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Exhibit 10.34
LICENSE AGREEMENT
THIS LICENSE AGREEMENT (this "Agreement") is entered into as of
September 12,
2006 (the "Effective Date"), by and between SOUTHERN RESEARCH
INSTITUTE, having
its principal place of business at 2000 Ninth Avenue South,
Birmingham, Alabama
35255 ("SRI"), and BIOENVISION, INC., a Delaware corporation
having its
principal place of business at 345 Park Avenue, 41st Floor, New
York, New York
10154 ("Bioenvision").
RECITALS
WHEREAS, SRI has rights in patents and technical information
relating to the
development and uses of 2'-flouro-2-halo substituted purine
nucleosides
("Clofarabine"), which has been shown to be effective in vitro
and in vivo
against hematologic malignancies and solid tumors, as well as
potentially
effective for various other therapeutic indications such as
autoimmune diseases
and transplantation immunity;
WHEREAS, SRI and Eurobiotech Group, Inc. (now Bioenvision
through a 100% equity
purchase) entered into a Co-Development Agreement, dated August
31, 1998 (as
amended from time to time before and after the date hereof, the
"Co-Development
Agreement"), pursuant to which SRI and Bioenvision agreed to
jointly develop
Clofarabine and SRI granted an exclusive license to Bioenvision
to practice
SRI's patents and technology relating to Clofarabine to develop
and
commercialize products throughout the world, except in Japan,
Indonesia,
Malaysia, Taiwan, Hong Kong, Singapore, Vietnam, Cambodia,
Thailand, Laos,
Philippines, and South Korea (collectively, the "Asian
Territories");
WHEREAS, SRI granted to Bioenvision an option to obtain an
exclusive license to
the patents and technology relating to Clofarabine to develop
and commercialize
products in the Asian Territories and Bioenvision has exercised
this option; and
WHEREAS, SRI desires to grant to Bioenvision, and Bioenvision
desires to receive
from SRI, an exclusive license to the patents and technology
relating to
Clofarabine to develop and commercialize products in the Asian
Territories,
subject to the terms and conditions provided below and to the
continued
existence of the license granted to Bioenvision in the
Co-Development Agreement.
NOW, THEREFORE, in consideration of the foregoing premises and
the mutual
covenants contained herein and for other good and valuable
consideration, the
receipt and sufficiency of which are hereby acknowledged, the
parties agree as
follows:
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treatment under
Rule 24b-2 of the Exchange Act of 1934. Material filed
separately with the
Securities and Exchange Commission.
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AGREEMENT
1. DEFINITIONS
1.1 "Allowable Costs" shall mean the following actual,
documented costs
incurred by Bioenvision that relate specifically to the sale of
the Product for
which Net Sales Revenue (defined below) is being calculated: (i)
value added,
sales, or use taxes, duties or other governmental tariffs, (ii)
trade, quantity
and cash discounts, credits, rebates, or allowances; (iii)
Product returns and
bad debts; (iv) freight, shipping, transportation, and insurance
charges; (v)
discounts mandated by, or granted to meet the requirements of,
applicable
territorial laws or regulations; and (vi) any other customary
and reasonable
deductions that may be made from the sales price of the Product
in the Asian
Territories. Allowable Costs shall not include any (i) start-up
costs, (ii)
research and development costs, or (iii) corporate overhead and
general
administrative expenses.
1.2 "Affiliate" of a party shall mean any person or entity
that
directly or indirectly controls, is controlled by, or is under
common control
with such party. 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 party, shall
mean the
possession, directly or indirectly, of the power to direct, or
cause the
direction of, the management or policies of such person or
entity, whether
through the ownership of voting securities, by contract or
otherwise.
1.3 "Asian Territories" shall have the meaning ascribed in
the
recitals.
1.4 "Clofarabine" shall have the meaning ascribed in the
recitals.
1.5 "Co-Development Agreement" shall have the meaning ascribed
in the
recitals.
1.6 "Commercially Reasonable Efforts" means, with respect to
Products,
the carrying out of development and 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 a product of similar market potential or profit
potential 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 Bioenvision: (i) promptly assign responsibility
for such
development and commercialization activities to specific
employees 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)
employ compensation systems for its employees that are no less
favorable
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treatment under
Rule 24b-2 of the Exchange Act of 1934. Material filed
separately with the
Securities and Exchange Commission.
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than the compensation systems Bioenvision applies to its other
programs, in
order to reasonably incentivize such employees to achieve such
objectives.
