EXHIBIT 10.35
CONFIDENTIAL
Execution Copy
CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR THE REDACTED PORTIONS OF THIS
EXHIBIT, AND SUCH CONFIDENTIAL PORTIONS HAVE BEEN OMITTED AND FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION.
STRATEGIC ALLIANCE AGREEMENT
By and Between
ATHERSYS, INC.
and
ANGIOTECH PHARMACEUTICALS, INC.
Effective as of May 5, 2006

 

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TABLE OF CONTENTS

                      Page        
ARTICLE I. DEFINITIONS
    2          
 
               
ARTICLE II. CERTAIN TRANSACTION COMPONENTS
    11          
 
               
2.1 Concurrent Execution.
    11            
2.2 Right of First Negotiation for Non-Licensed Cardiovascular Indications.
    11            
2.3 Additional Investment.
    13            
2.4 Phase I Milestone Fee.
    13            
2.5 Exclusivity.
    14            
2.6 Retained Rights.
    14            
2.7 Costs Borne by Each Party.
    15            
2.8 Certain Restrictions on Athersys’ Activities Outside of Cardiovascular
Indications.
    15            
 
               
ARTICLE III. JOINT STEERING COMMITTEE
    15          
 
               
3.1 Joint Steering Committee.
    15            
3.2 Subcommittees.
    15            
3.3 Chairperson.
    15            
3.4 JSC Meetings.
    15            
3.5 Responsibilities of the Joint Steering Committee.
    16            
3.6 Voting; Decision-Making.
    19            
3.7 JSC Disputes.
    19          
 
               
ARTICLE IV. PRE-CLINICAL DEVELOPMENT
    20          
 
               
4.1 Existing Pre–Clinical Development Programs.
    20            
4.2 Costs for Existing Pre-Clinical Development Programs.
    21            
4.3 New Pre-Clinical Development Programs.
    21          
 
               
ARTICLE V. CLINICAL DEVELOPMENT
    21          
 
               
5.1 Proposed Clinical Plans; Clinical Development Plans.
    21            
5.2 Athersys Responsibilities.
    21            
5.3 Angiotech Responsibilities.
    22            
5.4 Subcontracting.
    22          

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TABLE OF CONTENTS
(continued)

              Page
ARTICLE VI. OPT-OUT RIGHTS
    23  
 
       
6.1 Opt-Out Rights.
    23    
6.2 Development Updates.
    25    
6.3 Failure to Exercise Sole Development Option.
    25    
6.4 Diligence Requirement.
    25  
 
       
ARTICLE VII. COSTS, PAYMENTS AND FINANCIAL RECORD KEEPING
    26  
 
       
7.1 Clinical Development Costs.
    26    
7.2 Development Costs Quarterly Reconciliation.
    26    
7.3 Milestone Payments.
    27    
7.4 Profit Sharing.
    27    
7.5 Royalties on Sole Development Products.
    27    
7.6 Calculation and Payment of Royalties.
    29    
7.7 Sharing of Sole Development Income.
    30    
7.8 Financial Record Keeping.
    31    
7.9 Audits.
    31    
7.10 Late Payments.
    31  
 
       
ARTICLE VIII. COMMERCIALIZATION
    32  
 
       
8.1 Commercialization of Cell Therapy Products.
    32  
 
       
ARTICLE IX. MANUFACTURE AND SUPPLY OF CLINICAL DEVELOPMENT CANDIDATES AND CELL
THERAPY PRODUCTS
    32  
 
       
9.1 Athersys’ Manufacturing Obligation.
    32    
9.2 Manufacturing Costs.
    33    
9.3 Manufacturing Compliance.
    33    
9.4 Product Conformity.
    33    
9.5 Ordering; Forecasting; Acceptance and Rejection.
    33    
9.6 Inspection.
    34    
9.7 Supply Disruption.
    34    
9.8 Back-Up Supplier.
    34  

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TABLE OF CONTENTS
(continued)

              Page
ARTICLE X. REGULATORY MATTERS
    35  
 
       
10.1 Ownership of Regulatory Documentation and Reference Rights; Regulatory
Strategy.
    35    
10.2 Regulatory Communications.
    35    
10.3 Other Regulatory Responsibilities.
    36    
10.4 Cell Therapy Product Complaints and Recalls.
    36    
10.5 Compliance With All Applicable Laws and Regulations; Cooperation.
    36  
 
       
ARTICLE XI. INTELLECTUAL PROPERTY
    37  
 
       
11.1 Existing Intellectual Property Rights Retained.
    37    
11.2 Ownership Of New Intellectual Property.
    37  
 
       
ARTICLE XII. CLINICAL PROGRAM RECORD KEEPING
    37  
 
       
12.1 Scientific, Patent and Regulatory Records.
    37    
12.2 Review of Records.
    37    
12.3 Policies For Records.
    38  
 
       
ARTICLE XIII. CONFIDENTIAL INFORMATION
    38  
 
       
13.1 Confidential Information.
    38    
13.2 Confidentiality Obligations.
    38    
13.3 Permitted Disclosures.
    39    
13.4 Publication.
    41  
 
       
ARTICLE XIV. REPRESENTATIONS AND WARRANTIES
    41  
 
       
14.1 Authority.
    41    
14.2 No Conflicts.
    41    
14.3 Additional Representations and Warranties of Athersys.
    42    
14.4 Additional Covenants of Athersys.
    44    
14.5 Additional Covenants of Angiotech.
    46    
14.6 Disclaimer Of Warranties.
    47  
 
       
ARTICLE XV. INDEMNIFICATION AND INSURANCE
    47  
 
       
15.1 Indemnification By Athersys.
    47    
15.2 Indemnification By Angiotech.
    48    
15.3 Insurance.
    49  

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TABLE OF CONTENTS
(continued)

              Page
ARTICLE XVI. TERM AND TERMINATION
    49  
 
       
16.1 Term.
    49    
16.2 Termination.
    49    
16.3 Effects of Termination.
    52    
16.4 Survival Of Obligations.
    53  
 
       
ARTICLE XVII. DISPUTE RESOLUTION
    53  
 
       
17.1 Dispute Resolution Process.
    53    
17.2 Injunctive Relief.
    54  
 
       
ARTICLE XVIII. MISCELLANEOUS PROVISIONS
    55  
 
       
18.1 Governing Law.
    55    
18.2 Assignment.
    55    
18.3 Compliance With Laws.
    55    
18.4 Further Assurances.
    55    
18.5 Severability.
    55    
18.6 Waivers And Amendments; Preservation Of Remedies.
    56    
18.7 Headings.
    56    
18.8 Counterparts.
    56    
18.9 Successors.
    56    
18.10 Notices.
    56    
18.11 No Consequential Damages.
    57    
18.12 Independent Contractor.
    57    
18.13 Complete Agreement.
    57  

SCHEDULES
Schedule 1.13
Schedule 1.14
Schedule 1.33
Schedule 1.45
Schedule 2.2
Schedule 4.1
Schedule 7.3
Schedule 7.4
Schedule 14.3(b)
Schedule 14.3(g)
 - iv -

 

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TABLE OF CONTENTS
(continued)

              Page
Schedule 14.3(l)
       
 
       
EXHIBITS
       
Exhibit A – Note Purchase Agreement
       
Exhibit B – License Agreement
       
Exhibit C – Sublicense Agreement
       

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STRATEGIC ALLIANCE AGREEMENT
     This Strategic Alliance Agreement (this “Strategic Alliance Agreement”) is
made and entered into as of May 5, 2006 (the “Effective Date”), by and between
Athersys, Inc., a corporation organized under the laws of Delaware and having a
place of business at 3201 Carnegie Avenue, Cleveland, Ohio 44115 (“Athersys”),
and Angiotech Pharmaceuticals, Inc., a corporation organized under the laws of
British Columbia and having a place of business at 1618 Station Street,
Vancouver, British Columbia, Canada V6A 1B6 (“Angiotech”). In this Strategic
Alliance Agreement, Athersys and Angiotech may each be referred to as a “Party”
and collectively as the “Parties.”
RECITALS
     A. Angiotech is engaged in, among other things, design, research,
development, manufacture and commercialization of medical devices and
therapeutic, biopharmaceutical and biosurgery products and biomaterials.
     B. Athersys is engaged in, among other things, the research and development
of therapeutic biologics to treat disease.
     C. Angiotech and Athersys desire to enter into a strategic alliance
relating to the research, development, manufacture, market and commercialization
of clinical development candidates and cell therapy products for the treatment
and/or prophylaxis of certain cardiovascular diseases, disorders and conditions.
     D. Concurrently with the execution of this Strategic Alliance Agreement,
Angiotech and Athersys are entering into that certain Note Purchase Agreement
attached hereto as Exhibit A, pursuant to which Angiotech will loan
$5,000,000.00 to Athersys pursuant to a convertible promissory note (the “Note”)
on the terms and conditions set forth therein (such Note Purchase Agreement and
the exhibits and schedules thereto, the “Purchase Agreement”).
     E. Concurrently with the execution of this Strategic Alliance Agreement,
Angiotech and Athersys are entering into that certain License Agreement attached
hereto as Exhibit B (such License Agreement and the exhibits and schedules
thereto, the “License Agreement”) concerning Athersys’ license to Angiotech of
technology and intellectual property related to certain stem cells and stem cell
therapies.
     F. Concurrently with the execution of this Strategic Alliance Agreement,
Angiotech and Athersys are entering into that certain Sublicense Agreement
attached hereto as Exhibit C (such Sublicense Agreement and the exhibits and
schedules thereto, the “Sublicense Agreement”) concerning Athersys’ sublicense
to Angiotech of technology and intellectual property related to certain stem
cells and stem cell therapies licensed from the University of Minnesota.
     G. This Strategic Alliance Agreement, the License Agreement and the
Sublicense Agreement hereinafter shall be referred to collectively as the
“Transaction Agreements”, and unless expressly specified otherwise in the
License Agreement, the Sublicense Agreement or this

 

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Strategic Alliance Agreement, the terms and conditions of this Strategic
Alliance Agreement shall apply to all Transaction Agreements.
AGREEMENT
     NOW, THEREFORE, in consideration of the covenants and obligations expressed
herein, and intending to be legally bound, the Parties agree as follows:
ARTICLE I.
DEFINITIONS
     1.1 “Affiliate” means, with respect to any Party, any corporation or other
business entity which directly or indirectly through one or more intermediaries
controls, is controlled by, or is under common control with such Party, but only
for so long as the relationship exists. A corporation or other entity shall be
regarded as in control of another corporation or entity (a) if it (or any of its
subsidiaries or parents) beneficially owns, holds or directly or indirectly
controls more than fifty percent (50%) of the voting capital stock (or such
lesser maximum percentage permitted by applicable law considered a control
percentage) or other ownership interest of such other corporation or entity, or
(b) if it possesses, directly or indirectly, the power to direct or cause the
direction of the management and policies of such other corporation or entity, or
(c) if it possesses, directly or indirectly, the power to elect or appoint more
than fifty percent (50%) of the members of the governing body of such other
corporation or entity.
     1.2 “Angiotech” has the meaning ascribed to it in the preamble.
     1.3 “Angiotech Indemnitees” has the meaning ascribed to it in Section 15.1.
     1.4 “Athersys” has the meaning ascribed to it in the preamble.
     1.5 “Athersys Indemnitees” has the meaning ascribed to it in Section 15.2.
     1.6 “Athersys Stem Cells” has the meaning ascribed to it in the License
Agreement.
     1.7 “Athersys Stem Cell Technology” has the meaning ascribed to it in the
License Agreement.
     1.8 “Cardiovascular Indications” means myocardial infarction (whether
chronic (e.g., ischemia) or acute) and peripheral vascular disease (excluding
neurovascular) in humans.
     1.9 “Cells” means the following cells identified, developed, and/or
intended for use for treatment and/or prophylaxis of a disease or condition in
humans: (a) MAPCs; (b) progeny or components of any MAPCs; (c) derivatives of
any of the foregoing (a) or (b); (d) genetically-modified MAPCs; and
(e) Athersys Stem Cells; and including, without limitation, cells or tissues
that are derived from any of the foregoing, as any of the foregoing cells might
be at the time of treatment (i) in their native, undifferentiated

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state, (ii) in a partially or fully pre-differentiated state, (iii) primed for
differentiation (for example, through the introduction of a protein, peptide,
gene, polynucleotide, small molecule or other active pharmaceutical ingredient),
or (iv) in a modified form.
     1.10 “Cell Therapy” means the treatment and/or prophylaxis of a disease or
condition, by regional, local, systemic or other delivery, localization and/or
administration of Cells. The term “Cell Therapy” specifically excludes using
(a) any of the Cells as reagents; (b) any of the Cells for diagnostic
applications or assays; and (c) any of the Cells for drug and drug target
validation screening. The term “Cell Therapy” specifically includes (x)
delivery, localization and/or administration of a protein, peptide, gene,
polynucleotide, small molecule or other active pharmaceutical ingredient (or any
combination of the foregoing) at or near the time of delivery, localization
and/or administration of Cells; (y) delivery, localization and/or administration
of one or more fractions and/or subsets of Cells; and (z) delivery, localization
and/or administration of one or more other cell types at or near the time of
delivery, localization or administration of Cells.
     1.11 “Cell Therapy Product” means a therapeutic and/or prophylactic product
for humans that (a) includes a Cell developed under this Agreement that is
intended for use or used as Cell Therapy for at least one Cardiovascular
Indication, and (b) has obtained Regulatory Approval in a given country or
jurisdiction in the Territory.
     1.12 “Clinical Development Candidate” means (a) a Cell(s) that meets
certain criteria and has certain characteristics that are necessary and
desirable for the submission of an IND for use of such Cell(s) in Cell Therapy
for at least one Cardiovascular Indication (and, therefore, make such Cell(s)
suitable for a Clinical Development Program), as determined by the JSC; or (b) a
Cell(s) that is or has been the subject of an IND for use of such Cell(s) in
Cell Therapy for at least one Cardiovascular Indication. The term “Clinical
Development Candidate” shall expressly exclude Cell Therapy Products.
     1.13 “Clinical Development Costs” means the costs incurred by the Parties
in connection with their respective activities under a Clinical Development
Plan, as such costs are more fully described on Schedule 1.13.
     1.14 “Clinical Development Plan” means, for each Clinical Development
Candidate, a detailed plan that sets forth the responsibilities of, and the
activities to be conducted by, each of the Parties in advancing each such
Clinical Development Candidate to Regulatory Approval for a Cardiovascular
Indication (including a detailed budget corresponding to each such plan). Each
such Clinical Development Plan shall include, without limitation, the following
activities (or their equivalents), to the extent applicable:
          (a) conducting pre-clinical research, pre-clinical development and
other pre-clinical studies that are intended to support clinical development of
a Clinical Development Candidate for a Cardiovascular Indication;

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          (b) preparation and filing of an IND for a Clinical Development
Candidate for a Cardiovascular Indication;
          (c) conducting clinical trials of such Clinical Development Candidate
for a Cardiovascular Indication, including clinical trials that are intended to
support Regulatory Approvals for such Clinical Development Candidate for such
Cardiovascular Indication; and
          (d) preparation and filing of documentation, applications (including,
for example, an NDA/BLA) and related activities to enable the Parties to seek
Regulatory Approval for such Clinical Development Candidate for such
Cardiovascular Indication.
Each Clinical Development Plan approved by the Parties shall be attached hereto
as Schedule 1.14.
     1.15 “Clinical Development Program” means the clinical development
activities conducted by (or to be conducted by) each Party pursuant to a
Clinical Development Plan.
     1.16 “Commercialization Costs” means the costs incurred by Angiotech in
connection with the promotion, marketing, advertising, sale and/or distribution
of Cell Therapy Products, as such costs are more fully described on
Schedule 1.13.
     1.17 “Commercially Reasonable Efforts” shall mean efforts and deployment of
resources, consistent with the exercise of reasonable and prudent scientific and
business judgment, normally used by a research-based pharmaceutical company for
a product owned by it or to which it has rights, which is of similar market
potential at a similar stage in its development or product life, taking into
account issues of safety and efficacy, product profile, the competitiveness of
the marketplace, the proprietary position of the product, the regulatory and
reimbursement structure involved, the cost of scaling up a manufacturing process
(including facility costs), the profitability of the applicable products, and
other relevant factors.
     1.18 “Confidential Information” has the meaning ascribed to it in
Section 13.1.
     1.19 “Disclosing Party” has the meaning ascribed to it in Section 13.1.
     1.20 “Effective Date” has the meaning ascribed to it in the preamble.
     1.21 “FDA” means the United States Food and Drug Administration and any
successor governmental agency having substantially the same function.
     1.22 “FDA Approval” means the receipt by a Party of all approvals by the
FDA necessary or required for the commercialization in the United States of a
Cell Therapy Product.

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     1.23 “First Commercial Sale” shall mean, for each Cell Therapy Product in
each country in the Territory on a country-by-country basis, the first sale by
Angiotech, or a sublicensee of Angiotech, of a Cell Therapy Product to an
independent Third Party after the required Regulatory Approval to sell such Cell
Therapy Product in that country has been granted by the relevant regulatory
authority. If Regulatory Approval is not required in order to sell a Cell
Therapy Product in a particular jurisdiction, then First Commercial Sale shall
mean the first transfer of title by Angiotech, or a sublicensee of Angiotech, of
a Cell Therapy Product to an independent Third Party for consideration in any
arm’s-length transaction in such jurisdiction. Cell Therapy Product sale shall
be deemed to occur on the earlier of (a) the date the Cell Therapy Product is
shipped to the purchaser, or (b) the date of the invoice to the purchaser of the
Cell Therapy Product.
     1.24 “IND” means (a) an Investigational New Drug Application, as defined in
the United States Federal Food, Drug and Cosmetic Act, as amended, and the rules
and regulations promulgated thereunder, that is required to be filed with the
FDA before beginning clinical testing in the United States of a Clinical
Development Candidate in human subjects, or any successor application or
procedure; and (b) all supplements and amendments thereto, including any
supplemental Investigational New Drug Application; and (c) any related foreign
counterparts of (a) and (b) that may be filed with respect to the foregoing.
     1.25 “Intellectual Property” means all of the following (including any
substantial equivalent or counterpart) in any jurisdiction throughout the
Territory: (a) Patents and Patent Rights; (b) trademarks, service marks, trade
dress, trade names, corporate names, logos and Internet domain names;
(c) copyrights, software, source code and copyrightable works; (d) applications
and registrations for any of the foregoing; and (e) Know-How.
     1.26 “JSC” has the meaning ascribed to it in Section 3.1.
     1.27 “JSC Dispute” has the meaning ascribed to it in Section 3.7(a).
     1.28 “Know-How” means inventions, discoveries, data, information, trade
secrets, processes, methods, techniques, materials, technology, results or other
know-how, whether or not patentable.
     1.29 “License Agreement” has the meaning ascribed to it in the Recitals.
     1.30 “Local Therapeutic Company” means a corporation or other business
entity engaged in the business of exploiting products for human or veterinary
uses wherein all or a substantial portion of the activities of such corporation
or other business entity are competitive with those of Angiotech.
     1.31 “Manufacturing Costs” means, with respect to each Clinical Development
Candidate and Cell Therapy Product, the costs incurred by Athersys in connection
with the manufacture and supply of the Clinical Development Candidate or Cell
Therapy Product (respectively) to Angiotech or any Third Party on Angiotech’s
behalf, as such costs are more fully described on Schedule 1.13.

