Common use of Research and Development Payments Clause in Contracts

Research and Development Payments. (a) Subject to the terms and conditions set forth in this Section 8.4, Takeda agrees to pay BioNumerik up to the following maximum annual Research and Development Payments in the following calendar years to develop the Product for the Territory: 2005 2006 2007 2008 2009 Total ----------------- ------------------- ----------- -------------- -------------- ------------------ Thirty million US Thirty-five million Thirty-five Thirty million Eight million One hundred dollars (US US dollars million US US dollars (US US dollars (US thirty-eight $30,000,000) (US$35,000,000) dollars (US $30,000,000) $8,000,000) million US dollars $35,000,000) (US $138,000,000) (b) Within [**] after April 1st of each year, beginning with calendar 2005 and ending with calendar 2009, Takeda will pay BioNumerik in cash the first one-half of the annual Research and Development Payments for such year. For clarity and example, Takeda will pay BioNumerik fifteen million US dollars within [**] after April 1, 2005. (c) Takeda will satisfy its obligation to pay the remaining one-half of annual Research and Development Payments not otherwise paid pursuant to subsection (b) above by purchasing for cash, during each such year, Common Shares as follows: (i) Takeda will have the right in connection with any public or private offering of securities during such year by BioNumerik primarily for capital-raising purposes (but excluding, without limitation, shares issuable pursuant to an acquisition, another strategic alliance or [**] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS. licensing arrangement and shares issued pursuant to employee, director or consultant benefit plans) to acquire the lesser of (i) 20% of the number of Common Shares to be issued in each such offering; or (ii) the maximum number of Common Shares which, when aggregated with Takeda's existing holdings of Common Shares and Preferred Stock at the time, will result in Takeda's holdings not exceeding 9.99% of BioNumerik's outstanding Common Shares and Preferred Stock (calculated on an as converted basis) (taking such offering into account) exclusive of any Common Shares issuable pursuant to options or warrants granted but unexercised pursuant to BioNumerik's stock option or stock purchase plans or warrants issued but unexercised in connection with preferred stock issuances, at a price per share and otherwise on terms and conditions made available to other bona fide purchasers in any such offering, with such purchase by Takeda to be made concurrently with the closing of such other offering, and (ii) at any time during such calendar year as BioNumerik will elect upon at least one hundred twenty (120) days advance written notice to Takeda, (x) Takeda and BioNumerik will complete a separate sale or sales of Common Shares to Takeda at a price equal to the fair market value of such Common Shares based upon the average closing price or last sale price over the 10-business day period immediately preceding the sale, if BioNumerik is then a reporting company under the U.S. Securities Exchange Act of 1934, as amended (the "Exchange Act")), or, (y) if BioNumerik is not then a reporting company under the Exchange Act, Takeda and BioNumerik may agree upon a separate sale or sales of Common Shares to Takeda at such fair market value price as may be mutually agreed by BioNumerik and Takeda. If, within sixty (60) days after commencement of efforts by BioNumerik and Takeda to agree upon a fair market value price for Common Shares in accordance with the immediately preceding sentence, the Parties have been unable to so agree, then either Party, upon notice to the other Party, may elect to have the fair market value price determined as follows: (A) For a period of twenty (20) days after receipt of such notice, the Parties will attempt to agree upon an investment banking firm to determine the fair market value price for Common Shares and, if the Parties cannot agree upon an investment banking firm to make such determination within such period, then, with forty (40) days after receipt of the notice referenced above, each Party, by notice to the other Party, will name one internationally recognized investment banking firm not otherwise associated or doing business with such Party and such two investment banking firms will mutually select a third internationally recognized investment banking firm, which will then determine the fair market value price for Common Shares; and (B) Each Party may provide the investment banking firm selected to determine the fair market price value for Common Shares such materials and other written information, with copies to the other Party, as such Party believes relevant to such determination within ten (10) business days after such firm's selection. The investment banking firm will determine a fair market value price for Common Shares within sixty (60) days after its selection. Once the fair market value price for Common Shares has been determined by the investment banking firm, as provided above, the investment banking firm will notify both Parties of such value in writing, and the corresponding purchase of Common Shares pursuant to this Section 8.4 will be closed within thirty (30) days of such notification. The decision of the investment banking firm will be final and binding on the Parties. All costs and fees