1.7 "Confidential Information" shall mean any and all technical
and
non-technical information provided by one party to the other
party pursuant to
this Agreement, whether in oral, written, graphic or electronic
form, and
including, without limitation, SRI Know-How and any information
regarding the
status of development or Regulatory Approval, business
development plan, and/or
royalty reports for the Products provided by Bioenvision to SRI
under this
Agreement.
1.8 "Developed IP" shall have the meaning ascribed in Section
6.2.
1.9 "Field" shall mean all human and other animal health
applications,
including, without limitation, treatment, prevention, and/or
diagnosis of human
and other animal diseases or conditions.
1.10 "Financial Difficulty" of a party shall mean the occurrence
of:
(i) filing by the party in any court pursuant to any statute, a
petition in
bankruptcy or insolvency or for reorganization in bankruptcy or
for an
arrangement or for the appointment of a receiver or trustee for
such party or of
its assets; (ii) being served with an involuntary bankruptcy
petition against it
where such petition has not been dismissed within ninety (90)
days after the
filing thereof; or (iii) making an assignment for the benefit of
creditors.
1.11 "Indemnifying Party" shall have the meaning ascribed in
Section
11.2.
1.12 "Information" shall mean unencumbered published or
unpublished
confidential and proprietary information in the nature of
research and
development information, knowledge and technical data, together
with trade
secrets relating to Clofarabine or the SRI Licensed IP,
including any inventions
in the possession of and belonging solely to SRI on or prior to
the Effective
Date of this Agreement and which SRI has the obligation to
include in this
Agreement, or which comes into the possession of Bioenvision
during the term of
this Agreement and which is generated as a consequence of access
to technical
information provided by SRI. SRI shall include herein only that
Information
which is reasonably necessary for Bioenvision's practice of the
SRI Licensed IP
or without which such practice would constitute an infringement
of SRI's rights.
Information includes only the above information which is
developed by or on
behalf of SRI, or is generated pursuant to research funded, in
whole or in part,
by Bioenvision.
1.13 "Improvement" shall mean those unencumbered technology
advances in
the SRI License IP made by or on behalf of SRI during the term
of this Agreement
that are either within the scope of and would constitute an
infringement of the
Patent claims or use Information and are within the Field.
1.14 "Intellectual Property" shall mean all inventions,
discoveries,
know-how, methods, processes, data, information, technology,
research tools,
compositions, tangible materials and formulas that are invented,
discovered,
developed or otherwise generated by or for
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treatment under
Rule 24b-2 of the Exchange Act of 1934. Material filed
separately with the
Securities and Exchange Commission.
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either party or their respective Affiliates prior to or during
the term of this
Agreement, and all Intellectual Property Rights therein and
thereto anywhere in
the world.
1.15 "Intellectual Property Rights" shall mean any and all now
known or
hereafter existing: (i) rights associated with works of
authorship, including
exclusive exploitation rights, copyrights, and moral rights;
(ii) trademark and
trade name rights and similar rights; (iii) trade secret rights;
(iv) patents
and industrial property rights; (v) other proprietary rights in
Intellectual
Property of every kind and nature, whether arising by operation
of law, by
contract or license, or otherwise; and (vi) all registrations,
applications,
renewals, extensions, combinations, divisions, or reissues of
the foregoing, in
each case in any jurisdiction throughout the Asian
Territories.
1.16 "Losses" shall have the meaning given in Section
11.1(a).
1.17 "Maintenance Fee" shall have the meaning given in Section
4.5.
1.18 "Net Sales Revenue" shall mean the gross revenue recognized
by
Bioenvision or its Affiliates from the direct sale of a Product
through normal
distribution channels to a Third Party, which is not a
Sublicensee (as
determined by generally accepted accounting principles and
industry practices)
less Allowable Costs.
1.19 "Patent" shall mean (i) patent applications filed in any
country
within the Asian Territories; (ii) all divisional, continuation
(in whole or in
part), reissues, substitute applications and extensions with
respect to any of
the applications described in (i); (iii) all issued or granted
patents resulting
from any of the applications described above; and (iv) all
issued or granted
reissue, re-examination, renewal or extension patents,
supplementary protection
certificates, and confirmation or registration patents based on
any of the
patents described in (iii).
1.20 "Product" shall mean any product, service, test, or
information,
including Clofarabine, which, but for the license granted
herein, would infringe
one or more claims of a SRI Patent or is discovered, developed,
manufactured,
approved, marketed or sold using SRI Know-How or used with SRI
Know-How.
