrant with the same effect as if such successor entity had
been named as the Company herein. Upon the closing of the Acquisition, this
Warrant shall be exercisable for, in lieu of the Shares, the same securities,
cash, and property as would be payable for the Shares issuable upon exercise of
the unexercised portion of this Warrant as if such Shares were outstanding on
the record date of such Acquisition and subsequent closing. The Warrant Price
and/or number and type of securities subject to this Warrant following such
Acquisition shall be adjusted accordingly (as determined in good faith by the
Board of Directors of the Company).

As used herein (x) “Affiliate” shall mean any person or entity that owns or
controls directly or indirectly ten (10) percent or more of the Common Stock,
any person or entity that controls or is controlled by or is under common
control with such persons or entities, and each of such person’s or entity’s
officers, directors, joint venturers or partners, as applicable; and
(y) “Marketable Securities” shall mean securities meeting all of the following
requirements: (i) the issuer thereof is then subject to the reporting
requirements of Section 13 or Section 15(d) of the Securities Exchange Act of
1934, as amended (the “Exchange Act”), and is then current in its filing of all
required reports and other information under the Act and the Exchange Act;
(ii) the class and series of shares or other security of the issuer that would
be received by Holder in connection with the Acquisition were Holder to exercise
or convert this Warrant on or prior to the closing thereof is then traded on a
national securities exchange or over-the-counter market; (iii) Holder would not
be restricted by contract or by applicable federal or state securities laws from
publicly re-selling, within six (6) months following the closing of such
Acquisition, all of the issuer’s shares and/or other securities that would be
received by Holder in such Acquisition were Holder to convert this Warrant
pursuant to Section 1.2 above in full on or prior to the closing of such
Acquisition; and (iv) the issuer has a market capitalization, as of the date
immediately prior to and on the closing of such Acquisition of at least
$200,000,000.

 

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AMENDED.

 

ARTICLE 2. ADJUSTMENTS TO THE SHARES.

2.1 Stock Dividends, Splits, Etc. If the Company declares or pays a dividend on
its Common Stock payable in shares of Common Stock, or other securities of the
Company, then upon exercise of this Warrant, for each Share acquired, Holder
shall receive, without cost to Holder, the total number and kind of securities
to which Holder would have been entitled had Holder owned the Shares of record
as of the date the dividend occurred. If the Company subdivides the shares of
Common Stock by reclassification or otherwise into a greater number of shares,
the number of Shares purchasable hereunder shall be proportionately increased
and the Warrant Price shall be proportionately decreased. If the outstanding
shares of Common Stock are combined or consolidated, by reclassification or
otherwise, into a lesser number of shares, the Warrant Price shall be
proportionately increased and the number of Shares shall be proportionately
decreased. Any adjustment made pursuant to the first sentence of this paragraph
shall become effective immediately after the record date for the determination
of stockholders entitled to receive such dividend, and any adjustment pursuant
to the second and third sentences of this paragraph shall become effective
immediately after the effective date of such subdivision or combination.

2.2 Reclassification, Exchange, Combinations or Substitution. Upon any changes
in the Common Stock by reason of recapitalizations, reclassifications,
exchanges, substitutions, combinations, reorganizations, liquidations or similar
transactions, or other event that results in a change of the number and/or class
of the securities issuable upon exercise or conversion of this Warrant, Holder
shall be entitled to receive, upon exercise or conversion of this Warrant, the
number and kind of securities and property that Holder would have received for
the Shares if this Warrant had been exercised immediately before such event. The
Company or its successor shall promptly issue to Holder an amendment to this
Warrant setting forth the number and kind of such new securities or other
property issuable upon exercise or conversion of this Warrant as a result of
such reclassification, exchange, substitution or other event that results in a
change of the number and/or class of securities issuable upon exercise or
conversion of this Warrant. The amendment to this Warrant shall provide for
adjustments which shall be as nearly equivalent as may be practicable to the
adjustments provided for in this Article 2 including, without limitation,
adjustments to the Warrant Price and to the number of securities or property
issuable upon exercise of the new Warrant. The provisions of this Article 2.2
shall similarly apply to successive reclassifications, exchanges, substitutions,
or other events.

2.3 Intentionally Omitted.

2.4 No Impairment. The Company shall not, by amendment of its Certificate of
Incorporation or through a reorganization, transfer of assets, consolidation,
merger, dissolution, issuance, or sale of its securities or any other voluntary
action, avoid or seek to avoid the observance or performance of any of the terms
to be observed or performed under this Warrant by the Company, but shall at all
times in good faith assist in carrying out of all the provisions of this Article
2 and in taking all such action as may be necessary or appropriate to protect
Holder’s rights under this Article against impairment.

2.5 Fractional Shares. No fractional Shares shall be issuable upon exercise or
conversion of this Warrant and the number of Shares to be issued shall be
rounded down to the

 

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COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

 

nearest whole Share. If a fractional share interest arises upon any exercise or
conversion of the Warrant, the Company shall eliminate such fractional share
interest by paying Holder the amount computed by multiplying the fractional
interest by the fair market value of a full Share.

2.6 Certificate as to Adjustments.  Upon each adjustment of the Warrant Price,
the Company shall promptly notify Holder in writing, and, at the Company’s
expense, promptly compute such adjustment, and furnish Holder with a certificate
of its Chief Financial Officer setting forth such adjustment and the facts upon
which such adjustment is based. The Company shall, upon written request, furnish
Holder a certificate setting forth the Warrant Price in effect upon the date
thereof and the series of adjustments leading to such Warrant Price.

ARTICLE 3. REPRESENTATIONS AND COVENANTS OF THE COMPANY.

3.1 Representations and Warranties. The Company represents and warrants and
covenants to Holder as follows: All Shares which may be issued upon the exercise
of the purchase right represented by this Warrant, shall, upon issuance, be duly
authorized, validly issued, fully paid and nonassessable, and free of any liens
and encumbrances except for restrictions on transfer provided for herein or
under applicable federal and state securities laws.

3.2 Notice of Certain Events. If the Company proposes at any time (a) to declare
any dividend or distribution upon any of its stock, whether in cash, property,
stock, or other securities and whether or not a regular cash dividend; (b) to
effect any reclassification or recapitalization of any of its stock; or (c) to
merge or consolidate with or into any other corporation, or sell, lease,
license, or convey all or substantially all of its assets, or to liquidate,
dissolve or wind up, then, in connection with each such event, the Company shall
give Holder: (1) at least [ * ] days prior written notice of the date on which a
record will be taken for such dividend, distribution, or subscription rights
(and specifying the date on which the holders of Common Stock will be entitled
thereto) or for determining rights to vote, if any, in respect of the matters
referred to in (a) above; (2) in the case of the matters referred to in (b) and
(c) above at least [ * ] days prior written notice of the date when the same
will take place (and specifying the date on which the holders of common stock
will be entitled to exchange their common stock for securities or other property
deliverable upon the occurrence of such event). Notwithstanding the foregoing,
the failure to deliver such notice or any defect therein shall not affect the
validity of the corporate action required to be described in such notice.
Company will also provide information requested by Holder reasonably necessary
to enable the Holder to comply with the Holder’s accounting or reporting
requirements.

3.3 Reserved.

3.4 No Shareholder Rights. Except as provided in this Warrant, the Holder will
not have any rights as a shareholder of the Company until the exercise of this
Warrant.

ARTICLE 4. REPRESENTATIONS, WARRANTIES OF THE HOLDER. The Holder represents and
warrants to the Company as follows:

4.1 Purchase for Own Account. This Warrant and the securities to be acquired
upon exercise of this Warrant by the Holder will be acquired for investment for
the Holder’s account, not as a nominee or agent, and not with a view to the
public resale or distribution within the

 

5

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COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

 

meaning of the Securities Act of 1933, as amended (the “Act”). Holder also
represents that the Holder has not been formed for the specific purpose of
acquiring this Warrant or the Shares.

4.2 Disclosure of Information.  The Holder has received or has had full access
to all the information it considers necessary or appropriate to make an informed
investment decision with respect to the acquisition of this Warrant and its
underlying securities. The Holder further has had an opportunity to ask
questions and receive answers from the Company regarding the terms and
conditions of the offering of this Warrant and its underlying securities and to
obtain additional information (to the extent the Company possessed such
information or could acquire it without unreasonable effort or expense)
necessary to verify any information furnished to the Holder or to which the
Holder has access.

4.3 Investment Experience.  The Holder understands that the purchase of this
Warrant and its underlying securities involves substantial risk. The Holder has
experience as an investor in securities of companies in the development stage
and acknowledges that the Holder can bear the economic risk of such Holder’s
investment in this Warrant and its underlying securities and has such knowledge
and experience in financial or business matters that the Holder is capable of
evaluating the merits and risks of its investment in this Warrant and its
underlying securities and/or has a preexisting personal or business relationship
with the Company and certain of its officers, directors or controlling persons
of a nature and duration that enables the Holder to be aware of the character,
business acumen and financial circumstances of such persons.

4.4 Accredited Investor Status. The Holder is an “accredited investor” within
the meaning of Regulation D promulgated under the Act.

4.5 The Act. The Holder understands that this Warrant and the Shares issuable
upon exercise or conversion hereof have not been registered under the Act in
reliance upon a specific exemption therefrom, which exemption depends upon,
among other things, the bona fide nature of the Holder’s investment intent as
expressed herein. The Holder understands that this Warrant and the Shares issued
upon any exercise or conversion hereof must be held indefinitely unless
subsequently registered under the Act and qualified under applicable state
securities laws, or unless exemption from such registration and qualification
are otherwise available.

ARTICLE 5. MISCELLANEOUS.

5.1 Term. This Warrant is exercisable in whole or in part at any time and from
time to time on or before the Expiration Date.

5.2 Legends. This Warrant and the Shares shall be imprinted with a legend in
substantially the following form:

THIS WARRANT AND THE SHARES ISSUABLE HEREUNDER HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR THE SECURITIES LAWS OF
ANY STATE AND, EXCEPT AND PURSUANT TO THE PROVISIONS OF ARTICLE 5 BELOW, MAY NOT
BE OFFERED, SOLD OR OTHERWISE TRANSFERRED, PLEDGED OR HYPOTHECATED UNLESS AND
UNTIL REGISTERED UNDER SAID ACT AND APPLICABLE STATE SECURITIES LAW OR, IN THE
OPINION OF LEGAL

 

6

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COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

 

COUNSEL IN FORM AND SUBSTANCE SATISFACTORY TO THE ISSUER OF THESE SECURITIES,
SUCH OFFER, SALE OR TRANSFER, PLEDGE OR HYPOTHECATION IS EXEMPT FROM
REGISTRATION.

5.3 Compliance with Securities Laws on Transfer. This Warrant and the Shares
issuable upon exercise of this Warrant may not be transferred or assigned in
whole or in part without compliance with applicable federal and state securities
laws by the transferor and the transferee (including, without limitation, the
delivery of investment representation letters and legal opinions reasonably
satisfactory to the Company, as reasonably requested by the Company). The
Company shall not require Holder to provide an opinion of counsel if the
transfer is to any “affiliate” (as such term is defined in Regulation D
promulgated under the Act) of Holder, provided that any such transferee is an
“accredited investor” as defined in Regulation D promulgated under the Act.
Additionally, the Company shall also not require an opinion of counsel if there
is no material question as to the availability of current information as
referenced in Rule 144(c), Holder represents that it has complied with Rule
144(d) and (e) in reasonable detail, the selling broker represents that it has
complied with Rule 144(f), and the Company is provided with a copy of Holder’s
notice of proposed sale.

5.4 Transfer Procedure. After receipt by Holder of the executed Warrant, Royalty
Pharma may transfer all or part of this Warrant to one or more of Royalty
Pharma’s affiliates (each, a “Royalty Pharma Affiliate”) by execution of an
Assignment substantially in the form of Appendix 2. Subject to the provisions of
Article 5.3 and upon providing the Company with written notice, Royalty Pharma,
any such Royalty Pharma Affiliate and any subsequent Holder may transfer all or
part of this Warrant or the Shares issuable upon exercise of this Warrant to any
transferee, provided, however, in connection with any such transfer, the Royalty
Pharma Affiliate(s) or any subsequent Holder will give the Company notice of the
portion of the Warrant being transferred with the name, address and taxpayer
identification number of the transferee and Holder will surrender this Warrant
to the Company for reissuance to the transferee(s) (and Holder if applicable).

5.5 Notices. All notices and other communications from the Company to the
Holder, or vice versa, shall be deemed delivered and effective when given
personally or mailed by first-class registered or certified mail, postage
prepaid, at such address as may have been furnished to the Company or the
Holder, as the case may (or on the first business day after transmission by
facsimile) be, in writing by the Company or such Holder from time to time.
Effective upon receipt of the fully executed Warrant and the initial transfer
described in Article 5.4 above, all notices to the Holder shall be addressed as
follows until the Company receives notice of a change of address in connection
with a transfer or otherwise:

 RPI Finance Trust

 c/o Wilmington Trust Company

 Rodney Square North

 1100 North Market Street

 Wilmington, Delaware 19890-0001

 Attention:   Corporate Trust Administration

 Facsimile:   (302) 636-4140

 

7

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COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

 

 with a copy to:

 RP Management, LLC

 110 E. 59th Street, Suite 3300

 New York, New York 10022

 Attention:   Pablo Legorreta

 Facsimile:   (212) 883-2260

 with another copy to:

 Goodwin | Procter LLP

 Exchange Place

 53 State Street

 Boston, Massachusetts 02109

 Attention:   Arthur R. McGivern

 Facsimile:   (617) 523-1231

Notice to the Company shall be addressed as follows until the Holder receives
notice of a change in address:

 Sunesis Pharmaceuticals, Inc.

 395 Oyster Point Boulevard, Suite 400

 South San Francisco, California 94080

 Attn: Chief Financial Officer

 Telephone: (650) 266-3717

 Facsimile: (650) 266-3505

5.6 Waiver. This Warrant and any term hereof may be changed, waived, discharged
or terminated (either generally or in a particular instance and either
retroactively or prospectively) only by an instrument in writing signed by the
party against which enforcement of such change, waiver, discharge or termination
is sought.

