EXECUTION VERSION

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EXHIBIT 10.22

AMENDED AND RESTATED

COLLABORATION AND LICENSE AGREEMENT

by and between

MERCK & CO., INC.

and

FOXHOLLOW TECHNOLOGIES, INC.

 

 

 

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EXECUTION VERSION

AMENDED AND RESTATED COLLABORATION AND LICENSE AGREEMENT

This Amended and Restated Collaboration and License Agreement (as may be amended
from time to time, this “Agreement”) dated as of September 26, 2006, (the
“Restatement Date”) is entered into by and between Merck & Co., Inc., a New
Jersey corporation, having offices at One Merck Drive, Whitehouse Station, New
Jersey (“Merck”), and FoxHollow Technologies, Inc., a Delaware corporation,
having offices at 740 Bay Road, Redwood City, California (“FHT”), and amends and
restates in its entirety that certain Collaboration and License Agreement,
effective as of September 15, 2005 (the “Original Effective Date”), between
Merck and FHT (the “Original Agreement”).

Background:

FHT and Merck desire to amend and restate the Original Agreement on the terms
and subject to conditions set out in this Agreement. In connection with the
execution of this Agreement, Merck also shall purchase common stock of FHT on
the terms and conditions set forth in that certain Stock Purchase Agreement
executed as of the Restatement Date (the “Stock Purchase Agreement”).

NOW, THEREFORE, Merck and FHT agree as follows:

ARTICLE 1 DEFINITIONS. Unless specifically set forth to the contrary in this
Agreement, the following terms, whether used in the singular or plural, shall
have the respective meanings set forth below.

 

  1.1 “Affiliate” means (a) any corporation or business entity of which fifty
percent (50%) or more of the securities or other ownership interests
representing the equity, the voting stock or general partnership interest are
owned, controlled or held, directly or indirectly, by Merck or FHT; or (b) any
corporation or business entity which, directly or indirectly, owns, controls or
holds fifty percent (50%) (or the maximum ownership interest permitted by law)
or more of the securities or other ownership interests representing the equity,
the voting stock or, if applicable, the general partnership interest, of Merck
or FHT; or (c) any corporation or business entity of which fifty percent
(50%) or more of the securities or other ownership interests representing the
equity, the voting stock or general partnership interest are owned, controlled
or held, directly or indirectly, by a corporation or business entity described
in (a) or (b).

 

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1.2 “Alignment Committee” is defined in Section 2.2.3.

 

1.3 “Background Package” means the background package submitted to the FDA for
the end-of-Phase II meeting between Merck (or its Affiliate) and the FDA to
prepare for implementation of a Phase III Clinical Trial.

 

1.4 “Biological Samples and Data” means:

 

  (a) biological material (“Material”) directly obtained from human or animals,
or derivatives of such materials, and collected or tested under the
Collaboration Program, including during the period from September 15, 2006 until
the Effective Date.

Examples of Material include [ * ] and [ * ] contained in the [ * ], and all [ *
] that meets [ * ], and all [ * ], as well as any [ * ] from [ * ] or [ * ]; and

 

  (b) information generated from the testing or use of Material, or information
concerning the source of such Material (“Data”).

Examples of such Data include [ * ] concerning or resulting from the [ * ] of
any Material. This includes [ * ] found in [ * ] at different [ * ], and all [ *
], as well as any [ * ].

 

1.5 “Calendar Quarter” means the respective periods of three (3) consecutive
calendar months ending on March 31, June 30, September 30 and December 31.

 

1.6 “Calendar Year” means each successive period of twelve (12) months starting
on January 1 and ending on December 31.

 

1.7 “Cardiovascular Device” means a Device for the treatment or diagnosis of a
disease of the blood vessels or heart.

 

1.8 “Change of Control” as the meaning assigned thereto under the Stock Purchase
Agreement.

 

1.9 “Collaboration Program” means the activities undertaken by the Parties under
this Agreement during the Collaboration Program Term. All work to be conducted
by FHT under the Collaboration Program shall be conducted at the request or
approval of Merck, as further described in Section 2.1.

 

1.10 “Collaboration Program Budget” means the budget for activities to be
undertaken by FHT under the Collaboration Program, as described in Section 5.3.

 

1.11 “Collaboration Program Clinical Study” or “CPCS” means a clinical study
conducted under the Collaboration Program in accordance with a protocol that has
been approved by Merck.

 

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1.12 “Collaboration Program Inventions and Results” means:

 

  (a) all Biological Samples and Data;

 

  (b) all Inventions, protocols, results, data, discoveries, formulas, know-how
and trade secrets, including any biomarkers or surrogate markers, assays, tests,
clinical trial methodologies, or procedures (in each case whether patentable or
otherwise) that were generated in the course of or arise from the performance of
the Collaboration Program, including during the period from September 15, 2006
until the Effective Date, or resulting from the analysis of Biological Samples
and Data during the Collaboration Program Term or Tail Period, including during
the period from September 15, 2006 until the Effective Date; and

 

  (c) any improvements or enhancements to, or subsequent inventions resulting
from, any of the items described in clauses (a) and (b) to the extent such
improvements, enhancements or inventions are generated during the Collaboration
Program Term or Tail Period or during the period from September 15, 2006 until
the Effective Date; provided, however the term “Collaboration Program Inventions
and Results” shall not apply to, and shall exclude, FHT Independent Inventions
and Improvements, Excluded Merck Compound Rights, and Merck Independent
Inventions and Improvements.

 

1.13 “Collaboration Program Patent Rights” means any and all patents and patent
applications (which for the purposes of this Agreement shall be deemed to
include certificates of invention, provisional applications, and applications
for certificates of invention) claiming any Collaboration Program Invention and
Results.

 

1.14 “Collaboration Program Term” means the duration of the Collaboration
Program, as described more fully in Section 2.8.

 

1.15 “Combination Product” means a product containing both a Therapeutic Product
as well as one or more active ingredients that are other than a Profiled
Compound. All references to Product in this Agreement shall be deemed to include
Combination Products.

 

1.16 “Contract Year” means a year of 365 days (or 366 days in a leap year)
beginning on the Effective Date and ending one year thereafter and so on,
year-by-year.

 

1.17 “Control” with respect to intellectual property or tangible property rights
(e.g., compounds or information), means the legal authority (whether by
ownership or license, other than pursuant to this Agreement) of a Party to grant
access to, or a license or sublicense of such intellectual property rights or
tangible property.

 

1.18 “CPCS Samples and Data” is defined in Section 2.4.8(c).

 

1.19 “CRO” means a contract research organization.

 

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1.20 “Data” is defined in Section 1.3.

 

1.21 “DDMAC” means the FDA’s Division of Drug Marketing, Advertising, and
Communications.

 

1.22 “Device” means a mechanical device that FHT owns or controls.

 

1.23 “Dose Ranging Product” means a Therapeutic Product that achieved
Therapeutic Product Development Milestone [ * ] described in Section 5.4[ * ],
and Therapeutic Product Development Milestone [ * ] described in Section 5.4[ *
].

 

1.24 “Effective Date” means the Closing Date, as defined in the Stock Purchase
Agreement.

 

1.25 “EMEA” means the European Medicines Agency.

 

1.26 “Enhanced Label Product” means a Therapeutic Product with respect to which
any Collaboration Inventions and Results are contained in both: (i) [ * ]; and
(ii) [ * ] used by Merck or its Affiliates in the United States for such
Therapeutic Product.

 

1.27 “Exceptions to the Exclusive Field” are set out in Attachment B.

 

1.28 “Excluded Claim” is defined in Section 9.7.6.

 

1.29 “Excluded Merck Compound Rights” means all Merck NCEs (and any uses,
formulations or enhancements to the same), and all data on Merck NCEs.

 

1.30 “Exclusive Field” means the conduct of any Exclusive Field Activity, but
excluding all Exceptions to the Exclusive Field.

 

1.31 “Exclusive Field Activity” means each of those activities set out in
Attachment A.

 

1.32 “Exclusivity Maintenance Payment” is defined in Section 5.2.2.

 

1.33 “FDA” means the United States Food and Drug Administration.

 

1.34 “FHT Collaboration Program Inventions and Results” means all Collaboration
Program Inventions and Results discovered, developed or invented solely by
employees of FHT, or other persons not employed by Merck acting on behalf of
FHT.

 

1.35 “FHT Collaboration Program Patents” means all Collaboration Program Patent
Rights that claim FHT Collaboration Program Inventions and Results.

 

1.36 “FHT Exclusivity Period” is defined in Section 2.9.

 

1.37

“FHT Independent Inventions and Improvements” means: (a) FHT-Controlled
technology, methods, devices, and systems for the excision of plaque; (b) the
TALON Registry (excluding any Material contained therein that meets the Sample
Criteria); (c) any improvements to the items listed in (a) created under the
Collaboration Program or

 

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independent of the Collaboration Program but after the Original Effective Date;
and (d) FHT patents, patent applications and know-how covering any of the
foregoing.

 

1.38 “Filing” means the acceptance by the first Regulatory Authority of an NDA
for filing.

 

1.39 “First Commercial Sale” means, with respect to any Product or Test, the
first sale for end use or consumption of such Product or Test in a country,
excluding, however, any sale or other distribution for use in clinical trials.

 

1.40 “FTE” means the equivalent of a full-time FHT or Merck employee’s work time
in full working days over a 12-month period (including normal vacations, sick
days and holidays, but excluding weekends), provided that one person can only
account for a single FTE, regardless of the number of hours such person works on
Collaboration Program activities, or non-Collaboration Program activities. The
portion of an FTE year devoted by a FHT or Merck employee to the Collaboration
Program shall be determined by dividing the number of full working days during
any 12-month period devoted by such employee to the Collaboration Program by the
total number of working days of such employee during any such 12-month period.

 

1.41 “FTE Rate” means the amount that Merck will pay FHT in a Contract Year to
support one FTE assigned to the Collaboration Program during such Contract Year.
The FTE Rate will be [ * ] per FTE for each of the first two Contract Years. [ *
]

 

1.42 “Image-Enhancing Agent” means a combination of: (i) a vector (the source of
specificity, including but not limited to, small molecules, peptides, polymers,
proteins, antibody fragments, antibodies); and (ii) a reporter (the source of
physical detection; including, but not limited to, radionuclides, optical
chromophores, gadolinium complexes, iron oxide particles, iodine or tungsten
containing compounds, ultrasound bubbles).

 

1.43 “Indication” means a separate and distinct disease or medical condition in
humans (a) which a Therapeutic Product is intended to treat, and/or prevent,
where the Therapeutic Product is either in Phase III Clinical Trials, or is the
subject of an NDA; and/or (b) for which a Therapeutic Product has received
Marketing Authorization (meaning that such Indication is contained in the
Therapeutic Product’s labeling approved by a Regulatory Authority as part of the
Marketing Authorization for such Product).

 

1.44 “Information” means all information and data, whether communicated in
writing or orally or by any other method, which is provided by one Party to the
other Party under this Agreement.

 

1.45 “Initial FHT Exclusivity Period” is defined in Section 2.9.

 

1.46 “Initial Term” is defined in Section 2.8.

 

1.47 “Initiation” means, with respect to a Phase III Clinical Trial, the
administration of the first dose to the first patient in such Phase III Clinical
Trial.

 

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1.48 “Invention” means any process, method, composition of matter, article of
manufacture, discovery or finding that is conceived and/or reduced to practice
in the course of the activities of the Collaboration Program, including during
the period from September 15, 2006 until the Effective Date.

 

1.49 “Joint Collaboration Program Inventions and Results” means all
Collaboration Program Inventions and Results discovered, developed or invented
jointly by employees of Merck and FHT, or others acting on behalf of Merck and
FHT.

 

1.50 “Joint Patent Rights” means all Collaboration Program Patent Rights that
claim Joint Collaboration Program Inventions and Results.

 

1.51 “Labeled Product” means any Therapeutic Product with respect to which any
Collaboration Inventions and Results are contained in the [ * ], but are not
contained in [ * ] used by Merck or its Affiliates in the United States for such
Therapeutic Product.

 

1.52 “Major Indication” means any of the following Indications: [ * ].

 

1.53 “Major Market” means any the following: United States of America, Japan,
and either (i) the European Union, in the case of EMEA centralized procedure for
drug approval, or (ii) France, Germany, Italy, the United Kingdom, or Spain, in
the case where Merck or its Affiliates does not make use of the EMEA centralized
procedure for drug approval.

 

1.54 “Marketing Authorization” means all approvals necessary from the relevant
Regulatory Authority to market and sell a Therapeutic Product or Test (including
without limitation all applicable pricing and governmental reimbursement
approvals even if not legally required to sell Product or Test in a country).

 

1.55 “Material” is defined in Section 1.4.

 

1.56 “Merck Collaboration Program Inventions and Results” means all
Collaboration Program Inventions and Results discovered, developed or invented
solely by employees of Merck, or other persons not employed by FHT acting on
behalf of Merck.

 

1.57 “Merck Collaboration Program Patents” means all Collaboration Program
Patent Rights that claim Merck Collaboration Program Inventions and Results.

 

1.58 “Merck Independent Inventions and Improvements” means (a) Merck-Controlled
compounds (including Merck NCEs), methods of treatment, analysis technology,
clinical specimens (other than Biological Samples and Data), biomarkers, and
assays; (b) any improvements on the same created under the Collaboration Program
or independent of the Collaboration Program but after the Original Effective
Date; and (c) Merck (including Affiliate) patents, patent applications, and know
how covering any of the foregoing.

 

1.59 “Merck NCE” means any Merck-Controlled Profiled Compound that has not
received FDA approval for sale as a human use product at the time it is studied
in the Collaboration Program.

 

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1.60 “NDA” means a New Drug Application, Biologics License Application, or
Marketing Application Authorization, or similar application or submission for
Marketing Authorization filed with a Regulatory Authority to obtain marketing
approval for a biological, pharmaceutical or diagnostic product in country or in
group of countries within the jurisdiction of the Regulatory Authority.

 

1.61 “Non-Cardiovascular Device” means a Device other than a Cardiovascular
Device.

 

1.62 “Original Agreement” is defined in the preamble.

 

1.63 “Original Effective Date” is defined in the preamble.

 

1.64 “Original Agreement Period” means the period between the Original Effective
Date and the Effective Date.

 

1.65 “Party” means Merck or FHT, and “Parties” shall mean Merck and FHT.

 

1.66 “Patent Rights” means both the FHT Collaboration Program Patent Rights and
FHT’s interest in the Joint Collaboration Program Patent Rights.

 

1.67 “Permitted Cardiovascular Applications or Indications” is defined on
Attachment B, but expressly excludes de novo atherosclerosis and acute coronary
syndrome.

 

1.68 “Person” means any individual or corporation, partnership, trust,
incorporated or unincorporated association, joint venture, limited liability
company, or joint stock company.

 

1.69 “Phase III Clinical Trial” means a human clinical trial that is pivotal to
Filing and satisfies the requirements of 21 CFR 312.21(c).

 

1.70 “Phase III Ready” means that a drug has completed [ * ].

1.71 “Product” means each of the Dose Ranging Product, Labeled Product and
Enhanced Labeled Product, and each “Products” means all such products,
collectively. “Product” also includes any Combination Product.

 

1.72 “Product Net Sales” means the gross invoice price of Product sold by Merck,
its Affiliates and their respective sublicensees to the first Third Party after
deducting, if not previously deducted, from the amount invoiced or received:

 

  1.72.1   trade and quantity discounts other than early pay cash discounts;

 

  1.72.2   returns, rebates, chargebacks and other allowances;

 

  1.72.3   the standard inventory cost of devices or delivery systems used for
dispensing or administering Product (such as syringes or inhalation devices, but
not packaging);

 

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  1.72.4   sales commissions paid to Third Party distributors and/or selling
agents, in amounts customary to the trade and to the extent allocable to the
Product;

 

  1.72.5   retroactive price reductions that are actually allowed or granted;
and

 

  1.72.6   a fixed amount equal to [ * ] to cover bad debt, sales or excise
taxes, early payment cash discounts, transportation and insurance, custom
duties, and other governmental charges.