1.21 "Regulatory Approval" shall mean any and all approvals
(including
price and reimbursement approvals), licenses, registrations, or
authorizations
of any country, federal, state, or local regulatory agency,
department, bureau,
or other governmental entity located within the Asian
Territories that is
necessary for the manufacture, use, storage, import, transport,
and/or sale of a
Product in such jurisdiction.
1.22 "Royalty Term" shall mean in any country on a
product-by-product
basis, the period of time commencing on the first sale of the
applicable Product
and ending upon the later to occur of (i) the expiration,
revocation,
abandonment or final determination of invalidity of all Patents
for such Product
(if any), or abandonment of the last pending application
included in the SRI
Patents which covers the applicable Product in such country (if
any), as
applicable, and (ii) the tenth anniversary of the first
commercial sale of the
applicable Product following Regulatory Approval in such
country.
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treatment under
Rule 24b-2 of the Exchange Act of 1934. Material filed
separately with the
Securities and Exchange Commission.
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1.23 "SRI Know-How" shall mean all Information owned or
controlled by
SRI prior to or during the term of this Agreement, which relates
to the
development, manufacture, use, sale, or approval of
Clofarabine.
1.24 "SRI Licensed IP" shall mean SRI Know-How, SRI Patents
and
Improvements.
1.25 "SRI Patents" shall mean all Patents owned or controlled by
SRI
prior to or during the term of this Agreement, which relate to
the development,
use, manufacture, sale or approval of Clofarabine or related
Products or which
covers SRI Know-How, including, without limitation, those listed
in Exhibit A.
1.26 "Sublicense" shall mean an agreement pursuant to which
Bioenvision
grants a sublicense of some or all of the rights licensed to
Bioenvision by SRI
under Section 2.1 hereof. If Bioenvision enters into an
agreement with a Third
Party pursuant to which such Third Party shall have the right to
control the
marketing and sale of a Product within a defined territory (for
example, a
marketing and/or distribution arrangement under which a Third
Party will have
the right to market, sell and/or resell the Product), then such
an agreement
shall be deemed to be a "Sublicense." For avoidance of doubt, if
Bioenvision
enters into an agreement with a Third Party under which such
Third Party will
exercise certain of the rights licensed to Bioenvision under
Section 2.1 hereof
(other than the marketing or sale of the Product) for the
benefit of Bioenvision
(for example, if Bioenvision enters into a contract with a
contract research
organization or a contract sales organization, and Bioenvision
retains the right
to oversee and control such Third Party's performance), then
such arrangements
shall not be "Sublicenses" and such Third Parties shall not be
"Sublicensees."
1.27 "Sublicense Revenue" means all consideration received
by
Bioenvision from a Third Party for the grant, or in connection
with the exercise
of rights under, a Sublicense. Sublicense Revenue shall include
all upfront
license fees, milestone payments, royalties and the fair market
value of any
rights granted to Bioenvision to use, market, sell, develop,
import or export
products or technologies of a Third Party, in either case,
received by
Bioenvision from any Sublicensee pursuant to a Sublicense.
Bioenvision shall not
be entitled to deduct from Sublicense Revenues any start-up
costs, research and
development costs, general administrative expenses or other
costs. For clarity,
(i) revenues derived from sales of the Product by any Third
Party shall be
deemed to be Sublicense Revenue, and (ii) Bioenvision shall not
be obligated to
pay SRI with respect to any such monies paid to Bioenvision by a
Sublicensee:
(A) in exchange for shares of Bioenvision stock or other equity
securities, up
to the fair market value thereof; (B) to fund salaries,
materials and related
capital in support of specific research activities pursuant to
the applicable
Sublicense; or (C) for Product or other property or assets up to
an amount equal
to the lesser of the fair market value of such Product (meaning,
the amount
Bioenvision charges to Third Parties for similar quantities of
Product sold on
similar delivery, payment and other terms), property or assets,
or Bioenvision's
actual cost to acquire or manufacture such Product, property or
assets.
1.28 "Sublicensee" means a Third Party with whom Bioenvision
enters
into a Sublicense.
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Rule 24b-2 of the Exchange Act of 1934. Material filed
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Securities and Exchange Commission.
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1.29 "Third Party" shall mean any entity other than Bioenvision
or SRI
or an Affiliate of Bioenvision or SRI.
1.30 "Third Party IP" shall have the meaning given in Section
7.4.
