EXHIBIT 10.42
CONFIDENTIAL
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.
COLLABORATION AND LICENSE AGREEMENT
BETWEEN
ATHERSYS INC.,
ABT HOLDING COMPANY
AND
PFIZER INC.
DATED AS OF
December 18 2009

 

 

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CONFIDENTIAL
Table of Contents

         
Section 1 DEFINITIONS
    2  
 
       
Section 2 RESEARCH PROGRAM
    12  
 
       
Section 3 CLINICAL DEVELOPMENT PROGRAM
    15  
 
       
Section 4 MANUFACTURING OF LICENSED PRODUCT
    18  
 
       
Section 5 JOINT STEERING COMMITTEE
    20  
 
       
Section 6 RIGHTS TO RESEARCH PROGRAM AND COMBINATION PRODUCT IPRs
    23  
 
       
Section 7 LICENSES
    23  
 
       
Section 8 RESEARCH FUNDING
    26  
 
       
Section 9 FEES AND ROYALTIES
    27  
 
       
Section 10 ACCOUNTING AND PROCEDURES FOR PAYMENT
    29  
 
       
Section 11 PATENTS AND INFRINGEMENT
    32  
 
       
Section 12 CONFIDENTIALITY; PUBLICATION
    35  
 
       
Section 13 REPRESENTATIONS AND WARRANTIES
    39  
 
       
Section 14 ADDITIONAL COVENANTS
    42  
 
       
Section 15 TERM
    44  
 
       
Section 16 TERMINATION
    44  
 
       
Section 17 INDEMNIFICATION
    47  
 
       
Section 18 GOVERNING LAW AND JURISDICTION
    50  
 
       
Section 19 MISCELLANEOUS
    51  
 
       
ATHERSYS PATENT RIGHTS FOR THE PURPOSES OF THE ROYALTY TERM
    64  

 

 

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CONFIDENTIAL
COLLABORATION AND LICENSE AGREEMENT
Collaboration and License Agreement (this “Agreement”) dated as of December 18,
2009 between ATHERSYS, INC., an Ohio corporation with offices located at 3201
Carnegie Avenue, Cleveland, Ohio 44115 (“AI”), ABT HOLDING COMPANY, a Delaware
corporation and having a offices located at 3201 Carnegie Avenue, Cleveland,
Ohio 44115 (“ABT”), together referred to in this Agreement as (“ATHERSYS”) and
PFIZER INC., a Delaware corporation with offices located at 235 East 42nd
Street, New York, New York, 10017, U.S.A. (“PFIZER”).
WHEREAS, ATHERSYS owns or otherwise controls certain patents, patent
applications, technology, know-how and scientific and technical information
relating to MultiStem® stem cell technology;
WHEREAS, PFIZER has extensive experience and expertise in the development and
commercialization of therapeutic agents and biological products and documented
success in regulatory proceedings, and desires to collaborate with ATHERSYS in
respect of the development of MultiStem Products (as defined below) for the
Field (as defined below) and to acquire a license in the Territory (as defined
below) to such patents, patent applications, technology, know-how and scientific
and technical information on the terms of this Agreement; and
WHEREAS, ATHERSYS is a biopharmaceutical group that specialises in the
development of stem cell technology for therapeutic products, including
MultiStem® stem cell technology, to treat diseases and disorders and desires to
collaborate with PFIZER in relation to the development of MultiStem Products and
to grant licenses to PFIZER on the terms of this Agreement;
NOW, THEREFORE, in consideration of the mutual covenants and agreements provided
herein, ATHERSYS and PFIZER hereby agree as follows:
Section 1 DEFINITIONS
For purposes of this Agreement, the following definitions shall be applicable:
1.1 “Affiliate” means any entity directly or indirectly controlled by,
controlling, or under common control with, a party to this Agreement, but only
for so long as such control shall continue. For purposes of this definition,
“control” (including, with correlative meanings, “controlled by”, “controlling”
and “under common control with”) means (a) possession, direct or indirect, of
the power to direct or cause direction of the management or policies of an
entity (whether through ownership of securities or other ownership interests, by
contract or otherwise), or (b) beneficial ownership of at least 50% of the
voting securities or other ownership interest (whether directly or pursuant to
any option, warrant or other similar arrangement) or other comparable equity
interests of an entity.
1.2 “Athersys Combination Product” means a MultiStem Product containing or
co-administered (where the individual products/forms are intended for
simultaneous or sequential administration) with an Athersys Compound(s).

 

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1.3 “Athersys Combination Product IPRs” means rights in (i) 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; (ii) any re-examinations, reissues,
renewals, substitutions or extensions of any patents; (iii) foreign counterparts
or equivalents of any of the foregoing rights, (iv) inventions, discoveries,
data, information, trade secrets, processes, methods, techniques, materials,
technology, results or other know-how, whether or not patentable, (v) methods,
devices or improvements for delivery or maintenance of a cell-based product and
(vi) copyrights, software, source code and copyrightable works, in each case
(i) through (vi) that are created, devised or arise out of the parties (or their
Affiliates) undertaking and performing activities under the Research Program and
where such rights are directed to an Athersys Combination Product.
1.4 “Athersys Compound” means small molecules, biological molecules and drug
candidates and/or other pharmaceutical agent in respect of which ATHERSYS has
exclusive rights (e.g. by ownership or license from a Third Party ) under
relevant patents or patent applications at the time such Athersys Compound is
introduced into the Research Program.
1.5 “Athersys Confidential Information” means all information about any element
of Athersys Technology, Athersys Compounds or Athersys Combination Products, as
well as any other information regarding the business and operations of ATHERSYS
or any of its Affiliates, that is or has been disclosed (whether orally or in
writing) by ATHERSYS to PFIZER or its Affiliates to the extent that such
information is not (i) as of the date of disclosure to PFIZER, known to PFIZER
or its Affiliates; or (ii) disclosed in published literature, or otherwise
generally known to the public through no breach by PFIZER of this Agreement; or
(iii) obtained by Pfizer or its Affiliates from a Third Party free from any
obligation of confidentiality to ATHERSYS; or (iv) independently developed by
PFIZER or its Affiliates without use of the Athersys Confidential Information.
1.6 “Athersys Device” means a device intended to assist the delivery,
administration or release of a bio-pharmaceutical product in respect of which
ATHERSYS has exclusive rights (e.g. by ownership or license from a Third Party )
under relevant patents or patent applications at the time such Athersys Device
is introduced into the Research Program.
1.7 “Athersys Exclusive Patent Rights” shall have the meaning assigned to it in
Section 11.1.
1.8 “Athersys Patent Rights” means all patents and patent applications, whether
domestic or foreign, including all continuations, continuations-in-part,
divisions, provisionals and renewals, and letters of patent granted with respect
to any of the foregoing, patents of addition, supplementary protection
certificates, registration or confirmation patents and all reissues,
re-examination and extensions thereof, that are owned, co-owned by or licensed-
to ATHERSYS or its Affiliates, with the right to licence or sub-licence, as of
the Effective Date or at any time during the Term and that relate to MultiStem
Products, including the Athersys Patent Rights listed in Schedule 1.8, and any
patents that may issue from, or claim priority to or through, the applications
listed in Schedule 1.8.
1.9 “Athersys Technology” means all materials, technology, data, technical and
scientific information, standard operating procedures, specifications, know-how
(including all know-how related to manufacturing of MultiStem Products),
expertise and trade secrets that relate to or are used in connection with any
MultiStem Products, Athersys Combination Products , including any intellectual
property rights embodying any of the foregoing (other than Athersys Combination
Product IPR) which are owned, co-owned by or licensed to ATHERSYS or its
Affiliates, with the right to licence or sub-licence, as of the Effective Date
or at any time during the Term, but excluding Athersys Patent Rights.

 

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1.10 “BLA” means Biologics License Application filed with the FDA in accordance
with the FDCA with respect to a bio-pharmaceutical product or an analogous
application or filing with any Regulatory Authority outside of the United States
(including any supra-national agency such as the European Union) for the purpose
of obtaining approval to market and sell a bio-pharmaceutical product in such
jurisdiction.
1.11 “Business Day” means a day other than a Saturday, Sunday, or bank or other
public holiday in New York, New York.
1.12 “Change of Control” means that any of the following occurs in respect of AI
or ABT: (i) any entity becoming the beneficial owner, directly or indirectly, of
more than fifty percent (50%) of the voting securities of AI or ABT; (ii) the
sale or other disposition of all or substantially all of the assets of AI or
ABT; or (iii) a consolidation or merger of AI or ABT with any entity, other than
a merger or consolidation which would result in the voting securities of AI or
ABT outstanding immediately prior thereto continuing to represent at least fifty
percent (50%) of the total voting power represented by the voting securities of
AI or ABT outstanding immediately after such merger or consolidation.
1.13 “Clinical Development Candidate” means (a) a MultiStem Product or
Combination Product that meets the criteria and has the characteristics that are
necessary and desirable for the submission of an IND for use of such MultiStem
Product(s) or Combination Product(s) for treatment, prevention or control of a
Pilot or Major Indication, as advanced and recommended by the JSC or the
Development & Regulatory Committee; or (b) a MultiStem Product or Combination
Product that is or has been the subject of an IND for use of such MultiStem
Product or Combination Product(s) in the treatment, prevention or control of a
Pilot or Major Indication.
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 Pilot or Major Indication (including a
detailed budget corresponding to each such plan). Each Clinical Development Plan
shall be approved by the parties and upon such approval shall be subject to this
Agreement.
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 “Combination Product” means a Pfizer Combination Product and/or an Athersys
Combination Product.
1.17 “Commence” or “Commencement” when used with respect to a clinical study,
means the first dosing of the first patient for such study.

 

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1.18 “Commercially Reasonable Efforts” means those efforts and resources
consistent with the usual practice of PFIZER in pursuing the development or
commercialization of its own pharmaceutical products that are of similar market
potential as the Licensed Products, taking into account all relevant factors
including product labelling or anticipated labelling, present and future market
potential, past performance of Licensed Products and PFIZER’s own pharmaceutical
products that are of similar market potential, financial return, medical and
clinical considerations, present and future regulatory environment and
competitive market conditions, all as measured by the facts and circumstances at
the time such efforts are due. Without limitation to the generality and
principles stated above, the following shall be treated as evidence that PFIZER
has satisfied its obligations to use Commercially Reasonable Efforts:
(i) receipt by ATHERSYS of applicable Event Milestone Payments, (ii) progressing
development and commercialisation of Licensed Products in accordance with
Research Plans, Clinical Development Plans (including regulatory plans) and
plans for Launch; (iii) cooperation in relation to, funding or maintenance of
Athersys Patent Rights pursuant to Section 11, and (iv) maintaining meaningful
dialogue with Regulatory Authorities to progress any clinical or regulatory
issues which have delayed or may delay Clinical Development Plans and/or Launch.
1.19 “Committee” means each of the JSC, Research Committee, Development &
Regulatory Committee and/or Manufacturing Committee.
1.20 “Compound” means a Pfizer Compound and/or an Athersys Compound.
1.21 “Development & Regulatory Committee” shall have the meaning assigned to it
in Section 5.2(b).
1.22 “Device” means an Athersys Device and/or a Pfizer Device.
1.23 “Effective Date” means December 18, 2009.
1.24 “Event Milestone Payments” means the amounts set forth in Section 9.1(a)
opposite the respective Event Milestones.
1.25 “Extension” shall have the meaning assigned to it in Section 2.2.
1.26 “FDA” means the United States Food and Drug Administration or any successor
agency thereto.
1.27 “FDCA” means the U.S. Federal Food, Drug and Cosmetic Act, as amended, and
the regulations promulgated thereunder.
1.28 “Field” means the Pilot Indication and the Major Indication.
1.29 “FTE Rate” means the amount per annum set out in Section 8.1 (or such other
amount agreed by the parties), for the time of an employee to whom all required
facilities, materials and equipment have been made available for performance of
specific, technical or managerial work being a full time equivalent person
(consisting of a total of not less than [*] per annum of work supporting the
collaborative efforts and goals of the Research Plan); to be prorated on a daily
basis if necessary (such per annum amount to be divided by [*] to produce the
rate per whole day consisting of [*]).
 

      *   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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1.30 “Governmental Authority” means any court, agency, department, authority or
other instrumentality of any international, national, state, county, city or
other political subdivision.
1.31 “IND” means an Investigational New Drug Application submitted under the
FDCA; or an analogous application or filing with any analogous agency or
Regulatory Authority outside of the United States under any analogous foreign
Law for the purposes of obtaining permission to conduct human clinical studies.
1.32 “Indemnified Party” shall have the meaning assigned to it in Section 17.3.
1.33 “Indemnifying Party” shall have the meaning assigned to it in Section 17.3.
1.34 “Initial Research Term” shall have the meaning assigned to in Section 2.2.
1.35 “JSC” shall mean Joint Steering Committee and shall have the meaning given
to it in Section 5.1.
1.36 “Key Role” shall mean each of the following roles in connection with the
Research Program: [*].
1.37 “Launch” means the first shipment of a Licensed Product in commercial
quantities for commercial sale by PFIZER, its Affiliates or its sublicensees to
a Third Party in a country in the Territory after receipt by PFIZER of the first
Regulatory Approval (and, in any country in which Price Approval is necessary or
relevant for a majority of the population to obtain access to pharmaceutical
products, Price Approval) for such Licensed Product in such country.
1.38 “Laws” means all laws, statutes, rules, regulations, orders, judgments
and/or ordinances of any Governmental Authority.
1.39 “Licensed Product” means any bio-pharmaceutical product in all dosage forms
and formulations, for administration through any delivery platform or mechanism,
in each case that contains a MultiStem Product (including any Athersys
Combination Product and any Pfizer Combination Product), the manufacture, sale,
offer for sale, importation, or use of which [*].
1.40 “Losses” shall have the meaning assigned to it in Section 17.2.
1.41 “Major EU Countries” means the United Kingdom, Spain, Italy, France and
Germany.
1.42 “Major Indication” means inflammatory bowel disease in humans, [*].
1.43 “Manufacturing Committee” shall have the meaning assigned to it in Section
5.2(c).
 

      *   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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1.44 “Manufacturing Costs” means with respect to each Licensed Product, (a) if
the Licensed Product is manufactured by a Third Party for ATHERSYS or PFIZER or
their respective Affiliates, then the actual amount paid by ATHERSYS or PFIZER
or their Affiliates) to such Third Party for the manufacture and supply of the
Licensed Product and (b) if the Licensed Product is manufactured by ATHERSYS or
PFIZER or their respective Affiliates, then all of the costs and expenses
inclusive of any taxes (including applicable overhead costs and expenses, but
excluding any clinical development costs) incurred or paid by ATHERSYS and its
Affiliates (or PFIZER and its Affiliates if PFIZER has acquired manufacturing
rights under this Agreement) with respect to the manufacturing of Licensed
Products 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 Licensed Product : (i) all
direct costs with respect to manufacturing and supply the Licensed Product,
including all direct costs of raw materials, labor, license fees (if any),
maintenance and repair of equipment used to manufacture the Licensed Product,
storage and packaging and shipping costs and (ii) a reasonable allocation of
indirect costs associated with such direct costs, not to exceed [*] percent
([*%]) thereof.
1.45 “Materials Transfer Agreement” means an agreement in the form set out in
Schedule 1.45 pursuant to which the parties, or their Affiliates, shall or shall
be deemed to have transferred biological materials or compounds (including
MultiStem cells or Compounds) to each other pursuant to Section 2.9.
1.46 “MultiStem” means multipotent adult progenitor cells derived from bone
marrow and expanded more than twenty doublings, as covered by the Athersys
Patent Rights.
1.47 “MultiStem Products” means the following cells identified, developed,
and/or intended for use in treatment of a disease or conditions in humans,
however delivered: (a) MultiStem; (b) progeny or components of MultiStem;
(c) derivatives of any of the foregoing (a) or (b); and (d) genetically-modified
MultiStem; 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 state, (ii) in a partially or
fully pre-differentiated state, (iii) primed for differentiation or specific
biological activity (for example, through the introduction of a protein,
peptide, gene, polynucleotide, small molecule or other active pharmaceutical
ingredient), or (iv) in a modified form.
1.48 “NDA” means a New Drug Application filed with the FDA in accordance with
the FDCA with respect to a pharmaceutical products or an analogous application
or filing with any Regulatory Authority outside of the United States (including
any supra-national agency such as the European Union) for the purpose of
obtaining approval to market and sell a pharmaceutical product in such
jurisdiction.
1.49 “Net Sales” means (a) with respect to a Licensed Product in the Field that
is not a PFIZER Combination Product, the gross amount invoiced by PFIZER, its
Affiliates and its sublicensees of such Licensed Product to Third Parties, less
(i) bad debts related to such Licensed Product, (ii) sales returns and
allowances actually paid, granted or accrued, including, trade, quantity and
cash discounts and any other adjustments, including, those granted on account of
price adjustments, billing errors, rejected goods, damaged or defective goods,
recalls, returns, rebates, chargeback rebates, reimbursements or similar
payments granted or given to wholesalers or other distributors, buying groups,
health care insurance carriers or other institutions, adjustments arising
 

      *   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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CONFIDENTIAL
from consumer discount programs or other similar programs, (iii) customs or
excise duties, sales tax, consumption tax, value added tax, and other taxes
(except income taxes) or duties relating to sales, any payment in respect of
sales to the United States government, any state government or any foreign
government, or to any other Governmental Authority, or with respect to any
government-subsidized program or managed care organization actually collected,
and (iv) freight and insurance (to the extent that PFIZER or the Affiliates
bears the cost of freight and insurance for a Licensed Product); and (b) with
respect to a Combination Product, such percentage of the Net Sales of such
Combination Product, as determined in accordance with clause (a) hereof - as the
parties agree in good faith taking into account the relative value of any Pfizer
Compound, Pfizer Device, Athersys Compound, and Athersys Device included in the
Combination Product. Net Sales shall be determined from books and records
maintained in accordance with generally acceptable accounting principles in the
United States, as consistently applied by PFIZER with respect to sales of all
its pharmaceutical products.
1.50 “Pfizer Combination Product” means a MultiStem Product containing or
co-administered (where the individual products/forms are intended for
simultaneous or sequential administration) with a Pfizer Compound(s).
1.51 “Pfizer Combination Product IPRs” means rights in (i) 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; (ii) any re-examinations, reissues,
renewals, substitutions or extensions of any patents; (iii) foreign counterparts
or equivalents of any of the foregoing rights, (iv) inventions, discoveries,
data, information, trade secrets, processes, methods, techniques, materials,
technology, results or other know-how, whether or not patentable, (v) methods,
devices or improvements for delivery or maintenance of a cell-based product, and
(vi) copyrights, software, source code and copyrightable works ; in each case of
(i) through (vi) that are created, devised or arise out of the parties (or their
Affiliates) undertaking and performing activities under the Research Program and
where such rights are directed to a Pfizer Combination Product.
1.52 “Pfizer Compound” means a small molecule, biological molecule and/or drug
candidate and/or other pharmaceutical agent in respect of which PFIZER has
exclusive rights (e.g. by ownership or licence from a Third Party under relevant
patents and patent applications at the time such Pfizer Compound is introduced
into the Research Program.
1.53 “Pfizer Confidential Information” means all information relating to
Compounds or Licensed Products (including Pfizer Combination Products), as well
as any other information regarding the business and operations of PFIZER, that
is or has been disclosed (whether orally or in writing) by PFIZER to ATHERSYS or
its Affiliates to the extent that such information is not (i) as of the date of
disclosure known to ATHERSYS or its Affiliates; or (ii) disclosed in published
literature, or otherwise generally known to the public through no breach by or
ATHERSYS; of this Agreement or (iii) obtained by ATHERSYS or its Affiliates from
a Third Party free from any obligation of confidentiality to PFIZER; or
(iv) independently developed by ATHERSYS or its Affiliates without use of the
Pfizer Confidential Information; or (v) in the reasonable opinion of legal
counsel, required to be disclosed under Law; provided that, in the case of (v),
ATHERSYS provides PFIZER prior notice (to the extent practicable) of such
disclosure and agrees to cooperate, at the request and sole expense of PFIZER,
with PFIZER’s efforts to preserve the confidentiality of such information.