With respect to sales of Combination Products, Net Sales shall be calculated on
the basis of the gross invoice price of Product(s) containing the same strength
of Profiled Compound sold, without other active ingredients. If the Therapeutic
Product contained within any Product is not sold separately, Net Sales shall be
calculated on the basis of the gross invoice price of the Combination Product
multiplied by a fraction, the numerator of which shall be the [ * ] and the
denominator of which shall be the [ * ] in the Combination Product. Inventory
cost shall be determined in accordance with Merck’s regular accounting methods,
consistently applied. The deductions set out in Sections 1.72.1 through 1.72.6
will be applied in calculating Net Sales for a Combination Product. If Product
is sold only as a Combination Product and either Party reasonably believes that
the calculation set forth in this paragraph does not fairly reflect the value of
the Product relative to the other active ingredients in the Combination Product,
the Parties shall negotiate, in good faith, other means of calculating Net Sales
with respect to Combination Products

 

1.73 “Profiled Compound” means any chemical compound (including but not limited
to small molecules, proteins, antibodies and therapeutic nucleic acids): (a) for
which Biological Samples and Data is generated concerning such compound’s
effectiveness; or (b) the discovery, identification or development of which
utilizes or is based upon Collaboration Program Inventions and Results.

 

1.74 “Project Leader” is defined in Section 2.2.1.

 

1.75 “Project Manager” is described in Section 2.2.2.

 

1.76 “Promotional Material” means any material for promotion of a Therapeutic
Product in the United States that Merck prepares and that it is required to
submit to DDMAC on FDA transmittal Form 2253 (pursuant to 21 CFR 314.81) for a
Therapeutic Product, including brochures, booklets, detailing pieces,
advertisements published in journals, magazines, other periodicals and
newspapers, or broadcast through media such as radio, television, and telephone
communications systems, to the extent Merck (or its Affiliate) has approved and
obtains FDA approval for same for use in the United States.

 

1.77 “Prospective Registry” means the tissue and data collection registry
created under the Collaboration Program, as more fully described in
Section 2.4.2.

 

1.78

“Regulatory Authority” means the FDA, EMEA, and, with respect to Japan, the
Japanese governmental regulatory authority involved in granting approvals for
the

 

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manufacturing, marketing, reimbursement and/or pricing of a Product or Test in
the Japan, and any successor governmental authority having substantially the
same function.

 

1.79 “Restatement Date” is defined in the preamble.

 

1.80 “Restenosis Drug” means a [ * ] therapy directed to [ * ].

 

1.81 “Sample Criteria” is defined in Section 2.4.4.

 

1.82 “Securities Act” has the meaning given such term in the Stock Purchase
Agreement.

 

1.83 “Significant Event” is described in Section 8.2.1 (c).

 

1.84 “Stock Purchase Agreement” is defined in the Preamble.

 

1.85 “Tail Period” means the [ * ] month period immediately following the end of
the Collaboration Program Term.

 

1.86 “TALON Registry” means: (a) FHT’s multi-center registry designed to capture
and archive patient outcomes data, as well as all biological material, such as
excised plaque using FHT technology, and (b) any and all de-identified
patient-related clinical and demographic data corresponding to such biological
material, as well as any genetic, and genomic data associated with such
collections. TALON Registry is further described in Attachment C.

 

1.87 “Territory” means all of the countries in the world, and their territories
and possessions.

 

1.88 “Test” means (a) a prognostic test [ * ], to the extent such test was
developed, discovered or identified by Merck using, or incorporates,
Collaboration Program Inventions and Results; and/or (b) a diagnostic test [ *
]; and/or (ii) [ * ]; to the extent such test was developed, discovered or
identified by Merck using, or incorporates, Collaboration Program Inventions and
Results.

 

1.89 “Test Net Sales” mean the gross invoice price of Tests sold by Merck, its
Affiliates and their respective sublicensees to the first Third Party after
deducting, if not previously deducted, from the amount invoiced or received:

 

  1.89.1   trade and quantity discounts other than early pay cash discounts;

 

  1.89.2   allowances actually credited to such Third Party for spoiled,
damaged, outdated or returned Tests; and

 

  1.89.3   a fixed amount equal to [ * ] of the amount invoiced to cover bad
debt, sales or excise taxes, early payment cash discounts, transportation and
insurance, custom duties, and other governmental charges.

 

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  If Merck sells a Test in the form of kit containing items developed,
discovered or identified by Merck using Collaboration Inventions and Results,
together with other diagnostic or prognostic items that were developed,
discovered or identified without the use of Collaboration Invention and Results,
the Parties shall negotiate, in good faith, other means of calculating Net Sales
with respect to such Test kits to fairly reflect the value of the Collaboration
Inventions and Results relative to the other items in the Test kit.

 

1.90 “Therapeutic Product” means any pharmaceutical or biological preparation in
final form containing a Profiled Compound for: (a) sale by prescription,
over-the-counter or any other method; or (b) administration to human patients in
a Phase III Clinical Trial.

 

1.91 “Third Party” shall mean an entity other than Merck and its Affiliates, and
FHT.

 

1.92 “Valid Product Patent Claim” means a claim of an issued and unexpired
Merck-Controlled patent claiming the composition of matter of a Product which
claim has not been revoked or held unenforceable or invalid by a decision of a
court or other governmental agency of competent jurisdiction, and which decision
is not appealable or has not been appealed within the time allowed for appeal,
and which claim has not been disclaimed, denied or admitted by Merck to be
invalid or unenforceable through reissue, re-examination or disclaimer or
otherwise.

 

1.93 “Valid Test Patent Claim” means a claim of an issued and unexpired claim
within the Collaboration Program Patents Right which claim has not been revoked
or held unenforceable or invalid by a decision of a court or other governmental
agency of competent jurisdiction, and which decision is not appealable or has
not been appealed within the time allowed for appeal, and which claim has not
been disclaimed, denied or admitted by Merck to be invalid or unenforceable
through reissue, re-examination or disclaimer or otherwise.

ARTICLE 2 COLLABORATION PROGRAM.

 

2.1 General. FHT and Merck shall engage in and conduct the Collaboration Program
on the terms and subject to the conditions set out in this Agreement. Merck
shall be responsible for providing the overall direction of the Collaboration
Program, and all Collaboration Program activities shall require the prior
approval of Merck. In the event of disputes between the FHT and Merck with
respect to the implementation of Collaboration Program activities, FHT will have
final decision-making authority with respect to the methods and procedures for
harvesting and collecting of tissue, and Merck shall have the final
decision-making authority with respect to all other matters, subject to any and
all provisions in this Agreement that explicitly require FHT’s consent or
approval of particular decisions.

 

2.2 Collaboration Program Oversight and Management.

 

  2.2.1

  Project Leaders. The project leaders (“Project Leaders”) for the Collaboration

 

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Program are [ * ] for FHT, and [ * ] for Merck. The Project Leaders shall have
responsibility for providing day-to-day direction and oversight of the
Collaboration Program, documenting Collaboration Program assignments and
results, and presenting each of the Parties with periodic progress reports (but
no less than once per Calendar Quarter) describing the work performed and the
results achieved to date on the Collaboration Program. Each Party is entitled to
designate a replacement Project Leader reasonably acceptable to the other Party,
but shall notify the other Party in writing as soon as practicable upon the
changing of its Project Leader.

 

  2.2.2 Project Manager. Following the Effective Date, Merck shall have the
right to designate a Merck employee to serve as the project manager (the
“Project Manager”) of the Collaboration Program. The Project Manager shall
coordinate day-to-day Collaboration Program activities, track expenses incurred
in the performance of Collaboration Program activities against the established
Collaboration Program Budget for such activities, provide the Project Leaders
with reports on such expenses on a quarterly basis, or more frequently as the
Parties may agree, and make recommendations to the Project Leaders with respect
to the operation of the Collaboration Program.

 

  2.2.3 Alignment Committee. Promptly following the Effective Date, the Parties
will establish a joint committee (the “Alignment Committee”) with equal
representation from FHT and Merck of no less than two representatives each (who
may be substituted or replaced by alternates at any time). The Alignment
Committee will act as a non-decision making forum for periodic review,
assessment and discussions concerning the progress of the Collaboration Program,
and is intended to provide the Parties with an opportunity to draw on each
other’s experience and knowledge relevant to the Collaboration Program. The
Alignment Committee will meet in accordance with schedule established by mutual
agreement of the Parties, but at least twice per Contract Year during the
Collaboration Program Term, with the location for such meetings alternating
between Merck and FHT facilities (or such other location as may be determined by
the Alignment Committee. Alternatively, the Alignment Committee may meet by
means of teleconference, videoconference or other communication equipment.

 

2.3 General Collaboration Program Responsibilities.

 

  2.3.1

FHT will have the obligation to conduct all Collaboration Program activities
reasonably requested by Merck, and to use commercially reasonable efforts to
conduct such activities within the timeframes reasonably requested by Merck,
provided that Merck complies with its funding obligations in accordance with
Section 5.3. Notwithstanding the foregoing, any request by Merck that FHT
perform Collaboration Program activities shall be subject to FHT’s consent, not
to be unreasonably withheld, only to the extent FHT in good faith determines
that performing such activities within the requested timeframe would not be
practicable due to availability of appropriate FTEs. It is understood and agreed

 

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that FHT in no way guarantees the scientific results of any activities conducted
under the Collaboration Program. FHT and Merck each shall conduct its
Collaboration Program obligations and activities in good scientific manner, and
in compliance in all material respects with all requirements of applicable laws,
rules and regulations and attempt to achieve their respective objectives
efficiently and expeditiously. FHT and Merck shall each proceed diligently with
the work under the Collaboration Program by using its respective good faith
efforts to allocate sufficient time, effort, equipment and facilities to the
activities assigned to each Party under the Collaboration Program. Merck and FHT
shall each use personnel with sufficient skills and experience as are required
to accomplish the Collaboration Program in accordance with the terms of this
Agreement.

 

  2.3.2 Merck is entitled to utilize the services of its Affiliates and Third
Parties to perform its Collaboration Program activities; provided that Merck
shall notify in writing FHT periodically as to the identify of any such Merck
Affiliates and Third Parties to the extent not previously disclosed to FHT. FHT
shall be entitled to utilize the services of Third Parties to perform its
Collaboration Program activities only upon Merck’s prior written consent.
Notwithstanding any such consent or pre-approval, both Parties shall remain at
all times fully liable for its respective responsibilities under the
Collaboration Program. Each Party certifies that it has not, and will not,
employ or otherwise use in any capacity the services of any person debarred
under United States law, including but not limited to Section 21 USC 335a, in
performing any portion of its Collaboration Program responsibilities.

 

2.4 Specific Collaboration Program Responsibilities. Without limiting the
generality of the foregoing Section 2.3, the following Collaboration Program
tasks are examples of the Parties’ responsibilities under the Collaboration
Program.

 

  2.4.1 TALON Registry Biological Samples and Data. FHT shall own the TALON
Registry. During the Collaboration Program Term FHT shall be responsible for
maintaining the TALON Registry, and shall be responsible for providing access to
Merck to the Biological Samples and Data resulting from the TALON Registry.

 

  2.4.2 Prospective Registry Components. FHT shall be responsible for collecting
the components of the Prospective Registry. Merck agrees and acknowledges that
FHT has performed tasks and deliverables required of it pursuant to the Original
Agreement with respect to the deliverables owed with respect to the Prospective
Registry during the Initial Term of the Original Agreement. Following the
Effective Date, with respect to any additional Prospective Registry, FHT shall
be responsible for collecting the components of the Prospective Registry. The
Parties anticipate that the Prospective Registry will be made up of Biological
Samples and Data collected from the following sources:

 

  (a)

CPCS subjects who were not provided with any drug compounds,

 

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including any Merck NCEs;

 

  (b) TALON Registry Materials and Data that meet the Sample Criteria;

 

  (c) Peripheral arterial disease and coronary disease plaque excision
procedures conducted by or on behalf of FHT after the Original Effective Date
that do not involve the study of Profiled Compounds. This category will be made
up of Biological Samples and Data collected by physicians using FHT’s excision
devices; and

 

  (d) Carotid endarterectomy plaque excision procedures or excisions of any
other tissue excised by or on behalf of FHT after the Original Effective Date
that do not involve the study of Profiled Compounds. This category will be made
up of Biological Samples and Data collected by physicians using FHT’s excision
devices.

 

2.4.3 Ownership and Delivery of Prospective Registry Material and CPCS Samples
and Data. Notwithstanding anything to the contrary in this Agreement, Merck
shall solely own the Material contained in the Prospective Registry and the CPCS
Samples and Data. From time to time during the Collaboration Program Term as
reasonably requested by Merck and in accordance with Merck’s reasonable
instructions, FHT shall transfer to Merck the Prospective Registry Material and
the CPCS Samples and Data, along with a complete set of Data associated with
such Material.

 

2.4.4 Sample Criteria. As part of the Prospective Registry protocol, Merck and
FHT shall establish criteria (“Sample Criteria”) that Biological Samples and
Data comprising the Prospective Registry are intended to meet. Any TALON
Registry Biological Samples and Data meeting the Sample Criteria shall be
included in the Prospective Registry.

 

2.4.5 Compounds and Biological Sample Analysis.

 

  (a) Compounds. Merck shall be responsible for, and shall bear the cost of,
providing compounds to be profiled in the Collaboration Program or used in any
CPCS.

 

  (b) Collaboration Program Plaque Analysis. Merck, itself or through its
Affiliates, shall be responsible for analyzing Biological Samples and Data in an
effort to establish plaque biomarkers of atherosclerotic disease activity.
Merck’s Collaboration Program plaque analysis responsibilities, include, but are
not limited to, histology, all forms of protein and gene expression analysis,
and all forms of lipid content analysis.

 

  (c)

Non-Collaboration Program Plaque Analysis. Merck will provide up to [ * ] for
plaque analysis for the sole purpose of supporting FHT Device innovation as
permitted by Section 2.4.12 and 2.4.13. Merck shall provide

 

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such plaque analysis services [ * ]. If [ * ], Merck shall [ * ]. Merck will own
the data results of any plaque analysis Merck performs under this
Section 2.4.5(c), provided that FHT shall have the right to use the results of
such analysis solely for FHT Device innovation, regulatory filings in support of
such Device approval, and promotion of such Devices. FHT shall retain ownership
of any plaque samples analyzed by Merck under this Section 2.4.5(c).

 

2.4.6 Regulatory Matters.

 

  (a) During the Collaboration Program Term and thereafter, Merck shall be
solely responsible for, and shall bear the cost of, preparing and submitting
registration dossiers for Therapeutic Products, Products and Tests in the
Territory; provided, that Merck shall provide FHT with the regulatory reports as
described in Section 2.6.1.

 

  (b) Merck shall, by way of the Project Leaders, keep FHT periodically and
reasonably informed of Merck meetings with the FDA involving discussions of
Collaboration Program Inventions and Results in connection with milestone events
set out in Sections 5.4 and 5.5. [ * ]

 

  (c) Merck shall have sole discretion as to the regulatory strategy and
decision making for any Therapeutic Product, Product or Test; provided however,
that during the Collaboration Program Term, Merck shall consider in good faith
any and all FHT recommendations regarding regulatory strategy with respect to
the use of Collaboration Program Inventions and Results.

 

  (d) All Marketing Authorizations shall be held by and in the name of Merck (or
its Affiliates), and Merck (or its Affiliates) shall solely own all regulatory
submissions in connection therewith.

 

2.4.7 Clinical Trial Methodology. The Parties shall collaborate on efforts to:

 

  (i) study and collect Biological Samples and Data, and optimize Biological
Samples and Data handling and processing; and

 

  (ii) develop methodologies for designing and conducting clinical trials
involving [ * ]

The results of such efforts shall be deemed Collaboration Program Inventions and
Results.

