COLLABORATION AGREEMENT by and among
Exhibit
10.29
Portions
of this Exhibit 10.29 have been omitted based upon a request for confidential
treatment. This Exhibit, including the non-public information, has been filed
separately with the Securities and Exchange Commission. "[***]" designates
portions of this document that have been redacted pursuant to the request for
confidential treatment filed with the Securities and Exchange
Commission.
by
and among
NEUROMetrix,
Inc.,
And
PNIR,
LLC
February
19, 2008
Table
of Contents
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ARTICLE
I DEFINITIONS
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1
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ARTICLE
II SCOPE AND STRUCTURE OF THE COLLABORATION
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7
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Section
2.01. General
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7
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Section
2.02. Exclusive
Relationship and Non-Competition
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7
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ARTICLE
III GRANTS AND RESERVATIONS OF RIGHTS
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9
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Section
3.01. Licenses
of Rights by Cyberkinetics and NEUROMetrix to the Company
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9
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Section
3.02. Sublicenses
of Rights from the Company to Cyberkinetics and
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| NEUROMetrix |
10
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Section
3.03. Ancillary
Rights
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10
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Section
3.04. License
to Joint Inventions
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11
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Section
3.05. Non-Impairment
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11
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ARTICLE
IV CAPITAL CONTRIBUTIONS; FINANCIAL ARRANGEMENTS
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11
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Section
4.01. Program
Funding Commitments
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11
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Section
4.02. Distribution
of Net Profits
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12
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Section
4.03. Audit
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12
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ARTICLE
V THE DEVELOPMENT PROGRAM
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13
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Section
5.01. Conduct
of the Development Program
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13
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Section
5.02. Development
Information
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14
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Section
5.03. Regulatory
Approval Filings
|
15
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Section
5.04. Facilities
Visits
|
15
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ARTICLE
VI SALES, MARKETING AND ADMINISTRATIVE SERVICES
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16
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Section
6.01. Sales
and Marketing Services
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16
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Section
6.02. Commercialization
Plan
|
16
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Section
6.03. General
and Administrative Services
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17
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ARTICLE
VII MANUFACTURE AND SUPPLY
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17
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Section
7.01. Process
Development; Manufacturing Approvals
|
18
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Section
7.02. Manufacture
and Supply of Collaboration Products for Development
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| Purposes |
18
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Section
7.03. Manufacture
and Supply of Collaboration Products for Commercial
Sale..18
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Section
7.04. Device
History Record
|
19
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Section
7.05. Certificates
of Manufacturing Compliance
|
19
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Section
7.06. Access
to Facilities
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19
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ARTICLE
VIII MANAGEMENT
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20
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Section
8.01. Program
Management Team
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20
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Section
8.02. Steering
Committee
|
21
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Section
8.03. General
Disagreements
|
22
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ARTICLE
IX INTELLECTUAL PROPERTY RIGHTS
|
23
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Section
9.01. Ownership
|
23
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Section
9.02. Filing,
Prosecution and Maintenance of Patent Rights
|
24
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Section
9.03. Cooperation
|
25
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Section
9.04. Notification
of Patent Issuance
|
25
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Section
9.05. No
Other Technology Rights
|
25
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Section
9.06. Enforcement
of Patent Rights; Defense of Infringement Actions
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25
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ARTICLE
X CONFIDENTIALITY
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27
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Section
10.01. Nondisclosure
Obligations
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27
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-
i -
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Section
10.02. Terms
of this Agreement
|
27
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Section
10.03. Publications
|
28
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ARTICLE
XI REPRESENTATIONS AND WARRANTIES
|
28
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Section
11.01. Cyberkinetics's
Representations and Warranties
|
28
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Section
11.02. NEUROMetrix's
Representations and Warranties
|
29
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|
Section
11.03. Disclaimer
of Representations and Warranties
|
30
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Section
11.04. Limitation
of Liability
|
30
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ARTICLE
XII INDEMNIFICATION
|
30
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|
Section
12.01. Indemnification
by Cyberkinetics
|
30
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Section
12.02. Indemnification
by NEUROMetrix
|
31
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Section
12.03. Conditions
to Indemnification
|
31
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Section
12.04. Attribution
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31
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Section
12.05. Insurance
|
32
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ARTICLE
XIII TERM AND TERMINATION
|
32
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Section
13.01. Term
|
32
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Section
13.02. Termination
|
32
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Section
13.03. Effect
of Termination by Cyberkinetics
|
33
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Section
13.04. Effect
of Termination by NEUROMetrix
|
34
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Section
13.05. Cooperation
|
36
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Section
13.06. Survival
of Rights and Duties
|
36
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ARTICLE
XIV MISCELLANEOUS
|
37
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Section
14.01. Cooperation
|
37
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Section
14.02. Exchange
Controls
|
37
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Section
14.03. Withholding
Taxes
|
37
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Section
14.04. Interest
on Late Payments
|
37
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Section
14.05. Force
Majeure
|
37
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Section
14.06. Assignment
|
38
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Section
14.07. Severability
|
38
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Section
14.08. Notices
|
38
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Section
14.09. Applicable
Law; Jurisdiction
|
39
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Section
14.10. Dispute
Resolution
|
39
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|
Section
14.11. Entire
Agreement
|
42
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Section
14.12. Headings
|
42
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Section
14.13. Interpretation
|
42
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Section
14.14. Independent
Contractors
|
43
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Section
14.15. Agreement
Not to Solicit Employees
|
43
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Section
14.16. Waiver
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43
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Section
14.17. Interpretation
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43
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Section
14.18. Counterparts
|
43
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-
ii -
THIS
COLLABORATION AGREEMENT ("Agreement"),
dated
as of February 19, 2008 (the "Effective
Date"),
is
made by and among Cyberkinetics Neurotechnology Systems, Inc., a Delaware
corporation having its principal place of business at 000 Xxxxxxxxxx Xxxxxxxxx,
Xxxxx 000, Xxxxxxxxxx, Xxxxxxxxxxxxx 00000 ("Cyberkinetics");
NEUROMetrix, Inc., a Delaware Corporation having its principal place of business
at 00 Xxxxxx Xxxxxx, Xxxxxxx, Xxxxxxxxxxxxx 00000 ("NEUROMetrix");
and
PNIR, LLC, a Delaware Limited Liability Company having its principal place
of
business at 00 Xxxxxx Xxxxxx, Xxxxxxx, Xxxxxxxxxxxxx 00000 (the "Company";
Cyberkinetics, NEUROMetrix and the Company are sometimes referred to herein
individually as a "Party"
and
sometimes referred to herein collectively as the "Parties").
R
E C I T A L S
A. Cyberkinetics,
among other activities, is currently developing the Andara™ Oscillating Field
Stimulator (OFS™) device technology platform to treat a wide range of nervous
system injuries, disorders and conditions.
B. NEUROMetrix
has expertise in the areas of detection, measurement, diagnosis and treatment
of
a wide range of peripheral neurological conditions.
C. The
Company has been organized by Cyberkinetics and NEUROMetrix as a joint venture
to engage in research and development activities in the Field (as herein
defined) and to develop and commercialize the Collaboration Products (as
herein
defined) throughout the world.
NOW,
THEREFORE,
in
consideration of the premises and of the covenants herein contained, the
Parties
mutually agree as follows:
ARTICLE
I
DEFINITIONS
For
purposes of this Agreement, the terms defined in this Article shall have the
meanings specified below. Certain other capitalized terms are defined elsewhere
in this
Agreement.
"Affiliate"
with
respect to the specified Party, shall mean any corporation or other entity
which
controls, is controlled by, or is under common control with such Party. A
corporation or other entity shall be regarded as in control of another
corporation or entity if it owns or directly or indirectly controls more than
fifty percent (50%) of the voting stock or other ownership interest of the
other
corporation or entity, or if it possesses, directly or indirectly, the power
to
direct or cause the direction of the management and policies of the corporation
or other entity or the power to elect or appoint more than fifty percent (50%)
of the members of the governing body of the corporation or other entity.
Notwithstanding the foregoing, each Party is hereby deemed not to be an
"Affiliate" of any other Party for the purposes of this Agreement.
"Collaboration
Product"
shall
mean any product or process for use in the Field that is the subject of the
activities described in the Development Plan, or that otherwise arises in
connection with the Parties' performance of their obligations under the
Development Plan (including without limitation, the Parties' direct performance
of such obligations and the performance of such obligations by any
subcontractor), as such products or processes may be improved or modified during
the term of this Agreement.
"Commercialization
Costs"
shall
mean the direct variable costs and direct fixed costs incurred by Cyberkinetics,
NEUROMetrix, or any of their Affiliates, on or after the Effective Date,
to
perform, or to have performed by a subcontractor approved by the Company,
such
Party's obligations under the Commercialization Plan, to the extent such
costs
conform to the budget in the Commercialization Plan for such activities or
otherwise approved in writing by the Steering Committee. For purposes of
this
definition: (i) "direct variable costs" shall mean and include: (a) charges
for
the cost of labor, raw materials, supplies and other resources directly and
reasonably consumed in the conduct of the Commercialization Plan, (b) amounts
paid to subcontractors approved by the Company to perform a Party's obligations
under the Commercialization Plan, (c) amounts paid or payable by Cyberkinetics
or its Affiliates to Third Parties for access to or use of intellectual property
rights approved by the Steering Committee, including without limitation,
intellectual property rights that are subject, as of the Effective Date,
to a
license agreement listed and designated as a "License" on Schedule A, which
agreements are hereby deemed to be approved by the Steering Committee for
purposes of this Agreement and (d) amounts paid or payable by NEUROMetrix
or its
Affiliates to Third Parties for access to or use of intellectual property
rights
approved by the Steering Committee, including without limitation, intellectual
property rights that are subject, as of the Effective Date, to a license
agreement listed on Schedule C, which agreements are hereby deemed to be
approved by the Steering Committee for purposes of this Agreement; provided
that: (1) the foregoing amounts payable under the agreements listed and
designated as a "License" on Schedule A and agreements listed on Schedule
C,
respectively, shall not include payments under such agreements specifically
for
access to or use of intellectual property rights which are added to any such
agreements after the Effective Date, (2) the foregoing amounts shall only
include payments that are on account of the sale of Collaboration Products,
(3)
the foregoing amounts shall only be included within the definition of
"Commercialization Costs" to the extent they equal but do not exceed a total
of
[***] of the Net Sales of the relevant Collaboration Product, and (4) for
avoidance of doubt, all such amounts in excess of such [***] cap (excluding
payments specifically for access to or use of intellectual property rights
which
may be added to such an agreement after the Effective Date as approved hereunder
by the Steering Committee), shall be and remain Cyberkinetics's obligation
in
the case of agreements designated as a "License" on Schedule A and shall
be and
remain NEUROMetrix's obligation in the case of agreements listed on Schedule
C,
and (ii) "direct fixed costs" shall mean and include the cost of facilities,
utilities, insurance, equipment depreciation and other fixed costs incurred
in
connection with a Party's performance of its obligations under the
Commercialization Plan, allocated based upon the proportion of such costs
directly attributable to such performance, or by such other method of cost
allocation as may be approved by the Steering Committee. All cost determinations
made hereunder shall be made in accordance with United States generally accepted
accounting principles, consistently applied. Notwithstanding the foregoing
clauses "(i)(c)" and "(i)(d)", all maintenance fees that become payable (x)
under that certain License Agreement between Cyberkinetics and Purdue Research
Foundation, dated February 28, 2005, including for example the fees described
in
Section 4.3 of that agreement, shall be and remain payable by Cyberkinetics
and
shall not be includable as "Commercialization Costs" nor otherwise shared
with
the Company or NEUROMetrix and (y) under any agreements identified on
Schedule
C
shall be
and remain payable by NEUROMetrix and shall not be includable as
"Commercialization Costs" nor otherwise shared with the Company or
Cyberkinetics.
-
2 -
"Commercialization
Plan"
shall
mean the comprehensive plan for the commercialization of each Collaboration
Product, as more specifically described in Section
6.02(a)
of this
Agreement.
"Commercially
Reasonable and Diligent Efforts"
shall
mean that level of effort and care which, consistent with the exercise of
prudent scientific and business judgment, would be applied by other US-based
companies within the medical device industry to develop and commercialize a
medical device product that is at a similar stage of development and has similar
commercial potential, including without limitation, that such activities are
performed in accordance with this Agreement, the Transaction Agreements and
all
applicable laws and regulations.
"Company's
Operating Agreement"
shall
mean the Limited Liability Company Agreement of even date herewith between
Cyberkinetics and NEUROMetrix.
"Control"
shall
mean, when used in reference to a specified Patent Right or Technology, the
right of a Party or one of its Affiliates to grant a right or license in or
to
such Patent Right or Technology, as provided in this Agreement, without
breaching a contractual obligation to a Third Party.
"Cyberkinetics
Licensors"
shall
mean the licensors of Patent Rights licensed to Cyberkinetics and included
in
the Cyberkinetics Patent Rights sublicensed to the Company. Cyberkinetics
Licensors as of the Effective Date are listed on Schedule
A
attached
hereto.
"Cyberkinetics
Manufacturing Know-How"
shall
mean all Manufacturing Know-How owned or Controlled by Cyberkinetics or any
of
its Affiliates, now or at anytime during the term of this Agreement, that
relates to or is useful in the Field.
"Cyberkinetics
Patent Rights"
shall
mean all Patent Rights owned or Controlled by Cyberkinetics or any of its
Affiliates, as of the Effective Date or at anytime during the term of this
Agreement, to the extent that such Patent Rights claim an invention or
technology relating to or useful in the Field, including, without limitation,
the patent applications and patents listed on Schedule
B
attached
hereto.
"Cyberkinetics
Technology"
shall
mean all Technology owned or Controlled by Cyberkinetics or any of its
Affiliates, now or at anytime during the term of this Agreement, that relates
to
or is useful in the Field.
"Development
Costs"
shall
mean the direct variable costs and direct fixed costs incurred by Cyberkinetics,
NEUROMetrix, or any of their Affiliates, on or after the Effective Date, to
perform, or to have performed by a subcontractor approved by the Company, such
Party's obligations under the Development Plan, to the extent such costs conform
to the budget in the Development Plan for such activities or otherwise approved
in writing by the Steering Committee. For purposes of this definition: (i)
"direct variable costs" shall mean and include: (a) charges for the cost of
labor, raw materials, supplies and other resources directly and reasonably
consumed in the conduct of the Development Plan and (b) amounts paid to
subcontractors approved by the Company to perform a Party's obligations under
the Development Plan and (ii) "direct fixed costs" shall mean and include the
cost of facilities, utilities, insurance, equipment depreciation and other
fixed
costs incurred in connection with a Party's performance of its obligations
under
the Development Plan, allocated based upon the proportion of such costs directly
attributable to such performance, or by such other method of cost allocation
as
may be approved by the Steering Committee. All cost determinations made
hereunder shall be made in accordance with United States generally accepted
accounting principles, consistently applied.
-
3 -
"Development
Plan"
shall
mean the comprehensive plan and budget for the development of each Collaboration
Product under the Development Program, as more specifically described in
Section
5.01(b)
of this
Agreement.
"Development
Program"
shall
mean the activities conducted, or to be conducted, in the performance of the
Development Plan for each Collaboration Product.
"Effective
Date"
shall
mean the date appearing in the first paragraph of this Agreement.
"Existing
Cyberkinetics Patent Rights"
shall
mean all Patent Rights owned or Controlled by Cyberkinetics or any of its
Affiliates, as of the Effective Date, to the extent that such Patent Rights
claim an invention or technology relating to or useful in the
Field.
"Existing
NEUROMetrix Patent Rights"
shall
mean all Patent Rights owned or Controlled by NEUROMetrix or any of its
Affiliates, as of the Effective Date, to the extent that such Patent Rights
claim an invention or technology relating to or useful in the
Field.
"FDA"
shall
mean the United States Food and Drug Administration, any successor agency,
or
the regulatory authority of any country other than the United States with
responsibilities comparable to those of the United States Food and Drug
Administration.