5.7 Attorneys’ Fees. In the event of any dispute between the parties concerning
the terms and provisions of this Warrant, the party prevailing in such dispute
shall be entitled to collect from the other party all costs incurred in such
dispute, including reasonable attorneys’ fees.

5.8 Automatic Conversion upon Expiration. In the event that, upon the Expiration
Date, the fair market value of one Share (or other security issuable upon the
exercise hereof) as determined in accordance with Section 1.3 above is greater
than the Warrant Price in effect on such date, then this Warrant shall
automatically be deemed on and as of such date to be converted pursuant to
Section 1.2 above as to all Shares (or such other securities) for which it shall
not previously have been exercised or converted, and the Company shall promptly
deliver a certificate representing the Shares (or such other securities) issued
upon such conversion to the Holder.

 

8

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COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

 

5.9 Trustee Capacity of Wilmington Trust Company. Notwithstanding anything
contained herein to the contrary, it is expressly understood and agreed by the
parties hereto that (i) this Warrant is executed and delivered by Wilmington
Trust Company, not individually or personally but solely in its trustee
capacity, in the exercise of the powers and authority conferred and vested in it
under the Amended and Restated Trust Agreement dated as of August 9, 2011, among
State Street Custodial Services (Ireland) Limited, as Trustee of Royalty Pharma
Select, and Wilmington Trust Company, as owner trustee of Royalty Pharma,
(ii) each of the representations, undertakings and agreements herein made on the
part of Royalty Pharma is made and intended not as a personal representation,
undertaking and agreement by Wilmington Trust Company but is made and intended
for the purpose of binding only Royalty Pharma and (iii) under no circumstances
shall Wilmington Trust Company be personally liable for the payment of any
indebtedness or expenses of Royalty Pharma or be liable for the breach or
failure of any obligation, representation, warranty or covenant made or
undertaken by Royalty Pharma under this Warrant or any related documents.

5.10 Counterparts. This Warrant may be executed in counterparts, all of which
together shall constitute one and the same agreement.

5.11 Governing Law. This Warrant shall be governed by and construed in
accordance with the laws of the State of California, without giving effect to
its principles regarding conflicts of law.

[Balance of Page Intentionally Left Blank]

 

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COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

 

 

   COMPANY:    SUNESIS PHARMACEUTICALS, INC.    By:   

 

      Name: Daniel N. Swisher, Jr.      

Title:   President and Chief Executive

           Officer

   By:   

 

      Name: Eric H. Bjerkholt       Title:   Senior Vice President, Corporate
Development and Finance, Chief Financial Officer and Corporate
           Secretary    HOLDER:    RPI FINANCE TRUST    By:    Wilmington Trust
Company, not in its individual capacity but solely in its capacity as owner
trustee    By:   

 

      Name:       Title:

 

10

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BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

 

APPENDIX 1

NOTICE OF EXERCISE

Holder elects to purchase              shares of the common stock of SUNESIS

PHARMACEUTICALS, INC., par value $0.0001 per share (the “Common Stock”),
pursuant to the terms of the attached Warrant, and tenders payment of the
purchase price of the shares in full.

[or]

Holder elects to convert the attached Warrant into shares of Common Stock in the
manner specified in the Warrant. This conversion is exercised for            of
the Shares covered by the Warrant.

[Strike paragraph that does not apply.]

Please issue a certificate or certificates representing the shares of Common
Stock in the name specified below:

 

     

 

            Holders Name            

 

           

 

            (Address)      

By its execution below and for the benefit of the Company, Holder hereby
restates each of the representations and warranties in Article 4 of the Warrant
as the date hereof.

 

HOLDER:

By:

 

 

Name:

 

 

Title:

 

 

(Date):

 

 

 

11

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COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

 

APPENDIX 2

ASSIGNMENT

For value received, RPI Finance Trust hereby sells, assigns and transfers unto

 

  [Name:      [ROYALTY PHARMA TRANSFEREE]     Address:     

 

    Tax ID:     

 

  ]

that certain Warrant to Purchase Stock issued by SUNESIS PHARMACEUTICALS, INC.
(the “Company”), on March 29, 2012 (the “Warrant”) together with all rights,
title and interest therein.

 

RPI FINANCE TRUST Wilmington Trust Company, not in its individual capacity but
solely in its capacity as owner trustee

By:

 

 

Name:

 

Title:

 

Date:

 

By its execution below, and for the benefit of the Company, [ROYALTY PHARMA
TRANSFEREE] makes each of the representations and warranties set forth in
Article 4 of the Warrant and agrees to all other provisions of the Warrant as of
the date hereof.

 

[ROYALTY PHARMA TRANSFEREE] By:  

 

Name:   Title:  

 

12

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COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

 

Exhibit B

Rights and Remedies of the Buyer

1.1      Rights and Remedies. The following rights and remedies granted to Buyer
are subject to the Collateral Sharing Agreement.

(a)        Upon the occurrence and during the continuance of a Payment Breach,
the Buyer may do any or all of the following: (i) deliver notice of the Payment
Breach to the Seller or (ii) by notice to the Seller declining the NPV
Termination Offer.

(b)        Without limiting the rights of the Buyer set forth in Section 1.1(a)
above, upon the occurrence and during the continuance of a Payment Breach, the
Buyer shall have the right, without notice or demand, to do any or all of the
following:

(i)        foreclose upon and/or sell or otherwise liquidate, the Collateral;
and/or

(ii)       commence and prosecute an Insolvency Proceeding or consent to the
Seller commencing any Insolvency Proceeding.

(iii)      settle or adjust disputes and claims directly with any “account
debtor” (used herein as defined in the Code) with respect to the Collateral for
amounts on terms and in any order that the Buyer considers advisable, notify any
Person owing the Seller money of the Buyer’s security interest in such funds,
and verify the amount of such account;

(iv)      make any payments and do any acts it considers necessary or reasonable
to protect the Collateral and/or its security interest in the Collateral. The
Seller shall assemble the Collateral if the Buyer requests and make it available
in a location as the Buyer reasonably designates. The Buyer may enter premises
where the Collateral is located, take and maintain possession of any part of the
Collateral, and pay, purchase, contest, or compromise any Lien which appears to
be prior or superior to its security interest and pay all expenses incurred. The
Seller grants the Buyer a license to enter and occupy any of its premises,
without charge, to exercise any of the Buyer’s rights or remedies;

(v)       ship, reclaim, recover, store, finish, maintain, repair, prepare for
sale, and/or advertise for sale, the Collateral. The Buyer is hereby granted a
non-exclusive, royalty-free license or other right to use, without charge, the
Seller’s labels, patents, copyrights, mask works, rights of use of any name,
trade secrets, trade names, trademarks, service marks, and advertising matter,
or any similar property solely to the extent as each of the foregoing pertains
to the Collateral, in completing production of, advertising for sale, and
selling any Collateral and, in

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COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

 

connection with the Buyer’s exercise of its rights under this Section 1.1 above,
the Seller’s rights under all licenses and all franchise agreements inure to the
Buyer;

(vi)      if at any time, the Buyer is the sole control party with respect to
any deposit account constituting Collateral (e.g. a deposit account holding cash
proceeds of any Product Collateral), the Buyer may deliver a notice of exclusive
control, any entitlement order, or other directions or instructions pursuant to
any Control Agreement or similar agreements providing control of any Collateral;

(vii)     demand and receive possession of the Seller’s books and records,
records regarding the Seller’s assets or liabilities, the Collateral, business
operations or financial condition, and all computer programs or storage or any
equipment containing such information;

(viii)    appoint a receiver to seize, manage and realize any of the Collateral,
and such receiver shall have any right and authority as any competent court will
grant or authorize in accordance with any applicable law; and

(ix)      Subject to Sections 1.1(a) and (b) above, exercise all rights and
remedies available to the Buyer under this Agreement or at law or equity,
including all remedies provided under the Code (including disposal of the
Collateral pursuant to the terms thereof).

1.2        Power of Attorney.  Effective from and after the Closing, the Seller
hereby irrevocably appoints the Buyer as its lawful attorney-in-fact,
exercisable, subject to the Collateral Sharing Agreement; provided that the
Seller agrees that it shall not exercise its rights as the appointed lawful
attorney-in-fact at any time prior to the Marketing Approval of the Product.
Following Marketing Approval of the Product, upon the occurrence and during the
continuance of a Payment Breach, Buyer, as the appointed lawful attorney-in-fact
shall have the right to: (a) endorse the Seller’s name on any checks or other
forms of payment or security; (b) sign the Seller’s name on any invoice or bill
of lading for any account or drafts against account debtors; (c) settle and
adjust disputes and claims about the accounts directly with account debtors, for
amounts and on terms the Buyer determines reasonable; (d) make, settle, and
adjust all claims under the Seller’s insurance policies; (e) pay, contest or
settle any Lien, charge, encumbrance, security interest, and adverse claim in or
to the Collateral, or any judgment based thereon, or otherwise take any action
to terminate or discharge the same; and (f) transfer the Collateral into the
name of the Buyer or a third party as the Code or any applicable law permits.
The Seller hereby appoints the Buyer as its lawful attorney-in-fact to sign the
Seller’s name on any documents reasonably necessary to perfect or continue the
perfection of the Buyer’s security interest in the Collateral regardless of
whether a Payment Breach has occurred until all of the Seller’s obligations
under this Agreement (other than inchoate indemnity obligations), including the
payment of past and future Participation Payments or the NPV Termination Offer,
if not rejected by the Buyer, have been satisfied in full. The Buyer’s foregoing
appointment as the Seller’s attorney in fact, and all of the Buyer’s rights and
powers, coupled with an interest, are irrevocable until all of the Seller’s
obligations under this Agreement (other than inchoate

 

2

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indemnity obligations), including the payment of past and future Participation
Payments or the NPV Termination Offer, if not rejected by the Buyer, have been
satisfied in full; provided, however, that the Buyer shall exercise such rights
in accordance with the Collateral Sharing Agreement.

1.3        Protective Payments. If the Seller fails to pay any amount which the
Seller is obligated to pay to a Third Party with respect to the Product
Collateral or any covenant of Seller under Section 5 of this Agreement, the
Buyer may make such payment, and all amounts so paid by the Buyer are Buyer’s
Remedy Expenses and immediately due and payable and secured by the Collateral.
The Buyer will make reasonable efforts to provide the Seller with notice of the
Buyer making such payment at the time it is obtained or paid or within a
reasonable time thereafter. No such payments by the Buyer are deemed an
agreement to make similar payments in the future or the Buyer’s waiver of any
Payment Breach.

1.4        Application of Payments and Proceeds. Notwithstanding anything to the
contrary contained in this Agreement, upon the occurrence and during the
continuance of a Payment Breach, subject to the Collateral Sharing Agreement,
the proceeds of any sale of, or other realization upon all or any part of the
Collateral shall be applied: first, to the Buyer’s Remedy Expenses; and second,
to all of the Seller’s obligations under this Agreement, including the payment
of past and future Participation Payments or the NPV Termination Offer, if not
rejected by the Buyer.

1.5        Liability for Collateral. So long as the Buyer employs reasonable
practices regarding the safekeeping of the Collateral in the possession or under
the control of the Buyer, (i) the Buyer shall not be liable or responsible for:
(a) the safekeeping of the Collateral; (b) any loss or damage to the Collateral;
(c) any diminution in the value of the Collateral; or (d) any act or default of
any carrier, warehouseman, bailee, or other Person; and (ii) the Seller bears
all risk of loss, damage or destruction of the Collateral.

1.6        No Waiver; Remedies Cumulative. The Buyer’s failure, at any time or
times, to require strict performance by the Seller of any provision of this
Agreement shall not waive, affect, or diminish any right of the Buyer thereafter
to demand strict performance and compliance herewith or therewith. No waiver
hereunder shall be effective unless signed by the Buyer and then is only
effective for the specific instance and purpose for which it is given. The
Buyer’s rights and remedies under this Agreement are cumulative. The Buyer has
all rights and remedies provided under the Code, any applicable law, by law, or
in equity. The Buyer’s exercise of one right or remedy is not an election, and
the Buyer’s waiver of any Payment Breach is not a continuing waiver. The Buyer’s
delay in exercising any remedy is not a waiver, election, or acquiescence.

 

3

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COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

 

Exhibit C

Dainippon Agreement

{Exhibit C may be referenced as Exhibit 10.36 to the Company’s S-1/A}

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COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

 

Exhibit D

Manufacturing Agreements

{ Items 2, 3 and 4 of Exhibit D may be referenced as Exhibits 10.50, 10.51 10.52
to the Company’s 10-K for the year ended December 31, 2010. Items 1 and 5 of
Exhibit D are below}

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COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

 

MASTER SERVICES AGREEMENT

This Master Services Agreement (“Agreement”) is entered into as of November 3,
2003 (the “Effective Date”) by and between Sunesis Pharmaceuticals Incorporated,
a Delaware corporation with an office at 341 Oyster Point Boulevard, South San
Francisco, California 94080 (hereinafter the “Client”) and AAI Developmental
Services Inc. with an office at 2320 Scientific Park Drive, Wilmington, NC 28405
(hereinafter “AAI”). The Client and AAI are referred to singly as “Party” and
jointly as “Parties” throughout this Agreement.

WITNESSETH

WHEREAS, AAI is in the business of providing certain drug product stability,
analytical and manufacturing services, preclinical drug development, quality
assurance and regulatory consulting, bioanalytical testing, and design and
management of clinical trials, including monitoring, data management,
biostatistical, and reporting services for the pharmaceutical industry
(hereinafter, “Services”); and

WHEREAS, AAI represents that it has the necessary personnel, expertise,
facilities and experience to provide such Services to the Client;

WHEREAS, AAI and Client desire to enter into this Agreement to provide the terms
and conditions upon which Client may engage AAI, from time to time and agreed to
by AAI, to provide services for individual projects in accordance with mutually
agreed upon Work Orders (as defined below) specifying the details of the
services and the related terms and conditions.

NOW THEREFORE, for and in consideration of the mutual covenants and agreements
set forth hereinafter and for other good and valuable consideration, the receipt
and sufficiency of which is hereby acknowledged, the parties hereto do hereby
agree as follows:

ARTICLE I

SCOPE OF AGREEMENT AND WORK/CHANGE ORDERS

 

1.1

            This Agreement allows the Parties to contract for multiple projects
through the issuance of individual Work Orders (as discussed below) without
having to re-negotiate the basic terms and conditions contained herein.

