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Exhibit 10.2    
    

Translation from Finnish  

	TEKES	 	Dno 1865/31/04
	 	 	Subsection
	 	 	32.20.40.1/04
	 	 	32.20.83.2.1/04

DECISION
ABOUT FINANCING A PRODUCT DEVELOPMENT PROJECT NO. 976/04

        Technology
Development Centre TEKES has on November 16, 2004 made the following financing decision: 

1
§ Object of the financing decision 

        The
recipient company of funding is LAB Pharma Oy (Business ID 1629116-4). 

        Title
of the project relevant to the financing decision is Research and development of inhalation formulations. The project plan is set
forth in appendix 1. 

2
§ Responsible project manager 

        Responsible
project manager Taneli Jouhikainen shall report to Tekes about the project's progress as stipulated in 6 §. 

3
§ Project duration 

        Project
duration is from June 30, 2004 to December 31, 2005. 

4
§ Portion to be financed by Tekes and its grounds 

        The
development work shall be financed by Tekes with a product development grant of not more than 883.845 EUR (eight hundred eighty-three thousand eight hundred and
forty-five) and with a capital type product development loan of not more than 2.062.315 EUR (two million sixty-two thousand three hundred and fifteen). However, the grant shall
not be more than 15% and the capital type product development loan not more than 35% of the acceptable total costs. 

        The
total cost estimate approved for the project is 5.892.330 EUR (five million eight hundred ninety-two thousand three hundred and thirty). The cost estimate is
presented in appendix 2. 

        Grounds:    The project is technologically challenging and represents a high international standard in terms of both project
aspects. The project involves creating novel know-how with promising business outlooks because of new forms of administering inhalable medicaments. Financing by Tekes is vitally important
for carrying out the project and speeds up a practical application of the project's results. The financing contributes to the advancement of expertise in inhalation technology and to the continued
presence in Finland of inhalation-technology related production at par with standards of the Supervisory Medical Authority. The financing provides a functional stimulus to a cluster of pharmaceutical
innovators concentrated in Turku region. The project's results encourage
generation of health-care and social welfare services. Due to the predominantly market-oriented character of the project, the financing is presented as a loan-weighted
combination funding. In order to strengthen the company's balance sheet, the loan is given as a capital loan. 

        Legal provisions:    Decree of the Council of State regarding support for research and development activities (435/2004)
12 § and State Grants Act (688/2001) 37 §. 

1

 

5
§ Terms of financing 

        The
loan is granted without demanding collateral. The loan carries an interest of one percentage point less than prime rate, yet not lower than three percent. 

        The
loan period is 8 (eight) years, the first 5 (five) of which are nonamortizing. The loan shall be paid back in annual instalments. 

        More
detailed terms of the capital type product development loan are presented in a promissory note, which shall be submitted to the company by State Treasury. 

6
§ Project reporting 

        The
company shall submit reports to Tekes according to the following schedule: 

	Reporting times
 
	 	Reporting and accounting period

	1st progress report not later than 28.02.2005	 	30.06.2004-31.12.2004
	2nd progress report not later than 31.05.2005	 	01.01.2005-31.03.2005
	3rd progress report not later than 31.08.2005	 	01.04.2005-30.06.2005
	4th progress report not later than 30.11.2005	 	01.07.2005-30.09.2005
	final report not later than 02.05.2006	 	01.10.2005-31.12.2005

        The
right to receive payments of the granted funding shall expire in the event that the project reporting fails to comply with the above schedule (State Grants Act 688/2001; 29
§). 

        The
progress and final reports shall be supplemented with the following documents: 

	1)
	Concept
report (appendix 3, General terms, item 6.1)

	2)
	Cost
accounting form (appendix 3, General terms, item 6.2). 

        The
grant and the loan shall be paid afterwards as the reports have been accepted. However, the first loan instalment can be paid in advance. 

        The
company shall keep separate project books regarding the costs. The company shall return to Tekes a project bookkeeping form enclosed with the covering letter (appendix 3,
General terms, item 6.2). 

        At
the closing of accounts, the auditor's report as set forth on page 4 of the cost accounting form must be submitted by a chartered auditor, regarding costs of the project over
the entire duration of the project. 

7
§ Promissory note and withdrawal of the first loan instalment 

        The
promissory note shall be submitted by State Treasury to the company for signing as soon as the acceptance form of decision terms has been signed and returned to Tekes. 

        After
the promissory note has been signed, State Treasury can pay the company in advance, as a first loan instalment, the amount of 618.600 EUR (six hundred eighteen thousand and six
hundred). 

8
§ General terms of financing 

        This
financing decision is subject to the general terms for financing technological research and development work, appendix 3. 

9
§ Special terms of financing 

        The project is part of the LÄÄKE2000 Biomedicine, medication development and pharmaceutical development technology program. In
addition to this financing decision, the project is subject to the  

2

 

 general terms enclosed as appendix 3 and to the special terms set forth in the general terms' appendix 3 G.

10
§ Appeal 

        This
decision can be appealed to Tekes for rectification. Instructions for claiming rectification are enclosed. 

	Helsinki, December 16, 2004	 	 
	

Signature	
 	

Signature
	

Hannu Järvinen

Director	
 	

Katriina Kippo

Technology expert

Appendix 1.
Project plan

Appendix 2. Project cost estimate

Appendix 3. General terms 

3

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Exhibit 10.3    
    

Translation from Finnish  

	TEKES	 	Dno 1709/31/05
	 	 	Subsection
	 	 	32.20.40.1/05
	 	 	32.20.83.1.1/05

DECISION
ABOUT FINANCING A PRODUCT DEVELOPMENT PROJECT NO. 810/05

        Technology
Development Centre TEKES has on October 10, 2005 made the following financing decision: 

1
§ Object of the financing decision 

        The
recipient company of funding is LAB Pharma Oy (Business ID 1629116-4). 

        Title
of the project relevant to the financing decision is Dual action asthma treatments with TAIFUN DPI. The project plan is set forth in  appendix 1.

2
§ Responsible project manager 

        Responsible
project manager Taneli Jouhikainen shall report to Tekes about the project's progress as stipulated in 6 §. 

3
§ Project duration 

        Project
duration is from June 22, 2005 to December 31, 2006. 

4
§ Portion to be financed by Tekes and its grounds 

        The
development work shall be financed by Tekes with a product development grant of not more than 466.000 EUR (four hundred sixty-six thousand) and with a product development
loan of not more than 1.088.000 EUR (one million eighty-eight thousand). However, the grant shall not be more than 15% and the product development loan not more than 35% of the acceptable total
costs. 

        The
total cost estimate approved for the project is 3.109.610 EUR (three million one hundred nine thousand six hundred and ten)). The cost estimate is presented in
appendix 2. 

        Grounds:    Financing by Tekes is vitally important for carrying out the project and strengthens the project resources in a
manner apt to enhance business expectations. The project encourages the progress of nationally important key technologies, the revival and internationalization of LAB Pharma through collaboration. In
addition, financing by Tekes increases the portion of work performed in Finland within the company's international network. Due to the challenging nature and domestic networking, as well as the
predominantly market-oriented character of the project, the financing is presented as a loan-weighted combination funding. In order to strengthen the company's balance sheet, the loan is
given as a capital loan. 

        Legal provisions:    Decree of the Council of State regarding support for research and development activities (435/2004) 12
§ and State Grants Act (688/2001) 37 §. 

5
§ Terms of financing 

        The
loan is granted without demanding collateral. The loan carries an interest of three percentage points less than prime rate, yet not lower than one percent. 

        The
loan period is 8 (eight) years, the first 5 (five) of which are nonamortizing. The loan shall be paid back in annual instalments. 

1

 

        More
detailed terms of the product development loan are presented in a promissory note, which shall be submitted to the company by State Treasury. 

6
§ Project reporting 

        The
company shall submit reports to Tekes according to the following schedule: 

	Reporting times
 
	 	Reporting and accounting period

	1st progress report not later than 28.02.2006	 	22.06.2005-31.12.2005
	2nd progress report not later than 31.05.2006	 	01.01.2006-31.03.2006
	3rd progress report not later than 01.07.2006	 	01.04.2006-30.04.2005
	4th progress report not later than 30.11.2006	 	01.05.2006-30.09.2006
	final report not later than 02.05.2007	 	01.10.2006-31.12.2006

        The
right to receive payments of the granted funding shall expire in the event that the project reporting fails to comply with the above schedule (State Grants Act 688/2001; 29
§). 

        The
progress and final reports shall be supplemented with the following documents: 

	1)
	Concept
report (appendix 3, General terms, item 6.1)

	2)
	Cost
accounting form (appendix 3, General terms, item 6.2). 

        The
grant and the loan shall be paid afterwards as the reports have been accepted. However, the first loan instalment can be paid in advance. 

        The
company shall keep separate project books regarding the costs. The company shall return to Tekes a project bookkeeping form enclosed with the covering letter (appendix 3,
General terms, item 6.2). 

        At
the closing of accounts, the auditor's report as set forth on page 4 of the cost accounting form must be submitted by a chartered auditor, regarding costs of the project over
the entire duration of the project. 

