Exhibit 10.6



                        LICENSE AND SUB-LICENSE AGREEMENT



                  This License and  Sub-License  Agreement (the  "Agreement") is
entered into and made effective as of May 13, 2003, by and between  BIOENVISION,
INC., a Delaware corporation ("Bioenvision"), and DECHRA PHARMACEUTICALS, PLC, a
corporation organized under the laws of the United Kingdom ("Dechra").

                                    RECITALS


                  A.  Bioenvision  has entered into a  Co-Development  Agreement
with Stegram  Pharmaceuticals  Limited ("Stegram"),  dated July 15, 1998, a true
and correct copy of which is attached  hereto as Exhibit A (the  "Co-Development
Agreement"), pursuant to which Stegram has granted to Bioenvision certain rights
and entitlements  (including the marketing and development rights) in and to the
chemical  compound  known  as  trilostane,  an  inhibitor  of  3a-hydroxysteroid
dehydrogenase, and methods of using trilostane.

                  B.  Pursuant  to the  terms  set  forth in the  Co-Development
Agreement, Bioenvision has the right under the Co-Development Agreement to grant
sublicenses.

                  C. Bioenvision has certain rights and entitlements, in its own
name, in and to trilostane and methods of using trilostane.

                  D.  Dechra wishes to obtain from Bioenvision,  and Bioenvision
wishes  to grant  to  Dechra,  a  license  of all of  Bioenvision's  rights  and
entitlements   (including  without  limitation  the  marketing  and  development
rights),  within the  territory of the United  States and Canada,  in and to the
chemical compound known as trilostane and methods of using  trilostane,  in each
case,  solely  with  respect  to animal  health  applications,  on the terms and
conditions set forth herein.

                  NOW,  THEREFORE,  in consideration of the premises, the mutual
covenants  and  conditions  set  forth  herein,  and  other  good  and  valuable
consideration,  the  receipt  and  adequacy  of which are  hereby  acknowledged,
Bioenvision and Dechra agree as follows:

1. Definitions.

1.1.  Affiliate.  The term  "Affiliate"  of Dechra  shall mean any entity  which
directly or indirectly  controls,  is  controlled by or is under common  control
with Dechra. The term "control" as used herein means the possession of the power
to  direct or cause the  direction  of the  management  and the  policies  of an
entity,  whether through the ownership of a majority of the  outstanding  voting
securities or by contract or otherwise.

1.2.   FDA.  The  term  "FDA"  shall  mean  the  United  States  Food  and  Drug
Administration, or any successor agency thereto.

1.3. Licensed Assets. The term "Licensed Assets" shall mean all of Bioenvision's
rights  and  entitlements   (including  without  limitation  the  marketing  and
development rights) in and to the chemical compound known as trilostane, in each
case, solely with respect to animal health applications,  including the Licensed
Technology,   Licensed  Patents,  Licensed  Inventions,  Licensed  Improvements,
Licensed Technical Information, and all of



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Bioenvision's  rights and entitlements  (including the marketing and development
rights) under the Co-Development  Agreement, in each case solely with respect to
animal health  applications and solely within the Licensed  Territory and solely
with respect to the Licensed Field.

1.4.  Licensed Field.  The term "Licensed  Field" shall mean, and is limited to,
the practice of the Licensed Patents, Licensed Inventions and Licensed Technical
Information, in each case, solely for use in animal health applications.

1.5.  Licensed  Improvement.  The term "Licensed  Improvement"  shall mean those
unencumbered technology advances in the Licensed Technology made by or on behalf
of  either  or  both  of  Bioenvision   and  Stegram  during  the  term  of  the
Co-Development  Agreement  or the term of this  Agreement  that  either  (i) are
within the scope of, and would  constitute  an  infringement  of, any claim of a
Licensed Patent or (ii) use Licensed Technical  Information,  and are within the
Licensed Field.

1.6. Licensed Invention.  The term "Licensed  Invention" shall mean the Licensed
Technology  that is related to, or  necessary  for the practice of, the Licensed
Technology  for animal  health  applications  as disclosed and claimed in one or
more Licensed Patents.

1.7.  Licensed  Patent.  The term  "Licensed  Patent"  shall mean any patent and
patent  application,   covering  the  Licensed  Technology,  Licensed  Products,
Licensed  Inventions  or Licensed  Improvements,  patents to be issued  pursuant
thereto, and all divisionals,  continuations,  continuations-in-part,  reissues,
substitutions,  or  extensions  thereof,  or  any  patent  issuing  on a  patent
application,  filed after the "Effective Date" of the Co-Development  Agreement,
which is included in the grant of license hereunder and any foreign counterparts
of the foregoing  within the Licensed  Territory,  and including any "Patent" as
defined in the Co-Development Agreement.

1.8.  Licensed  Product.  The term  "Licensed  Product"  shall  mean a  product,
service,  test, or  information  which is based upon or related to animal health
applications and is sold or provided for a fee and, but for the licenses granted
herein,  would  infringe  one  or  more  claims  of a  Licensed  Patent,  or was
discovered,  developed,  approved  manufactured  or  marketed  using a  Licensed
Invention, Licensed Improvement or Licensed Technical Information.

1.9. Licensed Technical  Information.  The term "Licensed Technical Information"
shall mean (i) Technical Information as defined in the Co-Development Agreement,
based  upon  or  solely  related  to  animal  health   applications,   and  (ii)
unencumbered published or unpublished  confidential and proprietary  information
in the nature of research and development  information,  knowledge and technical
data, together with trade secrets relating to the Licensed Technology, including
any  inventions in the  possession of or belonging  solely to  Bioenvision on or
prior  to the  effective  date  of  this  Agreement  which  Bioenvision  has the
obligation to include in this  Agreement,  or which comes into the possession of
Bioenvision during the term of this Agreement.  Licensed  Technical  Information
shall  include  herein  only  that  Licensed  Technical   Information  which  is
reasonably necessary for Dechra's practice of the Licensed Inventions or without
which such practice would  constitute an infringement of  Bioenvision's  rights.
Licensed  Technical  Information  includes only the above  information  which is
developed by or on behalf of Bioenvision or Stegram, or is generated pursuant to
research funded, in whole or in part, by Bioenvision.

1.10. Licensed  Technology.  The term "Licensed  Technology" shall mean patented
and unpatented, patentable and unpatentable, proprietary technology related to a
dehydrogenase inhibitor and receptor blocker developed by or on behalf of either
or both of Bioenvision and Stegram, in each case, useable with respect to animal
health applications.

