[ * ] = 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.
Exhibit 10.43
EXCLUSIVE LICENSE AND COLLABORATION
AGREEMENT
by and between
Merck & Co., Inc.
and
GTx, Inc.

 

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EXCLUSIVE LICENSE AND COLLABORATION AGREEMENT
This Exclusive License and Collaboration Agreement (this “Agreement”) is made
and entered into effective as of the Closing Date (defined below) and is entered
into by and between Merck & Co., Inc., a corporation organized and existing
under the laws of New Jersey (“Merck”), and GTx, Inc., a corporation organized
and existing under the laws of Delaware (“GTx”).
RECITALS:
WHEREAS, GTx and Merck have each engaged in research and development activities
relating to selective androgen receptor modulators;
WHEREAS, Merck and GTx desire to enter into a collaboration to research, develop
and commercialize Compounds and Products (as hereinafter defined) upon the terms
and conditions set forth herein; and
WHEREAS, Merck and GTx each desires to obtain the licenses under the patent
rights and know-how controlled by the other Party that are needed to conduct
such a collaboration, upon the terms and conditions set forth herein;
NOW, THEREFORE, in consideration of the foregoing premises and the mutual
covenants herein contained, the receipt and sufficiency which are hereby
acknowledged, Merck and GTx hereby agree as follows:
ARTICLE 1 DEFINITIONS.
Unless specifically set forth to the contrary herein, the following terms,
whether used in the singular or plural, shall have the respective meanings set
forth below.

1.1   “Act” shall mean, as applicable, the United States Federal Food, Drug and
Cosmetic Act, 21 U.S.C. §§ 301 et seq., and/or the Public Health Service Act, 42
U.S.C. §§ 262 et seq., as such may be amended from time to time.   1.2   “Active
Ingredient” means the material(s) in a pharmaceutical product which provide its
pharmacological activity (excluding formulation components such as coatings,
stabilizers or controlled release technologies).   1.3   “Affiliate” of a
particular Party shall mean any corporation or other business entity that
controls, is controlled by, or is in common control with such Party, where for
the purposes of this definition the term “control” (with correlative meanings
for the terms “controlled by” and “in common control with”) shall mean that
(a) fifty percent (50%) or more (or the maximum ownership interest permitted by
law) of the securities or other ownership interests representing the voting
stock or general partnership interest of the applicable Party are owned,
controlled or held, directly or indirectly, by the subject entity.   1.4  
“Agreement” shall have the meaning given such term in the preamble to this
document.

 
[ * ] = 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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1.5   “Calendar Quarter” shall mean the respective periods of three (3)
 consecutive calendar months ending on March 31, June 30, September 30 and
December 31.   1.6   “Calendar Year” shall mean each successive period of twelve
(12)  months commencing on January 1 and ending on December 31.   1.7   “Cancer
Trial” shall have the meaning set forth in Section 4.3.2.   1.8   “Change of
Control” shall mean with respect to a Party: (1) the sale of all or
substantially all of such Party’s assets or business relating to the subject
matter of this Agreement; (2)  a merger, reorganization or consolidation
involving such Party in which the voting securities of such Party outstanding
immediately prior thereto cease to represent at least fifty percent (50%) of the
combined voting power of the surviving entity immediately after such merger,
reorganization or consolidation; or (3) a person or entity, or group of persons
or entities, acting in concert acquire more than fifty percent (50%) of the
voting equity securities or management control of such Party.   1.9   “Clinical
Trial” shall mean a Phase I Clinical Trial, Phase II Clinical Trial, Phase III
Clinical Trial, and/or Post-approval Clinical Trial.   1.10   “Closing
Conditions” shall have the meaning provided in Section 13.3.   1.11   “Closing
Date” shall mean the date when the Closing Conditions have been met.   1.12  
“Collaboration Compound” shall mean a Compound that is initially synthesized
during the R&D Collaboration Term as a result of the Collaboration and is
determined to be a SARM by the JRC. For avoidance of doubt, “Collaboration
Compound” does not include any GTx Compound or Merck Compound, including any
prodrug, salt, base, acid, solvate, or any polymorph, racemate, isomer or
metabolite thereof.   1.13   “Collaboration” shall mean the Research Program
activities, Development Program activities and commercialization activities
undertaken by the Parties and their respective Affiliates in the Field as set
forth in ARTICLE 3, ARTICLE 4, and ARTICLE 5.   1.14   “Combination Product”
shall mean either (a) any pharmaceutical product that consists of a Compound and
at least one other Active Ingredient that is not a Compound, or (b) any
combination of a Compound and another pharmaceutical product that contains at
least one other Active Ingredient that is not a Compound where such products are
not formulated together but are sold together as a single product and invoiced
as one product. All references to Product in this Agreement shall be deemed to
include Combination Product.   1.15   “Commercialization Committee” shall have
the meaning set forth in 5.1.

1.16   “Commercially Reasonable Efforts” shall mean, with respect to the efforts
to be expended by a Party and its Affiliates with respect to any objective for
the Collaboration, the reasonable, diligent, good faith efforts to accomplish
such objective as such Party and its Affiliates would normally use to accomplish
a similar objective under similar circumstances. It is understood and agreed
that with respect to the research, development and sale of Product by either
Party, such efforts shall be substantially equivalent to those efforts and
resources commonly used by such Party and its Affiliates for pharmaceutical
products owned by it or to which it has rights, which

 
[ * ] = 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.

2.

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product is at a similar stage in its development or product life and is of
similar market potential taking into account efficacy, safety, approved
labeling, the competitiveness of alternative products in the marketplace, the
patent and other proprietary position of the product, the likelihood of
regulatory approval given the Regulatory Authority involved, the profitability
of the product including the amounts payable to licensors of patent or other
intellectual property rights, alternative products and other relevant factors.
The Parties agree that Commercially Reasonable Efforts shall be determined on a
market-by-market and Indication-by-Indication basis for a particular Product. It
is acknowledged that the level of efforts expended by a particular Party under
the Collaboration may be different for different markets, and may change over
time, reflecting changes in the status of the Product and the market(s)
involved. Notwithstanding the foregoing, the obligation of a Party to engage in
Commercially Reasonable Efforts with respect to any Product is expressly
conditioned upon the continuing absence of any adverse condition or event
relating to the safety or efficacy of the Product, and the obligation of either
Party to develop or market any such Product shall be delayed or suspended so
long as in such Party’s good faith opinion any such condition or event exists.
If a Party decides that it will suspend its efforts in developing or marketing a
Product on account of an adverse condition or event relating to the safety or
efficacy of the Product, it shall so notify the JSC, which will determine how
long such efforts shall be suspended.

1.17   “Competing Pharma Change of Control” shall mean a Change of Control in
which a pharmaceutical or biotechnology company (or group of pharmaceutical or
biotechnology companies acting in concert) (a) for whom collective worldwide
sales of human pharmaceutical products in the Calendar Year that preceded the
Change of Control were [ * ] or more, or (b)  have a research, development or
commercialization program for a [ * ], is the acquirer (by asset purchase,
merger, consolidation, reorganization or otherwise) as part of such Change of
Control.   1.18   “Compound” shall mean a SARM or a prodrug, salt, base, acid,
solvate, or any polymorph, racemate, isomer or metabolite thereof that is
Controlled by Merck and/or GTx.   1.19   “Control”, “Controls” or “Controlled
by” shall mean with respect to any material, item of Information, or
intellectual property right under GTx Patent Rights or GTx SARM Know-How or
Merck SARM Know-How or Merck Patent Rights, that the applicable Party (or its
Affiliate) owns or has a license under such material, item of Information or
intellectual property or right and has the ability to grant to the other Party
access to and a license or sublicense (as applicable) under such material, item
or right as provided for herein without violating the terms of any agreement or
other arrangement with any Third Party existing at the time such Party would be
required hereunder to grant the other Party such access or license or
sublicense.   1.20   “Development Candidate” shall mean a preparation containing
a Compound which the JRC has identified for commencement of dosing of the first
animal in a study under conditions meeting Good Laboratory Practices, where the
JRC has determined that such study is intended to support the filing of an IND.
  1.21   “Development Program” shall have the meaning set forth in Section 4.1.
  1.22   “Early Development Committee” or “EDC” shall have the meaning set forth
in Section 4.1.   1.23   “Early-Stage Development” shall mean (i) the activities
to be conducted regarding the planning and execution, of pre-clinical and
clinical development of a particular Product, beginning upon identification of a
Compound as Development Candidate, and ending with the completion of

 
[ * ] = 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.

3.

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Phase IIB Clinical Studies, including the conduct of GLP toxicology studies
conducted for the purpose of obtaining an IND, the design of Clinical Trials and
determination of which Products should be developed for particular Indications;
and (ii) any interactions with any Regulatory Authority regarding such
activities.

1.24   “Exclusivity Period” shall mean the period commencing with the Closing
Date, and continuing until the expiration of the R&D Collaboration Term;
provided, however that such Exclusivity Period shall expire [ * ].   1.25  
“Execution Date” shall mean the date that this Agreement is last executed by
both Parties.   1.26   “Field” shall mean the use of Compound and Products for
any and all purposes.   1.27   “Filing” of an NDA shall mean the acceptance by
the applicable Regulatory Authority of an NDA for filing (which shall mean the
date of filing if the applicable regulatory jurisdiction does not have an
“acceptance” process or requirement).   1.28   “First Commercial Sale” shall
mean, with respect to any particular Product, the first sale for end use or
consumption of such Product in the applicable country, excluding, however, any
sale or other distribution for use in a Clinical Trial.   1.29   “Follow-up
Compounds” shall mean any Compound other than a Lead Compound that is Controlled
by either Party; provided, however, that [ * ].   1.30   “GLP” or “Good
Laboratory Practice” shall mean the applicable then-current standards for
laboratory activities for pharmaceuticals or biologicals, as set forth in the
Act and any regulations or guidance documents promulgated thereunder, as amended
from time to time, together with any similar standards of good laboratory
practice as are required by any Regulatory Authority in the Territory.   1.31  
“GTx” shall have the meaning given such term in the preamble to this Agreement.
  1.32   “GTX Background Patent Rights” shall mean GTx Patent Rights which exist
as of the Execution Date, including, but not limited to, those listed on
Schedule 1.32.   1.33   “GTX Background SARM Know-How” shall mean SARM Know-How
Controlled by GTx which exists as of the Execution Date.   1.34   “GTx Compound”
shall mean (i) Ostarine, (ii) the other identified GTx Compounds listed in
Schedule 1.34 hereto and (iii) any other Compound that is Controlled by GTx as
of the Execution Date or during the R&D Collaboration Term, but not including
any Collaboration Compound.   1.35   “GTx Information and Inventions” shall mean
all protocols, formulas, data, Inventions, know-how and trade secrets,
patentable or otherwise, resulting from the performance of the Collaboration
solely by employee(s) of GTx and/or its Affiliate(s), or other persons not
employed by Merck or GTx and/or their Affiliate(s), who are acting on behalf of
GTx and/or its Affiliate(s).   1.36   “GTx Patent Rights” shall mean Patent
Rights which during the Term are Controlled by GTx or its Affiliate (including,
but not limited to, GTX Background Patent Rights) which: (i) claim or cover the
Compound(s) and/or Product(s), including but not limited to any improvements,

 
[ * ] = 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.

4.

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methods of use or methods of manufacture thereof; or (ii) claim or cover GTx
Information and Inventions or Joint Information and Inventions.

1.37   “GTx Program Patent Rights” shall mean GTx Patent Rights that claim or
cover GTx Information and Inventions.   1.38   “GTx SARM Know-How” shall mean
SARM Know-How which during the Term is Controlled by GTx, (including without
limitation GTx Background SARM Know-How, GTx Information and Inventions and
GTx’s rights in Joint Information and Inventions).   1.39   “GTx SARM Program
Scientists” shall mean GTx’s key clinical and scientific SARMs experts in
medicinal chemistry, molecular modeling, pharmacology, screening, preclinical
modeling and clinical development.   1.40   “GTx Trademarks” shall mean those
trademarks set forth in Schedule 1.40, including Ostarine™.   1.41   “HSR Act”
shall mean the Hart-Scott-Rodino Antitrust Improvements Act of 1974, as amended,
15 U.S.C. §18A.   1.42   “HSR Clearance Date” means the earliest date on which
both Parties have actual knowledge that the following conditions, collectively,
have been achieved: (a) the waiting period under the HSR Act shall have expired
or earlier been terminated; (b) no injunction (whether temporary, preliminary or
permanent) prohibiting consummation of the transactions contemplated by this
Agreement or any material portion hereof shall be in effect; and (c) no
requirements or conditions shall have been imposed by the United States
Department of Justice or Federal Trade Commission (as applicable) in connection
with the filings by the Parties under the HSR Act, other than requirements or
conditions that are satisfactory to the Party on whom such requirements or
conditions are imposed.   1.43   “IND” shall mean an Investigational New Drug
application, Clinical Study Application, Clinical Trial Exemption, or similar
application or submission for approval to conduct human clinical investigations
filed with or submitted to a Regulatory Authority in conformance with the
requirements of such Regulatory Authority.   1.44   “Indication” shall mean the
prevention, treatment and/or modulation of a loss of muscle mass, muscle
strength/ function and/or bone mass (or other indications agreed by the Parties
(e.g., [ * ])) as a result of a separate and distinct disease or medical
condition in humans for which a Product that is in Clinical Trials is intended
to treat, prevent and/or modulate and/or for which a Product has received
Marketing Authorization. For clarity, the following identified indications
(“Identified Indications”) shall each be considered separate Indications: [ * ].

  1.44.1   [ * ]     1.44.2   [ * ]     1.44.3   [ * ]     1.44.4   [ * ]

 
[ * ] = 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.

5.

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  1.44.5   [ * ]     1.44.6   [ * ]

1.45   “Information” shall mean any and all information, results and data,
including without limitation all discoveries, improvements, processes,
formulations, methods, protocols, formulas, techniques, inventions, know-how and
trade secrets, patentable or otherwise, and all other scientific, pre-clinical,
clinical, regulatory, manufacturing, marketing, financial and commercial
information or data.   1.46   “Initiates”, “Initiated” or “Initiation” shall
mean, with respect to a Clinical Trial, the first administration of a dose to a
subject or patient in such Clinical Trial.   1.47   “Invention” shall mean any
Information, composition of matter, or article of manufacture, that is
developed, generated, made, conceived and/or reduced to practice by or on behalf
of a Party (or its Affiliate) through the performance of activities conducted as
a result of the Collaboration. Inventorship of such Invention shall be
determined in accordance with United States patent laws, and ownership of such
Invention shall be determined according to this Agreement.   1.48   “Joint
Information and Inventions” shall mean protocols, formulas, data, Inventions,
know-how and trade secrets, patentable or otherwise, resulting from the
performance of the Collaboration, which are developed or invented jointly by
employee(s) of Merck and/or its Affiliate(s) and/or a Third Party acting on
behalf of Merck and/or its Affiliate(s), on the one hand, and GTx and/or its
Affiliate(s) and/or a Third Party acting on behalf of GTx and/or its
Affiliate(s), on the other hand.   1.49   “Joint Patent Rights” shall mean
Patent Rights that claim or cover (i)  Joint Information and Inventions; and/or
(ii) Collaboration Compounds, including but not limited to any improvements,
method of use or methods of manufacture thereof.   1.50   “Joint Research
Committee” or “JRC” shall have the meaning set forth in Section 3.1.   1.51  
“Joint Steering Committee” or “JSC” shall have the meaning set forth in
Section 2.2.   1.52   “Late Development Committee” or “LDC” shall have the
meaning set forth in Section 4.1.   1.53   “Late-Stage Development” shall mean
activities to be conducted regarding (i) Phase III Clinical Studies, beginning
with the decision to commence Phase III Clinical Studies for such Product for a
particular Indication or Indications, including clinical trial designs for Phase
III Clinical Studies and the determination of which Products will be developed
for which Indications; (ii) any Post-approval Clinical Trials for a particular
Product; and (iii)  any interactions with any Regulatory Authority regarding
such activities.   1.54   “Lead Compound” shall mean any of (i) Ostarine; (ii) [
* ]; or (iii) [ * ].   1.55   “Major Market” shall mean any one of the following
countries: United States, Japan, the United Kingdom, France, Germany, Italy or
Spain.

1.56   “Marketing Authorization” shall mean all approvals from the relevant
Regulatory Authority necessary to market and sell a Product in a particular
country (including, without limitation all

 
[ * ] = 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.

6.

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applicable pricing and governmental reimbursement approvals even if not legally
required to sell Product in a country); provided that if the foregoing approvals
have not all yet been achieved in a particular country as of the First
Commercial Sale in such country, Marketing Authorization shall be deemed to have
occurred as of the date of such First Commercial Sale in such country.

1.57   “Material Patent Document” shall mean, with respect to any Joint Patent
Rights or Patent Rights of a particular Party being prosecuted: any restriction
requirement, office action, notice of allowability, notice of allowance, notice
of issuance, certificate of correction, and any other received document that is
material to the prosecution of the applicable application, and all to the extent
received from a United States or foreign patent office on or after the Execution
Date.   1.58   “Material Patent Draft” shall mean, with respect to any Joint
Patent Rights or Patent Rights of a particular Party being prosecuted: any draft
of a patent application, amendment to a patent application, response to
restriction requirement, response to an office action, request for certificate
of correction, and any other patent prosecution document that is material to the
prosecution of the applicable application including assignments and information
disclosure statements, prepared by or on behalf of GTx or Merck or an Affiliate
of either Party, in close to final form and prior to filing with the applicable
patent office.   1.59   “Merck Background Patent Rights” shall mean Merck Patent
Rights which exist as of the Execution Date, including, but not limited to those
listed on Schedule 1.59.   1.60   “Merck Background SARM Know-How” shall mean
Merck SARM Know-How which exists as of the Execution Date.   1.61   “Merck
Compound” shall mean (i) the Compounds [ * ]; and (ii) any other Compound that
is Controlled by Merck as of the Execution Date or during the R&D Collaboration
Term, but not including any Collaboration Compound.   1.62   “Merck Information
and Inventions” shall mean all protocols, formulas, data, Inventions, know-how
and trade secrets, patentable or otherwise, resulting from the performance of
the Collaboration solely by employee(s) of Merck and/or its Affiliate(s), or
other persons not employed by Merck and/or its Affiliate(s) who are acting on
behalf of Merck and/or its Affiliate(s).   1.63   “Merck Patent Rights” shall
mean Patent Rights which during the Term are Controlled by Merck or its
Affiliate, including, but not limited to, the Merck Background Patent Rights
which: (i) claim or cover Compound(s) and/or Product(s) including without
limitation any improvements, method of use or methods of manufacture thereof; or
(ii) claim or cover Merck Information and Inventions or Joint Information and
Inventions   1.64   “Merck Program Patent Rights” shall mean Merck Patent Rights
that claim or cover Merck Information and Inventions.   1.65   “Merck SARM
Know-How” shall mean SARM Know-How which during the Term is Controlled by Merck
or its Affiliate, (including without limitation Merck’s Background SARM
Know-How, Merck Information and Inventions and Merck’s rights in Joint
Information and Inventions).   1.66   “Merck” shall have the meaning given such
term in the preamble to this Agreement.

