Document:

<PAGE>   1
                                                                   Exhibit 10.12

                                                                  Execution Copy

                                FUNDING AGREEMENT

                                      AMONG

                       ELAN PHARMA INTERNATIONAL LIMITED,

                              ELAN CORPORATION, PLC

                                       AND

                        ELAN INTERNATIONAL SERVICES, LTD.

                                       AND

                                 ATHERSYS, INC.

<PAGE>   2

                                    CONTENTS
                                    --------

CLAUSE 1    SUBSEQUENT FUNDING

CLAUSE 2    TERMINATION

CLAUSE 3    MISCELLANEOUS

                                       i
<PAGE>   3

FUNDING AGREEMENT made this 21st day of October, 1999

AMONG:

(1)      ELAN PHARMA INTERNATIONAL LIMITED, a private limited company
         incorporated under the laws of Ireland having its registered office at
         WIL House, Shannon Business Park, Shannon, County Clare, Ireland, and,
         ELAN CORPORATION, PLC, a public limited company under the laws of
         Ireland, and each having its registered office at Lincoln House,
         Lincoln Place, Dublin 2, Ireland ("collectively, ELAN");

(2)      ELAN INTERNATIONAL SERVICES, LTD., an exempted limited liability
         company incorporated under the laws of Bermuda, and having its
         registered office at Clarendon House, 2 Church St., Hamilton, Bermuda
         ("EIS"); and

(3)      ATHERSYS, INC., a corporation incorporated under the laws of Delaware
         and having its principal place of business at 11000 Cedar Avenue,
         Cleveland, Ohio 44106, United States of America ("ATHERSYS").

RECITALS:

A.       EIS and Athersys have formed a Bermuda private limited company to be
         known as Athersys Newco Ltd., an exempt Bermuda company, incorporated
         on the 18th day of October, 1999 ("NEWCO").

B.       Elan is beneficially entitled to the use of certain patents which have
         been granted or are pending in relation to Medipad Technology.

C.       Athersys is beneficially entitled to the use of certain patents that
         have been granted or are pending in relation to its RAGE Technology.

D.       As of the date hereof, Elan has entered into a license agreement with
         Newco, and Athersys has entered into a license agreement with Newco, in
         connection with the license to Newco of the Elan Intellectual Property
         and the Athersys Intellectual Property, respectively.

E.       Elan and Athersys have agreed to co-operate in the research,
         development and commercialization of the Products based on their
         respective technologies.

F.       As of the date hereof, Elan, EIS, Athersys and Newco have entered into
         a Subscription, Joint Development and Operating Agreement dated as of
         the date hereof (the "JDOA") for the purpose of recording the terms and
         conditions of the research, development and commercialization of the
         Products and governing certain aspects of the affairs of and their
         dealings with Newco. The parties have agreed that capitalized terms
         when used in these

<PAGE>   4

         Recitals and in this Agreement shall bear the same meanings as ascribed
         to such terms in the JDOA.

                                    CLAUSE 1

                               SUBSEQUENT FUNDING

1.1      It is estimated that Newco will require an additional U.S. $5,000,000
         to commence development of the Products based upon the Athersys
         Intellectual Property, the Elan Intellectual Property and/or the Newco
         Technology (the "SUBSEQUENT FUNDING"). Within 36 months of the Closing
         Date, EIS and Athersys may provide to Newco, each by way of either (i)
         a capital contribution without the issuance of additional shares or
         (ii) a loan, as EIS and Athersys may agree, up to an aggregate maximum
         amount of U.S. $5,000,000, such funding to be provided on a pro rata
         basis in accordance with their respective ownership interest in Newco,
         taking into account all classes of share ownership (i.e., initially,
         80.1% by Athersys and 19.9% by EIS).

1.2      The Subsequent Funding shall be provided by EIS and Athersys at such
         times that shall be provided for the development of the Products as
         provided in the Business Plan or as otherwise approved by the Newco
         Directors, including the Newco Director designated by EIS (or after the
         Exchange Right, by all of the Newco Directors designated by EIS). The
         Subsequent Funding shall be funded on the following terms and subject
         to the following conditions:

         1.2.1    The minimum amount of each disbursement of the Subsequent
                  Funding shall be U.S.$250,000 (except in the event that an
                  amount less than U.S.$250,000 remains available for funding,
                  in which case such lesser amount may be funded);

         1.2.2    There shall be no Event of Default (as defined in the
                  Convertible Note and the Senior Note) under the Convertible
                  Note or the Senior Note on the date of the Subsequent Funding
                  (except to the extent that any Event of Default has been
                  waived by EIS); and

         1.2.3    Such funding shall be provided in accordance with the Business
                  Plan and the Research and Development Plan or as otherwise
                  approved by the Newco Board of Directors (including at least
                  one Newco Director designated by EIS and one Newco Director
                  designated by Athersys); and

         1.2.4    Such funding shall be subject to the receipt by Elan or EIS of
                  any required approvals under the Mergers and Takeovers
                  (Control) Acts 1978-1996 (the "IRISH MERGERS ACT").

1.3      In the event that Elan or EIS is unable to obtain any required approval
         under the Irish Mergers Act within 45 days after a determination of the
         necessity of such funding by the Newco Directors, the parties hereto
         shall work together in good faith, each in its sole discretion, to
         agree on an alternative funding mechanism.

                                       3
<PAGE>   5

1.4      Each request for Subsequent Funding shall be delivered from Newco to
         each of Athersys and EIS, which notice shall set forth:

         (i)      the amount of the Subsequent Funding requested and the portion
                  of such amount to be contributed or lent, as the case may be,
                  by each of Athersys and EIS;

         (ii)     the date requested to fund such amount (which date (A) shall
                  not be fewer than 15 days following the date of the request
                  for such subsequent Funding and (B) with respect to Athersys,
                  shall not be a date earlier than Athersys receives a
                  disbursement under the Note to permit funding of its share of
                  the Subsequent Funding, if applicable); and

         (iii)    a reasonably detailed narrative and summary of the uses and
                  application thereof.

1.5      Subject to the following paragraph, the first available net income
         received by Newco, in respect of amounts, if any of third party
         licensing fees, royalties, milestone payments or other amounts
         thereafter in respect of the marketing or licensing of products and/or
         intellectual property, shall be repaid or distributed to Athersys and
         EIS in proportion to their respective equity interests in Newco until
         such time as the full amounts of the Subsequent Funding have been
         repaid or distributed to Athersys and EIS. Such amounts shall be repaid
         or distributed at such time or times as approved by the Newco Board of
         Directors (including the approval of at least one Newco Director
         designated by EIS and one Newco Director designated by Athersys).

         In the event that EIS exercises its right to convert the Convertible
         Exchangeable Preferred Stock rather than exercising the Exchange Right,
         then, in such event, the net income in respect of amounts, if any, of
         third party licensing fees, royalties, milestone payments or other
         amounts received by Newco thereafter in respect of the marketing or
         licensing of products and/or intellectual property, shall be applied to
         (w) repayment of the Subsequent Funding or distribution of the full
         amounts thereunder to Athersys and EIS, as the case may be, (x) as to
         the next U.S. $15,000,000 of such net income, 100% to Athersys, and (y)
         as to any amounts in excess of (w) and (x), above, to the parties in
         proportion to their respective equity interests in Newco. Such amounts
         shall be distributed at such time or times that the Newco Board of
         Directors (with the approval of at least one Newco Director designated
         by EIS and one Newco Director designated by Athersys) shall deem to be
         appropriate.

                                    CLAUSE 2

                                   TERMINATION

2.1      This Agreement shall govern the funding methodology of EIS and Athersys
         with respect to Newco until (i) terminated by written agreement of all
         parties hereto or (ii) all of the Subsequent Funding amounts due under
         this Agreement have been repaid or distributed, as

                                       4
<PAGE>   6

         the case may be.

                                    CLAUSE 3

                                  MISCELLANEOUS

3.1      GOOD FAITH:
         -----------

         Each of the parties hereto undertakes with the others to do all things
         reasonably within its power that are necessary or desirable to give
         effect to the spirit and intent of this Agreement.

3.2      FURTHER ASSURANCE:
         ------------------

         At the request of any of the parties, the other party or parties shall
         (and shall use reasonable efforts to procure that any other necessary
         parties shall) execute and perform all such documents, acts and things
         as may reasonably be required subsequent to the signing of this
         Agreement for assuring to or vesting in the requesting party the full
         benefit of the terms hereof.

