Document:

Exhibit 10.46

 

 

 

 

 

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	American Sands Energy Corp.: Sunnyside Project

Proposal No. ESPP14038-01

Page 2 of 12	 

 

 

PROPRIETARY AND CONFIDENTIAL
STATEMENT

 

This proposal and all later refinements
and amendments (collectively, “Proposal”) contain intellectual property, technical know-how, pricing and cost data
and other highly confidential information that are proprietary to FLSmidth. This Proposal and related documents may only be used
as a basis to evaluate FLSmidth as a potential supplier of equipment, technology, services and technical solutions. For that purpose,
you may disclose and distribute this Proposal to persons in your organization and others retained by you to evaluate its contents.
However, no part of this Proposal can otherwise be disclosed or distributed to others or quoted, copied or reproduced in any form
for any purpose without FLSmidth’s prior express written permission.

 

Revision Log

 

	Revision	Date	Responsible	Description
	
         

        A
	
         

        11/06/14
	
         

        P. Keyser
	
        Proposal for Review

        & Approval

	B	17/06/14	P. Keyser	As Sold / Approved

 

 

IN WITNESS WHEREOF, American Sands Energy
Corp. has approved the Scope of Work hereto have executed this Agreement as of the date first set forth below.

 

	American Sands Energy Corporation	 	FLSmidth USA,Inc.	 
	 	 	 	 
	By: 	William Gibbs	 	By: 	Brian T. Field	 
	Title: 	CEO	 	Title: 	Vice President	 
	Signature: 	/s/ William Gibbs	 	Signature: 	/s/ Brian T. Field	 
	Date:  	6/26/14	 	Date:	6/25/14	 

 

 

 

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11 June 2014

 

American Sands Energy Corp. Sunnyside Project

201 S. Main St., Suite 1800

Salt Lake City, UT 84111

 

Ref: Engineering Activities for CAPEX
and OPEX Estimate

Attention: Mr. Robin Gereluk

 

Dear Mr. Gereluk:

 

FLSmidth is pleased to provide the following
proposal for the Sunnyside Project Preliminary Budget Engineering Activities.

 

For the execution of the project, FLSmidth
recommends the following approach:

 

Phase 1: FLSmidth will proceed with
Preliminary Budget level efforts sufficient to confirm flowsheets, equipment lists, preliminary General Arrangements, costs and
schedule to complete the design and supply. As a primary deliverable of this Phase, FLSmidth will prepare and submit a report with
supporting doucmentation to ASEC for the CAPEX and OPEX of a 5,000 bbl/day oil sands plant and a budget proposal for supply of
a defined FLS scope on an Engineering, Procurement, and technical Services (EPS) basis.

 

Phase 2: Upon approval of ASEC,
FLSmidth will proceed with Detailed Engineering, procurement of all required equipment, and all Project Management functions within
the EPS battery limits.

 

This proposal for the Phase 1, will be
developed over a period of 2 - 3 months.

 

We trust the enclosed meets your expectations. Please let us
know how we may be of further assistance.

 

Sincerely,

 

FLSmidth USA, Inc.

 

 

/s/ Paul M. Keyser                             

Paul M. Keyser

Global Director – Extended Scope

Metallurgical Technologies

 

 

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TABLE
OF CONTENTS

 

 

	PROPRIETARY AND CONFIDENTIAL STATEMENT 	2
	 	 
	REVISION LOG 	2
	 	 
	PROPOSAL LETTER 	3
	 	 
	11 JUNE 2014	3
	 	 
	1.  PROPOSAL SCOPE 	5
	1.1.  DIVISION OF RESPONSIBILITY (DOR) MATRIX	 5
	1.2.  BATTERY LIMIT / ASSUMPTIONS 	6
	 	 
	2. PROJECT ORGANIZATION CHART – FLSMIDTH	7
	 	 
	3. PRICING AND COMMERCIAL TERMS 	8
	3.1.  PRICING 	8
	3.2.  GENERAL TERMS AND CONDITIONS 	8
	 	 
	APPENDIX A: MUTUAL NON-DISCLOSURE AND NON-USE AGREEMENT 	10
	 	 
	APPENDIX B: TERMS AND CONDITIONS 	16
	 	 
	APPENDIX C: REPORT TABLE OF CONTENTS (DRAFT)	22

 

 

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1. PROPOSAL SCOPE

 

The Scope of Work included in this proposal
is to perform the Preliminary Budget Engineering activities to provide ASEC with a Class IV capital cost estimate (+/-25%) and
OPEX estimate for a proposed 5,000 bbl/d mined oil sands plant near the city of Price, Utah.

 

1.1.
Division of Responsibility (DOR) Matrix

 

The Scope of Work included on this proposal
is according to the following DOR.

 

 

 

 

 

 

The information transmitted by this document is the proprietary
and confidential property of FLSmidth and may not be duplicated, disclosed or utilized without written consent from FLSmidth.

 

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1.2.
Battery Limit / Assumptions

 

The block flow diagram below defines the
battery limits of the study. FLSmidth will, however, incorporate ASEC supplied information into the study with respect to the
distillation section of the plant.

 

 

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2. PROJECT ORGANIZATION
CHART - FLSMIDTH

 

The Services will be performed primarily
through the FLSmidth’s Metallurgical Technologies Group, Extended Scope and Plant Systems Group within the Mineral Processing
Division, headquartered in Salt Lake City, Utah, USA. Our group is uniquely positioned to provide the greatest value to ASEC. With
an industry experienced team, full-discipline engineering and project managers and a world-class metallurgical testing laboratory
combined with direct equipment design and supply, FLSmidth can deliver superior designs at lower cost and in less time than the
traditional EPCM approach. Equipment supply specialists are an integral part of the Project Execution Team. Thus, the client will
benefit from faster turn-around of OEM data, more reliable deliveries, and a more fully-integrated Execution Plan. This translates
directly into compressed execution schedules, lower capital and assurances that the process will perform as intended.

 

The Organization Chart proposed by FLSmidth
is as follows:

 

 

 

 

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3.PRICING AND COMMERCIAL TERMS

 

3.1.Pricing

 

The total cost for development of the Preliminary Budget Study
is provided below. FLSmidth will supply the services on a T&M basis up, not-to-exceed the value below.

 

 

	ITEM	DESCRIPTION	HOURS	USD
	1	Engineering Support Man Hours	1,243	$151,771
	 	 	 	 
	2	Travel Provision	Not Included	Not Included

 

Notes:

 

1- Meetings

A)Travel
Expenses (Tickets, living expenses and hotel) will be under reimbursable expenses and are excluded from this estimate.

 

2- General Notes

Note 1: Pricing excludes other taxes, duties or freight

Note 2: Proposal Validity 30 days

 

3.2.General
Terms and Conditions

 

NDA Agreement Requirement:

 

The MUTUAL NON-DISCLOSURE AND NON-USE AGREEMENT, executed
on 3 June 2014 and signed by both ASEC and FLS will remain in effect.

 

Schedule:

 

FLSmidth will develop the project in 2-3 months commencing
after the Project Kick-Off Meeting is completed.

 

Terms and Conditions:

 

FLSmidth is including its standard Terms and Conditions
are attached an made part of this proposal.

 

Payment Terms:

 

FLSmidth proposes a T&M, not-to-exceed Contract,
under the following conditions:

 

		•	FLSmidth shall invoice on or about the effective date of the Contract and the Customer shall pay Contractor a twenty percent
(20%) down payment of the Contract Price for Engineering Services (“Down Payment”).

 

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		•	FLSmidth shall invoice the Customer on a monthly basis for the hours expended
during the previous month.

 

		•	Should the total of all invoices (Down Payment plus monthly invoices) the
not-to-exceed price less 10% be reached prior to completed of the project, FLSmidth will stop monthly invoices until the the study
report is delivered to the Customer.

 

		•	Upon delivery of the Report in electronic format, FLSmidth will invoice the
remaining 10% of the contract value.

 

		•	Customer shall make payment of the invoiced amount no later than 15 (15)
Days after the date of Contractor’s invoice for such Engineering Services.

 

		•	Payments by the Customer to FLSmidth shall be by Electronic Transfer.

 

 

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APPENDIX
A: MUTUAL NON-DISCLOSURE AND NON-USE AGREEMENT

 

 

 

 

 

 

 

 

 

 

 

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MUTUAL NON-DISCLOSURE
AND

NON-USE AGREEMENT FOR
PROJECTS

 

This Non-Disclosure and Non-Use Agreement (“Agreement”)
is made this   3rd   day of   June  , 2014    ,

 

	BETWEEN [1]:	FLSmidth USA, Inc.       
                                 , a Delaware corporation (“FLSmidth”), with an office at 7158 S. FLSmidth
                                 Drive, Midvale, Utah 84047-5559                                 ,

	 	 
	AND [2]:

 	American Sands Energy Corporation                
    , a x corporation 

    £ partnership £                     
    organized under the laws of Delaware          (“Company”),
    its principal place of business being: 201 S. Main St., Suite 1800 Salt Lake City, UT 84111    .

 

BACKGROUND:

 

		A.	Each party or its client, or both, have certain technical and commercial information which it considers
to be proprietary and confidential.

 

		B.	Each
party or its client, or both, have certain technical and commercial information which it considers to be proprietary and confidential.
Each party wishes to disclose to the other party Confidential Information in relation to the Purpose. Each party wishes to ensure
that the other party maintains the confidentiality of its Confidential Information. In consideration of the benefits to the parties
of the disclosure of the Confidential Information, the parties have agreed to comply with the following terms in connection with
the use and disclosure of Confidential Information.

