Document:

exv10w14

 

Exhibit 10.14

	 	 	 	 	 	 
	 	

	 	 	Benefit Summary for Executives	 
	 	

	 	 	Executive Life Insurance	 
	 	 	 	 

	I.  	PURPOSE
	 
	   	The Executive Life Insurance Plan is a variable life insurance plan that provides you with a
company paid death benefit the option of purchasing additional optional coverage and the
opportunity to build cash value and contribute to a Cash Accumulation Account.
	 
	II.  	ELIGIBILITY
	 
	   	Full-time ACCO Brands executives whose positions are classified in a pay grade of 9 or
higher, on the US dollar payroll, are eligible to participate in the Executive Life
Insurance Plan.
	 
	III.  	EFFECTIVE DATE
	 
	   	Coverage is effective on the date that the insurance company, Pacific Life, approves your
application.
	 
	IV.  	ENROLLMENT
	 
	   	Shortly after you become eligible, Willis, the broker on this account, will send you a
personalized binder that contains a complete description of the plan and the different
options available to you. A representative from Willis will contact you to review the plan
answer any of your questions and collect your enrollment materials It is important for you
to know that even if you do not elect any of the optional features, your company paid
coverage will not be effective until you complete the enrollment materials and they are
approved by Pacific Life.
	 
	V.  	BENEFITS
	 
	   	Your executive life insurance benefits include:

	 	•  	A company paid death benefit equal to I times your base salary plus target bonus
	 
	 	•  	The option to purchase additional death benefit of I 2 3 or 4 times your base salary
plus target bonus
	 
	 	•  	The opportunity to build cash value by contributing additional premiums
	 
	 	•  	The ability to contribute to a Cash Accumulation Account offering tax-deferred,
variable investments
	 
	 	•  	Fully portable coverage if you leave ACCO or otherwise lose eligibility

January 1, 2004exv10w15

 

Exhibit 10.15

	 	 	 	 	 	 
	 	

	 	 	Benefit Summary for HR Managers

Executive
Tax and Financial Advisory
Assistance Program	 
	 	 	 	 

	1.  	This “Summary” has been written to highlight the principal provisions of the ACCO Brands’ Tax
and Financial Advisory Assistance Program. The Program Documents on file in the Company’s
office are the governing documents used to decide all matters concerning the Program. IF
THERE ARE ANY DISCREPANCIES BETWEEN THE INFORMATION IN THIS SUMMARY AND THE PROGRAM DOCUMENTS,
THE PROGRAM DOCUMENTS WILL PREVAIL.

2. Contact for HR Managers is Andrew Pfeifer (847/484 4434) – Manager, Compensation

3. Benefit Description:

ACCO provides key executives (as described in Section 4 below) with reimbursement of up to
$1,000 (pre-tax) per calendar year for receipt of tax and/or financial advisory assistance
for themselves and their immediate family (e.g., spouse, children). Amounts may be
pro-rated for newly hired or eligible executives or for executives who terminate their
employment or otherwise become ineligible to receive this executive benefit prior to
year-end (reference Section 6 below).

	4.  	Who is Eligible?

	 	•  	ACCO executives in Fortune Brands’ Salary Grade 9 & above
	 
	 	•  	Must work at least thirty (30) hours per week

	5.  	This Benefit is Effective as of the executive’s hire date and ends on their termination date.
	 
	6.  	How Do We Pro-Rate This Benefit For Newly Hired/Eligible Executives or Executives Who
Terminate Employment or Become Otherwise Ineligible Prior to Year-End?

Executives are eligible for partial year reimbursements equal to 1/12 of $1,000 (pre-tax)
for every month they are actively employed at ACCO.

Example: An employee is promoted to a Salary Grade 9 position in March. They are eligible
to receive reimbursement of up to $833 for that first year of eligibility.

10 months X 1/12 of $1,000 = $833

There is no “carryover” of unused reimbursement amounts from year to year.