incurred by the investment banking firm(s) in connection with the procedures described above will be borne equally by the Parties. In addition, with respect to purchases of the Common Shares in private offerings only, as a condition to each such purchase, Takeda and BioNumerik will execute and deliver, and the purchase and sale of the Common Shares will be made in accordance with, a Common Stock Purchase Agreement substantially in the form of attached Exhibit D. All Common Shares purchased by Takeda under this subsection (c) will be subject to the Registration Rights Agreement. (d) BioNumerik will have the right, in its sole discretion, in any particular calendar year, not to sell some or all of the Common Shares relating to such year to Takeda pursuant to clause (ii) of subsection (c); provided, however, that BioNumerik will have no such right to the extent that it initiates the procedures to select an investment banking firm to determine the fair market value price in accordance with Section 8.4(c) above with respect to the Common Shares subject to such valuation procedures. If, for any reason, BioNumerik is unable or unwilling to sell Common Shares to Takeda or Takeda is otherwise limited under this Section 8.4 from acquiring Common Shares, in either case in an amount sufficient for Takeda to satisfy its entire Research and Development funding obligation hereunder for any calendar year, then upon written notice to Takeda prior to the end of such calendar year, BioNumerik may elect to carry over such Takeda purchase commitment (to the extent of the Research and Development Payment amount for such calendar year that is not paid during such year pursuant to Section 8.4(c), being referred to as the "Carryover Amount", expressed in U.S. dollars) to the immediately following calendar year (together with Takeda's other Common Share purchase commitments for such following year), but if, in such following calendar year, BioNumerik is unable or unwilling to sell Common Shares to Takeda or if Takeda is otherwise limited under this Section 8.4 from acquiring Common Shares, in either case in such following year in an amount sufficient to satisfy such Carryover Amount (and all shares sold by BioNumerik to Takeda in such following year will be first allocated to satisfy the Carryover Amount) then Takeda's obligation to purchase any additional Common Shares pursuant to subsection (c) for the immediately preceding calendar year to which such Carryover Amount relates will terminate. BioNumerik, in its discretion, may sell Common Shares to Takeda to allow the satisfaction of some, but not all, of Takeda's funding commitment amount, in which event any remaining unsatisfied commitment amount would be carried over subject to the limitations described above. Similarly, to the extent a delay in the sale of Common Shares is agreed to by the Parties pursuant to Section 8.4(f) to enable Takeda to avoid a potential liability under Section 16(b) of the Exchange Act, the amount of any such deferred Research and Development Payment will be treated as a Carryover Amount to such following calendar year. To the extent any unpurchased amount of Common Shares in any calendar year does not become a Carryover Amount for the following year in accordance with the terms of the immediately preceding sentences, then Takeda's obligation to purchase such amount shall terminate. If, for any reason, BioNumerik is unable or unwilling to sell Common Shares to Takeda or Takeda is otherwise limited under this Section 8.4 from acquiring Common Shares, then in either case the costs for the clinical and non-clinical development of the Product in the Field for the Territory in accordance with the Development Plan exceeding Takeda's payment of half of the maximum annual Research and Development Payment pursuant to Section 8.4(b) will be borne solely by BioNumerik, but subject to the provisions of Section 8.4(h). (e) Anything else in this Agreement to the contrary notwithstanding, except as otherwise agreed by BioNumerik, Takeda will not purchase Common Shares pursuant to this Section 8.4 to the extent that Takeda's ownership of BioNumerik Common Shares and Preferred Stock then actually outstanding exceeds, or as a result of such purchase would exceed, 9.99% of BioNumerik's then outstanding Common Shares and Preferred Stock (calculated on an as converted basis) exclusive of any Common Shares issuable pursuant to options or warrants granted but unexercised pursuant to BioNumerik's stock option or stock purchase plans or warrants issued but unexercised in connection with certain other previous preferred stock issuances; provided however, that BioNumerik and Takeda will use reasonable efforts to cooperate with one another, pursuant to the provisions of the Registration Rights Agreement and otherwise, so that Takeda will be afforded the opportunity not less often than once every two years through the calendar year 2010 to effectuate in an orderly fashion sales of Common Shares held by Takeda in the principal U.S. securities markets, if any, in which BioNumerik's Common Shares are then traded (including, without limitation, in an underwritten public offering, which may involve, at Takeda's election, selling efforts by BioNumerik's management team; in negotiated block trades arranged by BioNumerik's or Takeda's principal investment banking firms; or in sales pursuant to Rule 144 of the Securities Act), and in the amount