Document:

exv10w2

 

Exhibit 10.2

AMENDMENT NO. 1

TO THE EXECUTIVE EMPLOYMENT AGREEMENT OF

NICK P. CALAMOS

AMENDMENT NO. 1, dated as of June 1, 2007 (“Amendment No. 1”), to the Executive Employment
Agreement of Nick P. Calamos dated as of October 26, 2004 (the “Agreement”), by and among Calamos
Asset Management, Inc., a Delaware Corporation, Calamos Advisors LLC., a Delaware Limited Liability
Company, and Nick P. Calamos, an individual.

WHEREAS, pursuant to Section 14 of the Agreement, the parties hereto desire to amend the terms of
the Agreement to reflect a certain revision.

NOW, THEREFORE, the parties hereto hereby agree as follows:

	 	1.	 	Amendment. Section 4(c)(i)(B)(2) of the Agreement is hereby amended to provide
as follows: “any material adverse change in the status, position or responsibilities of
Executive, including a change in Executive’s reporting relationship or removal from or
failure to re-elect Executive as a member of the Board;”.
	 
	 	2.	 	Reaffirmation. In all other respects the Agreement remains the same and in
full force and effect.
	 
	 	3.	 	Effective Date. This Amendment No. 1 shall become effective as of the date
first written above (the “Effective Date”). On and after the Effective Date of this
Amendment No. 1, each reference in the Agreement to “this Agreement,” “hereunder,”
“hereof,” or words of like import referring to the Agreement shall mean and be a reference
to the Agreement as amended by this Amendment No. 1.
	 
	 	4.	 	Governing Law. The validity and construction of this Amendment No. 1 shall be
determined and governed in all respects by the laws of the State of Illinois without regard
to conflict of laws principles.

IN WITNESS WHEREOF, the parties hereto have executed this Amendment No. 1 as of the day and year
first written above.

	 	 	 	 	 	 	 	 	 	 	 
	CALAMOS ASSET MANAGEMENT, INC.	 	 	 	NICK P. CALAMOS	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	By:

Its:
	 	/s/ John P. Calamos, Sr.
 

Chairman, CEO & Co-CIO
 

	 	 	 	 /s/
Nick P. Calamos
 

	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	CALAMOS ADVISORS LLC	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	By:

Its:
	 	/s/ Patrick H. Dudasik
 

EVP, COO, CFO & Treasurerexv10w3

 

Exhibit 10.3

AMENDMENT NO. 1

TO THE EXECUTIVE EMPLOYMENT AGREEMENT OF

PATRICK H. DUDASIK

AMENDMENT NO. 1, dated as of June 1, 2007 (“Amendment No. 1”), to the Executive Employment
Agreement of Patrick H. Dudasik dated as of October 26, 2004 (the “Agreement”), by and among
Calamos Asset Management, Inc., a Delaware Corporation, Calamos Advisors LLC., a Delaware Limited
Liability Company, and Patrick H. Dudasik, an individual.

WHEREAS, pursuant to Section 14 of the Agreement, the parties hereto desire to amend the terms of
the Agreement to reflect a certain revision.

NOW, THEREFORE, the parties hereto hereby agree as follows:

	 	1.	 	Amendment. Section 4(c)(i)(B)(2) of the Agreement is hereby amended to provide
as follows: “any material adverse change in the status, position or responsibilities of
Executive, including a change in Executive’s reporting relationship;”.
	 
	 	2.	 	Reaffirmation. In all other respects the Agreement remains the same and in
full force and effect.
	 
	 	3.	 	Effective Date. This Amendment No. 1 shall become effective as of the date
first written above (the “Effective Date”). On and after the Effective Date of this
Amendment No. 1, each reference in the Agreement to “this Agreement,” “hereunder,”
“hereof,” or words of like import referring to the Agreement shall mean and be a reference
to the Agreement as amended by this Amendment No. 1.
	 
	 	4.	 	Governing Law. The validity and construction of this Amendment No. 1 shall be
determined and governed in all respects by the laws of the State of Illinois without regard
to conflict of laws principles.

IN WITNESS WHEREOF, the parties hereto have executed this Amendment No. 1 as of the day and year
first written above.

	 	 	 	 	 	 	 	 	 	 	 
	CALAMOS ASSET MANAGEMENT, INC.	 	 	 	PATRICK H. DUDASIK	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	By:

Its:
	 	/s/ John P. Calamos, Sr.
 

Chairman, CEO & Co-CIO
 

	 	 	 	 /s/
Patrick H. Dudasik
 

	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	CALAMOS ADVISORS LLC	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	By:

Its:
	 	/s/ Patrick H. Dudasik
 

EVP, COO, CFO & Treasurerexv10w4

 

Exhibit 10.4

AMENDMENT NO. 1

TO THE EXECUTIVE EMPLOYMENT AGREEMENT OF

JAMES S. HAMMAN, JR.

AMENDMENT NO. 1, dated as of June 1, 2007 (“Amendment No. 1”), to the Executive Employment
Agreement of James S. Hamman, Jr. dated as of October 26, 2004 (the “Agreement”), by and among
Calamos Asset Management, Inc., a Delaware Corporation, Calamos Advisors LLC., a Delaware Limited
Liability Company, and James S. Hamman, Jr., an individual.

WHEREAS, pursuant to Section 14 of the Agreement, the parties hereto desire to amend the terms of
the Agreement to reflect a certain revision.

NOW, THEREFORE, the parties hereto hereby agree as follows:

	 	1.	 	Amendment. Section 4(c)(i)(B)(2) of the Agreement is hereby amended to provide
as follows: “any material adverse change in the status, position or responsibilities of
Executive, including a change in Executive’s reporting relationship;”.
	 
	 	2.	 	Reaffirmation. In all other respects the Agreement remains the same and in
full force and effect.
	 
	 	3.	 	Effective Date. This Amendment No. 1 shall become effective as of the date
first written above (the “Effective Date”). On and after the Effective Date of this
Amendment No. 1, each reference in the Agreement to “this Agreement,” “hereunder,”
“hereof,” or words of like import referring to the Agreement shall mean and be a reference
to the Agreement as amended by this Amendment No. 1.
	 
	 	4.	 	Governing Law. The validity and construction of this Amendment No. 1 shall be
determined and governed in all respects by the laws of the State of Illinois without regard
to conflict of laws principles.

IN WITNESS WHEREOF, the parties hereto have executed this Amendment No. 1 as of the day and year
first written above.

	 	 	 	 	 	 	 	 	 	 	 
	CALAMOS ASSET MANAGEMENT, INC.	 	 	 	JAMES S. HAMMAN, JR.	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	By:

Its:
	 	/s/ John P. Calamos, Sr.
 

Chairman, CEO & Co-CIO
 

	 	 	 	 /s/
James S. Hamman, Jr.
 

	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	CALAMOS ADVISORS LLC	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	By:

Its:
	 	/s/ Patrick H. Dudasik
 

EVP, COO, CFO & Treasurerexv10w1

 

Exhibit 10.1

EXCLUSIVE LICENSE AND RESEARCH COLLABORATION AGREEMENT

by and between

MERCK & CO., INC.

and

SURMODICS, INC.

 

TABLE OF CONTENTS

	 	 	 	 	 	 	 	 	 	 	 
	1.	 	DEFINITIONS	 	 	1	 
	 
	 	 	 	 	 	 	 	 	 	 
	2.	 	RESEARCH PROGRAM; REGULATORY MATTERS	 	 	10	 
	 
	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	2.1	 	 	Purpose; Responsibilities
	 	 	10	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	2.2	 	 	Conduct of Research
	 	 	11	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	2.3	 	 	Outline, Specification and Funding of SurModics’ Research Program Activities
	 	 	12	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	2.4	 	 	Program Coordinators
	 	 	15	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	2.5	 	 	Joint Research Committee
	 	 	15	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	2.6	 	 	Exchange of Information
	 	 	16	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	2.7	 	 	Records and Reports
	 	 	16	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	2.8	 	 	Research Information and Inventions
	 	 	17	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	2.9	 	 	Research Program Term; Termination of Research Program
	 	 	18	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	2.10	 	 	Materials
	 	 	19	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	2.11	 	 	[*]
	 	 	19	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	2.12	 	 	Use of Human Materials
	 	 	19	 
	 
	 	 	 	 	 	 	 	 	 	 
	3.	 	LICENSES; DEVELOPMENT AND COMMERCIALIZATION	 	 	20	 
	 
	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	3.1	 	 	License Grants to Merck
	 	 	20	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	3.2	 	 	Option for Exclusive Other [*] Licenses
	 	 	21	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	3.3	 	 	License Grants to SurModics
	 	 	22	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	3.4	 	 	No Implied Licenses; Reservation of Rights
	 	 	23	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	3.5	 	 	Development and Commercialization
	 	 	23	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	3.6	 	 	Excused Performance
	 	 	24	 
	 
	 	 	 	 	 	 	 	 	 	 
	4.	 	CONFIDENTIALITY AND PUBLICATION	 	 	24	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	4.1	 	 	Nondisclosure Obligation
	 	 	24	 

 

			
	*	 	Portions omitted pursuant to a request for confidential
treatment and filed separately with the Securities and Exchange Commission.

 

	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	4.2	 	 	SurModics Know-How
	 	 	25	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	4.3	 	 	Publication
	 	 	25	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	4.4	 	 	Publicity/Use of Names
	 	 	26	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	4.5	 	 	Certain Obligations of SurModics
	 	 	27	 
	 
	 	 	 	 	 	 	 	 	 	 
	5.	 	PAYMENTS; ROYALTIES AND REPORTS	 	 	27	 
	 
	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	5.1	 	 	License Fee and Milestone Payments
	 	 	27	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	5.2	 	 	Royalties
	 	 	28	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	5.3	 	 	Reports; Payment of Royalty
	 	 	30	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	5.4	 	 	Audits
	 	 	30	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	5.5	 	 	Payment Exchange Rate
	 	 	31	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	5.6	 	 	Income Tax Withholding
	 	 	31	 
	 
	 	 	 	 	 	 	 	 	 	 
	6.	 	REPRESENTATIONS AND WARRANTIES	 	 	32	 
	 
	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	6.1	 	 	Mutual Representations and Warranties
	 	 	32	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	6.2	 	 	SurModics Representations and Warranties
	 	 	32	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	6.3	 	 	SurModics Further Representations, Warranties and Covenants
	 	 	34	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	6.4	 	 	Merck Representations and Warranties
	 	 	34	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	6.5	 	 	DISCLAIMER OF WARRANTIES
	 	 	34	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	6.6	 	 	LIMITATION ON DAMAGES TO OTHER PARTY
	 	 	35	 
	 
	 	 	 	 	 	 	 	 	 	 
	7.	 	PATENT PROVISIONS	 	 	35	 
	 
	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	7.1	 	 	Filing, Prosecution and Maintenance of Patents
	 	 	35	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	7.2	 	 	[*]
	 	 	36	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	7.3	 	 	Interference, Opposition, Reexamination and Reissue
	 	 	36	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	7.4	 	 	Enforcement and Defense
	 	 	37	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	7.5	 	 	Infringement
	 	 	38	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	7.6	 	 	Cooperation; Patent Term Extension and Restoration
	 	 	39	 

 

			
	*	 	Portions omitted pursuant to a request for confidential
treatment and filed separately with the Securities and Exchange Commission.

-ii-

 

	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	7.7	 	 	[*]
	 	 	39	 
	 
	 	 	 	 	 	 	 	 	 	 
	8.	 	MANUFACTURING AND SUPPLY OBLIGATIONS	 	 	40	 
	 
	 	 	 	 	 	 	 	 	 	 
	9.	 	TERM AND TERMINATION	 	 	40	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	9.1	 	 	Term and Expiration
	 	 	40	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	9.2	 	 	Termination by Merck
	 	 	40	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	9.3	 	 	Termination for Cause
	 	 	41	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	9.4	 	 	Effect of Expiration or Termination; Survival
	 	 	42	 
	 
	 	 	 	 	 	 	 	 	 	 
	10.	 	INDEMNIFICATION	 	 	43	 
	 
	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	10.1	 	 	Indemnification by Merck
	 	 	43	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	10.2	 	 	Indemnification by SurModics
	 	 	43	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	10.3	 	 	Third Party Claim Procedure
	 	 	43	 
	 
	 	 	 	 	 	 	 	 	 	 
	11.	 	MISCELLANEOUS	 	 	44	 
	 
	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	11.1	 	 	Force Majeure
	 	 	44	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	11.2	 	 	Assignment/ Change of Control
	 	 	44	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	11.3	 	 	Severability
	 	 	45	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	11.4	 	 	Notices
	 	 	45	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	11.5	 	 	Applicable Law
	 	 	46	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	11.6	 	 	Dispute Resolution
	 	 	46	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	11.7	 	 	Entire Agreement; Amendments
	 	 	48	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	11.8	 	 	Affiliates
	 	 	48	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	11.9	 	 	Headings
	 	 	48	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	11.10	 	 	Independent Contractors
	 	 	48	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	11.11	 	 	Waiver
	 	 	48	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	11.12	 	 	Cumulative Remedies
	 	 	49	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	11.13	 	 	Waiver of Rule of Construction
	 	 	49	 

 

			
	*	 	Portions omitted pursuant to a request for confidential
treatment and filed separately with the Securities and Exchange Commission.

-iii-

 

	 	 	 	 	 	 	 	 	 	 	 
	 

	 	 	11.14	 	 	Certain Conventions
	 	 	49	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	11.15	 	 	Business Day Requirements
	 	 	49	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	11.16	 	 	Counterparts
	 	 	49	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	11.17	 	 	Adverse Experience Reporting
	 	 	49	 

-iv-

 

SCHEDULES

	 	 	 
	SCHEDULE 1.58

	 	REGULATORY RELATED DOCUMENTS
	 
	 	 
	SCHEDULE 1.65

	 	SURMODICS BACKGROUND PATENTS
	 
	 	 
	SCHEDULE

	 	[*]
	 
	 	 
	SCHEDULE 2.1

	 	RESEARCH PROGRAM
	 
	 	 
	SCHEDULE 2.3.2

	 	[*]
	 
	 	 
	SCHEDULE 2.3.3

	 	[*]
	 
	 	 
	SCHEDULE 3.2.3

	 	FORM OF FEASIBILITY STUDY AGREEMENT
	 
	 	 
	SCHEDULE

	 	[*]
	 
	 	 
	SCHEDULE 4.4

	 	PRESS RELEASES
	 
	 	 
	SCHEDULE 5.1.3

	 	[*]
	 
	 	 
	SCHEDULE 6.2(a)

	 	[*]
	 
	 	 
	SCHEDULE 6.2(l)

	 	[*]
	 
	 	 
	SCHEDULE 6.3

	 	[*]
	 
	 	 
	SCHEDULE 7.2

	 	[*]

 

			
	*	 	Portions omitted pursuant to a request for confidential
treatment and filed separately with the Securities and Exchange Commission.

-v-

 

EXCLUSIVE LICENSE AND RESEARCH COLLABORATION AGREEMENT

THIS AGREEMENT (this “Agreement”) is effective as of June 26, 2007 (the “Effective Date”) and
is entered into by and between Merck & Co., Inc., a corporation organized and existing under the
laws of New Jersey (“Merck”) and SurModics, Inc., a corporation organized and existing under the
laws of Minnesota (“SurModics”).

RECITALS:

WHEREAS, SurModics has developed SurModics Know-How (as hereinafter defined) and has SurModics
Patent Rights (as hereinafter defined) relating to its I-vation Platform (as hereinafter defined);

WHEREAS, Merck and SurModics desire to enter into a research collaboration to develop the
I-vation Platform for use with a certain steroid and with Merck’s pharmaceutical and biological
products upon the terms and conditions set forth herein;

WHEREAS, Merck desires to obtain a license under SurModics Technology (as hereinafter defined)
upon the terms and conditions set forth herein and SurModics desires to grant such a license;

NOW, THEREFORE, in consideration of the foregoing premises and the mutual covenants herein
contained, the Parties hereby agree as follows:

	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	 	“Affiliate” shall mean with respect to any Party, (a) any other Person of which [*] or more
of the securities or other ownership interests representing the equity, the voting stock or,
if applicable, general partnership interest of such other Person are owned, controlled, or
held, directly or indirectly by, or under common ownership or control with, such Party; or (b)
any other Person that, directly or indirectly, owns, controls, or holds [*] (or the maximum
ownership interest permitted by law) or more of the securities or other ownership interests
representing the equity, the voting stock or, if applicable, the general partnership interest,
of such Party or is otherwise able to control the direction of such Party.[*]

 

			
	*	 	Portions omitted pursuant to a request for confidential
treatment and filed separately with the Securities and Exchange Commission.

-1-

 

	1.3	 	“Calendar Quarter” shall mean the respective periods of three (3) consecutive calendar months
ending on March 31, June 30, September 30 and December 31.
	 
	1.4	 	“Calendar Year” shall mean each successive period of twelve (12) months commencing on January
1 and ending on December 31.
	 
	1.5	 	“cGMPs” shall mean all applicable laws and regulations, including, without limitation, the
laws and regulations applicable in the United States, European Union, and/or Japan, relating
to the Manufacture (as defined in Article 8 and the Supply Agreement) of I-vation Platform,
Products and/or Surgical Instruments.
	 
	1.6	 	“Change of Control” shall mean with respect to a Party: (a) the sale of all or substantially
all of such Party’s assets or business relating to this Agreement; (b) 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 [*] of the combined
voting power of the surviving entity immediately after such merger, reorganization or
consolidation; or (c) a person or entity, or group of persons or entities, acting in concert
to acquire more than [*] of the voting equity securities or management control of such Party.
	 
	1.7	 	“Clinical Trial” shall mean a Phase I Clinical Trial, Phase II Clinical Trial or Phase III
Clinical Trial, as applicable.
	 
	1.8	 	“Combination Product” shall mean the I-vation Platform incorporating a combination of two or
more of the following: TA Compound(s), [*] or Licensed Other [*] Compound(s) as active
ingredients and, for the purposes of Sections 5.2 through 5.6, in final form (a) for sale by
prescription, over-the-counter or any other method, or (b) for administration in a Clinical
Trial or post-Marketing Authorization clinical trial.
	 
	1.9	 	“Commercially Reasonable Efforts” shall mean (a) with respect to the efforts to be expended
by a Party to accomplish a particular objective other than those covered by clause (b), the
good faith and diligent efforts, consistent with the usual practice followed by such Party, to
accomplish a similar objective under similar circumstances; and (c) [*] Commercially
Reasonable Efforts shall be determined on a market-by-market basis for a particular Product,
and it is anticipated that the level of effort will be different for different markets, and
will change over time, reflecting changes in the status of the Product and the market(s)
involved.
	 