7
§ Promissory note and withdrawal of the first loan instalment 

        The
promissory note shall be submitted by State Treasury to the company for signing as soon as the acceptance form of decision terms has been signed and returned to Tekes. 

        After
the promissory note has been signed, State Treasury can pay the company in advance, as a first loan instalment, the amount of 326.500 EUR (three hundred twenty-six
thousand and five hundred). 

8
§ General terms of financing 

        This
financing decision is subject to the general terms for financing technological research and development work, appendix 3. 

9
§ Special terms of financing 

        The project is part of the LÄÄKE2000 Biomedicine, medication development and pharmaceutical development technology program. In
addition to this financing decision, the project is subject to the general terms enclosed as appendix 3 and to the special terms set forth in the general terms'
appendix 3 G.

        This
decision has been made on the premise that the following conditions be fulfilled during the project: 

	1)
	Collaboration
with small and mid-size (sm) businesses, universities or other public research institutions is implemented to the extent recorded in the project plan. If the
predominant 

2

 

form
of collaboration consists of subcontracting, not less than 10% of the acceptable project costs must be constituted by deliveries subcontracted from sm businesses and/or from public research
organizations. 

	2)
	The
project is implemented as part of Tekes' technology program mentioned in this financing decision and in compliance with its terms.

	3)
	Collaboration
with a foreign partner is implemented at least to the extent recorded in the project plan.

	4)
	The
research aspects of the project are implemented at least to the planned extent. 

10
§ Appeal 

        This
decision can be appealed to Tekes for rectification. Instructions for claiming rectification are enclosed. 

	Helsinki, October 18, 2005	 	 
	

Signature	
 	

Signature
	Hannu Järvinen

Director	 	Katriina Kippo

Technology expert

Appendix
1. Project plan

Appendix 2. Project cost estimate

Appendix 3. General terms 

3

APPENDIX 2 

LAB
Pharma Oy 

FINANCING
DECISION NO. 810/05
 Dual action asthma treatments with TAIFUN DPI  

COST ESTIMATE 

	Costs
 
	 	EUR

	1. Monetary wages for real working hours	 	427.500
	2. Social securities 47% (wages)	 	200.925
	3. Overheads 132% (wages+indirect employee costs)	 	829.520
	4. Traveling	 	100.000
	5. Materials and supplies	 	250.000
	6. Equipment purchases	 	349.000
	7. Equipment write-offs/leases	 	26.665
	8. Services purchased from sm businesses	 	436.000
	9. Services purchased from research institutions	 	456.000
	10. Services purchased from within the group or from interested businesses	 	0
	11. Services purchased from other businesses or organizations	 	34.000
	

TOTAL COSTS	
 	

3.109.610

mle

	Financial statement: Combination therapies	LAB Pharma Oy
	 	September 16, 2005

CGRP

	Year
 
	 	2005
	 	2006
	 	Total
	 	%

	Monetary wages	 	24.500	 	84.000	 	108.500	 	11,1
	Social securities	 	11.515	 	39.480	 	50.995	 	5,2
	Overheads	 	50.425	 	172.872	 	223.293	 	22,8
	Traveling	 	25.000	 	25.000	 	50.000	 	5,1
	Materials and supplies	 	50.000	 	10.000	 	60.000	 	6,1
	Equipment purchases	 	0	 	0	 	0	 	0,0
	Equipment write-offs/leases	 	0	 	0	 	0	 	0,0
	Services purchased	 	 	 	 	 	 	 	0,0
	From sm businesses	 	160.000	 	216.000	 	376.000	 	38,5
	From research institutions	 	25.000	 	50.000	 	75.000	 	7,7
	From in-group/interested businesses	 	0	 	0	 	0	 	0,0
	From other organizations	 	14.000	 	20.000	 	34.000	 	3,5
	 	 	
	 	
	 	
	 	

	Total	 	360.436	 	617.352	 	977.788	 	100,0
	 	 	
	 	
	 	
	 	

Combination
(EUR) 

	Year
 
	 	2005
	 	2006
	 	Total
	 	%

	Monetary wages	 	103.000	 	216.000	 	319.000	 	14,6
	Social securities	 	48.410	 	101.520	 	149.930	 	6,9
	Overheads	 	211.974	 	444.528	 	656.502	 	30,1
	Traveling	 	10.000	 	40.000	 	50.000	 	2,3
	Materials and supplies	 	40.000	 	150.000	 	190.000	 	8,7
	Equipment purchases	 	10.000	 	339.000	 	349.000	 	16,0
	Equipment write-offs/leases	 	6.667	 	20.000	 	26.667	 	1,2
	Services purchased	 	 	 	 	 	 	 	0,0
	From sm businesses	 	40.000	 	20.000	 	60.000	 	2,7
	From research institutions	 	31.000	 	350.000	 	381.000	 	17,5
	From in-group/interested businesses	 	0	 	0	 	0	 	0,0
	From other organizations	 	0	 	0	 	0	 	0,0
	 	 	
	 	
	 	
	 	

	Total	 	501.051	 	1.631.048	 	2.182.099	 	100,0
	 	 	
	 	
	 	
	 	

TOTAL

	Year
 
	 	2005
	 	2006
	 	Total
	 	%

	Monetary wages	 	127.500	 	300.000	 	427.500	 	13,5
	Social security costs	 	59.925	 	141.000	 	200.925	 	6,4
	Overheads	 	262.395	 	617.400	 	879.795	 	27,8
	Traveling	 	35.000	 	65.000	 	100.000	 	3,2
	Materials and supplies	 	90.000	 	160.000	 	250.000	 	7,9
	Equipment purchases	 	10.000	 	339.000	 	349.000	 	11,0
	Equipment write-offs/leases	 	6.667	 	20.000	 	26.667	 	0,8
	Services purchased	 	0	 	0	 	 	 	0,0
	From sm businesses	 	200.000	 	236.000	 	436.000	 	13,8
	From research institutions	 	56.000	 	400.000	 	456.000	 	14,4
	From in-group/interested businesses	 	0	 	0	 	0	 	0,0
	From other organizations	 	14.000	 	20.000	 	34.000	 	1,1
	 	 	
	 	
	 	
	 	

	Total	 	861.487	 	2.298.400	 	3.159.887	 	100,0
	 	 	
	 	
	 	
	 	

	TEKES support %
 
	 	Grant
	 	Loan
	 	 

	 	 	25	%	25	%	 
	TEKES support t EUROS	 	789.972	 	789.972	 	1.579.943

   GENERAL TERMS

June 1, 2004 

General
terms for financing research and development work 

Table
of contents 

	 	1 Purpose of financing and qualifications for support	 	2
	 	2 Field of application	 	2
	 	3 Project duration	 	2
	 	4 Acceptable costs	 	2
	 	 	4.1 General principles	 	2
	 	 	4.2 Acceptable types of cost	 	3
	 	 	 	4.2.1 Monetary wages	 	3
	 	 	 	4.2.2 Indirect employee costs	 	3
	 	 	 	4.2.3 Overheads	 	4
	 	 	 	4.2.4 Traveling costs	 	4
	 	 	 	4.2.5 Costs of materials and supplies	 	4
	 	 	 	4.2.6 Equipment purchases	 	4
	 	 	 	4.2.7 Equipment write-offs/leases	 	4
	 	 	 	4.2.8 Purchased services	 	5
	 	 	4.3 Business financing in public research projects	 	6
	 	 	4.4 Consideration of income	 	6
	5 Other public financing for the project	 	6
	6 Project reporting to Tekes	 	6
	 	6.1 Contents report	 	6
	 	6.2 Cost accounting	 	6
	 	6.3 Auditor's report	 	7
	 	6.4 Other information required in connection with reporting	 	7
	 	6.5 Post-project reporting	 	7
	7 Payment of a financing decision	 	7
	8 Changes in project implementation	 	8
	 	8.1 Conceptual and timetable-related changes	 	8
	 	8.2 Type-of-cost changes	 	8
	 	8.3 Failure to fulfil the financing criteria of large-scale businesses	 	8
	 	8.4 Change of business scale during a project	 	8
	9 Assignment of a project, sale of business, hand-over of a project's results and business rearrangements	 	8
	10 Leaving the loan uncollected	 	9
	11 Authority supervision	 	9
	12 Suspension of payments	 	10
	13 Restitution and recovery of financing	 	10
	 	13.1 Restitution of financing	 	10
	 	13.2 Obligatory recovery of financing	 	10
	 	13.3 Discretionary recovery	 	10
	 	13.4 Conversion of use and hand-over of machines and equipment	 	11
	 	13.5 Interest	 	11
	 	13.6 Penal interest	 	11
	 	13.7 Modification of the recovery of assistance	 	11
	 	13.8 Time limit for recovery	 	12
	14 Tekes' right of set-off	 	12
	15 Violations	 	12
	16 Special terms of financing	 	12
	 	16.1 Special terms of financing by European Regional Development Fund (appendix 3D)	 	12
	 	16.2 Special terms for group ventures (appendix 3E)	 	12
	 	16.3 Capital loan for establishing a technology business (appendix 3F)	 	12
	 	16.4 Special terms for technology programs (appendix 3G)	 	12
	 	16.5 Special terms for periodically financed projects (appendix 3H)	 	12

1

   GENERAL TERMS

June 1, 2004 

	1
	Purpose
of financing and qualifications for support 

        Financial
assistance for research and product development granted by Technology Development Centre (TEKES) is intended for businesses and other organizations registered and operating in
Finland. Project costs shall be entered in the accounts of a company or organization receiving the funding. 