2. LICENSE
2.1 License Grant.
(a) SRI hereby grants to Bioenvision and its Affiliates a
license
under the SRI Licensed IP to research, develop, make, have made,
use, sell,
offer for sale, import, and export the Products within the Asian
Territories,
within the Field. The license granted herein is exclusive within
the Asian
Territories without any reservation of rights by SRI, and will
remain in effect
until this Agreement is terminated in accordance with Section 10
below. For
avoidance of doubt, the foregoing license shall also include the
right to
practice the SRI Licensed IP to manufacture Products anywhere in
the world.
(b) Neither party grants to the other party any rights or
licenses
not expressly granted under this Agreement, whether by
implication, estoppel, or
otherwise.
2.2 Sublicense Rights.
(a) Bioenvision shall have the right to grant Sublicenses to
any
Third Party, provided that: (i) Bioenvision must disclose to SRI
the identity of
all proposed Sublicensees and provide SRI with copies of any
proposed Sublicense
or similar agreement not less than thirty (30) days prior to the
proposed
execution of a Sublicense or similar agreement; (ii) SRI shall
have the right to
approve or reject any Sublicense (including the Sublicensee and
the terms of the
Sublicense in advance), which approval will not be unreasonably
withheld (it
being understood that SRI will have the right to reject any
proposed Sublicense
if, in SRI's reasonable judgment, the terms of such Sublicense
are likely to
deprive SRI of the economic benefits provided by this
Agreement), (iii) all
Sublicenses entered into by Bioenvision will conform in all
material respects to
the applicable terms and conditions of this Agreement,
including, if applicable,
the written agreement of Sublicensee to assume all due diligence
and applicable
financial obligations of Bioenvision hereunder (provided that,
notwithstanding
the agreement of a Sublicensee to assume any obligations of
Bioenvision,
Bioenvision will remain obligated with respect to any and all
such obligations);
and (iv) Bioenvision will notify SRI of any material breach of a
Sublicense by a
Sublicensee and to the extent the material breach is not cured
within sixty (60)
days after notice thereof by Bioenvision, Bioenvision will
terminate the
Sublicense granted to such Sublicensee.
(b) If this Agreement is terminated for any reason, other than
by
Bioenvision as a result of a breach by SRI, SRI will have the
right to assume
any Sublicense so long as it is capable of fulfilling
Bioenvision's obligations
under such Sublicense. In the event that SRI elects to assume
the Sublicense,
such Sublicense will remain in full force and effect as long as
the Sublicensee
performs the obligations of the Sublicense, and Bioenvision will
execute an
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Rule 24b-2 of the Exchange Act of 1934. Material filed
separately with the
Securities and Exchange Commission.
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assignment of the Agreement to such Sublicensee. In the event
that SRI is not
capable of fulfilling Bioenvision's obligations under the
Sublicense or in the
event that the Sublicensee is in breach or default of the
Sublicense, SRI shall
be entitled to terminate the Sublicense.
3. DEVELOPMENT, REGULATORY APPROVAL, AND COMMERCIALIZATION
3.1 Development. Bioenvision will be responsible for the
development of
the Products in the Asian Territories, including all expenses
associated with
Bioenvision's development activities. Bioenvision may perform
its development
activities through one or more subcontractors or Sublicensees.
Bioenvision will
keep SRI informed as to the status of the development efforts.
SRI will disclose
to Bioenvision all SRI Licensed IP relevant to the development
of the Products
which Bioenvision is not already aware of and otherwise provide
Bioenvision with
any reasonable technical assistance related to the use of the
SRI Licensed IP
requested by Bioenvision. Bioenvision will conduct its
development activities in
compliance with the requirements of applicable laws and
regulations in all
material respects.
3.2 Regulatory Approvals. Bioenvision will be responsible for
obtaining
Regulatory Approvals of the Products in the Asian Territories,
including all
expenses associated with Bioenvision's efforts to obtain such
Regulatory
Approvals. Bioenvision may obtain Regulatory Approvals for the
Products through
one or more subcontractors. Bioenvision will keep SRI informed
as to the status
of Regulatory Approvals for the Products. SRI will provide
Bioenvision, at
Bioenvision's expense, with any assistance reasonably requested
by Bioenvision
in connection with Bioenvision's efforts to obtain such
Regulatory Approvals.
SRI shall not take any action that will or could reasonably be
expected to
impair Bioenvision's efforts to obtain Regulatory Approvals for
the Products.
