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.
COLLABORATION AGREEMENT
by and among
Cyberkinetics Neurotechnology Systems, Inc.,
NEUROMetrix, Inc.,
And
PNIR, LLC
February 19, 2008
Table of
Contents
|
ARTICLE
I DEFINITIONS
|
1
|
|
ARTICLE
II SCOPE AND STRUCTURE OF THE COLLABORATION
|
7
|
|
Section
2.01. General
|
7
|
|
Section
2.02. Exclusive
Relationship and Non-Competition
|
7
|
|
ARTICLE
III GRANTS AND RESERVATIONS OF RIGHTS
|
9
|
|
Section
3.01. Licenses
of Rights by Cyberkinetics and NEUROMetrix to the
Company
|
9
|
|
Section
3.02. Sublicenses
of Rights from the Company to Cyberkinetics and
|
|
|
NEUROMetrix |
10
|
|
Section
3.03. Ancillary
Rights
|
10
|
|
Section
3.04. License
to Joint Inventions
|
11
|
|
Section
3.05. Non-Impairment
|
11
|
|
ARTICLE
IV CAPITAL CONTRIBUTIONS; FINANCIAL ARRANGEMENTS
|
11
|
|
Section
4.01. Program
Funding Commitments
|
11
|
|
Section
4.02. Distribution
of Net Profits
|
12
|
|
Section
4.03. Audit
|
12
|
|
ARTICLE
V THE DEVELOPMENT PROGRAM
|
13
|
|
Section
5.01. Conduct
of the Development Program
|
13
|
|
Section
5.02. Development
Information
|
14
|
|
Section
5.03. Regulatory
Approval Filings
|
15
|
|
Section
5.04. Facilities
Visits
|
15
|
|
ARTICLE
VI SALES, MARKETING AND ADMINISTRATIVE SERVICES
|
16
|
|
Section
6.01. Sales
and Marketing Services
|
16
|
|
Section
6.02. Commercialization
Plan
|
16
|
|
Section
6.03. General
and Administrative Services
|
17
|
|
ARTICLE
VII MANUFACTURE AND SUPPLY
|
17
|
|
Section
7.01. Process
Development; Manufacturing Approvals
|
18
|
|
Section
7.02. Manufacture
and Supply of Collaboration Products for
Development
|
|
|
Purposes |
18
|
|
Section
7.03. Manufacture
and Supply of Collaboration Products for Commercial
Sale..18
|
|
Section
7.04. Device
History Record
|
19
|
|
Section
7.05. Certificates
of Manufacturing Compliance
|
19
|
|
Section
7.06. Access
to Facilities
|
19
|
|
ARTICLE
VIII MANAGEMENT
|
20
|
|
Section
8.01. Program
Management Team
|
20
|
|
Section
8.02. Steering
Committee
|
21
|
|
Section
8.03. General
Disagreements
|
22
|
|
ARTICLE
IX INTELLECTUAL PROPERTY RIGHTS
|
23
|
|
Section
9.01. Ownership
|
23
|
|
Section
9.02. Filing,
Prosecution and Maintenance of Patent Rights
|
24
|
|
Section
9.03. Cooperation
|
25
|
|
Section
9.04. Notification
of Patent Issuance
|
25
|
|
Section
9.05. No
Other Technology Rights
|
25
|
|
Section
9.06. Enforcement
of Patent Rights; Defense of Infringement Actions
|
25
|
|
ARTICLE
X CONFIDENTIALITY
|
27
|
|
Section
10.01. Nondisclosure
Obligations
|
27
|
|
Section
10.02. Terms
of this Agreement
|
27
|
|
Section
10.03. Publications
|
28
|
|
ARTICLE
XI REPRESENTATIONS AND WARRANTIES
|
28
|
|
Section
11.01. Cyberkinetics's
Representations and Warranties
|
28
|
|
Section
11.02. NEUROMetrix's
Representations and Warranties
|
29
|
|
Section
11.03. Disclaimer
of Representations and Warranties
|
30
|
|
Section
11.04. Limitation
of Liability
|
30
|
|
ARTICLE
XII INDEMNIFICATION
|
30
|
|
Section
12.01. Indemnification
by Cyberkinetics
|
30
|
|
Section
12.02. Indemnification
by NEUROMetrix
|
31
|
|
Section
12.03. Conditions
to Indemnification
|
31
|
|
Section
12.04. Attribution
|
31
|
|
Section
12.05. Insurance
|
32
|
|
ARTICLE
XIII TERM AND TERMINATION
|
32
|
|
Section
13.01. Term
|
32
|
|
Section
13.02. Termination
|
32
|
|
Section
13.03. Effect
of Termination by Cyberkinetics
|
33
|
|
Section
13.04. Effect
of Termination by NEUROMetrix
|
34
|
|
Section
13.05. Cooperation
|
36
|
|
Section
13.06. Survival
of Rights and Duties
|
36
|
|
ARTICLE
XIV MISCELLANEOUS
|
37
|
|
Section
14.01. Cooperation
|
37
|
|
Section
14.02. Exchange
Controls
|
37
|
|
Section
14.03. Withholding
Taxes
|
37
|
|
Section
14.04. Interest
on Late Payments
|
37
|
|
Section
14.05. Force
Majeure
|
37
|
|
Section
14.06. Assignment
|
38
|
|
Section
14.07. Severability
|
38
|
|
Section
14.08. Notices
|
38
|
|
Section
14.09. Applicable
Law; Jurisdiction
|
39
|
|
Section
14.10. Dispute
Resolution
|
39
|
|
Section
14.11. Entire
Agreement
|
42
|
|
Section
14.12. Headings
|
42
|
|
Section
14.13. Interpretation
|
42
|
|
Section
14.14. Independent
Contractors
|
43
|
|
Section
14.15. Agreement
Not to Solicit Employees
|
43
|
|
Section
14.16. Waiver
|
43
|
|
Section
14.17. Interpretation
|
43
|
|
Section
14.18. Counterparts
|
43
|
COLLABORATION AGREEMENT
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 100
Foxborough Boulevard, Suite 240, Foxborough, Massachusetts 02035
("
Cyberkinetics ");
NEUROMetrix, Inc., a Delaware Corporation having its principal
place of business at 62 Fourth Avenue, Waltham, Massachusetts 02451
("
NEUROMetrix ");
and PNIR, LLC, a Delaware Limited Liability Company having its
principal place of business at 62 Fourth Avenue, Waltham,
Massachusetts 02451 (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.
"
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.
"
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 Shai N. Gozani, W. Bradford
Smith, Xuan Kong, Michael L. Williams and Charles Fendrock, and,
with respect to Cyberkinetics shall mean the actual knowledge,
without independent investigation, of Timothy Surgenor, Mark
Carney, J. Christopher Flaherty, Jessica Duda and Kurt
Kruger.
"
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.
"
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.
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.
(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) .
(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 mark 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.
(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.
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.
(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.
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.
(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.
(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.
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.
(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 A
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