 

 

	7.  	What Expenses Are Considered Appropriate or Inappropriate As Part of This Program?

Tax and Financial Advisory Assistance provides reimbursement of expenses for services such
as:

	 	•  	Tax counseling
	 
	 	•  	Financial planning
	 
	 	•  	Investment counseling
	 
	 	•  	Estate planning
	 
	 	•  	Preparation of wills or trusts

This program does not provide reimbursement for any commissions or fees associated with
individual investment transactions (e.g., purchase/sale of equities, bonds, real estate,
commodities, etc.). Nor is it intended to reimburse participants for unrelated legal
expenses (e.g., real estate transactions), fines or penalties (e.g., tax penalties).

Participating executives may select the agent(s) from whom they wish to receive counsel.

	8.  	How Should Participants Submit Amounts for Reimbursement?

All Tax and Financial Advisory Assistance amounts should be submitted on an ACCO Brands
Expense Report as a Miscellaneous Expense. Amounts should be submitted in a timely fashion
(e.g., per standard expense reimbursement guidelines).exv10w16

 

 Exhibit 10.16

	 	 	 	 	 	 
	 	 

	 	 	Benefit Summary for Executives	 
	 	

	 	 	Executive Automobile Allowance Program	 
	 	 	 	 

	I.  	ELIGIBILITY
	 
	   	Full-time ACCO Brands’ executives whose positions are classified in a pay grade of 9 or
higher, on the US dollar payroll, are eligible to receive an automobile allowance.
	 
	II.  	ENROLLMENT
	 
	   	Upon notification of your eligibility, either through hire or promotion, the ACCO
Compensation Group will authorize the Payroll Manager to initiate payment of your auto
allowance on the next available payroll cycle. The authorization will include your name,
your employee number, the effective date, and allowance amount. The effective date of the
allowance will be the day that you met the eligibility requirements.
	 
	   	The allowance will be paid to you on a semi-monthly basis and included in your regular pay
check. All automobile allowance payments are considered taxable income.
	 
	   	If you are promoted to a grade that would change your allowance level, the Compensation
Group will instruct the Payroll Manager to make the appropriate changes effective the date
of promotion.
	 
	   	Periodically, the Compensation Group will review executive auto allowances to ensure the
level of allowance remains appropriate and meets the objectives of the policy.
	 
	III.  	TERMS
	 
	   	Your automobile allowance is intended to cover the expenses of operating a vehicle for
business related activities. The vehicle funded by this program must be driven by you during
the business week. You will be responsible for all costs of operating the automobile,
including, but not limited to, gas, maintenance, licenses, taxes, and other expenses.
Business mileage will not be reimbursed under this program.
	 
	   	Allowance Levels
	 
	   	The amount of the allowance is based on your pay grade as detailed below:

	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	ACCO Grade Level	 	 	Monthly Allowance	 	 	 	Semi-monthly Amount	 	 
	 	Grade 9
	 	 	$	700.00	 	 	 	$	350.00	 	 
	 	Grades 10-11
	 	 	$	900.00	 	 	 	$	450.00	 	 
	 	Grades 12-16
	 	 	$	1,166.00	 	 	 	$	583.00	 	 
	 	Grades 17 and higher
	 	 	$	1,333.00	 	 	 	$	666.50	 	 
	 

Vehicle Requirements

It is expected that vehicle funded by this benefit be commensurate with the level of
position within ACCO Brands and allowance level provided under this program.

 

 

Vehicles must not be older than four (4) model years and must provide seating for four (4)
adults. Qualified vehicles for this program include sedans and four (4) door sports utility
vehicles and mini vans. Full sized vans, conversion vans, trucks, sports cars, two-seat
vehicles, and recreational vehicles are considered unacceptable under this program.

Insurance Requirements

You are required to obtain and maintain, at your own expense, comprehensive automobile
liability insurance with limits not less than $150,000 per person; $300,000 per occurrence
for bodily injury; $100,000 per occurrence for property damage liability; and an umbrella
policy of at least $1,000,000 per occurrence.