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     1.32 “Major Market” means the following markets: United States, Australia,
Canada, United Kingdom, Germany, France, Italy, Spain and Japan.
     1.33 “MAPC” means any multipotent adult progenitor cell, including without
limitation those described in the Patent Rights listed on Schedule 1.33 or
described in any Patent Rights that claim priority to any such Patent Rights
listed on Schedule 1.33.
     1.34 “NDA/BLA” means (a) a New Drug Application and/or a Biologics License
Application as defined in the United States Federal Food, Drug and Cosmetic Act
or the United States Public Health Service Act, each as amended, and the rules
and regulations promulgated thereunder, that is required to be filed with the
FDA before commercialization of a product in the United States, and any
successor application or procedure; (b) all supplements and amendments thereto;
and (c) any related foreign counterparts of (a) and (b) that may be filed with
respect to the foregoing.
     1.35 “Net Sales” means the gross amount invoiced for sale or other
commercial disposition of a Cell Therapy Product (or any Cells sold for use in
the Therapeutic Field) by Athersys or Angiotech or any of their Affiliates or
their respective direct or indirect licensees, sublicensees or subcontractors,
to a Third Party (including, without limitation, sales to distributors), in bona
fide, arm’s-length transactions, after deduction of the following items (to the
extent actually incurred and to the extent not already deducted in the amount
invoiced):
          (a) all trade, quantity and cash discounts, wholesaler-charge backs or
rebates (including, but not limited to, rebates to governmental agencies,
managed care organizations, health management organizations, pharmacy benefit
managers and group purchasing organizations) actually allowed;
          (b) all credits or allowances actually granted for rejection or return
of a previously sold Cell Therapy Product (or Cells sold for use in the
Therapeutic Field);
          (c) excise, sales and other consumption taxes and customs duties;
          (d) retroactive price reductions including, but not limited to, those
imposed by governmental agencies; and
          (e) any charge for freight or insurance if separately stated on the
same invoice as for the sale of the Cell Therapy Product (or Cells sold for use
in the Therapeutic Field) and directly related to the sale or distribution of
the Cell Therapy Product (or Cells sold for use in the Therapeutic Field);
all in accordance with standard allocation procedures, allowance methodologies
and accounting methods consistently applied, which procedures and methodologies
shall be in accordance with generally accepted accounting principles (“GAAP”). A
“sale” of a Cell Therapy Product (or Cells sold for use in the Therapeutic
Field) is deemed to occur upon the invoicing, or if no invoice is issued, upon
the earlier of shipment or transfer of title in the Cell Therapy Product (or the
Cells) to the Third Party. Sales between or among a Party, on the one hand, and
its Affiliates, licensees or sublicensees, on the other

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hand, shall not be used to calculate “Net Sales” unless the purchasing
Affiliate, licensee or sublicensee is an end-user. “Net Sales” for purposes of
this Strategic Alliance Agreement includes all such sales by assignees or other
successors to either Party’s rights under this Strategic Alliance Agreement. If
a Cell Therapy Product (or the Cells) is sold as part of a larger bundle or kit
that incorporates or includes other products in addition to the Cell Therapy
Product (or the Cells), Net Sales will be computed using an average net selling
price of the Cell Therapy Product (or the Cells) sold separately or, if such
average net selling price is unavailable, it will include only that part of such
sale reasonably allocated by the JSC to the value of the Cell Therapy Product
(or the Cells) as compared to the value of the larger bundle or kit sold without
the Cell Therapy Product (or the Cells).
     1.36 “Non-Licensed Cardiovascular Indications” means any disease, disorder,
condition, or the prevention, palliation, treatment, or correction of the same,
which involves or relates to the heart and/or blood vessels, other than the
Cardiovascular Indications and neurovascular disease (including stroke).
Non-Licensed Cardiovascular Indications explicitly includes, but is not limited
to, congestive heart failure.
     1.37 “Party” and/or “Parties” has the meaning ascribed to it in the
preamble.
     1.38 “Patent” means any and all issued and granted patents, or other
registration of ownership of an invention, granted by any governmental authority
in the Territory, including, but not limited to, patents of implementation,
improvement or addition; utility patents; design patents; and inventors’
certificates, as well as those patents that may issue or be granted from any
divisions, reissues, continuations (in whole or in part), reexaminations,
renewals, substitutions and extensions of any of the foregoing.
     1.39 “Patent Prosecution” means the (a) preparation, filing and/or
prosecution of applications (of all types) for Patent(s); (b) maintenance of any
Patent Rights; and (c) management of any interference or opposition proceeding
relating to the foregoing.
     1.40 “Patent Rights” means rights in (a) issued Patents and pending
provisional and non-provisional applications for Patents, including, without
limitation, any continuations, continuations-in-part or divisions directed to
inventions disclosed therein; (b) any re-examinations, reissues, renewals,
substitutions or extensions of any Patents; and (c) foreign counterparts or
equivalents of any of the foregoing.
     1.41 “Phase I Study” means a clinical study in human subjects that is
intended to initially evaluate the tolerance, safety and/or pharmacological
effects of (or to otherwise satisfy the requirements of 21 C.F.R. § 312.21(a) or
its foreign equivalent with respect to) a Clinical Development Candidate for a
particular Cardiovascular Indication.
     1.42 “Phase II Study” means a clinical study in human patients that is
intended to initially evaluate the effectiveness of (or to otherwise satisfy the
requirements of 21 C.F.R. § 312.21(b) or its foreign equivalent with respect to)
a Clinical Development Candidate for a particular Cardiovascular Indication.

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     1.43 “Phase III Study” means a pivotal clinical study in human patients
with a defined dose or set of doses of a Clinical Development Candidate that is
designed to ascertain the safety and efficacy of (or to otherwise satisfy the
requirements of 21 C.F.R. § 312.21(c) or its foreign equivalent with respect to)
such Clinical Development Candidate for a particular Cardiovascular Indication,
which Phase III Study is conducted for the purpose of enabling the preparation
and submission of applications for Regulatory Approval to the competent
regulatory authorities in a country of the Territory.
     1.44 “Phase IV Study” means any clinical study in human patients that is
commenced after receipt of Regulatory Approval of a Cell Therapy Product in any
country of the Territory, which study is conducted within the parameters of the
Regulatory Approval, and shall include studies required or requested by the
Regulatory Authority as a condition of, or in connection with, obtaining
Regulatory Approval with respect to such Cell Therapy Product for a particular
Cardiovascular Indication. Phase IV Studies also shall include studies conducted
to gather additional information regarding such Cell Therapy Product, including,
without limitation, potential risks, medical or pharmacoeconomic benefits,
optimal use, dose, route and schedule of administration, modeling and
pharmacoeconomic studies, and investigator-sponsored clinical trials.
     1.45 “Pre-Clinical Development Plan” means a detailed plan that sets forth
the responsibilities of, and activities to be conducted by, Athersys (and
Angiotech pursuant to Section 4.3) in advancing one or more Cells and/or Cell
Therapies into one or more potential Clinical Development Candidates for a
particular Cardiovascular Indication (including a detailed budget corresponding
to each such plan). Each such Pre-Clinical Development Plan shall include,
without limitation, the following activities (or their equivalents), to the
extent applicable:
          (a) conducting research and development activities related to Cells
and Cell Therapy, as a step in the ultimate objective of identifying and
characterizing Clinical Development Candidates; and
          (b) conducting pre-clinical research, pre-clinical development and
other pre-clinical studies that are intended to facilitate and support
progression of one or more Cells and/or Cell Therapies to selection as Clinical
Development Candidates, and ultimately to Regulatory Approval of such Clinical
Development Candidate(s) as a Cell Therapy Product(s);
An initial draft Pre-Clinical Development Plan(s) has been prepared by Athersys
and presented to Angiotech prior to the Effective Date. Within ninety (90) days
after the Effective Date, the JSC shall finalize such draft Pre-Clinical
Development Plan(s), and such final Pre-Clinical Development Plan shall be
attached hereto as Schedule 1.45.
     1.46 “Pre–Clinical Development Program” means the pre-clinical development
activities conducted by (or to be conducted by) each Party pursuant to a
Pre-Clinical Development Plan.
     1.47 “Profit(s)” has the meaning ascribed to it on Schedule 7.4.

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     1.48 “Purchase Agreement” has the meaning ascribed to it in the Recitals.
     1.49 “Receiving Party” has the meaning ascribed to it in Section 13.1.
     1.50 “Regulatory Approval” means any and all approvals (including any
applicable governmental price and reimbursement approvals), licenses,
registrations or authorizations of any federal, national, multinational, state,
provincial or local regulatory agency, department, bureau, commission, council
or other governmental entity necessary for the commercial manufacture, use,
storage, import, export, transport, distribution, promotion, marketing, offer
for sale and sale of a therapeutic and/or prophylactic product in a country of
the Territory.
     1.51 “Royalty Term” shall mean, for a particular Sole Development Product
in a particular country in the Territory, the period of time from First
Commercial Sale of such Sole Development Product to the date on which market
exclusivity in such country ends, which shall mean the later date to occur of
the following: (a) the expiration of all Patent Rights covering such Sole
Development Product in such country; or (b) the expiration of market exclusivity
related to such Sole Development Product in such country.
     1.52 “Sole Development Income” shall mean any payments that the Developing
Party receives from a licensee or sublicensee of the rights owned by or granted
to the Developing Party hereunder, in consideration for the license or
sublicense of such rights as applicable to a Sole Development Product,
including, without limitation, license fees, milestone payments, license
maintenance fees, and other payments received for such a license or sublicense,
but specifically excluding royalty-type payments based on Net Sales, bona fide
payments for research and development, marketing, sales and/or other services,
bona fide reimbursement for costs and expenses incurred by the Developing Party
(such as patent prosecution costs), payments to the extent of fair market value
for the issuance of equity or debt (or for debt financing such as loans), and
payments resulting from any bona fide arms length agreement relating to the
supply to such licensee or sublicensee of the applicable Sole Development
Products (and/or ingredients or components thereof).
     1.53 “Sole Development Product” has the meaning ascribed to it in
Section 6.1.
     1.54 “Strategic Alliance Agreement” has the meaning ascribed to it in the
preamble.
     1.55 “Sublicense Agreement” has the meaning ascribed to it in the Recitals.
     1.56 “Successful Completion” means, with respect to a clinical study of a
Clinical Development Candidate in human patients, (a) completion of such
clinical study; (b) the meeting of all primary and secondary clinical endpoints
of such clinical study or the advancement of the Clinical Development Candidate
to the next phase of clinical trials (or to commercialization, where the subject
clinical study is a Phase III Study), even though the Clinical Development
Candidate does not meet all secondary endpoints; and

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(c) delivery to the JSC of the corresponding written, completed study report
prepared according to the study protocol.
     1.57 “Term” has the meaning ascribed to it in Section 16.1.
     1.58 “Territory” means the world.
     1.59 “Therapeutic Field” means, as the context requires, a field comprising
any one or more of the Cardiovascular Indications.
     1.60 “Third-Party” means a person or entity other than Angiotech or
Athersys.
     1.61 “Third Party Payments” shall mean all amounts payable to a Third Party
for rights or licenses to Intellectual Property in connection with the
manufacture, use, sale, offer for sale or importation of Clinical Development
Candidates and/or Cell Therapy Products, including without limitation license
fees, milestone payments, license maintenance fees, royalties and other payments
made for such a right or license.
     1.62 “Transaction Agreements” has the meaning ascribed to it in the
Recitals.
     1.63 Additional Definitions.

      Defined Term   Section in which Defined
CFOs
  7.2(c)
Change of Control
  16.2(e)
Change of Control Notice
  16.2(e)
CHF Offer
  2.2(b)
CHF Offer Notice
  2.2(b)
Co-Chair
  3.3
Code
  16.2(c)
Developing Party
  6.1
Diligence Requirement
  6.4
Discontinuing Party
  6.1
Existing Third Party Agreement
  4.1
for cause
  16.2(d)(i)
GAAP
  1.35
Heads of Research
  3.7(b)
Negotiation Notice
  2.2(a)
New Pre-Clinical Development Programs
  4.3
Offer Notice
  2.2(a)

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      Defined Term   Section in which Defined
Offer Period
  2.2(a)
Opt-Out Notice
  6.1
Paying Party
  7.6(a)
Phase I Milestone Fee
  2.4(a)
Product Specifications
  9.4
Proposed Clinical Plan(s)
  3.5(c)
Replacement Fee
  2.4(b)(i)
Royalty Recipient
  7.6(a)
Sole Development Option
  6.1
Supply Disruption
  9.7
Terms and Conditions
  2.2(b)

ARTICLE II.
CERTAIN TRANSACTION COMPONENTS
     2.1 Concurrent Execution. Each Party shall execute all of the Transaction
Agreements and the Purchase Agreement, and shall deliver each of them to the
other Party, and each of the Transaction Agreements and the Purchase Agreement
shall be effective as of the Effective Date. Neither Party shall have any
obligations under any of the Transaction Agreements or the Purchase Agreement
unless and until all of the Transaction Agreements and the Purchase Agreement
have been so executed and delivered.
     2.2 Right of First Negotiation for Non-Licensed Cardiovascular Indications.
          (a) Throughout the Term, Angiotech shall have the first right to
negotiate to obtain an exclusive license to Cell Therapy for all or any part of
the Non-Licensed Cardiovascular Indications. Athersys shall promptly notify
Angiotech in writing if: (a) Athersys intends to initiate a research and/or
development and/or commercialization program for Cell Therapy involving any of
the Non-Licensed Cardiovascular Indications; (b) Athersys intends to take any
action to initiate any process to license (whether exclusively or
non-exclusively) to a Third Party (or otherwise grant to a Third Party) any
rights to develop or commercialize Cell Therapy for any of the Non-Licensed
Cardiovascular Indications; or (c) Athersys receives an unsolicited offer from a
Third Party that desires to acquire any rights to develop or commercialize Cell
Therapy for any of the Non-Licensed Cardiovascular Indications (where each of
the events set forth in (a-c) above shall obligate Athersys to provide such
written notice, hereinafter termed an “Offer Notice”). The Offer Notice shall
specify the indications within the Non-Licensed Cardiovascular Indications to
which the notice applies, and in the case of (c), shall summarize the terms of
the Third Party’s offer. Upon Angiotech’s receipt of the Offer Notice, Angiotech
shall have fifteen (15) days (the “Offer Period”) to notify Athersys that
Angiotech desires to negotiate with Athersys to obtain a license for Cell
Therapy for

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the applicable Non-Licensed Cardiovascular Indications (such notice by Angiotech
is hereinafter referred to as the “Negotiation Notice”). If Angiotech delivers
such Negotiation Notice to Athersys, Athersys shall negotiate in good faith
exclusively with Angiotech, for a period of not less than ninety (90) days from
the date of Athersys’ receipt of the Negotiation Notice (the “Negotiation
Period”), mutually acceptable, commercially reasonable terms and conditions of
an exclusive license to Angiotech for the applicable Non-Licensed Cardiovascular
Indications. Accordingly, Angiotech shall have the right of first and exclusive
negotiation to obtain an exclusive license to Cell Therapy for all or any part
of the Non-Licensed Cardiovascular Indications identified in the Negotiation
Notice. If Angiotech fails to deliver the Negotiation Notice prior to expiration
of the Offer Period, or if Athersys and Angiotech are unable to consummate a
mutually acceptable transaction prior to expiration of the Negotiation Period,
Athersys shall be free to license Cell Therapy for the applicable Non-Licensed
Cardiovascular Indications to a Third Party. If Athersys is unable to complete a
transaction granting rights to Cell Therapy for the applicable Non-Licensed
Cardiovascular Indications to a Third Party within ninety days (90) days after
(y) the expiration of the applicable Offer Period if Angiotech has not delivered
a Negotiation Notice, or (z) the expiration of the applicable Negotiation Period
if Angiotech has delivered a Negotiation Notice, then Athersys’ notification
requirement shall “reset” with respect to Cell Therapy for the applicable
Non-Licensed Cardiovascular Indications. For the avoidance of doubt, this right
of first negotiation shall apply to Cell Therapy for all indications within the
Non-Licensed Cardiovascular Indications.
          (b) In addition to Section 2.2(a) above, throughout the Term with
respect to Cell Therapy involving congestive heart failure, Angiotech shall have
the right of first refusal to obtain a license to Cell Therapy for congestive
heart failure as described in this Section 2.2(b). Upon the receipt by Athersys
from a Third Party of any offer for any rights relating to Cell Therapy for
congestive heart failure that Athersys desires to accept (a “CHF Offer”),
Athersys shall provide written notice of such CHF Offer to Angiotech (the “CHF
Offer Notice”). The CHF Offer Notice shall include a detailed summary of the
material terms and conditions of the CHF Offer (the “Terms and Conditions”). If
the Terms and Conditions are substantially more favorable to such Third Party
than the terms and conditions offered by Angiotech pursuant to Section 2.2(a),
Angiotech shall have thirty (30) days from receipt of the CHF Offer Notice to
accept or reject the CHF Offer according to the Terms and Conditions. If
Athersys and Angiotech do not conclude such transaction within a ninety (90)-day
period of exclusive, good faith negotiations that begins on receipt of
Angiotech’s notice of “acceptance,” or if Angiotech does not provide such
written notice before expiration of its 30-day acceptance period (or if
Angiotech rejects the CHF Offer in writing before the end of such 30-day
period), Athersys shall then have ninety (90) days to negotiate definitive,
binding agreements with such Third Party on terms and conditions not
substantially more favorable to such Third Party than the Terms and Conditions.
If (i) Athersys is unable to complete such a transaction within such ninety
(90) day period with such Third Party, then the notification requirement shall
“reset” with respect to Cell Therapy for congestive heart failure, or (ii) the
terms and conditions negotiated with such Third Party and acceptable to both
Athersys and such Third Party concerning such transaction are substantially more
favorable to such Third Party than the Terms and Conditions, then the terms and
conditions of the transaction as

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negotiated shall be considered to be a new CHF Offer that is subject to the
right of first refusal on behalf of Angiotech described in this Section 2.2(b).
     2.3 Additional Investment.
          (a) Angiotech shall make an additional $5,000,000.00 investment in
Athersys pursuant to the terms described in Section 2.3(b) within ten
(10) business days after Athersys fulfills the first of the following conditions
to occur (provided that if Athersys fulfills any such condition prior to
January 1, 2007, then such condition shall be deemed to have been fulfilled on
January 1, 2007):
          (i) Athersys has commenced at least one additional pre-clinical animal
study between the Effective Date and January 1, 2007 (in accordance with the
applicable Pre-Clinical Development Plan) and either (A) such study has been
completed prior to January 1, 2007 in accordance with the applicable
pre-clinical animal study protocol; or (B) such study is ongoing as of
January 1, 2007 and is being conducted in accordance with the applicable
pre-clinical animal study protocol, or
          (ii) at any time after January 1, 2007 Athersys completes at least one
additional pre-clinical study (in accordance with the applicable Pre-Clinical
Development Plan) in accordance with the applicable pre-clinical animal study
protocol.
          (b) With respect to the investment described in (a) above:
          (i) if the Note has not been converted into capital stock of Athersys
prior to the date of such investment, then Angiotech and Athersys shall enter
into a note purchase agreement, in substantially the form of the Purchase
Agreement, pursuant to which Angiotech shall loan $5,000,000.00 in cash to
Athersys pursuant to a convertible promissory note having the same terms and
conditions as the Note; and
          (ii) if the Note has been converted into capital stock of Athersys
prior to the date of such investment, then Angiotech and Athersys shall enter
into a securities purchase agreement, in substantially the form of the Purchase
Agreement (except for necessary adaptations for a securities purchase instead of
a note purchase), pursuant to which Angiotech shall purchase with cash the
number of whole shares of capital stock of Athersys that can be purchased with
$5,000,000.00 in cash, at one hundred ten percent (110%) of the per share price
at which stock is sold in the Bona Fide Financial Investment (as defined in the
Note), on the terms and conditions set forth therein. The class and series of
capital stock shall be the same as that sold in the Bona Fide Financial
Investment.
     2.4 Phase I Milestone Fee.
          (a) As soon as reasonably practicable after the passage of thirty
(30) days (or such other period of time during which the FDA may then be
permitted to impose a

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clinical hold) following the first IND submission to the FDA in connection with
the first Clinical Development Candidate hereunder without the FDA imposing a
clinical hold, thereby enabling the Parties to lawfully initiate a Phase I Study
of such Clinical Development Candidate, subject to Section 2.4(b) below, the
Parties shall enter into a one-time only securities purchase agreement, in
substantially the form of the Purchase Agreement (except for necessary
adaptations for a securities purchase instead of a note purchase), pursuant to
which Angiotech shall purchase with cash the number of whole shares of capital
stock of Athersys that can be purchased with [$*] in cash, at the per share
price determined in accordance with Schedule 2.2, on the terms and conditions
set forth therein (the “Phase I Milestone Fee”). For the avoidance of doubt,
Angiotech shall not be required to enter into any further securities purchase
agreement(s) in connection with any subsequent IND submission .
          (b) Angiotech, in its sole discretion, may elect to decline payment of
the Phase I Milestone Fee by providing written notice of such election within
the applicable 30-day period set forth in Section 2.4(a). Within thirty
(30) days after receipt of such written notice from Angiotech, Athersys shall
provide written notice to Angiotech choosing one of the following items as a
replacement for the Phase I Milestone Fee:
          (i) requiring Angiotech to, within ten (10) business days following
the Successful Completion of the first Phase III Study for a Clinical
Development Candidate in the U.S. (or foreign equivalent trial) in any
Cardiovascular Indication, pay to Athersys a one-time milestone payment in cash
equal to [$*] (the “Replacement Fee”) upon the Successful Completion of the
first Phase III Study for a Clinical Development Candidate in the U.S. (or
foreign equivalent trial) in any of the Cardiovascular Indications; or
          (ii) modifying the split of Profits from the commercialization of a
Cell Therapy Product described in Schedule 7.4 to be [*%] to Athersys and [*%]
to Angiotech.
     2.5 Exclusivity. Except as expressly provided pursuant to a Clinical
Development Plan or in any Transaction Agreement, during the Term Athersys shall
not engage (itself or with a Third Party) in any clinical development or
commercialization activities directed to the Cardiovascular Indications using
any stem cells.
     2.6 Retained Rights. Except as expressly set forth herein or as otherwise
mutually agreed by the Parties in writing, no Intellectual Property rights or
licenses are granted by Angiotech to Athersys under this Strategic Alliance
Agreement. Angiotech retains all rights to Angiotech Intellectual Property.
Except as expressly set forth herein or as otherwise mutually agreed by the
Parties in writing, no Intellectual Property rights or licenses are granted by
Athersys to Angiotech under this Strategic Alliance Agreement.
 

*   Confidential treatment has been requested for the redacted portions of this
exhibit, and such confidential portions have been omitted and filed separately
with the Securities and Exchange Commission.

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Athersys retains all rights to Athersys Intellectual Property to the extent such
Intellectual Property rights are not expressly granted to Angiotech hereunder.
     2.7 Costs Borne by Each Party. Except as expressly set forth herein,
including without limitation Sections 7.1, 7.2 and 7.4 and Schedule 7.4, all
costs and expenses connected with a Party’s activities or performance under any
Pre-Clinical Development Program, Clinical Development Plan or this Strategic
Alliance Agreement shall be borne solely by that Party.
     2.8 Certain Restrictions on Athersys’ Activities Outside of Cardiovascular
Indications. In its research and development activities in connection with Third
Parties related to products for Cell Therapy outside of the Cardiovascular
Indications, Athersys shall make Commercially Reasonable Efforts to position
such products in a way that reduces the potential for such products to be used
off label in any of the Cardiovascular Indications.
ARTICLE III.
JOINT STEERING COMMITTEE
     3.1 Joint Steering Committee. Promptly following the Effective Date, the
Parties shall establish a Joint Steering Committee (“JSC”) to oversee and
coordinate the Parties’ responsibilities and activities in accordance with and
in furtherance of the Pre-Clinical Development Plan(s), Clinical Development
Plan(s) and this Strategic Alliance Agreement. The JSC shall be composed of up
to four (4) senior, qualified representatives from each Party (or from a Party’s
Affiliate). The total number of JSC members will initially be up to eight (8),
but the number may be increased or decreased from time-to-time by mutual written
agreement of the Parties; provided that the number of representatives from
Angiotech shall always be equal to the number of representatives from Athersys.
Each of Angiotech and Athersys may replace any of its representatives on the JSC
at will by giving written notice thereof to the other Party.
     3.2 Subcommittees. The JSC shall be empowered to create one or more
subcommittees, project teams or working groups, as it may deem appropriate or
necessary. Each such subcommittee, project team and working group shall report
to the JSC, which shall have authority to approve or reject recommendations or
actions proposed thereby, subject to the terms of this Strategic Alliance
Agreement. In general, the Parties contemplate that all JSC subcommittees shall
have an equal number of members appointed by each Party.
     3.3 Chairperson. Each Party shall appoint one of its representatives on the
JSC as a co-chair of the JSC (each, a “Co-Chair”), and a Party may change its
Co-Chair from time to time by written notice to the other Party. Each Party’s
Co-Chair shall serve as a co-chair of the JSC meetings, unless the Co-Chairs
jointly determine that they shall alternate responsibility for chairing JSC
meetings (whether on a meeting-by-meeting, calendar quarter-by-calendar quarter
or calendar year-by-calendar year basis).
     3.4 JSC Meetings.