 

NOW, THEREFORE,
in consideration of the mutually binding covenants and conditions set forth herein, as well as for other good and valuable consideration,
the parties agree as follows:

 

		1.	DEFINITIONS

 

		1.1	The definitions and rules of interpretation in this article apply in this Agreement. 

Confidential
Information: all confidential information (however recorded, preserved or disclosed) disclosed or made available directly or
indirectly (hereinafter “disclosed” or “disclose(s)”) by a party or its Representatives to the other party
or that party's Representatives, or both, on or after the date of this Agreement in connection with:

 

		(a)	the Purpose;

 

		(b)	any information that would be regarded as confidential by a reasonable business person relating to:

 

		(i)	the business, affairs, customers, clients, suppliers, plans, intentions, or market opportunities
of the Disclosing Party; and

 

		(ii)	the operations, processes, product information, systems, system services, know-how, designs, trade secrets technical data,
design information, developments, discoveries, inventions, ideas, and theories of the Disclosing Party; or

 

 

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		(c)	any information developed by the parties in the course of carrying out this Agreement.

 

Disclosing
Party: a party to this Agreement which discloses Confidential Information.

 

Purpose:
to enable Company to solicit offers, bids or quotations from FLSmidth for the supply of proprietary process and plant designs,
proprietary and auxiliary equipment, and technical services, and, if a contract is executed by and between FLSmidth and Company,
to enable FLSmidth to furnish or supply such proprietary process and plant designs, proprietary and auxiliary equipment and spare
parts and technical services.

 

Recipient:
a party to this Agreement which receives or obtains directly or indirectly Confidential Information.

 

Representative:
employees, officers, agents and other representatives of a party, as the case may be.

 

		2.	OBLIGATIONS OF CONFIDENTIALITY

 

		2.1	The Recipient shall keep the Disclosing Party's Confidential Information confidential and, except
with the prior written consent of the Disclosing Party, shall not, and shall ensure that its Representatives shall not:

 

		(a)	use or exploit the Confidential Information in any way except for the Purpose; or

 

		(b)	disclose the Confidential Information in whole or in part to any third party, except as expressly permitted by this Agreement;
or

 

		(c)	copy, reduce to writing or otherwise record the Confidential Information except as strictly necessary for the Purpose.

 

		2.2	The Recipient may only disclose the Disclosing Party's Confidential Information to those of its Representatives who need to
know this Confidential Information for the Purpose, provided that:

 

	 	(a)	it informs these Representatives of the confidential nature of the Confidential Information before disclosure; and
	 	 	 
	 	(b)	at all times, it is responsible for these Representatives' compliance with the obligations set out in this Agreement.

 

		2.3	A party may disclose Confidential Information to the extent required by law, by any governmental
or other regulatory authority or by a court or other authority of competent jurisdiction provided that, to the extent it is legally
permitted to do so, it gives the other party as much notice of this disclosure as possible.

 

		2.4	No party shall make, or permit any person to make, any public announcement concerning this Agreement,
the Purpose or its prospective interest in the Purpose without the prior written consent of the other party (such consent not to
be unreasonably withheld or delayed) except as required by law or any governmental or regulatory authority or by any court or other
authority of competent jurisdiction. No party shall make use of the other party's name or any information acquired through its
dealings with the other party for publicity or marketing purposes without the prior written consent of the other party.

 

 

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		3.	EXCLUSIONS

 

Excluded
from the obligations of this Agreement is any information that:

 

		(a)	is or becomes generally available to the public other than as a result of its disclosure by the
Recipient or its Representatives in breach of this Agreement; or

 

		(b)	was available to the Recipient on a non-confidential basis prior to disclosure by the Disclosing
Party; or

 

		(c)	was, is or becomes available to the Recipient on a non-confidential basis from a person who, to
the Recipient's knowledge, is not bound by a confidentiality agreement with the Disclosing Party or otherwise prohibited from disclosing
the information to the Recipient; or

 

		(d)	was lawfully in the possession of the Recipient before the information was disclosed to it by the
Disclosing Party; or

 

		(e)	the parties agree in writing is not confidential or may be disclosed; or

 

		(f)	is developed by or for the Recipient independently of the information disclosed by the Disclosing
Party.

 

		4.	RETURN OF INFORMATION

 

At
the request of the Disclosing Party, the Recipient shall:

 

		(a)	return to the Disclosing Party all documents and materials (and any copies) containing, reflecting,
incorporating, or based on the Disclosing Party's Confidential Information and shall also destroy any material it prepared which
incorporates any Confidential Information, and shall promptly certify such destruction in a writing to Disclosing Party;

 

		(b)	erase all the Disclosing Party's Confidential Information from its computer systems or which is
stored in electronic form (to the extent possible); and

 

		(c)	certify in writing to the Disclosing Party that it has complied with the requirements of this article,
provided that a Recipient may retain documents and materials containing, reflecting, incorporating, or based on the Disclosing
Party's Confidential Information to the extent required by law or any applicable governmental or regulatory authority. The provisions
of Article 2 shall continue to apply to any such documents and materials retained by the Recipient, subject to Article 3.

 

		5.	RESERVATION OF RIGHTS AND ACKNOWLEDGEMENT

 

		5.1	All Confidential Information shall remain the property of the Disclosing Party. Each party reserves
all rights in its Confidential Information. No rights, including, but not limited to, intellectual property rights, in respect
of a party's Confidential Information are granted to the other party and no obligations are imposed on the Disclosing Party other
than those expressly stated in this Agreement.

 

		5.2	Except as expressly stated in this agreement, no party makes any express or implied warranty or
representation concerning its Confidential Information, or the accuracy or completeness of the Confidential Information.

 

 

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		5.3	The Recipient acknowledges that damages alone would not be an adequate remedy for the breach of
any of the provisions of this Agreement. Accordingly, without prejudice to any other rights and remedies it may have, the Disclosing
Party shall be entitled to seek equitable relief (including without limitation injunctive relief) concerning any threatened or
actual breach of any of the provisions of this agreement.

 

		6.	TERM AND TERMINATION

 

		6.1	Either party may at any time elect to discontinue providing Confidential Information and to terminate
this Agreement, effective on the giving of notice thereof in writing to the other party. Upon the giving of such notice, except
as otherwise provided in this Agreement, the obligations and rights of the parties when providing and receiving Confidential Information
hereunder and the right to use the Confidential Information for the Purpose shall cease. The obligations of each party accrued
during the term of this Agreement shall continue for a period of 5 years from the termination of this Agreement provided that the
Recipient’s obligations with respect to any Confidential Information that is comprised of trade secrets shall continue for
so long as the information retains its trade secret status.

 

		6.2	Termination of this Agreement shall not affect any accrued rights or remedies to which either party
is entitled.

 

		7.	MISCELLANEOUS

 

		7.1	Entire Agreement and Variation.

 

		(a)	This Agreement constitutes the whole agreement between the parties and supersedes all previous
agreements between the parties relating to its subject matter. Each party acknowledges that, in entering into this Agreement, it
has not relied on, and shall have no right or remedy in respect of, any statement, representation, assurance or warranty (whether
made negligently or innocently) other than as expressly set out in this Agreement. Nothing in this clause shall limit or exclude
any liability for fraud or for fraudulent misrepresentation.

 

		(b)	No variation of this Agreement shall be effective unless it is in writing and signed by each of
the parties (or their authorised representatives).

 

		7.2	No Waiver. Failure to exercise, or any delay in exercising, any right or remedy provided under
this Agreement or by law shall not constitute a waiver of that or any other right or remedy, nor shall it preclude or restrict
any further exercise of that or any other right or remedy. No single or partial exercise of any right or remedy provided under
this Agreement or by law shall preclude or restrict the further exercise of that or any other right or remedy.

 

		7.3	Severability. All provisions of this Agreement are severable, and the unenforceability or invalidity
of any of the provisions of this Agreement shall not affect the validity or enforceability of the remaining provisions of this
Agreement. If any provision of this Agreement shall be found by a court of competent jurisdiction to be unenforceable in any respect,
then the court shall revise such provision the least amount necessary in order to make it enforceable.

 

 

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		7.4	Assignment. Except as otherwise provided in this Agreement, no party may assign, sub-contract
or deal in any way with, any of its rights or obligations under this Agreement or any document referred to in it without the written
permission of the other party.

 

		7.5	Independent Contractors. FLSmldth and Company are and will at all times solely remain Independent
contractors of the other, and neither the execution nor delivery of this Agreement, nor the disclosure and receipt of the Confidential
Information hereunder in any way implies or creates any onus or obligation on the part of either FLSmidth or the Company to enter
into any business relationship or contract, or to purchase any product(s) or service(s). Nothing in this Agreement shall, nor Is
Intended to, constitute the parties as principal-agent, partners, or trustee-beneficiary of each other.

 

		7.6	Governing Law and Jurisdiction. This Agreement shall be governed by and construed in accordance
with the laws of the jurisdiction where FLSmidth's main office is located (Pennsylvania for FLSmidth Inc. and Utah for FL.Smldth
USA Inc.), notwithstanding the result that otherwise may arise from application of the conflict of law rules of any competent jurisdiction.
All disputes concerning, arising from or relating In any way to this Agreement shall be decided solely in the courts of the jurisdiction
where FLSmidth's main office Is located. The Parties agree that such courts shall have In personam jurisdiction and venue over
each of them.

 

		7.7	Counterparts. This Agreement may be executed in any number of counterparts, by original
or facsimile signature, each of which shall be deemed to be an original and all counterparts taken together will be deemed to constitute
one and the same instrument.

 

IN WITNESS WHEREOF, the parties
hereto have executed this Agreement as of the date first set forth below.

 

 

	American Sands Energy Corporation	 	FLSmidth USA,Inc.	 
	 	 	 	 