 

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1.54 “Pfizer Device” means a device intended to assist the delivery,
administration or release of a bio-pharmaceutical product in respect of which
PFIZER has exclusive rights (e.g. by ownership or by licence from a Third Party
with the right to sublicense) under relevant patents and patent applications at
the time such Pfizer Device is introduced into the Research Program.
1.55 “Pfizer Quarter” means each of the four (4) calendar quarters of any
calendar year.
1.56 “Pfizer Technology” means all materials, technology, data, technical and
scientific information, know-how, expertise and trade secrets that relate to or
are used in connection with any MultiStem Products, Pfizer Combination Products,
including any intellectual property rights embodying any of the foregoing (other
than Pfizer Combination Product IPRs) which are owned, co-owned by or licensed
to PFIZER or its Affiliates, with the right to licence or sub-license as of the
Effective Date or at any time during the Term.
1.57 “Pfizer Year” means the twelve (12) month period commencing on January 1 of
any calendar year.
1.58 “Phase I Clinical Study” means a clinical study that is the first
introduction into humans of a Licensed Product that is intended initially to
evaluate the tolerance, safety and/or pharmacological effects at a potentially
therapeutic dose level of a Clinical Development Candidate and advance the
Clinical Development Candidate to Phase II or subsequent clinical study.
1.59 “Phase II Clinical Study” means a clinical study, other than a Phase III
Clinical Study, that is intended to test the effectiveness of a Clinical
Development Candidate for a specific indication in patients with the disease or
condition under study.
1.60 “Phase II(b) Clinical Study” means a Phase II Clinical Study that is
intended to establish the dosing regimen for use in a Phase III Clinical Study
of a Clinical Development Candidate for a specific indication.
1.61 “Phase III Clinical Study” means a clinical study intended to meet the
requirements for approval of an NDA, BLA or equivalent, for a Licensed Product.
1.62 “Pilot Indication” means ulcerative colitis [*].
1.63 “Price Approval” means, in any country where a Governmental Authority
authorizes reimbursement for, or approves or determines pricing for,
pharmaceutical products, receipt (or, if required to make such authorization,
approval or determination effective, publication) of such reimbursement
authorization or pricing approval or determination (as the case may be).
1.64 “Redacted Agreement” shall have the meaning assigned to it in Section 12.4.
1.65 “Regulatory Approval” means with respect to any jurisdiction, any and all
approvals, or authorizations (other than Price Approvals) (e.g. BLA, INDs, NDAs)
that are necessary for the commercial manufacture, distribution, use, marketing
or sale of a bio-pharmaceutical product in such jurisdiction.
 

      *   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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1.66 “Regulatory Authority” means, with respect to any jurisdiction, the
Governmental Authority having responsibility for granting Regulatory Approvals
in such country or jurisdiction.
1.67 “Research Committee” shall have the meaning assigned to it in
Section 5.2(a).
1.68 “Release Condition” shall have the meaning assigned to it in Schedule 2.7.
1.69 “Representatives” means with respect to a party, such party’s Affiliates,
licensees, officers, directors, managers employees, consultants, contractors,
sub-licensees and agents.
1.70 “Research Plan” means a detailed plan that sets forth the responsibilities
of, and activities to be conducted by, ATHERSYS and PFIZER with respect to
non-clinical research activities related to MultiStem and its potential usage in
the clinic, and in advancing one or more MultiStem Products into one or more
potential Clinical Development Candidates and Licensed Products (including a
detailed budget corresponding to each such plan). [*].
1.71 “Research Program” means the research and non-clinical development
activities conducted by (or to be conducted by) each party pursuant to the
Research Plan.
1.72 “Research Program IPRs” means rights in (i) 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; (ii) any re-examinations, reissues, renewals,
substitutions or extensions of any patents; (iii) foreign counterparts or
equivalents of any of the foregoing rights, (iv) inventions, discoveries, data,
information, trade secrets, processes, methods, techniques, materials,
technology, results or other know-how, whether or not patentable; (v) methods,
devices or improvements for delivery or maintenance of a cell-based product and
(vi) copyrights, software, source code and copyrightable works, in each case
(i) through (vi) that which are created, devised or arise out of the parties (or
their Affiliates) undertaking and performing the Research Program, other than
Athersys Combination Product IPRs and Pfizer Combination IPRs.
1.73 “Research Term” means the Initial Research Term and, at PFIZER’s sole
discretion, the Extension.
1.74 “Royalty Term” means, on a country-by-country and Licensed
Product-by-Licensed Product basis, the period commencing upon Launch of the
Licensed Product in the Field in the country and ending upon [*]: (i) the date
on which such Licensed Product is no longer covered by a Valid Claim in such
country; or (ii) [*] ([*]) years from the date of Launch of the first Licensed
Product in such country provided that the Regulatory Approval for such Licensed
Product in such country continues to provide data or market exclusivity in
respect of such Licensed Product.
1.75 “Sales Milestone Payments” means the amounts set forth in Section 9.2.
 

      *   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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1.76 “Stand-By License” means each license entered into pursuant to Section 7.5
between PFIZER, ATHERSYS and the corresponding Third Party to a Third Party
License.
1.77 “Suitably Qualified Person” means a person with the qualifications and/or
experience ordinarily required in connection with the relevant Key Role, which
in relation to: (i) ATHERSYS’ Co-Chair to the JSC shall mean a person with at
least [*] ([*]) years experience working in human cell based therapy research in
an industrial environment; (ii) ATHERSYS’ Co-Chair to the Manufacturing
Committee shall mean a person with at least [*] ([*]) years experience in the
manufacture of human cell based products and (iii) ATHERSYS’ Research Program
planning lead shall mean a person with at least [*] ([*]) years experience
managing human cell based research projects.
1.78 “Term” shall have the meaning assigned to it in Section 15.
1.79 “Territory” means the entire world.
1.80 “Third Party” means any person or entity other than PFIZER, ATHERSYS, or
any of their respective Affiliates.
1.81 “Third Party Claim” shall have the meaning assigned to it in Section 17.3.
1.82 “Third Party Licenses” means the Third Party licence agreements listed in
Schedule 1.82 as such Schedule may be amended during the Term by agreement of
the parties to include any relevant future Third Party licenses.
1.83 “Valid Claim” means [*]
 

      *   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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Section 2 RESEARCH PROGRAM
2.1 Purpose.
During the Research Term, ATHERSYS and PFIZER will conduct the Research Program
and Clinical Development Program and any other agreed upon activities by the
parties. The goal of the collaboration is to discover and develop Licensed
Products and in particular to: (i) advance one or more Licensed Products in the
Field to “proof of concept” in human; (ii) further advance Licensed Products in
the Field to preclinical testing as defined in the Research Plan; (iii) evaluate
the potential to advance one or more Licensed Products in the Field and give
ATHERSYS an opportunity to participate in co-development with PFIZER;
(iv) advance research in the potential for formulation, pre-treatment,
concurrent treatment, or follow-on treatment with one or more pharmaceutical
agents for improvement of cell-based therapy in the Field; and (v) to assure
continuity of MultiStem clinical supply and manufacturing capability to support
development and commercialisation of Licensed Products in the Field.
2.2 Research Term.
The initial Term of the Research Program will be for [*] from the Effective Date
(the “Initial Research Term”). Pfizer may elect, in its sole discretion, to
extend the Research Term for an additional [*] (“Extension”), subject to the
parties agreeing to any applicable changes to the Research Plan and/or Clinical
Development Plan(s) and to PFIZER providing the additional research funding
pursuant to Section 8.1.
2.3 Exclusivity.
During the Research Term and thereafter for as long as PFIZER is using
Commercially Reasonable Efforts to develop or commercialise a Licensed Product
in the Field in the Territory, ATHERSYS and its Affiliates shall work
exclusively with Pfizer in the development and commercialisation of Licensed
Products for the Field in the Territory.
2.4 Research Reports
(a) Quarterly Reports. After each Pfizer Quarter each party will submit to the
Research Committee a written report summarizing its activities under the
Research Program. Each research report shall include summary results and
material data and findings for all Research Program studies ongoing or completed
during the Pfizer Quarter. The report must be submitted within 30 days of the
end of the Pfizer Quarter.
(b) Annual Reports. After each Pfizer Year each party will submit to the JSC a
written report detailing the work it completed during the Pfizer Year and
evaluating the results of its work. The report must be submitted within 30 days
of the end of the Pfizer Year.
 

      *   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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2.5 Sharing of Research and Certain Information.
ATHERSYS shall share with PFIZER in good faith, as completely as possible,
promptly, but in any event in accordance with any requirements as to time for
submission/notification of any Regulatory Authorities [*], prior to the
Effective Date and which are set out in writing, certain research findings from
studies conducted using MultiStem Products or research materials outside this
Agreement (by example and without limitation[*]) which ATHERSYS reasonably deems
to be relevant to patient safety, the safe research use of MultiStem and the
research, development, regulatory requirements, and/or commercialization of a
Clinical Development Candidate. All information provided pursuant to this
Section 2.5 shall be considered Athersys Confidential Information.
2.6 Introduction of Technology.
If a party identifies technology or compounds independent of the Research
Program that it believes might have utility in the Research Program, it may
notify the Research Committee and the Research Committee shall discuss and agree
upon the nature and scope of incorporation of such technology or compound into
the Research Program, including such party’s patent rights with respect to such
technology, and designate such technology as Athersys Compounds or Devices or
Pfizer Compounds or Devices, as the case may be. If the Research Committee
cannot agree on introduction of such technology, the party proposing to
introduce the technology can withdraw its proposal and such technology will be
excluded from the Research Program.
2.7 Cell Repository.
By the date set out in the Research Plan, ATHERSYS hereby agrees to:
(i) transfer to PFIZER, on the terms of the Materials Transfer Agreement,
sufficient numbers of vials containing stored cells from each of: (a) the then
current MultiStem master cell banks, (b) each of the MultiStem working cell
banks which have been derived from a MultiStem master cell bank, and (c) the
then current media used by ATHERSYS to initiate cell expansion and a complete
list of the growth factors and media components required, in each case (a),
(b) and (c) as are capable of producing the MultiStem cells needed to (x) enable
PFIZER to serve as a repository for MultiStem cells and (y) manufacture Clinical
Development Candidates and Licensed Products for use in the Field in accordance
with Schedule 2.7; and (ii) a certified (to the extent required) copy of all
licenses, permits and authorisations granted by Regulatory Authorities and such
supporting documentation and donor consents required to demonstrate compliance
with all Laws relating to the isolation, purification, derivation, production
and traceability of the MultiStem cells, such other information as is required
to support the CMC sections of a regulatory dossier for a Licensed Product in
the Field and access to all electronic regulatory submissions made by or on
behalf of ATHERSYS (together referred to as the “MultiStem Regulatory File”).
2.8 Laboratory Facility and Personnel.
Each party will provide suitable laboratory facilities, materials, equipment and
personnel for the work to be done by it in the Research Program. ATHERSYS may
subcontract any of its obligations in respect of a Research Plan to its
Affiliates or to other Third Party providers as agreed under the applicable
Research Plan and subject to the terms of Section 19.8.
 

      *   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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2.9 Materials Transfer.
All biological materials and compounds for research and laboratory use(i.e.,
excluding clinical or commercial supply of Clinical Development Candidates and
other Licensed Products), transferred by ATHERSYS and PFIZER to the other party
shall be transferred pursuant to the Materials Transfer Agreement.
2.10 Commercially Reasonable Efforts.
PFIZER will use Commercially Reasonable Efforts and ATHERSYS will in good faith
apply those efforts and resources consistent with and in kind to PFIZER’S
Commercially Reasonable Efforts in pursing the development or commercialization
of the Licensed Products to achieve the goals of the Research Program.
2.11 Changes to Ongoing Research.
With respect to studies and activities of the Research Program, the party
responsible for a particular study or activity under the Research Program may
modify the study or its activities, but only after consultation with and
approval of the JSC (or applicable subcommittee) for material modifications and
changes, such approval to by given by email exchange of the applicable Committee
Co-Chairs.
2.12 New Research. During the Term, the parties anticipate undertaking
additional non-clinical research, and the parties acknowledge that either party
may assume certain responsibilities, and may conduct certain activities, in
connection with such research. The JSC (or a subcommittee designated with
responsibility therefore) shall have oversight for the parties’ responsibilities
and activities (if any) related to new research, and shall incorporate such
research, activities and studies into the Research Plan as appropriate.
2.13 Disclosure of Technology.
Within thirty (30) days after the Effective Date, and from time-to-time
throughout the Term, and at any time during the Term at PFIZER’s request,
ATHERSYS will disclose to PFIZER or its designated Affiliate all Athersys
Technology that may be necessary or useful to PFIZER to develop, manufacture,
register, or market Clinical Development Candidates or Licensed Products in the
Field and efficiently practice the licenses granted to PFIZER under this
Agreement (including all regulatory materials, permissions and consents relating
to MultiStem as may be required by any Regulatory Authority).

 

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Section 3 CLINICAL DEVELOPMENT PROGRAM
3.1 Clinical Development Program. The parties shall conduct the Clinical
Development Program in accordance with the Clinical Development Plan(s). The
Development & Regulatory Committee shall oversee the Clinical Development
Program. PFIZER shall have the exclusive right and responsibility for preparing
any Clinical Development Plans, conducting clinical development and executing
clinical trials thereunder, and obtaining all Regulatory Approvals for Licensed
Products in the Field. ATHERSYS, at its cost and without delay to the
progression of or interference with Regulatory Approvals, shall have the right
to participate as a direct observer in all aspects of development of a Clinical
Development Candidate through Phase II(b) Clinical Studies and, for so long as
ATHERSYS continues to fund Phase III Clinical Studies pursuant to
Section 3.2(c), Phase III Clinical Studies. PFIZER shall be solely responsible
for the costs of executing any clinical study of any Clinical Development
Candidate, except the costs of ATHERSYS’ own participation in the clinical study
in accordance with the Clinical Development Plan(s), certain Manufacturing Costs
pursuant to Section 4.1, and as provided in Section 3.2.
3.2 Opt-In Rights. Prior to the initiation of the first Phase III Clinical Study
in any Pilot Indication or Major Indication, ATHERSYS may elect to participate
in the development, and related funding, of the Phase III Clinical Study for
such Indication as follows:
(a) At least six (6) months prior to the initiation of the first Phase III
Clinical Study for a in any Pilot Indication or Major Indication, PFIZER shall
provide to ATHERSYS a written Clinical Development Plan, including a description
of the studies to be completed (including trial design(s)), the plan for seeking
any Regulatory Approval(s), any other requirements for obtaining Regulatory
Approval, the then current commercialization plan, and a budget describing
PFIZER’S good faith estimates of the costs of all of these activities.
(b) IF ATHERSYS wishes to participate in the co-development of the Licensed
Product pursuant to the Clinical Development Plan provided under Section 3.2(a)
it shall notify PFIZER in writing (“Opt-In Notice”) by no later than thirty
(30) days prior to Commencement of the corresponding Phase III Clinical Study.
If ATHERSYS does not provide an Opt-In Notice, then it forgoes its right to
participate in co-development of such Licensed Product. If ATHERSYS does provide
PFIZER with an Opt-In Notice, then it shall provide PFIZER within thirty
(30) days of the date of the Opt-In Notice a written commitment to fund its
share of costs. If ATHERSYS fails to provide such written commitment, then it
shall forgo its right to participate in the co-development of such Licensed
Product.
(c) If ATHERSYS provides to PFIZER the Opt-In Notice and a corresponding written
commitment, then (i) ATHERSYS shall make payment to PFIZER of its share of costs
on a quarterly basis as described in Schedule 3.2(c) and (ii) if ATHERSYS funds
all its share of the Clinical Development Costs for that Clinical Development
Candidate, ATHERSYS shall be entitled to (A) participate in any Development and
Regulatory Committee(s) and as a direct observer in all aspects of the Phase III
Clinical Study and the Clinical Development Plan for such Clinical Development
Candidate (subject to Pfizer’s rights in Section 3.1) and (B) share Profits from
the commercialization of such Licensed Product in accordance with
Schedule 3.2(c).
(d) If ATHERSYS is unable or elects not to pay any or all of its portion of
costs pursuant to Section 3.2(c) then, as the sole remedy for such failure, it
shall lose the benefits of Section 3.2 (c )(ii)(B) above with respect to the
Licensed Product and shall, subject to its obligations pursuant to Section 3.1,
have no further obligations to fund its share of costs.

 

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3.3 Clinical Development Program Reports.
(a) Quarterly Reports. After each Pfizer Quarter following the Commencement of a
Clinical Development Plan and during the Research Term each party will submit to
the Development & Regulatory Committee a written report summarizing its
activities under that Clinical Development Program. Each report shall include
summary results and material data and findings, if available, for all Research
Program studies ongoing or completed during the Pfizer Quarter. The report must
be submitted within thirty (30) days of the end of the Pfizer Quarter.
(b) Annual Reports or Clinical Summary Report. Following the Commencement of a
Clinical Development Plan and ending with the first Launch of the applicable
Licensed Product, PFIZER shall provide annually following the end of the Pfizer
Year, or at the end of a clinical study when the clinical report is issued,
written reports to the JSC or Development & Regulatory Committee regarding the
development of the Licensed Product. PFIZER shall use Commercially Reasonable
Efforts to provide the annual report within thirty (30) days of the end of each
Pfizer Year and the clinical summary report when completed and approved. If
PFIZER is preparing a clinical summary report for any clinical study that is
completed or terminated prior to completion, PFIZER will not have to prepare a
separate annual report if the clinical summary report is anticipated within the
following Pfizer Quarter.
(c) All information provided by PFIZER to ATHERSYS pursuant to this Section 3.3
shall be considered Pfizer Confidential Information.
3.4 Commercially Reasonable Efforts.
PFIZER will use Commercially Reasonable Efforts and ATHERSYS shall in good faith
apply those efforts and resources consistent with and in kind to PFIZER’s
Commercially Reasonably Efforts to achieve the goals of the Clinical Development
Program. PFIZER will use Commercially Reasonable Efforts to develop, seek
Regulatory Approval for and commercialize a Licensed Product for the Pilot
Indication and for the Major Indication following approval pursuant to this
Agreement of an applicable Clinical Development Plan for a Licensed Product for
the Pilot Indication or Major Indication.
3.5 Records.
During the Term, PFIZER will prepare and maintain accurate records and books
relating to the progress and status of its activities under a Clinical
Development Plan and otherwise in relation to the development of Licensed
Products. As reasonably requested by ATHERSYS from time-to-time throughout the
Term, PFIZER will disclose to or permit direct access, during PFIZER regular
business hours with appropriate notice from and good faith justification from
ATHERSYS, to ATHERSYS to material records, books and data related to the
development of any Licensed Product, including any regulatory filings and
communications; investigator’s brochures; study records, reports and related
data; and related information.

 

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3.6 Regulatory Affairs.
(a) PFIZER shall determine all regulatory plans and strategies for the Licensed
Products (including Clinical Development Candidates) in the Field, and will own
and be responsible for preparing, seeking, submitting and maintaining the
investigator’s brochure and all regulatory filings and Regulatory Approvals for
all Licensed Products in the Field, including preparing all reports necessary as
part of a regulatory filing or Regulatory Approval and for all communications
with Regulatory Authorities for such Licensed Products in the Field. ATHERSYS
shall have the right, at its cost and without delay to the progression of
Regulatory Approvals, to participate as a direct observer in significant
regulatory activities, including interactions with Regulatory Authorities.
Without limiting ATHERSYS’ obligations pursuant to Section 2.7 and Schedule 2.7,
ATHERSYS agrees to cooperate and assist Pfizer in the provision of any
documentation required for any regulatory filings for Regulatory Approvals for
Licensed Products in the Field.
(b) ATHERSYS shall keep PFIZER regularly and promptly informed of all material
regulatory filings, Regulatory Approvals and all material communications,
interfaces and other actions to, with or from Regulatory Authorities relating to
MultiStem Products outside the Field and shall ensure that all such filings,
Regulatory Approvals, communications, interfaces and actions are materially made
by ATHERSYS in accordance with the global clinical and regulatory strategy
approved by the Development & Regulatory Committee from time to time for the
Licensed Products in the Field. Additionally, ATHERSYS shall take in to account
in good faith any concerns or input raised by PFIZER in relation to such
regulatory filings, Regulatory Approvals, communications, interfaces and
actions.
(c) Without limiting the provisions of Section 3.6(a) and Section 2.5, the
safety reporting units from each of the parties shall meet and agree upon a
written agreement for exchanging adverse event and other safety and other
pharmacovigilance information relating to MultiStem Products prior to initiation
of any clinical activity in the Field implicating pharmacovigilance obligations
for the MultiStem Products in the Territory (the “Pharmacovigilance Agreement”).
Such Pharmacovigilance Agreement shall ensure that adverse events and other
safety information is exchanged upon terms that will permit each party to comply
with Laws and requirements of Regulatory Authorities.
(d) Any regulatory affairs matter relating to any Athersys Device to be used for
MultiStem Products in the Field shall be discussed initially by the JSC,
Development & Regulatory Committee, with appropriate regulatory experts from the
parties present at that meeting, for the purposes of determining the appropriate
regulatory strategy for use of such Device in the Field.