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          (a) The JSC shall meet at least once every calendar quarter during the
Term, either in person, by video conference or by telephone conference, as
appropriate, as reasonably arranged by the Co-Chairs; provided that at least one
(1) JSC meeting per calendar year shall be held in person. Meetings of the JSC
shall be effective only if at least one (1) JSC representative of each Party
participates in the meeting (in person or by telephone or videoconference). The
Co-Chairs (or the responsible JSC chairperson, if applicable) shall be
responsible for scheduling meetings of the JSC, preparing agendas for JSC
meetings, sending to all JSC members notices of all regular JSC meetings (at
least thirty (30) days before such meetings) and agendas for such meetings (at
least ten (10) days before such meetings).
          (b) In addition, either Co-Chair may from time to time request a
special JSC meeting by contacting the other Co-Chair and providing a proposed
agenda for such meeting. The Co-Chairs shall arrange a mutually acceptable time
for such special JSC meeting as promptly thereafter as reasonably possible, and
shall prepare and circulate an agenda for such special JSC meeting as far in
advance of such meeting as reasonably possible.
          (c) The Co-Chairs (or the responsible JSC chairperson, if applicable)
shall be responsible for having minutes of each JSC meeting prepared and
circulated among the JSC members. The JSC meeting minutes will be documented in
writing and shall provide a description in reasonable detail of the discussions
held at the JSC meeting, and a list of any actions, decisions or determinations
taken or approved by the JSC. In addition, the JSC meeting minutes shall
include, with respect to the Parties’ responsibilities, activities and tasks
hereunder, (i) the Parties’ progress to date, (ii) difficulties encountered by
the Parties to date, (iii) schedules for performing and completing the Parties’
tasks and activities, (iv) each Party’s action plans, and (v) any JSC
recommendation that the Parties approve a Proposed Clinical Plan or end an
existing Clinical Development Plan. The responsible Co-Chair shall distribute
the minutes of the JSC meeting to the Parties and the JSC members within ten
(10) days after the conclusion of each JSC meeting. The JSC meeting minutes
shall be deemed to be approved by the JSC members if no written objections to
the meeting minutes are submitted to the JSC within ten (10) days after being
distributed to the JSC members. Each Party shall be responsible for expenses
incurred by its JSC representatives in attending or otherwise participating in
JSC meetings.
     3.5 Responsibilities of the Joint Steering Committee.
          (a) Clinical Development Plans and Clinical Development Candidates. In
addition to its general responsibility to oversee and coordinate the activities
of the Parties in connection with the Pre-Clinical Development Plans, Clinical
Development Plans and this Strategic Alliance Agreement, the JSC shall in
particular:
          (i) monitor the progress made by Athersys in connection with the
Pre-Clinical Development Programs in a manner consistent with the corresponding
Pre-Clinical Development Plans and this Strategic Alliance Agreement;

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          (ii) monitor the Existing Third Party Agreements and any other
agreements with a Third Party related to the Pre-Clinical Development Plans,
Clinical Development Plans and/or Cell Therapy in the Therapeutic Field,
including without limitation monitoring compliance with such agreements and
activities thereunder, reviewing reports prepared by or for a Party, evaluating
Intellectual Property resulting from such agreements and ensuring that the
appropriate Party obtains rights to any such Intellectual Property when
advisable;
          (iii) designate Cell(s) as Clinical Development Candidate(s) in
accordance with criteria determined by the JSC;
          (iv) monitor the progress made, and direct the activities to be
undertaken, by the Parties in connection with the Clinical Development Programs
in a manner consistent with the corresponding Clinical Development Plans and
this Strategic Alliance Agreement;
          (v) review, modify as it deems appropriate, and recommend, as
necessary from time-to-time, the Clinical Development Plan(s);
          (vi) oversee and, whenever practicable, expedite the implementation of
each Pre-Clinical Development Plan and each Clinical Development Plan;
          (vii) create and update a risk analysis plan;
          (viii) clarify or adjust the tasks of the respective Parties under the
Pre-Clinical Development Plans and Clinical Development Plans, in a manner
consistent with this Strategic Alliance Agreement;
          (ix) ensure adequate resources are assigned by each Party for research
planning, project management and personnel and other resource management related
to the Clinical Development Plans;
          (x) create, review, modify as it deems appropriate, and recommend an
annual budget corresponding to each Clinical Development Plan, in a manner
consistent with this Strategic Alliance Agreement;
          (xi) reasonably determine or adjust milestones and progress related to
the Clinical Development Plans; and
          (xii) recommend whether or not, and to what extent, research or
development studies, beyond those identified in an existing Pre-Clinical
Development Plan or Clinical Development Plan, should be conducted.
          (b) Existing Third Party Agreements. Within thirty (30) days after the
Effective Date, Athersys shall provide to the JSC a report describing the status
of, purpose of, scope of activities encompassed by, recent activities conducted
under, and Intellectual Property developed under each Existing Third Party
Agreement related to the

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Pre-Clinical Development Plans, Clinical Development Plans and/or Cell Therapy
in the Therapeutic Field, together with complete, unredacted copies of each such
agreement and any reports delivered by or provided to Athersys thereunder,
subject to confidentiality obligations to the counterparty to each such
Agreement; provided that where such obligations of confidentiality preclude or
limit any such disclosures hereunder, Athersys shall use Commercially Reasonable
Efforts to obtain consent from such counterparty to permit such disclosures to
Angiotech.
          (c) Proposed Clinical Plans. The Parties, either separately or
jointly, may submit written proposals for Clinical Development Plans for any
Clinical Development Candidate (“Proposed Clinical Plans”) to the JSC for review
(which review shall take place at the first JSC meeting following submission of
a Proposed Clinical Plan to the JSC) and recommendation to the Parties; provided
that each Party may submit no more than one Proposed Clinical Plan per calendar
quarter during the Term. Each Proposed Clinical Plan shall include, as
appropriate, (i) an objective, key milestones and a timetable for the Proposed
Clinical Plan; (ii) a summary of resources expected to be required to conduct
the Proposed Clinical Plan to completion; (iii) a summary of expected Third
Party arrangements that may be necessary or useful, including, without
limitation, license agreements and/or supply arrangements; and (iv) a proposed
budget and term for the Proposed Clinical Plan. Any Proposed Clinical Plan that
is recommended by the JSC and approved in writing by the Parties will be deemed
a Clinical Development Plan, and each such approved Clinical Development Plan
shall be a part of, and subject to all of the provisions of, this Strategic
Alliance Agreement and the other Transaction Agreements, as applicable.
          (d) New Pre-Clinical Development Programs. The JSC shall oversee and
coordinate the Parties’ responsibilities and activities, and shall recommend to
the Parties appropriate cost-sharing by the Parties, in connection with each New
Pre-Clinical Development Program.
          (e) Advancement or Termination of Clinical Development Plans. Upon the
completion of each Clinical Development Plan, the JSC will have sixty (60) days
thereafter to provide written recommendations to the Parties as to whether the
Clinical Development Plan should either (i) be advanced to the next phase of
development or commercialization, as applicable, or (ii) be terminated by the
Parties. With the prior written approval of both Parties, the JSC will also have
the authority to terminate a Clinical Development Plan at any time.
          (f) Other Responsibilities. The JSC shall have such other
responsibilities as are expressly set forth elsewhere in this Strategic Alliance
Agreement, the Transaction Agreements or as are assigned to it as mutually
agreed upon by the Parties.
          (g) Angiotech Proposals. During the term of this Strategic Alliance
Agreement, Angiotech may, but is not obligated to, present to the JSC for
consideration medical devices, biomaterials, compositions and methods that may
enhance the development of Cells, Clinical Development Candidates and/or Cell
Therapy Products in the Cardiovascular Field. The JSC shall consider the value
of any such enhancements

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(including where appropriate, for example, an evaluation of market analysis,
financial projections, costs, resources, responsibilities of Athersys and
Angiotech, and timelines). After due consideration, the Steering Committee shall
accept or reject each such proposed enhancement. If the JSC accepts a proposed
enhancement, then the JSC shall (i) recommend appropriate compensation to
Angiotech with respect to such enhancement and the applicable Pre-Clinical
Development Plan or Clinical Development Plan shall be modified to include such
enhancement; and (ii) determine ownership of any Intellectual Property related
to the accepted enhancement that may be made, created, identified, conceived,
reduced to practice or derived by or on behalf of the Parties (either alone or
jointly) during the course of performance of a Party’s obligations under the
applicable Pre-Clinical Development Plan or Clinical Development Plan; provided
that Angiotech shall own all Intellectual Property related to any proposed or
accepted enhancement that is made, created, identified, conceived, reduced to
practice or derived by or on behalf of Angiotech or its Affiliates at or prior
to the time the enhancement is presented to the JSC for consideration.
     3.6 Voting; Decision-Making. Regardless of the number of JSC
representatives from any Party, Angiotech shall present one consolidated view
and have one vote on any issue before the JSC, to be cast by Angiotech’s
Co-Chair or his/her designee, and Athersys shall present one consolidated view
and have one vote on any issue before the JSC, to be cast by Athersys’ Co-Chair
or his/her designee. Except as otherwise expressly set forth herein, the JSC may
only act by unanimous written agreement. Except as otherwise expressly set forth
herein, the JSC shall have final decision-making authority (which
decision-making authority may be delegated to a subcommittee by the JSC, in its
discretion) regarding all issues relating to the Pre-Clinical Development Plans
and Clinical Development Plans; provided that the JSC may not modify or
renegotiate any terms or conditions of this Strategic Alliance Agreement. In
making decisions on the JSC, each Party shall duly consider in good faith any
suggestions, opinions and proposals made by the other Party, and shall use good
faith efforts to reach consensus with the other Party. If the JSC fails to reach
unanimous agreement on any matter within the scope of its responsibilities, as
described in this Strategic Alliance Agreement or as expressly delegated to the
JSC by written agreement of the Parties, the dispute shall be resolved as set
forth in Section 3.7.
     3.7 JSC Disputes.
          (a) If, before adjourning any JSC meeting, the JSC fails to reach
unanimous agreement on any matter or issue upon which the JSC has voted at such
JSC meeting, and upon which the JSC has authority to vote, in accordance with
this ARTICLE III (each such matter or issue, a “JSC Dispute”), such JSC Dispute
shall automatically be added as an agenda item for the next regular meeting of
the JSC. Between the meeting in which the JSC Dispute arose and such next
regularly scheduled JSC meeting, the JSC and/or the Parties may negotiate in
good faith to attempt to resolve the JSC Dispute. At any time during such
interim time period, the JSC may call a special meeting to attempt to resolve
the JSC Dispute.

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          (b) If the JSC members are unable to resolve such JSC Dispute before
or at the next regularly scheduled JSC meeting, such JSC Dispute shall be
referred for resolution to the Chief Scientific Officer (or person fulfilling
the equivalent function) of each Party (each, a “Head of Research”). Resolution
of such JSC Dispute by the Heads of Research shall occur within thirty (30) days
after the date of referral to the Heads of Research. If the Heads of Research
are unable to reach consensus and resolve such JSC Dispute within such 30-day
period after good faith attempts to reach such consensus and resolution, then
the JSC Dispute shall be referred for final resolution to Athersys’ President
(or other designated executive level officer of Athersys), if the JSC Dispute
relates to a Phase I Study completion or earlier matter or issue, and to
Angiotech’s CFO (or other designated executive level officer of Angiotech), if
the JSC Dispute relates to a post-Phase I Study (or later) or commercialization
matter or issue; provided that, when exercising such final, decision-making
authority, neither Party’s President, CFO (or other designated executive level
officer) shall be empowered to alter the Parties’ respective rights or
obligations under this Strategic Alliance Agreement; and provided further that
neither Party’s President, CFO (or other designated executive level officer)
shall have final decision-making authority with respect to approval or
modification of (i) designation of any Cell as a Clinical Development Candidate;
(ii) any Pre-Clinical Development Plan or Clinical Development Plan (but
expressly excluding any immaterial modifications to such Pre-Clinical
Development Plan or Clinical Development Plan); (iii) any Clinical Development
Plan budget (but expressly excluding any immaterial modifications to such
Clinical Development Plan budget), (iv) any IND filing pertaining to a Clinical
Development Candidate, (v) any NDA/BLA filing pertaining to a Clinical
Development Candidate; (vi) clinical trial design; or (vii) termination, or
advancement to the next stage, of development of a Clinical Development
Candidate; instead, such designations, plans, budgets filings, designs,
termination and advancements set forth in (i-vii) shall be approved or modified
only by consensus of the Parties and shall not be subject to the dispute
resolution process described in ARTICLE XVII.
ARTICLE IV.
PRE-CLINICAL DEVELOPMENT
     4.1 Existing Pre–Clinical Development Programs. Athersys shall conduct, and
shall be responsible for, the Pre-Clinical Development Programs in existence as
of the Effective Date within the Cardiovascular Indications. With respect to
each such existing Pre-Clinical Development Program, Athersys may modify its
activities and undertake new activities in connection with such Pre-Clinical
Development Program, but only after consultation with and approval of the JSC;
provided that Athersys shall: (a) use its Commercially Reasonable Efforts to
make available the resources specified in the Pre-Clinical Development Plan (or
otherwise by mutual agreement of the Parties), (b) use its Commercially
Reasonable Efforts to undertake its obligations and responsibilities in the
Pre-Clinical Development Plan (or otherwise by mutual agreement of the Parties),
(c) perform its activities and discharge the responsibilities that will
facilitate the ability of the Parties to obtain Regulatory Approval to
manufacture Cells to be used in Clinical Development Candidates and in Cell
Therapy Products in the United States and other countries of the Territory, as
determined by the JSC, and (d) manufacture the Cells in conformance with the
quantity and quality reasonably required for the conduct of the Pre-

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Clinical Development Programs. With respect to each such existing Pre-Clinical
Development Program, and subject to the foregoing sentence, Athersys shall
consider in good faith any recommendations and requests made by Angiotech and
its representatives on the JSC concerning the existing Pre-Clinical Development
Program. Athersys may subcontract any of its obligations under this Section 4.1,
provided that it furnishes the JSC and Angiotech with advance written notice
thereof specifying the work to be subcontracted, and with an opportunity to
object to such subcontract for sound business reasons. Any dispute regarding
Athersys’ use of a subcontractor pursuant to the foregoing sentence shall be
referred to the JSC, and any corresponding JSC Dispute shall be resolved in
accordance with Section 3.7. As of the Effective Date, Athersys has executed
agreements related to the existing Pre-Clinical Development Programs with the
Third Parties listed on Schedule 4.1 of this Strategic Alliance Agreement (each
such agreement, an “Existing Third Party Agreement”).
     4.2 Costs for Existing Pre-Clinical Development Programs. Athersys shall be
fully and solely responsible for all costs and expenses relating to the
activities conducted by or for Athersys in connection with the existing
Pre-Clinical Development Programs.
     4.3 New Pre-Clinical Development Programs. During the Term, the Parties
expect to undertake additional Pre-Clinical Development Programs (“New
Pre-Clinical Development Programs”), and the Parties acknowledge that Angiotech
may assume certain responsibilities, and may conduct certain activities, in
connection with such New Pre-Clinical Development Programs. Irrespective of
Angiotech’s responsibilities or activities in connection with any New
Pre-Clinical Development Program, the JSC shall assume oversight and
coordination of the Parties’ responsibilities and activities (if any), and shall
recommend appropriate compensation to Angiotech with respect to its activities
under each New Pre-Clinical Development Program and any Intellectual Property
and materials (including without limitation biomaterials and medical devices)
contributed by Angiotech to such New Pre-Clinical Development Program.
ARTICLE V.
CLINICAL DEVELOPMENT
     5.1 Proposed Clinical Plans; Clinical Development Plans. Angiotech and/or
Athersys may prepare and submit a Proposed Clinical Plan to the JSC in
accordance with Section 3.5(c) for any Clinical Development Candidate. Each
Proposed Clinical Plan shall address the specific roles and responsibilities of
each Party consistent with this Strategic Alliance Agreement, shall address
and/or incorporate any JSC recommendations, and shall propose appropriate
Clinical Development Programs for each stage of development set out in such
Proposed Clinical Plan. The responsibilities of the Parties set forth in this
ARTICLE V will apply only to those Clinical Development Plans approved by the
Parties in accordance with Section 3.5 and 3.7.
     5.2 Athersys Responsibilities. During each Clinical Development Program,
Athersys, after consulting with the JSC, shall direct all Clinical Development
Program activities through the completion of Phase I Studies. In this regard,
Athersys’ President shall have ultimate, final decision-making authority for JSC
Disputes pertaining to Phase

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I Study completion or earlier matters and issues, as described in
Section 3.7(b). During the Term, Athersys shall: (a) use its Commercially
Reasonable Efforts to make available the resources specified as the
responsibility of Athersys in the Clinical Development Plan (or otherwise by
mutual agreement of the Parties), (b) use its Commercially Reasonable Efforts to
undertake the obligations and responsibilities assigned to Athersys in the
Clinical Development Plan (or otherwise by mutual agreement of the Parties),
(c) perform the activities and discharge the responsibilities that are required
to obtain Regulatory Approval to manufacture Cells that are used in Clinical
Development Candidates and in Cell Therapy Products in the United States and
other countries of the Territory, as determined by the JSC, and (d) manufacture
the Cells in conformance with the quantity and quality reasonably required for
the conduct of the Clinical Development Programs, and supply such Cells to
Angiotech (or its designee) or to one or more Third Parties engaged by a Party
to perform clinical studies of Clinical Development Candidates and/or Cell
Therapy Products in accordance with this Strategic Alliance Agreement.
     5.3 Angiotech Responsibilities. During each Clinical Development Program,
Angiotech shall direct all Clinical Development Program activities after the
completion of Phase I Studies. In this regard, Angiotech’s CFO shall have
ultimate, final decision-making authority for JSC Disputes pertaining to
post-Phase I Study (or later) matters and issues, as described in Section
3.7(b). During the Term, Angiotech shall: (a) use its Commercially Reasonable
Efforts to make available the resources specified as the responsibility of
Angiotech in the Clinical Development Plan (or otherwise by mutual agreement of
the Parties), (b) use its Commercially Reasonable Efforts to undertake the
obligations and responsibilities assigned to Angiotech in the Clinical
Development Plan (or otherwise by mutual agreement of the Parties), and
(c) perform the activities and discharge the responsibilities that are required
to obtain Regulatory Approval to market and sell Cell Therapy Products in the
United States and the other countries of the Territory, as determined by the JSC
(to the extent such Regulatory Approval is not described as an obligation of
Athersys pursuant to Section 5.2).
     5.4 Subcontracting. Either Party may subcontract any of its obligations
under a Clinical Development Plan, provided that it furnishes the JSC and the
other Party with advance written notice thereof specifying the work to be
subcontracted, and with an opportunity to object to such subcontract for sound
business reasons. Any dispute regarding a Party’s use of a subcontractor
pursuant to the foregoing sentence shall be referred to the JSC, and any
corresponding JSC Dispute shall be resolved in accordance with Section 3.7. In
any subcontract agreement with a Third Party, the subcontracting Party shall
ensure that (a) such Third Party subcontractor is bound by obligations of
confidentiality no less stringent than those imposed on the Parties under this
Strategic Alliance Agreement, (b) all inventions, copyrightable subject matter,
discoveries or materials created, identified, conceived, reduced to practice or
developed by the Third Party subcontractor in the scope of its, his or her
engagement with a Party in connection with the subcontract agreement, and in
furtherance of a Clinical Development Program or this Strategic Alliance
Agreement, are appropriately documented and disclosed to the subcontracting
Party, and (c) all such inventions, copyrightable subject matter, discoveries or
materials directly related to the Cells (and not related to Angiotech