 
[ * ] = 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.

7.

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1.67   “NDA” shall mean a New Drug Application, Biologics License Application,
Worldwide Marketing Application, Marketing Application Authorization, filing
pursuant to Section 510(k) of the Act, or similar application or submission for
Marketing Authorization of a Product filed with a Regulatory Authority to obtain
marketing approval for a biological, pharmaceutical or diagnostic product in
that country or in that group of countries.   1.68   “Net Sales” shall mean the
gross invoice price (not including value added taxes, sales taxes, or similar
taxes) of Product sold by Merck or its Related Parties to the first Third Party
after deducting, if not previously deducted, from the amount invoiced or
received:

  (a)   trade and quantity discounts (other than early payment cash discounts)
off of the invoice price, to the extent actually incurred or allowed;     (b)  
amounts actually credited, rebated or allowed for rejections or returns of
Product;     (c)   retroactive price reductions that are actually allowed or
granted;     (d)   sales commissions paid to non-Affiliated Third Party
distributors and/or selling agents who are not employees of Merck, its
Affiliates or sublicensees;     (e)   an amount equal to [ * ] percent ([ * ]%)
of the amount invoiced to cover early payment cash discounts, bad debt,
transportation expenses related to the sale of Product and custom duties imposed
and with reference to the sale of Product; and     (f)   if applicable as to the
Product sold, Merck’s standard inventory cost, using Merck’s standard internal
system for determining such costs across all its products consistently applied,
of a Product Delivery Device (as defined below) that is sold with the Product. A
“Product Delivery Device” shall mean a device or delivery system that is used
for administering or delivering a Product (such as a syringe, inhaler or
specialized drug delivery system) and is sold accompanying such Product, such as
in a sterile kit, but will not include packaging items such as bottles used to
hold Product in tablet form;

Gross invoice price of Product sold and the deductions allowed in
Sections 1.67(a)-(f) shall be calculated in accordance with Merck’s internal
accounting procedures, consistently applied.
[ * ]

1.69   “Ostarine” shall mean [ * ] .   1.70   “Party” shall mean Merck or GTx,
individually, and “Parties” shall mean Merck and GTx, collectively.   1.71  
“Patent Rights” shall mean any and all patents and patent applications in the
Territory (which for the purpose of this Agreement shall be deemed to include
certificates of invention and applications for certificates of invention),
including any and all divisionals, continuations, continuations-in-part,
reissues, renewals, substitutions, registrations, re-examinations,
revalidations, extensions, supplementary protection certificates, pediatric
exclusivity periods and the like of any such patents and patent applications,
and foreign equivalents of the foregoing.

 
[ * ] = 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.

8.

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1.72   “Phase I Clinical Study” shall mean a controlled human clinical study
that would satisfy the requirements of 21 CFR 312.21(a), designed to provide
evidence of safety and tolerability, metabolism, and pharmacological activity,
the adverse experiences associated with increasing doses, and, possibly, early
evidence of efficacy of a Compound. Any clinical study in healthy volunteers is
a Phase I Clinical Study.   1.73   “Phase II Clinical Study” shall mean a
controlled human clinical study that would satisfy the requirements of 21 CFR
312.21(b), conducted to study the effectiveness and establish the dose range of
a Product for a particular Indication in patients with the disease or condition
under study, including a Phase IIA Clinical Study or Phase IIB Clinical Study.  
1.74   “Phase IIA Clinical Study” shall mean a relatively small Phase II
Clinical Study designed to study the effectiveness of a particular Product
against placebo or other positive controls for a particular Indication in
patients with the disease or condition under study, including narrowing the
optimal dose, the potential utility, and common short-term side effects of the
Product.   1.75   “Phase IIB Clinical Study” shall mean a relatively longer and
larger Phase II Clinical Study designed to study the effectiveness of different
doses of a particular Product against placebo or other positive controls for a
particular Indication in patients with the disease or condition under study,
which is determined by the PDC to be a Phase IIB Clinical Study.   1.76   “Phase
III Clinical Study” shall mean a large, controlled or uncontrolled Clinical
Study that would satisfy the requirements of 21 CFR 312.21(c), intended to
gather the additional information about effectiveness and safety that is needed
to evaluate the overall benefit-risk relationship of the drug and to provide an
adequate basis for physician labeling.   1.77   “Post-approval Clinical Trial”
shall mean a human clinical trial in any country that is conducted after
Marketing Authorization has been obtained, and is not conducted for the purpose
of obtaining Marketing Authorization for a Product; provided, however, that if a
Regulatory Authority requires the subsequent conduct of a Clinical Trial as a
condition of obtaining a Marketing Authorization, such Clinical Trial will
nevertheless be deemed to be a Post-approval Clinical Trial.   1.78  
“Product(s)” shall mean any pharmaceutical preparation in finished dosage form
containing a Compound either (i) for sale by prescription, over-the-counter or
any other method; or (ii) for administration to human subjects or patients in a
Clinical Trial, for any and all uses in the Field, including without limitation
any Combination Product.   1.79   “Product Development Committee” or “PDC” shall
have the meaning set forth in Section 4.1.   1.80   “Program Patent Rights”
shall mean GTx Program Patent Rights, Joint Program Patent Rights and Merck
Program Patent Rights.   1.81   “R&D Collaboration Term” shall mean the period
during the Term that either Party is engaged in any activities under the
Research Program or Development Program.   1.82   “Registration Rights
Agreement” shall have the meaning ascribed to it in Section 1.1 of the Stock
Purchase Agreement.

 
[ * ] = 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.

9.

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1.83   “Regulatory Authority” shall mean any applicable government regulatory
authority involved in granting approvals for the manufacturing, marketing,
reimbursement and/or pricing of a Product in the Territory, including, in the
United States, the United States Food and Drug Administration and any successor
governmental authority having substantially the same function.   1.84   “Related
Party” shall mean each of Merck, its Affiliates, and their respective
sublicensees (which term does not include distributors), as applicable.   1.85  
“Research Program” shall have the meaning set forth in Section 3.1.   1.86  
“Safety” shall mean the absence of adverse experiences associated with the
administration of a drug to a patient that are significant, serious or life
threatening to the patient or demonstrate significant toxicological effect(s) of
such drug on one or more body tissues that are not balanced by a countervailing
benefit to the patient. The Safety of a product will be determined in view of
the risk to benefit relationship of such product in the relevant patient
population.   1.87   “SARM Know-How” shall mean any information and materials,
including but not limited to, discoveries, improvements, processes, methods,
protocols, formulas, data, inventions know-how and trade secrets, patentable or
otherwise, which during the Term, (i) are Controlled by either Party, (ii) are
not generally known, (iii) relate to SARMs and (iv) are necessary or useful to
the other Party in the exercise and performance of its rights and obligations
under this Agreement.   1.88   “SARM” shall mean a tissue-selective small
molecule ligand whose primary pharmacologic effect at any concentration or dose
observed in vitro or in vivo is mediated by the androgen receptor, [ * ].   1.89
  “Shares” shall have meaning ascribed to it in Section 1.1 of the Stock
Purchase Agreement.   1.90   “Shelf Registration Statement” shall have meaning
ascribed to it in Section 2.01(a) of the Registration Rights Agreement.   1.91  
“Stock Purchase Agreement” shall mean the Stock Purchase Agreement executed by
the Parties on even date with the Execution Date.   1.92   “Term” shall have the
meaning set forth in Section 14.1.   1.93   “Territory” shall mean all of the
countries in the world, and their territories and possessions.   1.94   “Third
Party” shall mean an entity other than Merck and its Related Parties, and GTx
and its Affiliates.   1.95   “UT” shall mean the University of Tennessee.   1.96
  “UTRF” shall mean the University of Tennessee Research Foundation.   1.97  
“UTRF SARM License” shall mean the Consolidated, Amended and Restated License
Agreement dated July 24, 2007, by and between GTx and UTRF pertaining to GTX
Background Patent Rights and GTX Background SARM Know-How.   1.98   “Valid
Patent Claim” shall mean a claim of an issued and unexpired patent, including
those with an extended term under patent term adjustment, patent term extension
or pediatric exclusivity

 
[ * ] = 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.

10.

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which are included within the Joint Patent Rights, GTx Patent Rights or Merck
Patent Rights claiming the composition of matter of a Compound or use of
Compound which would be infringed by the unauthorized sale or use of the
Compound or Product in the country of sale, which claim has not been revoked or
held unenforceable or invalid by a decision of a court or other governmental
agency of competent jurisdiction (which decision is no longer appealable), and
which claim has not been disclaimed, denied or admitted to be invalid or
unenforceable through reissue, re-examination or disclaimer or otherwise
(including such claim during the term of any statutory or regulatory exclusivity
periods that relate back to or apply to that claim).
ARTICLE 2 COLLABORATION

2.1   General. Merck and GTx shall engage in a worldwide Collaboration regarding
the research, development and commercialization of Compounds in the Field,
pursuant to the terms and conditions of this Agreement. The Collaboration will
be conducted under the oversight of the Joint Steering Committee or “JSC”
(described in Section 2.2). The JSC shall oversee and resolve disputes regarding
(i) the Research Program (described in Section 3.1), which shall be managed by
the Joint Research Committee or “JRC” (described in Section 3.3); (ii)  the
Development Program (described in Section 4.1), which shall be managed by the
Product Development Committee or “PDC” (described in Section 4.6); and
manufacture, marketing and sale of Product(s), which shall be managed by the
Commercialization Committee or “CC” (described in Section 5.1).   2.2   Joint
Steering Committee. The Collaboration shall be overseen by the Joint Steering
Committee (“JSC”). The JSC shall focus primarily on strategic issues relating to
the research and development of Compounds and Products in the Field and aim to
solve any issues referred to it by the JRC, PDC, or CC. Such oversight shall
include providing guidance on the types of Indications to pursue for Compounds,
new formulations that may be beneficial for Compound delivery, and the types of
Compounds that the Parties should develop for new Indications.

  2.2.1   Conduct of the JSC. The JSC will be comprised of an equal number of
senior management members not to exceed three per Party, from each of Merck and
GTx, or its respective Affiliates, including one co-chairman appointed by each
Party or its respective Affiliates. The members will each have appropriate
qualifications to participate on behalf of the Parties relating to Products,
considering the stage of development and commercialization of the Products.
Either Party may replace any of its representatives at any time, and from time
to time, by giving written notice to the other Party. Each Party shall promptly
fill any vacancy to the JSC caused by the resignation or removal of any of its
representatives. The initial members of the JSC shall be appointed by each of
the Parties within thirty (30) calendar days following the Execution Date. At
any time commencing ten (10) years from the Closing Date, GTx may elect to
relinquish its membership in the JSC, and if and when GTx shall make such an
election, the JSC shall be composed of such Merck employees as Merck shall
determine.     2.2.2   Meetings. The JSC shall meet in accordance with a
schedule established by mutual agreement of the co-chairmen, but no less
frequently than once per Calendar Quarter, with the location for such meetings
alternating between GTx and Merck facilities (or such other location that may be
determined by the co-chairmen). Alternatively, the JSC may meet by means of
teleconference, videoconference or other similar communications equipment.
Special meetings of the JSC may be called on at least

 
[ * ] = 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.

11.

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fifteen (15)  calendar days notice by agreement of the co-chairmen. The
decisions of the JSC shall at all times be decided by unanimous agreement of its
members. Each Party shall keep the other Party regularly and fully apprised
through the meetings of the JSC and quarterly written reports of the plans,
results and developments in their respective research and development of
Compounds and Products. Each Party’s representatives on the JSC shall disclose
to the other Party’s representatives on the JSC, within a reasonable period of
time, all Information and documentation in their respective Control relating to
the research of Compounds that is reasonably necessary, in each Party’s opinion,
for each Party’s representatives to participate in the proceedings of the JSC.

  2.2.3   Disputes. The JSC shall resolve any disputes that may arise in the
administration of the Research Program, Development Program, or
Commercialization Program. In the event that the JSC fails to reach agreement on
an issue within its area of oversight, the matter will be referred by both
co-chairmen of the JSC to the President of Merck Research Laboratories (in the
event of a dispute regarding research or development activities) or Merck’s
President of Global Human Health (in the event of a dispute regarding
commercialization activities) and the Chief Executive Officer of GTx for
resolution. The final resolution of matters (i) relating to Research Program
matters referred to the JSC by the JRC shall be as set forth in Section 3.3.3;
(ii) relating to Development Program matters referred to the JSC by the PDC
shall be as set forth in 4.6.3; and (iii) relating to matters regarding
commercialization of a Product referred to the JSC by the CC shall be as set
forth in Section 5.2.3. For clarity, the JSC cannot modify or amend any terms of
this Agreement.

2.3   General Rules Regarding the Conduct of Committee Meetings Under the
Collaboration.

  2.3.1   Additional Representatives; Subcommittees for JSC, JRC, PDC or CC.
Additional representative(s) or consultant(s) may from time to time, by mutual
consent of the Parties, be invited to attend JSC, JRC, PDC and CC meetings,
subject to such representative’s or consultant’s written agreement to comply
with the requirements of Section 7.1. The relevant committee may delegate such
of its oversight and responsibilities to one or more of its members or to a
sub-committee or sub-committees (to be equally represented by the Parties). The
decisions of any sub-committee shall be reported to the relevant committee and
subject to the approval of such committee.     2.3.2   Exchange of Information.
Prior to the JSC, JRC, PDC or CC meetings, the Parties shall exchange written
summaries of the matters to be presented to the Committee, which shall include a
description of its activities and progress under the relevant portion of the
Collaboration, including details of any GTx Information and Inventions, Merck
Information and Inventions, and Joint Information and Inventions, and such other
information that may reasonably be useful for the other Party to follow the
progress of its activities and progress (including details of any problems,
delays or extraordinary incidents) and any proposals it they may have with
regard to the further activities and progress under the Collaboration. The
Parties may establish a secure electronic database for the purpose of sharing
such information. At committee meetings, the Parties, will share Information
arising from the performance of such activities of the Collaboration being
managed or overseen by such committee,

 
[ * ] = 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.

12.

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and any Information exchanged at such committee meetings shall be appropriately
documented in the minutes.

2.4   Exclusivity. During the Exclusivity Period, neither Party nor their
respective Affiliates shall, directly or indirectly through Third Parties
working at the direction of or in collaboration with such Party or its
Affiliates, engage in discovery, research, development, manufacturing or
commercialization activities regarding SARMs, except pursuant to this Agreement.
Any SARMs that are purchased, in-licensed or otherwise acquired by either Party
from any Third Party during the Exclusivity Period shall be deemed to be
Compounds Controlled by such Party and subject to the terms and conditions of
this Agreement. Subject to the provisions of Section 15.2.3 in the event of a
GTx Change of Control, the foregoing shall not in any way prohibit an entity
that is the acquiring party in effecting a Change of Control of a Party from
continuing to carry out and progress forward, outside and independent of this
Agreement and without restriction under this Section 2.4, a program relating to
SARMs that was ongoing at the time of such Change of Control.   2.5   Services
of Third Parties. Merck and GTx shall each be entitled to utilize the services
of Third Parties to perform its Collaboration activities as approved by the
relevant committee, provided that such services are conducted in a manner that
is consistent with this Agreement (including but not limited to Section 7.2.2)
and preserves the rights of the Parties under this Agreement. Each Party shall
remain at all times fully liable for its respective responsibilities under the
Collaboration and the activities of any Third Parties utilized in connection
therewith.   2.6   Records and Reports.

  2.6.1   Records. Each Party and its Affiliates 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 Research Program and/or Development
Program by such Party and its Affiliates.     2.6.2   Copies and Inspection of
Records. Upon request, in furtherance of a patent or regulatory filing being
performed by a Party or its designee, each Party shall provide to the other in a
timely manner copies of records referred to in Section 2.6.1. The Party to whom
such information is disclosed shall maintain all such records and the
information disclosed therein in confidence in accordance with Section 7.1.    
2.6.3   Consultations. Each Party, in fulfilling its rights and obligations
under the Research Program and/or Development Program, shall have the right to
arrange for its employee(s) and/or consultant(s) involved in Research Program
and/or Development Program activities to visit the offices and laboratories of
the other Party and any of its Third Party contractors as permitted under
Section 2.5 during normal business hours and upon reasonable notice, and to
discuss the Collaboration work and its results in detail with the technical
personnel and consultant(s) of the other Party, and to review and copy the
records described in Section 2.6.1.

2.7   Alliance Managers. Merck and GTx each shall appoint a person (an “Alliance
Manager”) to coordinate its part of the Collaboration. The Alliance Managers
shall be the primary contact between the Parties with respect to the
Collaboration. Each Party shall notify the other within thirty (30) days of the
Closing Date of the appointment of its Alliance Manager and shall notify the
other Party as soon as practicable upon changing this appointment.

 
[ * ] = 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.

13.

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2.8   GTx SARM Program Scientists. In the event that any of the personnel
comprising GTx SARM Program Scientists (including GTx’s Chief Scientific
Officer, Chief Medical Officer, Vice President, Preclinical Research &
Development and Director of Medicinal Chemistry) shall no longer work as a GTx
SARM Program Scientist, or should any of these persons no longer be GTx
employees, GTx will promptly notify Merck of such event, and GTx will use
Commercially Reasonable Efforts to replace the vacant position(s) with
demonstrably equal or better qualified individual(s) to support GTx’s research
activities described in Section 3.1.   2.9   Compliance. GTx and Merck each
shall conduct the Collaboration in compliance with all applicable laws, rules
and regulations, including, without limitation, current Good Manufacturing
Practices and Good Laboratory Practice and all applicable aspects of Federal
Policy (as such term is defined in Section 2.3 of the UTRF SARM License). In
addition, if animals are used in research hereunder, both Parties will comply
with the Animal Welfare Act or any other applicable local, state, national and
international laws and regulations relating to the care and use of laboratory
animals. Both Parties are encouraged to use the highest standards, such as those
set forth in the Guide for the Care and Use of Laboratory Animals (NRC, 1996),
for the humane handling, care and treatment of such research animals. Any
animals which are used in the course of the Collaboration or products derived
from those animals, such as eggs or milk, will not be used for food purposes,
nor will these animals be used for commercial breeding purposes. Each Party
shall notify the other Party in writing of any deviations from applicable
regulatory or legal requirements. Each Party hereby certifies that it has not
employed or otherwise used in any capacity 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
the Collaboration.   2.10   Use of Human Materials. If any human cell lines,
tissue, human clinical isolates or similar human-derived materials (“Human
Materials”) have been or are to be collected and/or used in the Collaboration,
the Party collecting such Human Materials (“Collecting Party”) shall assure
(i) that it has complied, or shall comply, with all applicable laws, guidelines
and regulations relating to the collection and/or use of the Human Materials 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
Human Materials. The Party collecting such Human Materials shall provide
documentation of such approvals and consents upon the other Party’s request. The
Collecting Party shall further assure that such Human Materials may be used as
contemplated in this Agreement without any obligations to the individuals or
entities (“Providers”) who contributed the Human Materials, 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
Human Materials for any purpose unless otherwise previously approved by the JSC.