	By: 	William Gibbs	 	By: 	Brian T. Field	 
	Title: 	Chairman/CEO	 	Title: 	Vice President, MetTech	 
	Signature: 	/s/ William Gibbs	 	Signature: 	 	 
	Date:  	6/5/14	 	Date:	 	 

 

 

 

 

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APPENDIX
B: TERMS AND CONDITIONS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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STANDARD TERMS
AND CONDITIONS FOR SUPPLY OF ENGINEERING SERVICES

 

		1.	DEFINITIONS:

 

		(a)	“FLS” shall mean the FLSmidth entity providing the proposal.

		(b)	“Buyer” shall mean the purchaser, its representatives and/or its agents acting on its
behalf.

		(c)	“Proprietary Data” shall mean engineering, drawings, specifications and/or instructions
created by FLS.
	 	(d)	“Work”
means the services that FLS is to perform or provide under this Contract as set forth in FLS’ proposal.

 

		2.	PREVAILING DOCUMENTATION:

 

		(a)	FLS’ proposal, including these terms and conditions, and any timely acceptance resulting
from, arising out of, or connected with this proposal, shall constitute the contract (the “Contract”), regardless of
any rejection or statement to the contrary in any document, which rejection, statement, and all additional or different terms or
conditions, are rejected unless expressly accepted in writing by an authorized representative of FLS. No course of dealing, usage
of trade or course of performance may be used to imply or add terms or conditions to or amend the terms or conditions of the Contract.

		(b)	FLS’ proposal, these terms and conditions, any confidentiality agreement executed by the
parties prior to or concurrent with the formation of the Contract, and any conditions agreed to in writing by the parties embody
the entire understanding between FLS and Buyer. The Contract may only be amended by a written Change Order signed by authorized
representatives of both parties.

		(c)	Unless otherwise stated elsewhere in this proposal, or withdrawn or modified by FLS at an earlier
date, the proposal is valid for thirty (30) days. FLS reserves the right to withdraw, or change the terms of this proposal at any
time before formation of the Contract.

		(d)	FLS’ obligation under the Contract shall not commence until the date when (i) any down payment
required in the proposal has been received by FLS; and (ii) any Letter of Credit or other security instrument for payment as required
in the proposal has been received by FLS (the “Commencement Date”). If the Commencement Date does not occur within
thirty-one (31) days of the date on which the Contract is executed, FLS may, at its option, either renegotiate the Contract price
and terms or terminate the Contract.

		(e)	If FLS was authorized by Buyer to begin any part of the Work before the Commencement Date, all
such Work shall be deemed to have been performed solely under and subject to these terms. Payments for such Work shall be credited
against the Contract price.
	 	(f)	Article
headings are provided for convenience and are not to be used in construing this Contract.

 

		3.	CONFIDENTIAL INFORMATION:

 

		(a)	All drawings, specifications, instructions, manuals, products, intellectual property and other
such information provided and/or furnished by FLS, whether in written, oral or electronic format, as well as any discovery, invention,
development or improvement made or conceived by either party directly or indirectly as a result of FLS performing the Work hereunder
(collectively, “Confidential Information”) shall be regarded as and shall remain the exclusive property of FLS and
shall not be disclosed by Buyer to any third party without the express written permission of FLS. Buyer agrees to execute a confidentiality
agreement in a form acceptable to FLS upon request.
	 	(b) 	All
Proprietary Data used by FLS in performing the Contract shall remain the sole property of FLS, regardless of its disclosure to
Buyer or persons acting on Buyer’s behalf. Proprietary Data is confidential and Buyer shall not disclose any part of the
data to others without the prior written consent of FLS. FLS grants to Buyer a non-exclusive license to utilize the Proprietary
Data for purposes of design, installation and construction, maintenance, improvement or repair of the equipment, system, facility,
works, or process which is the subject of the Work. Use of Proprietary Data by Buyer is limited to the purposes of the Contract.
	 	(c)	FLS and Buyer agree that, if Buyer breaches its obligations under this Article: (i) the confidentiality
of FLS’ Confidential Information, its proprietary rights and interests in its Confidential Information and Proprietary Data,
and its business will be substantially threatened and impaired; (ii) monetary relief will not provide an adequate remedy for such
breach; (iii) and notwithstanding Article 17 (Governing Law and Dispute Resolution), FLS shall be entitled to immediate injunctive
relief against Buyer and to such other equitable and other relief as the circumstances may require.

 

	4.	CHANGES:

 

		(a)	A change in the scope of work (a “Change”) shall mean any modification, addition, or
deletion to the Work.

		(b)	Buyer may initiate a Change within the general scope of the Work by issuing to FLS a written Change
Request describing the proposed Change in detail, or requesting FLS to estimate the cost to perform Buyer’s desired Change.
Within ten (10) days thereafter, or such longer period as Buyer may permit, FLS shall prepare and forward to Buyer a detailed Change
Estimate which shall include any adjustment in price and schedule. If Buyer approves the Change Estimate, Buyer shall issue a corresponding
contract amendment (“Change Order”) adjusting the price and schedule in accordance with the Change Estimate. Pending
issuance of a Change Order, FLS shall continue with the Work to the extent not affected by the Change. If Buyer does not approve
the Change Estimate, it shall either (i) withdraw the Change Request, or (ii) negotiate with FLS to perform the Change upon mutually
agreeable terms. In any case, FLS shall be reimbursed for the cost of preparing the Change Estimate. All Changes must be mutually
approved and agreed to in writing before they are to be performed by FLS.

		(c)	In the event either party believes a Change has occurred because of a circumstance described in
Article 4(d), it shall give written notice to the other within thirty (30) days following its first knowledge of the circumstance,
and the parties shall endeavor to resolve by mutual agreement any dispute regarding the occurrence of the Change, and any resulting
adjustment in price and schedule.
	 	(d)	In
the event (i) FLS is required by changes in applicable laws occurring after the date of this Contract to change the design of any
equipment, system, facility, works, process, or other part of the Work, or (ii) the Work is canceled or delayed, suspended or interfered
with by Buyer or any person or cause within Buyer’s direct or indirect control, such circumstances shall be treated as Changes.

 

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		5.	BUYER RESPONSIBILITY:

 

Buyer shall furnish FLS,
in English, with all information, instructions and drawings on which FLS’ timely and complete performance of the Contract
is dependent. Buyer represents that all information, instructions and drawings that it has provided prior to the Contract date
or provides thereafter to FLS are complete, up to date, accurate and conform to applicable codes, ordinances, laws, regulations
and other requirements.

 

		6.	WARRANTY:

 

FLS warrants that all
design and engineering services provided under this Contract shall be performed in a professional manner by qualified and efficient
personnel, in accordance with generally accepted industry standards. FLS further warrants that drawings and specifications resulting
from these design and engineering services shall conform to all applicable codes and standards in effect at the time these services
were performed. Any design and engineering services not in conformance with the foregoing warranties shall be promptly reperformed
by FLS at FLS’ sole cost and expense, provided FLS is notified by Buyer in writing of the nonconformance within one year
after completion of such services. Reperformance of any design and engineering services not in conformance with the foregoing
warranties constitutes FLS’ sole liability and Buyer’s exclusive remedy for breach of warranties.

 

		7.	COMPLIANCE WITH LAWS AND REGULATIONS:

 

In performing the Work, FLS
shall comply with all applicable laws, ordinances, rules and regulations of governmental authorities located in the United States
bearing on the conduct of the Work at the time the Work was performed, including, but not limited to, where applicable, laws and
regulations pertaining to non-discrimination in employment, the Fair Labor Standards Act of 1938, as amended, OSHA, and MSHA. FLS
shall be responsible for all U.S. federal, state and local taxes and charges, including social security and unemployment compensation
taxes and withholding taxes, pertaining or applicable to its employees or its income.

 

		8.	TIME OF PERFORMANCE OF THE WORK:

 

		(a)	FLS shall proceed with the Work with all reasonable dispatch, and shall use its best efforts to
complete the Work by the completion date(s) set forth in the proposal.
	 	(b)	If
FLS is rendered unable, wholly or in material part, by reason of Force Majeure to carry out any of its obligations hereunder, such
obligations shall be suspended. “Force Majeure” shall include, but is not limited to events or causes that are not
reasonably within the control of FLS, including but not limited to: fires and explosions; Acts of God (including, but not limited
to, floods, tornadoes, hurricanes and earthquakes); riots, insurrections, or civil unrest; acts or threatened acts of terrorists
and the results thereof; war, blockades or other acts or threatened acts of war or military action; trade embargoes or restrictions;
changes in applicable law; governmental or judicial acts, decrees, injunctions, restrictions or other orders; strikes; faulty or
defective castings, or unavailability of parts. FLS shall notify Buyer not later than fourteen (14) days after learning of the
Force Majeure event. The occurrence of a Force Majeure event shall not excuse a party from any payment obligation it may have under
the Contract.

 

		9.	COMPENSATION:

 

	 	(a)	To the extent the proposal provides that the Work is to be performed by FLS for a fixed price, then Buyer agrees to timely pay FLS the fixed price amount set forth in the proposal, in U.S. dollars, as full compensation for the Work, subject to Article 4 (Changes). The fixed price does not include any cost items not included in the scope of work as set forth in the proposal.
	 	(b)	To the extent the proposal provides that the Work is to be performed by FLS on a cost-reimbursable basis, then Buyer agrees to timely pay FLS, in U.S. dollars, for the Work and associated expenses pursuant to FLS’ standard rates.

 

		10.	TAXES:

 

Buyer shall reimburse FLS, in
addition to the price, for all federal, state, provincial, municipal and/or local customs, duties, sales, use, VAT and other similar
taxes, excises and charges which FLS may pay or be required to pay in connection with the Work (not including taxes pertaining
or applicable to its employees or its income).