3.3 Commercialization. Bioenvision will prepare a business
development
plan at least annually outlining its strategy for
commercializing the Products
within the Asian Territories and share this plan with and
provide a copy of the
plan (together with all amendments and updates) to SRI.
Bioenvision will use
Commercially Reasonable Efforts to implement and execute upon
such business
plan. From time to time during the term of this Agreement,
Bioenvision will
provide SRI updates to this plan and its commercialization
efforts thereunder.
3.4 Quarterly Updates. Until such time as Bioenvision has
obtained
Regulatory Approval and achieved commercial sales of the Product
in Japan,
Bioenvision will initiate and conduct regular quarterly meetings
to update SRI
on its efforts and progress for obtaining such approval and for
achieving
commercial sales of the Product in Japan. Such meetings may be
held either in
person or by teleconference and must be held during each
calendar quarter,
unless SRI waives the requirements for such meeting for a
particular quarter.
Bioenvision agrees to provide to SRI, not less than ten (10)
days prior to the
date of each quarterly meeting, written notice of the time and
location (if
applicable) of the meeting and a written report containing,
among other things,
a summary of the status of the regulatory process and
requirements, a summary of
any collaboration with Third Parties regarding Regulatory
Approvals,
sublicensing
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Rule 24b-2 of the Exchange Act of 1934. Material filed
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Securities and Exchange Commission.
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activities, distribution of the Product, and any other factors
that are material
to Bioenvision's development efforts and Regulatory Approval
efforts.
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treatment under
Rule 24b-2 of the Exchange Act of 1934. Material filed
separately with the
Securities and Exchange Commission.
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4. FEES AND PAYMENTS.
4.1 Upfront License Fee. In consideration of the license
granted
herein, Bioenvision will pay to SRI an upfront license fee in
the amount of four
million dollars ($4,000,000) payable in three (3) installments
as follows: (i)
two million five hundred thousand dollars ($2,500,000) will be
payable within
two (2) business days after the Effective Date; (ii)
[****]dollars ($[****])
will be payable on or before December 31, 2006; and (iii) the
remaining
[****]dollars ($[****]) will be payable on or before December
31, 2007. For
purposes of calculating amounts due to SRI under Section 4.4
below, the initial
installment payment of two million five hundred thousand dollars
($2,500,000)
paid under this Section 4.1 will be deducted from Sublicense
Revenues.
4.2 Milestone Payment. Within five (5) business days after
Bioenvision
or its Sublicensee obtains Regulatory Approval for Clofarabine
in any country
within the Asian Territories, Bioenvision will pay to SRI one
million dollars
($1,000,000). This is a one time payment for the first
Regulatory Approval of
Clofarabine within the Asian Territories and will not be a
recurring payment for
each additional Regulatory Approval for Clofarabine in any other
country within
the Asian Territories or for Regulatory Approval of any other
Product within the
Asian Territories.
4.3 Royalties.
(a) Bioenvision will pay to SRI a royalty in the amount of
[****]%
of Net Sales Revenue for all Products sold by Bioenvision and
its Affiliates to
Third Parties within any country in the Asian Territories in
which SRI has one
or more Patents claiming the manufacture, use, sale or
importation of the
applicable Product at the time of sale.
(b) Bioenvision will pay to SRI a royalty in the amount of
[****]%
of Net Sales Revenue for all Products sold by Bioenvision and
its Affiliates to
Third Parties within any country in the Asian Territories in
which SRI has no
Patent claiming the manufacture, use, sale or importation of the
applicable
Product at the time of sale (including countries in which SRI's
patent rights
have expired), during the ten year period following the first
commercial sale of
the applicable Product following Regulatory Approval in the
applicable country.
(c) Bioenvision shall provide SRI with written notice in the
event
that, at any time after the Effective Date, Bioenvision or its
Sublicensee
becomes legally required to obtain a license from any Third
Party under any
patent covering the applicable Product as a composition of
matter or method of
use (i.e., this reduction shall not apply, for example, with
respect to Third
Party patents covering a formulation, manufacturing process or
drug delivery
technology) in order to import, manufacture, use or sell a
Product in the Asian
Territories, and if Bioenvision (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 Product, and the infringement
of such patent
cannot reasonably be avoided by Bioenvision (or its
Sublicensee), or if
Bioenvision (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
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Securities and Exchange Commission.