 

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3.7 Regulatory Exclusivity
PFIZER shall have the sole right to apply for and secure exclusivity rights for
the Licensed Products in the Territory in the Field that may be available under
the Law of countries in the Territory, including any data or market exclusivity
periods such as those periods listed in the FDA’s Orange Book or periods under
national implementations of Article 10.1(a)(iii) of Directive 2001/EC/83
(including any paediatric exclusivity extensions or other forms of regulatory
exclusivity that may be available), and all international equivalents. ATHERSYS
shall in good faith apply those efforts and resources consistent with and in
kind to PFIZER’s Commercially Reasonable Efforts to cooperate with PFIZER and to
take such reasonable actions to assist PFIZER, in obtaining such exclusivity
rights in each country, as PFIZER may reasonably request from time to time.
3.8 Commercialization/Pricing.
PFIZER shall be solely responsible for marketing, promoting, selling,
distributing and determining pricing and other terms of sale for all Licensed
Products in the Territory in the Field. After each Pfizer Quarter, and once
annually, Pfizer will submit to ATHERSYS a written report summarizing its
commercialization activities during the applicable period. All information
provided by PFIZER to ATHERSYS pursuant to this Section 3.8 shall be considered
Confidential Information (as defined in Section 12.1) of PFIZER.
Section 4 MANUFACTURING OF LICENSED PRODUCT
4.1 Clinical Manufacture and Supply of Licensed Product during Research Term.
(a) Pre-Clinical Supply. ATHERSYS shall be responsible for the supply and
manufacture, itself or through ATHERSYS’ Third Party manufacturer as of the
Effective Date and any other Third Party manufacturer approved by PFIZER (such
approval not to be unreasonably withheld), of such quantities of the Clinical
Development Candidate material required for non-clinical research and studies
pursuant to a Research Plan at no cost to Pfizer during the Research Term.
(b) Certain Clinical Supply. ATHERSYS shall be responsible for the supply and
manufacture, itself or through an agreed Third Party manufacturer, of such
quantities of Clinical Development Candidate material required for clinical
studies pursuant to a Clinical Development Plan approved and underway during the
Research Term at a cost to PFIZER of [*] percent ([*%]) of the reasonable
Manufacturing Costs for that Clinical Development Candidate material based on
the following assumptions: (i) the estimated Manufacturing Costs per dose being
[$*]; and (ii) the anticipated amount of Clinical Development Candidate material
required being the amount required for [*] patients. If these assumptions are
materially incorrect, the Manufacturing Committee shall review the costs sharing
basis and agree to any revised cost sharing arrangement. The cost estimates are
for initial planning purposes and are not intended to describe a total cost
obligation from PFIZER. ATHERSYS shall use its commercially reasonable
endeavours to reduce Manufacturing Costs.
(c) Other Clinical Study Supply. Except as provided in Sections 4.1(a) and (b)
and subject to any Release Condition occurring, ATHERSYS shall be responsible
for the supply and manufacture, itself or through an agreed Third Party
manufacturer, of such quantities of the Clinical Development Candidate required
for clinical studies pursuant to an approved Clinical Development Plan at a cost
to Pfizer of [*] percent ([*%]) of the reasonable Manufacturing Costs in respect
of the manufacture and supply of Clinical Development Candidate material.
 

      *   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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4.2 Commercial Supply.
Subject to any Release Condition occurring, ATHERSYS shall be responsible for
the supply and manufacture, itself or through an agreed Third Party
manufacturer, of such quantities of the Licensed Product to the extent
reasonably required by PFIZER to commercialize the Licensed Products in the
Territory and in the Field. ATHERSYS shall supply such quantities of Licensed
Product at a price to PFIZER of [*] percent ([*%]) of the reasonable
Manufacturing Costs of such Licensed Products, unless ATHERSYS is sharing
Profits with respect to a Licensed Product pursuant to Section 3.2(c), in which
case the price to PFIZER shall be [*] percent ([*%]) of the reasonable
Manufacturing Costs. The terms and procedures by and upon which ATHERSYS shall
supply Licensed Products to PFIZER hereunder shall be reasonably mutually
determined by the parties in good faith based upon commercially reasonable and
customary terms, and shall be set forth in a separate manufacturing and supply
agreement not less than [*] months prior to the anticipated first Launch of a
Licensed Product.
4.3 Manufacturing Cost Records.
ATHERSYS shall keep, and shall require all Third Party manufacturers of Licensed
Products to keep, accurate records in sufficient detail concerning the
Manufacturing Costs. PFIZER shall be entitled, upon reasonable notice, to audit
the Manufacturing Costs. 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.
4.4 Manufacturing Compliance.
All Licensed 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 including but not
limited to the transportation, storage, use, handling and disposal of waste
materials and hazardous materials used to manufacture Licensed Products, all
product specifications and testing methods. 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 Licensed Products
hereunder, all facility licenses and government permits necessary to manufacture
and supply the Licensed Products.
4.5 Inspection.
With respect to the manufacture of the Licensed Products, PFIZER may, at its
expense, upon reasonable notice and during normal business hours, conduct
appropriate review and inspection of the Licensed 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 conformity of Licensed Products
with the applicable specifications and testing methods.
 

      *   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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Section 5 JOINT STEERING COMMITTEE
5.1 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 Research Plan(s), Clinical Development Plan(s) and this Agreement. The
JSC shall be composed of three (3) senior, qualified representatives from each
of AI and PFIZER (or from their Affiliates). The total number of JSC members
will initially be six (6), but the number may be increased or decreased from
time-to-time by written agreement of the parties; provided that the number of
representatives from PFIZER shall always be equal to the number of
representatives from ATHERSYS. Each of PFIZER and AI may replace any of its
representatives on the JSC at will by giving written notice thereof to the other
party.
5.2 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 Agreement. In general,
the parties contemplate that all JSC subcommittees shall have an equal number of
members appointed by each party.
(a) Within sixty (60) days of the Effective Date, the JSC shall establish a
research committee to oversee the non-clinical research activities of the
collaboration (“Research Committee”). The Research Committee shall be
responsible for the development, management, and performance of the Research
Plan and Research Program, and any other non-clinical activities as determined
by the JSC. The Research Committee shall be composed of three (3) senior,
qualified representatives from each of AI and PFIZER (or their Affiliates), and
a representative from each of AI and PFIZER shall jointly chair the Research
Committee. Decisions shall be made by consensus, and in the event a consensus is
not reached within ten (10) Business Days after it is first presented to the
joint chairs of the Research Committee, then such decisions shall be submitted
as soon as possible to the JSC for decision.
(b) Within ninety (90) days of the Effective Date, the JSC shall establish a
Development & Regulatory Committee responsible for overall strategic and
business guidance with respect to the development, management and performance of
the Clinical Development Program and Clinical Development Plan(s), the
coordination and alignment of the global clinical development and regulatory
strategies for MultiStem Products and Licensed Products and Combination Products
both inside and outside the Field (“Development & Regulatory Committee”). The
Development & Regulatory Committee shall be composed of an equal number of
senior, qualified representatives from each of AI and PFIZER (or their
Affiliates), and a representative from each of AI and PFIZER shall jointly chair
the Development & Regulatory Committee. Decisions shall be made by consensus,
and in the event a consensus is not reached within ten (10) Business Days after
it is first presented to the joint chairs of the Development & Regulatory
Committee, then such decisions shall be submitted as soon as possible to the JSC
for decision. In the event ATHERSYS fails to perform any material obligation or
activity assigned to it under a Clinical Development Plan for a Clinical
Development Candidate and does not cure such failure promptly after notice
thereof, PFIZER may elect to suspend or terminate all responsibilities of the
JSC and the Development & Regulatory Committee in respect of that Licensed
Product.

 

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(c) As soon as the JSC determines, but not later than the end of the Research
Term, the JSC shall establish a manufacturing committee to oversee the supply of
Licensed Product for the Field, and ensure cooperation regarding the then cGMP
manufacturing standards and regulatory requirements, product specifications and
testing methods (“Manufacturing Committee”). The Manufacturing Committee shall
be responsible for ensuring the supply of Licensed Product for the Field in
accordance with regulatory requirements and industry standards, including
forecasting supply requirements and contingency planning and actions for back-up
supply and supply disruptions, and any other activities as determined by the
JSC. The Manufacturing Committee shall be composed of three (3) senior,
qualified representatives from each of AI and PFIZER (or their Affiliates), and
a representative from each of AI and PFIZER shall jointly chair the
Manufacturing Committee. Decisions shall be made by consensus, and in the event
a consensus is not reached within ten (10) Business Days after it is first
presented to the joint chairs of the Manufacturing Committee, then such
decisions shall be submitted as soon as possible to the JSC for decision.
5.3 Chairperson. AI and PFIZER shall each appoint one of its representatives on
each of the Committees as a co-chair of that Committee (each, a “Co-Chair”), and
may change its Co-Chair from time to time by written notice to the other. Each
party’s Co-Chair shall serve as a co-chair of the applicable Committee meetings,
unless the Co-Chairs jointly determine that they shall alternate responsibility
for chairing Committee meetings (whether on a meeting-by-meeting, calendar
quarter-by-calendar quarter or calendar year-by-calendar year basis).
5.4 Committee Meetings.
(a) The JSC and Research Committee shall each meet at least once every Pfizer
Quarter during the Research 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 and Research Committee meeting per calendar
year shall be held in person.
(b) The Development & Regulatory Committee shall meet at least once every six
months up to first Launch of a Licensed Product in the Field where ATHERSYS
elects to co-develop a Licensed Product pursuant to Section 3.2 or (ii) once
every Pfizer Year where ATHERSYS does not so elect, 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) Development & Regulatory Committee
meeting per calendar year shall be held in person.
(c) The Manufacturing Committee shall meet at least once every six months for so
long as ATHERSYS manufactures or controls manufacture and supply by an agreed
Third Party of Clinical Development Candidates or Licensed Products for the
Field, 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) Manufacturing Committee meeting per calendar year shall be held in person.

 

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(d) Meetings of Committees shall be effective only if at least one (1) Committee
representative of each of ATHERSYS and PFIZER participates in the meeting (in
person or by telephone or videoconference). The Co-Chairs (or the responsible
Committee chairperson, if applicable) shall be responsible for scheduling
Committee meetings, preparing meeting agendas. Notices of all regular Committee
meetings shall be sent at least thirty (30) days before such meetings. Agendas
for such meetings shall be sent at least ten (10) days before such meetings.
(e) In addition, either Co-Chair of a Committee may from time to time request a
special Committee 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 Committee meeting as promptly thereafter as
reasonably possible, and shall prepare and circulate an agenda for such special
Committee meeting as far in advance of such meeting as reasonably possible.
(f) Each Committee will keep accurate minutes of its deliberations. The minutes
will record all decisions and proposed actions. A draft of the minutes must be
delivered to all Committee members within ten (10) Business Days after each
meeting. The party hosting the meeting will prepare and circulate the draft
minutes. The Co-chairs will edit, approve and distribute the minutes to all
Committee members at least ten (10) Business Days before the next Committee
meeting.
(g) Each party shall be responsible for its own expenses incurred by its
Committee representatives in attending or otherwise participating in Committee
meetings.
5.5 Responsibilities of the Joint Steering Committee.
In addition to its general responsibility to oversee and coordinate the
activities of the parties in connection with the Research Plans, Clinical
Development Plans and this Agreement, the JSC shall (itself or by delegation to
a subcommittee) in particular be responsible for the matters described in
Schedule 5.5, but the JSC shall have no authority to amend the terms of this
Agreement.
5.6 Voting; Decision-Making. Regardless of the number of Committee
representatives from any party, PFIZER shall present one consolidated view and
have one vote on any issue before a Committee, to be cast by PFIZER’S Co-Chair
or his/her designee, and ATHERSYS shall present one consolidated view and have
one vote on any issue before a Committee, to be cast by AI Co-Chair or his/her
designee. Committees may only act by unanimous written 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, the
dispute shall be resolved as set forth in Section 5.7.

 

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5.7 JSC Disputes.
If the JSC fails to reach unanimous agreement on any matter or issue within its
power to decide within ten (10) Business Days after the date of referral to the
JSC, the matter or issue shall be referred for resolution by [*]. If they are
unable to reach consensus and resolve the JSC Dispute within twenty
(20) Business Days after the date of referral to them, then the JSC Dispute
shall be referred for resolution [*], provided that [*] on any referred matter
if no consensus decision is reached within ten (10) Business Days of its
referral to the CEO of AI [*], and further provided that no such decision by [*]
may require ATHERSYS to spend money or devote resources beyond those it is
required pursuant to this Agreement or amend the terms of this Agreement.
Section 6 RIGHTS TO RESEARCH PROGRAM AND COMBINATION PRODUCT IPRs
6.1 Background Intellectual Property Rights Retained.
Nothing in this Agreement shall be construed to transfer ownership of any
intellectual property rights existing as of the Effective Date, or in the case
of Compounds or Devices as of the date any such Compound or Device is introduced
in to the Research Program, from one party to another party.
6.2 Ownership Of New Intellectual Property.
(a) Subject to Section 11.3, ATHERSYS shall be the owner of the Research Program
IPRs, which shall be deemed to form part of the Athersys Patent Rights, the
Athersys Technology and/or the Athersys Confidential Information, as applicable,
and of the Athersys Combination Product IPRs.
(b) PFIZER shall be the owner of the Pfizer Combination Product IPRs.
Section 7 LICENSES
7.1 Exclusive Licenses to PFIZER
In consideration of the License and Technology Access Fee Event Milestone
Payment and subject to the terms and conditions of this Agreement ATHERSYS
hereby grants to PFIZER, and PFIZER hereby accepts:
(a) an exclusive license (even as to ATHERSYS and its Affiliates, but subject to
any rights granted or reserved for non-commercial research purposes only to
Third Parties pursuant to a Third Party License existing as at the Effective
Date), including the right to sublicense, under the Athersys Patent Rights to
research, develop, make or have made, use, sell, offer for sale, supply, cause
to be supplied, and import Licensed Products, in each case in the Field and in
the Territory, and
(b) an exclusive license (even as to ATHERSYS and its Affiliates, but subject to
any rights granted or reserved for non-commercial research purposes only to
Third Parties pursuant to a Third Party License existing as at the Effective
Date), including the right to sublicense, to use Athersys Technology and
Athersys Confidential Information in connection with the research, development,
manufacture, use, sale, offer for sale, supply and importation of the Licensed
Products, in each case in the Field and in the Territory.
 

      *   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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7.2 Non-Exclusive Licenses to PFIZER
Without limiting any of the licenses granted in Section 7.1, subject to the
terms and conditions of this Agreement, ATHERSYS hereby grants to PFIZER, and
PFIZER hereby accepts:
(a) a non-exclusive, irrevocable, royalty-free, perpetual license, with the
right to sub licence to Affiliates, under the Athersys Combination Product IPRs
to develop, make, have made, use, sell, offer for sale, supply, cause to be
supplied and import any pharmaceutical or bio-pharmaceutical products (other
than Licensed Products) at PFIZER’S own risk;
(b) a non-exclusive, royalty-free license in the Territory, with the right to
sublicense to Affiliates and to service providers under contract to PFIZER or
its Affiliates, to use for research conducted pursuant to the Research Plan or a
Clinical Development Plan, the Athersys Patent Rights, the Athersys Technology,
the Athersys Confidential Information and the Athersys Combination Product IPRs
disclosed during the Term to PFIZER by ATHERSYS or its Affiliates; and
(c) a non-exclusive, irrevocable, royalty-free, perpetual license in the
Territory, with the right to sublicense to Affiliates and to service providers
under contract to PFIZER or its Affiliates, to use for all research purposes,
the Athersys Technology, Athersys Patent Rights, Athersys Combination Product
IPRs, Athersys Confidential Information and Research Program IPRs provided that
this Section 7.2(c) does not grant to PFIZER or its Affiliates any right to use
MultiStem cells outside of conducting activities under a Research Plan or
Clinical Development Plan.
7.3 Restriction on Exercise of Manufacturing Rights
Except through ATHERSYS, PFIZER agrees not to exercise its rights to make, have
made or manufacture under Sections 7.1 in respect of any Clinical Development
Candidates or other Licensed Products in the Field or disclose or transfer any
Athersys Technology or Athersys Confidential Information in respect of such
activities to any Affiliate or Third Party (other than Regulatory Authorities)
until the occurrence of a Release Condition.
7.4 Non-Exclusive Licenses to ABT
Subject to the terms and conditions of this Agreement, PFIZER hereby grants to
ATHERSYS, and ATHERSYS hereby accepts:
(a) a non-exclusive, irrevocable, royalty-free, license in the Territory and in
the Field, with the right to sublicense to Affiliates and such Third Parties
(for which the JSC has obtained management approval pursuant to Section 5 and
Schedule 5.5), under the Athersys Patent Rights, Athersys Technology, Athersys
Confidential Information and Pfizer Combination Products IPRs: (i) for ATHERSYS’
research purposes in perpetuity and provided that, if ATHERSYS will not be the
owner of any intellectual property rights created by such agreed Third Party
sublicense, ATHERSYS shall procure that each such agreed Third Party sublicensee
shall grant directly to PFIZER a non-exclusive, irrevocable, royalty free,
perpetual license in the Territory, with right to sublicense to its Affiliates,
in respect of any intellectual property rights created by such agreed Third
Party sublicensee, (ii) to develop during the Research Term and for so long as
ATHERSYS continues to exercise its rights to co-develop pursuant to Section 3.2,
Clinical Development Candidates and (iii) make or have made, Clinical
Development Candidates and Licensed Products in the Field pursuant to Section 4
and any manufacturing agreement entered pursuant thereto.

 

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(b) a non-exclusive, irrevocable, royalty-free, perpetual license in the
Territory and outside the Field, with the right to sub license to Affiliates,
under the Pfizer Combination Product IPRs to develop, make or have made, use,
sell, offer for sale, supply, cause to be supplied and import biopharmaceutical
products which are combined with MultiStem Products at ABT’s own risk.
(c) a non-exclusive, irrevocable, royalty-free, perpetual license in the
Territory, with the right to sublicense to Affiliates and to service providers
under contract to ATHERSYS or its Affiliates, to use for all research purposes
Pfizer Technology disclosed to ATHERSYS by PFIZER or its Affiliates during the
Research Term: (i) for all research purposes during the Research Term and
(ii) following expiry of the Research Term, for all research purposes outside
the Field.
7.5 Stand-By Licences.
With effect from the Effective Date, PFIZER and ATHERSYS (or its applicable
Affiliate) shall enter in to the stand-by licences with the Third Party
Licensors listed in Schedule 7.5 on the agreed terms. ATHERSYS undertakes to
procure in a timely manner and on substantially similar terms, any additional
stand-by licences from other Third Party licensors of any ATHERSYS Patent Rights
or ATHERSYS Technology which PFIZER, acting reasonably, may request.
7.6 Restriction on Sublicensing by PFIZER.
PFIZER shall notify ATHERSYS, not less than thirty (30) days, prior to granting
a sublicense pursuant to Section 7.1 to a Third Party (other than any service
provider or contract manufacturing organization) in respect of any right to
develop or commercialize a Licensed Product in the Field. Such notice shall set
out: (a) the identity of the proposed sublicensee, and (b) the terms and
conditions in the proposed sublicense governing the access to, use and
protection of Athersys Technology and Athersys Confidential Information (the
“Sublicense Restrictions”). If ATHERSYS reasonably and in good faith considers
that (i) the proposed sublicensee is a direct competitor of the MultiStem cell
therapy business of ATHERSYS existing at the Effective Date and as developed
therefrom internally (or together with licensees) by ATHERSYS (the “MultiStem
Business”) and (ii) the Sublicense Restrictions will not provide adequate and
reasonable protection against significant harm to the MultiStem Business,
ATHERSYS shall notify PFIZER in writing, within five (5) Business Days of
receipt of PFIZER’s notification, including the facts upon which such belief is
based and the reasons why the Sublicense Restrictions are inadequate. Promptly,
following receipt of such notice from ATHERSYS, the parties shall discuss
ATHERSYS’ concerns, including any additional, reasonable Sublicense Restrictions
which would satisfy those concerns. If the parties cannot resolve those
concerns, acting reasonably and in good faith, within thirty (30) days, PFIZER
shall not grant the sublicense to the proposed sublicensee and ATHERSYS accepts
that PFIZER shall not be held in breach of its obligations under Section 2.10 or
Section 3.4 in respect of any consequential delays or impact on the development
or commercialization of the Licensed Product in the Field resulting from such
inability to sublicense.

 

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7.7 Reservation of Rights.
Except as expressly stated in this Section 7, no rights or licenses are granted
under this Agreement by either party or its Affiliates under any intellectual
property of such party or its Affiliates to the other party or its Affiliates,
whether by implication, estoppel or otherwise, and all such rights not expressly
stated are hereby reserved by each party and its Affiliates.
Section 8 RESEARCH FUNDING.
8.1 During the Research Term, PFIZER will fund ATHERSYS (or its Affiliates) on
an FTE basis at the FTE Rate to perform the work required for the Research
Program and for progressing any Clinical Development Candidates in Phase I
Clinical Studies through to Phase II(b) Clinical Studies. Such work may include
work performed by ATHERSYS or on ATHERSYS’ behalf by Third Parties (for which
the JSC has obtained management approval pursuant to Section 5 and Schedule 5.5)
and may not represent [*] ([*]) specific ATHERSYS employees. The number of FTEs
to be funded by PFIZER and the FTE Rate per annum during the Research Term are
set out below in United States Dollars.

                  Period   FTEs   FTE Rate/annum   Total Funding   Quarterly
Payment
Initial Research Term
  [*]   [*]   [*]   [*]
 
               
Extension
  [*] or such greater number of FTEs agreed by PFIZER based on the Research Plan
  [*]   [*] or such higher amount linked to any agreed additional number of FTEs
  [*%] of the amount of the Total Funding for the Extension

Except as set out in this Section 8.1 or in Section 4.1, all costs and expenses
related to the performance of the Research Plan or a Clinical Development Plan
during the Research Term incurred by a party shall be borne by the respective
party undertaking the activity and incurring the related costs and expenses.
 