3.3      RELIANCE ON REPRESENTATIONS AND WARRANTIES:
         -------------------------------------------

         Each of the parties hereto hereby acknowledges that in entering into
         this Agreement it has not relied on any representation or warranty
         except as expressly set forth herein or in any document referred to
         herein.

3.4      FORCE MAJEURE:
         --------------

         Neither party to this Agreement shall be liable for delay in the
         performance of any of its obligations hereunder if such delay is caused
         by or results from causes beyond its reasonable control, including
         without limitation, acts of God, fires, strikes, acts of war (whether
         war be declared or not), insurrections, riots, civil commotions,
         strikes, lockouts or other labor disturbances or intervention of any
         relevant government authority, but any such delay or failure shall be
         remedied by such party as soon as practicable.

3.5      RELATIONSHIP OF THE PARTIES:
         ----------------------------

         Nothing contained in this Agreement is intended or is to be construed
         to constitute Elan or EIS, on one hand, and Athersys, on the other
         hand, as partners, or Elan or EIS as an employee or agent of Athersys,
         or Athersys as an employee or agent of Elan or EIS.

         No party hereto shall have any express or implied right or authority to
         assume or create any obligations on behalf of or in the name of another
         party or to bind another party to any contract, agreement or
         undertaking with any third party.

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<PAGE>   7

3.6      COUNTERPARTS:
         -------------

         This Agreement may be executed in any number of counterparts, and each
         such counterpart hereof shall be deemed to be an original instrument,
         but all such counterparts together shall constitute one agreement. This
         Agreement may be signed and delivered to the other party by facsimile
         transmission; such transmission shall be deemed a valid signature.

3.7      NOTICES:
         --------

         All notices, demands and requests of any kind to be delivered to any
         party in connection with this Agreement shall be in writing and shall
         be deemed to have been duly given if personally delivered or if sent by
         nationally-recognized overnight courier or by registered or certified
         mail, return receipt requested and postage prepaid, or by facsimile
         transmission, addressed as follows:

         Elan at:

         Lincoln House, Lincoln Place, Dublin 2
         Ireland
         Attention:  Vice President & General Counsel
         Elan Pharmaceutical Technologies,
         a division of Elan Corporation, plc
         Telephone:        353-1-709-4000
         Fax:              353-1-709-4124

         with a copy to:

         Brock Silverstein LLC
         800 Third Avenue, 21st Floor
         New York, NY 10022
         Attention:  David Robbins, Esq.
         Telephone         212-371-2000
         Fax:              212-371-5500

         EIS at:

         Elan International Services, Ltd.
         102 St. James Court
         Flatts, Smiths FL04
         Bermuda
         Attention:  President
         Telephone:        441-292-9169
         Fax:              441-292-2224

                                       6
<PAGE>   8

         with a copy to:

         Brock Silverstein LLC
         800 Third Avenue, 21st Floor
         New York, NY 10022
         Attention:  David Robbins, Esq.
         Telephone         212-371-2000
         Fax:              212-371-5500

         Athersys at:

         11000 Cedar Avenue
         Cleveland, Ohio  44106
         Attention:  President and Chief Executive Officer
         Telephone: (216) 231-9911
         Facsimile:  (216) 231-0905

         with a copy to:

         Jones, Day, Reavis & Pogue
         901 Lakeside Avenue
         Cleveland, Ohio  44114
         Attention:  Christopher M. Kelly, Esq.
         Telephone:        216-586-3939
         Fax:              216-579-0212

         Each party, by written notice given to the other in accordance with
         this Section 3.7 may change the address to which notices, other
         communication or documents are to be sent to such party. All notices,
         other communications or documents shall be deemed to have been duly
         given when received. Any such notice or communication shall be deemed
         to have been effectively given, (a) in the case of personal delivery,
         on the date of such delivery, (b) in the case of nationally-recognized
         overnight courier, on the second business day after the date when sent,
         (c) in the case of mailing, on the fifth business day following that
         day on which the piece of mail containing such communication is posted,
         and (d) in the case of facsimile transmission, on the date of
         transmission.

3.8      GOVERNING LAW:
         --------------

         This Agreement shall be governed by and construed in accordance with
         the internal laws of the State of New York, without giving effect to
         principles of conflicts of laws. Any dispute hereunder shall be
         adjudicated in a forum set forth in the JDOA.

                                       7
<PAGE>   9

3.9      SEVERABILITY:
         -------------

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

3.10     AMENDMENTS:
         -----------

         This Agreement may not be modified or amended, or any of the provisions
         hereof waived, except by written agreement of the Company and EIS.

3.11     WAIVER:
         -------

         No waiver of any right under this Agreement shall be deemed effective
         unless contained in a written document signed by the party charged with
         such waiver, and no waiver of any breach or failure to perform shall be
         deemed to be a waiver of any future breach or failure to perform or of
         any other right arising under this Agreement.

3.12     ASSIGNMENT:
         -----------

         None of the parties shall be permitted to assign its rights or
         obligations hereunder without the prior written consent of the other
         parties except as follows:

         3.12.1    Elan, EIS and/or Athersys shall have the right to assign
                   their rights and obligations hereunder to their respective
                   Affiliates, PROVIDED, HOWEVER, that such assignment does not
                   result in adverse tax consequences for any other parties
                   PROVIDED, HOWEVER, that the assigning party shall remain
                   liable for its obligations hereunder after such assignment

         3.12.2    Elan and EIS shall have the right to assign their rights
                   hereunder to a special purpose financing or similar vehicle
                   established by Elan or EIS; PROVIDED, HOWEVER, that the
                   assigning party shall remain liable for its obligations
                   hereunder after such assignment.

         3.12.3    Elan, EIS and/or Athersys shall have the right to assign or
                   otherwise transfer their rights and obligations hereunder in
                   connection with a sale of all or substantially all of the
                   business of such party, whether by merger, sale of stock,
                   sale of assets or otherwise.

3.13     ENTIRE AGREEMENT:
         -----------------

         This Agreement, the Confidentiality Agreement and the other Transaction
         Documents contain the entire understanding of the parties with respect
         to the subject matter hereof and supersede and terminate all prior
         agreement and understanding among the parties with respect thereto.

                                       8
<PAGE>   10

3.14     SUCCESSORS:
         -----------

         This Agreement and all of the provisions hereof shall be binding upon
         and inure to the benefit of the parties hereto and their respective
         successors and permitted assigns

3.15     EXPENSES:
         ---------

         Each of the parties shall be responsible for its own costs and expenses
         incurred in connection with the transactions contemplated hereby.

3.16     HEADINGS; REFERENCES:
         ---------------------

         The section and paragraph headings contained in this Agreement are for
         reference purposes only and shall not affect in any way the meaning or
         interpretation of the Agreement. Unless the context requires otherwise,
         references to "Sections" in this Agreement are references to Section of
         this Agreement.

                         [SIGNATURES ON FOLLOWING PAGE]

                                       9
<PAGE>   11

                  IN WITNESS WHEREOF, the parties hereto have caused their
respective duly authorized representatives to have executed this Funding
Agreement on the day first set forth above.

                                               SIGNED

                                               BY: /s/ Kevin Insley
                                                  -----------------------

                                               for and on behalf of
                                               ELAN PHARMA INTERNATIONAL LIMITED

in the presence of: /s/ Kim Burgess
                    ---------------

                                               SIGNED

                                               BY: /s/ Kevin Insley
                                                  -----------------------

                                               for and on behalf of
                                               ELAN CORPORATION, plc

in the presence of: /s/ Kim Burgess
                    ---------------

                                               SIGNED

                                               BY: /s/ Kevin Insley
                                                  -----------------------

                                               for and on behalf of
                                               ELAN INTERNATIONAL SERVICES, LTD.

in the presence of: /s/ Kim Burgess
                    ---------------

                                               SIGNED

                                               BY: /s/ Gil Van Bokkelen
                                                  -----------------------

                                               for and on behalf of
                                               ATHERSYS, INC.

in the presence of: /s/ James J. Kovach
                   --------------------<PAGE>   1
                                                                   Exhibit 10.13

                        RESEARCH COLLABORATION AGREEMENT

                                 ATHERSYS, INC.

                                       AND

                            ACORDA THERAPEUTICS, INC.