 
[ * ] = 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.

14.

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2.11   Information and Inventions. The entire right, title and interest in:

  2.11.1   Subject to Section 2.11.4, GTx Information and Inventions shall be
owned solely by or exclusively licensed to GTx;     2.11.2   Subject to
Section 2.11.4, Merck Information and Inventions shall be owned solely by Merck;
    2.11.3   Joint Information and Inventions shall be owned jointly by GTx (or
owned by UTRF and exclusively licensed to GTx) and Merck; and     2.11.4  
Information and Inventions regarding Collaboration Compounds, including but not
limited to any improvements, methods of use or methods of manufacture thereof,
shall be owned jointly by GTx and Merck.

Each Party shall promptly disclose to the other Party in writing the
development, making, conception or reduction to practice of Merck Information
and Inventions, GTx Information and Inventions and Joint Information and
Inventions, as applicable. Subject to the terms and conditions of this
Agreement, each Party shall have the non-exclusive right to use and to grant
licenses under its interest in Joint Information and Inventions outside the
Field as it deems appropriate without the consent of or any obligation to the
other Party as long as any such grant does not conflict with or otherwise
violate any term of this Agreement.
ARTICLE 3 RESEARCH PROGRAM; TECHNOLOGY TRANSFER

3.1   Conduct of Research Program. GTx and Merck each shall exercise
Commercially Reasonable Efforts, under the direction of the Joint Research
Committee (“JRC”) to engage in basic research and medicinal chemistry activities
for the purpose of identifying Development Candidates (the “Research Program”).
The Parties shall work together to further develop the necessary assays and
models to further characterize the Lead Compounds and the Follow-up Compounds,
and to develop a robust platform for identifying Compounds for pre-clinical and
clinical development. Within thirty (30) days after the Closing Date, the JRC
shall commence good faith discussions regarding the establishment of a work plan
for the Research Program, including expected Product profiles for one or more
Indications, and the timelines and procedures the JRC will be following in
reviewing the basic research and medicinal chemistry activities of the Parties
to identify Development Candidates. Any work plan approved by the JRC shall be
reviewed and updated as appropriate from time to time, but no less frequently
than once per Calendar Year.       It is the intention of the Parties that GTx
will be primarily responsible for conducting research activities to (and shall
use Commercially Reasonable Efforts to) identify, synthesize and biologically
characterize a sufficient number of SARMs, utilizing its SARM expertise and
personnel, to provide sufficient information to the JRC for the JRC to identify
at least [ * ] Collaboration Compounds that the JRC determines meet the criteria
for a Development Candidate during the [ * ] period following the Closing Date.
GTx shall undertake Commercially Reasonable Efforts, at its expense (subject
only to Merck’s funding obligations pursuant to Section 8.1) to provide
sufficient basic research resources, including research scientists and
technicians, to identify, screen and characterize sufficient SARMs to meet this
goal, based on one or more Product profiles agreed upon by the JRC.

 
[ * ] = 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.

15.

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Merck shall provide GTx with additional research resources (for example
providing GTx with high throughput screening and molecular profiling), as agreed
upon by the Parties in a work plan approved by the JRC from time to time As set
forth in Section 3.2.1, the Parties shall exchange information promptly after
the Closing Date, including making available to those scientists designated by
each of the Parties to conduct activities under the Research Program their
respective SARM structures, related data and material to effectively pool their
collective resources and expertise for the benefit of the Collaboration.

3.2   Exchange of SARM Know-How; Materials.

  3.2.1   SARM Know-How. Promptly after the Closing Date, both Parties shall
commence collaborating on the Research Program through the exchange of
personnel, materials, reagents and technology, including providing information
regarding all work regarding identified Compounds, and other potential Compounds
identified by GTx.

  (a)   GTx shall disclose to Merck in English and in writing or in an
electronic format all GTx SARM Know-How not previously disclosed. GTx shall also
promptly provide Merck with Information in its possession relative to the
manufacturing, formulation, and packaging of Ostarine and any and all Compounds.
Further GTx shall provide (at GTx’s expense) the personnel and appropriate tech
transfer for Merck to assume manufacturing of all Lead Compounds     (b)   Merck
shall disclose to GTx in English and in writing or in an electronic format all
Merck SARM Know-How not previously disclosed. During the R&D Collaboration Term,
the Parties shall continue to exchange SARM Know-How pursuant to procedures
established by the JRC.

  3.2.2   Materials. Except for Compounds that are subject to the Development
Program, Materials exchanged pursuant to the Research Program are not to be used
in humans, nor shall any such materials, or any derivatives, salts, isomers,
analogs, modifications or components thereof be transferred, delivered or
disclosed to any Third Party without the prior written approval of the
originating Party. Any unused materials and any derivatives, analogs,
modifications or components thereof shall be, at the originating Party’s option,
either returned to the originating Party, or destroyed in accordance with
instructions by the originating Party.

3.3   Joint Research Committee. The Parties hereby establish the JRC to
facilitate the Research Program as follows:

  3.3.1   Conduct of JRC. The Research Program shall be conducted under the
direction of the JRC comprised of three representatives of Merck and three
representatives of GTx. Each Party may change its representatives to the JRC
from time to time in its sole discretion, effective upon notice to the other
Party of such change. These representatives shall have appropriate technical
credentials, experience and knowledge, and ongoing familiarity with the Research
Program. The JRC shall be chaired by a representative of Merck. Decisions of the
JRC shall be made unanimously by the representatives of the Parties on the JRC.
In the event that the JRC cannot or does not, after good faith efforts, reach
agreement on an issue, the resolution and/or course of conduct shall be referred
to the JSC for resolution. At any time commencing the earlier of (i) ten
(10) years from the Closing Date or (ii) at

 
[ * ] = 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.

16.

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such time as there is a final determination by the JSC that no other or further
efforts will be expended by either Party under the Research Program, GTx may
elect to relinquish its membership in the JRC, and if and when GTx shall make
such an election, the JRC shall be composed of such Merck employees as Merck
shall determine.

  3.3.2   Meetings. For so long as the Parties are engaged in Research Program
activities, the JRC shall meet in accordance with a schedule established by
mutual written agreement of the Parties, but no less frequently than once per
Calendar Quarter, with the location for such meetings alternating between GTx
and Merck facilities (or such other location that may be determined by the JRC).
Alternatively, the JRC may meet by means of teleconference, videoconference or
other similar communications equipment. The JRC shall confer regarding the
status of the Research Program, review relevant data, consider and advise on any
technical issues that arise, consider issues of priority, and review and advise
on any expenses relating to the Research Program to the extent that funding for
such expenses is shared between the Parties. The JSC may determine to suspend
JRC meetings during any period where Research Program activities are suspended.
    3.3.3   Disputes. If the JRC refers a dispute regarding the Research Program
(such as a desired product profile or identification of a Development Candidate)
to the JSC and an impasse develops at the JSC regarding such dispute which
cannot be resolved by agreement of the two chairpersons of the JSC, then [ * ].

3.4   Opt-out of Differentiated Compound from Collaboration; Opt-In; Licenses.

  3.4.1   Opt-Out. If [ * ] the development of a new Compound for a new
Indication, the JRC may determine that (i) the Compound [ * ], and (ii)
 development of such Compound [ * ] (each such Compound a “Differentiated
Compound”). If the JRC designates a Compound to be a Differentiated Compound,
either Party may exercise its option (the “Opt-Out”) to develop such
Differentiated Compound independently of the Collaboration for such [ * ]
Indication, subject to the remaining provisions of this Section 3.4; provided,
however, that GTx shall [ * ] and Merck shall [ * ].     3.4.2   Procedure.
Either Party may exercise the Opt-Out for a Differentiated Compound effective
upon ninety (90) days written notice to the other Party. A Party may only
exercise an Opt-Out with regard to a Compound that the JRC has determined meets
the criteria of a Differentiated Compound pursuant to Section 3.4.1. [ * ], and
such Differentiated Compound shall be developed only for the Indication that has
been approved by the JRC. Upon exercise of the Opt-Out for a Differentiated
Compound, the Party exercising the Opt-out shall be free to conduct (and shall
be responsible for conducting) Clinical Trials and commercialization of such
Differentiated Compound for such Indication approved by the JRC, subject to
option rights of the other Party pursuant to Section 3.4.3 (in the case of an
Opt-Out by GTx) or Section 3.4.4 (in the case of an Opt-Out by Merck). Any
Opt-Out by either Party shall be documented by the JRC, noting the particular
Compound and Indication that have been approved for the Opt-Out.

 
[ * ] = 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.

17.

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  3.4.3   Merck Opt-In. In the event that GTx exercises the Opt-Out for a
Differentiated Compound, then promptly upon [ * ] for such Differentiated
Compound and reasonably in advance of a scheduled meeting of the PDC (as defined
in Section 4.1), GTx shall provide to Merck’s chairman of the PDC or his or her
representative as designated in writing, all relevant data regarding such [ * ]
(including but not limited to all relevant clinical and pre-clinical data and
all costs incurred by GTx for which it would seek reimbursement from Merck in
the event of a Merck Opt-In) (“Merck Opt-In Package”). GTx shall make qualified
personnel of GTx available to discuss all such relevant data in the Merck Opt-In
Package at the next PDC meeting that occurs with reasonable advance notice after
disclosure of all relevant data to Merck. Merck shall have the option to have
such Differentiated Compound become part of the Collaboration (the “Merck
Opt-In”) by (i)  providing written notice to GTx within ninety (90) days after
review of the Merck Opt-in Package at such PDC meeting of Merck’s desire to have
such Differentiated Compound become part of the Collaboration; and (ii) within
30 days after providing such notice, paying GTx an amount equal to [ * ] (and as
documented in the Merck Opt-In Package), and (iii) within 30 days after
providing such notice, paying [ * ]. Upon meeting such conditions, such
Differentiated Compound shall again be treated as a Compound subject to the
Collaboration and all of the provisions of this Agreement. If Merck shall not
exercise its Merck Opt-In, then GTx shall have the exclusive license rights
defined in Section 6.4.1.     3.4.4   GTx Opt-In. In the event that Merck
exercises the Opt-Out for a Differentiated Compound, then promptly upon [ * ]
for such Differentiated Compound and reasonably in advance of a scheduled PDC
meeting, Merck shall provide to GTx’s chairman of the PDC or his or her
representative as designated in writing, all relevant data regarding such [ * ]
(including but not limited to all relevant clinical and pre-clinical data and
all costs incurred by Merck for which it would seek reimbursement from GTx in
the event of a GTx Opt-In) (“GTx Opt-In Package”). Merck shall make qualified
personnel of Merck available to discuss all such relevant data in the GTx Opt-In
Package at the next PDC meeting that occurs with reasonable advance notice after
disclosure of all relevant data to GTx. GTx shall have the option to have such
Differentiated Compound become part of the Collaboration (the “GTx Opt-In”) by
(i) providing written notice to Merck within ninety (90) days after review of
the GTx Opt-in Package at such PDC meeting of GTx’s desire to have such
Differentiated Compound become part of the Collaboration; and (ii) within
30 days after providing such notice, paying Merck an amount equal to [ * ] (and
as documented in the GTx Opt-In Package). Upon meeting such conditions, such
Differentiated Compound shall again be treated as a Compound subject to the
Collaboration and all of the provisions of this Agreement. If GTx shall not
exercise its GTx Opt-In, then Merck shall have the exclusive license rights
defined in Section 6.4.2.

ARTICLE 4 DEVELOPMENT PROGRAM

4.1   Conduct of Development Program. GTx and Merck each shall exercise
Commercially Reasonable Efforts, under the direction of the Product Development
Committee (“PDC”) to engage in the pre-clinical and clinical development of one
or more Products for one or more Indications (the “Development Program”). The
Parties will endeavor to coordinate activities of Early-Stage Development and
Late-Stage Development into one integrated program for all

 
[ * ] = 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.

18.

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Products and Indications, managed by the PDC. In the event that multiple
Products enter development, the PDC may create an Early Development Committee
(“EDC”), responsible for managing Early-Stage Development, and a Late
Development Committee (“LDC”), responsible for managing Late-Stage Development.

4.2   Supply of Bulk Drug Substance for Clinical Trials. After the Closing Date
and upon receipt of the written request of Merck, GTx shall promptly provide
Merck with such amount of GTx’s existing inventory of intermediate SARM material
or Clinical Trial material for Ostarine as Merck shall request, stored and
handled in accordance with current good manufacturing practices, subject to GTx
retaining a reasonably sufficient supply of Ostarine and/or intermediate to
conduct its research activities under Section 3.1 and the development activities
it already has initiated or currently plans to initiate, including initiating
and supplying the Cancer Trial.   4.3   Early-Stage Development. Immediately
after the Closing Date, the PDC will commence good faith discussions regarding a
path forward for pre-clinical and clinical development of one or more Products
for one or more Indications, including establishing pre-clinical and clinical
milestones, timelines, procedures and protocols.

  4.3.1   Except as set forth in Section 4.3.2 regarding the Cancer Trial, Merck
shall be responsible, subject to Section 4.6.3, for managing and diligently
pursuing a development plan for each Compound and Indication approved by the PDC
pursuant to a protocol and timetable established by the PDC. If [ * ] and the
PDC [ * ], subject to Section 4.6.3 and ARTICLE 9; provided that the PDC may
determine not to pursue or continue a clinical study that it determines should
be discontinued due to concerns with safety and/or efficacy issues.

 
[ * ] = 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.

19.

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  4.3.2   As a part of the Collaboration, (i) GTx shall conduct its existing
Clinical Study studying Ostarine for muscle wasting associated with non-small
cell lung cancer, colorectal cancer, non-Hodgkin’s lymphoma or chronic
lymphocytic leukemia (the “Cancer Trial”) pursuant to the Cancer Trial clinical
protocol attached as Schedule 4.3.2, subject to Section 4.6.3 and ARTICLE 9.    
4.3.3   GTx shall work with Merck to coordinate the entry into the Merck-managed
clinical study tracking database of the results of the Cancer Trial, and any
other clinical study delegated to GTx pursuant to Section 4.3.1.

4.4   Late-Stage Development. Merck will take the lead in managing Phase III
Clinical Studies and any Post-approval Clinical Trials, under the management of
the PDC.   4.5   Funding of Development Program. Merck shall fund all clinical
development activities for all Products for all Indications, all GLP toxicology
studies for a Compound, and all other pre-clinical development activities that
are conducted after the identification of a Development Candidate, including all
related product development and manufacturing activities, which are (a) required
by the applicable Regulatory Authority for a particular clinical study,
(b) reasonably necessary or appropriate to conduct additional clinical studies,
or (c) reasonably necessary or useful to support the filing of an NDA or
comparable application for Marketing Authorization for the Product which is the
subject of the clinical development activity, except that GTx shall be fully
responsible for funding all clinical development activities for the Cancer
Trial, with no reimbursement from Merck. In the event that GTx engages in
activities in support of the Development Program as requested by the PDC, GTx
shall submit a budget of the expenses that it expects to incur as a result of
such activities to the PDC, and such expenses shall be reviewed and agreed upon
by the PDC prior to GTx engaging in any such activities. Upon completion of such
activities and submission of an invoice by GTx, Merck shall reimburse GTx for
such previously approved expenses. Reimbursement of such previously approved
expenses shall occur within thirty (30) days after receipt by Merck of such
invoice.   4.6   Product Development Committee. The Parties hereby establish the
PDC to facilitate the Development Program as follows:

  4.6.1   Conduct of PDC. The Development Program shall be conducted under the
direction of the PDC comprised of three representatives of Merck and three
representatives of GTx. Each Party may change its representatives to the PDC
from time to time in its sole discretion, effective upon notice to the other
Party of such change. These representatives shall have appropriate technical
credentials, experience and knowledge, and ongoing familiarity with the
Development Program. The PDC shall be chaired by a representative of Merck.
Decisions of the PDC shall be made unanimously by the representatives of the
Parties on the PDC. In the event that the PDC cannot or does not, after good
faith efforts, reach agreement on an issue, the resolution and/or course of
conduct shall be referred to the JSC for resolution. At any time, GTx may elect
to relinquish its membership in the PDC, and if and when GTx shall make such an
election, the PDC shall be composed of such Merck employees as Merck shall
determine.     4.6.2   Meetings. For so long as the Parties are engaged in
Development Program activities, the PDC shall meet in accordance with a schedule
established by mutual written agreement of the Parties, but no less frequently
than once per Calendar Quarter, with

 
[ * ] = 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.

20.

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      the location for such meetings alternating between GTx and Merck
facilities (or such other location may be determined by the PDC). Alternatively,
the PDC may meet by means of teleconference, videoconference or other similar
communications equipment. The PDC shall confer regarding the status of the
Development Program, review relevant data, consider and advise on any technical
issues that arise, consider issues of priority, and review and advise on any
expenses relating to the Research Program to the extent that funding for such
expenses is shared between the Parties. The JSC may determine to suspend PDC
meetings during any period where Development Program activities are suspended.  
  4.6.3   Disputes. If the PDC refers a dispute regarding the Development
Program to the JSC and an impasse develops at the JSC regarding the dispute
which cannot be resolved by agreement of the two chairpersons of the JSC, then
the final resolution of such dispute (other than the decision to commence the
Cancer Trial in accordance with the protocol heretofore approved by the Parties,
) will be decided by [ * ].

ARTICLE 5 COMMERCIALIZATION

5.1   Commercialization Activities. Merck shall engage in Commercially
Reasonable Efforts to commercialize Products, and shall take the lead on the
marketing and sale of Products throughout the Territory, and have the sole right
and responsibility regarding the manufacture and supply of Product. Merck and
GTx will participate through the Commercialization Committee regarding the
development of strategies for marketing of Products. Under the direction of the
Commercialization Committee, GTx shall have the right to participate in
conducting thought leader meetings and maintaining relationships with thought
leaders, and Merck shall reimburse GTx’s reasonable costs associated with any
such activities, provided that GTx shall have obtained the approval of the
Commercialization Committee for such costs before incurring any such costs.
Additionally, GTx shall have the right to request the Commercialization
Committee for approval for GTx to co-promote Products in the United States,
which co-promotion activities, if approved by the Commercialization Committee in
its discretion, would be pursuant to a written agreement entered into between
the Parties regarding the terms and conditions of such co-promotion. Similarly,
GTx may participate in such other commercialization activities for Products, as
requested by GTx and approved by the Commercialization Committee.   5.2  
Commercialization Committee. The Parties hereby agree to establish the
Commercialization Committee (“CC”) upon the completion of Phase IIB Clinical
Studies (or any other Clinical Trial that immediately proceeds a Phase III
Clinical Study) for the first Product.