"Field"
shall
mean the treatment of peripheral nervous system injury, disease or disorders,
in
humans, with an electrical field; provided, however, the term Field shall not
include (a) the treatment of injury, disease or disorders in humans that do
not
originate from the peripheral nervous system and affect, in substantially the
same manner, both the central nervous and peripheral nervous systems, (b) the
treatment of central nervous system injury, disease or disorders in humans,
(c)
the treatment of peripheral nervous system injury, disease or disorders with
drugs (whether chemical compounds or biologics), alone as a drug product, or
as
an active ingredient in a single product consisting of a drug and a medical
device (for avoidance of doubt, the phrase "single product" as used in this
definition means that the drug and medical device as configured for sale cannot
feasibly be divided by the purchaser for use separately) even if such product's
safety or efficacy is believed to rely in part on the use of an electrical
field
or (d) the diagnosis or treatment of peripheral nervous system injury, disease
or disorders in humans with quantitative localization of the peripheral nerve
and without using an electrical field as part of the therapy.
"Knowledge"
with
respect to NEUROMetrix shall mean the actual knowledge, without independent
investigation, of Xxxx X. Xxxxxx, X. Xxxxxxxx Xxxxx, Xxxx Kong, Xxxxxxx X.
Xxxxxxxx and Xxxxxxx Xxxxxxxx, and, with respect to Cyberkinetics shall mean
the
actual knowledge, without independent investigation, of Xxxxxxx Xxxxxxxx, Xxxx
Xxxxxx, J. Xxxxxxxxxxx Xxxxxxxx, Xxxxxxx Xxxx and Xxxx Xxxxxx.
-
4 -
"Manufacturing
Know-How"
shall
mean all information, data, processes, know-how, techniques, inventions,
discoveries, improvements, practices, methods, knowledge, skill, experience,
and
other technology, whether or not patentable or copyrightable, and any and all
intellectual property rights appurtenant thereto, including without limitation,
Patent Rights, copyrights, and trade secrets, in each case, relating to the
manufacture, in-process and release testing, packaging, storage and
transportation of products, including without limitation, ingredient and
component lists, supplier lists, raw material, in-process and finished product
specifications, acceptance criteria, manufacturing records, standard operating
procedures, engineering plans, installation, operation and process qualification
protocols for equipment and facilities, validation records, quality programs,
master files submitted to the FDA, process validation reports, environmental
monitoring processes, test data including clinical test data, cost data and
employee training materials.
"NEUROMetrix
Licensors"
shall
mean the licensors of Patent Rights licensed to NEUROMetrix and included in
the
NEUROMetrix Patent Rights sublicensed to the Company. NEUROMetrix Licensors
as
of the Effective Date are listed on Schedule
C
attached
hereto.
"NEUROMetrix
Manufacturing Know-How"
shall
mean all Manufacturing Know-How owned or Controlled by NEUROMetrix or any of
its
Affiliates, now or at anytime during the term of this Agreement, that relates
to
or is useful in the Field.
"NEUROMetrix
Patent Rights"
shall
mean all Patent Rights owned or Controlled by NEUROMetrix or any of its
Affiliates, as of the Effective Date or at anytime during the term of this
Agreement, to the extent that such Patent Rights claim an invention or
technology relating to or useful in the Field, including, without limitation,
the patent applications and patents listed on Schedule
D
attached
hereto.
"NEUROMetrix
Technology"
shall
mean all Technology owned or Controlled by NEUROMetrix or any of its Affiliates,
now or at anytime during the term of this Agreement, that relates to or is
useful in the Field.
"Net
Sales"
with
respect to a product shall mean the gross invoiced sales price of such product
billed to independent Third Party customers, including without limitation
distributors, in bona fide arms-length transactions, less, for purposes only
of
calculating the payments set forth in Article
XIII,
to the
extent such amounts are included in the gross invoiced sales price, actual:
(a) freight and insurance costs incurred in transporting such product to
such customers; (b) quantity, cash and other trade discounts actually
allowed and taken; (c) customs duties, surcharges and taxes and other
governmental charges incurred in connection with the exportation or importation
of such product in final form; (d) bad debt expense; (e) amounts
repaid or credited by reason of rejections or retroactive price reductions;
(f) amounts incurred resulting from governmental mandated rebate or
discount programs; and (g) Third Party rebates and chargebacks actually
allowed and taken, including hospital buying group chargebacks, hospital buying
group/group purchasing organization administration fees or managed care
organization rebates. The amount of Net Sales for any period shall be determined
on the basis of sales recorded in such period in accordance with United States
generally accepted accounting principles, consistently applied. The transfer
of
a product to Cyberkinetics or NEUROMetrix (or one of their Affiliates) shall
not
be considered a sale; in such cases, Net Sales shall be determined based on
the
invoiced sales price to the first Third Party customer, less the foregoing
deductions, as applicable.
-
5 -
"Patent
Rights"
shall
mean: (i) all patents, patent applications, certificates of invention,
applications for certificates of invention, and supplemental protection
certificates, (ii) all extensions, registrations, confirmations, reissues,
divisions, continuations or continuations-in-part, re-examinations or renewals
of any of the items listed in the foregoing clause "(i)" and (iii) all foreign
(ex-US) counterparts of any of the items listed in the foregoing clause "(i)"
and "(ii)".
"Program"
shall
mean the collaboration among the Company, Cyberkinetics and NEUROMetrix
described in this Agreement.
"Program
Costs"
shall
mean all Development Costs and Commercialization Costs.
"Program
Management Team"
shall
mean the joint team composed of representatives of Cyberkinetics and NEUROMetrix
described in Section
8.01(a)
of this
Agreement.
"Regulatory
Approvals"
shall
mean all approvals from regulatory authorities in any country required to
develop, test, manufacture, market, import, distribute, sell and use a
Collaboration Product in any such country, including without limitation, any
510K or Premarket Approval Application (PMA) filed with the FDA, any
establishment license application filed with the FDA to obtain approval of
the
facilities and equipment to be used to manufacture a Collaboration Product,
any
device master file filed with FDA, regulatory filings that are equivalent to
each of the foregoing examples that are made with any agency or authority of
a
governmental entity outside of the United States having similar authority to
the
FDA, and any product pricing approvals, where applicable.
"Steering
Committee"
shall
mean the governing body of the Company composed of representatives of
Cyberkinetics and NEUROMetrix as described in Section
8.02(a)
of this
Agreement.
"Technology"
shall
mean all information, data, processes, know-how, techniques, inventions,
discoveries, improvements, practices, methods, knowledge, skill, experience,
and
other technology, in each case that is unpatented or unpatentable, and any
and
all intellectual property rights appurtenant thereto, including without
limitation, copyrights, trade names, trademarks, service marks and trade
secrets.
"Third
Party"
shall
mean any entity other than the Company,
Cyberkinetics
or NEUROMetrix (and their respective Affiliates).
"Transaction
Agreements"
shall
mean and include the Company's Operating Agreement and any and all other written
agreements entered into be and between any of the Parties and relating to the
performance of the Program, including without limitation, the Marketing
Agreement, the Services Agreement and the Manufacturing Agreement.
-
6 -
ARTICLE
II
SCOPE
AND STRUCTURE OF THE COLLABORATION
Section
2.01. General.
Cyberkinetics
and NEUROMetrix have formed the Company to research the viability of the use
of
an electrical field to treat peripheral nerve injuries, diseases and disorders
in humans and, assuming such research demonstrates the viability thereof, as
well as safety and efficacy of such treatment, to develop and commercialize
Collaboration Products throughout the world. The Company will undertake the
Development Program for each of the Collaboration Products, with each of the
Parties assuming responsibility for those portions of the Development Program
allocated to it under the Development Plan and this Agreement, and as the
Parties may otherwise agree upon in writing. Upon completion of the Development
Program (and assuming the viability of the treatment with an electrical field
is
demonstrated), Cyberkinetics will manufacture the Collaboration Products for
commercial sale by the Company, and NEUROMetrix will market and sell the
Collaboration Products as agent for and on behalf of the Company, on the terms
and conditions provided for in the Commercialization Plan and this Agreement,
and as the Parties may otherwise agree upon in writing.
Section
2.02. Exclusive
Relationship and Non-Competition.
(a) Basic
Restrictions.
During
the term of this Agreement, neither the Company, Cyberkinetics nor NEUROMetrix
(nor any of their Affiliates) shall independently, or with a Third Party, engage
in the commercialization, manufacture, marketing, sale or distribution of,
any
products for use in the Field, other than as part of the Program. In addition,
during the two-year period following termination of this Agreement under
Section
13.02(a)
or
Section
13.02(b),
the
Party whose breach of this Agreement led to a termination under Section
13.02(a)
or the
Party that elects to terminate this Agreement under Section
13.02(b),
as
applicable, and such Party's Affiliates, shall not independently, or with a
Third Party, conduct research regarding, or engage in the development,
commercialization, manufacture, marketing, sale or distribution of, any products
in the Field. The restrictions set forth in this Section
2.02(a)
shall
survive the termination of this Agreement as and to the extent set forth
herein.
(b) Competitive
Product Restrictions.
During
the term of this Agreement, neither Cyberkinetics nor NEUROMetrix, nor any
of
their respective Affiliates (in each case the "Restricted Party"), shall
independently, or with or through a Third Party, sell
or
otherwise commercialize, or use for commercial purposes, a
product
to treat peripheral nerve injury, disease or disorders, if such product's safety
or efficacy is reasonably believed to rely in material part on the use of an
electrical field (each a "Competitive Product"), even if such product consists
in part of a drug (whether chemical compounds or biologics), except in
connection with the Research Program or as provided in this Section
2.02(b).
(i) Right
of First Negotiation.
The
Company shall have a right of first negotiation with respect to each Competitive
Product as follows.
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(ii) Competitive
Products.
If at
anytime during the term, the Restricted
Party
desires
to sell or otherwise commercialize, or use for commercial purposes, a
Competitive Product, the Restricted
Party
shall so
notify the Company and those two Parties shall negotiate in good faith towards
a
license, co-promotion, asset sale or similar agreement pursuant to which the
Company and the Restricted
Party
would
engage in such activities. If such Parties fail to enter into a license,
co-promotion, asset sale or similar agreement, the Restricted
Party
shall be
prohibited from continuing forward with the sale, or other commercialization,
or
use for commercial purposes, of such Competitive Product except as provided
in
this Section
2.02(b).
Specifically, if the Restricted
Party desires to sell
or
otherwise commercialize, or use for commercial purposes a
Competitive Product, before commencing such activities, the
Restricted
Party will notify the Company of its desire and will provide the Company with
a
notice
identifying the Competitive Product and an outline of the planned activities
(i.e., a proposed plan for commercialization, or a proposal to sell the rights
to the Competitive Product). If the Company notifies the Restricted
Party
in
writing of its election to pursue a license, co-promotion, asset sale or similar
agreement for such Competitive Product within twenty (20) days after the
Company's receipt of such notice, the Restricted
Party
and the
Company shall enter
into good faith negotiations with respect to such an agreement for a period
of
ninety (90) days following the
Restricted
Party's receipt of such election from the Company (the "Negotiation Period").
During the Negotiation Period, the Company may present one or more term sheets
to the
Restricted
Party (each a "Company Term Sheet") and the
Restricted
Party will either agree to a Company Term Sheet and the Parties will move
forward to negotiate a definitive agreement based on such term sheet, or
the
Restricted
Party will promptly provide a counter-offer term sheet to the Company (the
"Counter Offer"). During the Negotiation Period, the
Restricted
Party may revise the terms and conditions of the Counter Offer to the Company.
(iii) Access
to Information.
During
the Negotiation Period, the
Restricted
Party shall promptly provide the Company with additional information available
to the
Restricted
Party that is related to the Competitive Product that would be subject to the
license, and reasonable access to personnel and facilities, as reasonably
requested by the Company as part of its due diligence with respect to such
license. Such disclosure of information shall be subject to suitable
confidentiality and non-use restrictions to be negotiated by the parties at
such
time.
(iv) Failure
to Reach Agreement; the
Restricted
Party's Right to Negotiate.
If
the
Company does not provide the Restricted
Party
with
such notice of its election to pursue a license, co-promotion, asset sale or
similar agreement within the thirty (30) day period after receipt of a notice
as
described in Section
2.02(b)(ii),
the
Restricted
Party will then be free to enter into negotiations with any Third Party, and
the
Restricted
Party shall have the right to enter into an agreement with respect to the
Competitive
Product generally in accordance with the terms set forth in the proposed plan
for commercialization or proposal to sell the rights to the Competitive Product.
If the Company does pursue an agreement as set forth in Section
2.02(b)(ii),
but,
despite the Parties' compliance with such Section
2.02(b)(ii),
the
Restricted
Party and the Company do not reach an agreement during the Negotiation Period,
then the
Restricted
Party will then be free to enter into negotiations with any Third
Party
regarding such an
agreement for
such
Competitive Product, provided that such agreement shall have the same scope
and
general terms as included in the last Counter Offer of the Restricted Party
delivered to the Company under Section
2.02(b)(ii),
subject
to the provisions set forth in Section
2.02(b)(v).
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8 -
(v) Limitation
on the Restricted
Party's
Right to Enter Agreements with a Third Party.
The
Restricted
Party shall not enter into any such agreement with a Third Party for a
Competitive Product on terms and conditions which, when taken as a whole, are
materially less favorable to the
Restricted
Party than the terms and conditions set forth in the last Counter Offer offered
by the
Restricted
Party to the Company as described in Section
2.02(b)(ii).
(vi) Continued
Effectiveness of the Company Rights.
In the
event that the
Restricted
Party has not entered into an agreement with a Third Party with respect to
the
Competitive Product as permitted under Section
2.02(b)(v)
within
six (6) months following the end of a Negotiation Period, then thereafter,
if
the
Restricted
Party desires to enter into such an agreement, the
Restricted
Party will first notify the Company of its desire and the procedure described
in
this Section
2.02(b)
shall
apply again.
(c) The
provisions of each of the foregoing subsections of this Section
2.02
shall be
deemed to be separate and independent restrictions.
ARTICLE
III
GRANTS
AND RESERVATIONS OF RIGHTS
Section
3.01. Licenses
of Rights by Cyberkinetics and NEUROMetrix to the
Company.
(a) Grant
by Cyberkinetics.
Except
as otherwise expressly provided herein, Cyberkinetics hereby grants to the
Company the exclusive, worldwide, irrevocable (during the term of this Agreement
and thereafter to the extent specifically provided in Article
XIII
hereof),
royalty-free (except for the obligation to pay amounts to Cyberkinetics as
"Commercialization Costs" in reimbursement of amounts paid by Cyberkinetics
to
Cyberkinetics Licensors to the extent triggered by or on account of the
activities of the Company) right and license, with the right to grant
sublicenses, under the Cyberkinetics Patent Rights, the Cyberkinetics Technology
and the Cyberkinetics Manufacturing Know-How, to develop, make, have made,
use,
offer for sale, sell, have sold, import and export Collaboration Products.
In
addition to the foregoing, during the term of the Agreement, Cyberkinetics
hereby grants to the Company a non-exclusive and royalty-free license to use,
and have used, any of the following trademarks in connection with any of the
Collaboration Products and the distribution, marketing and sale thereof by
the
Company, or by NEUROMetrix on behalf of the Company (collectively, the "Licensed
Uses"): Andara™ Oscillating Field Stimulator™ and Andara™ OFS™ and OFS™ (the
"Licensed Trademarks"). The Company and NEUROMetrix shall perform all acts
reasonably requested by Cyberkinetics to assure that the nature and quality
of
the Company's use of the Licensed Trademarks are consistent with and do not
detract from the goodwill associated with the Licensed Trademarks. All use
of
the Licensed Trademarks and the goodwill associated therewith shall inure to
the
benefit of Cyberkinetics. Neither the Company nor NEUROMetrix shall file any
application to register any Licensed Trademark, in whole or in part, or any
xxxx
that is confusingly similar to any Licensed Trademark, at any time during the
term of the Agreement or thereafter. Neither the Company nor NEUROMetrix shall,
during the term of the Agreement or thereafter, challenge Cyberkinetics' or
its
affiliates' title to or rights in the Licensed Trademarks. The Company shall
ensure that the Licensed Trademarks are: (a) used in conjunction with the ® or ™
designations as directed by Cyberkinetics; (b) not modified in any manner
without the prior written consent of Cyberkinetics; (c) used alone without
any
other terms or designs which may detract from the Licensed Trademarks; and
(d)
reproduced according to specifications that may be provided from time to time
by
Cyberkinetics.
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9 -
(b) Grant
by NEUROMetrix.