        Financing
is granted on the premise that the businesses or organizations implement the project and deploy its results in a manner beneficial for Finnish society, citizens, national
economy and environment. The most important aspects include diversified advancement of know-how, networking nationally and internationally, as well as direct and indirect business impulses
in Finland through jobs, turnover and export. 

        The
recipient of financing (hereinafter the company) shall organize separate bookkeeping for keeping track of project hours and costs, as set forth in appendix 3A. 

        Intellectual
property rights arising from a project shall be owned by the company. 

	2
	Field
of application 

        These
terms shall be applied to grants and loans (hereinafter financing), which are granted by Tekes under State Grants Act (688/2001) and Council of State Decree relevant to the
financing of
technological research and development efforts. These terms have been set pursuant to Section 11, Paragraph 4 of the State Grants Act. 

	3.
	Project
duration 

        The
duration of a project is specified in the financing decision. In case the project is delayed, the company can request an extension of time by an informal application. The extension
of time must be requested prior to the termination of reporting times set forth in the financing decision. An extension of time can be granted provided that continuing the project is justified and
validity of the grant enables the extra time. 

	4.
	Acceptable
costs

	4.1
	General
principles 

        Acceptable
costs include project-incurred expenses generated over the course of a project, presented in the company's bookkeeping, paid up, shown in net terms and without value added
tax. The costs can be accepted with value added tax provided that the company is not liable to pay value added tax. 

        The
costs must be based on payment transaction entries of the corresponding expenses. However, this does not apply to 

	a)
	expenses
with no cash flow effect

	b)
	expenses
constructively allocated to the project. 

        Expenses
must be paid up at the time of clearing the same to Tekes. 

        An
expense allocated to a project, which is based on an order made prior to starting the process cycle, can only be accepted on the premise that the order carries a cancellation clause
linked with actually starting the project. 

2

 

        Tekes
can use its judgement to accept, for certain types of cost, a clearing procedure which is based on unit prices given by the company's cost counting systems and derived from
bookkeeping expenditure entries. If necessary, Tekes is entitled to require a statement about the reliability of accounting systems from an independent chartered auditor. 

        If
requested, the company must be able to supply the information necessary for overseeing the project costs, for example copies of documents, invoice specifications, and grounds for
selecting services that have been purchased. 

        Tekes
has a right not to accept costs presented by the company if it is likely that those are not linked with the project or are excessive with respect to the project's results. 

	4.2
	Acceptable
types of cost 

        As
costs of the project, Tekes may accept indirect employee costs, other direct costs resulting from implementing the project, as well as overhead costs. 

        The
acceptable maximum total amount of individual types of cost, the overstepping of which calls for a separate decision by Tekes, is determined by type-of-cost
specific euro amounts set forth in the cost estimate making up appendix 2 of the financing decision. 

4.2.1    Monetary
wages 

        The
acceptable costs include payroll taxable monetary wages for real working times to persons (not more than 11 months/year/person) participating in the implementation of a
project. Accountable wages
shall be based on the hour-specific tracking of working time. The hours shall be recorded and verified in a systematic manner at least once a month. 

        The
wages accounted to Tekes may not substantially differ from the earning level of a project staff at the time preceding the project. In addition, the accountable wages shall be in line
with a remuneration paid by the company for a respective-level job during the project. Tekes may find it appropriate to accept higher monetary wages incurred for the company in such a case that a
person temporarily expatriated for the implementation of a project be paid higher-than-usual wages for the time spent abroad, or if the implementation of a project calls for
hiring a new person at a higher-than-current level pay. 

        The
salaries of the company's management and administration are overhead costs. For special reasons, the work performed for a project by these persons can be accepted as direct payroll
costs when the recipient of financing is a small business according to the EU definition (see item 4.2.6). In addition, it is required that such salaries be accepted in advance by Tekes as
being included in the project. 

        The
employment assistance allocated to a project by labour authorities shall be subtracted from accountable total costs. Recorded as a deductible item shall be a proportional stake of
the employment assistance which corresponds to the portion of effective working time spent for the project by the assistance-receiving person. 

4.2.2    Indirect
employee costs 

        The
indirect employee costs include indirect wages (e.g. holiday and sick pay, holiday bonus), social security costs and other labour costs. As indirect employee costs can be accepted
the percentage set forth in a project cost estimate, regarding effective working time wages that have been paid and accepted for the project. However, Tekes is entitled to have indirect employee costs
scrutinized and hence the financing shall be paid on the basis of true indirect employee costs should they fall short of the level accepted in the cost estimate. The indirect employee costs are
calculated by using an indirect employee costs form for a t&k project obtainable from Tekes' web service. 

3

 

        The
recipient of financing is required to fill appendix 3B to notify whether the implementation of a project is participated by a person owning alone or jointly with family
members a stake of more than 50% of the company. The form is also required to declare whether a bonus-based wage system is used in the project. 

4.2.3    Overheads 

        Acceptable
overhead costs may include a percentage of the total payroll and indirect employee costs of a project as set forth in the project cost estimate. However, Tekes is entitled to
have the overhead percentage examined and hence the financing shall be paid on the basis of true overhead costs should they fall short of the level accepted in the cost estimate. The overhead
coefficient is calculated by using an overhead coefficient form for a t&k procedure obtainable from Tekes' web service. 

        Expenses
of overhead nature shall not be accepted in other accounted types of cost. 

4.2.4    Traveling
costs 

        Traveling
costs can be accepted in compliance with a decision of the National Board of Inland Revenue issued in the relevant year for tax-free traveling costs. 

4.2.5    Costs
of materials and supplies 

        Materials
and supplies purchased from outside the company shall be accepted as per invoice. In-house charges for materials and supplies shall be accepted at cost price. 

4.2.6    Equipment
purchases 

        When
the technical or economical service life of equipment, as well as computer software systems and other rights of use, is less than three years, the portion of purchase price relevant
to a project can be accepted as a purchase of equipment. Otherwise, the purchase can be accepted as a cost item of the project in write-offs. 

        A
fixed asset acquired by way of a hire-purchase agreement or the like consistent with the Hire-Purchase Act, made with a financing company, can be accepted on
the condition that the purchase price has been amortized at least in the amount equal to the portion of payable Tekes financing of this particular fixed asset. In this case, the company must have the
acquired fixed assets already delivered thereto. The financing, management, insurance, repair, maintenance or other such expenses of acquisitions obtained by hire-purchase terms shall not
be accepted as a basis for Tekes financing. 

4.2.7    Equipment
write-offs/leases 

        Write-offs
can be accepted as scheduled bookkeeping write-offs on the premise that neither national nor European community subsidies or loans have been received
for acquiring the assets. 

        The
write-off or leasing costs of machines and equipment predominantly deployed in a project can be accepted in the proportion of using the equipment in the project. 

        As
for expenses incurred by leasing equivalent to the acquisition of fixed assets, the only ones that can be accepted are those consistent with the purchase price of this particular
acquisition over the duration of a project. Other expenses associated with leasing (management, financing, insurance, repair and other such expenses) are not eligible to financing. In the event that a
breakdown of the above items cannot be provided; not more than 50 percent can be accepted of all project-related expenses incurred by the leasing contract. 

        The
above terms regarding the write-off and leasing costs of machines and equipment apply also to t&k premises costs whenever the acquisition of such has been inevitable for
a project. 

4

 

4.2.8    Purchased
services 

        Planning
and research services, as well as surveys, purchased from outside the company can be accepted as per invoice. 

        Information
retrieval, patent application, license purchasing, training, project auditing and other such expenses incurred by a project can be included in the costs of materials and
supplies or purchased services. The patent application costs of large-scale companies as determined in the EU definition shall not be accepted. The term large-scale company is used in reference to a
company which is not an sm company according to the EY definition (see the chapter Services purchased from small and mid-size businesses). 

        Donations
and scholarships are not acceptable costs. 

        Services
purchased from small and mid-size businesses 

        The
term small and mid-size (sm) business is used in reference to such a Finnish company which fulfils the EU definition for a small and mid-size company as
decreed in European Commission recommendations 96/280/EC (valid until December 31, 2004) and 03/361/EC (valid from January 1, 2005). 

        Services
purchased from research institutions 

        The
term research institution is used in reference to Finnish universities, occupational colleges, and public research institutions. 

        Purchases
from in-group and interested businesses 

 General principles  

        Purchases from in-group and interested companies shall be accepted without security. The seller shall provide an account of its costs by
appendix 3B. The costs shall be accepted on the same grounds as those of the recipient company. However, the applied overhead percentage shall be a standard coefficient based on the size of the
company's staff. 