 

2.4.8

Collaboration Program Clinical Studies. FHT is responsible for conducting
Collaboration Program Clinical Studies. All CPCSs must be performed under the
direction and control of Merck, in accordance with the terms of the applicable
Merck-approved study protocol. Each CPCS involving a Merck NCE shall be
performed under a separate Clinical Study Agreement based on the form of

 

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agreement attached as Attachment D to this Agreement and executed by the
appropriate parties. FHT shall conduct each CPCS in compliance with all FDA
regulations relating to Good Clinical Practice and Clinical Trials, and other
applicable regulations.

 

  (a) CPCS Protocols. Merck shall be responsible for writing all protocols for
CPCSs involving Merck NCEs and other Merck-Controlled compounds. Merck and FHT
shall determine which Party shall be responsible for writing non-Merck NCE CPCS
protocols on a case-by case basis. FHT shall be responsible for obtaining all
necessary approvals and appropriate informed consents, in writing, for the
collection of Biological Samples and Data for each CPCS. All protocols authored
by FHT shall be in writing and reviewed and approved by Merck. In addition,
Merck has the right to approve informed consents for each CPCS involving Merck
NCEs and other Merck-Controlled compounds.

 

  (b) Responsibility for CPCS Resources. Once Merck has approved a CPCS
protocol, FHT shall make available scientific and managerial personnel with
sufficient expertise and experience necessary to coordinate and conduct the
CPCS. FHT shall have the right to use a CRO to conduct a Collaboration Program
Clinical Study, provided that: (i) Merck consents in advance; (ii) the CRO
agrees to use only facilities approved in advance by Merck; (iii) the CRO is
retained by FHT pursuant to a written agreement; and (iv) the terms of such
agreement are approved by Merck (not to be unreasonably withheld). During a
given Contract Year, to the extent Merck approves the use by FHT of the services
of a CRO in the conduct of any CPCS, the Collaboration Program Budget shall be
revised in accordance with Section 5.3.1.

 

  (c) CPCS Samples and Data. FHT shall use commercially diligent efforts to
collect, pursuant to one or more CPCS, and deliver to Merck Biological Samples
and Data meeting Merck-specified quality control criteria (the “CPCS Samples and
Data”).

 

2.4.9 Agreements with Third Parties. If during the Collaboration Program Term
FHT believes that one or more Third Parties may possess skills, technology or
intellectual property of use to the Parties in the conduct of the Collaboration
Program, it shall identify such Third Party to the Merck, and Merck shall
determine in good faith whether or not it should enter into discussions with
such Third Party to collaborate with, or license intellectual property from,
such Third Party (a “Third Party Collaboration Agreement”). Without limiting the
generality of the foregoing, Merck agrees that, in the event that FHT presents
to Merck a Test business opportunity, Merck will consider such opportunity in
good faith.

 

2.4.10

Image-Enhancing Agents. Notwithstanding Section 8 of Attachment A and

 

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Section 2.9.1, if FHT, or Merck, determines that the use of Collaboration
Program Inventions and Results would be useful in the development of
Image-Enhancing Agents (non-OCT Agents), it shall so inform the other Party, and
where the Parties agree in writing, they will collaborate on the development of
such Image-Enhancing Agents. If as a result of such collaboration, Merck and FHT
develop Image-Enhancing Agents suitable for commercialization as stand-alone
products, or for sale to Third Parties to be sold into the market in combination
with other services or products of such Third Parties, all revenue generated
from the sale of such Image-Enhancing Agents would be shared on a [ * ] basis as
between Merck and FHT, and where a Third Party also contributes to such product,
as further agreed by the Parties, taking into consideration the contribution of
such Third Party. In such event, the direct costs associated with the
development of such Image-Enhancing Product would also be shared on a [ * ]
basis as between Merck and FHT, and to the extent one Party had expended funds
in excess of [ * ], the other Party would reimburse such overage costs. Merck
shall further have the right to count any amounts reimbursed to FHT for its
expenses associated with such development towards its funding requirements set
forth in Section 5.3.3. The terms of this Section 2.4.10 shall only apply to
Image-Enhancing Agents not covered by Section 2.4.11.

 

2.4.11 OCT Image-Enhancing Agents; Catheters.

 

  (a) Notwithstanding Section 8 of Attachment A and Section 2.9.1, if FHT or
Merck determines that the use of Collaboration Program Inventions and Results
would be useful in the development of Image-Enhancing Agents comprised of a
reporter, with or without a vector, for use with optical coherence tomography
(“OCT”), it shall so inform the other Party and [ * ]. Where the Parties so
agree, they will then collaborate pursuant to a separate agreement or work plan
on the development and commercialization of such Image-Enhancing Agents (“OCT
Agents”).

 

  (b) If the Parties do agree to so collaborate, and Merck and FHT develop OCT
Agents suitable for commercialization as stand-alone products, or for sale to
Third Parties to be sold into the market in combination with other services or
products of such Third Parties, all [ * ] generated from the sale of such OCT
Agents would [ * ] as between Merck and FHT. In such event, the [ * ] as between
Merck and FHT, and to the extent one Party had [ * ], the other Party would [ *
]. Merck shall further have the right to count any amounts reimbursed to FHT for
its expenses associated with such development towards its funding requirements
set forth in Section 5.3.3.

 

  (c)

If the Parties do agree to so collaborate , FHT shall also have the right to
work with a Third Party on behalf of the Collaboration Program with the sole
purpose of developing the [ * ]; provided that (i) FHT shall not have the right
to disclose Collaboration Program Inventions and Results or

 

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Merck Information to such Third Party; (ii) all plaque analysis done as part of
the FHT work with such a Third Party will [ * ]; and (iii) any such [ * ]
developed as a result of FHT’s work with such Third Party would be considered
Collaboration Program Inventions and Results arising as part of the
Collaboration Program, and [ * ] according to the negotiated agreement referred
to in Section 2.4.11(a), subject to such payments as are required to be paid to
such Third Party for its contribution to such [ * ]. [ * ] associated with such
development of the [ * ] would be [ * ] in the manner set forth above.

 

  (d) If Merck declines to so participate in the collaborative development and
commercialization of such OCT Agents with FHT, FHT would nonetheless have the
right to independently develop and commercialize such OCT Agents, either by
itself or with one or more Third Parties, subject to Section 2.4.11(e) and to
the remainder of this Section 2.4.11(d). FHT shall not have the right to use
Collaboration Inventions and Results in connection with the development and/or
commercialization of such OCT Agent, without the express written approval of
Merck. Any such approval would only be for [ * ], and in no event shall FHT have
the right to disclose Collaboration Program Inventions and Results to any Third
Party. If FHT obtains Merck’s approval for the proposed use of Collaboration
Inventions and Results, and FHT develops an OCT Agent suitable for
commercialization, Merck would be entitled to [ * ] arising from the sale of
such OCT Agents if the development and/or commercialization of such OCT Agents
made use of any Collaboration Program Inventions and Results. Taking into
consideration the contribution of such Collaboration Program Inventions and
Results in the development and/or commercialization of the resulting OCT Agent,
Merck and FHT would negotiate in good faith the exact [ * ] Merck would have the
right to receive under this Section 2.4.11(d).

 

  (e) If, after Merck declines to so participate in the collaborative
development and commercialization of such OCT Agents with FHT, FHT independently
develops and commercializes such OCT Agents, either by itself or with one or
more Third Parties, without the use of Collaboration Program Inventions and
Results, Merck shall [ * ] arising from the sale of such OCT Agents.

 

  (f) It is expressly understood that [ * ] on the development of OCT Agents,
but that [ * ]. In addition, during such time as Merck and FHT have an active
program ongoing with respect to the development and commercialization of an OCT
Agent, [ * ]. For clarity, the foregoing sentence [ * ]. Merck shall also [ * ],
provided Merck [ * ], and [ * ] in such work. If [ * ] (meaning that [ * ]), FHT
will notify Merck accordingly and Merck would no longer be subject to the
obligations set forth in this Section 2.4.11(e).

 

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  (g) In addition if Merck desires to use an OCT catheter in connection with the
testing, development or use of a Merck drug, and FHT owns or controls at such
time an FDA-approved, and commercially available diagnostic OCT catheter, then [
* ] any Third Party with respect to the use of such Third Party’s OCT catheter.

 

2.4.12 Delivery of Non-Oral Drugs by Device to Improve Clinical Performance of
Non-Cardiovascular Devices. As set forth in Section 2.9.2, FHT shall have the
right to identify and use non-orally delivered drugs for local, non-systemic
delivery by a Device in order to improve the clinical performance of any
Non-Cardiovascular Device (“Non-Cardiovascular Device Drugs”) and to develop
such combination product of a Non-Cardiovascular Device and Non-Cardiovascular
Device Drug, subject at all times to the terms of this Section 2.4.12. If FHT
desires to work with one or more Third Parties to identify and/or develop such
Non-Cardiovascular Device Drugs (each such effort, a “Drug Delivery
Opportunity”), FHT shall not have the right to so proceed with such Third Party
without the consent of Merck, such consent not to be unreasonably withheld.
Merck shall consider such Drug Delivery Opportunity in good faith. Examples of
scenarios where it would be [ * ], would include, but not be limited to, the
following:

 

  (a) the drug which is the subject of such Drug Delivery Opportunity [ * ].

 

  (b) The non-oral drug which is the subject of such Drug Delivery Opportunity [
* ].

 

  (c) The Third Party proposed by FHT for such Drug Delivery Opportunity is [ *
].

 

  (d) FHT’s work on such Drug Delivery Opportunity would [ * ] under the
Collaboration Program, as determined by [ * ].

 

2.4.13 Delivery of Non-Oral Drug via Cardiovascular Device to Improve Clinical
Performance of Cardiovascular Device. As set forth in Section 2.9.2, FHT shall
have the right to identify and use non-orally delivered drugs for local,
non-systemic delivery by a Device in order to improve the clinical performance
of any Cardiovascular Device for use in a Permitted Cardiovascular Application
or Indication (“Cardiovascular Device Drugs”) and to develop the combination
product of a Cardiovascular Device and Cardiovascular Device Drugs, subject at
all times to the terms of this Section 2.4.13. If FHT desires to work with one
or more Third Parties to identify and develop Cardiovascular Device Drugs, FHT
first shall so inform Merck, and the following will apply:

 

  (a) If Merck at such time Controls a drug [ * ], which drug either (i) has
been [ * ] or (ii) is [ * ] but either is [ * ], then, should Merck desire to [
* ], FHT will [ * ], on [ * ], prior to [ * ].

 

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  (b) If (i) Merck at such time Controls no drug which meets the criteria set
forth in Subsection 2.4.12(a) above, or (ii) if Merck and FHT proceed with
respect to a Merck-Controlled drug as provided under Section 2.4.12(a), [ * ],
then in either case, FHT shall have the right to proceed with a Third Party with
respect to the development and commercialization of a Cardiovascular Device Drug
if such Third Party owns or controls either:

 

  (i) a drug in the same class as the proposed [ * ], or

 

  (ii) an unapproved drug in the same class that is [ * ].

 

  2.4.14 De Novo Atherosclerosis Drugs. FHT is not entitled to work with Third
Parties to develop drugs for the treatment of de novo atherosclerosis, including
the treatment of acute coronary syndrome, unless and until agreed to by Merck.

 

2.5 FHT Representations Regarding Use of Biological Samples and Data.

With respect to any Biological Samples and Data that have been or are to be
collected by FHT and provided by FHT for use in the Collaboration Program, FHT
represents, warrants and covenants (i) that it has complied, or shall comply,
with all applicable laws, guidelines and regulations relating to the collection
and/or use of the Biological Samples and Data and (ii) that it has obtained, or
shall obtain, all necessary approvals and appropriate informed consents, in
writing, for the collection and/or use of such Biological Samples and Data in
the manner contemplated under this Agreement. FHT shall provide documentation of
such approvals and consents upon Merck’s request. FHT further agrees that such
Biological Samples and Data may be used as contemplated in this Agreement
without any obligations to the individuals or entities (“Providers”) who
contributed the Biological Samples and Data, including, without limitation, any
obligations of compensation to such Providers or any other Third Party for the
intellectual property associated with, or commercial use of, the Biological
Samples and Data.

 

2.6 Records and Reports.

 

  2.6.1 Records. FHT and Merck shall maintain records, in sufficient detail and
in good scientific manner appropriate for patent and regulatory purposes, which
shall fully and properly reflect all work done and results achieved in the
performance of the Collaboration Program by FHT and Merck, respectively,
provided, however, Merck is entitled to mask or de-identify all Merck Excluded
Merck Compound Rights. FHT will transfer all CPCS data to Merck’s clinical trial
data base, in accordance with procedures to be established by the Parties. In
addition, during and after the Collaboration Program Term, Merck shall provide
FHT with periodic reports fully and properly reflecting the use of Collaboration
Program Inventions and Results in connection with milestone events set out in
Sections 5.4 and 5.5.

 

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  2.6.2 Copies and Inspection of Records. Merck shall have the right, during
normal business hours and upon reasonable notice, to inspect and copy all such
records of FHT referred to in Section 2.6.1, and shall maintain such records and
the information disclosed therein in confidence in accordance with Section 4.1.
Each Party shall have the right to arrange for its employees and/or consultants
involved in the activities contemplated hereunder to visit the offices and
laboratories of the other Party during normal business hours and upon reasonable
notice, and to discuss the Collaboration Program work and its results in detail
with the appropriate technical personnel.

 

2.7 Rights to Collaboration Program Inventions and Results. The entire right,
title and interest in:

 

  2.7.1 FHT Independent Inventions and Improvements shall be owned solely by
FHT;

 

  2.7.2 Merck Independent Inventions and Improvements and Excluded Merck
Compound Rights shall be owned solely by Merck;

 

  2.7.3 FHT Collaboration Program Inventions and Results shall be owned solely
by FHT, and are subject to Merck’s exclusive license rights under Section 3.1.3;

 

  2.7.4 Merck Collaboration Program Inventions and Results shall be owned solely
by Merck, and are subject to FHT’s non-exclusive license rights under
Section 3.2; and

 

  2.7.5 Joint Collaboration Program Inventions and Results shall be owned
jointly by FHT and Merck, and together with FHT’s joint interest in such Joint
Collaboration Program Inventions and Results, are subject to Merck’s exclusive
license rights under Section 3.1.3.

Inventorship will be determined in accordance with the United States laws of
inventorship.

 

2.8 Collaboration Program Term. The initial term of the Collaboration Program
(the “Initial Term”) means the period starting on the Original Effective Date
and ending on the fourth anniversary of the Effective Date, subject to early
termination as provided in Article 8. Merck shall have the right, in its sole
discretion, to extend the term of the Collaboration Program for additional
12-month periods by notifying FHT in writing of its decision to extend at least
thirty (30) days before the end of the then current term. The Initial Term and
subsequent extension terms (if exercised by Merck) are collectively referred to
as the “Collaboration Program Term.” Notwithstanding the foregoing, no extension
of the Collaboration Program Term pursuant to this Section 2.8 shall be
permitted to the extent it would extend the end of the Collaboration Program
Term beyond the fifteenth (15th) anniversary of the Effective Date.

 

2.9 Exclusive Efforts and Exceptions.

 

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2.9.1 Exclusive Field Activities; FHT Exclusivity Period.

 

  (a) During the FHT Exclusivity Period (as defined below), neither FHT nor its
Down-Stream Affiliates will conduct, either itself or themselves, or with or
through any Third Party, any Exclusive Field Activity other than pursuant to the
Collaboration Program; provided, however, that to the extent FHT acquires a
Person who becomes a Down-Stream Affiliate and at the time of such acquisition,
such Person was conducting one or more Exclusive Field Activities, FHT shall not
be in breach of this Section 2.9.1(a) provided that it [ * ], or [ * ] of such
acquisition transaction.