      *   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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8.2 Research Funding Payment.
All payments will be made in U.S. currency by electronic funds transfer within
forty five (45) days after receipt and acceptance by PFIZER of an invoice from
ATHERSYS. ATHERSYS may invoice PFIZER in quarterly advance instalments provided
however that ATHERSYS may not invoice PFIZER more than thirty (30) days in
advance of a Pfizer Quarter. FTE funding for the first PFIZER Quarter of the
term of this Research Agreement will be paid to ATHERSYS within [*] Business
Days after the Effective Date.
Section 9 FEES AND ROYALTIES.
9.1 Event Milestone Payments.
(a) In consideration of the rights granted hereunder, and subject to the terms
and conditions of this Agreement, PFIZER shall pay to ATHERSYS the amount set
forth in the table below opposite the corresponding event Milestone (each an
“Event Milestone”) within thirty (30) days after the occurrence of such Event
Milestone, after providing prompt notice of such achievement to ATHERSYS (no
more than ten (10) days after achievement) provided however that the License and
Technology Access Fee Event Milestone shall be payable by PFIZER within ten
(10) Business Days after the Effective Date:

          No.   Event Milestone   Event Milestone Payment
 
       
1
  [*]   USD six million
($6,000,000)
 
       
2
  [*]   [$*]
 
       
3
  [*]   [$*]
 
       
4
  [*]   [$*]
 
       
5
  [*]   [$*]
 
       
6
  [*]   [$*]
 
       
7
  [*]   [$*]

(b) With respect to each milestone (i) each Event Milestone Payment shall be
payable only on the first occurrence of the corresponding Event Milestone;
(ii) none of the Event Milestone Payments shall be payable more than once;
(iii) should the first Licensed Product be replaced or succeeded by another
Licensed Product or advancement of the Licensed Product in another indication or
with additional regulatory guidance no additional Event Milestone Payments shall
be due for Event Milestones already met with respect to any other Licensed
Product; and (iv) the maximum amount payable by PFIZER in respect of Event
Milestone Payments if all Event Milestones occur shall be USD [*][$*]).
 

      *   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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9.2 Sales Milestone Payments.
In addition to the Event Milestone Payments, in consideration of the rights
granted hereunder, and subject to the terms and conditions of this Agreement,
PFIZER shall pay to ATHERSYS the following one-time payments (each, a “Sales
Milestone Payment”) when aggregate Net Sales of all Licensed Products in the
Field, but excluding any Net Sales relating to Licensed Products in the Field in
respect of which ATHERSYS has elected to share Profits pursuant to Section
3.2(c) and Schedule 3.2 (c), over a period of four (4) consecutive Pfizer
Quarters in the Territory first reach the respective thresholds indicated below
in United States Dollars:

      Net Sales in the Territory   Sales Milestone Payment  
Net Sales in [*] consecutive PFIZER Quarters
exceed [$*]
  [$*]
Net Sales in [*] consecutive PFIZER Quarters
exceed [$*]
  [$*]
Net Sales in [$*] consecutive PFIZER Quarters
exceed [$*]
  [$*]
Net Sales in [*] consecutive PFIZER Quarters
exceed [$*]
  [$*]

PFIZER shall make any Sales Milestone Payment within sixty (60) days of that
Sales Milestone Payment falling due and such payment shall be accompanied by a
report identifying the Licensed Products, the relevant countries, Net Sales of
each Licensed Product for each such country, and the amount payable to ATHERSYS.
All such reports shall be kept confidential by ATHERSYS and not disclosed to any
other party, other than ATHERSYS’ accountants which shall be obligated to keep
such information confidential, and such information and reports shall only be
used for purposes of this Agreement.
9.3 Royalty Payments.
In consideration of the rights granted hereunder, and subject to the terms and
conditions of this Agreement, unless and to the extent ATHERSYS is participating
in a Profit share in respect of any Licensed Product in the Field pursuant to
Section 3.2 and Schedule 3.2(c), PFIZER shall pay to ATHERSYS, with respect to
the Licensed Products in the Field, an amount equal to:
(a) [*] percent ([*%]) of Net Sales for the portion of Net Sales of such
Licensed Products in a Pfizer Year in the Territory below or equal to [*]
([$*]); plus
(b) [*] percent ([*%]) of Net Sales for the portion of Net Sales of such
Licensed Products in a Pfizer Year in the Territory greater than [*] ([$*]) and
less than or equal to [*] ([$*]); plus
(c) [*] percent ([*%]) Net Sales for the portion of Net Sales of such Licensed
Products in a Pfizer Year in the Territory in excess of [*] ([$*]).
 

      *   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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Notwithstanding the foregoing and subject to Section 9.5, any payments owed with
respect to sales of Licensed Products in a country in the Territory pursuant to
this Section 9.3 shall be reduced by [*] percent ([*%]), such reduction to be
prorated appropriately for the then-current Pfizer Quarter, for Net Sales
occurring during any time there is either no Valid Claim or no right of data or
market exclusivity covering such Licensed Product in the Field in such country
in the Territory. The parties agree and acknowledge that the payment of
royalties by PFIZER to ATHERSYS for sales in a country in which there is no
Valid Claim or no right of data or market exclusivity covering the applicable
Licensed Product in the Field shall represent consideration for the license to
Athersys Technology, Athersys Combination Product IPRs, and Athersys
Confidential Information granted by ATHERSYS to PFIZER in Sections 7.1.
9.4 Sales Milestone Payments Credit against Royalty Payments.
[*] percent ([*%]) of each Sales Milestone Payment (each a “Sales Milestone
Credit”) shall be credited against future payments under Section 9.3. PFIZER
shall reduce the royalty payments due in respect of the next Pfizer Quarter by
the amount of the applicable Sales Milestone Credit. To the extent any Sales
Milestone Credit cannot be fully credited by reducing the amount of the royalty
payments due in respect of that next Pfizer Quarter, the royalty payments due in
respect of subsequent Pfizer Quarters shall be reduced by any remaining amount
until the applicable Sales Milestone Credit has been fully credited.
9.5 Duration of Royalty Payments.
Payments under Section 9.3 in respect of Net Sales for a Licensed Product in the
Field in a country in the Territory shall continue until the expiration of the
Royalty Term in that country for such Licensed Product in the Field; thereafter,
the licenses granted under Section 7.1 with respect to such Licensed Product in
such country shall be royalty-free and fully paid up, perpetual and irrevocable.
Section 10 ACCOUNTING AND PROCEDURES FOR PAYMENT.
10.1 Inter-Company Sales.
Sales between or among PFIZER, its Affiliates or sub-licensees shall not be
subject to royalties under Section 9. Instead, only the first sale by PFIZER or
its Affiliates or sublicensees to a Third Party shall be used to calculate the
Net Sales upon which the royalty calculation is based. PFIZER shall be
responsible for the payment of royalties on Net Sales by its Affiliates or
sublicensees to Third Parties.
10.2 Currency.
All royalty payments shall be computed and paid in United States dollars. For
the purposes of determining the amount of any Sales Milestone Payments or
royalties due for the relevant Pfizer Quarter, the amount of Net Sales in any
foreign currency shall be converted into United States dollars in a manner
consistent with PFIZER’S normal practices used to prepare its audited financial
reports; provided that such practices use a widely accepted source of published
exchange rates.
 

      *   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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10.3 Royalty Payments.
(a) PFIZER shall make royalty payments to ATHERSYS with respect to each Pfizer
Quarter, within sixty (60) days after the end of each calendar quarter, and each
payment shall be accompanied by a report identifying the applicable Pfizer
Quarter for each Licensed Product in the Field: (i) each applicable country or,
for those countries where PFIZER does not typically produce a country-specific
report, the applicable region in which Net Sales occurred; (ii) the gross sales
for the Licensed Product in each such country or such region; (iii) the Net
Sales for the Licensed Product for each such country or such region; (iv) the
applicable royalty rate for the Net Sales for the Licensed Product in each such
country or such region; and (v) the amount of royalties payable to ATHERSYS for
the Licensed Product in each such country or such region, as well as the
computation thereof. Said reports shall be kept confidential by ATHERSYS and not
disclosed to any other party, other than ATHERSYS’s accountants which shall be
obligated to keep such information confidential, and such information and
reports shall only be used for purposes of this Agreement.
(b) If Net Sales in any Pfizer Quarter during a given Pfizer Year are less than
zero (as a result of returns or recalls of Licensed Product in the Field or any
other circumstance), then PFIZER will not be obligated to pay ATHERSYS any
royalties for such Pfizer Quarter, and for purposes of calculating royalty
payments with respect to the fourth Pfizer Quarter of such Pfizer Year, Net
Sales for such fourth Pfizer Quarter shall be reduced by the aggregate amount of
negative Net Sales in each Pfizer Quarter of such Pfizer Year in which Net Sales
are less than zero. If, as a result of such reduction, the aggregate Net Sales
with respect to such fourth Pfizer Quarter are less than zero, then, for
purposes of calculating royalty payments with respect to the first or subsequent
Pfizer Quarters of the next succeeding Pfizer Year, Net Sales for such first
Pfizer Quarter and until any negative Net Sales have been fully exhausted any
subsequent Pfizer Quarters shall be reduced by the amount of negative Net Sales
in the fourth Pfizer Quarter of the immediately preceding Pfizer Year.
10.4 Method of Payments.
Each payment hereunder shall be made by electronic transfer in immediately
available funds via either a bank wire transfer, an ACH (automated clearing
house) mechanism, or any other means of electronic funds transfer, at PFIZER’s
election, to such bank account as ATHERSYS shall designate in writing to PFIZER
at least five (5) Business Days before the payment is due.
10.5 Inspection of Records.
PFIZER shall, and shall cause its Affiliates and sublicensees to, keep accurate
books and records setting forth the, gross sales of each Licensed Product in the
Field, Net Sales of each such Licensed Product, amounts payable hereunder to
ATHERSYS for each such Licensed Product and other information reasonably
required to verify the calculation of payments made under Section 10.3 and
Schedule 3.2(c), provided that nothing in this Section 10.5 shall require PFIZER
to keep or create books, records or reports solely for the purpose for this
Section 10.5 or which PFIZER would not typically keep for the purpose

 

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of determining and reporting royalties or profit sharing arrangements. PFIZER
shall permit ATHERSYS, by independent certified public accountants employed by
ATHERSYS and reasonably acceptable to PFIZER, to examine such books and records
at any reasonable time, upon reasonable notice, but not later than two (2) years
following the rendering of the corresponding reports pursuant to Section 10.3
and Schedule 3.2(c). The foregoing right of examination may be exercised only
once during each twelve (12)-month period of the Term and once during the two
(2) year period after the Term. PFIZER may require such accountants to enter
into a reasonably acceptable confidentiality agreement, and in no event shall
such accountants disclose to ATHERSYS any information, other than such as
relates to the accuracy of the corresponding reports pursuant to Section 10.3
and Schedule 3.2(c). The opinion of said independent accountants regarding such
reports and related payments shall be binding on the parties, other than in the
case of manifest error. ATHERSYS shall bear the cost of any such examination and
review; provided that if the examination shows an underpayment of royalties of
more than five percent (5%) of the amount due for the applicable period, then
PFIZER shall promptly reimburse ATHERSYS for all costs incurred in connection
with such examination. PFIZER shall promptly pay to ATHERSYS the amount of any
underpayment of royalties revealed by an examination. Any overpayment of
royalties by PFIZER revealed by an examination shall be fully-creditable against
future royalty payments under Section 9.3.
Upon the expiration of the two (2) year period following the rendering of a
royalty report pursuant to Section 10.3, such report shall be binding on the
parties, and PFIZER and its Affiliates shall be released from any liability or
accountability with respect to royalties for the period covered by such report.
10.6 Tax Matters.
It is understood and agreed between the parties that any payments made by PFIZER
under this Agreement are inclusive of any value added or similar tax imposed
upon such payments. In addition, in the event any payments made by PFIZER
pursuant to this Agreement become subject to withholding taxes under the laws or
regulation of any jurisdiction, PFIZER shall deduct and withhold the amount of
such taxes for the account of ATHERSYS to the extent required by applicable Law
or regulations; such amounts payable to ATHERSYS shall be reduced by the amount
of taxes deducted and withheld; and PFIZER shall pay the amounts of such taxes
to the proper Governmental Authority in a timely manner and promptly transmit to
ATHERSYS an official tax certificate or other evidence of such tax obligations
together with proof of payment from the relevant Governmental Authority of all
amounts deducted and withheld sufficient to enable ATHERSYS to claim such
payment of taxes. Any such withholding taxes required under applicable Law or
regulations to be paid or withheld shall be an expense of, and borne solely by
ATHERSYS . PFIZER will provide ATHERSYS with reasonable assistance to enable
ATHERSYS to recover such taxes as permitted by applicable Law or regulations.

 

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Section 11 PATENTS AND INFRINGEMENT.
11.1 Prosecution.
ATHERSYS will be responsible for filing, prosecuting and maintaining the
Athersys Patent Rights, at its own cost and expense. ATHERSYS shall consult and
reasonably cooperate with PFIZER with respect to any potentially patentable
inventions within the Research Program IPRs and Athersys Combination Product
IPRs, including with respect to the content and timing of filing any draft
patent applications thereon. ATHERSYS shall consult with PFIZER regarding
countries in which to file any Athersys Patent Rights that (i) are based upon
Research Program IPRs or Athersys Combination Product IPRs, or (ii) are other
Athersys Patent Rights that are, at the relevant time, licensable or
sublicensable for commercial purposes exclusively by ATHERSYS or its Affiliates,
and that claim, or are reasonably likely to claim, inventions applicable to
Licensed Products for use in the Field (such Athersys Patent Rights under
(i) and (ii) collectively, “Athersys Exclusive Patent Rights”), and that are to
be filed subsequent to the Effective Date. ATHERSYS shall promptly notify PFIZER
of any new Athersys Patent Rights that are, or any Athersys Patent Rights
existing as of the Effective Date that become, Athersys Exclusive Patent Rights
under subsection (ii) of the preceding sentence.
11.2 Updates and Cooperation.
ATHERSYS will keep PFIZER informed of the status of the Athersys Patent Rights
from time to time and in any event promptly on PFIZER’s reasonable request, and
will provide PFIZER with copies of all substantive documentation submitted to,
or received from, the patent offices in connection with the Athersys Exclusive
Patent Rights. With respect to any substantive submissions that ATHERSYS is
required to, or otherwise intends to, submit to a patent office, or any material
decision relating to prosecution of the Athersys Exclusive Patent Rights,
ATHERSYS shall provide a draft of such submission to PFIZER or inform PFIZER of
such intended decision, reasonably in advance of the deadline or of the intended
filing date of such submission or such decision effective date, for submission
of such documentation. PFIZER shall have the right to review and comment upon
any such submission by ATHERSYS, or any intended decision, to a patent office
and will provide such comments, if any, reasonably in advance of the applicable
deadline, intended filing date or decision effective date. ATHERSYS shall
reasonably consider all comments provided by PFIZER and shall incorporate such
comments unless ATHERSYS provides to PFIZER reasonable justification for not
doing so.
11.3 Maintenance.
ATHERSYS shall maintain, for the full life thereof, all patents under the
Athersys Patent Rights unless ATHERSYS, in its reasonable discretion decides
otherwise for commercial reasons. ATHERSYS will notify PFIZER of any decision
not to file applications or any decision (i) not to file applications for, or
not to enter the national phase for a PCT patent application, or validate a
patent in a particular country, or (ii) to cease prosecution and/or maintenance
of, or cease to pay the expenses of prosecution or maintenance of, any Athersys
Exclusive Patent Rights in any country. ATHERSYS will provide such notice as
soon as reasonably possible after its decision with respect to any of the
foregoing, and sufficiently before (a) any date on which it must offer the right
to prosecute to Angiotech, any licensor or any other party, and (b) any filing
or payment due date or any other due date that requires action to avoid
abandonment of or loss of right to file the patent or application, to enable
PFIZER to consult with ATHERSYS regarding such decision and to undertake any
action it may be entitled to take hereunder, in connection with such Athersys
Exclusive Patent Rights. In such event, PFIZER shall, subject only to any rights
granted to Angiotech prior to the Effective Date, and any limitations in any
relevant in-licenses, have the right to make the filing, or to continue the
prosecution and maintenance of such Athersys Exclusive Patent Rights at its
expense, provided that (x) with respect to Athersys Exclusive Patent Rights
which are Research Program IPRs, ATHERSYS shall assign, free of charge, such
Athersys Exclusive Patent Rights to PFIZER and (y) with respect to any Athersys
Exclusive Patent Rights included in Schedule 1.83 such Athersys Exclusive Patent
Rights shall no longer be part of that Schedule.

 

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11.4 Notices.
ATHERSYS agrees that it will, and will cause its Affiliates to, (i) execute and
file those notices and other filings as PFIZER shall request be made to record
the existence of the rights granted hereunder, from time to time with the United
States Patent and Trademark Office (or any successor agency) or any analogous
patent office in the Territory, to the extent such filings are permitted in
accordance with applicable Laws.
11.5 Patent Term Extensions.
PFIZER, subject to any rights granted to Angiotech prior to the Effective Date,
shall have the exclusive right, but not the obligation, to seek, in ABT’s name
if so required, patent term extensions, and supplemental protection certificates
and the like available under Law, including 35 U.S.C. § 156 and applicable
foreign counterparts, in any country in the Territory in relation to the
Athersys Exclusive Patent Rights. ATHERSYS and PFIZER shall cooperate in
connection with all such activities, and PFIZER, its agents and attorneys will
give due consideration to all suggestions and comments of ATHERSYS regarding any
such activities, but in the event of a disagreement between the parties, PFIZER
will have final the final decision-making authority.
11.6 Third Party Royalty Obligations.
If PFIZER (a) reasonably determines in good faith that, in order to avoid
infringement of any patent not licensed hereunder, it is reasonably necessary to
obtain a license from a Third Party in order to make, use, sell, offer for sale,
supply, cause to be supplied, or import a Licensed Product in the Field in a
country in the Territory and to pay a royalty or other consideration under such
license (including in connection with the settlement of a patent infringement
claim), or (b) shall be subject to a final court or other binding order or
ruling requiring any payments, including the payment of a royalty to a Third
Party patent holder in respect of sales of any Licensed Product in the Field in
a country in the Territory, then, without limiting ATHERSYS’ obligations under
Section 17.1(a) (if any), the amount of PFIZER’s royalty payments under
Section 9.3 with respect to Net Sales for such Licensed Product in such country
shall be reduced by the amount payable by PFIZER to such Third Party, provided,
however, that in no event will a deduction, or deductions, under this
Section 11.6, in the aggregate, reduce any royalty payment made by PFIZER in
respect of Net Sales of such Licensed Product pursuant to Section 9.3 in any
Pfizer Year to less than [*] percent ([*%]) of Net Sales of such Licensed
Product for that Pfizer Year.
 

      *   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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11.7 Third Party Infringement.
(a) Each party will promptly notify the other in the event of any actual,
potential or suspected infringement of a patent under the Athersys Patent Rights
by any Third Party. Except as provided in Section 11.7(b) and 11.9, PFIZER shall
have the sole right, but not the obligation, to institute litigation in
connection with any infringement of the Athersys Exclusive Patent Rights in the
Field, and any such litigation shall be at PFIZER’s expense, subject to
ATHERSYS’ obligation to indemnify PFIZER for such expenses pursuant to
Section 17 (if any); provided that any recoveries resulting from such action
relating to a claim of a Third Party infringement, after deducting PFIZER’s out
of pocket expenses (including counsel fees and expenses) in pursuing such claim,
will be deemed Net Sales. If required in order to establish standing, ATHERSYS,
upon request of PFIZER, agrees to timely commence or join in any such
litigation, at PFIZER’s expense, and in any event to cooperate with PFIZER at
PFIZER’s expense. The parties shall consult with respect to potential strategies
for terminating such alleged or threatened infringement without litigation and
PFIZER may not enter into settlements, stipulated judgments or other
arrangements respecting such infringement without the prior written consent of
ATHERSYS. No settlement, stipulated judgment or other voluntary final
disposition of a suit under this Section 11.7 may be undertaken by PFIZER
without the consent of ATHERSYS if such settlement, stipulated judgment or other
voluntary final disposition would require ATHERSYS to be subject to an
injunction, admit wrong-doing, make a monetary payment or would otherwise
materially adversely affect ATHERSYS’ rights under this Agreement or any of the
Athersys Exclusive Patent Rights.
(b) If PFIZER fails, pursuant to Section 11.7(a) to bring an action with respect
to, or to terminate, the Third Party infringement prior to the earlier of
(i) one hundred and eighty (180) days following the notice of alleged
infringement; and (ii) ten (10) days before the time limit, if any, set forth in
the applicable Laws for the filing of such actions, then ATHERSYS shall have the
right, but not the obligation, to defend or institute litigation in connection
therewith, and any such litigation shall be at ATHERSYS’ expense; provided that
any recoveries resulting from such action relating to a claim of a Third Party
infringement will be retained by ATHERSYS. PFIZER, upon request of ATHERSYS,
shall cooperate with ATHERSYS at ATHERSYS’ expense, but shall be under no
obligation to join in any such litigation. If PFIZER joins in such litigation,
the parties shall consult with respect to potential strategies for terminating
such alleged or threatened infringement without litigation. ATHERSYS may not
enter into settlements, stipulated judgments or other arrangements respecting
such infringement without the prior written consent of PFIZER if such
settlement, stipulated judgment or other arrangement would require PFIZER to be
subject to an injunction, admit wrong-doing, make a monetary payment or would
otherwise conflict with the exclusive rights granted to PFIZER under this
Agreement.
11.8 ANDA Filings.
If either party receives a notice under 21 U.S.C. §355(b)(2)(A)(iv) or
355(j)(2)(A)(vii)(IV) (“Paragraph IV Notice”) or any supplements or comparable
provisions relating to biologic products (“ANDA Filing”) that are alleged to be
equivalent to a Licensed Product in the Field and for which an Athersys
Exclusive Patent Right is listed in the FDA’s Orange Book, then it shall provide
a copy of such notice to the other party within two (2) Business Days after its
receipt thereof. PFIZER shall have the only right, but no obligation, to
initiate patent infringement litigation based on any ANDA Filing concerning any
Athersys Exclusive Patent Rights in connection with the Field, at its own
expense. In order to establish standing, ATHERSYS shall reasonably cooperate
with PFIZER in any such litigation and shall timely commence or join in any such
litigations, at PFIZER’s request and expense.