	IV.  	EFFECT ON OTHER BENEFITS
	 
	   	The income provided by this program will not be considered as compensation for the purpose
of determining or calculating any other benefits including any life insurance, retirement,
savings and disability amounts.
	 
	V.  	TERMINATION OF PARTICIPATION 
	 
	   	Upon voluntary separation or retirement from ACCO Brands, you will receive the allowance
through the last paid day of work. In the event that you are separated involuntarily, the
Executive Severance Policy will determine the standard severance period through which the
automobile allowance will be paid, as well as the method of payment. If you experience a
status change that would deem them ineligible to participate in the program, the allowance
would cease on the date of the status change.<PAGE>

                                                                    Exhibit 10.1

                       EXCLUSIVE PATENT LICENSE AGREEMENT

      This EXCLUSIVE PATENT LICENSE AGREEMENT is entered into as of April 2,
1997, between IriSys Research & Development, LLC ("LICENSEE") and the Center for
Neurologic Study ("LICENSOR").

      NOW, THEREFORE, the parties hereby agree as follows:

      1.    CERTAIN DEFINITIONS.

            1.1   An "AFFILIATE" of a party means an entity directly or
indirectly controlling, controlled by or under common control with that party
provided that such entity will be considered an Affiliate only for the time
during which such control exists.

            1.2   "LICENSED PATENTS" means the patents or patent applications
set forth on Schedule A, including any continuations, continuations-in-part,
divisions, reissues, reexaminations and extensions thereof and patents
corresponding thereto.

            1.3   "LICENSED PRODUCTS" means and includes any and all
technologies, products, processes or biological materials embodied in whole or
in part, in the Licensed Patents.

            1.4   "NET REVENUES" means all sales, fees, royalties, milestone
payments, revenues, receipts, and monies directly or indirectly collected or
received by Licensee from the sale of Licensed Products whether in cash or by
way of other benefit, advantage, or concession (in which case the applicable
revenue will be the monetary equivalent of the same), whenever and wherever
obtained, which will not in any way be limited by territorial limitations or by
the source of those revenues, and will include any revenues which Licensee or
the other party directs to be paid to any other person or corporation, less (a)
in the event such revenues derive from Licensee's sublicense to third parties,
any and all of Licensee's reasonable out of pocket expenses arising therefrom,
including but not limited to, attorney's fees and expenses and (b) in the event
Licensee sells products or technologies covered by the Licensed Patents or
derives revenue from performing services covered by the Licensed Patents the
amount of any trade or cash discounts or allowances, transportation costs and
costs associated with returns. The calculations of Net Revenues will be carried
out in accordance with generally accepted accounting principles applied on a
consistent basis. All aforesaid monies earned or accrued due to Licensee during
the term of the Licensed Patents, but collected by Licensee after the term of
the Licensed Patents, will be included within Net Revenues for the purposes of
this Agreement. Net Revenues does not include any revenues, receipts or other
monies received in connection with or for the purpose of research and
development cost funding, including, without limitation, any governmental or
charitable grants received by Licensee for such purpose.

      2.    LICENSE.

            2.1   Grant. Subject to all terms and limitations of this Agreement,
Licensor hereby grants to Licensee an exclusive (even as to Licensor) license
(with the right to sublicense to others) to offer, make, use and sell
technology, products or processes with respect to, and

<PAGE>

covered by, the Licensed Patents in the United States. This license will
terminate with respect to any individual Licensed Patent upon the expiration of
such Licensed Patent, but will remain in force with respect to any unexpired
Licensed Patents until each such Licensed Patent expires, and will automatically
expire without the necessity of any action on the part of Licensor or Licensee,
upon the expiration of the last to expire of such Licensed Patents. The parties
hereto agree that Licensor shall not sell the Licensed Products to any other
party during the term of this Agreement.

            2.2   Royalties. As partial consideration for this Agreement,
Licensee will pay Licensor a royalty of (a) 50% on its Net Revenues received in
connection with the sublicense of the Licensed Patents or (b) 10% on its Net
Revenues received in connection with the making, use or sale of products or
technology covered by any of the Licensed Patents that have not expired at the
time of the receipt of such Net Revenues.