1.11.  Licensed Territory.  The term "Licensed  Territory" shall mean the United
States of America, its territories and possessions, and the country of Canada.


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1.12. Net Sales. The term "Net Sales" shall mean the aggregate  invoice price of
all Licensed  Products sold by Dechra or its Affiliates or  sublicensees  in the
Licensed  Territory within the Licensed Field, less the following  discounts and
offsets related thereto:  tariffs, import or export duties, excise,  value-added
and sales taxes,  where such tariffs,  duties or taxes are separately  stated as
part of the sales price;  customary trade,  quantity and cash discounts actually
given;  rebates and  adjustments  required  by  governmental  entities  and made
pursuant to  governmental  or private  third-party  health or medical  insurance
programs; transportation, packaging, handling and freight charges where such are
separately  stated as part of the sales  price;  and  allowances  or credits for
returns or rejections. In the event of a sale of a Licensed Product by Dechra to
an Affiliate of Dechra,  and the subsequent  resale of such Licensed  Product by
such  Affiliate,  Net Sales shall be  computed  on the basis of such  subsequent
resale. In the event that any Licensed Product is sold as a component of another
product,  "Net  Sales"  shall mean the portion of such other  product's  invoice
price  that is  allocable  to the  Licensed  Product  based on the  ratio of the
invoice price of the Licensed  Product when sold separately to the invoice price
of such other  product,  or, in the absence of the  invoice  price of either the
Licensed Product or such other product, on the ratio of the cost of the Licensed
Product to the total cost of such other product.  Net Sales in Canadian  dollars
shall  be  converted  into  United  States  dollars  at  each  time  at  which a
calculation of Net Sales is to be made under this Agreement.

1.13.  Royalty Period.  The term "Royalty  Period" shall mean, in respect of any
month,  either  (a) the  period  of 12  months  ending  on the  last  day of the
immediately preceding month or, if shorter, (b) the period beginning on the most
recent  Royalty Period Start Date provided in Section 3.5 and ending on the last
day of the immediately preceding month.

2. Grant.

2.1. Grant of License.  Subject to the terms and conditions hereof,  Bioenvision
hereby grants to Dechra and its Affiliates an exclusive  license of the Licensed
Assets,  including a sublicense  under the  Co-Development  Agreement,  free and
clear of all liens,  encumbrances  and claims other than those  specifically set
forth in this  Agreement.  Such license  shall  include the right to make,  use,
sell, offer for sale,  import and distribute  Licensed  Products and to practice
methods and processes under the Licensed Patents, Licensed Inventions,  Licensed
Improvements,  Licensed Technology and Licensed Technical  Information.  For the
avoidance  of doubt,  Bioenvision  agrees  that the  exclusivity  of the license
granted to Dechra means that  Bioenvision  shall not practice,  use or otherwise
exploit  the  Licensed  Patents,  Licensed  Inventions,  Licensed  Improvements,
Licensed Technology or Licensed Technical  Information in the Licensed Territory
for  use in  animal  health  applications  (including  making,  using,  selling,
offering for sale,  importing  or  distributing  a product,  service,  test,  or
information),  and that Bioenvision shall not grant a license to any party other
than Dechra to do any of the foregoing.

2.2.  Sublicenses.  The  license  granted  to Dechra by  Bioenvision  under this
Agreement shall include the right to grant  sublicenses.  To the extent that any
such sublicense is a further  sublicense of rights licensed to Bioenvision  from
Stegram under the  Co-Development  Agreement,  such further sublicense by Dechra
shall be in accordance with Article 7 of the Co-Development Agreement.

2.3.  Licensed  Technical  Information.  Bioenvision  agrees to provide  Dechra,
promptly  after the  execution of this  Agreement by all parties and  thereafter
during the term of this Agreement,  copies of such  documentation as Bioenvision
has in its  possession  from time to time  relating  to the  Licensed  Technical
Information.

3. Consideration.

                  In  consideration  of the grant of the licenses by Bioenvision
         to Dechra  hereunder,  Dechra agrees to make the following  payments to
         Bioenvision:

3.1.  Execution  of  Agreement.  Upon the  execution  of this  Agreement by both
Bioenvision  and Dechra,  and the receipt by both  Bioenvision and Dechra of the
written consent to this Agreement by Stegram, Dechra shall


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pay to Bioenvision in cash by wire transfer of  immediately  available  funds an
amount equal to One million two hundred and fifty thousand United States Dollars
(US $1,250,000.00).

3.2.  Submission  of NADA.  Upon  Dechra's  submission  of its New  Animal  Drug
Application ("NADA") to the FDA for trilostane,  Dechra shall pay to Bioenvision
in cash by wire transfer of immediately available funds an amount equal to seven
hundred and fifty thousand United States Dollars (US $750,000.00).

3.3. Receipt of NADA Approval and Licensed Patents.

3.3.1. If Dechra  receives  approval of its New Animal Drug  Application  ("NADA
Approval")  from the FDA for  trilostane  prior to the  issuance  of a  Licensed
Patent by the United States Patent and Trademark  Office (the "USPTO") to either
Stegram or Bioenvision, then (a) Dechra shall pay to Bioenvision in cash by wire
transfer of  immediately  available  funds an amount  equal to One Million  Five
Hundred Thousand United States Dollars (US  $1,500,000.00)  and (b) Dechra shall
deposit with a mutually  acceptable  escrow agent (the "Escrow Agent") an amount
equal  to  One  Million  Five  Hundred   Thousand   United  States  Dollars  (US
$1,500,000.00) (the "Escrowed Amount"). The Escrowed Amount shall be released to
Bioenvision,  with the accumulated interest accrued thereon, net of the fees and
expenses of the Escrow  Agent,  upon the  issuance  of a Licensed  Patent by the
USPTO.