 

  (b) The “FHT Exclusivity Period” shall mean the period starting on the
Original Effective Date and ending on the fourth anniversary of the Effective
Date, provided, however, that if Merck elects to extend the term of the
Collaboration Program beyond the Initial Term as provided in Section 2.8, for
such extension year, and only in such event, Merck is also entitled, in its sole
discretion, to extend the FHT Exclusivity Period, on a Contract Year-by-Contract
Year basis, for each year so extended, up to eleven (11) additional Contract
Years, by notifying FHT in writing of its decision to so as part of the
notification to FHT to extend the Collaboration Program due under Section 2.8,
and making the annual Exclusivity Maintenance Payment described in Section 5.2.3
for each such extension year. The initial FHT Exclusivity Period and subsequent
renewal terms (if and to the extent able to be exercised by Merck) are
collectively referred to as the “FHT Exclusivity Period.” Where Merck fails to
so notify FHT of its desire to extend, or fails to pay the annual Exclusivity
Maintenance Payment as provided in Section 5.3.3, FHT’s obligations under
Section 2.9.1(a) shall terminate. For clarity, extensions of the FHT Exclusivity
Period pursuant to this Section 2.9.1(b) are entirely dependent upon Merck’s
extension of the term of the Collaboration Program Term pursuant to Section 2.8.

 

  (c) In any event, following the fifteenth (15th) anniversary of the Effective
Date, FHT will no longer be obligated under the restrictions set forth in
Section 2.9.1(a).

 

  (d) As used in this Section 2.9.1, “Down-Stream Affiliate” means any Person
that FHT controls (as term is used in and construed under Rule 144 under the
Securities Act) directly, or indirectly through one or more intermediaries;
provided in no event shall a Down-Stream Affiliate be deemed to include any
Person that acquires all or substantially all of the voting stock or securities,
or assets of FHT.

 

2.9.2 Exceptions to the Exclusive Field.

 

  (a)

Notwithstanding Section 2.9.1, FHT shall have the right, either itself or

 

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with any Third Party but subject to Sections 2.4.10, 2.4.12, and 2.4.13, to
conduct any and all of the activities set forth in Attachment B – Exceptions to
the Exclusive Field, at any time.

 

  2.10 No Encumbrances. FHT shall not encumber or convey any rights to
Collaboration Program Inventions and Results or Patent Rights.

ARTICLE 3 LICENSES; EXCHANGE OF INFORMATION; DEVELOPMENT AND COMMERCIALIZATION.

 

3.1 FHT License Grants to Merck.

 

  3.1.1 License to Conduct the Collaboration Program. FHT hereby grants Merck a
non-exclusive license under FHT Independent Inventions and Improvements, for the
sole purposes of enabling Merck to conduct the Collaboration Program activities
assigned to Merck or its Affiliates under this Agreement. The foregoing license
may be sublicensed to Merck Affiliates and to Third Parties acting on behalf of
Merck.

 

  3.1.2 Exclusive Access to and Use of Biological Samples and Data. In
consideration of the fees received under the Original Agreement, FHT hereby
grants Merck and its Affiliates an exclusive, perpetual right to access, test,
profile, analyze and use all Biological Samples and Data within the TALON
Registry as Merck deems scientifically appropriate.

 

  3.1.3 Exclusive License Grant under FHT Collaboration Program Inventions and
Results.

FHT hereby grants to Merck an exclusive (even as to FHT and its Affiliates, but
subject to FHT retaining such rights as are necessary to conduct its activities
under the Collaboration Program), sublicensable license in the Territory under
the Patent Rights, the FHT Collaboration Program Inventions and Results and the
Joint Collaboration Program Inventions and Results, for any and all uses,
subject to the milestones and royalties described in Sections 5.4 and 5.5

 

  3.1.4

Non-Exclusive License Grants. If the making, having made, use, offer for sale,
sale or import by Merck, its Affiliates and sublicensees of Therapeutic Products
or Tests would infringe during the term of this Agreement a claim of issued
letters patent either in existence as of the Original Effective Date, or
claiming priority to an application in existence as of the Original Effective
Date and Controlled by FHT and which patents are not otherwise covered by the
license grant in this Article 3, FHT hereby grants to Merck, to the extent FHT
is legally able to do so, a non-exclusive, royalty-free license in the Territory
under such issued letters patent for Merck, to develop, make, have made, use,
sell, offer for sale or import Therapeutic Products, Products and Tests in the
Territory. Such non-exclusive

 

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license is sublicensable, but only to the extent the sublicensee is acting on
behalf of Merck or a Merck Affiliate.

 

3.2 Merck License Grant to FHT to Conduct the Collaboration Program. Merck
hereby grants FHT a non-exclusive license under (i) Merck Collaboration Program
Inventions and Results, (ii) Merck Collaboration Program Patents, and
(iii) Merck Independent Inventions, and Improvements for the sole purpose of
enabling FHT to conduct the Collaboration Program activities assigned to FHT
under this Agreement. The foregoing license may be sublicensed with the consent
of Merck to Third Parties (including CROs) acting on behalf of FHT.

 

3.3 No Implied Licenses. Except as specifically set forth in this Agreement,
neither Party shall acquire any license or other intellectual property interest,
by implication or otherwise, in any Information disclosed to it under this
Agreement or under any patents or patent applications owned or licensed by the
other Party or its Affiliates.

ARTICLE 4 CONFIDENTIALITY AND PUBLICATION.

 

4.1 Nondisclosure Obligation. All Information disclosed by one Party to the
other Party under this Agreement shall be maintained in confidence by the
receiving Party and shall not be disclosed to any Third Party or used for any
purpose except as set forth in this Agreement without the prior written consent
of the disclosing Party, except to the extent that such Information:

 

  4.1.1 is known by the receiving Party at the time of its receipt, and not
through a prior disclosure by the disclosing Party, as documented by the
receiving Party’s business records;

 

  4.1.2 is in the public domain by use and/or publication before its receipt
from the disclosing Party, or thereafter enters the public domain through no
fault of the receiving Party;

 

  4.1.3 is subsequently disclosed to the receiving Party, with no restrictions
on further disclosure, by a Third Party who may lawfully do so and is not under
an obligation of confidentiality to the disclosing Party;

 

  4.1.4 is developed by the receiving Party independently of Information
received from the disclosing Party, as documented by the receiving Party’s
business records;

 

  4.1.5 is disclosed to governmental or other regulatory agencies in order to
obtain patents or to gain or maintain approval to conduct clinical trials or to
market Therapeutic Products or Tests, but such disclosure may be only to the
extent reasonably necessary to obtain patents or authorizations;

 

  4.1.6

is disclosed to Affiliates, agents, consultants, and/or other Third Parties on a
need-to-know basis for purposes reasonably necessary or advisable for the
research and development, manufacturing and/or marketing of Therapeutic Product
and Test

 

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(or for such entities to determine their interest in performing such activities)
in accordance with this Agreement on the condition that such Third Parties agree
to be bound by confidentiality and non-use obligations that are no less
stringent than those confidentiality and non-use provisions contained in this
Agreement; provided, however, that the term of confidentiality for such Third
Parties shall be no less than ten (10) years; or

 

  4.1.7 is deemed necessary by counsel to the receiving Party to be disclosed to
such Party’s attorneys, independent accountants or financial advisors for the
sole purpose of enabling such attorneys, independent accountants or financial
advisors to provide advice to the receiving Party, on the condition that such
attorneys, independent accountants and financial advisors are bound by
confidentiality and non-use obligations that are no less stringent than those
confidentiality and non-use provisions contained in this Agreement.

Any combination of features or disclosures shall not be deemed to fall within
the foregoing exclusions merely because individual features are published or
available to the general public or in the rightful possession of the receiving
Party unless the combination itself and principle of operation are published or
available to the general public or in the rightful possession of the receiving
Party.

If a Party is required by law, regulation, or judicial or administrative process
to disclose Information that is subject to the non-disclosure provisions of this
Section 4.1, such Party shall promptly inform the other Party of the disclosure
that is being sought in order to provide the other Party an opportunity to
challenge or limit the disclosure obligations. Information that is disclosed by
law, regulation, judicial or administrative process shall remain otherwise
subject to the confidentiality and non-use provisions of this Section 4.1 and
the Party disclosing such Information shall take all steps reasonably necessary,
including without limitation obtaining an order of confidentiality, to ensure
the continued confidential treatment of such Information.

 

4.2

Publication. Except as may be permitted under Section 4.3, or as required to
file for and prosecute Patent Rights pursuant to Article 7, and subject to
Merck’s compliance with the terms of this Section 4.2, FHT shall not have the
right to publish or disclose information regarding Excluded Merck Compound
Rights or Collaboration Program Inventions and Results without Merck’s prior
written consent. Merck and FHT each acknowledge the other Party’s interest in
publishing the results of its research in order to obtain recognition within the
scientific community and to advance the state of scientific knowledge. Each
Party also recognizes the mutual interest in obtaining valid patent protection
and in protecting business interests and trade secret information. Consequently,
except for disclosures permitted pursuant to Section 4.1, either Party, its
employees or consultants wishing to make a publication or presentation
disclosing Collaboration Program Inventions and Results during the Collaboration
Program Term shall deliver to the other Party a copy of the proposed written
publication or an outline of a presentation at least sixty (60) days prior to
submission for publication or presentation. The reviewing Party shall have the
right (a) to propose modifications to the publication or presentation for

 

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patent reasons, or to remove trade secrets or confidential business information
or (b) to request a reasonable delay in publication or presentation in order to
protect patentable information or to protect confidential business information,
or if such proposed publication or presentation would, [ * ]. If the reviewing
Party requests a delay, the publishing Party shall delay submission or
presentation for a period of ninety (90) days to enable patent applications
protecting each Party’s rights in such information to be filed in accordance
with Article 7. Upon expiration of such ninety (90) days, the publishing Party
shall be free to proceed with the publication or presentation. If the reviewing
Party requests modifications to the publication or presentation, the publishing
Party shall edit such publication to prevent disclosure of the applicable trade
secret or confidential business information prior to submission of the
publication or presentation. Authorship of any publication shall be determined
based on the accepted standards used in peer-reviewed, academic journals at the
time of the proposed publication. Any publication or presentation made pursuant
to this Section 4.2 shall acknowledge the contributions made by the reviewing
Party.

 

4.3 Publicity/Use of Names. No disclosure of the existence, or the terms, of
this Agreement may be made by either Party, and no Party shall use the name,
trademark, trade name or logo of the other Party, its Affiliates or their
respective employees in any publicity, promotion, news release or disclosure
relating to this Agreement or its subject matter, without the prior express
written permission of the other Party, except as may be required by law or
regulation to which the Party concerned is subject, provided, that in any event
the disclosing Party shall use good faith efforts to give the non-disclosing
Party an opportunity, with reasonable advance notice, to review and comment on
any proposed disclosure, where practicable. Notwithstanding the foregoing, each
Party shall be entitled to announce the execution of this Agreement using the
press release attached as Attachment E. Neither disclosures of information for
which consent has previously been obtained, nor information of a similar nature
to that which has been previously disclosed publicly with respect to this
Agreement, will require advance approval.

 

4.4 Data Privacy and Security.

 

  4.4.1 Notwithstanding anything to the contrary in Sections 4.1 or 4.2, FHT and
Merck shall hold in confidence any data collected or produced in connection with
the Collaboration Program which identifies or could be used to identify an
individual natural person (“Personal Data”), except as required or permitted
under this Agreement, or to the extent necessary to be disclosed to regulatory
agencies as part of the review process. In addition, notwithstanding anything to
the contrary in Sections 4.1 or 4.2 or the foregoing sentence, FHT and Merck
each shall comply with all applicable laws and regulations, as amended from time
to time, with respect to the collection, use, storage, protection and disclosure
of any Personal Data, including without limitation, the Health Insurance
Portability and Accountability Act (HIPAA) and the regulations promulgated
thereunder (the “Personal Data Laws”).

 

  4.4.2

FHT and Merck agree to ensure that all appropriate technical and organizational

 

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measures are taken to protect Personal Data against loss, misuse, and any
unauthorized, accidental, or unlawful access, disclosure, alteration or
destruction, including without limitation, implementation and enforcement of
administrative, technical and physical security policies and procedures
applicable to Personal Data.

 

  4.4.3 Merck may use [ * ].

ARTICLE 5 COLLABORATION PROGRAM FUNDING, MILESTONES AND ROYALTIES

 

5.1 Original Agreement Fees; Waivers. FHT acknowledges that Merck has satisfied
in full of all of its payment obligations under Sections 5.1, 5.2 and 5.3 of the
Original Agreement, and has no further payment obligations to FHT under such
Sections. FHT hereby unconditionally and irrevocably releases Merck from and
waives any claims related thereto. Merck acknowledges that FHT has satisfied its
performance under the Initial Term of the Original Agreement and unconditionally
and irrevocably releases FHT from and waives any claims related to FHT’s
performance under the Original Agreement.

 

5.2 Exclusivity Fees.

 

  5.2.1 As consideration for FHT’s exclusive efforts in the Exclusive Field, in
accordance with Section 2.9, Merck shall make a one-time upfront payment of ten
million dollars ($10,000,000.00) no later than thirty (30) days after the
Effective Date, and additional ten million dollar ($10,000,000.00) payments on
each of the 1st, 2nd, and 3rd anniversaries of the Effective Date.

 

  5.2.2 If, in accordance with Section 2.9, Merck has the right, and does
exercise its right to extend the FHT Exclusivity Period for one or more
additional Contract Years beyond the Initial FHT Exclusivity Period, as
consideration for FHT’s exclusive efforts in the Exclusive Field for each such
extension year of the FHT Exclusivity Period, Merck shall pay to FHT the greater
of (i) ten million dollars ($10,000,000.00); or (ii) all royalties and
milestones due under the Agreement for each such Contract Year (the “Exclusivity
Maintenance Payment”). Each or any such annual Exclusivity Maintenance Payment
shall be paid in advance of the Contract Year to which it applies, and no later
than the applicable anniversary of the Effective Date. Any royalties and
milestones due under the Agreement for a Contract Year during an extension of
the Exclusivity Period by Merck in accordance with Section 2.9 shall only be
paid to the extent that such royalties and milestones exceed ten million dollars
($10,000,000.00) in the aggregate for such Contract Year.

 

  5.2.3

If in any Contract Year following the expiration of the Initial FHT Exclusivity
Period Merck does not pay FHT the applicable annual Exclusivity Maintenance
Payment, the FHT Exclusivity Period shall end, and FHT will no longer be subject
to the obligations set forth in Section 2.9.1. Expiration of the FHT

 

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Exclusivity Period shall not otherwise impact the rights and obligations of the
Parties under this Agreement.

 

  5.2.4 Merck shall in no event be entitled to extend the FHT Exclusivity Period
beyond the 15th anniversary of the Effective Date.

 

5.3 Collaboration Program Budget and Funding.

 

  5.3.1 Promptly following the Effective Date, and thereafter in advance of the
start of each subsequent Contract Year during the Collaboration Program Term,
the Project Leaders will develop a written budget in support of all
Collaboration Program activities to be conducted under this Agreement for such
Contract Year (a “Collaboration Program Budget”), and submit such Collaboration
Program Budget to Merck for its review, comment and [ * ]. The Collaboration
Program Budget shall reflect all estimated Collaboration Program costs for such
upcoming Contract Year ([ * ]), including the number FHT FTEs assigned to the
Collaboration Program for such period, and the [ * ]. FTE costs will be budgeted
at the FTE Rate, plus [ * ]. Non-FTE related Collaboration Program costs
incurred by FHT will also incur [ * ], provided, however the [ * ]. For the
purposes of this Section 5.3.1, [ * ] are defined as:

 

  (1) [ * ].

 

  (2) [ * ].

 

  (3) [ * ].

 

  5.3.2 In accordance with each such annual Collaboration Program Budget, Merck
will provide FHT with funding at [ * ] for Collaboration Program activities to
be performed during such [ * ]. Collaboration Program funding unspent at the end
of any Calendar Quarter will be applied towards the next [ * ]. If, in carrying
out its Collaboration Program activities in a Calendar Quarter, FHT incurs
expenses in excess of the Collaboration Program funding received by FHT for such
[ * ], FHT will so notify Merck (via the Project Manager), and to the extent
such excess expenses were approved by Merck, Merck will pay FHT a [ * ] equal to
such [ * ] after FHT incurs such approved expense. Merck will not be responsible
for providing any Collaboration Program funding for activities taking place
before the Effective Date. In addition, FHT shall reimburse Merck for any
unspent Collaboration Program funding upon a termination of the Agreement.