 

1.2

            The specific duties and responsibilities for each project under this
Agreement (each a “Project”) shall be separately negotiated and specified in
writing on terms, and in a format, mutually agreed upon and executed by the
Parties (each such writing, a “Work Order”). Each work Order shall include
(i) the scope and specification of the Project; (ii) deliverables and timelines;
(iii) any performance metrics; and (iv) a budget and payment schedule. Any
material change in the details of a Work Order shall require a written amendment
to the Work Order, mutually agreed upon and executed by the Parties (a “Change
Order”).

 

1.3

            Any and all Work Orders or Change Orders issued and executed
pursuant to this Agreement will be made part hereof and incorporated herein by
reference, and shall be

 

2

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subject to the terms and conditions set forth in this Agreement. Any and all
Work Orders or Change Orders shall also be subject to the terms and conditions
set forth in the quality requirements agreement to be completed and executed by
the parties and attached hereto as Exhibit A (the “Quality Agreement”), unless
otherwise expressly set forth in the Work Order or Change Order. The Parties
shall use commercially reasonable efforts to finalize and execute the Quality
Agreement within thirty (30) days of the Effective Date. To the extent there is
any conflict between the provisions of this Agreement, the Quality Agreement and
a Work Order and/or Change Order, the terms and conditions of this Agreement
shall govern.

 

1.4

            Services provided by AAI shall comply with all applicable Good
Laboratory Practices, current Good Manufacturing Practices, Good Clinical
Practices, and all other United States governmental and regulatory standards,
specifications and guidelines, as specified in the Quality Agreement.

 

1.5

            The Parties understand that AAI shall use commercially reasonable
efforts to initiate, conduct and complete the Services as set forth in a Work
Order in a timely fashion. The Client understands and agrees that completing the
Services as set forth in a Work Order assumes the full cooperation of the Client
as well as other third parties.

ARTICLE II

PROJECT IMPLEMENTATION

 

2.1

            Prior to AAI’s commencement of Services hereunder, the Parties shall
execute one or more Work Orders. The Client’s execution of a Work Order will be
deemed its authorization for AAI to proceed under the terms and conditions of
this Agreement and the Quality Agreement, if applicable.

 

2.2

            AAI shall utilize commercially reasonable efforts to provide the
Services as agreed in the Work Order and, if necessary, any associated Change
Order.

 

2.3

            The Parties recognize that in certain instances, the Client may wish
AAI to commence Services prior to the formal execution of a Work Order
authorizing such Services. In such circumstances, the Client may authorize AAI
in writing (hereinafter, “Letter of Authorization”) to commence specified
Services pending execution of the relevant Work Order. The Letter of
Authorization shall specify the Services to be performed and a dollar limitation
for the performance of such Services.

 

2.4

            AAI shall use commercially reasonable efforts to anticipate the
scope of activities necessary to complete Services established by a Work Order.
However, Work Orders constitute both Parties’ informed estimate of those
Services necessary to satisfactorily complete a Project and are based upon the
Parties’ current knowledge of the factual situation as well as the current
regulatory environment. Therefore, the scope of proposed Services may require
modification of the Work Order during the course of performance. In the event
additional or different Services are required, the Client’s authorized

 

3

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representative, as set forth in Article VIII, may in writing authorize AAI to
perform additional or different Services. AAI shall promptly acknowledge the
Client’s written authorization by issuing a Change Order for such additional or
different Services.

 

2.5

            AAI will use commercially reasonable efforts to complete the agreed
upon Project within the limits set forth in the executed Work Order or Change
Order. However, the Parties recognize that the Services to be provided hereunder
are not subject to precise advance determination, In the event unforeseen
difficulties arise, AAI shall inform the Client, outlining the basis for such
conclusion. In such event, the Parties agree to enter into good faith
negotiations regarding the terms of the Work Order applicable to the Project.

ARTICLE III

PAYMENT FOR SERVICES RENDERED

 

3.1

            The Client agrees to pay for Services according to a properly
authorized Work Order, Change Order, or Letter of Authorization.

 

3.2

            The Client will reimburse AAI for reasonable and customary
out-of-pocket expenses including any appropriate handling fees (not including
any supplies and services as set forth in Article 3.3 herein) incurred in
connection with the performance of the Services set forth in the Work Order
provided that AAI obtains the Client’s approval prior to incurring such
expenditures and that AAI provides the Client with documentation of such
approved expenditures, if requested. AAI shall invoice the Client for such
expenses at cost.

 

3.3

            Unless otherwise agreed by the Parties in writing in a Work Order or
Change Order, AAI shall charge the Client a fifteen percent (15%) handling fee
for all supplies, materials or services acquired for or on behalf of the Client
to satisfactorily complete the Services as set forth in the Work Order or Change
Order.

 

3.4

            AAI shall not engage any third party for any of the Services as set
forth in the Work Order or Change Order without the prior written consent of the
Client.

 

3.5

            If the Client delays or temporarily halts a Project after such
Project has commenced for reasons beyond the reasonable control of AAI, a
monthly fee will be assessed to compensate AAI for reasonable and actual time
and expenses incurred related to such delay including the storage of Client’s
samples and materials. AAI shall provide an itemized description of such
expenses, and shall invoice the Client for such expenses at cost. The Client
will pay the expenses associated with such invoices in accordance with Article
3.6 herein.

 

3.6

            Unless otherwise agreed by the Parties in writing, AAI shall invoice
the Client on a calendar month basis for Services rendered as set forth in the
Work Order. Invoices are due and payable net thirty (30) days after Client’s
receipt of invoice. All payments to

 

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AAI shall be made in U.S. dollars. Invoice balances not remitted within thirty
(30) days of receipt of invoice shall be subject to a one and one-half percent
(1.5%) per month interest charge. Should any part of the invoice be in dispute,
the Client shall pay any undisputed amount according to the terms and conditions
described herein while said dispute is being resolved.

ARTICLE IV

INTELLECTUAL PROPERTY

 

4.1

            Any invention, trade secret or know-how and any materials,
documents, programs or information belonging to Client and supplied to AAI by
Client pursuant to this Agreement shall remain the property of Client. Any
invention, trade secret or know-how and any materials, documents, programs or
synthesis information belonging to AAI prior to the date of this Agreement, or
developed by AAI independently of this Agreement, i.e. not falling within
Article 4.2 below, shall remain the property of AAI.

 

4.2

            Any inventions (whether or not patentable), processes, techniques,
improvements, discoveries, trade secrets, know-how and developments discovered
and reduced to practice by AAI solely or jointly for the purpose of performing
the Services or other work performed under a Project (collectively, “Project
IP”) are hereby assigned to Client (including any patent and all other
intellectual property rights therein), and shall be deemed the Confidential
Information of Client for purposes of Article V below (“Project IP”). AAI will,
at the expense and the written request of the Client, do all reasonable acts and
things and execute all documents as the Client may reasonably request to
transfer to and vest in the Client the ownership and registration of all
intellectual property rights that may exist in such Project IP.

 

4.3

            With respect to Project IP, AAI will not, to its actual knowledge,
incorporate or use therein any invention, discovery, process, technology or
information that (a) is covered in whole or in part by a claim of any patent
application or issued patent that is owned or controlled by AAI, but not
assigned to Client pursuant to Article IV (“AAI Background Patent Rights”),
(b) is covered in whole or in part by a claim of any patent or patent
application of a third party, or c) incorporates any AAI processes, inventions,
techniques, know-how, or trade secrets that is owned or controlled by AAI, but
not assigned to Client pursuant to Article IV (“AAI Background Know-How”). In
the event any Project IP incorporates or requires the use of AAI Background
Patent Rights or AAI Background Know-How (collectively, “AAI Proprietary
Technology”), AAI shall notify Client thereof and the Parties shall negotiate in
good faith the terms of an appropriate license agreement for such AAI
Proprietary Technology, with such license agreement memorialized in a separate
writing.

 

4.4

            The Client acknowledges that AAI is in the business of providing
Services for a variety of organizations other than the Client. Accordingly,
nothing in this Agreement shall preclude or limit AAI from providing Services or
developing materials for itself or other clients, or from utilizing the general
knowledge gained during the course of its

 

5

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performance hereunder to perform similar Services for other clients, provided
that such provision of Services or development of materials do not constitute a
breach of confidentiality under Article V herein.

ARTICLE V

CONFIDENTIALITY

 

5.1

            During the performance of Services and the Term of this Agreement,
AAI may receive from Client confidential or proprietary information, including
information concerning Client’s regulatory submissions, data, testing and
research techniques, inventions, materials, processes, practices, trade secrets
and like information (collectively “Confidential Information”). Client agrees
that it will only provide such Confidential Information to the extent that it is
required by AAI to perform Services. For the avoidance of doubt, the following
shall in all cases be treated as Confidential Information hereunder: (i) all
samples of chemical compounds and data related thereto, (ii) all Confidential
Information provided under the parties’ prior Non-Disclosure Agreement dated
September 9, 2003, and (iii) all of the data and Project IP which were developed
or generated by AAI for the Client, or any methodologies, technology, or assays
developed by AAI for the Client. Notwithstanding the foregoing, the obligations
of this Article V shall not apply in the case of:

 

  (i)

information of the Client which is now in the public domain or which
subsequently enters the public domain without fault on the part of AAI; or

 

  (ii)

information of the Client which is presently known by AAI from its own sources
where said present knowledge can be demonstrated by written records; or

 

  (iii)

information of the Client which AAI receives in good faith from a third party
where said third party is independent of the Client and is under no obligation
of confidentiality with respect to such information; or

 

  (iv)

information developed by or for AAI independent of the Projects and without the
use of any Confidential Information of Client, as evidenced by AAI’s written
records; or

 

  (v)

information disclosed by AAI as required by law pursuant to an appropriate legal
order by a court or government agency having the authority to compel such
disclosure; however, in such case, AAI shall notify the Client of such order
compelling disclosure, and where possible, reasonably cooperate with the Client
to provide it with the opportunity to take appropriate legal action to safeguard
said information.

 

5.2

            AAI agrees that without the express written consent of Client, it
will not itself use, or provide to, disclose to, or permit any third party to
use said Confidential Information. AAI agrees to take reasonable and appropriate
measures to safeguard Confidential

 

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Information from theft, loss or negligent disclosure to others and to limit
access internally to Confidential Information to those of its employees,
consultants, agents or subcontractors who reasonably require such access in
order to accomplish performance of the Services. AAI has had or will have all
employees, consultants, agents or subcontractors of AAI who have access to
Confidential Information sign a confidentiality agreement with provisions no
less protective of Confidential Information than this Article V prior to having
access to Confidential Information or undertaking the Services. Unless otherwise
consented to by Client in wilting or provided for in a Work Order, AAI agrees
not to analyze for chemical composition any samples or materials provided by
Client, nor to allow or cause any such samples or materials to be released to
third-parties for analysis. AAI shall not use, or disclose to Client, hereunder
any information it knows to be Confidential Information of a third party except
as approved in advance in writing by Client. AAI agrees to notify Client
promptly of the date of, and the circumstances involved in, the loss or
unauthorized disclosure of any Confidential Information of Client.

 

5.3

            Upon expiration or termination of this Agreement or completion or
termination of any Work Order and/or any Change Order and at the written
direction of the Client, AAI will promptly return all Client Confidential
Information, including any documents prepared by AAI that contain such
information. AAI may retain a single archival copy of the Confidential
Information for the sole purpose of determining the scope of obligations
incurred under this Agreement. The obligations of this Article V shall commence
on the Effective Date and survive for a period of five (5) years from the
expiration or termination of this Agreement.

 

5.4

            The Parties agree that they shall not use the other Party’s name, or
disclose any matters relating to the Services provided hereunder in any
advertising, promotion, written articles or communications without the prior
written consent of the other Party.

ARTICLE VI

REPRESENTATION AND INDEMNIFICATION

 

6.1

            EXCEPT AS SET FORTH HEREIN, AAI EXPRESSLY DISCLAIMS ALL
REPRESENTATIONS AND WARRANTIES, WHETHER EXPRESS OR IMPLIED, INCLUDING ANY
IMPLIED WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE
(REGARDLESS OF WHETHER OR NOT AAI KNOWS OR HAS REASON TO KNOW OF SUCH PURPOSE)
AND ANY WARRANTIES OF TITLE OR NONINFRINGEMENT. EXCEPT WITH RESPECT TO BREACH OF
ARTICLE V, AND EXCEPT TO THE EXTENT A PARTY MAY BE OBLIGATED TO INDEMNIFY THE
OTHER PARTY UNDER THIS ARTICLE VI, IN NO EVENT SHALL EITHER PARTY BE LIABLE FOR
ANY CONSEQUENTIAL, SPECIAL, EXEMPLARY INCIDENTAL OR OTHER INDIRECT DAMAGES OR
LOST PROFITS IN ANY WAY ASSOCIATED WITH THIS AGREEMENT, REGARDLESS OF THE FORM
OF ACTION.

 

7

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AMENDED.

 

6.2

            Subject to Article 6.4 below, the Client shall indemnify and hold
harmless AAI, its agents, employees, directors and affiliates from any loss,
expense and liability, including reasonable attorney’s fees arising from any
claim suit or proceeding to the extent resulting from Client’s use of
(i) products and services using the Project IP, or (ii) other materials or
processes supplied or disclosed to Client in the course of this Agreement,
except to the extent the claim, suit or proceeding is subject to AAI’s
indemnification obligations in Article 6.3 below.

 

6.3

            Subject to Article 6.4 below, AAI shall indemnify and hold harmless
the Client, its agents, employees and affiliates from any loss, expense and
liability, including reasonable attorney fees, incurred as a result of AAI’s
negligence or willful misconduct in connection with the performance of this
Agreement.

 

6.4

            A party that intends to claim indemnification (the “Indemnitee)
under Article 6.2 or Article 6.3 shall promptly notify the other party (the
“Indemnitor”) in writing of any claim, complaint, suit, proceeding or cause of
action with respect to which the Indemnitee intends to claim such
indemnification (for purposes of this Article 6.4, each a “Claim”), and the
Indemnitor shall have sole control of the defense and/or settlement thereof;
provided that the Indemnitee shall have the right to participate, at its own
expense, with counsel of its own choosing in the defense and/or settlement of
such Claim. The Indemnitor shall not settle any Claim without the consent of the
Indemnitee, which consent shall not be unreasonably withheld or delayed. The
Indemnitee, and its employees, at the Indemnitor’s request and expense, shall
provide full information and reasonable assistance to Indemnitor and its legal
representatives with respect to such Claims covered by this indemnification.