<PAGE>   2

<TABLE>
<CAPTION>

<S>                                                                                                            <C>
1.       DEFINITIONS..............................................................................................1

         1.1      "Acorda Cellular Assays"........................................................................1

         1.2      "Acorda Know How"...............................................................................1

         1.3      "Acorda Patents"................................................................................2

         1.4      "Affiliate".....................................................................................2

         1.5      "Athersys Know How".............................................................................2

         1.6      "Athersys Patents"..............................................................................2

         1.7      "Collaboration Discovery".......................................................................2

         1.8      "Collaboration Product".........................................................................2

         1.9      "Confidential Information"......................................................................2

         1.10     "Control" or "Controlled".......................................................................2

         1.11     "Development Plan"..............................................................................2

         1.12     "Improvement"...................................................................................2

         1.13     "Information"...................................................................................3

         1.14     "Joint Research Committee" or "JRC".............................................................3

         1.15     "Joint Patents".................................................................................3

         1.16     "Non-Participating Party".......................................................................3

         1.17     "Other Product".................................................................................3

         1.18     "Participating Party"...........................................................................3

         1.19     "Patents".......................................................................................3

         1.20     "Pre-existing Technologies".....................................................................3

         1.21     "Product Candidate".............................................................................3

         1.22     "RAGE Reagent"..................................................................................3

         1.23     "Research Information"..........................................................................4

         1.24     "Research Program"..............................................................................4

         1.25     "Research Protocol".............................................................................4

         1.26     "Third Party"...................................................................................4

2.       RESEARCH PROGRAM.........................................................................................4

         2.1      General.........................................................................................4

         2.2      Conduct of Research.............................................................................4

         2.3      Exchange of Material and Information............................................................4
</TABLE>

<PAGE>   3

<TABLE>
<CAPTION>

<S>                                                                                                           <C>
         2.4      Joint Research Committee........................................................................4

         2.5      Records and Reports.............................................................................5

                  (a)      Records................................................................................5

                  (b)      Copies and Inspection of Records.......................................................5

                  (c)      Quarterly Reports......................................................................5

         2.6      Research Program Term...........................................................................6

3.       DEVELOPMENT OF PRODUCT CANDIDATES AND COLLABORATION DISCOVERIES..........................................6

         3.1      General.........................................................................................6

         3.2      Determination of Product Candidates and Collaboration Discoveries...............................6

         3.3      Rights to Develop and Commercialize.............................................................6

         3.4      Co-Development by the Parties...................................................................6

                  (a)      General................................................................................6

                  (b)      Withdrawal by One Party................................................................7

                  (c)      Withdrawal of Both Participating Parties...............................................7

         3.5      Development and Commercialization by One Party..................................................7

         3.6      License to Third Parties........................................................................8

         3.7      Disclosure of Research Information..............................................................8

4.       LICENSES AND LIMITATIONS.................................................................................8

         4.1      Grant by Athersys...............................................................................8

         4.2      Grant by Acorda.................................................................................8

         4.3      Commercial Licenses.............................................................................8

         4.4      Limitations.....................................................................................8

5.       INTELLECTUAL PROPERTY....................................................................................8

         5.1      Ownership.......................................................................................8

         5.2      Patent Prosecution and Maintenance; Abandonment.................................................9

                  (a)      Pre-existing Technologies..............................................................9

                  (b)      Joint Inventions.......................................................................9

                  (c)      Improvements...........................................................................9

         5.3      Enforcement of Patent Rights....................................................................9

                  (a)      Pre-existing Technologies..............................................................9

                  (b)      Joint Patents.........................................................................10

6.       CONFIDENTIALITY.........................................................................................10

         6.1      Confidential Information.......................................................................10
</TABLE>

<PAGE>   4
<TABLE>
<CAPTION>

<S>                                                                                                          <C>

         6.2      Authorized Disclosure..........................................................................11

         6.3      Public Disclosure..............................................................................11

         6.4      Confidential Terms.............................................................................11

7.       REPRESENTATIONS AND WARRANTIES..........................................................................11

         7.1      Athersys.......................................................................................12

         7.2      Acorda.........................................................................................12

         7.3      Disclaimer of Warranties.......................................................................12

8.       DISPUTE RESOLUTION......................................................................................12

         8.1      Mediation......................................................................................12

         8.2      Arbitration....................................................................................12

9.       INDEMNIFICATION.........................................................................................13

         9.1      Acorda.........................................................................................13

         9.2      Athersys.......................................................................................13

         9.3      Procedure......................................................................................13

10.      TERMINATION.............................................................................................14

         10.1     Termination for Cause..........................................................................14

         10.2     Termination Upon Merger or Acquisition.........................................................14

         10.3     Termination Without Cause......................................................................14

         10.4     Effect of Termination..........................................................................14

                  (a)      Accrued Rights and Obligations........................................................14

                  (b)      Return of Confidential Information....................................................14

                  (c)      Survival..............................................................................15

11.      MISCELLANEOUS...........................................................................................15

         11.1     Governing Law..................................................................................15

         11.2     Independent Contractors........................................................................15

         11.3     Assignment.....................................................................................15

         11.4     Notices........................................................................................15

         11.5     Force Majeure..................................................................................15

         11.6     Advice of Counsel..............................................................................15

         11.7     Compliance with Laws...........................................................................16

         11.8     Further Assurances.............................................................................16

         11.9     Severability...................................................................................16

         11.10    Waiver.........................................................................................16
</TABLE>

<PAGE>   5
<TABLE>
<CAPTION>

<S>                                                                                                          <C>

         11.11    Complete Agreement.............................................................................16

         11.12    Use of Name....................................................................................16

         11.13    Headings.......................................................................................16

         11.14    Counterparts...................................................................................16
</TABLE>

<PAGE>   6

                        RESEARCH COLLABORATION AGREEMENT

     THIS RESEARCH COLLABORATION AGREEMENT (the "Agreement") is made and entered
into effective as of September 21, 2000 (the "Effective Date") by and between
ATHERSYS, INC., a Delaware corporation having its principal offices at 3201
Carnegie Ave., Cleveland, Ohio, 44115 on behalf of itself and its wholly owned
subsidiary, Advanced Biotherapeutics, Inc.("Athersys"), and ACORDA THERAPEUTICS,
INC., a Delaware corporation having its principal offices at 15 Skyline Drive,
Hawthorne, New York, 10532 ("Acorda"). Athersys and Acorda are sometimes
referred to herein individually as a "Party" and collectively as the "Parties."

                                    RECITALS

     A. Athersys owns technology and intellectual property rights relating to
its techniques referred to as the Random Activation of Gene Expression or
"RAGE(TM), which are useful (among other things) for creating cell lines
expressing a wide variety of proteins and to produce comprehensive protein
expression libraries.

     B. Acorda has expertise and intellectual property relating to certain
high-throughput cellular assays

     C. The Parties executed a Letter of Intent dated February 11, 2000 (the
"Letter") and a Collaboration Term Sheet (the "Term Sheet") dated July 25, 2000,
pursuant to which the Parties established a research collaboration for applying
the RAGE technology in conjunction with such Acorda assays for the purpose of
discovering new product candidates and other inventions of commercial value,
which will be jointly owned by the Parties and developed and commercialized as
provided therein. This Agreement is the "more fully defined collaboration
agreement" and the "Definitive Document" that incorporates the terms of and
supersedes the Letter and Term Sheet.

     NOW, THEREFORE, in consideration of the foregoing and the covenants and
promises contained in this Agreement, the Parties agree as follows:

1.   DEFINITIONS

     As used herein, the following capitalized terms shall have the following
meanings (with terms defined in the singular having the same meanings when used
in the plural):

     1.1 "ACORDA CELLULAR ASSAYS" shall mean the Acorda cellular assays
generally described in Exhibit A attached hereto, as such exhibit may be amended
by written agreement of the Parties.

     1.2 "ACORDA KNOW HOW" shall mean any Information that is Controlled by
Acorda during the term of this Agreement and that relates to the Acorda Cellular
Assays, and including any Improvements thereto, but excluding Acorda Patents.

                                       1
<PAGE>   7

     1.3 "ACORDA PATENTS" shall mean all Patents that are Controlled by Acorda
during the term of the Agreement and claim any aspect of the Acorda Cellular
Assays or their manufacture or use.

     1.4 "AFFILIATE" shall mean, with respect to a Party, any corporation or
other entity that, directly or indirectly, controls, is controlled by or is
under the common control with such Party. For the purpose of this definition,
"control" shall mean (a) the direct or indirect ownership of fifty percent (50%)
or more of the outstanding shares or other voting rights of the subject entity
to elect directors, or (b) if such amount of ownership of a foreign entity is
not permitted by law, ownership of the maximum amount of such entity as
permitted by law, or (c) the actual ability to control and direct the management
of the subject entity.