        The
seller shall set up project bookkeeping and tracking of working hours as set forth in these terms and appendix 3A. The responsible project manager's assurance, included in the
seller's accounting, shall be signed by a person officially authorized to sign for the company. The final report shall have appended thereto a chartered auditor's report. 

        The
interested company is a company not included in the group, which has at least 20% of its entire share capital or equivalent capital directly or indirectly in the ownership or
possession of the financing recipient or which has some other community of interest with the company. It is within Tekes' judgement to consider that no community of interest evolves even if the above
qualification are fulfilled. 

 Purchases from a foreign in-group and interested company and costs incurred in a foreign office  

        In the case of an sm business, Tekes can find it acceptable that the costs of a project also include purchases from foreign in-group and interested
companies, as well as costs incurred in an office located abroad. A mention of this must appear in the special terms of a financing decision. The acceptance of these costs deviates from domestic
in-group and interested purchases in the following aspects: 

	•
	As
basis for Tekes' financing, it is only possible to accept direct costs of a project, excluding indirect employee costs.

	•
	For
invoices in foreign currencies, the applied exchange rate is that of the date of payment. 

5

 

	•
	In
connection with the final accounting, it is required that a statement be presented by a chartered auditor independent of the foreign company, in which said auditor shall
confirm that the accounted costs are indeed book expenses. 

        In
the projects of large companies, costs incurred in offices or in-group or interested companies located abroad shall not be accepted. 

        Services
purchased from other companies/associations 

        Recorded
in this type of cost shall be services purchased from organizations other than those listed above. 

	4.3
	Business
financing in public research projects 

        The
finance recipient's participation fee in a project, financed by Tekes and carried out in a research institution, shall not be an acceptable cost. 

	4.4
	Consideration
of income 

        As
a general rule, the income of a project shall not be considered a cost-reducing factor. Nevertheless, in the event of receiving substantial income during a project from
selling a prototype created in the project or from the results of trial production, the company shall be required to report such income immediately to Tekes. Such income shall be accounted for as a
cost-reducing factor. A possible overpayment shall be determined on the basis of remitted funding and corrected accounting and shall be returned within six months of the sale transaction. 

        Overpayment
shall be allocated to various forms of financing in the proportion set forth in a financing decision. 

	5
	Other
public financing for the project 

        Other
public financing for a project shall be reported in cost accounting. The company shall be obliged to inform Tekes in the event that, for the costs of a project, it has received or
shall receive assistance, loan and other funding, interest subsidy, guarantee, easy terms, and other economic benefit comparable therewith, granted by or payable from the funds of the State, a
municipality or other public corporation or an institution or foundation under public law, as well as support granted from European Community funds or other European Union funds, excluding a support
awarded through the taxation system. 

	6
	Project
reporting to Tekes 

        For
the financing to be paid, the company is obliged to provide correct and sufficient information as set forth in the financing decision and its general terms. 

        The
project reporting timetable is presented in the financing decision. 

	6.1
	Contents
report 

        Along
with progress and final reports, the company is obliged to supply Tekes with a statement signed by the responsible project manager, explaining how the project is advancing
(appendix 3C). 

	6.2
	Cost
accounting 

        The
costs of a project shall be kept in a project account, which can be an account opened in bookkeeping or in cost/project accounting, an accounting item, a project number or another
project identifier, whereby the costs incurred by development work defined in the financing decision are identifiable and the relation of the costs with bookkeeping is verifiable. Upon receiving a
financing decision, the company is obliged to supply Tekes with a notification regarding acceptance of the decision terms, project bookkeeping, auditing, and a relevant bank account
(appendix 3A). 

6

 

        In
cost accounting, it shall be mandatory to disclose both costs per accounting period and cumulative costs from the outset of project duration identified by types of cost. The realized
costs shall be reported in full. On the basis of a progress report, the acceptability of tentatively accepted costs shall be reconsidered in connection with final reporting and accounting. After the
acceptance of final accounting, no further costs can be proposed for the project. The responsible project manager is obliged to provide an affidavit of the fact that the costs presented in cost
accounting are indeed those incurred by the project and allocated to the project as required by these general terms (appendix 3B, page 3). 

	6.3
	Auditor's
report 

        In
connection with final accounting, it shall be mandatory to submit a specified-form auditor's report covering the entire project duration and prepared by a chartered
auditor independent of the company (appendix 3B, page 4). 

        At
least half of the accounted costs shall be audited as per type-of-cost. In auditing, special attention shall be paid to the implementation and reliability of
project bookkeeping and tracking of working hours, as well as to the integrity of traceability chain. As for the payment transactions of monetary wages, the authentication shall be effected on the
basis of information set forth in the column Total monetary wage paid over reporting period on page 2 of appendix 3B. In the project auditing report, it shall not be necessary to express
a point of view either on indirect employee and overhead costs or net amounts of the costs. 

        Tekes
is entitled to hand the auditor's report over to other authorities for the supervision of financing. 

	6.4
	Other
information required in connection with reporting 

        The
company is obliged to supply Tekes with all requested project-pertinent information, as well as to make sure that Tekes has access to the latest financial statement along with its
auditor's report. 

	6.5
	Post-project
reporting 

        Tekes
monitors relevance of the projects even after their termination. For the period of five years following the termination of a project, the company shall be obliged, upon request, to
supply realization information regarding all those projections and predictions presented thereby during the financing process and implementation of the project, as well as a description regarding the
useful applications of technology developed in the project. In addition, Tekes is entitled to obtain the company's financial statements over five post-project financial periods, as well as
to commission a financial statement analysis of the company from another public financier. 

	7
	Payment
of a financing decision 

        Financing
shall be paid as a project progresses on the basis of reports. The payable amount shall be a percentage, as set forth in the financing decision, of the accepted costs over the
accounting period. 

        The
first instalment of a loan can be paid in advance. The final instalment of a loan, 20% of the principal of a granted loan, shall not be paid until after the approval of a final
report on the condition that it is warranted by the acceptable project. If the final accounting reveals that, including the advance payment, the amount of loan that has been paid is more than what
would be warranted by the accepted costs, the company shall be obliged to refund the overpaid portion. Tekes is also entitled not to pay the loan in full even for the costs of a progress reporting
period, if the project costs do not accrue at a scheduled rate. 

        The
final instalment of a grant, 10% of the awarded grant, shall not be paid until after the acceptance of a final report on the condition that it is warranted by the acceptable project
costs. 

7

 

        The
financing shall be paid by Tekes to a bank account notified by the company. The notification shall carry an official signature. 

        The
practical arrangements with regard to the loan and its payment shall be handled by State Treasury by the order of Tekes. The borrower is obliged to comply with the terms set by State
Treasury in the promissory note. 

        An
application for the final financing instalment shall be filed with Tekes in connection with final reporting and accounting. The financing, which is applied for later than this, can no
longer be paid. The loan shall be withdrawn from State Treasury not later than six months of the date of a payment letter following the final report and accounting. 

	8
	Changes
in project implementation

	8.1
	Conceptual
and timetable-related changes in a project 

        If
the progress of a project deviates from schedule, the company shall be obliged to contact Tekes immediately for a permission to make changes. 

        A
postponement of the reporting deadline shall be applied for in advance in writing. 

        The
procedure in changes pertinent to the project duration shall be as set forth in chapter 3. 

	8.2
	Type-of-cost
changes 

        The
cost estimate present in the decision appendix carries determined type-of-cost specific maximum amounts, the amendment of which calls for an advance written
application, along with a statement of reasons. 

	8.3
	Failure
to fulfil the financing criteria of large-scale businesses 

        The
large-scale companies as specified in the EU definition are required to fulfil the financing criteria set forth in the decision's special terms. In the event of a discovery, during
the course of a project, that the special terms are not fulfilled, the project shall be reconsidered in Tekes. At this point, a decision is also made regarding a possible suspension of financing
payments and a recovery process. 

8.4    Change
of business scale during a project 

        In
the event of a company undergoing a change, during the course of a project, from an sm company into a large one, the project is required to fulfil special terms set for the financing
of large-scale businesses. In order to ensure this, the terms of further financing the project shall be reconsidered and a decision shall be made at that point regarding a possible change of financing
level or a suspension of financing payments. 

        It
is the company's duty to inform Tekes immediately about a change of scale. 

	9
	Assignment
of a project, sale of business, hand-over of a project's results and business rearrangements 

        In
the event that the company desires to assign a financing decision to a third party, such an assignment calls for a written consent from Tekes. Prior to the assignment, the original
recipient of financing shall be obliged to report and account for its own share of the project. 

        If
the company intends to sell or otherwise hand over a substantial portion of business constituting the object of a project or intellectual properties or other rights evolved as a
result of the project, or if the in-house or in-group arrangements lead to a situation that the economical and social objectives, as intended in paragraph 1 (Purpose of
financing and qualifications for support) of the decision and declared by the company in its application, fail to become fulfilled to a substantial extent, the company shall require a written consent
from Tekes for such arrangement. 

8

 

        If
selling the rights of use or exploitation has been an essential aspect of the original business plan of a project, the above-referred Tekes' consent shall not be needed. 

