EX-10.2 2 srdx-ex102_48.htm EX-10.2 ABBOTT -- DEVELOPMENT AND DISTRIBUTION AGREEMENT (REDACTED) (2018-05-03) srdx-ex102_48.htm

Exhibit 10.2

 

EXECUTION VERSION

 

 

DEVELOPMENT AND DISTRIBUTION AGREEMENT

between

SURMODICS, INC.

and

ABBOTT VASCULAR, INC.

Dated as of February 26, 2018

 

 

*CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION. BRACKETED ASTERISKS ([**]) MARK THE PRECISE PLACES IN THE DOCUMENT WHERE CONFIDENTIAL TREATMENT IS REQUESTED WITH RESPECT TO OMITTED INFORMATION.


 

 

TABLE OF CONTENTS

 

 

ARTICLE 1 DEFINITIONS

 

1

 

 

 

 

 

 

 

 

ARTICLE 2 DEVELOPMENT AND REGULATORY ACTIVITIES

 

13

 

 

 

 

 

 

 

 

 

 

2.1

 

 

Development

 

13

 

 

 

 

 

 

 

 

 

 

2.2

 

 

Regulatory Activities

 

14

 

 

 

 

 

 

 

 

 

 

2.3

 

 

Regulatory Data

 

16

 

 

 

 

 

 

 

 

ARTICLE 3 DISTRIBUTION RIGHTS AND OTHER COMMERCIALIZATION MATTERS

 

17

 

 

 

 

 

 

 

 

 

 

3.1

 

 

Appointment of Abbott as Exclusive Distributor

 

17

 

 

 

 

 

 

 

 

 

 

3.2

 

 

(Sub)distributorships

 

17

 

 

 

 

 

 

 

 

 

 

3.3

 

 

Commercialization Diligence

 

17

 

 

 

 

 

 

 

 

 

 

3.4

 

 

Booking of Sales; Distribution

 

17

 

 

 

 

 

 

 

 

 

 

3.5

 

 

Pricing Approvals and Approvals of Promotional Materials

 

18

 

 

 

 

 

 

 

 

 

 

3.6

 

 

Product Trademarks

 

18

 

 

 

 

 

 

 

 

ARTICLE 4 MANUFACTURING AND SUPPLY

 

19

 

 

 

 

 

 

 

 

 

 

4.1

 

 

Supply

 

19

 

 

 

 

 

 

 

 

 

 

4.2

 

 

Supply Assurance

 

23

 

 

 

 

 

 

 

 

 

 

4.3

 

 

Right to Manufacture; Manufacturing Technology Transfer

 

23

 

 

 

 

 

 

 

 

ARTICLE 5 COMPLIANCE AND RELATED MATTERS

 

24

 

 

 

 

 

 

 

 

 

 

5.1

 

 

Compliance

 

24

 

 

 

 

 

 

 

 

 

 

5.2

 

 

Records

 

24

 

 

 

 

 

 

 

 

 

 

5.3

 

 

Authorized Representative

 

25

 

 

 

 

 

 

 

 

CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION.  CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.


 

 

 

5.4

 

 

Safety Data

 

25

 

 

 

 

 

 

 

 

 

 

5.5

 

 

Complaints

 

25

 

 

 

 

 

 

 

 

 

 

5.6

 

 

Notification Regarding Regulatory Inquiries and Potential Adverse Events

 

25

 

 

 

 

 

 

 

 

 

 

5.7

 

 

Recalls

 

26

 

 

 

 

 

 

 

 

ARTICLE 6 JOINT DEVELOPMENT COMMITTEE

 

27

 

 

 

 

 

 

 

 

 

 

6.1

 

 

Joint Development Committee

 

27

 

 

 

 

 

 

 

 

 

 

6.2

 

 

General Provisions Applicable to JDC

 

28

 

 

 

 

 

 

 

 

ARTICLE 7 PAYMENTS AND RECORDS

 

29

 

 

 

 

 

 

 

 

 

 

7.1

 

 

Initial Payment

 

29

 

 

 

 

 

 

 

 

 

 

7.2

 

 

Milestones

 

29

 

 

 

 

 

 

 

 

 

 

7.3

 

 

Net Profits Payment

 

30

 

 

 

 

 

 

 

 

 

 

7.4

 

 

Net Profit Share Payments and Reports

 

30

 

 

 

 

 

 

 

 

 

 

7.5

 

 

Mode of Payment

 

30

 

 

 

 

 

 

 

 

 

 

7.6

 

 

Offsets

 

30

 

 

 

 

 

 

 

 

 

 

7.7

 

 

Taxes

 

30

 

 

 

 

 

 

 

 

 

 

7.8

 

 

Financial Records

 

30

 

 

 

 

 

 

 

 

 

 

7.9

 

 

Audits

 

31

 

 

 

 

 

 

 

 

 

 

7.10

 

 

No Other Compensation

 

32

 

 

 

 

 

 

 

 

ARTICLE 8 LICENSES AND OPTIONS

 

32

 

 

 

 

 

 

 

 

 

 

8.1

 

 

Licenses Granted to Abbott

 

32

 

 

 

 

 

 

 

 

 

 

8.2

 

 

Sublicenses

 

33

 

 

 

 

 

 

 

 

 

 

8.3

 

 

Options Granted to Abbott

 

33

 

 

 

 

 

 

 

 

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CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION.  CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.