            2.3   Payment. Royalties will be paid, in US dollars, within thirty
(30) days of the end of each calendar quarter with respect to Net Revenues
received during that period. For each applicable period in which Net Revenues
are received by Licensee sales during the term of this Agreement, Licensee will
provide Licensor a written report within the same 30 days showing Net Revenues
subject to the royalty obligations of this Agreement and a calculation of such
royalties then due and payable.

                  2.3.1 In the event that Licensee becomes obligated at any time
or from time to time during the term of this Agreement to pay royalties to any
third party to practice the rights granted hereunder, Licensee's royalty
obligation to Licensor shall be reduced by an amount equal to its royalty
obligation to such third party.

                  2.3.2 Licensee's obligation to pay royalties hereunder shall
be suspended during any period of time that Licensee is enjoined from exercising
any of its rights hereunder with respect to the Licensed Patents or any Licensed
Products. Upon resolution of any such matter, Licensee shall promptly pay to
Licensor all amounts previously withheld with respect to such matter, less (i)
any reduction which may be applicable pursuant to the paragraph above, and (ii)
expenses incurred in the resolution thereof.

                  2.3.3 Any tax paid by Licensee on account of royalties payable
to Licensor under this Agreement shall be deducted from the amount of royalties
otherwise due.

                                       2
<PAGE>

      3.    RECORDS/AUDITS. Licensee shall keep accurate and correct records
with regard to Net Revenues and royalties and the calculation thereof under this
Agreement. Such records shall be retained for at least three (3) years following
a given report period. Licensor is hereby granted by Licensee the right, upon
reasonable written notice to Licensee, to retain an independent certified public
accountant reasonably acceptable to Licensee to audit Licensee's records solely
to verify sales of the Licensed Products and accuracy of all Net Revenue
reports. Licensor may designate an agent for purposes of this verification and
this verification shall be upon reasonable notice to Licensee. Licensor's
independent certified public accountant shall have the right, at Licensor's
expense, and on a confidential basis, to copy such records or any portion
thereof.

      4.    CONFIDENTIALITY. Each party recognizes the importance to the other
of the other's proprietary information. In particular Licensee recognizes that
Licensor's proprietary information (and the confidential nature thereof) are
critical to the business of Licensor and that Licensor would not enter into this
Agreement without assurance that such technology and information and the value
thereof will be protected as provided in this Section 4 and elsewhere in this
Agreement. Accordingly, the party receiving the other party's proprietary
information will (i) hold the disclosing party's proprietary information in
confidence as a fiduciary and take all reasonable precautions to protect such
proprietary information (including, without limitation, all precautions the
receiving party employs with respect to its confidential materials), (ii) not
divulge (except as such disclosure is required by Licensee's compliance with
legal requirements, and in any such case Licensee will promptly notify Licensor
of any such legally required disclosure) any such proprietary information or any
information derived therefrom to any third person, and (iii) not make any use
whatsoever at any time of such proprietary information except as expressly
authorized by this Agreement. Without granting any right or license, the
disclosing party agrees that the foregoing clauses (i), (ii), and (iii) will not
apply with respect to information the receiving party can document (a) is in or
(through no improper action or inaction by the receiving party or any Affiliate,
agent or employee) enters the public domain (and is readily available without
substantial effort), or (b) was rightfully in its possession or known by it
prior to receipt from the disclosing party, or (c) was rightfully disclosed to
it by another person without restriction, or (d) was independently developed by
it by persons without access to such information and without use of any
proprietary information of the disclosing party.