 

  5.3.3

Merck agrees to conduct the Collaboration Program and, through the Collaboration
Program Budget, provide Collaboration Program funding to FHT for a period of at
least four (4) Contract Years from the Effective Date. In each Contract Year of
the initial 3-year period following the Effective Date, the Collaboration
Program funding payable to FHT under the Collaboration Program Budget shall not
fall below [ * ] per Contract Year and not less than sixty million

 

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dollars ($60,000,000.00) over such 3 year collaboration period. In Contract Year
4 of such 4-year period (and in any subsequent Contract Year thereafter during
the Collaboration Program Term), Merck shall not be obligated to fund a
guaranteed level of funding, but would be limited to those costs and expenses
actually incurred by FHT (including the mark-up described in Section 5.3.1) in
accordance with the Collaboration Program Budget. Merck is entitled to extend
the Collaboration Program Term beyond this four year period, on a Contract Year
by Contract Year basis as provided in Section 2.8. FHT’s obligation to perform
Collaboration Program activities and Merck’s obligation to fund Collaboration
Program activities as described in this Section 5.3.3 would continue in any
extension of the Collaboration Program Term. The obligation of Merck to provide
FHT with the minimum amount of Collaboration Program funding described in this
Section shall no longer apply in the event that Merck, in good faith, determines
that FHT has [ * ], but only if such [ * ] either (a) is the result of [ * ] or
(b) such [ * ] in a given Contract Year. In such event, Merck’s Collaboration
Program funding obligations would be limited to those costs and expenses [ * ]
in accordance with the Collaboration Program Budget.

 

  5.3.4 FHT will keep (and cause its agents performing Collaboration Program
services to keep) true, accurate and complete records of costs and expenses in
sufficient detail to permit determination of the costs of such goods and
services, and will supply the Project Manager with evidence of such costs to
enable the Project Manager to monitor and report on such expenses. In addition,
at the request of Merck, FHT will permit Merck or its independent certified
accountants to have access during ordinary business hours to such of FHT’s
records (and records of its agents) as may be necessary to substantiate the
accuracy or appropriateness of the expenses charged to Merck and the conformance
of such expense to the Collaboration Program Budget. If there is a dispute
between Merck and FHT concerning the accuracy or appropriateness of the charges
for Collaboration Program services and materials charged by FHT, a Party may
submit the dispute to arbitration by a mutually agreed-upon accounting firm. If
the Parties cannot agree upon the selection of such accounting firm within [ * ]
of notice of the intention to submit such dispute to arbitration, the selection
shall, upon application of either Party, be made by the President of the
American Arbitration Association.

 

5.4 Therapeutic Product Development Milestones. Merck shall pay FHT the
following amounts no later than thirty (30) days following completion of the
following Product development milestones:

 

  (a) Therapeutic Product Milestone 1: Merck will make a milestone payment to
FHT on [ * ] for each Therapeutic Product, [ * ], if Merck included [ * ] in the
[ * ] it submitted to the FDA for such [ * ]. The milestone payable is:

 

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  (i) [ * ] if the [ * ] included in the [ * ] are [ * ] in support of [ * ] for
that Therapeutic Product’s entry into [ * ]; or

 

  (ii) [ * ] if the [ * ] included in the [ * ] do not provide support for [ *
].

 

  (b) Therapeutic Product Milestone 2: Merck will pay a milestone of [ * ] on [
* ] of the [ * ] for each Therapeutic Product with a Major Indication in the
first Major Market, if [ * ] are included in that [ * ].

 

  (c) Therapeutic Product Milestone 3: Merck will pay a milestone of [ * ] on
the [ * ] for each Therapeutic Product with a Major Indication in the first
Major Market, if [ * ] are included in that Therapeutic Product’s NDA.

 

5.5 Test Product Development Milestones.

Merck shall make the following milestone payments to FHT no later than thirty
(30) days following completion of the following Test development milestones:

 

  (a) Test Milestone 1: Merck will pay a milestone of [ * ] to FHT on [ * ] in
the first Major Market.

 

  (b) Test Milestone 2: Merck will pay a milestone of [ * ] to FHT on [ * ] in
the first Major Market.

 

5.6 Therapeutic Product and Test Development Milestones – General. The
Therapeutic Product development milestones set out in Section 5.4 and the Test
Development milestones set out in Section 5.5 are payable [ * ], upon the [ * ]
of each such milestone by a [ * ] or a [ * ], provided, that in no event will
any milestones be payable after the [ * ] of the Original Effective Date (i.e.,
[ * ]. Different Therapeutic Products shall be differentiated based upon whether
they contain [ * ] as an [ * ] compared to another Therapeutic Product.
Different Tests shall be differentiated based upon whether they contain [ * ]
within [ * ] as compared to another Test.

For the purposes of clarity, the Parties acknowledge and agree, that Merck may
develop and commercialize [ * ] in various [ * ], or as a [ * ], and that all [
* ] of [ * ] containing the same [ * ], whether as the [ * ] or in a [ * ],
shall be considered the same [ * ] for determining any milestone payments due.

 

5.7 Royalties on Test and Product Sales. Subject to the terms and conditions of
this Agreement, Merck shall pay FHT the following royalties:

 

  (a) Royalties of Test Net Sales: [ * ] of total annual worldwide Net Sales of
Tests in the Territory.

 

  (b) Royalties of Product Net Sales: royalties calculated on [ * ] basis in an
amount equal to:

 

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  (i) Labeled Products – [ * ] of total annual worldwide Net Sales of Labeled
Product in the Territory.

 

  (ii) Dose Ranging Product – [ * ] of total annual worldwide Net Sales of Dose
Ranging Product in the Territory.

 

  (iii) Enhanced Label Products

 

  (1) [ * ] of [ * ] of each Enhanced Label Product in the Territory [ * ]; and

 

  (2) [ * ] of [ * ] of each Enhanced Label Product in the Territory [ * ].

 

5.8 Royalties – General.

 

  5.8.1 Product royalties shall be based only on the highest tier achieved
(Labeled Products, Dose Ranging Products or Enhanced Label Products); royalty
tiers are not additive.

 

  5.8.2 Royalty Term:

 

  (a) Test Royalty Term. A royalty shall be payable with respect to a Test in a
given country in the Territory only as of the date of First Commercial Sale of
such Test in such country, and shall end upon the expiration of the later of:
(i) the last-to-expire issued Valid Test Patent Claim on such Test in such
country or (ii) [ * ] from First Commercial Sale of such Test in such country,
provided, however that in no event will any royalties be payable on Net Sales of
Tests occurring after [ * ].

 

  (b) Product Royalty Term. A royalty shall be payable with respect to a Product
in a given country in the Territory only as of the date of First Commercial Sale
of such Product in such country, and end upon the expiration of the later: of
(i) the expiration date of the last-to-expire issued Valid Product Patent Claim
on such Product in such country or (ii) [ * ] from First Commercial Sale of such
Product in such country; provided, however that in no event will any royalties
be payable on Net Sales of any Product occurring after [ * ].

 

  5.8.3 Conditions on Payment of Royalties. All royalties are subject to the
following conditions:

 

  (a) that only one (1) royalty shall be due in accordance with Section 5.7 with
respect to the same unit of Product or Test;

 

  (b)

that no royalties shall be due upon the sale or other transfer among Merck, its
Affiliates or sublicensees of Products or Test, but in such cases the

 

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royalty shall be due and calculated upon Merck’s or its Affiliate’s or its
sublicensee’s Net Sales to the first independent Third Party; and

 

  (c) no royalties shall accrue on the disposition of any Product or Test in
reasonable quantities by Merck, its Affiliates or sublicenses as samples
(promotion or otherwise), as donations (for example, to non-profit institutions
or government agencies for a non-commercial purpose), or for use in a clinical
trial.

 

  5.8.4 Compulsory Licenses. If a compulsory license is granted to a Third Party
with respect to any Product in any country in the Territory with a royalty rate
lower than the royalty rate provided by Section 5.7, then the royalty rate to be
paid by Merck on Net Sales in that country under Section 5.7 shall be reduced to
the rate paid by the compulsory licensee.

 

5.9 Reports; Payment of Royalty. During the term of this Agreement following the
First Commercial Sale of a Product or Test, Merck shall furnish to FHT a
quarterly written report for the Calendar Quarter showing the Net Sales of all
Products or Tests subject to royalty payments sold by Merck and its Related
Parties in the Territory during the reporting period and the royalties payable
under this Agreement. Reports shall be due on the [ * ] following the close of
each Calendar Quarter. Royalties shown to have accrued by each royalty report
shall be due and payable on the date such royalty report is due. Merck shall
keep complete and accurate records in sufficient detail to enable the royalties
payable to be determined.

 

5.10 Audits.

 

  5.10.1 Upon the written request of FHT and not more than once in each Calendar
Year, Merck shall permit an independent certified public accounting firm of
nationally recognized standing selected by FHT and reasonably acceptable to
Merck, at FHT’s expense, to have access during normal business hours to such of
the records of Merck as may be reasonably necessary to verify the accuracy of
the royalty reports hereunder for any year ending not more than [ * ] months
prior to the date of such request. The accounting firm shall disclose to FHT
only whether the royalty reports are correct or incorrect and the amount of any
discrepancy. No other information shall be provided to FHT.

 

  5.10.2 If such accounting firm correctly identifies a discrepancy made during
such period, the appropriate Party shall pay the other Party the amount of the
discrepancy within thirty (30) days of the date FHT delivers to Merck such
accounting firm’s written report so correctly concluding, or as otherwise agreed
upon by the Parties. The fees charged by such accounting firm shall be paid by
FHT.

 

  5.10.3

Merck shall include in each sublicense granted by it pursuant to this Agreement
a provision requiring the sublicensee to make reports to Merck, to keep and

 

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maintain records of sales made pursuant to such sublicense and to grant access
to such records by FHT’s independent accountant to the same extent required of
Merck under this Agreement.

 

  5.10.4 Upon the expiration of [ * ] months following the end of any year, the
calculation of royalties payable with respect to such year shall be binding and
conclusive upon FHT, and Merck and its Affiliates and sublicensees shall be
released from any liability or accountability with respect to royalties for such
year.

 

  5.10.5 FHT shall treat all financial information subject to review under this
Section 5.10 or under any sublicense agreement in accordance with the
confidentiality and non-use provisions of this Agreement, and shall cause its
accounting firm to enter into an acceptable confidentiality agreement with Merck
and/or its Affiliates and sublicensees obligating it to retain all such
information in confidence pursuant to such confidentiality agreement.

 

5.11 Payment Exchange Rate. All payments to be made by Merck to FHT under this
Agreement shall be made in United States dollars and may be paid by check made
to the order of FHT or bank wire transfer in immediately available funds to such
bank account in the United States as may be designated in writing by FHT from
time to time. In the case of sales outside the United States, the rate of
exchange to be used in computing the amount of currency equivalent in United
States dollars due FHT shall be made at the rate of exchange utilized by Merck
in its worldwide accounting system[ * ] in which such sales are recorded by
Merck.

 

5.12 Income Tax Withholding. If laws, rules or regulations require withholding
of income taxes or other taxes imposed upon payments set forth in this
Agreement, Merck shall make such withholding payments as may be required and
shall subtract such withholding payments from the payments set forth in this
Article 5. Merck shall submit appropriate proof of payment of the withholding
taxes to FHT within a reasonable period of time.

 

5.13 Sharing Certain Merck Sublicense Revenue. If Merck grants a Third Party a
license or sublicense under any Collaboration Program Patent Rights or to use
any Collaboration Program Inventions and Results to enable such Third Party
licensee to discover, identify, develop and sell any therapeutic product or any
diagnostic or prognostic test then Merck will owe to FHT a percentage of any
payments Merck receives as consideration for such license or sublicense,
including without limitation upfront fees, milestone fees, and product royalties
(“Merck Licensing Revenue”) as follows:

 

  (i) [ * ] of Merck Licensing Revenue received by Merck from the Third Party in
consideration for a license or sublicense to discover, identify, develop and
sell any therapeutic product.

 

  (ii) [ * ] of Merck Licensing Revenue received by Merck from the Third Party
in consideration for a license or sublicense to discover, identify, develop and
sell any diagnostic or prognostic test.

 

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ARTICLE 6 REPRESENTATIONS AND WARRANTIES

 

6.1 Representations and Warranties of Each Party. Each Party represents and
warrants to the other Party that as of the Restatement Date and Effective Date:

 

  6.1.1 it has the full right, power and authority to enter into this Agreement
and to perform its obligations hereunder;

 

  6.1.2 this Agreement has been duly executed by it and is legally binding upon
it, enforceable in accordance with its terms, and does not conflict with any
agreement, instrument or understanding, oral or written, to which it is a party
or by which it may be bound, nor violate any material law or regulation of any
court, governmental body or administrative or other agency having jurisdiction
over it; and

 

6.2 FHT Representations and Warranties. FHT represents and warrants to Merck
that as of the Restatement Date and Effective Date:

 

  6.2.1 it has not previously assigned, transferred, conveyed or otherwise
encumbered its right, title and interest in Collaboration Program Inventions and
Results, or the TALON Registry and the Biological Samples and Data contained
therein;

 

  6.2.2 to the best of FHT’s knowledge, it is the sole and exclusive owner of
the TALON Registry all of which are free and clear of any liens, charges and
encumbrances that would have a material effect on the Collaboration Program, and
no other Person, or governmental entity or subdivision thereof, has or shall
have any claim of ownership whatsoever with respect to the same;

 

  6.2.3 there are no judgments or settlements against or owed by FHT and no
pending (or, to the best of FHT’s knowledge, threatened) claims or litigation
relating to FHT Independent Inventions and Improvements and the TALON Registry,
and to the best of FHT’s knowledge, the presently contemplated use of FHT
Independent Inventions and Improvements under the Collaboration Program does not
infringe any intellectual property rights owned or possessed by any Third Party;
and

 

  6.2.4 FHT has disclosed to Merck all reasonably relevant information known to
FHT regarding the FHT Independent Inventions and Improvements, and the TALON
Registry.

 

  6.2.5 FHT represents and warrants that the information on its Devices provided
to Merck for the purposes of evaluating the relevance of Third Party
intellectual property by Merck is accurate and complete.

 

  6.2.6 neither FHT nor any of its Affiliates is a party to any agreement that
would conflict with, or limit in any way, FHT’s ability to perform its
obligations under this Agreement.

 

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ARTICLE 7 PATENT PROVISIONS.

 

7.1 Independent Inventions and Improvements

 

  7.1.1 FHT is solely responsible, at its sole discretion, for filing,
prosecution, maintenance, defense and enforcement of the FHT Independent
Inventions and Improvements.

 

  7.1.2 Merck is solely responsible, at its sole discretion, for filing,
prosecution, maintenance, defense and enforcement of the Merck Independent
Inventions and Improvements.

 

7.2 Filing, Prosecution and Maintenance of Collaboration Patents.

 

  7.2.1 FHT Collaboration Program Patents:

The terms of this Section 7.2.1 shall apply to all FHT Collaboration Program
Patents during the Collaboration Program Term. FHT shall be initially
responsible, at its expense, for the filing, prosecution and maintenance in the
Territory, upon appropriate consultation with Merck, of the FHT Collaboration
Program Patents. FHT shall give Merck an opportunity to review the text of any
FHT Collaboration Program Patent before filing, shall consult with Merck with
respect thereto, and shall provide Merck with a copy of any FHT Collaboration
Program Patents as filed, together with notice of its filing date and serial
number. FHT shall keep Merck advised of the status of the actual and prospective
patent filings and upon Merck’s request, shall provide advance copies of any
papers related to the filing, prosecution and maintenance of such patent
filings. FHT shall promptly give notice to Merck of the grant, lapse,
revocation, surrender, invalidation or abandonment of FHT Collaboration Program
Patents. If FHT elects not to file, prosecute or maintain a FHT Collaboration
Program Patent, FHT shall notify Merck and Merck shall have the right to file,
prosecute or maintain such FHT Collaboration Program Patent, at Merck’s sole
expense. In such event, FHT shall execute such documents and perform such acts
at FHT’s expense as may be reasonably necessary to transfer to Merck the right
to perform such filing, prosecution or maintenance.