 

 

 

8.4

 

 

Exclusivity

 

35

 

 

 

 

 

 

 

 

 

 

8.5

 

 

Retention of Rights

 

37

 

 

 

 

 

 

 

 

 

 

8.6

 

 

Confirmatory Patent License

 

37

 

 

 

 

 

 

 

 

 

 

8.7

 

 

In-License Agreements

 

37

 

 

 

 

 

 

 

 

 

 

8.8

 

 

No Impairment

 

38

 

 

 

 

 

 

 

 

ARTICLE 9 INTELLECTUAL PROPERTY

 

38

 

 

 

 

 

 

 

 

 

 

9.1

 

 

Ownership of Intellectual Property

 

38

 

 

 

 

 

 

 

 

 

 

9.2

 

 

Maintenance and Prosecution

 

39

 

 

 

 

 

 

 

 

 

 

9.3

 

 

Enforcement

 

41

 

 

 

 

 

 

 

 

 

 

9.4

 

 

Defense and Third Party Rights

 

42

 

 

 

 

 

 

 

 

 

 

9.5

 

 

Information

 

42

 

 

 

 

 

 

 

 

 

 

9.6

 

 

Cooperation and Participation

 

43

 

 

 

 

 

 

 

 

 

 

9.7

 

 

Settlement

 

43

 

 

 

 

 

 

 

 

 

 

9.8

 

 

Recovery

 

43

 

 

 

 

 

 

 

 

 

 

9.9

 

 

Liabilities

 

43

 

 

 

 

 

 

 

 

 

 

9.10

 

 

Inventor’s Remuneration

 

44

 

 

 

 

 

 

 

 

 

 

9.11

 

 

Patent Marking

 

44

 

 

 

 

 

 

 

 

ARTICLE 10 CONFIDENTIALITY

 

44

 

 

 

 

 

 

 

 

 

 

10.1

 

 

Confidentiality Obligations

 

44

 

 

 

 

 

 

 

 

 

 

10.2

 

 

Permitted Disclosures

 

45

 

 

 

 

 

 

 

 

 

 

10.3

 

 

Use of Name

 

46

 

 

 

 

 

 

 

 

 

 

10.4

 

 

Public Announcements

 

46

 

 

 

 

 

 

 

 

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CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION.  CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.


 

 

 

10.5

 

 

Publications

 

47

 

 

 

 

 

 

 

 

 

 

10.6

 

 

Return of Confidential Information

 

47

 

 

 

 

 

 

 

 

 

 

10.7

 

 

Privileged Communications

 

47

 

 

 

 

 

 

 

 

ARTICLE 11 REPRESENTATIONS AND WARRANTIES

 

48

 

 

 

 

 

 

 

 

 

 

11.1

 

 

Mutual Representations, Warranties, and Covenants

 

48

 

 

 

 

 

 

 

 

 

 

11.2

 

 

Additional Representations, Warranties, and Covenants of Surmodics

 

49

 

 

 

 

 

 

 

 

 

 

11.3

 

 

DISCLAIMER OF WARRANTIES

 

51

 

 

 

 

 

 

 

 

ARTICLE 12 INDEMNITY

 

52

 

 

 

 

 

 

 

 

 

 

12.1

 

 

Indemnification of Surmodics

 

52

 

 

 

 

 

 

 

 

 

 

12.2

 

 

Indemnification of Abbott

 

52

 

 

 

 

 

 

 

 

 

 

12.3

 

 

Indemnification Procedures

 

52

 

 

 

 

 

 

 

 

 

 

12.4

 

 

Special, Indirect and Other Losses

 

54

 

 

 

 

 

 

 

 

 

 

12.5

 

 

Insurance

 

55

 

 

 

 

 

 

 

 

ARTICLE 13 TERM AND TERMINATION

 

55

 

 

 

 

 

 

 

 

 

 

13.1

 

 

Term

 

55

 

 

 

 

 

 

 

 

 

 

13.2

 

 

Termination for Material Breach

 

55

 

 

 

 

 

 

 

 

 

 

13.3

 

 

Additional Termination Rights by Abbott

 

56

 

 

 

 

 

 

 

 

 

 

13.4

 

 

Termination for Patent Challenge

 

57

 

 

 

 

 

 

 

 

 

 

13.5

 

 

Termination for Insolvency

 

57

 

 

 

 

 

 

 

 

 

 

13.6

 

 

Rights in Bankruptcy

 

57

 

 

 

 

 

 

 

 

 

 

13.7

 

 

Consequences of Expiration or Termination

 

58

 

 

 

 

 

 

 

 

 

 

13.8

 

 

Remedies

 

58

 

 

 

 

 

 

 

 

- iv -

CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION.  CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.