of up to 50% of Takeda's then-current holdings of Common Shares and Preferred Stock (calculated on an as converted basis); provided, however, if the Parties successfully arrange any such sale opportunity and any Common Shares (including Common Shares issuable upon conversion of any Preferred Stock that can be converted) can then be sold by Takeda at a price per share in excess of the acquisition price for such Common Shares (or the acquisition price for the underlying Preferred Stock), Takeda will at that time sell all of such Common Shares to the extent that the number of Common Shares to be sold is equal to the greater of (i) 25% of Takeda's holdings of Common Shares and Preferred Stock (calculated on an as converted basis) (provided that 18 months or more will have elapsed since Takeda was last required to sell or dispose of Common Shares based upon such 25% standard); and (ii) the minimum number of Common Shares which, when aggregated with reasonably foreseeable Common Share purchase obligations under Section 8.4(c) for such calendar year, will result in Takeda's holdings not exceeding 9.99% of BioNumerik's then outstanding Common Shares and Preferred Stock (calculated on an as converted basis) exclusive of any Common Shares issuable pursuant to options or warrants granted but unexercised pursuant to BioNumerik's stock option or stock purchase plans or warrants issued but unexercised in connection with certain other previous preferred stock issuances. Takeda, in its discretion, may also sell additional Common Shares in such transaction up to the 50% limitation described in the prior sentence of this Section 8.4(e). Anything in this Section 8.4(e) to the contrary notwithstanding, Takeda will have no restrictions on sale of Common Shares hereunder in the event of (i) any sale of all or substantially all of the assets of BioNumerik, or any sale or related series of sales of shares of BioNumerik's capital stock by any holders thereof or any merger, consolidation or combination to which BioNumerik is a party and which results in the beneficial owners of BioNumerik's Common Shares as of the date immediately preceding such transaction or related series of transactions no longer beneficially owing the capital stock of BioNumerik (or any new or surviving corporation with which BioNumerik merges, consolidates or combines) possessing the voting power (under ordinary circumstances) to elect a majority of the board of directors, (ii) any sale or other disposition by ▇▇. ▇▇▇▇ ▇▇▇▇▇▇▇▇, in one or a series of related transactions, of 50% or more of the Common Shares beneficially owned by ▇▇. ▇▇▇▇ ▇▇▇▇▇▇▇▇ over any two-year period, or (iii) the termination of this Agreement. However, Takeda hereby agrees that Takeda will not sell or otherwise dispose of any shares of the Preferred Stock (though Takeda may convert the Preferred Stock and sell the underlying Common Shares in accordance with the provisions hereof) except (i) upon or following the occurrence of any of the events specified in clauses (i), (ii) or (iii) of the preceding sentence and (ii) for transfers to Affiliates of Takeda or to a successor to substantially all of the business or assets of Takeda in a transfer permitted under Section 11.1 (which in either case undertakes in connection with such transfer to be similarly bound to comply with this undertaking). (f) Anything in this Section 8.4 to the contrary notwithstanding, Takeda will have no obligation to purchase or sell the Common Shares or otherwise take any other action to the extent that any such purchase, sale, or other action would violate the Securities Act, the Exchange Act, or any other applicable federal or state securities law, or result in any liability to Takeda under the Securities Act, the Exchange Act, or any other applicable federal or state securities law. To the extent that Takeda is at any time deemed a holder of 10% or more of the shares of BioNumerik's outstanding common stock or is otherwise a person subject to the reporting and short-swing profit provisions of Section 16 of the Exchange Act, both Parties will cooperate, to the extent reasonably necessary as identified by Takeda, to arrange the timing of Takeda sales activity pursuant to Section 8.4(e) and Takeda purchases from BioNumerik pursuant to Sections 8.4(c) and 8.4(d) so as accomplish the objectives of not creating liability for Takeda under Section 16(b) of the Exchange Act and positioning Takeda to make purchases contemplated by Section 8.4(c) to fund Research and Development Payments. (g) Research and Development Payments made by Takeda pursuant to Section 8.4(b) will be allocated solely for the clinical and non-clinical development of the Product in the Field for the Territory in accordance with the Development Plan. Any portion of a Research and Development Payment received for a particular calendar year that is not spent in that particular calendar year may be deferred, as reasonably determined by BioNumerik, to be used in the following calendar year. BioNumerik will provide to Takeda a quarterly accounting regarding the costs for such development within thirty (30) days following the end of each calendar quarter of the Fiscal Year. BioNumerik will send Takeda a written report setting forth the reasonable costs that it incurred for the clinical and non-clinical development. Each cost will be described and the date on which the cost was paid will be included.

