Exhibit 10.1

 

Certain identified information has been excluded from the exhibit because it is
both (i) not material and (ii) would likely cause competitive harm to the
registrant if publicly disclosed.

 

LICENSE AND COLLABORATION AGREEMENT

DATED AS OF May 10, 2019

 

by and between

 

ONCONOVA THERAPEUTICS, INC.

 

and

 

HANX BIOPHARMACEUTICALS, INC.

 

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CONFIDENTIAL

 

LICENSE AND COLLABORATION AGREEMENT

 

This License and Collaboration Agreement (this “Agreement”), dated as of May 10,
2019 (the “Effective Date”), is made by and among Onconova Therapeutics, Inc., a
Delaware corporation (“Onconova”), and HanX Biopharmaceuticals, Inc., a company
registered under the laws of the People’s Republic of China, having its
registered office at 688 Binan Road, Binjing District, Hangzhou, China 310051
(“HanX”).  Onconova and HanX are sometimes referred to herein individually as a
“Party” and collectively as the “Parties”.

 

RECITALS

 

WHEREAS, Onconova has certain rights to patents and other intellectual property
related to the Compound (as defined below);

 

WHEREAS, HanX has significant experience in the development and
commercialization of pharmaceutical products in the Territory (as defined
below); and

 

WHEREAS, HanX desires to license from Onconova such intellectual property
rights, and to further develop and commercialize the Compound and Products (as
defined below) in the Territory for use in the Field (as defined below), and
Onconova desires to grant such a license to HanX in accordance with the terms
and conditions of this Agreement.

 

WHEREAS, concurrently with the execution and delivery of this Agreement, the
Parties are entering into a stock purchase agreement dated as of the Effective
Date (the “Securities Purchase Agreement”), providing for the issuance to HanX
of common stock of Onconova.

 

NOW THEREFORE, in consideration of the foregoing premises and the mutual
promises, covenants and conditions contained in this Agreement, the Parties
agree as follows:

 

ARTICLE 1
DEFINITIONS

 

As used in this Agreement, the following capitalized terms shall have the
meanings set forth in this Article 1 or as otherwise defined elsewhere in this
Agreement:

 

1.1                               “Affiliate” means any Person directly or
indirectly controlled by, controlling or under common control with, a Party, but
only for so long as such control shall continue.  For purposes of this
definition, “control” (including, with correlative meanings, “controlled by”,
“controlling” and “under common control with”) shall be presumed to exist with
respect to a Person in the event of the possession, direct or indirect, of
(i) the power to direct or cause the direction of the management and policies of
such Person (whether through ownership of securities, by contract or otherwise),
or (ii) at least fifty percent (50%) of the voting securities or other
comparable equity interests.  The Parties acknowledge that in the case of
certain entities organized under the laws of certain countries outside of the
United States, the maximum percentage ownership permitted by law for a foreign
investor may be less than fifty percent (50%), and that in such case, such lower
percentage shall be substituted in the preceding

 

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sentence, provided that such foreign investor has the power to direct or cause
the direction of the management and policies of such Person.  For the avoidance
of doubt, neither of the Parties shall be deemed to be an “Affiliate” of the
other.

 

1.2                               “Applicable Accounting Standards” means PRC
GAAP, US GAAP, or International Financial Reporting Standards (IFRS), as adopted
by HanX or its Affiliates, sublicensees or assignees in their respective
accounting practice.

 

1.3                               “Commercialize”, “Commercializing” or
“Commercialization” means all activities directed to the marketing, promotion,
selling or offering for sale of a product for an indication, including planning,
market research, pre-marketing, advertising, educating, marketing, promoting,
importing, exporting, distributing and post-marketing safety surveillance and
reporting.  For clarity, “Commercialization” shall not include any activities
related to clinical research, Manufacturing or Development of the Product.

 

1.4                               “Commercially Reasonable Efforts” means, with
respect to a Party’s obligation under this Agreement, including to Develop or
Commercialize the Product, the level of efforts required to carry out such
obligation in a sustained manner consistent with the best practices of similarly
situated company in the biotechnology and pharmaceutical industries with respect
to a product of similar market potential and profit potential, based on
conditions then prevailing.  Commercially Reasonable Efforts requires, with
respect to such an obligation, that the Party: (i) promptly assign
responsibility for such obligation to specific employee(s) who are held
accountable for progress and monitor such progress on an on-going basis,
(ii) set and consistently seek to achieve specific and meaningful objectives for
carrying out such obligation, and (iii) consistently make and implement
decisions and allocate resources designed to advance progress with respect to
such objectives.

 

1.5                               “Competitive Product” means any pharmaceutical
product [**]

 

1.6                               “Compound” means the pharmaceutical compound
rigosertib, having chemical structure set forth in Schedule 1.6, including any
and all salt, free acid/base, solvate, hydrate, pro-drug, stereoisomer, and
enantiomer thereof, and polymorphic forms thereof.

 

1.7                               “Control” means, when used in reference to
intellectual property, other intangible property or materials, that a Party owns
or has a license or sublicense to such intellectual property, other intangible
property or materials, and has the ability to grant a license or sublicense or
other right to use such intellectual property, other intangible property or
materials, as applicable, as provided for herein, without (i) requiring the
consent of a Third Party or (ii) violating the terms of any agreement or other
arrangement with any Third Party. Notwithstanding the foregoing, for the purpose
of defining whether intellectual property, other intangible property or
materials are Controlled by a Party, if such intellectual property, other
intangible property or materials are first acquired, licensed or otherwise made
available to such Party after the Effective Date (in the case of Onconova), or
at any time before or after the Effective Date (in the case of HanX) and if the
use, practice or exploitation thereof by or on behalf of the other Party, its
Affiliates or sublicensees would require the first Party to pay any amounts to
the Third Party from which the first Party acquired, licensed or otherwise
obtained such intellectual property, other intangible property or materials
(“Additional Amounts”), such

 

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intellectual property, other intangible property or materials shall be deemed to
be Controlled by the first Party only if the other Party agrees to pay (if
necessary) and does in fact pay all Additional Amounts with respect to such
other Party’s use of or license to such intellectual property, other intangible
property or materials to the extent specified in this Agreement. For clarity,
if, but for the acquisition, license or obtaining by Onconova of any
intellectual property, other intangible property or materials that are acquired
by Onconova, the Development, Manufacturing or Commercialization of the Product
(as of the Effective Date, or the Product as modified by Onconova after the
Effective Date outside the Territory) by HanX would infringe the intellectual
property of any Third Party, then HanX shall have the right to apply the terms
and conditions of Section 8.6 to the applicable Additional Amounts for such
third party intellectual property to reduce its royalty payments to Onconova
pursuant to Section 8.6.

 

1.8                               “Develop”, “Developing” or “Development” means
all activities relating to research, non-clinical, preclinical and clinical,
toxicology testing, statistical analysis and reporting, preparation and
submission of applications for regulatory approval of the Product, all other
non-CMC activities necessary or reasonably useful or otherwise requested or
required by a Regulatory Authority as a condition or in support of obtaining or
maintaining all regulatory approvals for the Product and all other
development-related activities that are deemed by the JSC to be commercially
useful.

 

1.9                               “Development Activities” means those
Development activities undertaken by or on behalf of HanX or its Affiliates with
respect to the Product in the Field in the Territory consistent with the
applicable Development Plan.

 

1.10                        “Dollar” means a U.S. dollar, and “$” shall be
interpreted accordingly.

 

1.11                        “FDA” means the U.S. Food and Drug Administration
and any successor Governmental Authority having substantially the same function.

 

1.12                        “FD&C Act” means the U.S. Federal Food, Drug, and
Cosmetic Act, 21 U.S.C. § 301 et seq., as amended from time to time, together
with any rules, regulations and requirements promulgated thereunder (including
all additions, supplements, extensions and modifications thereto).

 

1.13                        “Field” means all human therapeutic uses.

 

1.14                        “First Commercial Sale” means, with respect to the
Product, the first sale of the Product in a given country or other regulatory
jurisdiction in the Territory following receipt of Regulatory Approval by the
NMPA by or on behalf of HanX, its Affiliates, sublicensees or assignees to a
Third Party.

 

1.15                        “Good Clinical Practices” or “GCP” means all
applicable Good Clinical Practice standards for the design, conduct,
performance, monitoring, auditing, recording, analyses and reporting of clinical
trials, including, as applicable, (i) the Declaration of Helsinki (2004) as last
amended at the 52nd World Medical Association in October 2000 and any further
amendments or clarifications thereto, (ii) U.S. Code of Federal Regulations
(C.F.R.) Title 21, Parts 50 (Protection of Human Subjects), 56 (Institutional
Review Boards) and 312 (Investigational New Drug Application), as may be amended
from time to time, and (iii) the

 

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equivalent Laws in any relevant country, each as may be amended and applicable
from time to time and in each case, that provide for, among other things,
assurance that the clinical data and reported results are credible and accurate
and protect of the rights, integrity, and confidentiality of trial subjects.

 

1.16                        “Good Laboratory Practices” or “GLP” means all
applicable Good Laboratory Practice standards, including, as applicable, the
then-current good laboratory practice standards promulgated or endorsed by the
FDA as defined in 21 C.F.R. Part 58, and the equivalent Laws in any relevant
country, each as may be amended and applicable from time to time.

 

1.17                        “Good Manufacturing Practices” or “GMP” means all
applicable Good Manufacturing Practice standards including (i) the principles
detailed in the U.S. Current Good Manufacturing Practices, 21 C.F.R. Sections
210, 211, 601 and 610, (ii) the principles detailed in the ICH Q7A guidelines
and (iii) the equivalent Laws in any relevant country, each as may be amended
and applicable from time to time.

 

1.18                        “Governmental Authority” means any multinational,
federal, state, local, municipal or other governmental authority of any nature
(including any governmental division, prefecture, subdivision, department,
agency, bureau, branch, office, commission, council, court or other tribunal),
in each case, having jurisdiction over the applicable subject matter.

 

1.19                        “HanX Know-How” means all Know-How that is
(i) Controlled by HanX or its Affiliates as of the Effective Date or (ii) comes
under the Control of HanX or its Affiliates during the Term, in each case of
(i) or (ii), which (a) specifically describe, embody or relate to the Product or
its manufacture or use in any formulation or is necessary or useful for the
Manufacturing, Development or Commercialization of the Product in the Field, and
(b) is used by or on behalf of HanX or its Affiliates for Manufacturing,
Development or Commercialization of the Product.  For clarity, “HanX Know-How”
shall not include the HanX Patents.

 

1.20                        “HanX Patent” means any Patent that is
(i) Controlled by HanX or its Affiliates as of the Effective Date or (ii) comes
under the Control of HanX or its Affiliates during the Term, in each case of
(i) or (ii), which (a) specifically describe, embody or relate to the Compound
or Product or the manufacture or use thereof or any HanX Know-How, and (b) is
used by or on behalf of HanX or its Affiliates for Manufacturing, Development or
Commercialization of the Product.

 

1.21                        “HanX Technology” means the HanX Know-How and the
HanX Patents.

 

1.22                        “IND” means (i) an Investigational New Drug
Application as defined in the FD&C Act or (ii) the equivalent application to the
equivalent agency in any other regulatory jurisdiction outside the U.S., such as
a clinical trial application or a clinical trial exemption, the filing of which
is necessary to commence or conduct clinical testing of a pharmaceutical product
in humans in such jurisdiction.

 

1.23                        “Invention” means any writing, invention, discovery,
improvement, technology or other Know-How (in each case, whether patentable or
otherwise) that is discovered, made or conceived under this Agreement during the
Term.

 

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1.24                        “JSC” means the joint steering committee formed by
the Parties as described in Section 3.1.

 

1.25                        “Know-How” means any proprietary data, results,
material(s), technology, and nonpublic information of any type whatsoever, in
any tangible or intangible form, including know-how, trade secrets, practices,
techniques, methods, processes, inventions, developments, specifications,
formulations, formulae, materials or compositions of matter of any type or kind
(patentable or otherwise), software, algorithms, marketing reports and plans,
market research, expertise, technology, test data (including pharmacological,
biological, chemical, biochemical, toxicological, preclinical and clinical test
data), analytical and quality control data, stability data, other study data and
procedures.

 

1.26                        “Laws” means all laws, statutes, rules, regulations,
directives, decisions, ordinances, guidelines and other pronouncements of any
Governmental Authority.

 

1.27                        “Manufacture” or “Manufacturing” means all
activities related to the manufacturing of the Compound and/or Product, or any
ingredient thereof, including manufacturing for clinical use or commercial sale,
in-process and finished product testing, release of product, quality assurance
activities related to manufacturing and release of product and ongoing stability
tests and regulatory activities related to any of the foregoing.

 

1.28                        “Marketing Authorization Application” or “MAA” means
an application to the appropriate Regulatory Authority for approval to sell the
Product (but excluding Pricing Approval) in any particular country or regulatory
jurisdiction.

 

1.29                        “NDA” means a New Drug Application as defined in the
FD&C Act, filed with the FDA to obtain approval to sell the Product in the
United States.

 

1.30                        “Net Sales” means the gross amount invoiced by or on
behalf of HanX or any of its Affiliates or sublicensees or assignees (or
permitted distributors) on account of sales of the Product, less the following
deductions specifically and solely related to the Product and actually allowed:

 

(a)                                 customary trade, cash or quantity discounts
allowed and taken, to the extent not already reflected in the amount invoiced;

 

(b)                                 excise, value added and sales taxes and
customs duties to the extent included in the price and separately itemized on
the invoice price (but specifically excluding, for clarity, any income taxes
assessed against the income arising from such sale);

 

(c)                                  outbound freight, shipment and insurance
costs to the extent included in the price and separately itemized;

 

(d)                                 amounts actually allowed or credited or
refunded on returns in accordance with HanX’s returned goods policy provided to
Onconova, including by reason of rejections, defects return goods allowance,
recalls or returns, or because of retroactive price reductions, including
rebates or wholesaler chargebacks;

 

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(e)                                  reasonable estimates for doubtful accounts,
including bad debts, not to exceed two percent (2%) of gross sales amounts; and

 

(f)                                   price reductions or rebates, retroactive
or otherwise, imposed by, negotiated with or otherwise paid to Governmental
Authorities or other payees.

 

For clarity, (i) Net Sales shall not be reduced by the amount of any commissions
paid to individuals, whether they are associated with independent sales agencies
or regularly employed by HanX (or any agent, sublicensee, distributee or
designee thereof) or for a cost of collection or any other amount not
specifically set forth in (a) through (e) above and (ii) the amount of any
discounts, rebates or allowances granted or taken with respect to the total
sales to a customer for multiple products of HanX (or any agent, distributee, or
designee thereof) shall be reasonably allocated between all such products and
only the portion thereof allocated to the Product shall be included in
calculating Net Sales.  Any of the items set forth above that would otherwise be
deducted from the invoice price in the calculation of Net Sales but which are
separately charged to, and paid by, Third Parties shall not be deducted from the
invoice price in the calculation of Net Sales.  In the case of any sale of the
Product for value other than in an arm’s-length transaction exclusively for
cash, such as barter or counter-trade, Net Sales shall be determined by
referencing Net Sales at which substantially similar quantities of the Product
are sold in an arm’s-length transaction for cash.

 

Net Sales shall not include the sale or transfer of Product (i) among HanX, its
Affiliates, sublicensees or assignees (or permitted distributors) for subsequent
resale; provided that the subsequent resale is included in the computation of
Net Sales; or (ii) at or below cost for use as samples, donation, compassionate
use or in the Development of the Product, including in clinical trials.

 

If a Product contains any active pharmaceutical ingredient that is not a
Compound, then Net Sales, for the purposes of determining royalty payments on
such combination Product, shall be calculated by multiplying the Net Sales of
the combination Product by the fraction A/(A+B), where A is the gross selling
price, during the royalty paying period in question, of the Product that
contains only the Compound as its active ingredient when sold separately, and B
is the gross selling price, during the royalty period in question, of the other
active ingredients in the combination when sold separately.  If no such separate
sales are made of the Product that contains only the Compound as its active
ingredient or any of the other active ingredients or components in such
combination Product during the royalty paying period in question, the A and B
shall be the fair market value of the Compound and other active ingredient or
component.

 

Net Sales shall be accounted for in accordance with HanX’s Applicable Accounting
Standards, consistently applied.  Any price discounts offered by HanX, its
Affiliates, sublicensees or assignees (or any permitted distributor) to
purchasers of the Product will be reasonably consistent with the discount levels
customary in the industry for products that are comparable to the Product at a
similar stage in the product life cycle.

 

1.31                        “NMPA” means the National Medical Product
Administration of China (formerly known as China Food and Drug Administration)
and any successor Governmental Authority having substantially the same function.

 

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1.32                        “Onconova Know-How” means all Know-How that (i) is
Controlled by Onconova or its Affiliates as of the Effective Date or (ii) comes
under the Control of Onconova or its Affiliates during the Term, in each case of
(i) or (ii), which specifically describes, embodies or relates to the Product or
its manufacture or use in any formulation or is necessary or useful for the
Development, Manufacture or Commercialization of the Product in the Field in the
Territory.  For clarity, “Onconova Know-How” shall not include the Onconova
Patents.

 

1.33                        “Onconova Patent” means any Patent that is
(i) Controlled by Onconova or its Affiliates as of the Effective Date in the
Territory, including those set forth on Schedule 1.33 or (ii) a Patent that
comes under the Control of Onconova or its Affiliates during the Term in the
Territory, in each case of (i) and (ii), that claims or covers (a) Compound or
Product or its manufacture (including formulation) or use thereof or (b) any
Onconova Know-How.

 

1.34                        “Onconova Technology” means the Onconova Patents and
Onconova Know-How.

 

1.35                        “Patents” means patents and patent applications and
all substitutions, divisions, continuations, continuations-in-part, any patent
issued with respect to any such patent applications, any reissue, reexamination,
utility models or designs, renewal or extension (including any supplemental
patent certificate) of any such patent, and any confirmation patent or
registration patent or patent of addition based on any such patent, and all
counterparts thereof in any country.

 

1.36                        “Patent Term Extension” means any term extensions,
supplementary protection certificates, Regulatory Exclusivity and equivalents
thereof offering Patent protection beyond the initial term with respect to any
issued Patents.

 

1.37                        “Person” shall mean any corporation, limited or
general partnership, limited liability company, joint venture, trust,
unincorporated association, governmental body, authority, bureau or agency, any
other entity or body, or an individual.

 

1.38                        “Pricing Approval” means the approval, agreement,
determination or decision from a Governmental Authority establishing the price
or reimbursement for the Product for sale in a given country or regulatory
jurisdiction, as required by applicable Law in such country or other regulatory
jurisdiction prior to the sale of the Product in such country or regulatory
jurisdiction.

 

1.39                        “Product” means any pharmaceutical product
containing a Compound as an active ingredient in any formulation or dosage form
and for any mode of administration.

 

1.40                        “Regulatory Approvals” means all necessary approvals
(including INDs, NDAs, MAAs and supplements and amendments thereto and Pricing
Approvals), licenses, registrations or authorizations of any Governmental
Authority, necessary for the manufacture, distribution, use, promotion and sale
of the Product in a given country or regulatory jurisdiction.