 

 

 

13.9

 

 

Accrued Rights; Surviving Obligations

 

58

 

 

 

 

 

 

 

 

ARTICLE 14 MISCELLANEOUS

 

58

 

 

 

 

 

 

 

 

 

 

14.1

 

 

Force Majeure

 

58

 

 

 

 

 

 

 

 

 

 

14.2

 

 

Export Control

 

59

 

 

 

 

 

 

 

 

 

 

14.3

 

 

Change in Control of Surmodics

 

59

 

 

 

 

 

 

 

 

 

 

14.4

 

 

Assignment

 

59

 

 

 

 

 

 

 

 

 

 

14.5

 

 

Subcontracting

 

60

 

 

 

 

 

 

 

 

 

 

14.6

 

 

Severability

 

61

 

 

 

 

 

 

 

 

 

 

14.7

 

 

Dispute Resolution

 

61

 

 

 

 

 

 

 

 

 

 

14.8

 

 

Governing Law, Jurisdiction, and Venue

 

61

 

 

 

 

 

 

 

 

 

 

14.9

 

 

Notices

 

62

 

 

 

 

 

 

 

 

 

 

14.10

 

 

Entire Agreement; Amendments

 

63

 

 

 

 

 

 

 

 

 

 

14.11

 

 

English Language

 

64

 

 

 

 

 

 

 

 

 

 

14.12

 

 

Equitable Relief

 

64

 

 

 

 

 

 

 

 

 

 

14.13

 

 

Waiver and Non-Exclusion of Remedies

 

64

 

 

 

 

 

 

 

 

 

 

14.14

 

 

No Benefit to Third Parties

 

65

 

 

 

 

 

 

 

 

 

 

14.15

 

 

Further Assurance

 

64

 

 

 

 

 

 

 

 

 

 

14.16

 

 

Relationship of the Parties

 

65

 

 

 

 

 

 

 

 

 

 

14.17

 

 

Non-Solicitation of Employees

 

65

 

 

 

 

 

 

 

 

 

 

14.18

 

 

References

 

65

 

 

 

 

 

 

 

 

 

 

14.19

 

 

Construction

 

65

 

 

 

 

 

 

 

 

 

 

14.20

 

 

Counterparts

 

65

 

 

 

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CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION.  CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.


 

DEVELOPMENT AND DISTRIBUTION AGREEMENT

This Development and Distribution Agreement (the “Agreement”) is made and entered into effective as of February 26, 2018 (the “Effective Date”) by and between Surmodics, Inc., a Minnesota corporation (“Surmodics”), and Abbott Vascular, Inc., a subsidiary of Abbott Laboratories, a Delaware corporation (“Abbott”).  Surmodics and Abbott are sometimes referred to herein individually as a “Party” and collectively as the “Parties.”

RECITALS

WHEREAS, Surmodics has Developed and is continuing to Develop the Product; and

WHEREAS, Surmodics desires to appoint Abbott as its exclusive worldwide distributor of the Product and Abbott desires to accept such appointment and also to conduct certain additional Development relating to the Product in the Territory, in each case in accordance with the terms and conditions set forth below.

NOW, THEREFORE, in consideration of the premises and the mutual promises and conditions hereinafter set forth, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties, intending to be legally bound, do hereby agree as follows:

Article 1
DEFINITIONS

Unless otherwise specifically provided herein, the following terms shall have the following meanings, and grammatical variations thereof shall have corresponding meanings:

1.1Accounting Standards means, with respect to a Party or its Affiliates, standard internal accounting policies and procedures, in accordance with GAAP, applied on a consistent basis.

1.2Acquisition” means, with respect to a Party, a merger, acquisition (whether of all of the stock or all or substantially all of the assets of a Person or any operating or business division of a Person) or similar transaction by or with the Party or its Affiliates, other than a Change in Control of the Party.

1.3“Action” has the meaning set forth in Section 9.3.2.

1.4Adjusted Order Lot” has the meaning set forth in Schedule 4.1.2.

1.5Adverse Ruling” has the meaning set forth in Section 13.2.1.

1.6Affiliate” means, with respect to a Party, any Person that, directly or indirectly, through one or more intermediaries, controls, is controlled by or is under common control with such Party.  For purposes of this definition, “control” and, with correlative meanings, the terms “controlled by” and “under common control with” means (i) the possession,

CERTAIN INFORMATION IN THIS EXHIBIT HAS BEEN OMITTED AND FILED SEPARATELY WITH THE COMMISSION.  CONFIDENTIAL TREATMENT HAS BEEN REQUESTED WITH RESPECT TO THE OMITTED PORTIONS.


directly or indirectly, of the power to direct the management or policies of a business entity, whether through the ownership of voting securities, by contract relating to voting rights or corporate governance, or otherwise; or (ii) the ownership, directly or indirectly, of more than fifty percent (50%) of the voting securities or other ownership interest of a business entity (or, with respect to a limited partnership or other similar entity, its general partner or controlling entity).

1.7Agreement Inventions” has the meaning set forth in Section 9.1.1.