 

    	18

    	 

    

 

		11.	TERMS OF PAYMENT:

 

	 	(a)	For all fixed price work, unless the parties set forth a schedule of payments, FLS shall invoice Buyer monthly on a progress basis whereby the percent of the fixed price that is due will be equal to the percent of the Work that has been performed.
	 	(b)	For all cost-reimbursable Work, unless the parties agree otherwise, FLS shall invoice Buyer on a monthly basis in accordance with FLS’ standard invoicing procedures for Work completed and costs incurred during the previous month.
	 	(c)	Unless otherwise agreed, terms of payment are net thirty days to FLS from date of invoice. If any payment is not made within the specified time, interest will be charged at the prime rate of Citibank, N.A., of New York, New York, or at the maximum legal rate in the place where services were performed, whichever is lower, with interest computed and due monthly. In the event of any delay in payment, the Buyer will reimburse FLS for all costs incurred in collection of amounts due.
	 	(d)	This Contract is completely independent of all other contracts between the parties. Invoices issued under this Contract shall not be subject to set off against any money due or claimed to be due from FLS on account of any other transaction or claim.

 

		12.	PATENT INDEMNIFICATION:

 

	 	(a)	Except as otherwise provided in (b), FLS shall defend, indemnify and hold harmless Buyer against claims for infringement of valid United States patents with respect to the Work. The Buyer shall notify FLS of such claims within ten (10) days from the time it knew or should have known of them. If FLS’ design is found to be infringing or the Buyer is enjoined from the use of such design, FLS will at its own expense and option, either: (i) provide Buyer with a non-infringing design; or (ii) obtain a license or other authorization permitting Buyer to use the design.
	 	(b)	FLS’ liability and obligations under this Article shall not apply if the basis of the alleged infringement is claimed or proved to have arisen in whole or in part from (i) a design, process, product, equipment, material, software or software documentation provided by or through or specified by Buyer to FLS for its use in supplying the Work; (ii)a modification of the Work by Buyer or third persons after delivery by FLS; or (iii) a combination of the Work by Buyer or third persons with designs or equipment supplied by others.

 

		13.	INDEMNIFICATION:

 

Each party shall indemnify the
other from any and all third-person claims for damages, losses, costs and expenses directly resulting from personal injury to or
death of any person, and damage to tangible third- person property, to the extent such injury, death or damage is directly caused
by the negligence, gross negligence or willful misconduct of the indemnifying party.

 

		14.	INSURANCE:

 

FLS shall provide the following
insurance coverage and maintain it in place during the performance of the Work and for a period of one year thereafter: (i) Workers’
Compensation Insurance, including Employer’s Liability coverage, in the amount as required by law, for FLS’ employees;
(ii) Commercial General Liability and Property Damage Insurance with a combined single limit of $1,000,000 per occurrence and $2,000,000
aggregate; and (iii)Automobile Liability Insurance with a combined bodily injury and property damage limit of $1,000,000 per
occurrence.

 

		15.	TERMINATION AND SUSPENSION:

 

		(a)	Termination for Convenience. Buyer may terminate this Contract in whole or part for its convenience
by giving FLS fifteen (15) working days’ prior written notice, at which time FLS shall cease to perform Work as directed.
Upon termination for convenience, Buyer shall pay FLS for all Work performed up to the effective date of termination plus all reasonable
costs incurred in complying with Buyer’s instructions for terminating this Contract.
	 	(b)	Suspension.
Buyer may suspend all or any portion of the Work at any time by giving FLS seven (7) working days’ prior written notice,
at which time FLS shall suspend Work as directed. Buyer shall compensate FLS for any additional costs incurred by FLS in suspending
the Work and for maintaining its personnel on standby or protecting the documents and materials during the period of suspension
if so requested by Buyer. In addition, FLS may by written notice to Buyer terminate all or any portion of its obligations under
this Contract if the Work is suspended for thirty (30) or more consecutive days or a total of sixty (60) days in any continuous
150-day period through no fault of FLS or FLS’ subcontractors and vendors. Notwithstanding the foregoing, Buyer shall immediately
pay to FLS on demand all amounts due FLS for all Work executed prior to any such suspension or termination and any and all costs
and expenses incurred by FLS arising out of or related in way to any such (a) suspension including, but not limited to, additional
work, services and/or other cost escalations or increases, and any other cost or expense incurred by FLS by reason of such suspension,
or (b) termination including, but not limited to, reasonable shutdown and termination expenses, and any and all amounts that would
have been otherwise payable to FLS as profit, overhead, incentive or bonus through or upon completion or operation of the Work.

 

    	19

    	 

    

 

		(c)	Buyer shall have the right to terminate this Contract if: (i) FLS becomes bankrupt or makes an
assignment for the benefit of its creditors; (ii) an arbitration decision pursuant to the provisions of Article 17 (Governing Law
and Dispute Resolution) has established that FLS has materially breached a material provision of the Contract and has failed to
undertake remedial action to correct such failure pursuant to the Contract following notice in writing by Buyer; or (iii) FLS suspends
or abandons performance of all work for a period of thirty (30) days and it is established by an arbitration decision pursuant
to Article 17 (Governing Law and Dispute Resolution) that FLS was not entitled to suspend or abandon the work for such a period.
In any such event, Buyer may terminate the Contract upon receipt of written notice of the arbitration award or by giving FLS thirty
(30) days’ written notice of such termination. Upon such termination both parties shall be released from any further obligations
under this Contract.
	 	(d)	FLS
may suspend its performance of this Contract in whole or in part on account of Buyer’s failure to make a payment when due
or post security when due, or on Buyer’s other material breach of Contract, following seven (7) days’ notice by FLS.
If the Buyer fails to make such payment or submit such security for payment or cure such material breach within a period of thirty
(30) days of such notice, FLS shall have the right at its sole discretion to terminate the Contract for Buyer’s default.
In the event of such termination, FLS shall be entitled to an amount equal to the percentage stage of completion of the Work at
the time of such termination times the Contract Price plus an amount equal to ten percent (10%) of the Contract Price in lieu of
profit.

 

		16.	LIMITATION OF LIABILITY:

 

	 	(a)	It is expressly agreed that this Contract sets forth the sole and exclusive remedies available to Buyer and that FLS’ liabilities are limited as set forth herein. For the purposes of this article, “FLS” and “Buyer” shall include such party’s parent companies, affiliates, subsidiaries, and related companies, its other contractors, sub-vendors and subcontractors, and their respective directors, officers, agents, employees, and assigns. Neither party has granted or assumed any other warranties, guarantees, duties, liabilities, or obligations, either express, implied, statutory, at law or in equity. It is further expressly agreed that no breach of warranty or of contract or failure by a party to fulfill any other conditions of this contract shall constitute a failure of the essential purpose of the exclusive limited remedies.
	 	(b)	Neither FLS nor Buyer shall under any circumstances be liable to the other party for loss of profits, anticipated revenue, interest, loss of use, loss by reason of plant shutdown or non-operation, cost of substitute power, equipment, facilities or services, additional usage of fuel or utilities, cost of removal of defective equipment and installation of conforming or non-defective equipment, delays in installation of the work or completion of the project or plant and/or alleged “impact” of any such delay (including, for example, interferences, congestion, disruption, lack or restriction of access, compression, coordination problems, loss of productivity or efficiency, acceleration, escalation, out of sequence work, etc.), or other such claims arising from any cause whatsoever, or for any special, incidental, indirect, exemplary, punitive, or consequential damages, whether or not such loss or damage is based in contract, warranty, tort (including negligence or strict liability), indemnity or otherwise, and each party hereby releases the other party and the respective agents and employees of each from all such liability.
	 	(c)	FLS’ maximum aggregate liability for loss or damage arising under, resulting from or in connection with the supply or use of the Work provided under this Contract, or from the performance or breach of any obligation(s) imposed hereunder, whether such liability arises from any one or more claims or actions for breach of contract, tort (including negligence or strict liability), delayed completion, warranty, indemnity or otherwise, unless otherwise more restrictively limited by the terms hereof, shall be limited to twenty-five percent (25%) of the total amount paid by Buyer to FLS hereunder. Buyer hereby releases FLS, its agents and employees from any further liability therefor.
	 	(d)	FLS EXPRESSLY DISCLAIMS ALL WARRANTIES OTHER THAN THOSE STATED IN THIS CONTRACT, WHETHER EXPRESS, IMPLIED, STATUTORY, AT LAW OR IN EQUITY. THERE ARE NO IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS OF PURPOSE, OR OTHERWISE.

 

		17.	GOVERNING LAW AND DISPUTE RESOLUTION:

 

		(a)	The Contract shall be governed by and construed in accordance with the laws of the state in which
FLS is located (Arizona for FLSmidth USA Inc.–Tucson Operations; Illinois for Excel Foundry & Machine; Nebraska for FLSmidth
USA Inc.–Sioux City Operations; Pennsylvania for FLSmidth Inc. and FLSmidth USA Inc.–Pfister; Tennessee for FLSmidth
USA Inc.–Johnson City Operations; Utah for FLSmidth USA Inc.–Salt Lake City Operations; Washington for FLSmidth USA
Inc.–Spokane Operations); and West Virginia for FLSmidth USA Inc.– Charleston Operations), notwithstanding the result
that otherwise may arise from application of the conflict of law rules of any competent jurisdiction.
	 	(b)	All
disputes and claims concerning, arising from or relating in any way to the Contract (collectively, “Disputes”) that
cannot be settled by good faith discussion, shall be resolved through binding arbitration by the American Arbitration Association
(“AAA”) pursuant to the AAA’s Commercial Arbitration Rules in effect at the time. The arbitration shall be held
in New York, New York, and shall be conducted in English. The arbitrators shall have no right to add to, subtract from or modify
any of the provisions of this Contract, and shall not exceed any limitations of liability and remedy provided in the Contract.
The arbitration award shall not be appealable or subject to recourse to or review by any court or other arbitration. The arbitrator
shall award the substantially prevailing party full reimbursement of all fees and costs assessed by or through the AAA (including
arbitrator fees and any filing fee paid by that Party) plus that Party’s attorneys’ fees and arbitration- related costs.