 

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11.9 Validity and Enforceability Challenges Concerning Athersys Exclusive Patent
Rights.
Each party shall promptly notify the other in the event of any legal or
administrative action by any Third Party involving an Athersys Exclusive Patent
Right of which a party becomes aware, including any nullity, revocation,
re-examination or compulsory license proceeding. In the event of an assertion of
invalidity or unenforceability of Athersys Exclusive Patent Rights licensed
hereunder, ATHERSYS shall promptly advise PFIZER in writing of such assertion
and of all relevant facts and circumstances known to ATHERSYS pertaining to such
assertion. Where such validity or enforceability assertion is made in connection
with a litigation under Section 11.7 or 11.8, or in a declaratory judgment
action where a counterclaim for infringement is subsequently made by PFIZER or
ATHERSYS pursuant to Section 11.7, the party controlling such litigation under
Sections 11.7 or 11.8 shall have the right to control the defense of such
assertion. In all other instances, both parties shall thereafter consult and
cooperate fully to determine an appropriate course of action.
11.10 Compensation to Inventors/Third Party Licensing Athersys Patent Rights or
Technology.
As between ATHERSYS and PFIZER, only ATHERSYS shall be responsible for any
compensation and any other payments due to the inventors or Third Party
Licensors of Athersys Patent Rights, Athersys Technology or to the ATHERSYS
inventors of any Research Program IPRs or Athersys Combination Product IPRs. As
between ATHERSYS and PFIZER only PFIZER shall be responsible for any
compensation,and any other payments due to the inventors or PFIZER’s licensors,
of any Pfizer Technology or to the PFIZER inventors of any Research Program IPRs
or Pfizer Combination Product IPRs.
11.11 Trademarks.
The Licensed Product shall be sold in the Territory under trademark(s) selected
solely by PFIZER and marketed using logos, slogans, trade dress, domain names
and other intellectual property selected and owned by PFIZER (hereinafter
collectively “Trademarks”). All Trademarks filed in the Territory shall be owned
by PFIZER and applications for registration of such Trademarks shall be filed
and prosecuted by PFIZER with reasonable assistance from ATHERSYS if necessary.
All costs of the filing of applications for registration of Trademarks in the
Territory shall be borne solely by PFIZER.
Section 12 CONFIDENTIALITY; PUBLICATION
12.1 Confidential Information.
(a) PFIZER and ATHERSYS each agree that during the Term and for seven (7) years
thereafter, it will keep confidential, and will cause its Affiliates to keep
confidential, all of the other party’s Confidential Information that is
disclosed to it (including, in the case of ATHERSYS, disclosed pursuant to
ATHERSYS exercising its observation rights under this Agreement), or to any of
its Affiliates. PFIZER and ATHERSYS each agree to take such action, and to cause
its Affiliates to take such action, to preserve the confidentiality of Athersys
Confidential Information and Pfizer Confidential Information, respectively, as
it would customarily take to preserve the confidentiality of its own similar
types of confidential information.

 

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(b) Each of PFIZER, ATHERSYS and their respective Affiliates agree (i) to use
ATHERSYS Confidential Information and Pfizer Confidential Information,
respectively, only as expressly permitted in this Agreement and (ii) not to
disclose ATHERSYS Confidential Information and Pfizer Confidential Information,
respectively, to any Third Parties under any circumstance without the prior
consent of the other party, except as expressly permitted in this Agreement.
(c) Notwithstanding anything to the contrary in this Section 12, PFIZER may
disclose ATHERSYS Confidential Information (i) to Governmental Authorities
(A) to the extent desirable to obtain or maintain INDs or Regulatory Approvals
for any Licensed Product in the Field or Combination Product in the Field within
the Territory, and (B) in order to respond to inquiries, requests or
investigations relating to this Agreement; (ii) to outside consultants,
contractors, advisory boards, managed care organizations, and non-clinical and
clinical investigators, in each case to the extent desirable to develop,
register, market or otherwise commercialise any Licensed Product in the Field or
exercise its rights under Sections 7.1 and/or 7.2; provided that PFIZER shall
obtain the same confidentiality obligations from such Third Parties as it
obtains with respect to its own similar types of confidential information;
(iii) in connection with filing or prosecuting Patent Rights as permitted by
this Agreement; (iv) in connection with prosecuting or defending litigation as
permitted by this Agreement, provided that PFIZER shall use reasonable efforts
to limit the dissemination of such Confidential Information, including by use of
protective orders and the like, as PFIZER would use for its own similar types of
confidential information; (v) in connection with or included in scientific
presentations and publications relating to Licensed Products in the Field,
including abstracts, posters, journal articles and the like, and posting of
results of, and other information about, clinical trials to clincialtrials.gov
or PhRMA websites, and (vi) to the extent necessary or desirable in order to
enforce its rights under this Agreement, provided that PFIZER shall use
reasonable efforts to limit the dissemination of such Confidential Information,
including by use of protective orders and the like, as PFIZER would use for its
own similar types of confidential information.
(d) Notwithstanding anything to the contrary in this Section 12, ATHERSYS may
disclose Pfizer Confidential Information to: (i) Governmental Authorities in
order to respond to inquiries, requests or investigations relating to this
Agreement; (ii) to outside consultants, contractors, advisory boards, managed
care organizations, and non-clinical and clinical investigators, in each case to
the extent required for ATHERSYS to fulfil any of its obligations under the
Research Plan or a Clinical Development Plan or desirable to exercise its rights
under Section 7.4 provided that ATHERSYS shall obtain the same confidentiality
obligations from such Third Parties as it obtains with respect to its own
similar types of confidential information; (iii) in connection with prosecuting
or defending litigation as permitted by this Agreement; provided that ATHERSYS
shall use reasonable efforts to limit the dissemination of such Confidential
Information, including by use of protective orders and the like, as ATHERSYS
would use for its own similar types of confidential information; (iv) to the
extent necessary or desirable in order to enforce its rights under this
Agreement, provided that ATHERSYS shall use reasonable efforts to limit the
dissemination of such Confidential Information, including by use of protective
orders and the like, as ATHERSYS would use for its own similar types of
confidential information; and (v) in connection with filings required by
security regulations and the rules and regulations of any securities exchanges
upon which ATHERSYS’ securities are traded (e.g., Nasdaq); provided that
ATHERSYS shall use reasonable efforts to limit the dissemination of such
Confidential Information, including by use of protective orders and the like, as
ATHERSYS would use for its own similar types of confidential information.

 

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(e) If ATHERSYS is subject to a Change of Control, ATHERSYS will, and it will
cause its Representatives to, ensure that no Pfizer Confidential Information is
released to (i) any Affiliate of ATHERSYS that becomes an Affiliate as a result
of the Change of Control or (ii) any Representatives of ATHERSYS (or of the
relevant surviving entity of such Change of Control) who become Representatives
as a result of the Change of Control, unless such Representatives have signed
individual confidentiality agreements which include equivalent obligations to
those set out in this Section 12. If any Change of Control of ATHERSYS occurs,
ATHERSYS shall promptly notify PFIZER, share with PFIZER the policies and
procedures it plans to implement in order to protect the confidentiality of
Pfizer Confidential Information prior to such implementation and make any
adjustments to such policies and procedures that are reasonably requested by
PFIZER.
12.2 Publication.
ATHERSYS shall not, and shall cause, its Affiliate and its Affiliates’
employees, consultants, contractors, licensees and agents not to publish or
present any information with respect to any Licensed Product in the Field or
Combination Product in the Field without PFIZER’s prior written consent (which
may be withheld in its sole and final discretion), except as may be required by
Law or legal proceedings.
Notwithstanding the foregoing, ATHERSYS shall have the right to publish
information generated by ATHERSYS prior to the Effective Date with respect to
any Licensed Product in the Field or Combination Product in the Field subject to
the following procedure. ATHERSYS shall provide to PFIZER drafts of any proposed
abstracts, manuscripts or presentations that cover such Licensed Product or
Combination Product at least thirty (30) days prior to ATHERSYS’s submission of
such proposed abstract, manuscript or summary for publication or presentation.
PFIZER shall be permitted to review and comment on such drafts, and shall
designate a person who shall be responsible for approving such publications.
Such designated person shall respond promptly, and in no event later than twenty
(20) days after receipt of the proposed material, with either approval of the
proposed material or a specific statement of concern. If a statement of concern
is submitted, ATHERSYS agrees not to submit such publication or to make such
presentation that contains such information until PFIZER is able to resolve any
issues (not to exceed forty-five (45) days following such statement of concern).
With respect to any proposed abstracts, manuscripts or summaries for publication
or presentation by independent investigators or other Third Parties, such
materials shall be subject to review under the principles of this Section 12.2
to the extent reasonable practicable.

 

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12.3 Publicity.
The form of public announcement of the execution of this Agreement is set forth
on in Schedule 12.3 attached hereto and shall be promptly disseminated following
the execution of this Agreement by both parties. Except as set forth in
Section 12.2, neither Party may make any public statement (written or oral),
including in analyst meetings, concerning the terms of, or events related to,
this Agreement or concerning any Licensed Product in the Field including any
Combination Product in the Field, except where such statement: (a) is required
by Law, the rules and regulations of any securities exchange upon which a
party’s securities are traded, or legal proceedings, (b) is required to be
contained in a party’s financial statements prepared in accordance with
generally acceptable accounting principles in the United States, (c) has been
announced previously in accordance with this Section 12.3, or (d) has been
announced previously by a party, so long as, in the case of (c) or (d), such
public statement is consistent with such previously announced statement. In the
case of any public statement (written or oral) that is required by Law or legal
proceedings, the disclosing party shall (i) use commercially reasonable efforts
to obtain confidential treatment of financial and trade secret information, and
(ii) if reasonably practicable under the circumstances, give the other party
sufficient advance notice of the text so that such other party will have the
opportunity to comment upon the statement, and give due consideration to any
such comments in the final statement. The parties will work together to
establish a mutually agreed plan for publicizing activities and developments
under this Agreement.
12.4 Filing, Registration or Notification of the Agreement.
The parties shall promptly following the Effective Date and in any event within
forty five (45) days of the Effective Date agree a redacted form of this
Agreement (the “Redacted Agreement”) which will then be deemed included in this
Agreement at Schedule 12.4. If a party determines that it is required by Law to
publicly file, register or notify this Agreement with a Governmental Authority,
such party shall (i) initially file the Redacted Agreement, (ii) request, and
use commercially reasonable efforts to obtain, confidential treatment of all
terms redacted from this Agreement, as reflected in the Redacted Agreement, for
the maximum period permitted by such Governmental Authority, (iii) permit the
other party to review and approve such request for confidential treatment and
any subsequent correspondence with respect thereto at least five (5) Business
Days prior to its submission to such Governmental Authority, (iv) promptly
deliver to the other party any written correspondence received by it or its
representatives from such Governmental Authority with respect to such
confidential treatment request and promptly advise the other party of any other
communications between it or its representatives with such Governmental
Authority with respect to such confidential treatment request, (v) upon the
written request of the other party, request an appropriate extension of the term
of the confidential treatment period, and (vi) if such Governmental Authority
requests any changes to the redactions set forth in the Redacted Agreement, use
commercially reasonable efforts to support the redactions in the Redacted
Agreement as originally filed and shall not agree to any changes to the Redacted
Agreement without first discussing such changes with the other party and taking
the other party’s comments into consideration when deciding whether to agree to
such changes. Each party shall be responsible for its own legal and other
external costs in connection with any such filing, registration or notification.

 

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Section 13 REPRESENTATIONS AND WARRANTIES
13.1 ATHERSYS Representations and Warranties.
As of the date hereof and as of the Effective Date of this Agreement, AI and ABT
each jointly and severally hereby represents and warrants to PFIZER as follows:
(a) ATHERSYS has the corporate power and authority to execute and deliver this
Agreement and to perform its obligations hereunder, and the execution, delivery
and performance of this Agreement by ATHERSYS have been duly and validly
authorized and approved by proper corporate action on the part of ATHERSYS, and
ATHERSYS has taken all other action required by Law, its certificate of
incorporation, by-laws or other organizational documents or any agreement to
which it is a party, or to which it may be subject, required to authorize such
execution, delivery and performance. Assuming due authorization, execution and
delivery on the part of PFIZER, this Agreement constitutes a legal, valid and
binding obligation of ATHERSYS, enforceable against ATHERSYS in accordance with
its terms.
(b) The execution and delivery of this Agreement by ATHERSYS and the performance
by ATHERSYS contemplated hereunder does not and will not violate any Laws or any
order of any court or Governmental Authority applicable to or binding upon
ATHERSYS.
(c) To the knowledge of ATHERSYS, the patents and patent applications
encompassed within the Athersys Exclusive Patent Rights, are, or, upon issuance,
will be, valid and enforceable patents and no Third Party (i) is infringing any
such patents relating to any MultiStem Product as of the Effective Date or
(ii) other than a Government Authority in the course of patent prosecution, is
challenging the patentability, validity or enforceability of any claims of any
such patents or patent applications (including by way of example through the
institution or written threat of institution of interference, nullity or similar
invalidity proceedings before the United States Patent and Trademark Office or
any analogous foreign entity).
(d) To the knowledge of ATHERSYS, the manufacture, use, sale, offer for sale,
supply or importation by ATHERSYS or PFIZER (or their respective Affiliates) of
any MultiStem Product or Licensed Products existing, or any Clinical Development
Candidate and Licensed Products in the Field contemplated, at the Effective Date
does not and will not infringe any issued valid claims of any patent of any
Third Party.
(e) Schedule 1.8 contains a complete and correct list of all patents and patent
applications owned or co-owned by or licensed to ATHERSYS (and indicating which
entity owns or co-owns each patent and patent application and under which Third
Party License any such patents or patent applications are licensed to ATHERSYS)
relating to the Licensed Products.
(f) Except as otherwise set out in Schedule 1.8, ATHERSYS is the sole legal and
beneficial owner of all the ATHERSYS Patent Rights and ATHERSYS Technology, free
of any lien, encumbrance, charge, security interest, mortgage or other similar
restriction and no person, firm, corporation or other entity (including any
Affiliate of ATHERSYS) has any right, interest or claim in or to, and neither
ATHERSYS nor any of its Affiliates has entered into any agreement granting any
right, interest or claim in or to, any ATHERSYS Patent Rights or ATHERSYS
Technology to any Third Party (including any academic organization or agency)
that conflicts with or limits the rights licensed to PFIZER under Sections 7.1
and 7.2.
(g) ATHERSYS has complied in all material respects with all applicable Laws,
including any disclosure requirements, in connection with the filing,
prosecution and maintenance of the Athersys Exclusive Patent Rights in the
Territory.

 

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(h) Except as set out in Schedule 1.8 and to the best of ATHERSYS’ knowledge and
belief, none of the Athersys Patent Rights or Athersys Technology were developed
with federal funding from the United States government or any other Governmental
Authority.
(i) ATHERSYS or, as applicable ATHERSYS’ licensor, has obtained or procured
assignments, or an obligation to assign, by contract, university policies or
otherwise, from the inventors of all inventorship rights relating to the
Athersys Patent Rights, and all such assignments of inventorship rights relating
to the Athersys Patent Rights are valid and enforceable.
(j) The agreements listed in Schedule 1.8 as heretofore delivered by ATHERSYS to
PFIZER represent the complete agreement and understanding between the respective
Third Parties and ATHERSYS relating to the Athersys Patent Rights and Athersys
Technology which are the subject of those agreements. The agreements listed in
Schedule 1.8 have not been modified, supplemented or amended, other than by
amendments thereto provided to PFIZER prior to the execution date of this
Agreement or as required in writing by ATHERSYS, PFIZER and the relevant Third
Party in connection with the transactions contemplated by this Agreement. Except
for the agreements listed in Schedule 1.8, there are no agreements to which
ATHERSYS or any of its Affiliates is a party pursuant to which ATHERSYS or any
of its Affiliates has a license, or an option to obtain a license, or holds an
immunity from suit, with respect to patents which (x) are pending, applied for,
granted or registered, and (y) but for ATHERSYS’s rights under such agreements,
could be asserted by third parties to be infringed by the development
manufacture, distribution, use, or sale of Licensed Products in the Field.
ATHERSYS has previously delivered to PFIZER all of its agreements with any Third
Parties regarding supply and manufacture of all goods and services relating to
MultiStem Products none of which have been modified, supplemented or amended;
(ii) the Third Party Licenses are in full force and effect, all payments to date
required to be made thereunder by ATHERSYS have been made, and ATHERSYS is in
compliance in all respects with its respective obligations thereunder and
(iii) ATHERSYS is not aware of any breach by other parties to any Third Party
License.
(k) Except pursuant to the Third Party Licenses and as otherwise set out in
Schedule 1.8 none of the ATHERSYS Patent Rights or ATHERSYS Technology have been
licensed or otherwise made available (including pursuant to any immunity from
suit arrangement) to ATHERSYS or any of its Affiliates from a Third Party.
(l) ATHERSYS has heretofore disclosed to PFIZER all material scientific and
technical information and all information relating to safety and efficacy known
to it, or its Affiliates, with respect to the MultiStem Products and Licensed
Products.
(m) ATHERSYS has heretofore disclosed to PFIZER all material correspondence and
contact information between ATHERSYS and the FDA and any other Governmental
Authorities regarding the MultiStem Products and Licensed Products.
(n) Neither the execution and delivery of this Agreement nor the performance
hereof by ATHERSYS or any of the Affiliates requires ATHERSYS to obtain any
permits, authorizations or consents from any Governmental Authority or from any
other person, firm or corporation, and such execution, delivery and performance
will not result in the breach of or give rise to any right of termination,
rescission, renegotiation or acceleration under, or trigger any other rights
under, any agreement or contract to which ATHERSYS is a party or to which it may
be subject that relates to the ATHERSYS Patent Rights, the ATHERSYS Technology,
the MultiStem Products, Licensed Products or ATHERSYS’ obligations under this
Agreement.

 

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(o) There is no action, claim, demand, suit, proceeding, arbitration, grievance,
citation, summons, subpoena, inquiry or investigation of any nature, civil,
criminal, regulatory or otherwise, in law or in equity, pending or, to the
knowledge of ATHERSYS, threatened against ATHERSYS, any of its Affiliates or any
Third Party, in each case in connection with the ATHERSYS Patent Rights, the
ATHERSYS Technology or the MultiStem Products and Licensed Products which would
have a negative impact on the Research Program, any Clinical Development Plan or
any other obligation of ATHERSYS under this Agreement.
(p) ATHERSYS, its Affiliates or, to the best of ATHERSYS’ knowledge and belief,
its Third Party Licensors, have complied materially with all Laws, codes of
practice, directions, guidance, required licenses, permits and authorisations
concerning health and safety, human tissue, clinical trials and environmental
procedures, protocols and systems applicable to the isolation, purification,
derivation, production, traceability, research, development and manufacture of
the MultiStem Products and Licensed Products and all such licenses, permits or
authorisations in relation to such Law are valid and subsisting and there are no
circumstances or grounds that would lead a Governmental or Regulatory Authority
to revoke, suspend or cancel such licenses, permits or authorisations, or impose
a penalty or that would result in any permit, license authorisation being
revoked, suspended, cancelled or not renewed.
(q) The MultiStem Products are not derived from embryonic sources.
(r) ATHERSYS is financially solvent, that is has sufficient funds on hand as of
the Effective Date, and sufficient capacity to obtain additional funds for the
Initial Research Term, (including pursuant to Section 8.1) to satisfy all of its
obligations under this Agreement and to meet any other payment obligations as
they become due in the ordinary course of business.
13.2 PFIZER Representations and Warranties.
As of the date hereof and as of the Effective Date of this Agreement, PFIZER
hereby represents and warrants to ATHERSYS as follows:
(a) PFIZER has the corporate power and authority to execute and deliver this
Agreement and to perform its obligations hereunder, and the execution, delivery
and performance of this Agreement by PFIZER have been duly and validly
authorized and approved by proper corporate action on the part of PFIZER, and
PFIZER has taken all other action required by Law, its certificate of
incorporation or by-laws, or any agreement to which it is a party or to which it
may be subject, required to authorize such execution, delivery and performance.
Assuming due authorization, execution and delivery on the part of ATHERSYS, this
Agreement constitutes a legal, valid and binding obligation of PFIZER,
enforceable against PFIZER in accordance with its terms.

