Document:

Exhibit 10.23

 

	
   

  	
   

  	
  GE CAPITAL CORPORATION

  
	
  Barbara Kaiser

  	
   

  	
  Life Science Finance

  
	
  SVP, Sales

  	
   

  	
  2050 Martin Avenue

  
	
   

  	
   

  	
  Santa Clara, CA 95050

  
	
   

  	
   

  	
  408-986-6886 ph./ 408-980-7722

  

 

 

June 27, 2005

Revised:  June 29, 2005

Revised:  July 6, 2005

 

 

 

 

CONFIDENTIAL LOAN PROPOSAL
FOR

 

 

Sunesis Pharmaceuticals, Inc.

 

 

 

Sunesis
Pharmaceuticals, Inc.

 

Mr. Eric Bjerkholt

SVP/ Chief Financial Officer

Sunesis Pharmaceuticals, Inc.

341 Oyster Point Blvd

South San Francisco, CA 94080

 

Dear Eric:

 

General
Electric Capital Corporation (“GE Capital”) is pleased to submit the following
loan proposal to Sunesis Pharmaceuticals, Inc.:

 

	
  Transaction:

  	
   

  	
  Loan

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Borrower:

  	
   

  	
  Sunesis Pharmaceuticals, Inc.

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Lender:

  	
   

  	
  General
  Electric Capital Corporation, its affiliates or its assignee (“GE Capital”)

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Loan Amount:

  	
   

  	
  $2,500,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Equipment:

  	
   

  	
  Laboratory and scientific equipment, computer equipment, FF&E, and
  soft cost as detailed in the attached
  Addendum A. Equipment acquired 3/1/05 and after may be included in the line.
  All equipment is to be acceptable to GE Capital and will be free and clear of
  other liens, claims, and encumbrances.

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Loan
  Term and Payment:

  	
   

  	
  Computer equipment and soft cost: 36 months of Principal and
  Interest @ 3.16067% of financed cost, paid monthly in advance for each loan
  schedule, full payout. (9.10% all-in rate).

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  All other equipment: 48 months of Principal and
  Interest @ 2.47675% of financed cost, paid monthly in advance for each loan
  schedule, full payout. (9.15% all-in rate).

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Anticipated Funding Period:

  	
   

  	
  Through 12/31/06.

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Line Mechanics:

  	
   

  	
  Minimum fundings will be $75,000, with no more than one funding per
  month.

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  For schedules subsequent to the first, equipment with invoice dates
  older than 90 days will be financed at appropriate discount.

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Amortization begins on the first of the month start date. Interim interest will be charged for any period between
  the funding date and the start date.

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Warrants:

  	
   

  	
  The Company paid a warrant (dated 6/21/04, 1,435 shares of Series C-1
  Pf. Stock) for an additional $302,850 soft cost on the prior line. The
  additional soft cost was never used. Therefore, the warrant will be carried
  over to cover the first

  	
   

  

 

 

2

 

Sunesis
Pharmaceuticals, Inc.

 

	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  $302,850 soft cost financed under this new line.

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Additionally, in consideration for the remaining $322,150 soft cost
  to be financed under this line, the Company will provide to GE Capital a
  warrant for shares of Series C-1 Preferred stock equivalent to a 2.272%
  position at the Series C-1 price per share (i.e., $322,150 x 2.272%  ̧ $4.80 per share). The terms
  will be the same as the warrants dated 6/11/03 and 6/21/04.

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Lien:

  	
   

  	
  The
  existing continuing lien (on all equipment financed by GE Capital) will be
  extended through the end of the funding period for this new line.

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Covenants:

  	
   

  	
  None

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Deposits/

  	
   

  	
   

  	
   

  
	
  Compensating Balances:

  	
   

  	
  None

  	
   

  

 

 

GENERAL TERMS AND CONDITIONS

 

Our proposal contains the following provisions
and the Loan Payments we propose are specifically based upon these provisions
and our assumptions.

 

1.                                       MAINTENANCE
AND INSURANCE: All maintenance and insurance
(fire and theft, extended coverage and liability) are the responsibility of the
Company.  Company will be responsible for
maintaining in force, all risk damage, and liability insurance in amounts and
coverages satisfactory to GE Capital.

 

2.                                       DOCUMENTATION: GE Capital’s
current standard loan documentation for this type of collateralized loan will
be used.  (Almost all of the Company’s
master documents are already in place.)

 

3.                                       INDEXING: The Interest Rate,
Payment Factor and corresponding Loan Payment are based on the Federal Reserve
36- and imputed 48-month Treasury Constant Maturity Rates (H.15/ “Treasury
Rates”) for 6/22/05 and will be adjusted effective as of the date of funding of
any Financing.

 

4.                                       TRANSACTION COSTS: By execution and return of this
proposal letter, the Company will be responsible for all of its closing costs.

 

5.             PROPOSAL FEE:  $20,000.  Of this, $5,000 will be credited to schedules
as financed and the remaining $15,000 will be retained by GE Capital to cover
its ordinary costs and expenses associated with the line (e.g., application
processing, internal legal cost, UCC 
search and filing fees, documentation, etc.).   All or a portion of this fee will be
forfeited if this transaction is approved by 

GE Capital and not executed by Borrower as called for in this

 

 

3

 

 

Sunesis
Pharmaceuticals, Inc.

 

proposal.
If investment approval is not obtained, the fee will be promptly returned to
Borrower (less the cost of credit verification and investigation and any out of
pocket expenses incurred such as appraisal fees, legal fees, etc.).

 

6.                                       ELECTRONIC
PAYMENT SYSTEM: GE Capital’s standard payment
collection method is through an electronic payment system.  An enrollment form will be provided with Loan
documentation. (Optional, but recommended.)

 

7.                                       CONFIDENTIALITY: 
This proposal letter is being provided to the Company on a confidential
basis.  Except as required by law,
neither this proposal nor its contents may be disclosed, except to individuals
who are the Company’s officers, employees or advisors who have a need to know
of such matters and then only on the condition that such matters remain
confidential.  In addition, none of such
persons shall, except as required by law, use the name of, or refer to GE
Capital, in any correspondence, discussions, advertisement, press release or
disclosure made in connection with the Financing without the prior written
consent of GE Capital.

 

8.             EXPIRATION:  This proposal will expire 7/8/05 if not
accepted prior to that date.

 

This proposal expresses GE Capital’s willingness
to seek internal approval for the

transaction contemplated herein.  By signing and returning this letter both
parties acknowledge that:  The above
proposed terms and conditions do not constitute a commitment by GE Capital,
(ii) GE Capital’s senior management may seek changes to the above terms and
conditions, and (iii) GE Capital may decline further consideration of this
transaction at any point in the approval process.  GE Capital’s agreement to fund the proposed
transaction remains subject to and would be preceded by completion of a legal
and business due diligence, as well as collateral and credit review and
analysis, all with results satisfactory to GE Capital, and the closing of an
initial funding under such transaction would be conditioned upon the prior
execution and delivery of final legal documentation and all conditions
precedent acceptable to GE Capital and its counsel and no material adverse
change in the business conditions or prospects of the Company (“Material
Adverse Change”).  For transactions that
contemplate more than one funding, GE Capital’s obligation to make each such
subsequent funding would be subject to confirmation that no Material Adverse
Change has occurred.

 

                I would appreciate the
opportunity to discuss this proposal with you at your earliest
convenience.  Please do not hesitate to
contact me at (408) 986-6886 if you have any questions or if I may be of other
assistance.

 

	
  Sincerely,

  	
  PROPOSAL ACCEPTED BY:

  
	
   

  	
   

  
	
   

  	
  Sunesis Pharmaceuticals, Inc.

  
	
   

  	
   

  
	
  Barbara Kaiser

  	
  Name:

  	
  /s/ Eric Bjerkholt

  
	
  SVP, Sales

  	
   

  
	
   

  	
   

  	
  Title:

  	
  Senior Vice President and Chief Financial Officer

  
	
   

  	
   

  
	
   

  	
   

  	
  Date:

  	
  7/8/05

  

 

 

4

 

Sunesis
Pharmaceuticals, Inc.

 

Addendum A

 

Expected
Equipment Composition (by end of line):

 

	
  Category

  	
   

  	
   

  	
   

  	
  Amount

  	
   

  	
   

  	
  Percent

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Lab and scientific equipment:

  	
   

  	
  3

  	
   

  	
  $1,250,000

  	
   

  	
  3

  	
   

  	
  50

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Computer equipment:

  	
   

  	
  £

  	
   

  	
  500,000

  	
   

  	
  £

  	
   

  	
  20

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  FF&E:

  	
   

  	
  £

  	
   

  	
  125,000

  	
   

  	
  £

  	
   

  	
  5

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Soft Cost (LHs,
  software, tax, freight, 

  & similar):

  	
   

  	
  £

  	
   

  	
  625,000

  	
   

  	
  £

  	
   

  	
  25

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  TOTAL:

  	
   

  	
   

  	
   

  	
  $2,500,000

  	
   

  	
   

  	
   

  	
  100

  	
  %

  

 

 

5

AUTHORIZATION FOR RELEASE

 

OF INFORMATION

 

The undersigned hereby
authorizes past and present depositing institutions, creditors, vendors and
suppliers of the undersigned to provide such information pertaining to any
loans, leases, lines of credit, account balances, and payment histories of the
undersigned to General Electric Capital Corporation as it may request.

 

 

 

Sunesis
Pharmaceuticals, Inc.

 

 

	
  By:

  	
  /s/ Eric Bjerkholt

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Title:

  	
  Senior Vice President, Chief Financial Officer

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Date:

  	
  7/8/05

  	
   

  	
   

  

 

 

 

6Exhibit 10.35

 

EXECUTION VERSION

 

 

 

 

LICENSE AGREEMENT

 

between

 

SUNESIS PHARMACEUTICALS, INC.

 

and

 

BRISTOL-MYERS SQUIBB COMPANY

 

 

 

 

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.

 

 

LICENSE AGREEMENT

 

THIS LICENSE AGREEMENT (this “Agreement”) is made and entered
into as of April 27,  2005 (the “Effective Date”), by and between Bristol-Myers Squibb Company, a Delaware corporation
headquartered at 345 Park Avenue, New York, New York 10154 (“BMS”), and Sunesis Pharmaceuticals, Inc., a Delaware corporation
having its principal place of business at 341 Oyster Point Boulevard, South San
Francisco, California 94080 (“Sunesis”). 
BMS and Sunesis are sometimes referred to herein individually as a “Party”
and collectively as the “Parties.”

 

RECITALS

 

WHEREAS, BMS Controls (as defined below) certain patent rights and
know-how rights with respect to the Licensed Compounds (as defined below); and 

 

WHEREAS, Sunesis desires to obtain from BMS the licenses set forth
herein, and BMS desires to grant such licenses to Sunesis, all on the terms and
conditions set forth in this Agreement; 

 

NOW, THEREFORE in consideration of the foregoing and the mutual
agreements set forth below, the Parties agree as follows:  

 

ARTICLE 1

DEFINITIONS

 

The terms in this Agreement with initial letters capitalized, whether
used in the singular or the plural, shall have the meaning set forth below or,
if not listed below, the meaning designated in places throughout this
Agreement.

 

1.1                                 “AAA” has the meaning set forth in Section 14.2.

 

1.2                                 “Acceptance Notice” has the meaning
set forth in Section 3.1(e).

 

1.3                                 “Act” means the United States Food, Drug and
Cosmetic Act, as amended.

 

1.4                                 “Active Compound” means any compound that exhibits an IC50 of <[*] in any of the CDK inhibitor assays
described in Appendix 2 attached hereto, or any successor assay
designated in accordance with Section 4.6.

 

1.5                                 “Affiliate” of a Person means any
other Person which (directly or indirectly) is controlled by, controls or is
under common control with such Person. 
For the purposes of this definition, the term “control” (including, with
correlative meanings, the terms “controlled by” and “under common control with”)
as used with respect to a Person means (i) in the case of a corporate
entity, direct or indirect ownership of voting securities entitled to cast at
least fifty percent (50%) of the votes in the election of directors or (ii) in
the case of a non-corporate entity, direct or indirect ownership of at least
fifty percent (50%) of the voting securities with the power to direct the
management and policies of such entity.

 

[*]         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.

 

1

 

1.6                                 “Agreement” means this Agreement,
together with all Appendices attached hereto, as the same may be amended or
supplemented from time to time.

 

1.7                                 “Approval” means, with respect to any
Licensed Product in any regulatory jurisdiction, approval from the applicable
Regulatory Authority sufficient for the manufacture, distribution, use and sale
of the Licensed Product in such jurisdiction in accordance with applicable
Laws, including receipt of pricing and reimbursement approvals, where
applicable.  For purposes of the U.S.,
Approval means NDA approval.  For
purposes of Japan, Approval means JNDA approval.

 

1.8                                 “Blended Rate”
means (a) the total amount
of royalties (stated in U.S. dollars) that would be payable in a Calendar Year
with respect to a Product under Section 8.4.1, without the applicable
reduction in the royalty rate (under Section 8.4.3 and/or 8.4.4) divided
by (b) the total Net Sales (stated in U.S. dollars) of such Product in
that Calendar Year, expressed as a percentage. 

 

1.9                                 “BMS-387032”
means the compound identified by BMS as “BMS-387032”.

 

1.10                           “BMS Core Patent
Rights” means the patents
and patent applications which are listed in Section 1 of Appendix 1
hereto, and (a) any foreign counterparts thereof, (b) all
divisionals, continuations, continuations-in-part thereof or any other patent
application claiming priority to (i) any of the patents identified in Section 1 of Appendix 1 or (ii) any patent or patent application from which the patents
identified in Section 1
of Appendix 1 claim priority,
and (c) all patents issuing on any of the foregoing, together with all
registrations, reissues, re-examinations, supplemental protection certificates,
or extensions thereof, and any foreign counterparts thereof.

 

1.11                           “BMS Extension Patent Rights” has the meaning set forth in Section 2.8.

 

1.12                           “BMS Know-How” means all technical information and know-how
known to and Controlled by BMS as of the Effective Date (including, without
limitation, all biological, chemical, pharmacological, toxicological, clinical,
assay and related know-how and trade secrets, and all manufacturing data, the
specifications of ingredients, the manufacturing processes, specifications,
sourcing information, assays,
quality control and testing procedures, and related know-how and trade secrets)
that is primarily and directly related to and/or reasonably necessary for the
manufacture, Development and/or Commercialization of the Licensed Compounds or
a Licensed Product.  BMS Know-How shall
not include information and know-how that is acquired or developed by BMS after
the Effective Date.

 

1.13                           “BMS Other Patent Rights” means (a) patents and patent
applications (other than the BMS Core Patent Rights) that are necessary or
useful for the manufacture, Development and/or Commercialization of Licensed
Compounds and/or Licensed Products that are Controlled by BMS or its Affiliates
as of the Effective Date, which are listed in Section 2 of Appendix 1
hereto; (b) those claims in patents and patent applications (other than
the BMS Core Patent Rights) that are Controlled by BMS or its Affiliates that
are specifically directed to or specifically refer to one or more Licensed
Compound and/or Licensed Product (for example, patent rights covering the use
of a Licensed Compound in combination with another pharmaceutical agent); (c) all
divisionals, continuations, continuations-in-part thereof or any other patent
application claiming priority to (i) any of the patents identified in Section 2 of Appendix 1 or (ii) any patent or patent application from which the patents
identified in Section 2
of Appendix 1 claim priority;
and (d) all patents issuing on any of the foregoing, together with all
registrations, reissues, re-examinations, supplemental protection certificates,
or extensions thereof, and any foreign counterparts thereof.

 

1.14                           “BMS Patent Rights” means the BMS Core Patent Rights, BMS
Extension Patent Rights and the BMS Other Patent Rights.

 

2

 

1.15                           “Business Day” or “business day”
means a day other than Saturday,
Sunday or any day on which commercial banks located in New York, New York are
authorized or obligated by applicable Laws to close.

 

1.16                           “Calendar Quarter” means the respective periods of three consecutive
calendar months ending on March 31, June 30, September 30 and December 31.

 

1.17                           “Calendar Year” means each successive period of 12 months
commencing on January 1 and ending on December 31.

 

1.18                           “Caribbean and Central America” means all countries that are
included in the geographic area comprising as of the Effective Date:
Antigua and Barbuda, Bahamas, Barbados, Belize, Bermuda, Costa Rica, Cuba,
Dominica, Dominican Republic, El Salvador, Grenada, Guatemala, Haiti, Honduras,
Jamaica, Nicaragua, Panama, St. Kitts & Nevis, St. Lucia, St. Vincent &
the Grenadines, and Trinidad and Tobago.

 

1.19                           “CDK” means individually or
collectively CDK1, CDK2, CDK4, CDK7 and/or CDK9.

 

1.20                           “Combination Product” means a Licensed Product that includes at
least one additional active ingredient other than the Licensed Compound.  Drug delivery vehicles, adjuvants, and
excipients shall not be deemed to be “active ingredients”, except in the case
where such delivery vehicle, adjuvant, or excipient is recognized by the FDA as
an active ingredient in accordance with 21 CFR 210.3(b)(7). 

 

1.21                           “Commercialization” or “Commercialize” means
activities directed to commercially manufacturing, obtaining pricing and
reimbursement approvals, carrying out Phase 4 Trials for, marketing, promoting,
distributing, importing or selling a Licensed Product.

 

1.22                           “Commercially Reasonable Efforts” means, with respect to Licensed Compounds
and Licensed Products, the carrying out of Development or Commercialization
activities in a sustained manner using good faith commercially reasonable and
diligent efforts, using the efforts that a company within the pharmaceutical
industry would reasonably devote to an oncology product of similar market
potential or profit potential at a similar stage in development or product life
resulting from its own research efforts, based on conditions then prevailing
and taking into account, without limitation, issues of safety and efficacy,
product profile, the proprietary position, the then current competitive environment
for such product or compound and the likely timing of the product’s entry into
the market, the regulatory environment and status of the product, and other
relevant scientific, technical and commercial factors.  Commercially Reasonable Efforts requires that
Sunesis: (i) promptly assign responsibility for such Development and
Commercialization activities to specific employees, contractors, agents,
Affiliates or Sublicensees, as applicable, who are held accountable for
progress and monitor such progress on an on-going basis, (ii) set and
consistently seek to achieve specific and meaningful objectives and timelines
for carrying out such Development and Commercialization activities, (iii) consistently
make and implement decisions and allocate resources designed to advance
progress with respect to such objectives and timelines, and (iv) where
applicable, employ compensation systems for its employees that reasonably
incentivize such employees to achieve such objectives.  

 

1.23                           “Competitive Compound” means any compound that is not a Licensed
Compound and that exhibits activity in any of the assays described in Appendix
2 applicable to CDK2, CDK7 or CDK9 (or any

 

3

 

successor assay thereto designated in accordance with Section 4.6)
with: (i) an IC50 < [*], or (ii) an IC50
between [*] and [*] where the compound also exhibits activity against any
Primary Target that is less than [*]fold greater than such compound’s activity
against the applicable CDK2, CDK7 and/or CDK9. 
“Primary Target” as used herein is any target specified by
Sunesis other than CDK2, CDK7 or CDK9. 
For clarity, if a particular compound that is not a Licensed Compound
exhibits activity with an IC50 < [*] against any of CDK2, CDK7 or
CDK9, it is a Competitive Compound. 
Further, if a particular compound that is not a Licensed Compound
exhibits activity with an IC50 > [*] against each of CDK2, CDK7
and CDK9, it is not a Competitive Compound. 
Alternately, by way of example, if a particular compound that is not a
Licensed Compound exhibits activity with an IC50 > [*] against
both CDK2 and CDK7, but exhibits activity with an IC50 = [*] against
CDK9, it is a Competitive Compound unless it also exhibits activity with an IC50
< [*] against one or more Primary Target(s). 
For the purposes of determining whether a particular compound is a
Competitive Compound, activity against any Primary Target shall be measured in
an industry standard assay for such Primary Target, or if no such industry
standard exists for a particular Primary Target, then the measurement will be
made in the assay then used internally by Sunesis for such Primary Target.  

 

1.24                           “Confidential Information” means all trade secrets, processes, formulae,
data, know-how, improvements, inventions, chemical or biological materials,
techniques, marketing plans, strategies, customer lists, or other information
that has been created, discovered, or developed by a Party, or has otherwise
become known to a Party, or to which rights have been assigned to a Party, as
well as any other information and materials that are deemed confidential or
proprietary to or by a Party (including, without limitation, all information
and materials of a Party’s customers and any other Third Party and their
consultants), in each case that are disclosed by such Party to the other Party,
regardless of whether any of the foregoing are marked “confidential” or “proprietary”
or communicated to the other by the disclosing Party in oral, written, graphic,
or electronic form.  For all purposes of
this Agreement, BMS Know-How shall be treated as being Confidential Information
of both Parties.

 

1.25                           “Controlled” or “Controls”,
when used in reference to intellectual property, means the legal authority or
right of a Party hereto (or any of its Affiliates) to grant a license or
sublicense of intellectual property rights to another Party, or to otherwise
disclose proprietary or trade secret information to such other Party, without
breaching the terms of any agreement with a Third Party, or misappropriating
the proprietary or trade secret information of a Third Party.  

 

1.26                           “Development” means non-clinical and clinical drug
development activities reasonably related to the development and submission of
information to a Regulatory Authority, including, without limitation,
toxicology, pharmacology and other discovery and pre-clinical efforts, test
method development and stability testing, manufacturing process development,
formulation development, delivery system development, quality assurance and quality
control development, statistical analysis, clinical studies (including, without
limitation, pre- and post-approval studies and specifically excluding
regulatory activities directed to obtaining pricing and reimbursement
approvals).  When used as a verb, “Develop”
means to engage in Development.

 

1.27                           “Development Plan” means, with respect to any Licensed Product,
a comprehensive, multi-year plan specifying the anticipated timing and
technical details of Development activities for such Licensed Product,
including without limitation the indications to be targeted, line of therapy,
timelines for completing key activities, phasing of development, primary
endpoints, criteria for continuing activities,

 

[*]         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.

 

4

 

study size, comparator drugs, combination drugs, timelines for data
preparation and filing of regulatory submissions, toxicology and pharmacology
studies and manufacturing process development and scale up.  A summary of the initial Development Plan as
of the Effective Date is attached hereto as Appendix 3.

 

1.28                           “Dollar” or “$” means the lawful currency of
the United States.

 

1.29                           “Effective Date” means the date specified in the initial
paragraph of this Agreement.

 

1.30                           “EMEA” means the European Agency for the Evaluation of Medicinal
Products, or any successor agency thereto.

 

1.31                           “Equity Agreements” means the Series C-2
Stock Purchase Agreement, the Investor Rights Agreement and the Eighth Amended and Restated
Certificate of Incorporation of Sunesis.

 

1.32                           “EU” means the European Union, as its membership may be altered from time to
time, and any successor thereto, and which, as of the Effective Date, consists
of Austria, Belgium, Czech Republic, Denmark, Estonia, Finland, France,
Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta,
The Netherlands, Poland, Portugal, Slovakia, Slovenia, Spain, Sweden and the
United Kingdom, and that certain portion of Cyprus included in such
organization.

 

1.33                           “Europe” means the countries comprising the European Union as it
may be constituted from time to time, together with those additional countries
included in the European Economic Area as it may be constituted from time to
time (which as of the Effective Date includes Iceland, Liechtenstein and
Norway), Albania, Andorra, Belarus, Bosnia and Herzegovina, Bulgaria, Croatia,
Holy See (Vatican), Macedonia, Moldova, Monaco, Poland, Romania, Russian
Federation, San Marino, Serbia and Montenegro, Switzerland, Turkey, Ukraine,
other central and eastern European markets including former Soviet block and USSR
countries, and any successors to, or new countries created from, any of the
foregoing.

 

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

 

1.35                           “Field” means the diagnosis, prevention, treatment or control of any human or
animal disease, disorder or condition.

 

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

 

1.37                           “GAAP” means generally accepted accounting principles in the United States.

 

1.38                           “Generic Product” means any pharmaceutical product containing
as an active ingredient a Licensed Compound (or any salt, solvate, crystalline
or noncrystalline form of such Licensed Compound) that is also contained in a
Licensed Product, and which pharmaceutical product is sold in the same country
as such Licensed Product by any Third Party that is not a Sublicensee of
Sunesis or its Affiliates.

 

1.39                           “IND” means an Investigational New Drug Application, as defined in the Act,
filed with the FDA or its foreign counterparts.

 

1.40                           “Indemnification Claim” has the meaning set forth in Section 12.3.

 

5

 

1.41                           “Indemnitee” has the meaning set forth in Section 12.3.

 

1.42                           “Indemnitor” has the meaning set forth in Section 12.3.

 

1.43                           “Independent Evaluator” means an independent certified public
accounting firm or investment bank of
nationally recognized standing, which, at the time of the evaluation set forth
in Section 3.1, is not providing financial or consulting services to
either Party, and which is selected by Sunesis and reasonably acceptable to
BMS, or such other qualified Person as the Parties may mutually agree to.

 

1.44                           “Investor Rights Agreement” means the Eighth Amended and
Restated Investor Rights Agreement, as amended by the Amendment to Eighth
Amended and Restated Investor Rights Agreement entered into by Sunesis, BMS and
the other parties thereto concurrently with this Agreement in connection with
the issuance of Series C-2
Preferred Stock to BMS as part of the signing payment to BMS under Section 8.1.

 

1.45                           “JNDA” means a New Drug Application filed with the Koseisho
required for marketing approval for the applicable Licensed Product in Japan.

 

1.46                           “JNDA Approval” means the approval of a JNDA by the Koseisho for
the applicable Licensed Product in Japan.

 

1.47                           “JNDA Filing” means the acceptance by the Koseisho of the filing
of a JNDA for the applicable Licensed Product in Japan.

 

1.48                           “Koseisho” means the Japanese Ministry of Health and Welfare, or
any successor agency thereto.

 

1.49                           “Large Pharma Sublicensee” means a Sublicensee that is among the
top 25 largest pharmaceutical companies, based on worldwide annual sales (in
Dollars) of non-generic pharmaceutical products as measured by IMS Health or
its successor, or that is a collaboration partner of Sunesis as of the
Effective Date, in each case at the time of entering into the applicable
Sublicense agreement.

 

1.50                           “Laws” means all laws, statutes, rules, regulations, ordinances
and other pronouncements having the effect of law of any federal, national,
multinational, state, provincial, county, city or other political subdivision,
agency or other body, domestic or foreign. 

 

1.51                           “License” has the meaning set forth in Section 2.3(a).  “License” also refers to the corresponding
arrangement for the grant by Sunesis of rights back to BMS with respect to one
or more Licensed Compound(s) and Licensed Product(s) pursuant to Article 3.

 

1.52                           “Licensed Compound” means (a) BMS-387032, BMS-[*], BMS-[*] and BMS-[*] and any
other Active Compound, the composition, manufacture or use of which is covered
as of the Effective Date or at any time thereafter by a claim in a U.S. patent
or patent application within the BMS Core Patent Rights or BMS Extension Patent
Rights; (b) any Active Compound that is first synthesized by or for
Sunesis or its Affiliates (or by Sublicensees pursuant to a sublicense
hereunder) within [*] years following the Effective Date and that is derived
from or through use of a compound covered by the foregoing clause (a) or
from or through use of the BMS Know-How or practice of the BMS Patent Rights
(for example, any

 

[*]         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

 

Active Compound which is derived through iterative rational drug design
based upon the biological activity of a compound covered by the foregoing
clause (a)); (c) any compound that is first synthesized by or for Sunesis
or its Affiliates (or by Sublicensees pursuant to a sublicense hereunder)
within [*] years following the
Effective Date that is derived through iterative rational drug design based
upon the biological activity of a compound covered by the foregoing clause
(a)); and (d) any metabolic precursors or prodrugs, isomers, active
metabolites, hydrates, anhydrides, solvates, salt forms, free acids or bases,
esters, amides, complexes, conjugates or polymorphs of any compounds covered by
the foregoing clause (a) or (b) or (c).

 

1.53                           “Licensed
Product” means any pharmaceutical product containing a Licensed
Compound (alone or with other active ingredients), in all forms, presentations,
formulations and dosage forms.

 

1.54                           “List
A Countries” means [*] and the U.S.

 

1.55                           “Losses and Claims” has the meaning set forth in Section 12.1.