 

6.5

            Each Party shall be responsible for the safety of its own employees
and agents with respect to the handling or use of materials involved in the
performance of this Agreement and any Work Orders or Change Orders hereunder.

 

6.6

            AAI shall perform the Services hereunder as an independent
contractor, and nothing contained in this Agreement or otherwise shall be deemed
to create any other relationship, including employment, partnership, agency or
joint venture, between the Parties. The Parties acknowledge that Services
performed are solely within the control of AAI and the provisions of this
Agreement shall not be construed as authorizing the Client to exercise any
control or direction over the employees or agents of AAI in connection with this
Agreement. Neither Party to this Agreement shall have any authority to employ
any person as agent or employee for or on behalf of the other, or to bind, or
attempt to bind, the other to any obligation with any third party.

ARTICLE VII

TERM AND TERMINATION

 

7.1

            Unless sooner terminated in a manner herein provided, this Agreement
shall continue for a period of three (3) years from the Effective Date
(hereinafter the “Term”).

 

8

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The Parties may extend this Agreement by written mutual agreement at least sixty
(60) days prior to the expiration of the Term.

 

7.2

            This Agreement, the Quality Agreement and any corresponding Work
Order or Change Order then in effect may be terminated by (i) either Party upon
written notice for cause in the event of a failure by the other Party to
substantially perform any material obligation that through no fault of the Party
initiating the termination, remains uncured thirty (30) days after receipt of
such prior written notice; (ii) Client upon thirty (30) days written notice to
AAI; or (iii) either Party upon written notice in the event that the other Party
ceases to function as a going concern or to conduct its operations in the normal
course of business, or a receiver for such other Party is appointed, or a
petition under any law for the relief of bankruptcy is filed by or against such
other Party, or such other Party makes an assignment for the benefit of
creditors.

 

7.3

            In the event of a termination of this Agreement pursuant to Article
7.2, with the exception of material breach by AAI, the Client shall be obligated
to pay to AAI the cost of all Services completed, as set forth in the relevant
Work Order(s) and/or Change Order(s) currently in effect at the time of
termination, in accordance with the terms and conditions as set forth in this
Agreement. Client shall be obligated to pay for all unused supplies and
materials that were ordered by AAI in order to perform the Services. AAI shall
use commercially reasonable efforts to minimize the costs associated with the
cessation of such Work Order or Change Order.

 

7.4

            Client may terminate any Work Order or Change Order without
terminating this Agreement by providing AAI written notice. In the event of a
termination of a Work Order or Change Order, AAI shall receive full payment for
all Services actually performed through the effective date of termination,
including any appropriate delay or cancellation fees as may be set forth in the
Work Order. In accordance with the Client’s written instructions, AAI shall use
commercially reasonable efforts to transfer the results of such Work Order or
Change Order to the Client or its agent. The Client shall pay all reasonable
costs incurred by AAI that are necessary or reasonably required in connection
with the orderly cessation of such Work Order or Change Order. In no event shall
the total amount calculated pursuant to this Article 7.4 exceed the total amount
of payments set forth in the budget for such Work Order and/or Change Order.
Within thirty (30) days after the termination date of any Work Order and/or
Change Order, AAI shall refund to Client any amounts paid by Client to AAI in
excess of the calculated amount described herein.

 

7.5

            Upon expiration or termination of the Agreement or any Work Order or
Change Order, AAI will comply with the provisions of Article 5.3 herein
regarding the disposition of Confidential Information.

 

9

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AMENDED.

 

ARTICLE VIII

CORRESPONDENCE AND NOTICE

 

8.1

            Until advised in writing to the contrary by either Party, all
communications and notices related to this Agreement shall be effective upon
receipt and shall be addressed to:

 

  CLIENT:   Sunesis Pharmaceuticals Incorporated     341 Oyster Point Boulevard
    San Francisco, California 94080     (Attention:  Office of General Counsel)
   

Fax:  650-266-3506

 

  AAI:   AAI Development Services Inc.     2320 Scientific Park Drive    
Wilmington, North Carolina 28405     (Attention:  EVP of Business Development)  
 

Fax:  910-815-2300

 

   

With a copy to:

 

    aaiPharma Inc.     2320 Scientific Park Drive     Wilmington, North Carolina
28405     (Attention:  Office of General Counsel)     Fax:  910 815-6067

 

8.2

            All communications and notices related to a Work Order or Change
Order shall be addressed to the appropriate individual for each Party as set
forth in such Work Order or Change Order.

ARTICLE IX

RECORDS AND AUDITS

 

9.1

            AAI agrees to maintain records of all Services performed under this
Agreement in accordance with the United States Food and Drug Administration’s
(“FDA”) archival guidelines. The Client may review the records of AAI relating
to the Services performed and expenses incurred to assure compliance with all
provisions of this Agreement, provided that such inspection may take place
(i) only upon reasonable prior written notice and during regular business hours,
and (ii) at the Client’s sole cost and expense. The Client shall be invoiced for
any reasonable and actual incidental expenses AAI incurs resulting from any such
review, to the extent such review exceeds two (2) business days each calendar
year.

 

10

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AMENDED.

 

9.2

            Upon reasonable prior written notice (not less than fifteen
(15) business days) and during regular business hours the Client may, at its own
cost and expense, review AAI’s quality control procedures and records, with a
representative of AAI present. The Client shall be invoiced for any reasonable
and actual incidental expenses AAI incurs resulting from such review, to the
extent such review exceeds one (1) review each calendar year.

 

9.3

            In the event of an inspection by any governmental or regulatory
authority concerning the Services performed hereunder, AAI shall notify the
Client promptly upon learning of such an inspection, shall supply the Client
with copies of any correspondence or portions or correspondence relating to the
Services and shall inform the Client of the general findings and outcomes of
such inspections. The Client shall be invoiced for any reasonable and actual
incidental expenses AAI incurs resulting from such review.

ARTICLE X

MISCELLANEOUS

 

10.1

            Certification - AAI certifies that it is not debarred under the
United States Food, Drug and Cosmetic Act, (21 U.S.C. 301 et seq.) and that it
has not and will not use in any capacity the services of any person debarred
under such law with respect to Services to be performed under this Agreement.

 

10.2

            Insurance  -  During the Term of this Agreement, the Parties shall
secure and maintain in full force and effect appropriate insurance coverage for
its responsibilities in connection with this Agreement. Upon written request by
either Party, the other Party shall provide proper evidence showing that such
insurance is in force.

 

10.3

            Waiver  -  The failure of either Party hereto at any time or times
to require performance of any provision of this Agreement shall in no manner
affect the right of such Party at a later time to enforce the same. No waiver by
any Party hereto of any condition, or of the breach of any provision, term,
covenant, representation, or warranty contained in this Agreement, whether by
conduct or otherwise, in any one or more instances, shall be deemed to be or
construed as a further or continuing waiver of any such condition or of the
breach of any other provision, term, covenant, representation or warranty of
this Agreement.

 

10.4

            Parol Evidence  -  This Agreement contains the entire Agreement
between the Parties with respect to the subject matter thereof as of the
Effective Date and supersedes all prior agreements, negotiations,
representations and proposals, written and oral, relating to its subject matter,
except that Work Orders and/or Change Orders and other similar service
authorizations which have been properly executed prior to the Effective Date
shall remain in full force and effect, and shall be construed, where possible,
in accordance with the terms and conditions herein.

 

10.5

            Severability - If a court or other tribunal of competent
jurisdiction holds any term or provision, or portion thereof, of this Agreement
to be invalid, void or unenforceable,

 

11

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the remaining provisions of the Agreement shall remain in full force and effect.
It is the Parties’ intention that if a court or other tribunal holds any term or
provision of this Agreement to be excessive in scope, such term or provision
shall be adjusted rather than voided, if possible.

 

10.6

            Modification  -  This Agreement may not be amended or modified
except by written instrument signed by an authorized representative of the
Parties.

 

10.7

            Cooperation  -  Each Party will execute and deliver all such
instruments and perform all such other acts as the other Party may reasonably
request to carry out the transactions contemplated by this Agreement.

 

10.8

            Force Majeure - Neither Party shall be in default hereunder by
reason of its delay in the performance of or failure to perform any of its
obligations hereunder if such delay or failure is caused by strikes, acts of God
or the public enemy, terrorism or threats of terrorism, riots, incendiaries,
weather, interference by civil or military authorities, acts or failures to act
by any government or government agency, delays in transit or delivery, or any
other fault beyond its reasonable control and without its fault or negligence.
Upon the occurrence of any event of force majeure, the party whose performance
is thereby threatened shall promptly notify the other party and take reasonable
steps to mitigate such delay or failure to perform.

 

10.9

            Binding Effect  -  Subject to the restrictions on transfers,
assignments and encumbrances set forth herein, this Agreement shall inure to the
benefit of and be binding upon the undersigned Parties and their respective
legal successors.

 

10.10

            Headings  -  All headings herein are for convenience only and shall
not be construed as a limitation of the scope of the particular sections to
which they refer.

 

10.11

            Assignment - Neither Party shall assign its rights under this
Agreement without the prior written consent of the other Party, such consent not
to be unreasonably withheld, and any attempt to assign without such consent
shall be void and of no effect. Notwithstanding the foregoing, either Party
shall have the right to assign this Agreement, the Quality Agreement and all
outstanding Work Orders and Change Orders hereunder in connection with the
transfer or sale of all or substantially all of its business or assets related
to this Agreement, or in the event of its merger, reorganization, consolidation,
change in control or similar transaction.

 

10.12

            Non-Solicitation - Each Party agrees not to solicit an employee of
the other party who has performed any work in connection with this Agreement,
provided that newspaper, internet or other advertisements to fill job openings
shall not be deemed to be a “solicitation” hereunder. This provision shall
remain in effect during the term of this Agreement and for one (1) year
thereafter. Any exceptions to this provision must be in writing and signed by an
authorized representative of each Party.

 

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10.13

            Surviving Provisions  -  The Parties agree that the following
provisions will survive the expiration or termination of this Agreement; the
definitions contained herein to the extent such definitions pertain to terms in
surviving provisions, Articles IV, V, VI and VIII in their entirety, and
Articles 3.6 (with respect to Services performed prior to such expiration or
termination), 9.3, 10.12, 10.13 and 10.14.

 

10.14

            Governing Law  -  This Agreement shall be governed by and construed
in accordance with the laws of the State of Delaware without regard to any
conflicts of laws provisions.

IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed by
their duly authorized officers.

 

AAI DEVELOPMENT SERVICES INC.  

SUNESIS PHARMACEUTICALS, INCORPORATED

 

By: /s/ Vijay Aggarwal  

By: /s/ Daryl B. Winter

 

Name: Vijay Aggarwal  

Name: Daryl B. Winter, Ph. D.

 

Title: President  

Title: Senior Vice President & General Counsel

 

Date: November 3, 2003   Date: November 3, 2003

 

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EXHIBIT A

Quality Agreement

 

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QUALITY AGREEMENT

This is a Quality Agreement between AAIPharma Services Corp., located at 2320
Scientific Park Drive, Wilmington, NC 28405 (AAIPS) and Sunesis Pharmaceuticals,
Inc., located at 395 Oyster Point Blvd., Suite 400, South San Francisco, CA
94080 (Sunesis). The purpose of this Quality Agreement is to define the quality
operating requirements to be employed by AAIPS in regards to the services
provided to Sunesis.

This Quality Agreement is applicable to all services to be provided by AAIPS for
Sunesis. The requirements within this Quality Agreement shall be in effect
unless otherwise agreed to In writing.

GMPs (current Good Manufacturing Practices) per 21CFR210 and 211 shall apply to
any services performed, unless otherwise agreed to in writing. Conformance to
21CFR Part 11 is required where applicable.

AAIPS’ Quality System shall apply to any services performed.

Facilities: AAIPharma Services Corp, operations registered with the US FDA as
follows:

 

  —  

Facility Establishment Identifier (FEI) 1049418 in Wilmington, NC 28405 which
includes:

*          2320 Scientific Park Drive (primary mailing address, corporate
headquarters, quality assurance, regulatory affairs, metrology, analytical
laboratories)

*          1206 North 23rd Street (formulations, analytical and biotech
laboratories)

*          1817 Hall Drive (analytical and micro laboratories)

*          1726 North 23rd Street (non-sterile manufacturing)

*          1519 North 23rd Street (inspection and packaging, warehouse,
stability storage)

  —  

FEI 1058430 at 4620 Creekstone Drive, Durham, NC 27703 (analytical lab)

  —  

FEI 1055790 at 4221 Faber Place Drive, Charleston, SC 29405 (sterile
manufacturing, analytical and micro laboratories)

The specific sections below are for clarification of certain GMP issues only,
and are not meant to exclude or replace GMP and other regulatory requirements.

 

1.

DOCUMENT CONTROL RECORDS

 

  1.1.

Sunesis shall have the right to approve in writing all specifications, test
procedures, SOPS, Bills of Materials, batch records, protocols, and other
Sunesis specific documents written and/or to be used by AMPS. Sunesis shall also
approve changes to these documents, in advance.

 

  1.2

The following list of documents shall be approved by AAIPS and Sunesis QA:

 

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  1.2.1

Specifications: a reference to Sunesis part numbers should be included within
AAIPS specifications when applicable

 

  1.2.2

Test methods

 

  1.2.3

Bills of Materials (BOM)

 

  1.2.4

Master Batch Records (MBR)

 

  1.2.5

In Process tests: shall be incorporated within the Batch Record or referenced
within the Batch Record; any testing or inspection shall include frequency of
testing, sample size and acceptance criteria.

 

  1.2.6

Qualification and Validation protocols, both pre- and post-approval. A final
validation report and/or completed validation protocol shall also be approved by
AAIPS QA and approved by Sunesis.

 

  1.3

Electronic or hard copies of all product/client-specific test methods shall be
provided for approval prior to implementation. All relevant SOPs and other
proprietary AAIPS documents that may be needed to assess or approve work
performed shall be provided to Sunesis upon request during on-site audits.