3.3.2. If no Licensed Patent has been issued by the USPTO on or before the third
anniversary of the effective date of this Agreement,  then an amount equal to US
$250,000  of the  Escrowed  Amount,  with the pro rata share of the  accumulated
interest  accrued  thereon,  net of the fees and  expenses of the Escrow  Agent,
shall be released to Dechra. For each consecutive  90-day period thereafter,  if
no  Licensed  Patent  has been  issued by the USPTO on or before the end of such
90-day period,  then an amount equal to US $250,000 of the Escrowed Amount, with
the pro rata share of the accumulated  interest accrued thereon, net of the fees
and expenses of the Escrow Agent, shall be released to Dechra,  until either (i)
a  Licensed  Patent is issued by the USPTO or (ii) all of the  Escrowed  Amount,
with the accumulated  interest accrued thereon,  net of the fees and expenses of
the Escrow  Agent,  is released to Dechra,  whichever  shall first  occur.  If a
Licensed  Patent  is  issued by the  USPTO  prior to the  release  of all of the
Escrowed  Amount to Dechra as  provided  above,  then upon the  issuance of such
Licensed Patent: (a) the then remaining principal balance of the Escrowed Amount
shall be released to Bioenvision, with the accumulated interest accrued thereon,
net of the fees and expenses of the Escrow Agent,  and (b) Dechra shall promptly
pay to Bioenvision the excess of $1,500,000 over the remaining principal balance
of the  Escrowed  Amount  released  to  Bioenvision  together  with  accumulated
interest thereon.

3.3.3.  If  Dechra  receives  a  NADA  Approval  from  the  FDA  for  trilostane
simultaneously with or after the issuance of any Licensed Patent by the USPTO to
either Stegram or Bioenvision,  then upon Dechra's receipt of the NADA Approval,
Dechra  shall  pay to  Bioenvision  in  cash  by wire  transfer  of  immediately
available  funds an amount  equal to Three  Million  United  States  Dollars (US
$3,000,000.00).

3.4. Statement of Net Sales.  Following the execution of this Agreement,  Dechra
shall, by the 15th day of each month provide to Bioenvision a statement  showing
in reasonable detail the Net Sales for the immediately  preceding calendar month
with  respect  to  Licensed  Products  sold by Dechra or its  Affiliates  or its
sublicensees,   prepared  in  accordance  with  generally  accepted   accounting
principles in the United States (the "Monthly  Total").  In addition,  following
the execution of this Agreement and until such time, if any, as the Royalty rate
equals four percent as provided  below,  such monthly  statement shall also show
such Net Sales for the Royalty Period ending on the last day of the  immediately
preceding month (the "Rolling Annual Total").

3.5. Royalty Payments.


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3.5.1.  Until such time as the Rolling  Annual  Total is equal to or exceeds Ten
Million  United  States  Dollars (US  $10,000,000.00),  Dechra shall not owe any
payments to Bioenvision other than those set forth in Sections 3.1, 3.2 and 3.3.

3.5.2. In respect of the month in which the Rolling Annual Total first equals or
exceeds $10 million,  Dechra shall make a one-time payment to Bioenvision  equal
to the sum of:

                  (a)      Two  Hundred   Thousand  United  States  Dollars  (US
                  $200,000.00), plus

                  (b)      Two percent of the amount by which the Rolling Annual
                  Total exceeds $10 million.

3.5.3.  In respect of each month  subsequent  to the month  described in Section
3.5.2,  Dechra  shall  (subject  to  Sections  3.5.6  and  3.5.9  below)  pay to
Bioenvision a royalty (the "Royalty")  equal to two percent of the Monthly Total
for each such subsequent month.

3.5.4. The first day of the month  immediately  following the month described in
Section  3.5.2  shall  be a new  Royalty  Period  Start  Date  for  purposes  of
thereafter  determining the Royalty Period and the Rolling Annual Total shall be
recalculated effective from such new Royalty Period Start Date.

3.5.5. In respect of the month in which the Rolling Annual Total first equals or
exceeds  $15  million,  Dechra  shall,  in addition  to any  payments  due under
Sections 3.5.2 or 3.5.3,  make a one-time  payment to  Bioenvision  equal to one
percent of the amount by which the Rolling Annual Total exceeds $15 million.

3.5.6.  In respect of each month  subsequent  to the month  described in Section
3.5.5, and in lieu of any payment pursuant to Section 3.5.3 above,  Dechra shall
thereafter  (subject to Sections  3.5.8 and 3.5.9  below) pay to  Bioenvision  a
Royalty  equal to three  percent of the Monthly  Total for each such  subsequent
month.

3.5.7. The first day of the month  immediately  following the month described in
Section  3.5.5  shall  be a new  Royalty  Period  Start  Date  for  purposes  of
thereafter  determining the Royalty Period and the Rolling Annual Total shall be
recalculated effective from such new Royalty Period Start Date.

3.5.8. In respect of the month in which the Rolling Annual Total first equals or
exceeds  $20  million,  Dechra  shall,  in addition  to any  payments  due under
Sections 3.5.2,  3.5.3,  3.5.5 or 3.5.6,  make a one-time payment to Bioenvision
equal to one percent of the amount by which the Rolling Annual Total exceeds $20
million.

3.5.9.  In respect of each month  subsequent  to the month  described in Section
3.5.8,  and in lieu of any  payment  pursuant to Section  3.5.3 or 3.5.6  above,
Dechra shall  thereafter  pay to  Bioenvision a Royalty equal to four percent of
the Monthly Total for each such subsequent month.

3.6.  Illustrative  Examples.  For the avoidance of doubt,  the  application  of
Section  3.5 is  illustrated  by the  examples  set forth in  Exhibit B attached
hereto.

3.7. Statement of Royalty.  Once the payment of Royalty by Dechra to Bioenvision
begins pursuant to Section 3.5, the monthly  statement of Net Sales described in
Section  3.4 shall also  include the  calculation  in  reasonable  detail of the
related Royalty owed by Dechra with respect to such Net Sales. In the event that
Bioenvision  disagrees with Dechra's  calculation of Net Sales, such dispute may
be resolved in  accordance  with the dispute  resolution  procedure set forth in
Section 12 below.

3.8.  Renegotiation of Royalty Rates. The payment  obligations under the license
granted to Dechra for the Licensed Assets shall continue  throughout the term as
defined in this Agreement, but will be subject to good faith renegotiations upon
the  occurrence of whichever of the  following  applies,  unless this  Agreement
shall have been earlier terminated:  (a) the expiration of the last to expire of
the Licensed Patents  applicable to the Licensed Field within any country in the
Licensed  Territory;  or (b) if no Licensed  Patents  have been issued  within a
particular



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country in the Licensed Territory that are applicable to the Licensed Field, the
abandonment of the last to be abandoned of any applications for Licensed Patents
in such  country that are  applicable  to the  Licensed  Field.  Such good faith
renegotiations  shall take into  account  on a  country-by-country  or  regional
basis, but shall not be limited to: (i) competition  with the Licensed  Products
within the Licensed Field; (ii) utilization, incorporation and value of Licensed
Technical  Information  within  the  Licensed  Field;  (iii)  value of  Licensed
Technical  Information if no longer confidential or proprietary through no fault
of Dechra, or its Affiliates, sublicensees, contractors, financiers or any other
Dechra  agents or the  purchasers  of Products  or  services  from Dechra or its
Affiliates  who  have  access  to  Licensed  Technical  Information;   (iv)  the
applicable contract or patent law; or (v) prior payment commitments.