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Intellectual Property) shall be owned solely by Athersys (or jointly with
Angiotech in the case of Joint IP), or in the case of subcontractors that are
not-for-profit institutions, (i) either owned solely by Athersys (or jointly
with Angiotech in the case of Joint IP), (ii) jointly owned by Athersys and the
institution (and jointly with Angiotech in the case of Joint IP), or (iii) owned
solely by the institution, and in the case of (ii) or (iii), the institution’s
right, title and interest in such inventions, copyrightable subject matter,
discoveries or materials related to the Cells shall be either exclusively
licensed to Athersys (and Angiotech in the case of Joint IP) or the institution
shall have granted to Athersys (and Angiotech in the case of Joint IP) the
exclusive option to obtain an exclusive license thereto; provided, however, that
the foregoing shall not require Athersys to modify the terms or conditions of
any of the Existing Third Party Agreements which the Parties recognize may not
contain the terms described in this sentence. Any subcontract agreement under
this Section 5.4 shall (w) grant to the subcontracting Party a right to inspect
the subcontractor’s relevant records and facilities; (x) require the
subcontractor to be in good standing with all applicable regulatory authorities;
(y) require the subcontractor to comply (as appropriate) with current good
laboratory practices, current good manufacturing laboratory practices and
applicable laws, regulations, rules and guidelines; and (z) require that the
subcontractor have no outstanding violations or citations that would or may
impair the services or deliverables to be provided to the subcontracting Party
by such subcontractor; provided, however, that the foregoing shall not require
Athersys to modify the terms or conditions of any of the Existing Third Party
Agreements which the Parties recognize may not contain the terms described in
this sentence.
ARTICLE VI.
OPT-OUT RIGHTS
     6.1 Opt-Out Rights. Either Party may elect to discontinue (a “Discontinuing
Party”) joint research on, development and commercialization of a Clinical
Development Candidate or a Cell Therapy Product upon six (6) months prior
written notice (“Opt-Out Notice”) to the other Party; provided that the
effective date of either Party’s election to opt out shall not be prior to the
completion of the first Phase I Study conducted by the Parties hereunder, and
provided further that neither Party shall be relieved of its obligations to pay
for its share of Clinical Development Costs for a clinical study that is ongoing
at the effective date of a Party’s election to opt-out with respect to the
applicable Clinical Development Candidate. Notwithstanding the foregoing, if a
Party is unable to pay any or all of its portion of Clinical Development Costs
when due, such Party shall be deemed to have delivered an Opt-Out Notice on the
date such payment was due. Upon delivery of the Opt-Out Notice, the subject
Clinical Development Candidate or Cell Therapy Product shall be deemed a
“Rejected Product.” The Discontinuing Party shall be required to continue
co-funding all of its activities under this Strategic Alliance Agreement during
such six (6) month notice period (subject to the first sentence of this Section
6.1). Upon receipt of an Opt-Out Notice for a Clinical Development Candidate or
Cell Therapy Product, the non-discontinuing Party shall have the option (the
“Sole Development Option”), exercisable by providing written notice to the
Discontinuing Party by the end of such six (6) month period, to continue the
development and commercialization of such Rejected Product in the Therapeutic
Field (and in such event,

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such Rejected Product shall thereafter be referred to as a “Sole Development
Product”), at its own expense. Upon the exercise of such option, the
non-discontinuing Party shall be deemed the “Developing Party,” and the
Developing Party shall be released from its exclusivity obligations set forth in
Section 2.5 above with respect only to such Sole Development Product. The
Parties shall have the following rights and obligations upon exercise of the
Sole Development Option:
          (a) if Angiotech is the Developing Party, such Sole Development
Product shall continue to be considered a Clinical Development Candidate or Cell
Therapy Product (as applicable) for purposes of the Transaction Agreements;
provided, however that (i) the provisions of Section 2.4 and ARTICLES III, V,
VII (other than Sections 7.5-7.10) and IX (other than Sections 9.7 and 9.8)
shall no longer apply to such Sole Development Product; (ii) a Supply Disruption
shall be deemed to have occurred pursuant to Section 9.7 (and Section 9.7 shall
apply in its entirety with respect to such Supply Disruption), and Angiotech
shall have the right to engage a back-up supplier pursuant to Section 9.8 (and
Section 9.8 shall apply in its entirety with respect to engagement of such
back-up supplier); and further provided that if neither a Third-Party
manufacturer nor a Third-Party back-up manufacturer of the Cells, Clinical
Development Candidates and/or Cell Therapy Products is reasonably available at
the effective date of Athersys’ opt-out, Athersys shall manufacture and supply
Cells, Clinical Development Candidates and/or Cell Therapy Products to Angiotech
(as the supply chain for each exists at such time) for the Territory for a
period of up to twenty-four (24) months after the effective date of such opt-out
(during which Section 9.6 shall apply in its entirety), wherein such Cells,
Clinical Development Candidates and/or Cell Therapy Products supply shall be
provided by Athersys on commercially reasonable terms and conditions to be
discussed and agreed upon by Angiotech and Athersys at such time (which terms
shall include a reasonable price, and shall set forth any subsequent period
(after such 24-month period) during which Athersys is willing (in its sole
discretion) to supply Cells, Clinical Development Candidates and/or Cell Therapy
Products to Angiotech); and (iii) Angiotech shall be responsible for all
activities described in ARTICLE X with respect to such Sole Development Product;
          (b) if Athersys is the Developing Party, such Sole Development Product
shall no longer be considered a Clinical Development Candidate or Cell Therapy
Product for purposes of the License Agreement and Sublicense Agreement, but
shall continue to be considered a Clinical Development Candidate or Cell Therapy
Product for purposes of this Strategic Alliance Agreement; provided, however,
that (i) the provisions of ARTICLES II, III, V, VII (other than
Sections 7.5-7.10), VIII and IX shall no longer apply to such Sole Development
Product, and (ii) Athersys shall be responsible for all activities described in
ARTICLE X with respect to such Sole Development Product;
          (c) any Regulatory Approvals filed, and clinical data owned or
licensed, and any product trademarks owned or licensed by the Discontinuing
Party or its Affiliates relating to the applicable Sole Development Product
shall be (i) assigned or (ii) exclusively licensed to the Developing Party or
any Third Party or Affiliate designated by such Party, until such time as the
Developing Party or its designee is qualified to hold such Regulatory Approvals
or product trademarks under applicable laws and regulations,

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and then shall be transferred or assigned to the Developing Party or its
designee, as appropriate, as soon as practicable thereafter; provided, however,
that in any country where such transfer or assignment is not possible, the
Discontinuing Party shall use Commercially Reasonable Efforts to ensure that the
Developing Party has the benefit of such Regulatory Approvals and product
trademarks, and to this end consents to any regulatory authority
cross-referencing to the data and information on file with any regulatory
authority as may be necessary; and
          (d) the Developing Party shall pay a royalty on Sole Development
Products to the Discontinuing Party and shall share Sole Development Income with
the Discontinuing Party in accordance with Sections 7.5 through 7.10 below.
     6.2 Development Updates. At least every six (6) months during the Term, the
Developing Party shall provide the Discontinuing Party with a written update
regarding the status of the Developing Party’s efforts to develop and
commercialize Sole Development Products. All information provided by the
Developing Party to the Discontinuing Party pursuant to this Section 6.2 shall
be considered Confidential Information (as defined in Section 13.1) of the
Developing Party.
     6.3 Failure to Exercise Sole Development Option. In the event the
non-discontinuing Party does not exercise the Sole Development Option within the
six (6) month time period set forth in Section 6.1 above, and if agreed upon in
writing by the Parties, the JSC may seek, or designate one of the Parties to
seek, qualified Third Party(ies) to develop the applicable Clinical Development
Candidate or Cell Therapy Product. Both Parties shall have the right to approve
any such qualified Third Party(ies). The Parties shall share equally all
(a) income received from such Third Party(ies) and (b) Clinical Development
Costs, Commercialization Costs and Manufacturing Costs (as applicable)
associated with the wind-down of activities related to the applicable Clinical
Development Candidate or Cell Therapy Product.
     6.4 Diligence Requirement. The Developing Party’s right to exclusively
develop and commercialize a Sole Development Product is expressly conditioned on
such Party’s continuing effort to use Commercially Reasonable Efforts to develop
such Sole Development Product (the “Diligence Requirement”). The Diligence
Requirement shall be conditioned upon the continuing absence of any adverse
condition or event that warrants a delay in the development, clinical testing or
commercialization of a particular Sole Development Product; provided that a
delay shall only be warranted for as long as the condition or event preventing
the performance continues and, upon cessation of such condition or event, the
Developing Party shall promptly resume performance hereunder. Such conditions
and events shall include, without limitation, the inability to produce
preclinical or clinical supplies, events that would cause delays in clinical
studies (e.g., negative toxicological or pharmacological test results or an
adverse clinical event), challenges within the regulatory process, or
intellectual property impediments to developing a Sole Development Product that
the Developing Party could not reasonably have foreseen. If the Discontinuing
Party reasonably believes that the Developing Party has failed to satisfy the
Diligence Requirement with respect to a Sole Development Product, it shall so
notify the Developing Party in writing and the Developing Party shall

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then have ninety (90) days to demonstrate to the Discontinuing Party’s
reasonable satisfaction that the Diligence Requirement for such Sole Development
Product has been satisfied. Any dispute regarding the satisfaction of the
Diligence Requirement shall be resolved by the Parties under the terms of
ARTICLE XVII below. If it is determined that the Diligence Requirement has not
been satisfied with respect to a Sole Development Product, then the Parties
shall meet and discuss in good faith a mutually agreeable process for
development and commercialization of the Sole Development Product.
ARTICLE VII.
COSTS, PAYMENTS AND FINANCIAL RECORD KEEPING
     7.1 Clinical Development Costs. All Clinical Development Costs incurred in
accordance with the corresponding Clinical Development Plan budget shall be
borne by Athersys and Angiotech in the following proportions:
          (a) Clinical Development Costs associated with the execution of any
Phase I Study or Phase II Study pursuant to any Clinical Development Plan shall
be shared [*] percent ([*%]) by Athersys and [*] percent ([*%]) by Angiotech;
          (b) Clinical Development Costs associated with the execution of the
first Phase III Study conducted pursuant to this Strategic Alliance Agreement
shall be shared [*] percent ([*%]) by Athersys and [*] percent ([*%]) by
Angiotech; and
          (c) Clinical Development Costs associated with the execution of any
Phase III Study that is subsequent to the first Phase III Study trial described
in clause (b) above shall be shared [*] percent ([*%]) by Athersys and [*]
percent ([*%]) by Angiotech.
     7.2 Development Costs Quarterly Reconciliation.
          (a) Within thirty (30) days following the end of each calendar quarter
during the Term, Athersys shall submit to Angiotech a written report setting
forth in reasonable detail, and separately with respect to each Clinical
Development Plan and each of the categories of Clinical Development Costs set
forth in Section 7.1(a-c), all associated Clinical Development Costs incurred by
Athersys in the immediately preceding calendar quarter.
          (b) Within thirty (30) days following the end of each calendar quarter
during the Term, Angiotech shall submit to Athersys a written report setting
forth in reasonable detail, and separately with respect to each Clinical
Development Plan and each of the categories of Clinical Development Costs set
forth in Section 7.1(a-c), all associated Clinical Development Costs incurred by
Angiotech in the immediately preceding calendar quarter.
 

*   Confidential treatment has been requested for the redacted portions of this
exhibit, and such confidential portions have been omitted and filed separately
with the Securities and Exchange Commission.

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          (c) Within forty-five (45) days following the end of each calendar
quarter, Angiotech shall submit to Athersys a written report (i) reconciling the
Clinical Development Costs set forth in the reports required under
Section 7.2(a) and Section 7.2(b), and (ii) setting forth the calculation of any
net amount owed by Athersys to Angiotech, or by Angiotech to Athersys (as the
case may be) in order to ensure the sharing of such Clinical Development Costs
in accordance with Section 7.1. The net amount payable in accordance with clause
(ii) shall be paid by Angiotech or Athersys, as the case may be, within ten
(10) business days after Athersys’ receipt of such written report, without
regard to any dispute as to the amounts incurred by a Party or owed to a Party
under this Section 7.2(c) in accordance with the applicable budget. In the event
of such dispute under this Section 7.2(c), the disputing Party shall provide
written notice to the other Party within such ten (10)-business day period after
receipt of the written report in question, specifying in detail such dispute.
The Chief Financial Officers (“CFOs”) of the Parties shall promptly thereafter
meet and shall negotiate in good faith a final resolution to such dispute.
     7.3 Milestone Payments. Angiotech shall provide written notice to Athersys
within thirty (30) days of achievement of any milestone set forth on
Schedule 7.3; provided that such notice with respect to items 4 and 5 on
Schedule 7.3 shall be given within thirty (30) days following the calendar
quarter in which such milestone occurred. Angiotech shall pay to Athersys the
corresponding amount set forth on Schedule 7.3 within ten (10) business days
following receipt of such written notice by Athersys. An additional milestone
payment is described in Section 2.4.
     7.4 Profit Sharing. Angiotech and Athersys shall share Profits from the
sale of Cell Therapy Products in accordance with Schedule 7.4.
     7.5 Royalties on Sole Development Products.
          (a) Royalty Amounts. During the Royalty Term for each Sole Development
Product commercialized by the Developing Party under ARTICLE VI, the Developing
Party will pay the Discontinuing Party a royalty on Net Sales of such Sole
Development Product (except to the extent otherwise provided under
Section 7.5(b)) at the following rates:
          (i) if, as of the date the Opt-Out Notice is delivered, the first
patient has not yet been enrolled in a Phase II Study of such Sole Development
Product, such royalty shall be [*] percent ([*%]) with respect to Net Sales of
Sole Development Products for which Angiotech is the Developing Party, and no
royalty with respect to Net Sales of Sole Development Products for which
Athersys is the Developing Party;
          (ii) if, as of the date the Opt-Out Notice is delivered, the first
patient has been enrolled in a Phase II Study of such Sole Development Product
 

*   Confidential treatment has been requested for the redacted portions of this
exhibit, and such confidential portions have been omitted and filed separately
with the Securities and Exchange Commission.

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but the first patient has not yet been enrolled in a Phase III Study of such
Sole Development Product, such royalty shall be [*] percent ([*%]) with respect
to Net Sales of Sole Development Products for which Angiotech is the Developing
Party, and [*] percent ([*%]) with respect to Net Sales of Sole Development
Products for which Athersys is the Developing Party; and
          (iii) if, as of the date the Opt-Out Notice is delivered, the first
patient has been enrolled in a Phase III Study for such Sole Development Product
and thereafter, such royalty shall be [*] percent ([*%]) with respect to Net
Sales of Sole Development Products regardless of which Party is the Developing
Party;
provided, however, that if it is unclear whether a clinical trial is in a
particular phase, the actual phase of such clinical trial shall be determined by
reference to the next following clinical trial for such Sole Development Product
(e.g., a Phase I/II clinical trial would be considered a Phase II Study if,
following completion of such trial, the Developing Party commences a Phase III
Study of such Sole Development Product). If (xi) Angiotech is the Discontinuing
Party and has elected to decline payment of the Phase I Milestone Fee pursuant
to Section 2.4(b), and (xii) Athersys has elected to receive a greater share of
Profits pursuant to Section 2.4(b)(ii), then the royalty rate payable to
Angiotech pursuant to clause (ii) above shall be [*] percent [*%] and the
royalty rate payable to Angiotech pursuant to clause (iii) above shall be [*]
percent [*%]. The royalties payable pursuant to this Section 7.5(a) shall not be
creditable against any other payment by the Developing Party under this ARTICLE
VII.
          (b) Licensee and Sublicensee Royalties on Sole Development Products.
Any sales of Sole Development Products by a licensee or sublicensee of a
Developing Party or its Affiliate shall be subject to royalties under
Section 7.5(a) to the same extent as if the sale had been made by the Developing
Party; provided that the royalty payable to the Discontinuing Party pursuant to
(i) Section 7.5(a)(i) shall not exceed twenty-five percent (25%) of the royalty
revenue received by the Developing Party from such licensee or sublicensee; (ii)
Section 7.5(a)(ii) shall not exceed thirty percent (30%) of the royalty revenue
received by the Developing Party from such licensee or sublicensee; and (iii)
Section 7.5(a)(iii) shall not exceed thirty-five percent (35%) of the royalty
revenue received by the Developing Party from such licensee or sublicensee. The
royalties payable pursuant to this Section 7.3(b) shall not be creditable
against any other payment by the Developing Party under this ARTICLE VII.
          (c) Third Party Payments on Sole Development Products. The Developing
Party shall pay all Third Party Payments due as a result of any Sole Development
Product sold by the Developing Party. For the avoidance of doubt, such Third
Party Payments shall be in addition to any royalties that may be due pursuant to
Sections 7.5(a) and 7.5(b).
 

*   Confidential treatment has been requested for the redacted portions of this
exhibit, and such confidential portions have been omitted and filed separately
with the Securities and Exchange Commission.

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          (d) Reduction due to Royalty Stacking. In the event the Developing
Party obtains or possesses a license to one or more Patent Rights of a Third
Party in order to make, have made, use, lease, offer to sell, sell, export or
import a Sole Development Product and is required to pay Third Party Payments
with respect to the Sole Development Product in connection with such license(s),
then the Developing Party may deduct, from royalties due the other Party
pursuant to this Section 7.5(d), fifty percent (50%) of the Third Party Payments
that are actually paid and are attributable to such Sole Development Product,
but in no event may the royalties due to the other Party pursuant to this
Section 7.5(d) be reduced by more than fifty percent (50%) as a result of this
provision. Any amounts for which the Developing Party is entitled to receive
credit, which are not deducted as a result of the fifty percent (50%) cap, shall
be carried forward and credited against future royalties due to such Party.
     7.6 Calculation and Payment of Royalties.
          (a) Timing of Royalty Payments. A Party paying a royalty required
under Section 7.5 (the “Paying Party”) shall pay all such royalties to the other
Party (the “Royalty Recipient”) within forty-five (45) days after the last day
of the calendar quarter in which such royalties accrue; provided that the Paying
Party shall be entitled to offset any such royalty payment against amounts owed
to the Paying Party by the Royalty Recipient; and provided further that if:
(i) Angiotech is the Royalty Recipient and has elected to decline payment of the
Phase I Milestone Fee pursuant to Section 2.4(b); (ii) Athersys has elected to
receive the Replacement Fee pursuant to Section 2.4(b)(i); and (iii) the
Replacement Fee has not yet been paid, then before paying any royalties to
Angiotech under Section 7.5 or Sole Development Income to Angiotech under
Section 7.7, Athersys shall be entitled to withhold from such royalties and Sole
Development Income the Replacement Fee (plus interest) on the unpaid amount of
the Replacement Fee, at the rate set forth in Section 7.10, from the date of
Successful Completion of the first Phase III Study for a Clinical Development
Candidate in the U.S. in any Cardiovascular Indication(s), until the unpaid
amounts of the Replacement Fee (plus interest) are recovered by Athersys.
          (b) Payment Method. The Paying Party shall pay royalties hereunder in
U.S. dollars by wire transfer in immediately available funds to an account
designated by the Royalty Recipient.
          (c) Accrual of Royalties. Sales between a Party and its Affiliates or
their respective direct or indirect licensees, sublicensees or subcontractors ,
or between such parties, shall not be subject to royalties, but in such cases
royalties shall be calculated upon the quarterly Net Sales of Sole Development
Products by such parties to an independent Third Party. Only one (1) royalty
payment shall accrue with respect to the same unit of a Sole Development
Product. No royalties shall accrue on disposition of reasonable quantities of
Sole Development Products for no charge as samples, pursuant to an indigent
patient assistance program, or donations to Third Parties. Royalties shall
accrue on Sole Development Products distributed for free other than as described
in the preceding sentence based on average Net Sales for such Sole Development
Product during the corresponding period, excluding such free Sole Development
Product.

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          (d) Taxes. Any withholding of taxes levied by tax authorities on the
payments hereunder shall be deducted by the Paying Party from the sums otherwise
payable by the Paying Party hereunder for payment to the proper tax authorities
on behalf of the Royalty Recipient and shall be paid by the Paying Party to such
proper tax authorities. The Parties agree to cooperate with each other in the
event the Royalty Recipient claims exemption from such withholding or seeks
deductions under any double taxation or other similar treaty or agreement from
time to time in force, such cooperation to consist of providing receipts of
payment of such withheld tax or other documents reasonably available to the
Parties.
          (e) Royalty Reports. Within forty-five (45) days after the last day of
each calendar quarter in which royalties are due, the Paying Party shall deliver
to the Royalty Recipient a report setting forth in reasonable detail the
calculation of Net Sales and of royalties payable to the Royalty Recipient for
such calendar quarter identifying, by country, the Sole Development Products
sold by the Paying Party and its Affiliates, licensees, sublicensees and
distributors. Such reports shall be considered Confidential Information of the
Paying Party subject to the terms of ARTICLE XII hereof.
     7.7 Sharing of Sole Development Income. The Developing Party shall pay to
the Discontinuing Party the following percentage share of all Sole Development
Income received by the Developing Party that is attributable to the rights owned
by or granted to the Developing Party hereunder: (i) if the royalty rate
specified in Section 7.5(a)(i) would be payable on Net Sales of such Sole
Development Product, [*] percent ([*%]) of all such Sole Development Income;
(ii) if the royalty rate specified in Section 7.5(a)(ii) would be payable on Net
Sales of such Sole Development Product, [*] percent ([*%]) of all such Sole
Development Income; or (iii) if the royalty rate specified in Section
7.5(a)(iii) would be payable on Net Sales of such Sole Development Product, [*]
percent ([*%]) of all such Sole Development Income. All such amounts owed by the
Developing Party in accordance with this Section 7.7 shall be due and payable to
the Discontinuing Party within thirty (30) days after receipt of such Sole
Development Income by the Developing Party, subject to any right of offset
pursuant to Section 7.6(a). In the case of receipt by the Developing Party of
any non-cash consideration from a licensee or sublicensee in consideration for
the granting of a license or sublicense to a Sole Development Product that is
attributable to the rights owned by or granted to the Developing Party hereunder
(but excluding, for the avoidance of doubt, consideration received by the
Developing Party that is attributable to the items excluded from the definition
of Sole Development Income, and further excluding standard contractual benefits,
such as indemnities, warranties, diligence and confidentiality obligations and
the like), Sole Development Income shall be calculated based on the value of
such non-cash consideration received by the Developing Party (and shall be
combined with the value of any cash consideration received for purposes of
determining the applicable percentage share above).
 

*   Confidential treatment has been requested for the redacted portions of this
exhibit, and such confidential portions have been omitted and filed separately
with the Securities and Exchange Commission.