      5.    PATENT MATTERS. Licensor retains the sole right and discretion to
file and prosecute any foreign or US patent applications and maintain patents
relating to the Licensed Patents or any improvements made by Licensor. Licensor
will provide any status reports or other information relating to patents or
patent applications that licensee requests in writing. Unless agreed otherwise
in writing, in advance, Licensee will not file, apply for or prosecute any
foreign patents corresponding to the Licensed Patents. Any improvements to any
technology expressly claimed by the Licensed Patents (whether or not patentable
or copyrightable) will be owned solely by Licensor. If either party becomes
aware of any product or activity of any third party that involves infringement
or violation of any Licensed Patents or other proprietary right of Licensor,
then such party will promptly notify the other party in writing of such
infringement or violation. Licensor may in its discretion take or not take
whatever action it believes is appropriate. If Licensor elects to take action,
Licensee will fully cooperate therewith at Licensee's expense. If Licensor
initiates and prosecutes any such action under this Section 5, all amounts
received will first be used to reimburse Licensor's legal expense (including
court costs

                                       3
<PAGE>

and attorney's fees) and Licensor will be entitled to (a) 50% of all amounts
awarded by way of judgment, settlement or compromise if the amounts received are
in compensation for lost reasonable royalties or (b) 10% of any amounts received
that are compensation for Licensee's lost profits on sales of products or
technology and in either such case the remainder will be paid to Licensee. If
Licensor elects not to take any action in connection with such infringement or
violation, Licensee may, on Licensor's behalf and as exclusive licensee,
initiate action to enforce the rights granted hereunder. In such events, (i)
Licensor agrees to appoint Licensee as its lawful attorney in fact with full
power to prosecute such action, (ii) Licensee will bear the costs of such action
and (iii) any amounts received will first be used to reimburse Licensee's legal
expenses and the remaining portion will be allocated 90% to Licensee and 10% to
Licensor. Licensee understands that Licensor has not conducted comprehensive
patent searches in all countries. Licensor and Licensee will work cooperatively
regarding issues concerning patents and proprietary rights and similar matters
and to exercise reasonable business judgment in carrying out the objects of this
Agreement to avoid exposing either party to liability under patent or similar
laws in any country. Licensee represents and warrants that it is not aware of
infringement or potential infringement by any third parties that have not been
communicated to Licensor in writing before execution of this Agreement.

      6.    TERM AND TERMINATION. Unless terminated earlier in accordance with
this Agreement, the term of license granted hereunder shall expire upon the
termination of Licensee's royalty obligations to Licensor.

            6.1   In the event Licensee fails to make payments due hereunder,
Licensor shall have the right to terminate this Agreement upon forty-five (45)
days written notice, unless Licensee makes such payments within the forty-five
(45) day notice period.

            6.2   Licensee shall have the right during a period of six (6)
months following the effective date of such termination to sell or otherwise
dispose of Licensed Products existing at the time of such termination, and shall
make a final report and payment of all royalties related thereto within sixty
(60) days following the end of such period or the date of the final disposition
of such inventory, whichever occurs first.

            6.3   This Agreement will remain in effect according to the
expiration terms set forth in Section 2, unless terminated pursuant to this
Section 6. If a party materially breaches a material provision of this
Agreement, the other party may terminate this Agreement upon forty-five (45)
days' written notice unless the breach is cured within the notice period. In the
event of any expiration or termination of this Agreement, the rights and
licenses granted Licensee under this Agreement will terminate but all other
provisions of this Agreement will continue in accordance with their terms.
Neither party will incur any liability whatsoever for any damage, loss or
expenses of any kind suffered or incurred by the other arising from or incident
to any termination of this Agreement (or any part thereof) by such party which
complies with the terms of the Agreement whether or not such party is aware of
any such damage, loss or expenses. Termination is not the sole remedy under this
Agreement and, whether or not termination is effected, all other remedies will
remain available. In the event of any expiration or termination of this
Agreement for any reason, the provisions of Section 3, 4, 5, 6, 9, 11, 12, 13.6
and 13.7 will survive.

                                       4
<PAGE>

            6.4   Notwithstanding any other provision of this Agreement,
Licensee shall be considered to have committed an event of default, and this
Agreement and the license granted hereunder shall terminate, if any of the
following occur:

                  6.4.1 Licensee fails or neglects to perform or observe any of
its existing or future obligations under this Agreement, including, without
limitation, the obligation to use its reasonable best efforts to use the rights
and exclusive license granted herein to attempt to obtain maximum advantage, and
the timely payment of any sums due Licensor within fifteen (15) days after
notice that the payment is delinquent.