 

1.56                           “MAA Approval” means approval by the EMEA of a marketing
authorization application (“MAA”) filed with the EMEA for the applicable
Licensed Product under the centralized European procedure.  If the centralized EMEA filing procedure is
not used, MAA Approval shall be achieved upon the first Approval for the
applicable Licensed Product in France, Germany, Italy, Spain or the United
Kingdom.

 

1.57                           “MAA Filing” means filing with the EMEA of a marketing
authorization application (“MAA”) for the applicable Licensed Product
under the centralized European procedure. 
If the centralized EMEA filing procedure is not used, MAA Filing shall
be achieved upon the first filing of a marketing authorization application for
the applicable Licensed Product in France, Germany, Italy, Spain or the United
Kingdom.

 

1.58                           “Major Market Country” means the United States, Japan, Germany,
the United Kingdom, France, Spain and Italy. 

 

1.59                           “NDA” means a New Drug Application filed with the FDA required
for marketing approval for the applicable Licensed Product in the U.S.

 

1.60                           “NDA Approval” means the approval of an NDA by the FDA for the
applicable Licensed Product in the U.S.

 

1.61                           “NDA Filing” means the acceptance by the FDA of the filing of an
NDA for the applicable Licensed Product.

 

1.62                           “Negotiation Period” has the meaning
set forth in Article 3.

 

1.63                           “Net Sales” means, with respect to any Licensed Product,
the amount billed by a Party, an Affiliate of such Party, or any permitted
Sublicensee for sales of such Licensed Product to a Third Party less:

 

(a)                                  discounts (including, without limitation,
cash discounts and quantity discounts), retroactive price reductions, charge-back
payments and rebates granted to managed health care

 

[*]         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

 

organizations or to federal,
state and local governments, their agencies, and purchasers and reimbursers or
to trade customers (a “Discount”); provided however,
that where any such Discount is based on sales of a bundled set of products in
which such Licensed Product is included, the Discount shall be allocated to
such Licensed Product on a pro rata basis based on the sales value (i.e., the
unit average selling price multiplied by the unit volume) of the Licensed
Product relative to the sales value contributed by the other constituent
products in the bundled set, with respect to such sale;

 

(b)                                 credits or allowances actually granted upon
claims, damaged goods, rejections or returns of such Licensed Product,
including such Licensed Product returned in connection with recalls or
withdrawals;

 

(c)                                  freight out, postage, shipping and insurance
charges for delivery of such Licensed Product; 

 

(d)                                 taxes or duties levied on, absorbed or
otherwise imposed on the sale of such Licensed Product, including, without
limitation, value-added taxes, or other governmental charges otherwise imposed
upon the billed amount, as adjusted for rebates and refunds, to the extent not
paid by the Third Party; and 

 

(e)                                  write-downs for uncollectible payments
determined on a product-specific basis, provided that (i) the
payment is uncollectible due to the bankruptcy of the party owing such payment,
(ii) the write-down is not caused by Sunesis’ failure to maintain a
commercially reasonable program to monitor customer creditworthiness,
consistent with industry practice, (iii) a detailed report verifying such
write-down on a product-specific basis shall be provided in the royalty report
under Section 8.6 and (iv) if the uncollectible payment is ultimately
collected, in the next royalty payment period Sunesis shall provide BMS with a
write-up (i.e., increase in in royalty payment) corresponding to the previous
write-down.

 

Net Sales shall be determined in accordance with
GAAP.  In the case of any Combination
Product sold in the Territory, Net Sales for such Combination Product shall be
calculated by multiplying actual Net Sales of such Combination Product by the
fraction A/(A+B) where A is the invoice price of the Licensed Product if sold separately,
and B is the total invoice price of the other active ingredient or ingredients
in the Combination Product, if sold separately. 
If, on a country-by-country basis, the other active ingredient or
ingredients in the Combination Product are not sold separately in said country,
Net Sales for the purpose of determining royalties of the Combination Product
shall be calculated by multiplying actual Net Sales of such Combination Product
by the fraction A/D, where A is the invoice price of the Licensed Product if
sold separately, and D is the invoice price of the Combination Product.  If neither the Licensed Product nor the other
active ingredient(s) are sold separately in a given country, the Parties shall
determine Net Sales for such Combination Product by mutual agreement based on
the relative contribution of the Licensed Compound and each other active
ingredient to the Combination Product, and shall take into account in good
faith any applicable allocations and calculations that may have been made for
the same period in other countries (giving more weight to allocations made for
Major Market Countries than for other countries).

 

Net Sales shall not include any payments among Sunesis, its Affiliates
and Sublicensees.

 

1.64                           “North America” means Canada,
Mexico and the United States.

 

1.65                           “Notice” means the SAS data set of the
completed studies and any correspondences with the FDA, radiographic films for
responders, case report forms for responders, summary information

 

8

 

regarding any Third Party patents known to Sunesis for which a license
is likely to be required, summary information regarding the manufacture,
sourcing and cost of goods, in each case with respect to the applicable
Licensed Compounds and Licensed Products and to the extent known to Sunesis. 

 

1.66                           “Pay-to-Play Feature” means a feature that results in
disproportionate dilution of ownership or diminution of material rights
compared to other stockholders with respect to the same series of stock by virtue
of BMS’ failure to participate in an equity financing.  The parties agree that ordinary dilution
resulting from the issuance of shares of preferred stock (including, without
limitation, in connection with a financing with an implied pre-money valuation
less than the pre-money valuation implied by Sunesis’ Series C-2 Preferred
Stock financing) shall not be deemed to be a Pay-to-Play Feature.  

 

1.67                           “Person” means any individual, firm, corporation, partnership,
limited liability company, trust, business trust, joint venture company,
governmental authority, association or other entity.

 

1.68                           “Phase 1 Trial” means a human clinical
trial of a Licensed Product, the principal purpose of which is a preliminary
determination of safety in healthy individuals or patients, as described in 21
C.F.R. 312.21(a), or a similar clinical study prescribed by the Regulatory
Authorities in a foreign country.  For
purposes of this Agreement, “start of Phase 1 Trial” for a Licensed
Product means the first dosing of such Licensed Product in a human patient in a
Phase 1 Trial.  

 

1.69                           “Phase 2 Trial” means a human clinical
trial of a Licensed Product, the principal purpose of which is a determination
of safety and efficacy in the target patient population, as described in 21 C.F.R.
312.21(b), or a similar clinical study prescribed by the Regulatory Authorities
in a foreign country.  For purposes of
this Agreement, “start of Phase 2 Trial” for a Licensed Product means the
first dosing of such Licensed Product in a human patient in a Phase 2
Trial.

 

1.70                           “Phase 3 Trial” means a human clinical
trial of a Licensed Product on a sufficient number of subjects that is
designed to establish that a
pharmaceutical product is safe and efficacious for its intended use, and to determine warnings, precautions, and adverse
reactions that are associated with such
pharmaceutical product in the dosage range to be prescribed, which trial is intended to support Approval of a Licensed Product, as described in 21 C.F.R. 312.21(c), or a similar clinical study prescribed by the Regulatory Authorities in a
foreign country.  For purposes of this
Agreement, “start of Phase 3 Trial” for a Licensed Product means the first
dosing of such Licensed Product in a human patient in a Phase 3 Trial.

 

1.71                           “Phase 4 Trial” means a human clinical
trial for a Licensed Product commenced after receipt of Approval in the country
for which such trial is being conducted and that is conducted within the
parameters of the Approval for the Licensed Product.  Phase 4 Trials may
include, without limitation, epidemiological studies, modeling and
pharmacoeconomic studies, investigator sponsored clinical trials of Licensed
Product and post-marketing surveillance studies.

 

1.72                           “Proprietary Compound” of a Party means a specific compound being
developed or sold (as of the Effective Date or in the future) by such Party or
its Affiliates or their contractors or collaborators, where such compound is
specifically claimed in a patent application or patent.

 

1.73                           “Public Company” means a company with
a class of securities (i) registered pursuant to Section 12(b) or
12(g) of the Securities Exchange Act of 1934, as amended, and (ii) traded
on a national securities exchange or listed on an interdealer quotation system.

 

1.74                           “Regulatory Authority” means any national or supranational
governmental authority, including, without limitation, the FDA, EMEA or
Koseisho (i.e., the Japanese Ministry of Health and

 

9

 

Welfare, or any successor agency thereto), that has responsibility in
countries in the Territory over the Development and/or Commercialization of the
Licensed Compounds and Licensed Products.

 

1.75                           “Qualified Equity Financing” means, following the Effective
Date, the issuance and sale to investors of Sunesis preferred stock, the gross
proceeds of which are at least ten million Dollars ($10,000,000), which
preferred stock has at least the following rights, preferences and privileges
(by contract or otherwise): (i) a liquidation preference ranking pari passu
or senior to the Series C-2 Preferred Stock; (ii) rights of first
refusal on future securities issuances by Sunesis that are at least materially
the same as those provided for in the Investor Rights Agreement as in effect on
the Effective Date; (iii) registration rights that are at least materially
the same as those registration rights afforded the Series C-2 Preferred
Stock under the Investor Rights Agreement as in effect on the Effective Date;
and (iv) weighted-average and/or full ratchet anti-dilution protection
based on the sale price for such preferred stock.  In the event any preferred stock issued in
connection with any Qualified Equity Financing (“QEF Preferred Stock”)
is subject to a Pay-to-Play Feature, such Pay-to-Play Feature shall not apply
to the securities issued to BMS pursuant to Section 8.2.2 (either (1) by
there being a new class of preferred stock issued to BMS that is equivalent to
such QEF Preferred Stock in all material respects except that such stock shall
not be subject to such Pay-to-Play Feature or (2) BMS is put in materially
the same position by contract with Sunesis as it would have been had such
Pay-to-Play Feature not applied to the shares of QEF Preferred Stock issued to
BMS).  Qualified Equity Financing shall
also include, at the sole discretion of BMS, an issuance and sale to investors
of Sunesis preferred stock following the Effective Date that does not meet all
of the requirements set forth in this definition.

 

1.76                           “Royalty Term” has the meaning set forth in Section 8.4.2.

 

1.77                           “Series C-2 Financing” means the issuance and sale of Series C-2
Preferred Stock of Sunesis pursuant to the terms of the Series C-2
Preferred Stock Purchase Agreement dated    August 30,
2004, between Sunesis and the Purchaser (as defined therein).

 

1.78                           “Series C-2 Preferred Stock” means the Series C-2
Preferred Stock, par value $0.0001 per share, of Sunesis.

 

1.79                           “Series C-2 Stock Purchase Agreement” means the Stock
Purchase Agreement entered into by Sunesis and BMS concurrently with this
Agreement in connection with the issuance of Series C-2 Preferred Stock to
BMS pursuant to Section 8.1.

 

1.80                           “Sublicensee” means any Third Party expressly licensed under the
BMS Patent Rights by Sunesis to make, use and sell a Licensed Product.  As used in this Agreement, “Sublicensee”
shall also include a Third Party to whom Sunesis has granted the right to
promote or distribute a Licensed Product, provided that such Third Party is
responsible for marketing and promotion of such Licensed Product within its
promotion or distribution territory.  “Sublicensee”
shall also include any Third Party that is a party to a License agreement.

 

1.81                           “Territory” means any country in the world.

 

1.82                           “Third Party” means any Person other than Sunesis, BMS and
their respective Affiliates.

 

1.83                           “Third Party Term Sheet” has the
meaning set forth in Section 3.2.

 

1.84                           “Title 11” has the meaning set forth in Section 13.6.

 

10

 

1.85                           “United States” or “U.S.” means the United States of America and its territories and
possessions (including, without limitation, Puerto Rico).

 

1.86                           “Valid Claim” means a claim of (i) an issued and
unexpired patent or a supplementary protection certificate, which claim has not
been held invalid or unenforceable by a court or other government agency of
competent jurisdiction from which no appeal can be or has been taken and has
not been held or admitted to be invalid or unenforceable through re-examination
or disclaimer, opposition procedure, nullity suit or otherwise, or (ii) a
pending patent application, which claim in the case of clause (i) or (ii) covers
a Licensed Product, its manufacture or use; provided, however,
that if a claim of a pending patent application shall not have issued within [*]
([*]) years (or in Japan, [*] ([*]) years) after the earliest filing date from
which such claim takes priority, such claim shall not constitute a Valid Claim
for the purposes of this Agreement unless and until a patent issues with such
claim.

 

ARTICLE 2

LICENSE GRANT

 

2.1                                 BMS Core Patent
Rights and BMS Know-How.  Subject to all the terms and conditions set
forth in this Agreement (including, without limitation, the reservation of
rights in Section 2.6), BMS hereby grants to Sunesis a non-transferable
(except in accordance with Section 15.4), exclusive license, with the
right to sublicense in accordance with Section 2.3, under the BMS Core
Patent Rights and BMS Know-How to the extent reasonably necessary to, make, use
(including in activities directed at the research and Development of Licensed
Compounds), have made, sell, offer to sell, export, import and otherwise
exploit or Commercialize Licensed Compounds and Licensed Products in the Field in
the Territory; provided however, that Sunesis shall have no right to include any
compound covered by a claim within the BMS Core Patent Rights in any compound
library used for screening against non-CDK targets and Sunesis agrees that,
except for purposes of testing in appropriate counterscreens to determine the
selectivity of selected lead Active Compounds, it will not use any compound
covered by a claim within the BMS Core Patent Rights for purposes of screening
for activity against non-CDK targets.

 

2.2                                 BMS Other Patent
Rights.  Subject to all the terms and conditions set
forth in this Agreement (including, without limitation, the reservation of
rights in Section 2.6), BMS hereby grants to Sunesis a non-transferable
(except in accordance with Section 15.4), non-exclusive (subject to
conversion to exclusivity pursuant to Section 2.8 below) license, with the
right to sublicense in accordance with Section 2.3, under the BMS Other
Patent Rights solely to the extent reasonably necessary or useful to make, use
(including in activities directed at the research and Development of Licensed Compounds),
have made, sell, offer to sell, export and import and otherwise exploit or
Commercialize Licensed Compounds and Licensed Products in the Field in
the Territory, provided however, that no rights
are granted under this Section 2.2 with respect to any Proprietary
Compound of BMS, including but not limited to the use or formulation of a
Licensed Compound or Licensed Product in combination with any Proprietary
Compound of BMS.  For clarification, no
rights are granted under this Section 2.2 to co-formulate or use in
combination a Licensed Compound with any Proprietary Compound of BMS.

 

2.3                                 Sublicenses. 
Sunesis shall have the right to grant sublicenses with respect to the
rights licensed to Sunesis under Sections 2.1, 2.2 and 2.7(a) to any
Affiliate of Sunesis for so long as such Affiliate remains an Affiliate of
Sunesis, provided that (i) such Affiliate
shall agree in writing to be bound

 

[*]         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.

 

11

 

by
and subject to the terms and conditions of this Agreement in the same manner
and to the same extent as Sunesis and (ii) Sunesis shall remain
responsible for the performance of this Agreement and shall cause such
Affiliate to comply with the terms and conditions of this Agreement.  In addition, Sunesis shall have the right to
grant sublicenses with respect to the rights licensed to Sunesis under Sections
2.1, 2.2 and 2.7(a) to Third Parties with the prior written consent of
BMS, which consent shall not be unreasonably withheld or delayed, or without
such consent solely in accordance with this Section 2.3 below.

 

(a)                                  Sunesis shall have the right to grant a
sublicense under the BMS Patent Rights to any Third Party sublicensee with
respect to the Development or Commercialization of any Licensed Compounds or
any Licensed Products containing such Licensed Compounds (including without
limitation any sublicense, co-development, co-promotion or similar arrangement
expressly granting such rights) (such arrangement being a “License”)
upon the completion of the first Phase 2 Trial conducted under a U.S. IND for a
Licensed Compound based on a preceding Phase 1 Trial, provided
that such Phase 2 Trial shall have been designed to show a response rate of at
least [*] percent ([*]%) in [*] ([*]) or more patients.  In addition, such Phase 2 Trial shall be designed
to reasonably ensure that the dose and schedule provides optimal drug
exposure levels which allow for a potentially safe and effective dose, as
established in a relevant Phase 1 Trial. 
As used herein, “completion” of a Phase 2 Trial means the
completion of all patient dosing for such Phase 2 Trial and the preparation and
submission to BMS by Sunesis of the preliminary clinical studies report plus
the clinical data and tables for such trial. 
For clarification, an agreement with a contractor, contract research
organization, contract manufacturer or other Third Party performing contracted
services related to the manufacture, Development and/or Commercialization of
such Licensed Compound or Licensed Product shall not be a License thereof, provided such agreement is essentially a fee-for-service or
similar purchase arrangement and does not grant the Third Party the right to
sell or promote such Licensed Compound or Licensed Product.  Other than a permitted assignment of this
Agreement in accordance with Section 15.4.1, Sunesis shall not have the
right to enter into any License with a Third Party until after completion of
the first Phase 2 Trial under a U.S. IND as set forth above, and then only in
accordance with this Section 2.3 and the procedure set forth in Section 3.1.

 

(b)                                 Subject to the foregoing and Section 3.1,
Sunesis shall have the right to enter into a License agreement with a Third
Party, provided that:  

 

(i) such License
agreement shall refer to this Agreement and shall be subordinate to and
consistent with the terms and conditions of this Agreement, and, except with
respect to the disclosure of certain information to BMS as set forth in Section 2.3(c) below,
shall not limit Sunesis’ ability to fully perform all of its obligations under
this Agreement or BMS’ rights under this Agreement;

 

(ii) in such License
agreement, the Sublicensee shall agree in writing to be bound to Sunesis by
terms and conditions that are substantially similar to, or less favorable to
the Sublicensee than, or otherwise allow Sunesis to fully perform, the
corresponding terms and conditions of this Agreement, except as set forth in Section 2.3(c) below;

 

(iii) in such License
agreement, BMS shall be made an express third party beneficiary of the
Sublicensee’s obligations to Sunesis under such License that relate to
compliance with the terms and conditions of this Agreement; 

 

[*]         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.

 

12

 

(iv) promptly after the
execution of such License agreement, Sunesis shall provide a copy of such
License agreement to BMS, with financial terms redacted, and in addition, in
the case where the License Agreement is with a Large Pharma Sublicensee,
Sunesis may also redact those terms that are both (A) sensitive and
confidential to the Large Pharma Sublicensee and (B) not reasonably
necessary for BMS to determine Sunesis’ compliance with this Agreement;

 

(v) Sunesis shall
remain responsible for the performance of this Agreement (including, without
limitation, its obligations under Sections 5.1(a) and 6.1, the payment of
all payments due, and making reports and keeping books and records, subject to
availability of such information pursuant to Section 2.3(c)), and shall
use commercially reasonable efforts to monitor such Sublicensee’s compliance
with the terms of such License;

 

(vi) any sublicense
rights granted by Sunesis in a License (to the extent such sublicensed rights
are granted to Sunesis in this Agreement) shall terminate on a
country-by-country and Licensed Product-by-Licensed Product basis effective
upon the termination under Section 13.2 of the license from BMS to Sunesis
with respect to such sublicensed rights, provided that
such sublicensed rights shall not terminate if, as of the effective date of
such termination by BMS under Section 13.2, the Sublicensee is not in
material breach of its obligations to Sunesis under its License agreement, and
within sixty (60) days of such termination the
Sublicensee agrees in writing to be bound directly to BMS under a license
agreement substantially similar to this Agreement with respect to the rights
sublicensed hereunder, substituting such Sublicensee (a “Surviving
Sublicensee”) for Sunesis, and provided further
that (A) such license agreement shall not prejudice any remedy BMS may
have against Sunesis for the circumstances which were the basis for such
termination by BMS; (B) the scope of the rights granted to the Surviving
Sublicensee under such license agreement (with respect to licensed activities,
Licensed Products and territory) shall be equal to the scope of the rights that
had been sublicensed by Sunesis to the Surviving Sublicensee pursuant to the
License agreement; (C) such license agreement shall not include the
provisions of Article 3 or Section 8.1 hereof; (D) Sunesis shall
no longer be obligated under this Agreement to pay amounts set forth in
Sections 8.2, 8.3 and 8.4 hereof, to the extent such amounts are payable based
on the activities of such Surviving Sublicensee, its Affiliates and its
sublicensees; and (E) such license agreement shall obligate the Surviving
Sublicensee to pay directly to BMS amounts corresponding to those set forth in
Sections 8.2, 8.3 and 8.4 hereof which are payable based on the activities of
such Surviving Sublicensee, its Affiliates and its sublicensees; and

 

(vii) such Sublicensees
shall have the right to grant further sublicenses with respect to the
Development or Commercialization of Licensed Products, provided
that such further sublicenses shall be in accordance with and subject to all of
the terms and conditions of this Section 2.3 other than any reference to Article 3
contained therein (i.e., the Sublicensee shall be subject to this Section 2.3
in the same manner and to the same extent as Sunesis, but shall not be subject
to Article 3). 

 

(c)                                  Section 2.3(b)(ii) shall not apply
to Articles 3 and 4.  Without limiting
and subject to Section 2.3(b)(i), it shall not be deemed a breach of Section 2.3(b)(ii) if
the License agreement contains terms and conditions that differ from the
following corresponding terms and conditions of this Agreement:  Sections 5.3 and 5.4, Article 8
(provided that such License agreement shall not limit Sunesis’ ability to fully
perform its obligations under Article 8), Article 9, Article 10,
Section 12.3 (provided that
the Sublicensee provides equivalent or superior insurance protection through a
commercially reasonable self-insurance program), Article 14 and Article 15.  In addition, in the case of a Large Pharma
Sublicensee, it is recognized that in certain circumstances such a Large Pharma
Sublicensee may not be willing to provide BMS with direct access to information
and audit rights pursuant to the following Sections hereof: 5.1(b), 5.2, 5.5,
8.6(i) and 8.7.  In such case,
Sunesis shall use commercially reasonable efforts to obtain the Large Pharma
Sublicensee’s written agreement to provide such information and audit rights to
BMS, provided that if Sunesis fails to obtain
such Sublicensee’s agreement, such failure shall not

 

13

 

be a breach of Section 2.3(b)(ii).  Notwithstanding the foregoing, Sunesis shall
remain obligated under this Agreement to disclose information pursuant to
Sections 5.1(b), 5.2, 5.5, 8.6(i) and 8.7 hereof to reasonably enable BMS
to confirm that the Large Pharma Sublicensee is performing its obligations to
Sunesis in a manner that protects BMS’ interests under this Agreement.

 

(d)                                 For clarity, where provisions of this
Agreement provide that Sunesis shall be “solely” responsible or the like with
respect to a matter (for example, Sections 5.4, 5.5, or 7.1), it is understood
that such responsibilities may be carried out or borne on Sunesis’ behalf by a
permitted Sublicensee or contractor of Sunesis.

 

(e)                                  It shall be a breach of this Agreement for
Sunesis to enter into any License hereunder not in compliance with this Section 2.3.

 

2.4                                 No Trademark
License.  No right or license, express or implied, is
granted to Sunesis to use any trademark, trade name, trade dress or service
mark owned or Controlled by BMS or any of its Affiliates.  Sunesis, at its sole cost and expense, shall
be responsible for the selection, registration and maintenance of all
trademarks which it employs in connection with its activities conducted
pursuant to this Agreement, if any, and shall own and control such
trademarks.  

 

2.5                                 No Implied Licenses.  No
license or other right is or shall be created or granted hereunder by
implication, estoppel or otherwise.  All
such licenses and rights are or shall be granted only as expressly provided in
this Agreement.

 

2.6                                 Retained Rights.  All
rights not expressly granted hereunder are reserved by BMS and may be used by
BMS for any purpose.  Without limiting
the foregoing, BMS retains any and all rights under the BMS Patent Rights and
BMS Know-How to make, have made, use, sell, have sold, export or import any
compounds which are not Licensed Compounds and products not containing any
Licensed  Compounds, provided
that the BMS Know-How shall be treated by BMS as being Confidential Information
of Sunesis and BMS shall not publicly disclose the BMS Know-How except as
permitted under Article 11.  BMS
also expressly reserves and retains the right (i) to make, have made and
use Licensed Compounds for any internal research purposes and (ii) to
make, have made and use any Licensed Compound solely for use as an intermediate
or starting material in the manufacture of any compound which is not a Licensed
Compound.

 

2.7                                 Unblocking License.

 

(a)                                  In addition to the licenses granted by BMS to
Sunesis under Section 2.1 and 2.2, subject to the terms and conditions set
forth in this Agreement, BMS grants to Sunesis and its Affiliates a worldwide
nonexclusive (subject to conversion to exclusivity pursuant to Section 2.8
below) license to practice under and to utilize patent rights Controlled by BMS
(other than BMS Core Patent Rights and BMS Other Patent Rights), solely to the
extent that such patent rights claim subject matter that is within the scope of
and subgeneric to the scope of claims of the BMS Core Patent Rights (i.e.,
selection inventions), solely to research, Develop, Commercialize, make, have
made, use, import, offer to sell, and sell Licensed Compounds and Licensed
Products in the Field in the Territory. 
Such nonexclusive license shall be sublicensable together with any
permitted sublicense with respect to Licensed Compounds and Licensed Products.

 

(b)                                 Subject to the terms and conditions set forth
in this Agreement, Sunesis grants to BMS and its Affiliates a fully paid-up
worldwide nonexclusive license, with right to grant sublicenses, to practice
under and to utilize patent rights Controlled by Sunesis, solely to the extent
that such patent rights claim subject matter that is invented in the exercise
of a License granted hereunder and is within the

 

14

 

scope
of and subgeneric to the scope of claims of the BMS Core Patent Rights (i.e.,
selection inventions), solely to research, Develop, commercialize, make, have
made, use, import, offer to sell, and sell compounds and pharmaceutical
products other than Licensed Compounds or Licensed Products.  For clarification, this nonexclusive license
to BMS shall not limit the exclusive license granted by BMS to Sunesis under Section 2.1.

 

2.8                                 Conversion to Exclusive License.  BMS
shall have the right at its sole discretion (including, without limitation, for
purposes of extending the applicable Royalty Term under Section 8.4.2) to
convert the license granted to Sunesis under Section 2.2 or 2.7(a) to
be an exclusive license  upon notice to
Sunesis specifying the patents to be so converted, provided
that BMS has not, prior to the effective date of such conversion, granted a
license to any Third Party under any patent rights specified in such notice to
sell Licensed Compounds in any country in the Territory.  The BMS patent rights so exclusively licensed
to Sunesis pursuant to this Section 2.8 (i) shall then be considered
for purposes of determining the Royalty Term for the applicable Licensed
Product, and (ii) shall thereafter be deemed “BMS Extension Patents”.

 

ARTICLE 3

BMS RIGHT OF FIRST NEGOTIATION

 

3.1                                 BMS Right of First
Negotiation.  BMS shall have a right of first negotiation
with respect to Licensed Compounds and Licensed Products as follows.

 

(a)                                  After completion of the
first Phase 2 Trial under a U.S.
IND with respect to a Licensed Product as
set forth in Section 2.3, in the event that Sunesis desires at any
time within [*] after the Effective Date to enter into a License arrangement
with respect to one or more Licensed Compound(s) or Licensed Product(s), before
entering into negotiations with any Third Party with respect to such License,
Sunesis will notify BMS of its desire and provide BMS with a Notice with
respect to such Licensed Compound(s) or Licensed Product(s).  If BMS notifies Sunesis in writing of its
election to pursue a License for such Licensed Compound(s) or Licensed
Product(s) within thirty (30) days after BMS’ receipt of such Notice, Sunesis
and BMS shall enter into good faith negotiations with respect to such License
for a period of [*] following Sunesis’ receipt of such election from BMS (the “Negotiation
Period”).  

 

(b)                                 During the Negotiation Period, Sunesis will
provide BMS with an opportunity to make a Term Sheet proposal of terms and
conditions with respect to such License and Sunesis will either agree to the
proposal (and such Term Sheet shall be deemed as being offered by Sunesis) and
the Parties will move forward to negotiate a definitive agreement based on such
Term Sheet or Sunesis shall provide a counter offer Term Sheet to BMS
reasonably promptly.  During the Negotiation
Period, Sunesis may revise the terms and conditions of its counter proposal to
BMS and in any case the last Term Sheet that Sunesis delivers to BMS shall be
deemed the Term Sheet that Sunesis offers to BMS for purposes of Section 3.2
below, provided however, that Sunesis shall
provide BMS with a reasonable period of time to review and consider any such
Term Sheet which in no event will be less than [*] business days.  Such [*] Negotiation Period shall be extended
by an additional [*] of diligent good faith negotiation if (i) Sunesis and
BMS reach agreement with respect to a Term Sheet with respect to such License
and (ii) BMS

 

[*]         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.