Except
as otherwise expressly provided herein, NEUROMetrix hereby grants to the Company
the exclusive, worldwide, irrevocable (during the term of this Agreement and
thereafter to the extent specifically provided in Article
XIII
hereof),
royalty-free (except for the obligation to pay amounts to NEUROMetrix as
"Commercialization Costs" in reimbursement of amounts paid by NEUROMetrix to
NEUROMetrix Licensors to the extent triggered by or on account of the activities
of the Company) right and license, with the right to grant sublicenses, under
the NEUROMetrix Patent Rights, NEUROMetrix Technology and the NEUROMetrix
Manufacturing Know-How, to develop, make, have made, use, offer for sale, sell,
have sold, import and export Collaboration Products.
(c) Sublicense
Rights.
Except
as provided in Section
3.02,
the
Company shall not grant any sublicenses of any of the rights granted under
this
Section
3.01
without
the prior written consent of the Steering Committee.
Section
3.02. Sublicenses
of Rights from the Company to Cyberkinetics and
NEUROMetrix.
The
Company hereby grants to each of Cyberkinetics and NEUROMetrix a non-exclusive,
worldwide, irrevocable, royalty-free right and sublicense under the Patent
Rights, Technology and Manufacturing Know-How licenses granted to it pursuant
to
Section
3.01
solely
to the extent required to permit such Party (and its permitted subcontractors)
to perform its duties under this Agreement in connection with the
Program.
Section
3.03. Ancillary
Rights.
Anything
herein to the contrary notwithstanding, Cyberkinetics and NEUROMetrix shall
both
have the right and license hereunder during the term of this Agreement to make,
have made and use Collaboration Products for research purposes.
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10 -
Section
3.04. License
to Joint Inventions.
Company
hereby grants to Cyberkinetics the exclusive, worldwide, irrevocable,
royalty-free right and license, with the right to grant sublicenses, under
the
Joint Inventions (defined in Section
9.01(a))
to
develop, make, have made, use, offer for sale, sell, have sold, import and
export products and services to diagnose and treat spinal cord injuries,
diseases and disorders in humans. Company hereby grants to NEUROMetrix the
exclusive, worldwide, irrevocable, royalty-free right and license, with the
right to grant sublicenses, under the Joint Inventions to develop, make, have
made, use, offer for sale, sell, have sold, import and export products and
services to diagnose and treat peripheral nerve injuries, diseases or disorders
with the injection of a therapeutic agent or agents.
Section
3.05. Non-Impairment.
Cyberkinetics
and NEUROMetrix hereby covenant and agree that neither of them shall take any
action, or fail to take any reasonable action, that, in either case, would
impair or limit, in any material respect, the scope or enforceability of the
licenses or other rights granted under this Agreement (including without
limitation the licenses granted in this Article III and the rights and licenses
granted in Article XIII) or that would impair or limit in any material respect
such Party's ability to perform its obligations hereunder and under the other
Transaction Documents, including for example, terminating, or breaching (and
failing to cure such breach), any agreement listed on Schedule A or Schedule
C,
or any other agreement pursuant to which one of the Parties obtained access
to
intellectual property rights, for use hereunder, as approved by the Steering
Committee.
ARTICLE
IV
CAPITAL
CONTRIBUTIONS; FINANCIAL ARRANGEMENTS
Section
4.01. Program
Funding Commitments
(a) NEUROMetrix's
Program Funding Commitment.
Subject
to the terms and conditions set forth herein, NEUROMetrix hereby undertakes
to
make capital contributions to the Company in an amount equal to the Program
Costs incurred during the term of this Agreement up to a maximum of two million
dollars ($2,000,000) as an initial funding contribution (the Program Costs
incurred over such period, subject to the referenced cap, is the "NEUROMetrix
Initial Funding Commitment")
plus
(ii) fifty percent (50%) of the Program Costs incurred by the Company after
the NEUROMetrix Initial Funding Commitment has been reached. NEUROMetrix' first
capital contribution shall be paid within fifteen (15) days after the approval
of the initial Development Plan by the Steering Committee. Such capital
contribution shall be in an amount equal to the operating budget of the Company,
as set forth in the initial Development Plan and approved by the Steering
Committee, for the first quarter of the Company's operations. All other
NEUROMetrix capital contributions hereunder shall be payable on a quarterly
basis, as required to fund NEUROMetrix' share of the budget under the
Development Plan for the next quarter annual period, such amounts being due
and
payable no later than fifteen (15) days in advance of the commencement of the
relevant quarter annual period.
(b) Cyberkinetics's
Program Funding Commitment.
Subject
to the terms and conditions set forth herein, Cyberkinetics hereby undertakes
to
make capital contributions to the Company sufficient to pay fifty percent (50%)
of all Program Costs incurred by the Company after the NEUROMetrix Initial
Funding Commitment has been reached. All Cyberkinetics capital contributions
hereunder shall be payable on a quarterly basis, as required to fund
Cyberkinetics' share of the budget under the Development Plan for the next
quarter annual period, such amounts being due and payable no later then fifteen
(15) days in advance of the commencement of the relevant quarter annual period.
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11 -
(c) External
Funding.
The
Company may receive grants, awards and other funding from government and
not-for-profit organization sources. Any such grants, awards and funding shall
equally offset (50% to Cyberkinetics and 50% to NEUROMetrix) the funding
commitments of each of the Parties as set forth in clauses (a) and (b) above,
and such funding commitments shall be adjusted accordingly; provided that such
amounts shall not be used to reduce NEUROMetrix required cash capital
contributions unless NEUROMetrix has already made two million dollars
($2,000,000) in total capital contributions. The Company shall reimburse
Cyberkinetics and NEUROMetrix for reasonable out-of-pocket expenses directly
incurred by either of them in connection with securing any such funding as
follows: all reasonable out-of-pocket expenses directly incurred between
November 13, 2007 and the Effective Date shall be reimbursed but, after the
Effective Date, only amounts approved by the Steering Committee for such efforts
shall be reimbursable under this Section.
(d) Expense
Reimbursement.
After
the Effective Date, any Program Costs paid directly by Cyberkinetics or
NEUROMetrix (or any of their Affiliates) to any Third Party, in accordance
with
the Development Plan, the Commercialization Plan or otherwise pursuant to the
authorization of the Steering Committee, shall be reimbursed by the Company,
or
offset against the funding requirements of the respective Parties as set forth
in clauses (a) and (b) above, on a quarterly basis, upon presentation to the
Company of reasonably sufficient evidence of such expenditure. For avoidance
of
doubt, to the extent that costs incurred by NEUROMetrix or Cyberkinetics to
provide goods or services to the Company in accordance with the Development
Plan
or Commercialization Plan are properly categorized as Program Costs, such
amounts shall be paid to NEUROMetrix or Cyberkinetics, as applicable, in
accordance with this Agreement, or any Transaction Agreement, as applicable.
Section
4.02. Distribution
of Net Profits.
The
net profits of the Company shall be allocated to Cyberkinetics and NEUROMetrix
as set forth in the Company's Operating Agreement.
Section
4.03. Audit.
Each
of Cyberkinetics and NEUROMetrix shall keep and maintain proper and complete
records and books of account documenting all Program Costs incurred by it.
Each
Party shall permit independent accountants retained by the other Parties to
have
access to its records and books for the sole purpose of determining the
appropriateness of Program Costs charged by the non-auditing Party hereunder.
Such examination shall be conducted during regular business hours and upon
reasonable notice, at the auditing Party's own expense, and no more than once
in
each calendar year during the term of this Agreement and once during the three
(3) calendar years following the termination hereof. If such examination reveals
that such Program Costs have been overstated, any overpayment shall be promptly
refunded by the overpaid Party to the Company. The auditing Party shall pay
the
fees and expenses of the accountant engaged to perform the audit, unless such
audit reveals an overcharge of ten percent (10%) or more for the period
examined, in which case the Party who received such overpayment shall pay all
reasonable costs and expenses incurred by the auditing Party in the course
of
making such determination, including the fees and expenses of the
accountant.
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12 -
ARTICLE
V
THE
DEVELOPMENT PROGRAM
Section
5.01. Conduct
of the Development Program.
(a) General.
The
Company, Cyberkinetics and NEUROMetrix each agree to use Commercially Reasonable
and Diligent Efforts to perform their obligations under this Agreement, the
Transaction Agreements, the Development Plan and the Commercialization Plan
as
they relate to each Collaboration Product. Neither NEUROMetrix nor Cyberkinetics
shall be required to undertake activities in furtherance of the Development
Plan
or Commercialization Plan if, and for so long as, the other Party is in breach
of its obligation to contribute capital to the Company as required by the
provisions of this Agreement. The Parties each agree to notify the other Parties
regarding the terms and conditions of any licenses and other agreements
governing any Party's right to use any Patent Rights and Technology used in
connection with the Program and each Party agrees to comply with any such terms
and conditions to the extent applicable to such Party.
(b) Development
Plan.
The
Development Program shall be conducted by the Company under a Development Plan
which shall describe (i) the initial research activities to be undertaken by
the
Company to determine if an electrical field has potential therapeutic use in
the
treatment of peripheral nerve injury, disease or disorder, (ii) the process
by
which the key specifications of a prototype electrical field device for use
in
the treatment of peripheral nerve injury, disease or disorder will be determined
and specified, and (iii) the proposed overall program of development of the
Collaboration Products, including preclinical studies, clinical studies and
regulatory plans and other key elements necessary to obtain Regulatory Approvals
for each Collaboration Product. The Development Plan shall include a budget
for
all development activities proposed for each Collaboration Product, such budget
to be as detailed as reasonably possible in light of the stage of development
of
each such Collaboration Product.
(c) Initial
and Updated Development Plan.
Within
sixty (60) days after the Effective Date, the Program Management Team shall
submit to the Steering Committee for review and approval the definitive initial
Development Plan for the period beginning on the Effective Date and ending
on
December 31, 2008, upon which approval such definitive initial Development
Plan shall be signed by an authorized representative of each of Cyberkinetics
and NEUROMetrix. The Development Plan shall be updated annually by the Program
Management Team and submitted to the Steering Committee for review and approval
not later than forty-five (45) days prior to January 1 of each year during
the Development Program. Each such updated Development Plan shall include (i)
an
outline of the major research activities which are to be undertaken, and the
personnel that will be used for such research, (ii) when Collaboration
Products are known and specified, an overall development plan for each
Collaboration Product which sets forth all major development tasks remaining
to
be accomplished prior to submission of filings for Regulatory Approvals,
(iii) a detailed description and budget for the research and development
activities proposed for the forthcoming calendar year and (iv) until the
initial Commercialization Plan is submitted in accordance with Section
6.02,
an
overall plan which sets forth all major tasks remaining to be accomplished
prior
to submission of filings for Regulatory Approval. The Program Management Team
shall be primarily responsible for preparing the annual updates to the
Development Plan and, in connection with the preparation of such updates, shall
consult with Cyberkinetics and NEUROMetrix regarding the identification, timing
and execution of and budget for the major tasks and detailed activities required
to perform the updated Development Plan. The members of the Program Management
Team shall actively consult with one another throughout the term of the
Development Plan so as to adjust the specific work performed under the
Development Plan to conform to evolving developments in technology and the
results of the development work performed. While minor adjustments to the
Development Plan may be made from time to time upon approval of the Program
Management Team, significant changes in the scope or direction of the work
and
any changes in funding exceeding [***] of the total amount budgeted in any
calendar year must be approved by the Steering Committee, in the absence of
which approval the most recently approved Development Plan shall remain in
effect.
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13 -
(d) Execution
and Performance.
The
Development Plan shall allocate among the Parties responsibility for each of
the
activities described therein. The Parties shall use Commercially Reasonable
and
Diligent Efforts to conduct the activities described in the Development Plan.
The Steering Committee will supervise and coordinate the execution by the
parties of their obligations with respect to the Development Plan with the
Program Management Team supporting the Steering Committee in performing such
role.
(e) Attendance
at Regulatory Meetings.
Each
Party shall provide the other Parties with prior written notice of all meetings
between representatives of the notifying Party and regulatory authorities
regarding any matters that might reasonably be expected to impact a Party's
ability to perform its obligations hereunder, or the development or
commercialization of a Collaboration Product, including without limitation,
matters relating to clinical studies, quality programs, manufacturing operations
or facilities related to the Program or any Collaboration Product. Except as
otherwise provided herein, the Party receiving such notice shall have the right
to have representatives present at all such meetings.
Section
5.02. Development
Information.
(a) Reports
and Information Exchange.
The
Company shall own all clinical trial data accumulated from all clinical trials
of Collaboration Products. Each of Cyberkinetics and NEUROMetrix shall use
Commercially Reasonable and Diligent Efforts to disclose to the Company and
to
the other Parties all material information relating to any Collaboration Product
promptly after it is learned or its materiality is appreciated. The Company
shall maintain the database of clinical trial data accumulated from all clinical
trials of Collaboration Products and of adverse event information for all such
Collaboration Products. Each of Cyberkinetics and NEUROMetrix shall have a
permanent (during the term of this Agreement and thereafter) and irrevocable
right of access and reference to all such clinical trial data for use outside
the Field, subject to the exclusive licenses granted in Section
3.04.
At the
request of either Cyberkinetics or NEUROMetrix, such data shall be provided
to
the requesting Party in a computer readable format by the Company, to the extent
available, and the Company shall also assist in the transfer and validation
of
such data to the receiving Party. Each Party shall also keep the Program
Management Team informed as to its progress in the Development Plan. Within
sixty (60) days following the end of each calendar quarter during the
Development Program, each of Cyberkinetics and NEUROMetrix shall provide to
the
Company and to the other Party a reasonably detailed written report which shall
describe the progress to date of all activities for which such Party was
allocated responsibility during such quarter under the Development Plan.
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14 -
(b) Adverse
Event Reporting.
Each of
Cyberkinetics and NEUROMetrix shall notify the Company and the other Party
of
any potential adverse event information relating to any Collaboration Product
as
and when required to enable such Party to comply with any and all applicable
laws and regulations.
(c) Clinical
and Regulatory Audits.
Each of
Cyberkinetics and NEUROMetrix shall permit the Company and the other Party
or
the representatives of the Company or the other Party to have access, at the
auditing Party's own expense, no more than once in each calendar year during
the
term of this Agreement, to the non-auditing Party's records and facilities
relating to the Development Program for the purpose of monitoring compliance
with the requirements of this Agreement, the Transaction Agreements, current
Good Clinical Practice regulations promulgated by FDA (and foreign equivalents
thereto) and other applicable laws and regulations.
Section
5.03. Regulatory
Approval Filings.
Regulatory
Approval filings for the Collaboration Products shall be filed in the name
of
the Company to the extent permitted by the FDA and otherwise in the name of
such
other Party as the Steering Committee shall determine. Prior to submission
to
the FDA, the Parties, through the Program Management Team, shall consult,
cooperate in preparing and mutually agree on the content and scope of the
Regulatory Approval filings. If and for so long as the FDA does not permit
the
Company to file and own all Regulatory Approvals in its own name,
(i) Regulatory Approval filings shall be made in the name of such other
Party as may be designated by the Steering Committee, (ii) such designated
Party shall hold the licenses issued in respect of such Regulatory Approval
filings and maintain control over the manufacturing facilities and equipment
to
the extent required by the FDA, (iii) such designated Party shall provide
services to the Company in connection with such regulatory matters, and
shall
be reimbursed its direct costs in connection therewith, and (iv) the
Company and the other Party shall have a permanent and irrevocable right of
access and reference to such Regulatory Approval filings, licenses and
facilities.
Section
5.04. Facilities
Visits.
Representatives
of Cyberkinetics and NEUROMetrix may visit all manufacturing sites and the
sites
of any clinical trials or other research, development and commercialization
activities being conducted by the other Party or the Company in connection
with
the Development Program. If requested by the other Party, Cyberkinetics and
NEUROMetrix shall cause appropriate individuals working on the Development
Program to be available for meetings at the location of the facilities where
such individuals are employed at times reasonably convenient to the Party
responding to such request.
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ARTICLE
VI
SALES,
MARKETING AND ADMINISTRATIVE SERVICES
Section
6.01. Sales
and Marketing Services.
NEUROMetrix
shall market and sell the Collaboration Products on an exclusive basis as agent
for and on behalf of the Company. The terms and conditions pursuant to which
NEUROMetrix will perform those services for the Company will be set forth in
an
agreement to be negotiated in good faith by the Parties (the "Marketing
Agreement").