 

1.41                        “Regulatory Authority” means, (i) in a particular
country or regulatory jurisdiction, any applicable Governmental Authority
involved in granting Regulatory Approval

 

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in such country or regulatory jurisdiction, including in the U.S., the FDA, and
(ii) in the Territory, the NMPA.

 

1.42                        “Regulatory Data” means any and all research data,
pharmacology data, chemistry, manufacturing and control data, preclinical data,
clinical data and all other documentation submitted, or required to be
submitted, to Regulatory Authorities in association with regulatory filings for
the Product (including any applicable Drug Master Files (“DMFs”), Chemistry,
Manufacturing and Control (“CMC”) data, or similar documentation).

 

1.43                        “Regulatory Exclusivity” means any exclusive
marketing rights or data exclusivity rights conferred by any Governmental
Authority with respect to the Product other than a Patent right, including
rights conferred in the U.S. under the Hatch-Waxman Act or the FDA Modernization
Act of 1997, or rights similar thereto outside the U.S., including in the
European Union, European Commission Regulation (EC) No 726/2004 and European
Commission Directive 2001/83/EC (as amended).

 

1.44                        “Regulatory Materials” means regulatory
applications, submissions, notifications, communications, correspondence,
registrations, Regulatory Approvals and/or other filings made to, received from
or otherwise conducted with a Regulatory Authority that are necessary in order
to Develop, Manufacture, market, sell or otherwise Commercialize the Product in
a particular country or regulatory jurisdiction.  Regulatory Materials include
INDs, NDAs, MAAs and applications for other Product approvals.

 

1.45                        “Royalty Term” means the period of time commencing
on the First Commercial Sale of the Product in the Territory following
Regulatory Approval by the NMPA and continuing until the latest of (a) [**]
years after the First Commercial Sale of the Product in the Territory,
(b) expiration of all Regulatory Exclusivity for the Product in the Territory or
(c) expiration of the last-to-expire Valid Claim in Onconova Patents which
covers the composition of matter, formulation or method of use of the Product in
the Territory. Notwithstanding anything to the contrary, HanX’s obligation to
pay Onconova royalties with respect to a Product shall commence on the date of
first Net Sales of such Product in the Territory (even if prior to receipt of
Regulatory Approval of such Product in such country) and shall end at the
expiration of the Royalty Term for such Product in such country.

 

1.46                        “Temple License Agreements” means, collectively,
those certain License Agreements, dated as of January 1, 1999, October 1, 1999,
November 1, 1999, and October 1, 2000, by and between Onconova and Temple
University - Of the Commonwealth System of Higher Education, as each is amended
from time to time.

 

1.47                        “Territory” means (i) the People’s Republic of
China, (ii) Hong Kong, (iii) Macau and (iv) Taiwan.

 

1.48                        “Third Party” means any Person other than Onconova
or HanX or their respective Affiliates.

 

1.49                        “U.S.” means the United States of America and its
possessions and territories.

 

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1.50                        “Valid Claim” means (i) a claim of an issued and
unexpired Patent that has not been disclaimed, revoked or held to be invalid or
unenforceable by a court or other authority of competent jurisdiction, from
which decision no appeal can be further taken (or no appeal was taken within the
allowable time period) or (ii) a claim included in a pending patent application
whether filed before or after the Effective Date and that has not been
(a) canceled, (b) withdrawn from consideration, (c) finally determined to be
unallowable by the applicable governmental authority (from which no appeal is or
can be taken), (d) abandoned or disclaimed or (e) pending for more than seven
(7) years from its earliest priority date.  For clarity, a claim which issues
later from such pending patent application above shall be considered a Valid
Claim as defined in this Section 1.50 as of the date of issuance.

 

Interpretation.  Except where expressly stated otherwise in this Agreement, the
following rules of interpretation apply to this Agreement: (a) “include”,
“includes” and “including” are not limiting; (b) “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;
(c) words of one gender include the other gender; (d) references to a contract
or other agreement mean such contract or other agreement as from time to time
amended, modified or supplemented; (e) references to a Person are also to its
permitted successors and assigns; (f) references to an “Article”, “Section” or
“Schedule” refer to an Article or Section of, or Schedule to, this Agreement,
unless expressly stated otherwise; and (g) 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.

 

Additional Definitions. The following terms have the meanings set forth in the
corresponding Sections of this Agreement:

 

Term

 

Section

“Agreement”

 

Preamble

“Audited Party”

 

8.11

“Audit”

 

8.11

“CMC”

 

1.42

“Commercialization Data”

 

6.7

“Commercialization Plan”

 

6.2.1(a)

“Confidential Information”

 

12.1

“Development Data”

 

4.5

“Development Plan”

 

4.3.1

“Disclosing Party”

 

12.1

“DMFs”

 

1.42

“Effective Date”

 

Preamble

“Executive Officer”

 

3.4.1

“HanX”

 

Preamble

“Global Branding Strategy”

 

6.9

“Indemnification Claim Notice”

 

11.3.1

“Indemnified Party”

 

11.3.1

“Indemnifying Party”

 

11.3.1

“Indemnitees”

 

11.3.1

“Infringement Claim”

 

9.4.1(a)

“Losses”

 

11.1

“Onconova”

 

Preamble

“Party” or “Parties”

 

Preamble

“Patent Challenge”

 

9.7

“Receiving Party”

 

12.1

“Recovery”

 

9.4.2(c)(iv)

“Research and Development Expense Funding”

 

8.1.4

“Securities Purchase Agreement”

 

Preamble

“Term”

 

13.1

“Third Party Claim”

 

11.1

“Upfront Equity Issuance”

 

8.1.3

“Upfront Payment”

 

8.1.1

 

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ARTICLE 2
LICENSES

 

2.1                               Grant to HanX.  Subject to the terms and
conditions of this Agreement and the applicable terms of the Temple License
Agreements, Onconova, together with its Affiliates, hereby grants to HanX during
the Term (i) an exclusive, royalty-bearing license, with the right to
sublicense, under the Onconova Technology to Develop and Commercialize the
Product in the Field in the Territory and (ii) a non-exclusive, royalty-bearing
license, with the right to sublicense, under the Onconova Technology to
Manufacture the Product in the Field in the Territory.

 

2.2                               Grant to Onconova.  Subject to the terms and
conditions of this Agreement, HanX, together with its Affiliates, hereby grants
to Onconova (i) a non-exclusive, fully paid-up, irrevocable, royalty-free
license, with the right to sublicense, under the HanX Technology to Manufacture,
make and have made the Product in the Territory for (a) Development,
Commercialization or other use outside the Territory or (b) for supply to HanX
or its Affiliates or sublicensees in the Territory, and (ii) an exclusive, fully
paid-up, irrevocable, royalty-free license, with the right to sublicense, under
the HanX Technology (a) to Develop, Manufacture, and Commercialize the Product
outside the Territory and (b) to Manufacture the Product outside the Territory
for supply to HanX or its Affiliates or sublicensees in the Territory.

 

2.3                               Additional Licensing Provisions.

 

2.3.1                     Negative Covenant.  Each Party covenants that it will
not use or practice any of the other Party’s Patent rights or other intellectual
property rights licensed (or sublicensed, as applicable) to it under this
Article 2 except for the purposes expressly permitted in the applicable license
grant.

 

2.3.2                     No Implied Licenses; Retained Rights.  Except as
explicitly set forth in this Agreement, neither Party grants any license,
express or implied, under its intellectual property rights to the other Party,
whether by implication, estoppel or otherwise.  Without limiting the generality
of the foregoing, Onconova hereby expressly retains, on behalf of itself and its
Affiliates, licensees and sublicensees, all right, title and interest in and to
the Onconova

 

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Technology and Onconova’s Regulatory Materials with respect to (i) developing
(including obtaining and maintaining regulatory approval), making, using,
importing, exporting, offering for sale and selling pharmaceutical products
containing Compound for sale anywhere in the world (other than the development
and sale of the Product in the Field in the Territory, and subject to
Section 2.5 and Section 2.6), (ii) exercising its rights and performing its
obligations hereunder, including the Manufacture of the Product for supply to
HanX for use in the Development and Commercialization in the Field in the
Territory, (iii) from and after the end of the Term, developing (including
obtaining and maintaining regulatory approval), making, using, importing,
exporting, offering for sale and selling the Product in the Field in the
Territory.

 

2.4                               Performance by Affiliates, Sublicensees and
Subcontractors.

 

2.4.1                     Performance by Affiliates.  The Parties recognize that
each may perform some or all of its obligations under this Agreement through
Affiliates; provided, however, that each Party shall remain responsible for and
be guarantor of the performance by its Affiliates and shall cause its Affiliates
to comply with the provisions of this Agreement in connection with such
performance.  Each Party hereby expressly waives any requirement that the other
Party exhaust any right, power or remedy, or proceed against an Affiliate, for
any obligation or performance hereunder prior to proceeding directly against
such Party.  Wherever in this Agreement the Parties delegate responsibility to
Affiliates, the Parties agree that such entities may not make decisions
inconsistent with this Agreement, amend the terms of this Agreement or act
contrary to its terms in any way.

 

2.4.2                     Sublicensees.  Each Party and its respective
Affiliates shall be entitled, without the prior consent of the other Party, to
grant one or more sublicenses, in full or in part, by a written agreement to
Third Parties (with the right to sublicense through multiple tiers); provided,
however, that as a condition precedent to and requirement of any such
sublicense: (i) any such permitted sublicense shall be consistent with and
subject to the terms and conditions of this Agreement; (ii) the sublicensing
Party will continue to be responsible for full performance of such Party’s
obligations under this Agreement and will be responsible for all actions of the
sublicensee as if such sublicensee were the sublicensing Party hereunder; and
(iii) the sublicensing Party shall provide a written copy of the sublicensing
agreement to the other Party; which copy may be redacted to remove sensitive
information not necessary to confirm the sublicense’s compliance with the terms
and conditions set forth herein.

 

2.4.3                     Subcontractors.  Each Party shall ensure that each of
its subcontractors accepts and complies with all of the terms and conditions of
this Agreement, and such Party shall guarantee its subcontractors’ performance
under this Agreement.  For the avoidance of doubt, HanX will remain directly
responsible for all amounts owed to Onconova under this Agreement, including
royalty payments for Net Sales by HanX’s permitted subcontractors.  Each Party
hereby expressly waives any requirement that the other Party exhaust any right,
power or remedy, or proceed against a subcontractor, for any obligation or
performance hereunder prior to proceeding directly against such Party.

 

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2.5                               Exclusivity.

 

2.5.1                     HanX hereby covenants not to [**], during the Term,
any Competitive Product worldwide, either on its own, with or through any
Affiliate, or in collaboration with a Third Party, in each case other than with
respect to the Development and Commercialization of the Product in the Field in
the Territory pursuant to this Agreement.

 

2.5.2                     Onconova hereby covenants not to [**], during the
Term, any Competitive Product in the Territory, either on its own, with or
through any Affiliate, or in collaboration with a Third Party.

 

2.5.3                     Notwithstanding the foregoing, in the event that a
Third Party becomes an Affiliate of a Party after the Effective Date through
merger, acquisition, consolidation or other similar transaction, and such Third
Party, as of the closing date of such transaction, is engaged in the research,
development, manufacture or commercialization of a Competing Product, then such
new Affiliate shall have the right to continue such Competing Product and such
continuation shall not constitute a breach of such Party’s exclusivity
obligations set forth above, provided that such new Affiliate continues such
Competing Product independent of the activities of this Agreement and does not
use any Onconova Technology or HanX Technology in connection with such Competing
Product, including ensuring that there is no overlap between employees,
consultants, or contractors that are actively working on the Competing Product
with employees, consultants, or contractors that worked or are working on any
activities under this Agreement.

 

2.6                               Restrictive Covenants.

 

2.6.1                     Ex-Territory Activities.  HanX hereby covenants and
agrees that it shall not (and shall cause its Affiliates, sublicensees and
subcontractors not to), either directly or indirectly, market, distribute or
sell the Product into countries outside of the Territory.  Without limiting the
generality of the foregoing, with respect to such countries outside of the
Territory, HanX shall not (i) engage in any advertising activities relating to
the Product directed to customers located in such countries, or (ii) solicit
orders from any prospective purchaser located in such countries.  If HanX
receives any order from a prospective purchaser located in a country outside of
the Territory, HanX shall immediately refer that order to Onconova and shall not
accept any such order or deliver or tender (or cause to be delivered or
tendered) any Product under such order.  If HanX should reasonably know that a
customer or distributor, or a customer’s distributor or customer, is engaged in
the sale or distribution of the Product outside of the Territory, then HanX
shall (a) within forty-eight (48) hours of gaining knowledge of such activities
notify Onconova regarding such activities and provide all information that
Onconova may request concerning such activities and (b) take all reasonable
steps (including cessation of sales to such customer) necessary to limit such
sale or distribution outside the Territory.

 

2.6.2                     Territory Activities.  Onconova hereby covenants and
agrees that it shall not (and shall cause its Affiliates, sublicensees and
subcontractors not to), either directly or indirectly, market, distribute or
sell the Product into the Territory; provided that, for clarity, Onconova may
Manufacture and supply the Product to HanX for Development or Commercialization
in the Territory in connection with this Agreement.  Without limiting the
generality of the foregoing, with respect to such countries within the
Territory, Onconova shall

 

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not (i) engage in any advertising activities relating to the Product directed to
customers located in such countries, or (ii) solicit orders from any prospective
purchaser located in such countries.  If Onconova receives any order from a
prospective purchaser located in a country within the Territory, Onconova shall
immediately refer that order to HanX and shall not accept any such order or
deliver or tender (or cause to be delivered or tendered) any Product under such
order.  If Onconova should reasonably know that a customer or distributor, or a
customer’s distributor or customer, is engaged in the sale or distribution of
the Product within the Territory, then Onconova shall (a) within forty-eight
(48) hours of gaining knowledge of such activities notify HanX regarding such
activities and provide all information that HanX may request concerning such
activities and (b) take all reasonable steps (including cessation of sales to
such customer) necessary to limit such sale or distribution within the
Territory.

 

ARTICLE 3
GOVERNANCE

 

3.1                               Joint Steering Committee.  The Parties shall
establish a joint steering committee (JSC) within thirty (30) days after the
Effective Date that will have the responsibility for the overall coordination
and oversight of the Parties’ activities under this Agreement.  The role of the
JSC shall be:

 

(a)                                 to review, coordinate and discuss the
overall strategy for Developing and Commercializing the Product in the Field,
including reviewing, coordinating and discussing the overall strategy for
seeking Regulatory Approvals (including Pricing Approvals) and obtaining,
maintaining and enforcing Patent protection and market and data exclusivity for
the Product in the Field in the Territory;

 

(b)                                 to review any amendments or revisions to the
Development Plan and the Commercialization Plan;

 

(c)                                  to facilitate the exchange of information
between the Parties under this Agreement regarding the strategy for implementing
the Development Activities, including sharing Development Data created pursuant
to this Agreement and establishing procedures for the efficient sharing of
information and materials necessary or useful for the Parties’ Development of
the Product in the Field;

 

(d)                                 to review the design of the clinical trial
protocols and endpoints and oversee the conduct of all clinical trials to be
conducted with respect to the Product in the Field in the Territory;

 

(e)                                  to monitor HanX’s performance against the
then-current Development Plan;

 

(f)                                   to develop, review and approve an overall
strategic marketing plan for the Product in the Field in the Territory that
includes general strategies for pre-marketing, promoting and detailing the
Product, public relations activities, publication plans, Product marketing
support and life cycle management;

 

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(g)                                 to provide a forum for the Parties to
discuss the Commercialization of the Product in the Field in the Territory in
the broader context of Onconova’s Global Branding Strategy;

 

(h)                                 to resolve any disputes and to consider any
other issues brought to its attention by the Parties (including any proposed
amendments to the Development Plan or the Commercialization Plan);

 

(i)                                    to perform such other functions as
appropriate to further the purposes of this Agreement, as mutually agreed upon
by the Parties in writing.

 

3.2                               Joint Steering Committee Membership.  Onconova
and HanX shall each designate three (3) representatives to serve on the JSC by
written notice to the other Party.  Either Party may designate substitutes for
its representatives if one (1) or more of such Party’s designated
representatives are unable to be present at a meeting.  From time to time each
Party may replace its representatives by written notice to the other Party
specifying the prior representative(s) and their replacement(s).  Each Party
shall designate one of its representatives to serve as the co-chairpersons of
the JSC.  The co-chairpersons shall be responsible for (i) calling meetings,
(ii) preparing and issuing minutes of each such meeting within thirty (30) days
thereafter, and (iii) preparing and circulating an agenda for the upcoming
meeting; provided that the co-chairpersons shall consider including any agenda
items proposed by either Party no less than five (5) days prior to the next
scheduled JSC meeting.

 

3.3                               Joint Steering Committee Meetings. The JSC
shall hold at least one (1) meeting per calendar quarter at such times during
such calendar quarter as it elects to do so; provided that, notwithstanding the
foregoing, the JSC shall hold an initial meeting within ninety (90) days of the
Effective Date.  Meetings of the JSC shall be effective only if at least one
(1) representative of each Party is present or participating.  The JSC may meet
either (i) in person at either Party’s facilities or at such locations as the
Parties may otherwise agree or (ii) by audio or video teleconference; provided
that no less than one (1) meeting of the JSC during each calendar year shall be
conducted in person.  Other representatives of each Party involved with the
Product may attend meetings as non-voting participants, subject to the
confidentiality provisions set forth in Article 12.  Additional meetings of the
JSC may also be held with the consent of each Party, or as required under this
Agreement, and neither Party shall unreasonably withhold its consent to hold
such additional meetings.  Each Party shall be responsible for all of its own
expenses incurred in connection with participating in the JSC meetings.

 

3.4                               Joint Steering Committee Decisions.

 

3.4.1                     Initial Dispute Resolution Procedures.  Subject to the
provisions of this Section 3.4, actions to be taken by the JSC shall be taken
only following a unanimous vote, with each Party having one (1) vote.  If the
JSC fails to reach unanimous agreement on a matter before it for decision for a
period in excess of thirty (30) days, the matter shall be referred to the Chief
Executive Officers of each of the Parties, or a designee from senior management
with decision-making authority (the Chief Executive Officer or such designee,
the “Executive Officer”) for resolution.  In the event that the Executive
Officers are unable to resolve such

 

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dispute within ten (10) days of such dispute being referred to the Executive
Officers, then the provisions of Section 3.4.2 shall apply.

 

3.4.2                     Subsequent Dispute Resolution Procedures.  To the
extent a dispute of the JSC has not been resolved pursuant to Section 3.4.1, the
following shall apply:

 

(a)                                 Subject to Section 3.4.2(b), [**]shall have
the final decision-making authority with respect to any dispute involving the
Development or Commercialization of the Product in the Field in the Territory.

 

(b)                                 When exercising its final decision-making
authority pursuant to Section 3.4.2(a), [**]shall not make any decision [**]. 
If the Parties disagree on whether a decision [**], the dispute shall be
resolved in accordance with Section 15.3.