 

15

 

obtains internal BMS
Executive Committee approval to proceed with completing a definitive agreement
based on such Term Sheet.  

 

(c)                                  During the Negotiation Period and any
extension thereof, Sunesis shall use commercially reasonable efforts to
promptly provide BMS with additional information available to Sunesis that is
related to the Licensed Compound(s) and Licensed Product(s) that would be
subject to the License, and access to personnel and facilities, as reasonably
requested by BMS as part of its due diligence with respect to such
License.  BMS shall have the right to
determine the scope of Licensed Compounds and Licensed Products with respect to
the License under discussion between the Parties during the Negotiation Period
(i.e., whether such License will cover, for example, a single Licensed Compound
or a list of several Licensed Compounds or the entire genus of Licensed
Compounds) and the proposals and Term Sheets that Sunesis delivers to BMS
during that Negotiation Period shall include the terms for the scope of
Licensed Compounds and Licensed Products requested by BMS.

 

(d)                                 If Sunesis and BMS do not conclude a binding
definitive agreement with respect to such License during the Negotiation
Period, Sunesis will then be free to enter into negotiations with any Third
Party regarding a License for one or more Licensed Compound(s) and Licensed
Product(s), and free to enter into any such License, subject to the provisions
set forth in Section 3.2.  If BMS
does not provide Sunesis with notice of BMS’ election to pursue a License
within the [*] period after receipt of a Notice set forth above, Sunesis will
then be free to enter into negotiations with any Third Party, and Sunesis shall
have the right to enter into Licenses with respect to the Licensed Product(s)
described in the Notice, which shall not be subject to the provisions of Section 3.2.

 

(e)                                  This Section 3.1(e) shall be
subject to and shall not limit Section 3.3.  At any time after a Negotiation Period in
which Sunesis and BMS are unable to conclude a binding definitive License
agreement, where Sunesis intends to enter into a License agreement either with
BMS or with a Third Party in accordance with Section 3.2, Sunesis shall be
free to offer to BMS a Term Sheet for a License agreement including rights to
one or more Licensed Compound(s) and Licensed Product(s) that were the subject
of the Notice provided to BMS in the preceding Negotiation Period.  Sunesis shall have the right to determine the
scope of compounds to be licensed under the Term Sheet, provided
that the scope of compounds shall not be narrower than the scope of compounds
requested by BMS in the preceding Negotiation Period (pursuant to Section 3.1
(c) above).  If Sunesis offers a
Term Sheet for such License to BMS, BMS will have [*] in which to provide
Sunesis with notice that BMS desires to enter into an agreement with Sunesis on
substantially the same financial, governance and decision-making terms and
conditions as set out in such Term Sheet (an “Acceptance Notice”).  If an Acceptance Notice is provided by BMS,
BMS shall use diligent efforts to obtain internal BMS Executive Committee
approval to proceed with completing a definitive agreement based on such Term
Sheet, and the Parties will work diligently to expeditiously complete such an
agreement.  If (i) an Acceptance
Notice is not provided by BMS within such [*] period; (ii) BMS fails to
obtain internal BMS Executive Committee approval to proceed with completing a
definitive agreement based on such Term Sheet within [*] after Sunesis’ receipt
of the Acceptance Notice; or (iii) Sunesis and BMS do not execute a
binding License agreement within [*] after Sunesis’ receipt of the Acceptance
Notice, Sunesis will be free to enter into negotiations with any Third Party
regarding a License for one or more Licensed Compound(s) and Licensed
Product(s), and free to enter into any such License, subject to the provisions
set forth in Section 3.2, provided that
such Term Sheet shall be deemed the Term Sheet last offered by Sunesis to BMS
for the purposes of Section 3.2. 
Upon receipt of such Acceptance Notice and during the period described
above, Sunesis shall use

 

[*]         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

 

commercially reasonable
efforts to promptly provide BMS with additional information available to
Sunesis that is related to the Licensed Compound(s) and Licensed Product(s)
that would be subject to the License, and access to personnel and facilities,
as reasonably requested by BMS as part of its due diligence with respect to
such License.

 

In order to facilitate BMS’ ability to evaluate the
Term Sheet offered by Sunesis to BMS pursuant to this Section 3.1(e), as
soon as is practicable prior to the start of the foregoing [*] period, Sunesis
shall give BMS advance notice of the scope of compounds to be licensed under
such Term Sheet.

 

3.2                                 To the extent that this Article 3 has
not terminated or expired, Sunesis shall not enter into any agreement with any
Third Party with respect to a License under terms and conditions which are Less
Favorable to Sunesis than the terms and conditions set forth in the Term Sheet
last offered by Sunesis to BMS, except in accordance with the procedure set
forth in this Section 3.2 or as otherwise expressly set forth in this Article 3.

 

(a)                                  If Sunesis intends to enter into a License
agreement with a Third Party, Sunesis shall notify BMS and shall notify an
Independent Evaluator for the purpose of this Section 3.2.  Sunesis shall bear the costs of engaging the
Independent Evaluator.  Sunesis shall
provide the Independent Evaluator with the proposed Term Sheet or License
agreement with such Third Party (the “Third Party Term Sheet”), from
which Sunesis may redact the identity of the Third Party, and shall also
provide the Independent Evaluator with a copy of the last Term Sheet offered by
Sunesis to BMS.

 

(b)                                 The Independent Evaluator shall promptly make
a determination of whether the terms and conditions of the Third Party Term
Sheet are Less Favorable to Sunesis than the terms and conditions of the last
Term Sheet offered by Sunesis to BMS, in accordance with Section 3.5(a) below.  Unless the Parties agree otherwise, such
determination shall be made by the Independent Evaluator within [*] of receipt
of the relevant Term Sheets from Sunesis and the Independent Evaluator shall
promptly notify the Parties of such determination.  The Independent Evaluator shall be required
to make a definite determination based on the information provided to it as to
whether or not the Third Party Term Sheet is Less Favorable to Sunesis than the
last Term Sheet offered by Sunesis to BMS. 
The Independent Evaluator shall not have the authority to render any
other determination or to respond without a decision, and the Parties agree (i) that
the Independent Evaluator shall have no liability in any way by reason of its
decision, and (ii) to be bound by and not to challenge such determination,
provided that either Party may dispute
such determination but only if such Party holds a good faith belief that the
other Party acted in bad faith or engaged in willful misconduct in the
independent evaluation process.

 

(c)                                  If the Independent Evaluator determines that
the Third Party Term Sheet was not Less Favorable to Sunesis than the last Term
Sheet offered by Sunesis to BMS, Sunesis will be free to enter into an
agreement with such Third Party having the terms and conditions set forth in
the Third Party Term Sheet (or other terms and conditions that are not
financially Less Favorable to Sunesis than the terms and conditions set forth
in the Third Party Term Sheet presented to the Independent Evaluator) and such
other non-financial terms and conditions as Sunesis and the Third Party agree.

 

(d)                                 If the Independent Evaluator determines that
the terms and conditions set forth in the Third Party Term Sheet are Less
Favorable to Sunesis than the terms and conditions last offered by Sunesis to
BMS, Sunesis may at its discretion continue its negotiation with the Third
Party, with the

 

[*]         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

 

objective of obtaining
financial terms and conditions which are more favorable to Sunesis than the
financial terms and conditions last offered by Sunesis to BMS, provided that Sunesis shall not enter into an agreement with
such Third Party without first following the above procedure set forth in this Section 3.2
with respect to submitting a revised Third Party Term Sheet to the Independent
Evaluator.  

 

(e)                                  Alternatively, Sunesis may offer the terms
and conditions set out in the Third Party Term Sheet to BMS or otherwise then
proposed by Sunesis to the Third Party (or Sunesis may offer BMS terms and
conditions financially less favorable to Sunesis than the foregoing), including
without limitation those with respect to financial terms, governance,
decision-making, Development and Commercialization responsibilities and scope
of compounds to be licensed.  If Sunesis
offers such terms and conditions for a License to BMS in accordance with this Section 3.2(e),
BMS will have an additional [*] business days to provide Sunesis with an
Acceptance Notice.  If an Acceptance
Notice is provided by BMS, BMS shall use diligent efforts to obtain internal
BMS Executive Committee approval to proceed with completing a definitive
agreement based on such Term Sheet, and the Parties will work diligently to
expeditiously complete such an agreement. 
If (i) an Acceptance Notice is not provided by BMS within such [*]
period; (ii) BMS fails to obtain internal BMS Executive Committee approval
to proceed with completing a definitive agreement based on such Term Sheet
within [*] days after Sunesis’ receipt of the Acceptance Notice; or (iii) Sunesis
and BMS do not execute a binding License agreement within [*] after Sunesis’
receipt of the Acceptance Notice, Sunesis will be free to enter into
negotiations with any Third Party regarding a License for one or more Licensed
Compound(s) and Licensed Product(s), and free to enter into any such License,
subject to all of the provisions set forth in this Section 3.2, provided that the Term Sheet for which BMS provided an
Acceptance Notice (or if an Acceptance Notice is not provided by BMS within the
allotted period, the last Term Sheet offered by Sunesis pursuant to this Section 3.2(e))
shall be deemed the Term Sheet last offered by Sunesis to BMS for the purposes
thereof.  Upon receipt of such Acceptance
Notice and during the period described above, Sunesis shall use commercially
reasonable efforts to promptly provide BMS with additional information
available to Sunesis that is related to the Licensed Compound(s) and Licensed
Product(s) that would be subject to the License, and access to personnel and
facilities, as reasonably requested by BMS as part of its due diligence with
respect to such License.

 

3.3                                 In the event that Sunesis has not entered
into an agreement with a Third Party with respect to a License within the
earlier of [*] following the end of a Negotiation Period or at such time that
statistically significant interim or final results from a Phase 2 Trial or
Phase 3 Trial become available with respect to the applicable Licensed Product
after a Negotiation Period or an Acceptance Notice provided pursuant to Section 3.1(e) or
3.2(d), then thereafter, if Sunesis desires to enter into a License arrangement
for a Licensed Product, before entering into a License agreement with any Third
Party, Sunesis will first notify BMS of its desire and provide a Notice with
respect to such Licensed Product and the procedure described in Sections 3.1
and 3.2 above shall apply again, provided that
the Negotiation Period in this case shall be [*] (rather than [*]), provided further that Sunesis shall be free to continue
negotiations regarding a License with any Third Party (but not initiate any new
negotiations with any other Third Party with whom Sunesis has not previously
negotiated with respect to such Licensed Product) during any such Negotiation
Period pursuant to this Section 3.3, but may not enter into a License
agreement with a Third Party until after the end of such Negotiation Period,
and then only in accordance with and following the procedure set forth Section 3.2.

 

[*]         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

 

3.4                                 License Terms and Conditions.

 

(a)                                  During any Negotiation Period, Sunesis shall
make an offer of terms and conditions for a License where BMS would obtain
exclusive worldwide rights and joint responsibility for the further
manufacture, Development or Commercialization of the Licensed Product for all
indications.  The terms and conditions of
the foregoing license shall include but not be limited to Sunesis and BMS co-developing
and co-commercializing the Licensed Product, including equal participation in
co-commercialization of the Licensed Product in the U.S.

 

(b)                                 For clarity, any License agreement between
Sunesis and BMS shall include a grant to BMS by Sunesis of those license rights
required for BMS to carry out the manufacture, Development or Commercialization
anticipated by such License agreement, including without limitation (i) a
grant back to BMS of rights under the BMS Know-How and BMS Patent Rights, and (ii) a
grant to BMS under other know-how and patent rights Controlled by Sunesis with
respect to the Licensed Compound and Licensed Product that are subject to the
License, in each case as required for BMS to fulfill its obligations under such
License agreement.

 

3.5                                 Certain Definitions.  For
the purposes of this Article 3, the following capitalized terms shall have
the following meanings:

 

(a)                                  “Less Favorable to Sunesis” means,
with respect to a Third Party Term Sheet compared to the most recent Term Sheet
offered by Sunesis to BMS, that the Third Party Term Sheet contains financial
terms which, taken as a whole, are materially less favorable to Sunesis than
terms set forth in the last Term Sheet for a License offered to BMS by
Sunesis.  The determination by the
Independent Evaluator in accordance with Section 3.2 as to whether a Third
Party Term Sheet is Less Favorable to Sunesis than the last Term Sheet offered
to BMS by Sunesis shall be based upon assumptions and analysis performed in the
Independent Evaluator’s independent judgment, with the same assumptions applied
in the same manner to both the Third Party Term Sheet and the last Term Sheet
offered to BMS by Sunesis.  Such analysis
shall, at a minimum, include a comparison of the probability-adjusted
discounted cash flows for all payments, including royalties, payable to Sunesis
from the two respective Term Sheets. 
Such analysis shall include necessary adjustments for any difference in
the scope of compounds being licensed under the Term Sheets.  In such evaluation, payments in equity shall
be valued taking into consideration liquidity and other relevant factors.

 

(b)                                 “Term Sheet” means a non-binding term
sheet summarizing the key terms and conditions on which a Party would be
willing to enter into negotiations with a view to finalizing a mutually
acceptable definitive License agreement that includes the terms contained in
the Term Sheet.  It is understood that a
Term Sheet need not specify all material terms, and as is customary, may
provide a summary of only certain of the most significant terms, provided that
a Term Sheet shall include, at a minimum, the financial terms and conditions,
the scope and territory of licenses granted and the allocation of
responsibilities and costs with respect to the Development and
Commercialization of the Licensed Compound(s) and Licensed Product(s) to which
such Term Sheet relates, in such detail so as to reasonably enable the
Independent Evaluator to perform the determination set forth in Section 3.2.

 

3.6.                              It is acknowledged and agreed that: (i) this Article 3 shall
not be deemed to apply to a transaction by which a Third Party acquires
substantially all of the business or assets of Sunesis in accordance with Section 15.4.3
below; and (ii) if Sunesis enters into a License in accordance with this Article 3
that includes an option or other contingent right to acquire the sublicense
rights hereunder (an “Option”), then the grant of rights by Sunesis upon
a Third Party’s exercise of such Option shall not be subject to this Article 3
so long as the grant of such Option was made in compliance with this Article 3.

 

19

 

3.7                                 If BMS disputes Sunesis’ right to enter into
a License agreement based on (A) Sunesis’ compliance with Article 3
or (B) whether a License agreement or proposed License agreement complies
with Section 2.3, BMS will provide Sunesis with notice of such dispute and
simultaneously initiate an expedited arbitration thereof in accordance with the
procedure set forth in Section 14.3. 
If BMS does not provide written notice to Sunesis initiating such
arbitration within [*] days
after BMS’ receipt of a copy of a License agreement or proposed License
agreement in accordance with Section 2.3(b) above, then
notwithstanding Article 14 below, BMS shall have no further right to
dispute Sunesis’ right to enter into a License agreement based on (A) Sunesis’
compliance with Article 3 or (B) whether a License agreement complies
with Section 2.3; provided that
nothing in this Section 3.7 shall limit or prejudice BMS’ other rights
including but not limited to BMS’ right to enforce Sunesis’ ongoing obligations
with respect to such License, or to enforce any ongoing obligations of the
Sublicensee as permitted under Section 2.3(b)(iii) and applicable
Laws.

 

ARTICLE 4

TRANSFER OF KNOW-HOW AND MATERIALS

 

4.1                                 Documentation.  During the sixty (60) day period following
the Effective Date BMS shall
provide Sunesis with one (1) electronic or paper copy of all documents,
data or other information Controlled by BMS as of the Effective Date to the
extent that such documents, data and information are (i) subject to the
BMS Know-How license under Section 2.1; (ii) reasonably necessary for
the manufacture, Development or Commercialization of a Licensed Compound or
Licensed Product; and (iii) are reasonably available to BMS without undue
searching; provided, however, that subject to the
last sentence of this Section 4.1, the foregoing shall in no event require
BMS to provide (A) copies of manufacturing run records and laboratory
notebook records required to be maintained by BMS under applicable Laws, or (B) copies
of documents, data and information to the extent that such documents, data and
information do not satisfy the requirements in clauses (i), (ii) and (iii) of
the foregoing.  Such documentation shall
not be used by Sunesis for any purpose other than Development, manufacture or
Commercialization of Licensed Compounds and Licensed Products in accordance
with this Agreement and is Confidential Information of BMS.  BMS shall be responsible for the cost of
providing one (1) set of copies only. 
BMS shall have no obligation to reformat or otherwise alter or modify
any such materials, or to create materials in electronic form, in order to
provide them to Sunesis.  Any and all
such materials delivered to Sunesis pursuant to this Section 4.1 are and
shall remain the sole property of BMS, provided that
all such material shall be treated as being Confidential Information of both
Parties, and shall be subject to Sunesis’ rights in and to such material as
otherwise set forth in this Agreement.  Notwithstanding
the foregoing, if at any time during the term of this Agreement Sunesis
identifies particular documents,
data or information that are within the BMS Know-How, but were not previously delivered to
Sunesis, and that are reasonably necessary for the continued manufacture, Development or Commercialization of a
Licensed Compound or Licensed Product (including without limitation materials
requested in connection with an audit or other inquiry by a Regulatory
Authority), BMS shall promptly provide such material to Sunesis upon request to
the extent that such items are in BMS’ possession and are available without
undue searching.

 

4.2                                 Technical Assistance. 
Commencing on the Effective Date and continuing until the date that is [*]
months after the Effective Date, BMS shall reasonably cooperate with Sunesis to
provide technical assistance as set forth below and to transfer to Sunesis any
additional BMS Know-How licensed

 

[*]         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.

 

20

 

under Section 2.1 to
the extent such BMS Know-How is in BMS’ possession to effect the transfer of
all Development efforts related to Licensed Compounds and Licensed
Products.  Such cooperation shall
include, without limitation, providing Sunesis with reasonable access by
teleconference or in-person at BMS’ facilities (subject to BMS’ customary rules and
restrictions with respect to site visits by non-BMS personnel) to BMS personnel
involved in the research and development of Licensed Compounds and Licensed
Products to provide Sunesis with a reasonable level of technical assistance and
consultation in connection with the transfer of the BMS Know-How, provided, however, that (i) such access shall be
requested and coordinated through a single contact person to be designated by
BMS (a separate single contact person shall be designated by BMS with respect
to manufacturing related matters), (ii) BMS makes no warranty, express or
implied, that Sunesis shall be able to successfully implement and use the BMS
Know-How, (iii) BMS shall not be in default hereunder for any inadvertent
failure to disclose all pertinent information related to the BMS Know-How, and (iv) BMS
shall not be obligated to provide more than [*] aggregate hours of technical
assistance in such period, as evidenced by BMS’ reasonably itemized time
records to be provided to Sunesis upon request, which shall be allocated as
follows:  up to [*] aggregate hours for
technical assistance related to chemical and manufacturing matters related to
BMS-387032, up to [*] aggregate hours for technical assistance related to
clinical Development matters and up to [*] aggregate hours for technical
assistance related to all other matters. 
In addition, such technical assistance shall include, without
limitation, access to SAR information with respect to the Licensed Compounds
and BMS personnel involved in the research and development of Licensed
Compounds and Licensed Products, and providing responses to Sunesis queries
related thereto.  Sunesis shall be
responsible for ensuring that its personnel who receive such assistance are
appropriately qualified and experienced for such purpose.  It is understood and acknowledged that BMS
activities with respect to the document transfer of the INDs for the Licensed
Compounds shall not be applied towards the foregoing [*] aggregate hours of
technical assistance, provided that
subsequent assistance and follow-up questions requested by Sunesis with respect
to such INDs shall be applied towards the aggregate limit.

 

If Sunesis requests further technical assistance
related to chemical and manufacturing matters related to BMS-387032 in excess
of the [*] hour amount referenced above, BMS may at its sole discretion provide
such technical assistance and, if BMS elects to provide such technical
assistance, Sunesis shall reimburse BMS for its time incurred in connection therewith
at an FTE rate of $[*] per hour, plus any reasonable out-of-pocket expenses
incurred by BMS in providing such technical assistance requested by
Sunesis.  Such reimbursement shall be
made to BMS within thirty (30) days after submission of an invoice by BMS
reasonably detailing BMS’ time expended, together with reasonable
substantiation of any out-of-pocket expenses incurred.  

 

4.3                                 IND.  As soon as reasonably
practicable after the Effective Date, BMS shall effectuate the assignment of
all INDs for the Licensed Compounds to Sunesis. 
Such assignment and the transfer of responsibility for such INDs to
Sunesis will occur promptly after such time that Sunesis reasonably determines
that it is able to accept responsibility (including establishing at Sunesis
adequate safety monitoring and adverse event reporting procedures to meet
regulatory requirements) for the patients that are being treated as of the
Effective Date pursuant to such INDs, provided that
Sunesis agrees that it shall be able to accept responsibility, and shall accept
responsibility, for such patients within [*] following the Effective Date.  BMS will effectuate such assignment within [*]
after Sunesis provides BMS with written notice that Sunesis is able to accept
responsibility for such patients.  At the
time of the assignment of such INDs to Sunesis, upon reasonable request by
Sunesis, BMS shall provide additional technical assistance relating to the
transition of the IND to Sunesis, provided that
to the extent that any such assistance

 

[*]         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.

 

21

 

exceeds [*] aggregate hours
of additional technical assistance, as evidenced by BMS’ reasonably itemized
time records, it shall be applied towards the aggregate limit on technical
assistance set forth in Section 4.2 above.

 

Without limiting the foregoing, if such transfer of
the IND and/or transfer of responsibility for such patients is delayed and does
not occur within [*] months following the Effective Date, BMS may at its sole
discretion continue to be responsible for such IND and patients, provided that, if BMS elects to continue such
responsibility, Sunesis shall reimburse BMS for its time incurred in connection
therewith at an FTE rate of $[*] per hour, plus any reasonable out-of-pocket
expenses incurred by BMS in continuing such responsibility.  Such reimbursement shall be made to BMS
within thirty (30) days after submission of an invoice by BMS reasonably
detailing BMS’ time expended, together with reasonable substantiation of any
out-of-pocket expenses incurred. 

 

4.4                                 Provision of
Existing BMS-387032 Compound and Other Licensed Compounds.  As
soon as practicable after the Effective Date, but in any event within thirty
(30) days thereafter, BMS shall transfer to Sunesis the inventory of BMS-387032, BMS-[*],
BMS-[*], BMS-[*], BMS-[*], BMS-[*] and BMS-[*] compounds in BMS’ possession as of the Effective Date, provided that BMS shall have the right to retain up to [*]
of each such compound for use by BMS in accordance with Section 2.6.  Such compounds shall be used by Sunesis
solely in accordance with license rights and other terms and conditions of this
Agreement.  BMS shall inform Sunesis in
writing which, if any, of such Licensed Compounds have been manufactured in
accordance with GMP.

 

4.5                                 Provision of Samples of Other Existing
Licensed Compounds.  Upon request by Sunesis as set forth below,
BMS shall transfer to a Third Party testing service provider selected by
Sunesis and reasonably acceptable to BMS (a “Testing Contractor”)
samples of certain compounds (to the extent such samples are in BMS’ possession
as of the Effective Date) for testing by such Testing Contractor.  Such compounds which are believed to be in
BMS’ possession as of the Effective Date are listed in Appendix 5
hereto.  The testing of such compounds by
the Testing Contractor shall be carried out within [*] following the Effective
Date.  Such compounds will be used by the
Testing Contractor solely for purposes of performing the testing of the
compounds in CDK assays for Sunesis and for no other purpose.  After completion of the testing any unused
samples of the compounds will be destroyed or returned to BMS by the Testing
Contractor, as directed by BMS.  If any of
the compounds listed in Appendix 5 are not in BMS’ possession as of the Effective Date, BMS shall not
be required to prepare any new samples of such compound and such compound will
not be provided by BMS for testing hereunder.  Following testing by the
Testing Contractor, if Sunesis desires additional samples of any of the tested
compounds which are shown to be Active Compounds, BMS shall provide samples of
such Active Compounds to Sunesis, to the extent that such samples are then in
BMS’ possession, for use by Sunesis solely in accordance with license rights
and other terms and conditions of this Agreement, provided
that BMS shall have the right to retain up to [*] of each such compound for use
by BMS in accordance with Section 2.6.

 

4.6                                 Alternate CDK Assays.  It
is understood and acknowledged that Sunesis desires to develop assays that do
not require the use of radioactive materials but are otherwise comparable to
and substantially similar to one or more of the CDK inhibitor assays described
in Appendix 2 (such new assay being an “Alternate Assay”).  It is further understood that as of the
Effective Date BMS has performed and is capable of performing the assays
described in Appendix 2 (i.e., using radioactive materials) and that as
of the Effective Date Sunesis is not able to perform such assays.  Any such Alternate Assay shall

 

[*]         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.

 

22

 

be compared to and
calibrated with the corresponding assay in Appendix 2 using appropriate
reference compounds such that the IC50 in the Alternate Assay can be
compared to the IC50 that would be obtained using the corresponding
assay in Appendix 2.  It is agreed
that the Parties shall cooperate to determine the appropriate calibration
factor to convert the IC50 obtained in the Alternate Assay to the IC50
that would be obtained using the corresponding assay in Appendix 2 such
that Sunesis may use such Alternate Assay for purposes of determining whether a
compound is an Active Compound or a Competitive Compound.  Such calibration factor shall be determined
as follows: (a) Sunesis shall provide BMS with the detailed procedure for
the proposed Alternate Assay; (b) BMS shall provide Sunesis with a list of
at least ten (10) reference compounds, together with the IC50
values obtained by BMS using the assay described in Appendix 2; (c) Sunesis
shall test such reference compounds in the corresponding Alternate Assay and
provide BMS with the IC50 values obtained for such compounds in the
Alternate Assay; and (d) the Parties shall work together to reasonably
determine and agree on the calibration factor to convert the IC50
obtained in the Alternate Assay to the IC50 that would be obtained
using the corresponding assay in Appendix 2.  In the event the Parties are unable to reach
agreement on such calibration factor through good faith discussions, such
dispute will be resolved by an independent Third Party scientific expert, and
the Parties shall accept the calibration factor determined by such independent
expert in writing.  The independent Third
Party scientific expert shall be selected by mutual agreement of the Parties,
with such agreement not to be unreasonably withheld by either Party.  Upon such determination and agreement in
writing with respect to such Alternate Assay and the calibration factor for
such Alternate Assay, such Alternate Assay may then be used for purposes of
determining whether a compound is an Active Compound or a Competitive Compound
under this Agreement.  Except with
respect to the CDK2 inhibitor assay, for purposes of clause (b) above, BMS
shall not be required to carry out further testing of compounds after the
Effective Date using any assay described in Appendix 2 and if IC50
values for at least ten (10) reference compounds in such assay are not
available to BMS as of the Effective Date, and if Sunesis desires to obtain
such testing, such testing shall be performed by BMS, as elected by BMS at its
sole discretion, or by a Testing Contractor if BMS elects not to perform such
testing.  In the event of such testing of
such reference compounds after the Effective Date for this purpose, Sunesis
shall be responsible for the costs of any such testing by a Testing Contractor.  If BMS elects to carry out such testing,
Sunesis shall reimburse BMS for BMS’ time incurred in connection therewith at
an FTE rate of $[*] per hour, plus any reasonable out-of-pocket expenses
incurred by BMS in carrying out such testing, provided
that Sunesis shall be entitled to apply any of the unused portion of the [*] of
technical assistance provided in Article 4.2 to the cost of such
testing.  Such reimbursement shall be
made to BMS within thirty (30) days after submission of an invoice by BMS
reasonably detailing BMS’ time expended, together with reasonable
substantiation of any out-of-pocket expenses incurred.

 

ARTICLE 5

DEVELOPMENT

 

5.1                                 Development and Development Plan.

 

(a)                                  Commercially Reasonable Efforts. 
Sunesis (or its Sublicensee, as applicable) shall use Commercially
Reasonable Efforts to Develop at least one Licensed Compound and Licensed
Product.

 

(b)                                 Development Plan.  A
summary of the initial Development Plan as of the Effective Date is attached
hereto as Appendix 3 to the Agreement. 
Sunesis will provide BMS with any significant

 

[*]         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.