  5.2.1   Conduct of Commercialization Committee. The CC shall be comprised of
three representatives of Merck and three representatives of GTx. Each Party may
change its representatives to the CC from time to time in its sole discretion,
effective upon notice to the other Party of such change. These representatives
shall have appropriate technical credentials, experience and knowledge, and
ongoing familiarity with issues regarding the manufacture, marketing and sale of
Products. The CC shall be chaired by a representative of Merck. Decisions of the
CC shall be made unanimously by the representatives. In the event that the CC
cannot or does not, after good faith efforts, reach agreement on an issue, the
resolution and/or course of conduct shall be referred to the JSC for resolution.
At any time, GTx may elect to relinquish its membership in the CC, and if and
when GTx shall make such an election, the CC shall be composed of such Merck
employees as Merck shall determine.

 
[ * ] = 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.

21.

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  5.2.2   Meetings. CC meetings shall not be required until completion of Phase
IIB Clinical Studies (or any other Clinical Trial that immediately proceeds a
Phase III Clinical Study) for the first Product, and shall be held thereafter on
a regular basis consistent with the need to inform GTx of commercialization
activities and obtain input from GTx regarding commercialization issues
regarding Products that are being marketed or in Late-Stage Development. The
location for such meetings will alternate between GTx and Merck facilities (or
such other location may be determined by the CC). Alternatively, the CC may meet
by means of teleconference, videoconference or other similar communications
equipment. The CC shall confer regarding the status of the commercialization
activities and to review relevant data, and consider and advise on any technical
issues that may arise in the manufacture, packaging, distribution, marketing and
sale of a Product.     5.2.3   Disputes. If the CC refers a dispute regarding
commercialization to the JSC and an impasse develops at the JSC regarding the
dispute which cannot be resolved by agreement of the two chairpersons of the
JSC, then the final resolution of such dispute will be decided by [ * ].

ARTICLE 6 LICENSE; EXCHANGE OF INFORMATION

6.1   GTx License Grant; Retained Rights.

  6.1.1   Subject to the terms and conditions of this Agreement, including the
provisions of Sections 6.8 hereof, GTx hereby grants to Merck an exclusive
license (even as to GTx, but subject to Sections 6.1.2 and 6.4.1) under the GTx
Patent Rights and GTx SARM Know-How (i) to make, have made, use, offer to sell,
sell and/or import Compound(s) and Product(s) in the Field in the Territory, and
(ii) to carry out the Collaboration and other activities specifically as set
forth in this Agreement. Merck shall be entitled to grant and authorize
sublicenses under the GTx Patent Rights and GTx SARM Know-How, subject to
Section 6.5.     6.1.2   Notwithstanding the rights granted in Section 6.1.1 and
6.6, GTx hereby retains the rights necessary solely in connection with
performing its activities under ARTICLE 2, ARTICLE 3 and ARTICLE 4 of this
Agreement to research, develop, make, have made, and use in the Territory all
Compound(s), Product(s), and methods of use of Compounds and Products.

 
[ * ] = 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.

22.

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6.2   Merck License Grant, Retained Rights.

  6.2.1   Merck hereby grants to GTx a co-exclusive license (co-exclusive with
Merck and its Affiliates, but subject to Section 6.2.2) under the Merck Patent
Rights, Merck SARM Know-How, and such other intellectual property (as reasonably
determined by Merck) Controlled by Merck as needed by GTx in the Field in the
Territory, to carry out its activities under ARTICLE 2, ARTICLE 3 and ARTICLE 4
of this Agreement, subject, however, to Section 6.4.1. GTx may grant sublicenses
under such rights to Third Parties as may be necessary or useful for each such
Third Party to provide services for Collaboration activities as contemplated by
Section 2.5 hereof.     6.2.2   Merck shall retain rights under the Merck Patent
Rights and Merck SARM Know-How to make, have made, use, sell, offer to sell and
import Compound(s) and Product(s) in the Field in the Territory, and to practice
any Invention claimed in or covered by Merck Patent Rights (“Merck Retained
Rights”) but only in accordance with the provisions of this Agreement. Merck
shall be entitled to grant and authorize sublicenses to such Merck Retained
Rights, subject to Section 6.5.1.

6.3   Non-Exclusive License Grant. In the event that the making, having made,
use, offer for sale, sale or import by Merck, or Merck’s Related Parties, of
Compound(s) or Product(s) would infringe during the Term a claim under and
Patent Rights Controlled by GTx and which Patent Rights are not covered by the
grant in Section 6.1, GTx hereby grants to Merck, to the extent GTx is legally
able to do so, a non-exclusive license in the Field in the Territory under such
issued Patent Rights for Merck and its Related Parties to develop, make, have
made, use, sell, offer for sale or import Compound(s) and Product(s) in the
Territory, subject, however, to Section 6.4.1. Merck shall be entitled to grant
and authorize sublicenses under such Patent Rights, subject to Section 6.5.1.  
6.4   Licenses in the event of an Opt-Out by either Party.

  6.4.1   Opt-Out by GTx. In the event that GTx exercises its Opt-Out rights
pursuant to Section 3.4.1, Merck hereby grants to GTx an exclusive license (even
as to Merck, but subject to the Merck Opt-In set forth in Section 3.4.3) under
the Merck Patent Rights and Merck SARM Know-How, and GTx shall retain the
exclusive rights under GTx Patent Rights and GTx SARM Know-How, in each case
solely (i) to make, have made, use, offer to sell, sell and/or import
Differentiated Compound(s) and any product that contains a Differentiated
Compound for the Indication approved by the JRC pursuant to Section 3.4.1 in the
Territory. GTx shall be entitled to grant and authorize sublicenses under the
rights set forth in this Section 6.4.1, subject to Section 6.5.2.     6.4.2  
Opt-Out by Merck. In the event that Merck exercises its Opt-Out rights pursuant
to Section 3.4.1, GTx hereby grants to Merck an exclusive license (even as to
GTx, but subject to the GTx Opt-In set forth in Section 3.4.4) under the GTx
Patent Rights and GTx SARM Know-How, and Merck shall retain the exclusive rights
under Merck Patent Rights and Merck SARM Know-How, in each case solely (i) to
make, have made, use, offer to sell, sell and/or import Differentiated
Compound(s) and any product that contains a Differentiated Compound for the
Indication approved by the JRC pursuant to Section 3.4.1 in the Territory. Merck
shall be entitled to grant and authorize sublicenses under the rights set forth
in this Section 6.4.2, subject to Section 6.5.1.

 
[ * ] = 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.

23.

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6.5   Sublicenses.

  6.5.1   By Merck. Merck shall be entitled to grant and authorize sublicenses
under the licenses granted to it under Sections 6.1.1, 6.3 and 6.4.2, and under
the Merck Retained Rights retained pursuant to Section 6.2.2; provided that upon
any such sublicense to a Third Party, Merck will notify GTx and provide GTx with
a copy of such sublicense agreement. Merck shall only grant such sublicenses
pursuant to a written agreement that notifies such sublicensees of the relevant
obligations contained in this Agreement and the UTRF SARM License.     6.5.2  
By GTx. GTx shall be entitled to grant and authorize sublicenses under the
licenses granted to it under Section 6.4.1, and under the GTx Retained Rights
retained pursuant to Section 6.2.2. GTx shall only grant such sublicenses
pursuant to a written agreement that notifies such sublicensees of the relevant
obligations contained in this Agreement.

6.6   Trademark License. GTx hereby grants to Merck a fully paid-up,
non-exclusive license in the Field in the Territory to use the GTx Trademark,
and such other GTx trademarks and/or trade names as the Parties may agree, in
connection with use, sale, offer to sell and import of Product; provided,
however, that in the event that the parties agree that any GTx Trademark shall
be used in connection with the marketing and/or sale of a Product, such license
shall becoume a fully-paid up, exclusive (even as to GTx, but subject to
Section 6.1.2) license to use such GTx Trademark for any and all uses. The
Parties agree that, upon written request of either Party, the Parties shall
execute a trademark license containing the standard terms and conditions of such
a trademark license for the use by Merck, its Affiliates and/or their
sublicensee(s) of one or more GTx Trademarks and/or trade names in furtherance
of and conformity with this Section 6.6 as requested by Merck in its sole
discretion. Any such transfer to Merck of one or more GTx Trademarks shall
require Merck to keep in force and to use Commercially Reasonable Efforts not to
abandon or otherwise terminate the GTx Trademark without first obtaining the
prior written approval of GTx, which approval shall not be unreasonably
withheld. Notwithstanding the foregoing, it is understood and agreed that Merck,
its Affiliates and their respective sublicensees shall have no obligation to use
the GTx Trademark, or any other GTx trademark and/or trade name; Merck, its
Affiliates and their respective sublicensees may develop one or more trademarks
and/or trade names for use in connection with Product and all rights to such
trademark(s) and/or trade name(s) are retained by Merck, its Affiliates and
their respective sublicensees, except as set forth in Sections 14.2.2(vi) or
14.3.2(b)(iii).   6.7   No Implied Licenses. Except as set forth in Sections 6.1
through 6.6, 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 trademarks, patents or patent applications
owned or controlled by the other Party or its Affiliates.   6.8   UTRF SARM
License. Merck acknowledges that certain GTx Patent Rights are licensed to GTx
pursuant to the UTRF SARM License (“UTRF Licensed Patents”). The Parties agree
that the provisions of this Section 6.8 shall apply as it relates to the UTRF
SARM License and the licenses granted to Merck pursuant to Article 6. For
avoidance of doubt, any capitalized terms

 
[ * ] = 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.

24.

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    contained in this Section 6.8 that are not otherwise defined in this
Agreement shall have the meaning provided in the UTRF SARM License.

  6.8.1   Notwithstanding Section 2.5 of the UTRF SARM License, Merck shall not
be required to notify UTRF of any sublicense that it is permitted to grant
pursuant to Article 6 of this Agreement, or to enter into written agreements
with Merck Affiliates granting a sublicense that it is permitted to grant
pursuant to Article 6 of this Agreement.     6.8.2   Notwithstanding
Sections 2.6 of the UTRF SARM License, GTx acknowledges that this Agreement
complies with the sublicense requirements set forth in Section 2.6 of the UTRF
SARM License;     6.8.3   Notwithstanding Sections 2.6 and 12.3 of the UTRF SARM
License, GTx hereby covenants that (i) it shall comply in all material respects
with, and shall not default under, the UTRF SARM License (including but not
limited to Section 6.5 thereof), and (ii) GTx shall promptly notify Merck of any
communication with UT or UTRF, whether oral or in writing, regarding any
potential default by GTx under the UTRF SARM License, and shall promptly confer
with Merck regarding appropriate steps to cure any such default or potential
default by GTx;     6.8.4   [ * ]     6.8.5   Notwithstanding Section 4.2 of the
UTRF SARM License, GTx acknowledges that Merck’s sole withholding obligations
regarding payments made to GTx pursuant to this Agreement are as set forth in
Section 8.9 of this Agreement.     6.8.6   Notwithstanding Sections 4.4, 5.2 and
5.3 of the UTRF SARM License, GTx acknowledges that Merck’s sole obligations
regarding (i) payment of milestone payments are as set forth in Section 8.4.7 of
this Agreement, and (ii) payment and reporting of royalties shall be as set
forth in Section 8.6 of this Agreement.     6.8.7   Notwithstanding Sections 2.6
and 5.1 of the UTRF SARM License, GTx acknowledges that Merck’s sole obligation
regarding audit rights are as set forth in Section 8.7 of this Agreement.    
6.8.8   (a) GTx acknowledges that Merck Patent Rights under this Agreement are
not [ * ].       (b) To the extent that any Merck Information and Inventions or
Joint Information and Inventions are conceived or reduced to practice as a
result of Merck practicing under the UTRF Licensed Patents, Merck hereby grants
to UTRF, UT, OSU or OSURF a non-exclusive royalty free license to practice such
inventions for non-commercial, educational, research and academic purposes only
(such right excluding the practice of UTRF Licensed Patents for any
fee-for-services arrangement or for sponsored research on behalf of any
commercial entity).     6.8.9   Without limiting GTx’s obligations under
Article 12 of this Agreement, GTx shall not fail to file, and shall not abandon,
a patent application claiming an “Existing Invention”, “Improvement Invention”
or “New Invention” in any “Major Countries”

 
[ * ] = 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.

25.

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      (as such terms are defined in the UTRF SARM License) without first
consulting with Merck pursuant to Article 12 of this Agreement.     6.8.10  
Merck’s obligations under Section 6.9 of the UTRF SARM License shall be limited
to those required by applicable law.     6.8.11   Merck acknowledges that its
right to enforce UTRF Licensed Patents is limited by the provisions of
Sections 7.2, 7.3, 7.4 and 7.5 of the UTRF SARM License.     6.8.12   Merck
acknowledges the limitations of liability set forth in Section 8.3 of the UTRF
SARM License, and the provisions of Section 9.1 regarding export controls.    
6.8.13   The Parties agree Section 14.1 of the UTRF SARM License is fulfilled by
compliance by the Parties with Section 2.9 of this Agreement.     6.8.14   To
the extent that the obligations of the Parties under this Agreement are
inconsistent with the provisions of the UTRF SARM License, GTx shall use
reasonable efforts to obtain the agreement of UTRF to resolve any such
inconsistent provisions.

6.9   United States Bankruptcy Code. In the event of the rejection of this
Agreement by or on behalf of either Party 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 one Party to the other 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 each Party, as the 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 either Party under the Code, the other Party shall be entitled to a
complete duplicate of or complete access to (as other Party deems appropriate),
any such intellectual property and all embodiments of such intellectual
property. Such intellectual property and all embodiments thereof shall be
promptly delivered to non-rejecting Party (i) upon any such commencement of a
bankruptcy proceeding upon written request therefore by the non-bankrupt Party,
unless the bankrupt Party 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 a Party upon written request
therefore by the other Party. The foregoing provisions of Section 6.8 are
without prejudice to any rights the non-bankrupt Party may have arising under
the Code or other applicable law.

ARTICLE 7 CONFIDENTIALITY AND PUBLICATION.

7.1   Nondisclosure Obligation. All Information disclosed by one Party (the
“Disclosing Party”) to the other Party or the other Party’s Affiliates,
including Information disclosed to directors, officers, employees or agents of
any Party or the Party’s Affiliates (each being hereinafter referred to as a
“Receiving Party”) pursuant to this Agreement or in connection with each Party’s
activities on behalf of the Collaboration (the “Confidential Information” of the
Disclosing Party) 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
expressly permitted in this Agreement, without the prior written consent of the
Disclosing Party. The foregoing obligations as to particular Confidential
Information of a Disclosing Party shall not apply to the extent that the
Receiving Party can demonstrate that such Confidential Information:

 
[ * ] = 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.

26.

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  7.1.1   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;     7.1.2   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;     7.1.3   is
subsequently disclosed to the Receiving Party by a Third Party who may lawfully
do so and is not under an obligation of confidentiality to the Disclosing Party;
or     7.1.4   is developed by the Receiving Party independently and without use
of or reference to any Confidential Information received from the Disclosing
Party, as documented by the Receiving Party’s business records.

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.

7.2   Exception to Nondisclosure Obligation

     Notwithstanding the obligations in Section 7.1, a Party may disclose the
other Party’s Confidential Information to the extent that such disclosure:

  7.2.1   is to governmental or other regulatory agencies as required in order
to obtain patents or to gain or maintain approval to conduct Clinical Trials or
to market Product under this Agreement, or otherwise as required to comply with
applicable laws or regulations, but such disclosure may be only to the extent
reasonably necessary to obtain such patents or authorizations or comply with
such applicable law or regulation, and provided that reasonable steps are taken
to ensure confidential treatment of such Information (if applicable or
available);     7.2.2   is deemed necessary by a Party to be disclosed to
Related Parties, agent(s), consultant(s), and/or other Third Parties for the
research and development, manufacturing and/or marketing of the Product (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 substantially 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     7.2.3   is deemed
necessary by counsel to the Receiving Party to be disclosed (i) to such Party’s
directors, 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, or (ii) to bona fide
investors or potential bona fide investors, including potential acquirers or
merger partners, provided that such

 
[ * ] = 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.

27.

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      Confidential Information is limited to the financial terms of this
Agreement, in each such case on the condition that such attorneys, independent
accountants and financial advisors are bound by confidentiality and non-use
obligations no less onerous than those contained in this Agreement; or     7.2.4
  is required to be disclosed by judicial or administrative process, provided
that in such event such Party shall promptly inform the other Party of the
required disclosure that is being sought in order to provide the other Party an
opportunity to challenge or limit the disclosure obligations. Confidential
Information that is disclosed by judicial or administrative process shall remain
otherwise subject to the confidentiality and non-use provisions of this
Section 7.1 and Section 7.3, and the Party disclosing Confidential Information
pursuant to law or court order shall take all steps reasonably necessary,
including without limitation obtaining an order of confidentiality, to ensure
the continued confidential treatment of such Confidential Information.

7.3   SARM Know-How. Both Parties agree to keep confidential all SARM Know-How
Controlled by either Party, subject to Sections 7.1.2.   7.4   Publication.
Publication strategy shall be managed by the PDC, which shall have the right to
review and approve any publication, considering Merck’s and GTx’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, the need
to protect the confidentiality of Information, and the interest of the Parties
in having an integrated approach to developing one or more Products for one or
more Indications. Consequently, except for disclosures permitted pursuant to
Section 7.1, either Party or its Affiliates, or its or their employee(s) or
consultant(s) wishing to make a publication shall deliver to the PDC a copy of
the proposed written publication, abstract or manuscript, including a copy of
any presentation materials to be utilized at a conference or at a meeting of
persons which will include persons not employed by Merck and GTx, or an outline
of an oral disclosure, at least sixty (60) days prior to submission for
publication or presentation, provided that for purposes of any presentation
materials or an outline of an oral disclosure, the copy of such proposed written
materials shall be presented to the PDC at least thirty (30) days prior to
submission or presentation. The PDC shall have the right to require
modifications or delay of the publication or presentation. If the PDC requires
modifications or delay of the publication or presentation, the publishing Party
shall edit or delay such publication consistent with the requirements of the
PDC, and when such modifications have been made or the need for any such delay
shall have abated, the PDC will use Commercially Reasonable Efforts to approve
the publication pursuant to the request of the Party, its Affiliates, employees
or consultants requesting the publication. The PDC may refer certain
publications regarding the Research Program to the JRC, and may, once a Product
is under commercialization, refer publications regarding such Product to the
Commercialization Committee.   7.5   Publicity/Use of Names. No disclosure of
the existence, or the terms, of this Agreement may be made by either Party or
its Affiliates, and no Party shall use the name, trademark, trade name or logo
of the other Party, its Affiliates or their respective employee(s) 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 be law. A Party may disclose this Agreement and
its terms, and material developments or material Information generated under
this Agreement, in securities filings with the Securities Exchange Commission
(“SEC”) (or equivalent foreign agency) to the extent required by law after
complying with the procedure set forth in this Section 7.5. Since this Agreement
will be deemed to be a “material”

 
[ * ] = 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.