 

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(b) The execution and delivery of this Agreement by PFIZER and the performance
by PFIZER contemplated hereunder does not and will not violate any Laws or any
order of any court or Governmental Authority, except for such violations that
would not have an adverse effect on the ability of PFIZER to perform its
obligation under this Agreement.
(c) Neither the execution and delivery of this Agreement nor the performance
hereof by PFIZER requires PFIZER to obtain any permits, authorizations or
consents from any Governmental Authority (other than any regulatory approvals
relating to the manufacture, use, importation or sale of any Licensed Product)
or from any other person, firm or corporation, and such execution, delivery and
performance will not result in the breach of or give rise to any right of
termination under any agreement or contract to which PFIZER is a party or to
which it may be subject, except for those breaches or rights that would not
adversely affect the ability of PFIZER to perform its obligations under this
Agreement.
(d) There is no action, claim, demand, suit, proceeding, arbitration, grievance,
citation, summons, subpoena, inquiry or investigation of any nature, civil,
criminal, regulatory or otherwise, in law or in equity, pending or, to the
knowledge of PFIZER, threatened against PFIZER or any of its Affiliates relating
to the transactions contemplated by this Agreement.
13.3 Disclaimer of Warranty.
EXCEPT AS OTHERWISE EXPRESSLY STATED IN THIS AGREEMENT, NEITHER PARTY MAKES ANY
REPRESENTATION OR WARRANTY OF ANY KIND WITH RESPECT TO COMPOUNDS, DEVICES,
LICENSED PRODUCTS, ATHERSYS PATENT RIGHTS, OR ATHERSYS TECHNOLOGY, PFIZER
TECHNOLOGY OR COMBINATION PRODUCT IPRS OR ANY OTHER SUBJECT MATTER UNDER THIS
AGREEMENT. EXCEPT AS OTHERWISE PROVIDED IN THIS SECTION 13, EACH PARTY EXPRESSLY
DISCLAIMS ALL WARRANTIES, EXPRESS OR IMPLIED, INCLUDING WARRANTIES OF
MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE AND NON-INFRINGEMENT.
Section 14 ADDITIONAL COVENANTS.
14.1 ATHERSYS shall not (and shall cause its Affiliates not to) license, sell,
assign or otherwise transfer to any person any ATHERSYS Patent Rights or any
ATHERSYS Technology (or agree to do any of the foregoing) in a manner that would
conflict with the rights granted to PFIZER under Sections 7.1 and 7.2. In
addition, ATHERSYS hereby covenants and agrees that ATHERSYS shall not incur or
permit to exist (and shall cause each of its Affiliates not to incur or permit
to exist), with respect to any ATHERSYS Patent Rights and/or Athersys
Technology, any lien, encumbrance (other than grants of licenses to Third
Parties), charge, security interest, mortgage, liability, or other restriction
(including in connection with any indebtedness) without the prior written
agreement of PFIZER, such agreement not to be unreasonably withheld or delayed.
ATHERSYS shall notify PFIZER not less than thirty (30) days prior to granting
any license to a Third Party of its intention to grant that license, giving
PFIZER sufficient information as to the nature and scope of any proposed license
to be granted reasonably related to diseases or conditions in the area of immune
system dysfunction and modulation. ATHERSYS shall reasonably consider any
comments provided by PFIZER regarding such proposed license to a Third Party.

 

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14.2 ATHERSYS shall take all necessary steps to record the transfer in all
relevant patent offices of patent rights for [*] within thirty (30) days of the
Effective Date.
14.3 ATHERSYS shall promptly following the Effective Date obtain or procure
assignments from the inventors of all inventorship rights relating to the
Athersys Exclusive Patent Rights and shall promptly obtain or procure any
outstanding assignments from all inventors of all inventorship rights relating
to any other Athersys Patent Rights on PFIZER’s request.
14.4 ATHERSYS, without the prior written consent of PFIZER such agreement not to
be unreasonably withheld or delayed,(a) shall not execute or otherwise permit,
and shall cause its Affiliates to refrain from executing or otherwise
permitting, any amendment, modification or waiver to any of the Third Party
Licenses, (b) shall not make any election or exercise any right or option (or
omit to take any action) which would, and shall cause its Affiliates to refrain
from making any election or exercising any right or option (or omitting to take
any action) which would, terminate or relinquish in whole or in part any right
under a Third Party License, or (c) shall comply, and shall cause its Affiliates
to comply in all respects, with all of its, and its Affiliates’, obligations
under the Third Party Licenses. ATHERSYS shall take, and shall cause its
Affiliates to take, such actions as shall be necessary to keep in full force and
effect the Third Party Licenses and shall give prompt notice to PFIZER, together
with a detailed summary of outstanding issues if PFIZER so requests, of any
notice received from the Third Party to the Third Party License, of any actual
or alleged defaults, breaches, or violations, proposed exercise of any Third
Party rights or of any proposed amendments or proposed modifications of, or any
proposed waivers under, any of the Third Party Licenses by any of the parties
thereto that ATHERSYS is willing to accept.
14.5 Each of ATHERSYS and PFIZER shall conduct, and shall use reasonable efforts
to cause its Affiliates to conduct, all its activities contemplated under this
Agreement in accordance with all applicable Laws of the country in which such
activities are conducted.
14.6 Without limiting the generality of Section 14.5, each party and its
Representatives shall comply materially with all Laws, codes of practice,
directions, guidance, permits, licenses and authorisations concerning health and
safety, human tissue, clinical trials and environmental procedures, protocols
and systems applicable to the isolation, purification, derivation, production,
traceability, research, development and manufacture of the Licensed Products and
shall not take any action or omit to take any action which would lead a
Governmental or Regulatory Authority to revoke, suspend or cancel any licences,
permits or authorisations in relation to such Law or to impose a penalty or that
would result in any permit, license or authorisation, being revoked, suspended,
cancelled or not renewed.
14.7 From and after the date hereof, ATHERSYS shall, upon reasonable notice from
PFIZER, provide PFIZER and its Representatives with reasonable access, during
regular business hours, to (a) all information concerning Licensed Products in
the Field, ATHERSYS Patent Rights and/or Athersys Technology and (b) all
employees of ATHERSYS or its Affiliates who possess any information described in
clause (a) of this Section 14.7; in each case (a) and (b), to the extent
reasonably necessary for PFIZER to exercise the rights granted to it under this
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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14.8 ATHERSYS shall promptly provide to PFIZER, and keep PFIZER up-to-date in
respect of, all information relating to MultiStem Products outside the Field,
planned interactions with Regulatory Authorities (or correspondence received)
that will or may affect the material quality or safety profile for Licensed
Products. PFIZER shall have the right to review and comment upon such
information and ATHERSYS shall reasonably consider all comments provided by
PFIZER and any differences of opinion shall be submitted to the Co-Chairs of the
Development & Regulatory Committee for further discussion provided that this
covenant shall not apply as regards any such information in respect of which
ATHERSYS requires consent to disclose from Angiotech, until such consent has
been obtained. ATHERSYS shall promptly following the Effective Date, and using
commercially reasonable efforts, procure the consent of Angiotech to disclosure
by ATHERSYS to PFIZER of information pursuant to this Section 14.8.
14.9 Without prejudice to the obligations in Section 3.6 (c) PFIZER shall
promptly provide to ATHERSYS, and keep ATHERSYS up-to-date in respect of, all
information relating to Licensed Products inside the Field, planned interactions
with Regulatory Authorities (or correspondence received) that will or may affect
the material quality or safety profile for Licensed Products. ATHERSYS shall
have the right to review and comment upon such information and PFIZER shall
reasonably consider all comments provided by ATHERSYS and any differences of
opinion shall be submitted to the Co-Chairs of the Development & Regulatory
Committee for further discussion.
Section 15 TERM
This Agreement shall be effective as of the Effective Date and shall, unless
earlier terminated in accordance with Section 16, remain in effect until the
expiration of the last-to-expire Royalty Term.
Section 16 TERMINATION
16.1 Termination Rights.
This Agreement may be terminated as follows:
(a) If either PFIZER or ATHERSYS materially breaches or materially defaults in
the performance or observance of any of its respective obligations under this
Agreement, and such breach or default is not cured within ninety (90) days after
the giving of written notice by the other party specifying such breach or
default, then such other party shall have the right to terminate this Agreement
by providing the breaching party written notice within ten (10) days following
the expiration of such ninety (90)-day period (such termination to be effective
upon receipt of such termination notice). For the purpose of this
Section 16.1(a), a material breach or material default shall include a material
inaccuracy in any warranty or representation contained herein.

 

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(b) PFIZER may terminate this Agreement within thirty (30) days of giving
written notice to ATHERSYS if: (i) ATHERSYS is unable at any time during the
Research Term to appoint a Suitably Qualified Person to a Key Role following the
resignation or other departure of the person to whom that Key Role was
previously assigned and that Key Role remains unassigned to a Suitably Qualified
Person for [*] or longer; or (ii) [*] or more of the employees of ATHERSYS or
its Affiliates performing work under a Research Plan during the Initial Research
Term cease within any [*] period to work on the Research Program performing the
activities assigned to them under a Research Plan or a Clinical Development Plan
or (iii) a Stand-By Licence between PFIZER, the University of Minnesota and
ATHERSYS comes in to force due to a termination by the University of Minnesota
of its license with ATHERSYS (or its Affiliates).
(c) PFIZER may terminate this Agreement immediately on written notice to
ATHERSYS in the event of a Change of Control of AI or ABT that results in AI or
ABT being controlled by any entity which has a market capitalization of between
[*] to [*] US dollars or the equivalent value of cash in hand; provided, that
any such notice must be given by PFIZER within forty five (45) days of PFIZER
being notified by ATHERSYS in writing after the Change of Control of AI or ABT.
(d) At any time and for any reason, PFIZER, upon sixty (60) days’ written notice
to ATHERSYS, shall have the right, at PFIZER’s sole discretion, to terminate
this Agreement, such termination to be effective upon the expiration of such
sixty (60)-day period.
(e) ATHERSYS shall have the right to terminate this Agreement if Milestone Event
3 has not occurred within the later of (i) [*] following the end of the Research
Term and (ii) [*] following completion of a successful ‘proof of concept’
clinical study, being a clinical study initiated during the Research Term which
sufficiently establishes the effectiveness of a Licensed Product for the Pilot
or Major Indication in patients to set a dosing regimen for use in a Phase III
Clinical Study.
(f) If ATHERSYS reasonably believes that PFIZER has failed to satisfy its
obligations to use Commercially Reasonable Efforts to progress, pursuant to the
Research Plan and applicable Clinical Development Plan, a Licensed Product to
Launch in the Territory (“Diligence Requirement”), ATHERSYS shall so notify
PFIZER in writing and PFIZER shall then have one hundred and twenty (120) days
to reasonably demonstrate it has satisfied its Diligence Requirement, failing
which ATHERSYS may terminate this Agreement on giving PFIZER not less than one
hundred and eighty (180) days notice.
16.2 Accrued Obligations.
Expiration or termination of this Agreement for any reason (x) shall be without
prejudice to ATHERSYS’s right to receive all payments accrued prior to the
effective date of such termination in accordance with the provisions of
Sections 8, 9 and 10, as applicable, and to any other remedies that either party
may otherwise have and (y) shall not release a party hereto from any
indebtedness, liability or other obligation incurred hereunder by such party
prior to the date of termination or expiration.
 

      *   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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16.3 Effects of Termination.
(a) Upon any termination of this Agreement by ATHERSYS pursuant to Section 16.1
all licenses and rights granted herein to PFIZER shall terminate, other than the
license granted to PFIZER in Section 7.2 (a) and (c), licenses for a Licensed
Product in a country that become perpetual pursuant to Section 9.5, and
otherwise as specifically provided below.
(b) In addition, if ATHERSYS terminates this Agreement under Section 16.1 or if
PFIZER terminates this Agreement under Section 16.1(d), PFIZER shall, promptly
after such termination, (i) transfer to ATHERSYS ownership of all investigator’s
brochures, regulatory filings and Regulatory Approvals that relate solely to
Licensed Products, (ii) deliver to ATHERSYS all pre-clinical and clinical data
and information in PFIZER’s possession or control relating solely to Licensed
Products, including for clarity manufacturing data, if any (subject to the last
sentence of this Section 16.3), in the same form in which PFIZER maintains such
data; and (iii) deliver to ATHERSYS, in the same form in which PFIZER maintains
such items, copies of all reports, records, regulatory correspondence and other
materials in PFIZER’s possession or control relating solely to the pre-clinical
and clinical development of Licensed Products, including, if applicable, any
information contained in the global safety database established and maintained
by PFIZER; provided that the parties agree that any good faith failure by PFIZER
to provide immaterial data, information, reports, records, correspondence or
other materials to ATHERSYS shall not be a breach of PFIZER’s obligations under
this Section 16.3.
(c) Following termination of this Agreement pursuant to Section 16.1: (i) each
of PFIZER and ATHERSYS shall, upon request of the other party, return or destroy
all ATHERSYS Confidential Information and Pfizer Confidential Information,
respectively, disclosed to it pursuant to this Agreement, including all copies
and extracts of documents, as promptly as practicable following receipt of such
request, except that one (1) copy may be kept for the purpose of complying with
continuing obligations under this Agreement and ATHERSYS shall not be required
to destroy any information transferred or delivered to ATHERSYS by PFIZER
pursuant to Section 16.3(b).
(d) Upon termination of this Agreement by PFIZER pursuant to Sections 16.1(a),
(b) or (c) the licenses granted by ATHERSYS to PFIZER pursuant to Sections 7.1
and 7.2 will remain in full force and effect in accordance with their respective
terms, and any amounts payable by PFIZER to ATHERSYS pursuant to Section 3.2(c)
and Schedule 3.2(c) or Sections 9.1, 9.2 or 9.3 shall remain in effect in
accordance with and subject to the provisions of Sections 9 and 10 (along with
such other Sections as applicable) provided, however, that where PFIZER
terminates this Agreement pursuant to Sections 16.1(a) or (b), any amounts
payable by PFIZER to ATHERSYS pursuant to Section 3.2(c) and Schedule 3.2(c) or
Sections 9.1, 9.2 or 9.3 shall each be reduced to [*] percent ([*%]) of the
amount that would otherwise have been payable under the terms of the Agreement
during the Term.
(e) If this Agreement is terminated by PFIZER pursuant to Section 16.1(d) during
the Research Term, PFIZER shall remain under an obligation to provide the
research funding set out in Section 8 until the expiry of the Research Term.
16.4 Survival
The provisions of Sections 3.2(c), 6, 7.4, 9.5, 10, 11 (so long as any of
PFIZER’s licenses survive termination in accordance with Section 16.3), 12,
16.2, 16.3, 16.4, 17, 18, and 19 and Schedules 1.45, 2.7 and 3.2(c), as
applicable, (as well as any other Sections and Schedules or defined terms
referred to in such Sections and Schedules are necessary to give them effect)
shall survive termination or expiration of this Agreement and remain in force
until discharged in full. Furthermore, any other provisions required to
interpret and enforce the parties’ rights and obligations or to wind up their
outstanding obligations under this Agreement shall survive to the extent
required.
 

      *   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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16.5 Bankruptcy.
All rights and licenses granted under or pursuant to this Agreement by ATHERSYS
are, and shall otherwise be deemed to be, for purposes of Section 365(n) of the
U.S. Bankruptcy Code, licenses of rights to “intellectual property” as defined
under Section 101 of the U.S. Bankruptcy Code. The parties agree that PFIZER, as
licensee of intellectual property under this Agreement, shall retain and may
fully exercise all of its rights and elections under the U.S. Bankruptcy Code.
The parties further agree that in the event of a rejection of this Agreement by
either AI or ABT in any bankruptcy proceeding by or against AI or ABT under the
U.S. Bankruptcy Code, (i) PFIZER shall be entitled to a complete duplicate of
(or complete access to, as appropriate) any such intellectual property and all
embodiments of such intellectual property, which, if not already in Pfizer’s
possession, shall be promptly delivered to it upon Pfizer’s written request
therefore, and (ii) neither AI or ABT shall interfere with PFIZER’s rights to
intellectual property and all embodiments of intellectual property, and shall
assist and not interfere with PFIZER in obtaining intellectual property and all
embodiments of intellectual property from another entity. The term “embodiments”
of intellectual property includes all tangible, intangible, electronic or other
embodiments of rights and licenses hereunder, including all compounds and
products embodying intellectual property, Licensed Products, filings with
Regulatory Authorities and related rights, and technology.
Section 17 INDEMNIFICATION
17.1 Indemnification.
(a) ATHERSYS will indemnify, defend and hold PFIZER and PFIZER’s Representative,
harmless from any and all Losses (as defined below) incurred by any of them as a
result of:
i. the breach of any covenant, warranty or representation made by ATHERSYS under
this Agreement;
ii. the negligence, recklessness, or wilful misconduct of ATHERSYS or any of its
Representatives; or
iii. any acts or omissions of ATHERSYS or any of its Representatives in
connection with the research, development or commercialization of Licensed
Products prior to or after the Effective Date or following termination in whole
or in part of this Agreement and the reversion of the applicable rights
hereunder to ATHERSYS in accordance with Section 16.3.
ATHERSYS shall only be obligated to so indemnify, defend and hold PFIZER and
PFIZER’s Representatives harmless to the extent that such Losses do not arise
from (i) the breach of any covenant, warranty, or representation made by PFIZER
under this Agreement, or (ii) the negligence, recklessness or wilful misconduct
of PFIZER or any of its Representatives.

 

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(b) PFIZER will indemnify, defend and hold ATHERSYS and ATHERSYS’
Representatives, harmless from any and all Losses incurred by any of them as a
result of:
i. the breach of any covenant, warranty or representation made by PFIZER under
this Agreement;
ii. the negligence, recklessness, or wilful misconduct of PFIZER or any of its
Representatives; or
iii. any acts or omissions of PFIZER or any of its Representatives in connection
with the research, development or commercialization of Licensed Products during
the Term.
PFIZER shall only be obligated to so indemnify, defend and hold ATHERSYS and
ATHERSYS’ Representatives harmless to the extent that such Losses do not arise
from (i) the breach of any covenant, warranty or representation made by ATHERSYS
under this Agreement or (ii) the negligence, recklessness or wilful misconduct
of ATHERSYS or any of its Representatives.
17.2 Losses.
For purposes of this Agreement, “Losses” shall mean any and all costs, expenses,
claims, losses, liabilities, damages, fines, royalties, governmental penalties
or punitive damages, deficiencies, interest, settlement amounts, awards, and
judgments, including any and all reasonable, out-of-pocket costs and expenses
properly incurred as a result of a claim (including reasonable, out-of-pocket
attorneys’ fees and all other expenses reasonably incurred in investigating,
preparing or defending any litigation or proceeding, commenced or threatened),
in each case, net of any tax benefit or insurance recovery received in
connection with any of the foregoing.
17.3 Defense Procedures; Procedures for Third Party Claims.
In the event that any Third Party (in no event to include any Affiliate of any
of the parties) asserts a claim with respect to any matter for which a party
(the “Indemnified Party”) is entitled to indemnification hereunder (a “Third
Party Claim”), then the Indemnified Party shall promptly notify the party
obligated to indemnify the Indemnified Party (the “Indemnifying Party”) thereof;
provided, however, that no delay on the part of the Indemnified Party in
notifying the Indemnifying Party shall relieve the Indemnifying Party from any
obligation hereunder unless (and then only to the extent that) the Indemnifying
Party is prejudiced thereby.
(a) Subject to PFIZER’s right to control the defense of actions described in
Sections 11.7, 11.8 and 11.9 (even where ATHERSYS is the Indemnifying Party),
the Indemnifying Party shall have the right, exercisable by notice to the
Indemnified Party within ten (10) Business Days after receipt of notice from the
Indemnified Party of the commencement of or assertion of any Third Party Claim,
to assume direction and control of the defense, litigation, settlement, appeal
or other disposition of the Third Party Claim (including the right to settle the
claim solely for monetary consideration) with counsel selected by the
Indemnifying Party and reasonably acceptable to the Indemnified Party; provided
that (i) the Indemnifying Party has sufficient financial resources, in the
reasonable judgment of the Indemnified Party, to satisfy the amount of any
adverse monetary judgment that is sought, (ii) the Third Party Claim seeks
solely monetary damages and (iii) the Indemnifying Party expressly agrees in
writing that as between the Indemnifying Party and the Indemnified Party, the
Indemnifying Party shall be solely obligated to satisfy and discharge the Third
Party Claim in full (the conditions set forth in clauses (i), (ii) and
(iii) above are collectively referred to as the “Litigation Conditions”).