 

23

 

updates and revisions to the
Development Plan for BMS’ review and comment, to the extent Sunesis has the
right to do so under an agreement with a Sublicensee where applicable.  As set forth in Appendix 3, the Phase 1 Trial
for BMS-387032 is scheduled to start by October, 2005.

 

5.2                                 Development Reports.  Within
[*] months of transfer of all
INDs for the Licensed Compounds pursuant to Section 4.3, Sunesis will
provide BMS (to the BMS contact person designated in writing by BMS) with a
copy of the then-current Development Plan. 
Thereafter, Sunesis will provide BMS with a copy of the annual IND
updates for the Licensed Compounds (as required by the FDA) within thirty (30)
days of submission thereof to the FDA. 
In addition, during the term of this Agreement, Sunesis shall provide
BMS (to the BMS contact person designated in writing by BMS) a written
development report within thirty (30) days following the end of the second and
fourth Calendar Quarter of each Calendar Year (i.e., every six (6) months),
presenting a meaningful summary of the Development activities accomplished by
Sunesis through the end of such six (6) month period, including summaries
of significant results, information and data generated.  Upon reasonable request by BMS not more than
twice each Calendar Year, Sunesis shall also meet in-person with BMS to review
Sunesis’ development activities for Licensed Products.  In addition, upon reasonable request by BMS,
Sunesis shall provide BMS with summaries of clinical protocols, investigator
brochures, regulatory submissions and correspondence from Regulatory
Authorities with respect to Licensed Compound and Licensed Product.  Also, upon reasonable request by BMS, but not
more than once every six (6) months, Sunesis shall provide additional
details with respect to such summaries.  Notwithstanding the foregoing, but subject to
and without limiting Section 2.3, with respect to information controlled
by a Third Party, Sunesis’ obligations under this Section 5.2 shall be
limited to the extent Sunesis has the right to provide such information.

 

5.3                                 Records. 
Sunesis shall maintain complete and accurate records of all work
conducted in furtherance of the Development and Commercialization of the
Licensed Compounds and Licensed Products and all results, data and developments
made in conducting such activities.  Such
records shall be complete and accurate and shall fully and properly reflect all
such work done and results achieved in sufficient detail and in good scientific
manner appropriate for patent and regulatory purposes.

 

5.4                                 Development
Responsibilities and Costs.  Sunesis shall have sole responsibility for, and shall bear the cost of
conducting all Development with respect to the Licensed Compounds and Licensed
Products.  Sunesis shall Develop the Licensed
Compounds and Licensed Products in compliance with all applicable legal and
regulatory requirements, including, without limitation, all legal and
regulatory requirements pertaining to the design and conduct of clinical
studies.

 

5.5                                 Regulatory Responsibilities and Costs. 
Sunesis shall have sole responsibility for, and shall bear the cost of
preparing, all regulatory filings and related submissions with respect to the
Licensed Compounds and Licensed Products. 
Upon reasonable request by BMS, Sunesis shall provide BMS with draft and
final copies (which may be wholly or partly in electronic form) of all material
correspondence with Regulatory Authorities relating to the Licensed Compounds
or any Licensed Product, including any applications for Approval, to the extent
Sunesis has the right to do so under an agreement with a Sublicensee where
applicable.  Sunesis shall be responsible
for meeting the requirements of all pre-approval inspections required by any
Regulatory Authorities.  Except as set
forth in Section 13.4, Sunesis or its Affiliate or Sublicensee shall own
all INDs, Approvals and submissions in connection

 

[*]         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.

 

24

 

therewith and all Approvals
shall be obtained by and in the name of Sunesis or its Affiliate or
Sublicensee.

 

5.6                                 Subcontracting. 
Subject to and without limiting Section 2.3, Sunesis may perform
any activities in support of its Development or Commercialization of Licensed
Compounds and Licensed Products through subcontracting to a Third Party
contractor or contract service organization, provided
that: (a) none of the rights of BMS hereunder are adversely
affected as a result of such subcontracting; (b) any such Third Party
subcontractor to whom Sunesis discloses Confidential Information of BMS shall
enter into an appropriate written agreement obligating such Third Party to be
bound by obligations of confidentiality and restrictions on use of such BMS
Confidential Information that are no less restrictive than the obligations in
this Agreement; (c) Sunesis will, where practicable, obligate such Third
Party to agree in writing to assign or license (with the right to grant
sublicenses) to Sunesis any inventions (and any patent rights covering such
inventions) made by such Third Party in performing such services for Sunesis
that are necessary to the Development or Commercialization of Licensed Compound
or Products; and (d) Sunesis shall at all times be responsible for the
performance of such subcontractor.

 

ARTICLE 6

COMMERCIALIZATION

 

6.1                                 Sunesis Obligations. 
Sunesis (or its Sublicensee, as applicable) shall use Commercially
Reasonable Efforts to Commercialize at least one (1) Licensed Product in
countries in the Territory, including but not limited to the Major Market
Countries.  Without limiting the
foregoing, Sunesis shall use Commercially Reasonable Efforts to obtain
Approvals in such countries with respect to at least one (1) Licensed
Product and to effect the First Commercial Sale thereof in such countries as
soon as reasonably practicable after receipt of such Approvals.  

 

6.2                                 Continued Availability. 
Following the First Commercial Sale of a Licensed Product in a Major
Market Country in the Territory and until the expiration or termination of this
Agreement, Sunesis shall use Commercially Reasonable Efforts to supply and keep
such Licensed Product reasonably available to the public in such country.

 

6.3                                 Marking.  Each Licensed Product
Commercialized by Sunesis under this Agreement shall be marked (to the extent
not prohibited by applicable Laws): (i) with a notice that such Licensed
Product is sold under a license from BMS and (ii) with applicable patent
and other intellectual property notices relating to the BMS Patent Rights in
such a manner as may be required by applicable Law. 

 

ARTICLE 7

MANUFACTURE AND SUPPLY

 

7.1                                 Manufacture and
Supply.  Sunesis shall be solely responsible at its
expense for all of its requirements for making or having made all of its
requirements of the Licensed Compounds and Licensed Products.  Sunesis shall manufacture, handle, store and
ship the Licensed Compound and Licensed Products in compliance with all
applicable Laws, with all regulatory filings, and with its applicable internal
specifications and quality control procedures.

 

25

 

ARTICLE 8

FINANCIAL TERMS

 

In consideration of the rights granted by BMS to
Sunesis pursuant to this Agreement, Sunesis shall issue the shares of capital
stock and make the payments provided for in this Article 8.

 

8.1                                 Initial Payment. 
Within five (5) Business Days after the Effective Date, Sunesis
will issue to BMS, upon the terms and conditions set forth in the Equity
Agreements, 1,666,667 shares of Sunesis Series C-2 Preferred Stock.  Such shares shall have an aggregate
value of eight million Dollars ($8,000,000)
based on a price of $4.80 per share, which represents the price per share of
Sunesis Series C-2 Preferred Stock issued and sold in Sunesis’ Series C-2
Financing, and does not necessarily reflect the current fair market value of
such stock.  In accordance with the
Equity Agreements, such shares will initially be convertible into 1,666,667 shares of
Sunesis common stock (subject to anti-dilution adjustments) and shall have
rights, preferences and privileges (including but not limited to anti-dilution
and registration rights) that are the same as or no less favorable to BMS than
the rights, preferences and privileges granted to other holders of Series C-2
Preferred Stock in connection with the Series C-2 Financing.  Such
shares of Sunesis Series C-2 Preferred Stock shall be issued and delivered
to BMS in the form of certificated securities.

 

8.2                                 Development Milestone Payments.  

 

8.2.1                        Development Milestone Payments. 
Sunesis shall make milestone payments to BMS upon the first achievement
with respect to a Licensed Product of each of the milestones set forth in Table
1 in the amounts set forth therein.  The
milestone payments set forth in Table 1 will be payable by Sunesis to BMS
within ten (10) days of the achievement of the specified milestone event
with respect to a Licensed Product in the specified Formulation for the
specified Indication.  As used herein, “Formulation”
means either (a) any IV formulation or (b) any non-IV
formulation.  If a given Formulation is
an IV formulation, a “different Formulation” means any non-IV formulation (for
example, an oral formulation), and vice versa.  As used herein, “Indication” means a
tumor type, such as lung, breast or bladder cancer, without regard to the line
of therapy.  For example, breast cancer
and lung cancer would be different Indications. 
Such milestone payment shall not be refundable or returnable in any
event, nor shall it be creditable against royalties or other payments.

 

Table 1

 

	
  Column:  1

  	
   

  	
  2

  	
   

  	
  3

  	
   

  	
  4

  	
   

  	
  5

  	
   

  
	
   

  	
   

  	
  First Indication for First

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Milestone Event

  	
   

  	
  Formulation

  	
   

  	
  Second

  Formulation (any

  Indication)

  	
   

  	
  Second Indication

  for a Formulation

  	
   

  	
  Third Indication for

  a Formulation

  	
   

  
	
  Total Milestone

  	
   

  	
  Maximum

  
	
  Payment

  	
   

  	
  Equity Portion

  
	
  1. Start of Phase 1 Trial

  	
   

  	
  $

  	
  [*]

  	
   

  	
  $

  	
  [*]

  	
   

  	
  —

  	
   

  	
  —

  	
   

  	
  —

  	
   

  
	
  2. Start of Phase 2 Trial

  	
   

  	
  $

  	
  [*]

  	
   

  	
  $

  	
  [*]

  	
   

  	
  $

  	
  [*]

  	
   

  	
  $

  	
  [*]

  	
   

  	
  —

  	
   

  
	
  3. Start of Phase 3 Trial

  	
   

  	
  $

  	
  [*]

  	
   

  	
  $

  	
  [*]

  	
   

  	
  $

  	
  [*]

  	
   

  	
  $

  	
  [*]

  	
   

  	
  $

  	
  [*]

  	
   

  
	
  4. NDA Filing

  	
   

  	
  $

  	
  [*]

  	
   

  	
  $

  	
  [*]

  	
   

  	
  $

  	
  [*]

  	
   

  	
  $

  	
  [*]

  	
   

  	
  $

  	
  [*]

  	
   

  
	
  5. NDA Approval

  	
   

  	
  $

  	
  [*]

  	
   

  	
  —

  	
   

  	
  $

  	
  [*]

  	
   

  	
  $

  	
  [*]

  	
   

  	
  $

  	
  [*]

  	
   

  
	
  6. MAA Filing

  	
   

  	
  $

  	
  [*]

  	
   

  	
  —

  	
   

  	
  $

  	
  [*]

  	
   

  	
  $

  	
  [*]

  	
   

  	
  $

  	
  [*]

  	
   

  
	
  7. MAA Approval

  	
   

  	
  $

  	
  [*]

  	
   

  	
  —

  	
   

  	
  $

  	
  [*]

  	
   

  	
  $

  	
  [*]

  	
   

  	
  $

  	
  [*]

  	
   

  
	
  8. JNDA Filing

  	
   

  	
  $

  	
  [*]

  	
   

  	
  —

  	
   

  	
  $

  	
  [*]

  	
   

  	
  $

  	
  [*]

  	
   

  	
  $

  	
  [*]

  	
   

  
	
  9. JNDA Approval

  	
   

  	
  $

  	
  [*]

  	
   

  	
  —

  	
   

  	
  $

  	
  [*]

  	
   

  	
  $

  	
  [*]

  	
   

  	
  $

  	
  [*]

  	
   

  
	
  Total

  	
   

  	
  $

  	
  [*]

  	
   

  	
  $

  	
  [*]

  	
   

  	
  $

  	
  [*]

  	
   

  	
  $

  	
  [*]

  	
   

  	
  $

  	
  [*]

  	
   

  

 

[*]         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.

 

26

 

(a)                                  The milestone payments set forth in column 2
in Table 1 are payable upon the first achievement of the specified milestone
event for the first Indication for a Licensed Product for a first Formulation
(i.e., irrespective of whether an IV or non-IV formulation).  Upon payment of a column 2 milestone,
milestone payments are payable under column 3 in Table 1 for the first
Indication for a Licensed Product as a Formulation different than the
Formulation for which a milestone payment was previously payable under column
2.  For example, if a milestone were paid
under column 2 for an IV Formulation for any milestone event, then a milestone
would be payable under column 3 upon achievement of the same milestone event
for any non-IV Formulation, and vice versa.  Also, for clarification, the first IV Formulation
for a Licensed Product may or may not be for the same Indication as the first
non-IV Formulation.  For further
clarification, in the event that only one type of Formulation of Licensed
Product is ever used in humans (i.e., either IV or non-IV), then no payments
would become payable under column 3 of Table 1. 

 

(b)                                 Milestone payments for the second Indication
to be developed for a Formulation (whether IV or non-IV) are payable when the
milestone event is reached for the second Indication for an IV or non-IV
Formulation (column 4 in Table 1). 
Milestone payments for the third Indication to be developed for any
Formulation (whether IV or non-IV) are payable when the milestone event is
reached for the third Indication for an IV or non-IV Formulation (column 5 in
Table 1).  For example, if a milestone
payment has been paid for a particular milestone event for a non-IV Formulation
for a lung tumor Indication under column 2, then a milestone payment will be
payable under column 4 upon the first achievement of the same milestone event
for any non-IV Formulation for the Licensed Product for any non-lung tumor
Indication (such as a bladder tumor indication).  It is understood that the milestones in
column 4 and 5 shall be paid only once for all Formulations of a particular
Licensed Compound (i.e. payment will not be duplicated for additional
Formulations).  In accordance with the
foregoing, for a particular Licensed Compound, if both an IV and a non-IV
Formulation are Developed and Commercialized for such Licensed Compound, the
total milestone payments payable under Table 1 shall not exceed $[*].  

 

(c)                                  In the event that a Phase 3 Trial is started
(i.e., milestone event 3 in Table 1) such that a development milestone payment
is triggered for a particular Indication, where no Phase 2 Trial supporting
such Phase 3 Trial had previously been started (i.e., where milestone event 2
had not previously been

 

[*]         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.

 

27

 

triggered for such
Indication), then Sunesis shall pay the milestone payment for milestone event 2
along with the payment for milestone event 3 for such Indication
notwithstanding the absence of a Phase 2 Trial, provided,
however, that if Sunesis subsequently achieves the development
milestone event 2 for such Indication for which the milestone payment was made,
Sunesis shall not have to make any additional payment related thereto.  Other than as set forth in the preceding
sentence and with respect to deferred milestone payments as described in Section 8.2.3(b),
upon achievement of any particular milestone event for a Licensed Product, only
one payment under any Table 1 column would be due based on achievement of that
particular milestone event.

 

(d)                                 For clarification, Appendix 6 sets
forth examples illustrating how development milestone payments are intended to
by paid in accordance with the foregoing.

 

8.2.2                        Payment in Equity.  All of the development milestone payments set
forth in Table 1 will be payable in cash, with the exception of those milestone
payments for the first Licensed Compound which are marked with one or more
asterisks in Table 1, in accordance with the following.  For the payments marked by a single asterisk
(*) in Table 1, at the election of Sunesis up to the maximum equity portion set
forth in column 2 may be paid to BMS in shares of Sunesis stock as set forth
below, with the balance, if any, of such payment to be made in cash.  For the payments marked by a double asterisk
(**) in Table 1, at the election of Sunesis all or any portion of such payment
may be paid to BMS in shares of Sunesis stock as set forth below, with the
balance, if any, of such payment to be made in cash.  For the payments marked by a triple asterisk
(***) in Table 1, at the election of Sunesis, up to 50% of such payment may be
paid to BMS in shares of Sunesis stock as set forth below, with the balance of
such payment to be made in cash.  Any
milestone payment that Sunesis elects to make through the issuance of capital
stock shall be made pursuant to a stock purchase agreement containing provisions
(including, without limitation, representations, warranties and closing
conditions) substantially in the form of the Series C-2 Stock Purchase
Agreement (each, a “Subsequent Purchase Agreement”).  In connection with milestone payments to BMS
in shares of Sunesis stock before Sunesis becomes a Public Company, Sunesis
shall not be entitled to qualify its representations and warranties contained
in any Subsequent Purchase Agreement by, and shall not otherwise be entitled to
issue Sunesis stock in connection with the payment to BMS of any milestone
payment in the event of, any of the following: (i) any claim, suit,
demand, investigation, litigation or other proceeding by or before a court or
other governmental authority, (ii) any violation of any law, rule,
regulation, statute, order or decree, or (iii) any matter related to regulatory
matters or clinical trials, in the case of (i), (ii) or (iii) that
has arisen since the date of the then most recent Qualified Equity Financing
(or since the Effective Date if no Qualified Equity Financing has occurred
subsequent to the Effective Date) and that has had, or would reasonably be
expected to have, a material adverse effect on the business, operations or
financial condition of Sunesis and its subsidiaries taken as a whole.

 

In the event that any Sunesis stock issued to BMS as
payment under Section 8.1 or payment under this Section 8.2.2 becomes
subject to a Pay-to-Play Feature, then Sunesis shall no longer be entitled to
issue Sunesis stock in connection with the payment to BMS of any future
milestone payment and the entire amount of any future milestone payments shall
be paid in cash (i.e., any future milestone payments payable under Section 8.2
that would otherwise be payable all or in part in shares of Sunesis capital
stock as set forth in this Section 8.2.2, shall be paid entirely in
cash).  

 

(a)                                  Milestone Payments Prior to Sunesis Becoming
Public Company:  If Sunesis elects to make milestone payments
to BMS in shares of Sunesis stock before Sunesis becomes a Public Company, any
milestone payments made to BMS in Sunesis stock shall consist of shares of the
same securities issued in connection with the then most recent Qualified Equity
Financing, with such securities being valued at a price per share at which such
securities were sold in such Qualified Equity Financing (as appropriately
adjusted for any stock split, combination, reclassification, reorganization or
other similar

 

28

 

event),
and in connection therewith, BMS shall be granted the same rights, preferences
and privileges granted to other holders of the securities issued in connection
with such Qualified Equity Financing (to the extent such rights, preferences
and privileges have not already been granted to BMS), provided,
however, that, if no such Qualified Equity Financing has occurred
prior to the applicable milestone payment, then the milestone payment made to
BMS in Sunesis stock shall (subject to BMS’ right to waive one or more of the
requirements for a Qualified Equity Financing, as set forth in the last
sentence of the definition of a Qualified Equity Financing) consist of shares
of Series C-2 Preferred Stock with such securities being valued at $4.80
per share (as appropriately adjusted for any stock-split, combination,
reclassification, reorganization or other similar event), and in connection
therewith BMS shall be granted the same rights, preferences and privileges
granted to other holders of Series C-2 Preferred Stock (to the extent such
rights, preferences and privileges have not already been granted to BMS).

 

(b)                                 Milestone Payments After Sunesis Becomes a
Public Company:  If Sunesis elects to make milestone payments
to BMS in shares of Sunesis stock after Sunesis becomes a Public Company, such
shares will be unregistered Sunesis Common Stock valued at a price per share
equal to the average closing share price of Sunesis’ publicly traded Common
Stock as reported on the Nasdaq National Market (or if the Common Stock is not
then traded on the Nasdaq National Market, on the principal exchange or
quotation system on which the Common Stock is then traded or quoted) over the [*]
trading day period ending [*] trading days prior to the date the applicable
milestone event is achieved.  Such shares
shall be subject to, and “Registrable Securities” under, the Investor Rights
Agreement.

 

(c)                                  Notwithstanding the foregoing, Sunesis may
not pay any milestone payments in equity to the extent the number of shares so
issued, combined with shares previously issued to BMS under the Agreement and
then held by BMS, would exceed 19.9% of Sunesis’ then outstanding voting equity
on a fully diluted basis, in which case cash would be paid to BMS to cover the
full amount payable to BMS for such milestone.

 

(d)                                 BMS agrees not to knowingly exercise its
voting rights as a Sunesis stockholder in a manner that would interfere with
Sunesis’ efforts to proceed to an initial public offering of Sunesis stock or
effect a merger, consolidation or sale of all or substantially all of its
assets.  

 

8.2.3                        Reduction in Milestone Payments.  

 

(a)                                  For Licensed Products containing Licensed
Compounds that are included under clause (b) or clause (c) (or clause
(d), where clause (d) refers to clause (b) or (c)), but not clause (a) (or
clause (d), where clause (d) refers to clause (a)), of the definition of
Licensed Compound, the milestone payments payable with respect to such Licensed
Products under Section 8.2.1 will be [*] of the amounts listed in Table 1.

 

(b)                                 Only one set of milestone payments will be
paid for a given Licensed Compound (i.e., for a given chemical entity) upon the
first occurrence of the milestone event for that compound.  Each such milestone payment shall be payable
for the first Licensed Compound to reach the milestone event.  However, until NDA or MAA Approval is obtained
by a Licensed Compound, the milestone payments for each subsequent Licensed
Compound to achieve the same milestone event are deferred.  Once NDA or MAA Approval is obtained for a
Licensed Compound, any deferred milestone payments for the next most advanced
Licensed Compound that is still (as of the time of such Approval) in active
clinical

 

[*]         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.

 

29

 

development will be due, provided that for subsequent Licensed Compounds to reach a
milestone event (i.e., for those Licensed Compounds which are not the first
Licensed Compound to reach the milestone event) the milestone payments payable
will be [*] of the amounts listed in Table 1. 
As each additional Licensed Compound is approved, deferred milestone
payments will be paid consistent with the foregoing.  Except as set forth above for certain
milestone payments for the first Licensed Compound to reach the milestone
event, all development milestone payments, including all milestone payments for
subsequent Licensed Compounds, will be payable in cash.

 

(c)                                  The foregoing reductions shall not reduce the
amount of any given milestone payment payable to be less than [*] of the
amounts listed in Table 1.

 

8.3                                 Commercialization Milestone Payments.  The
following milestone payments will be payable in cash by Sunesis to BMS within
thirty (30) days of the end of the Calendar Year in which Sunesis (and its
Sublicensees, as applicable) first achieves the following annual Net Sales of
all Licensed Products in all countries in the Territory (including all
indications and formulations for such Licensed Products):

 

	
  Annual Net Sales

  	
   

  	
  Payment
  to BMS

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  $[*]

  	
   

  	
  $[*]

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  $[*]

  	
   

  	
  $[*]

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  $[*]

  	
   

  	
  $[*]

  	
   

  

 

It is understood that more than one
Commercialization milestone payment may be payable with respect to one Calendar
Year, provided that the maximum total amount
payable by Sunesis to BMS under this Section 8.3 shall be $[*].  For clarification, by way of example, if the
total annual Net Sales of Licensed Product for the first Calendar Year in which
the First Commercial Sale of the Licensed Product occurs is $[*], $[*] would be
payable by Sunesis to BMS under this Section 8.3 within thirty (30) days
of the end of the Calendar Year.  

 

8.4                                 Royalty Payments. 

 

8.4.1                        Sunesis shall pay to BMS in cash the
following royalty payments on the total aggregate annual Net Sales in the
Territory of all Licensed Products (including all indications and formulations
for such Licensed Products) in a particular Calendar Year by Sunesis, its
Affiliates, and Sublicensees in the Territory:

 

Table
2

 

	
  Aggregate Annual Worldwide Net Sales of All

  Licensed Products in Calendar Year

  	
   

  	
  Royalty Rate

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Up to U.S. $[*]

  	
   

  	
  [*]

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  Above U.S. $[*] to U.S. $[*]

  	
   

  	
  [*]

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  Above U.S. $[*] to U.S. $[*]

  	
   

  	
  [*]

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  Above $[*]

  	
   

  	
  [*]

  	
  %

  

 

[*]         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.

 

30

 

By way of example, in a given Calendar Year, if the
aggregate annual worldwide Net Sales for all Licensed Products is $[*], the
following royalty payment would be payable under this Section 8.4.1
(subject to the reductions set forth below): ([*]% x $[*]) + ([*]% x $[*]) + ([*]%
x $[*]) = $[*].

 

8.4.2                        Royalty Term. 
Royalties shall be payable on a product-by-product and country-by-country
basis on Net Sales of Licensed Products from the First Commercial Sale of a
particular Licensed Product in a country until the later of (i) ten (10) years
after the First Commercial Sale of such Licensed Product in such country or (ii) the
expiration of the last to expire patent in such country within the BMS Core
Patent Rights or BMS Extension Patent Rights, or otherwise owned by, Controlled
by or exclusively licensed to Sunesis (including extensions thereof under
applicable Laws, including patent term extensions, pediatric exclusivity
extensions or supplemental protection certificates or their equivalents in any
country), in each case with a Valid Claim covering the sale of the Licensed
Product for which Approval has been obtained in such country or (iii) the
expiration of all applicable data exclusivity with respect to such Licensed
Product (such as those periods listed
in the FDA’s Orange Book or periods under national implementations of Article 10.1(a)(iii) of
Directive 2001/EC/83, and equivalents in other countries in the Territory).  Such period during which royalties are
payable with respect to a Licensed Product in a country is referred to herein
as the “Royalty Term” in such country with respect to such Licensed
Product.

 

8.4.3                        Reduction of Royalty for Certain Licensed
Products.  For Licensed Products containing Licensed
Compounds that are included under clause (b) or clause (c) (or clause
(d), where clause (d) refers to clause (b) or (c)), but not clause (a) (or
clause (d), where clause (d) refers to clause (a)), of the definition of
Licensed Compound, the royalty payable by Sunesis under Section 8.4.1
shall be reduced such that the royalty rate shall be [*] of the royalty rate
set forth above in Table 2.

 

8.4.4                        Royalty Reduction for Generic Competition.  The
royalty amounts otherwise payable under Section 8.4.1 shall be reduced by [*]
on a country-by-country basis at any such time that there is no patent in
effect for any reason providing marketing exclusivity with respect to the
applicable Licensed Product in such country and where the sale of one or more
Generic Product(s) in such country exceeds [*] percent ([*]%) of the unit sales
volume of pharmaceutical products containing the applicable License Compound in
that country, as measured by IMS Health or its successor.  For such purposes, the reduction will be
calculated assuming that the royalty rate in such country is the Blended Rate
(i.e., the reduced royalty rate for such country shall be [*] percent ([*]%) of
the Blended Rate).  Such reduction shall
be first applied with respect to such country starting with sales in the
Calendar Quarter following the first Calendar Quarter where the sales of the
Generic Product(s) in such country exceed [*]% of the unit sales volume of the
applicable Licensed Product.  In no event
shall the royalty amounts payable in any such country be reduced below [*]
percent ([*]%) of the amount otherwise payable with respect to such Licensed
Product under Section 8.4.1.  

 

8.4.5                        Third Party Royalty Payments.  If
Sunesis or its Sublicensee, in its reasonable judgment, is required to obtain a
license from any Third Party under any patent covering the applicable

 

[*]         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.

 

31

 

Licensed Compound as a
composition of matter (i.e., this reduction shall not apply, for example, with
respect to Third Party patents covering a formulation or method of use for the
Licensed Compound or Licensed Product) in order to import, manufacture, use or
sell any Licensed Product, and if Sunesis (or its Sublicensee) is required to
pay to such Third Party under such license a one-time license fee, milestone
payments, or a royalty calculated on sales of a Licensed Product, and the
infringement of such patent cannot reasonably be avoided by Sunesis (or its
Sublicensee), or if Sunesis (or its Sublicensee) is required by a court of
competent jurisdiction to pay such a license fee, milestone payments or royalty
to such a Third Party (and the infringement of such patent cannot reasonably be
avoided by Sunesis), then the amount of Sunesis’ royalty obligations under this
Section 8.4 hereof shall be reduced by [*] percent ([*]%) of the amount of
such license fee, milestone payments or royalty paid to such Third Party,  provided however,
that the royalties payable under Section 8.4.1 hereof shall not be reduced
in any such event below [*]% of the amounts set forth in Section 8.4.1.  Sunesis (or its Sublicensee) shall use its
commercially reasonable efforts to minimize the amount of any of the foregoing
payments owed to Third Parties.  Prior to
Sunesis or its Sublicensee exercising its reasonable judgment under this Section 8.4.5,
Sunesis shall provide BMS with written notice of a potential need to obtain any
license from Third Parties.  The Parties
shall discuss the best course of action to resolve such potential license
requirement(s), provided that such discussions
shall not limit or unreasonably delay Sunesis’ or its Sublicensee’s right to
exercise its reasonable judgment.

 

Sunesis shall be responsible for paying any and all
royalties or other payments that may be payable to any Third Party as a result
of Sunesis’ manufacture, use or sale of any Licensed Compound or Licensed
Product.