 

  7.2.2 Merck Collaboration Program Patents: Merck is solely responsible, at its
sole discretion, for filing, prosecution, maintenance, defense and enforcement
of Merck Collaboration Program Patents.

 

7.3 Joint Collaboration Program Patents.

 

  7.3.1

Merck shall have the first right to file, prosecute and maintain Joint
Collaboration Program Patents. Merck may elect not to file, prosecute, or
maintain any Joint Collaboration Program Patents, on a country by country basis,
and if so shall notify FHT of that decision. FHT shall reply to such notice
within forty-five (45) days, indicating whether it wishes to take over filing,
prosecuting and/or

 

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maintaining of any Joint Collaboration Program Patent that is the subject of the
notice. In the absence of a reply within that forty-five (45) day period, Merck
has no further responsibility for the Joint Collaboration Patent that is the
subject of the notice. If FHT provides a notice assuming responsibility, FHT may
subsequently elect not to file, prosecute, or maintain Joint Collaboration
Program Patents, on a country by country basis, and if so shall notify Merck of
that decision. Merck shall reply to such notice within forty-five (45) days,
indicating whether it wishes to take over filing, prosecuting and/or maintaining
Joint Collaboration Program Patent that is the subject of the notice. In the
absence of a reply within that forty (45) day period, FHT has no further
responsibility for the Joint Collaboration Patent that is the subject of the
notice.

 

  7.3.2 Each Party shall execute such documents and perform such acts as
reasonably necessary for the filing, prosecution or maintenance of Joint
Collaboration Program Patents. The Party responsible for the filing, prosecution
or maintenance of a particular Joint Collaboration Program Patent (the “Filing
Party”) shall give the other Party (the “Non-Filing Party”) an opportunity to
review the text of the application before filing, shall consult with the
Non-Filing Party with respect thereto, and shall supply the Non-Filing Party
with a copy of the application as filed, together with notice of its filing date
and serial number. The Filing Party shall keep the Non-Filing Party advised of
the status of the actual and prospective patent filings and upon request, shall
provide advance copies of any papers related to the filing, prosecution and
maintenance of such patent filings. The Filing Party shall promptly give notice
of any Joint Collaboration Program Patents grant, lapse, revocation, surrender,
invalidation or abandonment.

 

  7.3.3 The Filing Party is responsible for all official fees. Each Party is
responsible for its own costs and attorney fees

 

7.4 Interference, Opposition, Reexamination and Reissue.

 

  7.4.1 Within ten (10) days of learning of any request for, or filing or
declaration of, any interference, opposition, reissue or reexamination relating
to FHT Collaboration Program Patents, FHT shall inform Merck of such event.
Merck and FHT shall thereafter consult and cooperate fully to determine a course
of action with respect to any such proceeding. Merck shall have the right to
review and approve any submission to be made in connection with such proceeding.

 

  7.4.2 FHT shall not initiate any reexamination, interference or reissue
proceeding relating to FHT Collaboration Program Patent Rights without the prior
written consent of Merck, which consent shall not be unreasonably withheld.

 

  7.4.3

In connection with any interference, opposition, reissue, or reexamination
proceeding relating to FHT Collaboration Program Patent Rights, Merck and FHT
will cooperate fully and will provide each other with any information or
assistance that either may reasonably request. FHT shall keep Merck informed of

 

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developments in any such action or proceeding, including, to the extent
permissible by law, consultation and approval of any settlement, the status of
any settlement negotiations and the terms of any offer related thereto.

 

  7.4.4 FHT shall bear the expense of any interference, opposition,
reexamination, or reissue proceeding relating to FHT Collaboration Program
Patent Rights.

 

  7.4.5 For Joint Collaboration Program Patents, the Filing Party is treated in
the same manner as FHT is treated in Sections 7.4.1-7.4.4.

 

7.5 Enforcement and Defense.

 

  7.5.1 Each Party shall give the other party notice of either (i) any
infringement of Joint Collaboration Program Patent Rights and FHT Collaboration
Program Patent Rights, or (ii) any misappropriation or misuse of Joint
Collaboration Program Inventions and Results or FHT Collaboration Program
Inventions and Results, that may come to its attention. Merck and FHT shall
thereafter consult and cooperate fully to determine a course of action,
including but not limited to the commencement of legal action by either or both
Merck and FHT, to terminate such infringement or misappropriation or misuse.
Each Party shall have the right to be represented by counsel of its own choice
and expense.

 

  (a) FHT, upon notice to Merck, shall have the first right to initiate and
prosecute legal action at its own expense and in the name of FHT and/or Merck,
or to control the defense of any declaratory judgment action relating to FHT
Collaboration Program Patent Rights or FHT Collaboration Program Inventions and
Results. FHT shall promptly inform Merck if it elects not to exercise such first
right and Merck shall thereafter have the right to either initiate and prosecute
such action or to control the defense of such declaratory judgment action in the
name of Merck and, if necessary, FHT.

 

  (b) Merck, upon notice to FHT, shall have the first right to initiate and
prosecute legal action at its own expense and in the name of FHT and/or Merck,
or to control the defense of any declaratory judgment action relating to Joint
Collaboration Program Patent Rights or Joint Collaboration Program Inventions
and Results. Merck shall promptly inform FHT if it elects not to exercise such
first right and FHT shall thereafter have the right to either initiate and
prosecute such action or to control the defense of such declaratory judgment
action in the name of FHT and, if necessary, Merck.

 

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  7.5.2 For any action to terminate any infringement under 7.5.1, if a Party is
unable to initiate or prosecute such action solely in its own name, the other
Party will join such action voluntarily and will execute and cause its
Affiliates to execute all documents necessary to initiate litigation to
prosecute and maintain such action, all at the expense (limited to out-of-pocket
costs) of the Party initiating such action. In connection with any action, Merck
and FHT will cooperate fully and will provide each other with any information or
assistance that either may reasonably request. Each Party shall keep the other
informed of developments in any action or proceeding, including, to the extent
permissible by law, consultation on and approval of any settlement, the status
of any settlement negotiations and the terms of any offer related thereto.

 

  7.5.3 Any recovery obtained by [ * ] Merck and FHT in connection with or as a
result of any action contemplated by this Section 7.5, whether by settlement or
otherwise, shall be shared in order as follows:

 

  (a) [ * ] shall recoup [ * ] of its costs and expenses incurred in connection
with the action;

 

  (b) [ * ] shall then, to the extent possible, recover [ * ] costs and expenses
incurred in connection with the action; and

 

  (c) the amount of any recovery remaining shall then be allocated between the
Parties [ * ] taking into consideration the [ * ].

 

  7.5.4 FHT shall inform Merck of any certification regarding any Patent Rights
it has received pursuant to either 21 U.S.C. §§355(b)(2)(A)(iv) or
(j)(2)(A)(vii)(IV) or its successor provisions or any similar provisions in a
country in the Territory other than the United States, and shall provide Merck
with a copy of such certification within five (5) days of receipt. FHT’s and
Merck’s rights with respect to the initiation and prosecution of any legal
action as a result of such certification or any recovery obtained as a result of
such legal action shall be as defined in Section 7.5.3 provided, however, that
FHT shall exercise its first right to initiate and prosecute any action and
shall inform Merck of such decision within ten (10) days of receipt of the
certification, after which time Merck shall have the right to initiate and
prosecute such action. Regardless of which Party has the right to initiate and
prosecute such action, both Parties shall, as soon as practicable after
receiving notice of such certification, convene and consult with each other
regarding the appropriate course of conduct for such action. The non-initiating
Party shall have the right to be kept fully informed and provide input regarding
the appropriate course of conduct for such action, and the right to join and
participate in such action using its own counsel at its expense.

 

7.6

Patent Term Restoration. The Parties hereto shall cooperate with each other,
including without limitation to provide necessary information and assistance as
the other Party may reasonably request, in obtaining patent term restoration or
supplemental protection

 

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certificates or their equivalents in any country in the Territory where
applicable to Patent Rights exclusively licensed to Merck. If elections with
respect to obtaining such patent term restoration are to be made, Merck shall
have the right to make the election, subject to good faith consultation with
FHT, and FHT agrees to abide by such election.

ARTICLE 8 TERM AND TERMINATION

 

8.1 Effectiveness and Term of Agreement.

 

  8.1.1 Term. This Agreement shall be effective as of the Effective Date and
continue in effect for the duration of the Collaboration Program Term until the
earlier termination:

 

  (a) by Merck at any time after the expiration of the Initial Term and during
the extended Contract Year where Merck has so elected to extend the
Collaboration Program under Section 2.8, in its sole discretion by giving ninety
(90) days’ advance written notice to FHT of such termination; or

 

  (b) by either Party for cause pursuant to Section 8.2.

 

  8.1.2 Effect of Unilateral Termination by Merck. Upon the expiration and
non-renewal of the Collaboration Program Term, or if the Collaboration Program
Term is terminated by Merck pursuant to Section 8.1.1(a), then:

 

  (a) Merck retains its exclusive licenses to Biological Samples and Data within
the TALON Registry under Section 3.1.2, and Collaboration Program Inventions and
Results under Section 3.1.3, and the non-exclusive license under Section 3.1.4,
subject to the payment of milestones and royalties, if any, by Merck in
accordance with Article 5.

 

  (b) FHT’s licenses pursuant to Section 3.2 from Merck shall terminate.

 

  (c) The provisions of Section 2.4.6, 2.6.1 (last two sentences only), and
Sections 5.4-5.13 shall survive such termination, in addition to those sections
which survive pursuant to Section 8.3.

 

  (d) Except as specified in this Section 8.1.2 and the surviving obligations
specified in Section 8.3, all rights and obligations under this Agreement shall
terminate as of such termination date; provided that Merck shall nonetheless be
required to reimburse FHT for Merck-approved activities under the Collaboration
Program which result in a total cost for a specific Calendar Quarter in excess
of that paid in advance by Merck for such Calendar Quarter pursuant to
Section 5.4.2. No later than [ * ] after such termination, FHT shall return to
Merck any funding in excess of costs incurred by FHT during such Calendar
Quarter.

 

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8.2 Termination for Cause.

 

  8.2.1 Cause for Termination. This Agreement may be terminated at any time
during the term of this Agreement:

 

  (a) upon written notice by either Party if the other Party is in breach of its
material obligations hereunder by causes and reasons within its control and has
not cured such breach within ninety (90) days after notice requesting cure of
the breach; provided, however, in the event of a good faith dispute with respect
to the existence of a material breach, the ninety (90) day cure period shall be
tolled until such time as the dispute is resolved pursuant to Section 9.7; and
provided, further, that neither Party shall be entitled to terminate this
Agreement or any rights and obligations of the Parties hereunder, due to any
such breach by the other Party of its obligations under Article 4
(Confidentiality or Publication), but in such case: (i) the non-breaching Party
remains entitled to pursue, all rights and remedies at law or in equity
available to it (including, but not limited to monetary damages); and (ii) if
Merck is the non-breaching Party in such instance, Merck may reduce milestone
and/or royalty obligations by the amount of the monetary damages suffered by
Merck as a result of the material breach of this Agreement by FHT to the extent
those damages have been determined pursuant to Section 9.7, or

 

  (b) by either Party upon the filing or institution of bankruptcy,
reorganization, liquidation or receivership proceedings, or upon an assignment
of a substantial portion of the assets for the benefit of creditors by the other
Party; provided, however, that in the case of any involuntary bankruptcy
proceeding such right to terminate shall only become effective if the Party
consents to the involuntary bankruptcy or such proceeding is not dismissed
within ninety (90) days after the filing thereof.

 

  (c) by Merck, in it sole discretion, within six (6) months following the
occurrence of any one of the following events (each, a “Significant Event”),
provided that termination on the occurrence of a Significant Event is subject to
the provisions of Section 8.2.3:

 

  (i) Competitors. If at any time prior to the third anniversary of the
Effective Date any Person listed on Attachment G of this Agreement (or any
successors of any such Person), beneficially owns twenty percent (20%) or more
in a circumstance that does not constitute a Change of Control.

 

  (ii) Departure of Dr. Simpson. If at any time prior to the third anniversary
of the Effective Date, Dr. John Simpson, for reasons other than his death or
disability, is no longer an officer or director of FHT.

 

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  (iii) Change of Control. If at any time prior to the third anniversary of the
Effective Date there is a Change of Control of FHT.

 

8.2.2 Effect of Termination for Cause.

 

  (a) If Merck terminates this Agreement under Section 8.2.1(a) or (b), in
addition to any other remedies available to Merck at law or in equity:

 

  (i) Merck retains the exclusive right to access the TALON Registry (and the
Biological Samples and Data contained therein), for any purpose, including to
support regulatory filings, and to the extent [ * ] the TALON Registry or any
portion of the Prospective Registry or the CPCS Samples and Data, FHT shall [ *
] such [ * ] to Merck in accordance with Merck’s instructions;

 

  (ii) Merck’s licenses pursuant to Sections 3.1.2, 3.1.3 and 3.1.4 shall become
perpetual licenses, subject to continued payment of milestones and royalties
thereon as provided in Article 5; provided that, Merck may reduce milestone
and/or royalty obligations by the amount of the monetary damages suffered by
Merck as a result of the material breach of this Agreement by FHT to the extent
those damages have been determined pursuant to Section 9.7, and provided,
further, that if such grounds for termination is a material breach of FHT’s
exclusivity obligations under Section 2.9, Merck’s licenses pursuant to Sections
3.1.2, 3.1.3 and 3.1.4 shall become perpetual exclusive licenses, and Merck
shall only be obligated to pay FHT milestones and royalties following the
effective date of such termination at a rate which is [ * ] of the rate that
would otherwise be payable pursuant to Article 5 if this Agreement had not been
so terminated with respect to either Products and/or Tests;

 

  (iii) The provisions of Section 2.4.6, 2.6.1 (last two sentences only), and
Sections 5.4-5.13 shall survive, in addition to those sections which survive
pursuant to Section 8.3.

 

  (iv) Merck’s obligations under the Collaboration Program shall terminate;

 

  (v) FHT’s licenses pursuant to Section 3.2 from Merck shall terminate;

 

  (vi) FHT shall, within thirty (30) days after the effective date of such
termination shall return or cause to be returned to Merck all Information in
tangible form, as well as any Excluded Merck Compound Rights; and

 

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  (vii) except as specified in this Section 8.2.2(a) and the surviving
obligations specified in Section 8.3, all rights and obligations under this
Agreement shall terminate as of such termination date.

 

  (b) If FHT terminates this Agreement under Section 8.2.1(a) or (b), then in
addition to any other remedies available to FHT at law or in equity:

 

  (i) Merck’s licenses pursuant to Sections 3.1.3 and 3.1.4 shall terminate as
of such termination date, and Merck’s exclusive access to the TALON Registry
(and any Biological Samples and Data contained therein) shall terminate;

 

  (ii) FHT’s obligations under the Collaboration Program shall terminate,
including, without limitation, its obligations under Section 2.9.1;

 

  (iii) Merck shall, within thirty (30) days after the effective date of such
termination return or cause to be returned to FHT all Information in tangible
form; and

 

  (iv) except as specified in this Section 8.2.2(b) and the surviving
obligations specified in Section 8.3, all rights and obligations under this
Agreement shall terminate as of such termination date.