        The
consent shall be respectively requested also for a merger, a division or other business rearrangement concerning the company. 

        The
consent shall be requested over the period of five years following the completion of a project or until the loan has been paid off. 

	10
	Leaving
the loan uncollected 

        If
a project fails financially or technically, the loan period can be extended up to ten years. The number of nonamortizing years can be extended up to five. The loan can also be
converted into a capital loan as specified in chapter 5 of Companies Act (734/1978), within a maximum support determined for the project according to the principles of the
Council-of-State decree. 

        If
the research and development work has failed technically, nor does it produce significantly exploitable results, the unpaid principal and interests of a loan can be left partially or
totally uncollected in special circumstances. 

        If
the research and development work is a technical success, yet does not lead to economically viable business, the loan can be left uncollected in special circumstances within a maximum
support determined for the project. In those cases, wherein the originally granted portion to be financed is less than or equal to the accepted maximum support intensity, the loan portion can be
converted afterwards into a grant. 

        In
the event that the provisions of this chapter disagree with what has been prescribed in the annual State budget of the loan-granting year about uncollecting a
Tekes-granted loan, the uncollection of the loan shall be subject to the provisions of the budget in this respect. 

	11
	Authority
supervision 

        The
company is obliged to provide Tekes with correct and sufficient information for supervising the compliance with the terms of this financing decision and the implementation of a
project. 

        Tekes,
the Commission and Court of Auditors of the European Community are entitled to conduct inspections of the company's economy and operation necessary in terms of supervising the
payments and use of the financing. If financing has been granted, as decreed in Section 7, Paragraph 2 of the State Grants Act, for use in a project of other than the recipient with an
objective consistent with the financing decision, Tekes shall be entitled to inspect the economy and operation of whoever is running the project. 

        Tekes
is entitle to authorize another authority or an independent chartered auditor to conduct inspections as referred to in the preceding paragraph. At Tekes' request, an independent
expert can provide assistance in the inspection. 

        The
right of inspection shall remain valid over five years as of the termination of a project. Project documents and other material necessary in view of the supervision and inspection of
a project shall be kept available for at least the same period of time. The company shall be obliged, without consideration, to provide the conductor of inspection with information necessary in view
of the inspection and also to otherwise assist in the inspection. 

        The
conductor of inspection is entitled to take possession of the material subjected to inspection, if this is called for by the inspection. The seizure of material shall be recorded in
minutes, stating the purpose of the seizure and the seized material. The material shall be returned immediately as it is no longer needed in the inspection. 

9

 

        The
conductor of inspection is entitled to gain access, to the extent warranted by the inspection, to business, storage and other such premises in possession or disposal of the company
for use in the pursuit of an occupation or livelihood, or to other areas meaningful in terms of granting the financing and supervising its use. An inspection may not be conducted in premises protected
by domiciliary peace. 

	12
	Suspension
of payments 

        Tekes
is entitled to order a temporary suspension of financing payments, if 

	1.
	there
is reasonable cause to suspect the company of neglecting its reporting obligation or using the financing in violation of the financing decision;

	2.
	the
grounds, on which the granting of financing was based, have changed substantially. Such changes include for example a deviation from the project plan without a written consent from
Tekes, a significant decline of the company's financial position with respect to the anticipated progress, a risk of imminent liquidation, an appearance of tax debts, as well as arrears associated
with Tekes loans;

	3.
	the
suspension of payments is called for pursuant to the European Community legislation. 

        If
the reasons of suspension are not corrected within a time frame set in the suspension judgement, Tekes shall be entitled to order a stop of the financing payments as well as a
recovery of the thus far remitted financing or a portion thereof. 

	13
	Restitution
and recovery of financing

	13.1
	Restitution
of financing 

        The
company is obliged to immediately return a financing or a portion thereof received incorrectly, excessively or obviously without justification. If the amount to be returned is less
than 10 euros, the restitution is not necessary. 

	13.2
	Obligatory
recovery of financing 

        Tekes
shall order a stop of the financing payments as well as a recovery of the thus far remitted financing, if the Company has: 

	1.
	failed
to restitute such a financing or a portion thereof which must be returned pursuant to item 13.1 of these general terms;

	2.
	used
the financing for a purpose essentially other than it was granted for;

	3.
	given
Tekes a false or misleading piece of information about an aspect liable to make a difference as regards the granting, amount or terms of financing, or concealed such an aspect.

	4.
	otherwise
substantially violated, in a manner comparable to sub-items 1-3, regulations regarding the use of financing.

	13.3
	Discretionary
recovery 

        Tekes
is entitled to order a stop of the financing payments, as well as a recovery of the thus far remitted financing or a portion thereof, if: 

	1.
	false
or misleading information has been given for the payment or supervision of financing, information has been concealed or refused to be disclosed;

	2.
	financing
has not been used as stipulated in the financing decision;

	3.
	the
company has declined to assist in the inspection of a project; 

10

 

	4.
	the
company has terminated a project constituting the object of financing, restricted or changed it substantially, or turned it over to another party;

	5.
	the
company has been subjected to an execution procedure, liquidation, bankruptcy or downsizing procedure;

	6.
	the
qualification in Section 5 of the Council of State decree, regarding the granting of financing to large companies, changes substantially during the course of a project or
the qualification of Section 4, regarding the increasing of financial support intensity, is not fulfilled;

	7.
	a
recovery of the financing is called for by the European Community legislation;

	8.
	the
company proceeds in another manner comparable with the items of this paragraph (for example proceeds without a written consent described in chapter 9 in circumstances which
call for the consent).

	13.4
	Conversion
of use and hand-over of machines and equipment 

        If
there is a change in the intended use of machines and equipment included in a project or they are handed over or otherwise transferred into the ownership or possession of another
party, a share of the property value proportional to the financing, yet no more than the financing amount, shall be restituted to Tekes within six months of the change of circumstances. The financing
need not be restituted, however, if the property has been replaced with an equivalent one or if more than five years has lapsed since the original acquisition. 

        If
the company receives, within five years of acquisition, insurance or other such compensation from a property constituting the object of financing, Tekes shall be paid a share of the
compensation proportional to its financing. However, the liability to pay does not result if the property is replaced with an equivalent one. 

        The
returnable principal, insurance or other corresponding indemnity shall be allocated to various forms of financing in a proportion set forth in the financing decision. 

	13.5
	Interest 

        The
company is obliged to pay on the returnable or recoverable amount, since the payment date of financing, an annual interest pursuant to Section 3, Paragraph 2 of the
Interest Act (633/1982), with three percentage points added on. 

	13.6
	Penal
interest 

        For
the period exceeding the due date set by Tekes, there is a liability to pay on the recoverable amount an annual penal interest consistent with the interest rate referred to in
Section 4, Paragraph 1 of the Interest Act. 

	13.7
	Modification
of the recovery of assistance 

        Tekes
is entitled to rule that a portion of the returnable or recoverable assistance, the interest or penal interest calculable thereon shall be left uncollected, if a full recovery is
unreasonable in view of the company's financial position and circumstances, the type of property acquired by the assistance or the procedure constituting the grounds of recovery or the change of
circumstances. 

        For
particularly weighty reasons, Tekes is entitled to decide that the returnable or recoverable amount, the interest or penal interest calculable thereon shall be left totally
uncollected. 

11

 

	13.8
	Time
limit for recovery 

        The
recovery of financing, an interest or penal interest payable thereon shall no longer be levied after the lapse of ten years since the payment of the final financing instalment of a
project. 

	14
	Tekes'
right of set-off 

        The
assistance, along with its interest, returnable or recoverable on the basis of this financing decision, can be collected by subtracting the same from other Tekes-granted support
payable to the company.
State Treasury is entitled to execute a corresponding set-off between loans granted by Tekes. 

	15
	Violations

        If,
in connection with a project, there is reason to suspect the company of violations as referred to in Sections 5-10 of Chapter 29 (criminal offenses against
public economy) of the Penal Code, Tekes shall take appropriate actions. 

	16
	Special
terms of financing 

        If
the special terms of a project are in conflict with the general terms, it is the special terms that shall apply. 

	 	16.1    Special terms of financing by European Regional Development Fund	 	(appendix 3D)
	 	16.2    Special terms for group ventures	 	(appendix 3E)
	 	16.3    Capital loan for establishing a technology business	 	(appendix 3F)
	 	16.4    Special terms for technology programs	 	(appendix 3G)
	 	16.5    Special terms for periodically financed projects	 	(appendix 3H)

APPENDICES

	Appendix 3A	 	Notification of the acceptance of decision terms, project bookkeeping, auditing, and the designated bank account
	Appendix 3B	 	Cost accounting form
	Appendix 3C	 	Report on the company's research and product development
	 	 	Appendices 3D-3H

        The
item Special terms of financing in the financing decision contains a mention as to whether appendices 3d-3H apply to this project. 