 

8.4.6                        Royalty Conditions.  The
royalties under Section 8.4.1 shall be subject to the following
conditions:

 

(a)                                  that only one royalty shall be due with
respect to the same unit of Licensed Product; 

 

(b)                                 that no royalties shall be due upon the sale
or other transfer among Sunesis, its Affiliates, or Sublicensees, but in such
cases the royalty shall be due and calculated upon Sunesis’ or its Affiliate’
or Sublicensee’s Net Sales of Licensed Product to the first independent Third
Party; and

 

(c)                                  no royalties shall accrue on the disposition
of Licensed Product in reasonable quantities by Sunesis, its Affiliates or
Sublicensees as part of an expanded access program or as part of Phase 4 Trials
or as donations to non-profit institutions or government agencies for non-commercial
purposes, provided, in each case, that neither
Sunesis, its Affiliate or Sublicensees receives any payment for such Licensed
Product.

 

8.4.7                        Limit on Royalty Reductions. 
Notwithstanding the royalty reductions set forth above under Sections
8.4.3, 8.4.4 and 8.4.5, under no circumstances shall the royalty rate used to
calculate the royalty payment payable under Section 8.4.1 be less than [*]%
of the royalty rate set forth above in Table 2 in Section 8.4.1.

 

8.5                                 Manner of Payment. 
Except for those payments that are paid in Sunesis equity, all payments
to be made by Sunesis hereunder shall be made in Dollars by wire transfer of
immediately

 

[*]         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

 

available funds to such
United States bank account as shall be designated by BMS.  Late payments shall bear interest at the rate
provided in Section 8.10.

 

8.6                                 Sales Reports and Royalty Payments. 
After the First Commercial Sale of a Licensed Product and during the
term of this Agreement, Sunesis shall furnish to BMS a written report, within
thirty (30) days after the end of each Calendar Quarter (or portion thereof, if
this Agreement terminates during a Calendar Quarter), showing the amount of
royalty due for such Calendar Quarter (or portion thereof).  Royalty payments for each Calendar Quarter
shall be due at the same time as such written report for the Calendar
Quarter.  With each quarterly payment,
Sunesis shall deliver to BMS a full and accurate accounting to include at least
the following information:

 

(a)                                  the quantity of each Licensed Product sold
(by country) by Sunesis, its Affiliates, and Sublicensees; 

 

(b)                                 the total gross sales and total Net Sales for
each Licensed Product (by country) by Sunesis, its Affiliates, and Sublicensees
in local currency and in Dollars;

 

(c)                                  the calculation of Net Sales from such gross
sales;

 

(d)                                 the exchange rates used in determining the
amount of U.S. Dollars payable;

 

(e)                                  the names and addresses of all Sublicensees
of Sunesis;

 

(f)                                    the royalties
payable in Dollars which shall have accrued hereunder in respect of such Net
Sales;

 

(g)                                 withholding
taxes, if any, required by applicable Law to be deducted in respect of such
royalties;

 

(h)                                 the dates of
the First Commercial Sales of Licensed Products in any country during the
reporting period; and

 

(i)                                     significant
Commercial activities and events with respect to Licensed Products. 

 

If no royalty or payment is
due for any royalty period hereunder, Sunesis shall so report.

 

8.7                                 Sales Record Audit. 
Sunesis shall keep, and shall cause each of its Affiliates, and
Sublicensees, if any, to keep, full and accurate books of accounting in
accordance with GAAP containing
all particulars that may be necessary for the purpose of calculating all
royalties payable to BMS.  Such books of
accounting (including, without limitation, those of Sunesis’ Affiliates, and
Sublicensees, if any) shall be kept at their principal place of business and,
with all necessary supporting data, shall during all reasonable times for the
three (3) years next following the end of the Calendar Year to which each
shall pertain, be open for inspection at reasonable times by an independent
certified accountant selected by BMS, and as to which Sunesis has no reasonable
objection, at BMS’ expense, for the purpose of
verifying royalty statements for compliance with this Agreement.  Such accountant must have agreed in writing
to maintain all information learned in confidence, except as necessary to
disclose to BMS such compliance or noncompliance by Sunesis.  The results of each inspection, if any, shall
be binding on both Parties.  BMS shall
pay for such inspections, except that in the event there is any upward
adjustment in aggregate

 

33

 

royalties payable for the
Calendar Quarter period of such inspection of more than [*] percent ([*]%) of
the amount paid, Sunesis shall pay for the reasonable out-of-pocket costs of
such inspection.  Any underpayments shall
be paid by Sunesis within ten (10) Business Days of notification of the
results of such inspection.  Any
overpayments shall be fully creditable against amounts payable in subsequent
payment periods.

 

8.8                                 Currency Exchange. With respect to Net Sales invoiced in
Dollars, the Net Sales and the amounts due to BMS hereunder shall be expressed
in Dollars.  With respect to Net Sales
invoiced in a currency other than Dollars, the Net Sales shall be expressed in
the domestic currency of the entity making the sale, together with the Dollar
equivalent, calculated using the arithmetic average of the spot rates on the
close of business on the last Business Day of each month of the Calendar
Quarter in which the Net Sales were made. 
The “closing mid-point rates” found in the “dollar spot forward against
the dollar” table published by The Financial Times or any other publication as
agreed to by the Parties shall be used as the source of spot rates to calculate
the average as defined in the preceding sentence.  All payments shall be made in Dollars.

 

8.9                                 Tax Withholding.  The
withholding tax, duties, and other levies (if any) applied by a government of
any country of the Territory on payments made by Sunesis to BMS hereunder shall
be borne by BMS.  Sunesis, its Affiliates
and Sublicensees shall cooperate with BMS to enable BMS to claim exemption
therefrom under any double taxation or similar agreement in force and shall
provide to BMS proper evidence of payments of withholding tax and assist BMS by
obtaining or providing in as far as possible the required documentation for the
purpose of BMS’ tax returns.

 

8.10                           Interest Due. 
Without limiting any other rights or remedies available to BMS, Sunesis shall pay BMS interest on any
payments that are not paid on or before the date such payments are due under
this Agreement at a rate of one and one-half percent (1.5%) per month or the
maximum applicable legal rate, if less, calculated on the total number of days
payment is delinquent.

 

ARTICLE 9

REPRESENTATIONS AND WARRANTIES; DISCLAIMER;

LIMITATION OF LIABILITY

 

9.1                                 Mutual
Representations and Warranties.  Each Party represents and warrants to the
other Party that (i) it has all requisite corporate power and authority to
enter into this Agreement and to perform its obligations under this Agreement, (ii) execution
of this Agreement and the performance by such Party of its obligations
hereunder have been duly authorized, (iii) this Agreement is legally binding
and enforceable on each Party in accordance with its terms, and (iv) the
performance of this Agreement by it does not create a breach or default under
any other agreement to which it is a Party.

 

9.2                                 Representations and Warranties of BMS.  

 

9.2.1                        BMS represents and warrants to Sunesis that
to the best of its knowledge (i) there is no pending litigation which
alleges, or any written communication alleging, that any Licensed Compound or
BMS’ activities with respect to the BMS Patent Rights or the Licensed Compounds
have infringed or misappropriated any of the intellectual property rights of
any Third Party; (ii) all fees

 

[*]         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

 

required to be paid by BMS
in order to maintain the BMS Patent Rights have been paid to date; (iii) it
has not previously assigned, transferred, conveyed or otherwise encumbered its
right, title and interest in the BMS Patent Rights or the BMS Know-How; (iv) Section 2
of Appendix 1 sets forth all patent rights (other than the BMS Core
Patent Rights) that are necessary or useful for the manufacture, Development
and/or Commercialization of Licensed Compounds and/or Licensed Products in
which BMS or its Affiliates has a right or interest as of the Effective Date; (v) BMS
owns all right, title and interest in and to the BMS Core Patent Rights and has
not granted any right or license under the BMS Core Patent Rights authorizing
any Third Party to manufacture, use or sell Licensed Compounds in any country
the Territory; (vi) all data related to Licensed Compounds included within
the BMS Know-How was generated in accordance with applicable Laws, the Licensed
Compounds provided to Sunesis pursuant to Section 4.4 above were
manufactured in accordance with applicable Laws; (vii) BMS has not
withheld any information of which it is aware that would materially adversely
affect the further Development or Commercialization of any Licensed Compounds;
and (viii) prior to the Effective Date BMS has disclosed to Sunesis all
material information related to BMS-387032 of which it is aware as of the
Effective Date.

 

9.2.2                        BMS represents and warrants to Sunesis that
as of the Effective Date, it has discontinued its internal CDK inhibitor drug
discovery and development programs and that it has no active internal programs
for the discovery or development of CDK inhibitors as of the Effective
Date.  Subject to the exclusive rights
granted to Sunesis under Article 2 and subject to the restrictions on use
of Sunesis’ Confidential Information under Article 11, BMS will not be
restricted from pursuing a CDK inhibitor drug discovery or development program
at any time following the Effective Date, provided however,
that BMS shall not initiate human clinical trials for any internally discovered
CDK inhibitor within [*]
following the Effective Date.  For
clarification, the foregoing restriction on BMS shall not apply to any CDK
inhibitor that is acquired from or through a Third Party, for example, through
in-license, acquisition or merger.

 

9.3                                 Representations and Warranties of Sunesis. 
Sunesis represents, warrants and covenants that, to the best of its
then-current knowledge, all of its activities related to its use of the BMS
Patent Rights and BMS Know-How, and the Development and Commercialization of
the Licensed Compounds and Licensed Products, pursuant to this Agreement shall
comply with all applicable legal and regulatory requirements. 
Sunesis further represents, warrants and covenants that (i) it
shall not knowingly engage in any activities that use the BMS Patent Rights
and/or BMS Know-How in a manner that is outside the scope of the license rights
granted to it hereunder or that infringe the intellectual property rights of
any Third Party; and (ii) that it
has or will have the financial resources to carry out its obligation under this
Agreement.  

 

9.4                                 Disclaimer. 
EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT, BMS MAKES NO
REPRESENTATIONS OR WARRANTIES OF ANY KIND, EITHER EXPRESS OR IMPLIED, INCLUDING
ANY EXPRESS OR IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A
PARTICULAR PURPOSE WITH RESPECT TO THE BMS PATENT RIGHTS OR BMS KNOW-HOW OR ANY
LICENSE GRANTED BY BMS HEREUNDER, OR WITH RESPECT TO ANY COMPOUNDS OR
PRODUCTS.  FURTHERMORE, EXCEPT AS
EXPRESSLY SET FORTH IN THIS AGREEMENT, BMS MAKES NO REPRESENTATIONS OR
WARRANTIES THAT ANY PATENT OR OTHER PROPRIETARY RIGHTS INCLUDED IN THE BMS
PATENT RIGHTS ARE VALID OR ENFORCEABLE OR THAT USE OF THE BMS PATENT RIGHTS AND

 

[*]         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.

 

35

 

BMS KNOW-HOW CONTEMPLATED
HEREUNDER DOES NOT INFRINGE ANY PATENT RIGHTS OR OTHER INTELLECTUAL PROPERTY
RIGHTS OF ANY THIRD PARTY.

 

9.5                                 Limitation of Liability. 
NOTWITHSTANDING ANYTHING IN THIS AGREEMENT OR OTHERWISE, NEITHER PARTY
SHALL BE LIABLE TO THE OTHER WITH RESPECT TO ANY SUBJECT MATTER OF THIS
AGREEMENT, WHETHER UNDER ANY CONTRACT, NEGLIGENCE, STRICT LIABILITY OR OTHER
LEGAL OR EQUITABLE THEORY, FOR ANY INCIDENTAL, INDIRECT, SPECIAL, EXEMPLARY,
PUNITIVE, MULTIPLE, OR CONSEQUENTIAL DAMAGES (INCLUDING, WITHOUT LIMITATION,
CONSEQUENTIAL DAMAGES CONSISTING OF LOST PROFITS, LOSS OF USE, DAMAGE TO
GOODWILL, OR LOSS OF BUSINESS) AND, IN ANY CASE, BMS SHALL NOT BE LIABLE IN AN
AMOUNT GREATER THAN THE AMOUNTS PAID BY SUNESIS TO BMS UNDER SECTIONS 8.1, 8.2,
8.3 AND 8.4 OF THIS AGREEMENT; PROVIDED, HOWEVER,
THAT THE FOREGOING SHALL NOT APPLY TO ANY BREACH BY SUNESIS OF THE LICENSES
GRANTED TO IT UNDER ARTICLE 2 HEREOF THAT IS AN INFRINGEMENT OF BMS PATENT
RIGHTS, OR ANY BREACH BY EITHER PARTY OF ARTICLE 11 HEREOF.

 

ARTICLE 10

PATENT MAINTENANCE; INFRINGEMENT; EXTENSIONS

 

10.1                           Ownership of
Inventions.  Inventorship of inventions conceived or
reduced to practice in the course of 
activities performed under or contemplated by this Agreement shall be
determined by application of United States patent Laws pertaining to
inventorship.  If such inventions are
jointly invented by one or more employees, 
consultants or contractors of each Party, such inventions shall be
jointly owned (“Joint Invention”), and if one or more claims included in
an issued patent or pending patent application which is filed in a patent
office in the Territory claim such Joint Invention, such claims shall be
jointly owned (“Joint Patent Rights”). 
If such an invention is solely invented by an employee of a Party, such
invention shall be owned by such Party, and any patent filed claiming such
solely owned invention shall also be owned by such Party.  Each Party shall enter into binding
agreements obligating all employees performing activities under or contemplated
by this Agreement, including activities related to the BMS Patent Rights,
Licensed Compounds or Licensed Products to assign his/her interest in any
invention conceived or reduced to practice in the course of such activities to
the Party for which such employee is providing its services.  This Agreement shall be understood to be a
joint research agreement in accordance with 35 U.S.C. § 103(c)(3) to
develop the Licensed Compounds and Licensed Products.  The filing, prosecution, maintenance and
enforcement of Joint Patent Rights which are BMS Other Patent Rights shall be
handled in accordance with this Article 10.

 

10.2                           Filing, Prosecution and Maintenance of BMS
Patent Rights.  

 

10.2.1                  Generally.  BMS shall be responsible,
using its in-house patent counsel or outside patent counsel selected by BMS
(such selection to be subject to Sunesis’ approval, such approval not to be
unreasonably withheld), for the preparation, prosecution (including, without
limitation, any interferences, reissue proceedings and reexaminations) and
maintenance of BMS Patent Rights.  BMS
shall be responsible for all costs incurred by BMS with respect to such
preparation, prosecution and maintenance of BMS Patent Rights so long as BMS
remains responsible for such preparation, prosecution and maintenance.  Upon request by Sunesis, BMS shall provide
Sunesis with an update of the filing, prosecution and maintenance status for
each of BMS Patent Rights.  BMS shall
reasonably consult with and cooperate with Sunesis with respect to the
preparation, prosecution and maintenance of the BMS Patent Rights.  BMS shall provide to Sunesis copies of any
papers relating to the filing, prosecution or maintenance of the BMS Patent
Rights promptly upon their being filed or received.  BMS shall not

 

36

 

knowingly take any action
during prosecution and maintenance of the BMS Patent Rights that would
materially adversely affect them (including any reduction in claim scope),
without Sunesis’ prior consent.  Upon
request by Sunesis, BMS shall provide to Sunesis copies of any papers relating
to the filing, prosecution or maintenance of the BMS Patent Rights.

 

10.2.2                  Maintenance of Core Patents. 
Notwithstanding anything to the contrary under this Section 10.2 or
Section 10.3, unless the Parties otherwise agree in writing, during the
period commencing on the Effective Date and ending on the earlier of (i) the
date of [*] for a Licensed
Product or (ii) [*] years following the Effective Date, BMS shall remain
responsible for all such preparation, prosecution and maintenance of the BMS
Core Patent Rights and BMS Extension Patent Rights, and all costs incurred by
BMS with respect thereto, in the List A Countries, and shall not permit any
such patent rights to lapse or become abandoned in any of the List A Countries.

 

10.2.3                  Filing New Applications. 
Sunesis shall have the right to request that BMS file and prosecute any
new patent application claiming an invention invented by BMS either prior to
the Effective Date or during the term of this Agreement that is specifically
directed to or specifically refers to one or more Licensed Compounds (and
accordingly such new patent application, if filed, would be a BMS Other Patent
Right under clause (b) of the definition of a BMS Other Patent
Right).  Upon such request, BMS shall
either assume responsibility for the preparation and filing of such patent
application and such patent application will be handled by BMS in accordance
with Section 10.2.1, or BMS may elect not to assume responsibility for
such preparation and filing of such patent application and such patent
application shall be handled by BMS (or Sunesis, at BMS’ election) in
accordance with Section 10.3.2. 
Accordingly, the provisions of this Article 10 shall govern the
Parties’ responsibilities with respect to prosecution, maintenance and
enforcement of such patents applications, any patents issuing therefrom and any
foreign equivalents thereto.  In the
event that BMS elects in its sole discretion not to file and prosecute any such
patent applications, BMS shall notify Sunesis in writing and Sunesis shall
thereupon have the right, but not the obligation, to assume responsibility for
the prosecution, maintenance and defense of such patent applications, on a
patent-by-patent and country-by-country basis, at Sunesis’ expense in
accordance with Section 10.3.2 below.

 

10.3                           Patent Abandonment.  

 

10.3.1                  Generally.  In no event will BMS knowingly
permit any of the BMS Patent Rights to be abandoned in any country in the
Territory, or elect not to file a new patent application claiming priority to a
patent application within the BMS Patent Rights either before such patent
application’s issuance or within the time period required for the filing of an
international (i.e., Patent Cooperation Treaty), regional (including European
Patent Office) or national application, without Sunesis first being given an
opportunity to assume full responsibility for the continued prosecution and
maintenance of such BMS Patent Rights, or the filing of such new patent
application.  Accordingly, BMS shall
provide Sunesis with notice of the allowance and expected issuance date of any
patent within the BMS Patent Rights, or any of the aforementioned filing
deadlines, and Sunesis shall provide BMS with prompt notice as to whether
Sunesis desires BMS to file such new patent application.  In the event that BMS decides either (i) not
to continue the prosecution or maintenance of a patent application or patent
within BMS Patent Rights in any country or (ii) not to file such new
patent application requested to be filed by Sunesis, BMS shall provide Sunesis
with notice of this decision at
least thirty (30) days prior to any pending lapse or abandonment thereof.

 

[*]         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.

 

37

 

10.3.2                  Sunesis Option to Assume Responsibility. 
Sunesis shall thereupon have the right, but not the obligation, to
assume responsibility for all reasonably documented external costs associated
with the filing and/or further prosecution and maintenance of such patents and
patent applications, on a patent-by-patent and country-by-country basis.  BMS shall proceed with such filing and/or
further prosecution and maintenance promptly upon receipt of written notice
from Sunesis of its election to assume such responsibility, with such filing to
occur prior to the issuance of the patent to which the application claims
priority or expiration of the applicable filing deadline, as set forth
above.  In the event that Sunesis assumes
such responsibility for such filing, prosecution and maintenance costs, BMS
shall have the right, but not the obligation, to transfer the responsibility
for such filing, prosecution and maintenance of such patent applications and
patents to Sunesis’ in-house patent counsel or outside patent counsel selected
by Sunesis and reasonably acceptable to BMS, provided
that BMS shall (i) provide sufficient written notice to Sunesis of any
such election such that the relevant transfer shall not prejudice the filing,
prosecution and/or maintenance of patent rights (where possible, such notice
shall be provided at least thirty (30) days prior to any pending lapse or
abandonment thereof); (ii) transfer or cause to be transferred to Sunesis
or its patent counsel the complete prosecution file for the relevant patents
and patent applications, including all correspondence and filings with patent
authorities with respect thereto; and (iii) at the reasonable request of
Sunesis and without demanding any further consideration therefore, do all
things necessary, proper or advisable, including without limitation the
execution, acknowledgment and recordation of specific assignments, oaths,
declarations and other documents on a country-by-country basis, to assist
Sunesis in obtaining, perfecting, sustaining and/or enforcing such
patent(s).  In such case, Section 10.2.1
shall apply to such patent applications and patents except that the role of BMS
and Sunesis shall be reversed.  Such
patent applications and patents shall otherwise continue to be subject to all
of the terms and conditions of the Agreement in the same way as the other BMS
Core Patent Rights, BMS Extension Patent Rights or BMS Other Patent Rights, as
applicable.  

 

10.4                           Enforcement of BMS Patent Rights Against Infringers.

 

10.4.1                  Enforcement by Sunesis.  

 

(a)                                  In the event that BMS or Sunesis becomes
aware of a suspected infringement of any BMS Patent Right exclusively licensed
to Sunesis under this Agreement, such Party shall notify the other Party
promptly, and following such notification, the Parties shall confer.  Sunesis shall have the right, but shall not
be obligated, to bring an infringement action with respect to such infringement
at its own expense, in its own name and entirely under its own direction and
control, subject to the following.  BMS
shall reasonably assist Sunesis (at Sunesis’ expense) in any action or
proceeding being prosecuted if so requested, and shall lend its name to and
join as a nominal party in such actions or proceedings if reasonably requested
by Sunesis or required by applicable Laws. 
BMS shall have the right to participate and be represented in any such
suit by its own counsel at its own expense. 
No settlement of any such action or proceeding which restricts the
scope, or adversely affects the enforceability, of a BMS Patent Right may be
entered into by Sunesis without the prior written consent of BMS, which consent
shall not be unreasonably withheld, delayed or conditioned.  

 

(b)                                 BMS shall have the
right at its discretion to grant to Sunesis such rights (including assignment
of the applicable BMS Patent Rights) as may be necessary for Sunesis to
exercise its rights under this Section 10.4 (including defending or
enforcing any BMS Patent Rights) without BMS’ involvement.  In the event of such grant of rights
(including assignment) with respect to any BMS Patent Rights, such BMS Patent
Rights shall continue to be treated as BMS Patent Rights and shall otherwise
continue to be subject to all of the terms and conditions of the Agreement in
the same way as the other applicable BMS Patent Rights.  For purposes of clarity, election by BMS to
grant or assign rights to Sunesis under this Section 10.4.1(b) shall
not limit BMS’s obligations under Section 10.4.1(a) to reasonably
assist Sunesis in any action or proceeding, or to join in such action or
proceeding upon request

 

38

 

by
Sunesis if such joinder is necessary under applicable Laws for Sunesis to
exercise its rights under this Section 10.4.

 

10.4.2                  Enforcement by BMS.  If
Sunesis elects not to bring any action for infringement described in Section 10.4.1
and so notifies BMS, then BMS may bring such action at its own expense, in its
own name and entirely under its own direction and control, subject to the
following.  Sunesis shall reasonably
assist BMS (at BMS’ expense) in any action or proceeding being prosecuted if so
requested, and shall lend its name to such actions or proceedings if requested
by BMS or required by applicable Laws. 
Sunesis shall have the right to participate and be represented in any
such suit by its own counsel at its own expense.  No settlement of any such action or
proceeding which restricts the scope, or adversely affects the enforceability,
of a BMS Patent Right may be entered into by BMS without the prior written
consent of Sunesis, which consent shall not be unreasonably withheld, delayed
or conditioned.

 

10.4.3                  Withdrawal.  If either Party brings an
action or proceeding under this Section 10.4 and subsequently ceases to
pursue or withdraws from such action or proceeding, it shall promptly notify
the other Party and the other Party may substitute itself for the withdrawing
Party under the terms of this Section 10.4

 

10.4.4                  Damages.  In the event that either Party
exercises the rights conferred in this Section 10.4 and recovers any
damages or other sums in such action, suit or proceeding or in settlement
thereof, such damages or other sums recovered shall first be applied to all
out-of-pocket costs and expenses incurred by the Parties in connection
therewith, including, without limitation, attorneys fees.  If such recovery is insufficient to cover all
such costs and expenses of both Parties, it shall be shared in proportion to
the total of such costs and expenses incurred by each Party.  If after such reimbursement any funds shall
remain from such damages or other sums recovered, such funds shall be retained
by the Party that controlled the action or proceeding under this Section 10.4;
provided, however, that if Sunesis is
the Party that controlled such action or proceeding, BMS shall receive out of
any such remaining recovery received by Sunesis an amount as follows: (i) as
to ordinary damages, BMS shall receive payment equivalent to payments that
would have been due to BMS under this Agreement had the infringing sales that
Sunesis lost to the infringer been made by Sunesis and (ii) as to special
or punitive damages, such amount shall be allocated between the Parties in the
same proportion as ordinary damages under clause (i), and provided further that the amounts paid
under (i) and (ii) shall not exceed [*]% of the total recovery of
Sunesis from such action or proceeding.

 

10.4.5                  Other Enforcement.  BMS
or any of its Affiliates or their licensees shall have the right, at their own
expense and under the direction and control of BMS, to enforce or defend in any
action or proceeding any BMS Other Patent Rights.  Sunesis shall have the right to participate
in any such action or proceeding with its own counsel and at its own expense,
which expense may be recovered from any damages or other sums recovered from
such action or proceeding on a pro rata basis
in proportion to all expenses incurred by the foregoing entities in connection
with the applicable action or proceeding. 
If Sunesis elects to so participate, the enforcing entity shall provide
Sunesis with an opportunity to consult regarding such action or
proceeding.  No settlement of any such
action or proceeding which restricts the scope, or adversely affects the
enforceability, of a BMS Other Patent Right may be entered into by BMS without
the prior written consent of Sunesis, which consent shall not be unreasonably
withheld, delayed or conditioned.

 

[*]         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.

 

39

 

10.5                           Patent Term Extension.  BMS
and Sunesis shall each cooperate with one another and shall use Commercially
Reasonable Efforts in obtaining patent term extension (including without
limitation, any pediatric exclusivity extensions as may be available) or
supplemental protection certificates or their equivalents in any country with
respect to patent rights covering the Licensed Products.  If elections with respect to obtaining such
patent term extensions are to be made, Sunesis shall have the right to make the
election to seek patent term extension or supplemental protection, provided that such election will be made so as to maximize
the period of marketing exclusivity for the Licensed Product.  For such purpose, for all Approvals Sunesis
shall provide BMS with written notice of any expected Approval at least thirty
(30) days prior to the expected date of Approval, as well as notice within five
(5) business days of receiving each Approval confirming the date of such
Approval.  Notification of the receipt of
an Approval shall be in accordance with Section 15.2 except that the
notification shall be sent to:

 

Bristol-Myers Squibb Company

P.O. Box 4000

Route 206 &
Province Line Road

Princeton, New Jersey 08543-4000

Attention:  Vice President and Chief
Intellectual Property Counsel

Telephone:  609-252-4825

Facsimile:  609-252-7884

 

10.6                           Data Exclusivity and Orange Book Listings.  

 

10.6.1                  With respect to data exclusivity
periods (such as those periods listed in the FDA’s Orange Book (including
without limitation any available pediatric extensions) or periods under
national implementations of Article 10.1(a)(iii) of Directive 2001/EC/83,
and all international equivalents), Sunesis shall use Commercially Reasonable
Efforts consistent with its obligations under applicable Law to seek, maintain
and enforce all such data exclusivity periods available for the Licensed
Products.  With respect to filings in the
FDA Orange Book (and foreign equivalents) for issued patents for a Licensed
Product, Sunesis shall, consistent with its obligations under applicable Law,
list in a timely manner and maintain all applicable BMS Patent Rights and other
patents Controlled by Sunesis required to be filed by it, or that it is
permitted to file, under applicable Law. 
At least sixty (60) days prior to an anticipated deadline for the filing
of patent listing information for BMS Patent Rights, Sunesis will consult with
BMS regarding the content of such filing. 
In the event of a dispute between the Parties as to whether a BMS Patent
Right can be filed and/or the content of such filing, the Parties will take
expedited steps to resolve the dispute as promptly as possible, including
seeking advice of an independent legal counsel to guide their decision.  BMS shall use Commercially Reasonable Efforts
consistent with its obligations under applicable Law to provide reasonable cooperation
to Sunesis in filing and maintaining such Orange Book (and foreign equivalent)
listings.  