 

  (c) If this Agreement is terminated by Merck pursuant to Section 8.3.1(b) due
to the rejection of this Agreement by or on behalf of FHT under Section 365 of
the United States Bankruptcy Code (the “Code”), all licenses and rights to
licenses granted under or pursuant to this Agreement by FHT to Merck are, and
shall otherwise be deemed to be, for purposes of Section 365(n) of the Code,
licenses of rights to “intellectual property” as defined under Section 101(35A)
of the Code. The Parties agree that Merck, as a licensee of such rights under
this Agreement, shall retain and may fully exercise all of its rights and
elections under the Code, and that upon commencement of a bankruptcy proceeding
by or against FHT under the Code, Merck shall be entitled to [ * ], any such [ *
] and all embodiments of such [ * ]. Such [ * ] shall be promptly delivered to
Merck (i) upon any such commencement of a bankruptcy proceeding upon written
request therefore by Merck, unless FHT elects to continue to perform all of its
obligations under this Agreement or (ii) if not delivered under (i) above, upon
the rejection of this Agreement by or on behalf of FHT upon written request
therefore by Merck. The foregoing provisions of Section 8.2.2 are without
prejudice to any rights Merck may have arising under the Code or other
applicable law.

 

8.2.3

Effect of Occurrence of Significant Event. FHT shall provide written notice to
Merck no later than [ * ] following the later of occurrence or public

 

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announcement of any Significant Event, and upon receipt of such notice, Merck
shall have the right, at Merck’s election at any time within six (6) months
after such notice to:

 

  (a) terminate the Collaboration Program Term pursuant to Section 8.2.1(c), in
which event:

 

  (i) all post-termination Collaboration Program funding obligations would
cease. Merck would still be responsible for reimbursing FHT for Merck-approved
work performed which results in a total cost for a specific Calendar Quarter in
excess of that paid in advance by Merck for that Calendar Quarter. No later than
sixty (60) days after such termination, FHT shall return to Merck any funding in
excess of costs incurred by FHT during such Calendar Quarter.

 

  (ii) Merck retains the exclusive right to access the TALON Registry (and the
Biological Samples and Data contained therein), for any purpose, including to
support regulatory filings, and to the extent [ * ] the TALON Registry or any
portion of the Prospective Registry or the CPCS Samples and Data, FHT shall [ *
] such [ * ] to Merck in accordance with Merck’s instructions;

 

  (iii) Merck’s licenses pursuant to Sections 3.1.2, 3.1.3 and 3.1.4 shall
become perpetual licenses, subject to continued payment of milestones and
royalties thereon as provided in Article 5;

 

  (iv) The provisions of Section 2.4.6, 2.6.1 (last two sentences only), and
Sections 5.4-5.13 shall survive in addition to those sections which survive
pursuant to Section 8.3.

 

  (v) Merck’s obligations under the Collaboration Program shall terminate;

 

  (vi) FHT’s licenses pursuant to Section 3.2 from Merck shall terminate;

 

  (vii) FHT shall, within thirty (30) days after the effective date of such
termination shall return or cause to be returned to Merck all Information in
tangible form, as well as any Excluded Merck Compound Rights; and

 

  (viii) except as specified in this Section 8.2.3 and the surviving obligations
specified in Section 8.3, all rights and obligations under this Agreement shall
terminate as of such termination date

 

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  (ix) FHT shall continue to be obligated under Section 2.9.1, on a Contract
Year-to-Contract Year basis, for up to four (4) Contract Years, but only as long
as Merck continues to pay to FHT the annual Exclusivity Maintenance Payment with
respect to such Contract Year.

 

  (b) not terminate this Agreement, but following the occurrence of any
Significant Event (other than the departure of Dr. John Simpson), Merck shall
have the right instead to require FHT and/or the surviving entity, to:
(x) segregate all Collaboration Program activities from any pharmaceutical
related activities of FHT; and (y) adopt [ * ] procedures to be agreed upon in
writing with Merck to prevent the disclosure of all Information of Merck and
other information with respect to the development and commercialization of Tests
and Products (collectively “Sensitive Information”) beyond FHT personnel having
access to and knowledge of Sensitive Information prior to the Significant Event
and to control the dissemination of Sensitive Information disclosed after the
Significant Event. The purposes of such procedures shall be to strictly limit
such disclosures to only those personnel having a need to know Sensitive
Information in order for FHT to perform its obligations under this Agreement and
to prohibit the use of Sensitive Information for competitive reasons against
Merck , including without limitation, the use of Sensitive Information [ * ].

 

8.3 Effect of Expiration or Termination; Survival. Expiration or termination of
this Agreement shall not relieve the Parties of any obligation accruing prior to
such expiration or termination. Any expiration or termination of this Agreement
shall be without prejudice to the rights of either Party against the other
accrued or accruing under this Agreement prior to expiration or termination,
including without limitation the obligation to pay royalties for Product(s) or
Test(s) sold prior to such expiration or termination. The provisions of Article
4 shall survive the expiration or termination of this Agreement and shall
continue in effect for ten (10) years. In addition, the provisions of Article 1,
Article 6 (but only to the extent claims arising with respect to such
representations and warranties arise based on activities conducted during the
term of this Agreement); Article 7 (to the extent provided therein), Article 9
(other than Section 9.11), and Sections 2.4.3, 2.7, and 3.3, shall survive any
expiration or termination of this Agreement.

ARTICLE 9 MISCELLANEOUS

 

9.1 Indemnification.

 

  9.1.1

Except to the extent due to the negligence or willful misconduct of Merck, FHT
shall indemnify, defend and hold Merck and its Affiliates, and their respective
directors, officers, employees and agents, harmless from and against any claims
of damages, bodily injury, death, or property damage made by a Third Party (a
“Third Party Claim”) to the extent arising from: (i) the negligence or willful

 

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misconduct of FHT under this Agreement; (ii) any liability due to FHT
Independent Inventions and Improvements or patent infringement due to FHT’s
Collaboration Program activities; (iii) the material breach by FHT of any
warranty, representation or obligation of FHT under this Agreement; or (iv) the
development, testing, use, marketing, sale, storage or handling by FHT or its
representatives or agents (but not Merck or its Affiliates) under this Agreement
of any FHT Independent Inventions and Improvements.

 

  9.1.2 Except to the extent due to the negligence or willful misconduct of FHT,
Merck shall indemnify, defend and hold FHT and its Affiliates, and their
respective directors, officers, employees and agents, harmless from and against
any Third Party Claim to the extent arising from: (i) the negligence or willful
misconduct of Merck, or patent infringement due to Merck’s Collaboration Program
activities, under this Agreement; (ii) any liability due to Merck Independent
Inventions and Improvements or patent infringement due to Merck’s Collaboration
Program activities; (iii) the material breach by Merck of any warranty,
representation or obligation of Merck under this Agreement; or (iii) the
development, testing, synthesis, use, storage, handling, manufacture or
commercialization by Merck or its representatives or agents (but not FHT or its
Affiliates) under this Agreement of any Therapeutic Product, Product, Test,
Merck NCE, or any Merck Independent Inventions and Improvements.

 

  9.1.3 If a Party (the “Indemnitee”) intends to claim indemnification under
this Section, it shall promptly notify the other Party (the “Indemnitor”) in
writing of any Third Party Claim for which the Indemnitee intends to claim such
indemnification. The failure of the Indemnitee to deliver written notice to the
Indemnitor within a reasonable time after the commencement of any such action
shall relieve the Indemnitor of any obligation to the Indemnitee under this
Section with respect to any such action. The Indemnitee shall permit the
Indemnitor to control the litigation and/or settlement of such Third Party
Claim, and cooperate fully with Indemnitor in all matters related thereto,
provided that unless agreed by Indemnitee (i) counsel appointed by Indemnitor to
defend Indemnitee shall not take any position which if sustained would cause
Indemnitee not to be indemnified by Indemnitor and (ii) no settlement will
involve any terms binding on Indemnitee except payment of money to by paid by
Indemnitor.

 

  9.1.4 Neither Party shall be liable to the other for indirect, consequential,
special or punitive damages under this Agreement. Indemnification pursuant to
this Section 9.1 shall be the Indemnitees’ sole remedy with respect to Third
Party Claims.

 

9.2

Force Majeure. Neither Party shall be held liable to the other Party nor be
deemed to have defaulted under or breached this Agreement for failure or delay
in performing any obligation under this Agreement to the extent such failure or
delay is caused by or results from causes beyond the reasonable control of the
affected Party, potentially including, but not limited to, embargoes, war, acts
of war (whether war be declared or not), acts of terrorism, insurrections,
riots, civil commotions, strikes, lockouts or other labor

 

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disturbances, fire, floods, or other acts of God, or acts, omissions or delays
in acting by any governmental authority or the other Party. The affected Party
shall notify the other Party of such force majeure circumstances as soon as
reasonably practical, and shall promptly undertake all reasonable efforts
necessary to cure such force majeure circumstances.

 

9.3 Assignment.

 

  9.3.1 Except as provided in this Section 9.3, this Agreement may not be
assigned or otherwise transferred, nor may any right or obligation hereunder be
assigned or transferred, by either Party without the consent of the other Party.

 

  9.3.2 Merck may, without consent of FHT, assign this Agreement and its rights
and obligations hereunder in whole or in part to an Affiliate of Merck or in its
entirety to the successor party connection with a Change of Control.

 

  9.3.3 FHT may, without the consent of Merck, assign this Agreement and its
rights and obligations hereunder in whole or in part to any Affiliate of FHT or
in its entirety to the successor party in connection with a Change of Control.

provided, that

Any attempted assignment not in accordance with this Section 9.3 shall be void.
Any permitted assignee shall assume all assigned obligations of its assignor
under this Agreement.

 

9.4 Severability. If any one or more of the provisions contained in this
Agreement is held invalid, illegal or unenforceable in any respect, the
validity, legality and enforceability of the remaining provisions contained in
this Agreement shall not in any way be affected or impaired thereby, unless the
absence of the invalidated provision(s) adversely affects the substantive rights
of the Parties. The Parties shall in such an instance use their best efforts to
replace the invalid, illegal or unenforceable provision(s) with valid, legal and
enforceable provision(s) which, insofar as practical, implement the purposes of
this Agreement.

 

9.5 Notices. All notices which are required or permitted hereunder shall be in
writing and sufficient if delivered personally, sent by facsimile (and promptly
confirmed by personal delivery, registered or certified mail or overnight
courier), sent by nationally-recognized overnight courier or sent by registered
or certified mail, postage prepaid, return receipt requested, addressed as
follows:

 

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if to FHT, to:

  

FoxHollow Technologies, Inc.

740 Bay Road

Redwood City, California 94063

Attention: Vice President, Corporate Development

Facsimile No.: [ * ]

with a copy to:

  

Cooley Godward LLP

Five Palo Alto Square

3000 El Camino Real

Palo Alto, CA 94306-2155

Attention: Barbara A. Kosacz, Esq.

Facsimile No.: (650) 849-7400

if to Merck, to:

  

Merck & Co., Inc.

One Merck Drive

P.O. Box 100, WS3A-65

Whitehouse Station, NJ 08889-0100

Attention: Office of Secretary

Facsimile No.: [ * ]

And

  

Merck & Co., Inc.

One Merck Drive

Attention: Chief Licensing Officer

P.O. Box 100, WS2A-30

Whitehouse Station, NJ 08889-0100

Facsimile: [ * ]

 

     or to such other address(es) as the Party to whom notice is to be given may
have furnished to the other Party in writing in accordance herewith. Any such
notice shall be deemed to have been given: (a) when delivered if personally
delivered or sent by facsimile on a business day (or if delivered or sent on a
non-business day, then on the next business day); (b) on the business day after
dispatch if sent by nationally-recognized overnight courier; or (c) on the fifth
(5th) business day following the date of mailing, if sent by mail.

 

9.6 Applicable Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York, without reference to its
conflict of laws principals, and the patent laws of the United States.

 

9.7 Dispute Resolution.

 

  9.7.1

The Parties shall negotiate in good faith and use reasonable efforts to settle
any dispute, controversy or claim arising from or related to this Agreement or
the breach thereof. If the Parties do not fully settle, and a Party wishes to
pursue the matter, each such dispute, controversy or claim that is not an
“Excluded Claim”

 

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shall be finally resolved by binding arbitration in accordance with the
Commercial Arbitration Rules and Supplementary Procedures for Large Complex
Disputes of the American Arbitration Association (“AAA”), and judgment on the
arbitration award may be entered in any court having jurisdiction thereof.

 

  9.7.2 The arbitration shall be conducted by a panel of three persons
experienced in the pharmaceutical business: within thirty (30) days after
initiation of arbitration, each Party shall select one person to act as
arbitrator and the two Party-selected arbitrators shall select a third
arbitrator within thirty (30) days of their appointment. If the arbitrators
selected by the Parties are unable or fail to agree upon the third arbitrator,
the third arbitrator shall be appointed by the AAA. The place of arbitration
shall be New York, New York, and all proceedings and communications shall be in
English.

 

  9.7.3 Either Party may apply to the arbitrators for interim injunctive relief
until the arbitration award is rendered or the controversy is otherwise
resolved. Either Party also may, without waiving any remedy under this
Agreement, seek from any court having jurisdiction any injunctive or provisional
relief necessary to protect the rights or property of that Party pending the
arbitration award. The arbitrators shall have no authority to award punitive or
any other type of damages not measured by a Party’s compensatory damages. Each
Party shall bear its own costs and expenses and attorneys’ fees and an equal
share of the arbitrators’ fees and any administrative fees of arbitration.

 

  9.7.4 Except to the extent necessary to confirm an award or as may be required
by law, neither a Party nor an arbitrator may disclose the existence, content,
or results of an arbitration without the prior written consent of both Parties.
In no event shall an arbitration be initiated after the date when commencement
of a legal or equitable proceeding based on the dispute, controversy or claim
would be barred by the applicable New York statute of limitations.

 

  9.7.5 The Parties agree that, in the event of a dispute over the nature or
quality of performance under this Agreement, neither Party may terminate this
Agreement until final resolution of the dispute through arbitration or other
judicial determination. The Parties further agree that any payments made
pursuant to this Agreement pending resolution of the dispute shall be refunded
if an arbitrator or court determines that such payments are not due.

 

  9.7.6 As used in this Section, the term “Excluded Claim” shall mean a dispute,
controversy or claim that concerns (a) the validity or infringement of a patent,
trademark or copyright; or (b) any antitrust, anti-monopoly or competition law
or regulation, whether or not statutory.

 

9.8

Entire Agreement; Amendments. This Agreement, together with its Attachments,
contains the entire understanding of the Parties with respect to the subject
matter of this Agreement and supersedes and cancels all previous express or
implied agreements and

 

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understandings, negotiations, writings and commitments, either oral or written,
in respect to that subject matter, including, without limitation, the Original
Agreement and in particular, Paragraph 1 of that certain letter agreement by and
between the Parties dated September 26, 2006. The Attachments to this Agreement
are incorporated in this Agreement by reference and shall be deemed a part of
this Agreement. This Agreement may be amended, or any term hereof modified, only
by a written instrument duly executed by authorized representatives of both
Parties.

 

9.9 Headings. The captions to the several Articles, Sections and subsections
hereof are not a part of this Agreement, but are merely for convenience to
assist in locating and reading the several Articles and Sections hereof.

 

9.10 No Third Party Beneficiaries. This Agreement is for the exclusive benefit
of the Parties, and their respective successors and assigns hereunder, and shall
not give any legal or equitable right, remedy or claim whatsoever to any other
Person.

 

9.11 FHT Employees. FHT shall inform Merck on a regular basis as to the status
of those FHT employees listed in Attachment F and agrees they shall not
terminate or demote any such employees without first notifying Merck of such
situation.

 

9.12 Independent Contractors. It is expressly agreed that FHT and Merck shall be
independent contractors and that the relationship between the two Parties shall
not constitute a partnership, joint venture or agency. Neither FHT nor Merck
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 Party,
without the prior written consent of the other Party.

 

9.13 Waiver. The waiver by either Party hereto of any right hereunder, or of any
failure of the other Party to perform, or of any breach by the other Party,
shall not be deemed a waiver of any other right hereunder or of any other breach
by or failure of such other Party whether of a similar nature or otherwise.

 

9.14 Cumulative Remedies. No remedy referred to in this Agreement is intended to
be exclusive, but each shall be cumulative and in addition to any other remedy
referred to in this Agreement or otherwise available under law.

