EXHIBIT 10.36


 


LICENSE
AGREEMENT


 


(AG-7352)


 


This LICENSE AGREEMENT made and entered into
as of the       day of              ,
2003 by and between Dainippon Pharmaceutical Co., Ltd., existing under the laws
of Japan and having its principal place of business at 6-8, Doshomachi 2-chome,
Chuo-ku, Osaka, 541-0045 Japan (hereinafter referred to as “Dainippon”) and
Sunesis Pharmaceuticals Inc., incorporated under the laws of the State of
Delaware, the United States of America and having its principal place of business
at 341 Oyster Point Boulevard, South San Francisco, California 94080, the
United States of America (hereinafter referred to as “Sunesis”)


 


WITNESSETH:


 


WHEREAS, Dainippon has long been engaged in
research on and development of pharmaceuticals and has made extensive efforts
in search, screening and invention of new medical substances in important
therapeutic fields, and as a result, Dainippon has found a certain valuable
compound; and


 


WHEREAS, Sunesis is interested in evaluating
the compound, and Dainippon and Sunesis concluded the confidentiality agreement
dated January 17, 2003 (hereinafter referred to as “Confidentiality
Agreement”) and the material transfer agreement dated February 26, 2003
(hereinafter referred to as “Material Transfer Agreement”) for Sunesis’
evaluation of the compound; and


 


WHEREAS, as a result of Sunesis’ evaluation, Sunesis proposed, and
Dainippon accepted, that Sunesis would carry out further evaluation of the
Compound, and Dainippon and Sunesis concluded the option agreement dated May
23, 2003 (hereinafter referred to as “Option Agreement”), under which Dainippon
granted Sunesis an exclusive option to conclude a license agreement covering
the Compounds and the Products (as defined below); and


 


WHEREAS, Sunesis exercised the option on (Date), 2003 under the Option
Agreement, and Dainippon and Sunesis intend to enter into the license
agreement.


 


NOW, THEREFORE, in consideration of the above premises and the
agreement herein contained, the parties agree as follows:


 


Article 1.        Definition


 


1.01         The
terms defined herein shall have the meaning set forth herein when they are used
in this Agreement.  As used in this
Agreement, the singular includes the plural, and the plural includes the
singular, wherever so required by fact or context.  Titles used in the Articles hereof shall be
only for the sake of convenience and shall not be regarded as a part of this
Agreement.


 


1.02         The
term “Primary Compound” shall mean a compound identified as
(+)-1,4-dihydro-7-[(3S,4S)-3-methoxy-4-(methylamino)-1-pyrrolidinyl]-4-oxo-1-(2-thiazolyl)-1,8-naphthyridine-3-carboxylic
acid which is specified by Dainippon as AG-7352.


 










Confidential treatment has been requested for portions of this
exhibit.  The copy filed herewith omits
the information subject to the confidentiality request.  Omissions are designated as [*].  A complete version of this exhibit has been
filed separately with the Securities and Exchange Commission.


 





















 


1.03         The
term “Compounds” shall mean the Primary Compound, and other compounds covered
by protection of the patents or claim of the patent applications included in
the Patent Rights as set forth in Schedule 1.17 attached hereto.


 


1.04         The
term “Products” shall mean products containing the Compound(s) as active
ingredient(s) ready for sale to customers, in finished, final packaged form as
pharmaceuticals for use in humans.


 


1.05         The
term “Information and Know-How” shall mean data, know-how, and information
relating to the Compounds and/or the Products in existence as of the date of
execution of this Agreement and owned or controlled by Dainippon, which is
listed on Schedule B of the Option Agreement or otherwise provided to
Sunesis pursuant to the Option Agreement or this Agreement, including Section 4.03,
and which includes the Manufacturing Know-How.


 


1.06         The
term “Territory” shall mean the entire world.


 


1.07         The
term “Affiliate” shall mean any company or organization directly or indirectly
owning, owned by or under common ownership with the subject entity in
question.  For purposes of this
definition only, a company shall “own” another entity only if it owns or
controls fifty percent (50%) or more of the voting ownership interest of the
subject entity.


 


1.08         The
term “Effective Date” shall mean the date first set forth above.


 


1.09         The
term “Test” shall mean any and all preclinical, non-clinical and clinical tests
or trials for the Compounds and/or the Products performed by Sunesis, its
Affiliate(s) and/or the Sublicensee(s) that are necessary or useful for
securing and/or maintaining the Regulatory Approval in the Territory.


 


1.10         The
term “Phase II Clinical Study” shall mean a study of a Product in human
patients for which the primary endpoint is a preliminary determination of
efficacy in patients being studied (for example, as described in 21 C.F.R.
§312.21(b), or similar clinical study in a country other than the United States
of America).  A first-in-human study or
any study for which a primary endpoint is directed to safety shall not be considered
a Phase II Clinical Study.


 


1.11         The
term “Phase III Clinical Study” shall mean large scale pivotal human clinical
trials of a Product, which is designed and sufficiently powered to establish
safety and efficacy of one or more particular doses in patients being studied
and to provide the statistical basis for the Marketing Approval for the
respective drug (for example, as described in 21 C.F.R. § 312.21(c), or
similar clinical study in a country other than the United States of America).


 


1.12         The
term “FDA” shall mean the United States Food and Drug Administration and any
successor agency thereof.


 


1.13         The
term “Regulatory Body” shall mean, as the fact or context of this Agreement
requires, the FDA and any or all equivalent governmental 


2





















 


authorities outside the United States of
America, authorized to permit any Test in the Territory and whose approval is
required for manufacture, marketing, promotion, sale or distribution of the
Products in the Territory.


 


1.14         The
term “IND” shall mean an Investigational New Drug Application filed with the
FDA or an equivalent filing with a Regulatory Body in the Territory.


 


1.15         The
term “NDA” shall mean a New Drug Application filed with the FDA or an
equivalent filing with a Regulatory Body in the Territory.


 


1.16         The
term “Regulatory Approval” shall mean all approvals (including pricing and
reimbursement approvals, if applicable), licenses, registrations or
authorizations by the Regulatory Body in any jurisdiction in the world
necessary to launch, sell, market, promote and distribute the Products in such
regulatory jurisdiction.


 


1.17         The
term “Patent Rights” shall mean any and all patents and patent applications in
the Territory which are owned or controlled by Dainippon or under which
Dainippon is or may become empowered to grant licenses, the subject matter of
which is necessary or useful in use and/or manufacture of the Compounds or
development, the Regulatory Approval, manufacture, use, marketing, promotion,
sale or distribution of the Products, and shall be the patents and patent
applications set forth in Schedule 1.17 attached hereto, as well as any
patents and patent applications covering the Improvements (as defined in Section 18.01),
together with any and all extensions, reissues, continuations in part,
reexaminations, substitutions and renewals of or to any of the aforesaid
patents or applications, and any patents issuing therefrom.  Dainippon shall use reasonable efforts to
update Schedule 1.17 from time to time as reasonably necessary, at least
once a year during the term of this Agreement, including in the event of
registration or expiration of any of the Patent Rights, provided, however, in
the event that Dainippon develops any Improvements with respect to the
Compounds which Dainippon considers would be the Dominating Patent Rights (as
defined hereinafter) and from which a patent is issuable, Dainippon shall grant
Sunesis a semi-exclusive license with respect thereto for the purpose of
development and manufacture of the Compounds and manufacture, sale, marketing,
promotion and distribution of the Products; and provided further that to the
extent a patent claims a particular drug formulation technology that is
patentable without regard to the particular drug substance being delivered, and
whose application is not limited to the Compounds, such patent shall not be
included in the license to be granted pursuant to the foregoing proviso.


 


1.18         The
term “Manufacturing Know-How” shall mean any and all proprietary information
relating to manufacture of the Compounds which is reasonably owned by or
available to Dainippon and is not subject to any Dainippon’s non-disclosure
obligations.


 


1.19         The
term “Marketing Year” shall mean any full calendar year after first launch of
the Product by Sunesis in the Territory commencing on January


 


3





















 


1 and ending on December 31, provided
that the first (1st) Marketing Year shall commence on the day of first launch
of the Product by Sunesis, its Affiliate(s) or the Sublicensee(s) in the
Territory and end on December 31 of the following calendar year.


 


1.20         The
term “Net Selling Price” shall mean the average selling price for the Products
during a given period which shall be calculated by dividing the Net Sales
during such period by the total number of the Products sold by Sunesis, its
Affiliates and the Sublicensees.


 


1.21         The
term “Net Sales” shall mean the actual gross sales of the Products sold by
Sunesis, its Affiliates and the Sublicensees to a non-Affiliate third party (excluding
any sales among Sunesis, its Affiliates and the Sublicensees) less the
following amounts related to the Products: (a) reasonable and customary
credits, allowances, discounts, rebates, and chargebacks for spoiled, damaged,
outdated, rejected, and returned Products, (b) reasonable and customary freight
and insurance costs incurred with respect to the shipment of the Products to
customers, in each case if charged separately on the invoice and paid by the
customer, (c) duties, surcharges and other governmental charges, (d) sales,
use, value-added, excise and other similar taxes (excluding income taxes), (e)
rebates, normal and customary cash, quantity, trade and similar discounts and
allowances and other price reductions reasonably and actually granted or paid
by Sunesis, its Affiliates and the Sublicensees in so far as they relate
directly to sales of the Products, and (f) actual uncollectible amounts.  Net Sales shall not include transfers of the
Products for use in clinical trials, development or other transactions that are
not a full commercial sale, and no royalty shall be due hereunder with respect
to such transfers.


 


1.22         The
term “Dainippon” shall include, where applicable, Dainippon’s Affiliate(s)
designated by Dainippon as provided for in Section 2.03.


 


1.23         The
term “Sunesis” shall include, where applicable, its Affiliate(s).


 


1.24         The
term “Major Market Countries” shall mean the United States of America, Canada,
Japan, Germany, Spain, France, Italy, and the United Kingdom.


 


1.25         The
term “Sublicensee” shall mean a non-Affiliate third party to whom Sunesis has
granted the right to develop, manufacture, promote, market, use, sell,
offer for sale, import and/or distribute the Products within the scope of the
license hereunder, including the marketing partner set forth in Section 10.01,
provided that such third party has primary responsibility for the development,
manufacture, promotion, marketing, use, sale, offer for sale, importation
and/or distribution of such Products in its distribution territory as granted
by Sunesis subject to Section 2.05 and has the right to record sales of
such Products for its account, provided that Sunesis shall remain responsible
for performance of such third party hereunder. 
For clarity, the Sublicensee(s) shall exclude any wholesaler or reseller
of the Products which is not primarily responsible for marketing or promotion
of the Products.  This definition shall
not be construed to limit


 


4





















 


the scope of sublicenses which may be granted
hereunder.