 

10.6.2                  Without limiting the foregoing,
BMS shall have the right at its discretion to grant to Sunesis such rights
(including assignment of the applicable BMS Patent Rights) as may be necessary for
Sunesis to exercise its rights under this Section 10.6 (including seeking,
maintaining and enforcing all data exclusivity periods) without BMS’
involvement.  In the event of such grant
of rights (including assignment) with respect to any BMS Patent Rights, such
BMS Patent Rights shall continue to be treated as BMS Patent Rights and shall
otherwise continue to be subject to all of the terms and conditions of the
Agreement in the same way as the other applicable BMS Patent Rights.  For purposes of clarity, election by BMS to
grant or assign rights to Sunesis under this Section 10.6.2 shall not
limit BMS’ obligation under Section 10.6.1 to provide reasonable
cooperation to Sunesis to the extent such cooperation is reasonably necessary
for Sunesis in filing and maintaining such Orange Book (and foreign equivalent)
listings.

 

40

 

10.7                           Notification of Patent Certification.  Sunesis shall notify
and provide BMS with copies of any allegations of alleged patent invalidity,
unenforceability or non-infringement of a BMS Patent Right pursuant to a
Paragraph IV Patent Certification by a Third Party filing an Abbreviated New
Drug Application, an application under §505(b)(2) or other similar patent
certification by a Third Party, and any foreign equivalent thereof.  Such notification and copies shall be
provided to BMS within seven (7) days after Sunesis receives such
certification, and shall be sent to the address set forth in Section 10.5.  In addition, upon request by BMS, Sunesis
shall provide reasonable assistance and cooperation (including, without limitation, making available to BMS documents
possessed by Sunesis that are reasonably required by BMS and making available
personnel for interviews and testimony) in any actions reasonably undertaken by
BMS to contest any such patent certification.

 

ARTICLE 11

NONDISCLOSURE OF CONFIDENTIAL INFORMATION

 

11.1                           Nondisclosure.  Each
Party agrees that, for so long as this Agreement is in effect and for a period
of ten (10) years thereafter, a Party (the “Receiving Party”)
receiving Confidential Information of the other Party (the “Disclosing Party”)
(or that has received any such Confidential Information from the other Party
prior to the Effective Date) shall (i) maintain in confidence such
Confidential Information using not less than the efforts such Receiving Party
uses to maintain in confidence its own proprietary industrial information of
similar kind and value, (ii) not disclose such Confidential Information to
any Third Party without the prior written consent of the Disclosing Party,
except for disclosures expressly permitted below, and (iii) not use such
Confidential Information for any purpose except those permitted by this
Agreement (it being understood that this clause (iii) shall not create or
imply any rights or licenses not expressly granted under Article 2
hereof).

 

11.1.1                  Exceptions.  The
obligations in Section 11.1 shall not apply with respect to any portion of
the Confidential Information that the Receiving Party can show by competent
proof:

 

(a)                                  is publicly disclosed by the Disclosing
Party, either before or after it is disclosed to the Receiving Party hereunder;
or

 

(b)                                 was known to the Receiving Party or any of
its Affiliates, without any obligation to keep it confidential or any
restriction on its use, prior to disclosure by the Disclosing Party; or

 

(c)                                  is subsequently disclosed to the Receiving
Party or any of its Affiliates by a Third Party lawfully in possession thereof
and without any obligation to keep it confidential or any restriction on its
use; or

 

(d)                                 is published by a Third Party or otherwise
becomes publicly available or enters the public domain, either before or after
it is disclosed to the Receiving Party; or

 

(e)                                  has been independently developed by employees
or contractors of the Receiving Party or any of its Affiliates without the aid,
application or use of Confidential Information of the Disclosing Party.

 

11.2                           Authorized Disclosure.  The
Receiving Party may disclose Confidential Information belonging to the
Disclosing Party to the extent (and only to the extent) such disclosure is
reasonably necessary in the following instances:

 

41

 

(a)                                  filing or prosecuting patents;

 

(b)                                 regulatory filings;

 

(c)                                  prosecuting or defending litigation;

 

(d)                                 subject to Section 11.4, complying with
applicable governmental Laws and regulations (including, without limitation,
the rules and regulations of the Securities and Exchange Commission or any
national securities exchange) and with judicial process, if in the reasonable
opinion of the Receiving Party’s counsel, such disclosure is necessary for such
compliance; and

 

(e)                                  disclosure, in connection with the
performance of this Agreement and solely on a “need to know basis”, to
Affiliates; potential or actual collaborators (including potential
Sublicensees); potential or actual investment bankers, investors, lenders, or
acquirers; or employees,
contractors, or agents, each of whom prior to disclosure must be bound by
written obligations of confidentiality and non-use no less restrictive than the
obligations set forth in this Article 11; provided,
however, that the Receiving Party shall remain responsible for any
failure by any Person who receives Confidential Information pursuant to this Article 11
to treat such Confidential Information as required under this Article 11.

 

If and whenever any
Confidential Information is disclosed in accordance with this Section 11.2,
such disclosure shall not cause any such information to cease to be
Confidential Information except to the extent that such disclosure results in a
public disclosure of such information (otherwise than by breach of this
Agreement).  Where reasonably possible
and subject to Section 11.4, the Receiving Party shall notify the
Disclosing Party of the Receiving Party’s intent to make such disclosure
pursuant to paragraphs (a) through (d) of this Section 11.2
sufficiently prior to making such disclosure so as to allow the Disclosing
Party adequate time to take whatever action it may deem appropriate to protect
the confidentiality of the information.

 

11.3                           Terms of this Agreement.  The
Parties acknowledge that the terms of this Agreement shall be treated as
Confidential Information of both Parties.

 

11.4                           Securities Filings.  In the event either Party proposes to file
with the Securities and Exchange Commission or the securities regulators of any
state or other jurisdiction a registration statement or any other disclosure
document which describes or refers to this Agreement under the Securities Act
of 1933, as amended, the Securities Exchange Act, of 1934, as amended, or any
other applicable Laws, the Party shall notify the other Party of such intention
and shall provide such other Party with a copy of relevant portions of the proposed
filing not less than five (5) business days prior to such filing (and any
revisions to such portions of the proposed filing a reasonable time prior to
the filing thereof), including any exhibits thereto relating to this Agreement,
and shall use reasonable efforts to obtain confidential treatment of any
information concerning this Agreement that such other Party requests be kept
confidential, and shall only disclose Confidential Information which it is
advised by counsel is legally required to be disclosed.  No such notice shall be required under this Section 11.4
if the substance of the description of or reference to this Agreement contained
in the proposed filing has been included in any previous filing made by the
either Party hereunder or otherwise approved by the other Party.

 

11.5                           Publication.

 

11.5.1                  Publication by BMS.  BMS may publish or present data and/or
results relating to a Licensed Compound or Licensed Product in scientific
journals and/or at scientific conferences, subject to the prior review and
comment by Sunesis as follows.  BMS shall
provide Sunesis with the opportunity to review any proposed abstract,
manuscript or presentation which discloses information relating to a

 

42

 

Licensed
Compound or Licensed Product by delivering a copy thereof to Sunesis no less
than thirty (30) days before its intended submission for publication or
presentation.  Sunesis shall have thirty
(30) days from its receipt of any such abstract, manuscript or presentation in
which to notify BMS in writing of any specific objections to the
disclosure.  In the event Sunesis objects
to the disclosure in writing within such thirty (30) days period, BMS agrees
not to submit the publication or abstract or make the presentation containing
the objected-to information until the Parties have agreed to the content of the
proposed disclosure, and BMS shall delete from the proposed disclosure any
Sunesis Confidential Information or BMS Know-How or the identity of any
Licensed Compound or Licensed Product, upon request by Sunesis.  Once any such abstract or manuscript is
accepted for publication, BMS will provide Sunesis with a copy of the final
version of the manuscript or abstract. 
For clarification, this Section 11.5.1 shall not limit or restrict
BMS’ ability to publish or present publicly information on CDK inhibitors which
are not Licensed Compounds or Licensed Products, provided
such publication or presentation does not contain Sunesis Confidential
Information (including BMS Know-How) or identify any Licensed Compound or
Licensed Product.

 

11.5.2                  Publication by Sunesis.  Sunesis may publish or present data and/or
results relating to a Licensed Compound or Licensed Product in scientific
journals and/or at scientific conferences, subject to the prior review and
comment by BMS as follows.  Sunesis shall
provide BMS with the reasonable opportunity to review, comment on and consult
with Sunesis with respect to any proposed abstract, manuscript or presentation
which discloses information relating to a Licensed Compound or Licensed
Product, and shall consider in good faith any comments or suggestions of BMS
with respect thereto.  Once any such
abstract or manuscript is accepted for publication, Sunesis will provide BMS
with a copy of the final version of the manuscript or abstract.

 

11.6                           Sunesis Equity and Financial Information.

 

(a)                                  As of the Effective Date, Sunesis has
provided BMS with a capitalization table listing the authorized classes of
capital stock and the number of outstanding shares (including shares issuable
upon exercise of outstanding warrants and options) and common share
equivalents.  Sunesis will provide BMS
with updates to such capitalization table (in the same format and detail as the
capitalization table provided to BMS as of the Effective Date) within 30 days
following the end of each fiscal quarter.

 

(b)                                 Sunesis will provide to BMS the financial
information as provided for in Section 5 of the Investor Rights Agreement
(i.e., Section 5 of the Eighth Amended and Restated Investor Rights
Agreement).

 

(c)                                  Sunesis shall no longer be required to
provide the information to BMS as set forth in this Section 11.6 after
Sunesis becomes a Public Company.  The
information provided by Sunesis to BMS under this Section 11.6 shall be Confidential
Information of Sunesis.

 

ARTICLE 12

INDEMNITY

 

12.1                           Sunesis Indemnity. 
Sunesis shall indemnify, defend and hold harmless BMS and its
Affiliates, and their respective officers, directors, employees, agents,
licensors, and their respective successors, heirs and assigns and representatives, from and against any
and all claims, threatened claims, damages, losses, suits, proceedings,
liabilities, costs (including, without limitation, reasonable legal expenses,
costs of litigation and reasonable attorney’s fees) or judgments, whether for
money or equitable relief, of any kind, arising out of any claim, action,
lawsuit or other proceeding brought by a Third Party (“Losses and Claims”)
arising out of or relating, directly or indirectly, (i) to the research,
Development,

 

43

 

Commercialization
(including, without limitation, promotion, advertising, offering for sale, sale
or other disposition), transfer, importation or exportation, manufacture,
labeling, handling or storage, or use of, or exposure to, the Licensed
Compounds or any Licensed Product by or for Sunesis or any of its Affiliates,
Sublicensees, agents and contractors or (ii) to Sunesis’ (or its
Affiliates’ and Sublicensees’) use and practice otherwise of the BMS Patent
Rights and BMS Know-How, including, without limitation, claims and threatened
claims based on (A) product liability, bodily injury, risk of bodily
injury, death or property damage, (B) infringement or misappropriation of
Third Party patents, copyrights, trademarks or other intellectual property
rights, or (C) the failure to comply with applicable Laws related to the
matters referred to in the foregoing clause (i) with respect to the
Licensed Compounds and/or any Licensed Product;
except in any such case for Losses and
Claims to the extent reasonably attributable to any breach by BMS of Article 11,
or BMS having committed an act or acts of gross negligence, recklessness or
willful misconduct.

 

12.2                           BMS Indemnity.  BMS
shall indemnify, defend and hold harmless Sunesis and its Affiliates, and their
respective officers, directors, employees, agents, licensors, and their
respective successors, heirs and assigns and
representatives, from and against any and all Losses and Claims arising out of
or relating to a breach of the representations, warranties and covenants of BMS
set forth in Article 9; except in any such case for Losses and Claims to the extent
reasonably attributable to any breach by Sunesis of Article 11, or Sunesis
having committed an act or acts of gross negligence, recklessness or willful
misconduct.

 

12.3                           Indemnification Procedure.  A
claim to which indemnification applies under Section 12.1 or Section 12.2
shall be referred to herein as an “Indemnification Claim”.  If any Person or Persons (collectively, the “Indemnitee”)
intends to claim indemnification under this Article 12, the Indemnitee
shall notify the other Party (the “Indemnitor”) in writing promptly upon
becoming aware of any claim that may be an Indemnification Claim (it being
understood and agreed, however, that the failure by an Indemnitee to give such
notice shall not relieve the Indemnitor of its indemnification obligation under
this Agreement except and only to the extent that the Indemnitor is actually
prejudiced as a result of such failure to give notice).  The Indemnitor shall have the right to assume
and control the defense of the Indemnification Claim at its own expense with
counsel selected by the Indemnitor and reasonably acceptable to the Indemnitee,
provided, however, that an Indemnitee
shall have the right to retain its own counsel, with the fees and expenses to
be paid by the Indemnitee, if representation of such Indemnitee by the counsel
retained by the Indemnitor would be inappropriate due to actual or potential
differing interests between such Indemnitee and any other party represented by
such counsel in such proceedings.  If the
Indemnitor does not assume the defense of the Indemnification Claim as
aforesaid, the Indemnitee may defend the Indemnification Claim but shall have
no obligation to do so.  The Indemnitee
shall not settle or compromise the Indemnification Claim without the prior
written consent of the Indemnitor, and the Indemnitor shall not settle or compromise
the Indemnification Claim in any manner which would have an adverse effect on
the Indemnitee’s interests (including without limitation any rights under this
Agreement or the scope or enforceability of the BMS Patents Rights or BMS
Know-How), without the prior written consent of the Indemnitee, which consent,
in each case, shall not be unreasonably withheld or delayed.  The Indemnitee shall reasonably cooperate
with the Indemnitor at the Indemnitor’s expense and shall make available to the
Indemnitor all pertinent information under the control of the Indemnitee, which
information shall be subject to Article 11.

 

12.4                           Insurance.  Sunesis shall, beginning with
the initiation of the first clinical trial for a Licensed Product, maintain at
all times thereafter during the term of the Agreement, and until the later of (i) two
(2) years after termination or expiration of the Agreement or (ii) the
date that all statutes of limitation covering claims or suits that may be
brought for personal injury based on the sale or use of a Licensed Product by
Sunesis have expired in all states in the U.S., commercial general liability
insurance from a recognized, creditworthy insurance company, on a claims-made
basis, with endorsements for

 

44

 

contractual liability and
product liability, and with coverage limits of not less than $10 million per
occurrence.  The minimum level of
insurance set forth herein shall not be construed to create a limit on Sunesis’
liability hereunder.  Within ten (10) days
following written request from BMS, Sunesis shall furnish to BMS a certificate
of insurance evidencing such coverage as of the date.  Each such certificate of insurance, as well
as any certificates evidencing new coverages of Sunesis, shall include a
provision whereby sixty (60) days’ written notice must be received by BMS prior
to coverage cancellation by either Sunesis or the insurer and of any new
coverage.  In the case of a cancellation
of such coverage, Sunesis shall promptly provide BMS with a new certificate of
insurance evidencing that Sunesis’ coverage meets the requirements in the first
sentence of this Section.

 

ARTICLE 13

TERM AND TERMINATION

 

13.1                           Term.  This Agreement shall commence
as of the Effective Date and, unless sooner terminated in accordance with the terms
hereof or by mutual written consent, shall continue on a Licensed
Product-by-Licensed Product and country-by-country basis until the end of the
Royalty Term with respect to such Licensed Product in such country.

 

13.2                           Termination By BMS.  BMS
shall have the right to terminate this Agreement, at BMS’ sole discretion, as
follows.

 

13.2.1                  Insolvency.  BMS
shall have the right to terminate this Agreement, at BMS’ sole discretion, upon
delivery of written notice to Sunesis upon the filing by Sunesis in any court
or agency pursuant to any statute or regulation of the United States or any
other jurisdiction a petition in bankruptcy or insolvency or for reorganization
or similar arrangement for the benefit of creditors or for the appointment of a
receiver or trustee of Sunesis or its assets, or if Sunesis is served with an
involuntary petition against it in any insolvency proceeding, upon the
ninety-first (91st) day after such service if such involuntary petition has not
previously been stayed or dismissed, or upon the making by Sunesis of an
assignment of substantially all of its assets for the benefit of its creditors.

 

13.2.2                  Breach. Subject to Section 13.2.4 below, BMS
shall have the right to terminate this Agreement, at BMS’ sole discretion, upon
delivery of written notice to Sunesis in the event of any material breach by Sunesis of any terms and conditions of this
Agreement (other than failure to use Commercially Reasonable Efforts to Develop
or Commercialize the Licensed Compounds or a Licensed Product, which breach is
covered under Section 13.2.3), provided that
such breach has not been cured within sixty (60) days after written notice
thereof is given by BMS to Sunesis specifying the nature of the alleged breach,
provided, however, that to the extent
such material breach involves the failure to make a payment when due, such
breach must be cured within thirty (30) days after written notice thereof is
given by BMS to Sunesis.

 

13.2.3                  Failure to Use Commercially Reasonable
Efforts.  Subject to Section 13.2.4 below, BMS
shall have the right to terminate this Agreement on a country-by-country basis
(except as otherwise set forth in this Section 13.2.3), at BMS’ sole
discretion, in the event that Sunesis fails to use (by itself or through its
Affiliates, Sublicensees, contractors or agents) Commercially Reasonable
Efforts to Develop and/or Commercialize at least one Licensed Compound or
Licensed Product in the Territory in breach of Section 5.1(a) or Section 6.1,
provided that Sunesis has not exercised
such Commercially Reasonable Efforts in the applicable country or countries
within three (3) months following written notice by BMS to Sunesis
specifying the nature of such failure.  

 

45

 

(a)                                  Termination under this Section 13.2.3
shall apply to all Licensed Compounds and Licensed Products, but only for the
affected country or countries, provided however,
that (i) if the applicable termination event relates to a breach of Section 5.1(a) or
Section 6.1 in any Major Market Country in the EU, then the termination
shall apply to all countries in Europe; (ii) if the applicable termination
event relates to a breach of Section 5.1(a) in the United States,
then the termination shall apply to all countries in the Territory; (iii) if
the applicable termination event relates to a breach of Section 6.1 in the
United States, then the termination shall apply to all countries in North
America; and (iv) if the applicable termination event relates to a breach
of Section 6.1 in all the Major Market Countries excluding Japan, then the
termination shall apply to all countries in the Territory.  Notwithstanding the
foregoing, if the applicable
termination event relates to a breach of Section 5.1(a) or Section 6.1
in: (i) a country in the EU that is not a Major Market Country, then BMS
shall not have the right to terminate this Agreement with respect to such
country if Sunesis is in compliance with such provisions with respect to all
Major Market Countries plus [*]
additional countries in the EU; and (ii) a country within Caribbean and
Central America, then BMS shall not have the right to terminate this Agreement
with respect to such country if Sunesis is in compliance with such provisions
with respect to all countries within North America.  

 

(b)                                 For clarity, it is understood and acknowledged that to the extent Sunesis uses
Commercially Reasonable Efforts (by itself or through its Affiliates,
Sublicensees, contractors or agents) to Develop at least one Licensed Product through a centralized filing with the EMEA,
Sunesis shall be in compliance with Section 5.1(a) with respect to
all countries in the EU.  For further
clarity, it is understood and acknowledged that Commercially Reasonable
Efforts in the Development of a Licensed Product in a particular country may
include sequential implementation of clinical trials and/or intervals between
clinical trials for data interpretation and clinical program planning, to the
extent such implementation is consistent with the scientific, technical and
commercial factors relevant to Development of such Licensed Product in such
country (including those described in Section 1.22).

 

13.2.4                  Disputed Breach.  If
Sunesis disputes in good faith the existence or materiality of a breach
specified in a notice provided by BMS pursuant to Section 13.2.2, or a
failure to use Commercially Reasonable Efforts specified in a notice provided
by BMS pursuant to Section 13.2.3, and Sunesis provides notice to BMS of
such dispute within the applicable thirty (30) day, sixty (60) day or three (3) month
period, BMS shall not have the right to terminate this Agreement unless and
until the existence of such material breach or failure by Sunesis has been
determined in accordance with Section 14.2 and Sunesis fails to cure such
breach within sixty (60) days following such determination (except to the
extent such breach involves the failure to make a payment when due, which
breach must be cured within ten (10) days following such
determination).  It is understood and
acknowledged that during the pendency of such a dispute, all of the terms and
conditions of this Agreement shall remain in effect and the Parties shall
continue to perform all of their respective obligations hereunder.  The Parties further agree that any payments
that are made by one Party to the other Party pursuant to this Agreement
pending resolution of the dispute shall be promptly refunded if an arbitrator
or court determines pursuant to Section 14.2 that such payments are to be
refunded by one Party to the other Party.

 

13.2.5                  Termination for Competitive Compound. 
Subject to the terms of this Section 13.2.5, BMS shall have the
right to terminate this Agreement (on a country-by-country or worldwide basis,
as BMS may elect), at BMS’ sole discretion, in the event that (a) Sunesis
or its Affiliate (alone or in collaboration with a Third Party) undertakes the
clinical development of a product that contains a

 

[*]         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.

 

46

 

Competitive Compound prior
to any Approval being obtained in a Major Market Country for a Licensed
Compound; or (b) Sunesis or its Affiliate (alone or in collaboration with
a Third Party) markets a product that contains a Competitive Compound within [*] years following the first U.S. NDA
Approval for a Licensed Product.  In the
event the Parties are unable to reach agreement regarding whether or not a
compound is a Competitive Compound, and the Parties have not resolved such
dispute through good faith discussions, such dispute will be resolved through
performance of the relevant scientific determination by an independent Third Party
testing provider or other scientific expert who shall be mutually and
reasonably selected by both Parties.  The
findings of such Third Party scientific expert with respect to such dispute
shall be binding on the Parties, and the costs of such testing shall be born by
the Party whom the independent determination does not favor.

 

13.2.6                  Scope of Termination. 
Except as otherwise expressly provided herein, termination of this
Agreement shall be as to all countries in the Territory and all Licensed
Products.  

 

13.3                           Termination by Sunesis.  Sunesis shall have the right to
terminate this Agreement, at Sunesis’
sole discretion, as follows.

 

13.3.1                  At Sunesis’ discretion, on a
country-by-country and product-by-product basis (including, for example, all
Licensed Compounds within specified BMS Patent Rights), effective upon three (3) months
prior written notice in the case where Approval has not been obtained for the
applicable Licensed Product or upon six (6) months prior written notice in
the case where Approval has been obtained for the applicable Licensed Product,
Sunesis may terminate this Agreement for any reason; provided,
however, that (i) no such termination right may be exercised as
to a Major Market Country in the EU unless all countries in Europe are so terminated
and (ii) no such termination right may be exercised as to all of the Major
Market Countries excluding Japan unless all countries in the Territory are so
terminated.

 

13.3.2                  In addition, Sunesis may terminate this
Agreement in the event of material breach by BMS, provided
that such breach has not been cured within sixty (60) days after written notice
thereof is given by Sunesis to BMS. 
Notwithstanding the foregoing, if BMS disputes in good faith the
existence or materiality of such breach and provides notice to Sunesis of such
dispute within such sixty (60) day period, Sunesis shall not have the right to
terminate this Agreement in accordance with this Section 13.3.2 unless and
until it has been determined in accordance with Section 14.2 that this Agreement
was materially breached by BMS and BMS fails to cure such breach within sixty
(60) days following such determination. 
It is understood and acknowledged that during the pendency of such a
dispute, all of the terms and conditions of this Agreement shall remain in
effect and the Parties shall continue to perform all of their respective
obligations hereunder.  The Parties
further agree that any payments that are made by one Party to the other Party
pursuant to this Agreement pending resolution of the dispute shall be promptly
refunded if an arbitrator or court determines pursuant to Section 14.2
that such payments are to be refunded by one Party to the other Party.

 

13.4                           Effect of Termination.  Upon expiration or termination of this
Agreement pursuant to Sections 13.2 and/or 13.3.1, the rights and obligations
of the Parties shall be as set forth in this Section 13.4.

 

[*]         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.

 

47

 

13.4.1                  Upon termination or expiration of this
Agreement, either in its entirety or with respect to one or more applicable
country (each, a “Terminated Country”) pursuant to Sections 13.2 and/or
13.3.1 hereof (the rights and obligations of the Parties as to the remaining
countries of the Territory in which termination under Section 13.2.3 or
13.3.1 has not occurred, being unaffected by such termination), the following
shall apply.

 

(a)                                  All rights and licenses granted to Sunesis in
Article 2 shall terminate with respect to each Terminated Country (subject
to Section 2.3(b)(vi)), and Sunesis shall cease all use of the BMS Patent
Rights and BMS Know-How with respect to each Terminated Country (except as set
forth in Section 13.4.1(c)).  To the
extent that there remain any countries in the Territory that are not Terminated
Countries (“Remaining Countries”), all such rights and licenses shall
remain in place with respect to the Remaining Countries.  

 

(b)                                 All regulatory filings (including, without
limitation, all INDs and NDAs) and Approvals, as they exist as of the date of
such termination (and all of Sunesis’ right, title and interest therein and
thereto) in each Terminated Country shall be assigned to BMS, and Sunesis shall
provide to BMS one (1) copy of the foregoing documents and filings and all
documents and filings contained in or referenced in any such filings, together
with the raw and summarized data for any preclinical and clinical studies of
the Licensed Compounds and such Licensed Product conducted by or for Sunesis
(and where reasonably available, electronic copies thereof).  In addition, upon request by BMS, Sunesis
shall grant to BMS the right to access and reference any documents (including
but not limited to regulatory filings) that are available to Sunesis and
reasonably necessary for BMS to further develop, manufacture and commercialize
the Licensed Compounds and Licensed Product for the Terminated Country.  To the extent that there are any Remaining
Countries, each Party shall use commercially reasonable efforts not to conduct
the Development and Commercialization of Licensed Products and/or Licensed
Compounds in its respective territory in a manner that would materially
adversely affect the other Party’s Development and Commercialization of
Licensed Products and/or Licensed Compounds in its respective territory,
including application or maintenance of any Approvals therein.  Without limiting the foregoing in this
paragraph, to the extent applicable, Sunesis’ obligations under Section 10.6
shall continue with respect to the terminated country.

 

(c)                                  Should Sunesis have, as of the effective date
of termination in a particular Terminated Country (the “Termination Date”
for such Terminated Country), any inventory of any Licensed Product for which
Approval has been obtained in such Terminated Country, the licenses granted in
Sections 2.1, 2.2 and 2.7(a) shall survive on a nonexclusive basis for a
period of [*] months after the
Termination Date solely for the purpose of selling such Licensed Products in
such terminated Country (subject to the payment to BMS of any royalties due
hereunder thereon), provided however,
that (i) such right shall not limit BMS or any Third Party so authorized
by BMS from selling Licensed Products in such Terminated Country, and (ii) such
Licensed Product shall not be sold at a discount to any purchaser that is
greater than the average discount provided to such purchaser (or purchasers of
the same market segment, where “market segments” include, for example, as
applicable, HMOs, wholesalers, Veterans Health Administration, Medicaid,
Medicare and other applicable types of purchasers) of Licensed Product in such
Terminated Country during the twenty-four (24) month period preceding the
Termination Date.

 

[*]         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.

 

48

 

(d)                                 If Sunesis has the capability as of the
Termination Date to commercially manufacture and supply Licensed Compound
and/or Licensed Product, upon request by BMS, Sunesis shall supply to BMS
Licensed Compound and/or Licensed Product for use and sale in the Terminated
Countries, at a price equal to [*] percent ([*]%) of Sunesis’ documented
fully-burdened manufacturing cost (determined in accordance with GAAP) for such
Licensed Compound and/or Licensed Product, under terms and conditions as may be
mutually agreed between the Parties.  In
such event, Sunesis shall manufacture and supply such Licensed Compound and/or
Licensed Product to BMS until, as BMS may elect at its sole discretion, BMS
assumes responsibility for its own manufacture and supply such Licensed
Compound and/or Licensed Product for the Terminated Countries.

 

(e)                                  Upon request by BMS, Sunesis shall disclose
to BMS the Sunesis Know-How (provided that the Sunesis Know-How remains the
Confidential Information of Sunesis and subject Article 11) and shall
grant BMS a non-exclusive license under the Sunesis Know-How solely for (i) using,
importing, selling and offering for sale the Licensed Compound and Licensed
Products in each Terminated Country and (ii) making and having made the
Licensed Compound and Licensed Products anywhere in the world solely for use,
importation, sale and offer for sale in each Terminated Country; with right to
grant sublicenses of the foregoing solely in connection with the Development
and Commercialization of Licensed Compounds and/or Licensed Products in the
Terminated Countries.  For the purposes
of the foregoing, “Sunesis Know-How”
means all processes, techniques and know-how owned or Controlled by
Sunesis as of the applicable Termination Date that are available to Sunesis as
of that Termination Date that are reasonably necessary for the manufacture,
Development and/or Commercialization of the Licensed Compounds or a Licensed
Product.  Sunesis Know-How shall not
include information and know-how that is acquired or developed by Sunesis after
the applicable Termination Date.