 

(c)                                  Resolution of any dispute that is the
subject of this Section 3.4.2, but not subject to any of the foregoing clause
(a) or (b), shall require agreement of both Parties and unless and until such
agreement is reached, no action shall be taken, and no obligations shall be
imposed on either Party, with respect to such disputed matter, and, for the
avoidance of doubt, any failure to reach agreement thereon shall not be subject
to any further dispute resolution pursuant to Article 15 or otherwise. 
Notwithstanding the foregoing, to the extent that the dispute relates to the
contents of a Development Plan or Commercialization Plan, then unless and until
such dispute is resolved pursuant to this clause (c), the then existing
Development Plan or Commercialization Plan, as applicable, shall remain in
effect as if the JSC had re-approved such Development Plan or Commercialization
Plan, as applicable, for the next applicable time period.

 

(d)                                 Notwithstanding the foregoing provisions of
this Section 3.4.2, neither Party shall exercise its right to finally resolve a
dispute pursuant to the foregoing clause (a) or (b), as applicable, in a manner
that excuses such Party from any of its obligations specifically enumerated
under this Agreement or in a manner that negates any consent rights or other
rights specifically allocated to the other Party under this Agreement or
increases any obligations of a Party under this Agreement.  In addition, in
resolving a dispute pursuant to the foregoing clause (a) or (b), such Party
shall act in good faith.

 

3.4.3                     No Limitation on Remedies.  Nothing in this
Section 3.4 shall affect the right of a Party to exercise its rights or remedies
for a breach of this Agreement by the other Party.

 

3.5                               Authority.  The JSC shall have only the powers
assigned expressly to it in this Article 3 and elsewhere in this Agreement, and
shall not have any power to amend, modify or waive compliance with this
Agreement.  In furtherance thereof, each Party shall retain the rights, powers
and discretion granted to it under this Agreement and no such rights, powers or
discretion shall be delegated or vested in the JSC unless such delegation or
vesting of rights is expressly provided for in this Agreement or the Parties
expressly so agree in writing.  Without limiting the generality of the
foregoing, the JSC shall have no decision-making authority with respect to any
matters related to the (i) Manufacturing of the Product for sale outside the
Territory or (ii) the Development, Commercialization or use of the Product
outside the Field or outside of the Territory; provided that in each case
Onconova shall not conduct any pre-clinical studies or

 

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clinical trials that likely will materially and adversely affect the Development
or Commercialization of the Product in the Territory without providing HanX the
opportunity to review and comment on the design and implementation of any such
pre-clinical studies and clinical trials, and if HanX has any reasonable
concerns that any such study or trial will adversely affect the Development or
Commercialization of Product in the Territory, then Onconova shall take
reasonable steps to address any such concerns.

 

ARTICLE 4
DEVELOPMENT

 

4.1                               Overview.

 

4.1.1                     Overview of Development.  During the Term, HanX shall
be solely responsible for Developing the Product in the Territory for use in the
Field as set forth in the Development Plan, at its sole cost and expense.  HanX
shall conduct the Development Activities in accordance with the Development Plan
as provided in this Article 4 and under the general supervision of the JSC.

 

4.1.2                     Development and Regulatory Approvals Outside the
Territory.  The Parties hereby agree and acknowledge that: (i) nothing contained
herein shall limit or otherwise restrict the ability of Onconova to Develop the
Product outside the Territory; and (ii) nothing contained herein shall limit or
otherwise restrict the ability of Onconova to obtain or maintain Regulatory
Approvals for the Product outside the Territory.  Without limiting the
generality of the foregoing, the Development Plan shall not address (1) any
Development Activities which are necessary solely for obtaining or maintaining
Regulatory Approval for the Product in any country outside the Territory or
(2) obtaining or maintaining Regulatory Approvals for the Product outside the
Territory.

 

4.1.3                     Certain Additional Restrictions.  HanX agrees and
acknowledges that it and its Affiliates shall not conduct any Development of the
Product except in accordance with a Development Plan established pursuant to
this Agreement.

 

4.2                               Objectives Under the Development Plan.

 

4.2.1                     Development Activities.  HanX shall use Commercially
Reasonable Efforts to promptly carry out the Development Activities under the
Development Plan and in accordance with the time frames set forth in the
Development Plan.  Without limiting the foregoing obligation, HanX shall be
required to spend a minimum of two million Dollars ($2,000,000) over the first
twenty-four (24) month period following the Effective Date on clinical trials
for Product as a single agent or in combination in the Territory. Each calendar
quarter during the Term, HanX shall provide written notice to Onconova of the
amount of out-of-pocket costs spent by HanX to carry out Development Activities
under the Development Plan for the previous calendar quarter.

 

4.2.2                     Compliance.  HanX shall conduct its Development
Activities in accordance with the Development Plan, consistent with sound and
ethical business and scientific practices, and in compliance with all applicable
Laws, including GCPs and GLPs.

 

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4.3                               Development Plan.

 

4.3.1                     General.  In connection with the Development of the
Product for use in the Field in the Territory, HanX shall conduct such
Development Activities pursuant to a comprehensive development plan (the
“Development Plan”); provided that such Development Plan shall include that HanX
shall conduct, at its expense, any pre-clinical and clinical trials necessary to
receive and maintain Regulatory Approval (including registrations) to
Commercialize Product in the Territory.  Notwithstanding the foregoing, Onconova
shall have the right to review and comment on the design and implementation of
any pre-clinical studies and clinical trials, and if Onconova has any reasonable
concerns that any such study or trial will adversely affect the Development or
Commercialization of Product outside the Territory, then HanX shall take
reasonable steps to address any such concerns.  The initial Development Plan for
the Product for the first full calendar year of this Agreement (including any
additional period from the Effective Date through the end of the initial
calendar year) has been agreed to by the Parties and circulated by HanX to
Onconova.

 

4.3.2                     Updating and Amending Development Plan; Additional
Development Activities.

 

(a)                                 On or before the end of each calendar year
during the Term, the JSC shall review and update the Development Plan, which
shall cover the Development Activities to be conducted during the upcoming
calendar year, and the JSC shall, on at least a quarterly basis, review and
update, as appropriate, the then-current Development Plan to reflect any
changes, reprioritizations of, or additions to the Development Plan; provided,
however, that any disputes with respect thereto shall be resolved pursuant to
Section 3.4.

 

(b)                                 From time to time during the Term, either
Party may submit to the JSC any proposed expansion or other amendment of the
Development Plan to cover additional Development Activities (or otherwise amend
the Development Activities) with respect to the Product for use in the Field in
the Territory for the JSC’s review and approval; provided, however, that any
disputes with respect thereto shall be resolved pursuant to Section 3.4.  Once
approved by the JSC (or otherwise resolved pursuant to Section 3.4), each
amended Development Plan shall become effective and supersede the previous
Development Plan as of the date of such approval or at such other time as
decided by the JSC.

 

4.4                               Records, Reports and Information.

 

4.4.1                     General.  HanX shall maintain current and accurate
records of all work conducted by on behalf of it under the Development Plan,
amounts spent by HanX and its Affiliates in performing all work under the
Development Plan, and all data and other information resulting from such work. 
Such records shall properly reflect all work done and results achieved in the
performance of the Development Activities in good scientific manner appropriate
for regulatory purposes.  HanX shall document all preclinical studies and
clinical trials to be conducted pursuant to the Development Plan in formal
written study reports according to applicable national and international
(e.g., ICH, GCP and GLP) guidelines.  HanX shall provide copies of any such
study reports (including copies of all toxicity, pharmacokinetics (PK) and

 

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pharmacodynamics (PD) reports) to Onconova within thirty (30) days of completion
of each report. For clarity, such reports shall be provided to Onconova in
English.

 

4.4.2                     Status Updates in the Territory.  HanX shall provide
the JSC with reports summarizing its Development Activities under the
Development Plan and the results thereof at least five (5) business days prior
to any JSC meeting.

 

4.4.3                     Access to Records.  Onconova shall have the right, not
more than one (1) time per calendar year, to review all records under the
Development Plan maintained by HanX at reasonable times, upon written request.

 

4.5                               Ownership and Transfer of Development Data. 
All data (including pre-clinical, clinical, technical, chemical, safety,
manufacturing and scientific data and information), know-how and other results
generated by or resulting from or in connection with the conduct of Development
Activities, including relevant laboratory notebook information, screening data,
Regulatory Data, Manufacturing batch records and synthesis schemes, including
descriptions in any form, data and other information (collectively, the
“Development Data”), shall be owned solely by the Party that generated such
Development Data and deemed the Confidential Information of such Party.  With
respect to Development Data generated by each Party hereunder, each Party shall
promptly provide the other Party with copies of reports and summaries thereof,
in each case as such reports and summaries become available to such Party.

 

4.6                               Right to Audit.  HanX shall ensure that
Onconova’s authorized representatives (no more than once a year, except for
cause) and, to the extent permitted by applicable Law, any Regulatory
Authorities may, during regular business hours and upon prior written notice,
(i) examine and inspect its facilities or, subject to any Third Party
confidentiality restrictions and other obligations, the facilities of any
subcontractor or any investigator site used by it in the performance of
Development of the Product in the Territory hereunder pursuant to the
Development Plan, and (ii) subject to applicable Law and any Third Party
confidentiality restrictions and other obligations, inspect all data,
documentation and work product relating to the activities performed by it, the
subcontractor or investigator site, in each case generated pursuant to the
Development Plan hereunder.  This right to inspect all data, documentation, and
work product relating to the Product in the Field in the Territory may be
exercised at any time during the Term, or such longer period as shall be
required by applicable Law.

 

4.7                               Technology Transfer and Assistance.  Following
receipt by Onconova of the Upfront Payment and payment under the Securities
Purchase Agreement, Onconova shall promptly transfer or provide HanX with access
to all Onconova Know-How that exists on the Effective Date and was not
previously provided to HanX.  Thereafter, from time to time during the Term of
this Agreement, Onconova shall transfer or provide HanX with access to
additional Onconova Know-How (including the data and results of any clinical or
non-clinical studies of the Compound and Product performed by or on behalf of
Onconova, its Affiliates and licensees outside the Territory) that comes under
the Control of Onconova or its Affiliates.  In connection with the technology
transfer under this Section 4.8, Onconova shall provide HanX with reasonable
technical assistance, including reasonable access to Onconova’s personnel
involved in the research and development of the Compound and Product.  For
clarity, the technology

 

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transfer under this Section 4.7 shall not include manufacture technology
transfer, which shall be performed pursuant to Section 7.2.2.

 

ARTICLE 5
REGULATORY

 

5.1          Regulatory Filings and Regulatory Approvals.

 

5.1.1       General.  HanX, under general supervision of the JSC, shall be
responsible for formulating regulatory strategy for obtaining and maintaining
Regulatory Approvals for the sale of the Product in the Field in the Territory. 
HanX shall be responsible for the preparation of all Regulatory Materials
necessary or desirable for obtaining and maintaining such Regulatory Approvals
in the Territory (including in connection with package inserts, labeling and
packaging for the Product in the Field in the Territory).  HanX shall submit
such Regulatory Materials and Regulatory Approval applications to the applicable
Governmental Authorities in the Territory.  Onconova shall cooperate with HanX
in connection therewith, including providing all such supporting documentation
in Onconova’s possession and control for Regulatory Materials to HanX with
sufficient time to allow HanX to review and timely submit such Regulatory
Materials in accordance with applicable Law.  The provisions of this
Section 5.1.1 shall be subject to the provisions of Section 5.1.2.

 

5.1.2       Certain Regulatory Approvals.

 

(a)           Pricing Approvals.  To the extent that a given country or
regulatory jurisdiction in the Territory requires Pricing Approval for sale of
the Product in the Field in such country or regulatory jurisdiction, HanX shall
(to the extent permitted by applicable Laws) be solely responsible for (and
shall use Commercially Reasonable Efforts toward) obtaining and maintaining
Pricing Approvals in all such countries and regulatory jurisdictions in the
Territory.  Without limiting the foregoing, HanX shall apply for Pricing
Approvals in each country or regulatory jurisdiction where Pricing Approvals are
required for the sale of the Product in the Field promptly following the receipt
of the MAA approval for the Product in such country or regulatory jurisdiction
in the Territory.  For clarity, HanX shall have the sole right to determine the
pricing of the Product sold in the Territory, and neither Onconova nor the JSC
shall have any authority to direct, control, or approve HanX’s pricing of the
Product in the Territory.

 

5.1.3       Ownership of Regulatory Materials and Regulatory Approvals.  All
Regulatory Approvals in the Territory for sale of the Product in the Field in
the Territory shall be in the name of HanX (or its Affiliates or sublicensees),
and HanX (or its Affiliates or sublicensees) shall own all right, title and
interest in all such Regulatory Approvals and all related Regulatory Materials. 
In the event that applicable Laws in the Territory do not allow HanX to be the
holder of the Regulatory Approval for the Product supplied by Onconova to HanX
for use and sale in the Territory, Onconova shall hold such Regulatory Approval
for the sole benefit of HanX and shall promptly transfer such Regulatory
Approval to HanX if and when changes in applicable Laws allow HanX to be the
holder of such Regulatory Approval.

 

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5.1.4       Cost of Regulatory Activities.  All costs and expenses incurred by
HanX (or its Affiliates) in connection with the preparation or maintenance of
Regulatory Materials and Regulatory Approvals for sale of the Product in the
Field in the Territory, including any filing fees shall be borne solely by HanX.

 

5.1.5       Reporting and Review.  HanX shall keep Onconova reasonably and
regularly informed in connection with the preparation of all Regulatory
Materials, Regulatory Authority review of Regulatory Materials, and Regulatory
Approvals, in each case with respect to the Product for sale in the Field in the
Territory.  HanX shall provide Onconova with all clinical reports with respect
to the Product in the Field in the Territory in accordance with Section 4.4.1. 
Each Party shall provide the other Party, in a timely manner, with copies of all
material notices, questions, and requests for information in tangible form which
it receives from a Regulatory Authority with respect to the Product for sale in
the Field; provided, however that such Party shall have the right to redact any
information to the extent not related to the Product.

 

5.2          Communications.  In addition to the information provided in
Section 5.5, the Parties shall cooperate in communicating with any Regulatory
Authority having jurisdiction in the Territory regarding the Product in the
Territory and each Party shall immediately notify the other in the event that
such Party communicates, or intends to communicate, with any Regulatory
Authority in the Territory regarding the Product, either on its own initiative
in accordance with this Agreement or as a result of such a Regulatory Authority
initiating contact with such Party.  Notwithstanding the foregoing, except as
may be required by Law, (a) HanX shall not, with respect to the Product,
communicate with (i) any Regulatory Authority having jurisdiction outside of the
Territory regarding the Product or (ii) any Regulatory Authority with respect to
the Product for use outside the Field, in each case, without the prior written
consent of Onconova, or unless so ordered by such Regulatory Authority, in which
case HanX shall immediately notify Onconova of such order; and (b) Onconova
shall not, with respect to the Product, communicate with any Regulatory
Authority having jurisdiction in the Territory regarding the Product, without
the prior written consent of HanX, or unless so ordered by such Regulatory
Authority, in which case Onconova shall immediately notify HanX of such order.

 

5.3          Rights of Reference to Regulatory Materials.

 

(a)           Onconova hereby grants to HanX a right of reference to all
Regulatory Materials filed by Onconova for Development, Manufacture or
Commercialization of the Product solely for the purposes of Manufacturing and
Development Activities to obtain Regulatory Approval and Commercialization in
the Field in the Territory.

 

(b)           HanX hereby grants to Onconova a right of reference to all
Regulatory Materials filed by HanX in the Territory for Development, Manufacture
or Commercialization of the Product in the Field in the Territory solely for the
purposes of Manufacturing and Development Activities to obtain Regulatory
Approval and Commercialization outside the Territory.

 

5.4          Pharmacovigilance.  HanX shall be responsible for all processing of
information related to any adverse events, including any information regarding
such adverse events that is received from a Third Party, related to any Product
sold by HanX or on behalf of HanX or any of

 

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its Affiliates or sublicensees in the Territory, and shall also be responsible
for all expedited and periodic reporting of such events to the applicable
Governmental Authority in the Territory in accordance with applicable Law.  Each
Party shall provide the relevant safety information it receives (either directly
or indirectly) for any Product sold by or on behalf of such Party or any of its
Affiliates or sublicensees in a timely manner so as to allow the other Party to
timely comply with its responsibility to report pharmacovigilance information to
the applicable Governmental Authorities in accordance with applicable Law. 
Without limiting the generality of the foregoing, each Party shall be allowed to
utilize any such adverse event report and other information to allow such Party
(and its designees) to comply with safety reporting requirements or other
applicable Laws with respect to the Product within the Territory with respect to
HanX, and outside of the Territory with respect to Onconova.  Within sixty (60)
days following the Effective Date, the pharmacovigilance departments of each of
Onconova and HanX shall meet and determine the approach to be taken for the
collection, review, assessment, tracking, exchange and filing of information
related to adverse events associated with the Product, consistent with the
provisions of this Section 5.4 (including establishing and maintaining a global
safety database, which shall be maintained by Onconova at Onconova’s own cost). 
Such approach shall be documented in a separate pharmacovigilance agreement on
terms customary to the pharmaceutical industry to be mutually agreed to and
entered by the Parties within sixty (60) days following the Effective Date. 
Such agreement will be in accordance with, and enable the Parties and their
Affiliates to fulfill, local and international regulatory reporting obligations
to Governmental Authorities and other applicable Law.

 

5.5          Regulatory Authority Communications Received by a Party.

 

5.5.1       General.  Each Party shall inform the other Party within forty-eight
(48) hours, or such shorter time as is necessary to comply with the reporting
requirements of any applicable Regulatory Authority, of notification of any
action by, or notification or other information which it receives (directly or
indirectly) from any Regulatory Authority anywhere in the world which (i) raises
any material concerns regarding the safety or efficacy of the Product;
(ii) indicates or suggests a potential material liability of HanX or Onconova to
Third Parties in connection with the Product; (iii) is reasonably likely to lead
to a recall, market withdrawal or field alert with respect to the Product
anywhere in the world; or (iv) relates to expedited and periodic reports of
adverse events with respect to the Product anywhere in the world, and which may
have an adverse impact on Regulatory Approval or the continued Commercialization
of the Product anywhere in the world.  Each Party shall also promptly provide
the other Party with a copy of all correspondence received from a Regulatory
Authority anywhere in the world specifically regarding the matters referred to
above.

 

5.5.2       Disclosures.  In addition to its obligations under this Agreement,
each Party shall disclose to the other Party the following regulatory
information:

 

(a)           Regulatory Actions.  To each Party’s knowledge, all material
information pertaining to actions taken by Regulatory Authorities in connection
with the Product anywhere in the world, including any notice, audit notice,
notice of initiation by Regulatory Authorities of investigations, inspections,
detentions, seizures or injunctions concerning the Product, notice of violation
letter (i.e., an untitled letter), warning letter, service of process or

 

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other inquiry; provided, however, that each Party shall be entitled to redact
those portions thereof to the extent not related to the Product.