28.

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    agreement of GTx under applicable SEC rules and regulations, it will be
filed with the SEC subsequent to the Closing Date. GTx will prepare a draft
confidential treatment request and proposed redacted version of this Agreement
to request confidential treatment for this Agreement, and Merck agrees to
promptly (and in any event, no less than seven (7) days after receipt of such
confidential treatment request and proposed redactions) give its input in a
reasonable manner in order to allow GTx to file its request within the time
lines proscribed by applicable SEC regulations. GTx shall exercise Commercially
Reasonable Efforts to obtain confidential treatment of the Agreement from the
SEC as represented by the redacted version reviewed by Merck.       Further,
Merck acknowledges that GTx may be legally required to make public disclosures
(including in filings with the SEC or other agency) of certain material
developments or material Information generated under this Agreement and agrees
that GTx may make such disclosures as required by law, provided that GTx first
provides Merck a copy of the proposed disclosure, and provided further that
(except to the extent that GTx is required to disclose such information to
comply with applicable laws or regulations) if Merck demonstrates to GTx’s
reasonable satisfaction, within ten (10) days of GTx providing the copy, that
the public disclosure of previously undisclosed information will materially
adversely affect the development and/or commercialization of a Product being
developed and/or commercialized by Merck, GTx will remove from the disclosure
such specific previously undisclosed information as Merck shall reasonably
request to be removed. Finally, Merck may request that GTx delay public
disclosure of certain material developments or material Information generated
under this Agreement for a reasonable period of time to allow Merck to present
such developments and/or Information (e.g., at Merck’s meetings with analysts),
and GTx agrees to such delay, subject to GTx’s obligations to disclose such
developments and/or Information to the SEC or another regulatory agency.      
Notwithstanding the foregoing, Merck and GTx have agreed on language of a joint
press release and an associated mutually acceptable list of appropriate answers
to anticipated questions (the “Q&A Attachment”) announcing the Collaboration,
which are collectively attached hereto as Schedule 7.5, to be issued after
execution of the Agreement by both Parties on the Execution Date. GTx may make
disclosures consistent with, and with no greater disclosure than in the
agreed-upon press release and Q&A Attachment, in a conference call with analysts
and interested investors.       The Parties agree that after a statement
pertaining to this Agreement and/or the Collaboration has been approved by both
Parties, either Party can repeat the statement in subsequent disclosures without
first seeking the other Party’s prior consent and approval.

ARTICLE 8 PAYMENTS; ROYALTIES AND REPORTS

8.1   Research Funding. In consideration for GTx’s performance of its
obligations under the Collaboration and in accordance with the provisions of
Article 3 upon the terms and conditions contained in this Agreement (including,
but not limited to, the meeting of all Closing Conditions), Merck shall pay GTx
an amount equal to five million dollars per year ($5 million) for three
(3) years beginning in 2008 and ending in 2010, to partially reimburse GTx for
the basic research and medicinal chemistry activities it will undertake as
approved by the JRC and as described in Section 3.1. Each annual payment amount
shall be due and payable on the first, second and third anniversary dates of the
Funding Trigger Date during 2008, 2009, and 2010. The “Funding Trigger Date”
shall be the earlier of December 30, 2007, or the Closing Date. GTx shall apply
the research funding it receives from Merck pursuant to this Section 8.1 solely
to carry out its

 
[ * ] = 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.

29.

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    Research Program activities in accordance with the terms and conditions of
this Agreement. GTx will fund all of its other costs and expenses conducted in
accordance with Section 3.1 in fulfilling its obligations to the Collaboration.
[ * ]   8.2   License Fee. Upon the terms and conditions contained herein, Merck
shall pay to GTx forty million dollars ($40 million) as a non-refundable,
non-creditable License Fee. The License Fee shall be due and payable within
thirty (30) days after the Closing Date.   8.3   Equity Investment. On the
Closing Date, Merck shall purchase the Shares, on the terms and conditions set
forth in the Stock Purchase Agreement.   8.4   Milestone Payments. Subject to
the terms and conditions of this Agreement (including but not limited to the
meeting of all Closing Conditions), Merck shall pay to GTx milestone payments as
set forth in this Section 8.4.

  8.4.1   Development of [ * ]. Merck shall pay to GTx upon first achievement of
the following milestones for a Product containing [ * ]:

[ * ]

  8.4.2   Development of [ * ]. Merck shall pay to GTx upon first achievement of
the following milestones by a Product containing [ * ]:

[ * ]

  8.4.3   Development of [ * ]. Merck shall pay to GTx upon first achievement of
the following milestones by a Product containing [ * ]:

[ * ]

  8.4.4   Development of [ * ]. If any Product containing [ * ], then Merck
shall pay to GTx upon first achievement of the following milestones by a Product
containing [ * ]:

[ * ]

  8.4.5   Development of [ * ]. If a Product containing [ * ], Merck shall pay
to GTx upon first achievement [ * ] by such Product containing [ * ].

[ * ]

  8.4.6   Development of [ * ]. Merck shall pay to GTx upon first achievement of
the following milestones by [ * ].

[ * ]

  8.4.7   Payment of Milestones. Merck shall notify GTx in writing within thirty
(30) days following the achievement of each milestone, and shall make the
appropriate milestone payment within thirty (30) days after the achievement of
such milestone. Milestones shall only be paid once for the initial achievement
of such milestone for a particular Indication, regardless of how many Products
have achieved such milestone for such Indication, and no amounts shall be due
hereunder for subsequent or

 
[ * ] = 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.

30.

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      repeated achievement of a particular milestone. If the milestone is
achieved for a particular Indication for a [ * ], Merck shall pay [ * ] such
milestone.

8.5   Royalties.

  8.5.1   Royalties Payable By Merck. Subject to the terms and conditions of
this Agreement (including but not limited to the meeting of all Closing
Conditions), Merck shall pay GTx royalties, calculated on a Product-by-Product
basis, as set forth in this Section 8.5.

  (a)   Royalty Tiers for Products containing [ * ]. Subject to the remaining
provisions of this Section 8.5, Merck shall pay GTx royalties for Net Sales by
Merck or its Related Parties of each Product containing [ * ] in an amount equal
to the following percentages:

  (i)   [ * ] of worldwide Net Sales in each Calendar Year up to and including [
* ];     (ii)   [ * ] of worldwide Net Sales in each Calendar Year for the
portion of Net Sales exceeding [ * ] up to and including [ * ]; and     (iii)  
[ * ] of worldwide Net Sales in each Calendar Year for the portion of Net Sales
exceeding [ * ].

  (b)   Royalty Tiers for Products containing [ * ]. Subject to the remaining
provisions of this Section 8.5, Merck shall pay GTx royalties for Net Sales by
Merck or its Related Parties of each Product containing [ * ] in an amount equal
to [ * ], as follows:

  (i)   [ * ] of worldwide Net Sales in each Calendar Year up to and including [
* ];     (ii)   [ * ] of worldwide Net Sales in each Calendar Year for the
portion of Net Sales exceeding [ * ] up to and including [ * ];and     (iii)   [
* ] of worldwide Net Sales in each Calendar Year for the portion of Net Sales
exceeding [ * ].

  (c)   Royalty tiers pursuant to Sections 8.5.1(a) and 8.5.1(b) shall be
calculated on a Product-by-Product basis, on worldwide Net Sales of each Product
in the Territory. For purposes of calculating royalties hereunder, all
formulations and/or doses of a Product containing the same Compound shall be
deemed to be the same Product, regardless of the number of Indications for which
such Product is approved, and any Product containing a different Compound shall
be deemed to be a different Product. Royalties on each Product at the rates set
forth above shall continue on a country-by-country basis until the later of
(i) expiration of the last to expire Valid Patent Claim in the country of sale,
or (ii) [ * ] years after first commercial sale of the first Product [ * ] (the
“Royalty Period”).     (d)   All royalties are subject to the following
conditions:

 
[ * ] = 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.

31.

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  (i)   that only one royalty shall be due with respect to the same unit of
Product;     (ii)   that no royalties shall be due upon the sale or other
transfer among Merck or its Related Parties, but in such cases the royalty shall
be due and calculated upon Merck’s or its Related Party’s Net Sales to the first
Third Party;     (iii)   no royalties shall accrue on the sale or other
disposition of Product by Merck or its Related Parties for use in a Clinical
Trial; and     (iv)   no royalties shall accrue on the disposition of Product in
reasonable quantities by Merck or its Related Parties as samples (promotion or
otherwise) or as donations (for example, to non-profit institutions or
government agencies for a non-commercial purpose).

  8.5.2   Royalties for [ * ]. In those cases in which Merck sells to a Third
Party [ * ], the royalty obligations of this Section 8.5 shall be applicable to
such sale of [ * ].     8.5.3   Compulsory Licenses. If a compulsory license of
GTx Patent Rights, Joint Patent Rights, or Merck Patent Rights is granted to a
Third Party with respect to Product in any country in the Territory and such
Third Party actually sells Product in the country under such compulsory license,
then the royalty rate to be paid by Merck on Net Sales in that country under
Section 8.5.1 shall be reduced to the rate paid by the compulsory licensee under
such license for sale of the Product, for so long as such Third Party continues
selling Product in such country.     8.5.4   Third Party Licenses.

  (a)   GTx shall be fully responsible for any payments owed to UTRF under the
UTRF SARM License.     (b)   Except as set forth in Section 8.5.4(a), in the
event that one or more patent licenses from other Third Parties are required by
Merck or its Related Parties in order to make, have made, use, offer to sell,
sell or import Compound or Product(s) (hereinafter “Third Party Patent
Licenses”), then:

  (i)   if such Compound is, or such Product contains, [ * ], [ * ], or     (ii)
  if such Compound is, or such Product contains, [ * ], [ * ]

of any consideration actually paid under such Third Party Patent Licenses by
Merck or its Related Parties for sale of such Compound or Product in a country
for a Calendar Quarter shall be creditable against royalty payments due to GTx
from Merck with respect to the sale of such Compound or Products in such
country; provided, however, that in no event shall the royalties owed by Merck
to GTx for such Compound or Product and such Calendar Quarter in such country be
reduced by more than [ * ] in the case of [ * ], or [ * ] in the case of [ * ].
 
[ * ] = 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.

32.

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8.6   Reports; Payment of Royalty. During the Term, following the First
Commercial Sale of a Product, Merck shall furnish to GTx a quarterly written
report for the Calendar Quarter showing the gross invoice price and aggregate
deductions taken to determine Net Sales of all Products 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, including such
other information as GTx shall reasonably request to comply with its reporting
obligations to UTRF under the UTRF SARM License to the extent that such other
information is reasonably available to Merck consistent with its normal royalty
accounting practices. Reports shall be due on the forty-fifth (45th) day
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 hereunder to be determined.

8.7   Audits.

  8.7.1   Upon the written request of GTx and not more than once in each
Calendar Year, Merck shall permit an independent certified public accounting
firm of nationally recognized standing selected by GTx and reasonably acceptable
to Merck (or if GTx shall fail to make a written request for an audit in the
Calendar Year, upon the written request to Merck from GTx’s licensor UTRF under
the UTRF SARM License, provided that only one such request for an audit can be
made by GTx and UTRF in any one Calendar Year), at GTx’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 Calendar Year ending not more than thirty-six (36) months prior to the date
of such request. The accounting firm shall disclose to GTx only whether the
royalty reports are correct or incorrect and the amount and nature of any
discrepancy, and the details of the discrepancy. No other information shall be
provided to GTx.     8.7.2   If such accounting firm 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 GTx 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 GTx; provided, however, that if such audit uncovers an
underpayment of royalties by Merck that either (i) exceeds [ * ] or (ii) [ * ]
of the total royalties owed, then (subject to Section 15.6) all fees of such
accounting firm shall be paid by Merck.     8.7.3   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 maintain records of sales made
pursuant to such sublicense and to grant access to such records by GTx’s
independent accountant to the same extent required of Merck under this
Agreement.     8.7.4   Upon the expiration of thirty-six (36) months following
the end of any Calendar Year, the calculation of royalties payable with respect
to such Calendar Year shall be binding and conclusive upon GTx, and Merck and
its Related Parties shall be released from any liability or accountability with
respect to royalties for such Calendar Year.

 
[ * ] = 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.

33.

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  8.7.5   GTx shall treat all financial information subject to review under this
Section 8.7 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 a reasonable confidentiality agreement with Merck
and/or its Related Parties obligating it to retain all such information in
confidence pursuant to such confidentiality agreement.

8.8   Payment Exchange Rate. All payments to be made by Merck to GTx under this
Agreement shall be made in United States dollars and may be paid by check made
to the order of GTx or bank wire transfer in immediately available funds to such
bank account in the United States as may be designated in writing by GTx from
time to time. In the case of sales outside the United States, the rate of
exchange to be used in computing the monthly amount of currency equivalent in
United States dollars due GTx shall be made at the monthly rate of exchange
utilized by Merck in its worldwide accounting system, prevailing on the third to
the last business day of the month preceding the month in which such sales are
recorded by Merck.   8.9   Income Tax Withholding. If applicable laws, rules or
regulations require withholding of income or other taxes imposed upon any
payments made by Merck to GTx under Article 3 of the Agreement, Merck shall make
such withholding payments as may be required and shall subtract such withholding
payments from such payments. Merck shall promptly notify GTx of such withholding
and submit appropriate proof of payment of the withholding taxes to GTx within a
reasonable period of time. Merck shall promptly provide GTx with the official
receipts. Merck shall render GTx reasonable assistance in order to allow it to
obtain the benefit of any present or future treaty against double taxation which
may apply to such payments. If Merck had a duty to withhold taxes in connection
with any payment it made to GTx under the Agreement but Merck failed to
withhold, and such taxes were assessed against and paid by Merck, then GTx will
hold harmless and reimburse Merck from and against such taxes (including
interest). If Merck makes a claim under this section, it will comply with the
obligations imposed by this section as if Merck had withheld taxes from a
payment to GTx.

ARTICLE 9 REGULATORY RESPONSIBILITIES; ADVERSE EXPERIENCE REPORTING

9.1   Regulatory Responsibilities. Except for the interactions GTx will be
required to have with the Regulatory Authorities for the Cancer Trial, Merck
shall have the sole right and responsibility with respect to interactions with
Regulatory Authorities regarding the development, marketing, sale and/or
manufacturing of Products, including but not limited to any IND, Marketing
Authorization, and adverse experience reporting. In the event that a Party
exercises its Opt-Out rights pursuant to Section 3.4.1, such Party shall have
the sole right and responsibility for interactions with Regulatory Authorities
regarding the Differentiated Compound and products containing such
Differentiated Compound. Promptly after the Closing Date, GTx shall execute all
documents necessary to transfer any open INDs to Merck; provided that the
Parties may agree to delay transfer of particular INDs in order to allow
completion of Clinical Trials or particular interactions with Regulatory
Authorities.   9.2   Adverse Experience Reporting.

  9.2.1   GTx agrees throughout the duration of this Agreement to notify the
other Party within two (2) working days in English of any information of which
GTx becomes aware concerning any side effect, injury, toxicity or sensitivity
reaction, or any unexpected incident, and the severity thereof, whether or not
determined to be

 
[ * ] = 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.

34.

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      attributable to any Product (hereinafter “Adverse Experience”), where such
Adverse Experience is (i) serious and associated with the clinical uses,
studies, investigations, tests and marketing of Product, whether or not
determined to be attributable to Product. With respect to all other adverse
experiences (non-serious expected or non-serious unexpected adverse
experiences), GTx shall furnish the other Party with copies of such non-serious
adverse experiences reported to GTx in connection with the marketing of Product,
in English, within 10 working days after receipt. “Serious” as used in this
Section refers to an experience which results in death, is immediately life
threatening, results in persistent and significant disability/incapacity or
requires in-patient hospitalization, or prolongation of existing
hospitalization, or is a congenital anomaly, cancer or an overdose. Other
important medical events that may jeopardize the patient or may require
intervention to prevent one of the outcomes previously listed should also be
considered serious. “Unexpected” as used in this Section refers to a condition
or development not listed in the current labeling for Product, and includes an
event that may be symptomatically and pathophysiologically related to an event
listed in the labeling, but differs from the event because of increased
frequency or greater severity or specificity. Furthermore, GTx agrees throughout
the Term to notify the other Party in English of any “Serious” Adverse
Experience which occurs in the Territory within 2 working days after the Party
becomes aware of such event and of any Non-serious Adverse Experience which
occurs in the Territory within 10 working days after the Party becomes aware of
such event.     9.2.2   With respect to Clinical Trials being carried out by or
on behalf of GTx or Merck, adverse experience reports of unexpected and fatal or
life-threatening events which are possibly, probably, definitely related or of
unknown relationship to the use of Product must be forwarded to by one Party to
the other Party within 3 calendar days after receipt of the information. In
addition, GTx shall furnish to the other Party copies of the end of study
summary of adverse experiences in English within the time period set forth in
the applicable then-current Development Program for the Product.     9.2.3   It
is understood and agreed that these adverse experience reporting requirement
provisions are based on the policies and procedures of Merck and regulatory
reporting requirements. Accordingly, in the event of changes to regulatory
requirements for adverse experience reporting, GTx agrees to comply with such
revised notification requirements.     9.2.4   In the event that GTx exercises
its Opt-Out rights pursuant to Section 3.4.1, then as it relates to such
Differentiated Compound and products containing such Differentiated Compound,
the rights and obligations of GTx pursuant to Sections 9.2.1 and 9.2.2 shall
apply to Merck, and the rights and obligations of Merck pursuant to this
Sections 9.2.1 and 9.2.2 shall apply to GTx mutatis mutandis.

ARTICLE 10 REPRESENTATIONS AND WARRANTIES; LIMITATIONS ON LIABILITY

10.1   Representations and Warranties of Each Party. Each Party represents and
warrants to the other Party that as of the Execution Date:

  10.1.1   it has the full right, power and authority to enter into this
Agreement, to perform its obligations hereunder, and to grant the licenses
granted under Article 6; and

 
[ * ] = 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.

35.

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  10.1.2   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.