                  6.4.2 Licensee fails to file one Investigational New Drug
Application (IND) for Licensed Products by September 30, 1998 and has not
initiated significant clinical activity by September 30, 1999.

                  6.4.3 Licensee makes any assignment of its business for the
benefit of creditors.

                  6.4.4 A petition of bankruptcy if filed by or against
Licensee.

                  6.4.5 A receiver, trustee in bankruptcy, or similar officer is
appointed to take charge of all or part of Licensee's property.

                  6.4.6 Licensee is adjudicated a bankrupt.

      7.    INDEPENDENT CONTRACTORS. The parties are independent contractors and
not partners, joint venturers, and neither has any right or authority to bind
the other in any way.

      8.    ASSIGNMENT. This Agreement shall not be assigned by Licensee,
whether as part of a transfer of all, or substantially all, of the business to
which this Agreement relates, or otherwise, without the prior written consent of
Licensor, which shall not be unreasonably withheld. In the event Licensor has
not provided written consent within 30 days following written notice of intent
to assign, Licensee has the right to proceed with assignment. This Agreement
shall be binding upon and inure to the benefit of successors in interest and
assigns of Licensee.

      9.    GOVERNING LAW. This Agreement will be governed by and construed
under the laws of the State of California and the United States without regard
to conflicts of laws provisions thereof. The parties agree that the proper forum
for the hearing and consideration of any dispute, case, or controversy arising
out of this Agreement or its interpretation and enforcement shall be within the
appropriate tribunal in San Diego, California.

      10.   NOTICES. Notices under this Agreement will be sufficient only if
personally delivered, delivered by a major commercial rapid delivery courier
service or mailed by certified or registered mail, return receipt requested to a
party at its addresses set forth in the signature block below or as amended by
notice pursuant to this subsection.

      11.   ENTIRE AGREEMENT. This Agreement constitutes the final, complete,
and exclusive statement of the terms of the agreement between the parties
pertaining to the subject

                                       5
<PAGE>

matter of this Agreement and supersedes all prior and contemporaneous proposals
(both oral and written), negotiations, conversations, discussions, and
understandings and agreements of the parties. no party has been induced to enter
into this Agreement by, nor is any party relying on, any representation or
warranty outside those expressly set forth in this Agreement.

      12.   WARRANTY DISCLAIMER. Licensor expressly disclaims any and all
implied or express warranties and makes no express or implied warranties of
merchantability of the Licensed Patents, Licensed Processes or Licensed Products
contemplated by this Agreement.

            12.1   Nothing in this agreement shall be construed as: (a) a
warranty or representation by Licensor as to the validity or scope of any
Licensed Patents; or (b) a warranty or representation that anything made, used,
sold or otherwise commercialized under the license granted in this agreement is
or will be free from infringement of patents owned by third parties; or (c)
conferring a right to use in advertising, publicity or otherwise the name of
Licensor, unless Licensor has specifically approved the same in writing.

            12.2   Licensor hereby represents that it has all right, title and
interest in and to the Licensed Patents and that it has the full right and power
to grant the exclusive license set forth in this Agreement.

      13.   GENERAL.

            13.1   Licensee shall not distribute or resell the Licensed Products
to others except in accordance with this Agreement, Licensee agrees to comply
with all applicable laws and regulations.

            13.2   The sole relationship between Licensor and Licensee shall be
that of Licensor and Licensee and Licensor shall have no power to bind or
obligate Licensee in any manner, except as is expressly set forth in this
Agreement.

            13.3   Each party shall indemnify, defend, and hold harmless the
other party and its employees and officers and their respective successors,
heirs and assigns from any and all liability, actions, demands, claims, losses,
damages, recoveries, settlements, and expenses {including without limitation
reasonable attorney fees and litigation expenses. of any nature, including
without limitation, liability for death, personal injury, or property damages
arising directly or indirectly from or in connection with such party's
possession, distribution, or other use of Licensed Products under this Agreement
and/or from such party's publication or distribution of test reports, data, and
other information relating to Licensed Products.