 

(b)           Regulatory Non-Compliance.  All information pertaining to notices
from Regulatory Authorities of non-compliance with Laws in connection with the
Product anywhere in the world, including receipt of a warning letter or other
notice of alleged non-compliance from any Regulatory Authority relating to the
Product; provided, however, that each Party shall be entitled to redact those
portions thereof to the extent not related to the Product.

 

5.6          Recall, Withdrawal or Field Alert of Product.  In the event that
any Governmental Authority threatens or initiates any action to remove the
Product from the market (in whole or in part) anywhere in the world, the Party
receiving notice thereof shall notify the other Party of such communication
immediately, but in no event later than one (1) business day, after receipt
thereof.  Notwithstanding the foregoing, in all cases HanX, as the holder of the
IND or MAA for the Product in the Territory, shall determine whether to initiate
any recall, withdrawal or field alert of the Product in the Territory, including
the scope of such recall or withdrawal (e.g., a full or partial recall, or a
temporary or permanent recall) or field alert; provided, however that before
HanX initiates a recall, withdrawal or field alert, the Parties shall promptly
meet and discuss in good faith the reasons therefor, provided that such
discussions shall not delay any action that HanX reasonably believes has to be
taken in relation to any recall, withdrawal or field alert.  In the event of any
such recall, withdrawal or field alert, HanX, as the holder of the IND or MAA
for the Product in the Territory, shall determine the necessary actions to be
taken, and as distributor of the Product in the Territory hereunder, shall
implement such action, with reasonable assistance from Onconova, to conduct such
recall, withdrawal or field alert.  Without limiting the foregoing, Onconova
shall have the right to propose that a Product recall, withdrawal or field alert
should be initiated by HanX, but HanX, as holder of the IND or MAA for the
Product, shall make the final decision as to whether or not the recall,
withdrawal or field alert should be initiated.

 

ARTICLE 6
COMMERCIALIZATION

 

6.1          Commercialization in the Field in the Territory.  During the Term,
subject to Section 6.2.2, HanX shall be solely responsible for Commercializing
the Product in the Territory for use in the Field, which Commercialization shall
be in accordance with the Commercialization Plan and this Agreement, with the
goal of maximizing the commercial potential of the Product in the Field in the
Territory.  HanX shall be responsible for all expenses (including pre-marketing
and other Commercialization expenses) incurred in connection with the
Commercialization of the Product in the Territory for use in the Field.

 

6.2          HanX’s Performance.

 

6.2.1       Commercialization Plan.

 

(a)           On an annual basis no later than September 30th of each year
(except with respect to the initial plan, which shall be prepared and circulated
to the JSC no later

 

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than six (6) months prior to the filing of the first MAA for the Product in the
Territory), HanX shall create and submit to the JSC for its review the
commercialization plan for the following calendar year (each, a
“Commercialization Plan”).  From time to time during a given calendar year, HanX
may propose written updates to the Commercialization Plan for review and
approval by the JSC; provided, however, that the Commercialization Plan shall
not be updated unless and until agreed to by the JSC (provided that the
provisions of Section 3.4 shall apply with respect to any dispute in connection
therewith).  HanX shall conduct all Commercialization of the Product in the
Territory in accordance with the Commercialization Plan.

 

(b)           Each annual Commercialization Plan shall include, at a minimum,
and set forth on a country-by-country basis, among other things, the following
items in connection with the Commercialization of the Product in the Territory
for use in the Field:

 

(i)            a description of the short- and long-term vision for the Product
and Product positioning; a situation analysis; and a description of critical
issues, strategic imperatives and tactics by strategic imperative with timelines
and budget, all of the foregoing from each of the following perspectives:
marketing, sales, and reimbursement;

 

(ii)           a summary of the minimum level of sales efforts to be dedicated
to the promotion of the Product, including detailing information;

 

(iii)         a description of any promotional materials and campaigns,
including publication plans to be used in connection with the promotion of the
Product in the Field; and

 

(iv)          a reasonably detailed budget for the Commercialization activities
for the applicable period.

 

6.2.2       Specific Commercialization Obligations.  Without limiting the
generality of the provisions of Section 6.1, in connection with the
Commercialization of the Product in the Territory for use in the Field by HanX
hereunder, during the Term, HanX shall be responsible for (and each
Commercialization Plan shall reflect that):

 

(a)           HanX shall be solely responsible for (i) receiving, accepting and
filling orders for the Product in the Field in the Territory, (ii) handling all
returns of the Product in the Field in the Territory, (iii) controlling
invoicing, order processing and collection of accounts receivable for the sales
of the Product in the Field in the Territory, (iv) booking and recording sales
of the Product in the Field in the Territory in its books of account and
(v) distributing and managing inventory of the Product in the Field in the
Territory, in each case in accordance with HanX’s Applicable Accounting
Standards, consistently applied, to the extent applicable.

 

(b)           HanX shall use Commercially Reasonable Efforts to launch the
Product in each country (or other regulatory jurisdiction) in the Territory
after all applicable Regulatory Approvals for the Product in such country (or
other regulatory jurisdiction) have been obtained; provided, however, that,
notwithstanding the foregoing, HanX shall commercially launch the Product in
each country in the Territory within [**] after the receipt of Pricing Approval
of the Product in such country (or other regulatory jurisdiction).

 

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6.2.3       Diligence Failures.  If Onconova believes in good faith that HanX
has failed to utilize Commercially Reasonable Efforts (which, for clarity, would
include the failure to satisfy the requirements set forth in Section 6.2.2) with
respect to the Commercialization of the Product in the Field in the Territory
pursuant to this Agreement, then Onconova shall first raise such issue through
the JSC, identifying the countries or regions at issue and specific detailed
reasons underlying such allegation.  Within thirty (30) days following HanX’s
receipt of any such notice from Onconova, HanX shall provide Onconova with a
written response specifying, in reasonable detail, how it is using or has begun
to use such Commercially Reasonable Efforts.  If HanX does not provide a written
response which demonstrates, in reasonable detail, how it has complied with, and
will continue to comply with, its obligation to use Commercially Reasonable
Efforts to Commercialize the Product in the Field in the Territory within thirty
(30) days after the receipt of such notice (or if HanX provides such response
but HanX does not thereafter comply with such obligations), then, effective upon
the expiration of such thirty (30)-day period (or immediately upon written
notice to the extent HanX does not thereafter comply with such obligations),
Onconova shall have the right to terminate this Agreement for the country(ies)
at issue upon thirty (30) days’ prior written notice to HanX.  In the event that
the Parties dispute whether HanX has failed to comply with its obligations to
utilize Commercially Reasonable Efforts as required by this Agreement, Onconova
shall not have the right to terminate this Agreement unless and until such
dispute is resolved in Onconova’s favor under Section 15.3 and HanX has failed
to cure such breach as set forth above in this Section 6.2.

 

6.3          Reports. HanX shall update the JSC on a country-by-country basis at
each meeting regarding its significant Commercialization activities involving
the Product.  HanX shall present written reports to the JSC at least quarterly,
summarizing its significant Commercialization activities with respect to the
Product pursuant to this Agreement.  Such reports submitted by HanX shall cover
the subject matter at a level of detail reasonably sufficient to enable Onconova
to determine HanX’s compliance with its diligence obligations pursuant to this
Article 6.

 

6.4          Compliance.  HanX shall comply with all applicable Laws, including
the U.S. Foreign Corrupt Practices Act, as well as all applicable Regulatory
Approvals for the Product.  In addition, HanX shall not use in any capacity in
the Development or Commercialization of the Product, any Person who has been
debarred pursuant to Section 306 of the FD&C Act (or similar Law outside of the
U.S.), or who is the subject of a conviction described in such section, and HanX
shall inform Onconova in writing immediately if it or any Person who is
performing services for HanX hereunder is debarred or is the subject of a
conviction described in Section 306 (or similar Law outside of the U.S.), or, to
HanX’s knowledge, if any action, suit, claim, investigation or legal
administrative proceeding is pending or is threatened, relating to the debarment
of HanX or any Person used in any capacity by HanX relating to the Product.

 

6.5          Use of Subcontractors.  HanX shall have the right to distribute or
detail the Product in the Territory in the Field directly or indirectly through
any Third Party(ies).

 

6.6          Promotional Materials.

 

6.6.1       Creation of Promotional Materials.  HanX will create and develop
promotional materials for the Territory in accordance with the Commercialization
Plan, the

 

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Regulatory Approvals and applicable Laws and shall provide samples thereof to
Onconova for review and comment (and HanX shall consider any such comments in
good faith) prior to distributing such promotional materials.  To the extent
HanX includes any Onconova trademarks in the promotional materials, HanX shall
comply with Onconova’s then-current guidelines for trademark usage, a copy of
which shall be provided to HanX from time to time.

 

6.6.2       Inclusion of Logos on Packaging and Promotional Materials.  To the
extent permitted or required by applicable Law and subject to obtaining
necessary Regulatory Authority approvals, with respect to Product to be sold by
HanX or on behalf of HanX or any of its Affiliates in the Territory, the
Onconova housemark and the HanX housemark shall be given equal prominence on all
package inserts utilized by HanX; provided, however, in the event that
applicable Law prevents the foregoing, Onconova shall still be identified on all
package inserts for the Product to the extent permitted by applicable Law.  HanX
hereby grants to Onconova a non-exclusive, royalty-free, non-sublicensable right
and license during the Term to utilize the HanX housemark (including all
trademarks, names and logos) in order to perform Onconova’s obligations
hereunder, and Onconova hereby grants to HanX a non-exclusive, royalty-free and
sublicenseable (only in connection with a sublicense to all Onconova Technology)
right and license during the Term to utilize the Onconova housemark (including
all trademarks, names and logos) in order to perform the Commercialization
activities required to be performed by HanX hereunder in accordance with the
terms of this Agreement.  Each Party shall only use the housemark of the other
Party with the necessary trademark designations, and each Party shall use the
other Party’s housemarks in a manner that does not derogate from such Party’s
rights in its trademarks, names and logos.  Each Party will take no action that
will interfere with or diminish the other’s rights in its respective trademarks,
names and logos, and if a Party reasonably believes that the use of its
trademarks, names and logos by the other Party hereunder is interfering with or
diminishing its rights, such Party shall notify the other Party thereof in
writing and such other Party shall promptly cease use of such trademarks, names
or logos in such manner.  Each Party agrees that all use of the other Party’s
trademarks, names and logos will inure to the benefit of such other Party,
including all goodwill in connection therewith.

 

6.7          Product Trademarks and Product Trade Dress.

 

6.7.1       Generally.  HanX shall Commercialize the Product in the Field in the
Territory consistent with (a) any trademark (and logo) or trade dress as HanX
may determine and approved by Onconova (such approval not to be unreasonably
withheld) prior to the First Commercial Sale in the Territory, or such other
trademark or trade dress as the Parties mutually agree upon, and (b) the Global
Branding Strategy.  All uses of the Product trademarks and trade dress to
identify and/or in connection with the Commercialization of the Product in the
Field in the Territory shall be reviewed by the JSC, shall be in accordance with
the Commercialization Plan, Regulatory Approvals and all applicable Laws.  The
Product trademarks and trade dress under which the Product is marketed or sold
by HanX in the Territory (other than HanX’s corporate trademarks or trade names)
shall be registered and owned by HanX and used by HanX only pursuant to the
terms of this Agreement to identify and in connection with the Commercialization
of the Product, and shall not be used by HanX to identify or in connection with
the marketing of any other products.

 

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

 

6.7.2       Trademark Acknowledgments.  Each Party acknowledges the sole
ownership by the other Party and validity of all trademarks, trade dress, logos
and slogans owned by the other Party and used or intended to be used in
connection with the Commercialization of the Product for the Field in the
Territory.  Each Party agrees that it will not at any time during or after the
Term assert or claim any interest in, or do anything which may adversely affect
the validity or enforceability of, any copyright, trademark, trade dress, logo
or slogan owned by the other Party and used or intended to be used on or in
connection with the marketing or sale of the Product.  Neither Party will
register, seek to register or cause to be registered any copyrights, trademarks,
trade dress, logos or slogans owned by the other Party and used or intended to
be used on or in connection with the marketing or sale of the Product or any
variation thereof, under any applicable Law providing for registration of
copyrights, trademarks, service marks, trade names or fictitious names
(including as an Internet domain name) or similar Laws, without the other
Party’s prior written consent (in its sole discretion).

 

6.8          Commercialization Data.  HanX shall own all marketing and sales
data and information resulting from its Commercialization of the Product in the
Field in the Territory during the Term (the “Commercialization Data”).  Upon
request from Onconova, HanX shall provide to Onconova a copy of such
Commercialization Data.  Onconova shall have the right and license to use all
Commercialization Data (and the right to grant its Affiliates and Third Parties
the right to use such Commercialization Data) in connection with the
Commercialization of the Product outside the Territory.

 

6.9          Global Branding Strategy.  Onconova shall have the right, from time
to time during the Term, to implement (and thereafter modify and update) a
global branding strategy, including global messaging, for the Product for use in
the Field throughout the world (the “Global Branding Strategy”).  To the extent
Onconova determines to employ such Global Branding Strategy, HanX shall use
Commercially Reasonable Efforts to adhere to the Global Branding Strategy in its
Commercialization of the Product.

 

ARTICLE 7
SUPPLY

 

7.1          Supply by Onconova

 

7.1.1       General.  HanX shall have the right to purchase the Compound and
Product from Onconova pursuant to the terms of this Section 7.1.  The Parties
shall negotiate in good faith the terms of a supply agreement and quality
agreement with respect to the manufacture and supply of Compound and Product by
or on behalf of Onconova to HanX for Development use within three (3) months
after the Effective Date.  No later than six (6) months before the anticipated
Regulatory Approval of the Product in the Territory, the Parties shall negotiate
in good faith the terms of a commercial supply agreement for the Compound and
Product.

 

7.1.2       Price.  Compound and Product supplied to HanX or its designee by or
on behalf of Onconova shall be invoiced at a price equal to [**].

 

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7.2          Supply by HanX.

 

7.2.1       General.  HanX shall have the right to Manufacture and supply the
Compound and Product for use and sale in the Territory, either by itself or
through its Affiliates or Third Party contract manufacturers.  After the
completion of manufacture technology transfer set forth below, the Parties shall
discuss the Manufacture and supply of the Compound and Product by HanX to
Onconova for use and sale outside the Territory.

 

7.2.2       Manufacture Technology Transfer.  If HanX notifies Onconova that it
wishes to Manufacture the Compound and Product, Onconova shall reasonably
cooperate with HanX to make available to HanX or a contract manufacturer
selected by HanX and reasonably acceptable to Onconova such Onconova Know-How as
is reasonably necessary to permit the Manufacture of the Compound and Product by
HanX or such contract manufacturer. In addition, Onconova shall provide HanX
with reasonable technical support as necessary for HanX to Manufacture the
Compound and Product, including making its technical personnel available and
providing master batch records, CMC information and other Manufacturing related
documents in Onconova’s Control.

 

ARTICLE 8
PAYMENTS

 

8.1          Upfront Fee and Equity Issuance; Research and Development Expense
Funding.

 

8.1.1       Total Amount.  The total amount in this Section 8.1 aggregates to
six million Dollars ($6,000,000) comprised of the Upfront Payment, the Upfront
Equity Issuance and the Territory Research and Development Expense Funding
described below.

 

8.1.2       Upfront Fee.  Within sixty (60) days after the Effective Date, HanX
shall pay to Onconova an upfront amount equal to two million Dollars
($2,000,000) (the “Upfront Payment”) by wire transfer of immediately available
funds into an account designated in writing by Onconova.  In the event the full
Upfront Payment and the full Upfront Equity Issuance proceeds described in
Section 8.1.3, are not received by Onconova or its designee within sixty (60)
days after the Effective Date, unless otherwise expressly waived in writing by
Onconova, this Agreement and all rights and licenses granted to HanX hereunder
shall be automatically deemed to be void ab initio.  Such Upfront Payment shall
be non-refundable and non-creditable against any other payments due hereunder. 
The Upfront Payment shall be used to fund and reimburse Onconova for research
and Development activities of the Product.

 

8.1.3       Upfront Equity Issuance.  HanX (either alone or together with a
Third Party payor designated by HanX so long as HanX or an Affiliate is the
registered and beneficial holder of the shares) shall pay to Onconova two
million Dollars ($2,000,000) (the “Upfront Equity Issuance”) for shares of
common stock pursuant to the Securities Purchase Agreement entered into by the
Parties concurrent with execution and delivery of this Agreement.  The proceeds
received by Onconova pursuant to the terms of the Securities Purchase Agreement
shall be used to fund and reimburse Onconova for research and Development
activities of the Product.

 

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8.1.4       Territory Research and Development Expense Funding.

 

(a)           Within sixty (60) days after the Effective Date, HanX shall set
aside two million Dollars ($2,000,000) or equivalent RMB funds (as calculated
pursuant to Section 8.8.1) into an escrow account reasonably acceptable to
Onconova (the “Territory Research and Development Expense Funding”).  The
Territory Research and Development Expense Funding shall be released to HanX
upon HanX’s request only to contribute toward funding or reimbursing the cost of
Product clinical trials and combination studies in the Territory.  HanX shall
use Commercially Reasonable Efforts to cause the Territory Research and
Development Expense Funding to be utilized within two (2) years from the
Effective Date.

 

(b)           If [**]in the research and development of the Product during the
[**]pursuant to the Development Plan,[**].

 

(c)           Following the later of (i) second (2nd) anniversary of the
Effective Date and (ii) the first FDA approval of the Compound, HanX shall use
Commercially Reasonable Efforts to Develop the Product for Regulatory
Approval(s) for the Territory pursuant to a joint global development plan for
the applicable period set forth in such joint global development plan.

 

(d)           Pursuant to the joint global development plan referenced in
Section 8.1.4(c) above, the Parties would negotiate in good faith appropriate
compensation from Onconova to HanX for Development work performed by HanX under
such joint global development plan in the Territory that can also be used
outside of the Territory.

 

8.2          Development Milestone Payments.  HanX shall pay to Onconova the
development milestone payments described in this Section 8.2 upon achievement
(first occurrence) of the corresponding milestone event.  HanX shall promptly
notify Onconova in writing, but in no event later than ten (10) business days
after, of the achievement of each such milestone event achieved by it or any
Affiliate or sublicensee or assignee.  HanX shall pay the applicable milestone
payment by wire transfer of immediately available funds into an account
designated by Onconova within sixty (60) days after the achievement (first
occurrence) of the applicable milestone event.  Each such payment is onetime
payment only and is non-refundable and non-creditable against any other payments
due hereunder.

 

Milestone Event

 

Milestone Payment

 

 

 

Approval [**]

 

[**]

 

 

 

Receipt [**]

 

[**]

 

 

 

Receipt [**]

 

[**]

 

 

 

Receipt [**]

 

[**]

 

[**]

 

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8.3                               Sales Milestone Payments.  HanX shall pay to
Onconova the sales milestone payments described in this Section 8.3 upon
achievement (first occurrence) of the corresponding milestone event.  As part of
the quarterly royalty report in Section 8.5, HanX shall notify Onconova in
writing of the achievement of each such milestone event achieved by it or any
Affiliate or sublicensee or assignee.  HanX shall pay the applicable milestone
payment by wire transfer of immediately available funds into an account
designated by Onconova within sixty (60) days after the end of the calendar
quarter during which the applicable milestone is achieved.  Each such payment is
onetime payment only and is non-refundable and non-creditable against any other
payments due hereunder.  The achievement of a higher sales milestone event shall
trigger the milestone payment for such milestone event as well as for all lower
milestone events in the event such lower milestone events had not been
previously triggered and paid.

 

Milestone Event

 

Milestone Payment

 

 

 

1. The first calendar year in which the aggregate annual Net Sales of all
Products in the Territory exceeds [**]

 

[**]

2. The first calendar year in which the aggregate annual Net Sales of all
Products in the Territory exceeds [**]

 

[**]

3. The first calendar year in which the aggregate annual Net Sales of all
Products in the Territory exceeds [**]

 

[**]

4. The first calendar year in which the aggregate annual Net Sales of all
Products in the Territory exceeds [**]

 

[**]

 

8.4                               Royalties.

 

8.4.1                     Royalty Rates for Product.  As further consideration
for the rights granted to HanX hereunder and subject to the terms and conditions
set forth in this Agreement, during the Royalty Term, HanX shall pay to Onconova
a tiered royalty on aggregate annual Net Sales of all Products in the Territory
as calculated by multiplying the applicable rate set forth below by the
corresponding amount of incremental aggregate Net Sales in all or any portion of
the calendar year:

 

Annual Net Sales of Product

 

Royalty Rate

 

 

 

For that portion of aggregate annual Net Sales less than or equal to [**]

 

[**]

 

 

 

For that portion of aggregate annual Net Sales greater than [**] and less than
or equal to [**]

 

[**]

 

 

 

For that portion of aggregate annual Net Sales greater than [**]and less than or
equal to [**]

 

[**]

 

 

 

For that portion of aggregate annual Net Sales greater than [**]and less than or
equal to [**]

 

[**]

 

 

 

For that portion of aggregate annual Net Sales greater than [**]

 

[**]

 

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8.4.2                     Reduction of Royalty Due to No Valid Claims.  On a
country-by-country basis, and a Product-by Product basis, in the event that, and
in such case from and after the date on which, a Product is Commercialized in a
country in the Territory and is not covered by a Valid Claim of an Onconova
Patent that covers the composition of matter, formulation, or method of use of
the Product in such country, the royalty rate set forth in Section 8.4.1 with
respect to such country shall be reduced by [**].  Notwithstanding the
foregoing, in no event will this Section 8.4.2 cause royalties payable to
Onconova in a given calendar quarter be reduced to less than fifty percent (50%)
of the applicable royalties set forth in Section 8.4.1.  In the event certain
Net Sales are subject to the royalty reduction set forth in this Section 8.4.2,
HanX shall calculate the royalty rates as follows: HanX shall allocate the
applicable reductions to a portion of the Net Sales during a particular calendar
quarter to the relevant Net Sales tier set forth in Section 8.4.1 equal to the
proportion of Net Sales eligible for such reduction compared to total Net
Sales.  [**]

 

8.4.3                     Cumulative Effect of Royalty Reductions.  In no event
shall the royalty reductions described in this Article 8, alone or together,
reduce the royalties payable by HanX for a Product in a country in any given
calendar quarter to less than the greater of (a) fifty percent (50%) of the
royalty amounts set forth in Section 8.4.1 for such Product in such country in
such calendar quarter and (b) [**]of Net Sales in such country; provided that
clause (b) shall be applicable to a Product only if and for so long as Onconova
is obligated to pay royalty on the Net Sales of such Product to a Third Party
under an agreement with such Third Party.  HanX may carry over and apply any
such royalty reductions, which are incurred or accrued in a calendar quarter and
are not deducted in such calendar quarter due to the limitation set forth above
in this Section 8.4.3, to any subsequent calendar quarter(s) and shall continue
applying such reduction on a calendar quarter basis thereafter until fully
deducted, in all cases subject to the limitation set forth above in this
Section 8.4.3.

 

8.5                               Royalty Payments and Reports.  HanX shall
calculate all amounts payable to Onconova pursuant to Section 8.4 with respect
to Net Sales at the end of each calendar quarter, which amounts shall be
converted to Dollars at such time in accordance with Section 8.8.  HanX shall
pay to Onconova the royalty amount due for Net Sales during a given calendar
quarter within sixty (60) days after the end of such calendar quarter.  Each
payment of royalties due to Onconova shall be accompanied by (i) a statement of
the amount of gross sales of each Product in the Territory during the applicable
calendar quarter (including such amounts expressed in local currency and as
converted to Dollars), (ii) an itemized calculation of Net Sales (a) in the
Territory as a whole and (b) on a country-by-country basis, showing for both
(a) and (b) deductions provided for in the definition of “Net Sales” during such
calendar quarter, and (iii) a calculation of the amount of royalty payment due
on such Net Sales for such calendar quarter.  Without limiting the generality of
the foregoing, HanX shall require its Affiliates and sublicensees and assignees
to account for its Net Sales and to provide such reports with respect thereto as
if such sales were made by HanX.

 

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8.6                               Third Party Licenses and Sublicenses.

 

8.6.1                     Third Party Licenses.  If HanX or any of its
Affiliates or sublicensees desires to obtain a license, covenant not to sue or
similar rights under any Third Party Patents or other Third Party intellectual
property necessary or useful Development, Manufacture or Commercialization of a
Product for sale in the Field, then prior to the earlier of commencing
negotiations with, or entering into any agreement with, any such Third Party
with respect to any such license, covenant or right, HanX shall promptly notify
Onconova in writing.  Onconova, itself or through any of its Affiliates or
licensees, shall have the first right to in-license or otherwise obtain such
rights, including the right to sublicense to HanX.  If Onconova elects to
in-license or otherwise obtain such rights, such Third Party Patents or other
Third Party intellectual property shall be automatically included in Onconova
Technology and sublicensed to HanX in the Territory.  In the event Onconova
elects not to in-license or otherwise obtain such rights, HanX or its Affiliates
or sublicensees may in-license or otherwise acquire rights under such Third
Party Patents or other Third Party intellectual property, but only with respect
to the Territory, and provided that HanX shall use reasonable efforts to obtain
rights that are assignable or sublicensable to Onconova.  Subject to
Section 8.4.3, in the event HanX enters into any license or covenant not to sue
or similar rights to any Third Party Patents or other Third Party intellectual
property necessary or useful to avoid infringement or misappropriation for the
Development, Manufacture or Commercialization of a Product in the Field in the
Territory, HanX shall have the right to deduct, from the royalty payment that
would otherwise have been due to Onconova under Section 8.4 with respect to Net
Sales of the Product in the Territory, an amount equal to fifty percent (50%) of
the royalties paid by HanX to such Third Party in a calendar quarter
attributable to such license in the Field in the Territory; provided that in no
event shall the royalty payment made to Onconova for such calendar quarter be
reduced by more than fifty percent (50%) of the amount otherwise payable under
Section 8.4; provided that HanX may carry forward to subsequent quarters any
amount it is unable to deduct due to such limitation.

 

8.6.2                     Sublicenses.  If HanX or any of its Affiliates grants
a sublicense (or any option thereto) or assignment of its rights (or any option
thereto) under this Agreement to any Third Party (a) [**]pursuant to this
Agreement, then HanX shall pay to Onconova [**]of any Sublicense Revenue
received by HanX or its Affiliates from such Third Party sublicensee or assignee
in connection with any such sublicense or assignment (or any option thereto) and
(b) [**], then HanX shall pay to Onconova [**]of any Sublicense Revenue received
by HanX or its Affiliates from such Third Party sublicensee or assignee in
connection with any such sublicense or assignment (or any option thereto). For
clarity, with respect to any sublicense (or any option thereto) or assignment of
its rights (or any option thereto) granted by HanX under this Agreement to any
Third Party following the [**].  For the purpose of this Section 8.6.2,
“Sublicense Revenue” means upfront payment, milestone payments and other
payments received by HanX or its Affiliates from a Third Party based on the
grant of a sublicense (or any option thereto) or assignment of its rights (or
any option thereto) under this Agreement to such Third Party, but excluding:
(i) with respect to any royalties received by HanX or its Affiliates from a
Third Party based on the grant of a sublicense (or any option thereto) or
assignment of its rights (or any option thereto) under this Agreement to such
Third Party, royalties equal to those paid by HanX to Onconova during any
calendar quarter pursuant to Sections 8.4 and 8.5; (ii) bona fide loans;
(iii) payments to purchase HanX’s equity at fair market value (for clarity, any

 

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premium paid by such Third Party in excess of the fair market value of the
equity purchased shall be included in Sublicense Revenue); (iv) payment to fund
bona fide research and development work related to the Compound and Product, at
cost without any markup or profit, which payment has been previously approved by
Onconova, which approval shall not to be unreasonably withheld or delayed (and
for clarity, (x) any payment received in excess of HanX’s cost shall be included
in Sublicense Revenue and (y) deductions in this clause (iv) shall not include
any reimbursement of previously incurred expenses or any expenses reimbursed by
Onconova pursuant to Section 8.1.4(b)); (v) payment for the supply of Compound
and Product, at cost without any markup or profit (for clarity, any payment
received in excess of HanX’s cost shall be included in Sublicense Revenue); and
(vi) reimbursement of patent prosecution, maintenance and enforcement cost
related to the Compound and Product.  In the event that HanX grants a sublicense
(or any option thereto) or assignment of its rights (or any option thereto)
under this Agreement in conjunction with a license, sublicense, assignment,
transfer and/or sale (including any option thereto) of other intellectual
property rights, properties or assets owned or controlled by HanX, HanX shall
reasonably allocate amount received between the sublicense or assignment
(including any option thereto) under this Agreement on one hand, and such other
intellectual property rights, properties or assets on the other hand, and the
amount allocated to such other intellectual property rights, properties or
assets shall excluded from Sublicense Revenue and not subject to sharing with
Onconova under this Section 8.6.2.  If Onconova disagrees with HanX’s
allocation, the allocation shall be decided by arbitration pursuant to
Section 15.3.

 

8.7                               Taxes and Withholding.  Any income or other
taxes which a paying Party is required by Law to pay or withhold on behalf of a
receiving Party with respect to any payments payable to a receiving Party under
this Agreement shall be deducted from the amount of such payments due, and paid
or withheld, as appropriate, by the paying Party on behalf of the receiving
Party.  Any such tax required by applicable Law to be paid or withheld shall be
an expense of, and borne solely by, the receiving Party.  The paying Party shall
furnish the receiving Party with reasonable evidence of such payment or amount
withheld, in electronic or written form, as soon as practicable after such
payment is made or such amount is withheld.  The Parties will reasonably
cooperate in completing and filing documents required under the provisions of
any applicable tax laws or under any other applicable Law in connection with the
making of any required tax payment or withholding payment, or in connection with
any claim to a refund of or credit for any such payment.  Notwithstanding the
foregoing, if HanX takes any action to assign or transfer its rights and
obligations to an Affiliate or Third Party not being a U.S. person (as defined
in Section 7701(a)(30) of the Code) that is not contemplated under this
Agreement, and if as a result of such action by HanX, such Affiliate or Third
Party or HanX is required by law to withhold taxes that were not (and would not
be) otherwise applicable, or if such action by HanX results in the imposition of
indirect taxes that were not (and would not be) otherwise applicable, from or in
respect of any amount payable under this Agreement, then any such amount payable
under this Agreement shall be increased to take into account such withholding
taxes and indirect taxes as may be necessary so that, after making all required
withholdings (including withholdings on the withheld amounts) and/or paying such
indirect taxes, as the case may be, Onconova receives an amount equal to the sum
it would have received had no such withholding been made and no such indirect
taxes had been imposed.

 

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8.8                               Currency Conversion; Blocked Payments;
Prohibitions on Payments.

 

8.8.1                     Currency Conversion.  All payments to a Party
hereunder shall be made in U.S. Dollars.  For the purpose of calculating any
sums due under, or otherwise reimbursable pursuant to, this Agreement (including
the calculation of Net Sales expressed in currencies other than Dollars), a
Party shall convert any amount expressed in a foreign currency into Dollar
equivalents, calculated using the average for the applicable currency conversion
as published by The Wall Street Journal, Eastern Edition, for the three
(3) months preceding the date on which such calculation is made.

 

8.8.2                     Blocked Payments.  In the event that, by reason of
applicable Law in any country, it becomes impossible or illegal for the paying
Party (or any of its Affiliates, sublicensees or assignees) to transfer, or have
transferred on its behalf, payments owed the other Party hereunder, the paying
Party will promptly notify the other Party of the conditions preventing such
transfer and such payments will be deposited in local currency in the relevant
country to the credit of the other Party in a recognized banking institution
designated by the other Party or, if none is designated by the other Party
within a period of thirty (30) days, in a recognized banking institution
selected by the paying Party or any of its Affiliates, sublicensees or
assignees, as the case may be, and identified in a written notice given to the
other Party.

 

8.8.3                     Prohibitions on Payments.  When in any country in the
Territory applicable Law prohibits both the transmittal and the deposit of
milestones or royalties on sales in such country, milestone payments or royalty
payments due on Net Sales shall be suspended for as long as such prohibition is
in effect and as soon as such prohibition ceases to be in effect, all royalties
that HanX would have been under an obligation to transmit or deposit but for the
prohibition shall forthwith be deposited or transmitted, to the extent
allowable. The Parties shall cooperate in good faith to overcome, to the extent
reasonably possible, any prohibition described in this Section 8.8.3 within a
reasonable period of time.

 

8.9                               General Payment Procedures.  With the
exception of the Upfront Payment payable pursuant to Section 8.1.2, the Research
and Development Expense Funding payable pursuant to Section 8.1.4, the milestone
payments payable pursuant to Sections 8.2 and 8.3, royalties payable pursuant to
Section 8.5 or other amounts expressly payable in certain time frames set forth
herein, the receiving Party shall invoice the paying Party for all amounts due
to such receiving Party under this Agreement, and such payments shall be made
within sixty (60) days following the receipt by the paying Party of an invoice
from the receiving Party specifying the amount due. The Parties understand and
agree that the amounts paid by HanX to Onconova shall be used to fund and
reimburse Onconova for research and Development activities of the Product.

 

8.10                        Late Payments.  Without limiting any other rights or
remedies available to a Party hereunder, if such Party does not receive payment
of any amount due to it on or before the due date, the other Party shall pay to
such Party interest on any such amounts from and after the date such payments
are due under this Agreement at a rate of one and one-half percent (1.5%) per
month or the maximum applicable legal rate, if less, calculated on the total
number of days’ payment is delinquent.

 

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8.11                        Records; Audits.  HanX, its Affiliates, sublicensees
and assignees shall keep full, true and accurate records and books of account
containing all particulars that may be necessary for the purpose of confirming
the accuracy of, and calculating, as applicable, all royalties and other amounts
payable to Onconova hereunder (including records of Net Sales) and any other
records reasonably required to be maintained with respect to HanX’s obligations
under this Agreement, in each case for a minimum period of four (4) years or
such longer period as required by applicable Law.  Onconova shall have a right
to request an audit of HanX, its Affiliates or sublicensees or assignees (the
“Audited Party”) in order to confirm the accuracy of any of the foregoing (an
“Audit”); provided, however, that Onconova shall only have the right to request
such Audit one time during any given calendar year.  Upon the written request by
Onconova to Audit the Audited Party, Onconova shall have the right to engage an
independent, internationally recognized accounting firm that is reasonably
acceptable to the Audited Party to perform a review as is reasonably necessary
to enable such accounting firm to calculate or otherwise confirm the accuracy of
any of the foregoing for the calendar year(s) requested by Onconova; provided
that (i) such accountants shall be given access to, and shall be permitted to
examine and copy such books and records of the Audited Party upon five
(5) business days’ prior written notice to the Audited Party, and at all
reasonable times on such business days, (ii) prior to any such examination
taking place, such accountants shall enter into a confidentiality agreement with
the Audited Party reasonably acceptable to the Audited Party in order to keep
all information and data contained in such books and records strictly
confidential and shall not disclose such information or copies of such books and
records to any third person including the auditing Party, but shall only use the
same for the purpose of the reviews and/or calculations which they need to
perform in order to determine any amounts being reviewed, and (iii) such
accountants shall use reasonable efforts to minimize any disruption to Audited
Party’s business.  The accountants shall deliver a copy of their findings to
each of the Parties within ten (10) business days of the completion of the
review, and, in the absence of fraud or manifest error, the findings of such
accountant shall be final and binding on each of the Parties.  Any underpayments
by HanX shall be paid to Onconova within ten (10) business days of notification
of the results of such inspection.  Any overpayments made by HanX shall be
refunded by Onconova within ten (10) business days of notification of the
results of such inspection.  The cost of the accountants shall be the
responsibility of Onconova unless the accountants’ calculation shows that the
actual royalties payable, and/or any such other amount audited hereunder to be
different, by more than five percent (5%), than the amounts as previously
calculated by the Audited Party, in which event the cost shall be the
responsibility of HanX and HanX shall reimburse Onconova for any Onconova costs
incurred for the Audit.

 

ARTICLE 9
INTELLECTUAL PROPERTY MATTERS

 

9.1                               Ownership of Inventions.

 

9.1.1                     General.  Subject to the provisions of this
Section 9.1.1 and except as expressly set forth otherwise in this Agreement, as
between the Parties: (i) Onconova shall solely own any Inventions made solely by
Onconova and the Patents claiming such sole Onconova Inventions, (ii) HanX shall
solely own any Inventions made solely by HanX and the Patents claiming such sole
HanX Inventions; and (iii) the Parties shall jointly own any Inventions made
jointly by Onconova and HanX, including the Patents claiming such joint
Inventions.  With

 

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respect to any Inventions jointly owned by the Parties, the Parties shall
reasonably cooperate with respect to the filing, prosecution and maintenance of
any Patents arising therefrom.  Except to the extent either Party is restricted
by the licenses granted to the other Party under this Agreement, each Party
shall be entitled to practice, license, assign and otherwise exploit the joint
Inventions and any Patents arising therefrom without the duty of accounting or
seeking consent from the other Party.  Each Party shall promptly disclose to the
other Party all Inventions, as applicable, made by it during the Term.  The
determination of inventorship for Inventions for the purpose of allocating
proprietary rights therein, shall, for purposes of this Agreement, be made in
accordance with applicable Laws relating to inventorship set forth in the patent
Laws of the United States (Title 35, United States Code).

 

9.1.2                     Employees.  Each Party will require all of its and its
Affiliates’ employees to assign all Inventions that are developed, made or
conceived by such employees according to the ownership principles described in
Section 9.1.1.  Each Party will require any agents or independent contractors
performing an activity pursuant to this Agreement to assign all Inventions that
are developed, made or conceived by such agents or independent contractors to
Onconova and/or HanX according to the ownership principles described in
Section 9.1.1.

 

9.2                               Disclosures; Disputes Regarding Inventions. 
Each Party shall, before filing a new patent application (including provisionals
and continuations-in-part) claiming an Invention to be assigned pursuant to
Section 9.1.1, promptly disclose such Invention to the other Party and shall
provide the other Party with a copy of the proposed patent application at least
ten (10) business days before filing such application or such shorter time as
may be required to preserve Patent rights, including the avoidance of a
statutory bar.  If the non-filing Party believes that the filing Party’s
proposed patent application discloses Confidential Information of the non-filing
Party, the non-filing Party shall so notify the filing Party within such ten
(10) business days after receipt thereof, and the filing Party shall amend its
proposed application to comply with the confidentiality provisions of this
Agreement.

 

9.3                               Patent Filings.

 

9.3.1                     Onconova Responsibilities.  Onconova shall have the
first right to prepare, file, prosecute and maintain Onconova Patents.  Onconova
shall keep HanX informed of the status of each such Onconova Patent and shall
give reasonable consideration to any suggestions or recommendations of HanX
concerning the preparation, filing, prosecution and maintenance thereof.  The
Parties shall cooperate reasonably in the prosecution of such Onconova Patents
under this Section 9.3.1 and shall share all material information relating
thereto promptly after receipt of such information.  If, during the Term,
Onconova intends to allow any Onconova Patent in the Territory to which HanX has
a license under this Agreement to expire or intends to otherwise abandon any
such Onconova Patent, Onconova shall notify HanX of such intention at least
thirty (30) days prior to the date upon which such Onconova Patent shall expire
or be abandoned and HanX shall thereupon have the right, but not the obligation,
to assume responsibility for the preparation, filing, prosecution or maintenance
thereof in the Territory at its sole cost and expense.

 

9.3.2                     HanX Responsibilities.  HanX shall have the first
right to prepare, file, prosecute and maintain HanX Patents.  HanX shall keep
Onconova informed of the status of each

 

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such Patent and shall give reasonable consideration to any suggestions or
recommendations of Onconova concerning the preparation, filing, prosecution and
maintenance thereof.  The Parties shall cooperate reasonably in the prosecution
of such HanX Patents under this Section 9.3.2 and shall share all material
information relating thereto promptly after receipt of such information.  If,
during the Term, HanX intends to allow any HanX Patent to which Onconova has a
license under this Agreement to expire or intends to otherwise abandon any HanX
Patent, HanX shall notify Onconova of such intention at least thirty (30) days
prior to the date upon which such HanX Patent shall expire or be abandoned, and
Onconova shall thereupon have the right, but not the obligation, to assume
responsibility for the preparation, filing, prosecution or maintenance thereof
at its sole cost and expense.

 

9.3.3                     Cooperation.  The Parties agree to cooperate in the
preparation, filing, prosecution and maintenance of all Patents under this
Section 9.3, including cooperating with the other Party so far as reasonably
necessary with respect to furnishing all information and data in its possession
reasonably necessary to obtain or maintain such Patents.

 

9.3.4                     Patent Expenses.  Any expenses incurred by a Party in
connection with the preparation, filing, prosecution and maintenance of any
Onconova Patents or HanX Patents, as applicable, in the Territory shall be borne
by HanX.

 

9.4                               Defense and Enforcement of Patents.

 

9.4.1                     Infringement of Third Party Patents.

 

(a)                                 Onconova and HanX shall each promptly notify
the other in writing if either Party, or any of their respective Affiliates,
shall be individually named as a defendant in a legal proceeding by a Third
Party alleging infringement of a patent or other intellectual property right of
such Third Party as a result of the Manufacturing, Development, use or
Commercialization of the Product hereunder for sale in the Field in the
Territory (each, an “Infringement Claim”). Neither Party shall have the right to
settle any Infringement Claim in a manner that diminishes the rights or
interests of the other Party under this Agreement without the written consent of
the other Party, which consent shall not be unreasonably withheld.

 

(b)                                 If a Party shall become engaged in or
participate in any Infringement Claim, the other Party shall cooperate, and
shall cause its and its Affiliates’ employees to cooperate, with such Party in
all reasonable respects in connection therewith.

 

9.4.2                     Prosecution of Infringers.

 

(a)                                 Notice.  If either Party (i) receives notice
of any patent nullity actions, any declaratory judgment actions or any alleged
or threatened infringement of patents or patent applications or misappropriation
of intellectual property comprising the Onconova Patents, Onconova Inventions,
Onconova Know-How, HanX Patents, HanX Inventions or HanX Know-How or (ii) learns
that a Third Party is infringing or allegedly infringing any Patent within the
Onconova Patents or the HanX Patents, or if any Third Party claims that any such
Patent is invalid or unenforceable, in each case, with respect to the Field in
the Territory, it will promptly notify the other Party thereof, including
providing evidence of infringement or the claim of invalidity or
unenforceability reasonably available to such Party.  The Parties will cooperate
and

 

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use reasonable efforts to stop such alleged infringement or to address such
claim without litigation.

 

(b)                                 Enforcement of Onconova Patents and HanX
Patents.

 

(i)                                    HanX will have the sole right (but not
the obligation) to take the appropriate steps to enforce or defend any Patent
within the HanX Patents against infringement by a Third Party in the Field in
the Territory.  HanX may take steps including the initiation, prosecution and
control of any suit, action, proceeding or other legal action by counsel of its
own choice.  HanX shall bear the costs of such enforcement.

 

(ii)                                HanX will have the first right (but not the
obligation) to take the appropriate steps to enforce any Onconova Patent against
infringement by a Third Party in the Field in the Territory, including the
initiation, prosecution and control of any suit, proceeding or other legal
action by counsel of its own choice.  HanX will bear the costs of such
enforcement.  Notwithstanding the foregoing, Onconova will have the right, at
its own expense, to be represented in any such action by counsel of its own
choice.

 

(iii)                            If, pursuant to Section 9.4.2(b)(ii), HanX
fails to take the appropriate steps to enforce any Onconova Patent in the
Territory within one hundred eighty (180) days of the date one Party has
provided notice to the other Party pursuant to Section 9.4.2(a) of such
infringement or claim, then Onconova will have the right (but not the
obligation), at its own expense, to bring any such suit, action or proceeding in
the Territory by counsel of its own choice, and HanX will have the right, at its
own expense, to be represented in any such action by counsel of its own choice.

 

(c)                                  Cooperation; Damages.

 

(i)                                    If one Party brings any suit, action or
proceeding under Section 9.4.2(b), the other Party agrees to be joined as party
plaintiff if necessary to prosecute the suit, action or proceeding and to give
the first Party reasonable authority to file and prosecute the suit, action or
proceeding; provided, however, that neither Party will be required to transfer
any right, title or interest in or to any property to the other Party or any
other party to confer standing on a Party hereunder.

 

(ii)                                The Party not pursuing the suit, action or
proceeding hereunder will provide reasonable assistance to the other Party,
subject to the other Party’s reimbursement of any out-of-pocket expenses
incurred by the non-enforcing or defending Party in providing such assistance.

 

(iii)                            HanX shall not settle any claim, suit or action
that it brought under Section 9.4.2 involving Onconova Patents without the prior
written consent of Onconova in its sole discretion if such settlement requires
admission of the invalidity of any Onconova Patent or otherwise adversely
affects any Onconova Patent.

 

(iv)                             Any settlements, damages or other monetary
awards (a “Recovery”) recovered pursuant to a suit, action or proceeding brought
pursuant to Section 9.4.2(b) will be allocated first to the costs and expenses
of the Party taking such action, and

 

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second, to the costs and expenses (if any) of the other Party, with any
remaining amounts (if any) shall be shared [**]to the enforcing Party and [**]to
the non-enforcing Party.

 

(d)                                 Infringement of Onconova Patents Outside of
the Territory or Outside the Field.  For clarity, with respect to any and all
infringement of any Onconova Patent anywhere outside of the Territory or outside
the Field, Onconova (or its designee) shall have the sole and exclusive right to
bring an appropriate suit or other action against any Person engaged in such
infringement of any such Onconova Patents, in its sole discretion and HanX shall
have no rights with respect thereto.

 

9.5                               Patent Term Extensions.  Onconova and HanX
shall cooperate in good faith in gaining Patent Term Extensions wherever
applicable to the Onconova Patents and HanX Patents in the Territory.  However,
Onconova shall have the sole discretion in determining for which Onconova
Patent(s) to seek Patent Term Extensions for any particular compound, protein,
composition, article, product, process or use.

 

9.6                               Patent Marking.  To the extent permitted by
applicable laws and regulations, HanX shall mark the Product marketed and sold
by HanX (or its Affiliate or distributor) hereunder with appropriate patent
numbers or indicia at Onconova’s request.

 

9.7                               Consequences of Patent Challenge.  Onconova
will be permitted to terminate this Agreement upon written notice to HanX,
effective upon receipt, if HanX or any of its Affiliates, directly or
indirectly, (i) initiate or request an interference or opposition proceeding
with respect to any Onconova Patent, (ii) make, file or maintain any claim,
demand, lawsuit or cause of action to challenge the validity or enforceability
of any Onconova Patent, or (iii) oppose any extension of, or the grant of a
supplementary protection certificate with respect to, any Onconova Patent.

 

ARTICLE 10
REPRESENTATIONS, WARRANTIES AND COVENANTS

 

10.1                        Mutual Representations and Warranties.  Each Party
hereby represents and warrants (as applicable) to the other Party, as of the
Effective Date, that:

 

10.1.1              Corporate Existence and Power.  It is a company or
corporation duly organized, validly existing, and in good standing under the
laws of the jurisdiction in which it is incorporated, and has full corporate
power and authority and the legal right to own and operate its property and
assets and to carry on its business as it is now being conducted and as
contemplated in this Agreement, including the right to grant the licenses
granted by it hereunder.

 

10.1.2              Authority and Binding Agreement.  (i) It has the corporate
power and authority and the legal right to enter into this Agreement and perform
its obligations hereunder, (ii) it has taken all necessary corporate action on
its part required to authorize the execution and delivery of this Agreement and
the performance of its obligations hereunder, and (iii) this Agreement has been
duly executed and delivered on behalf of such Party, and constitutes a legal,
valid, and binding obligation of such Party that is enforceable against it in
accordance with its terms, except as enforcement may be affected by bankruptcy,
insolvency or other similar laws and by general principles of equity.

 

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10.1.3              No Conflicts.  The execution, delivery and performance of
this Agreement by it does not violate any Laws of any Governmental Authority
having jurisdiction over it.

 

10.1.4              All Consents and Approvals Obtained.  Except with respect to
Regulatory Approvals for the Development, Manufacturing or Commercialization of
the Product or as otherwise described in this Agreement, (i) all necessary
consents, approvals and authorizations of, and (ii) all notices to, and filings
by such Party with, all Governmental Authorities and other persons or entities
required to be obtained or provided by such Party as of the Effective Date in
connection with the execution, delivery and performance of this Agreement have
been obtained and provided, except for those approvals, if any, not required at
the time of execution of this Agreement.

 

10.2                        Additional Representations and Warranties of
Onconova.  Onconova hereby represents and warrants to HanX, as of the Effective
Date, that:

 

10.2.1              Onconova has not filed any Marketing Authorization
Applications with a Governmental Authority in the Territory for the sale of the
Product in the Field in the Territory;

 

10.2.2              Neither Onconova nor its Affiliates, nor, to Onconova’s
knowledge, its subcontractors, has received any notice in writing or otherwise
has knowledge of any facts which have led Onconova to believe that any of
Onconova’s Regulatory Materials relating to the Product are not currently in
good standing with the FDA;

 

10.2.3              Neither Onconova nor its Affiliates, nor, to the knowledge
of Onconova, its subcontractors, has received written notice of any proceedings
pending before or threatened by any Regulatory Authority with respect to the
Product or any facility where the Product is Manufactured;

 

10.2.4              Neither Onconova nor its Affiliates, nor, to the knowledge
of Onconova, its subcontractors, have received any claim or demand asserted by
any Person in writing that challenges the rights of Onconova to use or license
any of the Onconova Technology in the Territory, except where such claim or
demand would not materially adversely affect the ability of the Parties to
conduct the Development, Manufacturing or Commercialization of the Product
hereunder;

 

10.2.5              Onconova Controls all patents and patent applications in the
Territory listed on Schedule 1.33; and other than the patents and patent
applications listed on Schedule 1.33, Onconova does not Control any patent or
patent applications that claim or over the Compound or Product or the
manufacture or use thereof in the Territory;

 

10.2.6              There are no claims, judgments or settlements against or
owed by Onconova, nor any pending reissue, reexamination, interference,
opposition or similar proceedings, with respect to the Onconova Patent Rights or
Onconova Know-How, and Onconova has not received written notice as of the
Effective Date of any threatened claims or litigation or any reissue,
reexamination, interference, opposition or similar proceedings seeking to
invalidate or otherwise challenge the Onconova Patent Rights or Onconova
Know-How;

 

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10.2.7              Onconova is the sole owner or exclusive licensee of the
Onconova Technology, free and clear of all liens, and has the right to grant to
HanX the rights and licenses as purported to be granted hereunder; Onconova has
not granted, and will not grant during the Term, any rights in the Onconova
Technology that are inconsistent with the rights granted to HanX under this
Agreement;

 

10.2.8              There is no pending or, to Onconova’s knowledge, threatened,
litigation or arbitration against Onconova or its Affiliates which alleges, that
Onconova’s research and development of the Onconova Technology, Compound or
Product have infringed or misappropriated any of the intellectual property
rights of any Third Party in the Territory;

 

10.2.9              To Onconova’s knowledge, the Manufacture, Development and
Commercialization of the Compound and Product do not and will not infringe or
otherwise conflict with any intellectual property rights or other rights of any
Third Party;

 

10.2.10       Neither Onconova nor its Affiliates is not aware of any
infringement or misappropriation of any Onconova Technology in the Field in the
Territory by any Third Party;

 

10.2.11       To Onconova’s knowledge, all information provided by Onconova to
HanX for due diligence purposes in relation to this Agreement does not contain
any untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements contained therein not misleading in
light of the circumstances under which they were made.  Without limiting the
foregoing, to Onconova’s knowledge, Onconova has disclosed to HanX or made
available to HanX for review all material non-clinical and clinical data for the
Compound and Product in Onconova’s control, and all other material information
(including relevant correspondence with Regulatory Authorities) relating to the
Compound and Product in Onconova’s control, in each case that would be material
for HanX to assess the safety and efficacy of the Compound and Product;

 

10.2.12       Except for the Temple License Agreements, there is no agreement
between Onconova or its Affiliates with any Third Party pursuant to which
Onconova or its Affiliates has in-licensed any Onconova Technology;

 

10.2.13       Onconova has provided HanX with a true and complete copy of each
Temple License Agreement, and each Temple License Agreement is in full force and
effect;

 

10.2.14       No written notice of default or termination has been received or
given under any Temple License Agreement, and to Onconova’s knowledge, there is
no act or omission by Onconova or its Affiliates that would provide a right to
terminate any Temple License Agreement;

 

10.2.15       During the Term of this Agreement, Onconova shall use Commercially
Reasonable Efforts to maintain each Temple License Agreement in full force and
effect and shall not terminate, amend, waive or otherwise modify (or consent to
any of the foregoing) its rights under any Temple License Agreement in any
manner that materially diminishes or materially adversely affects the rights or
licenses granted to HanX hereunder, without HanX’s express written consent;

 

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10.2.16       In the event Onconova becomes aware of, or receives from or on
behalf of Temple University any notice of, breach of any Temple License
Agreement by Onconova, Onconova shall promptly notify HanX in writing, and if
Onconova fails to cure such breach promptly, HanX shall have the right, but not
the obligation, to cure such breach on behalf of Onconova and, except with
respect to any breach caused directly or indirectly by HanX, to offset any
amounts incurred or paid by HanX in connection with the cure of such breach
against any amounts otherwise payable by HanX to Onconova under this Agreement;
and

 

10.2.17       In the event of any notice of breach of any Temple License
Agreement by Temple University in a manner that will or is reasonably likely to
adversely affect HanX’s rights or obligations under this Agreement, Onconova
shall promptly notify HanX in writing, and Onconova shall use Commercially
Reasonable Efforts at HanX’s expense to take such actions as reasonably
requested by HanX to enforce the Temple License Agreement.

 

10.3                        Additional Representations and Warranties of HanX. 
HanX hereby represents and warrants to Onconova, as of the Effective Date, that:

 

10.3.1              HanX is solvent and has the ability to pay and perform all
of its obligations as and when such obligations become due, including payment
obligations and other obligations under this Agreement;

 

10.3.2              To the knowledge of HanX, no claim or demand of any Person
has been asserted in writing to HanX that challenges the rights of HanX to use
or license any of the HanX Technology, except where such claim, notice, demand
or proceeding would not materially adversely affect the ability of the Parties
to conduct the Development, Manufacturing or Commercialization of the Product
hereunder.

 

10.4                        Mutual Covenants.  Each Party hereby covenants to
the other Party that:

 

10.4.1              All employees of such Party or its Affiliates or Third Party
subcontractors working under this Agreement will be under appropriate
confidentiality provisions at least as protective as those contained in this
Agreement and, to the extent permitted under Law, have agreed to a present
assignment of all right, title and interest in and to their inventions and
discoveries specifically relating to the Compound or Product or the manufacture
or use thereof, whether or not patentable, to such Party as the sole owner
thereof;

 

10.4.2              To its knowledge, such Party will not (i) employ or use, nor
hire or use any contractor or consultant that employs or uses, any individual or
entity, including a clinical investigator, institution or institutional review
board, debarred or disqualified by the FDA (or subject to a similar sanction by
any Regulatory Authority outside the United States) or (ii) employ any
individual who or entity that is the subject of an FDA debarment investigation
or proceeding (or similar proceeding by any Regulatory Authority outside the
United States), in each of subclauses (i) and (ii) in the conduct of its
activities under this Agreement; and

 

10.4.3              Neither Party nor any of its Affiliates shall, during the
Term, grant any right or license to any Third Party relating to any of the
intellectual property rights it owns or Controls which would conflict with any
of the rights or licenses granted to the other Party hereunder; and such Party
and its Affiliates shall perform its activities pursuant to this

 

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Agreement in compliance (and shall ensure compliance by any of its
subcontractors) in all material respects with all Laws including GLPs, GMPs and
GCPs as applicable and with respect to the Development, Manufacturing and
Commercialization activities contemplated hereunder.

 

10.5                        Disclaimer.  HanX understands that the Product is
the subject of ongoing clinical research and development and that Onconova
cannot ensure the safety or usefulness of the Product or that the Product will
receive Regulatory Approvals.  In addition, Onconova makes no warranties except
as set forth in this Article 10 concerning the Onconova Technology or otherwise.

 

10.6                        No Other Representations or Warranties.  EXCEPT AS
EXPRESSLY STATED IN THIS AGREEMENT, NO REPRESENTATIONS OR WARRANTIES WHATSOEVER,
WHETHER EXPRESS OR IMPLIED, INCLUDING WARRANTIES OF MERCHANTABILITY, FITNESS FOR
A PARTICULAR PURPOSE, NON-INFRINGEMENT, OR NON-MISAPPROPRIATION OF THIRD PARTY
INTELLECTUAL PROPERTY RIGHTS, ARE MADE OR GIVEN BY OR ON BEHALF OF A PARTY. 
EXCEPT AS EXPRESSLY STATED IN THIS AGREEMENT, ALL REPRESENTATIONS AND
WARRANTIES, WHETHER ARISING BY OPERATION OF LAW OR OTHERWISE, ARE HEREBY
EXPRESSLY EXCLUDED.

 

ARTICLE 11
INDEMNIFICATION

 

11.1                        Indemnification by Onconova.  Onconova hereby agrees
to indemnify, defend and hold HanX, its Affiliates, and their respective
directors, officers, agents and employees harmless from and against any and all
losses, damages, liabilities, costs and expenses (including reasonable
attorneys’ fees and expenses) (collectively, “Losses”) arising in connection
with any and all charges, complaints, actions, suits, proceedings, hearings,
investigations, claims, demands, judgments, orders, decrees, stipulations or
injunctions by a Third Party (each, a “Third Party Claim”) resulting or
otherwise arising from (i) any breach by Onconova of any of its representations,
warranties, covenants or obligations pursuant to this Agreement or (ii) the
negligence or willful misconduct by Onconova or its Affiliates or their
respective officers, directors, employees, agents, consultants or sublicensees
in performing any obligations under this Agreement; and (iii) the Manufacture
and supply of the Product by Onconova to HanX as provided in the supply
agreement to be mutually agreed by the Parties; and (iv) any matter related to
the Development, handling, storage, use, manufacture, packaging and labeling, or
Commercialization of the Product (including, for clarity, any product liability
Losses resulting therefrom) outside of the Territory for use outside of the
Territory by Onconova or its Affiliates or their respective officers, directors,
employees, agents, consultants or licensees and sublicensees (but excluding
HanX, its Affiliates, sublicensees and assignees) in each case, except to the
extent that such Losses are subject to indemnification by HanX pursuant to
Section 11.2.

 

11.2                        Indemnification by HanX.  HanX hereby agrees to
indemnify, defend and hold Onconova, its Affiliates, and their respective
directors, agents and employees harmless from and against any and all Losses
arising in connection with any and all Third Party Claims resulting or otherwise
arising from (i) any breach by HanX of any of its representations, warranties,
covenants or obligations pursuant to this Agreement, (ii) the negligence or
willful misconduct by

 

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HanX or its Affiliates or their respective officers, directors, employees,
agents, consultants or sublicensees in performing any obligations under this
Agreement, or (iii) any matter related to the Development, handling, storage,
use, packaging and labeling, or Commercialization of the Product hereunder
(including, for clarity, any product liability Losses resulting therefrom) by
HanX or its Affiliates or their respective officers, directors, employees,
agents, consultants or sublicensees (but excluding Onconova, its Affiliates,
licensees and sublicensees); in each case, except to the extent that such Losses
are subject to indemnification by Onconova pursuant to Section 11.1.

 

11.3                        Indemnification Procedures.

 

11.3.1              Notice of Claim.  All indemnification claims in respect of
any indemnitee seeking indemnity under Section 11.1 or 11.2, as applicable
(collectively, the “Indemnitees” and each, an “Indemnitee”) will be made solely
by the corresponding Party (the “Indemnified Party”).  The Indemnified Party
will give the indemnifying Party (the “Indemnifying Party”) prompt written
notice (an “Indemnification Claim Notice”) of any Losses and any legal
proceeding initiated by a Third Party against the Indemnified Party as to which
the Indemnified Party intends to make a request for indemnification under
Section 11.1 or 11.2, as applicable, but in no event will the Indemnifying Party
be liable for any Losses that result from any delay in providing such notice
which materially prejudices the defense of such proceeding.  Each
Indemnification Claim Notice shall contain a description of the claim and the
nature and amount of such Loss (to the extent that the nature and amount of such
Loss are known at such time).  Together with the Indemnification Claim Notice,
the Indemnified Party will furnish promptly to the Indemnifying Party copies of
all notices and documents (including court papers) received by any Indemnitee in
connection with the Third Party Claim.

 

11.3.2              Control of Defense.  At its option, the Indemnifying Party
may assume the defense of any Third Party Claim which solely seeks monetary
damages and for which the Indemnifying Party agrees, as between the Indemnifying
Party and the Indemnified Party, the Indemnifying Party shall be solely
responsible for payment of Losses related to such Third Party Claim, by giving
written notice to the Indemnified Party within thirty (30) days after the
Indemnifying Party’s receipt of an Indemnification Claim Notice.  Upon assuming
the defense of a Third Party Claim, the Indemnifying Party may appoint as lead
counsel in the defense of the Third Party Claim any legal counsel it selects,
and such Indemnifying Party shall thereafter continue to defend such Third Party
Claim in good faith.  Should the Indemnifying Party assume the defense of a
Third Party Claim (and continue to defend such Third Party Claim in good faith),
the Indemnifying Party will not be liable to the Indemnified Party or any other
Indemnitee for any legal expenses subsequently incurred by such Indemnified
Party or other Indemnitee in connection with the analysis, defense or settlement
of the Third Party Claim, unless the Indemnifying Party has failed to assume the
defense and employ counsel in accordance with this Section 11.3.

 

11.3.3              Right to Participate in Defense.  Without limiting
Section 11.3.2, any Indemnitee will be entitled to participate in the defense of
a Third Party Claim for which it has sought indemnification hereunder and to
employ counsel of its choice for such purpose; provided, however, that such
employment will be at the Indemnitee’s own expense unless (i) the employment
thereof has been specifically authorized by the Indemnifying Party in writing,
or (ii)

 

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the Indemnifying Party has failed to assume the defense (or continue to defend
such Third Party Claim in good faith) and employ counsel in accordance with this
Section 11.3, in which case the Indemnified Party will be allowed to control the
defense.

 

11.3.4              Settlement.  With respect to any Losses relating solely to
the payment of money damages in connection with a Third Party Claim and that
will not result in the Indemnitee becoming subject to injunctive or other relief
or otherwise adversely affect the business of the Indemnitee in any manner, and
as to which the Indemnifying Party will have acknowledged in writing the
obligation to indemnify the Indemnitee hereunder, the Indemnifying Party will
have the sole right to consent to the entry of any judgment, enter into any
settlement or otherwise dispose of such Loss, on such terms as the Indemnifying
Party, in its reasonable discretion, will deem appropriate (provided, however,
that such terms shall include a complete and unconditional release of the
Indemnified Party from all liability with respect thereto), and will transfer to
the Indemnified Party all amounts which said Indemnified Party will be liable to
pay prior to the time of the entry of judgment.  With respect to all other
Losses in connection with Third Party Claims, where the Indemnifying Party has
assumed the defense of the Third Party Claim in accordance with Section 11.3.2,
the Indemnifying Party will have authority to consent to the entry of any
judgment, enter into any settlement or otherwise dispose of such Loss, provided
it obtains the prior written consent of the Indemnified Party (which consent
will be at the Indemnified Party’s reasonable discretion).  The Indemnifying
Party that has assumed the defense of (and continues to defend) the Third Party
Claim in accordance with Section 11.3.2 will not be liable for any settlement or
other disposition of a Loss by an Indemnitee that is reached without the written
consent of such Indemnifying Party.  No Indemnitee will admit any liability with
respect to, or settle, compromise or discharge, any Third Party Claim without
first offering to the Indemnifying Party the opportunity to assume the defense
of the Third Party Claim in accordance with Section 11.3.2.

 

11.3.5              Cooperation.  If the Indemnifying Party chooses to defend or
prosecute any Third Party Claim, the Indemnified Party will, and will cause each
other Indemnitee to, cooperate in the defense or prosecution thereof and will
furnish such records, information and testimony, provide such witnesses and
attend such conferences, discovery proceedings, hearings, trials and appeals as
may be reasonably requested in connection with such Third Party Claim.  Such
cooperation will include access during normal business hours afforded to the
Indemnifying Party to, and reasonable retention by the Indemnified Party of,
records and information that are reasonably relevant to such Third Party Claim,
and making Indemnitees and other employees and agents available on a mutually
convenient basis to provide additional information and explanation of any
material provided hereunder, and the Indemnifying Party will reimburse the
Indemnified Party for all its reasonable out-of-pocket expenses incurred in
connection with such cooperation.

 

11.4                        Limitation of Liability.  NEITHER PARTY SHALL BE
LIABLE TO THE OTHER FOR ANY SPECIAL, CONSEQUENTIAL, INCIDENTAL, PUNITIVE, OR
INDIRECT DAMAGES ARISING FROM OR RELATING TO ANY BREACH OF THIS AGREEMENT,
REGARDLESS OF ANY NOTICE OF THE POSSIBILITY OF SUCH DAMAGES, EXCEPT THAT
NOTWITHSTANDING THE FOREGOING, NOTHING IN THIS SECTION 11.4 IS INTENDED TO OR
SHALL LIMIT OR RESTRICT THE INDEMNIFICATION RIGHTS OR OBLIGATIONS OF ANY PARTY
UNDER SECTION

 

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11.1 OR 11.2, OR DAMAGES AVAILABLE FOR A PARTY’S BREACH OF CONFIDENTIALITY
OBLIGATIONS UNDER ARTICLE 12.  .

 

11.5                        Insurance.  Each Party shall procure and maintain
insurance, including product liability insurance, adequate to cover its
obligations hereunder and which is consistent with normal business practices of
prudent companies similarly situated at all times during which the Product is
being clinically tested in human subjects or commercially distributed or sold by
such Party pursuant to this Agreement.  Each Party shall provide the other Party
with written evidence of such insurance upon request.  Each Party shall provide
the other Party with written notice at least thirty (30) days prior to the
cancellation, nonrenewal or material change in such insurance or self-insurance
which materially adversely affects the rights of the other Party hereunder.

 

ARTICLE 12
CONFIDENTIALITY

 

12.1                        Confidential Information.  As used in this
Agreement, the term “Confidential Information” means all information, whether it
be written or oral, including all production schedules, lines of products,
volumes of business, processes, new product developments, product designs,
formulae, technical information, laboratory data, clinical data, patent
information, know-how, trade secrets, financial and strategic information,
marketing and promotional information and data, and other material relating to
any products, projects or processes of one Party (the “Disclosing Party”) that
is provided to, or otherwise obtained by, the other Party (the “Receiving
Party”) in connection with this Agreement (including information exchanged prior
to the date hereof in connection with the transactions set forth in this
Agreement. Notwithstanding the foregoing sentence, Confidential Information
shall not include any information or materials that:

 

(a)                                 were already known to the Receiving Party
(other than under an obligation of confidentiality), at the time of disclosure
by the Disclosing Party, to the extent such Receiving Party has documentary
evidence to that effect;

 

(b)                                 were generally available to the public or
otherwise part of the public domain at the time of disclosure thereof to the
Receiving Party;

 

(c)                                  became generally available to the public or
otherwise part of the public domain after disclosure or development thereof, as
the case may be, and other than through any act or omission of the Receiving
Party in breach of such Party’s confidentiality obligations under this
Agreement;

 

(d)                                 were disclosed to the Receiving Party, other
than under an obligation of confidentiality, by a Third Party who had no
obligation to the Disclosing Party not to disclose such information to others;
or

 

(e)                                  were independently discovered or developed
by or on behalf of the Receiving Party without the use of the Confidential
Information belonging to the other Party, to the extent such Receiving Party has
documentary evidence to that effect.

 

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12.2                        Confidentiality Obligations.  Each of HanX and
Onconova shall keep all Confidential Information received from or on behalf of
the other Party with the same degree of care with which it maintains the
confidentiality of its own Confidential Information, but in all cases no less
than a reasonable degree of care.  Neither Party shall use such Confidential
Information for any purpose other than in performance of this Agreement or
disclose the same to any other Person other than to such of its and its
Affiliates’ directors, managers, employees, independent contractors, agents or
consultants, potential or actual sublicensees, acquiror, investors and other
business partners who have a need to know such Confidential Information to
implement the terms of this Agreement or enforce its rights under this
Agreement; provided, however, that a Receiving Party shall advise any of its and
its Affiliates’ directors, managers, employees, independent contractors, agents
or consultants, potential or actual sublicensees, acquiror, investors and other
business partners who receives such Confidential Information of the confidential
nature thereof and of the obligations contained in this Agreement relating
thereto, and the Receiving Party shall ensure (including, in the case of a Third
Party, by means of a written agreement with such Third Party having terms at
least as protective as those contained in this Article 12) that all such
directors, managers, employees, independent contractors, agents or consultants,
potential or actual sublicensees, acquiror, investors and other business
partners comply with such obligations.  Upon termination of this Agreement, the
Receiving Party shall return or destroy all documents, tapes or other media
containing Confidential Information of the Disclosing Party that remain in the
possession of the Receiving Party or its directors, managers, employees,
independent contractors, agents or consultants, except that the Receiving Party
may keep one copy of the Confidential Information in the legal department files
of the Receiving Party, solely for archival purposes.  Such archival copy shall
be deemed to be the property of the Disclosing Party, and shall continue to be
subject to the provisions of this Article 12.  It is understood that receipt of
Confidential Information under this Agreement will not limit the Receiving Party
from assigning its employees to any particular job or task in any way it may
choose, subject to the terms and conditions of this Agreement.

 

12.3                        Permitted Disclosure and Use.  Notwithstanding
Section 12.2, (i) either Party may disclose Confidential Information belonging
to the other Party to the extent such disclosure is reasonably necessary to:
(a) comply with or enforce any of the provisions of this Agreement; and
(b) comply with applicable Law; (ii) each Party may disclose Confidential
Information belonging to the other Party related to a Product to the extent such
disclosure is reasonably necessary to obtain or maintain regulatory approval of
a Product, as applicable, to the extent such disclosure is made to a
Governmental Authority; and (iii) each Party may disclose Development Data
(A) as reasonably necessary for filing or prosecuting Patents as permitted by
this Agreement, or (B) to actual and potential licensees employees, consultants
and sublicensees bound by a written agreement with such Party having terms at
least as protective as those contained in this Article 12.  If a Party deems it
necessary to disclose Confidential Information of the other Party pursuant to
this Section 12.3, such Party shall give reasonable advance written notice of
such disclosure to the other Party to permit such other Party sufficient
opportunity to object to such disclosure or to take measures to ensure
confidential treatment of such information, including seeking a protective order
or other appropriate remedy.

 

12.4                        Notification.  The Receiving Party shall notify the
Disclosing Party promptly upon discovery of any unauthorized use or disclosure
of the Disclosing Party’s Confidential Information, and will cooperate with the
Disclosing Party in any reasonably requested fashion to

 

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assist the Disclosing Party to regain possession of such Confidential
Information and to prevent its further unauthorized use or disclosure.

 

12.5                        Publicity; Filing of this Agreement.  The press
release to be issued in connection with the transactions shall be mutually
agreed to by the Parties.  Except as otherwise provided in this Section 12.5,
each Party shall maintain the confidentiality of all provisions of this
Agreement, and without the prior written consent of the other Party, which
consent shall not be unreasonably withheld, neither Party nor its respective
Affiliates shall make any press release or other public announcement of or
otherwise disclose the provisions of this Agreement to any Third Party, except
for: (i) disclosure to those of its directors, officers, employees, accountants,
attorneys, underwriters, lenders and other financing sources, advisors and
agents whose duties reasonably require them to have access to this Agreement,
provided that such directors, officers, employees, accountants, attorneys,
underwriters, lenders and other financing sources, advisors and agents are
required to maintain the confidentiality of this Agreement, (ii) disclosures
required by Nasdaq regulation or any listing agreement with a national
securities exchange, in which case the disclosing Party shall provide the
nondisclosing Party with at least forty eight (48) hours’ notice unless
otherwise not practicable, but in any event no later than the time the
disclosure required by such Nasdaq regulation or listing agreement is made,
(iii) disclosures as may be required by Law, in which case the disclosing Party
shall provide the nondisclosing Party with prompt advance notice of such
disclosure and cooperate with the nondisclosing Party to seek a protective order
or other appropriate remedy, including a request for confidential treatment in
the case of a filing with the Securities and Exchange Commission, (iv) the
report on Form 8-K, which may be filed by Onconova or an Affiliate of Onconova
setting forth the press release referred to above, and/or this Agreement in
redacted form, (v) disclosures that are consistent with or complementary to
those described in clause (iv) but which do not contain any Confidential
Information of the other Party; and (vi) other disclosures for which consent has
previously been given.  A Party may publicly disclose without regard to the
preceding requirements of this Section 12.5 any information that was previously
publicly disclosed pursuant to this Section 12.5.

 

12.6                        Publication.  Each Party shall submit copies of each
proposed academic, scientific, medical and other publication or presentation
that contains or refers to the Onconova Patents, Onconova Know-How or otherwise
relates to the Product or any research or Development Activities under this
Agreement to the other Party for review and comment at least thirty (30) days
prior to submission for publication or other disclosure.  At the reviewing
Party’s request, the publishing Party shall remove, redact or otherwise modify
the proposed publication or presentation to remove any Confidential Information
of the reviewing Party.  Upon request by the reviewing Party in writing, the
publishing Party will grant the reviewing Party an additional period of time,
not to exceed an additional ninety (90) days, in order to allow patent
applications to be filed to protect the potential patentability of any data,
information or material described therein.  In addition, in the event that the
document includes data, information or material generated by the reviewing
Party’s scientists, and professional standards for authorship would be
consistent with including such scientists as co-authors of the document, the
names of such scientists will be included as co-authors.

 

12.7                        Use of Names.  Except as otherwise set forth in this
Agreement, neither Party shall use the name of the other Party in relation to
this transaction in any public announcement,

 

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press release or other public document without the written consent of such other
Party, which consent shall not be unreasonably withheld; provided, however, that
subject to Section 12.5, either Party may use the name of the other Party in any
document filed with any regulatory agency or Governmental Authority, including
the FDA, NMPA and the Securities and Exchange Commission.

 

12.8                        Survival.  The obligations and prohibitions
contained in this Article 12 as they apply to Confidential Information shall
survive the expiration or termination of this Agreement for a period of seven
(7) years.

 

ARTICLE 13
TERM AND TERMINATION

 

13.1                        Term.  This Agreement shall become effective on the
Effective Date and, unless earlier terminated pursuant to this Article 13, shall
remain in effect until the expiration of all royalty payment obligations under
this Agreement (the “Term”).

 

13.2                        Termination for Breach.  Either Party may, without
prejudice to any other remedies available to it at law or in equity, terminate
this Agreement in the event that the other Party shall have materially breached
or defaulted in the performance of any of its obligations.  The non-terminating
Party shall have sixty (60) days (thirty (30) days in the event of non-payment)
after written notice thereof was provided to the non-terminating Party by the
terminating Party to remedy such default.  Any such termination shall become
effective at the end of such sixty (60)-day period thirty (30)-day period for
non-payment unless the non-terminating Party has cured any such breach or
default prior to the expiration of such sixty (60)-day period (thirty (30)-day
period for non-payment).

 

13.3                        Termination as a Result of Bankruptcy.

 

13.3.1              Each Party shall have the right to terminate this Agreement
upon written notice as a result of the filing or institution of bankruptcy,
reorganization, liquidation or receivership proceedings, or upon an assignment
of a substantial portion of the assets for the benefit of creditors by the other
Party; provided that such termination shall be effective only if such proceeding
is not dismissed within ninety (90) days after the filing thereof.