 

		18.	NOTICE:

 

Service of all notices under
the Contract shall be sufficient if given personally by mail, commercial express delivery, fax, electronically scanned e-mail attachment
or other similar means at the address set forth in the proposal, or to such address as such party may provide in writing from time
to time. All notices shall be effective upon receipt.

 

    	20

    	 

    

 

		19.	ASSIGNMENT:

 

Neither party shall assign this
Contract or any benefits arising therefrom without prior written consent of the other party, except that FLS reserves the right
without the consent of Buyer, to assign the Contract, or to subcontract any portion of the work under the Contract to an affiliated
company of FLS. In the event FLS consents to any assignment, the rights of any assignee shall be subject to all set-offs, counterclaims
and other rights of FLS arising hereunder and Buyer remains fully responsible for the performance by its assignee of all conditions
hereof.

 

		20.	DOCUMENTATION, PREVAILING LANGUAGE AND DATES: 

 

Unless specifically provided
for elsewhere in the Contract, all documentation, including drawings and written materials, shall be in the English language. In
the event the text of the Contract is translated into a language other than English, the English text shall prevail, control and
be binding in the event of any conflict or discrepancy. All dates shall be based on the Gregorian calendar.

 

		21.	PUBLICITY:

 

Neither party shall make or
consent to publicity releases or announcements or otherwise make written or verbal references to this Contract or the Work performed
or to be performed hereunder without the prior written consent of the other party, which consent shall not be unreasonably withheld.
Notwithstanding the foregoing, FLS shall be entitled to include a summary description of the project in its general promotional
materials.

 

		22.	WAIVER OF BREACH:

 

Neither payment nor receipt
of payment by a party; failure by a party to insist on strict performance of the Contract; acceptance of the work by a party; or
waiver by a party of any breach of the Contract shall constitute a waiver by that party of any other breach of the Contract or
its right to demand and enforce the other party’s compliance with its obligations hereunder.

 

		23.	INDEPENDENT CONTRACTOR:

 

It is expressly understood that
FLS is an independent contractor, and that neither FLS nor its principals, partners, employees or subcontractors are servants,
agents, partners, joint ventures or employees of Buyer in any way whatsoever.

 

		24.	SEVERABILITY:

 

In the event that any of the
provisions, or portions, or applications thereof, of the Contract are held to be unenforceable or invalid by any court or tribunal
of competent jurisdiction, the parties shall negotiate an equitable adjustment in the provisions of the Contract with a view toward
effecting the purpose and intent of the Contract and the validity and enforceability of the remaining provisions, or portions,
or applications thereof, shall not be affected thereby.

 

		25.	SURVIVAL OF TERMS:

 

Articles 3 (Confidential Information),
6 (Standards and Codes Controlling the Work), 10 (Taxes), 12 (Patent Indemnification), 13 (Indemnification), 16 (Limitation of
Liability), 17 (Governing Law and Dispute Resolution) and 22 (Waiver of Breach) shall survive completion or termination of the
Contract.

 

 

    	21

    	 

    

 

 

APPENDIX
C: REPORT TABLE OF CONTENTS (DRAFT)

 

 

 

 

 

 

 

    	22EX-10.1

 Exhibit 10.1 

CONFIDENTIAL TREATMENT REQUESTED UNDER RULE 406 UNDER THE SECURITIES ACT OF 1933, AS AMENDED. 

[*****] INDICATES OMITTED MATERIAL THAT IS THE SUBJECT OF A CONFIDENTIAL TREATMENT REQUEST FILED SEPARATELY WITH THE COMMISSION. THE OMMITTED MATERIAL
HAS BEEN FILED SEPERATELY WITH THE COMMISSION. 
 Collaboration and License Agreement 

dated October 21, 2003 between 

Auris Medical AG 
 and

 Xigen SA 

 Collaboration and license agreement, dated October 21, 2003
(“AGREEMENT”), by and among Auris Medical AG, Rütifeldstrasse 1, 4573 Lohn-Ammannsegg (“AURIS”), and Xigen SA, Chemin des Falaises 1, 1005 Lausanne (“XIGEN”; collectively the
“PARTIES”). 
 R E C I T A L S: 

WHEREAS, XIGEN has developed a number of cell permeable inhibitors to effectively block certain signal pathways in apoptotic processes
(“COMPOUNDS”); 
 WHEREAS, AURIS is developing pharmaceutical products (“PRODUCTS”) as well
as drug delivery devices and formulations for local administration of therapeutic substances to the inner ear for the treatment of ear disorders (“AREA”); 

WHEREAS, XIGEN and AURIS have entered into a preliminary contract (“CONTRACT”) on September 8, 2003, which shall
be superseded collectively by this AGREEMENT and a supply agreement (“SUPPLY AGREEMENT”), as well as an equity investment agreement (“EQUITY AGREEMENT”); and 

WHEREAS, the PARTIES wish to collaborate world-wide exclusively in the area of treatment of ear disorders, all as hereinafter set forth; 

NOW, THEREFORE, in consideration of the agreements contained herein, the receipt and sufficiency of which are hereby acknowledged, and
intending to be legally bound hereby, the parties hereto agree to the following: 
  

	0.	PRELIMINARY REMARK 

 The RECITALS to this AGREEMENT form an integral part hereof. Clause
headings in this AGREEMENT are intended solely for convenience of reference and shall be given no effect in the interpretation of this AGREEMENT. All signed annexes to this AGREEMENT, whether attached at the time of signature hereof or at any time
thereafter, shall be construed as an integral part of this AGREEMENT. 
  

	1.	SCOPE OF COLLABORATION 

  

	 	1.1.	AURIS wishes to in-license COMPOUNDS for use in the AREA (“LICENSE COMPOUNDS”) from XIGEN and XIGEN wishes to out-license COMPOUNDS to AURIS for the development of PRODUCTS to be used in the AREA.

  

	 	1.2.	XIGEN will supply AURIS with the LICENSE COMPOUNDS under the terms of the SUPPLY AGREEMENT, which shall be entered into by the PARTIES within [*****] from the signing of this AGREEMENT. 

 

	 	1.3.	XIGEN aims to optimise further LICENSE COMPOUNDS and to develop new COMPOUNDS for potential use in the AREA, either on its own or jointly with AURIS. 

	 	1.4.	THE PARTIES will collaborate in the non-clinical and clinical development of LICENSE COMPOUNDS by sharing data to speed up time to market and reduce development costs. 

 

	2.	LICENSE COMPOUNDS 

  

	 	2.1.	Subject to the terms and conditions of this AGREEMENT XIGEN hereby grants AURIS the exclusive and sole right to use world-wide any existing COMPOUND or future COMPOUNDS (subject to 2.3. and 3.7) for the development,
manufacturing, marketing and selling of PRODUCTS in the AREA. The LICENSE COMPOUNDS are defined in Appendix I to this AGREEMENT, which shall be amended to include any additional LICENSE COMPOUNDS. 

 

	 	2.2.	XIGEN shall provide AURIS with all necessary specifications of the LICENSE COMPOUNDS required for development and registration purposes. 

 

	 	2.3.	During the term of this AGREEMENT, AURIS has the right of first refusal for nine months to test and in-license any new COMPOUND which may also be used for the AREA (“PROSPECTIVE COMPOUND”); if AURIS
decides not to in-license such PROSPECTIVE COMPOUND, XIGEN may offer it to other interested parties. XIGEN will notify AURIS promptly about the development and availability of any PROSPECTIVE COMPOUND. 

 

	 	2.4.	AURIS will decide within [*****] from the date of closing of this AGREEMENT whether or not it will initiate the non-clinical or clinical development of a LICENSE COMPOUND into a PRODUCT. 

 

	 	2.5.	AURIS has the right to grant sub-licenses in the AREA to the LICENSE COMPOUNDS. AURIS will promptly notify XIGEN of the identity of any sub-licensee and the scope of such sub-license. 

 

	 	2.6.	Prior to the closing of this AGREEMENT, XIGEN and AURIS have entered into an agreement, whereas XIGEN develops for AURIS a LICENSE COMPOUND for potential use in the treatment of tinnitus. The conditions for the
development of this LICENSE COMPOUND are defined in Appendix IV. 

  

	3.	COLLABORATION 

  

	 	3.1.	The PARTIES will inform each other regularly on the status of their research and development projects. 

  

	 	3.2.	The PARTIES will coordinate non-clinical tests, clinical trials and regulatory undertakings in order to gain efficiency, save time and costs. 

  
 3 

	 	3.3.	The PARTIES will grant each other access to their non-clinical or clinical data relating to the LICENSE COMPOUNDS [*****] for use in their proprietary development programmes. Upon XIGEN’s request, AURIS will offer
third parties access to such data for their development programmes with LICENSE COMPOUNDS outside the AREA, provided that AURIS shall be compensated by the receiving party for [*****] of AURIS’s costs in obtaining such data. XIGEN shall seek
access to any third party’s non-clinical or clinical data relating to LICENSE COMPOUNDS for use outside of the AREA to make them accessible for AURIS upon request, subject to the third party willing to provide such access and asking to be
compensated for such information transfer. 

  

	 	3.4.	The PARTIES will review, coordinate and consolidate, as appropriate, safety and pharmacovigilance issues and data generated by either of them relating to the LICENSE COMPOUNDS. 