The
Marketing Agreement will be consistent with the applicable terms and conditions
set forth in this Agreement. The Parties will commence good faith negotiations
towards a Marketing Agreement once the final specifications for the first
Product are identified. NEUROMetrix shall be entitled to charge the Company
all
direct costs and a mutually agreed upon portion of indirect costs incurred
by
NEUROMetrix for the marketing and sale of each Collaboration Product, all as
more fully set forth in the Marketing Agreement. The Marketing Agreement shall
contain customary terms and conditions governing the marketing, sale,
distribution, customer account management, dispute resolution, use of logos
and
trademarks, product pricing, warranty and indemnification, confidentiality
and
such other matters as are mutually agreed upon by the Parties. NEUROMetrix
shall
not be permitted to sell any Collaboration Product for a discount, or make
rebates or other credits or offsets available, in connection with purchase
of a
product other than a Collaboration Product, without the prior written approval
of the Steering Committee. Such approval shall be conditioned on the approval
of
a formula, or other method, pursuant to which the combined revenue from the
sale
of such Collaboration Product and such other product are allocated between
the
Company and NEUROMetrix.
Section
6.02. Commercialization
Plan.
(a) The
commercialization of each Collaboration Product shall be governed by a
Commercialization Plan which shall describe the overall plan for commercializing
such Collaboration Product, including (i) a comprehensive marketing, sales,
pricing, distribution and licensing strategy for such Collaboration Product
in
all applicable countries, including the Third Parties to be utilized and the
arrangements with them that have been or are proposed to be agreed upon
(including policies and procedures for adjustments, rebates, bundling and the
like), (ii) estimated launch date, market and sales forecasts, in numbers of
devices to be sold and local currency issues, and competitive analysis for
such
Collaboration Product, and (iii) a budget for the Commercialization Costs to
be
incurred in connection with performing such Commercialization Plan.
(b) Upon
the
submission of all Regulatory Approval filings for a Collaboration Product in
any
given country, NEUROMetrix shall develop and submit to the Steering Committee
for review and approval an initial Commercialization Plan taking into
consideration factors such as market conditions, regulatory factors, competition
and the costs and profits of such Collaboration Product. NEUROMetrix shall
be
primarily responsible for developing each Commercialization Plan and, in
connection therewith, shall consult with Cyberkinetics regarding the
identification, timing and execution of and budget for the major
commercialization tasks required to perform the Commercialization Plan,
including without limitation the coordination of manufacturing with sales and
marketing. Cyberkinetics shall be primarily responsible for developing a
detailed manufacturing plan for each Collaboration Product, which plan shall
be
reviewed and approved by the Steering Committee and included within each
Commercialization Plan. Cyberkinetics shall deliver such plan to NEUROMetrix
within a reasonable period of time prior to the date NEUROMetrix expects to
submit the overall Commercialization Plan to the Steering Committee. Each
Commercialization Plan shall be updated annually by NEUROMetrix, in consultation
with Cyberkinetics, and shall be submitted to the Steering Committee for
approval not later than sixty (60) days prior to January 1 of each year. Each
Commercialization Plan approved by the Steering Committee shall be signed by
an
authorized representative of each of Cyberkinetics and NEUROMetrix.
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(c) NEUROMetrix
shall be primarily responsible for the implementation of each Commercialization
Plan, including without limitation, setting all terms of sale, including
establishing pricing policies, credit terms and cash discounts and allowances,
formulating marketing plans, providing patient information, providing customer
support services, providing reimbursement counseling services and sales force
training; provided that NEUROMetrix's execution and performance in respect
of
its marketing and sale of Collaboration Products shall be consistent with the
strategy, policies and procedures established by each Commercialization Plan.
NEUROMetrix shall act as an agent of the Company in connection with the sale
of
Collaboration Products and all revenues from such sales shall be booked by
the
Company. NEUROMetrix shall use Commercially Reasonable and Diligent Efforts
to
conduct the activities described in each Commercialization Plan. Cyberkinetics
shall use Commercially Reasonable and Diligent Efforts to perform any activities
allocated to it under a Commercialization Plan and to provide such additional
marketing support services as NEUROMetrix may from time to time reasonably
request.
Section
6.03. General
and Administrative Services.
General
and administrative services required by the Company shall be provided at cost
by
NEUROMetrix. The terms and conditions pursuant to which NEUROMetrix will perform
those services for the Company will be set forth in an agreement to be
negotiated in good faith by the Parties (the "Services
Agreement").
The
Services Agreement will be consistent with the applicable terms and conditions
set forth in this Agreement. The Parties will commence good faith negotiations
towards a Services Agreement promptly after the Effective Date. All such costs,
in addition to general and administrative costs payable to Third Parties (such
as accountants and lawyers), shall be considered to be Program Costs.
ARTICLE
VII
MANUFACTURE
AND SUPPLY
Subject
to the terms and conditions of this Agreement, Collaboration Products shall
be
manufactured and supplied for pre-clinical and clinical testing and for
commercial sale by Cyberkinetics (or a Third Party selected by Cyberkinetics
and
approved in writing in advance by the Steering Committee). The terms and
conditions pursuant to which Cyberkinetics will perform manufacturing services
for the Company will be set forth in an agreement to be negotiated in good
faith
by the Parties (the "Manufacturing
Agreement").
The
Manufacturing Agreement will be consistent with the applicable terms and
conditions set forth in this Agreement. The Parties will commence good faith
negotiations towards a Manufacturing Agreement once the primary specifications
for the first Collaboration Product are identified.
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Section
7.01. Process
Development; Manufacturing Approvals.
Cyberkinetics
shall be primarily responsible for and will use Commercially Reasonable and
Diligent Efforts to develop a process for the manufacture of each prototype
device for research activities of the Program and for each Collaboration Product
and to scale up that process to a scale sufficient to manufacture and supply
(i) the anticipated demand for clinical trials of such Collaboration
Product in accordance with the projections set forth in the Development Plan
and
(ii) the anticipated market demand for such Collaboration Product at the
time Regulatory Approval is obtained for such Collaboration Product in
accordance with the projections set forth in the Commercialization Plan for
such
Collaboration Product. The development of the process for the manufacture of
Collaboration Products as well as the scale up of such process and all material
issues incident to the development of the ability to produce Collaboration
Products for commercial purposes in sufficient quantity and in a timely manner
will be within the purview of Cyberkinetics but may be outsourced to a Third
Party if approved in writing in advance by the Steering Committee. Cyberkinetics
will use Commercially Reasonable and Diligent Efforts to make, and will cause
any Third Party manufacturer or supplier to make, filings necessary to obtain
approval of any license application for the production facility which may be
required as part of any Regulatory Approval for each Collaboration Product.
Any
plans for a production facility for the manufacture of Collaboration Products
for commercial sale shall be approved by the Steering Committee prior to
commencement of any manufacturing.
Section
7.02. Manufacture
and Supply of Collaboration Products for Development
Purposes.
Cyberkinetics
will use Commercially Reasonable and Diligent Efforts to manufacture and supply
(or to cause an approved Third Party to manufacture and supply) prototypes
for
research activities and Collaboration Products for preclinical studies and
clinical trials in quantities and within a time period sufficient to conduct
the
activities set forth in the Development Plan. Cyberkinetics shall be entitled
to
charge to the Company only direct costs incurred by Cyberkinetics for the
manufacture of all such Collaboration Products supplied for such
purposes.
Section
7.03. Manufacture
and Supply of Collaboration Products for Commercial
Sale.
Cyberkinetics
shall manufacture and supply (or cause an approved Third Party to manufacture
and supply) Collaboration Products for commercial sale on the following terms
and conditions:
(a) General.
Cyberkinetics shall use Commercially Reasonable and Diligent Efforts to
manufacture and supply Collaboration Products to meet market demand for
Collaboration Products ordered in accordance with the terms of the Manufacturing
Agreement. Cyberkinetics shall be entitled to charge the Company direct costs
and a mutually agreed upon portion of indirect costs incurred by Cyberkinetics
for the foregoing services, provided that in an approved subcontractor is
engaged, Cyberkinetics shall only be permitted to pass through the amounts
actually paid to such Third Party for such services without xxxx-up or other
fees.
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(b) Performance
Standards.
Cyberkinetics agrees that all Collaboration Products manufactured by it will
conform to the applicable specifications upon delivery to the Company (or its
designee) and will be manufactured in conformity with the quality program
established by Cyberkinetics and approved by the Program Management Team. The
Manufacturing Agreement will also include other terms, conditions and warranties
that are customary for manufacturing agreements pertaining to medical device
products.
Section
7.04. Device
History Record.
The
Manufacturing Agreement will also provide for Cyberkinetics to perform or cause
to be performed quality assurance and control tests on each Collaboration
Product and to provide a device history record setting forth for each
Collaboration Product delivered the items tested, specifications and results
in
a device history record containing the types of information which shall have
been approved by the Program Management Team or required by the FDA.
Cyberkinetics shall maintain (or shall cause the Third Party manufacturer to
maintain) all manufacturing records for a period of not less than five (5)
years
from the date of manufacture and for so long as required under applicable
requirements of the FDA.
Section
7.05. Certificates
of Manufacturing Compliance.
Pursuant
to the Manufacturing Agreement, Cyberkinetics shall prepare and maintain (or
shall cause the Third Party manufacturer to prepare and maintain) for a period
of not less than five (5) years and for so long as required under applicable
requirements of the FDA for each Collaboration Product manufactured a
certificate of manufacturing compliance containing the types of information
which shall have been approved by the Program Management Team or required by
the
FDA, which certificate will certify that the Collaboration Products were
manufactured in accordance with the applicable specifications and the Good
Manufacturing Practices of the FDA or other applicable governmental regulatory
agency as the same may be amended from time to time. Cyberkinetics shall advise
the other Parties immediately if an authorized agent of the FDA or other
governmental regulatory agency visits any of Cyberkinetics' manufacturing
facilities, or the facilities where the Collaboration Products are being
manufactured, for an inspection with respect to the Collaboration Products.
Cyberkinetics shall furnish to the other Parties the report by such agency
of
such visit, and any correspondence with such agency, to the extent relating
to
Collaboration Products, or that might reasonably impair the manufacture of
the
Collaboration Product in accordance with this Agreement or the Manufacturing
Agreement, within three (3) days of Cyberkinetics' receipt of such report.
Section
7.06. Access
to Facilities.
Each
Party shall have the right to inspect those portions of the manufacturing or
storage facilities where Collaboration Products are being manufactured or
stored, at any time during regular business hours and upon reasonable notice
to
ascertain compliance with this Agreement or the Manufacturing Agreement.
Cyberkinetics shall be responsible for securing such access and inspection
right
for the Parties in all agreements with Third Party manufacturers, suppliers
or
warehouses. Any confidential information disclosed to or otherwise gathered
by
the Party conducting such inspection during any such inspection shall be deemed
"Information"
as
defined in Section
10.01.
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ARTICLE
VIII
MANAGEMENT
Section
8.01. Program
Management Team.
(a) General.
The
Parties hereby establish a Program Management Team to oversee and coordinate
all
research activities, the development of Collaboration Products and to prepare
for and oversee the launch of Collaboration Products. The Program Management
Team will be composed of two (2) representatives appointed by Cyberkinetics
and
two (2) representatives appointed by NEUROMetrix. Each of such representatives
will be an individual with expertise in one or more of the following areas:
research, preclinical development, clinical development, manufacturing,
regulatory affairs, marketing, sales management and reimbursement. The Program
Management Team shall meet as needed but not less than once each week. It is
contemplated that the members of the Program Management Team will change over
time as the expertise that is most important to the success of the Program
changes. Such meetings shall be at times and places or in such form (e.g.,
telephone or video conference) as the members of the Program Management Team
shall agree. A Party may change its representatives to the Program Management
Team at any time. Members of the Program Management Team may be represented
at
any meeting by a deputy designated by him or her. Any approval, determination
or
other action agreed to by all of the members of the Program Management Team
(or
their designees) present at the relevant Program Management Team meeting shall
be the approval, determination or other action of the Program Management Team.
Representatives of either Cyberkinetics or NEUROMetrix who are not members
of
the Program Management Team may attend meetings of the Program Management Team,
but shall have no right to vote in matters that come before any
meeting.
(b) Development
Program Functions.
During
the term of the Development Program, the Program Management Team shall oversee
and coordinate the research activities and, thereafter, if and to the extent
appropriate, the development of Collaboration Products to obtain Regulatory
Approvals. The Program Management Team will develop and recommend to the
Steering Committee Development Plans (including annual development budgets),
will facilitate the flow of information with respect to development work being
conducted for each Collaboration Product on a worldwide basis, and will discuss
and cooperate with the Steering Committee regarding such worldwide
development.
(c) Commercialization
Functions.
Following submission of filings for Regulatory Approvals for the first
Collaboration Product, the functions of the Program Management Team shall be
expanded to include supporting the development of Commercialization Plans
(including annual budgets), facilitating the flow of information with respect
to
commercialization work being conducted for each Collaboration Product on a
worldwide basis, and will discuss and cooperate with the Steering Committee
regarding such worldwide commercialization.
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(d) Minutes.
The
Program Management Team shall keep accurate minutes of its deliberations which
shall record all proposed decisions and all actions recommended or taken. Draft
minutes shall be sent to all members of the Program Management Team within
five
(5) working days after each meeting. All records of the Program Management
Team
shall at all times be available to all Parties.
(e) Authority.
For
avoidance of doubt, all authority of the Program Management Team shall derive
from, and be subordinate to, the authority of the Steering Committee. The
Program Management Team shall have no authority to act on behalf of any Party
in
connection with Third Parties. Without limiting the foregoing, the Program
Management Team shall have no authority to, and shall not purport to or attempt
to: (i) negotiate agreements on behalf of any Party, (ii) make representations
or warranties on behalf of any Party, (iii) waive rights of any Party, (iv)
extend credit on behalf of any Party, or (v) take or grant licenses of
intellectual property on behalf of any Party.
Section
8.02. Steering
Committee.
(a) General.
The
Parties hereby establish a Steering Committee to oversee and coordinate the
activities of the Parties in the performance of the Program. The Steering
Committee will be composed of three (3) representatives appointed by
Cyberkinetics and three (3) representatives appointed by NEUROMetrix (or such
lesser number of representatives as mutually agreed by the Parties in a written
instrument). Such representatives will be senior officers and/or managers of
their respective companies. The Steering Committee will meet as needed but
not
less than once each calendar quarter. The Steering Committee shall appoint
one
of its members to act as Chairman. Such meetings shall be at times and places
or
in such form (e.g., telephone or video conference) as the members of the
Steering Committee shall agree, but shall in general alternate between the
offices of Cyberkinetics and NEUROMetrix. A Party may change one (1) or more
of
its representatives to the Steering Committee at any time. Members of the
Steering Committee may be represented at any meeting by another member of the
Steering Committee, or by a deputy. Any approval, determination or other action
agreed to by a all of the members of the Steering Committee or their designees
present at the relevant Steering Committee meeting shall be the approval,
determination or other action of the Steering Committee, provided at least
one
representative of each of Cyberkinetics and NEUROMetrix is present at such
meeting. Representatives of either Cyberkinetics or NEUROMetrix who are not
members of the Steering Committee may attend meetings of the Steering Committee,
but shall have no right to participate therein. Notwithstanding the foregoing,
in the event that the determination or decision involves an issue in which
the
interests of Cyberkinetics or NEUROMetrix are adverse to those of the Company
(e.g., the matter involves a contract between the Company and another Party
or
the exercise of the right of the Company that is or may be adverse to another
Party) then the determination or decision will be made by a majority
determination of the members of the Steering Committee appointed by the Party
that is not adverse to or in conflict with the Company.
(b) Functions.
The
Steering Committee shall: (i) coordinate the activities of the Parties
hereunder; (ii) promote communication between the Parties; (iii) exercise
decision-making authority with respect to those issues specified in this
Agreement and in the Transaction Agreements; (iii) serve as the governing
body of the Company; and (ix) perform such other functions as appropriate
to further the purposes of this Agreement as determined by the Parties.
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21 -
(c) Decision-Making
Standard for Steering Committee.
All
decisions and other actions of the Steering Committee shall be made in good
faith and with due care, after consideration of the information that is
reasonably available to the Steering Committee, with the intention that: (i)
the
resulting decision or actions will conform to, or be consistent with, the
provisions and requirements of this Agreement and the Transaction Agreements
and
(ii) the resulting decision or action will maintain or increase the likelihood
that the Parties will achieve the purposes and goals of the Program. Without
limiting the foregoing, the Steering Committee is expressly prohibited from
taking into account interests of a Party, or of any members of the Steering
Committee, other than their respective interests in achieving the purposes
and
goals of the Program.