12

Appendix 3A/June 1, 2004 

        Notification
of the acceptance of decision terms, project bookkeeping, auditing, and the designated bank account 

	Company	 	 
	 	 	

	Financing decision number	 	 
	 	 	

	Project title	 	 
	 	 	

	Responsible project manager	 	 
	 	 	

	Contact person/accounting firm for cost accounting

	

o In-house financial department/accountant	
 	

o Accounting firm/outside accountant

	

Name	
 	

 
	 	 	

	Address	 	 
	 	 	

	Phone number	 	Fax	 
	 	
	 	

	E-mail	 	 
	 	 	

An
account, an accounting item, a project number or another project identifier has been opened in the company's bookkeeping or cost/project accounting, whereby the costs incurred by development work
defined in the financing decision are identifiable and the relation of the costs with bookkeeping is verifiable. The hourly tracking of working time used for the project is organized according to the
general terms of the decision. 

Pursuant
to the general terms of the financing decision, an auditor's report of the incurred costs shall be presented by a chartered (approved by the Central Chamber of Commerce, a local Chamber of
Commerce, Public Administration) auditor independent of the company not later than in conjunction with the final report. The auditor has been informed of this notification regarding the qualifications
stated in the financing decision. 

Auditor's
name and contact details: 

	 	 	 
	Name	 	 
	 	 	

	Authorization	 	 
	 	 	

	Address	 	 
	 	 	

	Phone number	 	 	Fax	 
	 	
	 	 	

	E-mail	 	 
	 	 	

	Project's bank account number	 	 	 	 
	 	 	

We
accept the terms of the financing decision, along with appendices. With this signature we authorize the responsible project manager to act as an official representative of the company in all
matters relating to the management of this project. Changing of the bank account nonetheless requires the company's official signature. 

	

Place and date	
 	

 
	 	 	

	The company's official signature and name clarifications
	

	 
	

	    

   Business project's

cost accounting 

Appendix 3B

June 1, 2004 

This form can be found in Excel format in Tekes' website:

www.tekes.fi/rahoitus/yritys/raportointilomakkeet.html  

1.     PROJECT'S IDENTIFICATION DETAILS  

	Entry book number	 	Number of financing decision
	    

	Complete title of the project
	    

	Report period
	    

	Company	 	Business ID
	    

	Responsible project manager	 	Telephone number
	    

	E-mail address
	    

	Contact person for cost accounting	 	Telephone number
	    

	E-mail address
	    

2.     COST ACCOUNTING (costs are reported without value added tax)  

Indirect
employee cost coefficient            %

overhead cost coefficient            % 

	 
	 	Previously

reported

costs
	 	Costs for

period
	 	Total

accrued

costs
	 	Cost

estimate in

financing

decision

	Monetary wages for effective working time (breakdown on page 2)	 	 	 	 	 	 	 	 
	Indirect employee costs	 	 	 	 	 	 	 	 
	Travel costs	 	 	 	 	 	 	 	 
	Materials and supplies	 	 	 	 	 	 	 	 
	Equipment purchases	 	 	 	 	 	 	 	 
	Equipment write-offs/leases	 	 	 	 	 	 	 	 
	Services purchased from sm businesses	 	 	 	 	 	 	 	 
	Services purchased from research institutions	 	 	 	 	 	 	 	 
	Services purchased from in-group/interested companies	 	 	 	 	 	 	 	 
	Services purchased from other businesses/organizations	 	 	 	 	 	 	 	 
	 	 	
	 	
	 	
	 	

	Total costs	 	 	 	 	 	 	 	 
	Grant      %	 	 	 	 	 	 	 	 
	Loan      %	 	 	 	 	 	 	 	 

        Disclosure
of other public financing obtained for the project (form, grantor, and amount): 

   

   

   

1

 

BREAKDOWN
OF WAGES 

	Financing decision No.	 	Company	 	Reported wages over period
	    

	1. Person
 
	 	2. Occupation in

company
	 	3. Occupation in

project
	 	4. Working time

for project

in hours
	 	5. Hourly wages
	 	6. Wages

accounted for

over report

period
	 	7. Total

monetary

wages paid

over report

period

	    	 	 	 	 	 	 	 	 	 	 	 	 
	    	 	 	 	 	 	 	 	 	 	 	 	 
	    	 	 	 	 	 	 	 	 	 	 	 	 
	    	 	 	 	 	 	 	 	 	 	 	 	 
	    	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	
	 	
	 	
	 	
	 	
	 	

	Total	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	
	 	
	 	
	 	
	 	
	 	

	1.
	If
a person working for the project is owner of the company as defined in the general terms' item 4.2.2 or if a bonus-based payment of wages is applied in the project, this
shall be noted in conjunction with a person's name.

	4.
	Working
time shall be tracked for each project-participating person on an hourly basis. Hours shall be recorded and verified in systematic manner at least once a month. Material
relevant to working time tracking shall be kept for the period of at least five years following a termination of the project.

	5.
	A
monthly salary can be converted into hourly wages by having it divided with the number of hours stipulated in a collective labour agreement relevant to the person or with 158.

	5-7.
	Columns
5-7 dealing with personal wages do not constitute mandatory basic information. Tekes is nevertheless entitled to request this information, if
necessary.

	6-7.
	Wages
accounted for over a report period cannot exceed a person's total monetary wages over the respective period. 

2

 

RESPONSIBLE
PROJECT MANAGER'S DECLARATION 

        I
declare that the costs,                        euros in total, accounted for in a payment application relevant to the time period
of                        and based on Tekes' financing decision No.
                        , have been incurred by the project designated in the decision. Allocation of the costs to the project has
been conducted by observing the procedures set forth in the decision and in
the general terms constituting an appendix thereof. The costs are based on acceptable, net amount, paid-up and free-of-value added tax (1) expenses in
bookkeeping and are verifiable from project bookkeeping and working time tracking. 

        We
request a grant payment of            euros and a loan payment of            euros. 

	    
 Place and date	 	    
 Signature
	

    
 Position	
 	

    
 Clarification of name

	(1)
	If
the company is not liable to pay value added tax, this shall be noted separately in each accounting. 

3

 

AUDITOR'S
REPORT 

For

        We
have audited the costs relevant to the financing decision No.                        of for the period
of                        .
 

        The
costs declared for the project are                        euros in total. 

        Technical
reporting on the project's progress and preparation of the cost accounting have been in charge of the responsible project manager. Based on the audit conducted by us, we
present a statement regarding the cost accounting. 

        The
audit has been conducted, as appropriate, in compliance with auditing recommendations of the Central Chamber of Commerce, and particularly with auditing recommendation 800 (Reporting
on an auditing assignment conducted for a special purpose). 

        According
to the recommendations, the audit is planned and implemented for an adequate certainty of whether the calculation subjected to auditing contains essential errors or
shortcomings. 

        The
audit comprises examining the material constituting the basis for figures and other information presented in the calculation. 

        The
audit comprises also reviewing the basis of preparing and the form of presenting the calculation. 

        The
audit has been conducted as stipulated by item 6.3 (Auditor's report). 

        It
is our opinion that                        has in essential aspects complied with items 4 (Acceptable costs) and 6.2 (Cost
accounting) pertinent to the cost accounting procedures set
forth in Tekes' general terms 

	(check the next box).	 	o
	

Or else	
 	

 
	

The audit has revealed essential errors or shortcomings (check the next box).	
 	

o
	

The essential conflicts with the terms are listed below or in a separate document.

	

    
 Place and date	
 	

    
 Signature
	

    
 Auditing corporation	
 	

    
 Clarification of name, authorization

4

   REPORT ON COMPANIES' RESEARCH AND PRODUCT DEVELOPMENT 

	September 1, 2001	 	Handled confidentially

Appendix 3 C

	

In the case of project's	
 	

progress reporto	
 	

period financing reporto	
 	

final reporto
	

Title of project	
 	

 	
 	

Acronym	
 	

 
	

	
 	

	

Book entry number	
 	

Decision number	
 	

Reporting period

starting date	
 	

Closing date
	

	
 	

	
 	

	
 	

	

Name of organization as in trade register	
 	

Business ID	
 	

 
	

	
 	

	

Contact person in matters relating to project	
 	

Telephone number	
 	

 
	

	
 	

	
 	

 

        Tekes
keeps track of the progress of projects and reviews achieved results. To enable tracking, the client shall prepare progress, periodic financing, and/or final reports noted in the
project-pertinent decision and deliver the same to Tekes according to a timetable presented in the decision. The reports shall be signed by the responsible project manager. The reports shall be
delivered to Tekes (Tekes, registry, Kyllikinportti 2, PL 69, 00101 Helsinki) or to a Labour and Trade office possibly noted in the decision. 

        The
project reporting shall deal at least with matters mentioned in this form. Attached to the report form, it is possible to supply Tekes with separate reports explaining results of
development work and other material, such as technical reports or sales brochures, describing progress of the project. A separate, extensive contents report should be generally appended at least to
periodic financing and final reports. Information consistent with the form can be submitted to Tekes also in an informal report. 

        Tekes
shall be pay the financing granted thereby on the basis of received reports and cost accountings as well as further explanations requested thereby on a case by case basis. A report
and a cost accounting targeted on the same period shall be generally submitted to Tekes at the same time. The client is nevertheless entitled to deliver a project progress report to Tekes also without
cost accounting, if this is desirable. In this case, the accounting shall be submitted to Tekes in conjunction with the next/subsequent report. The financing shall not be paid until the accounting is
received. 