 

	 	3.5.	The PARTIES will set up detailed procedures for handling adverse events (Standard Operating Procedures covering how to handle pharmacovigilance procedures, batch recall or withdrawal, and adverse event exchange and
reporting). 

  

	 	3.6.	AURIS will aim to include XIGEN as official partner in research consortia of common interest. 

  

	 	3.7.	Upon AURIS’s decision to develop a LICENSE COMPOUND into a PRODUCT, the PARTIES will enter into an agreement whereas AURIS will sponsor research and development work and XIGEN will optimise LICENSE COMPOUNDS and
develop new COMPOUNDS for use in the AREA (“SPONSOR AGREEMENT”). Such SPONSOR AGREEMENT will be made for an initial term of [*****] with a renewal option, and shall be based upon a mutually agreed work plan and include regular
reporting by XIGEN of the amount of work and costs incurred. 

  

	4.	CONSIDERATION 

  

	 	4.1.	AURIS will make an upfront payment to XIGEN at the closing of this AGREEMENT of CHF 200,000. 

  

	 	4.2.	Subject to 3.7., AURIS will make annual payments to XIGEN under the SPONSOR AGREEMENT of at least [*****] during the initial term. This corresponds to at least [*****] full time equivalents of a qualified XIGEN senior
scientist’s time. XIGEN’s and AURIS’s contributions in terms of money, senior scientist’s time, space, use of equipment, purchases of materials etc. shall be reasonably balanced overall at a ratio of [*****]. 

 

	 	4.3.	 AURIS will make a milestone payment for each indication of CHF 1.5 million to XIGEN upon the successful completion of phase II of the clinical
trials (if necessary with a phase IIb) with a LICENSE COMPOUND. The 

  
 4 

	 	
trial is deemed successful in any case if subsequently a phase III clinical trial with the LICENSE COMPOUND will be conducted, or in case no further clinical trials are needed due to the grant of
an orphan drug status or similar status. 

  

	 	4.4.	AURIS will make a milestone payment of CHF 2.5 million to XIGEN upon receiving marketing approval for any PRODUCT making use of a LICENSE COMPOUND, whereas [*****] will be due upon approval in the USA, and [*****]
upon approval in the European Union. 

  

	 	4.5.	AURIS will make a milestone payment of CHF 200,000 to XIGEN upon initiation of the development programme for a PRODUCT using a LICENSE COMPOUND for the treatment of age-related hearing loss. 

 

	 	4.6.	[*****] of the milestone payments for each indication will be credited against future royalty payments for such indication, spread evenly over [*****]. 

 

	 	4.7.	In case of a relatively small indication (e.g. qualifying for orphan drug status), the milestone payments for such LICENSE COMPOUND will be reduced by [*****]. 

 

	 	4.8.	AURIS will pay XIGEN a royalty of [*****] on net sales as defined below of all PRODUCTS that use a patented LICENSE COMPOUND from XIGEN for the AREA during the period that commences on the closing date of this AGREEMENT
and ends on the later of (i) 10 years after the first market launch of any such PRODUCT in any country, or (ii) the first expiration of XIGEN’s patent or exclusive license covering the use of such LICENSE COMPOUND in any country. For
the avoidance of doubt, it is being understood that any device or accessory sold by AURIS, its affiliates, licensees or assignees in conjunction with a PRODUCT is excluded from the calculation of the royalty (e.g. pumps, catheters, syringes,
surgical instruments), unless the following conditions are cumulatively met: 

  

	 	(a)	the device or accessory constitutes a technically integral part of such PRODUCT, 

  

	 	(b)	it could not be sold on a stand-alone basis or in conjunction with other products from third parties, and 

  

	 	(c)	it is covered by a XIGEN patent or a patent jointly owned by the PARTIES. 

 In the event that
the PRODUCT is sold by AURIS together with a device or accessory as a bundle, where such device or accessory is excluded from the calculation of royalty payments, standard at-arm’s length prices for the device and accessory shall be deducted
from the bundle price in order to obtain the net sales of the PRODUCT subject to royalty payment. 

  
 5 

	 	4.9.	Net sales used for the calculation of the royalty (“NET SALES”) mean the amount invoiced for all sales of PRODUCTS by AURIS or any of its affiliates, licensees, assignees or distributors at arm’s
length to a third party, after the following deductions: 

  

	 	(a)	normal and customary trade, cash or quantity discounts, including any volume discount paid or credited to the third party, free samples of PRODUCTS, rebates and administrative fees (including U.S. Medicaid and Medicare
programs and equivalents and other private or government sponsored rebates and administrative fees paid to purchasing groups), 

  

	 	(b)	import, export, sales, use, excise and other consumption taxes and custom duties or tariffs, to the extent and up to the amount included as a separate item on the invoice, and any other governmental taxes (other than
income taxes) or charges imposed upon the importation, use or sale of PRODUCTS, 

  

	 	(c)	any charges for freight, postage, shipping, security or special handling or insurance, 

  

	 	(d)	reasonable provisions for allowance for uncollectible amounts. 

 Any PRODUCT sold or otherwise
transferred other than in an at arm’s length transaction or in exchange for other property (e.g. barter) shall be deemed invoiced at the PRODUCT’s ordinary market price to end users in the relevant country of sale, or failing such ordinary
market price, at the arm’s length price the PRODUCT would generally or on average be invoiced. NET SALES shall not include amounts invoiced for the PRODUCT transferred in a country as part of the clinical trials or other such studies prior to
receipt of regulatory marketing authorization in such country. 
  

	 	4.10.	The obligation to pay royalties pursuant to Section 4.8 shall commence with the first sale of any PRODUCT. 

  

	 	4.11.	Royalties shall be payable in Swiss Francs within [*****] calendar days after the end of each quarter on the basis of NET SALES during the preceding quarter. Not later than the date on which a royalty payment is
due, AURIS shall deliver to XIGEN a market sales report (the “SALES REPORT”), setting forth NET SALES of PRODUCTS achieved in the preceding quarter on a country-by-country basis in local currency as well as in Swiss Francs.
Conversion from currencies other than Swiss Francs shall be made using the spot rate on the last business day of the quarter in which the NET SALES were made, as published in the “Neue Zürcher Zeitung”. The first SALES REPORT
will be due for the first quarter after receiving marketing approval for any PRODUCT in any country in which the first commercial sales of any PRODUCT are recorded. 

  
 6 

	 	4.12.	XIGEN shall have the right to designate an independent accounting firm reasonably acceptable to AURIS, which shall have access to AURIS’s sales records, and if necessary to the records of its affiliates, licensees
or distributors (subject, in each case, to entering into a reasonable confidentiality agreement), during regular business hours and with ten days minimum prior notice, for the purpose of verifying NET SALES. No such verification shall be made more
than once with respect to any calendar year. The cost of the accounting firm’s services shall be borne by XIGEN, unless the accounting firm discovers that XIGEN has been underpaid by more than [*****] of the amount actually owed to XIGEN, in
which case the cost shall be borne by AURIS. 

  

	 	4.13.	For the avoidance of doubt, any new LICENSE COMPOUND developed jointly under the SPONSOR AGREEMENT as per section 3.7 or developed independently by Xigen as per sections 1.2 and 2.3 shall be subject to the same
milestone and royalty payments as LICENSE COMPOUNDS already existing at the closing of this AGREEMENT, subject to 4.14. 

  

	 	4.14.	If the LICENSE COMPOUND makes use of XIGEN’s proprietary technology for transporting a certain compound to a specific site of action, but such compound has not been developed by XIGEN itself, and if AURIS has to
purchase a license from a third party to obtain rights to use such COMPOUND for a PRODUCT, the PARTIES shall negotiate in good faith an appropriate reduction of the royalty rate and milestone payments to XIGEN. 

 

	5.	INTELLECTUAL PROPERTY 

  

	 	5.1.	XIGEN’s patents and licenses on and to the LICENSE COMPOUNDS, which are listed in Appendix II, will remain its property. XIGEN will maintain such patents and licenses for the term of this AGREEMENT.

  

	 	5.2.	New patents for specific inner ear indications or formulations of LICENSE COMPOUNDS filed by AURIS shall be jointly owned and assigned to AURIS for exclusive use in the AREA. All costs related to the filing, prosecution
and maintenance of such patents shall be borne by AURIS. XIGEN will have the option to obtain free of charge a world-wide exclusive license for the use of such formulations outside the AREA. 

 

	 	5.3.	Patents on new compounds developed by XIGEN under the SPONSOR AGREEMENT shall be filed by AURIS and remain its sole property. XIGEN will have the option to obtain a royalty free and world-wide exclusive license for
applications outside the AREA. If XIGEN elects to sub-license such right to a third party, AURIS shall receive a [*****] royalty on the net sales of any products sold by the third party based on such sub-license. 

  
 7 

	 	5.4.	The PARTIES shall be under the obligation to pursue any infringement of their intellectual property on their own against any third party infringer at their sole cost and expense. Each party shall provide the pursuing
party with all documents, information and assistance and shall take all action necessary to assist the pursuing party in its pursuit of the infringement. In case of co-owned intellectual property, AURIS shall defend the co-owned intellectual
property on behalf of both parties, whereas the PARTIES share the costs on a [*****] basis. In that case, XIGEN shall provide AURIS with all documents, information and assistance and shall take all action necessary to assist AURIS in its pursuit of
the infringement. 

  

	 	5.5.	Subject to 3.3, all know-how and other results from the development of LICENSE COMPOUNDS into PRODUCTS by AURIS shall be its exclusive and sole property. 

 

	6.	COVENANTS 

  

	 	6.1.	Subject to 1.3 and 1.4 as well as AURIS not exercising its right of first refusal as defined in 2.3, XIGEN will not pursue either directly or indirectly any development, manufacturing, marketing or selling of COMPOUNDS
and PRODUCTS, which would compete with AURIS in the AREA. 