1.8Applicable Law” means federal, state, local, national and supra-national laws, statutes, rules, and regulations, including any rules, regulations, guidelines, or other requirements of any Regulatory Authorities, major national securities exchanges or major securities listing organizations, that may be in effect from time to time during the Term and applicable to a particular activity or country or other jurisdiction hereunder.

1.9Approved Subcontractors” has the meaning set forth in Section 2.1.1(ii).

1.10Auditor” has the meaning set forth in Section 7.9.2.

1.11AVF Option Product” means [**].

1.12AVF Option Product Exercise Agreement” has the meaning set forth in Section 8.3.3(i).

1.13AVF Option Product Option Period” means [**].

1.14Breaching Party” has the meaning set forth in Section 13.2.1.

1.15BTK Option Product” means [**].

1.16BTK Option Product Exercise Agreement” has the meaning set forth in Section 8.3.2(i).

1.17BTK Option Product Option Period” means [**].

1.18Business Day” means a day other than a Saturday or Sunday on which banking institutions in New York, New York are open for business.

1.19Calendar Quarter” means each successive period of three (3) calendar months commencing on January 1, April 1, July 1 and October 1, except that the first Calendar Quarter of the Term shall commence on the Effective Date and end on the day immediately prior to the first to occur of January 1, April 1, July 1 or October 1 after the Effective Date, and the last Calendar Quarter of the Term shall end on the last day of the Term.

1.20Challenge” means, with respect to any Patent, directly or indirectly, (i) to assert in any court, patent office or other competent governmental authority that such Patent is, in whole or in part, invalid or unenforceable, (ii) to oppose the issuance of, or to challenge or

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seek to narrow the issued or applied for claims, scope or duration of, any claim of such Patent, (iii) to seek a declaratory judgment or similar relief, other than as a counterclaim to, or other defensive countermeasure in respect of, a patent infringement claim threatened to be brought or brought by or on behalf of Surmodics, that any product or service of Abbott or one of its Affiliates does not infringe any such Patent or is licensed or otherwise authorized under this Agreement or otherwise, (iv) to seek, request or otherwise take any action that results in the declaration, initiation or continuation of an interference or derivative proceeding, opposition, reexamination, post-grant review or inter partes review (or their equivalents) of such Patent, or (v) to assist or cooperate with any other Person to do any of the foregoing.

1.21Change in Control,” with respect to a Party, shall be deemed to have occurred if any of the following occurs after the Effective Date with respect to such Party or a parent company of such Party (such Party or such parent, considered separately, the “Change in Control Party”):

1.21.1any “person” or “group” (as such terms are defined below) (i) is or becomes the “beneficial owner” (as defined below), directly or indirectly, of shares of capital stock or other interests (including partnership interests) of such Change in Control Party then outstanding and normally entitled (without regard to the occurrence of any contingency) to vote in the election of the directors, managers or similar supervisory positions (“Voting Stock”) of such Change in Control Party representing more than fifty percent (50%) of the total voting power of all outstanding classes of Voting Stock of such Change in Control Party or (ii) has the power, directly or indirectly, to elect a majority of the members of the Change in Control Party’s board of directors, or similar governing body (“Board of Directors”); or

1.21.2such Change in Control Party enters into a merger, consolidation or similar transaction with another Person (whether or not such Change in Control Party is the surviving entity) and as a result of such merger, consolidation or similar transaction (i) the members of the Board of Directors of such Change in Control Party immediately prior to such transaction constitute less than a majority of the members of the Board of Directors of such Change in Control Party or such surviving Person immediately following such transaction or (ii) the Persons that beneficially owned, directly or indirectly, the shares of Voting Stock of such Change in Control Party immediately prior to such transaction cease to beneficially own, directly or indirectly, shares of Voting Stock of such Change in Control Party representing at least a majority of the total voting power of all outstanding classes of Voting Stock of the surviving Person in substantially the same proportions as their ownership of Voting Stock of such Change in Control Party immediately prior to such transaction; or

1.21.3such Change in Control Party sells or transfers to any Third Party, in one or more related transactions, properties or assets representing all or substantially all of such Change in Control Party’s consolidated total assets to which this Agreement relates; or

1.21.4the holders of capital stock of such Change in Control Party approve a plan or proposal for the liquidation or dissolution of such Change in Control Party.

For the purpose of this definition of Change in Control, (i) “person” and “group” have the meanings given such terms under Section 13(d) and 14(d) of the United States Securities

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Exchange Act of 1934 and the term group includes any group acting for the purpose of acquiring, holding or disposing of securities within the meaning of Rule 13d-5(b)(1) under the said Act; (ii) a beneficial owner shall be determined in accordance with Rule 13d-3 under the aforesaid Act; and (iii) the terms beneficially owned and beneficially own shall have meanings correlative to that of beneficial owner.

1.22Change in Control Party” has the meaning set forth in the definition of “Change in Control”.

1.23Clinical Data” means all Information that is made, collected, or otherwise generated under or in connection with Clinical Studies for the Product, including any data, reports, and results with respect thereto.