Research and Development Payments. (a) Subject to the terms and conditions set forth in this Section 8.4, Takeda agrees to pay BioNumerik up to the following maximum annual Research and Development Payments in the following calendar years to develop the Product for the Territory: 2005 2006 2007 2008 2009 Total ----------------- ------------------- ----------- -------------- -------------- ------------------ Thirty million US Thirty-five million Thirty-five Thirty million Eight million One hundred dollars (US US dollars million US US dollars (US US dollars (US thirty-eight $30,000,000) (US$35,000,000) dollars (US $30,000,000) $8,000,000) million US dollars $35,000,000) (US $138,000,000) (b) Within [**] after April 1st of each year, beginning with calendar 2005 and ending with calendar 2009, Takeda will pay BioNumerik in cash the first one-half of the annual Research and Development Payments for such year. For clarity and example, Takeda will pay BioNumerik fifteen million US dollars within [**] after April 1, 2005. (c) Takeda will satisfy its obligation to pay the remaining one-half of annual Research and Development Payments not otherwise paid pursuant to subsection (b) above by purchasing for cash, during each such year, Common Shares as follows: (i) Takeda will have the right in connection with any public or private offering of securities during such year by BioNumerik primarily for capital-raising purposes (but excluding, without limitation, shares issuable pursuant to an acquisition, another strategic alliance or [**] CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION. CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS. 35 licensing arrangement and shares issued pursuant to employee, director or consultant benefit plans) to acquire the lesser of (i) 20% of the number of Common Shares to be issued in each such offering; or (ii) the maximum number of Common Shares which, when aggregated with Takeda's existing holdings of Common Shares and Preferred Stock at the time, will result in Takeda's holdings not exceeding 9.99% of BioNumerik's outstanding Common Shares and Preferred Stock (calculated on an as converted basis) (taking such offering into account) exclusive of any Common Shares issuable pursuant to options or warrants granted but unexercised pursuant to BioNumerik's stock option or stock purchase plans or warrants issued but unexercised in connection with preferred stock issuances, at a price per share and otherwise on terms and conditions made available to other bona fide purchasers in any such offering, with such purchase by Takeda to be made concurrently with the closing of such other offering, and (ii) at any time during such calendar year as BioNumerik will elect upon at least one hundred twenty (120) days advance written notice to Takeda, (x) Takeda and BioNumerik will complete a separate sale or sales of Common Shares to Takeda at a price equal to the fair market value of such Common Shares based upon the average closing price or last sale price over the 10-business day period immediately preceding the sale, if BioNumerik is then a reporting company under the U.S. Securities Exchange Act of 1934, as amended (the "Exchange Act")), or, (y) if BioNumerik is not then a reporting company under the Exchange Act, Takeda and BioNumerik may agree upon a separate sale or sales of Common Shares to Takeda at such fair market value price as may be mutually agreed by BioNumerik and Takeda. If, within sixty (60) days after commencement of efforts by BioNumerik and Takeda to agree upon a fair market value price for Common Shares in accordance with the 36 immediately preceding sentence, the Parties have been unable to so agree, then either Party, upon notice to the other Party, may elect to have the fair market value price determined as follows: (A) For a period of twenty (20) days after receipt of such notice, the Parties will attempt to agree upon an investment banking firm to determine the fair market value price for Common Shares and, if the Parties cannot agree upon an investment banking firm to make such determination within such period, then, with forty (40) days after receipt of the notice referenced above, each Party, by notice to the other Party, will name one internationally recognized investment banking firm not otherwise associated or doing business with such Party and such two investment banking firms will mutually select a third internationally recognized investment banking firm, which will then determine the fair market value price for Common Shares; and (B) Each Party may provide the investment banking firm selected to determine the fair market price value for Common Shares such materials and other written information, with copies to the other Party, as such Party believes relevant to such determination within ten (10) business days after such firm's selection. The investment banking firm will determine a fair market value price for Common Shares within sixty (60) days after its selection. Once the fair market value price for Common Shares has been determined by the investment banking firm, as provided above, the investment banking firm will notify both Parties of such value in writing, and the corresponding 37 purchase of Common Shares pursuant to this Section 8.4 will be closed within thirty (30) days of such notification. The decision of the investment banking firm will be final and binding on the Parties. All costs and fees incurred