 


Article 2.        Grant


 


2.01         Dainippon
shall grant and hereby grants Sunesis a license, with the right to grant and
authorize sublicenses, under the Patent Rights and the Information and Know-How
to develop, manufacture, promote, market, use, sell, offer for sale, import
and/or distribute the Compounds and/or the Products in the Territory.  The license and right granted herein shall be
exclusive (even as to Dainippon), except that the license granted herein with
respect to a patent application for an intermediate of the Compound (Japanese
Patent Application No. 10-173986) as specified in Schedule 1.17 attached
hereto and the patents issuing thereon shall be non-exclusive.  Dainippon agrees not to (a) manufacture,
promote, market, use, sell, offer for sale, import or distribute the Compounds
and/or the Products for any commercial purpose, or (b) license any of the
Patent Rights or the Information and Know-How to any third party to develop,
manufacture, promote, market, use, sell, offer for sale, import and/or
distribute the Compounds and/or the Products for any use including veterinary
uses.  Notwithstanding the foregoing,
Dainippon shall have the right to license the patent application for the intermediate
of the Compound claimed in Japanese Patent Application No. 10-173986, as well
as the patents issuing thereon, to third parties; provided that neither
Dainippon nor such third parties shall have the right to use the intermediate
in the manufacture of the Compounds and/or the Products.  In addition, in the event that Dainippon
develops any Improvements which Dainippon considers would be the Dominating
Patent Rights and from which a patent is issuable, Dainippon shall grant
Sunesis a semi-exclusive license with respect to the Improvements of the
Compounds developed by Dainippon as described in Section 1.17.


 


2.02         Except
as provided in Section 23.01, the license granted Sunesis by Dainippon in Section 2.01
shall be non-assignable.  For purposes of
this Section 2.02, assignment shall mean a transfer of all rights and
obligations of Sunesis under this Agreement, such that Sunesis retains no
rights and obligations with respect to the Compounds and the Products.


 


2.03         Sunesis
may designate its Affiliate(s) to carry out its rights and obligations hereunder
in whole or in part, subject to Section 2.06 below, in which event Sunesis
shall promptly, but in no event later than sixty (60) days following such
designation, inform Dainippon in writing of the identity of such Affiliate(s)
and other reasonable information regarding such Affiliate(s), including the
nature of the rights and obligations given to the Affiliate(s).


 


2.04         Sunesis
may, at its cost, risk and responsibility, retain any contract research
organization(s) or other third party (hereinafter collectively referred to as “CRO”)
to have any Test or other services carried out by the CRO on Sunesis’ behalf,
subject to Section 2.06 below.


 


2.05         Sunesis
may appoint the Sublicensee(s) under the license granted


 


5





















 


Sunesis by Dainippon herein, subject to
Sections 2.02 and 2.06, provided that Sunesis shall inform Dainippon of the
identity of such Sublicensee(s) and other reasonable information regarding such
Sublicensee(s) promptly, but in no event later than sixty (60) days following
such appointment.  In addition, Sunesis
agrees that prior to the appointment of a Sublicensee within a Major Market
Country, to the extent it has the right to do so, Sunesis shall provide Dainippon
with other agreed information regarding such Sublicensee.  In the event Sunesis grants a sublicense
hereunder, Sunesis shall use diligent efforts to obtain from such Sublicensee
the same, substantially similar or more stringent material obligations,
including diligence obligations, to the extent applicable, as Sunesis has
hereunder.


 


2.06         In
the event that Sunesis delegates some or all of its rights and/or obligations
under this Agreement to its Affiliate(s), the Sublicensee(s) and/or the CRO,
Sunesis shall remain responsible for the performance of such rights and/or
obligations.


 


2.07         Dainippon
may designate its Affiliate(s) to carry out its rights and obligations
hereunder in whole or in part, in which event Dainippon shall promptly, but in
no event later than sixty (60) days following such designation, inform Sunesis
in writing of the identity of such Affiliate(s) and other reasonable
information regarding such Affiliate(s), including the nature of the rights and
obligations given to the Affiliate(s), and shall remain responsible for the
performance of such rights and obligations.


 


Article 3.        Payment


 


3.01         Sunesis
shall make the following payments to Dainippon in consideration of the license
granted to it under this Agreement (it being understood that each of the
Initial Payment and the Milestone Payments set forth below shall only be paid
one time):


 


(a)           Initial
Payment of United States Dollars [*] (US$[*]), payable within thirty (30) days
after the Effective Date, provided that the option fee of United States Dollars
[*] (US$[*]) paid by Sunesis to Dainippon under the Option Agreement shall be
credited against the Initial Payment;


 


(b)           Milestone
Payment of United States Dollars [*] (US$[*]), payable within sixty (60) days
after the date of the dosing of the first patient in the first Phase II
Clinical Study for the first Product in the Territory;


 


(c)           Milestone
Payment of United States Dollars [*] (US$[*]), payable within sixty (60) days
after the date of the dosing of the first patient in the first Phase III
Clinical Study for the first Product in the Territory, provided that in case no
Phase III Clinical Study is required for such Product in the Territory, the
amount of United


 










[*] Certain information on this page has been redacted and filed
separately with the Securities and Exchange Commission.  Confidential treatment has been requested
with respect to the omitted portions.


 


6





















 


States Dollars [*] (US$[*]) for this
Milestone Payment shall be paid simultaneously with the first payment of any of
the Milestone Payments in subsection (d), (e) or (f) below;


 


(d)           Milestone
Payment of United States Dollars [*] (US$[*]), payable within thirty (30) days
after the date of filing of the first NDA for the first Product in the United
States of America for treatment or prevention of cancer.  For purposes of this subsection (d), “the
date of filing” means the date of acceptance of such first NDA for substantive
review by the FDA as specified in 21 CFR 314.101(a);


 


(e)           Milestone
Payment of United States Dollars [*] (US$[*]), payable within thirty (30) days
after the date of filing of the first NDA for the first Product in any of the
Major Market Countries in Europe for treatment or prevention of cancer.  For purposes of this subsection (e), “the
date of filing” means the date of acceptance of such first NDA for substantive
review by the Regulatory Body in any of the Major Market Countries in Europe,
or such later date as may be provided by applicable law or regulation;


 


(f)            Milestone
Payment of United States Dollars [*] (US$[*]), payable within thirty (30) days
after the date of filing of the first NDA for the first Product in Japan for
treatment or prevention of cancer.  For
purposes of this subsection (f), “the date of filing” means the date of
acceptance of such first NDA for substantive review by the Regulatory Body in
Japan or such later date as may provided by applicable law or regulation;


 


(g)           Milestone
Payment of United States Dollars [*] (US$[*]), payable within thirty (30) days
after the date of the first receipt of the Regulatory Approval for the first
Product in the United States of America for treatment or prevention of cancer;


 


(h)           Milestone
Payment of United States Dollars [*] (US$[*]), payable within thirty (30) days
after the date of the first receipt of the Regulatory Approval for the first
Product in any of the Major Market Countries in Europe for treatment or
prevention of cancer;


 


(i)            Milestone
Payment of United States Dollars [*] (US$[*]), payable within thirty (30) days
after the date of the first receipt of the Regulatory Approval for the first
Product in Japan for treatment or prevention of cancer; and


 


(j)            Milestone
Payment of United States Dollars [*] (US $[*]), payable within thirty (30) days
after the date of the first receipt of the Regulatory Approval for a Product
for any indication other than treatment or prevention of cancer in any of the
Major Market Countries.  It is understood
and agreed that the Products for such


 










[*] Certain information on this page has been redacted and filed
separately with the Securities and Exchange Commission.  Confidential treatment has been requested
with respect to the omitted portions.


 


7





















 


non-cancer indications, and the development,
clinical studies, regulatory filings and the Regulatory Approvals thereof, if
any, shall be subject to this Milestone Payment (j) only (i.e. such Products
shall not be subject to the Milestone Payments (a) through (i) above) and this
Milestone Payment (j) shall be paid only one time (upon its first achievement).


 


For avoidance of doubt, the parties
acknowledge that in no event shall the total amount payable under this Section 3.01
exceed United States Dollars [*] (US$[*]), less any applicable credits.


 


3.02         Sunesis
shall pay royalties on annual Net Sales of the Products by Sunesis, its
Affiliate(s) and the Sublicensee(s) in the Territory.  Royalties shall be payable within sixty (60)
days after December 31 of each calendar year.


 


For any sales of the Products made by Sunesis
and its Affiliate(s), Sunesis shall pay Dainippon royalties based on the
following table, with each royalty percentage being applicable to the portion
of the annual Net Sales of the Products falling within the relevant band of the
Net Sales for a calendar year.


 


	
  Total annual Net Sales of Products by Sunesis and its Affiliates

  	
   

  	
  Applicable royalty rate

  	
   

  
	
  US$[*] or
  less

  	
   

  	
  [*]

  	
  %

  
	
  Greater than
  US$[*]

  	
   

  	
  [*]

  	
  %

  



 


For example, if in a calendar year, Net Sales
of US$[*] was realized by Sunesis and its Affiliate(s), the royalty payable
would be US$[*] ([*]% of the first US$[*] and [*]% of the next US$[*]).


 


For any sales of the Products made by any
Sublicensee(s), Sunesis shall pay Dainippon royalties equal to [*] percent
([*]%) of total annual Net Sales by the Sublicensee(s).


 


For purposes of the foregoing, it is
understood that annual Net Sales shall be calculated on a calendar year basis.


 


3.03         Sunesis
shall, from time to time and/or at the request of Dainippon, provide Dainippon
with its best estimate of the timing of the events relating to the Milestone
Payments as provided for in Section 3.01, and shall promptly notify
Dainippon of such events upon occurrence thereof.


 


3.04         The
royalties under Section 3.02 shall be payable on a country-by-country
basis with respect to each Product until: (a) expiry of the last to expire of
the patents within the Patent Rights (or, if any, the patents owned by Sunesis)
covering such Product sold in such country and/or the Compound contained in
such Product; or (b) ten (10) years following the date of commercial launch of
the first Product in such


 










[*] Certain information on this page has been redacted and filed
separately with the Securities and Exchange Commission.  Confidential treatment has been requested
with respect to the omitted portions.


 


8





















 


country, whichever is longer; provided that
in any country in which a generic competitor to a Product has been introduced,
if for any royalty period the Net Sales of the Product in such country declines
by [*] percent ([*]%) or more from the last full royalty reporting period prior
to the first commercial sale of the generic competitor in such country, then
the royalty rate applicable for sales of such Product in such country under Section 3.02
above shall be reduced for such period and the remainder of such royalty period
to [*] percent ([*]%) of such royalty rate. 
As used herein, a “generic competitor” shall mean a product sold by a
third party that contains the same active ingredient as the Product hereunder.


 


3.05         In
the event Sunesis, its Affiliate(s) or the Sublicensee(s) are required to pay a
third party amounts with respect to a Product for a right or license under
Dominating Patent Rights (as defined below), Sunesis may deduct [*] percent
([*]%) of such amount owing to such third parties (prior to any reductions)
from the payments owing to Dainippon for such Product.  Notwithstanding the foregoing provisions of
this Section 3.05, in no event shall the amounts due to Dainippon be so
reduced to less than [*] percent ([*]%) of the amount that would otherwise be
due to Dainippon.  In the event Sunesis
proposes to acquire from a third party patent rights that Sunesis believes are
Dominating Patent Rights, Sunesis shall advise Dainippon thereof, and the
parties shall discuss the situation.  As
used herein, “Dominating Patent Rights” shall mean patent rights without which
development and/or manufacture of the particular Compound and/or manufacture,
marketing, sale, promotion and/or commercialization of the particular Product
would not be reasonably practicable, as determined by mutual agreement of the
parties either prior to or following Sunesis’ acquisition of such third party
patent rights.  If the parties are not
able to agree whether a patent is a “Dominating Patent Right”, the
determination shall be made pursuant to Section 25.01.