     1.5 "ATHERSYS KNOW HOW" shall mean any Information that is Controlled by
Athersys during the term of this Agreement and relates to the RAGE Reagents and
use thereof, and including any Improvements thereto, but excluding Athersys
Patents.

     1.6 "ATHERSYS PATENTS" shall mean all Patents that are Controlled by
Athersys during the term of the Agreement and claim any aspect of the RAGE
Reagents and use thereof.

     1.7 "COLLABORATION DISCOVERY" shall mean any Research Information
(excluding Improvements) that the JRC determines may have commercial or research
potential, as provided in Section 3.2.

     1.8 "COLLABORATION PRODUCT" shall mean any product comprising or containing
a Product Candidate, including any formulation or dosage form thereof.

     1.9 "CONFIDENTIAL INFORMATION" shall mean: (a) any proprietary or
confidential information or material in tangible form disclosed by a Party
hereunder that is (i) marked as "Confidential" at the time it is delivered to
the receiving Party, or (ii) designated as confidential or proprietary in a
written memorandum executed by the disclosing Party within thirty (30) days of
disclosure; or (b) any proprietary or confidential information disclosed orally
by a Party hereunder that is identified as confidential or proprietary when
disclosed and in a written memorandum delivered by the disclosing Party to the
Receiving Party within thirty (30) days of such oral disclosure.

     1.10 "CONTROL" OR "CONTROLLED" shall mean, with respect to any material,
Information or intellectual property right, that a Party owns or has a license
to such material, Information or intellectual property right and has the ability
to grant to the other Party the licenses or sublicenses thereto as provided for
herein without violating the terms of any agreement with any Third Party.

     1.11 "DEVELOPMENT PLAN" shall mean the plan established by the JRC for the
joint development of a particular Collaboration Product, as provided in Section
3.2.

     1.12 "IMPROVEMENT" shall mean any Information developed by either Party
pursuant to this Agreement that is an improvement, modification or enhancement
to the Acorda Know-How, Acorda Patents, Athersys Know-How or Athersys Patents.

                                       2
<PAGE>   8

     1.13 "INFORMATION" shall mean information, results and/or data of any type
whatsoever, in any tangible or intangible form whatsoever, including without
limitation, databases, inventions, practices, methods, techniques,
specifications, formulations, formulae, knowledge, know-how, skill, experience,
test data including pharmacological, biological, chemical, biochemical,
toxicological and clinical test data, analytical and quality control data,
stability data, studies and procedures, and patent and other legal information
or descriptions.

     1.14 "JOINT RESEARCH COMMITTEE" OR "JRC" has the meaning set forth in
Section 2.4.

     1.15 "JOINT PATENTS" shall mean any and all Patents (which shall be deemed
to include certificates of invention and applications for certificates of
invention) that claim any invention within Research Information, and including
all divisions, continuations, continuations-in-part, reissues, renewals,
extensions, supplementary protection certificates or the like of any of the
foregoing Patents and foreign equivalents thereof, but excluding from the
foregoing any and all Patents to the extent such Patents claim an Improvement.

     1.16 "NON-PARTICIPATING PARTY" has the meaning set forth in Section 3.3.

     1.17 "OTHER PRODUCT" shall mean a composition of matter (such as a compound
or other substance) that comprises or is based on one or more Collaboration
Discoveries and is determined by the JRC under this Agreement to be a candidate
for development into a therapeutic, prophylactic, diagnostic or research
product, but excluding all Product Candidates.

     1.18 "PARTICIPATING PARTY" has the meaning set forth in Section 3.3.

     1.19 "PATENTS" shall mean all issued United States and foreign patents
(including all reissues, extensions, substitutions, re-examinations,
supplementary protection certificates and the like, and patents of addition) and
pending United States and foreign patent applications (including, without
limitation, all provisional and nonprovisional applications and all
continuations, continuations-in-part and divisions thereof).

     1.20 "PRE-EXISTING TECHNOLOGIES" shall mean, as to Acorda, the Acorda
Know-How and Acorda Patents, and as to Athersys, the Athersys Know-How and
Athersys Patents.

     1.21 "PRODUCT CANDIDATE" shall mean a gene or other DNA sequence, or a
protein or other polypeptide based on a DNA sequence, that comprises or is based
on one or more Collaboration Discoveries and is determined by the JRC under this
Agreement to be a candidate for development into a therapeutic or prophylactic
product.

     1.22 "RAGE REAGENT" shall mean a specific reagent or material developed by
Athersys using the RAGE technology for delivery to Acorda hereunder and
necessary to Acorda's work under the Research Program, as generally specified in
Exhibit A attached hereto.

     1.23 "RESEARCH INFORMATION" shall mean all Information, and all
intellectual property rights therein, conceived or reduced to practice by the
Parties, solely or jointly, pursuant to work conducted under the Research
Program.

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<PAGE>   9

     1.24 "RESEARCH PROGRAM" shall mean the program of collaborative research to
be conducted by the Parties pursuant to the Agreement in accordance with the
Research Protocol. The Research Program may be modified or amended from time to
time upon the mutual written agreement of the authorized representatives of the
Parties, by a written amendment of the Research Protocol.

     1.25 "RESEARCH PROTOCOL" shall mean the agreed plan for the collaborative
research activities of the Parties under this Agreement, attached hereto as
Exhibit A, as such plan may be modified or amended pursuant to Section 2.2.

     1.26 "THIRD PARTY" means any entity other than Athersys, Acorda or an
Affiliate of either of them.

2.   RESEARCH PROGRAM

     2.1 GENERAL. Athersys and Acorda agree to conduct the Research Program in
accordance with the Research Protocol and the other terms and conditions of this
Agreement. Subject to the foregoing, Acorda or Athersys or both Parties may
engage one or more research institutions to perform such work under the Research
Program as agreed to by the Parties; provided, however, that each such research
institution shall perform such work under such terms and conditions as may be
acceptable to both Parties consistent with the provisions of this Agreement.

     2.2 CONDUCT OF RESEARCH. Athersys and Acorda each shall conduct its
obligations under the Research Program in good scientific manner, and in
compliance in all material respects with all requirements of applicable laws,
rules and regulations and all applicable good laboratory practices to attempt to
achieve their objectives efficiently and expeditiously. Athersys and Acorda
shall each proceed diligently with the work set out in the Research Program by
using their respective good faith efforts in accordance with the Research
Protocol, and as managed by the JRC. The JRC may amend or modify, in writing,
the Research Protocol, provided that any material amendment to the Research
Protocol shall also require the written approval of management of each Party,
which approval may be communicated via the JRC.

     2.3 EXCHANGE OF MATERIAL AND INFORMATION. Promptly after execution of this
Agreement, Athersys shall supply to Acorda the Athersys Know-How that Athersys
determines is needed for Acorda's work, the RAGE Reagents, and any other
material and information specified to be provided by Athersys in the Research
Protocol. Acorda shall promptly disclose to Athersys during the term of this
Agreement the Acorda Know-How that may be necessary or useful to Athersys in the
performance of the Research Program, or as otherwise required by the Agreement.

     2.4 JOINT RESEARCH COMMITTEE. The Parties shall form a Joint Research
Committee ("JRC") that shall be composed of three scientific representatives
appointed by each Party. The Athersys representatives shall initially be Dr.
John Harrington, Dr. David Jackson and Dr. Bruce Sherf; and the Acorda
representatives shall initially be Dr. Andrew Blight, Dr. Eugene Johnson, and
Dr. Timothy Neuberger. From time to time, each Party may substitute one or more
of its representatives effective upon notice to the other Party. It is
anticipated that these representatives

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<PAGE>   10

shall have the appropriate technical credentials and knowledge, and ongoing
familiarity with the Research Program. The JRC shall meet at least quarterly
during the term of the Research Program to manage and direct the Research
Program, monitor and evaluate the progress and results of the Research Program,
amend in writing the Research Protocol as appropriate, and evaluate the Research
Information to select any Product Candidates and Collaboration Discoveries for
further research and development under the Agreement. Such meetings may be
face-to-face or by teleconference or videoconference, except that there must be
one face-to-face meeting approximately every six (6) months. The JRC shall
confer and make decisions regarding the status and direction of the Research
Program and the other matters specified in the Research Program or otherwise set
forth in this Agreement. The JRC shall maintain accurate records to document the
discussions and decisions at each meeting. The Parties shall alternate
responsibility for preparation of minutes of JRC meetings, which minutes shall
promptly be made available to the other Party for review and comment. All
decisions of the JRC shall be by unanimous consent. The JRC shall adopt
reasonable procedures to promote prompt consensus on all matters requiring JRC
decision, including development decisions and costs, and to resolve any
disagreements relating thereto. In the event of any unresolved differences with
respect to issues that come before the JRC, such differences shall be resolved
pursuant to Article 8 of this Agreement.