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     7.8 Financial Record Keeping. During the Term and for seven (7) years
thereafter, each Party shall keep complete and accurate records of its Clinical
Development Costs, Manufacturing Costs, Commercialization Costs, Net Sales and
other business and financial data and information underlying the
reconciliations, cost reports, calculation of costs and Profits, and payments
that are the subject of the Transaction Agreements.
     7.9 Audits. Upon at least forty-five (45) days prior written notice to the
other Party, a Party will have the right, once annually at its own expense, to
have an independent, certified public accounting firm, selected by such Party
and reasonably acceptable to the other Party, inspect relevant books and records
of the other Party in the location(s) where such books and records are
maintained by the other Party. The written notice from the auditing Party shall
name the accounting firm and shall describe the scope of the audit to be
conducted and the records and statements sought to be verified. Such audit shall
be conducted during regular business hours and under obligations of strict
confidence, and shall be conducted for the sole purpose of verifying the basis
and accuracy of any report(s) submitted by the audited Party and the payment of
costs and Profit-sharing amounts hereunder, as applicable, all to ascertain that
all costs charged and payments made hereunder are correct in accordance with the
Transaction Agreements, in each case with respect to relevant books and records
corresponding to the prior twenty-four (24) month period. If such audit of such
books and records concludes that the audited Party has failed to accurately
report any cost, Profit or payment information, then in the event of any
underpayment, the audited Party shall pay to the auditing Party any undisputed
additional amounts due within thirty (30) days after the date the audited Party
receives such accounting firm’s written report so concluding, together with
interest calculated using the prime rate (as published in The Wall Street
Journal on the date when payment was due) plus three percent (3%) for the time
from which the amounts should have been paid until the time of actual payment.
If such undisputed underpayment exceeds seven and one-half percent (7.5%) of the
payments that were to be paid to the auditing Party during the period audited,
the audited Party also shall reimburse the auditing Party for the amounts
(reasonable fees and expenses) paid to the accounting firm in conducting the
audit. If such accounting firm concludes that the audited Party overpaid the
auditing Party, the auditing Party shall refund such undisputed overpayments to
the audited Party within thirty (30) days after the date the auditing Party
receives such accounting firm’s report so concluding. If the audited Party
disputes the results of the audit, such dispute shall be resolved by the
Parties’ CFOs, and any purported underpayment shall be withheld until such
dispute is finally resolved.
     7.10 Late Payments. Interest will be assessed on any overdue payments at a
rate equal to the prime rate (as published in The Wall Street Journal on the
date when payment was due) plus three percent (3%) for the time from which the
amounts should have been paid until the time of actual payment, or at such lower
maximum rate permitted by law. The payment of such interest will not prevent the
Party to which such payment is due from exercising any other rights it may have
as a consequence of the lateness of any payment.

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ARTICLE VIII.
COMMERCIALIZATION
     8.1 Commercialization of Cell Therapy Products. During the Term, Angiotech
shall have the sole authority and the exclusive right to commercialize Cell
Therapy Products (itself or through one or more Third Parties selected by
Angiotech), and shall have sole authority and responsibility in all matters
relating to the commercialization of Cell Therapy Products including, without
limitation, the following activities (and other associated activities) with
respect to Cell Therapy Products: (a) executing product promotion, marketing and
sales activities; (b) booking sales; (c) handling all aspects of order intake
and processing, invoicing and collection, distribution, warehousing, inventory
and receivables, and collection of data of sales to hospitals and other end
users (i.e., market research data); (d) handling all privacy and
reimbursement-related activities; (e) handling the logistics of all recalls;
(f) handling all returns; (g) handling all other customer service related
functions; and (h) filing Cell Therapy Product promotional materials with the
relevant regulatory authority as permitted or required under applicable law.
Angiotech shall use Commercially Reasonable Efforts to commercialize at least
one Cell Therapy Product (at its discretion) for a myocardial infarction
indication and a peripheral vascular disease indication in countries of the
Territory where Regulatory Approval has been obtained for such Cell Therapy
Product(s); provided that Angiotech shall consider in good faith any
recommendations and requests by Athersys’ representatives on the JSC regarding
commercialization of Cell Therapy Products.
ARTICLE IX.
MANUFACTURE AND SUPPLY OF CLINICAL DEVELOPMENT CANDIDATES AND CELL THERAPY
PRODUCTS
     9.1 Athersys’ Manufacturing Obligation. Athersys shall be responsible for
manufacturing and supplying Clinical Development Candidates and Cell Therapy
Products for development and commercialization by the Parties in accordance with
the Transaction Agreements. In accordance with this ARTICLE IX, Athersys shall
supply (or shall engage a Third-Party manufacturer to supply) sufficient
quantities of the Clinical Development Candidates and Cell Therapy Products in
final packaged form to the extent reasonably required by Athersys and Angiotech
to implement the Clinical Development Programs and by Angiotech to commercialize
the Cell Therapy Products in the Territory. The specific terms and procedures by
and upon which Athersys shall supply the Cell Therapy Products to Angiotech
hereunder shall be reasonably mutually determined by the Parties in good faith,
and shall be set forth in a separate manufacturing and supply agreement not less
than twelve (12) months prior to the anticipated First Commercial Sale of a Cell
Therapy Product in the Territory, such terms and procedures to be commercially
reasonable and consistent with the provisions of the Transaction Agreements. The
Parties also may agree to negotiate in good faith a separate quality agreement
that sets forth the Parties’ obligations with respect to current good
manufacturing practices, production, release and/or distribution of Clinical
Development Candidates and Cell Therapy Products in the Territory, the first
draft of which shall be prepared collaboratively by the quality departments of
each Party. Unless otherwise provided herein, Athersys shall have the exclusive
right and obligation to manufacture

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(itself and/or through Third Parties selected by Athersys) and supply Clinical
Development Candidates and Cell Therapy Products for development and
commercialization hereunder.
     9.2 Manufacturing Costs. Athersys shall keep, and shall require all
Third-Party manufacturers of the Clinical Development Candidates and/or Cell
Therapy Products to keep, accurate records in sufficient detail concerning the
Manufacturing Costs. Angiotech shall be entitled to engage an independent public
accounting firm to audit the Manufacturing Costs as provided in, and in
accordance with, Section 7.6. For this purpose, Athersys itself shall keep, and
to the extent that Athersys has obtained records or documents from its
Third-Party manufacturers shall keep, such account books and related records or
documents for a period of at least seven (7) years after the end of the fiscal
year to which the Manufacturing Costs relate.
     9.3 Manufacturing Compliance. All Clinical Development Candidates and Cell
Therapy Products supplied hereunder shall be manufactured by or on behalf of
Athersys in compliance with current good manufacturing practices, other
applicable requirements of relevant regulatory authorities, and other applicable
laws and regulations, including applicable laws and regulations relating to the
transportation, storage, use, handling and disposal of waste materials and
hazardous materials used to manufacture Clinical Development Candidates and/or
Cell Therapy Products. Athersys, at its expense, shall obtain and maintain,
and/or shall require that its Third-Party manufacturers obtain and maintain, for
so long as Athersys is supplying Clinical Development Candidates and/or Cell
Therapy Products hereunder, all facility licenses and government permits
necessary to manufacture and supply the Clinical Development Candidates and Cell
Therapy Products.
     9.4 Product Conformity. Angiotech, in consultation with the JSC, shall
determine the Clinical Development Product and Cell Therapy Product
specifications and testing methods (“Product Specifications”) for the Clinical
Development Products and Cell Therapy Products to be supplied by Athersys
hereunder, and such specifications and testing methods shall be consistent with
industry standards and applicable regulatory requirements. When Regulatory
Approval is obtained in any country of the Territory, the Product Specifications
shall be those specifications and testing methods which have been approved by
the regulatory authority in that country. The Product Specifications may be
amended from time to time by written mutual agreement of the Parties. Athersys
shall, and shall ensure that any Third-Party manufacturer shall, manufacture the
Clinical Development Products and Cell Therapy Products in conformance with the
Product Specifications and in compliance with the requirements set forth in
Section 9.3.
     9.5 Ordering; Forecasting; Acceptance and Rejection. The terms and
procedures set forth in the manufacturing and supply agreement described in
Section 9.1 may include provisions related to Cell Therapy Product orders and
forecasts, Cell Therapy Product acceptance, and, subject to the provisions of
this Section 9.5, Cell Therapy Product rejection and remedies for defective Cell
Therapy Product. Any dispute arising between Athersys and Angiotech concerning a
shipment of Cell Therapy Product that the Parties do not resolve within thirty
(30) days of Angiotech providing a notice of shipment of

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defective Cell Therapy Product shall be submitted to a reputable independent
test organization located in the Territory, to be mutually agreed upon by the
Parties. Such independent test organization shall determine whether the Cell
Therapy Product in a given shipment was defective, and the decision of said
independent test organization shall be final and binding on Athersys and
Angiotech. If the defective Cell Therapy Product was supplied by a Third-Party
manufacturer or by Athersys, then any expenses actually incurred by Athersys in
connection with such defective Cell Therapy Product shall be borne solely by
Athersys, and shall not be included in Manufacturing Costs hereunder.
     9.6 Inspection. With respect to the manufacture of the Clinical Development
Candidates and Cell Therapy Products, Angiotech may, at its expense, upon
reasonable notice and during normal business hours, conduct appropriate review
and inspection of the Clinical Development Candidates and Cell Therapy Products
manufacturing facilities, procedures and related documentation to verify
Athersys’ and/or its Third-Party manufacturer’s (as applicable) compliance with
current good manufacturing practices, other applicable requirements of relevant
regulatory authorities, and other applicable laws and regulations, and
conformity of Clinical Development Candidates and Cell Therapy Products with the
applicable Product Specifications.
     9.7 Supply Disruption. In the event that Athersys is materially unable, at
any time, to fulfill its obligation to supply Clinical Development Candidates or
Cell Therapy Products in a timely manner, as required hereunder, for any reason
(a “Supply Disruption”), Athersys shall promptly notify Angiotech of such Supply
Disruption and the estimated extent of such Supply Disruption (including the
anticipated delay time and the quantity of Clinical Development Candidate or
Cell Therapy Product involved). Athersys shall use its Commercially Reasonable
Efforts to cure the Supply Disruption as soon as practicable. In the event that
such Supply Disruption is expected to continue for at least three (3) months
from the date of such notification, Angiotech shall have the right to have the
Clinical Development Candidate or Cell Therapy Product (as applicable)
manufactured by itself or by a Third-Party supplier/manufacturer, and Athersys
shall cooperate and use its Commercially Reasonable Efforts to transfer to
Angiotech (or Angiotech’s designee) all Athersys Intellectual Property
(including, without limitation, Athersys Stem Cell Technology and production and
manufacturing technology) that is necessary or useful to enable Angiotech to
establish (or be) a source for supply of the Clinical Development Candidate or
Cell Therapy Product (as applicable). In addition, Athersys shall teach and
instruct personnel of Angiotech (or Angiotech’s designee) how to obtain
appropriate raw materials and how to reproduce the production and manufacturing
processes and techniques used by Athersys for production and manufacturing of
the Clinical Development Candidate or Cell Therapy Product (as applicable).
     9.8 Back-Up Supplier. If Angiotech, through exercise of reasonable business
judgment, determines that it is reasonable and prudent to obtain a back-up
supplier to prevent a Supply Disruption, then Athersys shall use its
Commercially Reasonable Efforts to identify, engage and qualify at least one
back-up supplier for the Clinical Development Candidate(s) or Cell Therapy
Product(s). If a Third-Party is or will be the principal manufacturer of the
Clinical Development Candidate(s) or Cell Therapy Product(s), such back-up
supplier may be Athersys or its

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Affiliate or Angiotech or its Affiliate. In a manner similar to that described
in Section 9.7 regarding a Supply Disruption, Athersys shall transfer or license
to each such back-up supplier such Athersys Intellectual Property as is
necessary or useful to permit such back-up supplier to implement and practice
processes related to manufacture and supply of Clinical Development Candidate(s)
or Cell Therapy Product(s), and/or to maintain its status as a qualified
manufacturing entity under any and all applicable laws and regulations with
respect to such processes or Clinical Development Candidate(s) or Cell Therapy
Product(s). If Athersys decides to designate and qualify a back-up supplier,
Athersys agrees to consult with Angiotech in identifying and selecting an
appropriate Third Party as back-up supplier, and the Parties shall work together
to establish each selected Third Party back-up supplier as expeditiously as
reasonably possible, so as to minimize the period of absence of supply of
Clinical Development Candidate(s) and/or Cell Therapy Product(s), as the case
may be.
ARTICLE X.
REGULATORY MATTERS
     10.1 Ownership of Regulatory Documentation and Reference Rights; Regulatory
Strategy. Athersys (in collaboration with Angiotech) shall prepare and file, in
its own name, all IND applications for Clinical Development Candidates
throughout the Territory, such filings to be consistent with the JSC’s
regulatory strategy and decisions and subject to Angiotech’s prior written
approval. Upon Angiotech’s reasonable request and to the extent permitted by
applicable law, within thirty (30) days after the completion of each such Phase
I Study hereunder, Athersys shall assign and transfer to Angiotech Athersys’
entire right, title and interest in and to any corresponding IND and other
regulatory filings and documentation pertaining thereto. Angiotech shall own
(a) all regulatory filings and documentation pertaining to all post-Phase I
Studies of Clinical Development Candidates, and all Regulatory Approvals and
related regulatory documents prepared for and/or submitted to the applicable
regulatory authorities in the Territory for all Cell Therapy Products. Upon the
reasonable request of Angiotech, and within a time period that is reasonable and
appropriate in view of the nature and volume of documents so requested, Athersys
shall make available to Angiotech such regulatory filings and related regulatory
documents owned by Athersys (including a right to reference the foregoing) if
and to the extent necessary to enable Angiotech to fulfill its obligations and
to exercise its rights under the Transaction Agreements.
     10.2 Regulatory Communications. Athersys shall have the primary
responsibility for communicating with any regulatory authority regarding any IND
application or other regulatory filing pertaining to a Clinical Development
Candidate that has not yet completed a Phase I Study. Angiotech shall have the
primary responsibility for communicating with any regulatory authority regarding
any IND application or other regulatory filing pertaining to a Clinical
Development Candidate that has completed a Phase I Study, and regarding any
Clinical Development Candidate or Cell Therapy Product that has been submitted
for, or has obtained, Regulatory Approval. Each Party shall reasonably advise,
assist and cooperate with the other Party with respect to regulatory
communications within the primary responsibility of the other Party. Each Party
shall promptly notify the other Party in writing of any material communications

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with a regulatory authority regarding any Clinical Development Candidate or any
Cell Therapy Product in the Territory.
     10.3 Other Regulatory Responsibilities. At the time when the first Phase I
Study is completed for any Clinical Development Candidate, Angiotech thereafter
shall be responsible for (a) overseeing, monitoring and coordinating all
regulatory actions, communications and filings with, and submissions to, each
regulatory authority with respect to such Clinical Development Candidate and any
resulting Cell Therapy Product(s); (b) interfacing, corresponding and meeting
with each regulatory authority; (c) maintaining all regulatory filings;
(d) responding to any action by a regulatory authority that would prohibit the
marketing or the continued marketing of a Cell Therapy Product, or that would
result in any shortage or projected shortage of a Cell Therapy Product; and
(e) filing all adverse event reports. Using its Commercially Reasonable Efforts,
Athersys shall cooperate with Angiotech and assist Angiotech in the performance
of all such activities, and shall provide Angiotech with any information in
Athersys’ possession or control that Angiotech or Athersys reasonably deems to
be relevant to any such activities. To the extent either Party or its Affiliate
has or receives any information regarding any new adverse event or any serious
adverse event that may be relevant to the use of any Clinical Development
Candidate or Cell Therapy Product, such Party shall immediately contact the
other Party and provide the other Party with all such information in accordance
with the adverse event reporting procedures established by Angiotech from time
to time.
     10.4 Cell Therapy Product Complaints and Recalls. Angiotech shall be solely
responsible for responding to any Cell Therapy Product complaints. In the event
(a) any governmental agency or regulatory authority issues a request, directive
or order that a Cell Therapy Product be recalled; (b) a court of competent
jurisdiction orders that Cell Therapy Product be recalled; or (c) Angiotech
reasonably determines that a Cell Therapy Product should be recalled or
withdrawn from the market by Angiotech, or that a “Dear Doctor” letter should be
sent relating to use of a Cell Therapy Product (wherein Angiotech shall
determine the form and content of each such “Dear Doctor” letter), then
Angiotech shall take all appropriate remedial actions with respect thereto. The
cost of any recall, field alert, Cell Therapy Product withdrawal, or field
corrective action shall be considered a Commercialization Cost, unless such
recall, field alert, Cell Therapy Product withdrawal, or field corrective action
is caused in material part by a Party’s breach of its obligations under this
Strategic Alliance Agreement (including obligations regarding manufacturing,
advertising, distribution and storage of the Cell Therapy Products) or
applicable laws, or by its willful misconduct; then such cost shall be borne by
the breaching Party to the extent such recall, field alert, Cell Therapy Product
withdrawal, or field corrective action was due to such causes.
     10.5 Compliance With All Applicable Laws and Regulations; Cooperation. Each
Party shall perform its obligations under the Transaction Agreements, and its
responsibilities and rights under the Clinical Development Plans and otherwise
in connection with the development and commercialization of Clinical Development
Candidates and Cell Therapy Products, in accordance with all applicable laws,
rules and regulations, including those of all regulatory authorities in the
Territory, applicable

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reporting obligations, applicable import and export laws and regulations,
current good clinical practices. Each Party shall fully cooperate with the other
Party in all reasonable respects useful or necessary to enable each to be and
remain in compliance with all such applicable laws, rules and regulations.
ARTICLE XI.
INTELLECTUAL PROPERTY
     11.1 Existing Intellectual Property Rights Retained. Angiotech and Athersys
shall each retain all of their respective ownership interests in their
respective Intellectual Property, as such exists as of the Effective Date.
Nothing in this Strategic Alliance Agreement or any Transaction Agreement shall
be construed to transfer ownership of any Intellectual Property rights existing
as of the Effective Date from one Party to another Party.
     11.2 Ownership Of New Intellectual Property. Ownership and treatment of
Intellectual Property resulting from the Parties’ activities under the
Transaction Agreements shall be as set forth in the License Agreement.
ARTICLE XII.
CLINICAL PROGRAM RECORD KEEPING
     12.1 Scientific, Patent and Regulatory Records. When performing its
responsibilities and activities under each Pre-Clinical Development Program, New
Pre-Clinical Development Program and Clinical Development Program or under any
Transaction Agreement, each Party shall maintain, and shall cause its employees
and contractors to maintain, scientific and regulatory records, in sufficient
and reasonable detail and in good scientific manner appropriate for patent and
regulatory purposes, which shall fully and properly reflect all work done and
results achieved in the performance of such responsibilities and activities by
such Party.
     12.2 Review of Records. On reasonable advance written notice, and at
reasonable intervals, during normal business hours each Party shall have the
right to inspect and copy records of the other Party maintained in connection
with the activities conducted, work performed and results achieved in the
performance of its responsibilities and activities under each Pre-Clinical
Development Program, New Pre-Clinical Development Program and Clinical
Development Program or under any Transaction Agreement, including, without
limitation, records reflecting inventions, ideas, information or data developed
by a Party in the course of or work done hereunder, to the extent such access is
reasonably necessary or useful for a Party to exercise its rights and perform
its obligations under this Strategic Alliance Agreement or other Transaction
Agreements. Notwithstanding the definition of “Confidential Information” all
such records and the information disclosed therein shall constitute Confidential
Information of the Party creating such records, and shall be maintained in
confidence by the receiving Party in accordance with ARTICLE XIII.