10.2   GTx Representations and Warranties. GTx represents and warrants to Merck
that as of the Execution Date of this Agreement:

  10.2.1   to GTx’s knowledge and belief, the GTx Background Patent Rights are
not invalid or unenforceable, in whole or in part;     10.2.2   except for the
granting of certain rights in GTx’s SARM, andarine, and certain other SARMs to a
Third Party in 2004, which was subsequently terminated without any rights
remaining in such Third Party, it has not previously assigned, transferred,
conveyed or otherwise encumbered its right, title and interest in GTx Patent
Rights or GTx SARM Know-How;     10.2.3   to GTx’s knowledge, it is the sole and
exclusive owner or sole and exclusive licensee of the GTx Patent Rights and GTx
SARM Know-How, all of which are free and clear of any liens, charges and
encumbrances, and no other person, corporate or other private entity, or
governmental entity or subdivision thereof, has or shall have any claim of
ownership whatsoever with respect to the GTx Patent Rights and GTx SARM
Know-How, except as otherwise disclosed to Merck in Schedule 10.2.3 hereof;    
10.2.4   to GTx’s knowledge, the development, manufacture, use, sale and import
of Compound(s) and Product(s) that GTx currently knows of, under and in
accordance with the GTx Patent Rights and GTx Know-How, does not infringe any
intellectual property rights owned or possessed by any Third Party;     10.2.5  
to GTx’s knowledge, there are no claims, judgments or settlements against or
owed by GTx and no pending or threatened claims or litigation relating to the
GTx Background Patent Rights and GTX Background SARM Know-How;     10.2.6   to
GTx’s knowledge, GTx has disclosed to Merck all reasonably relevant information
regarding the GTx Patent Rights and GTx SARM Know-How licensed under this
Agreement;     10.2.7   to GTx’s knowledge, [ * ];     10.2.8   GTx has the SARM
scientific core competency and basic research infrastructure (scientists,
equipment and facilities) to support its responsibilities for research and
development as described in Section 3.1.     10.2.9   GTx has [ * ].

10.3   Merck Representations and Warranties. Merck represents and warrants to
GTx that as of the Execution Date of this Agreement:

 
[ * ] = 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.

36.

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  10.3.1   to Merck’s knowledge and belief, the Merck Background Patent Rights
and Merck Background SARM Know-How exists and are not invalid or unenforceable,
in whole or in part;     10.3.2   it has not previously assigned, transferred,
conveyed or otherwise encumbered its right, title and interest in Merck Patent
Rights or Merck SARM Know-How;     10.3.3   to Merck’s knowledge, upon
reasonable investigation, it is the sole and exclusive owner of the Merck Patent
Rights and Merck SARM Know-How, all of which are (and shall be, in the case of
Merck Information and Inventions) free and clear of any liens, charges and
encumbrances, and no other person, corporate or other private entity, or
governmental entity or subdivision thereof, has or shall have any claim of
ownership whatsoever with respect to the Merck Patent Rights and Merck SARM
Know-How;     10.3.4   to Merck’s knowledge, upon reasonable investigation, the
exercise of the license granted to GTx under the Merck Patent Rights and Merck
SARM Know-How, including without limitation the development, manufacture, use,
sale and import of Compound(s) and Product(s), do not interfere with or infringe
any intellectual property rights owned or possessed by any Third Party;    
10.3.5   to Merck’s knowledge, there are no claims, judgments or settlements
against or owed by Merck and no pending or threatened claims or litigation
relating to the Merck Background Patent Rights and Merck Background SARM
Know-How; and     10.3.6   to Merck’s knowledge, there are no claims, judgments
or settlements owed by Merck and no pending or threatened claims or litigation
relating to the Merck Background Patent Rights and Merck Background SARM
Know-How; and     10.3.7   Merck has the right to grant the licenses under Merck
Know-How and Merck Patent Rights to the extent set forth in this Agreement.

10.4   Limitation of Liability. EXCEPT FOR A BREACH OF ARTICLE 7 OR EITHER
PARTY’S OBLIGATIONS UNDER ARTICLE 11, IN NO EVENT SHALL EITHER PARTY BE LIABLE
FOR ANY INDIRECT, SPECIAL, PUNITIVE, INCIDENTAL OR CONSEQUENTIAL DAMAGES OF ANY
KIND, INCLUDING, WITHOUT LIMITATION, ANY LOSS OF PROFITS, LOSS OF BUSINESS, LOSS
OF USE, LOSS OR INACCESSIBILITY OF DATA, OR INTERRUPTION OF BUSINESS, ARISING
UNDER OR RELATING TO THIS AGREEMENT OR THE SUBJECT MATTER HEREOF, EVEN IF SUCH
PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.   10.5   Covenant of
Merck. As soon as reasonably practical after the Closing Date, but in any event
prior to Merck and GTx scientists meeting together to exchange information about
their respective Compounds and expertise, Merck will disclose to GTx all
reasonably relevant information regarding the Merck Patent Rights claiming the
Merck Compounds existing as of the Execution Date licensed under this Agreement
and Merck SARM Know-How related to such Merck Compounds.

 
[ * ] = 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.

37.

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ARTICLE 11 INDEMNIFICATION

11.1   By Merck. Merck agrees to indemnify, hold harmless and defend GTx, its
Affiliates and its and their respective officers, directors, shareholders,
employees, successors and assigns (collectively, the “GTx Indemnified Parties”)
against any and all losses, costs, expenses, fees or damages arising out of or
relating to claims, allegations, suits, actions or proceedings (including
reasonable attorneys fees and expenses incurred in connection therewith, except
as otherwise set forth in this Section 11.1) asserted by any Third Party
(collectively, the “Costs”), whether governmental and private, to the extent
arising out of or relating to (i) personal injury arising from the research,
development, manufacture, use, sale or other disposition by Merck or its Related
Parties or their respective distributors (A) of Product under this Agreement or
(B) of any Product containing a Differentiated Compound pursuant to Merck’s
Opt-Out rights hereunder; (ii) Merck’s breach of any of its representations and
warranties set forth in Sections 10.1, 10.3 or 13.3(f) of this Agreement;
(iii) Merck’s failure to comply with all applicable laws, rules and regulations;
(iv) Merck’s sublicensing of rights under this Agreement or (v) the gross
negligence or willful misconduct of any of the Merck Indemnified Parties as
defined below, provided that Merck shall not be required to indemnify, hold
harmless or defend any GTx Indemnified Party against any claim arising out of or
related to any GTx Indemnified Party’s (w) use, research, and/or development of
any Product under this Agreement; (x) research, development, manufacture, use,
sale or other disposition of any Product containing a Differentiated Compound
which is developed and commercialized by GTx pursuant to GTx’s Opt-Out rights
hereunder; (y) gross negligence, willful misconduct, or breach of this
Agreement, or (z) failure to comply with all applicable laws, rules and
regulations, to the extent that any failure pursuant to 11.1(w), (x), (y), or
(z) contributes to the Costs.   11.2   By GTx. Subject to the limitations set
forth in this Section 11.2, GTx agrees to indemnify, hold harmless and defend
Merck, its Affiliates and its respective officers, directors, shareholders,
employees, successors and assigns (collectively, the “Merck Indemnified
Parties”) against any and all Costs (as defined in Section 11.1) arising out of
or relating to claims, allegations, suits, actions or proceedings asserted by
any Third Party, whether governmental and private, to the extent arising out of
or relating to (i) personal injury (A) occurring during the use, research or
development of a Product under this Agreement by a GTx Indemnified Party or
(B) arising from the research, development, manufacture, use, sale or other
disposition, by GTx or its Affiliates or sublicensees or their respective
distributors, of any Product (1) containing a Differentiated Compound, pursuant
to GTx’s Opt-Out rights hereunder or (2) upon termination of this Agreement,
pursuant to a license granted by Merck pursuant to ARTICLE 14; (ii) GTx’s breach
of any of its representations and warranties set forth in Sections 10.1, 10.2 or
13.3(e) of this Agreement [ * ]; (iii) GTx’s failure to comply with all
applicable laws, rules and regulations; or (iv) the gross negligence or willful
misconduct of any of the GTx Indemnified Parties, provided that GTx shall not be
required to indemnify, hold harmless or defend any Merck Indemnified Party
against any claim arising out of or related to any Merck Indemnified Party’s
(x) use, research, development, manufacture and/or commercialization of any
Product under this Agreement or of any Product containing a Differentiated
Compound which is developed and commercialized by Merck pursuant to Merck’s
Opt-Out rights hereunder; (y) gross negligence, willful misconduct, or breach of
this Agreement, or (z) failure to comply with all applicable laws, rules and
regulations, to the extent any failure pursuant to 11.2(x), (y), or
(z) contributes to the Costs.

 
[ * ] = 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.

38.

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11.3   Procedure. If either Party is seeking indemnification under Sections 11.1
or 11.2 (the “Indemnified Party”), it shall inform the other Party (the
“Indemnifying Party”) of the claim giving rise to the obligation to indemnify
pursuant to such section as soon as reasonably practicable after receiving
notice of the claim. The Indemnifying Party shall have the right to assume the
defense of any such claim for which it is obligated to indemnify the Indemnified
Party. The Indemnified Party shall cooperate with the Indemnifying Party and the
Indemnifying Party’s insurer as the Indemnifying Party may reasonably request,
and at the Indemnifying Party’s cost and expense. The Indemnified Party shall
have the right to participate, at its own expense and with counsel of its
choice, in the defense of any claim or suit that has been assumed by the
Indemnifying Party. Neither Party shall have the obligation to indemnify the
other Party in connection with any settlement made without the Indemnified
Party’s written consent, which consent shall not be unreasonably withheld or
delayed. If the Parties cannot agree as to the application of Sections 11.1 or
11.2 as to any claim, pending resolution of the dispute pursuant to
Section 12.6, the Parties may conduct separate defenses of such claims, with
each Party retaining the right to claim indemnification from the other Party in
accordance with Sections 11.1 or 11.12 upon resolution of the underlying claim.

ARTICLE 12 PATENT AND TRADEMARK PROVISIONS.

12.1   Filing, Prosecution and Maintenance of Patents.

  12.1.1   Subject to the remaining provisions of this Section 12.1, each Party
agrees to exercise Commercially Reasonable Efforts to file, prosecute and
maintain (“Prosecute”) in the Territory, upon appropriate consultation with each
other, their respective Patent Rights, and Merck will be responsible for
Prosecuting in the Territory, after consultation with GTx, any Joint Patent
Rights and Merck Patent Rights.     12.1.2   The Parties agree, promptly after
the Closing Date, to disclose to each other all relevant information regarding
each others patent applications and prosecution efforts regarding their
respective SARM Patent Rights, and to share information and collaborate with one
another in order to devise a reasonably uniform and consistent patent strategy
to Prosecute their respective Patent Rights.     12.1.3   The Party that is
Prosecuting GTx Patent Rights, Merck Patent Rights or Joint Patent Rights, in
each case (i) shall give the other Party an opportunity to review the text of
the Material Patent Documents and Material Patent Drafts in a timely manner
before filing, shall consult with the other Party with respect thereto, and
shall supply the other Party with a copy of the Material Patent Documents and
Material Patent Drafts and responses as filed, together with notice of its
filing date and serial number; (ii) shall keep the other Party advised of the
status of the actual and prospective patent filings; (iii) shall report and
provide the other Party with all prosecution in a foreign jurisdiction in a
timely manner; (iv) upon the other Party’s request, shall provide advance copies
of any papers related to the Prosecution of such patent filings; and
(v) promptly give notice to the other Party of the grant, lapse, revocation,
surrender, invalidation or abandonment of any GTx Patent Rights, Merck Patent
Rights, or Joint Patent Rights for which such Party is responsible for
Prosecution.     12.1.4   With respect to all filings occurring from and after
the Closing Date, the Parties shall share equally in the out-of-pocket expenses
incurred (other than outside attorneys’

 
[ * ] = 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.

39.

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      fees) related to the Prosecution of their Patent Rights. In connection
herewith, the Parties agree that they shall aggregate all out-of-pocket Third
Party (but not including outside attorneys’ fees) patent costs each quarter
expended in the Prosecution of their respective Patent Rights and will share
this information with the other Party within thirty (30) days of the end of each
such quarter, with the agreement that the total out-of-pocket Third Party costs
for both Parties shall be divided equally between the Parties and there shall be
a settling up of expenses made by each such Party during the quarter so that
each Party shall have paid only 50% of such aggregate amount.

12.2   Interference, Opposition, Reexamination and Reissue.

  12.2.1   Each Party shall, within ten (10) days of learning of an
interference, opposition proceeding, or reexamination and/or reissue of one of
its patents, inform the other Party of any request for, or filing or declaration
of, any interference, opposition, reissue or reexamination relating to each
Party’s Patent Rights. Merck and GTx 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.     12.2.2   Each Party agrees that it will not
initiate any opposition, reexamination, interference or reissue proceeding
relating to their respective Patent Rights without the prior written consent of
the other Party, such consent not to be unreasonably withheld.     12.2.3   In
connection with any interference, opposition, reissue, or reexamination
proceeding relating to GTx Patent Rights, GTx shall take the lead. Merck and GTx
will cooperate fully and will provide each other with all Material Patent
Documents and Material Patent Drafts relating to GTx Patent Rights, and provide
any information or assistance that either may reasonably request. Merck shall
have the right to approve any submission to be made in connection with such
proceeding, such approval not to be unreasonably withheld. If GTx shall fail or
refuse to take any action with regard to any interference, opposition, reissue,
or reexamination proceeding pertaining to the GTx Patent Rights within thirty
(30) days after GTx shall have been notified thereof, then Merck shall have the
right to take the lead, and Merck and GTx will cooperate fully and will provide
each other with any information or assistance that either may reasonably
request.     12.2.4   In connection with any interference, opposition, reissue,
or reexamination proceeding relating to Merck Patent Rights and/or Joint Patent
Rights, Merck shall take the lead. Merck and GTx will cooperate fully and will
provide each other with all Material Patent Documents and Material Patent Drafts
relating to Merck Patent Rights and/or Joint Patent Rights, and provide any
information or assistance that either may reasonably request. GTx shall have the
right to approve any submission to be made in connection with such proceeding,
such approval not to be unreasonably withheld. If Merck shall fail or refuse to
take any action with regard to any interference, opposition, reissue, or
reexamination proceeding pertaining to the Merck Patent Rights and/or Joint
Patent Rights within thirty (30) days after Merck shall have been notified
thereof, then GTx shall have the right to take the lead, and Merck and GTx will
cooperate fully and will provide each other with any information or assistance
that either may reasonably request.

 
[ * ] = 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.

40.

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  12.2.5   The Parties shall share equally in the expense of any interference,
opposition, reexamination, or reissue proceeding relating to GTx Patent Rights,
Merck Patent Rights or Joint Patent Rights.     12.2.6   Both Parties shall, as
soon as practicable after receiving notice of such action, convene and consult
with each other regarding the appropriate course of conduct for such action.
Each Party shall have the right to be kept fully informed by the other Party and
to participate in the decisions regarding the appropriate course of conduct for
such action, and the right to join and participate in such action.

12.3   Enforcement and Defense.

  12.3.1   Each Party shall give the other Party notice of either (i) any
infringement of GTx Patent Rights, Merck Patent Rights and/or Joint Patent
Rights, or (ii) any misappropriation or misuse of GTx SARM Know-How, Merck SARM
Know-How and/or proprietary know-how developed through the Collaboration that
may come to either Party’s attention. Merck and GTx shall consult and cooperate
fully to determine a course of action, including but not limited to the
commencement of legal action to terminate any infringement of GTx Patent Rights,
Merck Patent Rights, or Joint Patent Rights or any misappropriation or misuse of
such GTx SARM Know-How, Merck SARM Know-How and/or other proprietary know-how.
Merck, upon notice to GTx, shall have the right to initiate and prosecute such
legal action in the name of GTx and Merck, or to control the defense of any
declaratory judgment action relating to GTx Patent Rights or GTx SARM Know-How.
If Merck shall fail or refuse to take any action with regard to infringement,
misappropriation or misuse of GTx SARM Know-How, Merck SARM Know-How and/or
other proprietary know-how within thirty (30) days after Merck shall have been
notified thereof, then GTx shall have the right to take the lead in any such
proceeding and Merck and GTx will cooperate fully and will provide each other
with any information or assistance that either may reasonably request. Each
Party shall have the right to be represented by counsel of its own choice.    
12.3.2   The costs of any agreed-upon course of action to terminate infringement
of GTx Patent Rights, Merck Patent Rights or Joint Patent Rights, or
misappropriation or misuse of GTx SARM Know-How or Merck SARM Know-How,
including without limitation the costs of any legal action commenced or the
defense of any declaratory judgment shall be shared equally by GTx and Merck.  
  12.3.3   For any action to terminate any infringement of GTx Patent Rights or
any misappropriation or misuse of GTx SARM Know-How, in the event that Merck is
unable to initiate or prosecute such action solely in its own name, GTx will
join such action voluntarily and will execute and cause its Affiliates to
execute all documents necessary for Merck to initiate litigation to prosecute
and maintain such action. In connection with any action, Merck and GTx 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.

 
[ * ] = 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.

41.

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  12.3.4   Subject to the rights of UTRF under the UTRF SARM License as it
pertains to GTx Patent Rights licensed from UTRF, any recovery obtained by
either or both Merck and GTx in connection with or as a result of any action
contemplated by this Section, whether by settlement or otherwise, shall be
shared in order as follows:

  (a)   the Party which initiated and prosecuted the action shall recoup all of
its costs and expenses incurred in connection with the action;     (b)   the
other Party shall then, to the extent possible, recover its costs and expenses
incurred in connection with the action; and     (c)   the amount of any recovery
remaining shall then be allocated between the Parties [ * ].

  12.3.5   Each Party shall inform the other Party of any certification
regarding any the Party’s Patent Rights it shall have 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 the other Party with a copy of such
certification within five (5) days of receipt. 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 Sections 12.3.1 through 12.3.4. 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. GTx
shall have the right to be kept fully informed and participate in decisions
regarding the appropriate course of conduct for such action, and the right to
join and participate in such action.

12.4   Cooperation on Patent Matters. The Parties agree to cooperate and to take
reasonable actions to maximize the protections available under the safe harbor
provisions of 35 U.S.C. 103(c) for US patents and patent applications. The
Parties 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 certificates or
their equivalents in any country in the Territory where applicable to GTx Patent
Rights and/or Merck Patent Rights. In the event that elections with respect to
obtaining such patent term restoration are to be made, Merck shall have the
right to make the election and GTx agrees to abide by such election, subject to
the following: if patent term restoration arises in connection with GTx’s
development of a Differentiated Compound under Section 3.4.1 as to which Merck
did not exercise the Merck Opt-In under Section 3.4.3, and if an election by GTx
of patent term restoration does not undermine Merck’s position regarding patent
term restoration as set forth in this Section 12.4 or if no other Product is in
Phase III development or being commercialized as of the time of such election,
then GTx shall have the right to make the election and Merck agrees to abide by
such election.

12.5   Trademarks. Merck will be responsible for Prosecuting in the Territory
any trademarks and/or trade names for use in connection with Product, except in
the case of any Products licensed to GTx under Section 6.4.1, as to which GTx
shall be responsible for such Prosecution. The Parties will disclose to each
other, promptly after the Closing Date, all relevant information regarding their
respective SARM-related trademarks, including (in the case of GTx) the GTx
Trademarks.