	1.
	Development
of the company's financial position during a reporting period, including viability, solvency, liquidity. The latest confirmed financial statements (a profit and loss
statement, a balance sheet, a balance sheet specification and notes to the accounts, an annual report and signature pages), along with an auditor's report therefor, shall be submitted as an appendix
unless those have already been delivered to Tekes at an earlier time. Large and/or publicly traded companies need not report about their financial status unless affected by major changes during the
project.

	2.
	Changes
with a major effect on the company's operation during a reporting period. For example, changes in the company's ownership, corporate or group structure or in its business
concept. 

1

 
	1.
	Realization
of a project's substance. Implemented work processes and achieved results. Comparison of the realized results with the plan.

	2.
	Use
of resources and collaboration. Report of realized subcontracted acquisitions, most important acquisitions of equipment and supplies, as well as amounts of work with respect to the
plan. What type of collaboration has been conducted with other businesses and/or research institutions?

	3.
	Possible
problems and necessary changes to the original plan. Problems possibly encountered in the project as well as necessary changes to the project plan, the timetable or the cost
and financing plan, along with valid reasons for such changes. 

2

 
	1.
	Commercial
prospects for the results. Commercial prospects for the results in the company's own business as compared to the time of deciding to launch the project. The possibly
difference-making development in markets, technology, the company's management and collaboration networks or business financing arrangements.

	2.
	The
development of technological know-how over a reporting period. New knowledge or know-how made available for the company as compared to the outset situation.
Development over the entire project duration shall be reported in the final report.

	3.
	Indirect
consequences of the project in other companies and/or social consequences. 

        In
the event that Tekes has in the decision set special terms for its financing, a summary of the fulfilment thereof shall be presented. 

        I
affirm that information in the report is correct and expense items presented in the cost accounting have been incurred by this pursuit. 

	
	 	

	Place and date	 	Signature
	Position of the undersigned:	 	Clarification of name:

3

 

        This
page is only filled IN CONNECTION WITH FINAL REPORT 

SUMMARY OF THE PROJECT'S RESULTS AND TECHNICAL SUCCESS 

        What
is available as the project is over? Were technical objectives achieved as initially set for the project? 

BUSINESS ESTIMATE 

        When
does a commercial application of the project's results in business begin and when is the commercial application at its peak? What is the magnitude of turnover, export and number of
jobs associated with the commercial activity in the year of introducing the results in the marketplace and
over the next two years, as well as in the target year of business (target year may also be one of the first three years)? The table shall not be filled in the case of projects
whose results are not products or components thereof for sale, nor do the project's consequences on the development of business lend themselves to reliable appraisal, anyway.

	 
	 	 
	 	 
	 	 
	 	 
	 	Mark X for project's effect on

net sales, export and jobs

	 
	 	 
	 	Estimated year of

market entry
	 	Next two years
	 	Target year

of business

	Business objective indices
	 	Preserving
	 	Renewing
	 	New

	Year	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Net sales	 	mFIM/euro	 	 	 	 	 	 	 	o	 	o	 	o
	Export	 	mFIM/euro	 	 	 	 	 	 	 	o	 	o	 	o
	Jobs, number	 	Cumulative number	 	 	 	 	 	 	 	o	 	o	 	o

4

 

FOLLOW-UP QUESTIONS 

	What is the project's impact on company?
	Change of strategy	 	o	 	Company has adopted new technology	 	o
	More contacts with foreign companies	 	o	 	Other impact	 	o
	More contacts with domestic companies	 	o	 	No impact	 	o
	More contacts with international research	 	o	 	Unpredictable, adverse impact	 	o
	More contacts with domestic research	 	o	 	 	 	 
	

What was created as a result of the project?
	New material product	 	o	 	Service product to replace a previous one	 	o
	New production process	 	o	 	Method or software for in-house use	 	o
	New service product	 	o	 	Technology with many applications	 	o
	Material product to replace a previous one	 	o	 	Basic know-how in project's field of research	 	o
	Production process to replace a previous one	 	o	 	Other	 	 
	

How is the project anticipated to change the company's technological position relative to competitors?
	Rises clearly	 	o	 	Falls somewhat	 	o
	Rises somewhat	 	o	 	Falls clearly	 	o
	Remains the same	 	o	 	 	 	 
	

How is the project anticipated to change the company's market position relative to competitors?
	Rises clearly	 	o	 	Falls somewhat	 	o
	Rises somewhat	 	o	 	Falls clearly	 	o
	Remains the same	 	o	 	 	 	 
	Numbers of patents, publications and dissertations realized in the project? (pcs)
	Doctoral theses	 	 
	 	Intellectual properties other than patents	 	 

	Other academic dissertions	 	 
	 	International scientific publications	 	 

	Other dissertions	 	 
	 	Scientific reports, trade magazine articles, etc.	 	 

	Patents (+ patent applications and patentable inventions)	 	 
	 	Other published articles on technology/science	 	 

	

What is the anticipated distribution of sales recorded in the business estimate table over various markets? (total 100%)
	North America	 	 
	 	The EU (except Nordic countries)	 	 

	Japan and/or other parts of Far East	 	 
	 	Nordic countries (except Finland)	 	 

	Russia, Eastern Europe and/or areas near Finland	 	 
	 	Finland	 	 

	The EU (except Nordic countries)	 	 
	 	Other countries	 	 

	

How is the project's work continued?
	Project ends	 	o	 	Results of product development are commercialized	 	o
	Project continues as new research work	 	o	 	 	 	 
	Project continues as product development work	 	o	 	Project continues in other form	 	o

5

   INSTRUCTION 

January 1,
2003 

INSTRUCTIONS FOR RECTIFICATION CLAIM 

        A
decision given by Technology Development Centre (Tekes) can be appealed by a party dissatisfied therewith by claiming for rectification. A claim for rectification shall be prepared in
writing and it shall be lodged within 30 days of receiving service of Tekes' decision, excluding the date of service. The date of service is indicated by a certificate of service. If the
decision is delivered by mail, the relevant party shall be considered having been informed of the decision on the seventh day since handing the decision over to Postal Service for delivery. 

        A
claim for rectification shall disclose 

	•
	name
of the rectification claimer

	•
	decision
subject to the rectification claim

	•
	which
aspects of the decision are subject to the rectification claim and which amendments are demanded therein

	•
	statement
of reasons for the rectification claim. 

        A
legal representative or attorney of the rectification claimer shall be obliged to sign a rectification brief. The attorney is obliged to enclose a power of attorney with the brief. 

        The
claim for rectification shall be filed within the set term with Tekes' registry. At one's own risk the claim can be delivered by way of mail or a messenger or a telecopy or
e-mail (kirjaamo@tekes.fi) in sufficient time for it arrive at the destination by 16.15 o'clock on the final day of the set term. Claims that miss the deadline shall be dismissed. 

1

Appendix 3 G 

September 1,
2001 

SPECIAL TERMS ON TECHNOLOGY PROGRAMS 

FIELD OF APPLICATION 

        These
special terms are applied to projects which are included in a technology program. The general terms pertinent to this project (financing decision, appendix 3) shall be
applied in addition to these special terms unless otherwise stipulated in these special terms. 

PUBLICITY OF PROJECTS 

        When
a project is part of a technology program, the company shall agree that Tekes is entitled, without being denied by confidentiality regulations regarding trade secrets, to disclose
the following details about the project: 

	•
	company's
name

	•
	project's
title and an overview thereof

	•
	project's
timetable and contact person in the company. 

        In
addition to the above information, Tekes shall be entitled to turn over more detailed information about the project to the program director for running and planning the program. The
program director is not allowed to forward this information to anyone, nor to use it for any other purpose. 

LÄÄKE 2000  

Dear
reader, 

        Welcome
to the second three-year period of a technology program entitled Lääke 2000! The purpose of this letter is to provide information about
practical aspects relevant to the program. 

        We
request each project to work out a short description in English of the project's substance, objectives and implementation and to deliver it not later than February 27, 2004 to
the program coordinator by way of e-mail at the address tanja.rautiainen@innomedica.fi In the event that your project was already involved
in the program's first three-year period, please have the description include also the results obtained over the first period. The description shall not be longer than half a page. The
description will be published in the program's website, as well as in other possible program information media, along with the following details: project's title, performer(s), starting and closing
dates, and the amount of payable support. 

        The
opening seminar for the second program period will be held on March 16, 2004 in Taitotalo, Helsinki. We will send an actual invitation and entry instructions by
e-mail closer to the seminar. The program Lääke 2000 will also organize in the spring on May 25, 2004 a Corporate project day, wherein the
program-participating companies present their research efforts, collaboration desires and possibilities to examiners of public projects. 