 

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(d) Within ten (10) Business Days after the Indemnifying Party has given notice
to the Indemnified Party of its exercise of its right to defend a Third Party
Claim, the Indemnified Party shall give notice to the Indemnifying Party of any
objection thereto based upon the Litigation Conditions. If the Indemnified Party
reasonably so objects, the Indemnified Party shall continue to defend the Third
Party Claim, at the expense of the Indemnifying Party, until such time as such
objection is withdrawn. If no such notice is given, or if any such objection is
withdrawn, the Indemnifying Party shall be entitled, at its sole cost and
expense, to assume direction and control of such defense, with counsel selected
by the Indemnifying Party and reasonably acceptable to the Indemnified Party.
During such time as the Indemnifying Party is controlling the defense of such
Third Party Claim, the Indemnified Party shall cooperate, and shall cause its
Representatives to cooperate upon request of the Indemnifying Party, in the
defense or prosecution of the Third Party Claim, including by furnishing such
records, information and testimony and attending such conferences, discovery
proceedings, hearings, trials or appeals as may reasonably be requested by the
Indemnifying Party. In the event that the Indemnifying Party does not satisfy
the Litigation Conditions or does not notify the Indemnified Party of the
Indemnifying Party’s intent to defend any Third Party Claim within ten
(10) Business Days after notice thereof, the Indemnified Party may (without
further notice to the Indemnifying Party) undertake the defense thereof with
counsel of its choice and at the Indemnifying Party’s expense (including
reasonable, out-of-pocket attorneys’ fees and costs and expenses of enforcement
or defense). The Indemnifying Party or the Indemnified Party, as the case may
be, shall have the right to join in (including the right to conduct discovery,
interview and examine witnesses and participate in all settlement conferences),
but not control, at its own expense, the defense of any Third Party Claim that
the other Party is defending as provided in this Agreement.
(e) The Indemnifying Party shall not, without the prior consent of the
Indemnified Party, enter into any compromise or settlement that commits the
Indemnified Party to take, or to forbear to take, any action. The Indemnified
Party shall have the sole and exclusive right to settle any Third Party Claim,
on such terms and conditions as it deems reasonably appropriate, to the extent
such Third Party Claim involves equitable or other non-monetary relief, but
shall not have the right to settle such Third Party Claim to the extent such
Third Party Claim involves monetary damages without the prior written consent of
the Indemnifying Party. Each of the Indemnifying Party and the Indemnified Party
shall not make any admission of liability in respect of any Third Party Claim
without the prior consent of the other party, and the Indemnified Party shall
use reasonable efforts to mitigate losses arising from the Third Party Claim.

 

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17.4 Disclaimer of Liability for Consequential Damages.
IN NO EVENT SHALL ANY PARTY OR ANY OF ITS RESPECTIVE AFFILIATES BE LIABLE UNDER
THIS AGREEMENT FOR SPECIAL, INDIRECT, INCIDENTAL OR CONSEQUENTIAL DAMAGES,
WHETHER IN CONTRACT, WARRANTY, TORT, NEGLIGENCE, STRICT LIABILITY OR OTHERWISE,
INCLUDING LOSS OF PROFITS OR REVENUE, SUFFERED BY PFIZER, ATHERSYS OR ANY OF
THEIR RESPECTIVE REPRESENTATIVES, EXCEPT (A) TO THE EXTENT OF ANY SUCH DAMAGES
PAID TO A THIRD PARTY IN CONNECTION WITH A THIRD PARTY CLAIM, AND (B) FOR
PURPOSES OF INDEMNIFICATION PURSUANT TO THIS SECTION 17, IN THE EVENT OF AN
INTENTIONAL AND WILFUL BREACH IN BAD FAITH OF ANY REPRESENTATION, WARRANTY,
COVENANT OR AGREEMENT BY ATHERSYS OR PFIZER (AS THE CASE MAY BE) CONTAINED IN
THIS AGREEMENT; PROVIDED THAT THIS SECTION SHALL NOT RELIEVE EITHER PARTY FROM
ITS PAYMENT OBLIGATIONS UNDER THIS AGREEMENT. ADDITIONALLY, THE PARTIES
ACKNOWLEDGE AND AGREE THAT, NOTWITHSTANDING THE DILIGENT EFFORTS OF THE PARTIES,
THE ACTIVITIES TO BE CONDUCTED UNDER THE RESEARCH PROGRAM AND THE CLINICAL
DEVELOPMENT PROGRAM ARE INHERENTLY UNCERTAIN, AND THAT THERE ARE NO ASSURANCES
THAT A LICENSED PRODUCT WILL BE SUCCESSFULLY DEVELOPED AND COMMERCIALIZED.
17.5 SOLE REMEDY.
EXCEPT AS EXPRESSLY PROVIDED IN THIS AGREEMENT AND EXCEPT FOR ANY EQUITABLE
REMEDIES THAT MAY BE AVAILABLE TO A PARTY, INDEMNIFICATION PURSUANT TO THIS
SECTION 17 SHALL BE THE SOLE AND EXCLUSIVE REMEDY (WHETHER BASED ON CONTRACT,
TORT OR ANY OTHER LEGAL THEORY) AVAILABLE TO ATHERSYS OR PFIZER FOR THE MATTERS
COVERED THEREIN.
Section 18 GOVERNING LAW AND JURISDICTION
18.1 Governing Law.
This Agreement shall be governed by and construed in accordance with the
substantive laws of the State of New York, without regard to conflicts of law
rules.
18.2 Jurisdiction.
With the exception of those matters referred for resolution by independent
accountants under Section 10.5, in the event of any controversy, claim or
counterclaim arising out of or relating to this Agreement, the parties shall
first attempt to resolve such controversy or claim through good faith
negotiations for a period of not less than thirty (30) days following
notification of such controversy or claim to the other party. If such
controversy or claim cannot be resolved by means of such negotiations during
such period, then such controversy or claim shall be resolved by the United
States District Court for the Southern District of New York or a local court
sitting in New York, New York (collectively, the “Courts”). Each party (a)
irrevocably submits to the exclusive jurisdiction in the Courts for purposes of
any action, suit or other proceeding relating to or arising out of this
Agreement and (b) agrees not to raise any objection at any time to the laying or
maintaining of the venue of any such action, suit or proceeding in any of the
Courts, irrevocably waives any claim that such action, suit or other proceeding
has been brought in an inconvenient forum and further irrevocably waives the
right to object, with respect to such action, suit or other proceeding, that
such Court does not have any jurisdiction over such party.

 

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ATHERSYS hereby irrevocably designates, appoints and empowers its designated
agent for service of process as registered with the State of Delaware, as its
true and lawful agent and attorney-in-fact in its name, place and stead to
receive and accept on its behalf service of process in any action, suit or
proceeding in the Courts with respect to any matters as to which it has
submitted to jurisdiction as set forth in the immediately preceding sentence.
Section 19 MISCELLANEOUS.
19.1 Force Majeure.
Neither party hereto shall be liable to the other party for any losses or
damages attributable to a default in or breach of this Agreement that is the
result of war (whether declared or undeclared), acts of God, revolution, acts of
terror, fire, earthquake, flood, pestilence, riot, enactment or change of Law
(following the Effective Date), accident(s), labor trouble, or shortage of or
inability to obtain material equipment or transport or any other cause beyond
the reasonable control of such party; provided that if such a cause occurs, then
the party affected will promptly notify the other party of the nature and likely
result and duration (if known) of such cause and use commercially reasonable
efforts to reduce the effect. If the event lasts for a period of longer than
three (3) months, the parties shall meet and discuss appropriate remedial
measures.
19.2 Severability.
If and solely to the extent that any provision of this Agreement shall be
invalid or unenforceable, or shall render this entire Agreement to be
unenforceable or invalid, such offending provision shall be of no effect and
shall not affect the validity of the remainder of this Agreement or any of its
provisions; provided, however, the parties shall use their respective reasonable
efforts to replace the invalid provisions in a manner that best accomplishes the
original intentions of the parties.
19.3 Waivers.
Any term or condition of this Agreement may be waived at any time by the party
that is entitled to the benefit thereof, but no such waiver shall be effective
unless set forth in a written instrument duly executed by or on behalf of the
party or parties waiving such term or condition. Neither the waiver by any party
of any term or condition of this Agreement nor the failure on the part of any
party, in one or more instances, to enforce any of the provisions of this
Agreement or to exercise any right or privilege, shall be deemed or construed to
be a waiver of such term or condition for any similar instance in the future or
of any subsequent breach hereof. All rights, remedies, undertakings, obligations
and agreements contained in this Agreement shall be cumulative and none of them
shall be a limitation of any other remedy, right, undertaking, obligation or
agreement.

 

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19.4 Entire Agreements; Amendments.
This Agreement sets forth the entire agreement and understanding between the
parties as to the subject matter hereof and supersedes all agreements or
understandings, verbal or written, made between ATHERSYS and PFIZER before the
date hereof with respect to the subject matter hereof, including the
confidentiality agreement between the parties, dated [*]. All ATHERSYS
Confidential Information disclosed to PFIZER prior to the Effective Date will be
deemed to have been disclosed pursuant to this Agreement. None of the terms of
this Agreement shall be amended, supplemented or modified except in writing
signed by the parties.
19.5 Construction
Except where expressly stated otherwise in this Agreement, the following rules
of interpretation apply to this Agreement: (i) “include”, “includes” and
“including” are not limiting and mean include, includes and including, without
limitation; (ii) definitions contained in this Agreement are applicable to the
singular as well as the plural forms of such terms; (iii) references to an
agreement, statute or instrument mean such agreement, statute or instrument as
from time to time amended, modified or supplemented; (iv) references to a person
are also to its permitted successors and assigns; (v) references to an
“Article”, “Section”, “Exhibit” or “Schedule” refer to an Article or Section of,
or any Exhibit or Schedule to, this Agreement unless otherwise indicated;
(vi) the word “will” shall be construed to have the same meaning and effect as
the word “shall”; and (vii) the word “any” shall mean “any and all” unless
otherwise indicated by context.
19.6 Assignment.
Neither this Agreement nor any rights or obligations of either party to this
Agreement may be assigned or otherwise transferred by either party without the
consent of the other party; provided, however, either party may, without such
consent, assign or otherwise transfer this Agreement, in whole or in part:
(i) to any of its respective Affiliates, subject to Section 19.6(a) in the case
of ATHERSYS; provided that such assigning or transferring party shall remain
jointly and severally liable with such Affiliate in respect of all obligations
so assigned; or (ii) to a Third Party where a party or its Affiliate is
required, or makes a good faith determination based on advice of counsel, to
divest any of the Licensed Products in order to comply with Law or the order of
any Governmental Authority as a result of a merger or acquisition; or (iii) in
connection with a Change of Control of ABT and/or AI (subject to
Sections 12.1(e) and 16.1(c) thereafter).
(a) ATHERSYS and any Affiliate of ATHERSYS may sell, assign or otherwise
transfer Athersys Patent Rights and/or Athersys Technology applicable to
Licensed Products in the Field solely to any wholly-owned direct or indirect
subsidiary of AI that (x) is and continues to be at all times incorporated and
domiciled (including with respect to principal headquarters) in any state of the
United States of America and (y) prior to any such sale, assignment or transfer
to such person described in clause (x), has acknowledged and confirmed in
writing to PFIZER, all in a manner reasonably acceptable to PFIZER, that,
effective as of such sale, assignment or other transfer, such transferee shall
be bound by this Agreement as if it were a party to it as and to the identical
extent applicable to the transferor with respect to Athersys Patent Rights and
Athersys Technology.
(b) Any purported assignment in violation of this Section 19.6 shall be void.
Any permitted assignee shall assume all obligations of its assignor under this
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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19.7 Independent Contractor.
The relationship between ATHERSYS and PFIZER is that of independent contractors.
ATHERSYS and PFIZER are not joint venturers, partners, principal and agent,
employer and employee, and have no other relationship other than independent
contracting parties. The parties’ obligations and rights in connection with the
subject matter of this Agreement are solely and specifically as set forth in
this Agreement, and the parties acknowledge and agree that neither party owes
the other any fiduciary or similar duties or obligations by virtue of the
relationship created by Agreement. Without limiting the foregoing, the parties
also acknowledge and agree that if a court of competent jurisdiction or an
arbitrator should determine that, notwithstanding the terms of this Section
19.7, that such fiduciary or similar duties or obligations exist, the parties
hereby waive such duties and obligations and agree not to assert or rely upon
such duties or obligations in connection with any dispute arising out of or
relating to this Agreement.
19.8 Subcontracting.
ATHERSYS may subcontract any of its obligations under this Agreement, provided
that it furnishes the JSC 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’s use of a
subcontractor shall be referred to the JSC, and any corresponding JSC Dispute
shall be resolved in accordance with Section 4.7. In any subcontract agreement
with a Third Party, ATHERSYS shall ensure that (i) that Third Party
subcontractor is bound by obligations of confidentiality no less stringent than
those imposed on the parties under this Agreement, (ii) 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 the Research Program or the
Clinical Development Program, are appropriately documented and disclosed
promptly to ATHERSYS, (iii) all such inventions, copyrightable subject matter,
discoveries or materials directly related to the Licensed Products shall be
owned by ATHERSYS unless otherwise approved by the JSC, (iv) shall (w) grant to
ATHERSYS or its representative 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; and (z) require that the
subcontractor has no outstanding violations or citations that would or may
impair the services or deliverables to be provided to ATHERSYS by such
subcontractor.
19.9 Notices.
Each communication and document made or delivered by one party to another under
this Agreement shall be made in the English language. All notices, consents,
approvals, requests or other communications required hereunder given by one
party to the other hereunder shall be in writing and made by registered or
certified air mail, facsimile, express overnight courier or delivered personally
to the following addresses of the respective parties:

     
If to ATHERSYS:
  Athersys Inc.
3201 Carnegie Avenue
Cleveland, Ohio 44115
Attention: President
Facsimile: +1-216-361-9495

 

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      with a copy to:

  Thomas A Briggs
Jones Day
12265 El Camino Real, Suite 200
San Diego, CA 92130
Facsimile: +1 858-314-1200
If to Pfizer:
  Pfizer Global R&D Headquarters
50 Pequot Avenue
New London, CT 06320
Attn: Head of Research, PGRD

Copy to: General Counsel, Pharma Therapeutics (PhTx)
Pfizer Inc.
235 East 42nd Street
New York NY USA 10017
Facsimile [*]

Invoices should be sent to the attention of [*] (or the Finance Lead, Pfizer
Regenerative Medicine) at the following address:

[*] (or her designate)
Pfizer Ltd Finance
Ramsgate Road
Sandwich
Kent
CT13 9NJ
Great Britain
And electronically to:
[*]

Notices hereunder shall be deemed to be effective (a) upon receipt if personally
delivered, (b) on the tenth (10th) Business Day following the date of mailing if
sent by registered or certified air mail; (c) on the second (2nd) Business Day
following the date of transmission or delivery to the overnight courier if sent
by facsimile or overnight courier. A party may change its address listed above
by sending notice to the other party in accordance with this Section 19.9.
 

      *   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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19.10 Third Party Beneficiaries
None of the provisions of this Agreement shall be for the benefit of or
enforceable by any Third Party, including any creditor of either party. No Third
Party shall obtain any right under any provision of this Agreement or shall by
reason of any such provision make any claim in respect of any debt, liability or
obligation (or otherwise) against either party.
19.11 Binding Effect.
This Agreement shall be binding upon and inure to the benefit of the parties
hereto and their respective heirs, successors and permitted assigns.
19.12 Counterparts.
This Agreement may be executed in any two or more counterparts, each of which,
when executed, shall be deemed to be an original and all of which together shall
constitute one and the same document.
19.13 Headings.
Headings in this Agreement are included herein for ease of reference only and
shall have no legal effect. References to the parties, Sections, Schedules, and
Exhibits are to the parties, Sections, Schedules and Exhibits to and of this
Agreement unless otherwise specified.

 

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IN WITNESS WHEREOF the parties hereto have caused this Agreement to be executed
by their duly authorized officers upon the date set out below.

                              ATHERSYS       PFIZER    
 
                            ATHERSYS INC       PFIZER INC.    
 
                            By:   /s/ Gil Van Bokkelen       By:   /s/ Polly A.
Murphy                          
 
  Name:   Gil Van Bokkelen           Name:   Polly A. Murphy    
 
  Title:   Chairman & CEO           Title:   Vice President    
 
                      Worldwide Business Development    
 
                            ABT HOLDING COMPANY                    
 
                            By:   /s/ William O. Lehmann                        
                     
 
  Name:   William O. Lehmann                    
 
  Title:   President                    

 

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Schedule 1.8
ATHERSYS PATENT RIGHTS
[*]
 

      *   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 1.14

CLINICAL DEVELOPMENT PLAN(S)
[*]
 

      *   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 1.45

MATERIAL TRANSFER AGREEMENT FOR CONDUCT
OF THE RESEARCH PLAN
Whereas, PFIZER INC, a Delaware corporation, having an office at 235 East 42nd
Street, New York, New York 10017 (“Pfizer”), and ATHERSYS INC, a Ohio
corporation with offices located at 3201 Carnegie Avenue, Cleveland, Ohio 44115
(“AI”), ABT HOLDING COMPANY, a Delaware corporation and having a offices located
at 3201 Carnegie Avenue, Cleveland, Ohio 44115 (“ABT”), together referred to in
this Agreement as (“Athersys”) have entered into a COLLABORATION AND LICENSE
AGREEMENT as of December 18, 2009 (the “Agreement”); and
Whereas, Pfizer and Athersys have agreed, in accordance with the provisions of
the Agreement, including Section 2.9 thereto, to exchange and provide to one
another samples of biochemical, biological or synthetic chemical materials,
other than clinical materials, and any documents and information relating to the
same for the purposes of progressing the Research Plan (“Materials”).
Now, in consideration of the foregoing and the covenants and promises contained
in the Agreement, and in this Material Transfer Agreement (the “MTA”), the
parties agree to the following terms and conditions for the disclosure, control,
use and protection of the Materials:

1.   This MTA is effective of even date with the Agreement between the parties.

2.   If there is any conflict between the terms of this MTA and the Agreement,
the terms of the Agreement will dominate. Unless specifically defined otherwise
herein, any defined term used in this MTA will have the meaning defined within
the Agreement.

3.   Either Athersys or Pfizer (a “Provider”) may deliver or have delivered to
the other party (a “Recipient”) Materials.

4.   The Provider warrants to Recipient that Provider has the right to deliver
to Recipient the Materials. Provider hereby grants to Recipient and its
Affiliates a license in accordance with Section 7 of the Agreement to use the
Materials, in each case solely for the purpose of performing the Recipient’s
obligations under the Research Plan.

5.   Recipient accepts that Provider will have no responsibility for any injury
(including injury resulting in death, damage or loss related to the handling,
use, making, manufacturing, storage or disposal of the Materials. Recipient will
hold harmless, indemnify and defend the Provider, its Affiliates, licensees,
officers, directors, employees, consultants, contractors, sub-licensees and
agents from and against any and all liabilities, claims, demands, damages,
losses and expenses, including reasonable attorneys’ fees and witness fees and
costs, arising from or relating to the use, storage or disposal of the Materials
by, through or on behalf of Recipient except to the extent caused by the
negligence, recklessness or wilful misconduct of the Recipient.

 

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6.   Recipient will only allow those trained in handling similar materials in
their assigned job functions to handle Materials. Recipient assumes all
responsibilities and risks in connection with the handling, use, making,
manufacturing, storage or disposal of Materials, and Recipient shall comply with
all applicable Laws, codes of practice, directions, guidance, permits, licenses
and authorisations concerning health and safety, human tissue, clinical trials
and environmental procedures, protocols and systems in connection with such
activities.

7.   Recipient understands and accepts that Materials have not been approved for
human use and agrees that Materials will not be administered to humans in any
manner or form.

8.   MATERIALS ARE EXPERIMENTAL IN NATURE AND ARE PROVIDED “AS IS” WITHOUT
WARRANTY, EXPRESS OR IMPLIED, INCLUDING WITHOUT LIMITATION, WARRANTY OF
MERCHANTABILITY, FITNESS FOR PURPOSE AND WARRANTY OF NON-INFRINGEMENT OF ANY
PROPRIETARY RIGHT OF A THIRD PARTY. PROVIDED THAT NOTHING IN THIS SECTION 8
REMOVES, QUALIFIES OR ALTERS ANY WARRANTIES GIVEN IN THE AGREEMENT.

9.   Recipient will fully and promptly disclose any improvements and inventions
arising from the use of the Materials in accordance with the Agreement.
Inventions made from the Materials will be handled in accordance with the
Agreement.

10.   The results, and the rights and use of any intellectual property rights
and any ownership rights from use of results obtained with Materials will be
governed by the Agreement.

11.   The provision of any Materials will not alter any ownership or licensed
rights Provider may have obtained in or for the Materials or rights Provider has
obtained to control the Materials. Recipient undertakes that Materials will not
be sold, transferred or otherwise distributed to any third party or any employee
or agent of Recipient who is not under Recipient’s or its Affiliate’s direct
supervision or subject to a written contract with Recipient or its Affiliate.

12.   Recipient undertakes that it will not attempt to reverse engineer,
characterize, or ascertain the chemical structure, genomic structure or other
make-up of Materials, and agrees not to make derivatives of, or perform
experiments to determine the identity of, any of Materials except as agreed to
by the parties under the Research Plan.