ARTICLE 13 CONDITIONS TO CLOSING; HSR ACT
 
[ * ] = 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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13.1   HSR Filing. Unless otherwise exempted from filing, each of Merck and GTx
shall, within fifteen (15) days after the Execution Date, file with the United
States Federal Trade Commission and the Antitrust Division of the United States
Department of Justice, any HSR Filing required of it under the HSR Act with
respect to the transactions contemplated hereby. The Parties will cooperate with
one another to the extent necessary in the preparation of any such HSR Filing.
Each Party will be responsible for its own costs, expenses, and filing fees
associated with any HSR Filing.

13.2   Cooperation. In respect of any HSR Filing, each of Merck and GTx will use
its good faith, diligent efforts to resolve and address any concerns on the part
of any court or Governmental Authority regarding the legality of the proposed
transaction, including cooperating in good faith with any government
investigation and the prompt production of documents and information demanded by
a second request for documents and of witnesses if requested, and to cause the
Closing Date of this Agreement to occur as soon as practicable, as provided in
Section 13.3.

13.3   Closing Date of Agreement. The “Closing Date” shall not occur until
(a) the waiting period under the HSR Act shall have expired or earlier been
terminated; (b) no injunction (whether temporary, preliminary or permanent)
prohibiting consummation of the transactions contemplated by this Agreement or
any material portion hereof shall be in effect; (c) no requirements or
conditions shall have been imposed in connection therewith which are not
reasonably satisfactory to the Parties; (d) each Party shall certify that the
representations set forth in Section 10.1 (Representations and Warranties)
remain true and correct as of the Closing Date; (e) GTx shall certify that the
representations set forth in Sections 10.2.1 and 10.2.2 remain true and correct
as of the Closing Date; (f) Merck shall certify that the representations set
forth in Sections 10.3.1, 10.3.2 and 10.3.7 remain true and correct as of the
Closing Date; and (g) the “Closing” (as such term is defined in the Stock
Purchase Agreement) of the sale and purchase of the Shares under Section 2.1 of
the Stock Purchase Agreement shall have occurred on or before the Closing Date
(collectively, the “Closing Conditions"). In the event that the Closing
Conditions are not satisfied on or before termination of the Stock Purchase
Agreement, this Agreement shall terminate, and the Parties acknowledge that the
provisions of Sections 14.2, 14.3 and 15.10 shall not survive such termination.

13.4   Portions of Agreement effective as of Execution Date. Notwithstanding
Section 13.3, the following provisions of the Agreement shall be in full force
and effect as of the Execution Date: ARTICLE 1 (Definitions), ARTICLE 7
(Confidentiality and Publications), ARTICLE 10 (Representations and Warranties),
ARTICLE 13 (Conditions to Closing), ARTICLE 14 (Termination), and ARTICLE 15
(Miscellaneous).

13.5   Activities between Execution Date and Closing Date. Effective upon the
Closing Date: (i) GTx SARM Know-How and GTx Patent Rights resulting from the
independent activities of GTx between the Execution Date and Closing Date shall
be deemed to be GTx Background SARM Know-How and GTx Background Patent Rights,
respectively, and subject to the licenses granted by GTx to Merck hereunder; and
(ii) Merck SARM Know-How and Merck Patent Rights resulting from the independent
activities of Merck between the Execution Date and Closing Date shall be deemed
to be Merck Background SARM Know-How and Merck Background Patent Rights,
respectively, and subject to the licenses granted by Merck to GTx hereunder.

ARTICLE 14 TERM AND TERMINATION

14.1   Term and Expiration. Except as set forth in Section 13.4, this Agreement
shall be effective as of the Closing Date and unless terminated earlier pursuant
to Sections 14.2 or 14.3, this

 
[ * ] = 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.

43

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Agreement shall continue in full force and effect until one or more Products has
received Marketing Authorization and, thereafter, until expiration of all
royalty obligations hereunder (the “Term”). Upon expiration of this Agreement,
the licenses granted hereunder pursuant to Sections 6.1, 6.3 and 6.4 shall
become fully paid-up, non-exclusive, perpetual licenses.
14.2 Termination by Merck.

  14.2.1   Notwithstanding anything contained herein to the contrary, from and
after [ * ] following the Closing Date, Merck shall have the right to terminate
this Agreement at any time in its sole discretion by giving ninety (90) days’
advance written notice to GTx.     14.2.2   If Merck terminates this Agreement
pursuant to Section 14.2.1, (i) Merck shall pay all amounts then due and owing
to GTx as of the termination date; (ii) Merck shall continue to be obligated
during the termination notice period to perform all of its obligations under
this Agreement, including its obligation to pay all expenses associated with any
ongoing Development Program (including the expense of any Clinical Trials
provided, that Merck shall not be obligated to continue such funding if Merck in
good faith believes that any such Clinical Trials should be terminated for
Safety reasons); and (iii) Merck shall continue to be obligated to provide any
research funding pursuant to Section 8.1 that would become due in the period
between Merck’s notice of termination and the third anniversary date of the
Funding Trigger Date in 2010. In addition, as a result of any such termination
by Merck under Section 14.2.1:

  (i)   all licenses and rights to GTx Patent Rights, GTx SARM Know-How, and GTx
Trademarks granted to Merck hereunder shall terminate;     (ii)   all
Information in tangible form and all substances or compositions delivered or
provided by GTx to Merck, as well as any other material provided by GTx to Merck
in any medium, shall be returned to GTx, except that Merck may retain one copy
of such Information solely for legal archive purposes;     (iii)   subject to
the remaining provisions of this Section 14.2.2, all Information in tangible
form and all substances or compositions delivered or provided by Merck to GTx,
as well as any other material provided by Merck to GTx in any medium, shall be
returned to Merck, except that GTx may retain one copy of such Information
solely for legal archive purposes;     (iv)   Merck shall transfer to GTx such
technology and information reasonably necessary to allow GTx to manufacture and
supply Compounds and Products covered under the GTx Patent Rights, GTx SARM
Know-How and/or Joint Patent Rights for which plans shall have been approved by
the PDC to commence Phase I Clinical Studies or which are in clinical
development or being marketed, including any finished Product inventory or
Product supply Merck then may have on hand to manufacture Product under such
Patent Rights, provided that Merck shall be relieved of this obligation in the
event Merck in good faith believes

 
[ * ] = 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.

44

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      there is a question of Safety pertaining to any such inventory or Product
supply;

  (v)   If Merck’s election to terminate this Agreement is effective prior to
completion of a Clinical Trial for any Compound covered by GTx Patent Rights,
GTx SARM Know-How and/or Joint Patent Rights that already has been Initiated,
Merck shall be obligated for the period ending thirty (30) days after the
effective date of such termination to continue to fund the Clinical Trial at its
expense in accordance with the protocol for the Clinical Trial approved by the
PDC, and to transfer any clinical data and Clinical Trial results generated from
such Clinical Trials during such period to GTx unless Merck shall reasonably
believe the Clinical Trial should not be continued or completed for reasons of
Safety.     (vi)   Merck shall promptly transfer and assign ownership to GTx of
all INDs, Marketing Authorizations and NDAs for Compounds and Products covered
by GTx Patent Rights, GTx SARM Know-How, and/or Joint Patent Rights, shall enter
into an agreement granting GTx a royalty-free exclusive license under all
trademarks owned by Merck covering such Compounds and Products, but only if such
trademarks have been publicly associated with such Compound or Product, and
shall take such other actions and execute such other instruments, assignments
and documents as may be necessary to effect the transfer of rights hereunder to
GTx;     (vii)   Merck shall agree that any SARM that is owned by or licensed in
by Merck or any Affiliate of Merck that (i) is in clinical development or is
commercialized for any Indication, including any Identified Indication, as of
the effective date of termination of the Agreement on account of Merck’s
exercise of its right to terminate under Section 14.2.1, or (ii) enters clinical
development or is commercialized for any Indication, including any Identified
Indication, during the period of [ * ] from and after the effective date of
termination, shall [ * ] notwithstanding the termination by Merck;     (viii)  
GTx shall grant to Merck a non-exclusive license under GTx Patent Rights and GTx
SARM Know-How (but not GTX Background SARM Know-How) (i) to use Merck Compounds
and Collaboration Compounds on a fully paid up basis for research purposes, and
(ii) to develop, make, have made, use, sell and offer to sell Products
containing (A) Merck Compounds or (B) Collaboration Compounds that have been
identified by the JRC as Development Candidates, or are in clinical development
or are being commercialized as of the termination date and Products embodying
such Collaboration Compounds and Merck Compounds; provided, however, that any
development and/or sale of such Products shall [ * ] notwithstanding Merck’s
termination of this Agreement, in each case in the form that such Collaboration
Compounds and Products exist as of such termination date, and excluding any GTx
SARM Know-How that is, and claims of GTx Patent Rights that specifically claim,

 
[ * ] = 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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      proprietary manufacturing methods or techniques developed independent of
this Agreement and generally applicable to other GTx compounds.

  (ix)   Merck shall grant to GTx a non-exclusive license under Merck Patent
Rights and Merck SARM Know-How (but not Merck Background SARM Know-How) (i) to
use GTx Compounds and Collaboration Compounds on a fully paid up basis for
research purposes, and (ii) to develop, make, have made, use, offer to sell,
sell and/or import (A) GTx Compounds and (B) Collaboration Compounds that have
been identified by the JRC as Development Candidates, or are in clinical
development, or are being commercialized as of the termination date, and
Products embodying such Collaboration Compounds and GTx Compounds, in each case
in the form that such Collaboration Compounds and Products exist as of such
termination date, and excluding any Merck SARM Know-How that is, and claims of
Merck Patent Rights that specifically claim, proprietary manufacturing methods
or techniques developed independent of this Agreement and generally applicable
to other Merck compounds; and     (x)   All Collaboration Compounds that are not
subject to Section 14.2.2(viii and ix) above (i.e,,Collaboration Compounds that
have not been identified by the JRC as Development Candidates as of the
termination date) will be fully transferred by Merck to GTx, and Merck shall
have no other or further rights in such Collaboration Compounds. Merck shall
grant to GTx (i) a non-exclusive license under the Merck Patent Rights and Merck
SARM Know-How (but not Merck Background SARM Know-How) and (ii) an exclusive
license under its rights in Joint Patent Rights and Joint Information and
Inventions, to make, have made, use, offer to sell, sell and/or import any such
Collaboration Compounds and Products embodying such Collaboration Compounds.

  14.2.3   Except for the surviving provisions set forth above and in
Section 14.4, the rights and obligations of the Parties hereunder shall
terminate as of the date of such termination.

14.3 Termination for Cause.

  14.3.1   Cause for Termination. This Agreement may be terminated at any time
during the Term:

  (a)   upon written notice by either Party if the other Party materially
breaches one or more of its obligations under this Agreement, 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 15.6; 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

 
[ * ] = 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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      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.

14.3.2 Effect of Termination for Cause.

  (a)   If Merck terminates this Agreement under Section 14.3.1, then it may
proceed under this Section 14.3.2(a) or under Section 14.3.3. If Merck
determines, at its option and sole discretion to terminate the Agreement under
this Section 14.3.2(a), then:

  (i)   All licenses and rights to Merck Patent Rights and Merck SARM Know-How
granted to GTx hereunder shall terminate.     (ii)   All Information in tangible
form and all substances or compositions delivered or provided by Merck to GTx,
as well as any other material provided by Merck to GTx in any medium, shall be
returned to Merck except that GTx may retain one copy of such Information solely
for legal archive purposes.     (iii)   Subject to GTx’s retained rights under
Section 6.4.1 for any Differentiated Compound that is not a Merck Compound that
GTx is developing or commercializing as of the date of such termination, and
further subject to Section 14.3.2(a)(iv), GTx will grant Merck (a) an exclusive
license under GTx Patent Rights, GTx SARM Know-How, GTx Information and
Inventions, GTx Joint Information and Inventions and Joint Patent Rights to
conduct research and to develop, make, have made, use, offer to sell, sell and
import (but also subject to GTx’s obligations to Third Parties) any GTx Compound
or Product containing a GTx Compound which has been identified as a Development
Candidate and for which a Phase I Clinical Study has been Initiated.     (iv)  
Subject to any set-off for damages incurred by Merck as a result of GTx’s breach
of the Agreement, Merck shall pay all amounts then due and owing to GTx under
this Agreement as of the termination date, and notwithstanding Merck’s
termination of this Agreement, shall [ * ]. GTx and Merck agree that [ * ].    
(v)   GTx shall agree that for a period of [ * ] from and after the effective
date of termination of the Agreement on account of the exercise by Merck of its
rights under this Section 14.3.2(a) on account of GTx’s uncured material breach
of this Agreement, [ * ].

  (b)   If GTx terminates this Agreement under Section 14.3.1:

  (i)   All licenses and rights to GTx Patent Rights, GTx SARM Know-How, and GTx
Trademarks granted to Merck hereunder shall terminate.     (ii)   All
Information in tangible form and all substances or compositions delivered or
provided by GTx to Merck, as well as any other material

 
[ * ] = 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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      provided by GTx to Merck in any medium, shall be returned to GTx, except
that Merck may retain one copy of such Information solely for legal archive
purposes.

  (iii)   Merck (a) shall grant GTx an exclusive license in and to any Joint
Patent Rights and Joint Information and Inventions, to conduct research and to
develop, make, have made, use, offer to sell, sell and import (i) GTx Compounds,
(ii) Collaboration Compounds within the scope of Joint Patent Rights, and
(iii) Products comprising any of the foregoing, but subject to Merck’s
obligations to Third Parties, if any, and excluding from the foregoing any Merck
SARM Know-How that is, and any claims of Merck Patent Rights that specifically
claim, proprietary manufacturing methods or techniques developed independent of
this Agreement and generally applicable to other Merck compounds; (b) shall
enter into an agreement granting GTx a royalty-free exclusive license under all
trademarks owned by Merck covering such Compounds covered by any GTx Patent
Rights, GTx SARM Know-How and/or Joint Patent Rights, but only if such
trademarks have been publicly associated with such Compound, and (c) shall grant
a non-exclusive license in and to Merck Patent Rights and Merck SARM Know-How
that has been applied to the formulation, manufacture or use of such GTx
Compounds, Collaboration Compounds or Products as of the date of such
termination, excluding, however, the proprietary manufacturing methods or
techniques described above.     (iv)   For any Product containing a
Collaboration Compound that is either (a) undergoing a Phase III Clinical Study
at the time GTx notifies Merck of its intention to terminate this Agreement
under Section 14.3.1, or (b) has concluded a Phase III Clinical Study and has
filed or expects to file for Marketing Authorization, Merck shall [ * ].     (v)
  Merck shall transfer to GTx such Joint Information and Inventions and Merck
Information and Inventions reasonably necessary to allow GTx to manufacture and
supply Compounds and Products covered under the GTx Patent Rights, GTx SARM
Know-How, and/or Joint Patent Rights for which Phase I Clinical Studies have
been commenced and which are being actively developed at the time of
termination, including any finished Product inventory or Product supply Merck
then may have on hand to manufacture Product under such Patent Rights, provided
that Merck shall be relieved of this obligation in the event Merck has a good
faith question of Safety pertaining to any such inventory or Product supply.    
(vi)   Merck shall promptly transfer and assign ownership to GTx of all INDs,
Marketing Authorizations and NDAs for Compounds and Products covered by GTx
Patent Rights, GTx SARM Know-How, Joint Patent Rights, and shall take such other
actions and execute such other instruments, assignments and documents as may be
necessary to effect the transfer of rights hereunder to GTx.

 
[ * ] = 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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  (vii)   Merck shall have a non-exclusive license to use Collaboration
Compounds, Joint Patent Rights, GTx Information and Inventions and GTx’s
interest in Joint Information and Inventions (but not GTX Background SARM
Know-How) on a fully paid up basis for internal research purposes only.

  14.3.3   Merck Limited Termination for Cause. If GTx materially breaches one
or more of its obligations under this Agreement, and does not cure a material
breach within the period set forth under Section 14.3.1(a), then Merck shall
have the option, in lieu of electing (at its sole discretion) to terminate this
Agreement in its entirety as provided in Section 14.3.2(a) to terminate the
Agreement only with respect to the following specific provisions: ARTICLE 3
(Research Program) and ARTICLE 4 (Development). If Merck elects so to terminate
this Agreement solely with respect to such provisions after GTx’s uncured
material breach, Merck shall give GTx written notice of such termination, and in
such event: (a) GTx shall cease work on the Research Program immediately;
(b) GTx will reimburse Merck for any amounts of Research Program funding
provided by Merck pursuant to Section 8.1 for the then-current quarter that have
not been expended by GTx on Research Program activities undertaken prior to and
up to the effective date of the termination hereunder; (c) GTx shall provide to
Merck (to the extent not previously provided) copies of all GTx Information and
Inventions generated under the Research Program, for use by Merck as licensed
under this Agreement; (d) Merck shall not be obligated to pay GTx any further
amounts for Research Program funding, except for reimbursement of amounts
contracted for outsourced studies that were authorized prior to such date and
that cannot be canceled: and (e) the remainder of the Agreement shall remain in
full force and effect, including all milestone and royalty payment provisions.
Notwithstanding the foregoing, all other claims and unpaid payment obligations,
if any, that accrued prior to such termination date shall survive termination of
the Agreement in accordance with, and to the extent provided in the Agreement.

14.4 Effect of Expiration or Termination; Survival.

  14.4.1   Upon termination of this Agreement by Merck pursuant to Section 14.2
or by GTx pursuant to Section 14.3.1, Merck and its Affiliates, sublicensees and
distributors shall be entitled, [ * ] following the effective date of
termination, to finish any work-in-progress and to sell any Products or Compound
remaining in inventory, in accordance with the terms of this Agreement, provided
that Merck shall pay GTx all royalties under Section 8.5 to which GTx is
entitled on account of any sales of such Product or Compound. Notwithstanding
the preceding sentence, GTx shall have the option to purchase from Merck any
finished Product and/or Compounds at Merck’s fully allocated cost calculated
according to GAAP for such Products and/or Compounds in lieu of Merck selling
the inventory. Merck agrees to promptly notify GTx of any finished Product and
Compound inventory and to allow GTx to purchase from Merck such amounts as GTx
shall elect.     14.4.2   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

 
[ * ] = 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.

49

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      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 Compound sold prior to such expiration or
termination. The provisions of ARTICLE 7 shall survive the expiration or
termination of this Agreement and shall continue in effect for ten (10) years.
In addition, except as set forth in Section 13.3, the provisions of ARTICLE 1
(Definitions), ARTICLE 10 (Representations and Warranties), ARTICLE 11
(Indemnification), ARTICLE 13 (Conditions to Closing), ARTICLE 14 (Termination),
and ARTICLE 15 (Miscellaneous) other than Section 15.2, and Sections 2.11, 6.4
and 8.7 shall survive any expiration or termination of this Agreement.