(d) Authority.
The
Steering Committee shall have no authority to act on behalf of any Party in
connection with Third Parties. Without limiting the foregoing, the Steering
Committee shall have no authority to, and shall not purport to or attempt to:
(i) negotiate agreements on behalf of any Party, (ii) make representations
or
warranties on behalf of any Party, (iii) waive rights of any Party, (iv) extend
credit on behalf of any Party, or (v) take or grant licenses of intellectual
property on behalf of any Party. For avoidance of doubt, where applicable laws
or regulations require the approval, certification or authorization of a
specific party with respect to any action described herein (including any
product development or commercialization activities), any requirement herein
that the Steering Committee also approve, certify or authorize such action
shall
be in addition to the requirements of such law or regulation and shall not
be in
replacement or limitation thereof.
(e) Minutes.
The
Steering Committee shall keep accurate minutes of its deliberations which shall
record all proposed decisions and all actions recommended or taken. The Chairman
shall be responsible for the preparation of draft minutes. Draft minutes shall
be sent to all members of the Steering Committee within ten (10) working days
after each meeting. All records of the Steering Committee shall at all times
be
available to all Parties.
(f) Expenses.
Cyberkinetics and NEUROMetrix shall each bear all expenses of their respective
Steering Committee members related to their participation on the Steering
Committee and attendance at Steering Committee meetings.
Section
8.03. General
Disagreements.
All
disagreements within the Program Management Team or the Steering Committee
shall
be subject to the following: (a) the representatives to the Program
Management Team or Steering Committee, as applicable, will negotiate in good
faith for a period of not less than thirty (30) days to attempt to resolve
the
dispute. In the case of the Program Management Team, any unresolved dispute
shall be referred to the Steering Committee for good faith negotiations for
an
additional period of not less than thirty (30) days to attempt to resolve the
dispute; (b) in the event that the dispute is not resolved after the
periods specified in clause (a), then such dispute shall be referred to
resolution as described in Section
14.10.
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ARTICLE
IX
INTELLECTUAL
PROPERTY RIGHTS
Section
9.01. Ownership.
The
Parties acknowledge that the ownership rights set forth in this Article
IX
(i) shall not be affected by the participation of any person in the
discovery or development of an Invention in the course of discharging such
person's duties as a member of the Program Management Team or the Steering
Committee; and (ii) are subject to the license grants set forth in this
Agreement.
(a) Ownership
of Discoveries and Improvements.
All
right, title and interest in all writings, inventions, discoveries, improvements
and other technology, whether or not patentable or copyrightable, and any patent
applications, patents or copyrights based thereon (collectively, the
"Inventions")
that
are discovered, made or conceived during and in connection with the Program
solely by employees of Cyberkinetics or others acting on behalf of Cyberkinetics
shall be owned by Cyberkinetics. All right, title and interest in all Inventions
that are discovered, made or conceived during and in connection with the Program
solely by employees of NEUROMetrix or others acting on behalf of NEUROMetrix
shall be owned by NEUROMetrix. All right, title and interest in all Inventions
that are discovered, made or conceived during and in connection with the Program
jointly by employees of Cyberkinetics and NEUROMetrix ("Joint
Inventions")
shall
be owned by the Company. Each of Cyberkinetics and NEUROMetrix shall promptly
disclose to the Company and the other Party the making, conception or reduction
to practice of Inventions by employees or others acting on behalf of such Party.
(b) Ownership
of Trademarks.
Cyberkinetics and NEUROMetrix shall select (which selection shall be approved
by
the Steering Committee), and the Company shall own, all trademarks for the
sale
and use of Collaboration Products and shall bear all expenses thereof.
Notwithstanding the forgoing, the name Andara™ Oscillating Field Stimulator™ and
Andara™ OFS™ and OFS™ shall remain the exclusive property of Cyberkinetics,
subject to the licenses granted herein.
(c) Cooperation
of Employees.
Each of
Cyberkinetics and NEUROMetrix represents and agrees that all of its employees
or
others acting on its behalf in performing its obligations under this Agreement
or otherwise participating in the Program shall be obligated under a binding
written agreement to assign to such Party, or as such Party shall direct, all
Inventions made or conceived by such employee or other person. In the case
of
non-employees working for other companies or institutions on behalf of
Cyberkinetics or NEUROMetrix, Cyberkinetics or NEUROMetrix, as applicable,
shall
have the right to obtain licenses for all Inventions made by such non-employees
on behalf of Cyberkinetics or NEUROMetrix, as applicable, in accordance with
the
policies of said company or institution. Cyberkinetics and NEUROMetrix agree
to
undertake to enforce such agreements (including, where appropriate, by legal
action) considering, among other things, the commercial value of such
Inventions.
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23 -
Section
9.02. Filing,
Prosecution and Maintenance of Patent Rights.
Anything
herein to the contrary notwithstanding, all rights and privileges in
Section
9.02
through
and including Section
9.06
shall be
subject to the rights of Cyberkinetics Licensors and NEUROMetrix Licensors
to
the extent provided in the relevant license agreement; provided however, that
each of NEUROMetrix and Cyberkinetics covenant and agree to use reasonable
efforts to negotiate rights in any such agreements entered into after the
Effective Date that would permit, or at least not be inconsistent with, the
terms and conditions set forth in Section
9.02
through
and including Section
9.06.
(a) Filing,
Prosecution and Maintenance.
Each of
Cyberkinetics and NEUROMetrix shall be responsible for the filing, prosecution
and maintenance of all patent applications and patents which make up its Patent
Rights that are relating to or useful in the Field. For so long as any of the
license grants set forth in Article
III
remain
in effect and upon request of each other Party, each of Cyberkinetics and
NEUROMetrix agrees to file and prosecute patent applications and maintain the
patents covering its Patent Rights in all countries determined by the Steering
Committee. Each of Cyberkinetics and NEUROMetrix shall consult with and keep
the
other fully informed of important issues relating to the preparation and filing
(if time permits), prosecution and maintenance of such patent applications
and
patents, and shall furnish to each other Party copies of documents relevant
to
such preparation, filing, prosecution or maintenance in sufficient time prior
to
filing such document or making any payment due thereunder to allow for review
and comment by each other Party and, to the extent possible in the reasonable
exercise of its discretion, the filing Party shall incorporate all such
comments. Neither Cyberkinetics nor NEUROMetrix shall allow any of its Patent
Rights relating to or useful in the Field to lapse or become abandoned without
the prior consent of the Company and the other Party, which consent shall not
be
unreasonably withheld or delayed. Each Party shall be deemed to have consented
to any such lapse or abandonment if it fails to send written notice of its
objections thereto to the other Parties within ten (10) days of receipt of
written notice of the intention of either such Party to allow such lapse or
abandonment to occur. The Company shall have the right, but not the obligation,
to assume responsibility for the filing, prosecution maintenance and enforcement
of any of such patent applications and patents, at its sole expense, and such
patent applications and patents shall be assigned by the owner to the Company
and shall no longer be subject to the licenses granted herein.
(b) Patent
Filing Costs.
Each
Party shall bear its own costs associated with filing, prosecuting and
maintaining patent applications and patents relating to or useful in the Field.
(c) Joint
Inventions.
The
Company shall use Commercially Reasonable and Diligent Efforts to file,
prosecute and maintain all patent applications and patents covering Joint
Inventions at its own expense. During the Term, the Company shall file and
prosecute patent applications and maintain the patents covering Joint Inventions
at the direction of the Steering Committee. The Company shall consult with
and
keep Cyberkinetics and NEUROMetrix fully informed of issues relating to the
preparation and filing (if time permits), prosecution and maintenance of such
patent applications and patents, and shall furnish to the Cyberkinetics and
NEUROMetrix copies of documents relevant to such preparation, filing,
prosecution or maintenance in sufficient time prior to filing such document
or
making any payment due thereunder to allow for review and comment by the
Cyberkinetics and NEUROMetrix and, to the extent possible in the reasonable
exercise of its discretion, Company shall incorporate all such comments. The
Company shall not allow any of its Patent Rights relating to or useful in the
Field to lapse or become abandoned without the prior written consent of the
Steering Committee. All costs associated with filing, prosecuting and
maintaining patent applications and patents covering Joint Inventions shall
be
deemed Development Costs. Upon any abandonment of any patent application or
patent under this Section
9.02(c),
the
remaining Parties shall have the right to assume responsibility for the filing,
prosecution and maintenance of such patent application or patent, at its own
expense, and such patent application or patent shall be assigned to such other
Party and shall become part of the NEUROMetrix Patent Rights or Cyberkinetics
Patent Rights, as applicable, for all purposes hereunder. If both Cyberkinetics
and NEUROMetrix desire to assume responsibility for a patent application or
patent abandoned under this Section
9.02(c),
then
both shall have the right to do so, as joint owners of such patent application
or patent, each shall bear fifty percent (50%) of the costs of such activities
and such patent application or patent shall become part of both Cyberkinetics
Patent Rights and NEUROMetrix Patent Rights.
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Section
9.03. Cooperation.
Each
of Cyberkinetics and NEUROMetrix shall make available to each other Party (or
to
the other Party's authorized attorneys, agents or representatives) its
employees, agents or consultants to the extent necessary or appropriate to
enable the appropriate Party to file, prosecute and maintain patent applications
and resulting patents with respect to inventions owned by a Party and for
periods of time sufficient for such Party to obtain the assistance it needs
from
such personnel. Where appropriate, each of Cyberkinetics and NEUROMetrix shall
sign or cause to have signed all documents relating to said patent applications
or patents at no charge to any other Party.
Section
9.04. Notification
of Patent Issuance.
Each
of Cyberkinetics and NEUROMetrix shall promptly notify each other Party of
the
issuance of each patent included within the notifying Party's Patent Rights
that
covers Technology that relates to or is useful within the Field, giving the
date
of issue and patent number for each such patent.
Section
9.05. No
Other Technology Rights.
Except
as otherwise expressly provided in this Agreement, under no circumstances shall
a Party hereto, as a result of this Agreement, obtain any ownership interest
in
or other right to the Patent Rights, Technology or Manufacturing Know-How of
the
other Party, including items owned, controlled or developed by the other Party,
or transferred by the other Party to said Party at any time pursuant to this
Agreement.
Section
9.06. Enforcement
of Patent Rights; Defense of Infringement Actions.
Cyberkinetics
and NEUROMetrix shall each promptly notify the other in writing of any alleged
or threatened infringement of any patents or patent applications comprising
the
Cyberkinetics Patent Rights, NEUROMetrix Patent Rights or Joint Patent Rights,
or if any Party, or any of their respective Affiliates, shall be individually
named as a defendant in a legal proceeding by a Third Party for infringement
of
a patent because of the manufacture, use, importation, or sale of a
Collaboration Product.
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(a) First
Right to Respond.
Subject
to any rights or privileges of any Third Party licensor, each Party shall use
Commercially Reasonable and Diligent Efforts to respond to or defend against
such challenge or infringement of its Patent Rights or charge of infringement;
provided that if such challenge or infringement relates to claims or activities
within the Field, or a charge that the manufacture, use, importation, or sale
of
Collaboration Products infringe upon the Patent Rights of Third Parties, then
the Steering Committee shall use Commercially Reasonable and Diligent Efforts
to
respond to or defend against such challenge or infringement. In either case,
the
other Parties will cooperate with the responding Party's legal counsel, join
in
such suits as may be brought by the responding Party, and be available at the
responding Party's reasonable request to be an expert witness or otherwise
to
assist in such proceedings.
(b) Sharing
of Litigation and Settlement Expenses.
The
costs incurred by a Party in responding to or defending against a challenge
to
or infringement of a Party's Patent Rights shall be borne by such Party. If
any
amounts are recovered in such efforts, such amounts shall be distributed to
the
Parties to reimburse them for such expenses. If recoveries are insufficient
to
provide for full reimbursement to all Parties, then the amounts recovered shall
be disbursed in proportion to the amount to the Parties' respective expenses.
If
the amounts recovered exceed the total expenses incurred, such excess amounts
shall be retained by the Party that controlled such action.
(c) Second
Right to Respond.
If a
Party does not exercise its right to respond to or defend against challenges
or
infringements of its Patent Rights as provided in Section
9.06(a)
within
sixty (60) days of becoming aware of or being notified of such challenges or
infringements, then the other Parties shall have the option to do so at its
sole
cost; provided that in such case all amounts so recovered from such Third Party
shall be retained by the Party undertaking such response or defense and the
Party so responding shall have no further obligations to the other Parties
with
respect to the response or defense thereof. This second right to respond shall
not constitute a waiver of any claims that may arise out of a Party's failure
to
use Commercially Reasonable and Diligent Efforts to perform its obligations
to
the extent required under this Section
9.06.
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ARTICLE
X
CONFIDENTIALITY
Section
10.01. Nondisclosure
Obligations.
Except
as otherwise provided in this Article
X,
during
the term of this Agreement and for a period of five (5) years thereafter, all
Parties shall maintain in confidence and use only for purposes specifically
authorized under this Agreement (i) confidential information and data
resulting from or related to the research undertaken in connection with the
Program and (ii) all information and data not described in clause
(i) but supplied by any other Party under or in connection with the
activities contemplated by this Agreement. For purposes of this Article
X,
information and data described in clause (i) or (ii) of the preceding
paragraph shall be referred to as "Information."
To the
extent it is reasonably necessary or appropriate to fulfill its obligations
or
exercise its rights under this Agreement, a Party may disclose Information
it is
otherwise obligated under this Section not to disclose to its Affiliates,
sublicensees, consultants, outside contractors and clinical investigators,
on a
need-to-know basis and on the condition that such entities or persons agree
to
keep the Information confidential for the same time periods and to the same
extent as such Party is required to keep the Information confidential; and
a
Party or its sublicensees may disclose such Information to government or other
regulatory authorities to the extent that such disclosure is reasonably
necessary to obtain patents or authorizations to conduct clinical trials with
and to market commercially Collaboration Products or, in the case of information
and data described in clause (i), products outside the Field to the extent
that
a Party has the right to use such information and data outside the Field. The
obligation not to disclose Information shall not apply to any part of such
Information that (i) is or becomes patented, published or otherwise becomes
publicly known other than by acts of the Party obligated not to disclose such
Information or its Affiliates or sublicensees in contravention of this
Agreement; (ii) can be shown by written documents to have been disclosed to
the receiving Party or its Affiliates or sublicensees by a Third Party, provided
such Information was not obtained by such Third Party directly or indirectly
from any other Party under this Agreement; (iii) prior to disclosure under
this Agreement, was already in the possession of the receiving Party or its
Affiliates or sublicensees, provided such Information was not obtained directly
or indirectly from any other Party under this Agreement; (iv) can be shown
by written documents to have been independently developed by the receiving
Party
or its Affiliates without breach of any of the provisions of this Agreement;
(v) is disclosed by the receiving Party pursuant to a subpoena lawfully
issued by a court or governmental agency, provided that the receiving Party
notifies each other Party immediately upon receipt of any such subpoena or
(vi) is used outside the Field on the condition that any entity or person
to whom such Information is disclosed agrees to keep such Information
confidential for the same time periods and to the same extent as the Party
disclosing such Information is required to keep such terms confidential. The
terms and conditions of this Article X shall supersede the terms and conditions
set forth in any confidentiality, non-disclosure or similar agreement entered
into by and between the Cyberkinetics and NEUROMetrix prior to the Effective
Date and all such other agreements shall terminate (subject to the survival
of
any rights and obligations as provided therein).
Section
10.02. Terms
of this Agreement.
The
Parties agree that the public announcement of the execution of this Agreement
shall be in the form of the joint press release attached hereto as Schedule
E,
and that from and after the Effective Date, each Party shall be entitled to
make
or publish any statement limited to the contents of such press release. The
Parties further agree to seek confidential treatment for the filing of this
Agreement with the Securities and Exchange Commission and shall agree upon
the
content of the request for confidential treatment made by each Party in respect
of such filing. Except as permitted by the foregoing provisions or as otherwise
required by law, Cyberkinetics and NEUROMetrix each agree not to disclose any
terms or conditions of this Agreement to any Third Party without the prior
written consent of each other Party; provided, that each Party shall be entitled
to disclose the terms of this Agreement without such consent to professional
advisors (lawyers, accountants and investment bankers) and to potential
investors or other financing sources on the condition that such potential
investors or financing sources agree to keep such terms confidential for the
same time periods and to the same extent as such Party is required to keep
such
terms confidential.