by the investment banking firm(s) in connection with the procedures described above will be borne equally by the Parties. In addition, with respect to purchases of the Common Shares in private offerings only, as a condition to each such purchase, Takeda and BioNumerik will execute and deliver, and the purchase and sale of the Common Shares will be made in accordance with, a Common Stock Purchase Agreement substantially in the form of attached Exhibit D. All Common Shares purchased by Takeda under this subsection (c) will be subject to the Registration Rights Agreement. (d) BioNumerik will have the right, in its sole discretion, in any particular calendar year, not to sell some or all of the Common Shares relating to such year to Takeda pursuant to clause (ii) of subsection (c); provided, however, that BioNumerik will have no such right to the extent that it initiates the procedures to select an investment banking firm to determine the fair market value price in accordance with Section 8.4(c) above with respect to the Common Shares subject to such valuation procedures. If, for any reason, BioNumerik is unable or unwilling to sell Common Shares to Takeda or Takeda is otherwise limited under this Section 8.4 from acquiring Common Shares, in either case in an amount sufficient for Takeda to satisfy its entire Research and Development funding obligation hereunder for any calendar year, then upon written notice to Takeda prior to the end of such calendar year, BioNumerik may elect to carry over such Takeda purchase commitment (to the extent of the Research and Development Payment amount for such calendar year that is not paid during such year pursuant to Section 8.4(c), being referred to as the "Carryover Amount", expressed in U.S. dollars) to the immediately following calendar year (together with Takeda's other Common Share purchase commitments for such following year), but if, in such following calendar year, BioNumerik is unable or unwilling to sell Common Shares to Takeda or if Takeda is otherwise limited under this Section 8.4 from acquiring Common Shares, in either case in such following year in an amount sufficient to satisfy such Carryover Amount (and all shares sold by BioNumerik to Takeda in such following year will be first allocated to satisfy the Carryover Amount) then Takeda's obligation to purchase any additional Common Shares pursuant to subsection (c) for the immediately preceding calendar year to which such Carryover Amount relates will terminate. BioNumerik, in its discretion, may sell Common Shares to Takeda to allow the satisfaction of some, but not all, of Takeda's funding commitment amount, in which event any remaining unsatisfied commitment amount would be carried over subject to the limitations described above. Similarly, to the extent a delay in the sale of Common Shares is agreed to by the Parties pursuant to Section 8.4(f) to enable Takeda to avoid a potential liability under Section 16(b) of the Exchange Act, the amount of any such deferred Research and Development Payment will be treated as a Carryover Amount to such following calendar year. To the extent any unpurchased amount of Common Shares in any calendar year does not become a Carryover Amount for the following year in accordance with the terms of the immediately preceding sentences, then Takeda's obligation to purchase such amount shall terminate. If, for any reason, BioNumerik is unable or unwilling to sell Common Shares to Takeda or Takeda is otherwise limited under this Section 8.4 from acquiring Common Shares, then in either case the costs for the clinical and non-clinical development of the Product in the Field for the Territory in accordance with the Development Plan exceeding Takeda's payment of half of the maximum annual Research and Development Payment pursuant to Section 8.4(b) will be borne solely by BioNumerik, but subject to the provisions of Section 8.4(h). (e) Anything else in this Agreement to the contrary notwithstanding, except as otherwise agreed by BioNumerik, Takeda will not purchase Common Shares pursuant to this Section 8.4 to the extent that Takeda's ownership of BioNumerik Common Shares and Preferred Stock then actually outstanding exceeds, or as a result of such purchase would exceed, 9.99% of BioNumerik's then outstanding Common Shares and Preferred Stock (calculated on an as converted basis) exclusive of any Common Shares issuable pursuant to options or warrants granted but unexercised pursuant to BioNumerik's stock option or stock purchase plans or warrants issued but unexercised in connection with certain other previous preferred stock issuances; provided however, that BioNumerik and Takeda will use reasonable efforts to cooperate with one another, pursuant to the provisions of the Registration Rights Agreement and otherwise, so that Takeda will be afforded the opportunity not less often than once every two 39 years through the calendar year 2010 to effectuate in an orderly fashion sales of Common Shares held by Takeda in the principal U.S. securities markets, if any, in which BioNumerik's Common Shares are then traded (including, without limitation, in an underwritten public offering, which may involve, at Takeda's election, selling efforts by BioNumerik's management team; in negotiated block trades arranged by BioNumerik's or Takeda's principal investment banking firms; or in sales pursuant to Rule 144 of the Securities Act), and in the