     2.5 RECORDS AND REPORTS.

     (a) RECORDS. Athersys, and Acorda shall maintain records that shall be
complete and accurate and shall fully and properly reflect all work done and all
results achieved, including raw data, in the performance of the Research Program
("Records"). The Records shall be kept with sufficient detail and in good
scientific manner appropriate for patent and regulatory purposes and shall allow
thorough evaluation of all Research Information, Improvements and including
potential Product Candidates and Collaboration Discoveries and shall be kept
separately from all other work conducted by Athersys and Acorda.

     (b) COPIES AND INSPECTION OF RECORDS. Each Party shall have the right,
during normal business hours and upon reasonable notice, to inspect and copy all
of the Records of Athersys or Acorda referenced in Section 2.5(a). Athersys and
Acorda shall maintain such Records and the Information disclosed therein in
confidence in accordance with Article 5. All inspections, copying and visits
hereunder shall be conducted in a manner so as not to disrupt significantly the
business of the Party maintaining the records or cause any disclosure of any
other confidential information.

     (c) QUARTERLY REPORTS. Within 30 days following the end of each calendar
quarter during the term of this Agreement, the Parties shall provide to each
other a written progress report that shall describe the work performed to date
on the Research Program, evaluate the work performed in relation to the goals of
the Research Program, summarize all relevant Research Information created or
developed and provide such other Information required by the Research Program or
reasonably requested by a Party relating to the progress of the goals or
performance of the Research Program. Upon request, each Party shall promptly
provide copies of the Records described in Section 2.5(a) above. With such
reports, such Party shall disclose and describe to the other in summary form the
development, making, conception or reduction to practice of all Research
Information and Improvements that are discovered, made, conceived or

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<PAGE>   11

reduced to practice under the Research Program, and shall identify in detail all
such Research Information that such Party believes may be Collaboration
Discoveries.

     2.6 RESEARCH PROGRAM TERM. Except as otherwise provided herein, the term of
the Research Program shall commence on the Effective Date and continue for a
period of three (3) years (the "Research Program Term"). The Parties may, by
mutual written agreement executed by authorized representatives, extend the
Research Program Term for one or more additional years. Upon extension of the
Research Program Term, if applicable, Exhibit A setting forth the Research
Protocol shall be amended in writing by mutual agreement of the Parties as
appropriate to address the work to be conducted during such extension.

3. DEVELOPMENT OF PRODUCT CANDIDATES AND COLLABORATION DISCOVERIES.

     3.1 GENERAL. The Parties anticipate that the Research Program may result in
Collaboration Discoveries that may be developed and commercialized as Product
Candidates or as Other Products, as applicable. The Parties agree that they
shall pursue the development and commercialization of all products based on
Collaboration Discoveries solely as provided in this Article 3.

     3.2 DETERMINATION OF PRODUCT CANDIDATES AND COLLABORATION DISCOVERIES. The
JRC shall have the sole authority to select and designate particular Research
Information as constituting a Product Candidate or other Collaboration
Discovery. The JRC, upon designating a Product Candidate or other Collaboration
Discovery, shall promptly and simultaneously notify in writing each Party of
such designation, identifying in detail the Product Candidate or other
Collaboration Discovery and the commercial use intended therefore. Each Party
shall have the right, under Section 2.5, to inspect all Research Information to
evaluate the Product Candidate or Collaboration Discovery.

     3.3 RIGHTS TO DEVELOP AND COMMERCIALIZE. After the JRC has identified and
designated a Product Candidate or a Collaboration Discovery, each Party shall
have the rights set forth below to elect to develop and commercialize the
Product Candidate or other Product based on such Collaboration Discovery. Each
Party shall provide the other Party written notice, as soon as possible but in
no event later than sixty (60) days after receiving notification from the JRC of
a Product Candidate or Collaboration Discovery, of whether the Party wishes to
develop and commercialize the Product Candidate or other Product based on such
Collaboration Discovery. If a Party wishes to develop and commercialize such
Product Candidate or Other Product, as applicable, (a "Participating Party"), it
shall notify the other Party in the form set forth in Exhibit B (a "Notice of
Participation"). If a Party declines to develop and commercialize a Product
Candidate or Other Product, as applicable, (a "Non-Participating Party"), it
shall notify the other Party of such decision in the form set forth in Exhibit C
(a "Participation Waiver").

     3.4 CO-DEVELOPMENT BY THE PARTIES.

     (a) GENERAL. If both Parties elect, as provided in Section 3.3, to be a
Participating Party to develop and commercialize a particular Product Candidate
or Other Product, representatives of each Party shall meet to establish the
terms under which such development and commercialization shall proceed, which
shall be set forth in a development

                                       6
<PAGE>   12

agreement ("Development Agreement") to be negotiated in good faith and entered
into between the Parties for such purpose. The Parties shall use good faith
efforts to enter such Development Agreement within ninety (90) days after each
elects to be a Participating Party. Each such Development Agreement shall
specify that the Parties shall share equally in the costs of developing and
commercializing the applicable Collaboration Product or Other Product and in the
profits from such commercialization, unless otherwise agreed, and shall
establish the roles of each Party in, and the mechanisms for, pursuing such
development and commercialization, including terms for withdrawal by either
Party and termination.

     (b) WITHDRAWAL BY ONE PARTY. If, under a particular Development Agreement,
a Participating Party desires to cease continuing its participation in the joint
development conducted under such Development Agreement pursuant to Section
3.4(a), such Party (thereafter, the "Withdrawing Party") shall notify the other
Party of such decision in the form of a Participation Waiver set forth in
Exhibit C. Promptly thereafter, the Parties shall negotiate a Non-Participation
License as contemplated in Section 3.5, which agreement shall also provide for
additional provisions to compensate the Withdrawing Party (by an adjustment to
the Non-Participation Royalty rate provided in Section 3.5 or per terms set
forth in the Development Agreement or as otherwise agreed by the Parties) for
the actual expenses the Withdrawing Party incurred in developing the applicable
Collaboration Product or Other Product under such Development Agreement. The
Withdrawing Party shall not be entitled to any share of profits realized from
the commercialization of such Collaboration Product or Other Product, (as
applicable), and instead shall receive payment as provided in such
Non-Participation License.

     (c) WITHDRAWAL OF BOTH PARTICIPATING PARTIES. If both Participating Parties
decide they shall withdraw from further joint development work under a
particular Development Agreement, the Parties may elect to license the
Collaboration Product or Other Product (as applicable) covered by such
Development Agreement, as provided in Section 3.6; the revenues received from
licensing such Collaboration Product or Other Product shall be shared in
percentages equal to the percentages of the total development costs incurred and
paid by each Party under such Development Agreement prior to such election to
withdraw.

     3.5 DEVELOPMENT AND COMMERCIALIZATION BY ONE PARTY. If only one Party
elects under Section 3.3 to be the Participating Party to develop and
commercialize a particular Collaboration Product or Other Product (as
applicable), the Parties shall negotiate in good faith and execute a separate
license agreement for such Collaboration Product or Other Product (as
applicable) subject to the Participation Waiver (the "Non-Participation
License"). Such Non-Participation License shall require that the Participating
Party shall pay the Non-Participating Party a royalty of worldwide net sales to
non-affiliated third parties generated by sales of each Collaboration Product or
Other Product subject to a Participation Waiver as set forth in Exhibit B (the
"Non-Participation Royalty"). Such Non-Participation License shall further
require that, if the Participating Party sublicenses such Collaboration Product
or Other Product to a Third Party, such Third Party shall be required to pay the
Non-Participation Royalty directly to the Non-Participating Party. In addition
to the terms set forth herein, all Non-Participation Licenses shall contain
customary terms, including a commercially reasonable definition of "net sales"
and other terms and conditions relating to payments; patent rights and related
protection and prosecutions; auditing and review rights and confidentiality;
representations and warranties; indemnities; and prohibition of assignment.
Non-Participation Licenses shall not require the Participating Party to

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<PAGE>   13

undertake any level of activity other than reasonable commercial efforts as
reasonably determined by the Participating Party and shall not require the any
milestone payments or any minimum royalty amounts. The Parties agree to use good
faith efforts to enter into any Non-Participation License agreement within
ninety (90) days.