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     12.3 Policies For Records. In order to protect each Party’s Patent Rights
under United States and foreign law in any inventions conceived or reduced to
practice in connection with any activities or work performed by the Parties
under this Strategic Alliance Agreement or any Transaction Agreement, each Party
shall require its employees to record and maintain data and information
developed pursuant to the Transaction Agreements in such a manner as to enable
the Parties to use such records to establish inventorship and corroborated and
documented dates of conception, diligence to reduction to practice and/or actual
reduction to practice. Each Party shall require its employees engaged in
activities or work in connection with the Transaction Agreements to assign all
Intellectual Property created, conceived or reduced to practice in connection
therewith to their respective employer, and each Party shall ensure that each
such employee has signed such an agreement before any activities or work in
connection with the Transaction Agreements commences.
ARTICLE XIII.
CONFIDENTIAL INFORMATION
     13.1 Confidential Information. “Confidential Information” means all
proprietary, non-public Intellectual Property and other information, including,
but not limited to, proprietary information and materials (whether or not
patentable) regarding a Party’s technology, products, business information or
objectives, that is communicated in any way or form by such Party (a “Disclosing
Party”) to the other Party (a “Receiving Party”), and all copies thereof made,
in whole or in part, by the Receiving Party in any form. Notwithstanding the
foregoing, the term “Confidential Information” shall not include any information
of a Disclosing Party that: (a) was already known by the Receiving Party, other
than under an obligation of confidentiality, at the time of disclosure by the
Disclosing Party; (b) was generally available to the public or otherwise part of
the public domain at the time of its disclosure to the Receiving Party;
(c) became generally available to the public or otherwise part of the public
domain after its disclosure to the Receiving Party and other than through any
act or omission of the Receiving Party in breach of this Strategic Alliance
Agreement or any Transaction Agreement; (d) was subsequently lawfully disclosed
to the Receiving Party by a Third Party on a non-confidential basis; (e) can be
shown by written records of the Receiving Party to have been independently
developed by the Receiving Party without reference to the Confidential
Information of the Disclosing Party, and without breach of any of the provisions
of this Strategic Alliance Agreement or any Transaction Agreement; or (f) is
information that the Disclosing Party has specifically agreed in writing that
the Receiving Party may disclose. The existence and terms of each of the
Transaction Agreements, the transactions described thereby and the performance
of any Party’s rights or any Party’s obligations under them shall be considered
the Confidential Information of both of the Parties for which each of the
Parties are deemed to be the Disclosing Party.
     13.2 Confidentiality Obligations. For the Term and for five (5) years
thereafter:
          (a) Except as expressly permitted in the Transaction Agreements, the
Receiving Party shall keep completely confidential, and shall not publish or
otherwise

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disclose, and shall not use for any purpose, any Confidential Information of the
Disclosing Party; provided, however, that the Receiving Party may disclose any
Confidential Information of the Disclosing Party to a Third Party to the extent
necessary to allow the Receiving Party to collaborate with such Third Party in
performing any of its obligations or exercising any of its rights under any
Transaction Agreement or to allow the Disclosing Party to make the regulatory
filings with such Third Party as advisable or required to obtain approval to
conduct clinical trials or obtain Regulatory Approval for a Clinical Development
Candidate or Cell Therapy Product, and in each case then only after (i) first
advising such Third Party of the Receiving Party’s obligations under this
Strategic Alliance Agreement and the Transaction Agreements, and (ii) securing
from such Third Party a written obligation of confidentiality no less stringent
than that imposed on the Receiving Party under this Strategic Alliance Agreement
and the Transaction Agreements (except when not possible with regard to
governmental authorities or agencies).
          (b) Except as expressly permitted in the Transaction Agreements, the
Receiving Party shall not disclose the Confidential Information of the
Disclosing Party to any person or entity except the Receiving Party, its
Affiliates and their respective employees, consultants and agents who have a
need to know such Confidential Information of the Disclosing Party to further
the purposes of any of the Transaction Agreements, and then only after (i) first
advising such employees, consultants and agents of the Receiving Party’s
obligations under this Strategic Alliance Agreement and the Transaction
Agreements, and (ii) securing from such employees, consultants and agents a
written obligation of confidentiality no less stringent than that imposed on the
Receiving Party under this Strategic Alliance Agreement and the Transaction
Agreements.
          (c) Except with the prior written consent of the other Party, a Party
shall not make any public announcement or press release concerning any of the
Transaction Agreements, the transactions contemplated by any of them, the rights
or obligations of the Parties under any of them, or any of the activities that
have occurred or may occur thereunder.
          (d) The Parties agree on the importance of coordinating their public
announcements respecting the Transactional Agreements and the subject matter
thereof (other than academic, scientific or medical publications that are
subject to the publication provision set forth below). Angiotech and Athersys
shall, from time to time, and at the request of the other Party, discuss and
agree on the general information content relating to the Transactional
Agreements which may be publicly disclosed (including, without limitation, by
means of any printed publication or oral presentation).
     13.3 Permitted Disclosures. Notwithstanding Section 13.2:
          (a) The Receiving Party may disclose Confidential Information of the
Disclosing Party to the extent the Receiving Party is compelled to disclose such
information by a court or other tribunal of competent jurisdiction; provided,
however, that in such case the Receiving Party shall immediately give notice to
the Disclosing Party, so that the Disclosing Party may seek a protective order
or other remedy from said

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court or tribunal. In any event, the Receiving Party shall disclose only that
portion of the Confidential Information of the Disclosing Party that, in the
opinion of its legal counsel, is legally required to be disclosed, and will
exercise reasonable efforts to ensure that any such Confidential Information of
the Disclosing Party so disclosed will be accorded confidential treatment by
said court or tribunal.
          (b) The Receiving Party may disclose the terms and conditions of this
Strategic Alliance Agreement or any Transaction Agreement (including providing a
copy hereof or thereof, redacted as appropriate) to any bona fide potential
permitted assignee or successor to a Party’s interest under this Strategic
Alliance Agreement or any Transaction Agreement, or to a bona fide potential
lender from which a Party is considering borrowing money, or to a bona fide
potential collaborator in connection with the Transaction Agreements, or in the
case of Athersys, to any bona fide financial investor from which it may take
money; provided, however, in any such case such that the Receiving Party shall
first obtain a written obligation of confidentiality no less stringent than that
imposed on the Receiving Party under this Strategic Alliance Agreement and the
Transaction Agreements from the bona fide potential permitted assignee or
successor, bona fide potential lender, bona fide potential collaborator or bona
fide financial investor.
          (c) The Receiving Party may disclose the terms and conditions of this
Strategic Alliance Agreement and/or the Transaction Agreements (including
providing a copy hereof, redacted (as appropriate) with the prior written
approval of the other Party, such approval not to be unreasonably withheld or
delayed) in connection with filings with the U.S. Securities and Exchange
Commission or otherwise pursuant to applicable securities laws and regulations,
filings with the Internal Revenue Service and otherwise pursuant to applicable
tax laws and regulations, and other filings required by law or regulation;
provided, however, that the Receiving Party shall provide to the other Party a
copy of any such proposed filing at least two (2) business days in advance of
the filing, and shall consider in good faith the other Party’s suggested
redactions. In any event, the Receiving Party shall disclose only that portion
of the Confidential Information of the Disclosing Party that, in the reasonable
opinion of its legal counsel, is legally required to be disclosed by law or
regulation. Additionally, so long as Athersys’ securities are not publicly
traded, Athersys may disclose (including providing a copy hereof, redacted as
appropriate) to any bona fide potential purchaser of Athersys’ securities the
foregoing information; provided, however, that Athersys first obtains a written
obligation of confidentiality from the recipient that is no less stringent than
Athersys’ obligations under this Strategic Alliance Agreement and the
Transaction Agreements.
          (d) The Third Party collaborators set forth on Schedule 4.1 with which
Athersys has executed an agreement as of the Effective Date, and which might be
considered a subcontractor of Athersys’ obligations under this Strategic
Alliance Agreement and the Transaction Agreements may have limited rights to
publish their results obtained pursuant to such agreements. Any publication by a
Third Party collaborator in accordance with the terms and conditions of its
executed Existing Third Party Agreement with Athersys shall not be considered a
breach of Athersys’ obligations hereunder.

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          (e) The Parties agree that the public announcement of the execution of
this Strategic Alliance Agreement shall be in the form of a press release to be
mutually agreed upon within five (5) business days after the Effective Date;
provided that such press release shall not be publicly disseminated by either
Party prior to May 15, 2006. A Party may republish, reuse or disclose the same
content of any prior publication, press release or disclosure, if such
republication, reuse or disclosure is presented in substantially the same form
in which it was previously published, used or disclosed, without modification of
the content that was previously published, used or disclosed.
     13.4 Publication. Except as provided in Section 13.3(e), during the Term
each Party will submit to the other Party for review and approval all proposed
academic, scientific and medical publications and public presentations relating
to the Pre-Clinical Development Programs, New Pre-Clinical Development Programs,
Clinical Development Programs, or the Transactional Agreements, for review in
connection with preservation of Patent Rights and/or to determine whether any of
such other Party’s Confidential Information should be modified or deleted.
Written copies of such proposed publications and presentations shall be
submitted to the non-publishing Party no later than thirty (30) days before
submission for publication or presentation, and the non-publishing Party shall
provide its comments with respect to such publications and presentations within
fifteen (15) business days of its receipt of such written copy. The review
period may be extended for an additional thirty (30) days in the event the
non-publishing Party can demonstrate reasonable need for such extension,
including, but not limited to, the preparation and filing of patent
applications. By mutual agreement, this period may be further extended. Athersys
and Angiotech will each comply with standard academic practice regarding
authorship of scientific publications and recognition of contribution of other
parties in any publications pursuant to this Section 13.4. With regard to
proposed publications and presentations by a Third Party pursuant to an Existing
Third Party Agreement, the time periods set forth above shall be complied with
by the Parties to the extent possible, taking into account the applicable
provisions of the subject Existing Third Party Agreement.
ARTICLE XIV.
REPRESENTATIONS AND WARRANTIES
     14.1 Authority. Each Party represents and warrants that, as of the
Effective Date, it has the full right, power and authority to enter into this
Strategic Alliance Agreement and the other Transaction Agreements, and that this
Strategic Alliance Agreement and the other Transaction Agreements have been duly
executed by such Party and constitute the legal, valid and binding obligations
of such Party, enforceable in accordance with their terms, subject to (a) the
effect of any applicable bankruptcy, insolvency, reorganization, moratorium and
other similar laws relating to or affecting creditors’ rights and remedies
generally, and (b) the effect of general equitable principles, regardless of
whether asserted in a proceeding in equity or at law.
     14.2 No Conflicts. Each Party represents and warrants that the execution,
delivery and performance of this Strategic Alliance Agreement and the other
Transaction Agreements do not conflict with, or constitute a breach or default
under, any of its charter

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or organizational documents, any law, order, judgment or governmental rule or
regulation applicable to it, or any material agreement, contract, commitment or
instrument to which it is a party.
     14.3 Additional Representations and Warranties of Athersys. In addition to
the representations and warranties made by Athersys in Sections 14.1 and 14.2,
Athersys, subject to Section 14.6, hereby represents and warrants that as of the
Effective Date:
          (a) it has not granted to any Third Party any right or license which
would conflict with the rights granted by it to Angiotech under any of the
Transaction Agreements;
          (b) except as disclosed in Schedule 14.3(b) attached hereto, Athersys
is the sole and exclusive owner of the Athersys Patent Rights set forth in
Schedule 1.33, and Athersys has not placed, or suffered to be placed, any liens,
charges or encumbrances on or against such Athersys Patent Rights;
          (c) Schedule 1.33 is a true and complete list of Athersys’ Patent
Rights that pertain to the subject matter of the Transaction Agreements.;
          (d) Athersys has submitted to the United States Patent and Trademark
Office all information related to the Cells, pre-clinical development
candidates, Clinical Development Candidates and Cell Therapy Products that is
required to be submitted in accordance with 37 C.F.R. 1.56, 1.97 and 1.98;
          (e) the Athersys Intellectual Property that is the subject of the
rights and licenses granted to Angiotech under the Transaction Agreements
constitutes all intellectual property owned or controlled by Athersys that is
necessary or useful to manufacture, research, develop, use or commercialize the
Cells, pre-clinical development candidates, Clinical Development Candidates and
Cell Therapy Products for the Cardiovascular Indications, and to the knowledge
of Athersys there is no other Intellectual Property necessary for such purposes
that is owned or controlled by Athersys;
          (f) the Athersys Patent Rights set forth in Schedule 1.33 are existing
and inventorship of the Athersys Patent Rights not licensed by Athersys from the
University of Minnesota has been properly determined and to Athersys’ knowledge
inventorship of the Athersys Patent Rights licensed from the University of
Minnesota has been properly determined, and to Athersys’ knowledge, no issued or
granted patents within the Athersys Patent Rights licensed or sublicensed to
Angiotech under the Transaction Agreements are invalid or unenforceable;
          (g) except as set forth in Schedule 14.3(g) attached hereto, no
Athersys Patent Rights listed in Schedule 1.33 are subject to any funding
agreement with any government or government agency;
          (h) Athersys has received no written notice alleging infringement of a
Third Party Patent Right in connection with its research and development of
Cells, pre-clinical development candidates, Clinical Development Candidates
and/or Cell Therapy

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Products, and Athersys has disclosed to Angiotech all material information of
which Athersys is aware as to whether the research, development, manufacture,
use, sale, offer for sale or importation of Clinical Development Candidates or
Cell Therapy Products infringes or would infringe issued or granted patents
owned by a Third Party as of the Effective Date;
          (i) the Athersys Patent Rights licensed or sublicensed to Angiotech
under the Transaction Agreements are not subject to any litigation, judgments or
settlements against or owed by Athersys, nor has Athersys received written
notice of any threats of such litigation;
          (j) the Athersys Patent Rights licensed or sublicensed to Angiotech
under the Transaction Agreements are not the subject of any interference,
opposition, reissue or reexamination proceeding in the United States or, to the
knowledge of Athersys, any opposition proceeding outside of the United States;
          (k) Athersys has not knowingly used any Intellectual Property
misappropriated from a Third Party in connection with the subject matter of the
Transactional Agreements, and Athersys is not aware of any claim by a Third
Party that Intellectual Property misappropriated from such Third Party has been
used by Athersys in its research and development of Cells, pre-clinical
development candidates, Clinical Development Candidates and/or Cell Therapy
Products;
          (l) except as set forth in Schedule 14.3(l) attached hereto, to
Athersys’ knowledge, there is no unauthorized use, infringement or
misappropriation of any of the Intellectual Property that is the subject of the
rights and licenses granted to Angiotech under the Transaction Agreements by any
Third Party, including any current or former employee or consultant of Athersys
and its Affiliates;
          (m) with respect to activities conducted by Athersys, and to Athersys’
knowledge with respect to activities conducted by Third Parties on behalf of
Athersys, there has not been any scientific fraud regarding Cells, Clinical
Development Candidates or Cell Therapy Products or Intellectual Property of
Athersys licensed to Angiotech under the Transaction Agreements;
          (n) to Athersys’ knowledge, no employee or agent of Athersys or any of
its Affiliates has made an untrue statement of a material fact to any
governmental authority with respect to the Cells, pre-clinical development
candidates, Clinical Development Candidates and/or Cell Therapy Products
(whether in any submission to such governmental authority or otherwise), or
failed to disclose a material fact required to be disclosed to any governmental
authority with respect to the Cells, pre-clinical development candidates,
Clinical Development Candidates and/or Cell Therapy Products;
          (o) none of it, its officers, directors, employees, or Affiliates is
debarred under the Generic Drug Enforcement Act or convicted of a crime which
could lead to debarment, and it has not knowingly utilized, and has not
knowingly utilized, the services of any individual or entity in conducting its
manufacturing activities hereunder that has

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been debarred under the Generic Drug Enforcement Act or convicted of a crime
that could lead to debarment;
          (p) that its employees have complied materially with all safety and
environmental procedures, protocols, systems, laws, rules and regulations
applicable to or associated with its Cell isolation, purification and production
activities hereunder;
          (q) Athersys and its Affiliates have complied materially with all
applicable laws, rules, regulations, permits, governmental licenses,
registrations, approvals, concessions, franchises, authorizations, orders,
injunctions and decrees, including the Federal Food, Drug and Cosmetic Act, in
the research, development, manufacture and use of the Cells, pre-clinical
development candidates, Clinical Development Candidates and/or Cell Therapy
Products, and neither Athersys nor any of its Affiliates has received any
written notice from any regulatory authority claiming that any such activities
as conducted by them are not in such compliance; and
          (r) that the Cells are not derived from embryonic sources (i.e., the
Cells are not embryonic stem cells).
     14.4 Additional Covenants of Athersys. In addition to the representations
and warranties made by Athersys in Sections 14.1, 14.2, and 14.3 Athersys,
subject to Section 14.6, hereby covenants to Angiotech that during the Term:
          (a) it will not grant to any Third Party any right or license which
would conflict with the rights granted by it to Angiotech under any of the
Transaction Agreements;
          (b) Athersys will not place, or suffer to be placed, any liens,
charges or encumbrances on or against any Athersys Patent Rights that may have
an adverse effect on Angiotech’s rights or licenses with respect to Athersys
Patent Rights licensed to Angiotech under the Transaction Agreements;
          (c) Athersys will submit to the United States Patent and Trademark
Office all information related to the Cells, pre-clinical development
candidates, Clinical Development Candidates and Cell Therapy Products that is
required to be submitted in accordance with 37 C.F.R. 1.56, 1.97 and 1.98;
          (d) the Athersys Intellectual Property that is the subject of the
rights and licenses granted to Angiotech under the Transaction Agreements
constitutes all intellectual property owned or controlled by Athersys that is
necessary or useful to manufacture, research, develop, use or commercialize the
Cells, pre-clinical development candidates, Clinical Development Candidates and
Cell Therapy Products for the Cardiovascular Indications, and to the knowledge
of Athersys there is no other Intellectual Property necessary for such purposes
that is owned or controlled by Athersys;
          (e) Athersys will take all steps necessary to ensure that the Athersys
Patent Rights set forth in Schedule 1.33 are existing and that inventorship of
the Athersys Patent Rights is properly determined, and Athersys’ will promptly
inform Angiotech in

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writing if any issued or granted patents within the Athersys Patent Rights
licensed or sublicensed to Angiotech under the Transaction Agreements become
invalid or unenforceable;
          (f) Athersys will promptly inform Angiotech in writing of receipt of
any written notice alleging infringement of a Third Party Patent Right in
connection with Athersys’ research and development of Cells, pre-clinical
development candidates, Clinical Development Candidates and/or Cell Therapy
Products, and Athersys will disclose to Angiotech all material information of
which Athersys becomes aware as to whether the research, development,
manufacture, use, sale, offer for sale or importation of Clinical Development
Candidates or Cell Therapy Products might constitute infringement of issued or
granted patents owned by a Third Party;
          (g) Athersys will promptly inform Angiotech in writing if Athersys
Patent Rights licensed or sublicensed to Angiotech under the Transaction
Agreements become subject to any litigation, judgments or settlements against or
owed by Athersys, or if Athersys receives written notice of any threats of such
litigation;
          (h) Athersys will promptly inform Angiotech in writing if the Athersys
Patent Rights licensed or sublicensed to Angiotech under the Transaction
Agreements become the subject of any interference, opposition, reissue or
reexamination proceeding in the United States or, if Athersys learns of any
opposition proceeding outside of the United States with respect to the Athersys
Patent Rights licensed to Angiotech under the Transaction Agreements;
          (i) Athersys will not knowingly use any Intellectual Property
misappropriated from a Third Party in connection with the subject matter of the
Transactional Agreements, and Athersys will promptly inform Angiotech in writing
of any claim by a Third Party that Intellectual Property misappropriated from
such Third Party has been used by Athersys in its research and development of
Cells, pre-clinical development candidates, Clinical Development Candidates
and/or Cell Therapy Products;
          (j) Athersys will promptly inform Angiotech in writing of any
unauthorized use, infringement or misappropriation of any of the Intellectual
Property that is the subject of the rights and licenses granted to Angiotech
under the Transaction Agreements by any Third Party, including any current or
former employee or consultant of Athersys and its Affiliates;
          (k) there will not be any scientific fraud by Athersys or its
Affiliates regarding Cells, Clinical Development Candidates or Cell Therapy
Products or Intellectual Property of Athersys licensed to Angiotech under the
Transaction Agreements, and with respect to activities conducted on behalf of
Athersys, Athersys shall make Commercially Reasonable Efforts to ensure that
there will not be any scientific fraud by any such Third Party regarding Cells,
Clinical Development Candidates or Cell Therapy Products or Intellectual
Property of Athersys licensed to Angiotech under the Transaction Agreements;

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          (l) no employee or agent of Athersys or any of its Affiliates will
make an untrue statement of a material fact to any governmental authority with
respect to the Cells, pre-clinical development candidates, Clinical Development
Candidates and/or Cell Therapy Products (whether in any submission to such
governmental authority or otherwise), or fail to disclose a material fact
required to be disclosed to any governmental authority with respect to the
Cells, pre-clinical development candidates, Clinical Development Candidates
and/or Cell Therapy Products;
          (m) none of it, its officers, directors, employees, or Affiliates will
be debarred under the Generic Drug Enforcement Act or will be convicted of a
crime which could lead to debarment, and it will not knowingly utilize, the
services of any individual or entity in conducting its manufacturing activities
hereunder that has been debarred under the Generic Drug Enforcement Act or
convicted of a crime that could lead to debarment;
          (n) that its employees will comply materially with all safety and
environmental procedures, protocols, systems, laws, rules and regulations
applicable to or associated with its Cell isolation, purification and production
activities hereunder;
          (o) Athersys and its Affiliates will comply materially with all
applicable laws, rules, regulations, permits, governmental licenses,
registrations, approvals, concessions, franchises, authorizations, orders,
injunctions and decrees, including the Federal Food, Drug and Cosmetic Act, in
the research, development, manufacture and use of the Cells, pre-clinical
development candidates, Clinical Development Candidates and/or Cell Therapy
Products, and Athersys will promptly inform Angiotech in writing if either
Athersys or any of its Affiliates receive any written notice from any regulatory
authority claiming that any such activities as conducted by them are not in such
compliance; and
          (p) that the Cells will not be derived from embryonic sources (i.e.,
the Cells will not be embryonic stem cells).
     14.5 Additional Covenants of Angiotech. In addition to the representations
and warranties made by Angiotech in Sections 14.1 and 14.2, Angiotech, subject
to Section 14.6, hereby covenants to Athersys that during the Term:
          (a) Angiotech will not knowingly use any Intellectual Property
misappropriated from a Third Party in connection with the subject matter of the
Transactional Agreements, and Angiotech will promptly inform Athersys in writing
of any claim by a Third Party that Intellectual Property misappropriated from
such Third Party has been used by Angiotech in its research and development of
Cells, pre-clinical development candidates, Clinical Development Candidates
and/or Cell Therapy Products;
          (b) Angiotech will promptly inform Athersys in writing of any
unauthorized use, infringement or misappropriation of any of the Intellectual
Property that is the subject of the rights and licenses granted to Angiotech
under the Transaction Agreements by any Third Party;