amount of up to 50% of Takeda's then-current holdings of Common Shares and Preferred Stock (calculated on an as converted basis); provided, however, if the Parties successfully arrange any such sale opportunity and any Common Shares (including Common Shares issuable upon conversion of any Preferred Stock that can be converted) can then be sold by Takeda at a price per share in excess of the acquisition price for such Common Shares (or the acquisition price for the underlying Preferred Stock), Takeda will at that time sell all of such Common Shares to the extent that the number of Common Shares to be sold is equal to the greater of (i) 25% of Takeda's holdings of Common Shares and Preferred Stock (calculated on an as converted basis) (provided that 18 months or more will have elapsed since Takeda was last required to sell or dispose of Common Shares based upon such 25% standard); and (ii) the minimum number of Common Shares which, when aggregated with reasonably foreseeable Common Share purchase obligations under Section 8.4(c) for such calendar year, will result in Takeda's holdings not exceeding 9.99% of BioNumerik's then outstanding Common Shares and Preferred Stock (calculated on an as converted basis) exclusive of any Common Shares issuable pursuant to options or warrants granted but unexercised pursuant to BioNumerik's stock option or stock purchase plans or warrants issued but unexercised in connection with certain other previous preferred stock issuances. Takeda, in its discretion, may also sell additional Common Shares in such transaction up to the 50% limitation described in the prior sentence of this Section 8.4(e). Anything in this Section 8.4(e) to the contrary notwithstanding, Takeda will have no restrictions on sale of Common Shares hereunder in the event of (i) any sale of all or substantially all of the assets of BioNumerik, or any sale or related series of sales of shares of BioNumerik's capital stock by any holders thereof or any merger, consolidation or combination to which BioNumerik is a party and which results in the beneficial owners of BioNumerik's Common Shares as of the date immediately preceding such transaction or related series of transactions no longer beneficially owing the capital stock of BioNumerik (or any new or surviving corporation with which BioNumerik merges, consolidates or combines) possessing the voting power (under ordinary circumstances) to elect a majority of the board of directors, (ii) any sale or other disposition by ▇▇. ▇▇▇▇ ▇▇▇▇▇▇▇▇, in one or a series of related transactions, of 50% or more of the Common Shares beneficially owned by ▇▇. ▇▇▇▇ ▇▇▇▇▇▇▇▇ over any two-year period, or (iii) the termination of this Agreement. However, Takeda hereby agrees that Takeda will not sell or otherwise dispose of any shares of the Preferred Stock (though Takeda may convert the Preferred Stock and sell the underlying Common Shares in accordance with the provisions hereof) except (i) upon or following the occurrence of any of the events specified in clauses (i), (ii) or (iii) of the preceding sentence and (ii) for transfers to Affiliates of Takeda or to a successor to substantially all of the business or assets of Takeda in a transfer permitted under Section 11.1 (which in either case undertakes in connection with such transfer to be similarly bound to comply with this undertaking). (f) Anything in this Section 8.4 to the contrary notwithstanding, Takeda will have no obligation to purchase or sell the Common Shares or otherwise take any other action to the extent that any such purchase, sale, or other action would violate the Securities Act, the Exchange Act, or any other applicable federal or state securities law, or result in any liability to Takeda under the Securities Act, the Exchange Act, or any other applicable federal or state securities law. To the extent that Takeda is at any time deemed a holder of 10% or more of the shares of BioNumerik's outstanding common stock or is otherwise a person subject to the reporting and short-swing profit provisions of Section 16 of the Exchange Act, both Parties will cooperate, to the extent reasonably necessary as identified by Takeda, to arrange the timing of Takeda sales activity pursuant to Section 8.4(e) and Takeda purchases from BioNumerik pursuant to Sections 8.4(c) and 8.4(d) so as accomplish the objectives of not creating liability for Takeda under Section 16(b) of the Exchange Act and positioning Takeda to make purchases contemplated by Section 8.4(c) to fund Research and Development Payments. (g) Research and Development Payments made by Takeda pursuant to Section 8.4(b) will be allocated solely for the clinical and non-clinical development of the Product in the Field for the Territory in accordance with the Development Plan. Any portion of a Research and Development Payment received for a particular calendar year that is not spent in that particular calendar year may be deferred, as reasonably determined by BioNumerik, to be used in the 41 following calendar year. BioNumerik will provide to Takeda a quarterly accounting regarding the costs for such development within thirty (30) days following the end of each calendar quarter of the Fiscal Year. BioNumerik will send Takeda a written report setting forth the reasonable costs that it incurred for the clinical and non-clinical development. Each cost will be described and the date on which the cost was paid will be included.wi