 

  1.4

AAIPS shall provide electronic and/or hard copies of all GMP/CMC related
documents and records to allow submission of an IND, NDA, or other regulatory
submission.

 

  1.5

AAIPS QA shall forward copies of each Batch file to Sunesis immediately upon
release or closure of each batch. Batch files include at least the following:
the Batch Records), In-process results, Test Results, and all other documents,
results, and data incorporated into the AAIPS QA Batch file.

 

  1.6

Copies of all documentation and records generated will be forwarded to Sunesis
for review.

 

  1.7

AAIPS shall preserve all such records in accordance with any applicable federal,
state or local requirements. Raw data, documentation, batch records, source
documents and reports (collectively, “Documentation”) shall be retained by AAIPS
for a period of five (5) years, with the exception of documentation that
supports validations, which will be maintained for the duration of the
utilization of the method or process validated. If specifically requested by
Sunesis, after the retention period, Documentation will be sent to Sunesis at an
address specified herein or longer term storage may be arranged at Sunesis’
expense. Otherwise, Documentation will be subject to destruction without further
notice after five (5) years. During the above-described retention periods,
Documentation shall be available for inspection by Sunesis, its authorized
agents and authorized government agencies.

 

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2.

SPECIFICATIONS

 

  2.1

Specifications for components shall be in place before release of said
components.

 

  2.2

Specifications for the drug substance and products shall be in place before use
or production of said materials.

 

3.

TEST METHODS

 

  3.1

Test methods include but are not exclusive to test methods for Components, in
process, Drug Substance, Drug product(s), Stability, and Cleaning.

 

  3.2

Developed Test Methods shall be in compliance with GMPs, and should follow USP
and ICH guidelines wherever possible.

 

  3.3

Qualification of the analytical methods is to occur in accordance with AAIPS’
quality system. The development results shall be documented in a report.

 

4.

COMPONENTS

 

  4.1

Purchase, receipt, test, disposition, and storage of components shall be
performed by AAIPS per AAIPS quality system.

 

  4.2

Unless otherwise agreed, AAIPS shall use only approved suppliers per their
written SOP. Sunesis reserves the right to audit that the suppliers have been
approved according to AAIPS’ quality system.

 

5.

PRODUCT RELEASE

 

  5.1

Product testing arid disposition shall be performed by AAIPS; however, Sunesis
shall assign the final approval before using the material for further processing
and/or before releasing for any shipments.

 

  5.2

A Certificate of Conformance shall be generated for each lot produced. All data
generated as part of the process and testing will be reviewed by AAIPS QA (or a
technically qualified and authorized AAIPS employee not having direct
responsibility for the processing activities). AAIPS QA shall be the signer of
the COC and release of the product for shipment to Sunesis and/or designated
locations. The certificate will cover at a minimum the following information:

 

  5.2.1

Work Order/Purchase Order numbers, Description, AAIPS part number or part name,
Sunesis part number, lot number, quantity manufactured, manufacture date.

 

  5.2.2

Conformance statement such as “The product was manufactured in compliance with
GMPs, AAIPS quality system, current procedures and specifications. This product
meets specifications.”

 

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  5.2.3

Certificate(s) of Analysis including a table/listing of the tests, test method,
specification, result, and passes result.

 

  5.2.4

QA signature and date.

 

6.

PROCESS CONTROL

 

  6.1

Processing shall be performed per GMPs.

 

  6.2

Manufacturing shall be documented within a Batch Record.

 

  6.3

Manufacturing conditions shall be appropriate for production of a sterile
injectable drug product.

 

  6.4

AAIPS will process the product in an appropriately controlled environment.

 

  6.5

Set-up procedures, as established by AAIPS, shall be followed.

 

  6.6

Equipment where cleaning cannot be confirmed shall be dedicated.

 

  6.7

Cleaning control shall be established by AAIPS. Written procedures must be in
place to ensure adequate levels of cleanliness and environmental control;
records of cleaning shall be documented and maintained.

 

7.

PACKAGING, STORAGE, SHIPPING

 

  7.1

All materials shall be stored under GMP conditions.

 

  7.2

Storage conditions and any special storage requirements shall be described in
the applicable specifications.

 

  7.3

Shipping of material shall maintain the specified storage conditions for the
material, e.g. - protect from light, refrigerated, overnight delivery. Monitors
(such as TempTales) shall be incorporated within shipping containers to assure
stability of the product during shipment, when appropriate.

 

8.

TRAINING

Personnel involved in the processing of materials shall be trained in their job
specific responsibilities or have the education and experience required to
perform the job and that these responsibilities will take into account the
requirements of this Quality Agreement (e.g. training with respect to AAIPS
Quality Systems regarding SOPs, Test Methods, Batch Records, Specifications,
etc.). They should also have documented training on Good Manufacturing Practices
per 21CFR211.

 

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AMENDED.

 

9.

CHANGES NOTIFICATION

AAIPS shall notify Sunesis, in advance, of any significant changes to the
process, processing steps, equipment, manufacturing environment, facility,
components, testing, or other change which may have an impact on the quality of
products or projects related to Sunesis. Changes will require written approval
by Sunesis prior to implementation.

 

10.

NONCONFORMANCES / INVESTIGATIONS / 00S

 

  10.1

Sunesis shall be made aware of any GMP nonconformances and deviations
encountered in conjunction with projects related to Sunesis within one
(1) business day. The nonconformances also apply to Out of Specification
(005) analytical results.

 

  10.2

AAIPS will perform additional product investigations, if and as required by
Sunesis, when product fails to meet specifications. Investigations shall be
completed within twenty (20) business days and final reports will be forwarded
to Sunesis. This timeline on completing a lab investigation can be extended by
agreement of both parties in those cases where more time is needed.

 

11.

COMPLIANCE AUDITS

 

  11.1

Sunesis reserves the right to have a “person in plant” during any manufacturing
or testing activities.

 

  11.2

Sunesis reserves the right to conduct an annual audit, in person or by other
means, of any work performed, and compliance to GMPs and other applicable
regulations, as well as an initial qualification audit. For cause” audits may be
scheduled in addition to the qualification and/or annual audit. “Man-in-plant”
during Sunesis project work is not considered an audit.

 

  11.2.1

If deviations or concerns are noted within the audit, AAIPS will provide a
written response to Sunesis’ written audit report within four (4) weeks of
receipt of the report from Sunesis. The response will include the corrective
actions to be taken by AAIPS, if any, and a timeline for such implementation.

 

  11.3

Reasonable prior notice will be given before any visit or audit, and audits will
be conducted at mutually agreed upon times. Prior to an audit, Sunesis will
communicate to AAIPS the scope of the audit.

 

  11.4

In the event of an inspection by any governmental or regulatory authority
concerning the work being performed for Sunesis, AAIPS shall notify Sunesis
promptly upon learning of such an inspection. AAIPS shall also supply Sunesis
with copies of any FDA Form 483, any correspondence or portions of

 

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correspondence relating to Sunesis’ materials and shall inform Sunesis of the
general findings and outcomes of such inspections.

 

SIGNATURES   Sunesis Pharmaceuticals, Inc.   AAIPharma Services Corp. By: /s/
Steven B. Ketchum   By: /s/ Christopher Smith Name: Steven B. Ketchum   Name:
Christopher Smith Title: Senior Vice President, Research &
Development and Quality   Title:   VP, Quality & Regulatory Affairs
Date: October 25, 2010   Date: October 25, 2010

 

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MASTER SERVICES AGREEMENT

This Master Services Agreement (“Agreement”) is made and entered into as of
January 1, 2010 (the “Effective Date”), by and between Albany Molecular
Research, Inc., having its principal place of business at 26 Corporate Circle,
Albany, New York 12203 (together with its subsidiaries hereinafter collectively
referred to as “AMRI”) and Sunesis Pharmaceuticals, Inc., having its principal
place of business at 395 Oyster Point Boulevard, Suite 400, South San Francisco,
California 94080 (hereinafter “SUNESIS”). AMRI and SUNESIS are referred to
individually as a “Party” and together as the “Parties” throughout this
Agreement.

WHEREAS, SUNESIS is engaged in the discovery and development of pharmaceutical
products;

WHEREAS, AMRI is engaged in the business of providing synthetic and natural
product chemical research and analysis, bio-assay development and screening,
chemistry and bioscience consulting, medicinal chemical synthesis, computational
chemistry services, parallel synthesis, manufacturing of specialty chemical
products, process development, synthesis of compounds in accordance with current
Good Manufacturing Practices (“cGMP”), analytical method development,
validation, and release testing, stability studies, and related services, (the
“Services”);

WHEREAS, AMRI has the technology and capacity to perform the Services indicated
in an applicable Work Order (as discussed below) pursuant to this Agreement;

WHEREAS, SUNESIS proposes to retain AMRI, from time to time, for the specific
purpose of providing certain Services for individual projects in accordance with
an applicable Work Order pursuant to this Agreement.

NOW, THEREFORE, for the mutual promises set forth below, and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereby agree as follows:

 

1.

AMRI Services.

Subject to the terms and conditions of (i) this Agreement, (ii) work orders (a
statement of the actual work to be provided) as agreed upon in writing from time
to time by the Parties pursuant to this Agreement (each a “Work Order” and
collectively “Work Orders”), and (iii) the quality requirements agreement
attached hereto as Exhibit A (the “Quality Agreement”), AMRI agrees to provide
SUNESIS with the Services as further described generally below and specifically
in the Quality Agreement (when applicable) and the Work Orders. All such Work
Orders will specify the work to be undertaken (the “Project(s)”), the conditions
and timing under which the Project(s) is to be completed, and the amount of and
payment terms for AMRI compensation. Each Work Order shall be dated, numbered,
reference this Agreement, and shall be signed by an authorized representative of
each Party.

 

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Services may include, but are not limited, to the following:

 

  a.

Product Development Assistance: AMRI shall be available to SUNESIS to advise on
the design and synthesis of organic compounds and to complete the manufacture of
such organic compounds.

 

  b.

Technical Assistance: AMRI shall be available to SUNESIS to perform synthetic
chemical research, medicinal chemistry, process development and process
optimization studies.

 

  c.

Technical Consultations: AMRI shall be available to SUNESIS at such times as are
requested by SUNESIS for technical consultations with SUNESIS personnel via
telephone. Additionally, AMRI shall be available for consultation at a mutually
agreed upon site, provided that the extent of this activity shall be determined
by mutual agreement of AMRI and SUNESIS. SUNESIS shall reimburse AMRI for all
reasonable and necessary travel expenses as requested by SUNESIS.

AMRI will endeavor with all commercially reasonable efforts to conform to its
obligations identified herein. Although no anticipated delays or limits in
performing any Services are expected, if such delays or limits are encountered,
AMRI shall promptly notify SUNESIS. The Parties acknowledge that circumstances
beyond the control of AMRI may affect the projected completion date of any
Project(s) hereunder. Such circumstances include, but are not limited to,
changes to the process necessitated to meet the required specifications and
other issues not reasonably foreseeable at the time of execution of the Work
Order for the applicable Project(s). SUNESIS agrees to accommodate any
reasonable change in timetables as a result of such delays, provided the
Services have been proceeding to SUNESIS’s reasonable satisfaction.

Should any of the terms of any Work Order conflict with the general terms and
conditions of this Agreement, the terms and conditions of this Agreement shall
govern, unless otherwise explicitly stated in the Work Order. In the event any
provision contained in this Agreement conflicts with any part of a purchase
order provided by either Party for Services under this Agreement, the provision
set forth in this Agreement shall take precedence and the other Party
specifically rejects any additional terms and/or conditions contained in any
such purchase order.

 

2.

Specific Obligations of AMRI.

In assuming responsibility for undertaking this Agreement and in addition to the
obligations set forth in the Work Orders or as outlined in the Quality
Agreement, or any attachment thereto, AMRI will:

 

  a.

Provide Services and/or compounds as expeditiously as possible.

 

  b.

Provide to SUNESIS Certificates of Analysis to include, as appropriate, among
such parameters as elemental analysis, optical rotation, HPLC analysis, MS,

 

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TGA, moisture content by Karl Fischer titration, and NMR spectra on any
compounds provided.

 

  c.

As appropriate for the Project(s) and/or corresponding Work Order, comply with
all current governmental regulatory requirements and perform experiments using
standard and accepted cGMPs as specified in the Code of Federal Regulations
Title 21, Sections 210 and 211 and as further defined for active pharmaceutical
ingredients (“API”) in the International Conference on Harmonization (“ICH”)
guide Q7 ICH Good Manufacturing Practice Guide for as applied to the
manufacture, testing, and quality control of APIs, techniques and record keeping
procedures, and in each case as amended from time to time, as appropriate to the
Services outlined in a Work Order.

 

  d.

Interact with SUNESIS scientists as is deemed appropriate in the conduct of a
fully integrated drug discovery and development Project team effort.

 

  e.

Interact with and communicate with SUNESIS, to its satisfaction, and all
reasonable requests, regarding any Services.

 

  f.

Provide written research reports to SUNESIS describing the full experimental
procedures and results (hereinafter, “Research Reports”), due within a mutually
agreed upon timeframe after the conclusion or termination of the Project in
accordance with the procedures and timelines in the applicable Work Order. The
Research Reports shall include but not be limited to the full experimental
procedures, analyses and the Certificate of Analysis describing the work
accomplished under the Project and any other deliverables specified in the
applicable Work Order. Each Research Report shall contain sufficient detail so
that SUNESIS can understand and fully implement and exploit on its own the
information described therein and any Developed IP (as defined in Section 7)
resulting from the Services. Upon request by SUNESIS, from time to time, AMRI
shall provide reasonable assistance at SUNESIS’s expense to SUNESIS in SUNESIS’s
efforts to understand and implement the same.

 

  g.

Retain experimental records, laboratory notebooks or laboratory notebook pages
containing experimental descriptions and data generated from the Project(s)
hereunder for a period of not less than seven (7) years from the completion of
each such Project. After this time and upon written request by SUNESIS and
SUNESIS’s expense, AMRI shall provide to SUNESIS, for non-GMP Project(s), copies
of all experimental records, laboratory notebooks, laboratory notebook pages or
other documentation, as mutually agreed upon in writing by the Parties,
containing information from the Services for retention in SUNESIS’s archives.
For cGMP projects, AMRI shall provide SUNESIS, upon SUNESIS’s written request
and at SUNESIS’s expense, copies of executed Batch Records, deviation reports,
investigation report and analytical testing results of APIs or other
documentation as mutually agreed upon in writing by the Parties.