     3.6 LICENSE TO THIRD PARTIES. If neither Party elects under Section 3.3 to
develop and commercialize a particular Collaboration Product or Other Product
(as applicable), the Parties may jointly decide to license the Product Candidate
or other Product or related Collaboration Discovery to a Third Party. Neither
Party shall have the sole right, on its own and without agreement of the other
Party, to license a Product Candidate, Other Product or Collaboration Discovery
to any Third Party, but each Party agrees to use good faith diligent efforts to
cooperate with the other Party in seeking to obtain such license agreement so as
to maximize the commercial value to the Parties of such Collaboration
Discoveries, Other Product or Product Candidates. All amounts to be received
from such licensing to Third Party shall be shared equally by the Parties unless
otherwise agreed.

     3.7 DISCLOSURE OF RESEARCH INFORMATION. Both Parties agree to and
acknowledge their obligation to fully disclose all Research Information to each
other. The Parties further agree to commercialize Research Information only in a
manner consistent with the terms of this Agreement.

4. LICENSES AND LIMITATIONS.

     4.1 GRANT BY ATHERSYS. Subject to the terms of this Agreement, Athersys
hereby grants to Acorda a nonexclusive, limited license, under the Athersys
Know-How and Athersys Patents solely to conduct Acorda's obligations under the
Research Program.

     4.2 GRANT BY ACORDA. Subject to the terms of this Agreement, Acorda hereby
grants to Athersys the nonexclusive, limited license, under the Acorda Know-How
and Acorda Patents solely to conduct Athersys' obligations under the Research
Program.

     4.3 COMMERCIAL LICENSES. Upon the effectiveness of a Participation Waiver
as set forth in Sections 3.3 or 3.4(b), the Non-Participating Party shall grant
to the Participating Party an exclusive, worldwide license, with rights to
sub-license, under the Non-Participating Party's interests in the Research
Information and Joint Patents, to make, use, and sell the particular
Collaboration Product or Other Product subject to such Participation Waiver.

     4.4 LIMITATIONS. Athersys and Acorda each covenants that it shall not use
or practice the other Party's know-how or Patents licensed in Sections 4.1, 4.2,
and 4.3 except as expressly provided and permitted for the specific purposes for
which the license is granted, and for no other purpose.

5. INTELLECTUAL PROPERTY.

     5.1 OWNERSHIP.

     (a) Athersys shall remain the sole owner of the Athersys Know-How,
including but not limited to the RAGE Reagents, and of the Athersys Patents, and
of any

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<PAGE>   14

Improvements to either. Athersys shall have the sole right and responsibility,
at its sole discretion, for patent prosecution and choice of patent counsel in
relation to Athersys Know-How and Athersys Patents, including any Improvements,
and shall pay all expenses associated therewith. Acorda hereby assigns and
agrees to assign to Athersys its entire interest in any Improvements to the
Athersys Know-How and/or Athersys Patents.

     (b) Acorda shall remain the sole owner of the Acorda Know-How, including
but not limited to the Acorda Cellular Assays, and of the Acorda Patents, and of
any Improvements to either. Acorda shall have the sole right and responsibility,
at its sole discretion, for patent prosecution and choice of patent counsel in
relation to Acorda Know-How and Acorda Patents, including any improvements, and
shall pay all expenses associated therewith. Athersys hereby assigns and agrees
to assign to Acorda its entire interest in any Improvements to the Acorda
Know-How and/or Acorda Patents.

     (c) Subject to the other terms of the Agreement, Athersys and Acorda shall
each own an undivided one-half interest in and to any and all Research
Information and all intellectual property rights claiming or covering or
appurtenant thereto (including the Joint Patents), but excluding all
Improvements. Athersys and Acorda shall have the right to grant licenses under
such Joint Research Information and the Joint Patents, but subject to all
limitations thereon provided for in this Agreement with respect to all
Collaboration Discoveries.

     5.2 PATENT PROSECUTION AND MAINTENANCE; ABANDONMENT.

     (a) PRE-EXISTING TECHNOLOGIES. Each Party shall retain control over and
bear all expenses associated with the filing, prosecution and maintenance of all
of that Party's Patents claiming its Pre-existing Technologies.

     (b) JOINT INVENTIONS. The JRC shall establish the patent strategy for all
Joint Patents claiming Inventions in the Research Information. The JRC shall
supervise and direct the filing, prosecution and maintenance of all Joint
Patents. The JRC shall provide each Party with (i) drafts of any new patent
application that covers a Joint Invention prior to filing that application,
allowing adequate time for review and comment by the Party (and its patent
counsel); provided, however, the JRC shall not be obligated to unreasonably
delay the filing of any patent application; and (ii) copies of all
correspondence from any and all patent offices concerning patent applications
covering Joint Inventions and an opportunity to comment on any proposed
responses, voluntary amendments and submissions of any kind to be made to any
and all such patent offices. The Parties shall share equally in the costs and
expenses of patent prosecution of Joint Inventions unless the Parties agree in
writing to different terms.

     (c) IMPROVEMENTS. A Party that owns an Improvement (as provided in Section
4.1) shall have the sole right, at its discretion, to pursue Patents claiming
inventions therein.

     5.3 ENFORCEMENT OF PATENT RIGHTS.

     (a) PRE-EXISTING TECHNOLOGIES. Each Party shall have the sole right, but
not the obligation, to institute, prosecute or control any action or proceeding
with respect to

                                       9
<PAGE>   15

infringement by a Third Party of one or more issued Patents covering the Party's
Pre-existing Technologies.

     (b) JOINT PATENTS. If either Party becomes aware of conduct by a Third
Party that potentially infringes one or more Joint Patents, that Party shall
notify the other Party in writing (the "Notice") of the potential infringement
within ten (10) days of becoming aware of such infringement. The Parties shall
promptly confer to discuss the potential infringement and, within thirty (30)
days of the Notice, shall determine a course of action including, without
limitation, the commencement of legal action by either or both of Athersys and
Acorda to terminate any such infringement. Except as otherwise provided in any
Development Agreement or Non-Participation License (as set forth in Sections 3.4
and 3.5, respectively) with respect to the applicable Joint Patent, each Party
shall have the right, but not the obligation, to initiate such legal action at
its sole expense. If only one Party takes such legal action at its sole cost,
that Party alone shall be entitled to all damages awarded or any settlement paid
as a result of such legal action. If both Parties commence such legal action
jointly, the Parties shall share equally all costs and all recovered damages or
settlement payments arising from such legal action.

6. CONFIDENTIALITY.

     6.1 CONFIDENTIAL INFORMATION. Except as expressly provided herein, the
Parties agree that, for the term of this Agreement and for five (5) years
thereafter, the receiving Party shall keep completely confidential and shall not
publish or otherwise disclose and shall not use for any purpose except for the
purposes contemplated and permitted by this Agreement any Confidential
Information furnished to it by the disclosing Party hereto pursuant to this
Agreement, except that to the extent that it can be established by the receiving
Party by competent written evidence that such Confidential Information:

     (a) was already known to the receiving Party, other than under an
obligation of confidentiality, at the time of disclosure;

     (b) was generally available to the public or otherwise part of the public
domain at the time of its disclosure to the receiving Party;

     (c) became generally available to the public or otherwise part of the
public domain after its disclosure and other than through any act or omission of
the receiving Party in breach of this Agreement;

     (d) was independently developed by the receiving Party as demonstrated by
competent written evidence prepared contemporaneously with such independent
development; or

     (e) was subsequently lawfully disclosed to the receiving Party by a person,
other than a Party hereto, who was not then under obligation to keep such
information in confidence.

     6.2 AUTHORIZED DISCLOSURE. Notwithstanding the foregoing, a Party may
disclose the Confidential Information of the other Party to the extent such
disclosure is reasonably necessary in the following instances:

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<PAGE>   16

     (a) Regulatory filings;

     (b) Prosecuting or defending litigation;

     (c) Complying with applicable governmental regulations;

     (d) Conducting clinical trials;

     (e) Making a permitted sublicense;

     (f) Disclosure, in connection with the performance of this Agreement, to
Affiliates, research institutions, sublicensees, research collaborators,
employees, consultants, or agents, each of whom prior to disclosure must be
bound by similar obligations of confidentiality and non-use at least equivalent
in scope to those set forth in this Article 6; and

     (g) Disclosure to existing or potential investment bankers, investors
and/or merger or acquisition parties, provided that the disclosing Party uses
reasonable efforts to obtain from such recipient prior to disclosure an
agreement to be bound by obligations of confidentiality and non-use at least
similar in scope to those set forth in this Article 6.