1.24Clinical Development” means the performance of clinical Development, including statistical analysis, Clinical Studies or related clinical activities, in each case for purposes of complying with, obtaining or maintaining Regulatory Approvals with respect to the Product.

1.25Clinical Studies” means the tests and studies in human subjects conducted to Develop the Product, including feasibility or pilot studies and studies required by Applicable Law, or otherwise recommended by applicable Regulatory Authorities, to obtain or maintain Regulatory Approvals for the Product for one (1) or more indications, including tests or studies that are intended to expand the Product Labeling with respect to an indication.

1.26Combination Product” means a Product that is sold in combination with one (1) or more other products or services sold together as separate units in a single package or sold in separate packages for a single price.

1.27Commercial Forecast Commencement Date” has the meaning set forth in Section 4.1.3.

1.28Commercialization” means any and all activities directed to the preparation for sale of, offering for sale of, or sale of the Product, including activities related to marketing, promoting, distributing, importing, and exporting the Product, and interacting with Regulatory Authorities regarding any of the foregoing, including pre-launch activities, and including obtaining and maintaining any Pricing Approvals, but excluding Development or Manufacture of the Product.  When used as a verb, “to Commercialize” and “Commercializing” means to engage in Commercialization, and “Commercialized” has a corresponding meaning.

1.29Commercially Reasonable Efforts” means [**].  “Commercially Reasonable Efforts” shall be determined for any country taking into account the potential impact of such country on the overall worldwide Product opportunity.

1.30Competing Product” has the meaning set forth in Section 8.4.1.

1.31“[**]” shall mean [**].

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1.32Competitormeans [**].

1.33Complaint” means any written, electronic, or oral communication that alleges deficiencies related to the identity, quality, durability, reliability, safety, effectiveness, or performance of a device after it is released for distribution.

1.34Confidential Information” has the meaning set forth in Section 10.1.

1.35Control” means, with respect to any item of Information, Regulatory Documentation, material, Patent or other intellectual property right, possession of the right, whether directly or indirectly and whether by ownership, license or otherwise (other than by operation of any license or other right granted by a Party to the other Party hereunder), to grant a license, sublicense or other right (including the right to reference Regulatory Documentation) to or under such Information, Regulatory Documentation, material, Patent or other intellectual property right as provided for herein without violating the terms of any agreement with any Third Party.

1.36“Controlling Party” means, with respect to a Prosecution, or an Action with respect to (i) any alleged or threatened infringement of the Surmodics Product Patents, the Surmodics Other Patents, the Joint Patents, or the Product Trademarks, or the Existing Serene Trademark, (ii) a Third Party Patent Infringement Claim, (iii) an Invalidity Claim, or (iv) a Third Party Trademark Infringement Claim, the Party controlling such Prosecution, or Action.  

1.37Core European Countries” [**].

1.38Default Notice” has the meaning set forth in Section 13.2.1.

1.39Development” means, in respect of the Product, all activities related to research, bench, pre-clinical and other non-clinical testing, test method development, process development, manufacturing scale-up, qualification and validation, quality assurance/quality control, Clinical Studies, including Manufacturing in support thereof, statistical analysis and report writing, the preparation and submission of Device Approval Applications, regulatory affairs with respect to the foregoing and all other activities necessary or reasonably useful or otherwise requested or required by a Regulatory Authority as a condition or in support of obtaining or maintaining a Regulatory Approval.  When used as a verb, “Develop” means to engage in Development.

1.40Device Approval Application” means an application for Premarket Approval as defined in the FFDCA (“PMA”), or any corresponding foreign application in the Territory, including, with respect to the European Union, a submission to a Notified Body for the performance of a conformity assessment to demonstrate conformity with the requirements of the Medical Devices Directive and permit the application of the CE Mark to a device.

1.41Dispute” has the meaning set forth in Section 14.7.

1.42Distributor” means, with respect to a country, any Person (i) that is in Abbott’s customary distribution chain for distributing products in such country or (ii) that Abbott has, in its reasonable discretion, selected as appropriate to distribute, market and sell the Product

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in such country consistent with Abbott’s common practices for selection of distributors in such country generally.

1.43Dollars” or “$” means United States Dollars.

1.44EAV” has the meaning set forth in Schedule 4.1.2.

1.45EEA” means the European Economic Area as its membership may be constituted from time to time, and any successor thereto, and which, as of the Effective Date, is comprised of the members of the European Union together with Iceland, Liechtenstein and Norway.

1.46Effective Date” has the meaning set forth in the preamble hereto.

1.47EU Launch Quantity” has the meaning set forth in Section 4.1.3.

1.48European Union” means [**].

1.49Existing Product Patents” has the meaning set forth in Section 11.2.2.

1.50Existing Serene Trademark” means Serene, and its existing registrations as set forth in Schedule 1.50.  

1.51Existing SurVeil Trademark” means SurVeil, and its existing registrations as set forth in Schedule 1.51, or such replacement Trademark as may be accepted by Surmodics pursuant to Section 3.6.2.

1.52Existing Third Party Patent” means any Patent in the United States or under the European Patent Convention issued or published as of the Effective Date and owned by a Third Party.  