         If a Licensed  Product  incorporates  inventions,  patents or technical
information  that are obtained from sources other than  Bioenvision  or Stegram,
the parties  agree to  negotiate in good faith a new Royalty rate to reflect the
combination of such third-party  inventions,  patents or technical  information;
provided,  however, the parties agree to use commercially  reasonable efforts to
incorporate  inventions.,  patents and technical  information  from  Bioenvision
and/or Stegram in such Licensed Products.
4. Term and Termination.

4.1. Term.  Unless  terminated  sooner in accordance with the provisions of this
Agreement,  the term of the  licenses  granted  to Dechra by  Bioenvision  shall
expire when the last of the Royalty obligations set forth herein has expired.

4.2. Rights Upon Termination.  Upon termination of this Agreement, neither party
shall be released from any  obligation  that matured prior to the effective date
of such  termination.  Dechra  and its  Affiliates  and  any  sublicensees  may,
however,  after  the  effective  date of such  termination,  sell  all  Licensed
Products  in  inventory  provided  that  Dechra  shall  pay to  Bioenvision  the
Royalties as required by Article 3 hereof and shall submit the reports  required
by Article 3 hereof.

4.3.  Termination  Upon  Default.  If either  party  shall be in  default of any
obligation  hereunder,  the other party may terminate  this  Agreement by giving
notice of termination  by certified or registered  mail to the party in default,
specifying  the  basis for  termination.  If within  sixty  (60) days  after the
receipt of such notice of  termination,  the party in default shall  remedy,  in
good faith,  the  condition  forming the basis for  termination,  such notice of
termination  shall cease to be operative,  and this Agreement  shall continue in
full force.

4.4.  Termination  Upon  Bankruptcy or  Insolvency.  Either party shall have the
right to  terminate  this  Agreement if the other party shall cease to carry out
its business as related to the Licensed  Products  within the Licensed Field and
the  Licensed  Territory,   become  insolvent,  file  a  voluntary  petition  in
bankruptcy,  apply for or consent to the  appointment of a trustee,  receiver or
liquidator of its assets,  seek relief under any law for the aid of debtors,  or
fail to have an  involuntary  petition in  bankruptcy  dismissed  within 60 days
after the filing thereof, other than any such case that was initiated,  directly
or indirectly, by the party attempting to cancel this Agreement.

4.5. Notice of Imminent  Bankruptcy.  Each party shall inform the other party of
such party's  intention to file a voluntary  petition in  bankruptcy  or of such
party's  knowledge of another's  intention  to file an  involuntary  petition in
bankruptcy,  to be  received,  in the event of a party's  voluntary  petition in
bankruptcy, at least thirty (30) days prior to filing such a petition.

4.6. Survival.  Notwithstanding anything else in this Agreement to the contrary,
the parties agree that Dechra's  obligation to pay  Bioenvision  any payments or
other  consideration  accrued but unpaid prior to termination  shall survive the
termination of this Agreement.

5. Records and Audits.


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Dechra  shall  keep  accurate  records  of  all  operations  affecting  payments
hereunder.  Bioenvision shall have the right for it or its duly authorized agent
to audit and  otherwise  inspect  all such  records no more often than twice per
calendar year pursuant to not less than fifteen (15) calendar days prior written
notice, signed by Bioenvision,  which audit shall be conducted at the offices of
Dechra during customary business hours.  Information  obtained by Bioenvision or
its  authorized  agent in such  audits  and  inspections  shall be  deemed to be
Confidential Information of Dechra and subject to the provisions of Section 11.1
below.

6. Ownership of Intellectual Property.

Bioenvision  and Dechra shall each retain full ownership of its own existing and
future  intellectual  property rights,  including rights in the process of being
protected  and  rights  conceived  but not yet  reduced  to  practice  as of, or
subsequent to, the effective date of this Agreement.

7. Patent Prosecution and Infringement.

         7.1.  Bioenvision  shall provide  Dechra with copies of allowed  patent
         claims when such claims are  allowed in the  Licensed  Field and in the
         Licensed  Territory for all Licensed Patents,  Licensed  Inventions and
         Licensed Improvements licensed hereunder

         7.2.  Bioenvision  shall  provide  Dechra  with  draft  copies  of  all
         correspondence  and filings and related  prosecution  documents  on the
         Licensed Patents and Dechra shall promptly provide comments, if any, to
         Bioenvision.  Bioenvision  shall  confer  with  Dechra,  and shall make
         reasonable efforts to have Dechra's suggestions  regarding  prosecution
         tactics  and  strategy  adopted by  Stegram  with  respect to  Licensed
         Patents  that are  licensed  to  Bioenvision  from  Stegram  under  the
         Co-Development   Agreement.   Notwithstanding  the  foregoing,   Dechra
         acknowledges  that, under the Co-Development  Agreement,  Stegram shall
         have the right to take such  actions as are  reasonably  necessary,  in
         Stegram's  good faith  judgment,  to  preserve  all  rights  under such
         Licensed  Patents as are licensed to Bioenvision from Stegram under the
         Co-Development  Agreement  and to maintain  such  Licensed  Patents and
         patent  applications  in the  name of  Stegram.  As soon as  practical,
         subsequent to the filing of any prosecution document, Bioenvision shall
         provide  Dechra with a copy of the document.  In addition,  Bioenvision
         shall  provide  Dechra with a copy of any  official  office  action and
         copies of responses and  submissions  filed by  Bioenvision or filed by
         Stegram and in the possession of Bioenvision.

         7.3.  Bioenvision  shall inform  Dechra at least  forty-five  (45) days
         prior to any  decision  having as a result the failure to file,  or the
         abandonment of a Licensed  Patent  application or failure to maintain a
         Licensed  Patent licensed  hereunder,  so that Dechra may take over and
         maintain such Licensed  Patent in force in the name of  Bioenvision  or
         Stegram, as the case may be.

         7.4.  In the  event  that  Bioenvision  decides  not  to pay  patenting
         expenses in any  jurisdiction  in the  Licensed  Territory,  whether as
         provided in Article 11 of the  Co-Development  Agreement or  otherwise,
         Bioenvision agrees to notify Dechra promptly of such decision.  In such
         event,  Dechra may elect to maintain such Licensed  Patent in force, in
         the name of Bioenvision or Stegram, as the case may be.