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          (c) there will not be any scientific fraud by Angiotech or its
Affiliates regarding Cells, Clinical Development Candidates or Cell Therapy
Products licensed to Angiotech under the Transaction Agreements, and with
respect to activities conducted on behalf of Angiotech, Angiotech shall make
Commercially Reasonable Efforts to ensure that there will not be any scientific
fraud by any such Third Party regarding Cells, Clinical Development Candidates
or Cell Therapy Products licensed to Angiotech under the Transaction Agreements;
          (d) no employee or agent of Angiotech or any of its Affiliates will
make an untrue statement of a material fact to any governmental authority with
respect to the Cells, pre-clinical development candidates, Clinical Development
Candidates and/or Cell Therapy Products (whether in any submission to such
governmental authority or otherwise), or fail to disclose a material fact
required to be disclosed to any governmental authority with respect to the
Cells, pre-clinical development candidates, Clinical Development Candidates
and/or Cell Therapy Products;
          (e) none of it, its officers, directors, employees, or Affiliates will
be debarred under the Generic Drug Enforcement Act or will be convicted of a
crime which could lead to debarment, and it will not knowingly utilize, the
services of any individual or entity in conducting its manufacturing activities
hereunder that has been debarred under the Generic Drug Enforcement Act or
convicted of a crime that could lead to debarment; and
          (f) Angiotech and its Affiliates will comply materially with all
applicable laws, rules, regulations, permits, governmental licenses,
registrations, approvals, concessions, franchises, authorizations, orders,
injunctions and decrees, including the Federal Food, Drug and Cosmetic Act, in
the research, development, manufacture and use of the Cells, pre-clinical
development candidates, Clinical Development Candidates and/or Cell Therapy
Products, and Angiotech will promptly inform Athersys in writing if either
Angiotech or any of its Affiliates receive any written notice from any
regulatory authority claiming that any such activities as conducted by them are
not in such compliance.
     14.6 Disclaimer Of Warranties. EXCEPT AS EXPRESSLY SET FORTH IN THIS
STRATEGIC ALLIANCE AGREEMENT OR ANY TRANSACTION AGREEMENT, NEITHER PARTY MAKES
ANY REPRESENTATIONS NOR EXTENDS ANY WARRANTIES OR CONDITIONS OF ANY KIND, EITHER
EXPRESS OR IMPLIED, INCLUDING, BUT NOT LIMITED TO, WARRANTIES OF
MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, OR NON-INFRINGEMENT.
ARTICLE XV.
INDEMNIFICATION AND INSURANCE
     15.1 Indemnification By Athersys. Athersys shall indemnify, defend and hold
Angiotech, its Affiliates and their permitted contractors and agents, employees,
officers and directors (the “Angiotech Indemnitees”) harmless from and against
any and all

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liability, damage, loss, cost or expense (including reasonable attorneys’ fees)
arising out of Third Party claims or lawsuits related to (a) Athersys’
performance of its obligations under the Transaction Agreements, (b) a breach by
Athersys of any of its covenants, representations or warranties set forth in the
Transaction Agreements; (c) arising out of the use of the Company Technology,
Company Patents, University Technology, and/or University Patents and/or the
development, manufacture, use, storage, handling, distribution or sale of any
Clinical Development Candidates or Cell Therapy Products by or on behalf of
Athersys or its Affiliates (other than those Cell Therapy Products for which the
Parties share Profits); or (d) the failure of Clinical Development Candidates or
Cell Therapy Products manufactured by or on behalf of Athersys to meet the
Clinical Development Candidate or Cell Therapy Product (as applicable)
specifications or to be manufactured in compliance with current Good
Manufacturing Practices or other applicable laws and regulations; provided,
however, all of the foregoing is only to the extent that such claims or suits do
not result from a breach of any of the provisions of the Transaction Agreements,
gross negligence or willful misconduct of any of the Angiotech Indemnitees. Upon
the assertion of any such claim or suit, Angiotech shall promptly notify
Athersys thereof and Athersys shall appoint counsel reasonably acceptable to the
affected Angiotech Indemnitees to represent such Angiotech Indemnitees with
respect to any claim or suit for which indemnification is sought. Neither
Athersys nor the Angiotech Indemnitees shall enter into any settlement agreement
with any Third Party without the consent of the other Party, which consent shall
not be unreasonably withheld; provided that affected Angiotech Indemnitees shall
be permitted in their sole discretion to settle any such claim or suit if they
have first waived their rights to indemnification hereunder.
     15.2 Indemnification By Angiotech. Angiotech shall indemnify, defend and
hold Athersys, its Affiliates and their permitted contractors and agents,
employees, officers and directors (the “Athersys Indemnitees”) harmless from and
against any and all liability, damage, loss, cost or expense (including
reasonable attorneys’ fees) arising out of Third Party claims or lawsuits
related to (a) Angiotech’s performance of its obligations under the Transaction
Agreements; (b) a breach by Angiotech of any of its covenants, representations
or warranties set forth in the Transaction Agreements; or (c) arising out of the
use of the Company Technology, Company Patents, University Technology, and/or
University Patents and/or the development, manufacture, use, storage, handling,
distribution or sale of any Clinical Development Candidates or Cell Therapy
Products by or on behalf of Angiotech or its Affiliates (other than those Cell
Therapy Products for which the Parties share Profits); provided, however, all of
the foregoing is only to the extent that such claims or suits do not result from
a breach of any of the provisions of the Transaction Agreements, gross
negligence or willful misconduct of the Athersys Indemnitees. Upon the assertion
of any such claim or suit, Athersys shall promptly notify Angiotech thereof and
Angiotech shall appoint counsel reasonably acceptable to the affected Athersys
Indemnitees to represent such Athersys Indemnitees with respect to any claim or
suit for which indemnification is sought. Neither Angiotech nor the Athersys
Indemnitees shall enter into any settlement agreement with any Third Party
without the consent of the other Party, which consent shall not be unreasonably
withheld; provided that affected Athersys Indemnitees shall be permitted in
their sole

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discretion to settle any such claim or suit if they have first waived their
rights to indemnification hereunder.
     15.3 Insurance. During the Term and for a period of two (2) years
thereafter, each Party shall obtain and maintain commercial general liability
insurance, including products liability insurance, with reputable and
financially secure insurance carriers with respect to its obligations,
responsibilities and activities under the Transaction Agreements. Such insurance
shall be in such amounts and subject to such deductibles as the Parties may
agree based upon standards prevailing in the industry at the time, but in each
case with limits of not less than Five Million Dollars ($5,000,000.00) per
occurrence and in the aggregate.
ARTICLE XVI.
TERM AND TERMINATION
     16.1 Term. This Strategic Alliance Agreement shall commence on the
Effective Date and, unless terminated earlier pursuant to Section 16.2, shall
continue in full force and effect until the earlier to occur of: (a) five
(5) years after the Effective Date, if the JSC has not approved any Clinical
Development Program on or before such fifth year anniversary; (b) if at least
one Cell Therapy Product has obtained Regulatory Approval in the Territory and
the Parties have shared Profits with respect to at least one Cell Therapy
Product, on the date that there has been no sales for twelve (12) months of any
Cell Therapy Product that has been the subject of Profit-sharing, unless a
Clinical Development Candidate is in Phase III Studies or later; or (c) the
later of (i) the expiration date of the last-to-expire patent licensed to
Angiotech under the Transaction Agreements, or (ii) fifteen (15) years after the
Effective Date. The period of time from the Effective Date until expiration or
early termination is the “Term.”
     16.2 Termination.
          (a) Uncured Breach of Athersys. The failure by Athersys to
substantially comply with any of the material obligations contained in this
Strategic Alliance Agreement or any Transaction Agreement shall entitle
Angiotech to give written notice to have the default cured. If such default is
not cured within sixty (60) days after the receipt of such written notice, or if
by its nature such default is not capable of cure within such sixty (60)-day
period, then Angiotech shall be entitled, without prejudice to any of its other
rights conferred on it by this Strategic Alliance Agreement or any Transaction
Agreement, and in addition to any other remedies that may be available to it, to
terminate this Strategic Alliance Agreement; provided, however, that such right
to terminate shall be stayed in the event that, during such sixty (60)-day
period, Athersys shall have: (i) initiated dispute resolution in accordance with
ARTICLE XVII below with respect to the alleged default, and (ii) diligently and
in good faith cooperated in the prompt resolution of such dispute resolution
process.
          (b) Uncured Breach of Angiotech. The failure by Angiotech to
substantially comply with any of the material obligations contained in this
Strategic Alliance Agreement or any Transaction Agreement shall entitle Athersys
to give written

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notice to have the default cured. If such default is not cured within sixty
(60) days after the receipt of such written notice, or if by its nature such
default is not capable of cure within such sixty (60)-day period, then Athersys
shall be entitled, without prejudice to any of its other rights conferred on it
by this Strategic Alliance Agreement or any Transaction Agreement, and in
addition to any other remedies that may be available to it, to terminate this
Strategic Alliance Agreement; provided, however, that such right to terminate
shall be stayed in the event that, during such sixty (60)-day period, Angiotech
shall have: (i) initiated dispute resolution in accordance with ARTICLE XVII
below with respect to the alleged default, and (ii) diligently and in good faith
cooperated in the prompt resolution of such dispute resolution process.
          (c) Insolvency of Athersys. In the event that Athersys has filed or
instituted bankruptcy, reorganization, liquidation or receivership proceedings,
or has assigned a substantial portion of its assets for the benefit of creditors
during the Term, Angiotech may immediately terminate the Transaction Agreements
in their entirety upon written notice of termination to Athersys; provided,
however, that in the event of any involuntary bankruptcy or receivership
proceeding, such right of Angiotech to terminate the Transaction Agreements
shall only become effective if Athersys consents to the involuntary bankruptcy
or receivership or such proceeding is not dismissed within ninety (90) days
after the filing thereof; and further provided that, if the Transaction
Agreements are terminated by Angiotech due to the rejection of this Strategic
Alliance Agreement or any Transaction Agreement by or on behalf of Athersys
under Section 365 of the United States Bankruptcy Code (the “Code”), all
licenses and rights to licenses granted under or pursuant to the Transaction
Agreements by Athersys to Angiotech are, and shall otherwise be deemed to be,
for purposes of Section 365(n) of the Code, licenses of rights to “intellectual
property” as defined under Section 1010(35A) of the Code. The Parties agree that
Angiotech, as a licensee of such rights under the Transaction Agreements, shall
retain and may fully exercise all of its rights and elections under the Code,
and that upon commencement of a bankruptcy proceeding by or against Athersys
under the Code, Angiotech shall be entitled to a complete duplicate of, or
complete access to (as Angiotech deems appropriate), any such intellectual
property and all embodiments of such intellectual property. Such intellectual
property and all embodiments thereof shall be promptly delivered to Angiotech
(a) upon any such commencement of a bankruptcy proceeding and upon written
request therefor by Angiotech, unless Athersys elects to continue, and does
continue, to perform all of its obligations under the Transaction Agreements, or
(b) if not delivered under (a) above, upon the rejection of this Strategic
Alliance Agreement or any Transaction Agreement by or on behalf of Athersys and
upon written request therefor by Angiotech. Athersys agrees not to interfere
with Angiotech’s exercise under the Code of rights and licenses to intellectual
property licensed hereunder and embodiments thereof in accordance with this
Section 16.2(c) and agrees to use Commercially Reasonable Efforts to assist
Angiotech to obtain such intellectual property and embodiments thereof in the
possession or control of Third Parties as are reasonably necessary or useful for
Angiotech to exercise such rights and licenses in accordance with the
Transaction Agreements. The foregoing provisions are without prejudice to any
rights Angiotech may have arising under the Code or other applicable law.

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          (d) Termination for Cause. Angiotech shall have a right to terminate
the Transaction Agreements for cause (as set forth in (i) or (ii) below), which
termination right may be exercised at any time during the Term. Such termination
shall require at least one hundred twenty (120) days prior written notice by
Angiotech that terminates for cause, and during such 120-day period the Parties
shall continue to share costs that are incurred and Profit that is obtained in
connection with activities under the Transaction Agreements that have been
commenced but not yet completed.
     (i) Grounds that Constitute “For Cause”. If Angiotech, using its reasonable
and sound business judgment, determines that (A) a primary endpoint(s) in a
clinical study within a Clinical Development Plan has not been fulfilled or met;
(B) at least one (1) IND has not been filed by the Parties within three
(3) years after the Effective Date; (C) clinical efficacy and/or safety with
respect to Cells, a Clinical Development Candidate or a Cell Therapy Product
have not been demonstrated; (D) applicable regulatory requirements for Cells, a
Clinical Development Candidate or a Cell Therapy Product in one or more Major
Markets in the Territory shall have a material adverse impact on the ability to
obtain Regulatory Approval for a Cell Therapy Product in such countries;
(E) Athersys data regarding Cells, a Clinical Development Candidate or a Cell
Therapy Product were obtained, in whole or in part, through scientific fraud;
and/or (F) a Cell Therapy Product is not (or is not expected to be) commercially
viable or profitable for a Party in at least one of the Major Market in the
Territory, then any of the conditions (A-F) above shall constitute a grounds for
termination of the Transaction Agreements “for cause.”
     (ii) Decision to Terminate For Cause. If Angiotech decides to terminate the
Transaction Agreements for cause, then Angiotech shall provide written notice to
Athersys of such decision (and this written notice shall also serve as a notice
of termination as specified in such written notice); provided that with respect
to each instance of an event giving rise to the applicable grounds for
termination, in order to be effective such written notice shall be provided to
Athersys within one hundred eighty (180) days after Angiotech, using its
reasonable and sound business judgment, makes a determination that such event
has occurred.
          (e) Change of Control of Athersys. For purposes of this clause (e),
“Change of Control” means the consummation of a transaction during the Term in
which a Third Party acquires, merges or consolidates with Athersys; or possesses
(directly or indirectly) the power to direct or cause the direction of
management or policies of Athersys through ownership of a majority of
securities, partnership, or other ownership rights or agreements; or in which
Athersys transfers or sells all or substantially all of its assets or business
to which the Transaction Agreements relate; provided, however, that none of the
following shall be considered a Change in Control: (i) a merger effected
exclusively for the purpose of changing the domicile of Athersys; (ii) an equity
financing in which Athersys is the surviving corporation; or (iii) a transaction
in which the stockholders of Athersys immediately prior to the transaction own
fifty percent (50%) or more of the voting power of the surviving corporation
following the transaction. In the

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event of a Change of Control of Athersys during the Term, Athersys shall provide
written notice of such Change of Control to Angiotech no later than ten
(10) business days after the occurrence of such event (“Change of Control
Notice”). If the Change of Control results in Athersys becoming controlled by a
Local Therapeutic Company, or if Angiotech has other sound business reasons,
Angiotech may, in its sole discretion and at its election, terminate the
Transaction Agreements by giving Athersys and the Third Party successor to
Athersys written notice of termination within ninety (90) days after the later
to occur of: (x) the date of consummation of such transaction, or (xi) the date
Angiotech received the Change of Control Notice from Athersys. Any such notice
of termination by Angiotech shall be effective sixty (60) days after delivery of
such notice to Athersys and the Third Party successor to Athersys. If Angiotech
does not exercise this right of termination, Angiotech, Athersys and the Third
Party successor to Athersys shall continue thereafter to fulfill their
respective rights and obligations under the Transaction Agreements.
     16.3 Effects of Termination.
          (a) Termination by Angiotech. Upon termination of the Transaction
Agreements by Angiotech pursuant to Section 16.2(a) or Section 16.2(c), Athersys
shall be deemed to be the Discontinuing Party and to have delivered an Opt-Out
Notice on the effective date of such termination with respect to all Clinical
Development Candidates and Cell Therapy Products pursuant to Section 6.1
(notwithstanding whether or not the first Phase I Trial has been completed) and
Angiotech shall be entitled to exercise the Sole Development Option as described
in Section 6.1. If Angiotech exercises the Sole Development Option as described
in the foregoing sentence, the Parties’ rights and obligations set forth in the
Transaction Agreements (including, without limitation, Intellectual Property
licenses) shall survive in perpetuity to the extent necessary for Angiotech and
Athersys to exercise their rights and obligations as Developing Party and
Discontinuing Party (respectively) pursuant to ARTICLE VI; provided, however,
that if Angiotech exercises the Sole Development Option as described in this
Section 16.3(a): (i) the Replacement Fee (if any is outstanding at the time of
termination) shall remain payable to Athersys as described in Section 2.4, and
(ii) notwithstanding the provisions of Section 6.1(a), the achievement of each
regulatory approval or commercialization milestone pursuant to Section 7.3 (as
described in Schedule 7.3, Items 2-5) shall result in an amount payable to
Athersys equal to (A) twenty five percent (25%) of the amount described for such
milestone in Schedule 7.3, Items 2-5 (as applicable), if the Transaction
Agreements are terminated by Angiotech pursuant to Section 16.2(a), or (B) fifty
percent (50%) of the amount described for such milestone in Schedule 7.3, Items
2-5 (as applicable), if the Transaction Agreements are terminated by Angiotech
pursuant to Section 16.2(c).
          (b) Termination by Athersys. Upon termination of the Transaction
Agreements by Athersys pursuant to Section 16.2(b), Angiotech shall be deemed to
be the Discontinuing Party and to have delivered an Opt-Out Notice on the
effective date of such termination with respect to all Clinical Development
Candidates and Cell Therapy Products pursuant to Section 6.1 (notwithstanding
whether or not the first Phase I Trial has been completed) and Athersys shall be
entitled to exercise the Sole Development

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Option as described in Section 6.1. If Athersys exercises the Sole Development
Option as described in the foregoing sentence, the Parties’ rights and
obligations set forth in the Transaction Agreements (including, without
limitation, Intellectual Property licenses) shall survive in perpetuity to the
extent necessary for Athersys and Angiotech to exercise their rights and
obligations as Developing Party and Discontinuing Party (respectively) pursuant
to ARTICLE VI.
     16.4 Survival Of Obligations. The termination or expiration of this
Strategic Alliance Agreement or any Transaction Agreement shall not relieve the
Parties of any obligations accruing prior to such expiration or termination, and
any such expiration or termination shall be without prejudice to the rights of
any Party against another Party. In addition, the provisions of Article I, to
the extent definitions are embodied in the following listed Articles and
Sections of this Agreement; Articles VII (to the extent any payments have
accrued as of the effective date of expiration or termination, but have not yet
been paid), XI, XIII, XV and XVII (with respect to disputes arising during the
Term that have not been resolved); Sections 2.6, 2.7, 3.7 (with respect to
disputes arising during the Term that have not been resolved), 7.8, 7.9 (once
within one year after termination), 7.10, 9.5 (with respect to rejection of any
Cell Therapy Product), 12.2, 14.6, 16.3, this 16.4, 18.1, and 18.4-18.13, shall
survive any expiration or termination of this Strategic Alliance Agreement for
any reason. In each situation, where one of the surviving provisions requires
action or review by the JSC, the JSC will also survive expiration or termination
to the extent necessary.
ARTICLE XVII.
DISPUTE RESOLUTION
     17.1 Dispute Resolution Process. The Parties acknowledge and agree that
their long-term mutual interests as of the Effective Date will be best served by
effecting a rapid and fair resolution of any claims or disputes which may arise
out of this Strategic Alliance Agreement or any Transaction Agreement.
Therefore, the Parties agree to use their commercially reasonable best efforts
to resolve in good faith all such disputes as rapidly as possible on a fair and
equitable basis.
          (a) Except as set forth in Section 3.7, Section 5.2, Section 5.3 and
Section 7.2(c), if any dispute, controversy or claim arising under this
Strategic Alliance Agreement or any other Transaction Agreement cannot be
readily resolved by the Parties, then the Parties agree to refer the matter to a
panel consisting of the President of Angiotech and the President of Athersys for
review and resolution. A copy of the terms of this Strategic Alliance Agreement
and the other Transaction Agreements, agreed-upon facts (and areas of
disagreement), and a concise summary of the basis for each Party’s position and
contentions will be provided to such Presidents, who shall review the same,
confer in good faith and reach a mutual resolution of the issue.
          (b) If a dispute, controversy or claim cannot be settled through
negotiation of the Presidents of the Parties pursuant to Section 17.1(a), then,
except as otherwise specified in any of the Transaction Agreements, the Parties
agree to submit the dispute to

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mediation under the Commercial Mediation Rules of the American Arbitration
Association.
          (c) If efforts at mediation are unsuccessful within sixty (60) days
after the date that one Party notifies the other Party that it desires to
resolve a dispute, controversy or claim through mediation, any unresolved
dispute, controversy or claim between the Parties shall be resolved at the
mutual agreement of the Parties by binding arbitration in accordance with the
Commercial Arbitration Rules of the American Arbitration Association, except as
modified herein. Failing mutual agreement to submit such unresolved dispute,
controversy or claim to arbitration, either Party may resort to other legal
remedies.
          (d) If the Parties mutually agree to submit an unresolved dispute,
controversy or claim to arbitration, each Party shall select one arbitrator and
the two (2) arbitrators so selected shall choose a third arbitrator to resolve
the dispute. Prior to the commencement of arbitration, each Party shall certify
that its chosen arbitrator is competent to decide such dispute and the two
(2) arbitrators so certified shall jointly certify that their chosen third
arbitrator is likewise competent to decide such dispute. Such competence may
include the ability to understand disputes which are primarily scientific in
nature or which require expertise and knowledge of processes related to the
commercial development of a pharmaceutical/medical device product which is
peculiar to persons in the biotechnology/pharmaceutical industry. A reasoned
arbitration decision shall be rendered in writing within six (6) months of the
conclusion of mediation and shall be binding and not be appealable to any court
in any jurisdiction. The prevailing Party may enter such decision in any court
having competent jurisdiction. The mediation and arbitration proceedings shall
be conducted in the English language and shall be held in New York, New York,
U.S.A. The Parties agree that they shall share equally the cost of the mediation
and arbitration filing and hearing fees, and the cost of the
mediator/arbitrator. Each Party must bear its own attorneys’ fees and associated
costs and expenses with respect to any such mediation and arbitration
proceedings.
     17.2 Injunctive Relief. Each Party acknowledges that (a) the covenants and
the restrictions of the other Party that are contained in this Strategic
Alliance Agreement and the other Transaction Agreements are an inducement to
enter into this Strategic Alliance Agreement and the other Transaction
Agreements, and are necessary and required for the protection of the Parties,
(b) such covenants and restrictions may relate to matters that are of a special,
unique and extraordinary character that may give each of such covenants a
special, unique and extraordinary value, and (c) a material breach of any of
such covenants and restrictions may result in irreparable harm and damages to a
Party in an amount that may be difficult to ascertain, and which may not be
adequately compensated by a monetary award. Accordingly, in addition to any of
the relief to which a Party may be entitled under this Strategic Alliance
Agreement or any other Transaction Agreement, at law or in equity, such Party
shall be entitled to seek temporary and permanent injunctive relief from any
such breach or threatened breach of such covenants or restrictions without proof
of actual damages that have been or may be caused to such Party by such breach
or threatened breach. In the event an action for injunctive relief is

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brought by a Party, the other Party waives any right to require the Party
bringing such action to post any bond or other security with the court in
connection therewith.
ARTICLE XVIII.
MISCELLANEOUS PROVISIONS
     18.1 Governing Law. The Transaction Agreements shall be governed by and
construed in accordance with the laws of the State of New York, without giving
effect to the principles of conflict of laws.
     18.2 Assignment. Neither Party shall be permitted to assign or otherwise
transfer any of its rights or obligations under the Transaction Agreements
without the prior written consent of the other Party; provided, however, that,
subject to Section 16.2(e), a Party may assign or otherwise transfer all of its
rights and obligations under the Transaction Agreements without the prior
written consent of the other Party (a) in connection with a sale of all or
substantially all of its business or assets, whether by merger, sale of stock,
sale of assets or otherwise or (b) to an Affiliate of such Party.
Notwithstanding the foregoing, in the event of any such permitted assignment or
other transfer, all rights and obligations under the Transaction Agreements must
be assigned or otherwise transferred together in their entirety to such assignee
or successor.
     18.3 Compliance With Laws. Each Party shall comply with all applicable
laws, rules and regulations in connection with its performance of its
obligations and exercise of its rights under the Transaction Agreements. Each
Party shall furnish to the other Party any information reasonably requested or
required by the requesting Party during the Term to enable the requesting Party
to comply with the requirements of any United States or foreign federal, state,
and/or government agency.
     18.4 Further Assurances. At any time, or from time to time, following the
date of the Transaction Agreements, each Party shall, at the request of the
other Party (a) deliver or cause to be delivered to the requesting Party any
records, data or other documents consistent with the provisions of the
Transaction Agreements, (b) duly execute and deliver, or cause to be duly
executed or delivered, all such consents, assignments, documents or further
instruments of transfer or license as required by the Transaction Agreements,
and (c) take or cause to be taken all such actions, in each case as the
requesting Party may reasonably deem necessary in order for the requesting Party
to obtain the full benefits of the Transaction Agreements and the transactions
contemplated hereby.
     18.5 Severability. In the event that any provision of the Transaction
Agreements is determined to be invalid or unenforceable by a court of competent
jurisdiction, the remainder of the Transaction Agreements shall remain in full
force and effect without said provision. In such event, the Parties shall in
good faith attempt to negotiate a substitute clause for any provision declared
invalid or unenforceable, which substitute clause shall most nearly approximate
the intent of the Parties in agreeing to such invalid provision, without itself
being invalid.