1.53Exploit” or “Exploitation” means to make, have made, import, use, sell, or offer for sale, including to research, Develop, Commercialize, register, modify, enhance, improve, Manufacture, have Manufactured, hold, or keep (whether for disposal or otherwise), formulate, optimize, export, transport, distribute, promote, market, or have sold or otherwise dispose of.

1.54Extended Term” has the meaning set forth in Section 13.1.

1.55FDA” means the United States Food and Drug Administration and any successor agency(ies) or authority having substantially the same function.

1.56FFDCA” means the United States Federal Food, Drug, and Cosmetic Act, 21 U.S.C. § 301 et seq., as amended from time to time, together with any rules, regulations and requirements promulgated thereunder (including all additions, supplements, extensions, and modifications thereto).

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1.57First Commercial Sale means, with respect to a country, the first sale for monetary value to an end user following Regulatory Approval for the Product in such country, excluding any transfers of the Product for use in pre-launch physician preference testing, pre-launch clinical trials or registries, and excluding any transfer between or among a Party and its Affiliates.  Sales prior to receipt of Regulatory Approval for the Product, including named patient sales and compassionate use sales, shall not be construed as a First Commercial Sale of the Product.

1.58Forecast” has the meaning set forth in Section 4.1.3.

1.59GAAP” means generally accepted accounting principles in the United States, consistently applied.

1.60Good Faith Efforts Orders” has the meaning set forth in Section 4.1.4.

1.61IDE” means an application, including an application filed with a Regulatory Authority, for authorization to commence human clinical studies, including (i) an Investigational Device Exemption as defined in the FFDCA or any successor application or procedure filed with the FDA, (ii) an abbreviated IDE as specified in FDA regulations, (iii) any equivalent of a United States IDE in other countries or regulatory jurisdictions, and (iv) all amendments, variations, extensions and renewals thereof that may be filed with respect to the foregoing.

1.62In-License Agreement” has the meaning set forth in Section 11.2.3.

1.63[**].  

1.64Indemnification Claim Notice” has the meaning set forth in Section 12.3.1.

1.65Indemnified Party” has the meaning set forth in Section 12.3.1.

1.66Information” means all technical, scientific, and other know-how and information, trade secrets, knowledge, technology, means, methods, processes, practices, formulae, instructions, skills, techniques, procedures, experiences, ideas, technical assistance, designs, drawings, assembly procedures, computer programs, apparatuses, specifications, data, results and other material, including: biological, chemical, pharmacological, toxicological, pharmaceutical, physical and analytical, pre-clinical, clinical, safety, manufacturing and quality control data and information, including study designs and protocols; assays; and biological methodology; in each case (whether or not confidential, proprietary, patented or patentable) in written, electronic or any other form now known or hereafter developed.

1.67Initial Indication” means [**].

1.68Initial Term” has the meaning set forth in Section 13.1.

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1.69Invalidity Claim” means any claim, suit or proceeding by a Third Party alleging or asserting the invalidity or unenforceability of a Surmodics Product Patent, Surmodics Other Patent, or Joint Patent.

1.70JDC” has the meaning set forth in Section 6.1.1.

1.71Joint Know-How has the meaning set forth in Section 9.1.2.

1.72Joint Patents has the meaning set forth in Section 9.1.2.

1.73Losses” has the meaning set forth in Section 12.1.

1.74Manufacture” and “Manufacturing” means, with respect to the Product, all activities related to the production, manufacture, processing, finishing, packaging, labeling, shipping, and holding of the Product or any intermediate thereof, including process development, process qualification and validation, scale-up, pre-clinical, clinical and commercial manufacture and analytic development, quality assurance, and quality control; provided, however, when used in the context of Abbott’s right or license to Manufacture or a Technology Transfer hereunder, “Manufacture” and “Manufacturing” means the use or practice of the Manufacturing Process.

1.75Manufacturing Process” has the meaning set forth in Section 4.3.2(i).

1.76Manufacturing Transfer Event” has the meaning set forth in Section 4.3.1.

1.77Market Mix Table” has the meaning set forth in Schedule 4.1.2.

1.78MDR” has the meaning set forth in Section 5.4.

1.79Medical Devices Directive” means Council Directive 93/42/EEC concerning medical devices, as amended from time to time, or any subsequent or superseding law, statute or regulation, including Regulation (EU) 2017/745 on medical devices.

1.80Milestone” has the meaning set forth in Section 7.2.

1.81Milestone Payment” has the meaning set forth in Section 7.2.

1.82Net Profit Payment” has the meaning set forth in Schedule 7.  

1.83Net Profits” has the meaning set forth in Schedule 7.

1.84Net Sales” has the meaning set forth in Schedule 7.

1.85Non-Conforming Product” has the meaning set forth in Section 4.1.10(i).

1.86Non-Controlling Party” means, with respect to a Prosecution, or an Action with respect to (i) any alleged or threatened infringement of the Surmodics Product

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Patents, the Surmodics Other Patents, the Joint Patents, or the Product Trademarks, or the Existing Serene Trademark, (ii) a Third Party Patent Infringement Claim, (iii) an Invalidity Claim, or (iv) a Third Party Trademark Infringement Claim, the Party not controlling such Prosecution, or Action.