     If a Party is required to make any disclosure of another Party's
confidential information that is authorized under this Section 6.2, other than
pursuant to a confidentiality agreement, it will give reasonable advance notice
to the latter Party of such disclosure and, save to the extent inappropriate in
the case of patent applications, will use its best efforts to secure
confidential treatment of such information prior to its disclosure (whether
through protective orders or otherwise) and to limit the extent of the
disclosure as much as possible.

     6.3 PUBLIC DISCLOSURE. Except as otherwise required by law, neither Party
shall issue a press release or make any other disclosure of the terms of this
Agreement or any aspect of the research conducted pursuant to this Agreement
without the prior approval of such press release or disclosure by the other
Party hereto. Each Party shall submit any such press release or disclosure to
the other Party, and the receiving Party shall have five (5) days to review and
approve any such press release or disclosure, which approval shall not be
unreasonably withheld. If the receiving Party does not respond within such five
(5) day period, the press release or disclosure shall be deemed approved. In
addition, if a public disclosure is required by law, including without
limitation in a filing with the Securities and Exchange Commission, the
disclosing Party shall provide copies of the disclosure reasonably in advance of
such filing or other disclosure for the nondisclosing Party's prior review and
comment.

     6.4 CONFIDENTIAL TERMS. Except as expressly provided herein, each Party
agrees not to disclose any terms of this Agreement or any aspect of the research
conducted pursuant to this Agreement to any Third Party without the consent of
the other Party; provided, however, that either Party shall have the right to
disclose the material terms of this Agreement under strictures of
confidentiality to any potential acquirer, candidate merger, partner, investment
bank, venture capital firm, or other financial institution or investor to obtain
financing; and provided further that either Party shall have the right to
disclose the material terms of this Agreement under strictures of
confidentiality to any bona fide potential strategic partner and to Affiliates.

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<PAGE>   17

7. REPRESENTATIONS AND WARRANTIES.

     7.1 ATHERSYS. Athersys represents and warrants that: (i) it is a
corporation duly organized validly existing and in good standing under the laws
of the State of Delaware; (ii) the execution, delivery and performance of this
Agreement have been duly authorized by all necessary corporate action on the
part of Athersys; (iii) it has the right to grant the licenses contemplated to
be granted by Athersys to Acorda under this Agreement; (iv) it is not aware of
any arrangement with any Third Party, whether contractual or otherwise, which
would conflict with or restrict its license grants to Acorda contemplated by
this Agreement; and (v) it shall not, during the term of this Agreement, enter
into any arrangement with any Third Party which directly interferes with license
grants to Acorda contemplated by this Agreement .

     7.2 ACORDA. Acorda represents and warrants that: (i) it is a corporation
duly organized validly existing and in good standing under the laws of the State
of Delaware; and (ii) the execution, delivery and performance of this Agreement
have been duly authorized by all necessary corporate action on the part of
Acorda; (iii) it has the right to grant the licenses contemplated to be granted
by Acorda to Athersys under this Agreement; (iv) it is not aware of any
arrangement with any Third Party, whether contractual or otherwise, which would
conflict with or restrict its license grants to Athersys contemplated by this
Agreement; and (v) it shall not, during the term of this Agreement, enter into
any arrangement with any Third Party which directly interferes with the license
grants to Athersys contemplated by this Agreement .

     7.3 DISCLAIMER OF WARRANTIES. EACH PARTY'S KNOW-HOW PATENTS AND THE RAGE
REAGENTS ARE PROVIDED AND LICENSED TO THE OTHER PARTY (AS APPLICABLE) FOR
PURPOSES OF THIS AGREEMENT "AS IS", AND NEITHER PARTY MAKES ANY REPRESENTATIONS
OR WARRANTIES OF ANY KIND, EITHER EXPRESS OR IMPLIED, WITH RESPECT THERETO OR TO
THE PRODUCTS BASED THEREON, INCLUDING, BUT NOT LIMITED TO, ANY WARRANTIES OF
MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, VALIDITY OF THE PATENT RIGHTS
WHICH MAY BE LICENSED HEREUNDER, OR NONINFRINGEMENT OF THE INTELLECTUAL PROPERTY
RIGHTS OF THIRD PARTIES.

8. DISPUTE RESOLUTION.

     8.1 MEDIATION. If a dispute arises out of or relates to this Agreement, or
the breach thereof, and if such dispute cannot be settled promptly, the Parties
agree first to try in good faith to settle the dispute by good faith discussions
between the CEOs of each Party. If such discussions do not resolve the dispute
within thirty (30) days after a Party has referred the dispute to resolution by
the CEOs, the Parties agree to submit such dispute within twenty (20) days to
non-binding mediation under the Commercial Mediation Rules of the American
Arbitration Association. If such mediation fails to resolve the dispute within
ninety (90) days, either Party may proceed to seek any remedies available to it.

     8.2 ARBITRATION. Subject to Section 8.1, Athersys and Acorda agree that any
dispute or controversy arising out of, in relation to, or in connection with
this Agreement, or the validity, enforceability, construction, performance or
breach thereof, shall be settled by binding arbitration in Cleveland, Ohio if
requested by Acorda and in New York City if requested by

                                       12
<PAGE>   18

Athersys, under the then-current Rules of Commercial Arbitration of the American
Arbitration Association by one (1) arbitrator appointed in accordance with such
Rules. The arbitrator shall determine what discovery will be permitted, based on
the principle of limiting the cost and time that the Parties must expend on
discovery; provided, however, that the arbitrator shall permit such discovery as
he or she deems necessary to achieve an equitable resolution of the dispute. The
decision and/or award rendered by the arbitrator shall be written (setting forth
in reasonable detail the legal and factual basis for such decision), final and
non-appealable and may be entered in any court of competent jurisdiction. The
Parties agree that, any provision of applicable law notwithstanding, they will
not request, and the arbitrator shall have no authority to award punitive or
exemplary damages against any Party. The costs of any arbitration, including
administrative fees and fees of the arbitrator, shall be shared equally by the
Parties, unless the arbitrator determines otherwise, it being expressly agreed
that the arbitrator shall have the power to award costs and reasonable attorneys
fees to the prevailing Party.

9. INDEMNIFICATION.

     9.1 ACORDA. Acorda shall indemnify, defend and hold harmless Athersys and
its directors, officers, employees and agents (each an "Athersys Indemnitee")
from and against any and all liabilities, damages, losses, costs or expenses
(including reasonable attorneys' and professional fees and other expenses of
litigation and/or arbitration as they accrue) (each a "Liability") resulting
from a claim, suit or proceeding made or brought by a Third Party against an
Athersys Indemnitee arising from or occurring as a result of (i) any breach of
the representations and warranties set forth in Section 7, or (ii) the
performance by Acorda of its obligations hereunder, or (iii) any development,
testing, manufacture, importation, use, offer for sale, sale or other
distribution of any Collaboration Product or Other Product by Acorda or its
Affiliates or its sublicensees (including, without limitation, product liability
and patent infringement claims), pursuant to Section 3.5, where Acorda is the
Participating Party with respect thereto, except, in each case, to the extent
caused by the negligence or willful misconduct of Athersys.

     9.2 ATHERSYS. Athersys shall indemnify, defend and hold harmless Acorda and
its directors, officers, employees and agents (each an "Acorda Indemnitee") from
and against any and all liabilities, damages, losses, costs or expenses
(including reasonable attorneys' and professional fees and other expenses of
litigation and/or arbitration as they accrue) (each a "Liability") resulting
from a claim, suit or proceeding made or brought by a Third Party against an
Acorda Indemnitee, arising from or occurring as a result of (i) any breach of
the representations and warranties set forth in Section 7, (ii) any development,
testing, manufacture, importation, use, offer for sale, sale or other
distribution of any Collaboration Product or Other Product by Athersys or its
Affiliates or Sublicensees (including, without limitation, product liability and
patent infringement claims) pursuant to Section 3.5 where Athersys is the
Participating Party with respect thereto, except in each case to the extent
caused by the negligence or willful misconduct of Acorda.