	1.10	 	“Competing Pharma Change of Control” means a Change of Control involving a Person or group of
Persons acting in concert (a) with collective worldwide sales of ethical pharmaceutical
products in the Calendar Year that preceded the Change of Control were [*] or more, or (b) [*]

 

			
	*	 	Portions omitted pursuant to a request for confidential
treatment and filed separately with the Securities and Exchange Commission.

-2-

 

	1.11	 	“Competing Product” shall mean, with respect to a particular Product and country of sale, a
product (a) using a [*]
	 
	1.12	 	“Control,” “Controls” or “Controlled by” shall mean with respect to any item of or right
under SurModics Patent Rights, Merck Patent Rights, SurModics Know-How or Merck Know-How, or
any other intellectual property rights, the possession of (whether by ownership or license,
other than pursuant to this Agreement), or the ability of a Party or its Affiliates, as the
case may be, to grant access to, or a license or sublicense of, such 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.
	 
	1.13	 	“Extraction Tool” shall mean the surgical tool that is used to remove the Intravitreal
Implant from the eye.
	 
	1.14	 	“FDA” means the U.S. Food and Drug Administration.
	 
	1.15	 	“Field” shall mean [*]
	 
	1.16	 	“Filing” of an NDA shall mean the acceptance by a Regulatory Authority of an NDA for filing.
	 
	1.17	 	“First Commercial Sale” shall mean, with respect to any Product, the first sale for end use
or consumption of such Product in a country, excluding, however, any sale or other
distribution for use in a Clinical Trial or post-Marketing Authorization clinical trial.
	 
	1.18	 	“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.
	 
	1.19	 	“Improvements” shall mean any and all enhancements, discoveries, inventions, additions,
alterations, modifications, design changes and other improvements, whether or not patentable,
with respect to the I-vation Platform and Surgical Instruments Controlled by SurModics or its
Affiliates during the Term.
	 
	1.20	 	“IND” shall mean an Investigational New Drug application, Investigational Device Exemption,
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.
	 
	1.21	 	“Information” shall mean any and all information and data including without limitation, all
Merck Know-How, SurModics Know-How, and all other scientific, pre-clinical,

 

			
	*	 	Portions omitted pursuant to a request for confidential
treatment and filed separately with the Securities and Exchange Commission.

-3-

 

	 	 	clinical, regulatory, manufacturing, marketing, financial and commercial information or
data, whether communicated in writing or orally or by any other method, which is provided by
one Party to the other Party in connection with this Agreement.
	 
	1.22	 	“Initiation,” “Initiates” or “Initiated” shall mean, with respect to a Clinical Trial, the
administration by Merck or its Affiliates of the first dose to a patient in such Clinical
Trial.
	 
	1.23	 	“Initiation of a Feasibility Study” shall mean [*]
	 
	1.24	 	“Initiation of IND-Enabling Study” shall mean [*]
	 
	1.25	 	“Insertion Tool” shall mean the surgical tool that is used to insert the Intravitreal Implant
into the eye.
	 
	1.26	 	“Intravitreal Implant” shall mean [*]
	 
	1.27	 	“Invention” shall mean any process, method, composition of matter, article of manufacture,
discovery or finding that is conceived and/or reduced to practice as a result of the Research
Program and/or a Feasibility Study conducted in accordance with this Agreement.
	 
	1.28	 	“I-vation Platform” shall mean [*]
	 
	1.29	 	“I-vation TA Product” shall mean the Intravitreal Implant incorporating a TA Compound as
evaluated in the STRIDE Clinical Trial.
	 
	1.30	 	“JHU License Agreement” means that certain license agreement entered into on or about
September 4, 2001 between The Johns Hopkins University (“JHU”) and InnoRx, Inc. (“InnoRx")
relating to Drug Delivery, the Addendum entered into on or about November 14, 2003, the Second
Addendum entered into on or about December 21, 2004, the Amendment entered into January 14,
2005, the Third Addendum entered into on May 31, 2007, and the letter agreement dated as of
June 19, 2007.
	 
	1.31	 	“Joint Program Information and Inventions” shall mean all protocols, formulas, data,
Inventions, know-how and trade secrets, resulting from the Research Program and/or the
Feasibility Studies, whether or not patentable, developed or invented jointly by employee(s)
of Merck, its Affiliates and/or a Third Party acting on behalf of Merck or its Affiliates
within the scope of the Research Program and/or the Feasibility Studies, on the one hand, and
employee(s) of SurModics, its Affiliates and/or a Third Party acting on behalf of SurModics or
its Affiliates within the scope of the Research Program and/or the Feasibility Studies, on the
other hand.
	 
	1.32	 	“Joint Program Know-How” shall mean all Joint Program Information and Inventions that are not
claimed or covered by Joint Program Patent Rights.

 

			
	*	 	Portions omitted pursuant to a request for confidential
treatment and filed separately with the Securities and Exchange Commission.

-4-

 

	1.33	 	“Joint Program Patent Rights” shall mean any and all Patent Rights which during the Term are
Controlled by SurModics and Merck (or their respective Affiliates) in accordance with Section
2.8.1(c) that claim or cover Joint Program Information and Inventions.
	 
	1.34	 	“JRC” or “Joint Research Committee” shall mean the joint research committee established to
facilitate the Research Program and Feasibility Studies, as more fully defined in
Section2.5.1.
	 
	1.35	 	[*]
	 
	1.36	 	[*]
	 
	1.37	 	“Know-How Royalty” shall have the meaning given such term in Section 5.2.1(b).
	 
	1.38	 	“Licensed Other [*] Compounds” shall mean the Other [*]
	 
	1.39	 	“Major EU Market” shall mean [*]
	 
	1.40	 	“Marketing Authorization” shall mean all approvals and permits from the relevant Regulatory
Authority necessary to market and sell a Product and/or Surgical Instrument in any country
(including without limitation, all applicable pricing and governmental reimbursement approvals
even if not legally required to sell Product or Surgical Instrument(s) in a country).
	 
	1.41	 	“Merck Program Information and Inventions” shall mean all protocols, formulas, data,
Inventions, know-how and trade secrets, resulting from the Research Program and/or Feasibility
Study, whether or not patentable, and is developed or invented solely by employees of Merck or
its Affiliates or Third Parties acting on behalf of Merck or its Affiliates within the scope
of the Research Program and/or the Feasibility Studies.
	 
	1.42	 	“Merck Know-How” shall mean any information and materials, including but not limited to
discoveries, improvements, processes, methods, protocols, formulas, data, inventions
(including without limitation Merck Program Information and Inventions and Merck’s rights in
Joint Program Information and Inventions), know-how and trade secrets, patentable or
otherwise, which as of the Effective Date and/or during the Term, (a) are Controlled by Merck
or its Affiliates, (b) are not generally known and (c) are necessary to SurModics in the
performance of its obligations under the Research Program, the Feasibility Studies and/or the
manufacture and supply by SurModics of Clinical Supplies and commercial supply of the Products
to Merck and its Related Parties in accordance with Article 8.
	 
	1.43	 	“Merck Patent Rights” shall mean Patent Rights which during the Term are Controlled by Merck
or its Affiliates that claim or cover Merck Know-How.

 

			
	*	 	Portions omitted pursuant to a request for confidential
treatment and filed separately with the Securities and Exchange Commission.

-5-

 

	1.44	 	“NDA” shall mean a New Drug Application, Biologics License Application, Worldwide Marketing
Application, Marketing Authorization Application, Premarket Approval (PMA), Premarket
Notification filing pursuant to Section 510(k) of the US Food, Drug and Cosmetics 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.
	 
	1.45	 	“Net Sales” shall mean the gross amount invoiced for Products sold by Merck or its Related
Parties to the first Third Party after deducting, if not previously deducted, from the amount
invoiced:

	 	(a)	 	trade and quantity discounts other than early payment cash discounts;
	 
	 	(b)	 	returns, rebates, chargebacks and other allowances;
	 
	 	(c)	 	retroactive price reductions that are actually allowed or granted;
	 
	 	(d)	 	[*]
	 
	 	(e)	 	[*]

	 	 	For the avoidance of doubt, the gross amount invoiced for Products will not include value
added taxes and other similar taxes on Product.
	 
	1.46	 	“Other [*] Compound(s)” shall mean [*]
	 
	1.47	 	“Other [*] Product(s)” shall mean the [*] and, for the purposes of Sections 5.2 through 5.6,
that is in final form (a) for sale by prescription, over-the-counter or any other method, or
(b) for administration in a Clinical Trial or post-Marketing Authorization clinical trial.
	 
	1.48	 	“Party” shall mean Merck and SurModics, individually, and “Parties” shall mean Merck and
SurModics, collectively.
	 
	1.49	 	“Patent Rights” shall mean any and all issued patents and patent applications in the
Territory (which for the purposes of this Agreement shall be deemed to include certificates of
invention and applications for certificates of invention) and any divisionals, continuations,
continuations-in-part, reissues, renewals, substitutions, registrations, re-examinations,
revalidations, supplementary protection certificates, pediatric exclusivity periods, any other
patent term extensions and exclusivity periods and the like of any such patents and patent
applications, and any and all U.S. and foreign equivalents of the foregoing.

 

			
	*	 	Portions omitted pursuant to a request for confidential
treatment and filed separately with the Securities and Exchange Commission.

-6-

 

	1.50	 	“Person” shall mean any individual, corporation, joint venture, limited liability company,
partnership, limited partnership, limited liability partnership, trust or any other private,
public or governmental entity.
	 
	1.51	 	“Phase I Clinical Trial” shall mean a human clinical trial in any country that would satisfy
the requirements of 21 CFR 312.21(a).
	 
	1.52	 	“Phase II Clinical Trial” shall mean a human clinical trial in any country that would satisfy
the requirements of 21 CFR 312.21(b).
	 
	1.53	 	“Phase III Clinical Trial” shall mean a human clinical trial in any country that would
satisfy the requirements of 21 CFR 312.21(c).
	 
	1.54	 	“Polymers” shall mean [*]
	 
	1.55	 	“Product(s)” shall mean TA Product(s), [*], Other [*] Product(s), or Combination Product(s),
individually or collectively, unless otherwise specified and, for the purposes of Sections 5.2
through 5.6, that is in final form (a) for sale by prescription, over-the-counter or any other
method, or (b) for administration in a Clinical Trial or post-Marketing Authorization clinical
trial.
	 
	1.56	 	“Program Patent Rights” shall mean the Joint Program Patent Rights and SurModics Program
Patent Rights.
	 
	1.57	 	“Regulatory Authority” shall mean any applicable government regulatory authority involved in
granting approvals for the manufacturing, marketing, reimbursement and/or pricing of a Product
or Surgical Instrument 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.
	 
	1.58	 	“Regulatory Related Documents” shall mean all documents and records filed with or relied upon
on in any filings with Regulatory Authorities with respect to any chemistry, manufacturing or
control information, non-clinical studies or Clinical Trial relating to the TA Product
conducted by or on behalf of SurModics as of the Effective Date, including, without
limitation, documents relating to the STRIDE Clinical Trial and the planned Phase II Clinical
Trial for the TA Product. Regulatory Related Documents shall include without limitation the
documents and records listed on Schedule 1.58 attached hereto.
	 
	1.59	 	“Related Party” shall mean each of Merck, its Affiliates, and their respective sublicensees
(which term does not include distributors), as applicable.
	 
	1.60	 	“Research Program” shall mean the research and development activities undertaken by the
Parties hereto as set forth in Article 0. Unless otherwise specified, references herein to
the Research Program shall include the separate research programs for each [*], as generally
outlined on Schedule 2.1.

 

			
	*	 	Portions omitted pursuant to a request for confidential
treatment and filed separately with the Securities and Exchange Commission.

-7-

 

	1.61	 	“Research Program Term” shall with respect to [*], have the meaning given such term in
Section 2.9. All references to Research Program Term shall be deemed to include any extension
of the Research Program Term in accordance with such Section 2.9.
	 
	1.62	 	“STRIDE Clinical Trial” shall mean the Phase I Clinical Trial, commenced by SurModics prior
to the Effective Date, assessing the safety and tolerability of the I-vation TA Product in
patients with diabetic macular edema under the TA Product IND.
	 
	1.63	 	“Supply Agreement” shall mean the Supply Agreement, effective as of the Effective Date
pursuant to which SurModics or its Affiliates (a) will Manufacture (as defined in the Supply
Agreement) and supply Clinical Product or Marketed Product (as each such term is defined in
the Supply Agreement) to Merck or its Related Parties, and (b) will provide scale up and
transfer of manufacturing capabilities to Merck.
	 
	1.64	 	“Surgical Instruments” shall mean the Insertion Tool and/or the Extraction Tool, and any
Improvements thereto.
	 
	1.65	 	“SurModics Background Patent Rights” shall mean [*]
	 
	1.66	 	“SurModics Know-How” shall mean [*]
	 
	1.67	 	“SurModics Patent Rights” shall mean the SurModics Background Patent Rights and [*]
	 
	1.68	 	“SurModics Program Information and Inventions” shall mean [*]
	 
	1.69	 	“SurModics Program Know-How” shall mean SurModics Joint Program Information and Inventions
that are not claimed or covered by SurModics Program Patent Rights.
	 
	1.70	 	“SurModics Program Patent Rights” shall mean [*]
	 
	1.71	 	“SurModics Program Technology” shall mean SurModics Program Information and Inventions,
including without limitation SurModics Program Patent Rights and SurModics Program Know-How.
	 
	1.72	 	“SurModics Technology” shall mean the [*]
	 
	1.73	 	“TA Compound(s)” shall mean [*].
	 
	1.74	 	“TA Product” shall mean the I-vation Platform incorporating a TA Compound as an active
ingredient (which shall include without limitation the I-vation TA Product) and, for the
purposes of Sections 5.2 through 5.6, that is in final form (i) for sale by prescription,
over-the-counter or any other method, or (ii) for administration in a Clinical Trial or
post-Marketing Authorization clinical trial.

 

			
	*	 	Portions omitted pursuant to a request for confidential
treatment and filed separately with the Securities and Exchange Commission.

-8-

 

	1.75	 	“TA Product IND” shall mean the IND submitted by SurModics to the FDA for authorization to
conduct the STRIDE Clinical Trial.
	 
	1.76	 	[*]
	 
	1.77	 	“Territory” shall mean all of the countries in the world, and their territories and
possessions.
	 
	1.78	 	“Third Party” shall mean an entity other than Merck and its Related Parties, and SurModics
and its Affiliates.
	 
	1.79	 	“Valid Patent Claim” shall mean [*]
	 
	1.80	 	Other Definitions:

	 	 	 
	AAA
	 	11.6.1
	Adverse Experience
	 	11.17
	Agreement
	 	Preamble
	Clinical Data Package
	 	2.1.4
	Clinical Supplies
	 	8.4.1(a)
	[*]
	 	3.2.2(a)
	Compulsory License
	 	5.2.3
	Effective Date
	 	Preamble
	Excluded [*]
	 	3.2.2(b)
	Estimated Costs
	 	2.3.2
	Excluded Claim
	 	11.6.7
	Feasibility Study
	 	3.2.3(a)
	Human Materials
	 	2.12
	Indemnified Party
	 	10.3
	Indemnifying Party
	 	10.3
	Infringement Notice
	 	7.4
	Initial Work Period
	 	2.3.2
	InnoRx
	 	1.30
	JHU
	 	1.30
	Know-How Royalty
	 	5.2.1(b)
	Merck
	 	Preamble
	Materials
	 	2.10
	Option [*]
	 	3.2.2(c)

 

			
	*	 	Portions omitted pursuant to a request for confidential
treatment and filed separately with the Securities and Exchange Commission.

-9-

 

	 	 	 
	Other [*] License Option
	 	3.2.1
	Other [*] Compound Option Period
	 	3.2.1(a)
	Patent Royalty
	 	5.2.1(a)
	Program Coordinator
	 	2.4
	Progress Reports
	 	3.5.3
	Providers
	 	2.12
	SurModics
	 	Preamble
	Selection Notice
	 	3.2.2(a)
	Sensitive Information
	 	11.2.3(d)
	Serious
	 	11.7
	Supporting Documents
	 	9.3.2
	[*] Selection Fee
	 	3.2.3(b)
	Term
	 	9.1
	Third Party Notice
	 	3.2.4
	Third Party Patent License
	 	5.2.4
	Work Plan
	 	2.3.2

	2.	 	RESEARCH PROGRAM; REGULATORY MATTERS

	2.1	 	Purpose; Responsibilities

	 	2.1.1	 	Purpose of Research Program. SurModics and Merck shall engage in the
Research Program for the TA Products, [*], upon the terms and conditions set forth in
this Agreement. Merck may request that SurModics undertake certain activities in the
course of the Research Program as generally outlined in Schedule 2.1, which
schedule may be amended from time to time by the JRC in accordance with this Article 2.
The objectives of the Research Program are [*]
	 
	 	2.1.2	 	Merck Responsibilities. Merck shall have responsibility for the
development of Products in the Territory within the scope of the rights granted to it
hereunder and upon the terms and conditions set forth in this Agreement, and subject to
SurModics’ performance of its research and development obligations as set forth in this
Article 2 and other obligations set forth in this Agreement.
	 
	 	2.1.3	 	SurModics Responsibilities. SurModics shall collaborate with Merck in
the development of the TA Products, [*], and shall provide support as may be reasonably
requested by Merck, in accordance with the provisions of Section 2.3.
	 
	 	2.1.4	 	Initial delivery of I-vation TA Clinical Data Package and Transfer of
Certain Other Documents and Files to Merck. To facilitate the transfer of
development responsibilities to Merck:

 

			
	*	 	Portions omitted pursuant to a request for confidential
treatment and filed separately with the Securities and Exchange Commission.

-10-

 

	 	(a)	 	within seven (7) calendar days of the Effective Date, SurModics
shall provide Merck with a “Clinical Data Package” (as delineated below) which
shall consist of

	 	i.	 	[*]
	 
	 	ii.	 	[*]
	 
	 	iii.	 	[*]

If Merck in good faith believes that the Clinical Data Package is not complete
Merck may ask the JRC to meet, and in good faith discuss such concerns.

	 	(b)	 	After delivery of the Clinical Data Package to Merck, SurModics
and its Affiliates shall:

	 	(i)	 	within thirty (30) days after the Effective
Date, transfer and assign to Merck the TA Product IND in electronic
format and provide Merck with all Regulatory-Related Documents related
thereto;
	 
	 	(ii)	 	as requested by Merck during the Term, provide
Merck and, upon Merck’s request, its Related Parties with access to any
regulatory submissions filed with any Regulatory Authorities and the
data and know-how contained therein, including without limitation, Drug
Master Files and Device Master Files, of SurModics and its Affiliates
that relate to the I-vation Platform, TA Product, and the Surgical
Instruments;
	 
	 	(iii)	 	as requested by Merck during the Term, cause
its suppliers of the I-vation Platform and the TA Product to provide
Merck and its Affiliates with access to any regulatory submissions
filed with any Regulatory Authorities and the data and know-how
contained therein, including without limitation, Drug Master Files and
Device Master Files, of such Third Parties that relate to the I-vation
Platform, TA Product, and the Surgical Instruments; and
	 
	 	(iv)	 	take such other steps with respect to the TA
Product IND, Regulatory-Related Documents and Research Program as Merck
may reasonably request.

2.2 Conduct of Research

	 	2.2.1	 	Conduct of Research Program. SurModics and Merck shall each proceed
with its respective responsibilities under the Research Program in accordance with the

 

			
	*	 	Portions omitted pursuant to a request for confidential
treatment and filed separately with the Securities and Exchange Commission.

-11-

 

	 	 	 	terms of this Agreement. SurModics and Merck shall each conduct its respective
responsibilities under the Research Program in good scientific manner, and in
compliance in all material respects with all requirements of applicable laws, rules
and regulations and all applicable Good Laboratory Practices and attempt to achieve
their objectives efficiently and expeditiously. SurModics and Merck each shall
proceed diligently with the work set out in the Research Program by using their
respective Commercially Reasonable Efforts to allocate sufficient time, effort,
equipment and facilities to the Research Program and to use personnel with
sufficient skills and experience as are required to accomplish the Research Program
in accordance with the terms of this Agreement and Schedule 2.1.
	 
	 	2.2.2	 	Use of Third Parties. Merck shall be entitled to utilize the services
of its Affiliates and Third Parties to perform its Research Program activities.
SurModics shall be entitled to utilize the services of Third Parties to perform its
Research Program activities only upon Merck’s prior written consent or as specifically
set forth in Schedule 2.1. Notwithstanding any such consent, each Party shall
remain at all times fully liable for its respective responsibilities under the Research
Program.

	2.3	 	Outline, Specification and Funding of SurModics’ Research Program Activities

	 	2.3.1	 	Outline of SurModics’ Research Program Activities. SurModics’
research and development activities under this Article 2 are outlined on Schedule
2.1, which generally fall within the scope of the following areas:

	 	(a)	 	[*]
	 
	 	(b)	 	[*]
	 
	 	(c)	 	[*]
	 
	 	(d)	 	[*]
	 
	 	(e)	 	[*]
	 
	 	(f)	 	[*]
	 
	 	(g)	 	provide any other support or assistance that may be requested
by Merck in connection with the research and development of the Products.

	 	2.3.2	 	Establishing SurModics’ Specific Responsibilities under the Research
Program. With respect to the separate Research Programs (as generally outlined on
Schedule 2.1) for each of the TA Product, [*], as the case may be, SurModics
shall perform its responsibilities within the scope of the areas generally specified in
Section 2.3.1 (or as otherwise agreed among the Parties) as requested by Merck. Merck
shall compensate SurModics for its work under each Research

 

			
	*	 	Portions omitted pursuant to a request for confidential
treatment and filed separately with the Securities and Exchange Commission.

-12-

 

	 	 	 	Program as set forth in Section 2.3.3. For each Research Program, the specific work
to be performed by SurModics under such Research Program shall be established
pursuant to the procedures set forth below.

	 	(a)	 	Subject to Section 2.3.2(b), with respect to each Research
Program outlined on Schedule 2.1, no later than sixty (60) days prior
to the commencement of any Calendar Quarter during the applicable Research
Program Term, Merck shall notify SurModics in writing as to the general scope
of the work Merck would like SurModics to perform during such Calendar Quarter
(and, if Merck desires, covering up to the next four Calendar Quarters) under
such Research Program. Merck may alternatively communicate such requests to
SurModics through the JRC meetings and or the Program Coordinators. Promptly
after delivery of such notification by Merck, Merck and SurModics shall, in
good faith mutually agree through the JRC or the Program Coordinators upon a
written work plan (each a “Work Plan”) describing the specific research and
development activities to be performed by SurModics under each such Research
Program during such Calendar Quarter (or for up to the next four Calendar
Quarters, as the case may be), which shall also include a budget of SurModics’
estimated costs (including hourly task estimates and anticipated costs) to
perform the Work Plan to be proposed by SurModics, and approved by Merck
(“Estimated Costs”) reasonably sufficient to fund (in accordance with the
reimbursement principles specified in Section 2.3.3) those research and
development activities to be carried out by SurModics as contemplated in such
Work Plan. Each Work Plan and its Estimated Costs shall be agreed by the
Parties prior to the commencement of the applicable Calendar Quarter. 
	 
	 	(b)	 	Schedule 2.3.2 sets forth the preliminary Work Plans
(including the Estimated Costs) for the Research Programs for TA Products [*]
(the “Initial Work Period”). Promptly after the Effective Date, the JRC shall
meet in good faith to discuss and approve the Work Plan and Estimated Costs for
SurModics work during the Initial Work Period (including any necessary
adjustments thereto). The JRC shall endeavor to approve the Work Plans and
Estimated Costs for the Initial Work Period no later than thirty (30) days
after the Effective Date. Following such JRC approval, SurModics shall perform
the research and development activities (and Merck shall compensate SurModics)
in accordance with such approved Work Plans and Section 2.3.

	 	2.3.3	 	Merck’s Funding of SurModics Work Under a Work Plan.

 

			
	*	 	Portions omitted pursuant to a request for confidential
treatment and filed separately with the Securities and Exchange Commission.

-13-

 

	 	(a)	 	For research and development activities performed in accordance
with each Work Plan, Merck will pay SurModics [*] basis [*] Merck will also
reimburse SurModics for SurModics’ [*]
	 
	 	(b)	 	Periodically during each Research Program where SurModics is
performing work under a Work Plan, and as requested by Merck, the Program
Coordinators for each Party shall meet and discuss SurModics progress, [*] for
work assigned to SurModics under any Work Plan. The goal of such discussions
shall be to ensure that the contemplated work under a Work Plan is
appropriately completed and performed within its Estimated Costs. SurModics
shall also, on a monthly basis during each Calendar Quarter in which it is
performing work under a Work Plan, provide Merck’s Program Coordinator with an
update of SurModics then current progress toward fulfilling its obligations
under such Work Plan, together with a summary of its [*] for such work during
such prior month.
	 
	 	(c)	 	No later than [*] following the conclusion of each Calendar
Quarter, in which SurModics has performed work under any Work Plan, SurModics
shall provide Merck a detailed invoice for such Calendar Quarter setting forth
a detailed list of the work actually performed by SurModics under the Work
Plan(s) covering such Calendar Quarter, together with a detailed list of [*]
Merck shall pay SurModics within [*] of Merck’s receipt of a satisfactory
invoice. Notwithstanding anything to the contrary in this Agreement, unless
otherwise agreed to by the Parties, Merck’s total financial obligations under
any Work Plan shall not exceed the Estimated Costs for such Work Plan, and
SurModics shall not be obligated to continue its performance under such Work
Plan incurring costs and expenses in excess of the Estimated Costs.
	 
	 	(d)	 	SurModics will keep (and cause its agents performing services
under any Research Program to keep) true, accurate and complete records of [*]
sufficient detail to permit determination of the costs of such goods and
services, and will provide Merck’s Program Coordinator with evidence of such
costs to enable Merck’s Program Coordinator to monitor and report on such
expenses. [*]

	 	2.3.4	 	SurModics shall require that all SurModics personnel, employees, consultants
and agents involved in any of the Research Programs have entered into confidentiality
and invention assignment agreements that are consistent with the provisions of this
Agreement and shall be obligated to assign any rights they may have in any SurModics
Program Technology and Joint Program Information and Inventions made during such work
to SurModics consistent with any rights granted to Merck in any such Program Technology
under this Agreement.

 

			
	*	 	Portions omitted pursuant to a request for confidential
treatment and filed separately with the Securities and Exchange Commission.

-14-

 

	2.4	 	Program Coordinators
	 
	 	 	Each Party shall appoint a representative to serve as the primary contact between the
Parties with respect to the Research Program and to coordinate its respective activities
under the Research Program (“Program Coordinator”). Each Party shall name its Program
Coordinator and notify the other Party of such person promptly following the Effective Date.
Each Party may change its Program Coordinator from time to time, in its sole discretion,
effective upon providing written notice to the other Party of such change.
	 
	2.5	 	Joint Research Committee
	 
	 	 	The Parties hereby establish a committee to facilitate the Research Program and Feasibility
Studies as follows:

	 	2.5.1	 	Composition of the Joint Research Committee. The Research Program
shall be conducted under the direction of a joint research committee (the “JRC”)
comprised of [*] representatives of Merck and [*] representatives of SurModics. Each
Party shall name its JRC representatives and notify the other Party of its JRC
representatives promptly following the Effective Date. Each Party may change its
representatives to the JRC from time to time, in its sole discretion, effective upon
providing written 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. Additional representatives or consultants may
from time to time, by mutual consent of the Parties, be invited to attend JRC meetings,
subject to such representative’s or consultant’s written agreement to comply with the
requirements of Section 4.1. The JRC shall be chaired by a representative of Merck.
Each Party shall bear its own expenses related to the attendance of such meetings by
its representatives.
	 
	 	2.5.2	 	Scope of JRC Oversight. The JRC’s oversight responsibilities shall be
limited to the Research Program activities specified in Schedule 2.1 and the
Feasibility Studies. Within such scope, the JRC shall:

	 	(a)	 	[*]
	 
	 	(b)	 	[*]
	 
	 	(c)	 	[*]
	 
	 	(d)	 	[*]
	 
	 	(e)	 	[*]

 

			
	*	 	Portions omitted pursuant to a request for confidential
treatment and filed separately with the Securities and Exchange Commission.

-15-

 

	 	(f)	 	[*]
	 
	 	(g)	 	[*]

	 	 	 	Notwithstanding anything to the contrary in the foregoing, the JRC shall not have
any supervisory or decision making authority beyond the Research Program activities
specified in Schedule 2.1 and Feasibility Studies.
	 
	 	2.5.3	 	Decision-Making. Decisions of the JRC shall be made unanimously, with
each Party having one vote. [*]
	 
	 	2.5.4	 	Meetings. 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
SurModics and Merck facilities (or such other location as may be determined by the
JRC). Alternatively, the JRC may meet by means of teleconference, videoconference or
other similar communications equipment.
	 
	 	2.5.5	 	Termination of the JRC. All of the JRC’s functions and duties with
respect to each of the TA Products, [*] shall automatically terminate upon the
conclusion of the Research Program Term related to such TA Products, [*], as the case
may be; provided, however, thereafter during the Term Merck may, in its
sole discretion, call a meeting of the JRC from time-to-time to discuss and exchange
information regarding the Products and any other scientific and development information
relating to the Products.

	2.6	 	Exchange of Information
	 
	 	 	In addition to the obligations specified in Section 2.1.4, upon execution of this Agreement,
and on an ongoing basis during the Research Program Term, SurModics shall promptly disclose
to Merck in writing or in an electronic format all SurModics Know-How not previously
disclosed and any SurModics Information and Inventions, including any Improvements relating
to the I-vation Platform and Surgical Instruments as reasonably requested by or that may be
reasonably necessary or useful for Merck to carry out its rights and obligations under this
Agreement.
	 
	2.7	 	Records and Reports

	 	2.7.1	 	Records. SurModics 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 by SurModics.
	 
	 	2.7.2	 	Copies and Inspection of Records. Not more than [*] Merck shall have
the right, during normal business hours and upon reasonable notice, to inspect and copy
all

 

			
	*	 	Portions omitted pursuant to a request for confidential
treatment and filed separately with the Securities and Exchange Commission.

-16-

 

	 	 	 	such records of SurModics referred to in Section 2.7.1. Merck shall maintain such
records and the information disclosed therein in confidence in accordance with
Section 4.1. Merck shall have the right to arrange for its employees and/or Third
Parties involved in the activities contemplated hereunder to visit the offices and
laboratories of SurModics and any of its Third Party contractors as permitted under
Section 2.2 during normal business hours and upon reasonable notice, and to discuss
the Research Program work and its results in detail with the technical personnel of
SurModics. Upon request, SurModics shall provide copies of the records described in
Section 2.7.1.
	 
	 	2.7.3	 	Quarterly Reports. Within [*] following the end of each Calendar
Quarter during the Term, SurModics shall provide to Merck a written progress report
which shall describe the work performed to date on the Research Program, evaluate the
work performed in relation to the goals of the Research Program and provide such other
information as may be required by the Research Program or reasonably requested by Merck
relating to the progress of the goals or performance of the Research Program.

	2.8	 	Research Information and Inventions

	 	2.8.1	 	Ownership of Information and Inventions. Subject to the licenses granted
between the Parties under this Agreement, the entire right, title and interest in:

	 	(a)	 	SurModics Program Information and Inventions shall be
[*]
	 
	 	(b)	 	Merck Program Information and Inventions shall be [*]
	 
	 	(c)	 	Joint Program Information and Inventions shall be [*]

	 	 	 	Within [*] following the end of each Calendar Quarter during the applicable Research
Program Term, (i) SurModics shall disclose to Merck in writing the development,
making, conception or reduction to practice of SurModics Program Information and
Inventions and Joint Program Information and Inventions made during such Calendar
Quarter (or in any previous Calendar Quarter if it had not yet been so disclosed by
SurModics) and (ii) Merck shall disclose to SurModics in writing the development,
making, conception or reduction to practice of Joint Program Information and
Inventions made during such Calendar Quarter (or in any previous Calendar Quarter if
it had not yet been so disclosed by Merck).
	 
	 	2.8.2	 	Inventorship. Inventorship of Inventions, whether or not patentable,
conceived and/or reduced to practice by the Parties in the course of exercising rights
or performing obligations pursuant to this Agreement, all related intellectual property
rights, and all other information developed in the course of the Parties’

 

			
	*	 	Portions omitted pursuant to a request for confidential
treatment and filed separately with the Securities and Exchange Commission.

-17-

 

	 	 	 	exercise of rights under or performance of this Agreement shall be determined in
accordance with the rules of inventorship under United States patent laws.

	2.9	 	Research Program Term; Termination of Research Program

	 	2.9.1	 	Term. Except as otherwise provided herein, the initial term of the
Research Program shall [*] The Parties may extend any Research Program Term by mutual
written agreement of the authorized representative of the Parties, and shall, in such
case, amend Schedule 2.1, as applicable. In addition, Merck may extend each such
Research Program Term by an additional [*] period, for a total of up to [*] renewals by
providing SurModics written notice of each such [*] renewal no later than [*] prior to
the then termination date for such Research Program Term, in each such case the Parties
shall amend Schedule 2.1 as applicable. The initial term and any subsequent extension
term(s) with respect to the TA Product, [*] are collectively for each such Product
referred to as the “Research Program Term” for such Product.
	 
	 	2.9.2	 	Termination by Merck. At anytime during the Research Program Term,
Merck, in its sole discretion, shall have the right to terminate any or all of the
Research Programs or any Work Plan, by giving [*] advance written notice to SurModics.
Upon termination of any or all of the Research Programs (or a particular Work Plan), or
at any other time that Merck may request, SurModics agrees to return all Merck
Information, the Materials, and all documents generated by SurModics in connection with
the Research Program so terminated by Merck. Termination of a Research Program or a
Work Plan under this Section 2.9.2 shall not affect either Party’s rights or
obligations under this Agreement except (a) with respect to SurModics’ obligation to
perform, and Merck’s obligation to fund, SurModics’ assigned responsibilities with
respect to such terminated Work Plan and/or Research Program, as the case may be, under
this Article 2; and (b) the non-exclusive licenses granted by Merck to SurModics under
Section 3.3.1 shall terminate, solely as it pertains to any terminated Research
Programs. [*]
	 
	 	2.9.3	 	Effect of Termination. In the event of termination of a Research Program or
any particular Work Plan, the Parties agree as follows:

	 	(a)	 	Merck shall be responsible for funding SurModics only for [*] incurred
in performance of services under, and for any non-cancelable commitments, made
up to the effective date of such termination for, such Research Program or Work
Plan, as the case may be; provided, however, in no case will
Merck be required to pay SurModics for any [*] in excess of the Estimated Costs
for the applicable Work Plan(s).

 

			
	*	 	Portions omitted pursuant to a request for confidential
treatment and filed separately with the Securities and Exchange Commission.

-18-

 

	 	(b)	 	[*]

	2.10	 	Materials 
	 
	 	 	In order to facilitate the Research Program, each Party shall provide the other Party with
sufficient quantities of material as set forth in Schedule 2.1 and other materials
as each such Party may provide from time to time under this Agreement (the “Materials").
Merck shall provide SurModics with sufficient quantities of the [*] solely for the purpose
of enabling SurModics to perform its activities under the Research Program in accordance
with the terms of this Agreement. Each Party shall use the Materials supplied by the other
Party solely for the purposes of carrying out its respective activities under the Research
Program in accordance with the terms of this Agreement and, consistent with the licenses
granted to either party under this Agreement. Neither Party shall transfer, deliver or
disclose any such Materials of the other Party, or any derivatives, analogs, modifications
or components thereof, to any Third Party without the prior written approval of the
providing Party, except that Merck may transfer Materials provided by SurModics without
SurModics’ prior written consent to Merck’s Related Parties, agents and subcontractors for
the purpose of carrying out the development and commercialization of Products. The
Materials supplied by Merck are not to be used in humans, except as contemplated by this
Agreement and permitted by applicable law and shall not be transferred, delivered or
disclosed to any Third Party by SurModics without the prior written approval of Merck. Any
unused Materials supplied by Merck and any derivatives, analogs, modifications or components
thereof to SurModics shall be, at Merck’s option, either returned to Merck, or destroyed in
accordance with instructions by Merck.
	 
	2.11	 	[*]

[*]
	 
	2.12	 	Use of Human Materials
	 
	 	 	If any human primary cell lines, human tissue, human clinical isolates or similar
human-derived materials (“Human Materials”) have been or are to be collected and/or used in
the Research Program and Feasibility Studies, each Party represents and warrants (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. Each Party shall provide documentation of
such approvals and consents upon Merck’s request. Each Party further represents and
warrants 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

 

			
	*	 	Portions omitted pursuant to a request for confidential
treatment and filed separately with the Securities and Exchange Commission.

-19-

 

	 	 	compensation to such Providers or any other Third Party for the intellectual property
associated with the Human Materials or the commercial use thereof for any purposes.

	3.	 	LICENSES; DEVELOPMENT AND COMMERCIALIZATION
	 
	3.1	 	License Grants to Merck

	 	3.1.1	 	Exclusive License Grants. SurModics hereby grants to Merck the
following licenses:

	 	(a)	 	an exclusive license (even as to SurModics) in the Territory
under the SurModics Patent Rights, and Program Patent Rights to research,
develop, make, have made, use, offer to sell, sell, have sold, import and
export the Products in the Field;
	 
	 	(b)	 	an exclusive license (even as to SurModics) in the Territory
under the SurModics Know-How, the SurModics Program Know-How, and SurModics’
rights in Joint Program Know-How to research, develop, make, have made, use,
offer to sell, sell, have sold, import and export the Products in the Field;
and
	 
	 	(c)	 	an exclusive license (even as to SurModics) in the Territory
under the SurModics Technology to research, develop, make, have made, use,
offer to sell, sell, have sold, import and export the Surgical Instruments
solely for use with, or in connection with the sale of, the Products in the
Field.

	 	 	 	Notwithstanding the license grants set forth above, SurModics shall retain those
rights under the SurModics Technology that are necessary to perform SurModics’
obligations under the Research Program and the Feasibility Studies in accordance
with Article 2 and to manufacture and supply clinical supplies and commercial supply
of Product to Merck and its Related Parties and the scale up and transfer of
manufacturing capabilities to Merck in accordance with Article 8 and the Supply
Agreement.
	 
	 	3.1.2	 	Non-Exclusive License Grant. Subject to the terms and conditions of
this Agreement, SurModics hereby grants to Merck a non-exclusive, royalty-free license
in the Territory under the SurModics Program Technology, for any and all uses,
including without limitation, to research, develop, make, have made, use, offer to
sell, sell, have sold, import and export a product other than the Products.
	 
	 	3.1.3	 	[*]
	 
	 	3.1.4	 	[*]

 

			
	*	 	Portions omitted pursuant to a request for confidential
treatment and filed separately with the Securities and Exchange Commission.

-20-

 

	3.2	 	Option for Exclusive Other [*] Licenses

	 	3.2.1	 	Option to Acquire Other [*] Licenses. Subject to Third Party rights
granted by SurModics as of the Effective Date, or otherwise granted by SurModics after
the Effective Date as set forth under Section 3.2.4 (in each case, so long as such
Third Party Rights remain in effect) and the terms and conditions of this Section
3.2.1, SurModics hereby grants to Merck an option to enter into [*] additional [*]
licenses in the Territory under the SurModics Technology to research, develop, make,
have made, use, offer to sell, sell, have sold, import and export the I-vation Platform
incorporating Other [*] Products in the Field (each an “Other [*] License Option”).

	 	(a)	 	Other [*] Option Period. The Other [*] License Option
may be exercised by Merck at any time within [*] following the Effective Date
[*] (the “Other [*] Option Period”). Notwithstanding the previous sentence, in
the event that a Feasibility Study for a [*] in accordance with Section 3.2.2
is not completed before the expiration of the Other [*] Option Period, Merck’s
Other [*] License Option with respect to those Other [*] Compounds that include
the [*] shall be extended and remain exercisable by Merck until [*] after
Merck’s receipt of the results of such Feasibility Study in accordance with
Section 3.2.3(b).
	 
	 	(b)	 	[*]

	 	3.2.2	 	Selection Notice.

	 	(a)	 	During the Other [*] Option Period, Merck may identify in writing to
SurModics (each a “Selection Notice”) [*]
	 
	 	(b)	 	Within [*] days of receipt of a Selection Notice, [*] In the event
that SurModics determines that either condition set forth in the previous
sentence is true, then the [*] identified in the Selection Notice shall be
considered an “Excluded [*].”
	 
	 	(c)	 	If SurModics determines that a [*] described in a Selection Notice is
an Excluded [*], then SurModics will notify Merck in writing of the grounds for
the exclusion during the forty-five [*] period described above.
	 
	 	(d)	 	[*]
	 
	 	(e)	 	[*]
	 
	 	(f)	 	For the purposes of clarity, SurModics’ obligations under this Section
3.2.2 shall no longer apply following expiration of the Other [*] Compound
Option Period, [*]

 

			
	*	 	Portions omitted pursuant to a request for confidential
treatment and filed separately with the Securities and Exchange Commission.

-21-

 

	 	3.2.3	 	Feasibility Study.

	 	(a)	 	[*] Merck and SurModics shall in good faith mutually design and agree
on a work plan to evaluate the use of the I-vation Platform [*] (each a “Feasibility Study”) and enter into a Feasibility
Study Agreement therefore in the form attached hereto as Schedule
3.2.3. Both Merck and SurModics shall use their Commercially Reasonable
Efforts to conduct the Feasibility Study at Merck’s cost and in accordance with
the work plan set forth in the Feasibility Study Agreement in as expeditious
manner as practicable.
	 
	 	(b)	 	At any time [*] but no later than [*] days after Merck’s receipt of
the results of such Feasibility Study, Merck may exercise the [*] Option with
respect to such [*] upon payment to SurModics of [*] (the “[*] Selection Fee”).

	 	3.2.4	 	SurModics’ Obligations. Subject to the terms and conditions of this
Agreement, including Sections 2.11, 3.1 and 3.2.4, SurModics shall be free to grant
rights under the SurModics Technology to any Third Party without restriction or
obligation to Merck. [*]
	 
	 	3.2.5	 	Other [*] Exclusive License Grant. Subject to the terms and
conditions of this Section 3.2 and upon Merck’s exercise of the Other [*] Option with
respect to Other [*] Compounds incorporating a particular [*] as set forth in Section
3.2.3(b), such Other [*] Compounds shall be included within the definition of Licensed
Other [*] Compounds, and Merck shall automatically be granted an exclusive license
under the SurModics Technology under, and in accordance with, the license grants
provided in Section 3.1 and subject to payment of the [*] Selection Fee therefor in
accordance with Section 3.2.3(b).
	 
	 	3.2.6	 	[*]

	3.3	 	License Grants to SurModics

	 	3.3.1	 	Non-Exclusive License Grant. Merck hereby grants to SurModics a
non-exclusive, non-sublicensable (except to the extent SurModics is permitted to use a
Third Party in performing its obligation under the Research Program in accordance with
Section 2.2.2), royalty-free license in the Territory under Merck Program Information
and Inventions, Merck Know-How and Merck Patent Rights for the sole purpose of
discharging SurModics’ obligations under the Research Program during the Research
Program Term, the Feasibility Studies during the term of each such Feasibility Study
and the manufacture and supply by SurModics of clinical supplies and commercial supply
of Product to Merck and its Related Parties and the scale up and transfer of
manufacturing capabilities to Merck in accordance with Article 8 and the Supply
Agreement.

 

			
	*	 	Portions omitted pursuant to a request for confidential
treatment and filed separately with the Securities and Exchange Commission.

-22-

 

	3.4	 	No Implied Licenses; Reservation of Rights
	 
	 	 	Except as specifically set forth in this Agreement, neither Party, its Affiliates or Related
Parties shall acquire any license or other rights of any kind, whether by implication,
estoppel or otherwise, in any Information disclosed to it under this Agreement or under any
patents, patent applications or other intellectual property rights owned or Controlled by
the other Party or its Affiliates.
	 
	 	 	Merck acknowledges that SurModics’ business involves the application of the SurModics
Technology to numerous drugs and other products and that SurModics retains the right
(expressly subject to SurModics’ obligations under this Agreement or under any other
agreement between the Parties) to apply such SurModics Technology to drugs or products owned
by SurModics or any Third Party and to make, use or sell drugs or products owned by
SurModics or any Third Party. For the avoidance of doubt, no license is conferred to Merck
under the SurModics Technology (other than the non-exclusive right set forth in Section
3.1.2) to research, develop, make, have made, use, offer to sell, sell, have sold, import,
export or otherwise deal in or with any product, item, device or technology other than
Products in the Field, and SurModics retains and reserves all rights that are not explicitly
granted to Merck herein, including the sole and exclusive right to use and exploit SurModics
Technology to research, develop, make, have made, use, offer to sell, sell, have sold,
import, export or otherwise deal in any product, process, item, device, machine or other
apparatus that is not a Product, including any I-vation Platform incorporating any
compound(s) other than TA Compounds, [*].
	 
	3.5	 	Development and Commercialization

	 	3.5.1	 	Merck shall use Commercially Reasonable Efforts to develop and commercialize a
TA Product, a [*] and, if applicable, an Other [*] Product for each Licensed Other [*]
Compound, as the case may be, on a commercially reasonable basis in such countries in
the Territory where it is commercially viable to do so. Merck’s diligence obligations
under this Section 3.5 shall be subject to Section 3.6 and SurModics performing its
obligations under the applicable Research Program in accordance with Article 2 and
SurModics’ rights and obligations to manufacture and supply the clinical supply of
Product and/or the commercial supply of Products and/or the scale up and transfer of
manufacturing capabilities to Merck in accordance with Article 8 and the Supply
Agreement.

 

			
	*	 	Portions omitted pursuant to a request for confidential
treatment and filed separately with the Securities and Exchange Commission.

-23-

 

	 	3.5.2	 	[*]
	 
	 	3.5.3	 	[*]
	 
	 	3.5.4	 	[*]
	 
	 	3.5.5	 	[*]

	3.6	 	Excused Performance
	 
	 	 	In addition to the provisions of Article 6, the obligations of Merck with respect to any
Product under Article 2 and Section 3.5 are expressly conditioned upon the continuing
absence of any material adverse condition or event relating to the safety or efficacy of the
Product, and the obligation of Merck to develop or market any such Product shall be delayed
or suspended so long as in Merck’s opinion any such condition or event exists.
	 
	4.	 	CONFIDENTIALITY AND PUBLICATION
	 
	4.1	 	Nondisclosure Obligation
	 
	 	 	All Information disclosed by one Party to the other Party hereunder shall be maintained in
confidence by the receiving Party and shall not be disclosed to any Third Party or used for
any purpose except as set forth herein without the prior written consent of the disclosing
Party, except to the extent that such Information:

	 	(a)	 	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;
	 
	 	(b)	 	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;
	 
	 	(c)	 	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;
	 
	 	(d)	 	is developed by the receiving Party independently of Information received from
the disclosing Party, as documented by the receiving Party’s business records;
	 
	 	(e)	 	is disclosed to governmental or other regulatory agencies in order to obtain
patents or to gain or maintain approval to conduct clinical trials or to market
Product, but such disclosure may be only to the extent reasonably necessary to obtain
patents or authorizations;

 

			
	*	 	Portions omitted pursuant to a request for confidential
treatment and filed separately with the Securities and Exchange Commission.

-24-

 

	 	(f)	 	is deemed necessary by Merck to be disclosed to Related Parties, agents,
consultants, and/or other Third Parties for any and all purposes Merck deems necessary
or advisable in the ordinary course of business in accordance with this Agreement on
the condition that such Third Parties agree to be bound by the confidentiality and
non-use obligations contained in this Agreement; provided, however,
that the term of confidentiality for such Third Parties shall be no less than ten (10)
years; or
	 
	 	(g)	 	is deemed necessary by counsel to the receiving Party to be disclosed to such
Party’s attorneys, independent accountants or financial advisors for the sole purpose
of enabling such attorneys, independent accountants or financial advisors to provide
advice to the receiving Party, on the condition that such attorneys, independent
accountants and financial advisors agree to be bound by the confidentiality and non-use
obligations contained in this Agreement; provided, however, that the
term of confidentiality for such attorneys, independent accountants and financial
advisors shall be no less than ten (10) years.

	 	 	Any combination of features or disclosures shall not be deemed to fall within the foregoing
exclusions merely because individual features are published or available to the general
public or in the rightful possession of the receiving Party unless the combination itself
and principle of operation are published or available to the general public or in the
rightful possession of the receiving Party.
	 
	 	 	If a Party is required by Federal, State or other applicable law by a court of competent
jurisdiction, or other judicial or administrative process to disclose Information that is
subject to the non-disclosure provisions of this Section 4.1 or Section 4.2, such Party
shall promptly inform the other Party of the disclosure that is being sought in order to
provide the other Party an opportunity to challenge or limit the disclosure obligations.
Information that is disclosed by judicial or administrative process shall remain otherwise
subject to the confidentiality and non-use provisions of this Section 4.1 and Section 4.2,
and the Party disclosing 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 Information.
	 
	4.2	 	SurModics Know-How 
	 
	 	 	SurModics agrees to keep all SurModics Know-How solely related to the Products in the Field
confidential subject to exceptions (b) or (e) in Section 4.1, and SurModics’ reservation of
rights as set forth in Section 3.4.
	 
	4.3	 	Publication 
	 
	 	 	Merck and SurModics each acknowledge the other Party’s interest in publishing the results of
its research in order to obtain recognition within the scientific community and to advance
the state of scientific knowledge. Each Party also recognizes the mutual interest in
obtaining valid patent protection and in protecting business interests and trade secret
information. Consequently, except for disclosures permitted pursuant to

-25-

 

	 	 	Section 4.1, either Party, its employees or consultants wishing to make a publication shall
deliver to the other Party a copy of the proposed written publication or an outline of an
oral disclosure at least [*] prior to submission for publication or presentation. The
reviewing Party shall have the right (a) to propose reasonable modifications to the
publication or presentation for patent reasons, trade secret reasons or business reasons or
(b) to request a reasonable delay in publication or presentation in order to protect
patentable information. If the reviewing Party requests a delay, the publishing Party shall
delay submission or presentation for a period of [*] to enable patent applications
protecting each Party’s rights in such information to be filed in accordance with Article 7.
Upon expiration of such [*] the publishing Party shall be free to proceed with the
publication or presentation. If the reviewing Party requests modifications to the
publication or presentation, the publishing Party shall edit such publication to prevent
disclosure of trade secret or proprietary business information prior to submission of the
publication or presentation. Notwithstanding anything to the contrary, publications or
presentations made by either Party covered by the provisions of this Section 4.3 shall be
limited to the results of research or other activities performed solely as part of the
Research Program. Subject to any obligations of confidentiality it may have to Third
Parties, SurModics will provide Merck with a courtesy copy of any publication or
presentation by SurModics not otherwise covered by this Section 4.3 that relates to the
I-vation Platform at least one (1) week prior to such publication. 
	 
	4.4	 	Publicity/Use of Names 
	 
	 	 	Upon execution of this Agreement, the Parties agree that the Parties shall issue a joint
press release which shall be substantially in the applicable form attached hereto in
Schedule 4.4. No disclosure of the existence, or the terms, of this Agreement may
be made by either Party, and neither Party shall use the name, trademark, trade name or logo
of the other Party, its Affiliates or their respective employees in any publicity,
promotion, news release or disclosure relating to this Agreement or its subject matter,
without the prior express written permission of the other Party, except as may be required
by law or government regulation.
	 
	 	 	Each Product shall be marketed under trademarks, including logos, slogans, trade dress,
domain names, and other intellectual property, selected by Merck. Notwithstanding anything
to the contrary in the foregoing, in the event Merck desires to use SurModics’ I-vationTM
trademark in connection with the marketing, promotion and/or sale of any Product, it shall
so notify SurModics and SurModics shall grant Merck a non-exclusive, royalty-free, perpetual
license to such trademark, with a right of sublicense, solely for the marketing, promotion
and sale of Products in the Field in the Territory in accordance with this Agreement.

 

			
	*	 	Portions omitted pursuant to a request for confidential
treatment and filed separately with the Securities and Exchange Commission.

-26-

 

	4.5	 	Certain Obligations of SurModics
	 
	 	 	Notwithstanding anything in this Article 4 to the contrary, [*] to the extent necessary for
SurModics to comply with its obligations and/or enforce its rights under the JHU License
Agreement; provided that JHU shall be subject to appropriate written obligations of
confidentiality and non-use with respect to such disclosures and JHU shall be obligated to
only use such disclosed information for the purposes of the JHU License Agreement.
	 
	5.	 	PAYMENTS; ROYALTIES AND REPORTS
	 
	5.1	 	License Fee and Milestone Payments

	 	5.1.1	 	License Fee. In consideration for the licenses granted as set forth
in Section 3.1and the other rights granted under this Agreement, upon the terms and
conditions contained herein, Merck shall pay to SurModics Twenty Million Dollars (USD
$20,000,000) within thirty (30) days after the Effective Date.
	 
	 	5.1.2	 	[*] Subject to the terms and conditions of this Agreement, Merck shall
pay to SurModics [*] following the achievement of each such milestone, and shall make
the appropriate milestone payment within [*] after the achievement of such milestone.
For the sake of clarity, [*]
	 
	 	5.1.3	 	[*].

 

			
	*	 	Portions omitted pursuant to a request for confidential
treatment and filed separately with the Securities and Exchange Commission.

-27-

 

	 	(a)	 	Subject to the terms and conditions of this Agreement, with respect to
[*] and the [*] of [*] respectively, Merck shall pay to SurModics the following
milestone payments based upon the achievement of each of the corresponding
clinical development milestones.
	 
	 	 	 	[*]
	 
	 	(b)	 	Merck shall notify SurModics in writing within [*] following the
achievement of each milestone event set forth in this Section 5.1.3, and shall
make the appropriate milestone payment within [*] after the achievement of such
milestone event. The milestone payments set forth in this Section 5.1 shall be
payable only upon the initial achievement of the particular milestone event for
each Product and no amounts shall be due hereunder for subsequent or repeated
achievement of such milestone event for such Product. In the event that a [*]
development milestone event is skipped for a particular Product, the milestone
payment that would have otherwise been due for such skipped milestone event
shall become due and payable upon the achievement of the next to occur [*]
development milestone event for such Product.
	 
	 	(c)	 	[*]

	5.2	 	Royalties

	 	5.2.1	 	Royalties Payable By Merck. Subject to the terms and conditions of
this Agreement, Merck shall pay SurModics royalties, calculated on a Product-by-Product
basis, as set forth in this Section 5.2.1.

	 	(a)	 	Patent Royalties. Subject to the other provisions of this
Section 5.2, Merck shall pay SurModics royalties in an amount equal to a
certain percentage of Net Sales of Products by Merck or its Related Parties as
set forth below; provided that the sale of such Products would infringe
a Valid Patent Claim in the country of sale but for the licenses granted to
Merck by SurModics (“Patent Royalty”):

	 	(i)	 	[*]
	 
	 	(ii)	 	[*]

	 	(aa)	 	[*];
	 
	 	(bb)	 	[*].

	 	(iii)	 	[*]

 

			
	*	 	Portions omitted pursuant to a request for confidential
treatment and filed separately with the Securities and Exchange Commission.

-28-

 

	 	(aa)	 	[*];
	 
	 	(bb)	 	[*].

	 	(iv)	 	[*]

	 	(b)	 	Know-How Royalty. Notwithstanding the provisions of Section
5.2.1(a), and subject to the other provisions of this Section 5.2, in countries
where the sale of Product by Merck or its Related Parties would not infringe a
Valid Patent Claim, Merck shall pay royalty rates that shall be set at [*] of
the applicable royalty rate determined according to Section 5.2.1 (“Know-How
Royalty”). The Parties agree and acknowledge that the payment of Know-How
Royalties by Merck to SurModics for Net Sales in a country in which there is no
Valid Patent Claim covering the applicable Product shall represent
consideration for the license grant as set forth in Section 3.1.1(b).
	 
	 	(c)	 	[*]
	 
	 	 	 	All royalties are subject to the following conditions:

	 	(i)	 	that only one royalty shall be due with respect
to the same unit of Product, including without limitation, subject to
Section 5.2.1(iv), for any Combination Products;
	 
	 	(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 independent 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, or other clinical trial, in the latter case conducted
after the First Commercial Sale of Product; 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).

	 	5.2.2	 	[*]

 

			
	*	 	Portions omitted pursuant to a request for confidential
treatment and filed separately with the Securities and Exchange Commission.

-29-

 

	 	5.2.3	 	[*]
	 
	 	5.2.4	 	[*]
	 
	 	5.2.5	 	[*]
	 
	 	5.2.6	 	[*]

	5.3	 	Reports; Payment of Royalty
	 
	 	 	During the Term following the First Commercial Sale of a Product, Merck shall furnish to
SurModics a quarterly written report for the Calendar Quarter showing the Net Sales on a
country-by-country basis of all Products subject to royalty payments sold by Merck and its
Related Parties in the Territory during the reporting period, total deductions and the
royalties payable under this Agreement. Reports shall be due on the [*] 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.
	 
	5.4	 	Audits

	 	(a)	 	Upon the written request of SurModics and not more than [*], Merck shall permit
an independent certified public accounting firm of nationally and/or regionally
recognized reputation selected by SurModics and reasonably acceptable to Merck, at
SurModics’ expense, to have access during normal business hours to such of the records
of Merck as may be reasonably necessary to verify the accuracy of the royalty reports
hereunder for any year ending not more than [*] prior to the date of such request. The
accounting firm shall disclose to SurModics only whether the royalty reports are
correct or incorrect and the amount of any discrepancy. No other information shall be
provided to SurModics.
	 
	 	(b)	 	If such accounting firm correctly identifies a discrepancy made during such
period, the appropriate Party shall pay the other Party the amount of the discrepancy
as follows:

	 	(i)	 	if such audit uncovers an underpayment of
royalties, Merck shall pay SurModics the amount of such underpayment
within [*] of the date SurModics delivers to Merck such accounting
firm’s written report so correctly concluding, or as otherwise agreed
upon by the Parties. In such case, the fees charged by such accounting
firm shall be paid by SurModics; provided, however, [*]
	 
	 	(ii)	 	[*].

 

			
	*	 	Portions omitted pursuant to a request for confidential
treatment and filed separately with the Securities and Exchange Commission.

-30-

 

	 	(c)	 	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
complete and accurate records of sales made pursuant to such sublicense and to grant
access to such records by SurModics’ independent accountant to the same extent required
of Merck under this Agreement. Upon the expiration of [*] following the end of any
Calendar Year, the calculation of royalties payable with respect to such Calendar Year
shall be binding and conclusive upon the Parties, and Merck and its Related Parties
shall be released from any liability or accountability with respect to royalties for
such Calendar Year and SurModics shall be released from any liability with respect to
any overpayment by Merck for such Calendar Year.
	 
	 	(d)	 	SurModics shall treat all financial information subject to review under this
Section 5.4 or under any sublicense agreement in accordance with the confidentiality
and non-use provisions of this Agreement, and shall cause its accounting firm to enter
into an acceptable confidentiality agreement with Merck and/or its Related Parties
obligating it to retain all such information in confidence pursuant to such
confidentiality agreement.

	5.5	 	Payment Exchange Rate 
	 
	 	 	All payments to be made by Merck to SurModics under this Agreement shall be made in United
States dollars and may be paid by check made to the order of SurModics or bank wire transfer
in immediately available funds to such bank account in the United States as may be
designated in writing by SurModics 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 SurModics 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.
	 
	5.6	 	Income Tax Withholding 
	 
	 	 	If applicable laws, rules or regulations require withholding of income or other taxes
imposed upon any payments made by Merck to SurModics under this Article 5 of the Agreement,
Merck shall make such withholding payments as may be required and shall subtract such
withholding payments from such payments. Merck shall submit appropriate proof of payment of
the withholding taxes to SurModics within a reasonable period of time. Merck shall promptly
provide SurModics with the official receipts. Merck shall render SurModics reasonable
assistance in order to allow SurModics to obtain the benefit of any present or future treaty
against double taxation which may apply to such payments. If Merck did not withhold taxes,
in whole or in part, in connection with any payment it made to SurModics under the Agreement
and a tax authority subsequently disagrees with Merck’s interpretation of the withholding
rules and finds that

 

			
	*	 	Portions omitted pursuant to a request for confidential
treatment and filed separately with the Securities and Exchange Commission.

-31-

 

	 	 	Merck had a duty to withhold taxes and such taxes were assessed against and paid by Merck,
then SurModics will indemnify and hold harmless Merck from and against such taxes, [*] 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 SurModics.
	 
	6.	 	REPRESENTATIONS AND WARRANTIES
	 
	6.1	 	Mutual Representations and Warranties 
	 
	 	 	Each Party represents and warrants the following as of the Effective Date of this Agreement:

	 	(a)	 	Corporate Power. Such Party is duly organized and validly existing
under the laws of the state of its organization and has full corporate power and
authority to enter into this Agreement and carry out the provisions hereof.
	 
	 	(b)	 	Due Authorization. The execution and delivery of this Agreement and
the consummation of the transactions contemplated hereby have been duly authorized by
the necessary corporate actions of such Party. This Agreement any other documents
contemplated hereby constitute valid and legally binding obligations of such Party
enforceable against it in accordance with their respective terms.
	 
	 	(c)	 	Non-Contravention. The execution, delivery and performance by such
Party of this Agreement and any other agreements and instruments contemplated hereunder
will not (i) in any material respect violate any statute, regulation, judgment order,
decree or other restriction of any Governmental Authority to which such Party is
subject, (ii) violate any provision of the corporate charter, by-laws or other
organizational documents of such Party, or (iii) constitute a material violation or
breach by such Party of any provision of any material contract, agreement or instrument
to which such Party is a party or to which such Party may be subject although not a
party.

	6.2	 	SurModics Representations and Warranties
	 
	 	 	SurModics represents and warrants to Merck that as of the Effective Date of this Agreement:

	 	(a)	 	Except as set forth on Schedule 6.2(a), SurModics and/or its
Affiliates Control the SurModics Background Patent Rights and existing SurModics
Know-How and, to the actual knowledge of SurModics (i) the SurModics Background Patent
Rights and existing SurModics Know-How are free and clear of any liens, charges and
encumbrances, and (ii) no other person, corporate or other private entity, or
governmental entity or subdivision thereof has any claim of ownership whatsoever with
respect to the SurModics Background Patent Rights or existing

 

			
	*	 	Portions omitted pursuant to a request for confidential
treatment and filed separately with the Securities and Exchange Commission.

-32-

 

	 	 	 	SurModics Know-How, including without limitation, any claims relating to
inventorship with respect thereto.
	 
	 	(b)	 	Schedule 1.65 sets forth and includes a true and correct copy of all
SurModics Background Patent Rights which are necessary to the development, manufacture,
use, sale and import of the I-vation Platform, TA Products [*] respect to [*]
	 
	 	(c)	 	SurModics has not granted any right, license, or interest in, to, or under the
SurModics Background Patent Rights or SurModics Know-How that is inconsistent with the
rights, licenses, and interests granted to Merck under the terms and conditions of this
Agreement. SurModics has the right to grant the licenses and rights herein granted to
Merck.
	 
	 	(d)	 	To SurModics’ actual knowledge, the SurModics Know-How exists and SurModics
has not received any written communications from any Third Party that any issued patent
within the SurModics Background Patent Rights are invalid or unenforceable, in whole or
in part.
	 
	 	(e)	 	To SurModics’ actual knowledge, SurModics has not received any written
communications from any Third Party that the development, manufacture, use, sale or
import of the I-vation Platform or TA Products would infringe the valid claims of any
issued patent owned by any Third Party.
	 
	 	(f)	 	[*]
	 
	 	(g)	 	SurModics and its Affiliates have made available to Merck all information
regarding SurModics Background Patent Rights and SurModics Know-How that, to the
knowledge of SurModics, is reasonably likely to be material to the development and
commercialization of Products in the Field in the Territory (as such development and
commercialization is viewed by SurModics as of the Effective Date).
	 
	 	(h)	 	[*]
	 
	 	(i)	 	[*]
	 
	 	(j)	 	[*]
	 
	 	(k)	 	[*]
	 
	 	(l)	 	[*]
	 
	 	(m)	 	[*]

 

			
	*	 	Portions omitted pursuant to a request for confidential
treatment and filed separately with the Securities and Exchange Commission.

-33-

 

	 	(n)	 	Neither SurModics nor any of its Affiliates is currently subject to an FDA
consent decree or any other similar action of a Regulatory Authority.

	6.3	 	SurModics Further Representations, Warranties and Covenants

	 	 	SurModics represents and warrants to Merck that [*]
	 
	6.4	 	Merck Representations and Warranties
	 
	 	 	Merck represents and warrants to SurModics that as of the Effective Date of this
Agreement:

	 	(a)	 	Merck and/or its Affiliates Control the Merck Patent Rights and Merck Know-How
existing as of the Effective Date and, to the actual knowledge of Merck (i) the
existing Merck Patent Rights and Merck Know-How are free and clear of any liens,
charges and encumbrances and (ii) no other person, corporate or other private entity,
or governmental entity or subdivision thereof has any claim of ownership whatsoever
with respect to the existing Merck Patent Rights or Merck Know-How.
	 
	 	(b)	 	Merck has not granted any right, license, or interest in, to, or under the
Merck Patent Rights or Merck Know-How that is inconsistent with the rights, licenses,
and interests granted to SurModics under the terms and conditions of this Agreement.
	 
	 	(c)	 	Merck has not received any written communications from any Third Party that
any issued patent within Merck Patent Rights in existence as of the Effective Date is
invalid or unenforceable, in whole or in part.
	 
	 	(d)	 	There are no known outstanding, unsatisfied claims, judgments or settlements
against or owed by Merck relating to the Merck Patent Rights and Merck Know-How and, to
the actual knowledge of Merck, there are no pending or threatened claims or litigation
relating to the Merck Patent Rights and Merck Know-How.
	 
	 	(e)	 	To Merck’s actual knowledge, Merck has not received any written communications
from any Third Party that the development, manufacture, use, sale or import of any
product incorporating its proprietary [*] would with respect to such [*] infringe the
valid claims of any issued patent owned by any Third Party.

	6.5	 	DISCLAIMER OF WARRANTIES
	 
	 	 	THE WARRANTIES EXPRESSLY PROVIDED IN THIS AGREEMENT ARE THE SOLE WARRANTIES GIVEN BY THE
PARTIES HEREUNDER, AND ARE MADE EXPRESSLY IN LIEU OF AND EXCLUDE ANY IMPLIED WARRANTIES OF

 

			
	*	 	Portions omitted pursuant to a request for confidential
treatment and filed separately with the Securities and Exchange Commission.

-34-

 

	 	 	MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, NON-INFRINGEMENT OR OTHERWISE, AND ALL
OTHER EXPRESS OR IMPLIED REPRESENTATIONS AND WARRANTIES PROVIDED BY COMMON LAW, STATUTE OR
OTHERWISE ARE HEREBY DISCLAIMED BY BOTH PARTIES.
	 
	6.6	 	LIMITATION ON DAMAGES TO OTHER PARTY 
	 
	 	 	IN NO EVENT WILL EITHER PARTY BE LIABLE FOR ANY PUNITIVE, SPECIAL, INDIRECT, CONSEQUENTIAL,
INCIDENTAL OR EXEMPLARY DAMAGES OR SIMILAR DAMAGES OR LOSSES TO THE OTHER PARTY ARISING OUT
OF THIS AGREEMENT OR THE EXERCISE OF ITS RIGHTS HEREUNDER, INCLUDING BUT NOT LIMITED TO LOST
PROFITS, REGARDLESS OF WHETHER ARISING FROM BREACH OF CONTRACT, WARRANTY, TORT, STRICT
LIABILITY OR OTHERWISE, EVEN IF THE PARTY IS ADVISED OF THE POSSIBILITY OF SUCH LOSS OR
DAMAGE OR IF SUCH LOSS OR DAMAGE COULD HAVE BEEN REASONABLY FORESEEN; PROVIDED HOWEVER, THAT
THE FOREGOING LIMITATION OF LIABILITY SHALL NOT APPLY TO THE LIABILITIES ARISING FROM EITHER
PARTY’S GROSS NEGLIGENCE OR WILLFUL MISCONDUCT AND THIS SECTION 6.6 SHALL NOT BE CONSTRUED
TO LIMIT EITHER PARTY’S INDEMNIFICATION OBLIGATIONS UNDER SECTION 10.1 and 10.2 OR A PARTY’S
RIGHT TO OBTAIN SUCH DAMAGES FOR A BREACH OF ARTICLE 4.
	 
	7.	 	PATENT PROVISIONS 
	 
	7.1	 	Filing, Prosecution and Maintenance of Patents 

	 	(a)	 	SurModics Patent Rights. SurModics agrees to file, prosecute and
maintain in the Territory the SurModics Background Patent Rights licensed to Merck
under this Agreement. Such patent filings, prosecution and maintenance shall be at
SurModics’ sole expense, discretion and control. SurModics agrees to file, prosecute
and maintain in the Territory, as appropriate and upon appropriate consultation with
Merck, patent applications directed to the SurModics Program Technology licensed to
Merck under this Agreement.
	 
	 	(b)	 	Joint Program Information and Joint Program Inventions. With respect
to Joint Program Information and Inventions, the Parties agree to select outside
counsel acceptable to both Parties to file, prosecute and maintain in the Territory,
upon appropriate consultation with the Parties, Joint Program Patent Rights. [*]
	 
	 	(c)	 	SurModics Program Technology. With respect to SurModics Program
Technology, SurModics may elect not to file patent applications thereon and if so,
SurModics shall notify Merck and Merck shall have the right to file such patent
applications. In the event Merck elects to file, SurModics shall execute such

 

			
	*	 	Portions omitted pursuant to a request for confidential
treatment and filed separately with the Securities and Exchange Commission.

-35-

 

	 	 	 	documents and perform such acts at Merck’s expense as may be reasonably necessary to
effect an assignment of such SurModics Program to Merck in a timely manner to allow
Merck to file such patent application.
	 
	 	(d)	 	SurModics Program Technology and Joint Program Information and
Inventions. In each case involving patent applications filed covering SurModics
Program Technology or Joint Program Information and Inventions, the filing Party shall
give the non-filing Party an opportunity to review the text of the application before
filing, shall consult with the non-filing Party with respect thereto, and shall supply
the non-filing Party with a copy of the application as filed, together with notice of
its filing date and serial number.
	 
	 	(e)	 	Notice to Merck. SurModics shall keep Merck advised of the status of
the actual and prospective patent filings and, upon Merck’s request, shall provide
advance copies of any papers related to the filing, prosecution and maintenance of such
patent filings. SurModics shall promptly give notice to Merck of the grant, lapse,
revocation, surrender, invalidation or abandonment of any SurModics Patent Rights
licensed to Merck for which SurModics is responsible for the filing, prosecution and
maintenance.
	 
	 	(f)	 	Costs. Except as provided in this Section 7.1, with respect to all
filings hereunder, the filing Party shall be responsible for payment of all costs and
expenses related to such filings.

	7.2	 	[*]
	 
	 	 	[*]
	 
	7.3	 	Interference, Opposition, Reexamination and Reissue 

	 	(a)	 	Each party shall, within [*] of learning of such event, inform other Party of
any request for, or filing or declaration of, any interference, opposition, reissue or
reexamination relating to SurModics Patent Rights or Program Patent Rights. Merck and
SurModics 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 pertaining to Program
Patent Rights and Merck shall have the right to review and comment on any submission to
be made in connection with SurModics Patent Rights.
	 
	 	(b)	 	SurModics shall not initiate any reexamination, interference or reissue
proceeding relating to SurModics Patent Rights or Program Patent Rights without the
prior written consent of Merck, which consent shall not be unreasonably withheld, or
delayed.

 

			
	*	 	Portions omitted pursuant to a request for confidential
treatment and filed separately with the Securities and Exchange Commission.

-36-

 

	 	(c)	 	In connection with any interference, opposition, reissue, or reexamination
proceeding relating to SurModics Patent Rights or Program Patent Rights, Merck and
SurModics will cooperate fully and will provide each other with any information or
assistance that either may reasonably request. SurModics shall keep Merck informed of
developments in any such 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.
	 
	 	(d)	 	The Parties shall share equally the expense of any interference, opposition,
reexamination, or reissue proceeding relating to SurModics Patent Rights licensed to
Merck under this Agreement, except to the extent that SurModics Patent Rights or
Program Patent Rights have also been licensed to a Third Party then all parties shall
share in the expense on a pro-rated basis.

	7.4	 	Enforcement and Defense

	 	(a)	 	During the Term, each of the Parties shall promptly notify the other in the
event they learn of (i) any known or suspected infringement of SurModics Patent Rights
or Program Patent Rights that cover a Product in the Field, or (ii) any known or
suspected misappropriation or misuse of SurModics Know-How that covers a Product in the
Field (the “Infringement Notice"). The Parties shall thereafter consult and cooperate
fully to determine a course of action, including but not limited to the commencement of
legal action by either or both Merck and SurModics, to terminate any infringement of
the SurModics Patent Rights or Program Patent Rights or any misappropriation or misuse
of the SurModics Know-How. However, SurModics, upon notice to Merck, shall have the
first right to initiate and prosecute such legal action at its own expense and in the
name of SurModics (or in the name of Merck and SurModics in the case of Joint Program
Patent Rights), or to control the defense of any declaratory judgment action relating
to SurModics Patent Rights, Program Patent Rights or SurModics Know-How. SurModics
shall inform Merck if it elects not to exercise such first right promptly, but in no
event later than [*] from the date of the Infringement Notice by either Party, and
Merck shall thereafter have the right to either initiate and prosecute such action or
to control the defense of such declaratory judgment action in the name of Merck and, if
necessary, SurModics. Each Party shall have the right to be represented by counsel of
its own choice.[*]
	 
	 	(b)	 	In the event that SurModics elects not to initiate and prosecute an action as
provided in paragraph (a), and Merck elects to do so, the costs of any course of action
to terminate such infringement of SurModics Patent Rights, Program Patent Rights or
misappropriation or misuse of SurModics Know-How, including without limitation the
costs of any legal action commenced or the defense of any declaratory judgment, shall
be borne solely by Merck.

 

			
	*	 	Portions omitted pursuant to a request for confidential
treatment and filed separately with the Securities and Exchange Commission.

-37-

 

	 	(c)	 	For any action to terminate any infringement of SurModics Patent Rights or
Program Patent Rights or any misappropriation or misuse of SurModics Know-How, in the
event that Merck is unable to initiate or prosecute such action solely in its own name,
[*] In connection with any action, Merck and SurModics 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; provided, that neither Party may enter into a settlement or
consent judgment or other voluntary final disposition of a suit under this Section that
materially affects the other Party’s rights or interests without the consent of the
other Party, which consent shall not be unreasonably withheld, or delayed.
	 
	 	(d)	 	Any recovery (including without limitation royalties, settlement fees or other
consideration) obtained by either or both Merck and SurModics 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:

	 	(i)	 	[*]
	 
	 	(ii)	 	[*]
	 
	 	(iii)	 	[*]

	 	(e)	 	Notwithstanding anything herein to the contrary, the Parties’ rights and
obligations under this Section 7.4 shall apply only to the extent that any
infringement, misappropriation or misuse pertains to SurModics Patent Rights, Program
Patent Rights or SurModics Know-How that claim or cover one or more Products and this
Section 7.4 shall not apply, and Merck shall have no rights hereunder, to the extent
that any infringement, misappropriation or misuse pertains to SurModics Patent Rights,
Program Patent Rights or SurModics Know-How that claim or cover any I-vation Platform
incorporating a compound(s) other than TA Compounds, [*]

	7.5	 	Infringement

	 	(a)	 	If either Party or its Affiliates receives a written notice from a Third Party
alleging that the development or commercialization of a Product infringes or otherwise
violates the intellectual property rights of such Third Party, then such Party shall
promptly notify the other Party in writing of the allegation. As soon as reasonably
practicable after the receipt of such notice, the Parties shall meet and consider the
appropriate course of action with respect to the allegation. The Parties shall at all
times cooperate, share all material notices and filings in a

 

			
	*	 	Portions omitted pursuant to a request for confidential
treatment and filed separately with the Securities and Exchange Commission.

-38-

 

	 	 	 	timely manner, provide all reasonable assistance to each other. Each Party shall
have the right to defend any action naming it. Neither Party may enter into a
settlement or consent judgment or other voluntary final disposition of a suit under
this Section that materially affects the other Party’s rights or interests without
the consent of the other Party, which consent shall not be unreasonably withheld, -
or delayed. For the sake of clarity, the rights and obligations in this Section
relating to notice, cooperation and limitations on settlement shall apply even if
only one Party defends the relevant action.
	 
	 	(b)	 	SurModics shall inform Merck of any certification regarding any SurModics
Patent Rights it has received pursuant to either 21 U.S.C. §§355(b)(2)(A)(iv) or
(j)(2)(A)(vii)(IV) or its successor provisions, or any similar provisions in a country
in the Territory other than the United States, and shall provide Merck with a copy of
such certification within [*] of receipt. SurModics’ and Merck’s rights with respect to
the initiation and prosecution of any legal action as a result of such certification or
any recovery obtained as a result of such legal action shall be as defined in
paragraphs 7.4(a)-(d); provided, however, that SurModics shall exercise its
first right to initiate and prosecute any action and shall inform Merck of such
decision within [*] of receipt of the certification, after which time Merck shall have
the right to initiate and prosecute such action. Regardless of which Party has the
right to initiate and prosecute such action, both Parties shall, as soon as practicable
after receiving notice of such certification, convene and consult with each other
regarding the appropriate course of conduct for such action. The non-initiating Party
shall have the right to be kept fully informed and participate in decisions regarding
the appropriate course of conduct for such action, and the right to join and
participate in such action.

	7.6	 	Cooperation; Patent Term Extension and Restoration
	 
	 	 	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 U.S. patents/patent
applications. The Parties hereto shall cooperate with each other, including without
limitation to provide necessary information and assistance as the other Party may reasonably
request, in obtaining patent term extension, restoration or supplemental protection
certificates or their equivalents in any country in the Territory where applicable to
SurModics 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
SurModics agrees to abide by such election. All costs, fees and expenses incurred in
obtaining patent term extensions, restorations or supplemental protection certificates shall
be shared equally by SurModics and Merck.
	 
	7.7	 	[*]
	 
	 	 	[*]

 

			
	*	 	Portions omitted pursuant to a request for confidential
treatment and filed separately with the Securities and Exchange Commission.

-39-

 

	8.	 	MANUFACTURING AND SUPPLY OBLIGATIONS 
	 
	8.1	 	Pursuant to the terms of the Supply Agreement, SurModics agrees to Manufacture (as defined in
the Supply Agreement), or have Manufactured, and supply Merck’s and its Related Parties’
requirements for (a) Clinical Product (as defined in the Supply Agreement) in the Territory
for use in the Clinical Trials, the Research Program and other non-commercial uses by Merck,
and its Related Parties, and (b) Marketed Product as defined in the Supply Agreement) for sale
in the Territory.
	 
	8.2	 	SurModics shall provide the scale up and technology transfer services to Merck as specified
in Sections 2.6 and 12.9(d) of the Supply Agreement. Such obligations shall survive
termination of the Supply Agreement and constitute the obligations of SurModics under this
Agreement as if fully set forth herein.
	 
	9.	 	TERM AND TERMINATION
	 
	9.1	 	Term and Expiration
	 
	 	 	This Agreement shall be effective as of the Effective Date and unless terminated earlier
pursuant to Sections 9.2 or 9.3, this Agreement shall continue in effect until expiration of
all royalty obligations hereunder. Upon expiration of this Agreement, Merck’s licenses
pursuant to Section 3.1, if granted, shall become fully paid-up, perpetual licenses. For the
purposes of this Agreement, “Term” shall mean the period commencing with the Effective Date
through to the date of such expiration or earlier termination referenced in the first
sentence of this Section, and in the event this Agreement is terminated or expires only with
respect to TA Products, [*], “Term” of this Agreement as it applies to such Product shall
terminate as of the effective termination or expiration date for such Product as specified
in this Article 9.
	 
	9.2	 	Termination by Merck 
	 
	 	 	Notwithstanding anything contained herein to the contrary, Merck shall have the right to
terminate this Agreement, in its entirety or on a Product-by-Product basis, at any time in
its sole discretion by giving [*] advance written notice to SurModics. No later than [*]
after the effective date of such termination, each Party shall return or cause to be
returned to the other Party all Information in tangible form received from the other Party
and all copies thereof or in the case of termination with respect to a Product, Information
with respect to such Product; provided, however, that each Party may retain
any Information reasonably necessary for such Party’s continued practice under any
license(s) which do not terminate pursuant to this Section, and may keep one copy of
Information received from the other Party in its confidential files for record purposes. In
the event of termination under this Section 9.2: (i) each Party shall pay all amounts then
due and owing as of the termination date; (ii) Merck’s license pursuant to Section 3.1.2
shall become a perpetual license; and (iii) except for the surviving provisions set forth in
this Section 9.2, Section 9.3.2(c) and Section 9.4, the rights and obligations of the
Parties hereunder shall terminate as of the date of such termination or in the case of
termination

 

			
	*	 	Portions omitted pursuant to a request for confidential
treatment and filed separately with the Securities and Exchange Commission.

-40-

 

	 	 	with respect to a Product, those rights and obligations of the Parties with respect to such
Product shall terminate as of the date of such termination.
	 
	9.3	 	Termination for Cause

	 	9.3.1	 	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 is in breach of
its material obligations hereunder by causes and reasons within its control and
has not cured such breach within [*] after notice requesting cure of the
breach; provided, however, that in the event of a good faith
dispute with respect to the existence of a material breach, the [*] as the case
may be) cure period shall be tolled until such time as the dispute is resolved
pursuant to Section 11.6;
	 
	 	(b)	 	by either Party upon the filing or institution of bankruptcy,
reorganization, liquidation or receivership proceedings, or upon an assignment
of a substantial portion of the assets for the benefit of creditors by the
other Party; provided, however, that in the case of any
involuntary bankruptcy proceeding such right to terminate shall only become
effective if the Party consents to the involuntary bankruptcy or such
proceeding is not dismissed within [*] after the filing thereof.

	 	9.3.2	 	Effect of Termination for Cause on License.

	 	(a)	 	If SurModics terminates this Agreement under Section 9.3.1(a), (i)
Merck’s licenses pursuant to Section 3.1.1 and 3.1.4 shall terminate as of such
termination date; (ii) Merck shall pay all amounts then due and owing as of the
termination date; and (iii) Merck shall, within [*] after the effective date of
such termination, return or cause to be returned to SurModics all Information
in tangible form and all substances or devices delivered or provided by
SurModics, as well as any other material provided by SurModics in any medium;
provided that if SurModics terminates this Agreement pursuant to
Section 9.3.1(a) for Merck’s breach of its material obligation under Section
3.5, this Agreement shall be terminated only with respect to the particular
Product for which such breach has occurred and the Agreement shall otherwise
remain in full force and effect with respect to the remaining Products covered
by this Agreement for which a breach of Section 3.5 has not occurred.
	 
	 	(b)	 	If Merck terminates this Agreement under Section 9.3.1(a), [*] In
addition, (x) SurModics shall, within [*] after the effective date of such
termination, return or cause to be returned to Merck all Information in

 

			
	*	 	Portions omitted pursuant to a request for confidential
treatment and filed separately with the Securities and Exchange Commission.

-41-

 

	 	 	 	tangible form, and all substances or compositions delivered or provided by
Merck, including Merck Material, as well as any other material provided by
Merck in any medium, and (y) SurModics obligations under Article 8 shall
continue until satisfied.
	 
	 	(c)	 	Upon termination of this Agreement by Merck pursuant to Section 9.2,
or by SurModics pursuant to Section 9.3.1(a), [*]
	 
	 	(d)	 	If this Agreement is terminated by Merck pursuant to Section 9.3.1(b)
due to the rejection of this Agreement by or on behalf of SurModics 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 SurModics to
Merck are, and shall otherwise be deemed to be, for purposes of Section 365(n)
of the Code, licenses of rights to “intellectual property” as defined under
Section 101(35A) of the Code. The Parties agree that Merck, as a licensee of
such rights under this Agreement, shall retain and may fully exercise all of
its rights and elections under the Code, and that upon commencement of a
bankruptcy proceeding by or against SurModics under the Code, Merck shall be
entitled to a complete duplicate of, or complete access to (as Merck 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 Merck (i) upon any such commencement of a
bankruptcy proceeding upon written request therefor by Merck, unless SurModics
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 SurModics upon written request therefor by Merck.
	 
	 	 	 	The foregoing provisions of this Section 9.3.1(d) are without prejudice to
any rights Merck may have arising under the Code or other applicable law.

	9.4	 	Effect of Expiration or Termination; Survival 
	 
	 	 	Expiration or termination, in its entirety or on a Product-by-Product basis, of this
Agreement shall not relieve the Parties of any obligation accruing prior to such expiration
or termination. Any expiration or termination, in its entirety or on a Product-by-Product
basis, of this Agreement shall be without prejudice to the rights of either Party against
the other accrued or accruing under this Agreement prior to expiration or termination,
including without limitation the obligation to pay royalties for Products sold prior to such
expiration or termination. In the case of termination of this Agreement with respect to a
particular Product(s), only those provisions relating to such Products shall terminate and
otherwise, the Agreement shall remain in full force and effect.

 

			
	*	 	Portions omitted pursuant to a request for confidential
treatment and filed separately with the Securities and Exchange Commission.

-42-

 

	 	 	The provisions of Article 4 shall survive the expiration or termination of this Agreement
and shall continue in effect for [*] In addition, the provisions of [*] shall survive any
expiration or termination of this Agreement.
	 
	10.	 	INDEMNIFICATION 
	 
	10.1	 	Indemnification by Merck.
	 
	 	 	Merck agrees to indemnify, defend and hold harmless SurModics, its Affiliates and their
respective directors, officers, employees and agents from and against any liabilities,
losses, costs, damages, fees or expenses arising out of any Third Party claim relating to or
resulting from [*]
	 
	10.2	 	Indemnification by SurModics
	 
	 	 	SurModics agrees to indemnify, defend and hold harmless Merck, its Affiliates and their
respective directors, officers, employees and agents from and against any liabilities,
losses, costs, damages, fees or expenses arising out of any Third Party claim relating to or
resulting from [*]
	 
	10.3	 	Third Party Claim Procedure
	 
	 	 	A Person entitled to indemnification under this Article 10 (an “Indemnified Party”) shall
give prompt written notification to the Person from whom indemnification is sought (the
“Indemnifying Party”) of the commencement of any action, suit or proceeding relating to a
Third Party claim for which indemnification may be sought or, if earlier, upon the assertion
of any such claim by a Third Party (it being understood and agreed, however, that the
failure by an Indemnified Party to give notice of a Third-Party claim as provided in this
Section 10.3 shall not relieve the Indemnifying Party of its indemnification obligation
under this Agreement except and only to the extent that such Indemnifying Party is actually
damaged as a result of such failure to give notice). Within [*] after delivery of such
notification, the Indemnifying Party may, upon written notice thereof to the Indemnified
Party, assume control of the defense of such Third Party claim with counsel reasonably
satisfactory to the Indemnified Party. If the Indemnifying Party does not assume control of
such defense, the Indemnified Party shall control such defense. The Party not controlling
such defense may participate therein at its own expense. The Party controlling such defense
shall keep the other Party advised of the status of such action, suit, proceeding or claim
and the defense thereof and shall consider recommendations made by the other Party with
respect thereto. The Indemnified Party shall not agree to any settlement of such action,
suit, proceeding or claim without the prior written consent of the Indemnifying Party, which
shall not be unreasonably withheld, delayed or conditioned. The Indemnifying Party shall
not agree to any settlement of such action, suit, proceeding or claim or consent to any
judgment in respect thereof that does not include a complete and unconditional release of
the Indemnified

 

			
	*	 	Portions omitted pursuant to a request for confidential
treatment and filed separately with the Securities and Exchange Commission.

-43-

 

	 	 	Party from all liability with respect thereto or that imposes any liability or obligation on
the Indemnified Party without the prior written consent of the Indemnified Party.
	 
	11.	 	MISCELLANEOUS
	 
	11.1	 	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, other than a
payment obligation, under this Agreement to the extent that 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 all reasonable efforts necessary to cure such force majeure
circumstances.
	 
	11.2	 	Assignment/ Change of Control 

	 	11.2.1	 	Except as provided in this Section 11.2, 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.
	 
	 	11.2.2	 	Merck may, without SurModics’ consent, assign this Agreement and its rights and
obligations hereunder in whole or in part to a Merck Affiliate or in connection with a
Change of Control and Merck may undergo a Change of Control.
	 
	 	11.2.3	 	SurModics may assign this Agreement in its entirety to the successor party in
connection with a Change of Control and undergo a Change of Control; provided
that SurModics shall provide written notice to Merck within at least [*] after the
completion of such Change of Control, and if such Change of Control is a Competing
Pharma Change of Control, Merck shall have the right, at Merck’s

 

			
	*	 	Portions omitted pursuant to a request for confidential
treatment and filed separately with the Securities and Exchange Commission.

-44-

 

	 	 	 	election at any time after such Competing Pharma Change of Control has occurred, by
written notice to SurModics to [*]

	 	(a)	 	[*]
	 
	 	(b)	 	[*]
	 
	 	(c)	 	[*]
	 
	 	(d)	 	[*]

	 	11.2.4	 	Any permitted assignee shall assume all assigned obligations of its assignor under
this Agreement. Any attempted assignment not in accordance with this Section 11.2
shall be void.

	11.3	 	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.
	 
	11.4	 	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 SurModics, to:

	 	SurModics, Inc.
	 

	 	9924 West 74th Street

Eden Prairie, MN 55344
	 
	 	 
	 

	 	Attn: Chief Executive Officer

Facsimile: (952) 829-2743
	 
	 	 
	with a copy to:

	 	SurModics, Inc.
	 

	 	One Corporate Park, Suite 150

Irvine, CA 92606
	 
	 	 
	 

	 	Attn: President, Ophthalmology Division

 

			
	*	 	Portions omitted pursuant to a request for confidential
treatment and filed separately with the Securities and Exchange Commission.

-45-

 

	 	 	 
	 

	 	Fax: (949) 387-7465
	 
	 	 
	If to Merck, to:

	 	Merck & Co., Inc.
	 

	 	One Merck Drive [*]
	 

	 	P.O. Box 100
	 

	 	Whitehouse Station, NJ 08889-0100
	 
	 	 
	 

	 	Attn: [*]
	 

	 	Facsimile: [*]
	 
	 	 
	and:

	 	Merck & Co., Inc.
	 

	 	One Merck Drive [*]
	 

	 	P.O. Box 100
	 

	 	Whitehouse Station, NJ 08889-0100
	 
	 	 
	 

	 	Attn: [*]

Facsimile: [*]

	 	 	or to such other address(es) as the Party to whom notice is to be given may have furnished
to the other Party in writing in accordance herewith. Any such notice shall be deemed to
have been given: (a) when delivered, if personally delivered or sent by facsimile on a
business day (or if delivered or sent on a non-business day, then on the next business day);
(b) on the business day after dispatch, if sent by nationally-recognized overnight courier;
or (c) on the fifth (5th) business day following the date of mailing, if sent by
mail.
	 
	11.5	 	Applicable Law
	 
	 	 	This Agreement shall be governed by and construed in accordance with the laws of the State
of New York and the patent laws of the United States, without reference to any rules of
conflict of laws or renvoi.
	 
	11.6	 	Dispute Resolution 

	 	11.6.1	 	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” shall be
finally resolved by binding arbitration in accordance with the Commercial Arbitration
Rules and Supplementary Procedures for Large Complex

 

			
	*	 	Portions omitted pursuant to a request for confidential
treatment and filed separately with the Securities and Exchange Commission.

-46-

 

	 	 	 	Disputes of the American Arbitration Association (“AAA”), and judgment on the
arbitration award may be entered in any court having jurisdiction thereof. [*]
	 
	 	11.6.2	 	The arbitration shall be conducted by a panel of three persons experienced in the
pharmaceutical business: [*] 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 [*] 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 in the
event that SurModics initiates a proceeding under this Section 11.6, and Minneapolis,
Minnesota in the event that Merck initiates a proceeding under this Section 11.6. All
proceedings and communications shall be in English.
	 
	 	11.6.3	 	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.
	 
	 	11.6.4	 	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
New York statute of limitations.
	 
	 	11.6.5	 	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.
	 
	 	11.6.6	 	With respect to any dispute brought by SurModics claiming that Merck has breached its
diligence obligations under Section 3.5, no later than [*] after selection of the third
arbitrator in accordance with Section 11.6.2, the Parties and their representatives
shall hold a preliminary meeting with the arbitrators, to mutually agree upon and
thereafter follow procedures seeking to assure that the arbitration will be concluded
[*] from such meeting. Failing any such mutual

 

			
	*	 	Portions omitted pursuant to a request for confidential
treatment and filed separately with the Securities and Exchange Commission.

-47-

 

	 	 	 	agreement, the arbitrators will design and the Parties shall follow procedures to
such effect.
	 
	 	11.6.7	 	As used in this Section, the term “Excluded Claim” shall mean a dispute, controversy
or claim that concerns (a) the validity or infringement of a patent, trademark or
copyright; or (b) any antitrust, anti-monopoly or competition law or regulation,
whether or not statutory.

	11.7	 	Entire Agreement; Amendments
	 
	 	 	This Agreement contains the entire understanding of the Parties with respect to the Research
Program and the licenses granted hereunder. Any other express or implied agreements and
understandings, either oral or written, with regard to the Research Program or the licenses
granted hereunder, including, without limitation, the Collaboration Agreement, dated June
22, 2005, are superseded by the terms of this Agreement. This Agreement may be amended, or
any term hereof modified, only by a written instrument duly executed by authorized
representatives of both Parties hereto.
	 
	11.8	 	Affiliates
	 
	 	 	Each Party may perform its obligations hereunder personally or through one of more
Affiliates, although each Party shall nonetheless be solely responsible for the performance
of its Affiliates. Neither Party shall permit any of its Affiliates to commit any act
(including any act or omission) which such Party is prohibited thereunder from committing
directly.
	 
	11.9	 	Headings
	 
	 	 	The captions to the several Articles and Sections 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.
	 
	11.10	 	Independent Contractors
	 
	 	 	It is expressly agreed that SurModics and Merck shall be independent contractors and that
the relationship between the Parties shall not constitute a partnership, joint venture or
agency. Neither SurModics 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.
	 
	11.11	 	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

 

			
	*	 	Portions omitted pursuant to a request for confidential
treatment and filed separately with the Securities and Exchange Commission.

-48-

 

		 	other right hereunder or of any other breach by or failure of such other Party, whether of a
similar nature or otherwise.
	 
	11.12	 	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.
	 
	11.13	 	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.
	 
	11.14	 	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, and (c) words using the singular shall include the plural, and vice versa.
	 
	11.15	 	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 be required to be taken on the next occurring business day.
	 
	11.16	 	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.
	 
	11.17	 	Adverse Experience Reporting
	 
	 	 	Subject to any duties of confidentiality owed to Third Parties, each Party agrees throughout
the Term to notify the other Party within [*] in English of any information of which it
becomes aware concerning any side effect, injury, toxicity or sensitivity

 

			
	*	 	Portions omitted pursuant to a request for confidential
treatment and filed separately with the Securities and Exchange Commission.

-49-

 

	 	 	reaction, and/or Feasibility Study incident, near incident, medical device report or any
unexpected incident, and the severity thereof involving the I-vation Platform, the Surgical
Instrument, TA Product, [*], whether or not determined to be attributable to the I-vation
Platform or the Surgical Instruments (hereinafter “Adverse Experience”), where such Adverse
Experience is serious and associated with the clinical uses, studies, investigations, tests
or marketing of the I-vation Platform, the Surgical Instruments, TA Product, [*], whether or
not determined to be attributable to the I-vation Platform or the Surgical Instruments.
With respect to all other adverse experiences, each Party shall furnish the other Party with
copies of such non-serious adverse experiences reported to such Party in connection with the
clinical uses, studies, investigations, tests and marketing of the I-vation Platform, the
Surgical Instruments, TA Product, [*], in English, within [*] 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. In addition, a device malfunction report (if the device failed
to perform as intended and caused a serious event described in the criteria above) will be
handled as a serious adverse experience report. All other medical device reports that
suggest the device caused or contributed to a non-serious adverse experience should be
handled as a non-serious experience report. Furthermore, each Party agrees throughout the
term of the Agreement to notify the other Party in English of any Serious Adverse Experience
which occurs in the Territory within [*] after such Party becomes aware of such event and of
any Non-serious Adverse Experience which occurs in the Territory [*] after such Party
becomes aware of such event.
	 
	 	 	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, SurModics agrees to comply with such revised notification requirements.
	 
	 	 	As soon as practicable after the Effective Date, but no later than the start of Merck
Clinical Trials, the Parties shall enter into a separate and more detailed agreement
concerning adverse experience exchange and reporting.

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

	 	 	 
	MERCK & CO., INC.

	 	SURMODICS, INC.

 

			
	*	 	Portions omitted pursuant to a request for confidential
treatment and filed separately with the Securities and Exchange Commission.

-50-

 

	 	 	 	 	 	 	 	 	 	 	 	 	 
	By:

	 	 	 	 	 	By:	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 
	 

	 	Name:
	 	 	 	 	 	Name:
	 	Bruce J Barclay	 	 
	 

	 	Title:
	 	 	 	 	 	Title:
	 	Chief Executive Officer
	 	 

-51-

 

SCHEDULE 1.58

[*]

	1.	 	[*]
	 
	2.	 	[*]
	 
	3.	 	[*]
	 
	4.	 	[*]
	 
	5.	 	[*]
	 
	6.	 	[*]
	 
	7.	 	[*]
	 
	8.	 	[*]
	 
	9.	 	[*]

 

			
	*	 	Portions omitted pursuant to a request for confidential
treatment and filed separately with the Securities and Exchange Commission.

 i 

 

 

SCHEDULE 1.65

SURMODICS BACKGROUND PATENTS

[*]

 

			
	*	 	Portions omitted pursuant to a request for confidential
treatment and filed separately with the Securities and Exchange Commission.

 ii 

 

 

[*]

[*]

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	[*]	 	 [*]	 	[*]   	 	[*]   	 	[*]   	 	[*]   	 
	 
	 	 	 	 	 	 	 	 	 	 	[*]	 	 	 	[*]	 	 	 	[*]	 
	 
	 	 	 	 	 	 	[*]	 	 	 	[*]	 	 	 	[*]	 	 	 	[*]	 
	 
	 	 	 	 	 	 	 	 	 	 	[*]	 	 	 	[*]	 	 	 	[*]	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	[*]	 	 	 	 	 
	 
	 	 	[*]	 	 	 	 	 	 	 	[*]	 	 	 	[*]	 	 	 	[*]	 
	 
	 	 	 	 	 	 	[*]	 	 	 	 	 	 	 	 	 	 	 	 	 
	[*]
	 	 	 	 	 	 	 	 	 	 	[*]	 	 	 	[*]	 	 	 	[*]	 
	 
	 	 	 	 	 	 	[*]	 	 	 	[*]	 	 	 	[*]	 	 	 	[*]	 
	 
	 	 	[*]	 	 	 	[*]	 	 	 	[*]	 	 	 	[*]	 	 	 	[*]	 
	 
	 	 	[*]	 	 	 	[*]	 	 	 	[*]	 	 	 	[*]	 	 	 	[*]	 
	 
	 	 	 	 	 	 	 	 	 	 	[*]	 	 	 	[*]	 	 	 	[*]	 
	[*]
	 	 	[*]	 	 	 	[*]	 	 	 	[*]	 	 	 	[*]	 	 	 	[*]	 
	 
	 	 	[*]	 	 	 	[*]	 	 	 	[*]	 	 	 	[*]	 	 	 	[*]	 
	[*]
	 	 	[*]	 	 	 	[*]	 	 	 	[*]	 	 	 	[*]	 	 	 	[*]	 
	 
	 	 	[*]	 	 	 	[*]	 	 	 	[*]	 	 	 	[*]	 	 	 	[*]	 
	[*]
	 	 	[*]	 	 	 	[*]	 	 	 	[*]	 	 	 	[*]	 	 	 	[*]	 
	 
	 	 	 	 	 	 	 	 	 	 	[*]	 	 	 	[*]	 	 	 	[*]	 
	[*]
	 	 	[*]	 	 	 	[*]	 	 	 	[*]	 	 	 	[*]	 	 	 	[*]	 
	[*]
	 	 	[*]	 	 	 	[*]	 	 	 	[*]	 	 	 	[*]	 	 	 	[*]	 
	[*]
	 	 	[*]	 	 	 	[*]	 	 	 	[*]	 	 	 	 	 	 	 	[*]	 

 

			
	*	 	Portions omitted pursuant to a request for confidential
treatment and filed separately with the Securities and Exchange Commission.

 iii 

 

 

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

 

			
	*	 	Portions omitted pursuant to a request for confidential
treatment and filed separately with the Securities and Exchange Commission.

 iv 

 

 

[*]

[*]

[*]

[*]

[*]

[*]

[*]

 

			
	*	 	Portions omitted pursuant to a request for confidential
treatment and filed separately with the Securities and Exchange Commission.

 v 

 

 

	 	 	 	 	 
	[*]
	 	 	 	 
	 
	 	 	 	 
	[*]
	 	 	 	 
	 
	 	 	 	 
	 

	 	-
	 	[*]
	 
	 	 	 	 
	[*]
	 	 	 	 
	 
	 	 	 	 
	 

	 	-
	 	[*]
	 

	 	-
	 	[*]
	 

	 	-
	 	[*]
	 

	 	-
	 	[*]
	 
	 	 	 	 
	[*]
	 	 	 	 
	 
	 	 	 	 
	 

	 	-
	 	[*]
	 
	 	 	 	 
	 

	 	 	 	[*]

[*]
	 

	 	 	 	[*]
	 

	 	 	 	[*]
	 
	 	 	 	 
	 

	 	-
	 	[*]

 

			
	*	 	Portions omitted pursuant to a request for confidential
treatment and filed separately with the Securities and Exchange Commission.

 vi 

 

 

	 	 	 	 	 	 	 
	[*]
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	-
	 	 	 	[*]
	 

	 	-
	 	 	 	[*]
	 

	 	-
	 	 	 	[*]
	 

	 	-
	 	 	 	[*]
	 
	 	 	 	 	 	 
	 

	 	 	 	o
	 	[*]
	 

	 	 	 	o
	 	[*]

 

			
	*	 	Portions omitted pursuant to a request for confidential
treatment and filed separately with the Securities and Exchange Commission.

 vii 

 

 

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

 

			
	*	 	Portions omitted pursuant to a request for confidential
treatment and filed separately with the Securities and Exchange Commission.

 viii 

 

 

	 	 	 	 	 
	[*]
	 	 	 	 
	 
	 	 	 	 
	[*]
	 	 	 	 
	 
	 	 	 	 
	[*]
	 	 	 	 
	 
	 	 	 	 
	 

	 	-
	 	[*]
	 

	 	-
	 	[*]
	 

	 	-
	 	[*]
	 

	 	-
	 	[*]
	 

	 	-
	 	[*]
	 
	 	 	 	 
	[*]
	 	 	 	 
	 
	 	 	 	 
	[*]
	 	 	 	 
	 
	 	 	 	 
	 

	 	-
	 	[*]
	 

	 	-
	 	[*]
	 

	 	-
	 	[*]
	 
	 	 	 	 
	[*]
	 	 	 	 
	 
	 	 	 	 
	 

	 	-
	 	[*]
	 

	 	-
	 	[*]

 

			
	*	 	Portions omitted pursuant to a request for confidential
treatment and filed separately with the Securities and Exchange Commission.

 ix 

 

 

	 	 	 	 	 
	 

	 	-
	 	[*]
	 
	 	 	 	 
	[*]
	 	 	 	 
	 
	 	 	 	 
	 

	 	-
	 	[*]
	 

	 	-
	 	[*]
	 

	 	-
	 	[*]

 

			
	*	 	Portions omitted pursuant to a request for confidential
treatment and filed separately with the Securities and Exchange Commission.

 x 

 

 

	 	 	 	 	 
	[*]
	 	 	 	 
	 
	 	 	 	 
	[*]
	 	 	 	 
	 
	 	 	 	 
	 

	 	-
	 	[*]
	 

	 	-
	 	[*]
	 

	 	-
	 	[*]
	 

	 	-
	 	[*]
	 

	 	-
	 	[*]
	 

	 	-
	 	[*]
	 
	 	 	 	 
	[*]
	 	 	 	 
	 
	 	 	 	 
	[*]
	 	 	 	 
	 
	 	 	 	 
	[*]
	 	 	 	 
	 
	 	 	 	 
	[*]
	 	 	 	 

 

			
	*	 	Portions omitted pursuant to a request for confidential
treatment and filed separately with the Securities and Exchange Commission.

 xi 

 

 

	 	 	 	 	 
	[*]
	 	 	 	 
	 
	 	 	 	 
	[*]
	 	 	 	 
	 
	 	 	 	 
	 

	 	-
	 	[*]
	 

	 	-
	 	[*]
	 

	 	-
	 	[*]
	 

	 	-
	 	[*]
	 

	 	-
	 	[*]
	 
	 	 	 	 
	[*]
	 	 	 	 
	 
	 	 	 	 
	[*]
	 	 	 	 
	 
	 	 	 	 
	 

	 	-
	 	[*]
	 

	 	-
	 	[*]
	 

	 	-
	 	[*]
	 
	 	 	 	 
	[*]
	 	 	 	 
	 
	 	 	 	 
	 

	 	-
	 	[*]
	 

	 	-
	 	[*]
	 

	 	-
	 	[*]
	 
	 	 	 	 
	[*]
	 	 	 	 
	 
	 	 	 	 
	 

	 	-
	 	[*]
	 

	 	-
	 	[*]

 

			
	*	 	Portions omitted pursuant to a request for confidential
treatment and filed separately with the Securities and Exchange Commission.

 xii 

 

 

	 	 	 	 	 
	 

	 	-
	 	[*]

 

			
	*	 	Portions omitted pursuant to a request for confidential
treatment and filed separately with the Securities and Exchange Commission.

 xiii 

 

 

SCHEDULE 2.3.2

[*] 

SUMMARY

This schedule is provided to identify the scope of work and estimated budgets for 2007. This
assumes that work will begin on [*] (and may be adjusted as appropriate based upon an actual later
start date) and include continuation of the [*] [*] and initiation of [*] development work. This
work is described broadly in the following sections of Schedule 2.1 Merck-SurModics Collaborative
Research Program.

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*] 

The estimated budget for work conducted from [*] is approximately [*] The actual charges will be
based upon [*]

• [*]

• [*]

• [*]

 

			
	*	 	Portions omitted pursuant to a request for confidential
treatment and filed separately with the Securities and Exchange Commission.

 xiv 

 

 

[*]

	 	 	 	 	 
	[*]	 	[*]	 	 
	[*]
	 	 	 	 
	[*]
	 	[*]	 	 
	[*]
	 	[*]	 	[*]
	 
	 	[*]	 	[*]
	[*]
	 	[*]	 	[*]
	 
	 	[*]	 	[*]
	 
	 	[*]	 	[*]
	[*]
	 	[*]	 	[*]
	[*]
	 	 	 	 
	[*]
	 	[*]	 	[*]
	[*]
	 	[*]	 	[*]
	 
	 	[*]	 	[*]
	[*]
	 	[*]	 	*[]
	[*]
	 	[*]	 	[*]
	[*]
	 	[*]	 	 

 

			
	*	 	Portions omitted pursuant to a request for confidential
treatment and filed separately with the Securities and Exchange Commission.

 xv 

 

 

	 	 	 	 	 	 	 
	[*]
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	[*]
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	[*]
	 	 	 	 	 	 
	 
	 	[*]	 	 	 	 
	 
	 	 	 	•   [*]	 	 
	 
	 	 	 	•            [*]	 	 
	 
	 	 	 	•            [*]	 	 
	 
	 	 	 	•            [*]	 	 
	 
	 	 	 	•            [*]	 	 
	 
	 	 	 	 	 	 
	 
	 	[*]	 	 	 	 
	 
	 	 	 	[*]	 	 
	 
	 	 	 	[*]	 	 
	 
	 	 	 	[*]	 	 
	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	[*]
	 
	 	 	 	 	 	[*]
	 
	 	 	 	 	 	[*]
	 
	 	 	 	 	 	[*]
	 
	 	 	 	 	 	[*]
	 
	 	 	 	 	 	 
	 
	 	[*]	 	 	 	 

	 	 	 
	[*]	 	[*]
	[*]

	 	[*]
	[*]

	 	[*]
	[*]

	 	[*]
	[*]

	 	[*]
	[*]

	 	[*]
	[*]

	 	[*]
	[*]

	 	[*]
	[*]

	 	[*]
	[*]

	 	[*]
	[*]

	 	[*]
	[*]

	 	[*]

 

			
	*	 	Portions omitted pursuant to a request for confidential
treatment and filed separately with the Securities and Exchange Commission.

 xvi 

 

 

	 	 	 	 	 	 	 
	[*]
	 	 	 	 	 	 
	 
	 	[*]	 	 	 	 
	 
	 	 	 	•   [*]	 	 
	 
	 	 	 	•            [*]	 	 
	 
	 	 	 	•            [*]	 	 
	 
	 	 	 	•            [*]	 	 
	 
	 	 	 	•            [*]	 	 
	 
	 	 	 	 	 	 
	 
	 	[*]	 	 	 	 
	 
	 	 	 	[*]	 	 
	 
	 	 	 	[*]	 	 
	 
	 	 	 	[*]	 	 
	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	[*]
	 
	 	 	 	 	 	[*]
	 
	 	 	 	 	 	[*]
	 
	 	 	 	 	 	[*]
	 
	 	 	 	 	 	[*]
	 
	 	 	 	 	 	 
	 
	 	[*]	 	 	 	 

    [*]

	 	 	 
	[*]	 	[*]
	[*]

	 	[*]
	[*]

	 	[*]
	[*]

	 	[*]
	[*]

	 	[*]
	[*]

	 	[*]
	[*]

	 	[*]
	[*]

	 	[*]
	[*]

	 	[*]
	[*]

	 	[*]
	[*]

	 	[*]
	[*]

	 	[*]
	[*]

	 	[*]
	[*]

	 	[*]

[*]

 

			
	*	 	Portions omitted pursuant to a request for confidential
treatment and filed separately with the Securities and Exchange Commission.

 xvii 

 

 

[*]

     [*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

 

			
	*	 	Portions omitted pursuant to a request for confidential
treatment and filed separately with the Securities and Exchange Commission.

 xviii 

 

 

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

	 	 	 
	[*]	 	[*]
	[*]
	 	 
	• [*]
	 	[*]
	• [*]
	 	[*]
	[*]
	 	[*]
	[*]
	 	[*]
	[*]
	 	[*]

 

			
	*	 	Portions omitted pursuant to a request for confidential
treatment and filed separately with the Securities and Exchange Commission.

 xix 

 

 

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

 

			
	*	 	Portions omitted pursuant to a request for confidential
treatment and filed separately with the Securities and Exchange Commission.

 xx 

 

 

[*]

[*]

[*]

[*]

[*]

[*]

[*]

  [*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

 

			
	*	 	Portions omitted pursuant to a request for confidential
treatment and filed separately with the Securities and Exchange Commission.

 xxi 

 

 

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

 

			
	*	 	Portions omitted pursuant to a request for confidential
treatment and filed separately with the Securities and Exchange Commission.

 xxii 

 

 

[*]

[*]

   [*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

 

			
	*	 	Portions omitted pursuant to a request for confidential
treatment and filed separately with the Securities and Exchange Commission.

 xxiii 

 

 

[*]

[*]

[*]

[*]

 

			
	*	 	Portions omitted pursuant to a request for confidential
treatment and filed separately with the Securities and Exchange Commission.

 xxiv 

 

 

[*]

[*]

[*]

	 	 	 	 	 
	[*]
	 	 	[*]	 
	[*]
	 	 	[*]	 
	[*]
	 	 	[*]	 
	[*]
	 	 	[*]	 
	[*]
	 	 	[*]	 

 

			
	*	 	Portions omitted pursuant to a request for confidential
treatment and filed separately with the Securities and Exchange Commission.

 xxv 

 

 

SCHEDULE 3.2.3

FORM OF FEASIBILITY STUDY AGREEMENT

This Feasibility Study Agreement (this “Study Agreement"), dated as of                     , 200X is
made by and between Merck & Co., Inc., a New Jersey corporation (“Merck") and SurModics, Inc., a
Minnesota corporation (“SurModics”) and confirms the terms under which Merck and SurModics will
conduct a Feasibility Study pursuant to the Exclusive License and Research Collaboration Agreement
between the Parties dated as of [insert effective date] (the “License Agreement”).

	1.	 	DEFINITIONS
	 
	 	 	All capitalized terms in this Study Agreement (whether used in the singular or the
plural), unless otherwise defined herein shall have the meanings set for the License
Agreement. In addition, the following terms as used in this Study Agreement, whether used
in the singular or the plural shall have the meanings set forth in this Section 1.
References to “Sections” in this Study Agreement shall be to Sections of this Study
Agreement unless otherwise specifically provided.
	 
	1.1	 	“License Agreement” shall have the meaning given such term in the preamble to this Study
Agreement
	 
	1.2	 	“Work Plan” shall mean the research to be conducted under this Study Agreement as described
in Attachment A. The Work Plan format shall follow the format set forth in Attachment C
attached hereto.
	 
	2.	 	PURPOSE; WORK PLAN; THIRD PARTIES
	 
	2.1	 	The Parties have entered in to this Study Agreement pursuant to Section 3.2.3 of the License
Agreement to determine [*].
	 
	2.2	 	Each Party agrees to use Commercially Reasonable Efforts to perform its respective tasks
under this Study Agreement and as set forth in the Work Plan. All work performed hereunder
will be conducted under the direction of the JRC which shall have sole decision-making
authority with respect to any amendments to the Work Plan in accordance with Article 2 of the
License Agreement.
	 
	2.3	 	Merck shall be entitled to utilize the services of its Affiliates and Third Parties to
perform its Work Plan responsibilities. SurModics shall be entitled to utilize the service of
Third Parties to perform its Work Plan activities only upon Merck’s prior written consent, or
as

 

			
	*	 	Portions omitted pursuant to a request for confidential
treatment and filed separately with the Securities and Exchange Commission.

 xxvi 

 

 

	 	 	specifically set forth in the Work Plan. Each Party shall ensure: (a) that all employees and
permitted Third Parties involved in the Work Plan are subject to confidentiality provisions
at least as stringent as those of this Study Agreement; (b) that each employee and permitted
Third Party who works on the Work Plan is qualified by appropriate experience and
qualifications to perform the Work Plan work assigned to such employee or permitted Third
Party in a capable and professional manner; and (c) that each employee and permitted Third
Party who works on the Work Plan has assigned their rights to inventions in a manner
consistent with the provisions of Section 7 of this Agreement.
	 
	3.	 	[*]
	 
	 	 	Merck shall supply, [*] to carry out the Work Plan in accordance with this Study Agreement.
[*]
	 
	4.	 	FUNDING OF FEASIBILITY STUDY
	 
	 	 	The budget for the research and development activities performed in accordance with the Work
Plan (“Study Budget”) is attached hereto as Attachment B. [*]

 

			
	*	 	Portions omitted pursuant to a request for confidential
treatment and filed separately with the Securities and Exchange Commission.

 xxvii 

 

 

	5.	 	CONFIDENTIALITY
	 
	 	 	All Information disclosed by one Party to the other Party hereunder shall be maintained in
confidence by the receiving Party and shall not be disclosed to any Third Party or used for
any purpose except as set forth herein without the prior written consent of the disclosing
Party, except to the extent that such Information:

	 	(a)	 	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;
	 
	 	(b)	 	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;
	 
	 	(c)	 	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;
	 
	 	(d)	 	is developed by the receiving Party independently of Information received from
the disclosing Party, as documented by the receiving Party’s business records;
	 
	 	(e)	 	is required to be disclosed by Federal or State law, by a court of competent
jurisdiction, or is disclosed to a governmental or other regulatory agency in order to
obtain patents or to gain or maintain approval to conduct clinical trials or to market
Product, but such disclosure may be only to the extent reasonably necessary to obtain
patents or authorizations or as so required by law or a court of competent
jurisdiction;
	 
	 	(f)	 	is deemed necessary by Merck to be disclosed to Related Parties, agents,
consultants, and/or other Third Parties for any and all purposes Merck and its
Affiliates deem necessary or advisable in the ordinary course of business in accordance
with this Study Agreement on the condition that such Third Parties agree to be bound by
the confidentiality and non-use obligations contained in this Study Agreement;
provided, however, that the term of confidentiality for such Third
Parties shall be no less than ten (10) years.

These obligations of confidentiality and non-use shall continue during the term of this
Study Agreement and continue until the longer of (i) ten (10) years after termination or
expiration of this Study Agreement or (ii) ten (10) years after termination or expiration of
the License Agreement.

 xxviii 

 

 

	6.	 	REPORTS
	 
	 	 	SurModics shall maintain records, in sufficient detail and in good scientific manner
appropriate for patent purposes which shall fully and properly reflect all work done and all
results achieved in performance of the Work Plan. Upon completion of the Feasibility Study,
SurModics shall provide a complete written report of the Feasibility Study results to Merck
(hereinafter the “Feasibility Report”) within fifteen (15) days after completion of the
Feasibility Study. In addition to any other relevant results and information, the
Feasibility Report shall contain such information as specified in the Work Plan.
	 
	 	 	Merck shall have the right, during normal business hours and upon reasonable notice, to
inspect and copy all documents generated by SurModics relating to the Feasibility Study.
Merck shall maintain such records and the information disclosed therein in confidence in
accordance with Section 5. Merck shall have the right to arrange for its employees and/or
consultants involved in the activities contemplated hereunder to visit the offices and
laboratories of SurModics and any of its Third Party contractors as permitted under Section
2.3 during normal business hours and upon reasonable notice, and to discuss the Feasibility
Study work and its results in detail with the technical personnel of SurModics. Upon
request, SurModics shall provide Merck with copies of all records related to the Feasibility
Study.
	 
	7.	 	INVENTIONS
	 
	7.1	 	Ownership of Information and Inventions. The entire right, title and interest in:

	 	(a)	 	SurModics Program Technology [*]
	 
	 	(b)	 	Merck Program Information and Inventions [*]; and
	 
	 	(c)	 	Joint Program Information and Inventions shall be owned [*]. Subject to the
licenses granted under Article 3 of the License Agreement and the exclusive efforts
obligations set forth in Section 2.11 thereof, [*], without obligation to account to
the other for exploitation thereof, or to seek consent of the other Party for the grant
of any license thereunder.
	 
	 	 	 	Within thirty (30) days following the end of each Calendar Quarter during the term
of this Agreement, (i) SurModics shall disclose to Merck in writing all SurModics
Program Technology and Joint Program Information and Inventions developed or
invented by employees of SurModics or its Affiliates or Third Parties acting on
behalf of SurModics or its Affiliates during such Calendar Quarter, and (ii) Merck
shall promptly disclose to SurModics in writing all Joint Program Information and
Inventions and Merck Information and Inventions

 

			
	*	 	Portions omitted pursuant to a request for confidential
treatment and filed separately with the Securities and Exchange Commission.

 xxix 

 

 

	 	 	 	developed or invented by employees of Merck or its Affiliates or Third Parties
acting on behalf of Merck or its Affiliates during such Calendar Quarter.

	7.2	 	Inventorship. Inventorship of inventions, whether or not patentable, conceived
and/or reduced to practice by the Parties in the course of exercising rights or performing
obligations pursuant to this Study Agreement, all related intellectual property rights, and
all other information developed in the course of the Parties’ exercise of rights under or
performance of this Agreement shall be determined in accordance with the rules of inventorship
under United States patent laws.
	 
	8.	 	PUBLICATION
	 
	 	 	Any publication of the Feasibility Study results by either Party shall be in accordance with
Section 4.3 of the License Agreement.
	 
	9.	 	COMPLIANCE WITH LAW
	 
	 	 	Each Party shall conduct its respective tasks under the Work Plan in accordance with all
applicable laws, rules and regulations. In addition, if animals are used as part of the
Work Plan, SurModics will comply with the Animal Welfare Act or any other applicable local,
state, national and international laws or regulations relating to the care and use of
laboratory animals. Merck encourages SurModics 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 receive the
[*] in the course of the investigation, 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. SurModics will notify Merck in writing of any deviations from applicable
regulatory or legal requirements. SurModics hereby certifies that it will not and has not
employed or otherwise used in any capacity the services of any person debarred under Section
21 USC 335a in performing any Feasibility Study hereunder. 
	 
	10.	 	LIABILITY
	 
	 	 	Merck assumes no responsibility and shall have no liability for the nature, conduct or
results of any research, testing or other work performed hereunder. THE [*] IS
SUPPLIED “AS IS” AND IS PROVIDED WITHOUT WARRANTY OF MERCHANTABILITY OR
FITNESS FOR A PARTICULAR PURPOSE OR ANY OTHER WARRANTY, EXPRESS OR IMPLIED. SURMODICS
ACKNOWLEDGES

 

			
	*	 	Portions omitted pursuant to a request for confidential
treatment and filed separately with the Securities and Exchange Commission.

 xxx 

 

 

	 	 	THAT THE [*] IS EXPERIMENTAL IN NATURE AND MAY HAVE
UNKNOWN HAZARDOUS
CHARACTERISTICS, IT IS AWARE OF THE RISKS OF WORKING WITH EXPERIMENTAL MATERIALS AND THAT IT
WILL STRICTLY ADHERE TO PROPER LABORATORY PROCEDURES FOR HANDLING CHEMICALS WITH UNKNOWN
HAZARDS.
	 
	11.	 	TERM AND TERMINATION
	 
	11.1	 	Term. This Agreement shall continue in effect for a period of [*] from the date
first written above unless earlier terminated pursuant to this Section 11.
	 
	11.2	 	Termination for Convenience. Merck may terminate this Study Agreement upon thirty
(30) days’ written notice to SurModics.
	 
	11.3	 	Termination for Breach. Either party shall have the right to terminate this Study
Agreement upon thirty (30) days written notice to the other, in the event that the other party
shall commit any serious or persistent breach of any material provision of this Study
Agreement; provided, however, that if the Party receiving such notice of
termination shall cure such breach within said (30) day period, or take steps to begin such
cure if the cure cannot be fully effectuated in the thirty (30) day period, the Study
Agreement shall continue in full force and effect.
	 
	11.4	 	Termination Triggered by Termination of License Agreement. Termination of the
License Agreement shall constitute and have the effect of termination of this Study Agreement.
	 
	11.5	 	Effect of Termination. In the event of termination of this Study Agreement pursuant
to Section 11.2 above, Merck shall reimburse SurModics for the pro-rata costs incurred in
performance of the Work Plan and for any non-cancelable commitments made up to the date of
termination; provided, however, that in no case will reimbursement under this
Study Agreement exceed the amount specified in the Study Budget. If this Study Agreement is
terminated pursuant to Section 11.3 above, then in addition to any other remedies available to
Merck under the License Agreement, no such reimbursement will be paid by Merck to SurModics.
Upon termination of this Study Agreement, or at any other time that Merck may request,
SurModics agrees to return all Candidate Compound and all documents generated by SurModics in
connection with the Feasibility Study to Merck.
	 
	12.	 	SURVIVAL
	 
	 	 	The provisions of [*] and all definitions relating to the foregoing, shall survive
termination or expiration of this Study Agreement.

 

			
	*	 	Portions omitted pursuant to a request for confidential
treatment and filed separately with the Securities and Exchange Commission.

 xxxi 

 

 

	13.	 	NOTICES
	 
	 	 	Any notices required or provided by the terms of this Study Agreement shall be in writing,
addressed in accordance with this Section, and shall be delivered personally or sent by
certified or registered mail, return receipt requested, postage prepaid or by
nationally-recognized express courier services providing evidence of delivery. The effective
date of any notice shall be the date of first receipt by the receiving Party. Notices shall
be sent to the addressee given below or to such other addressee as the Party to whom notice
is to be given may have provided to the other Party in writing in accordance with this
provision.

	 	 	 
	If to Merck:

	 	Attn: [*]
	 

	 	Merck & Co., Inc.
	 

	 	[*]

[*]
	 

	 	[*]
	 
	 	 
	With a copy to:

	 	[*]
	 

	 	Merck & Co., Inc.
	 

	 	P.O. Box 100
	 

	 	One Merck Drive
	 

	 	Whitehouse Station, NJ 08889-0100
	 
	 	 
	If to SurModics:

	 	Chief Executive Officer
	 

	 	SurModics, Inc.
	 

	 	9924 West 74th Street
	 

	 	Eden Prairie, MN 55344
	 

	 	Fax: 952-829-2743
	 
	 	 
	With a copy to:

	 	SurModics, Inc.
	 

	 	One Corporate Park
	 

	 	Suite 150
	 

	 	Irvine, CA 92606
	 

	 	Attn: Paul A. Lopez
	 

	 	Fax: 949-387-7465

 

			
	*	 	Portions omitted pursuant to a request for confidential
treatment and filed separately with the Securities and Exchange Commission.

 xxxii 

 

 

	14.	 	REPRESENTATIONS, WARRANTIES AND INDEMNIFICATION PROVISIONS OF LICENSE AGREEMENT 
	 
	 	 	The representations and warranties relating to SurModics Program Technology contained in the
License Agreement are true and correct as of the date of this Study Agreement and shall
apply hereto.
	 
	15.	 	INCORPORATION OF THE LICENSE AGREEMENT
	 
	 	 	The Parties expressly acknowledge and agree that the provisions of the License Agreement are
incorporated by reference herein, or by their terms otherwise apply hereto, and further
agree that such provisions shall be given full effect in interpreting and enforcing this
Study Agreement. In the event of any inconsistency between this Study Agreement and the
License Agreement, the License Agreement shall control.
	 
	16.	 	COUNTERPARTS 
	 
	 	 	This Study Agreement may be executed (by facsimile or otherwise) in one or more
counterparts, each of which shall for all purposes be deemed an original and all of which
shall constitute one and the same agreement.
	 
	 	 	IN WITNESS WHEREOF, the Parties have executed this Study Agreement as of the date first set
forth above.

	 	 	 
	MERCK & CO., INC.

	 	SURMODICS, INC.
	 
	 	 
	By:

	 	By:
	Name:

	 	Name:
	Title:

	 	Title:

 xxxiii 

 

 

[*]

[*]

 

			
	*	 	Portions omitted pursuant to a request for confidential
treatment and filed separately with the Securities and Exchange Commission.

 xxxiv 

 

 

[*]

[*]

 

			
	*	 	Portions omitted pursuant to a request for confidential
treatment and filed separately with the Securities and Exchange Commission.

 xxxv 

 

 

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

 

			
	*	 	Portions omitted pursuant to a request for confidential
treatment and filed separately with the Securities and Exchange Commission.

 xxxvi 

 

 

[*]

[*]

[*]

[*]

[*]

[*]

 

			
	*	 	Portions omitted pursuant to a request for confidential
treatment and filed separately with the Securities and Exchange Commission.

 xxxvii 

 

 

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

 

			
	*	 	Portions omitted pursuant to a request for confidential
treatment and filed separately with the Securities and Exchange Commission.

 xxxviii 

 

 

SCHEDULE 4.4

FORM OF PRESS RELEASE

See Attached.

 xxxix 

 

 

[*]

[*]

[*]

 

			
	*	 	Portions omitted pursuant to a request for confidential
treatment and filed separately with the Securities and Exchange Commission.

 x1 

 

 

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

	 	 	 	 	 
	[*]
	 	[*]	 	 
	[*]
	 	[*]	 	[*]
	 
	 	[*]	 	[*]
	 
	 	[*]	 	[*]
	 
	 	[*]	 	[*]
	 
	 	[*]	 	[*]
	 
	 	[*]	 	[*]

 

			
	*	 	Portions omitted pursuant to a request for confidential
treatment and filed separately with the Securities and Exchange Commission.

 x1i 

 

 

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

[*]

 

			
	*	 	Portions omitted pursuant to a request for confidential
treatment and filed separately with the Securities and Exchange Commission.

 x1ii 

 

 

[*]

[*]

[*]

 

			
	*	 	Portions omitted pursuant to a request for confidential
treatment and filed separately with the Securities and Exchange Commission.

 x1iii 

 

 

SCHEDULE 7.2

THIRD PARTIES WITH PATENT PROSECUTION RIGHTS

[*]

 

			
	*	 	Portions omitted pursuant to a request for confidential
treatment and filed separately with the Securities and Exchange Commission.

 x1iv

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00127-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00127-of-00352.parquet"}], [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00127-of-00352.parquet"}], [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00127-of-00352.parquet"}]]