1.87Non-Sales Revenue” has the meaning set forth in Schedule 7.

1.88Notified Body” means an entity licensed, authorized or approved by the applicable government agency, department or other authority to assess and certify the conformity of a medical device with the requirements of the Medical Devices Directive.

1.89Notifying Party” has the meaning set forth in Section 13.2.1.

1.90Option Exercise Agreement” means, in respect of the AVF Option Product, the AVF Option Product Exercise Agreement, and in respect of the BTK Option Product, the BTK Option Product Exercise Agreement.

1.91Option Product” means the AVF Option Product or the BTK Option Product, as applicable.

1.92Other Abbott Trademark” means any Trademark Controlled by Abbott or its Affiliates that is used in the Commercialization of the Product other than any Product Trademark.

1.93Other SFA Product” has the meaning set forth in Section 8.3.4.

1.94Other SFA Product Notice” has the meaning set forth in Section 8.3.4.

1.95Party” and “Parties” have the meaning set forth in the preamble hereto.

1.96Party Development Activities” means, with respect to a Party, the Development activities conducted by such Party pursuant to this Agreement.

1.97Patents” means (i) all national, regional and international patents and patent applications, including provisional patent applications; (ii) all patent applications filed either from such patents, patent applications or provisional applications or from an application claiming priority from either of these, including divisionals, continuations, continuations-in-part, provisionals, converted provisionals and continued prosecution applications; (iii) any and all patents that have issued or in the future issue from the foregoing patent applications ((i) and (ii)), including utility models, petty patents and design patents and certificates of invention; and (iv) any and all extensions or restorations by existing or future extension or restoration mechanisms, including revalidations, reissues, re-examinations and extensions (including any supplementary protection certificates and the like) of the foregoing patents or patent applications ((i), (ii), and (iii)).

1.98Payment” has the meaning set forth in Section 7.7.1.

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1.99Person means an individual, sole proprietorship, partnership, limited partnership, limited liability partnership, corporation, limited liability company, business trust, joint stock company, trust, unincorporated association, joint venture or other similar entity or organization, including a government or political subdivision, department or agency of a government.

1.100PO” has the meaning set forth in Section 4.1.2.

1.101Post-Approval Study” means, with respect to an indication, any Clinical Study that constitutes a post-marketing requirement of a Regulatory Authority to, or a commitment to a Regulatory Authority that is required to, maintain any Regulatory Approval given by such Regulatory Authority for the Product for such indication.

1.102Pricing Approvals” means pricing and reimbursement approvals from a Regulatory Authority that are necessary or desirable in order to sell the Product in a country or jurisdiction in the Territory.

1.103Primary Efficacy Endpoint” has the meaning set forth in Schedule 7.

1.104Primary Safety Endpoint” has the meaning set forth in Schedule 7.

1.105Product” means the paclitaxel-coated balloon dilatation catheter in Development as of the Effective Date by Surmodics and its Affiliates as described in IDE G150121 and any improvements, derivatives, and iterations thereof, [**].

1.106Product Concerns” has the meaning set forth in Section 5.7.

1.107Product Labeling” means, with respect to a country or other jurisdiction in the Territory, (i) the Regulatory Authority‑approved labeling and instructions for use for the Product for such country or other jurisdiction, and (ii) all labels and other written, printed, or graphic matter upon a container, wrapper, or any package insert utilized with or for the Product in such country or other jurisdiction.

1.108Product Regulatory Filings” has the meaning set forth in Section 2.2.6.

1.109Product Trademarks” means any Trademark(s) to be used by Abbott or its Affiliates or its or their respective (sub)distributors, or subcontractors only for the Commercialization of the Product in the Territory, including the Existing SurVeil Trademark and the Existing Serene Trademark, and any registrations thereof or any pending applications relating thereto in the Territory (excluding, in any event, any trademarks, service marks, names or logos that include any corporate name or logo of either Party or its respective Affiliates).

1.110Proposed In-License Agreement” has the meaning set forth in Section 8.7.2.

1.111Prosecute” means, with respect to a Patent, to prepare, file, prosecute, and maintain the Patent; with respect to a Trademark, to register, prosecute and maintain the Trademark; and “Prosecution” and “Prosecuting” shall have corresponding meanings.

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1.112QSR means: (i) the requirements applicable to manufacturers of finished medical devices (including current Good Manufacturing Practices) pertaining to the methods used in, and the facilities and controls used for, the design, manufacture, packaging, labeling, storage, installation, and servicing of all finished devices intended for human use, as specified in the U.S. Code of Federal Regulations and FDA’s guidance documents, and all successor applicable regulations and guidance documents thereto, (ii) applicable standards under or arising out of the Medical Devices Directive, and (iii) requirements for quality systems contained in applicable international standards for medical devices, including those of the International Organization for Standardization (ISO).

1.113Quality Agreement” has the meaning set forth in Section 4.1.9.