            13.4   If any provision of this Agreement is ultimately held to be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.

            13.5   Any delay in enforcing a party's rights under this Agreement
or any waiver as to a particular default or other matter shall not constitute a
waiver of a party's right to the future enforcement of its rights under this
Agreement, except in the event of written and signed waiver.

                                       6
<PAGE>

            13.6   Limitation of Liability. Licensor will not be liable with
respect to any subject matter of this Agreement under any contract, negligence,
strict liability or other theory for cost of procurement of substitute goods,
services, technology or rights.

            13.7   Severability. If any provision of this Agreement is held
illegal, invalid or unenforceable by a court of competent jurisdiction, that
provision will be limited or eliminated to the minimum extent necessary so that
this Agreement will otherwise remain in full force and effect and enforceable.

            13.8   Amendment and Waiver. Except as otherwise expressly provided
in this Agreement, any provision of this Agreement may be amended and the
observance of any provision of this Agreement may be waived (either generally or
any particular instance and either retroactively or prospectively) only with the
written consent of the parties.

            13.9   Arbitration. Any dispute, controversy, or claim arising out
of this Agreement, or the interpretation, performance, breach, enforcement or
termination thereof, or arising out of the respective rights and duties of the
parties to this Agreement, will be settled by arbitration in accordance with the
Rules of the American Arbitration Association, in effect as of the date hereof.
This provision does not apply to disputes, claims, or controversies involving
any issues of or disputes relating to patent validity or infringement arising
out of or relating to this Agreement, which will be determined by a court of
competent jurisdiction. The parties have agreed on this mechanism in order to
obtain prompt and expeditions resolutions of disputes. Unless the parties agree
in writing on the appointment of a single arbitrator, the matter will be
referred to three arbitrators; one to be appointed by each party, and the third,
who will act as Chairman, being nominated by the two so selected by the parties.
The award is to be given by a majority decision; however, if there be no
majority, the award will be made by the Chairman of the arbitral tribunal alone.
The cost of the proceeding will initially be borne equally by the parties to the
dispute, but the prevailing party in such proceeding will be entitled to
recover, in addition to reasonable attorneys' fees and all other expenses, its
contribution for the reasonable expenses of the arbitrator as an item of damage
and/or recoverable expenses. The place of arbitration will be in San Diego,
California. Judgment on the award rendered by the arbitrators may be entered in
any court of competent jurisdiction, or application may be made to such court
for judicial acceptance of the award and/or an order of enforcement as the case
may be.

      IN WITNESS WHEREOF the parties to this Agreement have executed this
Agreement this 25th day of July, 1997.

LICENSEE:                                    LICENSOR:

IriSys Research & Development, LLC           Center for Neurologic Study

By: Gerald J. Yakatan                        By: Richard A. Smith
    _______________________________              ____________________________

Gerald J. Yakatan, Ph.D.                     Richard A. Smith, M.D.
President & CEO                              Director
11760 Sorrento Valley Road, Suite E          9850 Genessee Avenue, Suite 320
San Diego, California 92121-1018             La Jolla, California 92037

                                       7
<PAGE>

                                   SCHEDULE A

LICENSED PATENTS:

            1.    5,166,207, "Method for Enhancing the Systemic Delivery of
Dextromethorphan for the Treatment of Neurological Disorders," issued November
24, 1992.

            2.    5,206,248, "Method for Reducing Emotional Lability in
Neurologically Impaired Patients," issued April 27, 1993.

            3.    5,350,756, "Use of a Cytochrome Oxidase Inhibitor to Increase
the Cough-Suppressing Activity of Dextromethorphan," issued September 27, 1994.

            4.    5,366,980, "Use of Dextromethorphan and an Oxidase Inhibitor
to Treat Dermatitis," issued November 22, 1994.

            5.    PCT Application PCT/US94110771, "Compositions Useful for the
Preparation of Medicines for Treating a Variety of Intractable Disorders."

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