 

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3.

Specific Obligations of SUNESIS.

In assuming responsibility for undertaking this Agreement and in addition to the
obligations set forth in the Work Orders or outlined in the Quality Agreement,
or any attachment thereto, SUNESIS shall:

 

  a.

Provide to AMRI any SUNESIS materials described in the applicable Work Order
(the “Sample(s)”) for purposes of performing the Services.

 

  b.

Provide intermediates to AMRI as set forth in the applicable Work Order in order
for AMRI to conduct and complete the Services.

 

  c.

Provide written commentary on Research Reports.

 

  d.

Pay AMRI for the Services performed by AMRI as set forth in the corresponding
Work Order.

 

  e.

Provide AMRI access to or quantities of Project-specific chemicals, materials,
tools and equipment required to conduct Services solely for SUNESIS as set forth
in the applicable Work Order.

 

4.

Confidential Information Use of Name.

 

  a.

“Confidential Information” shall mean electronic, graphic or oral information
disclosed or furnished by one Party (the “Disclosing Party”) to the other Party
(the “Receiving Party”) and indicated as being or which reasonably appears to be
or is marked to be confidential, or observed by Receiving Party as the result of
a site visit or audit, which

 

  i.

in the case of SUNESIS shall consist of information pertaining to its trade
secrets, know-how, inventions (whether or not patentable), regulatory
submissions, the Sample(s), chemical synthesis or process data, proprietary
chemicals, Research Reports, preclinical and clinical data and program results,
or any other information or data acquired or generated by AMRI as a result of
this Agreement or from performance of the Services rendered hereunder and

 

  ii.

in the case of AMRI shall consist of information pertaining to its trade
secrets, know-how, inventions (whether or not patentable), and any analytical,
bioanalytical, formulations and manufacturing data, methods, processes, and
techniques, provided, that such data methods, processes or techniques do not
fall within Section 7 of this Agreement.

Receiving Party agrees that (A) it will not, and will not permit any of its
employees, consultants or representatives to, use the Disclosing Party’s
Confidential Information other than for the purposes permitted under this

 

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Agreement, (B) it will not, and will not permit any of its employees,
consultants or representatives to disclose any of said Confidential Information
to a third party except as permitted by this Agreement, and (C) it will not, and
will not permit any of its employees, consultants or representatives to publish
or submit for publication said Confidential Information without Disclosing
Party’s prior written approval.

 

  b.

The Receiving Party’s obligations with regard to Confidential Information which
is a Trade Secret (as defined herein) shall continue in perpetuity from the date
of this Agreement, and with regard to Confidential Information which is not a
Trade Secret shall continue for a period of five (5) years from the termination
or expiration of this Agreement. For purposes of this Agreement, “Trade Secret”
shall mean information, including but not limited to, technical or non-technical
data, a formula, pattern, compilation, program, device, method, technique,
drawing, or process, which:

 

  i.

derives economic value, actual or potential, from not being generally known and
not being readily ascertainable by proper means to other persons who can obtain
economic value from its disclosure or use; and

 

  ii.

is the subject of efforts that are reasonable under the circumstances to
maintain its secrecy or confidentiality.

For the avoidance of doubt, any information pertaining to the Sample(s), and any
chemical synthesis or process data, proprietary chemicals, Research Reports,
preclinical and clinical data and program results, or any other information or
data acquired or generated by AMRI as a result of this Agreement or from
performance of the Services hereunder shall be considered a “Trade Secret” of
SUNESIS for purposes of this Agreement.

 

  c.

Notwithstanding the foregoing, the obligations of Section 4 shall not apply to
Confidential Information:

 

  i.

which is now or later becomes generally available to the public through no fault
of Receiving Party;

 

  ii.

which is already known to Receiving Party (without confidentiality restrictions)
at the time of disclosure, as demonstrated by Receiving Party’s files in
existence at the time of such disclosure;

 

  iii.

which is lawfully acquired by Receiving Party (without restrictions) from third
parties who have a right to disclose the information;

 

  iv.

which is developed by or for Receiving Party independently of the Projects
hereunder and without use of any Confidential Information of the

 

11

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COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

 

 

Disclosing Party, as evidenced by Receiving Party’s written records created at
the time of such independent development; or

 

  v.

which by mutual written agreement of the Parties is released from confidential
status.

 

  d.

Section 4c above shall not restrict Receiving Party from disclosing Confidential
Information that is legally required to be disclosed pursuant to an order or
requirement of a court, governmental agency or by law; provided, however,
Receiving Party shall provide prompt notice of such court order or requirement
to Disclosing Party to enable Disclosing Party the opportunity to seek a
protective order or otherwise prevent or restrict such disclosure of its
Confidential Information.

 

  e.

All of the Confidential Information belonging to the Disclosing Party shall
remain the sole property of the Disclosing Party. Upon the written request of
Disclosing Party, all tangible Confidential Information, including all copies
thereof, shall be promptly delivered to Disclosing Party, except that the
Receiving Party may retain one (1) copy of the Confidential Information to
ensure compliance hereunder.

 

  f.

Neither Party shall use the name of the other Party or any of its employees,
agents or Affiliates (as defined herein) or subsidiaries without the written
consent of the other Party, such consent shall not be unreasonably delayed or
withheld. For the purposes of this Agreement the term “Affiliate” shall mean:
any corporation, partnership, joint venture or other business arrangement which
is controlled by, controlling or under common control with such Party and shall
include without limitation any direct or indirect beneficial ownership of fifty
percent (50%) or more of the voting stock or participating profit interest of
such corporation or other business entity. Further, neither Party shall use the
trade name, trademark, product reference or other designation of the other Party
in connection with any product, service, promotion or advertising without the
express prior written consent of the other Party. Neither Party shall disclose
to any third party or to the public generally (i) the terms or the existence of
this Agreement or (ii) the relationship between SUNESIS and AMRI established
hereunder without the prior written consent of the other Party, provided that
either Party may, without the other Party’s prior consent, disclose such
information (A) to potential or actual investors, financial institutions or
advisors, legal counsel, or accountants, (B) as required by law, order or
regulation of a governmental agency or a court of competent jurisdiction, or
(C) to any governmental agency in connection with filings with the Securities
and Exchange Commission (SEC) or for purposes of filing patent applications, or
obtaining approval to test or market a product or service.

 

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AMENDED.

 

  g.

Each Party agrees and acknowledges:

 

  i.

that the obligations set forth in Section 4 are necessary and reasonable in
order to protect the Disclosing Party and its business:, and

 

  ii.

that due to the nature of the Disclosing Party’s Confidential Information,
monetary damages may be inadequate to compensate the Disclosing Party for any
breach by the Receiving Party of the obligations set forth in Section 4; and

 

  iii.

that any such breach may cause irreparable injury to the Disclosing Party, and
that, in addition to the procedures outlined in Section 18b below and any other
remedies that may be available in law, equity or otherwise, the Disclosing Party
shall be entitled to immediately seek injunctive relief against the breach or
the continuation of such breach by the Receiving Party.

 

5.

Term and Termination.

 

  a.

This Agreement shall commence on the Effective Date set forth above and shall
terminate the later of (i) three (3) years, from the Effective Date or (ii) six
(6) months after the completion of the last Work Order executed by the Parties
prior to the third anniversary of the Effective Date, unless earlier terminated
by either Party hereto. Extension of this Agreement shall be subject to future
written Agreement between the Parties.

 

  b.

The representations and warranties contained in this Agreement (including the
recitals hereto), as well as those rights and/or obligations contained in the
terms of this Agreement which by their intent or meaning have validity beyond
the term hereof, including without limitations Sections 4, 5.b, 6, 7, 10, 11,
12, 15, 16.a, 18 and 19 hereof, shall survive the expiration or termination of
this Agreement.

 

  c.

This Agreement may be terminated prior to the expiration of the term only under
the following conditions:

 

  i.

BY SUNESIS, if AMRI materially breaches any of the covenants and agreements
under this Agreement, upon written notice to AMRI and AMRI fails to cure such
breach within thirty (30) days after written notice of such breach to AMRI.

 

  ii.

BY SUNESIS, if AMRI is substantially unable to perform assigned duties hereunder
whether due to sickness, disability or incapacity or any other reason upon
thirty (30) days written notice to AMRI.

 

  iii.

BY AMRI, if SUNESIS materially breaches any of the covenants and agreements
under this Agreement, upon written notice to SUNESIS and

 

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COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

 

 

SUNESIS fails to cure such breach within thirty (30) days after written notice
of such breach to SUNESIS.

 

  iv.

Either Party may terminate this Agreement without cause upon sixty (60) days
written notice to the other Party.

 

  v.

In the event this Agreement or any Work Order is terminated SUNESIS shall pay
AMRI for all work completed pursuant to the relevant Work Order(s) currently in
effect at the time of termination, and any non-cancelable or non-refundable
expenses incurred by AMRI in connection with the performance of Services
hereunder. If payments in a terminated Work Order are milestone-based, and the
Work Order is terminated after costs have been incurred by AMRI toward achieving
such milestone, but such milestone has not yet been achieved, SUNESIS will pay
AMRI’s standard fees and expenses incurred for actual work performed up to the
date of termination, not to exceed the actual amount due for completing such
milestone.

 

  vi.

Upon receipt of a termination notice, AMRI shall promptly cease performing any
work not necessary for the orderly close out of the affected Project(s), or for
the fulfillment of regulatory requirements, and will submit to SUNESIS for
review and approval an itemized accounting of the Services completed, any
non-cancelable and/or non-refundable expenses reasonably incurred by AMRI
relating to the unfinished Work Order or Work Orders, and payments received from
SUNESIS in order to determine a balance to be paid by either Party to the other
Party. Such balance will be paid within thirty (30) days after receipt and
approval of such itemized accounting.

 

6.

Communications and Payments.

 

  a.

Communications: All notices, requests, demands, waivers and other communications
required or permitted to be given under this Agreement shall be in writing and
may be given in the following methods: personal delivery, registered or
certified mail, postage prepaid, return receipt requests, or air courier
service. Notices shall be sent to the appropriate party at its address given
below (or at such other address for such Party as shall be specified by notice
given hereunder):

 

To AMRI:   Legal Department   Albany Molecular Research, Inc.   26 Corporate
Circle   Albany, New York 12203 To SUNESIS:    Legal Department   Sunesis
Pharmaceuticals, Inc.

 

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COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

 

  395 Oyster Point Boulevard   Suite 400   South San Francisco, California 94080

 

  b.

Payments: In consideration of the Services to be performed by AMRI under this
Agreement, SUNESIS shall pay AMRI in accordance with the fees for each Service
as set forth in the corresponding Work Order. SUNESIS agrees to submit payments
to AMRI no later than thirty (30) business days after receipt of an invoice from
AMRI. If SUNESIS disputes an invoice then SUNESIS will notify AMRI in writing
promptly upon identifying such dispute, and the Parties shall use good faith
efforts to reconcile the disputed invoice as soon as practicable.

 

7.

Ownership and Retention of Records.

All materials, documents, information, programs, research reports, results,
syntheses and suggestions of any kind and description supplied to AMRI by
SUNESIS at any time, shall be the property of SUNESIS. Provided SUNESIS fulfills
its obligations under Section 3 and 6 with respect to a given Work Order, and
subject to the provisions in Section 2.j., all materials, documents,
information, programs, research reports, results, syntheses and suggestions of
any kind and description generated by AMRI as a result of the Services performed
hereunder in respect of such Work Order shall be the sole and exclusive property
of SUNESIS, other than for AMRI proprietary technology (inclusive of
computational and combinatorial techniques, biocatalysis technology, natural
product libraries, and other technology). Any ideas, inventions, discoveries,
techniques, methods, processes, trade secrets or other know-how, whether
patentable or not, that may be conceived by employees or other contractors of
SUNESIS and/or AMRI through use of the material, documents, information,
programs, syntheses and suggestions described above or as a result of the
Service performed under this Agreement (hereinafter, “Developed IP”) shall be
the sole and exclusive property of SUNESIS, and AMRI hereby does assign, and
agrees to assign or cause to be assigned, all rights thereto to SUNESIS. AMRI
and its employees agree to cooperate with SUNESIS in taking all reasonable steps
which SUNESIS believes necessary or desirable to secure its rights on the
Developed IP, at the expense of SUNESIS. SUNESIS acknowledges that AMRI is in
the business of providing services for a variety of organizations other than
SUNESIS. Accordingly nothing in this Agreement shall preclude or limit AMRI from
providing services or developing materials for itself or other customers, or
from utilizing the general knowledge gained during the course of its performance
hereunder or AMRI property to perform similar services for other parties,
provided that such provision of services or development of materials does not
constitute a breach of confidentiality under Section 4 herein.

Experimental records and laboratory notebooks containing experimental
descriptions and data generated under this Agreement, as outlined in
Section 2.j., shall be (i) maintained in accordance with AMRI’s notebook policy
and (ii) promptly transferred from AMRI to SUNESIS or its designee upon the
termination of this Agreement as set forth in Section 5

 

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AMENDED.

 

of this Agreement unless such materials are otherwise required to be stored or
maintained by AMRI as a matter of law or regulation. AMRI shall maintain all
written materials and all other data obtained or generated by AMRI in the course
of providing the Services under this Agreement in a secure area reasonably
protected from fire, theft and destruction. In no event shall AMRI provide to
any third party any materials or data or information generated or obtained by
AMRI in the course of providing the Services under this Agreement without first
obtaining SUNESIS’ s written permission.

Other than the rights expressly set forth in this Agreement, no provision of
this Agreement shall be construed to grant to AMRI by implication, estoppel, or
otherwise, any right, title, or interest in or to any intellectual property
owned or controlled by SUNESIS.

 

8.

Safety and Environmental.