         7.5.  Either  party  promptly  shall  notify  the  other  party  of any
         suspected  infringement by a third party of the Licensed Patents in the
         Licensed  Field and the  Licensed  Territory,  and each party  promptly
         shall  inform the other of any  evidence of such  infringement.  Dechra
         shall  have  the  right to  exercise,  in the  name  and on  behalf  of
         Bioenvision,  the  rights  of  Bioenvision  under  Article  12  of  the
         Co-Development  Agreement with respect to infringements in the Licensed
         Field and the Licensed Territory.

         7.6. In the event that either party becomes aware of the institution by
         a third party of any  proceedings  for the  revocation  of any Licensed
         Patent  in  the  Licensed  Field  and in any  country  in the  Licensed



<PAGE>



         Territory,  such party shall  notify the other party  promptly.  Dechra
         shall have the right to participate  in any such  proceeding at its own
         expense, in its own name.

         7.7. In the event that  either  party  becomes  aware of any claim by a
         third party that the exercise by Dechra of its rights under the license
         granted  by  Bioenvision  constitutes  an  infringement  of such  third
         party's  rights,  such party  shall  notify the other  party  promptly.
         Dechra shall have the right to  exercise,  in the name and on behalf of
         Bioenvision,  the  rights  of  Bioenvision  under  Article  14  of  the
         Co-Development Agreement.

         7.8.  In the  event  that  Bioenvision  obtains  a  legally  assignable
         ownership  interest  in any  issued  Licensed  Patent  in the  Licensed
         Territory which claims subject matter solely within the Licensed Field,
         Bioenvision  agrees,  on the  written  request  of Dechra  and  without
         further   consideration  from  Dechra,  to  assign  to  Dechra  all  of
         Bioenvision's right, title and interest in and to such Licensed Patent,
         and to execute such  instruments  as Dechra may  reasonably  request to
         effect, perfect and record such assignment.

8. Representations; Acceptance of Liability.

         8.1.  Bioenvision  represents  that it has the right to grant to Dechra
         all of the rights set forth as being granted to Dechra herein.

         8.2.  Bioenvision is unaware of any claims asserted against Bioenvision
         or Stegram by any third parties with respect to patent  infringement or
         any other type of liability  relevant to licensing or  sublicensing  of
         the   Licensed   Patents,   the  Licensed   Inventions,   the  Licensed
         Improvements  and the Licensed  Technical  Information,  which have not
         been disclosed to Dechra as of the effective date of this Agreement.

         8.3. Bioenvision represents that it has full power, authority and legal
         right to enter into this Agreement and to consummate  the  transactions
         contemplated herein.

         8.4.  Dechra  represents  that it has full power,  authority  and legal
         right to enter into this Agreement and to consummate  the  transactions
         contemplated herein.

         8.5. Dechra shall accept  liability to the extent of the Licensed Field
         and the  Licensed  Territory  for or on account of any injury,  loss or
         damage,  of any kind or nature  sustained by, or any damage assessed or
         asserted  against,  or any other liability  incurred by or imposed upon
         either party arising out of or in connection with or resulting from (i)
         the  production,  use or sale of any  Licensed  Product by Dechra,  its
         Affiliates  or  its  sublicensees,  or  (ii)  the  use by  Dechra,  its
         Affiliates  or  its   sublicensees   of  any   technical   information,
         techniques,  or  practices  disclosed  by  either  party,  or (iii) any
         advertising or other promotional  activities by Dechra,  its Affiliates
         or  its  sublicensees  with  respect  to any  of  the  foregoing.  If a
         sublicense is granted by Dechra to a third party that third party shall
         accept all liability for any injury, loss or damage as set forth above,
         in addition to Dechra  remaining  liable to Bioenvision for any and all
         such liabilities.

9.       Indemnification.

         Dechra  hereby  agrees to  indemnify,  hold  harmless  and defend  from
         liability,  to the extent of the  Licensed  Field and for the  Licensed
         Territory,  Bioenvision  and  Stegram  and their  respective  officers,
         directors, representatives,  agents and employees, from and against any
         and all demands, claims, suits or actions of any character presented or
         brought on account of any injuries,  losses or damages sustained by any
         person or property in  consequence of (i) any act or omission of Dechra
         or its agents,  employees  or  subcontractors,  or (ii) any  liability,
         except for any  injuries,  losses or damages that  specifically  result




<PAGE>



         from the  negligence or willful  misconduct of  Bioenvision or Stegram.
         The  foregoing  indemnity  shall  include  but not be  limited to court
         costs,  attorneys' fees,  costs of  investigation  and costs of defense
         associated with such demands,  claims,  suits or actions. The foregoing
         indemnity  shall apply only to the extent of the Licensed  Field and in
         the Licensed Territory.

10. Insurance.

         Dechra shall maintain,  during the term of this  Agreement,  reasonable
         amounts  of  comprehensive   general  liability  insurance,   including
         products  liability  insurance,  with reputable and financially  secure
         insurance   carriers  to  cover  the   activities  of  Dechra  and  its
         Affiliates.  Such insurance shall be written to cover claims  incurred,
         discovered,  manifested,  or made  during or beyond the  expiration  or
         termination  of this  Agreement  during  the period  that any  product,
         process,  or  service,  relating  to, or  developed  pursuant  to, this
         Agreement is being  commercially  distributed or sold by Dechra or by a
         sublicensee,  Affiliate  or agent of Dechra.  Dechra  shall  furnish to
         Bioenvision a  certificate  of insurance  evidencing  such coverage and
         periodically, upon request, provide evidence that the coverage is still
         in effect.


11. Confidentiality; Publication; Publicity.

         11.1. In fulfilling their obligations  under this Agreement,  it may be
         desirable  or  necessary  for the  parties to  disclose  to one another
         certain of their Confidential  Information.  In the event of receipt of
         such Confidential  Information,  the receiving party agrees to preserve
         such  information  as  confidential  and not to  disclose  it to  third
         parties or to use it except in connection  with this  Agreement  during
         the term of this Agreement and for a period of five (5) years following
         its  termination.  The  foregoing  obligations  shall  not apply to any
         information that:

                  (a)      is now in the  public  domain  or  becomes  generally
                           available  to the  public  through  no  fault  of the
                           receiving party;

                  (b)      is  already  known to, or in the  possession  of, the
                           receiving party as can be demonstrated by documentary
                           evidence;

                  (c)      is   disclosed   to   the   receiving   party   on  a
                           non-confidential  basis by a third  party  having the
                           right to make such disclosure; or

                  (d)      is independently  developed by the receiving party as
                           can be demonstrated by documentary evidence.

                           In addition,  to the extent  reasonably  necessary to
                  fulfill  its  obligations  or exercise  its rights  under this
                  Agreement (i) a party may disclose Confidential Information to
                  its    Affiliates,    sublicensees,    consultants,    outside
                  contractors,     research     investigators    and    clinical
                  investigators,  on a need-to-know basis on condition that such
                  persons or  entities  agree to be bound by the  provisions  of
                  this Agreement, (ii) a party or its Affiliates or sublicensees
                  may disclose Confidential Information to governmental or other
                  regulatory  authorities to the extent that such  disclosure is
                  reasonably   necessary   to  obtain   patents  or   regulatory
                  authorizations,  provided the  disclosing  party shall request
                  confidential treatment thereof, and (iii) a party may disclose
                  Confidential   Information  as  required  by  applicable  law,
                  regulation or judicial process, provided that such party shall
                  give the other party (x) prior  written  notice  thereof,  (y)
                  adequate  opportunity  to object to any such  disclosure or to
                  request confidential treatment thereof, and (z) shall take all
                  steps  reasonably  possible to minimize the disclosure to that
                  level mandated by law.

<PAGE>



         11.2. If either  Bioenvision  or Stegram  desires to publish or present
         the results of the Co-Development Program,  Bioenvision shall provide a
         copy of the manuscript of any proposed  publication or  presentation to
         Dechra.  Dechra shall then have fifteen (15) days to review and comment
         on the manuscript or presentation, and Bioenvision agrees to delete any
         information  identified by Dechra as its trade secrets or  Confidential
         Information. In the event that Dechra determines that a Licensed Patent
         application covering information  contained in the proposed publication
         or  presentation   should  be  filed,   Bioenvision  shall  delay  such
         publication  or  presentation  for up to  thirty  (30)  days  after the
         fifteen (15) days described above to allow such filing to be made.

         11.3.  Each  party  shall  provide  the  other  party  with  the  prior
         opportunity  to review and approve any press releases or similar public
         announcements  concerning  this  Agreement or clinical,  regulatory and
         commercial  developments  related to Licensed  Products in the Licensed
         Field and the  Licensed  Territory  as soon as  practicable,  but in no
         event later than 24 hours before an announcement is made. Neither party
         shall not use the name of the  other  party or  otherwise  refer to any
         organization  related  to the  other  party,  except  with the  written
         approval  of the other  party,  such  approval  not to be  unreasonably
         withheld.

         11.4.  Each  party  shall  provide  the  other  party  with  the  prior
         opportunity  to review and approve any press releases or similar public
         announcements  concerning  this  Agreement or clinical,  regulatory and
         commercial  developments  related  to  Licensed  Products  as  soon  as
         practicable, but in no event later than 24 hours before an announcement
         is made.

12. Dispute Resolution.

                  12.1.  Exclusive  Procedure.  Any  dispute  arising  out of or
         relating  to this  Agreement,  including  the  breach,  termination  or
         validity  hereof,  shall be resolved in  accordance  with the procedure
         specified  in this  article,  which  shall be the  sole  and  exclusive
         procedure for the resolution of any such disputes.

                  12.2. Negotiation Between Executives.  The parties shall first
         attempt in good faith to resolve any dispute arising out of or relating
         to this Agreement  promptly by negotiation  between executives who have
         authority  to settle the  controversy  and who are at a higher level of
         management   than  the   persons   with   direct   responsibility   for
         administration of this Agreement.  Either party (the "Disputing Party")
         may give the other party (the "Responding Party") written notice of any
         dispute not  resolved  in the normal  course of  business.  Such notice
         shall include:  (a) a statement of the Disputing Party's position and a
         summary of arguments  supporting  that  position,  and (b) the name and
         title of the  executive who will  represent the Disputing  Party and of
         any other person who will accompany the executive.  Within fifteen (15)
         days after delivery of the notice,  the Responding  Party shall respond
         with (i) a statement of the Responding  Party's  position and a summary
         of arguments  supporting that position,  and (ii) the name and title of
         the executive who will represent the Responding  Party and of any other
         person who will accompany the executive.  Within thirty (30) days after
         delivery of the initial notice by the Disputing  Party,  the executives
         of both parties shall meet at a mutually acceptable time and place, and
         thereafter as often as they reasonably  deem  necessary,  to attempt to
         resolve the dispute.  All reasonable  requests for information  made by
         one party to the other party will be honored. All negotiations pursuant
         to  this  section  shall  be  confidential  and  shall  be  treated  as
         compromise  and  settlement  negotiations  for purposes of the rules of
         evidence.

                  12.3.  Mediation.  If the  dispute  has not been  resolved  by
         negotiation  within sixty (60) days of the  Disputing  Party's  initial
         notice,  or if executives  of the parties  failed to meet within thirty
         (30) days



<PAGE>



         after  delivery  of the  initial  notice by the  Disputing  Party,  the
         parties  shall  endeavor to settle the dispute by  mediation  under the
         then  current  Mediation  Procedure  of the CPR  Institute  for Dispute
         Resolution. Unless otherwise agreed, the parties will select a mediator
         from the CPR Institute  Panels of  Distinguished  Neutrals.  Each party
         shall bear its own expenses  (including  attorneys'  fees) and an equal
         share  of  the  expenses  of the  mediator  and  any  fees  of the  CPR
         Institute.

                  12.4.  Arbitration.  Any dispute arising out of or relating to
         this Agreement,  including the breach,  termination or validity hereof,
         which  has not been  resolved  by the  non-binding  dispute  resolution
         procedure provided above within one hundred twenty (120) days after the
         initiation  of such  procedure,  shall be finally  resolved  by binding
         arbitration in accordance with the then current CPR Institute Rules for
         Non-Administered  Arbitration by a sole arbitrator;  provided, however,
         that if either party refuses to participate in the non-binding  dispute
         resolution  procedure provided above, then the other party may initiate
         binding  arbitration  before  expiration  of such 120-day  period.  The
         arbitrator  shall  be  knowledgeable  in  the  commercial,   legal  and
         technical  aspects  of  the  subject  matter  of  the  dispute.  Unless
         otherwise  agreed,  the parties will select the arbitrator from the CPR
         Institute Panels of Distinguished  Neutrals.  The arbitration  shall be
         conducted in either or both of New York, New York, and London, England,
         as determined by the arbitrator.  The arbitrator shall determine issues
         of arbitrability  but shall not be empowered to award injunctive relief
         or damages in excess of  compensatory  damages and each party expressly
         waives and forgoes any right to punitive,  exemplary or similar damages
         unless a statute  requires the  compensatory  damages be increased in a
         specific manner.  Unless determined  otherwise by the arbitrator,  each
         party shall bear its own expenses  (including  attorneys'  fees) and an
         equal share of the expenses of the  arbitrator  and any fees of the CPR
         Institute. The arbitration shall be governed by the Federal Arbitration
         Act, 9 U.S.C.  ss.ss. 1-16, and judgment upon the award rendered by the
         arbitrator may be entered by any court having jurisdiction.

                  12.5.   Confidentiality.   Except  as  required  by  law,  the
         existence, content and result of the mediation and arbitration shall be
         held  in  confidence  by  the  parties,  their  representatives,  other
         participants,  the mediator and the  arbitrator,  each of whom shall be
         bound by an appropriate written confidentiality agreement.

                  12.6. Tolling of Limitations  Periods. All applicable statutes
         of  limitations  and  defenses  based upon the passage of time shall be
         tolled while the  procedures  specified in this article 12 are pending.
         The parties shall take such action, if any, required to effectuate such
         tolling.

                          13. Third-Party Beneficiary.

                  It is  understood  and agreed that Stegram is intended to be a
         third-party   beneficiary  of  this  Agreement,   and  is  entitled  to
         diligently enforce the same in its own name, notwithstanding any action
         or inaction by Bioenvision with regard to the enforcement  thereof, and
         free from any claim,  defense,  setoff or other right of Dechra against
         Bioenvision.

14. General Provisions.

                  14.1.  Independent   Contractors.   The  relationship  between
         Bioenvision and Dechra is that of independent contractors.  Bioenvision
         and  Dechra are not joint  venturers,  partners,  principal  and agent,
         master  and  servant,   employer  or   employee,   and  have  no  other
         relationship other than independent  contracting  parties.  Bioenvision
         and Dechra  shall have no power to bind or  obligate  each other in any
         manner, other than as is expressly set forth in this Agreement.


<PAGE>



                  14.2.  Entire  Agreement;  Modification.  This  Agreement sets
         forth the entire agreement and understanding  between the parties as to
         the  subject   matter   hereof.   There  shall  be  no   amendments  or
         modifications to this Agreement,  except by a written document which is
         signed by both parties.

                  14.3. Force Majeure.  The parties shall not be responsible for
         failure to perform  any of the  obligations  imposed by this  Agreement
         (except an obligation to pay money), provided the failure is not due to
         negligence and provided such failure is caused by fire, storms, floods,
         strikes,   lockouts,   accidents,   war,  terrorism,   riots  or  civil
         commotions,  inability  to  obtain  transportation  or  raw  materials,
         embargoes, any local, state, provincial or national regulation, law, or
         restriction,  seizure or  acquisition of the technology or the Licensed
         Products by any local, state, provincial or national government,  or of
         any agency  thereof,  or by reason of any  compliance  with a demand or
         request for such Licensed Product for any purpose for national defense,
         or any other cause or contingency beyond the reasonable control of said
         party  (whether  or not of the same  kind or  nature  as the  causes or
         contingencies  above enumerated) shall not subject the party so failing
         to any liability to the other.

                  14.4.  Further  Assurances.   Each  party  shall  execute  any
         instruments  reasonably  believed by the other party to be necessary to
         implement the provisions of this Agreement.

                  14.5.  Governing  Law. This  Agreement  shall be construed and
         enforced in accordance  with the  substantive  laws of the State of New
         York,  without regard to the principles thereof regarding the choice of
         law.

                  14.6.  Headings.  The headings for each article and section in
         this Agreement have been inserted for convenience of reference only and
         are not  intended  to limit or expand on the  meaning  of the  language
         contained in the particular article or section.

                  14.7.  Severability.  Should any one or more of the provisions
         of this  Agreement  be held  invalid  or  unenforceable  by a court  of
         competent  jurisdiction,  it  shall be  considered  severed  from  this
         Agreement  and shall not serve to invalidate  the remaining  provisions
         thereof.  The  parties  shall make a good faith  effort to replace  any
         invalid or  unenforceable  provision with a valid and  enforceable  one
         such  that the  objectives  contemplated  by them  when  entering  this
         Agreement may be realized.

                  14.8. No Waiver. Any delay in enforcing a party's rights under
         this Agreement or any waiver as to a particular default or other matter
         shall not  constitute  a waiver of such  party's  rights to the  future
         enforcement of its rights under this Agreement, excepting only as to an
         express  written  and  signed  waiver as to a  particular  matter for a
         particular period of time.

                  14.9. Marking. Dechra shall place in a conspicuous location on
         any product or its packaging,  which is made or sold under any Licensed
         Patent coming within this Agreement, a patent notice in accordance with
         the laws  concerning  the marking of patented  articles.  Dechra  shall
         include a marking provision similar to this section in every sublicense
         granted pursuant to Article 2 above.

                  14.10.  Attorneys' Fees. In the event of a dispute between the
         parties  hereto or in the  event of any  default  hereunder,  the party
         prevailing  in the  resolution  of any such dispute or default shall be
         entitled  to recover  its  reasonable  attorneys'  fees and other costs
         incurred in connection with resolving such dispute or default.

                  14.11.  Notices.  Any notices required by this Agreement shall
         be in writing,  shall specifically refer to this Agreement and shall be
         sent by registered or certified  airmail,  postage prepaid,  or by fax,
         telex or cable,  charges  prepaid,  or by  overnight  courier,  postage
         prepaid and shall be forwarded to the  respective  addresses  set forth
         below unless subsequently changed by written notice to the other party:


<PAGE>



     For Bioenvision:          Bioenvision, Inc.
                               509 Madison Avenue, Suite 404
                               New York, New York  10022
                               Attention: Christopher B. Wood and David P. Luci
                               Fax No.:  (212) 750-6777

              For Dechra:      Dechra Pharmaceuticals, PLC
                               Dechra House
                               Jamage Industrial Estate
                               Talke Pits
                               Stoke-on-Trent  ST7 1XW
                               Attention: Ian Page and Ed Torr
                               Fax No.: +44 (0) 1782 773366

                  Notice shall be deemed delivered upon the earliest of (i) when
                  received,  (ii)  five (5) days  after  deposit  into the mail,
                  (iii) the date notice is sent via fax, telex or cable, or (iv)
                  two business days immediately  following delivery to overnight
                  courier (except Sunday and holidays).

                  14.12.   Compliance  with  Laws.  Nothing  contained  in  this
         Agreement  shall require or permit  Bioenvision or Dechra to do any act
         inconsistent with the requirements of any applicable law, regulation or
         executive order as the same may be in effect from time to time.

                  14.13.  Assignment.  Dechra  shall not assign any rights under
         this  Agreement  not  specifically  transferable  by its  terms  or not
         permitted by Dechra's right to grant sublicenses hereunder, without the
         prior  written  consent  of  Bioenvision,  which  consent  shall not be
         unreasonably  withheld  or  delayed.  Subject  to the  foregoing,  this
         Agreement  shall be  binding  upon  and  inure  to the  benefit  of any
         successors in interest and assigns of Bioenvision and Dechra.  Any such
         successor or assignee of either party's interest shall expressly assume
         in writing  the  performance  of all the terms and  conditions  of this
         Agreement  to  be  performed  by  such  party.  If  the  Co-Development
         Agreement is  terminated  for any reason,  except breach of contract by
         Stegram, this Agreement shall automatically transfer to Stegram insofar
         as  this  Agreement   grants  to  Dechra  any   sublicense   under  the
         Co-Development Agreement, unless Dechra is in breach or default hereof,
         and shall  remain in full force and  effect so long as Dechra  performs
         its obligations hereunder.

                  14.14.  Counterparts.   This  Agreement  may  be  executed  in
         counterparts, each of which shall be an original but all of which taken
         together shall be one and the same instrument.

                   [The following page is the signature page.]




<PAGE>



         IN WITNESS  WHEREOF,  the  parties  have  executed  this  Licensee  and
Sub-License Agreement by their duly authorized  representatives  effective as of
the date first set forth above.


<TABLE>
<CAPTION>
         BIOENVISION, INC.                                    DECHRA PHARMACEUTICALS, PLC



<S>                                                           <C>
         By       /s/ David P. Luci                           By       /s/ Ian D. Page
            -----------------------------------------            -----------------------------------------

         Name:             David P. Luci                      Name:             Ian D. Page
               --------------------------------------               --------------------------------------

         Title:            Director of Finance, Gen Counsel   Title:            Chief Executive
                -------------------------------------------          -------------------------------------

</TABLE>




         CONSENTED AND AGREED:

         STEGRAM PHARMACEUTICALS LIMITED



         By       /s/ George Margetts
            -----------------------------------------------

         Name:             George Margetts
            -----------------------------------------------
         Title:            Director
            -----------------------------------------------






<PAGE>




                                    EXHIBIT A

                        COPY OF CO-DEVELOPMENT AGREEMENT

                         BETWEEN BIOENVISION AND STEGRAM





<PAGE>




                                    EXHIBIT B

                        EXAMPLES OF ROYALTY CALCULATIONS


Illustration No. 1

Dechra begins to sell Licensed  Products during Month 1. For the 12-month period
beginning  on the first day of Month 1, and  ending on the last day of Month 12,
the Rolling Annual Total of Net Sales equals US $9,500,000.  In accordance  with
Section  3.5.1,  no Royalty  payments  are due from Dechra to  Bioenvision  with
respect such Net Sales.

For the 12-month period beginning on the first day of Month 2, and ending on the
last  day of  Month  13,  the  Rolling  Annual  Total  of Net  Sales  equals  US
$10,500,000.  In Month 14,  Dechra  owes  Bioenvision  a Royalty  payment  under
Section 3.5.2 as follows:

 $200,000 + [.02 x ($10,500,000 - $10,000,000)] = $200,000 + $10,000 = $210,000

In accordance  with Section  3.5.4,  the first day of Month 14 is a new "Royalty
Period Start Date" and the Rolling Annual Total is  recalculated  effective from
the beginning of Month 14.

In respect of Month 14 and each month  thereafter,  Dechra  owes  Bioenvision  a
Royalty  payment  under  Section 3.5.3 of 2% of the Monthly Total for such month
(subject  to  Sections  3.5.5  and  3.5.6 as shown in  Illustration  No.  2, and
Sections 3.5.8 and 3.5.9 as shown in Illustration No. 3).


Illustration No. 2

Assume the same facts as in Illustration No. 1.

For the six-month  period  beginning on the first day of Month 14, and ending on
the last day of Month 19, the Rolling  Annual Total equals US  $13,000,000.  The
Royalty in respect of each of these  months is 2% of the Monthly  Total for each
such month.  The Monthly  Total for Month 20 equals US  $4,000,000,  so that the
Rolling Annual Total for the  seven-month  period  beginning on the first day of
Month 14 and ending on the last day of Month 20 equals US $17,000,000.  In Month
21, Dechra owes Bioenvision a Royalty payment under Section 3.5.5 as follows:

          .02 x $4,000,000 + [.01 x ($17,000,000 - $15,000,000)] = $80,000
          + $20,000 = $100,000

In accordance  with Section  3.5.7,  the first day of Month 21 is a new "Royalty
Period Start Date" and the Rolling Annual Total is  recalculated  effective from
the beginning of Month 21.

In respect of Month 21 and each month  thereafter,  Dechra  owes  Bioenvision  a
Royalty  payment  under  Section 3.5.6 of 3% of the Monthly Total for such month
(subject to Sections 3.5.8 and 3.5.9 as shown in Illustration No. 3).

Illustration No. 3

Assume the same facts as in Illustration Nos. 1 and 2.

For the three-month period beginning on the first day of Month 21, and ending on
the last day of Month 23, the Rolling  Annual Total equals US  $16,000,000.  The
Royalty in respect of each of these  months is 3% of the Monthly  Total for each
such month.  The Monthly  Total for Month 24 equals US  $7,000,000,  so that the
Rolling  Annual Total for the  four-month  period  beginning on the first day of
Month 21 and ending on the last day of Month 24 equals US $23,000,000.  In Month
25, Dechra owes Bioenvision a Royalty payment under Section 3.5.8 as follows:

         .03 x $7,000,000 + [.01 x ($23,000,000 - $20,000,000)] = $210,000 +
         $30,000 = $240,000

In respect of Month 25 and each month  thereafter,  Dechra  owes  Bioenvision  a
Royalty  payment  under Section 3.5.9 of 4% of the Monthly Total for such month,
without regard to the Rolling Annual Total thereafter.