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     18.6 Waivers And Amendments; Preservation Of Remedies. The Transaction
Agreements may be amended, modified, superseded, canceled, renewed or extended,
and the terms and conditions hereof may be waived, only by a written instrument
signed by the Parties or, in the case of a waiver, the Party waiving compliance.
No delay on the part of any Party in exercising any right, power or privilege
hereunder shall operate as a waiver thereof, nor shall any waiver on the part of
any Party of any right, power or privilege hereunder, nor any single or partial
exercise of any right, power or privilege hereunder, preclude any other or other
exercise thereof hereunder. The rights and remedies herein provided are
cumulative and are not exclusive of any rights or remedies which any Party may
otherwise have at law or in equity.
     18.7 Headings. The captions to the several Articles and Sections hereof are
not a part of the Transaction Agreements, but are included merely for
convenience of reference only and shall not affect its meaning or
interpretation.
     18.8 Counterparts. The Transaction Agreements may be executed by original
or facsimile signature in any number of counterparts, and each such counterpart
shall be deemed to be an original instrument, and all of which counterparts
together shall constitute one instrument.
     18.9 Successors. This Strategic Alliance Agreement shall be binding upon
and inure to the benefit of the Parties and their respective successors and
permitted assigns.
     18.10 Notices. All notices, requests, demands, claims and other
communications hereunder shall be in writing and shall be deemed to have been
duly given if delivered personally, by fax, sent by nationally recognized
overnight courier or mailed by registered or certified mail (return receipt
requested), postage prepaid, to the Parties at the addresses set forth below (or
at such other address for such party as shall be specified by like notice). All
such notices and other communications shall be deemed to have been given and
received (a) in the case of personal delivery, on the date of such delivery,
(b) in the case of delivery by facsimile transmission, on the date of such
delivery, (c) in the case of delivery by nationally recognized express courier,
on the date of such delivery, and (d) in the case of mailing within the United
States, on the fifth (5th) business day following such mailing.
If to Angiotech:
Angiotech Pharmaceuticals, Inc.
1618 Station Street
Vancouver, BC Canada V6A 1B6
Fax: 604-221-2330
Attn: Vice President Business Development
with a required copy to:
Angiotech Pharmaceuticals, Inc.
1618 Station Street

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Vancouver, BC Canada V6A 1B6
Fax: 604-221-2330
Attn: General Counsel
If to Athersys:
Athersys, Inc.
3201 Carnegie Avenue
Cleveland, OH 44115-2634
Fax: (216) 361-9495
Attn: Chief Executive Officer
with a copy (which shall not constitute notice) to:
Jones Day
North Point
901 Lakeside Avenue
Cleveland, OH 44114
Fax: (216) 579-0212
Attn: Thomas A. Briggs, Esq.
     18.11 No Consequential Damages. EXCEPT IN CONNECTION WITH A PARTY’S
OBLIGATIONS UNDER ARTICLE XV, IN NO EVENT SHALL A PARTY BE LIABLE TO THE OTHER
PARTY FOR SPECIAL, INDIRECT, INCIDENTAL OR CONSEQUENTIAL DAMAGES, WHETHER IN
CONTRACT, WARRANTY, TORT, NEGLIGENCE, STRICT LIABILITY OR OTHERWISE, INCLUDING,
BUT NOT LIMITED TO, LOSS OF PROFITS OR REVENUE.
     18.12 Independent Contractor. Neither Party shall be construed to be a
partner, joint venturer, franchisee, employee, principal, agent, representative
or participant of or with the other Party for any purpose whatsoever by virtue
of the Transaction Agreements. No Party has any right or authority to assume or
to create any obligation or responsibility, express or implied, on behalf of or
in the name of the other Party in any manner by virtue of the Transaction
Agreements.
     18.13 Complete Agreement. This Strategic Alliance Agreement, together with
its Schedules and Exhibits, and any Pre-Clinical Development Plans and Clinical
Development Plans approved by the Parties, the Note and Purchase Agreement, and
the Mutual Confidential Disclosure Agreement between the Parties dated July 20,
2005, along with any other letters or agreements signed by both Parties and of
even date herewith, constitute the entire agreement, both written and oral,
between the Parties with respect to the subject matter hereof, and all prior
agreements respecting the subject matter hereof, either written or oral,
expressed or implied, are merged and canceled, and are null and void and of no
effect.

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[Signature page follows]

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     IN WITNESS WHEREOF, the Parties have caused this Strategic Alliance
Agreement to be executed by their duly authorized officers, effective as of the
Effective Date.

                  ATHERSYS, INC.    
 
           
 
  By:        
 
           
 
  Name:        
 
           
 
  Title:        
 
           
 
                ANGIOTECH PHARMACEUTICALS, INC.    
 
           
 
  By:        
 
           
 
  Name:        
 
           
 
  Title:        
 
           

[Signature page to Strategic Alliance Agreement]

 

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Schedule 1.13
Cost Definitions

1.   “Clinical Development Costs” means, with respect to each Clinical
Development Plan, all of the external and internal costs and expenses (including
applicable overhead costs and expenses, including applicable general and
administrative expenses, but excluding any Commercialization Costs and
Commercial Manufacturing Costs) incurred or paid by a Party and its Affiliates
in connection with the clinical development of Clinical Development Candidates
or Cell Therapy Products, including, without limitation, the following costs to
the extent such costs are actually incurred by a Party, accounted for in
accordance with U.S. GAAP as consistently applied by such Party and attributable
to the activities assigned to it under the Clinical Development Plan (except to
the extent such costs constitute Commercialization Costs or Commercial
Manufacturing Costs):

  (a)   All direct costs of preparing and conducting clinical trials that is/are
subject of the Clinical Development Plan, including all direct costs related to
site recruitment, enrollment, project management, site management and
monitoring, biostatistics, clinical event classification, medical communication,
data management, outcome studies, regulatory submissions and compliance, safety
surveillance, clinical monitoring and all Clinical Manufacturing Costs; and    
(b)   A reasonable allocation of indirect costs associated with the foregoing.

2.   “Commercialization Costs” means, with respect to each Cell Therapy Product,
all of the external and internal costs and expenses (including applicable
overhead costs and expenses, including applicable general and administrative
expenses, but excluding any Clinical Development Costs and Commercial
Manufacturing Costs) incurred or paid by Angiotech and its Affiliates in
connection with the commercialization of Cell Therapy Products, including,
without limitation, the following costs to the extent such costs are actually
incurred by a Party, accounted for in accordance with U.S. GAAP as consistently
applied by such Party and attributable to the promotion, marketing, advertising,
sale, or distribution of the Cell Therapy Product and preparing and conducting
Phase IV Studies:

  (a)   All direct costs of promoting, marketing, advertising and selling the
Cell Therapy Product, including sales commissions, product labels, marketing
brochures, graphic and media design, website modification and license fees (if
any);     (b)   All Third Party Payments; and     (c)   A reasonable allocation
of indirect costs associated with the foregoing;         provided that any costs
described above incurred or paid by Angiotech and its Affiliates in connection
with the preparation for commercialization of a Clinical Development Candidate
that Angiotech reasonably believes will obtain Regulatory Approval for at least
one Cardiovascular Indication (and thereby become a “Cell Therapy Product”
hereunder) shall also be deemed to be “Commercialization Costs”.

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3.   “Manufacturing Costs” means, with respect to each Clinical Development
Candidate (the “Clinical Manufacturing Costs”) and Cell Therapy Product (the
“Commercial Manufacturing Costs”), all of the external and internal costs and
expenses (including applicable overhead costs and expenses, including applicable
general and administrative expenses, but excluding any Clinical Development
Costs) incurred or paid by Athersys and its Affiliates (or Angiotech and its
Affiliates if Angiotech has acquired manufacturing rights hereunder) in
connection with the manufacturing of Clinical Development Candidates or Cell
Therapy Products (as applicable), including, without limitation, the following
costs to the extent such costs are actually incurred by the manufacturing Party,
accounted for in accordance with U.S. GAAP as consistently applied by the
manufacturing Party and attributable to the manufacture and supply of the
Clinical Development Candidate or Cell Therapy Product (as applicable) to
Angiotech or any Third Party:

  (a)   All direct costs of manufacturing and supply the Clinical Development
Candidate or Cell Therapy Product (as applicable), including all direct costs of
raw materials, labor, license fees (if any), maintenance and repair of equipment
used to manufacture the Clinical Development Candidate or Cell Therapy Product
(as applicable), storage and packaging and shipping costs; and     (b)   A
reasonable allocation of indirect costs associated with the foregoing, including
depreciation associated with the cost of capital for equipment used to
manufacture the Clinical Development Candidate or Cell Therapy Product (as
applicable).

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Schedule 1.14
Clinical Development Plans
[Each Clinical Development Plan to be developed by the Parties in accordance
with the
Strategic Alliance Agreement and attached hereto]

 

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Schedule 1.33
Patent Rights Related To MAPCs
[attached]

 

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Schedule 1.45
Pre-Clinical Development Plans
[Each Pre-Clinical Development Plan to be developed by the Parties in accordance
with the
Strategic Alliance Agreement and attached hereto]

 

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Schedule 2.2
Equity Valuation

1.   For the purpose of any Athersys capital stock issued to Angiotech pursuant
to this Strategic Alliance Agreement, the price per share of such Athersys
capital stock shall be calculated as follows:

  (a)   If at the time of issuance Athersys common stock is publicly traded, the
capital stock shall be Athersys common stock and the price per share of Athersys
common stock shall be equal to (i) the Average Closing Price (as defined below)
plus (ii) 12.5% of the Average Closing Price.     (b)   If at the time of
issuance Athersys common stock is not publicly traded, the capital stock shall
be Athersys common stock and the price per share of Athersys common stock shall
be equal to the price per share for the purchase of common stock during the last
round of funding by Athersys from any Third Party financial investor plus 12.5%
of such amount and.

2.   For purposes of this Schedule, the following terms shall have the meanings
indicated below:

  (a)   “Average Closing Price” shall mean the arithmetic mean of the Closing
Prices (as defined below) for the twenty (20) days immediately preceding the
fifth trading day prior to the date of issuance.     (b)   “Closing Price” shall
mean the price per share of the last sale of Athersys common stock, as reported
on the relevant national exchange on which the Athersys common stock is publicly
traded, at the close of the trading day.

 

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Schedule 4.1
Existing Third Party Agreement
[attached]

 

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Schedule 7.3
Milestone Payments

1.   Upon first Successful Completion of a Phase II Study for a Clinical
Development Candidate in the U.S. (or foreign equivalent trial) in any of the
Cardiovascular Indications, one of the following shall occur:

  (a)   If both Athersys and Angiotech agree that such Clinical Development
Candidate should proceed to a Phase III Study, then the following shall apply:

  (i)   Angiotech shall pay to Athersys a one-time milestone payment in cash
equal to $[*]; and     (ii)   Angiotech shall enter into a securities purchase
agreement, in substantially the form of the Purchase Agreement (except for
necessary adaptations for a securities purchase instead of a note purchase),
pursuant to which Angiotech shall make a one-time purchase of $[*]of capital
stock of Athersys, of the class and at the per share price determined in
accordance with Schedule 2.2, on the terms and conditions set forth therein.

  (b)   If both Athersys and Angiotech agree that an additional Phase II Study
needs to be conducted for such Clinical Development Candidate, then the
following shall apply:

  (i)   Angiotech shall pay to Athersys a one-time milestone payment in cash
equal to $[*]; and     (ii)   Upon next Successful Completion of a Phase II
Study for any Clinical Development Candidate in any Cardiovascular Indication,
and a mutual determination that such Clinical Development Candidate should
proceed to a Phase III Study, Angiotech shall enter into a securities purchase
agreement, in substantially the form of the Purchase Agreement (except for
necessary adaptations for a securities purchase instead of a note purchase),
pursuant to which Angiotech shall make a one-time purchase of $[*]of capital
stock of Athersys, of the class and at the per share price determined in
accordance with Schedule 2.2, on the terms and conditions set forth therein.

  (c)   If Angiotech believes that the Clinical Development Candidate should
proceed to a Phase III Study and Athersys does not agree with Angiotech then, if
such disagreement persists after attempts at resolution by the Heads of Research
and the Party’s President, CFO (or other designated executive level officer)
pursuant to Section 3.7(b), the following shall apply:

 

*   Confidential treatment has been requested for the redacted portions of this
exhibit, and such confidential portions have been omitted and filed separately
with the Securities and Exchange Commission.

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  (i)   Angiotech shall pay to Athersys a one-time milestone payment in cash
equal to $[*];     (ii)   Athersys shall be deemed to have delivered an Opt-Out
Notice with respect to such Clinical Development Candidate pursuant to ARTICLE
VI and all such provisions in ARTICLE VI shall apply; and     (iii)   Upon the
next Successful Completion of a Phase II Study for any Clinical Development
Candidate in any Cardiovascular Indication, and a mutual determination that such
Clinical Development Candidate should proceed to a Phase III Study, Angiotech
shall enter into a securities purchase agreement, in substantially the form of
the Purchase Agreement (except for necessary adaptations for a securities
purchase instead of a note purchase), pursuant to which Angiotech shall make a
one-time purchase of $[*]of capital stock of Athersys, of the class and at the
per share price determined in accordance with Schedule 2.2, on the terms and
conditions set forth therein.

  (d)   If Athersys believes that the Clinical Development Candidate should
proceed to a Phase III Study and Angiotech does not agree with Athersys then, if
such disagreement persists after attempts at resolution by the Heads of Research
and the Party’s President, CFO (or other designated executive level officer)
pursuant to Section 3.7(b), the following shall apply:

  (i)   No milestone payment shall be paid by Angiotech to Athersys with respect
to such Phase II Study;     (ii)   Angiotech shall be deemed to have delivered
an Opt-Out Notice with respect to such Clinical Development Candidate pursuant
to ARTICLE VI and all such provisions in ARTICLE VI shall apply; and     (iii)  
Upon the next Successful Completion of a Phase II Study for any Clinical
Development Candidate in any Cardiovascular Indication, and a mutual
determination that such Clinical Development Candidate should proceed to a Phase
III Study, the following shall apply:

  (A)   Angiotech shall pay to Athersys a one-time milestone payment in cash
equal to $[*]; and     (B)   Angiotech shall enter into a securities purchase
agreement, in substantially the form of the Purchase Agreement (except for
necessary adaptations for a securities purchase instead of a note purchase),
pursuant to which Angiotech shall make a one-time purchase of $[*]of capital
stock of Athersys, of the class and at the per share price determined in
accordance with Schedule 2.2, on the terms and conditions set forth therein.

 

*   Confidential treatment has been requested for the redacted portions of this
exhibit, and such confidential portions have been omitted and filed separately
with the Securities and Exchange Commission.

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  (e)   If both Athersys and Angiotech agree that such Clinical Development
Candidate should NOT proceed to a Phase III Study and that an additional Phase
II should NOT be conducted for such Clinical Development Candidate, then the
following shall apply:

  (i)   No milestone payment shall be paid by Angiotech to Athersys with respect
to such Phase II Study; and     (ii)   The provisions of this Schedule 7.3,
Item 1 shall apply to future Phase II Studies with respect to other Clinical
Development Candidates in any Cardiovascular Indications as if such prior Phase
II Studies had not been conducted.

     For the avoidance of doubt, in no event shall Angiotech be obligated to pay
to Athersys during the Term more than $[*]in the aggregate under this
Schedule 7.3, Item 1.

2.   Upon the approval of the first NDA/BLA for the first Clinical Development
Candidate in the U.S. in any of the Cardiovascular Indications, Angiotech shall
pay to Athersys a one-time milestone payment in cash equal to $[*].

3.   Upon the approval of the first NDA/BLA equivalent application for the first
Clinical Development Candidate in Europe for any of the Cardiovascular
Indications, Angiotech shall pay to Athersys a one-time milestone payment in
cash equal to $[*].

4.   For Net Sales (of all Cell Therapy Products in the aggregate on a worldwide
basis) reaching $500,000,000.00, Angiotech shall pay to Athersys a one-time
milestone payment in cash equal to $[*].

5.   For Net Sales (of all Cell Therapy Products in the aggregate on a worldwide
basis) reaching $1,000,000,000.00, Angiotech shall pay to Athersys a one-time
milestone payment in cash equal to $[*].

     For the avoidance of doubt, for purposes of this Schedule 7.3 and the
milestone payment obligations described herein, “Cell Therapy Products” shall
not include Sole Development Products, except as and to the extent specifically
provided in Section 16.3(a).
 

*   Confidential treatment has been requested for the redacted portions of this
exhibit, and such confidential portions have been omitted and filed separately
with the Securities and Exchange Commission

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Schedule 7.4
Profit Sharing

1.   “Profits” means, with respect to any calendar quarter, the aggregate of all
Net Sales of all Cell Therapy Products in such quarter minus the aggregate of
all Commercial Manufacturing Costs and Commercialization Costs incurred in such
quarter.

2.   Profits from the commercialization of a Cell Therapy Product, whether such
calculation leads to a positive or negative number, will be split [*]% by
Athersys and [*]% by Angiotech (subject to modification pursuant to
Section 2.4(b)) according to the following procedure:

  (a)   Within forty-five (45) following the end of each calendar quarter,
Angiotech shall submit to Athersys a written report setting forth in reasonable
detail:

  (i)   separately with respect to each Cell Therapy Product on a country by
country basis, all Net Sales of Cell Therapy Products in the immediately
preceding calendar quarter and the basis for such calculation; and     (ii)  
all Commercialization Costs in the immediately preceding calendar quarter and
the basis for such calculation.

  (b)   Within forty-five (45) days following the end of each calendar quarter,
Athersys shall submit to Angiotech a written report setting forth in reasonable
detail all Commercial Manufacturing Costs for the immediately preceding calendar
quarter.     (c)   Within sixty (60) days following the end of each calendar
quarter, Angiotech shall submit to Athersys a written report setting forth the
calculation of Profits and the amount to be paid by one Party to the other Party
to split Profits in accordance with this Schedule. The net amount payable by a
Party shall be paid by Angiotech or Athersys, as the case may be, to the other
Party within ten (10) business days after receipt of such written report,
without regard to any dispute as to the amount to be paid thereunder. In the
event of a dispute, the disputing Party shall provide written notice within such
ten (10) business day period after receipt of the written report in question,
specifying in detail such dispute. The Parties shall promptly thereafter meet
and negotiate in good faith a resolution to such dispute. In the event that the
Parties are unable to resolve such dispute within thirty (30) days after notice
by the disputing Party, the CFOs of the Parties shall resolve such dispute.

 

*   Confidential treatment has been requested for the redacted portions of this
exhibit, and such confidential portions have been omitted and filed separately
with the Securities and Exchange Commission

 

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Schedule 14.3(b)
Ownership or Liens, Charges or Encumbrances

 

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Schedule 14.3(g)
Government Funding

 

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Schedule 14.3(l)
Unauthorized Use, Infringement or Misappropriation of Intellectual Property

 

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Exhibit A
Note Purchase Agreement

 

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Exhibit B
License Agreement

 

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Exhibit C
Sublicense Agreement