        The
projects participating in the program Lääke 2000 are required to comply with the program's ground rules (enclosed) as well as to make a project-specific
agreement regarding the publicity, ownerships and rights of use of the project's results. A condition in the program Lääke 2000 is that the agreements be concluded at the
outset of a venture. In the process of working out the agreement, we advise that attention be paid to the items included in the enclosed check list. The above-mentioned documents can also be found in
electronic form in the program's website www.tekes.fi/ohjelmat/laake2000. It should be further reminded that the first management group meeting of a
project has a task of accepting a project plan. 

        Further
information is provided by your project's contact person at Tekes. 

Best
regards,

Merja Hiltunen

Lääke 2000 Program director, Tekes 

Tanja
Rautiainen

Lääke 2000 Coordinator, Innomedica Oy 

APPENDICES: 

Summary
of the program Lääke 2000

Lääke 2000 ground rules

Lääke 2000 agreement check list 

LÄÄKE 2000  

 Summary of the program Lääke 2000  

Tekes' role and objectives of the program Lääke 2000  

        Tekes or Technology Development Centre activates and finances challenging research and product development projects conducted both by research units and
corporations. The activities are targeted at social welfare, growth of export, and expansion of industrial base. 

        In
keeping with Tekes' principles, it is an objective of the program Lääke 2000 to strengthen Finnish pharmaceuticals development, to create new and upgrade
existing research networks, to enhance the competitiveness of research service units and corporations, as well as to come up with new international business in the field of pharmaceuticals. 

        The
program Lääke 2000 has its focus on applied research, while keeping in mind the short- and long-term needs of Finnish companies in the field
of pharmaceuticals development. A particular objective of the program's second three-year period 2004-2006 is to promote the skills of commercial utilization on a project level
and to thereby encourage the creation of new business activity. 

        More
information about the program at www.tekes.fi/ohjelmat/laake2000.

How do the projects benefit from the program?  

        Lääke 2000 hosts every year an annual program seminar, as well as workshops and educational functions, featuring introductions of
most essential research results, networking amongst researchers and companies, hearing presentations of international experts about timely technologies and research trends, as well as promoting
general skills in the field of commercial utilization. 

        In
2004, the program Lääke 2000 examines all projects of universities and research institutions by means of TULI (From Research To Business) screening.
Projects selected on the basis of this screening will be offered an opportunity of proceeding further in the TULI process. 

What is required of the projects?  

        The program's projects are required to show transparency and readiness for new forms of collaboration recognized during the program, especially towards
corporations. 

        Release
of information and publishing have a more active role in the technology program than in individual projects. The technology-program participating projects are required, upon
request, to supply more information for media purposes during the program. 

LÄÄKE 2000  

 GROUND RULES FOR THE TECHNOLOGY PROGRAM LÄÄKE 2000  

        The projects participating in the technology program Lääke 2000 comply with the technology program's ground rules. In addition, the
projects financed by Tekes observe the general terms and guidelines of Tekes' research financing, grants and loans, as well as agreements concluded separately as per project. The projects of Academy
of Finland are subject to the principles relevant to the research financing by Academy of Finland. 

Objectives of the program  

        It is an objective of the program to enhance Finnish pharmaceuticals development, to create new and upgrade existing research networks, to promote the
competitiveness of research service units and corporations, as well as to come up with new international business in the field of pharmaceuticals. 

        A
long-term objective is solid, internationally operating, research- and development-minded Finnish pharmaceutical industry, whose development projects are based on Finnish
basic research. 

Implementation of the program  

        The program is implemented in two three-year periods: 2001-2003 and 2004-2006. 

        The
program includes annual seminars. The purpose of an annual seminar is to introduce most essential research results, discuss timely technologies and research trends, as well as to
network with other researchers and companies operating in the field. 

        In
addition, the program Lääke 2000 includes organizing support measures for projects participating in the program. The support measures include workshops
dealing with various technological domains, a
clinic for commercial utilization, educational functions, and other measures contributing to the achievement of the program's objectives. 

Organization of the program  

        The overall program is run by a Tekes-appointed management group. The management group comprises representatives of Tekes and Academy of Finland, representatives
of businesses participating in the program, a representative of university circles, a representative of Sitra (Finnish National Fund for Research and Development), as well as a representative of
financed projects. 

        The
management group's most important function is to take a stand on the program's strategic ideas, emphases and actions to be decided by Tekes. The management group is responsible for
launching essential ventures and supervises the advancement thereof, takes a stand on the program's publicity principles and on the overall aspects of public research projects, as well as
participates, through its members, in recruiting and activating the business community as well as in promoting the program's objectives. 

        Tekes
appoints a coordinator for the program. The coordinator takes care of activation and practical operations of the program, communications between various groups, as well as
information inside and outside the program. The coordinator serves as secretary at the management group meetings. 

Tracking  

        The projects are reporting annually to the program's management group about their progress by means of the program's own annual report form. In addition, in
Tekes-funded projects, the projects' progress is monitored by Tekes e.g. in the projects' management group meetings. Based on this information, the coordinator compiles a summary, by means of which
the program's management group judges progress of the program and realization of the objectives. 

Joining the program  

        Public research projects are able to join the program in a collective application. After the program has started, the collective applications are not organized by
anyone else but Tekes. Information about application times is displayed e.g. on the www-site. Corporations may have their projects accepted in the program regardless of this schedule. 

        Other
Tekes-funded projects can be incorporated in the program at Tekes' discretion. 

Publicity and information  

        The program-participating projects are required to have more transparency and readiness than separate ventures for possible new forms of collaboration recognized
during the program. All projects participating in the program shall have the following details published: title, performer(s), opening and closing dates of the project and the amount of payable
support. The projects shall also have a brief description prepared of the substance, objectives and implementation of a given project and displayed on the website. 

        Information
and publishing is more active in the technology program than in individual projects. Projects participating in the technology program shall be required, upon request, to
provide more information for public relations purposes during the program. The information channels comprise a www-site, program brochures, press releases and seminars. 

Official languages of the program  

        Those participating in or seeking to join the program Lääke 2000 are entitled to conduct business with Tekes and the Academy of
Finland not only in both national languages but also in English. 

        The
information languages of the program's www-site are Finnish and English. This is to promote international visibility as well as international networking of the
program-participating projects. 

Publicity, ownerships and rights of use of the program's results  

        The publicity, ownerships and rights of use of Tekes-funded public research projects shall be agreed as per project. In the process of working out the agreement,
attention shall be paid to aspects included in the Lääke 2000 check list. 

LÄÄKE 2000  

Lääke 2000 check list for agreements  

Aspects to be considered in the preparation of an agreement:  

	1)
	Parties
to an agreement

	2)
	Subject
of an agreement

	3)
	Duration
of an agreement

	4)
	Definitions
(all terms used in the agreement must be defined)

	•
	E.g.
background and result materials and the extent of rights of use

	5)
	Publicity

        It
is the general rule that the results are public after the technology program Lääke 2000 is over 

	•
	To
be also defined 1) publicity during the project, 2) publication principles (Note! Neither disclosing business secrets nor obstructing protection of the
results shall be allowed), 3) who makes the decision about publishing.

	6)
	Ownership

        It
is the general rule that a result is owned by its achiever. The rights shall be assigned from researcher to university in a separate agreement as referred to herein. 

	•
	A
joint ownership of the result material shall be agreed separately (may also include rights other than patents).

	7)
	Right
of use 

        It
is the general rule that the parties have a right to use results in educational, research and development work, as well as in business. Regarding the intellectual property rights and
tangible result materials, a reasonable compensation shall be paid. 

	•
	Relevant
considerations in the judgement of compensation include a portion of the venture financing and other investments already paid by the company, as well as the
result's value, feasibility, extent of the right, possible patenting costs, etc.

	•
	If
the ownership is surrendered, the right of use shall be preserved.

	8)
	Inventions
and patenting

	•
	Clear
ground rules shall be agreed for the protection of invention:

	•
	Who
is responsible for drafting and handling an invention report?

	•
	When
is the invention report drafted?

	•
	To
whom is the invention report presented?

	•
	How
is the inventor's compensation worked out?

	•
	Are
the rights due to revert from university to researchers, and if so, in which situation?

	•
	The
scope of patenting and maintenance?

	•
	If
the objective is for the conducted study to create new business activity, the way of proceeding shall be described in this paragraph. The rights shall be assigned to the
incipient company at a compensation found reasonable for all parties.

	9)
	Computer
programs and other materials protected by a copyright

	•
	Ground
rules shall be agreed as in item "Inventions and patenting" 

	10)
	Tangible
result materials 

        It
is the general rule that these belong to university and other practices shall be agreed separately in advance. 

	•
	Who
is responsible for tangible results after the project is over?

	11)
	Assignment
(= sale) of rights

	•
	Is
it permissible to assign rights to third parties during the technology program Lääke 2000?

	•
	If
yes, on which terms?

	12)
	Liabilities

	•
	What
are the contracting parties liable for?

	13)
	Administration

	•
	What
are the management group's duties, ruling procedures, rights and responsibilities?

	14)
	Disputes

	•
	Are
disputes primarily decided by conciliation, in the court of law or in the court of arbitration? 

        Signatures
(= signatures of the designated parties) 

QuickLinks

Exhibit 10.3

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