  

	 	6.2.	The PARTIES agree, also on behalf of their affiliates, for the term of this AGREEMENT not to solicit or induce employees of the other party to terminate their employment with the other party. 

 

	 	6.3.	XIGEN will have the right to review all articles written on behalf of or in collaboration with AURIS referring to LICENSE COMPOUNDS prior to publication; XIGEN will submit any articles referring to the AREA prior to
publication to AURIS for review. AURIS has the right to withhold any publications if such publication would compromise the registration of any intellectual property rights (e.g. patent registration). 

 

	 	6.4.	AURIS will obtain sufficient product liability insurance and insurance coverage for non-clinical and clinical trials, where COMPOUNDS or LICENSE COMPOUNDS of XIGEN are used, as well as for commercial sales of PRODUCTS
which use LICENSE COMPOUNDS. 

  

	 	6.5.	XIGEN will obtain sufficient product liability insurance and insurance coverage for any defects and deficiencies in the LICENSE COMPOUNDS supplied to AURIS. 

 

	 	6.6.	 Each PARTY is entitled to receive confirmation from the other PARTY’s insurance company certifying that there is reasonable insurance coverage
with a minimum limit of liability of at least [*****] and that all 

  
 8 

	 	
premiums are paid. If one PARTY fails to provide such information [*****] after having received a request for information, the other PARTY shall, based on this AGREEMENT, be entitled to receive
such information directly from the insurance company. This section shall be considered being a consent of the failing PARTY that the insurance company shall be obliged to provide the relevant information to the requesting PARTY. 

 

	7.	REPRESENTATIONS AND WARRANTIES 

  

	 	7.1.	XIGEN owns solely, legally and beneficially all intellectual property rights or owns all exclusive licenses to such rights (with the right to grant sublicenses without any limitation) necessary to grant AURIS the rights
to LICENSE COMPOUNDS as defined in article 2 of this AGREEMENT. No former or present employee of XIGEN owns or has claimed to own all or any part of the intellectual property rights related to the LICENSE COMPOUNDS. With regard to LICENSE COMPOUNDS,
XIGEN to its best knowledge does not violate nor is likely to violate any right of any other party with respect to their intellectual property rights (whether registered or not), and no such claim of violation of any such rights is pending or
threatened. To XIGEN’s best knowledge, the use of XIGEN’s intellectual property rights with regard to LICENSE COMPOUNDS does not and is not likely to infringe any company’s or person’s rights (including but not limited to
intellectual property rights and contractual rights). XIGEN has no knowledge of nor received any notice alleging that it has infringed intellectual property rights with regard to LICENSE COMPOUNDS of any other person or company. XIGEN is not subject
to any injunction, undertaking, or court order or order of any other authority of competent jurisdiction not to use or restricting the use of any of its intellectual property rights with regard to LICENSE COMPOUNDS. There exists no actual or
threatened infringement or any event likely to constitute an infringement or breach by any third party of any of the intellectual property rights held or used by XIGEN with regard to LICENSE COMPOUNDS. 

 

	 	7.2.	All information and documents communicated by XIGEN to AURIS and / or accessed to by AURIS relating to this AGREEMENT are complete, fair and true in all material aspects and none of such documents or information are of
such nature as to mislead AURIS as to facts and circumstances relating to XIGEN, the LICENSE COMPOUNDS or to the representations and warranties of this AGREEMENT. 

 

	 	7.3.	XIGEN has not failed to bring to the attention of AURIS any fact whatsoever, which is of such a nature that AURIS should reasonably consider that it would be of material relevance to the decision of a diligent
collaboration and license partner whether or not to enter into a collaboration and license agreement or to the consideration offered by such a collaboration and license partner for the rights from such a collaboration and license agreement.

  
 9 

	 	7.4.	XIGEN has entered with CHUV/University of Lausanne on October 17, 2003, into a license agreement (“CHUV/UNIL AGREEMENT”). Those parts of the CHUV /UNIL AGREEMENT which are relevant to AURIS as
sub-licensee to XIGEN are contained in Appendix III. 

  

	 	7.5.	XIGEN warrants that in the event it ceases to operate before any patent assignment has taken place from the CHUV/UNIL, the CHUV/UNIL has agreed to grant AURIS a sole license in the AREA at the same financial terms and
conditions. 

  

	 	7.6.	The representations and warranties set forth in this AGREEMENT shall survive the closing date. 

  

	8.	INDEMNIFICATION 

  

	 	8.1.	From and after the closing of this AGREEMENT, XIGEN agrees to indemnify and hold harmless AURIS, their respective subsidiaries and affiliates, their respective successors and permitted assigns, and their respective
officers, directors, employees and agents from, against and in respect of any and all losses, claims, demands, liabilities, assessments, damages, deficiencies, costs, expenses, actions or causes of action in respect thereof (including reasonable
attorneys’ fees and related costs) relating to or arising out of or in connection with 

  

	 	(a)	any breach by XIGEN of any of its representations or warranties contained in this AGREEMENT, 

  

	 	(b)	any breach by XIGEN of any of its covenants or agreements contained in this AGREEMENT, 

  

	 	(c)	any LICENSE COMPOUNDS supplied to AURIS 

  

	 	8.2.	From and after the closing of this AGREEMENT, AURIS agrees to indemnify and hold harmless XIGEN, their respective subsidiaries and affiliates, their respective successors and permitted assigns, and their respective
officers, directors, employees and agents from, against and in respect of any and all losses, claims, demands, liabilities, assessments, damages, deficiencies, costs, expenses, actions or causes of action in respect thereof (including reasonable
attorneys’ fees and related costs) relating to or arising out of or in connection with any breach by AURIS of any of its representations or warranties contained in this AGREEMENT, and any breach by AURIS of any of its covenants or agreements
contained in this AGREEMENT. 

  
 10 

	 	8.3.	An indemnified party under this article 8 shall give prompt written notice to the indemnifying party of any liability or obligation in respect of which such indemnifying party has a duty to provide indemnity to such
indemnified party. 

  

	 	8.4.	Except for the indemnification obligations set forth in section 8.1 c) or as expressly provided in this AGREEMENT, neither XIGEN nor AURIS shall have any liability arising out of this AGREEMENT until the aggregate
amount of such liabilities exceeds [*****], in which case all such liabilities shall be owed, and in no event will either party’s aggregate liability hereunder exceed a total of [*****], and neither party shall have any claim against the other
for breach of or any inaccuracy in any representation or breach of any warranty set forth herein unless such party shall have given the other party notice of such claim not later than [*****] after the closing of this AGREEMENT. 

 

	9.	TERM OF AGREEMENT 

  

	 	9.1.	The term of this AGREEMENT is indefinite. 

  

	 	9.2.	This AGREEMENT may be terminated by either of the PARTIES with [*****] prior notice if AURIS has neither been using any LICENSE COMPOUNDS nor evaluating any new COMPOUND for use in the AREA for at least [*****] from the
closing of this COLLABORATION AGREMENT. XIGEN has the right to terminate the AGREEMENT if AURIS does not commence any development programme with LICENSE COMPOUNDS within [*****] from the closing of this AGREEMENT. 

 

	 	9.3.	Early termination of this AGREEMENT will be possible in case of material breach, force majeure, or the bankruptcy or liquidation of either one of the PARTIES. 

 

	 	9.4.	Upon expiration of the relevant patent on a LICENSE COMPOUND, the PARTIES shall enter in good faith into negotiations about the conditions of AURIS using further such LICENSE COMPOUND, whereas such discussions shall
take into consideration the effects of any potential or existing competition in the marketplace for the relevant PRODUCT. 

  

	10.	MISCELLANEOUS 

  

	 	10.1.	If any term or provision of this AGREEMENT shall for any reason be held invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any other term or provision
hereof, and this AGREEMENT shall be interpreted and construed as if such term or provision, to the extent the same shall have been held to be invalid, illegal or unenforceable, had never been contained herein. 

  
 11 

	 	10.2.	Nothing in this AGREEMENT shall be construed to constitute either PARTY as the partner, joint venture, agent, employee or affiliate of the other, it being intended that the parties shall remain independent contractors.
Neither PARTY shall be liable for the obligations, liabilities or representations of the other PARTY provided this AGREEMENT stipulates the contrary. 

  

	 	10.3.	Failure of any of the parties to enforce any of the provisions of this AGREEMENT or any rights with respect thereto shall in no way be considered as a waiver of such provisions or rights or in any way to affect the
validity of this AGREEMENT. The waiver of any breach of this AGREEMENT by any party hereto shall not operate to be construed as a waiver of any other prior or subsequent breach. 

 

	 	10.4.	This AGREEMENT may be modified or amended only by written agreement of the PARTIES and any provision hereof may be waived only by a document signed by the party waiving such provision. 

 

	 	10.5.	This AGREEMENT and the rights and liabilities arising thereunder may not be transferred to third parties except with the prior written consent of the other PARTY to this AGREEMENT. Both PARTIES may, however, transfer
this AGREEMENT and/or the rights and liabilities arising thereunder to an affiliated company, in which case the approval of the other PARTY shall be deemed to have been given. 

 

	 	10.6.	The PARTIES as well as any person acting on behalf of any of them shall keep the terms and conditions of this AGREEMENT in strict confidence. The PARTIES agree to disclose no such terms and conditions to any third
parties, except to their employees, affiliates, investors or consultants on a “need to know” basis and bound by respective confidentiality agreements. 