     9.3 PROCEDURE. In the event that any Indemnitee intends to claim
indemnification under this Article 9, it shall promptly notify the other Party
(the "Indemnitor") in writing of such alleged Liability. The Indemnitor shall
have the sole right to control the defense and settlement

                                       13
<PAGE>   19

thereof; provided, however, that any Indemnitee shall have the right to
participate in any proceeding, at its own expense, with separate counsel of its
choosing. The Indemnitees shall cooperate with the Indemnitor and its legal
representatives in the investigation of any action, claim or liability covered
by this Article 9. The Indemnitee shall not, except at its own cost, voluntarily
make any payment or incur any expense with respect to any claim or suit without
the prior written consent of the Indemnitor, which the Indemnitor shall not be
required to give.

10. TERMINATION.

     10.1 TERMINATION FOR CAUSE. Either Party may terminate this Agreement in
the event the other Party has materially breached or defaulted in the
performance of any of its obligations hereunder, and such default has continued
for sixty (60) days after written notice thereof was provided to the breaching
Party by the non-breaching Party. Any termination shall become effective at the
end of such sixty (60) day period unless the breaching Party has cured any such
breach or default prior to the expiration of the sixty (60) day period.
Notwithstanding the above, in the case of a failure to timely pay any amounts
due hereunder, the period for cure of any subsequent default following notice
thereof shall be thirty (30) days and, unless payment is made within such period
the termination shall become effective at the end of such period.

     10.2 TERMINATION UPON MERGER OR ACQUISITION. Either Party may terminate
this Agreement in the event that the other Party has merged with or been
acquired by a competitor of the terminating Party, as reasonably determined by
the terminating Party. The terminating Party shall provide the other Party with
written notification of its intent to terminate within sixty (60) days after the
closing of such merger or acquisition, and the termination shall become
effective thirty (30) days after the date of such notification. During such
time, the Parties will negotiate in good faith and agree in writing upon the
terms of such termination.

     10.3 TERMINATION WITHOUT CAUSE. At any time after the first anniversary of
the Effective Date of this agreement, this Agreement may be terminated by either
Party, without cause, upon six (6) months prior written notice to the other
Party.

     10.4 EFFECT OF TERMINATION.

     (a) ACCRUED RIGHTS AND OBLIGATIONS. Termination of this Agreement for any
reason shall not release any Party hereto from any liability which, at the time
of such termination, has already accrued to the other Party or which is
attributable to a period prior to such termination nor preclude either Party
from pursuing any rights and remedies it may have hereunder or at law or in
equity with respect to any breach of this Agreement. It is understood and agreed
that monetary damages may not be a sufficient remedy for any breach of this
Agreement and that the non-breaching Party may be entitled to injunctive relief
as a remedy for any such breach.

     (b) RETURN OF CONFIDENTIAL INFORMATION. Upon any termination of this
Agreement, Athersys and Acorda shall promptly return to the other Party all
Confidential Information of the other; provided each Party may retain one (1)
copy of such Confidential Information solely for archival purposes and for
ensuring compliance with Article 3.

                                       14
<PAGE>   20

     (c) SURVIVAL. Sections 3.4, 3.5, 3.6, 7.3 and 10.4, and Articles 5, 6, 7,
8, 9 and 11 of this Agreement shall survive termination of this Agreement for
any reason.

11. MISCELLANEOUS.

     11.1 GOVERNING LAW. This Agreement and any dispute, including without
limitation any arbitration, arising from the performance or breach hereof shall
be governed by and construed and enforced in accordance with the laws of the
state of New York, without giving effect to its conflict of laws rules and
regulations.

     11.2 INDEPENDENT CONTRACTORS. The relationship of the parties hereto is
that of independent contractors. The parties hereto are not deemed to be agents,
partners or joint venturers of the others for any purpose as a result of this
Agreement or the transactions contemplated thereby.

     11.3 ASSIGNMENT. Neither Party may assign its rights or obligations under
this Agreement absent the prior written consent of the other Party.

     11.4 NOTICES. All notices, requests and other communications hereunder
shall be in writing and shall be personally delivered or sent by telecopy or
other electronic facsimile transmission or by registered or certified mail,
return receipt requested, postage prepaid, in each case to the respective
address specified below, or such other address as may be specified in writing to
the other parties hereto:

If to Acorda:              Acorda Therapeutics
                           15 Skyline Drive
                           Hawthorne, NY  10532
                           Attn:  Chief Executive Officer
                           Fax No.: (914) 347-4560

If to Athersys:            Athersys, Inc.
                           3201 Carnegie Avenue
                           Cleveland, Ohio 44115
                           Attn:  President
                           Fax No.: (216) 361-9495

     11.5 FORCE MAJEURE. Neither Party shall lose any rights hereunder or be
liable to the other Party for damages or losses (except for payment obligations)
on account of failure of performance by the defaulting Party if the failure is
occasioned by war, strike, fire, Act of God, earthquake, flood, lockout,
embargo, governmental acts or orders or restrictions, failure of suppliers, or
any other reason where failure to perform is beyond the reasonable control and
not caused by the negligence, intentional conduct or misconduct of the
nonperforming Party has exerted all reasonable efforts to avoid or remedy such
force majeure; provided, however, that in no event shall a Party be required to
settle any labor dispute or disturbance.

     11.6 ADVICE OF COUNSEL. Acorda and Athersys have each consulted counsel of
their choice regarding this Agreement, and each acknowledges and agrees that
this Agreement shall not be deemed to have been drafted by one Party or another
and will be construed accordingly.

                                       15
<PAGE>   21

     11.7 COMPLIANCE WITH LAWS. Each Party will comply with all applicable laws
and regulations in connection with its performance under this Agreement. Each
Party shall furnish to the other Party any information requested or required by
that Party during the term of this Agreement or any extensions hereof to enable
that Party to comply with the requirements of any U.S. or foreign federal, state
and/or government agency.

     11.8 FURTHER ASSURANCES. At any time or from time to time on and after the
date of this Agreement, either Party shall at the request of the other Party
hereto (i) execute, and deliver or cause to be delivered, all such consents,
documents or further instruments of transfer or license as required by this
Agreement, and (ii) take or cause to be taken all such actions as are necessary
for the compliance with the terms and intent of this Agreement and the
transactions contemplated hereby.

     11.9 SEVERABILITY. In the event that any provisions of this Agreement are
determined to be invalid or unenforceable by a court of competent jurisdiction,
the remainder of the Agreement shall remain in full force and effect without
said provision. In such event, the parties shall in good faith negotiate a
substitute clause for any provision declared invalid or unenforceable, which
shall most nearly approximate the intent of the parties in entering this
Agreement.

     11.10 WAIVER. It is agreed that no waiver by either Party hereto of any
breach or default of any of the covenants or agreements herein set forth shall
be deemed a waiver as to any subsequent and/or similar breach or default.

     11.11 COMPLETE AGREEMENT. This Agreement, together with its Exhibits,
constitutes the entire agreement, both written and oral, between the Parties
with respect to the subject matter hereof, and that all prior agreements,
including the Letter, respecting the subject matter hereof, either written or
oral, expressed or implied, are merged and canceled, and are null and void and
of no effect. No amendment or change hereof or addition hereto shall be
effective or binding on either of the parties hereto unless reduced to writing
and duly executed on behalf of both parties.

     11.12 USE OF NAME. Unless otherwise permitted by this Agreement or required
by applicable laws or regulations, neither Party shall use the name or
trademarks of the other Party without the prior written consent of such other
Party.

     11.13 HEADINGS. The captions to the several Sections and Articles hereof
are not a part of this Agreement, but are included merely for convenience of
reference only and shall not affect its meaning or interpretation.

     11.14 COUNTERPARTS. This Agreement may be executed in two counterparts,
each of which shall be deemed an original and which together shall constitute
one instrument.

                                       16
<PAGE>   22

     IN WITNESS WHEREOF, Acorda and Athersys have executed this Agreement by
their respective duly authorized representatives.

ACORDA THERAPEUTICS                   ATHERSYS, INC.

By: /s/ Ron Cohen                     By: /s/ Gil Van Bokkelen
   ----------------------------          ------------------------------

Print Name: /p/ Ron Cohen             Print Name: /p/ Gil Van Bokkelen
           --------------------                  ----------------------

Title: President and CEO              Title: President and CEO
      -------------------------             ---------------------------

                                       17

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