In carrying out its responsibilities under this Agreement, AMRI agrees to ensure
that the Services are conducted in compliance with any applicable SUNESIS
protocols, provided that such protocols are specifically agreed to in writing by
AMRI, and/or specifications of which AMRI is reasonably advised in a timely
manner and in compliance with all applicable laws, rules, and regulations,
including, but not limited to the U.S. Food, Drug and Cosmetic Act and the
regulations promulgated pursuant thereto and all relevant U.S. environmental
regulations.

 

9.

Independent Contractors.

 

  a.

The Parties are and shall be independent contractors to one another, and nothing
herein shall be deemed to cause this Agreement to create an agency, partnership
or joint venture between the Parties. Further, nothing in this Agreement shall
be interpreted or construed as creating or establishing the relationship of
employer and employee between the Parties or between a Party and any employee or
agent of the other Party. Neither Party shall at any time represent its
relationship with the other Party as anything other than that of an independent
contractor.

 

  b.

Neither Party, nor its employees, agents or Permitted Subcontractors (as
discussed below) shall be (i) deemed employees of the other Party, nor
(ii) entitled to participate in or receive any benefit or right as an employee
of the other Party.

 

  c.

Each Party shall pay and report all federal and state income tax withholding,
Social Security taxes and unemployment insurance applicable to such Party.

 

  d.

Permitted Subcontractors: AMRI shall have the right to subcontract a portion of
its obligations in connection with its performance of any Project other than to
its Affiliates (hereinafter a “Permitted Subcontractors”), provided that
(i) AMRI shall have obtained the prior written approval of SUNESIS to use of
such Permitted Subcontractors, including providing SUNESIS with sufficient
information to enable proper evaluation of such subcontractor; (ii) such
subcontract shall not

 

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COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

 

 

relieve AMRI of any of its obligations under this Agreement; (iii) AMRI shall
enter into a written agreement with such Permitted Subcontractors on terms and
conditions substantially similar to the confidentiality and intellectual
property provisions of this Agreement; and (iv) each Work Order, when
applicable, shall specify the name of such Permitted Subcontractors.

 

10.

Warranty.

 

  a.

AMRI WARRANTS THAT (i) ALL PRODUCTS MANUFACTURED BY IT PURSUANT TO THIS
AGREEMENT SHALL COMPLY WITH THE SPECIFICATIONS AND cGMP IF SO SPECIFIED IN A
WORK ORDER HEREUNDER., AND CONFORM TO THE INFORMATION SHOWN ON THE CERTIFICATE
OF ANALYSIS, AND (ii) ALL SERVICES SHALL BE PERFORMED IN A PROFESSIONAL AND
WORKMANLIKE MANNER IN ACCORDANCE WITH INDUSTRY STANDARDS, BUT MAKES NO OTHER
WARRANTY OR REPRESENTATION OF ANY KIND, EITHER EXPRESS OR IMPLIED, INCLUDING,
BUT NOT LIMITED TO, THE WARRANTIES OR MERCHANTABILITY AND FITNESS FOR A
PARTICULAR PURPOSE.

 

  b.

EXCEPT FOR THE WARRANTIES PROVIDED IN SECTIONS 10(a) AND 15, NEITHER PARTY MAKES
ANY WARRANTY, EXPRESSED OR IMPLIED BY STATUTE OR IN WRITING, REGARDING THE
SERVICES OR THE PRODUCT, INCLUDING WITHOUT LIMITATION ANY WARRANTY REGARDING
THEIR FITNESS FOR PURPOSE, THEIR QUALITY, THEIR MERCHANTABILITY OR THEIR
NON-INFRINGEMENT OF INTELLECTUAL PROPERTY RIGHTS OF THIRD PARTIES. ANY OTHER
REPRESENTATIONS OR WARRANTIES MADE BY ANY PERSON OR ENTITY, INCLUDING EMPLOYEES
OR REPRESENTATIVES OF A PARTY HERETO, THAT ARE INCONSISTENT HEREWITH, SHALL BE
DISREGARDED AND SHALL NOT BE BINDING ON SUCH PARTY.

 

11.

Limitations on Liability.

IN NO EVENT SHALL EITHER PARTY BE LIABLE TO THE OTHER PARTY OR ITS AFFILIATES
FOR LOST PROFITS OR ANY SPECIAL, CONSEQUENTIAL, INCIDENTAL, PUNITIVE OR INDIRECT
DAMAGES ARISING FROM ANY BREACH OF THIS AGREEMENT, INCLUDING WITHOUT LIMITATION
ANY BREACH OF A WARRANTY CONTAINED HEREIN OR OF ANY OBLIGATION TO PERFORM
SERVICES OR TO PROVIDE COMPOUNDS BY A SPECIFIED TIME.

 

12.

Indemnification and Liability.

 

  a.

By SUNESIS. SUNESIS shall indemnify and hold AMRI, its Affiliates and their
directors, officers, employees and agents (“AMRI Indemnitee”) harmless from and
against any and all third-party claims, damages, liabilities, losses, costs and

 

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AMENDED.

 

 

expenses (collectively, “Claims”) relating to the Sample(s), or the product
resulting from the Services hereunder (a “Product”) after it has been accepted
by SUNESIS, and arising from (i) SUNESIS’s or a third party’s use or sale of the
Product or SUNESIS’s or a third party’s manufacture, use or sale of any product
incorporating the Product, including without limitation any product liability
Claims attributable to such Product or any other SUNESIS product (whether based
on strict liability, inherent design defect, negligence, failure to warn, breach
of contracts or any theory of liability), (ii) any Claims that the Product,
Samples or the process provided by SUNESIS to AMRI for the conduct of a Project
hereunder infringe a third party’s patent or other intellectual property rights,
or (iii) any acts or omissions of SUNESIS or any of its directors, officers,
employees, or agents (“SUNESIS Indemnitee”), except to the extent that such
Claim (A) is caused by the gross negligence, willful misconduct or breach of
this Agreement by an AMRI Indemnitee, or (B) infringement of third-party rights
caused by AMRI’s use of third-party technology or materials in performing the
Services for SUNESIS.

 

  b.

By AMRI. AMRI shall indemnify and hold SUNESIS Indemnitees harmless from and
against any and all Claims arising from (i) AMRI’s gross negligence or willful
misconduct in connection with this Agreement or AMRI’s breach of this Agreement,
and (ii) alleged infringement of third-party rights caused by AMRI’s use of
third-party technology or materials in performing the Services for SUNESIS,
except to the extent that such a Claim is caused by the gross negligence or
willful misconduct of SUNESIS Indemnitees.

 

  c.

Indemnification Procedures. A Party seeking indemnity hereunder (the
“Indemnified Party”) (i) shall give prompt written notice to the other Party
(the “Indemnifying Party”) of any Claim for which indemnification is sought,
(ii) shall permit the Indemnifying Party to assume full responsibility to
investigate, prepare for and defend against the Claim, (iii) shall reasonably
assist the Indemnifying Party, at the Indemnifying Party’s reasonable expense in
the investigation of preparation for and defense of such Claim, and (iv) shall
not compromise or settle such Claim in a manner that adversely affects the other
Party’s rights under this Agreement without the Indemnifying Party’s prior
written consent.

 

13.

Force Majeure.

Neither SUNESIS nor AMRI shall be liable for delays in performing or any failure
to perform any terms of this Agreement caused by the effects of fire, strike,
war (declared or undeclared), insurrection, government restriction or
prohibition, force majeure or other causes reasonably beyond its control and
without its fault, but the Party failing to perform shall use all reasonable
efforts to resume performance of this Agreement as soon as feasible. Any episode
of force majeure which continues for sixty (60) days from the date of
notification of its existence shall give the non-affected Party the right to
terminate this Agreement upon thirty (30) days additional notice.

 

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COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

 

14.

Assignment.

Neither Party shall have the right to assign this Agreement or any of the rights
or obligations hereunder without the prior written consent of the other Party,
except that each Party may assign this Agreement without such consent to an
Affiliate or a subsidiary of that Party, and SUNESIS may assign this Agreement
without such consent in connection with the transfer or sale of all or
substantially all of its business or assets, or in the event of its merger,
reorganization, consolidation, change in control or similar transaction.

 

15.

Representations and Warranties.

 

  a.

Each Party represents and warrants to the other Party that (i) such Party has
full power and authority to execute and deliver this Agreement and to perform
its obligations hereunder, (ii) the execution, delivery and performance by such
Party of this Agreement has been duly and validly authorized, and the Parties
have secured all consents and authorizations necessary to enter into this
Agreement and proceed with the undertakings required herein, and (iii) this
Agreement has been duly executed and delivered by such Party and constitutes a
valid and legally binding obligation of such Party, enforceable in accordance
with its terms.

 

  b.

AMRI represents and warrants to SUNESIS that this undertaking does not conflict
with its duties and obligations under any other agreements to which it is a
party, including any agreements with any other company or institution, or any
policies applicable to them.

 

16.

Entire Agreement.

 

  a.

This Agreement and the Work Orders attached hereto represent the entire
agreement between the Parties with respect to the subject matter hereof and
supersedes all prior understandings and agreements with respect thereto,
including the previous Service Agreement between the Parties dated August 22,
2003 and any amendment and Quality Agreement thereto.

 

  b.

No change or modification of the provisions of this Agreement shall be effective
unless it is in writing and signed by a duly authorized officer of AMRI and
SUNESIS.

 

17.

Insurance.

Each Party shall maintain appropriate product liability and commercial general
liability insurance with respect to the conduct and performance of the Services
under each Work Order as each Party customarily maintains with respect to
similar activities. Each Party shall provide the other Party evidence of such
insurance upon written request.

 

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AMENDED.

 

18.

Choice of Law and Dispute Resolution.

 

  a.

Choice of Law. This Agreement shall be governed by and interpreted in accordance
with the laws of the State of Delaware without regard to conflicts of law
principles thereof.

 

  b.

Dispute Resolution. Any dispute with regard to the performance of this Agreement
by either Party will be settled by the following method:

 

  i.

Initial disputes will be reviewed by a technical committee comprised on an equal
number of staff from both SUNESIS and AMRI (the “Discrepancy Review Committee”).
Either Party may initiate such a review by written notice to the other Party.
Dispute resolution will be in writing and signed by the research director (or
equivalent officer) of both SUNESIS and AMRI.

 

  ii.

If the Discrepancy Review Committee cannot reach a resolution within thirty
(30) days after such dispute notice (“Notification”), the Chief Executive
Officers (“CEOs”) or their designees of both SUNESIS and AMRI will meet to reach
a resolution acceptable to both.

 

  iii.

If the CEOs or their designees cannot reach an acceptable resolution within
sixty (60) days after such Notification, the Parties may submit to mediation of
the dispute. If the mediation is unsuccessful, the parties may then resort to
arbitration, litigation or another dispute resolution procedure.

 

19.

Miscellaneous.

 

  a.

AMRI will permit SUNESIS to audit AMRI’s relevant non-financial records during
and for a period of twelve (12) months after the term of this Agreement with
reasonable advanced prior notice, during normal business hours, and not more
than once per calendar year solely to permit SUNESIS to confirm that the
Services are or have been performed in compliance with applicable laws and
regulations.

 

  b.

If any term or provision of this Agreement or the application thereof shall be
invalid or unenforceable, the remainder of this Agreement shall be unaffected
and each remaining term or provision of this Agreement shall be valid and be
enforceable to the fullest extent permitted by law.

 

  c.

Waiver by either Party or the failure by either Party to claim a breach of any
provision of this Agreement shall not be deemed to constitute a waiver or
estoppel with respect to any subsequent breach of any provision hereof.

 

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COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

 

20.

No Implied Rights.

Except as otherwise expressly provided herein, neither Party shall have any
right, title or interest to or in any patents, patent applications, know-how
(whether patentable or unpatentable) or other intellectual property rights of
the other Party.

 

21.

Counterpart.

This Agreement may be executed in two or more counterparts, each of which shall
be deemed an original, but all of which, taken together, shall constitute one
and the same legal instrument.

IN WITNESS WHEREOF, the Parties intending to be legally bound have caused this
Agreement to be executed by their duly authorized representatives.

 

ALBANY MOLECULAR RESEARCH, INC.   SUNESIS PHARMACEUTICALS, INC. By: /s/ Steve
Jennings   By: /s/ Steven B. Ketchum Name: Steve Jennings   Name: Steven B.
Ketchum, Ph. D.

Title: SVP, Sales, Marketing & Business

Development

 

Title: Senior Vice President, Research &

Development

Date: December 14, 2009   Date: December 17, 2009

 

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AMENDED.

 

EXHIBIT A

QUALITY AGREEMENT

 

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QUALITY AGREEMENT

 

CONTRACTED FACILITY:    Albany Molecular Research, Inc. CONTRACTOR:    Sunesis
Pharmaceuticals, Inc.

This is a Quality Agreement between Albany Molecular Research, Inc. (AMRI) and
Sunesis Pharmaceuticals, Inc. (Sunesis). It is applicable to all services to be
performed in accordance with GMP’s (current Good Manufacturing Practices)
including the development and qualification of analytical methods for the
support of GMP manufacture, analytical support to GMP manufacture, and the GMP
manufacture itself. These requirements will be in effect unless otherwise agreed
to in writing.

GMPs per ICH Q7 for active pharmaceutical ingredients (APIs, drug substance) and
as applicable to APIs, 21CFR Parts 210 and 211, shall apply to those specific
services that are to be performed in accordance with GMP’s as further clarified
in Work Orders. Conformance to 21CFR Part 11 is required where applicable.

AMRI’s Quality System shall apply to any GMP services performed.

Services are to be performed at the AMRI site at 21 Corporate Circle, Albany,
NY, or at the AMRI Rensselaer, Inc. site at 33 Riverside Avenue, Rensselaer, NY
12144, or at other AMRI sites as agreed upon by both parties.

The specific sections below are for clarification of certain GMP issues only.
The sections below are not meant to exclude or replace GMP and other regulatory
requirements.

 

1.

DOCUMENT CONTROL / RECORDS

 

1.1.

For in-process materials, intermediates, and API, Sunesis shall have the right
to approve in writing all specifications, test procedures, batch records,
written and/or to be used by AMRI. Changes to these documents shall also be
approved, in advance, by Sunesis. Scientific reports such as starting material
designation or impurity identification that are intended to support or be
included in regulatory submissions shall be reviewed and approved by both
parties. However, Sunesis agrees to accept responsibility for project timeline
set-backs that might occur as a result of any delays in its review of such
documentation.