 

(f)                                    Sunesis shall assign or exclusively license
(or, if applicable, cause its Affiliate to assign or exclusively license) to
BMS all of Sunesis’ (and such Affiliates’) right, title and interest in and to
any registered or unregistered trademark, trademark application, trade name or
internet domain name in each Terminated Country that is specific to a Licensed
Product (it being understood that the foregoing shall not include any
trademarks or trade names that contain the name “Sunesis”).

 

(g)                                 Sunesis shall grant to BMS a license, which
license shall be exclusive with respect to each Terminated Country, with the
right to grant sublicenses, under the Sunesis Patent Rights solely for (i) using,
importing, selling and offering for sale the Licensed Compound and Licensed
Products in each Terminated Country and (ii) making and having made the
Licensed Compound and Licensed Products anywhere in the world solely for use,
importation, sale and offer for sale in each Terminated Country; provided, however, that no rights will be granted under this
Section 13.4.1(g) with respect to any Proprietary Compound of Sunesis
which is not a Licensed Compound, including but not limited to the use or
formulation of a Licensed Compound or Licensed Product in combination with any
Proprietary Compound of Sunesis which is not a Licensed Compound.  For purposes of clarity, no rights will be
granted under this Section 13.4.1(g) to co-formulate or use in
combination a Licensed Compound with any Proprietary Compound of Sunesis which
is not a Licensed Compound.  For the
purposes of the foregoing, “Sunesis Patent Rights” means, with respect
to specific Licensed Compounds and/or Licensed Products and Termination Dates: (i) those
claims in patents and patent applications Controlled by Sunesis as of such
Termination Date that are specifically directed to or specifically refer to
such Licensed Compounds and/or Licensed Products (for example, patent rights covering
the use of such Licensed

 

[*]         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.

 

49

 

Compounds in combination
with another pharmaceutical agent); (ii) all divisionals, continuations,
continuations-in-part thereof or any other patent application claiming priority
thereto; and (iii) all patents issuing on any of the foregoing, together
with all registrations, reissues, re-examinations, supplemental protection
certificates, or extensions thereof, and any foreign counterparts thereof.

 

(h)                                 BMS will [*] to Sunesis a [*] on [*] of such [*] by BMS, its Affiliates and
sublicensees in the Territory, at the following [*] (i) at a [*] to [*] of
the [*] set forth in [*] if the [*] has [*] in such country at the [*] of such
[*], (ii) at a [*] to [*] of the [*] set forth in [*] if an [*] for the
[*] but it [*] at the [*] of such [*], or (iii) at a [*] to [*] of the [*]
set forth in [*] if an [*] for the [*]at the [*] of such [*], or (iii) at
a [*] to [*] of the [*] set forth in [*] if an [*] for the [*] at the [*] of
such [*] .  In addition, in the [*] that
[*] to Sunesis [*] are included in the [*] by [*] in [*], and Sunesis is [*] or
[*] to such [*] based on the [*] or [*] by or on behalf of [*] of [*] and [*]
in the [*], then [*] Sunesis for any such [*] promptly upon [*] of [*].  For clarification, no [*] shall be [*] by [*]
based on any [*].

 

13.4.2                  Upon
termination of this Agreement pursuant to Section 13.3.2 hereof, all
rights and licenses granted in Article 2 shall terminate (subject to
2.3(b)(vi)), and Sunesis shall cease all use of the BMS Patent Rights and BMS
Know-How.  For clarification, the
provisions of Section 2.7(b) shall terminate and BMS shall cease all
use of the patent rights licensed thereunder.

 

13.4.3                  Survival.  The
following provisions shall survive termination or expiration of this Agreement,
as well as any other provision which by its terms or by the context thereof, is
intended to survive such termination: Article 1 (as applicable), Section 2.3(b)(vi),
Article 5 (with respect to obligations arising prior to expiration or
termination of this Agreement), Article 8 (with respect to obligations
arising prior to expiration or termination of this Agreement), Section 9.4,
Section 9.5, Section 10.1, Section 10.4.4 (with respect to an
action, suit or proceeding commenced prior to termination), Section 10.7, Article 11,
Article 12 (with respect to Losses and Claims arising from activities and
breaches that take place prior to expiration or termination of this Agreement),
this Section 13.4, Section 13.5, Article 14 and Article 15.  Termination or expiration of this Agreement
shall not relieve the Parties of any liability or obligation which accrued
hereunder prior to the effective date of such termination or expiration nor
preclude either Party from pursuing all rights and remedies it may have
hereunder or at law or in equity, subject to Section 14.2, with respect to
any breach of this Agreement nor prejudice either Party’s right to obtain
performance of any obligation.  All other
obligations shall terminate upon expiration of this Agreement.

 

[*]         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.

 

50

 

13.5                           Bankruptcy. The Parties agree that in the event a Party becomes a debtor under
Title 11 of the U.S. Code (“Title 11”), this Agreement shall be deemed to be, for purposes of Section 365(n)
of Title 11, a license to rights to “intellectual property” as defined
therein.  Each Party as a licensee
hereunder shall have the rights and elections as specified in Title 11.  Any agreements supplemental hereto shall be
deemed to be “agreements supplementary to” this Agreement for purposes of Section 365(n)
of Title 11.

 

ARTICLE 14

DISPUTE RESOLUTION; ARBITRATION

 

14.1                           Resolution by Senior Executives.  Other than (i) determinations made by
Independent Evaluators, certified accountants and scientific experts as
provided in Sections 3.2, 8.7 and 13.2.5, respectively; (ii) pursuit of
equitable relief as provided in Section 14.2(g); and (iii) a dispute
governed by expedited arbitration in accordance with Section 14.3 below, in the event of any dispute between the
Parties in connection with this Agreement, the construction hereof, or the
rights, duties or liabilities of either Party hereunder, the Parties shall
first attempt in good faith to resolve such dispute by negotiation and
consultation between themselves.  In the
event that such dispute is not resolved on an informal basis within ten (10) Business
Days, either Party may, by written notice to the other Party, refer the dispute
to the Chief Executive Officer of Sunesis and the President, Pharmaceutical
Research Institute of BMS or other designated officer of BMS for attempted
resolution by good faith negotiation within thirty (30) days after such notice
is received.

 

14.2                           Arbitration.  Other than (i) determinations made by
Independent Evaluators, certified accountants and scientific experts as
provided in Sections 3.2(b), 8.7 and 13.2.5, respectively; (ii) pursuit of
equitable relief as provided in Section 14.2(g); and (iii) expedited
arbitration in accordance with Section 14.3 below, if any dispute between
the Parties relating to or arising out this Agreement cannot be resolved in
accordance with Section 14.1, either Party may submit such dispute for
resolution through binding arbitration as follows:

 

(a)                                  A Party may submit
such dispute to arbitration by notifying the other Party, in writing, of such
dispute.  Within thirty (30) days after
receipt of such notice, the Parties shall designate in writing a single
arbitrator to resolve the dispute; provided, however,
that if the Parties cannot agree on an arbitrator within such thirty (30) day
period, the arbitrator shall be selected by the New York, NY office of the
American Arbitration Association (the “AAA”) or, if such office does not
exist or is unable to make a selection, by the office of the AAA nearest to New
York City.  The arbitrator for any
disputed breach under Section 13.2.4 related to an alleged failure to use
Commercially Reasonable Efforts as described in Section 13.2.3, the
arbitrator shall be an individual with experience and expertise in the
worldwide Development and Commercialization of pharmaceuticals and the
business, legal and scientific considerations related thereto.  Otherwise, the arbitrator shall be a lawyer
knowledgeable and experienced in the applicable Laws concerning the subject matter of the dispute.  In any case the arbitrator shall not be an
Affiliate, employee, consultant, officer, director or stockholder of either
Party, or otherwise have any current or previous relationship with either Party
or their respective Affiliates.  The
governing law in Section 15.7 shall govern any such proceedings.  The language of the arbitration shall be
English.  

 

(b)                                 Within thirty (30)
days after the designation of the arbitrator, the arbitrator and the Parties
shall meet, and each Party shall provide to the arbitrator a written summary of
all disputed issues, such Party’s position on such disputed issues and such
Party’s proposed ruling on the merits of each such issue.

 

51

 

(c)                                  The arbitrator
shall set a date for a hearing, which shall be no later than thirty (30) days
after the submission of written proposals pursuant to Section 14.2(b), for
the presentation of evidence and legal argument concerning each of the issues
identified by the Parties.  The Parties
shall have the right to be represented by counsel.  Except as provided herein, the arbitration
shall be governed by the Commercial Arbitration Rules of the AAA
applicable at the time of the notice of arbitration pursuant to Section 14.2(a);
provided, however, that the Federal Rules of
Evidence shall apply with regard to the admissibility of evidence in such
hearing.

 

(d)                                 The arbitrator
shall use his or her best efforts to rule on each disputed issue within
thirty (30) days after completion of the hearing described in Section 14.2(c).  The determination of the arbitrator as to the
resolution of any dispute shall be binding and conclusive upon all
Parties.  All rulings of the arbitrator
shall be in writing and shall be delivered to the Parties except to the extent
that the Commercial Arbitration Rules of the AAA provide otherwise.  Nothing contained herein shall be construed
to permit the arbitrator to award punitive, exemplary or any similar
damages.  

 

(e)                                  The (i) attorneys’
fees of the Parties in any arbitration, (ii) fees of the arbitrator and (iii) costs
and expenses of the arbitration shall be borne by the Parties in a proportion
determined by the arbitrator.

 

(f)                                    Any arbitration
pursuant to this Section 14.2 shall be conducted in New York, New
York.  Any arbitration award may be entered
in and enforced by a court in accordance with Section 15.8.

 

(g)                                 Notwithstanding
anything in this Article 14, each Party shall have the right to seek
injunctive or other equitable relief from a court of competent jurisdiction
pursuant to Section 15.8 that may be necessary to avoid irreparable harm,
maintain the status quo or preserve the subject matter of the arbitration,
including any breach or threatened breach of Section 11.1 or 13.4.

 

14.3                           Expedited
Arbitration.  The Parties agree that it is important to be able to clarify any
disputes regarding Section 2.3 or Article 3 quickly.  Accordingly, if:

 

(i) if BMS disputes Sunesis’ right to enter
into a License agreement based on (A) Sunesis’ compliance with Article 3
or (B) whether a License agreement complies with Section 2.3; and
such dispute is not precluded by the terms of Section 3.7; 

 

(ii) there is an alleged breach of Article 3
by either Party; 

 

(iii) Sunesis alleges that BMS has failed to
act in good faith with respect to its performance under Article 3,
including without limitation by providing an Acceptance Notice without a good
faith intention to enter into a binding License agreement with Sunesis on the
terms and conditions of the Term Sheet for which BMS provided such Acceptance
Notice; 

 

(iv) BMS alleges that Sunesis has failed to act
in good faith with respect to its performance under Article 3; or 

 

(v) either Party disputes the finding of the
Independent Evaluator pursuant to Section 3.2(b), provided
that such Party holds a good faith belief that the other Party acted in bad
faith or engaged in willful misconduct in the independent evaluation process; 

 

then the Parties shall resolve such dispute in
accordance with this Section 14.3.

 

52

 

Arbitration under this Section 14.3 shall be
conducted in the same manner and subject to the same terms and conditions as
arbitration under Section 14.2, provided that:

 

(a)                                  the Parties shall designate in writing a
single arbitrator within fifteen (15) days of written notice of the dispute;

 

(b)                                 the arbitrator and the Parties shall meet,
and each Party shall provide to the arbitrator a written summary of all
disputed issues, such Party’s position on such disputed issues and such Party’s
proposed ruling on the merits of each such issue within fifteen (15) days after
the designation of the arbitrator;

 

(c)                                  the arbitrator shall use his or her best
efforts to rule on each disputed issue within fifteen (15) days after
completion of the hearing described in Section 14.2(c);

 

(d)                                 the arbitrator shall select one of the
requested positions as his decision, and shall not have the authority to render
any substantive decision other than to so select the position of either BMS or
Sunesis; and

 

(e)                                  the Parties shall use good faith efforts to
complete arbitration under this Section 14.3 within sixty (60) days
following a request by any Party for such arbitration.

 

14.4                           In an arbitration procedure under Section 14.3, in the event that
the arbitrator determines that BMS has failed to act in good faith with respect
to its performance under Article 3, the following shall apply:  (a) the provisions of Article 3
shall terminate and (b) all other provisions of this Agreement shall
remain in full force and effect.  For
purposes of clarity, the foregoing shall be in addition to and shall in no way
limit any ruling of the arbitrator in accordance with Section 14.3.

 

ARTICLE 15

MISCELLANEOUS

 

15.1                           Severability.  If any one or more of the provisions of this
Agreement is held to be invalid or unenforceable, the provision shall be
considered severed from this Agreement and shall not serve to invalidate any
remaining provisions hereof.  The Parties
shall make a good faith effort to replace any invalid or unenforceable
provision with a valid and enforceable one such that the objectives
contemplated by the Parties when entering this Agreement may be realized. 

 

15.2                           Notices.  Any notice required or
permitted to be given by this Agreement shall be in writing and shall be
delivered by hand or overnight courier with tracking capabilities or mailed
postage prepaid by first class, registered or certified mail addressed as set
forth below unless changed by notice so given:

 

If to Sunesis:

Sunesis Pharmaceuticals, Inc.

341 Oyster Point Boulevard

South San Francisco, California
94080

Attention:  Daryl Winter, General Counsel

Telephone:  650-266-3720

Facsimile:  650-266-3505

 

53

 

With a copy to:

Wilson Sonsini Goodrich &
Rosati

Professional Corporation

650 Page Mill Road

Palo Alto, California 94304-1050

Attention: Kenneth A. Clark, Esq.

Telephone:  650-320-4742

Facsimile:  650-493-6811

 

If to BMS:

Bristol-Myers Squibb Company

P.O. Box 4000

Route 206 &
Province Line Road

Princeton, New Jersey 08543-4000

Attention:  Senior Vice President,
Corporate and Business Development

Telephone:  609-252-4712

Facsimile:  609-252-7212

 

With a copy to:

Bristol-Myers Squibb Company

P.O. Box 4000

Route 206 & Province Line Road

Princeton, New Jersey 08543-4000

Attention:  Vice President &
Senior Counsel, Corporate Development

Telephone:  609-252-4311

Facsimile:  609-252-4232

 

Any such notice shall be deemed given on the date received.  A Party may add, delete, or change the person
or address to whom notices should be sent at any time upon written notice
delivered to the Party’s notices in accordance with this Section 15.2.

 

15.3                           Force Majeure. 
Neither Party shall be liable for delay or failure in the performance of
any of its obligations hereunder if such delay or failure is due to causes
beyond its reasonable control, including, without limitation, acts of God,
fires, earthquakes, strikes and labor disputes, acts of war, terrorism, civil
unrest or intervention of any governmental authority (“Force Majeure”); provided, however, that the affected Party promptly notifies
the other Party and further provided that the affected Party shall use its
commercially reasonable efforts to avoid or remove such causes of
non-performance and to mitigate the effect of such occurrence, and shall continue
performance with the utmost dispatch whenever such causes are removed.  When such circumstances arise, the Parties
shall negotiate in good faith any modifications of the terms of this Agreement
that may be necessary or appropriate in order to arrive at an equitable
solution.

 

15.4                           Assignment.

 

15.4.1                  BMS may, without Sunesis’ consent, assign or
transfer all of its rights and obligations hereunder, in connection with any
transfer of all of the BMS Patent Rights and BMS Know-How, to any Affiliate of
BMS or to any Third Party (including, without limitation, a successor in
interest); provided, however, that such assignee or
transferee agrees in a writing provided to Sunesis to be bound by the terms of
this Agreement.

 

54

 

15.4.2                  Upon thirty (30) days advance written notice
to BMS and subject to BMS’ approval, such approval not to be unreasonably
withheld, delayed or conditioned, Sunesis may assign or transfer all of its
rights and obligations hereunder to any Third Party, provided
however, that, (i) Sunesis’ rights and obligations under this
Agreement shall be assumed by the Third Party assignee, (ii) such
assignment includes, without limitation, all Approvals and all rights and
obligations under this Agreement, (iii) such Third Party shall have agreed
prior to such assignment or transfer to be bound by the terms of this Agreement
in a writing provided to BMS, and (iv) Sunesis remains responsible for the
performance of this Agreement.

 

15.4.3                  Notwithstanding the provisions of Section 15.4.2
above, Sunesis may assign or transfer all of its rights and obligations
hereunder without such consent to an Affiliate of Sunesis or to a successor in
interest by reason of merger, consolidation or sale of all or substantially all
of the assets of Sunesis, provided however,
that (i) Sunesis’ rights and obligations under this Agreement shall be
assumed by its successor in interest and shall not be transferred separate from
all or substantially all of its other business assets, (ii) such
assignment includes, without limitation, all Approvals and all rights and
obligations under this Agreement, (iii) such successor in interest or
Affiliate shall have agreed prior to such assignment or transfer to be bound by
the terms of this Agreement in a writing provided to BMS, and (iv) where
this Agreement is assigned or transferred to an Affiliate, Sunesis remains
responsible for the performance of this Agreement.

 

15.4.4                  Subject to the foregoing, this Agreement
shall inure to the benefit of and be binding on the Parties’ successors and
assigns.  Any assignment or transfer in
violation of the foregoing shall be null and void and wholly invalid, the
assignee or transferee in any such assignment or transfer shall acquire no
rights whatsoever, and the non-assigning non-transferring Party shall not
recognize, nor shall it be required to recognize, such assignment or transfer.

 

15.5                           Further Assurances.  Each
Party agrees to do and perform all such further acts and things and shall
execute and deliver such other agreements, certificates, instruments and
documents necessary or that the other Party may deem advisable in order to
carry out the intent and accomplish the purposes of this Agreement and to
evidence, perfect or otherwise confirm its rights hereunder.

 

15.6                           Waivers and Modifications.  The
failure of any Party to insist on the performance of any obligation hereunder
shall not be deemed to be a waiver of such obligation.  Waiver of any breach of any provision hereof
shall not be deemed to be a waiver of any other breach of such provision or any
other provision on such occasion or any succeeding occasion.  No waiver, modification, release or amendment
of any obligation under or provision of this Agreement shall be valid or
effective unless in writing and signed by all Parties hereto.

 

15.7                           Choice of Law.  This
Agreement shall be governed by, enforced, and shall be construed in accordance
with the laws of the State of New York without regard to its conflicts of law
provisions (other than section 5-1401 of the New York General Obligations
Law). 

 

15.8                           Jurisdiction.

 

15.8.1                  Unless the Parties otherwise agree in
writing, each Party, for the purpose of enforcing an award under Section 14.2
or for seeking injunctive or other equitable relief as permitted under Section 14.2(g),
hereby irrevocably submits to the exclusive jurisdiction of (i) the
Supreme Court of the State of New York, New York County or the Supreme Court or
Chancery Court of the State of Delaware (each a “State Court”), and (ii) the
United States District Court for the Southern District of New York or the U.S.
District Court for the District of Delaware (each a “District Court”),
for the purposes of any suit, action or other proceeding arising out of this
Agreement or out of any transaction contemplated hereby.  Each party

 

55

 

agrees to commence any such
action, suit or proceeding either in a District Court or if such suit, action
or other proceeding may not be brought in such court for jurisdictional
reasons, in a State Court.

 

Each party further agrees
that service of any process, summons, notice or document by personal delivery,
by registered mail, or by a recognized international express delivery service
to such Party’s respective address set forth above shall be effective service
of process for any action, suit or proceeding in the applicable District Court
or State Court with respect to any matters to which it has submitted to
jurisdiction in this Section.  Each party
irrevocably and unconditionally waives any objection to the laying of venue of
any action, suit or proceeding arising out of this Agreement or the
transactions contemplated hereby in the applicable District Court or State
Court, and hereby and thereby further irrevocably and unconditionally waives
and agrees not to plead or claim in any such court that any such action, suit
or proceeding brought in any such court has been brought in an inconvenient
forum.

 

15.8.2                  Each Party hereto hereby waives to the
fullest extent permitted by applicable Laws, any right it may have to a trial
by jury in respect to any litigation directly or indirectly arising out of,
under or in connection with this Agreement. 
Each Party hereto (i) certifies that no representative, agent or
attorney of the other Party has represented, expressly or otherwise, that such
other Party would not, in the event of litigation, seek to enforce that
foregoing waiver and (ii) acknowledges that it and the other Party hereto
have been induced to enter into this Agreement, as applicable, by, among other
things, the mutual waivers and certifications in this Section 15.8.

 

15.9                           Publicity.  Upon execution of this
Agreement, the Parties shall issue the press release announcing the existence
of this Agreement in the form and substance as set forth in Appendix 4
hereof.  Each Party agrees not to issue
any other press release or other public statement disclosing other information
relating to this Agreement or the transactions contemplated hereby without the
prior written consent of the other Party, provided, however,
that any disclosure which is required by applicable Laws or the rules of a
securities exchange, as reasonably advised by the disclosing Party’s counsel,
may be made subject to the following. 
The Parties agree that any such required disclosure will not contain
confidential business or technical information and, if disclosure of
confidential business or technical information is required by applicable Laws,
the Parties will use appropriate diligent efforts to minimize such disclosure
and obtain confidential treatment for any such information which is disclosed
to a governmental agency.  Each Party
agrees to provide to the other Party a copy of any public announcement
regarding this Agreement or the subject matter thereof as soon as reasonably
practicable under the circumstances prior to its scheduled release.  Except under extraordinary circumstances,
each Party shall provide the other with an advance copy of any such
announcement at least five (5) business days prior to its scheduled
release.  Each Party shall have the right
to expeditiously review and recommend changes to any such announcement and,
except as otherwise required by applicable Laws, the Party whose announcement
has been reviewed shall remove any Confidential Information of the reviewing
Party that the reviewing Party reasonably deems to be inappropriate for
disclosure.  The contents of any
announcement or similar publicity which has been reviewed and approved by the
reviewing Party can be re-released by either Party without a requirement for
re-approval.  Nothing in this Section 15.9
shall be construed to prohibit Sunesis or its Affiliates or Sublicensees from
making a public announcement or disclosure regarding the stage of development
of Licensed Products in Sunesis’ (or its Affiliates’ or Sublicensees’) product
pipeline or disclosing clinical trial results regarding such License Products,
as may be required by applicable Laws or the rules of a securities
exchange, as reasonably advised by Sunesis’ (or its Affiliates’ or Sublicensees’)
counsel.

 

15.10                     Relationship of the Parties.  Each
Party is an independent contractor under this Agreement.  Nothing contained herein is intended or is to
be construed so as to constitute BMS and Sunesis as partners, agents or joint
venturers.  Neither Party shall have any
express or implied right or

 

56

 

authority to assume or
create any obligations on behalf of or in the name of the other Party or to
bind the other Party to any contract, agreement or undertaking with any Third
Party.

 

15.11                     Headings.  Headings and captions are for
convenience only and are not be used in the interpretation of this
Agreement.  

 

15.12                     Entire Agreement.  This
Agreement, together with the Equity Agreements, constitutes the entire
agreement between the Parties as to the subject matter of this Agreement, and
supersedes and merges all prior negotiations, representations, agreements and
understandings regarding the same.

 

15.13                     Counterparts.  This
Agreement may be executed in counter-parts with the same effect as if both
Parties had signed the same document. 
All such counterparts shall be deemed an original, shall be construed
together and shall constitute one and the same instrument.

 

15.14                     Nonsolicitation.  During
the term of this Agreement, Sunesis agrees that neither it nor any of its
Affiliates shall knowingly recruit, solicit or induce, directly or indirectly,
any employee of BMS or any of its Affiliates directly involved in the research or Development activities with
respect to Licensed Compounds to terminate his or her employment
with BMS or such Affiliate and become employed by or consult for Sunesis or any
of its Affiliates.  For purposes of the
foregoing, “recruit”, “solicit” or “induce” shall not be deemed to mean (i) circumstances
where an employee of BMS or any of its Affiliates initiates contact with
Sunesis or any of its Affiliates with regard to possible employment, or (ii) general
solicitations of employment not specifically targeted at employees of BMS or
any of its Affiliates, including responses to general advertisements.

 

15.15                     Exports.  Sunesis agrees not to export
or re-export, directly or indirectly, any information, technical data, the
direct product of such data, samples or equipment received or generated under
this Agreement in violation of any applicable export control Laws.

 

15.16                     Interpretation.

 

15.16.1  Each of the Parties acknowledges and agrees
that this Agreement has been diligently reviewed by and negotiated by and
between them, that in such negotiations each of them has been represented by
competent counsel and that the final agreement contained herein, including the
language whereby it has been expressed, represents the joint efforts of the
Parties hereto and their counsel. 
Accordingly, in interpreting this Agreement or any provision hereof, no
presumption shall apply against any Party hereto as being responsible for the
wording or drafting of this Agreement or any such provision, and ambiguities,
if any, in this Agreement shall not be construed against any Party,
irrespective of which Party may be deemed to have authored the ambiguous
provision.

 

15.16.2  The definitions of the terms herein shall
apply equally to the singular and plural forms of the terms defined.  Whenever the context may require, any pronoun
shall include the corresponding masculine, feminine and neuter forms.  The words “include”, “includes” and “including”
shall be deemed to be followed by the phrase “without limitation”.  The word “will” shall be construed to have the
same meaning and effect as the word “shall”. 
The word “any” shall mean “any and all” unless otherwise clearly
indicated by context.

 

15.16.3  Unless the context requires otherwise, (a) any
definition of or reference to any agreement, instrument or other document
herein shall be construed as referring to such agreement, instrument or other
document as from time to time amended, supplemented or otherwise modified
(subject to any restrictions on such amendments, supplements or modifications
set forth herein or therein), (b) any reference to any Laws herein shall
be construed as referring to such Laws as from time to time

 

57

 

enacted, repealed or amended, (c) any
reference herein to any person shall be construed to include the person’s
successors and assigns, (d) the words “herein”, “hereof” and “hereunder”,
and words of similar import, shall be construed to refer to this Agreement in
its entirety and not to any particular provision hereof, and (e) all
references herein to Articles, Sections or Appendices, unless otherwise
specifically provided, shall be construed to refer to Articles, Sections and
Appendices of this Agreement.

 

*
* *

 

[signature
page follows]

 

58

 

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

 

 

	
   

  	
  SUNESIS
  PHARMACEUTICALS, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Daniel N. Swisher, Jr.

  
	
   

  	
   

  	
    (Signature)

  
	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
  Daniel N. Swisher, Jr.

  
	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
  Chief Executive Officer

  
	
   

  	
   

  	
   

  
	
   

  	
  Date:

  	
  April 27, 2005

  
	
   

  	
   

  	
   

  
	
   

  	
  BRISTOL-MYERS SQUIBB
  COMPANY

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Tamar D. Howson

  
	
   

  	
   

  	
    (Signature)

  
	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
  Tamar D. Howson

  
	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
  Sr. VP, Corporate and
  Business Development

  
	
   

  	
   

  	
   

  
	
   

  	
  Date:

  	
  April 27, 2005

  

 

59

 

Appendix 1

 

BMS Patent Rights

 

 

1.                                       BMS Core -Patent Rights

 

U.S.
patent [*] (docket number [*])

 

U.S.
patent [*] (docket number [*])

 

U.S.
patent [*] (docket number [*])

 

U.S.
patent [*] (docket number [*])

 

 

The
foreign counterparts to the above patents are listed in Appendix 7 hereto.  

 

 

2.                                       BMS Other Patent Rights

 

U.S.
patent [*] (process)

 

biomarker
application (BMS Docket No. [*] (PCT/US[*]))

 

U.S.
Patent Application Pub. No. [*]

 

 

[*]         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.

 

60

 

Appendix 2

 

CDK Assays

 

Description of CDK2 Inhibitor Assay

[*] consist of [*] of [*]-CDK2/[*] complex, [*] (amino acids [*] of [*]
protein), [*], [*] in 50 μL
kinase buffer ([*], pH 8.0, [*], [*], [*]). 
Reactions
are incubated for [*] at [*] and stopped by the addition of [*] to a final
concentration of [*]%.  [*] are collected
onto [*]) using a [*]) and the filters were quantitated using a [*]).  Dose response curves are generated to
determine the concentration required to inhibit [*]% of kinase activity (IC50).  Compounds are dissolved at [*] in [*] and
evaluated at [*] concentrations, each in [*]. 
The final concentration of [*] in the assay is [*]%.  IC50 values are derived by
non-linear regression analysis and have a coefficient of variance (SD/mean, [*])
equal to or less than [*]%.