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27 -
Section
10.03. Publications.
Each
Party recognizes the mutual interest in obtaining valid patent protection.
Consequently, any Party, its employees or consultants wishing to make a
publication not otherwise permitted by this Article X, (including any oral
disclosure made without obligation of confidentiality) relating to work
performed by such Party as part of the Program (the "Publishing
Party")
shall
transmit to each other Party (the "Reviewing
Party")
a copy
of the proposed written publication at least forty-five (45) days prior to
submission for publication, or an abstract of such oral disclosure at least
fifteen (15) days prior to submission of the abstract or the oral disclosure,
whichever is earlier. The Reviewing Party shall have the right (a) to
request a delay in publication or presentation in order to protect patentable
information, (b) to propose modifications to the publication for patent
reasons or (c) to request that the information be maintained as a trade
secret. If the Reviewing Party requests a delay as described in (a) above,
the
Publishing Party shall delay submission or presentation of the publication
for a
period of ninety (90) days to enable patent applications protecting each Party's
rights in such information to be filed. Upon the expiration of forty-five (45)
days, in the case of proposed written disclosures, or fifteen (15) days, in
the
case of an abstract of proposed oral disclosures, from transmission of such
proposed disclosures to the Reviewing Party, the Publishing Party shall be
free
to proceed with the written publication or the oral presentation, respectively,
unless the Reviewing Party has requested the delay described above. To the
extent possible in the reasonable exercise of its discretion, the Publishing
Party shall incorporate all modifications proposed under clause (b) above.
If a
trade secret that is the subject of a request made under clause (c) above cannot
be otherwise equivalently protected without unreasonable expense to the
Reviewing Party, such information shall be omitted from the
publication.
ARTICLE
XI
REPRESENTATIONS
AND WARRANTIES
Section
11.01. Cyberkinetics's
Representations and Warranties.
Except
as otherwise disclosed on Schedule
11.01
attached
hereto, Cyberkinetics represents and warrants, as of the Effective Date,
that:
(a)
Cyberkinetics has all requisite corporate power and corporate authority to
enter
into this Agreement and to perform its obligations hereunder. The execution
and
delivery of this Agreement and the performance of the obligations of
Cyberkinetics hereunder have been duly authorized by all necessary corporate
action by the Board of Directors of Cyberkinetics, and no other corporate
proceedings on the part of Cyberkinetics are necessary to authorize the
execution, delivery or performance of this Agreement. This Agreement has been
duly executed by Cyberkinetics and constitutes Cyberkinetics's valid and binding
obligation, enforceable against Cyberkinetics in accordance with its
terms.
(b) to
Cyberkinetics's Knowledge, the issued patents included within the Existing
Cyberkinetics Patent Rights are valid and enforceable, and to Cyberkinetics's
Knowledge, there are no current or threatened claims by a Third Party alleging
that any of such issued patents are invalid or unenforceable or that the use
of
any invention or technology claimed in any of the issued patents within the
Existing Cyberkinetics Patent Rights in the Field would infringe a Third Party's
Patent Rights;
(c) there
is
no existing or, to Cyberkinetics's Knowledge, threatened litigation concerning
the ownership or use of the Existing Cyberkinetics Patent Rights;
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28 -
(d) all
Existing Cyberkinetics Patent Rights that have been prosecuted by Cyberkinetics
(directly or through legal counsel retained by Cyberkinetics) have been
prosecuted in good faith;
(e) to
Cyberkinetics's Knowledge, all Existing Cyberkinetics Patent Rights that have
been prosecuted by a Third Party (directly or through legal counsel retained
by
a Third Party) have been prosecuted in good faith;
(f)
Cyberkinetics
has not sold, transferred, granted any licenses, or otherwise conveyed any
rights in or to the Existing Cyberkinetics Patent Rights that would prevent
Cyberkinetics from granting the rights and licenses granted herein;
(h)
Cyberkinetics
has no Knowledge of any existing or threatened acts by any Third Party that
would infringe the Existing Cyberkinetics Patent Rights; and
(i)
the
agreements listed on Schedule
11.01
represent all agreements in effect as of the Effective Date, or that have been
entered into but are to become effective after the Effective Date, that
Cyberkinetics (or its Affiliates) have entered into with Third Parties pursuant
to which: (i) Cyberkinetics (or its Affiliates) have granted to a Third Party
the right to use the Existing Cyberkinetics Patent Rights within the Field,
(ii)
a Third Party granted to Cyberkinetics (or its Affiliates) the right to use
such
Third Party's intellectual property rights within the Field, or (iii)
Cyberkinetics (or its Affiliates) and a Third Party have or shall conduct
activities relating to the treatment of peripheral nerve disease, injury or
disorder with an electrical field.
Section
11.02. NEUROMetrix's
Representations and Warranties.
Except
as otherwise disclosed on Schedule
11.02
attached
hereto, NEUROMetrix represents and warrants, as of the Effective Date,
that:
(a)
NEUROMetrix has all requisite corporate power and corporate authority to enter
into this Agreement and to perform its obligations hereunder. The execution
and
delivery of this Agreement and the performance of the obligations of NEUROMetrix
hereunder have been duly authorized by all necessary corporate action by the
Board of Directors of NEUROMetrix, and no other corporate proceedings on the
part of NEUROMetrix are necessary to authorize the execution, delivery or
performance of this Agreement. This Agreement has been duly executed by
NEUROMetrix and constitutes NEUROMetrix' valid and binding obligation,
enforceable against NEUROMetrix in accordance with its terms.
(b) to
NEUROMetrix' Knowledge, the issued patents included within the Existing
NEUROMetrix Patent Rights are valid and enforceable, and to NEUROMetrix'
Knowledge, there are no current or threatened claims by a Third Party alleging
that any of such issued patents are invalid or unenforceable or that the use
of
any invention or technology claimed in any of the issued patents within the
existing NEUROMetrix Patent Rights in the Field would infringe a Third Party's
Patent Rights;
(c) there
is
no existing or, to NEUROMetrix' Knowledge, threatened litigation concerning
the
ownership or use of the Existing NEUROMetrix Patent Rights;
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29 -
(d) all
Existing NEUROMetrix Patent Rights that have been prosecuted by NEUROMetrix
(directly or through legal counsel retained by NEUROMetrix) have been prosecuted
in good faith;
(e) to
NEUROMetrix' Knowledge, all Existing NEUROMetrix Patent Rights that have been
prosecuted by a Third Party (directly or through legal counsel retained by
a
Third Party) have been prosecuted in good faith;
(f)
NEUROMetrix
has not sold, transferred, granted any licenses, or otherwise conveyed any
rights in or to the Existing NEUROMetrix Patent Rights that would prevent
NEUROMetrix from granting the rights and licenses granted herein;
(h)
NEUROMetrix
has no Knowledge of any existing or threatened acts by any Third Party that
would infringe the Existing NEUROMetrix Patent Rights; and
(i)
the
agreements listed on Schedule
11.02
represent all agreements in effect as of the Effective Date, or that have been
entered into but are to become effective after the Effective Date, that
NEUROMetrix (or its Affiliates) have entered into with Third Parties pursuant
to
which: (i) NEUROMetrix (or its Affiliates) have granted to a Third Party the
right to use the Existing NEUROMetrix Patent Rights within the Field, (ii)
a
Third Party granted to NEUROMetrix (or its Affiliates) the right to use such
Third Party's intellectual property rights within the Field, or (iii)
NEUROMetrix (or its Affiliates) and a Third Party have or shall conduct
activities relating to the treatment of peripheral nerve disease, injury or
disorder with an electrical field.
Section
11.03. Disclaimer
of Representations and Warranties.
EXCEPT
AS OTHERWISE EXPRESSLY SET FORTH IN THIS AGREEMENT, NEITHER CYBERKINETICS,
NEUROMETRIX NOR THE COMPANY MAKES ANY REPRESENTATIONS OR EXTENDS ANY WARRANTIES
OF ANY KIND, EITHER EXPRESS OR IMPLIED, INCLUDING BUT NOT LIMITED TO WARRANTIES
OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, AND THE NON-INFRINGEMENT
OF ANY THIRD-PARTY PATENTS OR PROPRIETARY RIGHTS. ALL UNIFORM COMMERCIAL CODE
AND OTHER WARRANTIES ARE EXPRESSLY DISCLAIMED BY THE PARTIES.
Section
11.04. Limitation
of Liability.
Except
for a breach of obligations under Article X, it is agreed by the Parties that
no
Party shall have a right to or shall claim special, indirect or consequential
damages, including lost profits, for breach of this Agreement. Remedies shall
be
limited to claims for amounts due hereunder or as otherwise provided in this
Agreement, including claims for indemnification as provided in Section
12.01
or
Section
12.02.
ARTICLE
XII
INDEMNIFICATION
Section
12.01. Indemnification
by Cyberkinetics.
During
the course of, and upon and after termination of this Agreement for any reason
whatsoever, Cyberkinetics shall indemnify, defend and hold, without duplication,
(a) the Company, (b) NEUROMetrix (and the Affiliates of NEUROMetrix other than
the Company) and (c) their respective directors, officers and employees
(collectively, "NEUROMetrix
Indemnitees")
harmless against any claims (including, without limitation, claims for product
liability, personal injury or death, or property damage), liability, damage,
loss, cost or expense (including reasonable attorneys' fees and costs) incurred
by any of them, to the extent resulting from: (i) the negligence or willful
misconduct of Cyberkinetics, or any of its Affiliates, or their employees,
representatives or agents; or (ii) Cyberkinetics's breach of this Agreement
or
any Transaction Agreement. Notwithstanding anything to the contrary, this
provision shall not apply to any claims or suits to the extent attributable
to
the negligence or willful misconduct of a NEUROMetrix Indemnitee or a breach
of
this Agreement or the Company's Operating Agreement by NEUROMetrix.
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30 -
Section
12.02. Indemnification
by NEUROMetrix.
During
the course of, and upon and after termination of this Agreement for any reason
whatsoever, NEUROMetrix shall indemnify, defend and hold, without duplication,
(a) the Company, (b) Cyberkinetics (and the Affiliates of Cyberkinetics other
than the Company) and (c) their respective directors, officers and employees
(collectively, "Cyberkinetics
Indemnitees")
harmless against any claims (including, without limitation, claims for product
liability, personal injury or death, or property damage), liability, damage,
loss, cost or expense (including reasonable attorneys' fees and costs) incurred
by any of them, to the extent resulting from: (i) the negligence or willful
misconduct of NEUROMetrix, or any of its Affiliates, or their employees,
representatives or agents; or (ii) NEUROMetrix's breach of this Agreement or
any
Transaction Agreement. Notwithstanding anything to the contrary, this provision
shall not apply to any claims or suits to the extent attributable to the
negligence or willful misconduct of a Cyberkinetics Indemnitee or a breach
of
this Agreement or the Company's Operating Agreement by
Cyberkinetics.
Section
12.03. Conditions
to Indemnification.
A
Party seeking indemnification under this Article
XII
(the
"Indemnified
Party")
shall
give prompt notice of the claim to the other Party (the "Indemnifying
Party")
and,
provided that the Indemnifying Party is not contesting the indemnity obligation,
shall permit the Indemnifying Party to control any litigation relating to such
claim and disposition of any such claim, provided that the Indemnifying Party
shall act reasonably and in good faith with respect to all matters relating
to
the settlement or disposition of any claim as the settlement or disposition
relates to Parties being indemnified under this Article
XII
and
provided, further, that the Indemnifying Party shall not settle or otherwise
resolve any claim without prior notice to the Indemnified Party and the consent
of the Indemnified Party (which consent shall not be unreasonably withheld,
conditioned or delayed) if such settlement involves anything other than the
payment of money by the Indemnifying Party and a complete and unconditional
release of all applicable claims and liability. The Indemnified Party shall
cooperate with the Indemnifying Party in its defense of any claim for which
indemnification is sought under this Article
XII
and
shall have the right to be present in person or through counsel at all legal
proceedings giving rise to the right of indemnification.
Section
12.04. Attribution.
For
purposes of this Article
XII:
(a)
none of the Company, Cyberkinetics or Cyberkinetics's Affiliates (or their
respective employees) shall be deemed to be an employee, agent or representative
of NEUROMetrix, (b) none of the Company, NEUROMetrix or NEUROMetrix's Affiliates
(or their respective employees) shall be deemed to be an employee, agent or
representative of Cyberkinetics and (c) none of Cyberkinetics or NEUROMetrix
or
their respective Affiliates (or their respective employees) shall be deemed
to
be an employee, agent or representative of the Company.
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31 -
Section
12.05. Insurance.
The
Company shall maintain product liability insurance with respect to development,
manufacture and sales of Collaboration Products in an amount reasonably believed
by the Steering Committee to be adequate and customary for the development,
manufacture and sale of novel therapeutic products considering the nature of
the
activities being conducted by the Company at that time. Cyberkinetics and
NEUROMetrix shall be named as additional insureds on any such policy.
ARTICLE
XIII
TERM
AND TERMINATION
Section
13.01. Term.
The
term of this Agreement shall be perpetual unless and until terminated pursuant
to Section
13.02.
Section
13.02. Termination.
This
Agreement may be terminated in the following circumstances:
(a) For
Breach.
If
either Cyberkinetics or NEUROMetrix commits a breach of a material provision
of
this Agreement or any Transaction Agreement, and such breach is not cured within
ninety (90) days of written notice thereof from the non-breaching Party, the
non-breaching Party (Cyberkinetics or NEUROMetrix as the case may be) may
terminate this Agreement and all Transaction Agreements. Such 90-day cure period
shall be extended by an additional ninety (90) days, to a total of one hundred
eighty (180) days, if the breaching Party has engaged in good faith efforts
to
remedy such default within such initial 90-day period and indicated in writing
to the non-breaching Party prior to the expiration of such 90-day period that
it
believes that it will be able to remedy the default within such 180-day period,
but such extension shall apply only so long as the breaching Party is using
good
faith, diligent efforts to remedy such default. For purposes of this
Section
13.02(a),
breach
of a material provision of this Agreement or any Transaction Agreement shall
include, without limitation, the following: (i) NEUROMetrix's or Cyberkinetics's
failure to satisfy timely any financial obligations hereunder; (ii) failure
by
Cyberkinetics or NEUROMetrix to disclose, contribute or license (or sublicense)
Intellectual Property required to be disclosed, contributed or licensed by
it
hereunder; and (iii) a failure by Cyberkinetics or NEUROMetrix to perform timely
any obligation that significantly delays or impairs, or is reasonably likely
to
significantly delay or impair, the research or the development or
commercialization activities of the Company with respect to a Collaboration
Product.
(b) For
Convenience.
At any
time following the two (2) year anniversary of the Effective Date, Cyberkinetics
or NEUROMetrix may terminate this Agreement for any reason upon one hundred
eighty (180) days prior written notice to each other Party (during which 180-day
period the obligations of the Parties under this Agreement, including, without
limitation, obligations with respect to funding and contribution and/or
licensing of intellectual properties, shall continue in full force and effect);
provided that such terminating Party's right to so terminate the Agreement
is
conditioned on its being in compliance with all of its obligations hereunder,
and under the Transaction Agreements, at such time.
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32 -
Section
13.03. Effect
of Termination by Cyberkinetics.
(a) For
Breach.