 

1.2.

Electronic or hard copies of all relevant SOPs and other documents that may be
needed to assess or approve work performed shall be provided to Sunesis upon
request during the annual audit.

 

1.3.

Copies of all documentation and records generated will be forwarded to Sunesis
for review and retention. These records shall include: executed processing
records, in-process testing and results, certificate of analysis and supporting
raw data, such as copies of note books, chromatograms and copies of any
deviations and their resolutions.

 

1

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BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

 

1.4.

Copies of each Batch file shall be forwarded to Sunesis immediately upon release
or closure of each batch by AMRI QA. Batch files include at least the fallowing:
the Batch Record(s), in-process results, Test Results, and all other documents,
results, and data incorporated into the AMRI QA Batch file.

 

1.5.

AMRI shall retain all documents and records for this project per AMRI’s
archiving procedure. At the end of the applicable archival period, AMRI shall
contact Sunesis for written instructions regarding whether the information is to
be disposed of or whether the information will be returned to Sunesis for
archiving, Sunesis reserves the right to obtain copies of documents and records
for archiving within Sunesis.

 

1.6.

AMRI shall provide electronic and/or hard copies of all GMP/CMC related
documents and records to allow submission of an IND, NDA, or other regulatory
submission.

 

2.

SPECIFICATIONS

 

2.1.

For the starting materials, in-process materials, intermediates, and API, all
specifications shall be written by AMRI, approved by AMRI QA, and approved by
Sunesis.

 

2.2.

Specifications for components shall be in place before release of said
components.

 

2.3.

Specifications for Intermediates and APIs/products shall be in place before
production of the said materials.

 

2.4.

Specifications for drug substance shall be in place before production of
material.

 

2.5.

A reference to Sunesis part numbers should be included within AMRI
specifications when applicable.

 

3.

TEST METHODS

 

3.1.

For the starting materials, in-process materials, intermediates, and API, Test
Methods shall be written by AMRI, approved by AMRI QA, and approved by Sunesis.

 

3.2.

This applies to the following types of test methods:

 

  3.2.1.

Sunesis project specific components, critical starting materials, Intermediates,
In-process, Drug Substance, and Stability. This would not apply to common
solvents, reagents, and equipment for which existing AMRI test methods are
already in place.

 

3.3.

Qualification/validation of the analytical methods is to occur In accordance
with AMRI Multi-Site SOPs .55 (for early phase projects) and .50 (for late
phase/commercial projects). The development results shall be documented in a
report.

 

3.4.

Development and validation of Test Methods shall be in compliance with GMPs, and
should follow USP and ICH guidelines wherever possible.

 

2

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BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

 

4.

COMPONENTS (TO BE DEFINED IN THE WORK ORDER)

 

4.1.

Component (Container Closure) Specifications shall be written by AMRI, approved
by AMRI QA, and approved by Sunesis.

 

4.2.

In addition to the Specifications for Components, a document will be prepared
for each component that includes line items such as an identification of the
supplier, grade, and any unique identifier used by the supplier (such as part
number), inspection reference (if applicable), tests to be performed, test
methods to be used for each test, acceptance levels, storage condition.

 

4.3.

Purchase, receipt, test, disposition, and storage of components shall be
performed by AMRI per AMRI’s quality system.

 

4.4.

AMRI shall use only approved suppliers. Unless otherwise agreed, AMRI shall
assess and, if necessary, audit the suppliers per their written SOPs. Sunesis
reserves the right to audit that the suppliers have been approved according to
AMRI’s quality system.

 

5.

PRODUCT RELEASE

 

5.1.

Product testing and disposition shall be performed by AMRI, however, the final
approval shall be assigned by Sunesis before using the material for further
processing and/or before releasing for any shipments. In the event that Sunesis
takes more than thirty (30) business days to notify AMRI of its decision
regarding the material, AMRI will have the right to bill Sunesis for such
material to the extent agreed in the appropriate Work Order.

 

5.2.

A Certificate of Analysis (COA), including a statement of Conformance to GMPs
shall be generated for each lot produced. All data generated as part of the
process and testing will be reviewed by AMRI QA (or a technically qualified AMRI
employee not having direct responsibility for the processing activities). AMRI
QA shall be the final signer of the COA and release of the product for shipment
to Sunesis and/or designated location. The certificate will cover at a minimum
the following information:

 

  5.2.1.

Description, AMRI item number or item name, lot/batch #, release date,
manufacture date, retest/re-evaluation date. (Sunesis part number will be
applied to the labeling of the shipping container.)

 

  5.2.2.

Conformance statement such as “The product was manufactured in compliance with
GMPs, AMRI’s quality system, current procedures and specifications. This product
meets specifications.”

 

  5.2.3.

Certificate of Analysis section to include a listing of the tests,
specification, and result.

 

  5.2.4.

QA signature and date

 

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BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

 

6.

PROCESSING DOCUMENTS

 

6.1.

These written documents require review and approval by both AMRI QA and Sunesis
prior to initiation of any manufacturing:

 

  6.1.1.

Bill of Materials (BOM): list of all components to be used to manufacture
products and intermediates and quantity per a set batch size.

 

  6.1.2.

Batch Records: written processing parameters and controls, and all component
traceability (including unique identifier) and specific quantity.

 

  6.1.3.

In-Process tests: shall be incorporated within the Batch Record or referenced
within the Batch Record; any testing or inspection shall include frequency of
testing and acceptance criteria.

 

7.

PROCESS CONTROL

 

7.1.

Processing shall be performed per GMPs.

 

7.2.

Manufacturing shall be documented within a Batch Record.

 

7.3.

Manufacturing conditions shall be appropriate to keep the bioburden as low as
applicable for production of materials that will be used for formulating a
sterile drug product.

 

7.4.

AMRI will process the product in an appropriately controlled environment.

 

7.5.

Equipment where cleaning cannot be confirmed shall be dedicated.

 

7.6.

Cleaning control: written procedures must be in place to ensure adequate levels
of cleanliness and environmental control; records of cleaning shall be
documented and maintained; the Drug Substance will be subsequently formulated
into a sterile Drug Product, therefore, low and controlled bioburden/endotoxin
processing should be adapted wherever possible.

 

7.7.

Qualification and Validation protocols, both pre- and post-approval, shall be
approved by AMR’ GA and reviewed and commented on by Sunesis. A final validation
report and/or completed validation protocol shall also be approved by AMRI CIA
and reviewed and commented on by Sunesis. If required by Sunesis internal
procedures, Sunesis can issue a letter of approval that AMRI will file with the
Process Validation protocol and reports.

 

8.

PACKAGING / STORAGE / SHIPPING

 

8.1.

All materials shall be stored under GMP conditions.

 

8.2.

Storage conditions and any special storage requirements shall be described in
the applicable material labeling.

 

4

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BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

 

8.3.

Shipping of material shall maintain the specified storage conditions for the
material. e.g. — protect from light, refrigerated, overnight delivery. Monitors
(such as TempTales) shall be incorporated within shipping containers to assure
stability of the product during shipment, when applicable.

 

9.

TRAINING

 

9.1.

Personnel involved in the processing of materials shall be trained in their job
specific responsibilities or have the education and experience required to
perform the job. They should also have documented training on Good Manufacturing
Practices per ICH Q7 and where applicable 21CFR Part 211.

 

9.2.

AMRI is responsible for providing training on all elements of this Quality
Agreement and any relevant AMRI SOPs and methods to any of its staff assigned to
work on Sunesis projects. All personnel training must be documented.

 

10.

NONCONFORMANCES / INVESTIGATIONS / 005

 

10.1.

Sunesis shall be made aware of any GMP non-conformances and deviations
encountered in conjunction with projects related to Sunesis. The
non-conformances also applies to Out of Specification (OOS) analytical results.

 

10.2.

AMRI will perform additional product investigations, if and as required by
Sunesis, when product fails to meet specifications. Provided out of
specifications results are not due to the gross negligence of AMRI, Sunesis
agrees to appropriately compensate AMRI for additional work beyond the original
project scope. Investigations shall be completed within 30 business days and
final reports will be forwarded to Sunesis within 35 business days.

 

11.

CHANGE NOTIFICATION TO GMP MANUFACTURE

 

11.1.

AMRI shall notify Sunesis, in advance, of any significant changes to the
process, processing steps, equipment, manufacturing environment, facility,
components or testing that are planned and which may have an impact on the
quality of products or projects related to Sunesis. Changes will require written
approval by Sunesis based on their approval of batch records, specifications or
Monographs prior to implementation.

 

12.

COMPLIANCE / AUDITS

 

12.1.

Sunesis reserves the right to have a “person in plant” during any manufacturing
or testing activities as mutually agreed upon by both parties.

 

12.2.

Annually and/or for cause, Sunesis reserves the right to audit, in person or by
other means, any work performed, and audit to compliance to GMPs and other
applicable regulations. Reasonable prior notice will be given before any visit
or audit. Prior to an audit, Sunesis will communicate to AMRI the scope of the
audit.

 

5

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COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

 

  12.2.1.

If deviations or concerns are noted within the audit, AMRI will provide a
written response to Sunesis’ written audit report within 30 business days of
receipt of the report from Sunesis. The response will include the corrective
actions to be taken by AMRI, if any, and a timeline for such implementation.

 

12.3.

In the event of an inspection by any governmental or regulatory authority
concerning the site at which Sunesis projects are performed, AMRI shall notify
Sunesis promptly upon learning of such an inspection. AMRI shall also supply
Sunesis with redacted copies of any FDA Form 483, any correspondence or portions
or correspondence relating to Sunesis’s materials and shall inform Sunesis of
the general findings arid outcomes of such inspections.

 

12.4.

During the course of this project, Sunesis requests reasonable frequency of
telephone and/or video conferences with the appropriate parties at AMRI,
permission to visit AMRI and inspect progress as determined necessary, as well
as periodic access to interim data generated in support of this project.

SIGNATURES

 

Sunesis    AMRI By: /s/ Steven B. Ketchum    By: /s/ Gary M. Klee Name: Steven
B. Ketchum    Name: Gary M. Klee Title: Senior Vice President, Research &
Development and Quality    Title: Director, Regulatory Affairs Date:
November 30, 2010    Date: December 17, 2010

 

6

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COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

 

Exhibit E

Revenue Participation Report

 

7

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COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

 

Sunesis Pharmaceuticals, Inc.

[Insert Product Name]

Revenue Participation Report by Country

[Insert Quarterly Period]

 

  Location        Date of First
     Commercial Sale      

    Units    

Sold

      Gross Sales     
(in local
currency)   Net Sales
(in local
     currency)           FX Rate            Net Sales     
(in U.S.
dollars)  

    [If Combination    
Product,

percentage
attributed to
Product]

  Revenue
Participation
     Amount (in U.S.    
dollars) [Insert Country 1]                                    [Insert
Country 2]                                                                     
                                                                               
                                                                               
                                                                               
                                                                               
                                                                               
                                                                               
                                                          TOTALS               
                   

 

1

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BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

 

Exhibit F

Collateral

The Collateral consists of all of Seller’s right, title and interest in and to
the following personal property:

All goods, accounts (including health-care receivables), equipment, inventory,
contract rights or rights to payment of money, leases, license agreements,
franchise agreements, general intangibles (including the Product Collateral but
excluding the Excluded Intellectual Property), commercial tort claims,
documents, instruments (including any promissory notes), chattel paper (whether
tangible or electronic), cash, deposit accounts, all certificates of deposit,
fixtures, letters of credit rights (whether or not the letter of credit is
evidenced by a writing), securities, and all other investment property,
supporting obligations, and financial assets, whether now owned or hereafter
acquired, wherever located; and

All Seller’s books relating to the foregoing, and any and all claims, rights and
interests in any of the above and all substitutions for, additions, attachments,
accessories, accessions and improvements to and replacements, products, proceeds
and insurance proceeds of any or all of the foregoing.

Notwithstanding the foregoing, the Collateral does not include any of the
following, whether now owned or hereafter acquired: (i) except with respect to
the Product Collateral, (A) any copyright rights, copyright applications,
copyright registrations and like protections in each work of authorship and
derivative work, whether published or unpublished; (B) any patents, patent
applications and like protections, including improvements, divisions,
continuations, renewals, reissues, extensions, and continuations-in-part of the
same; (C) trademarks, trade names, service marks, mask works, rights of use of
any name or domain names and, to the extent permitted under applicable law, any
applications therefor, whether registered or not; (D) the goodwill of the
business of Seller connected with and symbolized thereby, know-how, operating
manuals, trade secret rights, clinical and non-clinical data, rights to
unpatented inventions; and (E) any claims for damage by way of any past,
present, or future infringement of any of the foregoing (collectively, the
“Excluded Intellectual Property”); provided, however, the Collateral shall
include all accounts, license and royalty fees and other revenues, proceeds, or
income arising out of or relating to any of the foregoing; and (ii) more than
65% of the total combined voting power of all classes of stock entitled to vote
the shares of capital stock (the “Shares”) of any subsidiary of Seller which is
not an entity organized under the laws of the United States or any territory
thereof, if Seller demonstrates that a pledge of more than sixty five percent
(65%) of the Shares of such Subsidiary creates a present and existing adverse
tax consequence to Seller under the U.S. Internal Revenue Code.

Pursuant to the terms of this Agreement, Seller has agreed not to encumber any
of its Excluded Intellectual Property.

Furthermore, upon the Loan Repayment, the Collateral shall only include the
Product Collateral.

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BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

 

DISCLOSURE SCHEDULE

Schedule 3.1(h)(i)

Option Agreement, dated May 23, 2003, by and between Dainippon Pharmaceutical
Co. Ltd. and Sunesis Pharmaceuticals, Inc.

 

2

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BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

 

Schedule 3.1(h)(ii)

None

 

3

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COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

 

Schedule 3.1(h)(iv)

None

 

4

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BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

 

Schedule 3.1(k)(iv)

Vosaroxin Patent Rights

[ * ]

 

5

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BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

 

Schedule 3.1(k)(v)

Infringement of Vosaroxin Patent Rights

None.

 

6

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COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

 

SCHEDULE 9.1

[ * ]

 

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COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

 

Schedule A

 

See Schedule 3.1(k)(iv).

 

8