 

Description of CDK9 Inhibitor Assay

[*] are treated with [*] ([*]) to
stimulate CDK9 activity ([*]). 
Whole-cell [*] are prepared and [*] is used in each [*].  [*] are prepared using [*] of [*]CDK9 [*] and
[*] of protein [*].  The [*] are washed
three times with a buffer that contains [*], [*], pH 7.7, [*], [*], [*], and [*].  The [*] are then resuspended in a total
volume of [*] that contains [*], pH 7.7, [*], [*], and [*]) at [*].  Kinase reactions are allowed to proceed at [*]
for [*] and are terminated by the addition of [*] of a stop buffer ([*]).  The [*] are pelleted by a brief
centrifugation and the supernatants are transferred to new microfuge tubes, to
which is added [*] of a mixture of [*] and [*]. 
The mixtures are incubated on ice for [*] and [*] are recovered on [*])
using a Packard [*] harvester. 
Incorporation of [*] into the [*] is determined by liquid scintillation
counting.  [*] is determined by
non-linear regression analyses and data are reported as the inhibitory
concentration required to achieve [*]% inhibition relative to control reactions
(IC50). 

 

Description of CDK1 Inhibitor Assay

[*]
consist of [*] of [*]-CDK1/[*] complex, [*] ([*]), [*], [*] in [*] ([*], [*], [*],
[*]).  Reactions are incubated for [*] at
[*] and stopped by the addition of [*] to a final concentration of [*]%.  The [*] are collected onto [*] and IC50
values are determined as above.

 

Description of CDK4 Inhibitor Assay

[*]
consist of [*] of [*]-CDK4/[*] complex, [*] of [*], [*] (amino acids [*] of [*]),
[*], [*] in [*] ([*], [*], [*], [*]). 
Reactions are incubated for [*] at [*] and stopped by the addition of [*]
to a final concentration of [*]%.  The [*]
are collected onto [*] and IC50 values are determined as above.

 

Description of CDK7 Inhibitor Assay

CDK7
kinase activity is measured in [*] as described above for CDK9.   [*] are prepared using an [*]CDK7 [*] and [*].   Kinase activity is measured using [*] as the
[*], as described above for CDK9.

 

 

[*]         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.

 

61

 

Appendix 3

 

Summary of Development Plan
as of Effective Date

 

SNS-032 FOR TREATMENT OF HUMAN
MALIGNANCIES

 

Overview:

 

SNS-032
(also referred to herein as BMS-387032) is a novel inhibitor of multiple
cyclin-dependent kinases, including CDK2, CDK7 and CDK9.  SNS-032 is being developed for the treatment
of both solid and hematological tumors.  The therapeutic hypothesis calls
for [*] of SNS-032 to achieve prolonged [*] biologic activity.  In
addition, since [*] likely results in [*] following [*] therapy, [*] with [*]
can be expected.

 

The
clinical plan calls for a phase 1 escalating-dose trial of SNS-032 administered
IV [*] in a [*] cycle.  A phase 1b/2 trial under consideration is a
combination of SNS-032 and [*] in [*] or [*].  Concomitantly, an oral
formulation will likely be developed and explored in [*] phase 1 trials of oral
SNS-032 ([*]).

 

Phase
2 and 3 trials will likely follow in [*] and [*] with SNS-032 as a single
agent.  Combination trials under consideration are SNS-032 for treatment
of earlier stage [*] and [*].

 

SNS-032 PRELIMINARY PHASE 1 STUDY
SYNOPSIS

 

Title:

 

Phase
1, dose-escalation, multi-center clinical study of the safety and tolerability
of intravenously administered SNS-032, a novel cyclin-dependent kinase
inhibitor, administered to patients with advanced solid malignancies and
relapsed [*] malignancies

 

Objectives:

 

1.                                       Assess the safety and tolerability of [*]
given [*] in a [*] treatment cycle

2.                                       Assess the pharmacokinetics of SNS-032 

3.                                       Assess the value of biological surrogates ([*])
as potential response monitoring pharmacodynamic markers of study drug activity
in patients

4.                                       Assess the baseline levels of [*], [*], [*]
and [*] as potential responder stratification biomarkers

 

Study Design:

 

SNS-032
will be administered to cohorts of [*], starting at a dose (to be determined)
given [*] as a [*] IV infusion to patients meeting entry criteria.  Dose escalation by cohort will occur in the
absence of identification of dose-limiting toxicities according to
protocol-specified criteria.  Doses will
be escalated

 

[*]         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.

 

62

 

until
at least [*] patients experience [*], except for nausea and vomiting adequately
controlled with standard anti-emetic medications.  A modified [*] will used for subsequent dose
escalation.

 

Patients
will be eligible for up to [*] cycles of treatment; tumor assessments will be
conducted at the completion of the [*] cycles. 
Patients will be removed from the study upon evidence of tumor
progression as defined by [*] criteria.

 

A
thorough and adequate assessment of the effects of SNS-032 on [*] will be
conducted.

 

Inclusion/Exclusion Criteria:  

 

TBD

 

Estimated sample size:  

 

~[*]

 

Estimated number of study centers:  

 

[*]

 

Expected duration of study:                                               

 

[*]
enrollment; [*] follow up

 

Formulation:                         

 

SNS-032
Injection, [*]/vial ([*]) as the [*], is formulated as a [*] aqueous solution.  It is supplied in [*] vials.  A [*]% fill overage is included for
vial-needle-syringe (VNS) withdrawal loss. 
Each vial contains [*] of SNS-032 active [*], [*] (solubilizer), [*]
(buffer, pH 4.0) and Water for Injection. 
Vials of SNS-032 Injection contain sterile unpreserved solution.

 

Statistical Plan:        

 

TBD

 

SNS-032 Initial Clinical Timelines:

 

Shown
below are the initial clinical timelines for the Development of SNS-032.

 

 

[*]         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.

 

63

 

	
   

  	
   

  	
  2005

  	
   

  	
  2006

  	
   

  	
  2007

  	
   

  	
  2008

  	
   

  	
  2009

  	
   

  
	
   

  	
   

  	
  Q1

  	
   

  	
  Q2

  	
   

  	
  Q3

  	
   

  	
  Q4

  	
   

  	
  Q1

  	
   

  	
  Q2

  	
   

  	
  Q3

  	
   

  	
  Q4

  	
   

  	
  Q1

  	
   

  	
  Q2

  	
   

  	
  Q3

  	
   

  	
  Q4

  	
   

  	
  Q1

  	
   

  	
  Q2

  	
   

  	
  Q3

  	
   

  	
  Q4

  	
   

  	
  Q1

  	
   

  	
  Q2

  	
   

  	
  Q3

  	
   

  	
  Q4

  	
   

  
	
  I.V.

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Single Agent

  	
   

  	
  [*]

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Combination

  	
   

  	
  [*]

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  [*]

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Oral

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Single Agent

  	
   

  	
  [*]

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  [*]

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  [*]

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  [*]

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Oral

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Combination

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  [*]

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  [*]

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

	
   

  	
   

  	
  2010

  	
   

  	
  2011

  	
   

  	
  2012

  	
   

  	
  2013

  	
   

  	
  2014

  	
   

  
	
   

  	
   

  	
  Q1

  	
   

  	
  Q2

  	
   

  	
  Q3

  	
   

  	
  Q4

  	
   

  	
  Q1

  	
   

  	
  Q2

  	
   

  	
  Q3

  	
   

  	
  Q4

  	
   

  	
  Q1

  	
   

  	
  Q2

  	
   

  	
  Q3

  	
   

  	
  Q4

  	
   

  	
  Q1

  	
   

  	
  Q2

  	
   

  	
  Q3

  	
   

  	
  Q4

  	
   

  	
  Q1

  	
   

  	
  Q2

  	
   

  	
  Q3

  	
   

  	
  Q4

  	
   

  
	
  I.V.

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Single Agent

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Combination

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Oral

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Single Agent

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Oral

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Combination

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

[*]         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.

 

64

 

Appendix 4

 

Press Release

 

 

Sunesis
to Acquire Clinical-Stage, Anti-Cancer Compound from Bristol-Myers Squibb 

 

SNS-032 Expands Sunesis’ Pipeline of Novel
Anti-Cancer Therapeutics

 

SOUTH SAN
FRANCISCO, California, March X, 2005 –Sunesis
Pharmaceuticals, Inc. announced today that it has obtained worldwide
development and commercialization rights to BMS-387032 (now SNS-032), a
targeted small molecule anti-cancer compound from Bristol-Myers Squibb Company
(NYSE: BMY).  SNS-032 is a novel cyclin
dependent kinase (CDK) inhibitor that induces cell cycle arrest and
apoptosis.  This clinical-stage compound
is the third cell-cycle inhibitor in Sunesis’ proprietary oncology portfolio. 

 

Under the terms of the
agreement, Bristol-Myers Squibb will receive an up-front equity stake of $8
million in Sunesis.  Sunesis will make a
series of additional milestone payments of up to $29 million in cash and equity
based on the successful development and approval for the first indication and
formulation of SNS-032.  Additional
development and commercialization milestones could total up to $49 million in
cash and equity.  Sunesis will also make
royalty payments based on net sales.  In
return, Sunesis will receive an exclusive, worldwide license to SNS-032 and
future CDK inhibitors derived from related intellectual property.  

 

“We believe that CDK is
an excellent therapeutic target for cancer therapy and SNS-032, in particular,
fits well with our overall strategy to advance a diversified pipeline of novel
anti-cancer therapeutics with potential to improve current treatment standards,”
said Daniel Swisher, CEO of Sunesis.  “In
preclinical studies, SNS-032 has demonstrated anti-tumor activity in multiple
solid and hematological tumor models.  In
2005, we intend to commence a new Phase I clinical trial in patients with
advanced solid tumors and relapsed lymphoid malignancies.”

 

About SNS-032

Cytotoxic agents,
including many cell cycle inhibitors, remain the front-line standard of care in
many cancers.  SNS-032 is a novel
aminothiazole small molecule cell cycle modulator that targets the
cyclin-dependent kinases CDK2, CDK7 and CDK9, thus halting the uncontrolled
cell division characteristic of cancer. 
Preclinical studies have shown that SNS-032 induces cell cycle arrest
and apoptosis across multiple cell lines. 
In Phase I trials , SNS-032 displayed promising pharmacologic properties
and safety consistent with that of other cytotoxic anti-cancer

 

1

 

molecules.  Preclinical studies have shown that SNS-032
has activity in cancer models of solid tumors and hematologic malignancies. 

 

SNS-032 is a small
molecule that is currently administered by IV infusion, but also has the
potential for being developed as an oral medication.  In addition, the compound has the potential
to be used as either a single agent or as part of a combination drug
regimen.  Sunesis intends to commence new
Phase I clinical trials of SNS-032 administered by IV as a single agent and in
combination with leading cancer therapies to evaluate the compound’s safety,
tolerability and pharmacokinetic properties in humans to establish optimal dosing
regimens for Phase II clinical testing.

 

About
Sunesis’ Other Oncology Programs

Sunesis has built a
portfolio of preclinical and development stage product candidates in oncology
focused on novel pathways and targets, including inhibiting cell cycle and
survival signaling. Sunesis is currently conducting Phase I clinical trials for
its lead compound, SNS-595, a cell-cycle modulator that acts on proliferating
cancer cells by inducing cell cycle arrest and apoptosis, or cell death.  In addition, Sunesis’ Aurora kinase inhibitor
program is undergoing preclinical evaluation and, in cooperation with Biogen
Idec, Sunesis is developing novel small molecule inhibitors of Raf and other
oncology kinases.

 

About Sunesis Pharmaceuticals

Sunesis
is a clinical-stage biopharmaceutical company focused on the discovery,
development and commercialization of small molecule therapeutics for oncology,
inflammatory diseases and other unmet medical needs.  Sunesis has built a product candidate
portfolio through internal discovery and acquisition of novel cancer
therapeutics.  Sunesis is advancing its product candidates through
in-house research and development efforts and strategic collaborations with
leading pharmaceutical and biopharmaceutical companies.  For further information, visit
www.sunesis.com. 

 

Forward-Looking Statements

This press release contains forward-looking statements
concerning Sunesis Pharmaceuticals’ and its product development plans,
including plans to commence and conduct preclinical studies and clinical trials.
Sunesis may not be successful in such plans.

 

Statements
in this press release regarding Sunesis Pharmaceuticals’ business which are not
historical facts are “forward-looking statements” that involve risks and
uncertainties. Forward-looking statements can be identified by, among other
things, the use of forward-looking language, such as “anticipate,” “believe,” “could,”
“estimate,” “expect,” “future,” “intends,” “may,” “plans,” “should,” “seeks,” “potential,”
“will,” or the negative of those terms, or other variations of those terms of
comparable language, or by discussions of strategy or intentions. A number of
important factors could cause actual results to differ materially from those
projected or suggested in the forward-looking statements including, but not
limited to, the ability of Sunesis to: (i) discover product candidates, (ii) successfully
conduct preclinical studies and clinical trials of product candidates, (iii) obtain
regulatory approval of any product candidates and (iv) obtain and enforce
intellectual property rights. These statements speak only as of the

 

2

 

date
of this press release and the company assumes no obligation or responsibility
to update or revise the statements.

 

 

	
  CONTACT:

  	
   

  
	
  Eric Bjerkholt,

  	
  Media and
  Investors

  
	
  CFO of Sunesis
  Pharmaceuticals, Inc.,

  	
  BCC Partners

  
	
  +1-650-266-3717

  	
  Karen L. Bergman
  or Michelle Coral

  
	
   

  	
  650.575.1509 or
  415.794.8662

  

 

3

 

Appendix 5

 

List of BMS Compounds to be
Provided Under Section 4.5

 

[*]

BMS-387032

[*]

 

 

[*]         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.

 

4

 

Appendix 6

 

Illustrative Examples of
Milestone Payments Under Section 8.2

 

In
the four examples below, it is assumed that the Licensed Compound is a Licensed
Compound under clause (a) of the Licensed Compound definition.

 

Example 1

 

•                  Licensed
Compound is developed, filed and approved for IV treatment of [*] in [*] and [*]
for [*].

•                  Licensed
Compound is developed in parallel for the oral treatment of [*] but is never
filed.

•                  No
other development, filing or approval milestones are achieved.

•                  The
following would be paid.

 

	
  Column:  1

  	
   

  	
  2

  	
   

  	
  3

  	
   

  	
  4

  	
   

  	
  5

  	
   

  
	
  Milestone Event

  	
   

  	
  First Indication for

  First Formulation

  =IV for [*]

  	
   

  	
  Second Formulation (any
  Indication)

  = Oral for [*]

  	
   

  	
  Second

  Indication for a

  Formulation =

  =IV for [*]

  	
   

  	
  Third

  Indication for

  a Formulation

  	
   

  
	
  1. Start of Phase 1 Trial

  	
   

  	
  $

  	
  [*]

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2. Start of Phase 2 Trial

  	
   

  	
  $

  	
  [*]

  	
   

  	
  $

  	
  [*]

  	
   

  	
  [*]

  	
   

  	
   

  	
   

  
	
  3. Start of Phase 3 Trial

  	
   

  	
  $

  	
  [*]

  	
   

  	
  $

  	
  [*]

  	
   

  	
  $

  	
  [*]

  	
   

  	
   

  	
   

  
	
  4. NDA Filing

  	
   

  	
  $

  	
  [*]

  	
   

  	
   

  	
   

  	
  $

  	
  [*]

  	
   

  	
   

  	
   

  
	
  5. NDA Approval

  	
   

  	
  $

  	
  [*]

  	
   

  	
   

  	
   

  	
  $

  	
  [*]

  	
   

  	
   

  	
   

  
	
  6. MAA Filing

  	
   

  	
  $

  	
  [*]

  	
   

  	
   

  	
   

  	
  $

  	
  [*]

  	
   

  	
   

  	
   

  
	
  7. MAA Approval

  	
   

  	
  $

  	
  [*]

  	
   

  	
   

  	
   

  	
  $

  	
  [*]

  	
   

  	
   

  	
   

  
	
  8. JNDA Filing

  	
   

  	
  $

  	
  [*]

  	
   

  	
   

  	
   

  	
  $

  	
  [*]

  	
   

  	
   

  	
   

  
	
  9. JNDA Approval

  	
   

  	
  $

  	
  [*]

  	
   

  	
   

  	
   

  	
  $

  	
  [*]

  	
   

  	
   

  	
   

  
	
  Total

  	
   

  	
  $

  	
  [*]

  	
   

  	
  $

  	
  [*]

  	
   

  	
  $

  	
  [*]

  	
   

  	
   

  	
   

  

 

[*]         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.

 

5

 

Example 2

 

•                  Licensed
Compound is developed, filed and approved for IV treatment of [*] in [*].

•                  Licensed
Compound is developed, filed and approved for the oral treatment of [*] in [*].

•                  Licensed
Compound is developed, filed and approved for IV treatment of [*] in [*].

•                  Licensed
Compound is developed, filed and approved for the oral treatment of [*] in [*].

•                  No
other development, filing or approval milestones are achieved.

•                  The
following would be paid.  Note that the
oral [*] would be the second indication for a formulation which has already
been paid for IV for [*] and so would not trigger payments.

 

	
  Column:1

  	
   

  	
  2

  	
   

  	
  3

  	
   

  	
  4

  	
   

  	
  5

  	
   

  
	
  Milestone Event

  	
   

  	
  First Indication for

  First Formulation

  = IV for [*]

  	
   

  	
  Second Formulation

  (any Indication)

  =oral for [*]

  	
   

  	
  Second

  Indication for a

  Formulation

  =IV for [*]

  	
   

  	
  Third Indication

  for a

  Formulation

  	
   

  
	
  1. Start of Phase 1 Trial

  	
   

  	
  $

  	
  [*]

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2. Start of Phase 2 Trial

  	
   

  	
  $

  	
  [*]

  	
   

  	
  $

  	
  [*]

  	
   

  	
  [*]

  	
   

  	
   

  	
   

  
	
  3. Start of Phase 3 Trial

  	
   

  	
  $

  	
  [*]

  	
   

  	
  $

  	
  [*]

  	
   

  	
  $

  	
  [*]

  	
   

  	
   

  	
   

  
	
  4. NDA Filing

  	
   

  	
  $

  	
  [*]

  	
   

  	
  $

  	
  [*]

  	
   

  	
  $

  	
  [*]

  	
   

  	
   

  	
   

  
	
  5. NDA Approval

  	
   

  	
  $

  	
  [*]

  	
   

  	
  $

  	
  [*]

  	
   

  	
  $

  	
  [*]

  	
   

  	
   

  	
   

  
	
  6. MAA Filing

  	
   

  	
  $

  	
  [*]

  	
   

  	
  $

  	
  [*]

  	
   

  	
  $

  	
  [*]

  	
   

  	
   

  	
   

  
	
  7. MAA Approval

  	
   

  	
  $

  	
  [*]

  	
   

  	
  $

  	
  [*]

  	
   

  	
  $

  	
  [*]

  	
   

  	
   

  	
   

  
	
  8. JNDA Filing

  	
   

  	
  $

  	
  [*]

  	
   

  	
  $

  	
  [*]

  	
   

  	
  $

  	
  [*]

  	
   

  	
   

  	
   

  
	
  9. JNDA Approval

  	
   

  	
  $

  	
  [*]

  	
   

  	
  $

  	
  [*]

  	
   

  	
  $

  	
  [*]

  	
   

  	
   

  	
   

  
	
  Total

  	
   

  	
  $

  	
  [*]

  	
   

  	
  $

  	
  [*]

  	
   

  	
  $

  	
  [*]

  	
   

  	
   

  	
   

  

 

 

[*]         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

 

Example 3

 

•                  Licensed
Compound is developed, filed and approved for IV treatment of [*] in [*].

•                  Licensed
Compound is developed, filed and approved for the IV treatment of [*] in [*].

•                  Licensed
Compound is developed, filed and approved for IV treatment of [*] in [*].

•                  Licensed
Compound is developed, filed and approved for the IV treatment of [*] in [*].

•                  No
other development, filing or approval milestones are achieved.

•                  The
following would be paid.  Note that the
IV for [*] would be the fourth indication for a formulation and would not
trigger payments.

 

	
  Column:1

  	
   

  	
  2

  	
   

  	
  3

  	
   

  	
  4

  	
   

  	
  5

  	
   

  
	
  Milestone Event

  	
   

  	
  First Indication for

  First Formulation

  = IV for [*]

  	
   

  	
  Second Formulation

  (any Indication)

  	
   

  	
  Second

  Indication for a

  Formulation

  =IV for [*]

  	
   

  	
  Third Indication

  for a

  Formulation

  =IV for [*]

  	
   

  
	
  1. Start of Phase 1 Trial

  	
   

  	
  $

  	
  [*]

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2. Start of Phase 2 Trial

  	
   

  	
  $

  	
  [*]

  	
   

  	
   

  	
   

  	
  [*]

  	
   

  	
  —

  	
   

  
	
  3. Start of Phase 3 Trial

  	
   

  	
  $

  	
  [*]

  	
   

  	
   

  	
   

  	
  $

  	
  [*]

  	
   

  	
  $

  	
  [*]

  	
   

  
	
  4. NDA Filing

  	
   

  	
  $

  	
  [*]

  	
   

  	
   

  	
   

  	
  $

  	
  [*]

  	
   

  	
  $

  	
  [*]

  	
   

  
	
  5. NDA Approval

  	
   

  	
  $

  	
  [*]

  	
   

  	
   

  	
   

  	
  $

  	
  [*]

  	
   

  	
  $

  	
  [*]

  	
   

  
	
  6. MAA Filing

  	
   

  	
  $

  	
  [*]

  	
   

  	
   

  	
   

  	
  $

  	
  [*]

  	
   

  	
  $

  	
  [*]

  	
   

  
	
  7. MAA Approval

  	
   

  	
  $

  	
  [*]

  	
   

  	
   

  	
   

  	
  $

  	
  [*]

  	
   

  	
  $

  	
  [*]

  	
   

  
	
  8. JNDA Filing

  	
   

  	
  $

  	
  [*]

  	
   

  	
   

  	
   

  	
  $

  	
  [*]

  	
   

  	
  $

  	
  [*]

  	
   

  
	
  9. JNDA Approval

  	
   

  	
  $

  	
  [*]

  	
   

  	
   

  	
   

  	
  $

  	
  [*]

  	
   

  	
  $

  	
  [*]

  	
   

  
	
  Total

  	
   

  	
  $

  	
  [*]

  	
   

  	
   

  	
   

  	
  $

  	
  [*]

  	
   

  	
  $

  	
  [*]

  	
   

  

 

 

[*]         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

 

Example 4

 

•                  Licensed
Compound, A, IV form is developed through phase 1 ([*]), phase 2 ([*]) and
Phase 3 ([*]) for AML but is never filed.

•                  Licensed
Compound, A, oral form is developed through phase 1 ([*]), phase 2 ([*]) and
Phase 3 ([*]) but is never filed.

•                  A
separate Licensed Compound, B, is developed, NDA/MAA are filed ([*]) and
NDA/MAA are approved ([*]) for the IV treatment of [*] in [*].

•                  No
other development, filing or approval milestones are achieved.

•                  The
following would be paid.  Note that the
column 2 payments for start of Phase 2 and Phase 3 are only triggered once for
IV [*] and are not repaid for the IV [*] start of Phase 2 and Phase 3. 

 

	
  Column:1

  	
   

  	
  2

  	
   

  	
  3

  	
   

  	
  4

  	
   

  	
  5

  	
   

  
	
  Milestone Event

  	
   

  	
  First Indication for

  First Formulation

  	
   

  	
  Second Formulation

  (any Indication)

  	
   

  	
  Second

  Indication for a

  Formulation

  	
   

  	
  Third Indication

  for a

  Formulation

  	
   

  
	
  1. Start of Phase 1 Trial

  	
   

  	
  $[*] in [*] for IV [*]

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2. Start of Phase 2 Trial

  	
   

  	
  $[*] in [*] for IV [*]

  	
   

  	
  $[*] in [*] for oral [*]

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  3. Start of Phase 3 Trial

  	
   

  	
  $[*] in [*] for IV [*]

  	
   

  	
  $[*] in [*] for oral [*]

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4. NDA Filing

  	
   

  	
  $[*] in [*] for IV [*]

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  5. NDA Approval

  	
   

  	
  $[*] in [*] for IV [*]

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  6. MAA Filing

  	
   

  	
  $[*] in [*] for IV [*]

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  7. MAA Approval

  	
   

  	
  $[*] in [*]

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  8. JNDA Filing

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  9. JNDA Approval

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Total

  	
   

  	
  $[*]

  	
   

  	
  $[*]

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

 

[*]         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

 

Appendix 7

 

BMS Core Patent Rights

 

1.                                       BMS Core -Patent Rights

 

U.S.
patent [*] (docket number [*])

U.S.
patent [*] (docket number [*])

U.S.
patent [*] (docket number [*])

U.S.
patent [*] (docket number [*])

 

 

The
foreign counterparts of the above patents are listed below.

 

Docket Number [*]

 

	
  Ctry

  	
   

  	
  Type

  	
   

  	
  Filing Date

  	
   

  	
  Filing Number

  	
   

  	
  Publication

  	
   

  	
  Proc

  	
   

  	
  PUB ro GRT

  Number

  	
   

  
	
  [*]

  	
   

  	
  [*]

  	
   

  	
  [*]

  	
   

  	
  [*]

  	
   

  	
  [*]

  	
   

  	
  [*]

  	
   

  	
  [*]

  	
   

  

 

Docket Number [*]

 

	
  Ctry

  	
   

  	
  Type

  	
   

  	
  Filing Date

  	
   

  	
  Filing Number

  	
   

  	
  Publication

  	
   

  	
  Proc

  	
   

  	
  PUB or GRT Number

  	
   

  
	
  [*]

  	
   

  	
  [*]

  	
   

  	
  [*]

  	
   

  	
  [*]

  	
   

  	
  [*]

  	
   

  	
  [*]

  	
   

  	
  [*]

  	
   

  

 

Docket Number [*]

 

	
  Ctry

  	
   

  	
  Type

  	
   

  	
  Filing Date

  	
   

  	
  Filing Number

  	
   

  	
  Publication

  	
   

  	
  Proc

  	
   

  	
  PUB or GRT Number

  	
   

  
	
  [*]

  	
   

  	
  [*]

  	
   

  	
  [*]

  	
   

  	
  [*]

  	
   

  	
  [*]

  	
   

  	
  [*]

  	
   

  	
  [*]

  	
   

  

 

Docket Number [*]

 

	
  Ctry

  	
   

  	
  Type

  	
   

  	
  Filing Date

  	
   

  	
  Filing Number

  	
   

  	
  Publication

  	
   

  	
  Proc

  	
   

  	
  PUB or GRT Number

  	
   

  
	
  [*]

  	
   

  	
  [*]

  	
   

  	
  [*]

  	
   

  	
  [*]

  	
   

  	
  [*]

  	
   

  	
  [*]

  	
   

  	
  [*]

  	
   

  

 

Docket Number [*]

 

	
  Ctry

  	
   

  	
  Type

  	
   

  	
  Filing Date

  	
   

  	
  Filing Number

  	
   

  	
  Publication

  	
   

  	
  Proc

  	
   

  	
  Number

  	
   

  
	
  [*]

  	
   

  	
  [*]

  	
   

  	
  [*]

  	
   

  	
  [*]

  	
   

  	
  [*]

  	
   

  	
  [*]

  	
   

  	
  [*]

  	
   

  

 

[*]         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.

 

[*]         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.

 

[*]         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.

 

[*]         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

 

Docket Number [*]

 

	
  Ctry

  	
   

  	
  Type

  	
   

  	
  Filing Date

  	
   

  	
  Filing Number

  	
   

  	
  Publication

  	
   

  	
  Proc

  	
   

  	
  GRT or PUB Number

  	
   

  
	
  [*]

  	
   

  	
  [*]

  	
   

  	
  [*]

  	
   

  	
  [*]

  	
   

  	
  [*]

  	
   

  	
  [*]

  	
   

  	
  [*]

  	
   

  

 

[*]         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.

 

10

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