 

9.15 Waiver of Rule of Construction. Each Party has had the opportunity to
consult with counsel in connection with the review, drafting and negotiation of
this Agreement. Accordingly, the rule of construction that any ambiguity in this
Agreement shall be construed against the drafting Party shall not apply.

 

9.16

Certain Conventions. Any reference in this Agreement to an Article, Section,
subsection, paragraph, clause, or Attachment shall be deemed to be a reference
to an Article, Section, subsection, paragraph, clause, or Attachment, of or to,
as the case may be, this Agreement, unless otherwise indicated. Unless the
context of this Agreement otherwise requires, (a) words of any gender include
each other gender, (b) words such as

 

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“in this Agreement”, “hereof”, and “hereunder” refer to this Agreement as a
whole and not merely to the particular provision in which such words appear,
(c) words using the singular shall include the plural, and vice versa.

 

9.17 Business Day Requirements. If a notice or other action or omission is
required to be taken by a Party under this Agreement on a day that is not a
business day then such notice or other action or omission shall be deemed to
require to be taken on the next occurring business day.

 

9.18 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.

 

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IN WITNESS WHEREOF, the Parties have executed this Agreement as of the
Restatement Date.

 

MERCK & CO., INC.     FOXHOLLOW TECHNOLOGIES, INC. BY:  

/s/ Judy C. Lewent

   

BY:

 

/s/ Dr. John Simpson

Judy C. Lewent

   

Dr. John Simpson

TITLE: Executive Vice President and Chief Financial Officer    

TITLE: Chief Executive Officer and Chairman of

the Board

 

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ATTACHMENT A – EXCLUSIVE FIELD ACTIVITIES

The Exclusive Field Activities are any or all of the following:

 

1. The collection or study of extracted human tissue (whether atherosclerotic
plaque, blood or other biological fluid derived from blood, blood cells, or any
other human tissue):

 

  •   for any pharmaceutical, diagnostic, or prognostic use, or for any other
research, discovery, development or commercialization purpose, including, but
not limited to,

 

  •   Identifying or studying predictive markers or biomarkers (novel or
otherwise) or identifying or studying drugs or drug targets for a disease or
condition.

 

  •   for use as diagnostic health tools or prognostic health tools.

 

2. The conduct of clinical trials with or without administration of a drug to
study human tissue (whether atherosclerotic plaque, blood or other biological
fluid derived from blood, blood cells, or any other human tissue), and
establishment of methodologies to conduct such clinical trials.

 

3. The discovery, evaluation, research or development (including clinical study)
of drugs, drug targets, diagnostic tools, prognostic tools or targets in any
therapeutic area.

 

4. The use of any medical device, technology (including assays), or platform
Controlled by FHT to identify, discover, research or develop drugs or drug
targets.

 

5. The use of atherosclerotic plaque, blood or other biological fluid derived
from blood, blood cells, or any other human tissue studied or extracted under
the terms of the Agreement by any FHT Device or product.

 

6. Delivery of drugs via Device (except for: (a) the delivery of a Restenosis
Drug via Device as described in Section 4 of Exceptions to Exclusive Field; or
(b) as set forth Sections 5 and 6 of the Exceptions to Exclusive Field).
However, if after the Effective Date FHT acquires a catheter or device that at
the time of acquisition already has been approved by regulatory authorities for
the delivery of a specific drug, then the delivery of such drug via such
acquired catheter or device will not fall within the scope of the Exclusive
Field.

 

7. The development and/or commercialization of non-invasive external imaging
technologies for use in a procedure in connection with the testing, development
or use of a drug.

 

8. The development of Image-Enhancing Agents for all forms of vascular imaging,
including but not limited to: (a) all intravascular image enhancing reagents
developed by FHT; (b) all plaque analysis required for any portion of an
image-enhancing reagent development project; and (c) identification of the [ *
], subject the provisions of Section 2.4.10.

 

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ATTACHMENT B – EXCEPTIONS TO THE EXCLUSIVE FIELD

 

The exceptions to the Exclusive Field, are:

 

1.      Mechanical Treatment Devices. The design, development, pre-clinical or
clinical testing, or commercialization of any mechanical Device to treat any
disease. FHT shall have the right to conduct clinical trials, extract tissue,
and analyze extracted tissue (as described below) for the purpose of developing,
testing or commercializing such mechanical treatment Device. If a drug is to be
used with such Device, Exceptions to Exclusive Field Sections 5 and 6 dictate
how those drugs would be selected.

2.      Mechanical Diagnostic Devices. The design, development, pre-clinical or
clinical testing, or commercialization of any intravascular catheter-based
mechanical diagnostic Device. All plaque analysis required to develop these
Devices will be performed by Merck as set forth in Section 2.4.5.

 

FHT shall have the right to conduct clinical trials for the purpose of
developing, testing and commercializing such mechanical diagnostic Device.

 

If a drug is to be used with such Device, Exceptions to Exclusive Field #5 and
#6 dictate how those drugs would be selected.

 

The use of Image-Enhancing Reagents with such Device is subject to the
restrictions and terms and conditions set out in Section 8 of Attachment A,
Section 2.4.10, and Section 2.4.11.

 

With respect to Sections 1 and 2 above of this Attachment B:

 

•      FHT is not permitted to engage in these mechanical Device activities to
evaluate the use of mechanical Devices with drugs for the purpose of treating de
novo atherosclerosis or acute coronary syndromes.

 

•      All plaque analysis performed for the development or commercialization of
these products [ * ].

3.      Intravascular Imaging Devices. The design, development, pre-clinical or
clinical testing, or commercialization of any intravascular imaging device, to
identify, and/or characterize de novo atherosclerotic plaque or restenotic
lesions, and which is either (i) used in preparation for removal of those
lesions by a Device for therapeutic purposes to improve blood flow, or
(ii) comprises a diagnostic catheter.

 

“Intravascular imaging device” would include [ * ].

4.      Delivery of Restenosis Drugs. FHT is entitled to work with Third Parties
in the delivery of Restenosis Drugs via a Device, provided such work only
involves the development and commercialization of [ * ].

 

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5.      Delivery of Non-Oral Drugs to Improve Clinical Performance of
Non-Cardiovascular Devices.

 

As set out in Section 2.4.12.

6.      Delivery of Non-Oral Drug via Cardiovascular Device to Improve Clinical
Performance of Cardiovascular Device.

 

As set out in Section 2.4.13.

 

Permitted Cardiovascular Applications or Indications, are:

(1) the following non-atherosclerotic diseases of blood vessels: [ * ].

 

(2) the following non-atherosclerotic disease of the pericardium: [ * ].

 

(3) the following non-atherosclerotic disease of the myocardium: [ * ].

 

(4) the following non-atherosclerotic disease of the endocardium: [ * ].

 

(5) the following non-atherosclerotic disease of the impulse generation or
conduction system: [ * ].

 

[ * ].

 

Permitted Cardiovascular Applications or Indications expressly excludes de novo
atherosclerosis and acute coronary syndrome.

 

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EXECUTION VERSION

ATTACHMENT C – DESCRIPTION OF TALON REGISTRY

[ * ]

 

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EXECUTION VERSION

ATTACHMENT D – FORM OF CLINICAL STUDY AGREEMENT

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LOGO [g3922303000001.jpg]

This Schedule 2.4.8 is an integral part of the Amended and Restated
Collaboration and License Agreement between Merck and Co., Inc. and FoxHollow
Technologies, Inc. (the “Collaboration Agreement”) to which it is attached. The
rights and obligations set out in this schedule shall be in addition to the
rights and obligations set out in the Collaboration Agreement, and may be
modified or supplemented in accordance with Section 9.8 of the Collaboration
Agreement. All capitalized terms used but not defined in this Schedule have the
meanings ascribed to them in the Collaboration Agreement.

 

[ * ]

 

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LOGO [g3922303000001.jpg]

ATTACHMENT E – PRESS RELEASE

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Media Contacts:    Investor Contacts: Merck:    Christopher Loder    Merck:   
Graeme Bell    Dir., Media Relations      

Sr. Dir., Investor Relations

   (908) 423-3786      

(908) 423-5185

   christopher_loder@merck.com      

graeme_bell@merck.com

FoxHollow:    Robin Gaffney    FoxHollow:   

Matt Ferguson

   Dir., Global Brand Strategy & Comm.      

Chief Financial Officer

   (650) 421-8614      

(650) 421-8449

   rgaffney@foxhollowtech.com      

investorrleations@foxhollowtech.com

Merck and FoxHollow Technologies Expand

Scope of Worldwide Strategic Research Collaboration

Merck Commits More Than $100M in Funding and Acquires Stake in FoxHollow

REDWOOD CITY, C.A., and WHITEHOUSE STATION, N.J., Sept. 27, 2006 – FoxHollow
Technologies, Inc. and Merck & Co., Inc., today announced that they will expand
the scope of their existing strategic collaboration for atherosclerotic plaque
analysis and that Merck will acquire a stake in FoxHollow with the purchase of
$95 million in common stock, subject to customary closing conditions and
clearance under the Hart-Scott-Rodino Anti-Trust Improvements Act.

Under the terms of the expanded collaboration agreement, Merck will pay $40
million to FoxHollow over four years in exchange for FoxHollow’s agreement to
collaborate exclusively with Merck in specified disease areas. If Merck extends
the collaboration program beyond this period, to continue the exclusive
collaboration arrangement, Merck would pay $10 million per year, which may be
offset by potential royalty and milestone obligations.

Merck will also provide a minimum of $60 million in funding to FoxHollow over
the first three years of the four year collaboration program term, for research
activities to be conducted by Fox Hollow under Merck’s direction, including
removal of atherosclerotic plaque from patient arteries for analysis, conduct of
clinical trials and drug profiling by Merck. FoxHollow will receive milestone
payments on successful development of drug products or diagnostic tests
utilizing results from the collaboration, as well as royalties.

 

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BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
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In addition, Merck will acquire newly-issued shares of FoxHollow common stock at
$29.629 per share, representing approximately an eleven percent stake in the
company. FoxHollow will appoint a Merck representative to the FoxHollow Board of
Directors, increasing the size of the board to six members, and receive certain
protective provisions.

Novel Collaboration Enlarged

It was in September 2005 that FoxHollow and Merck announced the first
pharmaceutical-medical device partnership aimed at identifying cardiovascular
biomarkers for use as diagnostics and as tools for drug development.

The expanded collaboration remains focused on the analysis of atherosclerotic
plaque collected from patients treated with FoxHollow’s SilverHawk™ Plaque
Excision System. The scope and magnitude of these studies have substantially
increased and other disease areas have now been added. Merck is using these
analyses of human atherosclerotic plaque as a means of identifying novel targets
to treat atherosclerosis and biomarkers to develop therapies that are in Merck’s
pipeline or have been licensed from other partners.

“For the first time in any pharmaceutical company’s history, we have the ability
to capture and evaluate atherosclerotic plaque from thousands of patients,” said
Peter S. Kim, Ph.D., president of Merck Research Laboratories. “Our first year
of collaboration with FoxHollow has given us novel insights into cardiovascular
disease, and we’re very pleased to enlarge our relationship today to continue
this focus on cardiovascular disease while including other important disease
areas as well.”

The expanded collaboration will also enable FoxHollow to use human plaque
analysis to enhance the capabilities of its NightHawk™ intravascular plaque
imaging system, and accelerate its anti-restenosis drug therapy program.

“Removing and analyzing plaque from patients unlocks a tremendous amount of
valuable information that informs research moving forward,” said John Simpson,
Ph.D., M.D., CEO of FoxHollow. “Merck’s expertise in cardiovascular medicine
makes it uniquely suited to partner with FoxHo llow in this work. We are proud
to be working together and welcome Merck’s input on our Board of Directors.” “We
hope our collaboration will lead to the development of novel, individualized
cardiovascular therapies,” noted Richard C. Pasternak, M.D., vice president of
Cardiovascular Research, Merck Research Laboratories, who has worked closely
with FoxHollow in the past year. “We look forward to the expansion of what has
been a most productive partnership with FoxHollow.”

 

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His words were echoed by Duke Rohlen, FoxHollow’s president of Strategic
Operations. “We are passionately committed to improving patient care through the
development of innovative and effective treatments,” Rohlen added. “An essential
part of that commitment is partnering our device expertise with Merck, an
innovative leader in cardiovascular pharmaceutical research and development.”

About FoxHollow Technologies, Inc.

FoxHollow Technologies, Inc. develops and markets minimally invasive plaque
excision devices for the treatment of peripheral artery disease (PAD). An
estimated 12 million people in the U.S. are thought to suffer from PAD, with
2.5 million patients currently diagnosed. PAD results from plaque that
accumulates in the arteries and blocks blood flow in the legs. These blockages
can result in severe pain, very limited physical mobility, and limb loss. The
company’s SilverHawk system is a minimally invasive method of removing the
obstructive plaque and restoring blood flow to the legs and feet. For more
information, please visit our website at http://www.foxhollowtech.com.

FoxHollow Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the
U.S. Private Securities Litigation Reform Act of 1995. Statements in this press
release regarding FoxHollow’s business that are not historical facts may be
“forward-looking statements” that involve risks and uncertainties. Specifically,
statements concerning expansion of the plaque analysis collaboration and
expectations regarding payments thereunder and the effect of the collaboration
on the development of the NightHawk and FoxHollow’s anti-restensosis drug
therapy program are forward-looking statements. Forward-looking statements are
based on management’s current, preliminary expectations and are subject to risks
and uncertainties, which may cause FoxHollow’s actual results to differ
materially from the statements contained herein. These potential risks and
uncertainties include the risk that the investment by Merck and the
collaboration activities under the Merck agreement cannot occur due to either a
failure to obtain antitrust clearance under the Hart Scott Rodino act or
material adverse changes in FoxHollow’s business that result in its inability to
fulfill certain closing conditions under the agreements or that future payments
may not be realized due to FoxHollow’s inability to achieve certain milestones
under the collaboration agreement. Other risks and uncertainties are included
under the captions, “Managements’ Discussion and Analysis of Financial Condition
and Results of Operations,” and “Risk Factors,” in our quarterly report on Form
10-Q as filed with the Securities and Exchange Commission on August 9, 2006,
which is on file with the SEC

 

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and available on our investor relations website at
http://investor.foxhollowtech.com and on the SEC’s website at www.sec.gov. Undue
reliance should not be placed on forward-looking statements, which speak only as
of the date they are made. FoxHollow undertakes no obligation to update publicly
any forward-looking statements to reflect new information, events or
circumstances after the date they were made, or to reflect the occurrence of
unanticipated events.

About Merck

Merck & Co., Inc. is a global research-driven pharmaceutical company dedicated
to putting patients first. Established in 1891, Merck currently discovers,
develops, manufactures and markets vaccines and medicines to address unmet
medical needs. The Company devotes extensive efforts to increase access to
medicines through far-reaching programs that not only donate Merck medicines but
help deliver them to the people who need them. Merck also publishes unbiased
health information as a not-for-profit service. For more information, visit
www.merck.com.

Merck Forward-Looking Statement

This press release contains “forward-looking statements” as that term is defined
in the Private Securities Litigation Reform Act of 1995. These statements are
based on management’s current expectations and involve risks and uncertainties,
which may cause results to differ materially from those set forth in the
statements. The forward-looking statements may include statements regarding
product development, product potential or financial performance. No
forward-looking statement can be guaranteed, and actual results may differ
materially from those projected. Merck undertakes no obligation to publicly
update any forward-looking statement, whether as a result of new information,
future events, or otherwise. Forward-looking statements in this press release
should be evaluated together with the many uncertainties that affect Merck’s
business, particularly those mentioned in the cautionary statements in Item 1 of
Merck’s Form 10-K for the year ended Dec. 31, 2005, and in its periodic reports
on Form 10-Q and Form 8-K, which the Company incorporates by reference.

# # #

 

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ATTACHMENT F – CERTAIN FHT EMPLOYEES

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[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.

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ATTACHMENT G— LIST OF COMPANIES

 

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[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 24B-2 OF THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED.