EXCLUSIVE LICENSE AND RESEARCH COLLABORATION AGREEMENT

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

			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

			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

			11.14			Certain Conventions			49
			11.15			Business Day Requirements			49
			11.16			Counterparts			49
			11.17			Adverse Experience Reporting			49

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		[*]

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.[*]

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) [*]

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,

		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.

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.

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.

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 .

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.

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)

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:

(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

			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

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 .

	(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.

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)		[*]

	(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 , howeve r, 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

			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’

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).

(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

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		[*]

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, [*]

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.

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.

	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		Nond