 


3.06         In
the event that a Product is sold for a single combined price with another
product, component, active ingredient or service for which no royalty would be
due hereunder if sold separately, Net Sales from such combination sales for
purposes of calculating the amounts due under this Article 3 shall be
reasonably allocated between such Product and such other product, component,
ingredient or service, based on the relative values thereof.


 


3.07         The
payments made by Sunesis under Sections 3.01 and 3.02 shall be made in the
United States Dollars by telegraphic transfer to a bank account designated by
Dainippon and shall in any event be non-refundable.  The withholding tax relating to the payments,
if any, shall be borne by Dainippon, and Sunesis shall provide Dainippon with
appropriate evidence of Sunesis’ payments of the withholding tax.


 










[*] Certain information on this page has been redacted and filed
separately with the Securities and Exchange Commission.  Confidential treatment has been requested
with respect to the omitted portions.


 


9





















 


Article 4.        Supply
of Information


 


4.01         Dainippon
represents and warrants that to the best knowledge of Dainippon, Dainippon has
furnished Sunesis prior to the Effective Date with all substantial information
requested by Sunesis (and has not withheld from Sunesis any material
information) in its possession as of the Effective Date necessary or useful to
enable Sunesis to properly evaluate safety and efficacy of the Compounds and/or
the Products, or which would otherwise be material to Sunesis’ decision to
enter into this Agreement and to undertake the obligations set forth herein,
including all information provided to Sunesis under the Option Agreement, the
Confidentiality Agreement or the Material Transfer Agreement.


 


4.02         Dainippon’s
obligations under Article 3 of the Option Agreement to provide Sunesis
with all documents listed in Schedule B thereto shall continue to apply to
the extent that such obligations have not been satisfied by Dainippon prior to
execution of this Agreement.  Upon
execution of this Agreement, and from time to time for the duration of this
Agreement thereafter when it becomes available to Dainippon, Dainippon shall
promptly supply Sunesis with other Information and Know-How in Dainippon’s
possession or available to Dainippon.


 


4.03         In
addition to Section 4.02 above, if Sunesis or Dainippon identifies a
particular item pertaining to the Compounds and/or the manufacture thereof that
Dainippon owns or has the right to provide to Sunesis hereunder but has not
been previously transferred to Sunesis, and without which Sunesis’ performance
or exercise of rights under this Agreement would be materially impeded by not
having such item, Dainippon shall use reasonable efforts to provide the same to
Sunesis as soon as practicable, subject to such non-disclosure obligations to
which the disclosure of such requested item may be subject.


 


4.04         Any
Information and Know-How supplied by Dainippon to Sunesis before the Effective
Date shall be regarded as having been supplied under this Agreement and shall
be governed by the terms and conditions contained herein.


 


Article 5.        Reports
and Consultation


 


5.01         Sunesis
shall report to Dainippon in writing annually, providing a summary of its
activities under this Agreement with respect to the Major Market Countries
during a calendar year (each, an “Annual Report”), within sixty (60) days after
December 31 of the relevant calendar year. 
In addition, Sunesis agrees to provide Dainippon with such other summary
of its activities under this Agreement as reasonably requested by Dainippon and
agreed by Sunesis, which agreement shall not be unreasonably withheld (each, an
“Additional Report”).


 


5.02         Prior
to the commercial launch of the first Product, Sunesis shall include in the
Annual Report and the Additional Report information regarding the progress
during the relevant period of the Tests, and efforts, performed or undertaken
by Sunesis, its Affiliates and, to the extent that Sunesis has the right to do
so and such information is available to Sunesis, the Sublicensees, to obtain
the Regulatory Approval of the Compounds and


 


10





















 


the Products in the Major Market Countries,
and such other countries of the Territory as reasonably requested by Dainippon
and agreed by Sunesis, which agreement shall not be unreasonably withheld,
including the protocols as well as summaries of the results, in written and/or
computerized form, of the major clinical studies within the Tests for the Major
Market Countries hereunder initiated or completed during such period and any
milestones achieved during such period, provided that Sunesis shall diligently
seek to obtain such information relating to the Sublicensees from the
Sublicensees as described in Section 2.05 above.  The parties acknowledge that the aggregate
burden on Sunesis of providing information with respect to the countries other
than the Major Market Countries requested by Dainippon under this Section 5.02
(and other information requested under Section 9.04 below), in relation to
the significance to Dainippon of obtaining such incremental information at the
time of such request, shall be a factor in determining whether it would be
reasonable for Sunesis to withhold its agreement to provide such
information.  In addition, each Annual
Report provided to Dainippon under this Section 5.02 shall identify the
primary CROs involved in the major clinical studies within the Tests conducted
for the Major Market Countries during the period covered by such Annual Report.


 


5.03         After
the commercial launch of the first Product, Sunesis shall include in the Annual
Report information as specified in (a), (b), (c) and (d) below, and to the
extent requested by Dainippon and agreed by Sunesis, which agreement shall not
be unreasonably withheld, in the Additional Report the information as specified
in (a) and (d) below:


 


(a)           the
Net Sales and number of the Products sold in the relevant period by Sunesis,
its Affiliates and the Sublicensees on a country-by-country basis,


 


(b)           a
calculation of the royalties due on a country-by-country basis based on such
Net Sales,


 


(c)           the
total royalties so calculated and due Dainippon on a country-by-country basis,


 


(d)           the
progress of any efforts in the relevant period to conduct further Tests or
develop the Compounds and/or the Products in those countries in the Territory
covered by Section 5.02 above in each case, to the extent the information
is available and Sunesis has the right to provide the same, provided that
Sunesis shall diligently seek to obtain such information.


 


5.04         In
addition, Dainippon may request Sunesis to arrange a meeting between appropriate
representatives of Dainippon and of Sunesis, its Affiliates and/or the
Sublicensees to discuss in good faith the current status, prospect, strategy
and other issues relating to the development and the Regulatory Approval of the
Compounds and the Products as reflected in the Annual Report and/or the
Additional Report and to discuss in good faith the way and strategy for
optimizing the parties’ mutual success with respect to the Compounds and the
Products.


 


11





















 


Sunesis shall make reasonable efforts to
arrange such meeting as requested by Dainippon. 
Such meetings shall take place no more frequently than once per calendar
year and shall be held at Sunesis’ or its Affiliate’s facilities at times
convenient for Sunesis.  Each party shall
be responsible for its own costs in connection with such meetings.


 


Article 6.        Development
and Regulatory Approval


 


6.01         Without
limiting the rights granted in Article 2 above, Sunesis shall have the
right and obligation to take at its sole expense, risk and responsibility, or
have its Affiliates and/or the Sublicensees take at their expense, risk and
responsibility, either by itself or themselves or through its or their
designee, all necessary steps for securing and maintaining the Regulatory
Approval and carrying out the Tests. 
Sunesis shall undertake, or have its Affiliates and/or the Sublicensees
undertake, such activities in accordance with Articles 6 and 14 and any
applicable laws or regulations in the Territory.  Dainippon shall have no obligation to carry
out any Test, and Sunesis agrees that no Test will be carried out by Dainippon.


 


6.02         Promptly
after the Effective Date, Dainippon shall supply Sunesis at no additional cost
to Sunesis with all quantities of the Compounds and intermediates as are
available to Dainippon as of the Effective Date as set forth in Schedule 6.02
attached hereto.  Dainippon shall have no
obligation to synthesize nor manufacture any further Compounds including any
intermediates thereof, and Sunesis agrees that no further Compounds including
any intermediates thereof will be synthesized nor manufactured by Dainippon.


 


6.03         Sunesis
has provided Dainippon with its preliminary development plan for the Compounds
and the Products as set forth in Schedule 6.03 attached hereto.  Sunesis shall provide Dainippon with a draft
of the development plan for the Compounds and the Products within six (6)
months after the Effective Date, and with a draft of the update annually to the
extent the plans have been updated; provided that if the development plan has
not been updated in such annual reporting period, Sunesis shall so state.  Dainippon shall review, and may comment on,
the draft of the development plan and the update thereof, and the parties may
discuss such comments and plans.


 


6.04         Sunesis
shall, promptly after they become available to Sunesis, provide Dainippon with
a copy of the letter of approval and the summary of product
characteristic/package insert.  In
addition, Sunesis shall, upon reasonable notice, provide Dainippon with (i) the
initial IND package for the United States of America in written and/or
computerized form, and (ii) electronic copies of the NDAs filed in the Major
Market Countries, to the extent such copies exist in electronic format, in each
case subject to Section 19.03 below and to the extent Sunesis has the
right to provide the same, and will diligently seek to obtain such right from
any Sublicensee with respect to the NDAs for the United States of America.


 


6.05         In
the event that Sunesis does not intend to continue its efforts to secure the
Regulatory Approval by itself or through its Affiliate(s) or the


 


12





















 


Sublicensee(s) due to any reason in (i) Asia
and the Pacific Rim, (ii) North America, (iii) Europe, (iv) Latin America or
(v) all other countries in the world (each of (i)-(v), as further defined in Schedule 6.05,
being referred to as a “Region”), Sunesis shall immediately notify Dainippon
thereof and the parties shall meet to discuss the situation, and Sunesis shall
return to Dainippon its rights in the Products in such Region.  For clarity, it is understood that so long as
Sunesis intends to continue such efforts, and uses diligent efforts consistent
with its obligations under Section 14.01 to do so, in one or more
countries in a Region, this Section 6.05 shall not apply to that
Region.  In addition, the foregoing shall
not apply in the event Sunesis makes such determination based upon factors
relating to safety or efficacy of the Products as supported by clear evidence,
or based on the potential for commercial harm to the Products in a Region that
may be agreed upon between the parties (for example, the potential for parallel
imports).  For clarity, it is understood
that “diligent efforts” would not require Sunesis to simultaneously pursue each
Region, as long as the activities and Regions it is pursuing are consistent
with pursuing the particular Region within a reasonable time frame (which may,
for example, be to pursue such Region after obtaining Regulatory Approval in
another Region).


 


Article 7.        Publication


 


7.01         In
the event that either party intends to publish a paper in a peer reviewed
journal or make a scientific oral presentation containing non-public
Information and Know-How relating to the Compounds and/or the Products, such
party shall provide the other party with a draft of such publication for prior
review (or, in the case of a public oral presentation, use reasonable efforts,
to the extent practicable under the circumstances, to provide the other party
with a summary of the proposed oral presentation for prior review).  Within fifteen (15) business days after
receipt of a draft publication (or within five (5) days in the case of a public
oral presentation) (the “Review Period”), the receiving party may review the
draft and may give its written comments on the draft to the publishing
party.  The publishing party shall
prepare the final version of the publication or the oral presentation, taking
the comments into consideration if appropriate. 
Thereafter, the publishing party may disclose to third parties the
information disclosed in such publication or oral presentation (i.e., in that
or any subsequent publication or presentation) without the need for further
approval by the other party.  In the
event that no response is given by the receiving party to the publishing party
within the applicable Review Period, the receiving party shall be deemed to
have no comment on the draft. 
Notwithstanding the foregoing, as Sunesis has been granted the exclusive
right to commercialize the Products in the Territory, Sunesis shall have the
right to make the final decision whether to proceed with any publication or
oral presentation.  Sunesis shall have the
right to approve (but shall not unreasonably withhold such consent) to any
publication or oral presentation requested by Dainippon and, if no response is
given by


 


13





















 


Sunesis to Dainippon within the applicable
Review Period, Sunesis shall be deemed to consent to the publication or oral
presentation.  With respect to
publications or oral presentation by third parties, it is understood that the
foregoing rights of review shall apply only to the extent the party hereto has
the right to require such third party to comply.  Additionally, Sunesis shall use reasonable
efforts to inform Dainippon of major publications and major public
announcements of Test results, to the extent Sunesis has the right to do so and
to the extent practicable, in advance of such publications and announcements.


 


Article 8.        Manufacture


 


8.01         Without
limiting the rights granted in Article 2 above, Sunesis shall have the
right and obligation to manufacture at its sole expense, risk and
responsibility, or have its Affiliate and/or the Sublicensees manufacture at
their expense, risk and responsibility, the Compounds and the Products by
itself or themselves or through its or their designee for the purpose of this
Agreement.  Dainippon shall have no
obligation to supply nor manufacture the Compounds and the Products, and
Sunesis agrees that no Compounds nor Products will be supplied nor manufactured
by Dainippon.


 


8.02         In
the event that Sunesis requests Dainippon to provide Sunesis with direct
technical assistance (including ongoing assistance) with respect to manufacture
or regulatory aspects of the Compounds, Dainippon shall make its reasonable
efforts to provide such assistance to Sunesis, for example, by sending a person
or persons qualified for this purpose to Sunesis’ facility or receiving Sunesis’
employee(s) in Dainippon’s facilities for such purpose.  Sunesis shall bear traveling, lodging and
other out-of-pocket expenses incurred for such assistance as mutually
agreed.  Dainippon shall, at Sunesis’
written request, cooperate with Sunesis in responding to requests from the
Regulatory Bodies relating to the Compounds and/or the Products, including
without limitation making its facilities available for audit and inspection by
representatives of such Regulatory Bodies. 
Notwithstanding the foregoing, nothing in this Section 8.02 shall
relieve Dainippon of its obligation to supply the Compounds and intermediates
listed in Schedule 6.02 attached hereto under the terms and conditions set
forth in Section 6.02 and Dainippon shall make no warranty, express or
implied, relating to such direct technical assistance.


 


Article 9.        Marketing
and Sale


 


9.01         Without
limiting the rights granted in Article 2 above, Sunesis shall have the
right and obligation to perform at its sole expense, risk and responsibility,
or have its Affiliates and/or the Sublicensees perform at their expense, risk
and responsibility, by itself or themselves or through its or their designee,
any promotion, marketing, sale and distribution of the Products in the
Territory.  Sunesis shall undertake, or
have its Affiliates and/or the Sublicensees undertake, such activities in
accordance with Articles 9 and 14 below, and in accordance with all


 


14





















 


applicable laws and regulations.


 


9.02         Sunesis
may use the trademark(s) selected by Sunesis for its marketing, promotion, sale
and distribution of the Products in the Territory, and shall bear all expenses,
risk and responsibility relating such trademark(s) used for the Products.


 


9.03         Sunesis
has provided Dainippon with the preliminary non-binding sales forecast of the
Products for the initial three (3) Marketing Years as set forth in Schedule 9.03
attached hereto.  Sunesis shall update
such preliminary sales forecast with respect to sales in the Major Market
Countries upon completion of the Phase II Clinical Studies.  Following receipt by Sunesis of the
Regulatory Approval for a Product in a Major Market Country, Sunesis shall
provide to Dainippon a three (3) year sales forecast for such Product in such
country and shall update such forecast annually thereafter, which shall be used
for purposes of Section 10.01 below. 
It is understood that such forecast for any period may include a range
of potential sales levels, based on alternative assumptions.  In addition, Sunesis shall diligently seek to
provide annual sales forecasts following receipt by the Sublicensees of the
Regulatory Approval for the Major Market Countries relating to the Sublicensees
(it being understood, however, that Section 10.01 shall not apply to the
Sublicensees).


 


9.04         Sunesis
shall notify Dainippon within sixty (60) days of its receipt (or receipt by its
Affiliate(s) or the Sublicensee(s)) of the Regulatory Approval in any country
of the Territory and shall, within a reasonable time after obtaining the
Regulatory Approval in a Major Market Country and such other countries of the
Territory as reasonably requested by Dainippon and agreed by Sunesis, which
agreement shall not be unreasonably withheld, furnish Dainippon with an
estimated date of launch of the Products and an outline of how Sunesis, its
Affiliate(s) or, to the extent available, the Sublicensee(s) intends to market
the Products in such country, provided that Sunesis shall diligently seek to
obtain such information relating to the Sublicensees from the Sublicensees as
described in Section 2.05 above. 
The parties acknowledge that the aggregate burden on Sunesis of
providing information with respect to the countries other than the Major Market
Countries requested by Dainippon under Section 9.04 above (and other
information requested under this Section 5.02), in relation to the
significance to Dainippon of obtaining such incremental information at the time
of such request, shall be a factor in determining whether it would be
reasonable for Sunesis to withhold its agreement to provide such information.


 


9.05         In
the event that Sunesis intends not to launch the Products in a given Region, or
having launched a Product in a given Region, intends to discontinue all sales
of the Products (including sales through its Affiliate(s) or the
Sublicensee(s)) within such Region, Sunesis shall immediately notify Dainippon
thereof and the parties shall meet to discuss the situation and Sunesis shall
return to Dainippon its rights in the Products in such Region.  For clarity, it is understood that so long as


 


15





















 


Sunesis intends to so launch or continue such
sales of the Products, and uses diligent efforts consistent with its
obligations under Section 14.01 to do so, in one or more countries in a
Region, this Section 9.05 shall not apply. 
In addition, the foregoing shall not apply in the event Sunesis makes
such determination based upon factors relating to safety or efficacy of the
Products as supported by clear evidence, or based on the potential for
commercial harm to the Products in a Region that may be agreed upon between the
parties (for example, the potential for parallel imports).  For clarity, it is understood that “diligent
efforts” would not require Sunesis to simultaneously pursue each Region, as
long as the activities and Regions it is pursuing are consistent with pursuing
the particular Region within a reasonable time frame (which may, for example,
be to pursue such Region after obtaining Regulatory Approval in another
Region).


 


Article 10.      Minimum
Sales Amount


 


10.01       If
despite its commercially reasonable efforts, Sunesis fails in any [*] Marketing Years to attain [*] percent
([*]%) of the [*] sales amount of the [*] as set forth in the [*] provided
under Section 9.03 for the Major Market Countries in which Sunesis or its
Affiliate(s) market the Products, the parties shall meet to discuss the
situation and potential solutions, such as (where appropriate and commercially
reasonable) for Sunesis to recruit the efforts of a marketing partner.  In the event of recruiting a marketing
partner under this Section 10.01, Sunesis shall provide Dainippon with
reasonable details of the proposed marketing partner including but not limited
to its sales capacity and products, and Dainippon may approve or disapprove the
proposed marketing partner, but shall not unreasonably withhold the approval.


 


Article 11.      Records;
Audits


 


11.01       Sunesis
shall keep accurate and adequate records with respect to the Net Sales of the
Products by Sunesis, its Affiliate(s) and the Sublicensee(s), including the Net
Selling Price thereof, during the term of this Agreement and upon Dainippon’
written request, but not more frequently than once per calendar year, shall
permit a certified independent public accountant selected by Dainippon and
reasonably acceptable to Sunesis to examine the books and records of Sunesis,
its Affiliate(s) and the Sublicensee(s) during regular business hours of
Sunesis, its Affiliate(s) and, to the extent provided below, the
Sublicensee(s), to verify the accuracy thereof but only with respect to any
calendar year ending not more than two (2) years prior to the date of the
examination.  To the extent that Sunesis
does not have the right to grant Dainippon the right to audit the Sublicensees’
books and records hereunder, Sunesis shall, upon Dainippon’s request, exercise
its own audit right with respect to the Sublicensees by having such audit
carried


 










[*] Certain information on this page has been redacted and filed
separately with the Securities and Exchange Commission.  Confidential treatment has been requested
with respect to the omitted portions


 


16





















 


out by a
certified independent public account selected by Sunesis and reasonably
acceptable to Dainippon and provide the results of such audit for inspection by
Dainippon pursuant to this Section 11.01.  Sunesis
shall provide any information reasonably required to explain its records to the
extent necessary.  If the certified
independent public accountant’s report establishes that the figures previously
provided to Dainippon by Sunesis were incorrect and as the result, amount of
the royalties already paid by Sunesis is different from the amount that should
have been paid, the amount of difference shall be compensated by Sunesis or
Dainippon, as the case may be, within sixty (60) days after receipt of such
report by Dainippon.  The fee and expense
of the certified independent public accountant shall be borne by Dainippon,
except that such fee and expense shall be borne by Sunesis if the certified
independent public accountant’s report indicates Sunesis has underpaid amounts
owed hereunder by [*] percent ([*]%) during
such audited period.


 


Article 12.      Protection
of Patent Rights


 


12.01       Dainippon
shall at its own expense and responsibility maintain the Patent Rights in the
Territory, and agrees to take any necessary steps to extend the patent term of
the Patent Rights as reasonably requested by Sunesis.  Sunesis shall cooperate, and have the
Sublicensee(s) cooperate, with Dainippon in extension of patent term of the
Patent Rights and at the request and expense of Dainippon, shall take any
necessary steps to extend the patent term of the Patent Rights on behalf of
Dainippon.  Additionally, Dainippon
agrees to keep Sunesis informed regarding the status and maintenance of the
Patent Rights and the prosecution of any patent applications therein by
updating Schedule 1.17, and without limiting the foregoing shall not allow
any patent or patent application within the Patent Rights to lapse without
Sunesis’ mutual consent.


 


12.02       Each
party shall inform the other party promptly when it becomes aware that a third
party is infringing or attempting to infringe the Patent Rights.


 


12.03       Dainippon
is not obliged to indemnify Sunesis, its Affiliate(s) and the Sublicensee(s)
for any damage or loss caused from infringement by any third party of the
Patent Rights, but Dainippon shall grant Sunesis the first right, but not the
obligation, to institute, by itself or through Sunesis’ designee, at its
expense, such action, suit or proceeding as Sunesis may consider necessary to
stop the infringement (hereinafter referred to as “Enforcement Action”).  If within ninety (90) days after Dainippon
has requested Sunesis to initiate a suit with respect to a particular alleged
infringement, Sunesis has failed by itself or through its designee to initiate
an Enforcement Action to stop the infringement or use reasonable efforts to
settle such infringement, then Dainippon shall be entitled, but have no
obligation, to initiate an Enforcement Action at its expense against the
infringing party.  The party initiating
an Enforcement Action (hereinafter


 










[*] Certain information on this page has been redacted and filed
separately with the Securities and Exchange Commission.  Confidential treatment has been requested
with respect to the omitted portions.


 


17





















 


referred to as the “Enforcing Party”) shall
control such action, provided that the other party (hereinafter referred to as
the “Non-Enforcing Party”) shall have the right to participate therein with
advisory counsel of its own choice at its own expense.  All recoveries received from an action to
enforce the Patent Rights shall be first applied to reimburse the Enforcing
Party’s, and then the Non-Enforcing Party’s, unreimbursed expenses, including
without limitation, reasonable attorney’s fees and court costs.  Any remainder shall, to the extent the same
pertains to an infringement of the Patent Rights, be divided [*] percent ([*]%)
to the Enforcing Party and [*] percent ([*]%) to the Non-Enforcing Party.


 


12.04       The
Non-Enforcing Party shall cooperate with the Enforcing Party with respect to
any Enforcement Action, in all aspects and shall make available any relevant
personnel, records, documents, information, evidence, samples, papers,
materials and the like for the action in its possession, and shall upon the
request of the Enforcing Party, join as a party-plaintiff in any such
Enforcement Action to the extent such joinder is required by law to bring such
action, provided that for purposes of this Section 12.04, the
Non-Enforcing Party shall not be required to dispatch more personnel and expend
more resources hereunder than may be legally required or otherwise agreed upon
by the parties.


 


Article 13.      Representations
and Warranties; Disclaimer


 


13.01       Dainippon
represents and warrants that to the best of Dainippon’s knowledge as of the
Effective Date:


 


(a)           Dainippon
is the owner of the right, title, and interest in and to the Compounds and the
Patent Rights and agrees not to transfer ownership of the Patent Rights to any
third party during the period of this Agreement without the prior written
consent of Sunesis.  Dainippon has the
sole right and authority to enter into this Agreement and grant the rights and
licenses hereunder.


 


(b)           Dainippon
has not previously granted, and during the period of this Agreement will not
grant, any rights in the Compounds and the Patent Rights that are inconsistent
with the rights and licenses granted to Sunesis herein. Dainippon shall not
suffer or permit any liens or restrictions to be imposed on the Patent Rights
without the prior written consent of Sunesis unless the lien holder agrees to
take such intellectual property subject to Sunesis’ rights therein.


 


(c)           Schedule 1.17
accurately and completely identifies all of the patents and patent applications
within the Patent Rights as of the Effective Date.  To the extent that Dainippon has omitted from
the Patent Rights any patent or patent application, the claims of which would
dominate the practice of the Patent Rights or be


 










[*]
Certain information on this page has been redacted and filed separately with
the Securities and Exchange Commission. 
Confidential treatment has been requested with respect to the omitted
portions.


 


18





















 


infringed by the manufacture, sale, use,
importation or other exploitation of the Compounds, Dainippon shall grant
Sunesis a semi-exclusive license, including the right to sublicense, under such
patent to perform the rights and obligations of this Agreement.


 


(d)           There
are no patent rights of any third party which may prevent or hinder any
performance of obligations or exercise of rights under this Agreement, and none
of the Patent Rights are invalid, unenforceable or have been misused; provided
that no such warranty is made under this Section 13.01(d) with respect to
patent rights disclosed to Sunesis in writing prior to the Effective Date.


 


(e)           With
respect to the composition of matter, method of use and manufacture relating to
the Compounds, Dainippon owns the right, title and interest in and to the
Compounds and the Products.


 


(f)            As
of the Effective Date, there are no existing actions, suits or proceedings, and
Dainippon has not received any written claim or demand from a third party, that
challenges Dainippon’s rights with respect to the Patent Rights, the
Information and Know-How, the Compounds and/or the Products or Dainippon’s
rights to enter into this Agreement or that asserts that development,
manufacture or sale of the Compounds and/or the Products would infringe the
intellectual property rights of a third party.


 


13.02       Except
as set forth in Section 13.01, Dainippon does not warrant that the Patent
Rights granted Sunesis by Dainippon hereunder are valid and do not infringe
upon any patent rights or other intellectual property rights held or to be held
by third parties in the Territory or that Sunesis’ performances under this
Agreement are free from infringement upon any rights or licenses held or to be
held by third parties in the Territory. 
Except pursuant to the representations and warranties set forth in Section 13.01,
Dainippon is not obliged to indemnify Sunesis, its Affiliates and the
Sublicensees for any cost, loss or damage caused by invalidity of the Patent
Rights or infringement by the Compounds and/or the Products upon any rights or
licenses held by third parties.


 


13.03       Each
party hereto shall notify the other party promptly in the event of the receipt
of notice of any action, suit or claim alleging infringement by the Compounds
and/or the Products upon any patent rights or other intellectual property
rights held by a third party.  Sunesis
shall have the right to control the defense of such action, suit or claim
alleging infringement.  Any liability and
expenses incurred by Sunesis in such defense shall be treated as amounts paid
for third party patent rights under Section 3.05 above to the extent such
third party patent rights are Dominating Patent Rights.  In the event that the Patent Rights are
alleged to be invalid by such third party, Sunesis shall have the right, but
not the obligation, to defend against such claims of invalidity, provided that


 


19





















 


Dainippon shall have the right to participate
therein with advisory counsel of its own selection at its own expense.  In the event Sunesis elects not to defend
against such claims of invalidity, Dainippon shall take at its own expense,
risk and responsibility any step to cope with the claim of invalidity, provided
that Dainippon reasonably judges that there is commercial interest for
Dainippon to cope with the claim of invalidity.


 


13.04       NEITHER
PARTY SHALL BE LIABLE TO THE OTHER PARTY FOR ANY SPECIAL, CONSEQUENTIAL,
EXEMPLARY OR INCIDENTAL DAMAGES (INCLUDING LOST OR ANTICIPATED REVENUES OR
PROFITS RELATING TO THE SAME), ARISING FROM ANY CLAIM RELATING TO THIS
AGREEMENT, WHETHER SUCH CLAIM IS BASED ON CONTRACT, TORT (INCLUDING NEGLIGENCE)
OR OTHERWISE, EVEN IF ADVISED OF THE POSSIBILITY OR LIKELIHOOD OF SAME.


 


Article 14.      Diligence


 


14.01       Sunesis
shall either directly or through its Affiliates and/or the Sublicensees use
commercially reasonable diligent efforts to develop, commercialize, promote,
market, sell and distribute the Products in the Territory.  In addition, Sunesis shall use such efforts
to appoint the Sublicensees where and when Sunesis reasonably considers
appropriate.


 


Article 15.      Indication
of Collaboration


 


15.01       To
the extent required by applicable laws and regulations in a particular country
within the Territory or reasonably requested by Dainippon, Sunesis shall refer
to Dainippon as “Under license from Dainippon Pharmaceutical Co., Ltd.” or any
other wording as agreed upon between the parties in all package, package insert
and promotional literature for the Products being marketed by Sunesis and its
Affiliates for use in such country.  In
addition, to the extent required by applicable laws and regulations in a
particular country within the Territory, or as reasonably requested by
Dainippon where Sunesis has the right to do so, Sunesis shall require the
Sublicensee(s) to mark the package and the package insert for the Products with
the words “Under license from Dainippon Pharmaceutical Co., Ltd.” or other
wording as agreed upon between the parties.


 


Article 16.      Independent
Contractor


 


16.01       Each
of the parties hereto shall act as an independent contractor hereunder and
neither of the parties shall bind, or attempt to bind the other party to any
other contract or any performance of any obligation not included herein except
as to which the other party specifically agrees.  Nothing contained herein or done hereunder
shall be construed as constituting either party the agent of the other party in
any sense of the term whatsoever.


 


20





















 


Article 17.      Indemnification


 


17.01       Sunesis
shall indemnify Dainippon and Dainippon’s Affiliates against and hold Dainippon
and Dainippon’s Affiliates harmless from any and all liability, loss, judgment,
damage or expense (including reasonable attorney’s fee) (hereinafter
collectively referred to as “Loss”) by reason of litigation brought or
otherwise for claims made by a third party against Dainippon or Dainippon’s
Affiliates arising out of or by reason of or in connection with Sunesis’, its
Affiliates’ and/or the Sublicensees’ performance of this Agreement including
but not limited to use and manufacture of the Compounds and test, development,
manufacture, packaging, promotion, marketing, sale and distribution of the
Products in each case by Sunesis, its Affiliates and/or the Sublicensees,
except to the extent that the Loss is attributable to any negligent or intentional
act or omission of Dainippon or Dainippon’s Affiliates, or otherwise falling
within the claims described in Section 17.02 below.  Dainippon shall promptly notify Sunesis of
any such claim or litigation, shall reasonably cooperate with and provide full
information to Sunesis with respect thereto and shall permit Sunesis to handle
and control such claim or litigation at Sunesis’ cost and expense, to the
extent Dainippon desires indemnification therefor, and Dainippon shall have the
right to participate in any defense or settlement thereof with its own counsel
at its own expense.


 


17.02       Dainippon
shall indemnify Sunesis, its Affiliates and the Sublicensees against and hold
Sunesis, its Affiliates and the Sublicensees harmless from any and all
liability, loss, judgment, damage or expense (including reasonable attorney’s
fee) by reason of litigation brought or otherwise for claims made by a third
party against Sunesis, its Affiliates and/or the Sublicensees arising out of or
by reason of any negligent or intentional act or omission of Dainippon or any
breach by Dainippon of its warranties under Section 13.01.  Sunesis shall promptly notify Dainippon of
any such claim or litigation, shall reasonably cooperate with and provide full
information to Dainippon with respect thereto and shall permit Dainippon to
handle and control such claim or litigation at Dainippon’s cost and expense to
the extent Sunesis desires indemnification therefor, and Sunesis shall have the
right to participate in any defense or settlement thereof with its own counsel
at its own expense.


 


Article 18.      Improvement


 


18.01       In
the event that Dainippon or Sunesis makes any improvement, invention or
discovery relating to the Compounds and/or the Products including formulation
of the Products and derivative of the Compounds (hereinafter referred to as “Improvement”),
the inventing party shall have the right, title and interest in the Improvement
and any patent application or patent covering the Improvement, subject to the
licenses granted herein (i.e., subject to Sunesis’ license under Section 2.01
in the case of an Improvement by Dainippon and subject to Dainippon’s license
under Section 21.01 in the case of an Improvement by Sunesis).


 


21





















 


Notwithstanding the foregoing, Improvements
consisting of drug formulation technology that is patentable without regard to
the particular drug substance being delivered, and whose application is not
limited to the Compounds, shall not be subject to the licenses granted in
Sections 2.01 and 21.01.  As used herein,
“Improvements” shall include such inventions made by Dainippon’s other
licensees or Sunesis’ Sublicensees, to the extent Dainippon or Sunesis,
respectively, has the right to include the same hereunder, provided that
Dainippon and Sunesis shall diligently seek to obtain such right.


 


Article 19.      Confidentiality


 


19.01       Sunesis
and Dainippon shall each maintain confidential and not use or disclose
information received from the other party under this Agreement in writing and
marked “Confidential” or otherwise to indicate its proprietary nature or that
is disclosed orally and confirmed in writing as confidential within a
reasonable time following the initial disclosure thereof (hereinafter
collectively referred to as “Confidential Information”), except for
information:


 


(a)           which
must be disclosed by any of the parties to the Regulatory Body to the extent
the same is reasonably necessary to enable the attainment of the purpose of
this Agreement; or


 


(b)           which
is subsequently disclosed in literature available to the public but only to the
extent of the disclosure thereof; or


 


(c)           the
disclosure of which is expressly approved by the providing party; or


 


(d)           which
is made public by a third party without the receiving party’s fault; or


 


(e)           which
is known to the receiving party at the time of disclosure; or


 


(f)            which
the receiving party can demonstrate was developed independently of the
Confidential Information disclosed hereunder; or


 


(g)           which
is received by the recipient without any obligation of confidentiality from a
third party as a result of lawful and proper disclosure by such third party.


 


19.02       Notwithstanding
the foregoing, Sunesis shall have the right to use and disclose the
Confidential Information within the Information and Know-How, subject to Section 7.01
above, provided that Sunesis shall not disclose the Confidential Information to
third parties other than for purposes of this Agreement (including in
connection with fund raising activities, recruitment of patients and clinicians
for clinical trials, and other activities that may directly or indirectly
assist Sunesis’ development or commercialization of the Products).  In addition, Sunesis may disclose the
Confidential Information within the Information and Know-How to the
Sublicensees and permit the Sublicensees to use the Confidential Information
for the sole purpose of this Agreement, provided that the


 


22





















 


Sublicensees shall have the same,
substantially similar or more stringent confidentiality obligations as provided
for in this Article 19.  With
respect to Dainippon’s use and disclosure of the Confidential Information
within the Information and Know-How, it is understood that the exclusivity
provided to Sunesis under Section 2.01 above means that during the term of
the Agreement, Dainippon shall not disclose to any third party the Information
and Know-How, provided however that the foregoing restriction shall not apply
to the Manufacturing Know-How.


 


19.03       Notwithstanding
any other provision of this Agreement, the protocols, summary results, NDAs and
other information regarding the Tests supplied to Dainippon pursuant to this
Agreement, including Sections 5.02, 5.03, and 6.04, are for Dainippon’s
informational purposes only and Dainippon shall not use or disclose such
documents and the information contained therein for any purpose, provided
however that the foregoing shall not apply to the designation of a third party
by Dainippon pursuant to Section 21.02 following termination of this
Agreement.


 


19.04       The
obligation of confidentiality and non-use under this Article 19 shall
survive expiration or early termination of this Agreement.


 


19.05       Notwithstanding
the provisions of Section 19.01, but subject to Sections 19.03 above, the
receiving party may also use or disclose the Confidential Information of the
disclosing party to the extent it exercises its rights hereunder (including
commercialization and/or sublicensing of the Compounds, the Products, the
Patent Rights and the Information and Know-How) or fulfills its obligations
and/or duties hereunder and in filing for, prosecuting or maintaining any
proprietary rights, prosecuting or defending litigation, complying with
applicable governmental regulations and/or submitting information to tax or
other governmental authorities; provided that if the receiving party is
required by law to make any public disclosures of the Confidential Information
of the disclosing party, to the extent it may legally do so, it shall give reasonable
advance notice to the disclosing party of such disclosure.


 


19.06       Except
as expressly provided herein, each party agrees not to disclose any terms of
this Agreement to any third party without the prior written consent of the
other party, except that a party may disclose the terms or conditions of this
Agreement (a) as required by securities or other applicable laws; (b) to
prospective and other investors; (c) to such party’s accountants, attorneys and
other professional advisors; or (d) to other third parties on a need to know
basis under an obligation of confidentiality.


 


19.07       Upon
execution of this Agreement, the parties shall agree upon the timing and
content of a press release relating to execution of this Agreement. Thereafter,
each party may disclose to third parties the information disclosed in such
press release without the need for further approval by the other party.


 


23





















 


Article 20.      Term
of Agreement


 


20.01       This
Agreement takes effect on the Effective Date, and unless sooner terminated as
provided in Article 22, shall expire upon the expiration of all
obligations of Sunesis to make payments under this Agreement.  Sunesis’ license with respect to the
Compounds, the Products and the Information and Know-How shall survive the
expiration (but not an earlier termination, except as provided in Section 22.05
below) of this Agreement and shall be fully paid-up, royalty-free and
perpetual.


 


Article 21.      Return
of Rights upon Termination 


 


21.01       Upon
termination of this Agreement as provided for in Section 22.01 or 22.03,
or for a material breach of this Agreement by Sunesis under Section 22.02
or bankruptcy of Sunesis under Section 22.04, all Information and Know-How
on the Compounds and/or the Products shall be immediately returned to
Dainippon, and thereafter Sunesis shall not be granted the right to develop,
register, manufacture, use, promote, market, sell or distribute the Compounds
and the Products by itself or through its Affiliates and/or (except as provided
below) the Sublicensees, and Sunesis shall promptly assign to Dainippon or
Dainippon’s designee free of charge, subject to 21.02 below, all approvals,
permits, and registrations (including the Regulatory Approval) obtained by
Sunesis, its Affiliate(s) and the Sublicensee(s) from a Regulatory Body with
respect to the Compounds and/or the Products unless local laws prohibit such
assignment, in each case to the extent that Sunesis has the right to make such
return and/or assignment.  In addition,
upon such termination Sunesis agrees to grant to Dainippon a non-exclusive
license under any patent rights in the Improvements owned by Sunesis that are
necessary to make, use or sell any Products for which Sunesis has conducted
clinical trials during the term of this Agreement.  Notwithstanding the foregoing, Sunesis shall
have no obligation to grant such license to Dainippon, or to assign to
Dainippon any Regulatory Approvals, permits and registrations, and the rights
and licenses granted hereunder shall not terminate, (i) to the extent relating
to the Compounds and/or the Products that are being developed by a Sublicensee
at the time of the termination of this Agreement if such Sublicensee notifies
Sunesis and Dainippon of its intention to diligently continue such development
and/or commercialization efforts and the Sublicensee diligently continues the
development and/or commercialization, and in addition, in such case, Sunesis
shall have no obligation to return the Information and Know-How provided to such
Sublicensee, or (ii) in the event such termination is based upon factors
relating to safety or efficacy of the Products as supported by clear evidence,
or based on the potential for commercial harm to the Products in a Region that
may be agreed upon between the parties (for example, the potential for parallel
imports).  Dainippon shall reimburse
Sunesis for all fees actually paid by Sunesis in transferring such approvals,
permits, and registrations under this Section 21.01 (except in the event
of breach by Sunesis).


 


21.02       In
the event of a return of the Products to Dainippon by Sunesis under Section 21.01,
except in the event of termination due to Sunesis’ material


 


24





















 


breach or failure under Section 22.02, Dainippon and Sunesis shall
discuss in good faith whether or not Dainippon should pay to Sunesis a reverse
royalty on the net sales of the Products by Dainippon, its Affiliates and sublicensees,
the amount of which shall be reasonably agreed to reflect Sunesis’ contribution
in the development of such Products as well as the value of any Improvements
that may be licensed to Dainippon under Section 21.01 above.


 


Article 22.      Termination


 


During the term of this Agreement, the Agreement may only be terminated
in accordance with this Article 22.


 


22.01       Dainippon
may terminate this Agreement pursuant to Section 6.05 or 9.05 in the event
Sunesis has decided to discontinue seeking the Regulatory Approval and/or sale
of the Products in the whole Territory and so notifies Dainippon in writing
pursuant to Section 6.05 or 9.05.


 


22.02       In
the event that Dainippon or Sunesis materially fails to fulfill (including a
failure by Sunesis to ensure that a Sublicensee fulfills) or materially
breaches the terms and conditions hereof, the other party shall give the
breaching party a written notice to remedy such material failure or breach
within ninety (90) days.  In cases where
there is no dispute as to the failure or breach and such material failure or
breach is not remedied by the breaching party within ninety (90) days of
receipt of such notice, the complaining party may terminate this Agreement at
its option.  However, if the party
alleged to be in breach of this Agreement disputes such failure or breach
within such ninety (90) day period, the complaining party shall not have the
right to terminate this Agreement unless it has been determined by an
arbitrator pursuant to Section 25.01 that this Agreement was materially
breached, and the breaching party fails to comply with its obligations
hereunder within ninety (90) days after such determination.


 


22.03       Sunesis
may terminate this Agreement for its convenience by giving Dainippon at least
one hundred twenty (120) days prior written notice; provided, however, that if
Sunesis is terminating for reasons related to safety or efficacy of the Product
supported by clear evidence, Sunesis may terminate this Agreement upon thirty
(30) days prior written notice.  However,
at least sixty (60) days prior to delivering such notice of termination,
Sunesis shall apprise Dainippon of Sunesis’ desire to terminate this Agreement
and, upon Dainippon’s request, the parties shall meet to review the situation
and discuss in good faith as mutually agreed the best manner in which to
proceed under the circumstances.


 


22.04       In
the event that Dainippon or Sunesis is declared bankrupt, ceases all business
or is subject to any proceedings for bankruptcy or dissolution, which
proceedings if involuntary, are not dismissed within ninety (90) days after
filing, or makes an assignment of substantially all of its assets for the
benefit of creditors, the other party may terminate this Agreement immediately
with a written notice.


 


25





















 


22.05       In
the event of any merger involving Sunesis, or a sale of all or substantially
all of the assets of Sunesis, Dainippon has an option to terminate this
Agreement by giving at least ninety (90) days prior written notice if, after
such merger or sale, the surviving entity does not agree to use the same
diligence in developing and/or marketing the Products as is required of Sunesis
under Article 14 above.


 


22.06       Survival


 


(a)           Articles
and Sections 1, 3.07, 11, 13.01, 13.02, 13.04, 16, 17, 18, 19, 21, 22.06, 23,
24, 25, 26, 27, 28 and 29 shall survive expiration or any termination of this
Agreement.  Except as otherwise provided
in this Section 22.06, all rights and obligations of the parties under
this Agreement shall terminate upon the expiration or termination of this
Agreement.


 


(b)           Expiration
or termination of this Agreement shall have no effect on amounts due either
party at the time of such expiration or termination, or any other obligations
or liabilities that have accrued prior to such expiration or termination.


 


(c)           Subject
to Section 21.01, upon termination of this Agreement by Dainippon for any
reason, any sublicense granted by Sunesis hereunder shall survive, provided
that Dainippon shall make, and Sunesis shall have the Sublicensee(s) make,
reasonable efforts to conclude new agreement(s) between Dainippon and the
Sublicensee(s) for the Products on terms substantially identical to this
Agreement.


 


Article 23.      Assignment
of this Agreement


 


23.01       This
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective corporate successors and shall not be assigned by either
party without prior written consent of the other party.  Notwithstanding the foregoing, either party
may assign this Agreement and its rights and delegate its obligations hereunder
(a) to any of its Affiliates as described in Section 2.03 above or (b) to
a third party in connection with the transfer or sale of all or substantially
all of its business relating to the subject matter of this Agreement, or in the
event of its merger, consolidation, change in control or similar transaction;
provided Dainippon shall have the right to terminate this Agreement in the
event of (b) above, as provided in Section 22.05 above.  Any permitted assignee shall assume all
obligations of its assignor under this Agreement.  Any purported assignment or transfer in
violation of this Section 23.01 shall be void.


 


Article 24.      Force
Majeure


 


24.01       Neither
party shall be liable for failure to perform part or the whole of this
Agreement when such failure is due to force majeure events including but not
limited to fire, flood, earthquake, strike, labor troubles, delays of carriers,
common carriers or other industrial disturbances, inevitable accidents, war
(declared or undeclared), embargoes, blockades, legal


 


26





















 


restrictions, riots, insurrections, governmental action, orders,
legislation, regulations or restrictions, and/or any similar or other causes
beyond control of the parties hereto, provided that any obligations of payment
under this Agreement that have already accrued shall not be excused by such
force majeure.


 


Article 25.      Arbitration


 


25.01       In
the event of any controversy or claim arising out of or in relation to any
provision of this Agreement or the breach thereof, the parties shall try to
settle the problem between themselves. 
Should they fail to agree, the matter in dispute shall be finally
settled by arbitration in the English language (including all testimony
therein) in accordance with the Rules of Arbitration of International Chamber
of Commerce.  The arbitration shall be
held in Geneva, Switzerland.  The award
rendered by the arbitration shall in any case be final and binding upon the
parties hereto.  Judgment upon the award may be entered in any court having jurisdiction
thereof.


 


Article 26.      Governing
Law


 


26.01       This
Agreement shall be interpreted in accordance with and governed by the laws of
Switzerland, without reference to conflict of laws principles.


 


Article 27.      Waiver


 


27.01       The
waiver of any relief for any breach or non-fulfillment of any term or condition
of this Agreement does not constitute a waiver of any relief for any other
breach or non-fulfillment of that or any other term or condition.


 


Article 28.      Notice


 


28.01       Any
notice required or permitted to be given hereunder by either party shall be
given in writing, by registered or certified airmail or recognized courier
service, or fax followed by registered or certified airmail or recognized
courier service, addressed to the party for whom it is intended at the
following address or such other address as such party may subsequently notify
the other party in writing:


 


To Sunesis:           Sunesis
Pharmaceuticals Inc.


341 Oyster Point Boulevard,


South San Francisco,


California 94080, the United States of America


Attention:   Daryl Winter, General Counsel


Facsimile number: +1-(650)
266-3506


 


To
Dainippon:      Dainippon Pharmaceutical Co., Ltd.


6-8, Doshomachi 2-chome, Chuo-ku,


Osaka, 541-0045 Japan


Attention:   Takashi Wada, Senior
Director, Legal Affairs


Facsimile number: +81-6-6202-6028


 


Article 29.      Entire
Agreement and Miscellaneous


 


29.01       This
Agreement supersedes any promise, agreement or consent


 


27





















 


concerning the Compounds and/or the Products in relation to the subject
matter of this Agreement made between the parties hereto by officers or
employees of the parties before the execution of this Agreement, except the
Option Agreement to the extent provided for in Section 4.02.


 


29.02       This
Agreement may not be modified orally and no modification nor any claimed waiver
of any of the provisions hereof shall be binding unless in writing and signed
by both parties.


 


29.03       If
any provision of this Agreement shall be found by a court to be void, invalid
or unenforceable, the same shall be reformed to comply with applicable law or
stricken if not so conformable, so as not to affect the validity or
enforceability of the remainder of this Agreement.


 


29.04       This
Agreement may be executed in counterparts, each of which shall be deemed an
original, but both of which together shall constitute one and the same
instrument.


 


IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized representatives as of the date first set
forth above and each one of the two originals to be kept by the respective
parties.


 


	
   

  	
   

  	
   

  	
  Dainippon Pharmaceutical Co., Ltd.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Date

  	
   

  	
   

  	
  By

  
	
   

  	
   

  	
  Kenjiro Miyatake, President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Sunesis Pharmaceuticals Inc.

  
	
   

  	
   

  
	
   

  	
   

  
	
  Date

  	
   

  	
   

  	
  By

  
	
   

  	
   

  
	
   

  	
   

  	
  James W. Young, Ph. D.

  
	
   

  	
   

  	
  Chief Executive Officer

  
							



 


28





















 


Schedule 1.17


 


Patent Rights (1)


 


	
  Country

  	
   

  	
  Application No.

  Entering Date

  	
   

  	
  Patent No.

  Patent Date

  	
   

  	
  Expiry

  	
   

  	
  Date Annuity

  Paid(1)

  	
   

  	
  Next

  Annuity

  Due Date

  
	
  Argentina

  	
   

  	
  950100147

  	
   

  	
  3914

  	
   

  	
  Nov. 13, 2015 

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (Nov.13, 1995)

  	
   

  	
  July 6, 2001

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Australia 

  	
   

  	
  25767/95

  	
   

  	
  679,859

  	
   

  	
  Jun. 6, 2015 

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Dec. 6, 1996

  	
   

  	
  Oct. 30, 1997

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Brazil

  	
   

  	
  PI 9508037-6

  	
   

  	
  PI9508037-6

  	
   

  	
  Jun. 6, 2015 

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Dec. 16, 1996

  	
   

  	
  Apr. 15, 2003

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Canada 

  	
   

  	
  2,192,824

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Dec. 12, 1996

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  China

  	
   

  	
  95 194461.4

  	
   

  	
  55440

  	
   

  	
  Jun. 6, 2015 

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Jan. 31, 1997

  	
   

  	
  Mar. 17, 2000

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Czech 

  	
   

  	
  PV 3643/96

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Dec. 11, 1996

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  EP

  	
   

  	
  95 920265.6

  	
   

  	
  787726

  	
   

  	
  Jun. 6, 2015 

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Dec.12, 1996

  	
   

  	
  Nov. 28, 2001

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Austria

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Apr.30, 2003

  	
   

  	
  Jun.30, 2004

  
	
  Belgium

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Jun.18, 2003

  	
   

  	
  Jun.30, 2004

  
	
  Denmark

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Jun.4, 2003

  	
   

  	
  Jun.30, 2004

  
	
  France

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  May 28, 2003

  	
   

  	
  Jun.30, 2004

  
	
  Germany

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  June 18, 2003

  	
   

  	
  Jun.30, 2004

  
	
  Greece

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  May 5, 2003

  	
   

  	
  Jun.30, 2004

  
	
  Ireland

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  May 20, 2003

  	
   

  	
  Jun.30, 2004

  
	
  Italy

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Jun.12, 2003

  	
   

  	
  Jun.30, 2004

  
	
  Luxembourg

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  May 27, 2003

  	
   

  	
  Jun.30, 2004

  
	
  Monaco

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Apr.29, 2003

  	
   

  	
  Jun.30, 2004

  
	
  Netherlands

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Apr.29, 2003

  	
   

  	
  Jun.30, 2004

  
	
  Portugal

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  May 7, 2003

  	
   

  	
  Jun.6, 2004

  
	
  Spain

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Jun.17, 2003

  	
   

  	
  Jun.30, 2004

  
	
  Sweden

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Jun.4, 2003

  	
   

  	
  Jun.30, 2004

  
	
  Switzerland & Liechtenstein

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Jun.10, 2003

  	
   

  	
  Jun.30, 2004

  
	
  UK

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Jun.4, 2003

  	
   

  	
  Jun.6, 2004

  
	
  Latvia

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Jun.20, 2003

  	
   

  	
  Jun.6, 2004

  
	
  Lithuania

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  May 6, 2003

  	
   

  	
  Jun.6, 2004

  
	
  Slovenia

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Apr.29, 2003

  	
   

  	
  Jun.6, 2004

  
	
  Finland 

  	
   

  	
  96 5020

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Dec. 13, 1996

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Jun.10,
  2003

  	
   

  	
  Jun.30,
  2004

  



 


29





















 


Schedule 1.17


 


Patent Rights (2)


 


	
  Country

  	
   

  	
  Application No.

  Entering Date

  	
   

  	
  Patent No.

  Patent Date

  	
   

  	
  Expiry

  	
   

  	
  Date

  Annuity

  Paid(1)

  	
   

  	
  Next

  Annuity

  Due Date

  
	
  Hong Kong 

  	
   

  	
  97 101948.5

  	
   

  	
  1000495B

  	
   

  	
  Jun. 6, 2015 

  	
   

  	
   

  	
   

  	
  June 6,
  2006 

  
	
   

  	
  (Oct. 17, 1997)

  	
   

  	
  Jul. 19, 2002

  	
   

  	
   

  	
   

  	
   

  
	
  Hungary 

  	
   

  	
  P 96 03455

  	
   

  	
  220072

  	
   

  	
  Jun. 6, 2015 

  	
   

  	
  May 9, 2003 

  	
   

  	
  June 6, 2006 

  
	
   

  	
  Dec. 13, 1996

  	
   

  	
  Oct. 29, 2001

  	
   

  	
   

  	
   

  
	
  Israel 

  	
   

  	
  115726

  	
   

  	
  115726

  	
   

  	
  Oct. 23, 2015 

  	
   

  	
  Oct.22, 2001 

  	
   

  	
  Oct.25, 2005 

  
	
   

  	
  (Oct. 23, 1995)

  	
   

  	
  Mar. 1, 2000

  	
   

  	
   

  	
   

  
	
  Korea 

  	
   

  	
  707029/1996

  	
   

  	
  350921

  	
   

  	
  Jun. 6, 2015 

  	
   

  	
  Aug.20, 2002 

  	
   

  	
  Aug.20, 2005 

  
	
   

  	
  Dec. 9, 1996

  	
   

  	
  Aug. 20, 2002

  	
   

  	
   

  	
   

  
	
  Mexico 

  	
   

  	
  96 6331

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Dec. 11, 1996

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  New Zealand 

  	
   

  	
  287139

  	
   

  	
  287139

  	
   

  	
  Jun. 6, 2015 

  	
   

  	
  Apr.18, 2002 

  	
   

  	
  Jun.6, 2006 

  
	
   

  	
  Dec. 5, 1996

  	
   

  	
  Nov. 19, 1997

  	
   

  	
   

  	
   

  
	
  Norway 

  	
   

  	
  96.5305

  	
   

  	
  307255

  	
   

  	
  Jun. 6, 2015 

  	
   

  	
  Apr.29, 2003 

  	
   

  	
  Jun.30, 2006 

  
	
   

  	
  Dec. 11, 1996

  	
   

  	
  Mar. 6, 2000,

  	
   

  	
   

  	
   

  
	
  Pakistan 

  	
   

  	
  564/95

  	
   

  	
  134,868

  	
   

  	
  Oct. 23, 2011 

  	
   

  	
  Sep.1, 2003 

  	
   

  	
  Oct.23, 2004 

  
	
   

  	
  (Oct. 23, 1995)

  	
   

  	
  Oct. 23, 1997

  	
   

  	
   

  	
   

  
	
  Philippines 

  	
   

  	
  51621

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (Nov. 2, 1995)

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Poland 

  	
   

  	
  P 317726

  	
   

  	
   

  	
   

  	
  Jun.6, 2015 

  	
   

  	
  May 5, 2003 

  	
   

  	
  June.6, 2005 

  
	
   

  	
  Dec. 13, 1996

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Romania 

  	
   

  	
  96-02349

  	
   

  	
   

  	
   

  	
  Jun.6, 2015 

  	
   

  	
  Jul.30, 2003 

  	
   

  	
  June.6, 2006 

  
	
   

  	
  Dec. 12, 1996

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Russia 

  	
   

  	
  97 100718

  	
   

  	
  2151770

  	
   

  	
  Jun. 6, 2015 

  	
   

  	
  May 15, 2003 

  	
   

  	
  Jun.6, 2006 

  
	
   

  	
  Jan. 13, 1997

  	
   

  	
  Jun.27, 2000

  	
   

  	
   

  	
   

  
	
  Singapore 

  	
   

  	
  96 12283-3

  	
   

  	
  37810

  	
   

  	
  Jun. 6, 2015 

  	
   

  	
  May 26, 2003 

  	
   

  	
  Jun.6, 2006 

  
	
   

  	
  Dec. 10, 1996?

  	
   

  	
  Dec. 19, 1997

  	
   

  	
   

  	
   

  
	
  Slovakia 

  	
   

  	
  PV 1574/96

  	
   

  	
  281341

  	
   

  	
  Jun. 6, 2015 

  	
   

  	
  May 15, 2003 

  	
   

  	
  Jun.6, 2006 

  
	
   

  	
  Dec. 6, 1996

  	
   

  	
  Nov. 8, 2000

  	
   

  	
   

  	
   

  
	
  South Africa 

  	
   

  	
  95/9030

  	
   

  	
  95/9030

  	
   

  	
  Oct. 25, 2015 

  	
   

  	
  Sep.2, 2003 

  	
   

  	
  Oct.25, 2004 

  
	
   

  	
  (Oct. 25, 1995)

  	
   

  	
  Aug. 28, 1996

  	
   

  	
   

  	
   

  
	
  Taiwan 

  	
   

  	
  84 106000

  	
   

  	
  90869

  	
   

  	
  Jun. 12, 2015 

  	
   

  	
  Aug.28, 2003 

  	
   

  	
  Nov.10, 2004 

  
	
   

  	
  (Jun. 13, 1995)

  	
   

  	
  Mar. 18, 1998

  	
   

  	
   

  	
   

  



 


30





















 


Schedule 1.17


 


Patent Rights (3)


 


	
  Country

  	
   

  	
  Application No.

  Entering Date

  	
   

  	
  Patent No.

  Patent Date

  	
   

  	
  Expiry

  	
   

  	
  Date Annuity

  Paid(1)

  	
   

  	
  Next

  Annuity

  Due Date

  
	
  USA 

  	
   

  	
  08/765,232

  	
   

  	
  5,817,669

  	
   

  	
  Oct. 6, 2015 

  	
   

  	
  Mar.13, 2002 

  	
   

  	
  Apr.6 2006 

  
	
   

  	
  Dec. 13, 1996

  	
   

  	
  Oct. 6, 1998

  	
   

  	
   

  	
   

  
	
  Japan

  	
   

  	
  8-501923 (2)

  	
   

  	
  3391796

  	
   

  	
  Jun. 6, 2015 

  	
   

  	
  Jan.10, 2003 

  	
   

  	
  Jan.24, 2006 

  
	
   

  	
  Dec. 6, 1996

  	
   

  	
  Jan. 24, 2003

  	
   

  	
   

  	
   

  
	
   

  	
  8-351948 (3)

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (Dec. 10, 1996)

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  10-173986 (4)

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (Jun. 5, 1998)

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  



 










PCT: WO
95/34559 (Filing Date: June 6, 1995)


(   ):
 Filing date


Bold & Underlined:
Granted


(1)   Place
date annuity was paid here.


(2)   Basic
Patent Application


(3)   Patent
Application for a medical use


(4)   Patent
Application for an intermediate


 


31





















 


Schedule 6.02


 


Compounds available for supply


 


	
  Code number

  	
   

  	
  Chemical Structure

  	
   

  	
  Available Quantity

  
	
  AG-7352

  	
   

  	
  

  	
   

  	
  [*]

  
	
  [*]

  	
   

  	
  [*]

  	
   

  	
  [*]

  
	
  [*]

  	
   

  	
  [*]

  	
   

  	
  [*]

  



 










[*]  Certain information on this
page has been redacted and filed separately with the Securities and Exchange
Commission.  Confidential treatment has
been requested with respect to the omitted portions.


 


32





















 


Schedule 6.03


 


Preliminary Development Plan (1)


 


Sunesis Pharmaceuticals, Inc. is planning to develop SPC-595 (AG-7352)
for the treatment of human cancer. 
SPC-595 is a novel cytotoxic drug of the naphthyridine chemical class,
structurally related to the quinolone antibiotics.  It possesses anti-tumor activity in a large
number of syngeneic and xenograft models. 
The proposed mechanism of action has not been fully elucidated, although
there is experimental evidence suggesting that the drug acts by arresting the
cell cycle at the G2/M interface.


 


Phase I


Sunesis intends to conduct phase I clinical trials on two schedules in
subjects with advanced solid tumors.  The
phase II regimen (dose and schedule) will be selected based on the phase I
results.


 


The first phase I study is likely to be designed as an open-label [*]
study in which SPC-595 will be administered intravenously once every 21 days, for
two cycles.  Drug doses will be
administered to [*] of [*], and [*], using an [*] schema.


 


The second phase I study is likely to be designed as an open-label [*]
study, in which SPC-595 will be administered [*] weekly times [*] weeks, for
[*].  In this study, a cycle is defined
as a 4-week period, with study drug administered on Days 0, 7, and 14 of each
cycle, followed by at least 14 days of observation.  Initial dosing in this study will begin after
preliminary safety and tolerability of SPC-595 has been evaluated in at least
[*] in the first phase I study.


 


Phase II


The goal of the phase II program is to provide evidence of clinical
activity and safety in a variety of tumor types.  At this time, Sunesis is planning to evaluate
SPC-595 in different indications possibly including: [*].  The choice of tumor types in the phase II
program will likely be based on a number of factors, including the compound’s
[*] observed in [*], likely [*] to and [*] of [*], and the [*].  This phase II program will likely be modified
based on the findings in the phase I studies.


 


If Sunesis chooses [*], the plan is to treat patients with [*] for [*]
of SPC-595 therapy, [*] to treatment with a [*] regimen.  We would anticipate enrolling up to [*] and
assess [*].


 










[*]  Certain information on this
page has been redacted and filed separately with the Securities and Exchange
Commission.  Confidential treatment has
been requested with respect to the omitted portions.


 


33





















 


If Sunesis chooses [*], the plan would be to conduct a [*], with
enrollment of up to [*] patients who have [*] and [*] for their disease.  Approximately [*] would be enrolled in the
[*], and would be administered [*] of SPC-595 therapy.  If there were any [*] observed, then an
additional [*] would be [*].


 


Another choice for a phase Ib/II study could be first-line [*] of [*]
with SPC-595 in [*] with [*].  In the
phase Ib portion of the study patients would be administered [*] doses of [*]
and [*] of SPC-595 to determine an optimal regimen for the phase II
portion.  Patients would be followed to
assess the [*].


 


Another potential indication for study would be [*].  In this phase Ib/II study, patients who [*]
or have [*] would be enrolled and administered [*] of SPC-595 with the goal of
[*].  The study would be expected to
enroll up to [*], and if there was evidence of [*] in at least [*], the study
could be expanded to approximately [*].


 


Phase III


The lead
indication for a phase III trial will be contingent on the outcome of the phase
II trial.  The trial design, size and
duration of any phase III trial will depend on the specific indications and
upon extensive discussions with treating physicians and members of the
appropriate regulatory agencies.


 










[*]  Certain information on this
page has been redacted and filed separately with the Securities and Exchange
Commission.  Confidential treatment has
been requested with respect to the omitted portions.


 


34





















 


Schedule 6.05


 


Region


 


(i) Asia and Pacific
Rim


 


Japan, Korea, North Korea, China (including Hong Kong and Macao),
Taiwan, Thailand, Malaysia, Singapore, Philippines, Indonesia, East Timor,
Brunei, Viet Nam, Laos, Cambodia, Myanmar, India, Pakistan, Bangladesh, Sri
Lanka, Maldives, Nepal, Bhutan, Mongolia, Iran, Iraq, United Arab Emirates,
Saudi Arabia, Bahrain, Kuwait, Qatar, Oman, Syria, Jordan, Lebanon, Palestine,
Yemen, Israel, Afghanistan, Kazakhstan, Uzbekistan, Turkmenistan, Kyrgyz,
Tajikistan, Australia, New Zealand, Papua New Guinea, Fiji, Kiribati, Marshall
Islands, Micronesia, Nauru, Solomon Islands, Tonga, Tuvalu, Vanuatu, Samoa,
Palau, Niue, Cook Islands


 


(ii) North America


 


United States of America (including Puerto Rico), Canada


 


(iii) Europe


 


United Kingdom, Spain, Portugal, France, Monaco, Andorra, Italy,
Vatican, Malta, San Marino, Liechtenstein, Switzerland, Austria, Belgium,
Netherlands, Luxembourg, Germany, Denmark, Sweden, Finland, Norway, Ireland,
Iceland, Greece, Cyprus, Poland, Czech Republic, Slovakia, Hungary, Romania,
Bulgaria, Croatia, Slovenia, Macedonia, Bosnia and Herzegovina, Serbia and Montenegro, Albania,
Estonia, Latvia, Lithuania, Russia, Belarus, Ukraine, Azerbaijan, Armenia,
Georgia, Moldova, Turkey


 


(iv) Latin America


 


Mexico, Guatemala, Belize, El Salvador, Honduras, Nicaragua, Costa
Rica, Panama, Colombia, Venezuela, Guyana, Suriname, Ecuador, Peru, Brazil,
Bolivia, Paraguay, Uruguay, Argentina, Chile, Jamaica, Cuba, Bahamas, Haiti,
Dominican Republic, Saint
Christopher and Nevis, Antigua and Barbuda, Dominica, Saint Lucia, Saint
Vincent and the Grenadines, Trinidad and Tobago, Barbados, Grenada


 


(v) Other Countries


 


All the countries other than those set forth
in (i), (ii), (iii) and (iv) above.


 


35





















 


Schedule 9.03


 


Preliminary Sales Forecast


 


Preliminary
Sales Forecast (U.S. $ Millions)


 


This forecast
is based on the assumption that one of the potential Phase II programs in the
Preliminary Development Plan is successfully pursued and results in a drug
approval. The forecast is based on AG-7352 being used in first line [*] in [*]
with  [*].


 


The worldwide
market for [*] therapeutics in 2000 was:


 


	
   

  	
   

  	
  2000

  	
   

  	
   

  
	
  [*]

  	
   

  	
  [*]

  	
   

  	
   

  
	
  Other

  	
   

  	
  34

  	
   

  	
   

  
	
  Total

  	
   

  	
  [*]

  	
   

  	
  (source:
  Decision Resources)

  



 


Assumptions:


 


AG-7352
secures FDA approval for first-line [*] in 2011.


The market for
therapeutics grows by [*]% per annum for all agents.


AG-7352 is
priced similarly to [*].


 


	
   

  	
   

  	
  2011

  	
   

  	
  2012

  	
   

  	
  2013

  	
   

  
	
  [*]

  	
   

  	
  [*]

  	
   

  	
  [*]

  	
   

  	
  [*]

  	
   

  
	
  Other

  	
   

  	
  59

  	
   

  	
  62

  	
   

  	
  65

  	
   

  
	
  Total

  	
   

  	
  [*]

  	
   

  	
  [*]

  	
   

  	
  [*]

  	
   

  



 


Percentage (%)
of use of AG-7352 in [*] with [*] in [*]:


 


	
   

  	
   

  	
  [*]

  	
  %

  	
  [*]

  	
  %

  	
  [*]

  	
  %

  



 


	
  Sales of

  AG-7352

  	
   

  	
  [*]

  	
   

  	
  [*]

  	
   

  	
  [*]

  	
   

  



 


Potential
factors that could reduce this preliminary sales forecast:


Sales could be
lower based on the likelihood that the indication will not be granted in all
markets at the same time (in 2000, the U.S. market represented [*]% of
worldwide [*] market).  Generic entries
into this market could depress pricing and reduce penetration rates of new
entities.  Time to new drug approval may
be longer than indicated.


 










[*]  Certain information on this
page has been redacted and filed separately with the Securities and Exchange
Commission.  Confidential treatment has
been requested with respect to the omitted portions.


 


36