 

	 	10.7.	For this AGREEMENT Swiss law shall apply. 

  

	 	10.8.	The venue shall be Solothurn. 

  

													
	Xigen SA	 		 	Auris Medical AG
					
	By:	 	 /s/ Peter Harboe-Schmidt
	 		 	By:	 	 /s/ Thomas Meyer

		 	Name:	 	Peter Harboe-Schmidt	 		 		 	Name:	 	Thomas Meyer
		 	Title:	 	Chairman & CEO	 		 		 	Title:	 	Chairman & CEO

  
 12 

 Appendix I: List of LICENSE COMPOUNDS 

 

	•	 	JNK Inhibitors XG 101/102 

  

	•	 	Beta cell and neuronal cell specific MKK7 inhibitors XG 201 CS 

  

	•	 	Proprotein convertases 

  

	•	 	IB1 Protein 

  

	•	 	D-NR2B9C and L-NR2B9C 

  
 Appendix I-1 

 Appendix II: List of XIGEN patents and licenses 

relevant for LICENSE COMPOUNDS 

Patents licensed from CHUV/UNIL 

IDF 1/99 
 Design of cell permeable
inhibitors of the c-Jun N-terminal kinase 
 Ch. Bonny, Inventor 

USSN JNK Inhibitors 
 Filed 14 February, 2000 (continuation
of US 60/158,774) Priority date 12 October 1999 
 Serial number 09/503,954 

Status: Delivered on 26 August 2003 
 Published on
26 August 2003, patent number US 6,108,820 
 USSN CIP JNK & MKK7 Inhibitors 

Filed 7 June 2002 (continuation of USSN 09/503,954 and addition of 60/347,062) Priority date 12 October 1999 & 9 January 2002 (on
claims) 
 Serial number 10/165,250 
 Status: Pending 

Published on 12 June 2003, patent number US 2003-0108539 

USSN CIP2 JNK & MKK7 Inhibitors 
 Filed 9 June
2003. (continuation of USSN 09/503,954 and USSN CIP 10/165,250) Priority date 12 October 1999 
 Serial number 10/457,614 

Status: Pending 
 USSN DIV JNK Inhibitors 

Filed 3 October 2001 (continuation of USSN 09/503,954) Priority date 12 October 1999 

Serial number 09/970,515 
 Status: Pending 

USSN CON JNK Inhibitors 
 Filed 15 January 2003
(continuation of USSN 09/503,954 and 60/158,774) Priority date 12 October 1999 
 Serial number 10/342,683 

Status: Pending 
 USSN MKK7 Inhibitors 

Filed 9 January 2003 (continuation of 60/347,062) Priority 9 January 2002 

Serial number 10/340,458 
 Status: Pending 

PCT JNK Inhibitors 
 Filed 12 October 2000 (extension of
USSN 09/503,954 and US 60/158,774) Priority date 12 October 1999 
 Serial number PCT/IB00/01538 

Status: Pending 
 Published on 19 April 2001, patent number
WO0127268 A2 

  
 Appendix II-1 

 AU JNK Inhibitors 

Filed 12 October 2000 (extension of PCT/IB00/01538) Priority date 12 October 1999 

Serial number 79382/00 
 Status: Pending 

JP JNK Inhibitors 
 Japanese Nat’l filing date 11 April
2002 (extension of PCT/IB00/01538) Effective international filing date 12 October 2000 
 Priority date 12 October 1999 

Serial number 2001-530472 
 Status: Pending 

Published on 25 March 2003, patent number 2003-511071 
 EP
JNK Inhibitors 
 Filed 12 October 2000 (extension of PCT/IB00/01538) Priority date 12 October 1999 

Serial number 000969730.1 
 Status: Pending 

Published on 23 April 2003, patent number EP1303600 
 CA JNK
Inhibitors 
 Filed 12 October 2000 (extension of PCT/IB00/01538) Priority date 12 October 1999 

Serial number 2,387,184 
 Status: Pending 

US NATL JNK Inhibitors 
 Filed 12 October 2000 (extension of
PCT/IB00/01538) Priority date 12 October 1999 
 Serial number 10/110,430 

Status: Pending 
 PCT MKK7 Inhibitors 

Filed 9 January 2003 (extension of USSN 10/340,458) Priority date 9 January 2002 

Serial number PCT/IB03/00332 
 Status: Pending 

Published on 17 July 2003, patent number WO 03/057725 
 PCT
CIP JNK & MKK7 Inhibitors 
 Filed 9 January 2003 (extension of USSN 10/165,250) Priority date 12 October 1999 

Serial number PCT/IB03/03094 
 Status: Pending 

  
 Appendix II-2 

 12-13/00 

Use of proprotein convertase for the intracellular delivery of drugs and macromolecules 

Ch. Bonny, Inventor 
 USSN Proprotein Convertase

 Filed 15 October 2001 (continuation of US 60/240,315) Priority date 13 October 2000 

Serial number : 09/978,831 
 Status: pending 

Published on 28 August 2002, patent number US-2002-0120100 

USSN CIP Proprotein Convertase 
 Filed 7 June 2002
(continuation of USSN 09/977,831) Priority date 13 October 2000 
 Serial number : 10/165,015 

Status: pending 
 Published on 13 February 2003, patent
number US 2003-0032594 
 PCT Proprotein Convertase 
 Filed
15 October 2001 (extension of USSN 09/977,831 and US 60/240,315) Priority date 13 October 2000 
 Serial number: PCT/IB01/02423 

Status: pending 
 Published 18 April 2002, publication number
WO02/31109 
 AU Proprotein Convertase 
 Filed 15 October
2001 (extension of PCT/IB01/02423) Priority date 13 October 2000 
 Serial number 2002220979 

Status: Pending 
 JP Proprotein Convertase 

Filed 15 October 2001 (extension of PCT/IB01/02423) Priority date 13 October 2000 

Serial number 2002-534479 
 Status: Pending 

EP Proprotein Convertase 
 Filed 15 October 2001 (extension
of PCT/IB01/02423) Priority date 13 October 2000 
 Serial number 01986713.4 

Status: Pending 
 Published on 24 September 2003, patent
number EP 1 345 956 
 CA Proprotein Convertase 
 Filed
15 October 2001 (extension of PCT/IB01/02423) Priority date 13 October 2000 
 Serial number 2,425,610 

Status: Pending 
 US NATL Proprotein Convertase 

Filed 15 October 2001 (extension of PCT/IB01/02423) Priority date 13 October 2000 

Serial number 10/399,127 
 Status: Pending 

  
 Appendix II-3 

 PCT CIP Proprotein Convertase 

Filed 6 June 2003 (extension of USSN 10/165,015) Priority date 13 October 2000 

Serial number: PCT/IB03/03097 
 Status: pending 

Patents Owned by Xigen 

Transcription factor Islet Brain (IB1) 

Inventor: Waeber et Al. 
 (Assigned
to Xigen) 
 USSN Islet Brain 
 Filed May 20, 1997 

Application no: 859,201 
 Status: Delivered on March 9,1999

 Patent number: 5,880,261 
 PCT 

Filed 2 April, 1998 
 Application no: 98913958.9 

International publication number: WO 98/44106 
 Status: Pending

  
 Appendix II-4 

 Appendix III: Relevant conditions of the CHUV/UNIL AGREEMENT 

ARTICLE 2 — GRANT 
 [*****] 

  
 Appendix III-1 

 ARTICLE 5 — REPORTS AND RECORDS 

[*****] 
 ARTICLE 7 — INFRINGEMENT

 [*****] 

  
 Appendix III-2 

 [*****] 

ARTICLE 8 — NO WARRANTIES AND LIABILITY 
 [*****]

  
 Appendix III-3 

 [*****] 

ARTICLE 9 — CONFIDENTIALITY 
 [*****]

 ARTICLE 10 — USE OF NAMES 

[*****] 
 ARTICLE 12 — CHALLENGE OF THE
PATENT RIGHTS 
 [*****] 
 ARTICLE 13
— BREACH AND CURE 
 [*****] 

ARTICLE 14 — TERM OF THE AGREEMENT 

[*****] 

  
 Appendix III-4 

 [*****] 

ARTICLE 16 — MISCELLANEOUS PROVISIONS 

[*****] 

  
 Appendix III-5 

 [*****] 

  
 Appendix III-6 

 Appendix IV: Tinnitus Molecule development 

XIGEN will develop for AURIS the peptides D-NR2B9C and L-NR2B9C which could block the interaction between the PSD-95 protein and NMDA
receptors and thus block tinnitus. NR2B9C as well as pTat-NR2B9C have already been described in scientific literature. However, the coupling of the NR2B9C with XIGEN’s D-Tat molecule as well as the local administration of D-NR2B9C (or L-NR2B9C)
for the treatment of inner ear disorders have not been published so far. XIGEN will supply AURIS with D-NR2B9C and L-NR2B9C for the in vitro and in vivo evaluation of the compound in tinnitus treatment (stage 1). If the results of the evaluation
studies are unsatisfactory, further analysis and development work of up to 6 months may be necessary (stage 2). 
 D-NR2B9C and
L-NR2B9C (collectively “AM-102”) are developed under the terms of the AGREEMENT, subject to the following particular conditions: 

1. AURIS will pay [*****] to XIGEN for the supply of [*****] of D-NR2B9C and [*****] of L-NR2B9C and support in drafting [*****] patents on
the two compounds and/or the application 
 2. Regarding intellectual property, section 5.3 of the AGREEMENT shall apply 

3. There shall be no milestone payments whatsoever (sections 4.3 and 4.4 of the AGREEMENT) 

4. The royalty payments on NET SALES of AM-102 will be [*****] at a maximum. If AURIS has to obtain one or more licenses from third parties in
order to be able to legally sell AM-102, the royalty payment shall be reduced in half (i.e. to [*****]). 
 In case that a second stage
shall be deemed necessary by AURIS, the payment of AURIS to XIGEN for the additional development work and supplies shall be negotiated between the PARTIES in good faith. 

  
 Appendix IV-1

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