13.   Within thirty (30) days of written notice by Provider, Recipient will as
directed by Provider (a) return to Provider any remaining portion of Material or
(b) destroy and properly dispose of any remaining portion of Material in
accordance with all applicable laws, regulations, codes of practice and
guidelines and certify in writing that it has done so.

14.   If any part of this MTA is found by a court to be invalid or
unenforceable, it will be deemed modified to the extent necessary to allow
enforcement, and all other portions of this MTA not so modified will remain in
full force and effect.

 

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15.   This MTA shall b governed by and construed in accordance with the
substantive laws of the State of New York, without regard to conflicts of law
rules.

16.   This MTA may be executed in any two or more counterparts, each of which,
when executed, shall be deemed to be an original and all of which together shall
constitute one and the same document.

17.   In the event of any controversy, claim or counterclaim arising out of or
relating to this MTA, the parties shall first attempt to resolve such
controversy or claim through good faith negotiations for a period of not less
than thirty (30) days following notification of such controversy or claim to the
other party. If such controversy or claim cannot be resolved by means of such
negotiations during such period, then such controversy or claim shall be
resolved by the United States District Court for the Southern District of New
York or a local court sitting in New York, New York (collectively, the
“Courts”). Each party (a) irrevocably submits to the exclusive jurisdiction in
the Courts for purposes of any action, suit or other proceeding relating to or
arising out of this Agreement and (b) agrees not to raise any objection at any
time to the laying or maintaining of the venue of any such action, suit or
proceeding in any of the Courts, irrevocably waives any claim that such action,
suit or other proceeding has been brought in an inconvenient forum and further
irrevocably waives the right to object, with respect to such action, suit or
other proceeding, that such Court does not have any jurisdiction over such
party. Athersys hereby irrevocably designates, appoints and empowers its
designated agent for service of process as registered with the State of
Delaware, as its true and lawful agent and attorney-in-fact in its name, place
and stead to receive and accept on its behalf service of process in any action,
suit or proceeding in the Courts with respect to any matters as to which it has
submitted to jurisdiction as set forth in the immediately preceding sentence.

IN WITNESS WHEREOF, and intending to be bound, the parties have caused this
Agreement to be executed personally or by their duly authorized representatives,
to be effective as of the Effective Date:

                      Pfizer Inc.:       ABT Holding Company    
 
                   
By:
          By:        
 
 
 
         
 
   
 
  Name:           Name:    
 
  Title:           Title:    
 
                   
 
          ATHERSYS INC.    
 
                   
 
          By:        
 
             
 
   
 
              Name:    
 
              Title:    

 

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Schedule 1.70

RESEARCH PLAN(S)
[*]
 

      *   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 1.82

THIRD PARTY LICENSES APPLICABLE TO ENTIRE 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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Schedule 1.83

ATHERSYS PATENT RIGHTS FOR THE PURPOSES OF THE ROAYLTY TERM
[*]
 

      *   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 2.7
MULTISTEM CELLS REPOSITORY AND RELEASE CONDITIONS
1. CELL REPOSITORY OBLIGATIONS
1.1 ATHERSYS shall provide or procure that its Third Party manufacturer shall
provide, to PFIZER or its designated Third Party manufacturer and keep up to
date a complete manufacturing dossier, including all specifications, SOPs,
testing reports, and other information and materials which PFIZER would require
to manufacture Clinical Development Candidates and Licensed Products in the
Field to the required manufacturing standards.
1.2 PFIZER shall or procure that its Affiliates or Third Party contractor shall
maintain the MultiStem cells transferred to it pursuant to Section 2.7 and all
related information and documentation, including the manufacturing dossier
referred to in paragraph 1.1 above, in accordance with all specifications
notified to it by ATHERSYS and in a secure and suitably controlled environment,
using security measures at least comparable to those PFIZER uses for its own
similar highly confidential biological and pharmaceutical materials and
otherwise reasonably under the circumstances.
1.3 In the event that the MultiStem cell repository held by or on behalf of
PFIZER is lost, damaged or destroyed, ATHERSYS shall provide promptly to PFIZER,
at PFIZER’s cost, replacement MultiStem cells of the type described in
Section 2.7 of this Agreement.
1.4 ATHERSYS shall keep up to date the MultiStem Regulatory File provided to
PFIZER pursuant to Section 2.7 of this Agreement.
2. RELEASE CONDITIONS
2.1 [*]
2.2 Following the occurrence of a Release Condition:
[*]; and
[*]; and
 

      *   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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2.2.3 ATHERSYS shall, and shall procure that its Third Party manufacturer shall,
co-operate with and assist, at PFIZER’s expense, PFIZER (pursuant to which
PFIZER shall be entitled to contact such Third Party manufacturer directly and
share Athersys Confidential Information with such Third Party) in exercising its
rights to manufacture or have made the applicable Clinical Development Candidate
or Licensed Product to ensure a smooth transition of the manufacture of such
Clinical Development Candidate or Licensed Product.
2.3 If at any time after PFIZER has exercised its right to manufacture or have
made in accordance with this Schedule, [*].
 

      *   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 3.2 (c)

CO-DEVELOPMENT COSTS AND PROFITS SHARING
1. “Clinical Development Costs” means, with respect to any Pfizer Quarter, the
aggregate of all costs incurred in performing the activities under a Clinical
Development Plan (including clinical Manufacturing Costs) for a Licensed
Product, excluding corporate overhead.
(a) out-of-pocket costs and expenses incurred internally or to a Third Party in
connection with all development activities performed in accordance with a
Clinical Development Plan, including personnel costs, study costs, clinical
supply costs, costs in connection with regulatory submissions, and costs for
process development of the manufacturing process for the Licensed Product;
(b) Manufacturing Costs of products for clinical trials;
(c) such other out-of-pocket costs and expenses as the parties may agree upon in
writing from time to time; and
(d) a reasonable allocation of indirect costs associated with such direct costs
not to exceed [*] per cent ([*%]) thereof.
2. In the event that ATHERSYS elects to co-develop a Licensed Product pursuant
to Section 3.2, Clinical Development Costs will be split [*%] for ATHERSYS and
[*%] for PFIZER according to the following procedure:
(a) Within fifteen (15) days following the end of each PFIZER Quarter, ATHERSYS
shall submit to PFIZER a written report setting forth in reasonable detail all
Clinical Development Costs incurred by ATHERSYS, if any, for the immediately
preceding Pfizer Quarter.
(b) Within thirty (30) days following the end of each PFIZER Quarter, PFIZER
shall submit to ATHERSYS a written report setting forth in reasonable detail its
estimate of all Clinical Development Costs incurred by PFIZER, if any, for the
immediately preceding Pfizer Quarter.
(c) Within forty five (45) days following the end of each PFIZER Quarter, PFIZER
shall submit to ATHERSYS a written report setting forth the final calculation of
the total Clinical Development Costs for that Pfizer Quarter and the net amount
to be paid by ATHERSYS and PFIZER.
The net amount payable by a party shall be paid by PFIZER or ATHERSYS, as the
case may be, to the other party within fifteen (15) Business Days after receipt
of such written report, without regard to any dispute as to the amount to be
paid thereunder.
 

      *   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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3. If clinical development of the Licensed Product for the Field is successful,
then ATHERSYS and PFIZER shall split the Manufacturing and Commercialization
Costs and Profits from commercialization of the Licensed Product, [*%] for
Athersys and [*%] for PFIZER as follows:
(a) “Profits” shall mean an amount calculated as follows:
Profits = Net Sales minus (Clinical Development Costs plus Manufacturing Costs
plus Commercialization Costs).
(b) “Commercialization Costs” means, with respect to the Licensed Product for
the Field, the following costs to the extent such costs are actually incurred,
accounted for in accordance with U.S. GAAP as consistently applied by the entity
incurring such costs, attributable to the marketing or sales of Licensed
Product:
(i) direct costs that are exclusively incurred for (as opposed to allocated to)
obtaining and maintaining Regulatory Approvals, marketing, promotion, sales and
distribution of Licensed Product, including advertising and promotion expenses,
such as for example, promotional material and goods, print production/reprints,
advertising agency fees, costs of key opinion leaders, advertising space, direct
mail, trade show expenses and free samples, conduct of Phase IV clinical
studies, conduct of primary and secondary market research, sales commissions and
salaries, and distribution costs;
(ii) costs relating to the packaging, labelling and release of the Licensed
Product (to the extent not included in Manufacturing Costs), warehouse,
distribution and delivery of the Licensed Product and conduct of recalls of the
Licensed Product;
(iii) the amounts payable (if any) pursuant to Section 11.6;
(iv) any litigation costs incurred in respect of Third Party infringement of the
Licensed Product in the Field or any other legal or administrative action in
connection with the Field involving an Athersys Patent Right, Athersys
Technology or Pfizer Combination Product IPR or Trademark;
(v) such other out-of-pocket costs and expenses as the parties may agree upon in
writing from time to time; and
(vi) a reasonable allocation of indirect costs associated with the foregoing
direct costs, not to exceed [*] per cent ([*%]) of such direct costs.
(c) The parties’ respective Clinical Development Costs, Manufacturing and
Commercialization Costs will be covered with proceeds from Net Sales. Profits
from Net Sales shall be shared by the parties, based on the [*:*] Athersys:
Pfizer split, adjusted for disproportionate cost sharing, as illustrated with
the following conceptual example, which assumes that all Clinical Development
Costs have been fully recovered by that Pfizer 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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Actual Net Sales in a Pfizer Quarter 100

                  Athersys   Pfizer   Total
Actual Costs
           
Manufacturing
  [*]   [*]   [*]
Commercialization
  [*]   [*]   [*]
Total Costs
  [*]   [*]   [*]
 
           
Allocation %
  [*%]   [*%]   [*%]
Allocated Costs
  [*]   [*]   [*]
 
           
Allocated Profit Share
  [*]   [*]   [*]
Adjustment to Profit Share
  [*]   [*]   [*]
Actual Profit Share
  [*]   [*]   [*]

(d) Within fifteen (15) days following the end of each Pfizer Quarter, ATHERSYS
shall submit to PFIZER a written report setting forth in reasonable detail all
Clinical Development Costs, Manufacturing Costs and Commercialization Costs
incurred by ATHERSYS, if any, for the immediately preceding Pfizer Quarter.
(e) Within thirty (30) days following the end of each Pfizer Quarter, PFIZER
shall submit to ATHERSYS a written report setting forth in reasonable detail its
estimate of ATHERSYS’ share of Profits (if any), separately for each Licensed
Product that is the subject of Profit sharing hereunder, the following
information on a country by country basis for the immediately preceding Pfizer
Quarter:
(i) Gross Sales;
(ii) Net Sales;
(iii) Clinical Development Costs;
(iv) Manufacturing Costs;
(v) Commercialization Costs;
(vi) Profits;
(vii) The share of Profits earned by ATHERSYS for such quarter (including
applicable adjustments for cost sharing) provided that if Profits are negative
for such quarter, then ATHERSYS’ share of such negative amount shall be accrued
and applied by PFIZER as an offset against future ATHERSYS Profits for a Pfizer
Quarter in which Profits are positive until such negative amount has been fully
recovered;
(viii) Any offset being applied due to one or more previous Pfizer Quarters with
negative Profits; and
 

      *   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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(ix) The amount being paid to ATHERSYS or, if ATHERSYS’ running balance of
Profits remains negative after the foregoing calculations, the current value of
such negative amount.
(f) Within forty five (45) days following the end of each Pfizer Quarter, PFIZER
shall submit to ATHERSYS a written report setting forth the final calculation of
the amounts in paragraph 3(e) of this Schedule 3.2(c) and the Profits or
negative amounts to be paid or allocated (as applicable) to ATHERSYS. The net
amount payable to ATHERSYS shall be paid by PFIZER within fifteen (15) Business
Days after delivery of such written report, without regard to any dispute as to
the amount to be paid thereunder.

 

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Schedule 5.5

JSC RESPONSIBILITIES
In addition to its general responsibility to oversee and coordinate the
activities of the parties in connection with the Research Plans, Clinical
Development Plans and this Agreement, the JSC shall in particular:

(a)   monitor the progress made by the parties in connection with the Research
Program(s) in a manner consistent with the corresponding Research Plans and this
Agreement, including reports prepared for the committee, the activities and
resource and personnel commitments of the parties;

(b)   seeking management approval of each party for any subcontracts or
sublicenses to Third Parties for the conduct of any material activities under a
Research Plan or Clinical Development Plan and monitoring the performance of
such Third Parties, including monitoring compliance, reviewing reports prepared
by or for a party, evaluating and reporting to management any intellectual
property resulting from such Third Party agreements and ensuring that the
appropriate party obtains rights to any such intellectual property pursuant to
Section 11;

(c)   monitoring and seeking management approval for the grant of material
transfer agreements between ATHERSYS and Third Parties in respect of the conduct
of any research in the Field;

(d)   designate Clinical Development Candidate(s) in accordance with criteria
determined by the JSC;

(e)   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 Agreement;

(f)   review, modify as it deems appropriate, and recommend, as necessary from
time-to-time, the Clinical Development Plan(s);

(g)   review, and recommended for both parties’ management approval,
publications emanating from the Research Plan activities;

(h)   oversee and, whenever practicable, expedite the implementation of each
Research Plan and each Clinical Development Plan,;

(i)   create and update a risk analysis plan (where appropriate);

(j)   designate a head of the Manufacturing Committee;

  (1)   assure the manufacturing dossier referred to in Schedule 2.7 is kept up
to date and in particular the availability of appropriate SOPs and knowhow to
allow transfer of manufacturing, if required, to maintain Pfizer’s Commercially
Reasonable diligence in maintaining clinical or product supply;

 

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  (2)   assure review and update requisite master cell bank(s) and feeder cell
lines needed to allow maintenance of manufacturing and transfer of
manufacturing, if needed;

  (3)   monitor third party supply arrangements and as appropriate, observe
third party manufacturing and monitoring;

(k)   clarify or adjust the tasks of the respective parties under the Research
Plans and Clinical Development Plans, in a manner consistent with this
Agreement;

(l)   ensure adequate resources are assigned by each party for research
planning, project management and personnel and other resource management related
to the Research and Clinical Development Plans in a manner consistent with this
Agreement;

(m)   create, review, modify as it deems appropriate, and recommend an annual
budget corresponding to each Clinical Development Plan, in a manner consistent
with this Agreement;

(n)   reasonably determine or adjust milestones and progress related to the
Clinical Development Plans;

(o)   recommend whether or not, and to what extent, research or development
studies, beyond those identified in an existing Research Plan or Clinical
Development Plan, should be conducted;

(p)   recommend whether a Clinical Development Candidate should either be
advanced to the next phase of development or commercialization, as applicable,
or be terminated by the parties;

(q)   seek management approval in respect of all public announcements;

(r)   evaluation, review and comment on draft publications, abstracts,
manuscripts and presentations relevant to the Field; and

(s)   such other responsibilities as are expressly set forth elsewhere in the
Agreement or as are assigned to it as mutually agreed upon by the parties.

 

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Schedule 7.5

LIST OF STAND-BY LICENCES
1. Stand-By License Agreement, by and among Regents of the University of
Minnesota, ABT Holding Company, and Pfizer Inc., dated as of December 18, 2009.

 

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Schedule 12.3

FORM OF PRESS RELEASE
Athersys Enters into Global Agreement with Pfizer to Develop and Market
MultiStem® for the Treatment of Inflammatory Bowel Disease
—Athersys to Host Conference Call Today at 11:00 AM EST to Discuss Stem Cell
Partnership—
CLEVELAND OH December 21, 2009 (BUSINESS WIRE) —Athersys, Inc. (NASDAQ: ATHX)
announced today that it has entered into an agreement with Pfizer Inc. (PFE) to
develop and commercialize MultiStem® for the treatment of Inflammatory Bowel
Disease (“IBD”). MultiStem is an investigational stem cell therapy currently in
development by Athersys for several other conditions, including acute myocardial
infarction, bone marrow transplant support, and ischemic stroke.
Under the terms of the agreement, Athersys will receive an up-front cash payment
of $6 million from Pfizer, as well as research funding and support during the
initial phase of the collaboration. In addition, Athersys is also eligible to
receive milestone payments of up to $105 million upon the successful achievement
of certain development, regulatory and commercial milestones. Pfizer will have
responsibility for development, regulatory and commercialization and will pay
Athersys tiered royalties on worldwide commercial sales of MultiStem IBD
products. Alternatively, in lieu of royalties and certain commercialization
milestones, Athersys may elect to co-develop with Pfizer and the parties will
share development and commercialization expenses and profits/losses on an agreed
basis beginning at phase III clinical development.
Inflammatory Bowel Disease is a group of inflammatory and autoimmune conditions
that affect the colon and small intestine, typically resulting in severe
abdominal pain, weight loss, vomiting and diarrhea. The most common forms of the
disease include Ulcerative Colitis and Crohn’s disease, which are estimated to
affect more than two million people in the U.S., major European countries and
Japan. Chronic IBD can be a severely debilitating condition, and advanced cases
may require surgery to remove the affected region of the bowel, and may also
require temporary or permanent colostomy or iliostomy. In many cases, surgery
does not achieve a permanent cure, and patients suffer a return of the disease.
“Pfizer is committed to the development of new medicines that have the potential
to fundamentally improve the quality of clinical care in areas of need. We are
delighted to work with Athersys to develop MultiStem for inflammatory bowel
disease,” said Dr. Ruth McKernan, Head of Pfizer Regenerative Medicine. “This is
an innovative new area and our collaboration with Athersys represents a
cornerstone of Pfizer’s stem cell and regenerative medicine strategy.”

 

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“We have been systematically evaluating potential partnering opportunities in
multiple areas, and we believe that Pfizer represents the ideal partner for this
program,” said Dr. Gil Van Bokkelen, Chairman and Chief Executive Officer at
Athersys. “Their longstanding global leadership in development and
commercialization of new medicines, focus on best-in-class therapies, and their
growing commitment to regenerative medicine provide a great foundation for
working together.”
About MultiStem
MultiStem is a patented and proprietary cell therapy product consisting of a
special class of stem cells that are obtained from the bone marrow of healthy,
consenting adult donors, and which have the demonstrated ability to produce a
range of factors, as well as form multiple cell types. MultiStem appears to
promote tissue repair and healing in multiple ways, such as through the
production of multiple therapeutic factors produced in response to signals of
inflammation and tissue damage. Athersys believes that MultiStem represents a
unique “off-the-shelf” stem cell product based on the apparent ability to
deliver multiple mechanisms of therapeutic benefit, administration of the
product without tissue matching or immunosuppression, and its capacity for large
scale production. Athersys maintain rights to develop and commercialize
MultiStem for areas outside of the Pfizer collaboration. In 2008 Athersys was
awarded the Frost & Sullivan North American Product Innovation of the Year Award
for MultiStem, which cited the product as having best-in-class potential among
stem cell and regenerative medicine technologies.
Conference Call Information
Athersys will hold a conference call today at 11:00 a.m. Eastern Time (8:00 a.m.
Pacific Time) to discuss this announcement. To participate in the conference
call, please call [Insert Dial-up information]. In addition, this call is being
Webcast and can be accessed at Athersys’s website at www.Athersys.com.
About Athersys, Inc.
Athersys is a clinical stage biopharmaceutical company engaged in the discovery
and development of therapeutic product candidates designed to extend and enhance
the quality of human life. The company is developing MultiStem, a patented,
adult-derived “off-the-shelf” stem cell product platform for multiple disease
indications, including damage caused by myocardial infarction, bone marrow
transplantation and oncology treatment support, ischemic stroke and other
indications. The company is also developing a portfolio of other therapeutic
programs, including orally active pharmaceutical product candidates for the
treatment of metabolic and central nervous system disorders, utilizing
proprietary technologies, including Random Activation of Gene Expression
(RAGE®).

 

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Forward Looking Statements
This press release contains forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995 that involve risks and
uncertainties. We have attempted to identify forward-looking statements by using
such words as “anticipates,” “believes,” “can,” “continue,” “could,”
“estimates,” “expects,” “intends,” “may,” “plans,” “potential,” “should,”
“will,” or other similar expressions. These forward-looking statements are only
predictions and are largely based on our current expectations. A number of known
and unknown risks, uncertainties, and other factors could affect the accuracy of
these statements. Some of the more significant known risks that we face are the
risks and uncertainties inherent in the process of discovering, developing, and
commercializing products that are safe and effective for use as human
therapeutics, including the uncertainty regarding market acceptance of our
product candidates and our ability to generate revenues, including MultiStem for
the treatment of Inflammatory Bowel Disease or other indications. These risks
may cause our actual results, levels of activity, performance, or achievements
to differ materially from any future results, levels of activity, performance,
or achievements expressed or implied by these forward-looking statements. You
should not place undue reliance on forward-looking statements contained in this
press release, and we undertake no obligation to publicly update forward-looking
statements, whether as a result of new information, future events or otherwise.

 

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Schedule 12.4

REDACTED AGREEMENT
The Redacted Agreement approved by the parties in accordance with
this Agreement shall be attached hereto

 

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Schedule 14.2
[*]
 

      *   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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