 

13.3.2              All rights and licenses granted by a Party to the other
Party under or pursuant to this Agreement are, and shall otherwise be deemed to
be, for purposes of Section 365(n) of Title 11 of the United States Code and
other similar laws in any jurisdiction outside the US (collectively, the
“Bankruptcy Laws”), licenses of rights to be “intellectual property” as defined
under the Bankruptcy Laws.  If a case is commenced during the Term by or against
a Party under Bankruptcy Laws then, unless and until this Agreement is rejected
as provided in such Bankruptcy Laws, such bankruptcy Party (in any capacity,
including debtor-in-possession) and its successors and assigns (including a
trustee) shall perform all of the obligations provided in this Agreement to be
performed by such Party.  If a case is commenced during the Term by or against a
Party under the Bankruptcy Laws, this Agreement is rejected as provided in the
Bankruptcy Laws and the other Party elects to retain its rights hereunder as
provided in the Bankruptcy Laws, then the bankruptcy Party (in any capacity,
including debtor-

 

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in-possession) and its successors and assigns (including a Title 11 trustee),
shall provide to the other Party copies of all information and know-how
necessary for such other Party to prosecute, maintain and enjoy its rights under
the terms of this Agreement promptly upon such other Party’s written request
therefor.  All rights, powers and remedies of such other Party as provided
herein are in addition to and not in substitution for any and all other rights,
powers and remedies now or hereafter existing at law or in equity (including the
Bankruptcy Laws) in the event of the commencement of a case by or against the
bankruptcy Party under the Bankruptcy Laws.

 

13.4                        Termination by Onconova.  In addition, Onconova may
terminate this Agreement in accordance with Sections 6.2.3 and 9.7.

 

13.5                        Termination for Convenience by HanX.  HanX may
terminate this Agreement in whole (but not in part) at any time upon [**]f days’
prior written notice to Onconova.

 

ARTICLE 14
EFFECTS OF TERMINATION

 

14.1                        Termination by Onconova.  Without limiting any other
legal or equitable remedies that a Party may have, if this Agreement is
terminated by Onconova pursuant to Section 13.2, 13.3 or 13.4 or by HanX
pursuant to Section 13.5, then the following provisions shall apply.

 

14.1.1              Termination of Licenses.  All rights and licenses granted to
HanX hereunder shall immediately terminate and be of no further force and
effect.

 

14.1.2              Assignments.  HanX will promptly, in each case within sixty
(60) days after receipt of Onconova’s request, and at no cost to Onconova:

 

(a)                                 to the extent permitted by the relevant
agreement, assign to Onconova all of HanX’s right, title and interest in and to
any agreements (or portions thereof) between HanX and Third Parties that to the
extent relate to the Development or Commercialization of the Product in any
country for which such termination is effective;

 

(b)                                 assign and does hereby to Onconova all of
HanX’s right, title and interest in and to any (i) promotional materials and
(ii) copyrights and trademarks, any registrations and design patents for the
foregoing and any internet domain name registrations for such trademarks and
slogans, all to the extent solely related to the Product in any country for
which such termination is effective (but excluding HanX’s and its Affiliate’s
and sublicensee’s corporate name, trademark, logo or domain name); provided,
however, in the event Onconova exercises such right to have assigned such
promotional materials, HanX shall grant, and hereby does grant, a royalty-free
right and license to any housemarks, trademarks, names and logos of HanX (not
otherwise transferred pursuant to this clause (b)) contained therein for a
period of eighteen (18) months in order use such promotional materials in
connection with the Commercialization of the Product;

 

(c)                                  if and to the extent requested by Onconova
in writing, assign to Onconova, the management and continued performance of any
clinical trials for the Product ongoing hereunder as of the effective date of
such termination in any country for which such

 

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termination is effective, and Onconova shall be solely responsible for the
performance of such clinical trial at its own cost and expense after the
effective date of such termination;

 

(d)                                 transfer and assign and does hereby transfer
and assign to Onconova all of, if any, HanX’s right, title and interest in and
to any and all regulatory filings, Regulatory Approvals and other Regulatory
Materials for the Product in any country for which such termination is
effective;

 

(e)                                  grant, and hereby does grant to Onconova
and its Affiliates, and Onconova and its Affiliates will automatically have [**]
license, with the right to grant sublicenses through multiple tiers, under HanX
Technology Controlled by HanX and its Affiliates and sublicensees covering or
relating to Product or its manufacture or use in any formulation, and all
Commercialization Data, to make, have made, use, offer to sell, sell, import and
otherwise exploit Product in the Territory;

 

provided, however, that (i) to the extent that any agreement or other asset
described in this Section 14.1.2 is not assignable by HanX, then such agreement
or other asset will not be assigned, and upon the request of Onconova, HanX will
take such steps as may be necessary to allow Onconova to obtain and to enjoy the
benefits of such agreement or other asset, without additional payment therefor,
in the form of a license or other right to the extent HanX has the right and
ability to do so; (ii) any present assignment or grant of right to Onconova
under this Section 14.1 shall not become effective unless and until this
Agreement is terminated.  For purposes of clarity, Onconova shall have the right
to request that HanX take any or all of the foregoing actions in whole or in
part, or with respect to all or any portion of the assets set forth in the
foregoing provisions.

 

14.1.3              Disclosure and Delivery.  HanX will promptly transfer to
Onconova copies of any physical embodiment of any HanX Know-How, to the extent
then used in connection with the Development or Commercialization of the
Product; such transfer shall be effected by the delivery of documents, to the
extent such HanX Know-How is embodied in documents, and to the extent that HanX
Know-How is not fully embodied in documents, HanX shall make its employees and
agents who have knowledge of such HanX Know-How in addition to that embodied in
documents available to Onconova for interviews, demonstrations and training to
effect such transfer in a manner sufficient to enable Onconova to practice such
HanX Know-How.  At Onconova’s request and expense, HanX shall cooperate with
Onconova (and/or its designees) to provide reasonable assistance to the extent
necessary or reasonably useful to allow Onconova to continue to Develop and/or
Commercialize Product, either itself or through one or more Third Parties, in
the Territory.

 

14.1.4              Disposition of Inventory.  Onconova shall have the option,
exercisable within thirty (30) days following the effective date of such
termination, to purchase any inventory of the Product affected by such
termination at the price for which such Product was sold to HanX by Onconova
hereunder.  Onconova may exercise such option by written notice to HanX during
such thirty (30)-day period; provided, however in the event Onconova exercises
such right to purchase such inventory, HanX shall grant, and hereby does grant,
a royalty-free right and license to any housemarks, trademarks, names and logos
of HanX contained therein for a period of eighteen (18) months in order to sell
such inventory.  Upon such exercise, the Parties

 

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will establish mutually agreeable payment and delivery terms for the sale of
such inventory.  If Onconova does not exercise such option during such thirty
(30)-day period, or if Onconova provides HanX with written notice of its
intention not to exercise such option, then HanX and its Affiliates will be
entitled, during the period ending on the last day of the eighteenth (18th) full
month following the effective date of such termination, to sell any inventory of
Product affected by such termination that remains on hand as of the effective
date of the termination, so long as HanX pays to Onconova the royalties and
other amounts payable hereunder (including milestones) applicable to said
subsequent sales, with respect to sales in the Territory, as applicable, in
accordance with the terms and conditions set forth in this Agreement.

 

14.1.5              Disposition of Commercialization-Related Materials.  HanX
will promptly deliver to Onconova in electronic, sortable form (i) a list
identifying all wholesalers and other distributors involved in the
Commercialization of the Product in the Territory as well as any customer lists
related to the Commercialization of the Product in the Territory and (ii) all
promotional materials as well as any items bearing the Product trademark and/or
any trademarks or housemarks otherwise associated with the Product or Onconova.

 

14.2                        Termination by HanX.  Without limiting any other
legal or equitable remedies that HanX may have, if this Agreement is terminated
by HanX in accordance with Section 13.3 or if this Agreement is terminated in
accordance with Section 13.2 and Onconova is the breaching Party, then (a) all
rights and licenses granted by HanX to Onconova shall immediately terminate and
be of no further force and effect and (b) all rights and licenses granted by
Onconova to HanX shall continue so long as HanX continue to pay royalties to
Onconova in accordance with terms and conditions of this Agreement, provided
however that all such payment shall be reduced by [**].

 

14.3                        Expiration of this Agreement.  Upon expiration of
this Agreement pursuant to Section 13.1 with respect to a given country, all
rights and licenses granted to HanX shall continue as fully paid, non-exclusive,
perpetual license in such country.

 

14.4                        Accrued Rights.  Termination or expiration of this
Agreement for any reason will be without prejudice to any rights that will have
accrued to the benefit of a Party prior to the effective date of such
termination.  Such termination will not relieve a Party from obligations that
are expressly indicated to survive the termination or expiration of this
Agreement.

 

14.5                        Survival.  Notwithstanding anything to the contrary
contained herein, the following provisions shall survive any expiration or
termination of this Agreement: Articles 1, 11, 12, 13, 14, 15 and 16, and
Sections 2.3.2, 4.4, 4.5, 4.6, 9.1.  Except as set forth in this Article 14 or
otherwise expressly set forth herein, upon termination or expiration of this
Agreement all other rights and obligations of the Parties shall cease.

 

ARTICLE 15
DISPUTE RESOLUTION

 

15.1                        Disputes.  The Parties recognize that, from time to
time during the Term, disputes may arise as to certain matters which relate to
either Party’s rights and/or obligations hereunder.  It is the objective of the
Parties to establish procedures to facilitate the resolution of disputes

 

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arising under this Agreement in an expedient manner by mutual cooperation and
without resort to litigation.  To accomplish this objective, the Parties agree
to follow the procedures set forth in this Article 15 to resolve any controversy
or claim arising out of, relating to or in connection with any provision of this
Agreement (other than a dispute addressed in Section 3.4).

 

15.2                        Executive Officers.  With respect to all disputes
arising between the Parties and not from the JSC, including any alleged failure
to perform, or breach, of this Agreement, or any issue relating to the
interpretation or application of this Agreement, if the Parties are unable to
resolve such dispute within thirty (30) days after such dispute is first
identified by either Party in writing to the other, the Parties shall refer such
dispute to the Executive Officers of each Party for attempted resolution by
good-faith negotiations within thirty (30) days after such notice is received.

 

15.3                        Dispute Resolutions.

 

15.3.1              If the Executive Officers are not able to resolve such
dispute referred to them under Section 15.2 within such thirty (30)-day period,
then such dispute (other than an Excluded Claim as defined in Section 15.3.5
below) shall be finally resolved by binding arbitration administered by the
International Chamber of Commerce (“ICC”) pursuant to its arbitration rules and
procedures then in effect, and judgment on the arbitration award may be entered
in any court having jurisdiction thereof.

 

15.3.2              The arbitration shall be conducted by a single independent
arbitrator experienced in the pharmaceutical business.  If the Parties are
unable or fail to agree upon the arbitrator, the arbitrator shall be appointed
by ICC.  The place of arbitration shall be New York City, New York, and all
proceedings and communications shall be in English.

 

15.3.3              Either Party may apply to the arbitrator for interim
injunctive relief until the arbitration award is rendered or the controversy is
otherwise resolved.  Either Party also may, without waiving any remedy under
this Agreement, seek from any court having jurisdiction any injunctive or
provisional relief necessary to protect the rights or property of that Party
pending the arbitration award.  The arbitrator shall have no authority to award
punitive or any other type of damages not measured by a Party’s compensatory
damages.  Each Party shall bear its own costs and expenses and attorneys’ fees
and an equal share of the arbitrator’s fees and any administrative fees of
arbitration.

 

15.3.4              Except to the extent necessary to confirm an award or as may
be required by applicable Law or applicable national securities exchange rules,
neither a Party nor an arbitrator may disclose the existence, content, or
results of an arbitration without the prior written consent of both Parties.  In
no event shall an arbitration be initiated after the date when commencement of a
legal or equitable proceeding based on the dispute, controversy or claim would
be barred by the applicable statute of limitations.

 

15.3.5              As used in this Section, the term “Excluded Claim” shall
mean a dispute, controversy or claim that concerns (a) the scope, validity,
enforceability, inventorship or infringement of a patent, patent application,
trademark or copyright; or (b) any antitrust, anti-monopoly or competition law
or regulation, whether or not statutory.

 

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15.4                        Injunctive Relief.  Nothing herein may prevent
either Party from seeking a preliminary injunction or temporary restraining
order so as to prevent any Confidential Information from being disclosed in
violation of this Agreement.

 

ARTICLE 16
MISCELLANEOUS

 

16.1                        Entire Agreement; Amendment.  This Agreement and the
Securities Purchase Agreement, including the Schedules hereto, sets forth the
complete, final and exclusive agreement and all the covenants, promises,
agreements, warranties, representations, conditions and understandings between
the Parties hereto with respect to the subject matter hereof and supersedes, as
of the Effective Date, all prior agreements and understandings between the
Parties with respect to the subject matter hereof.  There are no covenants,
promises, agreements, warranties, representations, conditions or understandings,
either oral or written, between the Parties other than as are set forth herein
and therein.  No subsequent alteration, amendment, change or addition to this
Agreement shall be binding upon the Parties unless reduced to writing and signed
by an authorized representative of each Party.

 

16.2                        Force Majeure.  A Party shall be excused from the
performance of its obligations under this Agreement (excluding any obligations
to make payments) to the extent that such performance is prevented by force
majeure and the nonperforming Party promptly provides notice of the prevention
to the other Party.  Such excuse shall be continued so long as the condition
constituting force majeure continues and the nonperforming Party makes
reasonable efforts to remove the condition.  For purposes of this Agreement,
force majeure shall include conditions beyond the control of the Parties,
including an act of God, war, civil commotion, terrorist act, action or inaction
by the government, labor strike or lock-out, epidemic, failure or default of
public utilities or common carriers, destruction of production facilities or
materials by fire, earthquake, storm or like catastrophe.  Notwithstanding the
foregoing, a Party shall not be excused from making payments owed hereunder
because of force majeure affecting such Party.

 

16.3                        Notices.  Any notice required or permitted to be
given under this Agreement shall be in writing, shall specifically refer to this
Agreement, and shall be addressed to the appropriate Party at the address
specified below or such other address as may be specified by such Party in
writing in accordance with this Section 16.3, and shall be deemed to have been
given for all purposes (i) when delivered, if hand-delivered or sent by
facsimile on a business day, (ii) on the next business day if sent by a
reputable international overnight courier service, or (iii) five (5) business
days after mailing, if mailed by first-class certified or registered airmail,
postage prepaid, return receipt requested.  Unless otherwise specified in
writing, the mailing addresses of the Parties shall be as described below:

 

If to Onconova:                                                          
Onconova Therapeutics, Inc.

375 Pheasant Run

Newton, Pennsylvania 18940

Attn: Chief Executive Officer

Fax:   267-759-3681

 

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with a copy to:                                                               
Onconova Therapeutics, Inc.

375 Pheasant Run

Newton, Pennsylvania 18940

Attn: Legal Department

email: legal@onconova.us

 

If to
HanX:                                                                                  
HanX Biopharmaceuticals Inc.

Biolake B6, No.666 Gaoxing Road,

Eastlake Hi-Tech Zone, Wuhan 430074

Attn: Chief Executive Officer

Fax:   +86 27 87531746

 

16.4                        No Strict Construction; Interpretation.  This
Agreement has been prepared jointly and shall not be strictly construed against
either Party.  Ambiguities, if any, in this Agreement shall not be construed
against any Party, irrespective of which Party may be deemed to have authored
the ambiguous provision.  The headings of each Article and Section in this
Agreement have been inserted for convenience of reference only and are not
intended to limit or expand on the meaning of the language contained in the
particular Article or Section.

 

16.5                        Assignment.  Neither Party may assign or transfer
this Agreement or any rights or obligations hereunder without the prior written
consent of the other, except that each Party may make such an assignment without
the other Party’s consent to (i) Affiliates and (ii) a successor to all or
substantially all of the business of such Party to which this Agreement relates,
whether in a merger, sale of stock, sale of assets or other transaction;
provided that (a) the assignee agrees in writing to assume all of the assigning
Party’s obligations under this Agreement and (b) in the case of assignment to
Affiliates, the assigning Party will remain responsible for the performance by
its Affiliate assignee of this Agreement or any obligations hereunder so
assigned.  Notwithstanding anything to the contrary, either Party may assign
this Agreement to a pharmaceutical or biopharmaceutical company with financial
creditworthiness equivalent or superior to that of the assigning Party with the
prior written consent of the other Party, not to be unreasonably withheld.  Any
permitted assignment shall be binding on the successors of the assigning Party. 
Any assignment or attempted assignment by either Party in violation of the terms
of this Section 16.5 shall be null, void and of no legal effect. Notwithstanding
anything to the contrary in this Section 16.5, Onconova shall be entitled to
enter into financing and sales transactions with Third Parties regarding the
assignment, pledging, and collateralization (including grants of liens,
encumbrances and other charges) of the right to receive all amounts under this
Agreement in connection with Onconova’s interest in any Product.

 

16.6                        Further Actions.  Each Party agrees to execute,
acknowledge and deliver such further instruments, and to perform all such other
acts, as may be necessary or appropriate in order to carry out the purposes and
intent of this Agreement.

 

16.7                        Severability.  If any one or more of the provisions
of this Agreement are held to be invalid or unenforceable by any court of
competent jurisdiction from which no appeal can be or is taken, such provision
or provisions shall be considered severed from this Agreement and shall not
serve to invalidate any remaining provisions hereof.  The Parties shall make a
good-faith effort to replace any invalid or unenforceable provision with a valid
and enforceable one

 

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such that the objectives contemplated by the Parties when entering this
Agreement may be realized.

 

16.8                        No Waiver.  Any delay in enforcing a Party’s rights
under this Agreement or any waiver as to a particular default or other matter
shall not constitute a waiver of such Party’s rights to the future enforcement
of its rights under this Agreement, except with respect to an express written
and signed waiver relating to a particular matter for a particular period of
time.

 

16.9                        Independent Contractors.  Each Party shall act
solely as an independent contractor, and nothing in this Agreement shall be
construed to give either Party the power or authority to act for, bind, or
commit the other Party in any way.  Nothing herein shall be construed to create
the relationship of partners, principal and agent, or joint-venture partners
between the Parties.

 

16.10                 English Language; Governing Law.  This Agreement was
prepared in the English language, which language shall govern the interpretation
of, and any dispute regarding, the terms of this Agreement.  This Agreement and
all disputes arising out of or related to this Agreement or any breach hereof
shall be governed by and construed under the laws of New York, without giving
effect to any choice of law principles that would require the application of the
laws of a different country.

 

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

 

[Signature Page Follows]

 

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IN WITNESS WHEREOF, the Parties have executed this Agreement by their duly
authorized representatives as of the Effective Date.

 

HANX BIOPHARMACEUTICALS, INC.

 

ONCONOVA THERAPEUTICS, INC.

 

 

 

By:

/s/ Faming Zhang

 

By:

/s/ Steven M. Fruchtman, M.D.

Name:

Faming Zhang

 

Name:

Steven M. Fruchtman, M.D.

Title:

CEO

 

Title:

President & CEO

 

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