  14.4.3   ARTICLE 12 shall expire upon termination of this Agreement for any
reason. Following expiration of such Article, each Party shall be responsible
for the prosecution, maintenance and enforcement of its own Patent Rights. To
the extent Joint Patent Rights have been exclusively licensed to one Party under
this ARTICLE 14 following termination, such Party shall have the rights assigned
to Merck under ARTICLE 12 with respect to the patents and patent applications
which are the subject of such exclusive license, and the other Party shall have
the rights assigned to GTx under ARTICLE 12. To the extent Joint Patent Rights
have not been exclusively licensed to one Party following termination, the
Parties shall confer in good faith as to the best mechanism for preserving and
sharing the benefit of such Joint Patent Rights.

ARTICLE 15 MISCELLANEOUS

15.1   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
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 and continue diligently all
reasonable efforts necessary to cure such force majeure circumstances or to
perform its obligations in spite of the ongoing circumstances.

15.2 Assignment/ Change of Control/ Competing Pharma Change of Control.

  15.2.1   Except as otherwise provided in this Section 15.2, 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.     15.2.2   Merck may, without consent of GTx, assign this
Agreement and its rights and obligations hereunder in whole or in part to an
Affiliate of Merck, or in whole to its successor in interest in connection with
a Change of Control. GTx may, without Merck’s consent, assign this Agreement and
its rights and obligations hereunder (except as specified below) in whole to its
successor in interest in connection with a Change of Control.

 
[ * ] = 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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  15.2.3   In the event that there is a GTx Change of Control that is a
Competing Pharma Change of Control, then GTx shall provide written notice to
Merck at least thirty (30) days prior to the completion of such Change of
Control and Merck shall have the right, at Merck election at any time after such
Change of Control, to implement some or all of the following revisions to this
Agreement:

  (a)   Merck may limit some of the detail required as a part of its obligations
to provide GTx royalty related reports pursuant to Section 8.6; provided that
Merck shall not limit such reporting in a manner that would cause GTx to be in
breach of its obligations to UTRF to provide the related royalty reports
required under the UTRF License; provided further that GTx shall exercise
diligent efforts to permit Merck to make such disclosures directly to UTRF
without copy to GTx; provided further that, Merck will, if requested by GTx,
provide royalty reports specified in such Section 8.6 to an independent
certified public accounting firm for auditing in accordance with Section 8.7.  
  (b)   Merck may terminate any GTx activities relating to commercialization of
any Product;     (c)   Merck may terminate, without penalty, one or more of the
Joint Steering Committee, the Joint Research Committee, the Development
Committee and the Commercialization Committee. Regardless of such termination,
effective upon such Competing Pharma Change of Control, any decision rights of
such committees shall be exercised by Merck in its sole discretion, and
regardless of whether such meetings are terminated, any affirmative obligation
of Merck to disclose confidential Information in connection with such committee
meetings shall be terminated;     (d)   If GTx shall not have already exercised
such right, Merck may terminate, without penalty, GTx’s Opt-Out right pursuant
to Section 3.4.1 and/or the GTx Opt-In pursuant to Section 3.4.4; provided,
however, that if GTx has exercised its Opt-Out right pursuant to Section 3.4.1
and Merck has not exercised the Merck Opt-In pursuant to Section 3.4.3, then the
license rights set forth in Section 6.4.1 shall continue in effect;     (e)   In
the event that such Competing Pharma Change of Control occurs during the term of
the Research Program, Merck shall have the right to immediately terminate the
Research Program and any remaining funding obligations pursuant to Section 8.1
that would be owed after such termination; and     (f)   Merck shall have the
right to require GTx, including the Change of Control party, to adopt reasonable
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 research,
development and commercialization of Compounds and Products (collectively
“Sensitive Information”) beyond GTx personnel having access to and knowledge of
Sensitive Information prior to the Change of Control and to control the
dissemination of Sensitive Information disclosed after the Change of Control.
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
GTx to perform its obligations under this Agreement and

 
[ * ] = 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.

51

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      to prohibit the use of Sensitive Information for competitive reasons
against Merck and its Related Parties and Compounds or Products, including
without limitation, the use of Sensitive Information for the development or
commercialization of competing products.

  (g)   Merck may immediately terminate its obligations pursuant to Section 2.4
as to the Exclusivity Period.

Any attempted assignment not in accordance with this Section 15.2 shall be void.
Any permitted assignee shall assume all assigned obligations of its assignor
under this Agreement. For clarity, the intellectual property rights of the
assignee in a Change of Control transaction, as existing on the date of closing
of such transaction, shall be automatically excluded from the rights licensed to
the other Party under this Agreement.

15.3   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
herein 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.

15.4   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:

     
if to GTx, to:
  GTx, Inc.
 
  Mitchell S. Steiner
 
  Vice Chairman & CEO
 
  3 North Dunlap Ave.
 
  Memphis, TN 38163
 
  Facsimile No.: (901)507-8608
 
   
and:
  Henry P. Doggrell
 
  Vice President, General Counsel
 
  Attention: Office of Counsel
 
  Facsimile No.: 901-844-8075
 
   
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.: (908)735-1246
 
   
and
  Merck & Co., Inc.
 
  One Merck Drive
 
  Attention: Chief Licensing Officer

 
[ * ] = 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.

52

--------------------------------------------------------------------------------

 

     
 
  P.O. Box 100, WS2A-30
 
  Whitehouse Station, NJ 08889-0100
 
  Facsimile: (908)735-1214

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.

15.5   Applicable Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware and the patent laws of the
United States without reference to any rules of conflict of laws or renvoi.

15.6 Dispute Resolution.

  15.6.1   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” (defined below) 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.     15.6.2   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.     15.6.3   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.     15.6.4   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 Delaware statute of limitations.

 
[ * ] = 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.

53

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  15.6.5   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.     15.6.6
  As used in this Section, the term “Excluded Claim” shall mean a dispute,
controversy or claim that concerns (a) the scope, validity, enforceability,
inventorship or infringement of a patent, patent application, trademark or
copyright; or (b) any antitrust, anti-monopoly or competition law or regulation,
whether or not statutory.

15.7   Entire Agreement; Amendments. This Agreement, together with the Schedules
and Exhibits hereto, contains the entire understanding of the Parties with
respect to the Collaboration and the licenses granted hereunder. Any other
express or implied agreements and understandings, negotiations, writings and
commitments, either oral or written, in respect to the Collaboration and the
licenses granted hereunder are superseded by the terms of this Agreement. The
Schedules and Exhibits to this Agreement are incorporated herein 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 representative(s) of both Parties hereto. The Parties agree that,
effective as of the Closing Date, that certain Bilateral Disclosure Agreement
between the Parties dated as of May 9, 2007 (“Confidentiality Agreement”) shall
be superseded by this Agreement, and that disclosures made prior to the Closing
Date pursuant to the Confidentiality Agreement shall be subject to the
confidentiality and non-disclosure provisions of this Agreement.

15.8   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.

15.9   Independent Contractors. It is expressly agreed that GTx and Merck shall
be independent contractors and that the relationship between the two Parties
shall not constitute a partnership, joint venture or agency. Neither GTx 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.

15.10   No Solicitation. During the R&D Collaboration Term, Merck and its
Affiliates shall not, directly or indirectly, solicit for employment in Merck’s
or its Affiliates’ United States operations (or hire as a result of such
solicitation), any employee of GTx (a) who is principally involved in research,
development, regulatory, or clinical responsibilities related to SARMs, and
(b) whose gross annual salary [ * ]; provided, however, that nothing in this
Section 15.10 shall prohibit general advertising or solicitations or the hiring
of persons responding solely to such general advertising or solicitations.

15.11   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.

 
[ * ] = 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.

54

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15.12   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.

15.13   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.

15.14   Certain Conventions. Any reference in this Agreement to an Article,
Section, subsection, paragraph, clause, Schedule or Exhibit shall be deemed to
be a reference to an Article, Section, subsection, paragraph, clause, Schedule
or Exhibit, 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 “herein”, “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.

15.15   Business Day Requirements. In the event that any 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 required to be taken on the next occurring business day.

15.16   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.

 
[ * ] = 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.

55

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

              MERCK & CO., INC.   GTx, INC.
 
           
BY:
  /s/ Peter N. Kellogg   BY:   /s/ Mitchell S. Steiner, M.D.
 
           
 
  Peter N. Kellogg       Mitchell S. Steiner, M.D.
 
           
TITLE:
  Executive Vice President and   TITLE:   Vice Chairman, Chief Executive Officer
 
  Chief Financial Officer        

 
[ * ] = 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.

 

--------------------------------------------------------------------------------

 

SCHEDULES
 
[ * ] = 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.

2

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Exclusive License and Collaboration Agreement
Schedule 1.32 GTx Patents

            SERIAL NO.         DOCKET NO.   TITLE   INVENTOR (S)   PATENT NO.  
FILING DATE   STATUS                    
[ * ]
  [ * ]   [ * ]   [ * ]   [ * ]   [ * ]

 
[ * ] = 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.

 

--------------------------------------------------------------------------------

 

Exclusive License and Collaboration Agreement
Schedule 1.34 GTx Compounds
[ * ]
 
[ * ] = 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.

 

--------------------------------------------------------------------------------

 

Exclusive License and Collaboration Agreement
Schedule 1.40 GTx Trademarks

                                          Application Trademark   Country  
Class   Description   Date
Ostarine
  European Community     05     Pharmaceutical preparations for use in the
prevention or treatment of any disease related to androgen (testosterone)  
March 2, 2007
 
              deficiency, including but not limited to cardiovascular disease,
atherosclerosis, osteoporosis, bone disorders, cancer cachexia, kidney disease,
muscle wasting, dry eye, appetite disorders, frailty, metabolic syndrome,
obesity, wasting disorders, depression or sexual dysfunction      
Ostarine
  United States     05     Pharmaceutical preparations for use in the prevention
or treatment of any disease related to androgen (testosterone) deficiency,
including but not limited to cardiovascular disease, atherosclerosis,
osteoporosis, bone disorders, cancer cachexia, kidney disease, muscle wasting,
dry eye, appetite disorders, frailty, metabolic syndrome, obesity, wasting
disorders, depression or sexual dysfunction   August 29, 2007

 
[ * ] = 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.

 

--------------------------------------------------------------------------------

 

SCHEDULE 1.59

                                              APPLICATION   APPLICATION   PATENT
  GRANT   PUBLICATION   PUBLICATION CASE #   TITLE   COUNTRY   NUMBER   DATE  
NUMBER   DATE   NUMBER   DATE
[ * ]
  [ * ]   [ * ]   [ * ]   [ * ]   [ * ]   [ * ]   [ * ]   [ * ]
 
                               

 
[ * ] = 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.

 

--------------------------------------------------------------------------------

 

Exclusive License and Collaboration Agreement
Schedule 4.3.2
[ * ]
 
[ * ] = 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.

 

--------------------------------------------------------------------------------

 

Exclusive License and Collaboration Agreement
Schedule 7.5
 
[ * ] = 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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(MERCK LOGO) [g12156g1215601.gif]
  (GTX LOGO) [g12156g1215600.gif]
 
  News Release

             
Merck Contacts:
  Investor Relations   GTx Inc Contact:   Investor Relations
 
  Graeme Bell       Media
 
  Investor Relations       McDavid Stilwell
 
  1-908-423-5185       901-507-2667
 
           
 
  Ian R. McConnell        
 
  Media        
 
  1-908-423-3046        

GTx, Inc. and Merck & Co., Inc. Enter Global Strategic Collaboration for the
Development of SARMs,
a Novel Investigational Class of Drugs to Treat Muscle Loss and other
Musculoskeletal Conditions
MEMPHIS, Tenn., and WHITEHOUSE STATION, N.J., Nov. 6, 2007 — GTx, Inc. (NASDAQ:
GTXI) and Merck & Co., Inc. (NYSE: MRK) today announced an agreement providing
for a research and development and global strategic collaboration for selective
androgen receptor modulators (SARMs), a new class of drugs with the potential to
treat age-related muscle loss (sarcopenia) as well as other musculoskeletal
conditions. This collaboration includes GTx’s lead SARM candidate, Ostarine™,
which is currently being evaluated in a Phase II clinical trial for the
treatment of muscle loss in patients with cancer, and establishes a broad SARM
collaboration under which GTx and Merck will pool their programs and partner to
discover, develop, and commercialize current as well as future SARM molecules.
As part of this global agreement, Merck will be responsible for all future costs
associated with ongoing development and, if approved, commercialization of
Ostarine and other investigational SARMs resulting from the collaboration.
     Under the terms of the collaboration agreement and related stock purchase
agreement, GTx and Merck will combine their respective SARM research programs.
GTx will receive an upfront payment of $40 million plus $15 million in research
reimbursements to be paid over the initial three years of the collaboration. In
addition, Merck will make an equity investment of $30
 
[ * ] = 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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million in GTx common stock at a 40 percent premium to the 30 day average
closing price. GTx will also be eligible to receive up to $422 million in future
milestone payments associated with the development and approval of a drug
candidate if multiple indications receive regulatory approval. Additional
milestones may be received for the development and approval of other
collaboration drug candidates. GTx will receive royalties on any resulting
worldwide product revenue.
     “By combining our drug candidates, resources and talents, this Merck-GTx
collaboration positions both companies for success in the development and
commercialization of SARMs,” said Mitchell S. Steiner, M.D., chief executive
officer of GTx. “We believe that Ostarine and our other SARMs offer the
potential to address a number of unmet medical needs focused on musculoskeletal
disorders. GTx believes that Merck has the world class scientific, clinical
development, and commercial expertise to capture the potential of the SARM
class.”
     “By selectively targeting the androgen receptor, SARMs offer a promising
alternative to androgen therapy with the potential advantages of oral dosing,
tissue selectivity and improved safety and tolerability,” said Alan B.
Ezekowitz, MBChB, D.Phil., senior vice president and franchise head, Bone,
Respiratory, Immunology, and Endocrine, Merck Research Laboratories. “GTx has
established a strong scientific reputation in the research and development of
novel SARMs and we look forward to working with Dr. Steiner and his team.”
     The effectiveness of the collaboration agreement and the investment in GTx
common stock by Merck are subject to the expiration or earlier termination of
the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act, if
applicable, as well as other customary closing conditions.
Conference Call
     GTx will host a conference call at 9 a.m. Eastern Time today to discuss the
GTx-Merck collaboration as well as GTx’s third quarter 2007 financial results.
To listen to the conference call, please dial: 800-901-5248 from the United
States and Canada or 617-786-4512 (International). The passcode for the call is
#62291111.
     A playback of the call will be available beginning today at 11:00 a.m.
Eastern Time through November 20, and may be accessed by dialing: 888-286-8010
from the United States and Canada or 617-801-6888 (International). The
reservation number for the replay is #89187183.
 
[ * ] = 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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About SARMs
     Selective androgen receptor modulators (SARM) are a new class of drugs with
the potential to treat sarcopenia (age-related muscle loss) and other
musculoskeletal conditions. Ostarine, a first in class SARM, has demonstrated
the ability to build lean body mass (muscle) in a proof of concept clinical
trial and may have the potential to improve physical performance. Ostarine is
currently being evaluated in a Phase II clinical trial for the treatment of
muscle loss in patients with cancer.
About GTx
     GTx, headquartered in Memphis, Tenn., is a biopharmaceutical company
dedicated to the discovery, development, and commercialization of small
molecules that selectively target hormone pathways to treat cancer, osteoporosis
and bone loss, muscle wasting and other serious medical conditions. GTx is
developing ACAPODENE® (toremifene citrate), a selective estrogen receptor
modulator, or SERM, in two separate clinical programs in men: first, a pivotal
Phase III clinical trial for the treatment of serious side effects of androgen
deprivation therapy for advanced prostate cancer, and second, a pivotal Phase
III clinical trial for the prevention of prostate cancer in high risk men with
high grade prostatic intraepithelial neoplasia, or PIN. GTx has licensed to
Ipsen Limited exclusive rights in Europe to develop and commercialize ACAPODENE.
GTx has agreed to a collaboration with Merck & Co., Inc. for the development and
global commercialization of selective androgen receptor modulators, or SARMs, a
new class of drugs with the potential to treat a variety of indications
associated with muscle wasting and bone loss including sarcopenia and
osteoporosis, cancer cachexia, and chronic kidney disease muscle wasting. GTx is
also developing GTx-878, an estrogen receptor beta agonist for the treatment of
benign prostatic hyperplasia and chronic prostatitis. GTx is planning to
initiate human clinical studies for GTx-878 in 2009.
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 medicine 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
http://www.merck.com.
 

[ * ] =   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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GTx Forward-Looking Statement
     This press release contains forward-looking statements based upon GTx’s
current expectations, including all statements (i) that reflect the completion
of the proposed collaboration with Merck (including statements related to GTx’s
receipt of upfront licensing fees, guaranteed preclinical development
reimbursements, development and approval milestone payments and royalty
payments, as well as proceeds from the sale of GTx common stock to Merck); and
(ii) relating to the prospects for, and the development and commercialization
of, Ostarine and other SARMs. Forward-looking statements involve risks and
uncertainties. GTx’s actual results and the timing of events could differ
materially from those anticipated in such forward-looking statements as a result
of these risks and uncertainties, which include, without limitation, the risks
that (i) the collaboration agreement may not become effective and the investment
by Merck in GTx common stock may not occur as a result of the failure to satisfy
certain closing conditions under the agreements with Merck, including relating
to the Hart-Scott-Rodino Antitrust Improvements Act of 1974; (ii) even if the
collaboration agreement becomes effective, future payments to GTx may not be
realized due to the inability to achieve certain milestones under the
collaboration agreement or the failure to develop and commercialize Ostarine and
other SARMs included in or arising from the collaboration; (iii) product
candidates developed under the collaboration may not be commercialized as a
result of the failure to obtain required regulatory approvals, including if
clinical trials do not demonstrate safety and efficacy in humans; (iv) even if
required regulatory approvals are obtained, products developed under the
collaboration may not gain market acceptance among physicians, patients, health
care payors and the medical community; and (v) GTx could utilize its available
cash resources sooner than it currently expects and may be unable to raise
capital when needed, which would force GTx to delay, reduce or eliminate its
product development programs or commercialization efforts. You should not place
undue reliance on these forward-looking statements, which apply only as of the
date of this press release. GTx’s quarterly report on form 10-Q filed with the
U.S. Securities and Exchange Commission on August 1, 2007, contains under the
heading “Risk Factors,” a more comprehensive description of these and other
risks to which GTx is subject. GTx expressly disclaims any obligation or
undertaking to release publicly any updates or revisions to any forward-looking
statements contained herein to reflect any change in its expectations with
regard thereto or any change in events, conditions or circumstances on which any
such statements are based.
 

[ * ] =   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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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 risk factors and cautionary
statements in Item 1A of Merck’s Form 10-K for the year ended December 31, 2006,
and in its periodic reports on Form 10-Q and Form 8-K, which the Company
incorporates by reference.
# # #
 

[ * ] =   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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GTx Questions & Answers
Draft: 11/5
BACKGROUND
[ * ]
 

[ * ] =   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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Exclusive License and Collaboration Agreement
Schedule 10.2.3
NONE
GTx Confidential Information
October 31, 2007
 

[ * ] =   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.