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reasonably be avoided). Such notice will describe the nature of
the Third Party
patents, the nature and background of the claim and legal
requirements and the
amount(s) required to be paid. SRI will have the right,
exercisable within
forty-five (45) days of the date it receives such written
notice, to pay the
required amounts and/or obtain the related license(s) or other
rights to such
Third Party patent. In the event that SRI does not exercise such
rights, then
the amount of Bioenvision's royalty obligations under this
Section 4.3 may be
reduced by the aggregate amount of such payments to such Third
Party, not to
exceed fifty percent (50%) of the amount of such license fees,
milestone
payments or royalties paid to such Third Party; provided
however, that the
royalties payable under this Section shall not be reduced in any
such event
below fifty percent (50%) of the amounts set forth herein; and
provided further,
that if any of such amount cannot be used as a reduction in a
given royalty
period due to the preceding proviso, such unused amount may be
carried forward
for use in a future royalty period. Bioenvision (or its
Sublicensee) shall use
its commercially reasonable efforts to minimize the amount of
any of the
foregoing payments owed to Third Parties. Notwithstanding the
foregoing, the
Parties agree to work together to attempt to avoid and/or
resolve such potential
license requirement(s) prior to the time that payments relating
thereto may be
required.
4.4 Sublicense Revenue. Bioenvision will pay SRI
[****]percent
([****]%) of all Sublicense Revenue received by Bioenvision
(subject to the
reduction provided for in Section 4.1 above).
4.5 Maintenance Fees. In order to maintain the exclusive
license
granted under Section 2.1, on February 15 of each calendar year
following the
calendar year in question, Bioenvision will pay SRI the
maintenance fees
provided below (the "Maintenance Fees"); provided, however, that
any and all
royalties paid to SRI under Section 4.3 and Sublicense payments
paid to SRI
under Section 4.4 during such prior calendar year shall be
credited against each
such Maintenance Fee for such calendar year
(a) The following Maintenance Fees will apply in calendar
years
within which (i) there are no Regulatory Approvals for the
Product in any
country within the Asian Territories, (ii) any and all
Regulatory Approvals for
the Product within Asian Territories are pending or (iii) only a
Regulatory
Approval for a pediatric oncology indication has been obtained
in any country
within the Asian Territories:
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Calendar Year Maintenance Fee
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Year 1 [****]
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Year 2 [****]
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Year 3 [****]
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Year 4 [****]
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Securities and Exchange Commission.
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Year 5 and thereafter [****]
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(b) Beginning on the earlier of (i) the date on which the
Product
has obtained Regulatory Approval for one or more adult disease
indications in
any country within the Asian Territories, or (ii) the Sublicense
or sale of
Bioenvision's rights to the Product under this Agreement, the
following
Maintenance Fees will apply:
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alendar Year Maintenance Fee
-----------------------------------------------------------
ear 1 [****]
-----------------------------------------------------------
ear 2 [****]
-----------------------------------------------------------
ear 3 [****]
-----------------------------------------------------------
ear 4 [****]
-----------------------------------------------------------
ear 5 and thereafter [****]
-----------------------------------------------------------
(c) For the avoidance of doubt:
(i) For any Maintenance Fee payable by Bioenvision under
Section 4.5(a) or Section 4.5(b) for a calendar year,
Bioenvision
may deduct all royalties paid to SRI under Section 4.3 and
any
Sublicense revenue paid to SRI under Section 4.4 during that
calendar year, and pay the remaining balance of the
Maintenance
Fee;
(ii) Nothing herein shall be construed as a cap or limit on
the
amount of royalties payable to SRI under Section 4.3 or
Sublicense
revenues payable to SRI under Section 4.4;
(iii) The payment obligations of Bioenvision under Section
4.5(a) and Section 4.5(b) are mutually exclusive, and the
payments
required under Section 4.5(b) are not additive with the
payment
obligations set forth in Section 4.5(a). Thus, if during any
calendar year Bioenvision is required to make the payments
set
forth in Section 4.5(b), Bioenvision has no further payment
obligations under Section 4.5(a); and
(iv) All amounts payable by Bioenvision under this Agreement
are separate from and expressly in addition to any sums due
and
owing and arising out of other agreements, including, but
not
limited to, the Co-Development Agreement.
11
**** Material omitted pursuant to a request for confidential
treatment under
Rule 24b-2 of the Exchange Act of 1934. Material filed
separately with the
Securities and Exchange Commission.
<PAGE>
5. PAYMENT; RECORDS; AUDITS
5.1 Payment; Reports. Royalty payments and reports for the sale
of the
Products shall be calculated, documented and reported for each
calendar quarter.
All royalty payments due to SRI shall be paid within thirty
(30)
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