In
addition to the surviving rights and duties set forth in Section
13.05,
Cyberkinetics and NEUROMetrix shall have the following rights and duties upon
termination of this Agreement by Cyberkinetics following a breach of this
Agreement by NEUROMetrix pursuant to Section
13.02(a):
(i) the Company shall be dissolved; (ii) all Joint Inventions shall be
assigned to Cyberkinetics, and Cyberkinetics shall grant to NEUROMetrix a
license to such Joint Inventions that is substantially equivalent to the license
granted in Section
3.04;
(iii)
the licenses granted in Article
III
shall be
revoked; provided, however, that Cyberkinetics shall have an option exercisable
upon written notice to NEUROMetrix within the 90-day period provided in
Section
13.02(a)
to
obtain from NEUROMetrix the exclusive, worldwide, irrevocable, non-royalty
bearing (except as provided below in this Section
13.03(a)
and in
Section
13.05)
right
and license, with the right to grant sublicenses, under the NEUROMetrix Patent
Rights, NEUROMetrix Technology and the Manufacturing Know-How owned or
controlled by NEUROMetrix, to develop, make, have made, use, offer for sale,
sell, have sold, import and export Collaboration Products and other devices
or products in the Field; (iv) if Cyberkinetics exercises the option
provided in clause (iii) above, any applicable Regulatory Approvals (including
without limitation those held by a Party other than the Company pursuant to
Section
5.03)
and
clinical data and any trademark and associated goodwill owned by the Company
or
assigned to the Company by either Cyberkinetics or NEUROMetrix shall be assigned
to Cyberkinetics; and (v) if Cyberkinetics exercises the option provided
under clause (iii) above, Cyberkinetics shall make payments to NEUROMetrix
equal
to up to [***] of Net Sales on all Collaboration Products that exist on the
Agreement termination date that are sold by Cyberkinetics (or on behalf of
Cyberkinetics) and on all other devices or products in the Field that
incorporate any of the claims in the NEUROMetrix Patent Rights as of the
Agreement termination date that are sold by Cyberkinetics (or on behalf of
Cyberkinetics) until the later of (A) such time as all NEUROMetrix Patent Rights
subject to the license granted in clause (iii) this Section
13.03(a)
shall
have expired or (B) ten (10) years after the earlier of (x) the date of the
first commercial sale of a Collaboration Product in the United States following
Regulatory Approval of such Collaboration Product or (y) the termination of
this
Agreement. The above-referenced [***] royalty shall be reduced by amounts paid
by Cyberkinetics, after the effective date of termination of this Agreement,
to
Third Parties, for access to or use of Patent Rights that are subject, as of
the
Effective Date, to a license agreement listed on Schedule C attached hereto
as
of the Effective Date, to the extent such payments exceed [***] of Net Sales
of
devices or products sold by Cyberkinetics pursuant to the exercise of the
license granted in this Section
13.03(a);
provided that such reduction shall not be permitted to decrease any single
royalty payment hereunder to less than [***] of Net Sales of any such device
or
product.
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33 -
(b) For
Convenience.
In
addition to the surviving rights and duties set forth in Section
13.05,
Cyberkinetics and NEUROMetrix shall have the following rights and duties upon
termination of this Agreement by Cyberkinetics for its convenience pursuant
to
Section
13.02(b):
(i) the
Company shall be dissolved; (ii) all Joint Inventions shall be assigned to
NEUROMetrix, and NEUROMetrix shall grant to Cyberkinetics a license to such
Joint Inventions that is substantially equivalent to the license granted in
Section
3.04;
(iii) the licenses granted in Article
III
shall be
revoked; provided, however, that NEUROMetrix shall have an option exercisable
upon written notice to Cyberkinetics within the 180-day period provided in
Section
13.02(b)
to
obtain from Cyberkinetics the exclusive, worldwide, irrevocable, non-royalty
bearing (except as provided below in this Section
13.03(b)
and in
Section
13.05)
right
and license, with the right to grant sublicenses, under the Cyberkinetics Patent
Rights, Cyberkinetics Technology and the Manufacturing Know-How owned or
controlled by Cyberkinetics, to develop, make, have made, use, offer for sale,
sell, have sold, import and export Collaboration Products and other devices
or
products in the Field; provided that any license granted to NEUROMetrix
hereunder shall be subject to the terms and conditions of Cyberkinetics's
obligations to the Cyberkinetics Licensors; (iv) if NEUROMetrix exercises
the option provided in clause (iii) above, any applicable Regulatory Approvals
(including without limitation those held by a Party other than the Company
pursuant to Section
5.03)
and
clinical data and any trademark and associated goodwill owned by the Company
or
assigned to the Company by either Cyberkinetics or NEUROMetrix shall be assigned
to NEUROMetrix; and (v) if NEUROMetrix exercises the option provided under
clause (iii) above, NEUROMetrix shall make royalty payments to Cyberkinetics
equal to the royalty payments that would have been payable by NEUROMetrix to
Cyberkinetics if NEUROMetrix had terminated this Agreement following a breach
of
this Agreement by Cyberkinetics and NEUROMetrix had thereafter exercised its
option under Section
13.04(a),
but
such royalty payments shall be payable by NEUROMetrix until the later of (A)
such time as all Cyberkinetics Patent Rights subject to the license granted
in
clause (iii) this Section
13.03(b)
shall
have expired or (B) fifteen (15) years after the earlier of (x) the date of
the
first commercial sale of a Collaboration Product in the United States following
Regulatory Approval of such Collaboration Product or (y) the termination of
this
Agreement.
Section
13.04. Effect
of Termination by NEUROMetrix.
(a) For
Breach.
In
addition to the surviving rights and duties set forth in Section
13.05,
Cyberkinetics and NEUROMetrix shall have the following rights and duties upon
termination of this Agreement by NEUROMetrix following a breach of this
Agreement by Cyberkinetics pursuant to Section
13.02(a):
(i) the Company shall be dissolved; (ii) all Joint Inventions shall be
assigned to NEUROMetrix, and NEUROMetrix shall grant to Cyberkinetics a license
to such Joint Inventions that is substantially equivalent to the license granted
in Section
3.04;
(iii)
the licenses granted in Article
III
shall be
revoked; provided, however, that NEUROMetrix shall have an option exercisable
upon written notice to Cyberkinetics within the 90-day period provided in
Section
13.02(a)
to
obtain from Cyberkinetics the exclusive, worldwide, irrevocable, non-royalty
bearing (except as provided below in this Section
13.04(a)
and in
Section
13.05)
right
and license, with the right to grant sublicenses, under the Cyberkinetics Patent
Rights, Cyberkinetics Technology and the Manufacturing Know-How owned or
controlled by Cyberkinetics, to develop, make, have made, use, offer for sale,
sell, have sold, import and export Collaboration Products and other devices
or
products in the Field; (iv) if NEUROMetrix exercises the option provided in
clause (iii) above, any applicable Regulatory Approvals (including without
limitation those held by a Party other than the Company pursuant to Section
5.03)
and
clinical data and any trademark and associated goodwill owned by the Company
or
assigned to the Company by either Cyberkinetics or NEUROMetrix shall be assigned
to NEUROMetrix; and (v) if NEUROMetrix exercises the option provided under
clause (iii) above, NEUROMetrix shall make payments to Cyberkinetics equal
to
[***] of Net Sales on all Collaboration Products that exist on the Agreement
termination date and on all other devices or products in the Field that
incorporate any of the claims in the Cyberkinetics Patent Rights as of the
Agreement termination date that are sold by NEUROMetrix (or on behalf of
NEUROMetrix) until the later of (A) such time as all Cyberkinetics Patent
Rights subject to the license granted in clause (iii) of this Section
13.04(a)
shall
have expired or (B) ten (10) years after the earlier of (x) the date of
first commercial sale of a Collaboration Product in the United States following
Regulatory Approval of such Collaboration Product or (y) the termination of
this
Agreement. The above-referenced [***] royalty shall be reduced by amounts paid
by NEUROMetrix, after the effective date of termination of this Agreement,
to
Third Parties, for access to or use of Patent Rights that are subject, as of
the
Effective Date, to a license agreement listed on Schedule A attached hereto
as
of the Effective Date, to the extent such payments exceed [***] of Net Sales
of
devices or products sold by NEUROMetrix pursuant to the exercise of the license
granted in this Section
13.04(a);
provided that such reduction shall not be permitted to decrease any single
royalty payment hereunder to less than [***] of Net Sales of any such device
or
product.
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34 -
(b) For
Convenience.
In
addition to the surviving rights and duties set forth in Section
13.05,
Cyberkinetics and NEUROMetrix shall have the following rights and duties upon
termination of this Agreement by NEUROMetrix for its convenience pursuant to
Section
13.02(b):
(i) the Company shall be dissolved; (ii) all Joint Inventions shall be
assigned to Cyberkinetics, and Cyberkinetics shall grant to NEUROMetrix a
license to such Joint Inventions that is substantially equivalent to the license
granted in Section
3.04;
(iii) the licenses granted in Article
III
shall be
revoked; provided, however, that Cyberkinetics shall have an option exercisable
upon written notice to NEUROMetrix within the 180-day period provided in
Section
13.02(b)
to
obtain from NEUROMetrix the exclusive, worldwide, irrevocable, non-royalty
bearing (except as provided below in this Section
13.04(b)
and in
Section
13.05)
right
and license, with the right to grant sublicenses, under the NEUROMetrix Patent
Rights, NEUROMetrix Technology and the Manufacturing Know-How owned or
controlled by NEUROMetrix, to develop, make, have made, use, offer for sale,
sell, have sold, import and export Collaboration Products and other devices
or
products in the Field; (iv) if Cyberkinetics exercises the option provided
in clause (iii) above, any applicable Regulatory Approval (including without
limitation those held by a Party other than the Company pursuant to Section
5.03)
and
clinical data and any trademark and associated goodwill owned by the Company
or
assigned to the Company by either Cyberkinetics or NEUROMetrix shall be assigned
to Cyberkinetics; and (v) if Cyberkinetics exercises the option provided
under clause (iii) above, Cyberkinetics shall make royalty payments to
NEUROMetrix equal to the royalty payments that would have been payable by
Cyberkinetics to NEUROMetrix if Cyberkinetics had terminated this Agreement
following a breach of this Agreement by NEUROMetrix and Cyberkinetics had
thereafter exercised its option under Section
13.03(a),
but
such royalty payments shall be payable by Cyberkinetics until the later of
(A)
such time as all NEUROMetrix Patent Rights subject to the license granted in
clause (iii) this Section
13.04(b)
shall
have expired or (B) fifteen (15) years after the earlier of (x) the date of
the
first commercial sale of a Collaboration Product in the United States following
Regulatory Approval of such Collaboration Product or (y) the termination of
this
Agreement.
-
35 -
Section
13.05. Cooperation.
(a) Licensor
Party.
NEUROMetrix and Cyberkinetics each covenant and agree that, if the other Party
exercises an option to take a license under Section
13.03
or
Section
13.04
above,
then NEUROMetrix or Cyberkinetics, as applicable (for purposes of this
Section
13.05
only,
under such circumstances such Party is a "Licensor
Party"
and the
other Party is the "Licensee
Party"),
as
the Licensor Party, will: (i) provide the Licensee Party with notice and a
copy
of any agreements between the Licensor Party and any Third Parties pursuant
to
which Licensor Party has in-licensed or otherwise obtained access to
intellectual property rights that are subject to the relevant license granted
under Section
13.03
or
Section
13.04
(each
such Third Party agreement is a "Third
Party License"),
(ii)
not terminate or otherwise allow to lapse the rights of any such Third Party
License without the consent of the Licensee Party, which consent shall not
be
unreasonably withheld, (iii) not breach or fail to cure any breach of any such
Third Party License which breach or failure to cure would result in termination
of the Third Party License, (iv) take such other measures not prohibited by
the
Third Party License which measures are reasonably requested by the Licensee
Party to enable it to exercise its rights under the relevant license granted
under Section
13.03
or
Section
13.04
and (v)
not take any action without the consent of the Licensee Party, which consent
shall not be unreasonably withheld, that would limit or impair or that would
reasonably be anticipated to limit or impair, in any material respects, with
the
Licensee Party's rights under any Third Party License.
(b) Licensee
Party.
NEUROMetrix and Cyberkinetics each covenant and agree that, when and for so
long
as it is the Licensee Party, it will: (i) comply with the terms of any
applicable Third Party License of which it has notice, including by timely
paying all royalties or other amounts that are payable in connection with the
exercise of its license; and (ii) not take any action that would limit or impair
or that would reasonably be anticipated to limit or impair, in any material
respects, with the Licensor Party's retained rights under any Third Party
License.
Section
13.06. Survival
of Rights and Duties.
No
termination of this Agreement shall eliminate any rights or duties accrued
prior
to such termination which by their terms extend after the termination, including
without limitation the rights and duties of the Parties under Articles
X
and
XII
and this
Article
XIII
and
Sections
2.02(a),
3.04,
4.03,
5.02(a)(as
relates to the right of access and reference to certain clinical data),
9.01(a),
9.01(c),
9.03,
9.05,
11.04,
14.01,
14.04,
14.09,
14.10,
and
14.15,
all of
which shall survive any termination of this Agreement. For the avoidance of
any
doubt, the Party that continues to develop and market Collaboration Products
following a termination pursuant to this Article
XIII
shall
not be obligated to utilize the marketing and sales services, general and
administrative services, or manufacturing services, as the case may be, of
the
other Party pursuant to Article
VI
or
Article
VII
hereof
(and such other Party shall have no obligation to provide such services).
-
36 -
ARTICLE
XIV
MISCELLANEOUS
Section
14.01. Cooperation.
If
either Cyberkinetics or NEUROMetrix (the "Assuming
Party")
shall
acquire rights from the other Party (the "Responsible
Party")
to
develop, make, have made, use, offer for sale, sell, have sold, import and
export Collaboration Products or other devices or products in the Field in
accordance with the provisions of Article
XIII,
the
Responsible Party shall promptly provide to the Assuming Party (or any Third
Party or Affiliate designated by the Assuming Party) all Technology,
Manufacturing Know-How and access to regulatory filings sufficient to allow
the
Assuming Party to exercise its rights thereunder. The Responsible Party shall
further use its reasonable best efforts to provide all assistance required
by
the Assuming Party with respect to such transfer so as to permit the Assuming
Party to begin to exercise such rights as soon as possible to minimize any
disruption in the continuity of supply or marketing of Collaboration Products.
In addition, if upon the date this Agreement is terminated Collaboration
Products are being manufactured in facilities owned or leased by the Responsible
Party (including facilities subleased by the Company from the Responsible
Party), the Responsible Party agrees to lease such facilities to the Assuming
Party on commercially reasonable terms for a period of up to twenty-four (24)
months.
Section
14.02. Exchange
Controls.
All
payments due hereunder shall be paid in United States dollars. If at any time
legal restrictions prevent the prompt remittance of part or all payments with
respect to any country where a Collaboration Product is sold, payment shall
be
made through such lawful means or methods as the Parties may determine.
Section
14.03. Withholding
Taxes.
If
applicable laws or regulations require that taxes be withheld from payments
made
hereunder, the Company will (i) deduct such taxes, (ii) timely pay such
taxes to the proper authority, and (iii) send written evidence of payment to
the
Party from whom such taxes were withheld within sixty (60) days after payment.
Each Party will assist the other Parties in claiming tax refunds, deductions
or
credits at such other Party's request and will cooperate to minimize the
withholding tax, if available, under various treaties applicable to any payment
made hereunder.
Section
14.04. Interest
on Late Payments.
Any
payments to be made hereunder that are not paid on or before the date such
payments are due under this Agreement shall bear interest, to the extent
permitted by applicable law, at the London Interbank Offer Rate (LIBOR), plus
three (3) percentage points, calculated on the number of days payment is
delinquent; provided that, to the extent a Party fails to make any capital
contributions to the Company, interest shall become due and payable as set
forth
in the Company's Operating Agreement (and interest shall not be payable
hereunder).
Section
14.05. Force
Majeure.
No
Party
shall be held liable or responsible to any other Party (or to any other person
or entity) nor be deemed to have defaulted under or breached this Agreement
for
failure or delay in fulfilling or performing any term of this Agreement (other
than the obligation to pay money as and when due hereunder) when such failure
or
delay is caused by or results from causes beyond the reasonable control of
the
affected Party, including but not limited to, fire, floods, embargoes, war,
acts
of war (whether war is declared or not), insurrections, riots, civil commotions,
strikes, lockouts or other labor disturbances, acts of God or acts, omissions
or
delays in acting by any governmental authority or any other Party; provided
that
such Party takes reasonable measures to minimize the duration and effect of
any
such causes of default or breach.
-
37 -
Section
14.06. Assignment.
This
Agreement may not be assigned or otherwise transferred by any Party without
the
consent of the other Parties; provided, however, that either Cyberkinetics
or
NEUROMetrix: (a) may, without such consent, assign its rights and obligations
under this Agreement in connection with a corporate reorganization, to any
member of an affiliated group, all or substantially all of the equity interest
of which is owned and controlled by such Party or its direct or indirect parent
corporation, and (b) shall assign its rights and obligations under this
Agreement to a Third Party (i) in connection with a merger, consolidation
or sale of substantially all of such Party's assets to such Third Party and
(ii)
in connection with a sale by such Party of all or substantially all of the
assets owned by such Party that relate to the activities described herein;
provided, in both such cases, that such Party's rights and obligations under
this Agreement shall be assumed by such Third Party in any such transaction.
Any
purported assignment in violation of the preceding sentence shall be void.
Section
14.07. Severability.
Each
Party hereby agrees that it does not intend to violate any public policy,
statutory or common laws, rules, regulations, treaty or decision of any
government agency or executive body thereof of any country or community or
association of countries. Should one or more provisions of this Agreement be
or
become invalid, the Parties hereto shall substitute, by mutual consent, valid
provisions for such invalid provisions which valid provisions in their economic
effect are sufficiently similar to the invalid provisions that it can be
reasonably assumed that the Parties would have entered into this Agreement
with
such valid provisions. In case such valid provisions cannot be agreed upon,
the
invalidity of one or several provisions of this Agreement shall not affect
the
validity of this Agreement as a whole, unless the invalid provisions are of
such
essential importance to this Agreement that it is to be reasonably assumed
that
the Parties would not have entered into this Agreement without the invalid
provisions.
Section
14.08. Notices.
Any
consent, notice or report required or permitted to be given or made under this
Agreement by one of the Parties hereto to the other shall be in writing,
delivered personally or by facsimile (and promptly confirmed by personal
delivery or courier) or courier, postage prepaid (where applicable), addressed
to such other Party at its address indicated below, or to such other address
as
the addressee shall have last furnished in writing to the addressor, and shall
be effective upon receipt by the addressee.
-
38 -
If
to
Cyberkinetics:
000
Xxxxxxxxxx Xxxxxxxxx, Xxxxx 000
Xxxxxxxxxx,
Xxxxxxxxxxxxx 00000
Attention:
President
with
a
copy to:
Ice
Xxxxxx LLP
Xxx
Xxxxxxxx Xxxxxx Xxxxx 0000
Xxxxxxxxxxxx,
Xxxxxxx 00000
Attention:
Xxxx X. Xxxxxxxxxx, Esq
If
to
NEUROMetrix:
NEUROMetrix,
Inc.
00
Xxxxxx
Xxxxxx
Xxxxxxx,
Xxxxxxxxxxxxx 00000
Attention:
President
with
a
copy to:
Xxxxxxx
& Xxxxxxx LLP
Exchange
Place
Boston,
Massachusetts 02019
Attention:
H. Xxxxx Xxxxxx, Esq.
If
to the
Company:
PNIR,
LLC
00
Xxxxxx
Xxxxxx
Xxxxxxx,
Xxxxxxxxxxxxx 00000
Attention:
President
with
a
copy to the other Party not sending such notice.
Section
14.09. Applicable
Law; Jurisdiction.
This
Agreement shall be governed by and construed in accordance with the laws of
the
Commonwealth of Massachusetts. Any dispute not required to be subject to the
dispute resolution processes set forth herein (including Section
8.03
and
Section
14.10),
shall
be filed and litigated exclusively in a state or federal court located in the
Commonwealth of Massachusetts, and each Party hereby consents to the exclusive
jurisdiction of such courts and waives any defense of personal jurisdiction,
improper venue or forum
non conveniens.
Section
14.10. Dispute
Resolution.
(a) General.
Except
as otherwise provided in Section
8.03
and
Section
14.10(c)(v),
any
dispute or claim arising out of or relating to this Agreement (or any agreement
entered into by the Company with any other Party), or a breach hereof or
thereof, shall be resolved in accordance with this Section
14.10.
Except
with respect to any dispute as to whether a Party properly exercised its rights
to terminate this Agreement, during the course of resolving any such dispute,
the Parties shall continue to perform their obligations hereunder and under
such
other agreements (including by making payment of any undisputed portion of
any
payment obligation that is the subject of a dispute hereunder or thereunder).
Notwithstanding the foregoing, the obligation of the Parties to continue to
perform hereunder and under such other agreements during the resolution of
disputes shall not require a Party to perform obligations (other any undisputed
portion of any payment obligation) where such performance is rendered
impossible, or would otherwise not maintain or increase the likelihood that
the
Parties will achieve the purposes and goals of the Program, because of
circumstances created by or directly related to the dispute itself.
-
39 -
(b) Good
Faith Consultation.
In the
event of a dispute between the Parties (a "Dispute"),
the
Parties shall attempt in good faith to settle such Dispute through mutual
consultation. If, after such consultation, the Dispute cannot be resolved,
the
Parties shall wait for not less than sixty (60) days after the Dispute arises
and at the end of such period meet for a second consultation. If the Dispute
is
not resolved after the second consultation, the matter shall be referred to
the
Chief Executive Officer of Cyberkinetics and the Chief Executive Officer of
NEUROMetrix (together, the "Senior
Executives")
for
resolution. The Senior Executives shall diligently attempt to resolve the
Dispute, including, if they deem it necessary, meeting directly in order to
provide full consideration of the Dispute. If the Senior Executives are unable
to resolve the Dispute within sixty (60) additional days after the second
consultation then the Dispute shall be referred to arbitration.
(c) Arbitration.
Any
arbitration hereunder shall be conducted pursuant to the provisions of this
Section
14.10.
Each
such arbitration shall be conducted in the English language by an arbitrator
(the "Arbitrator").
The
Arbitrator shall be appointed pursuant to the rules of JAMS alternative dispute
resolution company ("JAMS") upon delivery of the Notice of Arbitration (as
herein defined). Any such arbitration shall be held in Boston, Massachusetts.
The Arbitrator shall have the authority to allocate between the Parties the
costs of arbitration in such equitable manner as the Arbitrator shall determine.
Judgment upon the award so rendered may be entered in any court having
jurisdiction or application may be made to such court for judicial acceptance
of
any award and an order of enforcement, as the case may be.
(i) Whenever
a Party (the "Claimant")
shall
decide to institute arbitration proceedings, it shall give written notice to
that effect (the "Notice
of Arbitration")
to
JAMS and to each other Party (the "Respondent").
The
Notice of Arbitration shall set forth in detail the nature of the Dispute,
the
facts upon which the Claimant relies and the issues to be arbitrated
(collectively, the "Arbitration
Issues").
Within fifteen (15) days of its receipt of the Notice of Arbitration, the
Respondent shall send the Claimant and the Arbitrator a written Response (the
"Response").
The
Response shall set forth in detail the facts upon which the Respondent relies.
In addition, the Response shall contain all counterclaims which the Respondent
may have against the Claimant, whether or not such claims have previously been
identified. If the Response sets forth a counterclaim, the Claimant shall,
within fifteen (15) days of the receipt of the Response, deliver to the
Respondent and the Arbitrator a Reply, answering such counterclaim and setting
forth in detail the facts upon which the Claimant relies.
-
40 -
(ii) Each
Party shall have the right to engage in pre-arbitration discovery in the form
of
requests for production of documents and, if agreed to by the Parties or
permitted by the Arbitrator for good cause shown, depositions, subject to any
limitation as ordered by the Arbitrator. Each Party will, upon the written
request of each other Party, within thirty (30) calendar days of the request,
provide the other with copies of documents relevant to the issues raised by
any
claim or counterclaim on which the producing Party may rely in support of or
in
opposition to any claim or defense. Depositions, if any, shall be held within
thirty (30) calendar days of the Arbitrator's order granting such a request
or
by a date agreed to by the Parties. Each deposition shall be limited to a
maximum of three (3) hours duration. Any dispute regarding discovery, or the
relevance, scope or deadlines thereof, shall be determined by the Arbitrator,
which determination shall be conclusive. All discovery shall be completed within
sixty (60) calendar days following the appointment of the Arbitrator.
(iii) The
Parties shall agree, or the Arbitrator shall set a date that falls fifteen
(15)
days after the later of (i) the expiration of the period provided in
Section
14.10(b)(i)
for the
Claimant to deliver a Reply or (ii) the completion of any discovery
pursuant to Section
14.10(b)(ii) for:
each of
the Parties to submit to the Arbitrator a proposed resolution of the Arbitration
Issues and a proposed resolution of any counterclaims set forth in the Response,
including the amount of monetary damages, if any, or other relief sought. Once
all Parties' proposals have been submitted, the Arbitrator shall deliver to
each
Party a copy of each other Party's proposal.
(iv) A
final
arbitration hearing shall be held within thirty (30) days of the submission
of
the proposals. At the final arbitration hearing, presentation of the case shall
include: opening statements, testimony of necessary witnesses, stipulated or
properly authenticated documents, and closing statements. Each Party may compel
existing employees of the opposing Party to testify, and each Party agrees
to
make such existing employees available for hearing testimony. No documents
may
be submitted as evidence unless the documents have been provided to the opposing
Party in advance of the arbitration. Any Party may demand that a transcript
of
the hearing be prepared. If such a demand is made, then the Parties shall each
pay one-half of the cost of the transcript. Within one (1) month of the final
arbitration hearing, the Arbitrator shall issue a written opinion with respect
to any Dispute, which opinion shall explicitly accept either Party's proposal
in
its entirety (the "Final
Decision").
The
Arbitrator shall not have the authority to reach a Final Decision that is not
consistent in all material respects with either Party's proposal. The Arbitrator
shall have no authority to issue any other Final Decision, other than an
allocation of costs and fees in accordance with Section
14.10(c).
In
rendering a Final Decision, the Arbitrator shall follow the law of the
jurisdiction set forth in Section
14.09,
and
shall not use equitable or other principles that would permit the Arbitrator
to
ignore the Agreement or the law. A Final Decision shall be binding on all
Parties. Any award of monetary damages by the Arbitrator shall be subject to
all
limitations set forth in this Agreement.
-
41 -
(d) Business
Issue Deadlocks.
In the
event an issue relating to the conduct of the business of the Program comes
before the Steering Committee or the conduct of the business of the Company
comes before the Program Management Team, and such business decision is not
governed by the terms of this Agreement, but rather is specifically or by
omission left to the business judgment of the Steering Committee or the Program
Management Team, and the Steering Committee or the Program Management Team,
acting in accordance with this Agreement (including the provisions of
Section
8.03),
is
unable to reach a decision on how (or whether) to address or resolve such
business issue, then the provisions set forth in Section
14.10(c)
shall
apply, but the arbitrator shall be an individual with senior management
experience at a company that manufactures and sell medical devices in the United
States and such arbitrator's decision shall be rendered as follows: at the
conclusion of the arbitration hearings, each party shall submit a proposed
resolution of the business dispute to the arbitrator that it believes will
preserve the benefits of the Collaboration for each of the Parties, insofar
as
reasonably possible, while preserving or increasing the likelihood that the
Company will successfully develop and commercialize a Collaboration Product.
The
arbitrator shall choose among the proposed resolutions and adopt one as the
arbitrator's decision, and shall render that decision as the arbitrator's final
determination. The arbitrator shall not have discretion to render any decision
other than one submitted by one of the Parties. Notwithstanding the foregoing,
to the extent the deadlock to be resolved under this Section
14.10(d)
relates
to the amount of the budget to be included in the Development Plan or the
Commercialization Plan for a coming calendar year, then the amount of the budget
for such coming calendar year shall be determined as set forth above, provided
that the maximum amount of the budget for such coming calendar year shall be
capped at [***] of the budget for the then current calendar year.
Section
14.11. Entire
Agreement.
This
Agreement and the Company's Operating Agreement contain the entire understanding
of the Parties with respect to the subject matter hereof. All express or implied
agreements and understandings, either oral or written, heretofore made are
expressly merged in and made a part of this Agreement. This Agreement may be
amended, or any term hereof modified, only by a written instrument duly executed
by all Parties hereto.
Section
14.12. Headings.
The
captions to the several Articles and Sections hereof are not a part of this
Agreement, but are merely guides or labels to assist in locating and the several
Articles and Sections hereof.
Section
14.13. Interpretation.
Wherever
from the context it appears appropriate, each term stated in either the singular
or the plural shall include the singular and the plural, and pronouns stated
in
either the masculine, feminine or the neuter gender shall include the masculine,
feminine and the neuter.
-
42 -
Section
14.14. Independent
Contractors.
It
is expressly agreed that Cyberkinetics and NEUROMetrix shall be independent
contractors and that, except as limited liability company members of the
Company, the relationship between the two Parties shall not constitute a
partnership, joint venture or agency. Neither Cyberkinetics nor NEUROMetrix
shall have the authority to make any statements, representations or commitments
of any kind, or to take any action, which shall be binding on the other or
the
Company, without the prior consent of any other Party to do so, or except as
expressly set forth herein, for example when NEUROMetrix acts as a sales agent
for the Company.
Section
14.15. Agreement
Not to Solicit Employees.
During
the term of this Agreement and for a period of [***] years following the
termination of this Agreement (the "Restricted Period"), Cyberkinetics and
NEUROMetrix agree not to solicit, seek to persuade, or induce any individual
who
is or was during the Restricted Period an employee of the other Party to
discontinue his or her employment with that Party or to employ or engage such
person in order to become employed by or associated with any business,
enterprise or effort that is associated with its own business. For avoidance
of
doubt, hiring or engaging the services of an individual in response to an
advertisement, or in response to an unsolicited inquiry, shall not be a breach
of this Section
14.15.
Section
14.16. Waiver.
The
waiver by any Party hereto of any right hereunder or the failure to perform
or
of a breach by any other Party shall not be deemed a waiver of any other right
hereunder or of any other breach or failure by said other Party whether of
a
similar nature or otherwise.
Section
14.17. Interpretation.
Each
of the Parties acknowledges and agrees that this Agreement has been diligently
reviewed by and negotiated by and between them, that in such negotiations each
of them has been represented by competent counsel and that the final agreement
contained herein, including the language whereby it has been expressed,
represents the joint efforts of the Parties hereto and their counsel.
Accordingly, in interpreting this Agreement or any provision hereof, no
presumption shall apply against any Party hereto as being responsible for the
wording or drafting of this Agreement or any such provision, and ambiguities,
if
any, in this Agreement shall not be construed against any Party, irrespective
of
which Party may be deemed to have authored the ambiguous provision
Section
14.18. Counterparts.
This
Agreement may be executed in two or more counterparts, each of which shall
be
deemed an original, but all of which together shall constitute one and the
same
instrument.
[SIGNATURE
PAGE FOLLOWS]
-
43 -
IN
WITNESS WHEREOF, the parties have executed this Agreement as of the date first
set forth above.
|
CYBERKINETICS
NEUROTECHNOLOGY
SYSTEMS,
INC.
|
||
| |
|
|
| By: | /s/ Xxx Xxxxxxxx | |
|
Title: President |
||
|
NEUROMETRIX,
INC.
|
||
| |
|
|
| By: | /s/ Xxxx Xxxxxx | |
|
Title: President |
||
|
PNIR,
LLC
|
||
| |
|
|
| By: |
CYBERKINETICS
NEUROTECHNOLOGY
SYSTEMS,
INC.,
Member
|
|
| By: |
/s/
Xxx Xxxxxxxx
|
|
|
Title: President |
||
| By: NEUROMETRIX, INC., Member | ||
| |
|
|
| By: | /s/ Xxxx Xxxxxx | |
|
Title: President |
||
-
44 -
Schedule
A
Cyberkinetics
Licensors*
[***]
*
The
term "Cyberkinetics Licensors" includes those entities having at least one
agreement designated with an "L" but excludes those entities whose agreement
or
agreements are all designated with an "O."
-
45 -
Schedule
B
Cyberkinetics
Patent Rights include the following patents and patent applications if and
to
the extent the patents and patent applications include claims to an invention
or
technology relating to or useful in the Field:
Cyberkinetics
Licensed Pending and Issued Patents
sorted
by
origin of technology
[***]
Cyberkinetics
Patent Rights include the following patent applications if and to the extent
the
patent applications include claims to an invention or technology relating to
or
useful in the Field:
Cyberkinetics
Owned Pending Applications (none yet issued as of 2008 01 20)
Note:
numerous additional inventions being prioritized and considered for patent
filing
sorted
by
Cyberkinetics Docket #
[***]
-
46 -
Schedule
C
NEUROMetrix
Licensors
[***]
-
47 -
Schedule
D
Neurometrix
Patent Rights include the following patents and patent applications if and
to
the extent such patents and patent applications include claims to an invention
or technology relating to or useful in the Field:
Issued
Patents [Patent Number, Issue Date, Title]
[***]
Filed
Patents [Publication Number, File Date, Title]
[***]
Provisional
Patents [ Publication Number, File Date, Title]
[***]
-
48 -
Schedule
11.01
Cyberkinetics
Exception to Representations and Warranties
[***]
-
49 -
Schedule
11.02
NEUROMetrix
Exception to Representations and Warranties
[***]
-
50 -
Schedule
E
Joint
Press Release
(attached)
-
51 -