1.114Regulatory Approval” means, with respect to a country or other jurisdiction in the Territory, any and all approvals or premarket notifications (including Device Approval Applications), licenses, registrations, certificates, or authorizations of any Regulatory Authority or Notified Body necessary to commercially distribute, sell, or market the Product in such country or other jurisdiction, including, where applicable, pre- and post-approval marketing authorizations, but excluding Pricing Approvals and any approvals of any promotional materials.

1.115Regulatory Authority” means any applicable supra-national, federal, national, regional, state, provincial, or local governmental or regulatory authority, agency, department, bureau, commission, council, or other entities (e.g., FDA) regulating or otherwise exercising authority with respect to activities contemplated in this Agreement, including the Exploitation of the Product in the Territory.

1.116Regulatory Documentation” means all (i) applications (including all IDEs and Device Approval Applications, and amendments or supplements thereto, and other regulatory filings and documents), registrations, licenses, authorizations, notifications, certificates, and approvals (including Regulatory Approvals); (ii) correspondence and reports submitted to or received from Regulatory Authorities and Notified Bodies, (iii) minutes and contact reports relating to any communications with any Regulatory Authority or Notified Body, (iv) device history files, (v) advertising and promotion documents, (vi) MDR files and associated complaint files; and (vii) Clinical Data and data contained or relied upon in any of the foregoing, in each case ((i) through (vii)) relating to the Product.

1.117“Secondary Party” means, where a Party is identified as having the first right to take or control an action, the other Party.  

1.118Senior Officer” means, with respect to Surmodics, its President, and with respect to Abbott, its President of Abbott Vascular.

1.119SG&A Adjustment” has the meaning set forth in Schedule 7.

1.120Specifications” has the meaning set forth in Section 4.1.7(i).

1.121Supplied Materials” has the meaning set forth in Section 4.3.2(i).

1.122Supply Disruption” has the meaning set forth in Schedule 1.122.

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1.123Surmodics Know-How means [**].

1.124Surmodics Other Patents” means, other than any Joint Patents, [**].

1.125Surmodics Product Patents” means [**].

1.126Suspension Period” has the meaning set forth in Section 13.3.1(i).

1.127Suspension Period Commencement Date” has the meaning set forth in Section 13.3.1(i).

1.128Target Order Lot” has the meaning set forth in Schedule 4.1.2.

1.129Technology Transfer” means [**].

1.130Technology Transfer Event” has the meaning set forth in Section 4.3.2(i).

1.131Term” has the meaning set forth in Section 13.1.

1.132Territory” means the entire world.

1.133Third Party” means any Person other than the Parties, their successors, and their respective Affiliates.

1.134Third Party Claim” has the meaning set forth in Section 12.1.

1.135Third Party Infringement Claim” means any claim, suit or proceeding by a Third Party alleging infringement by the Exploitation of the Product by the Parties, their Affiliates or their respective (sub)licensees, (sub)distributors, subcontractors, or customers of any intellectual property right owned by a Third Party, including any defense or counterclaim in connection with an Action initiated pursuant to Section 9.3.

1.136Third Party Infringement Claim Losses” has the meaning set forth in Section 9.9.

1.137Third Party Patent Infringement Claim” means any claim, suit or proceeding by a Third Party alleging infringement by the Exploitation of the Product by the Parties, their Affiliates or their respective (sub)licensees, (sub)distributors, subcontractors or customers of a Patent.

1.138Third Party Right” means an intellectual property right of a Third Party (including a Patent or trade secret) that is infringed or misappropriated, or is reasonably expected to be infringed or misappropriated, by the Exploitation of the Product by Abbott or any of its Affiliates or any of its or their (sub)licensees, (sub)distributors, subcontractors, or customers.

1.139Third Party Trademark Infringement Claim” means any claim, suit or proceeding by a Third Party alleging that the use of a Product Trademark in connection with the

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Product infringes, dilutes, misappropriates or violates any Trademark or other similar right (excluding Patents) of such Third Party.

1.140Trademark Infringement” means any alleged or threatened infringement, dilution, misappropriation or other violation of, or unfair trade practices or any other like offense by a Third Party relating to the Product Trademarks, except the Existing Serene Trademark.

1.141Trademarks” means any word, name, symbol, color, shape, designation or any combination thereof, including any trademark, service mark, trade name, brand name, sub-brand name, trade dress, product configuration rights, program name, delivery form name, certification mark, collective mark, logo, tagline, slogan, design or business symbol, that functions as an identifier of source, origin or quality, whether or not registered, and all statutory and common law rights therein and all registrations and applications therefor, together with all goodwill associated with, or symbolized by, any of the foregoing.

1.142TRANSCEND Clinical Study” means that certain Clinical Study of the Product allowed under IDE G150121 under protocol SUR17-001, as such Clinical Study may be modified from time to time.

1.143Transfer Price” has the meaning set forth in Schedule 7.

1.144United States” or “U.S.” means the United States of America and its territories and possessions (including the District of Columbia and Puerto Rico).

1.145U.S. Launch Quantity” has the meaning set forth in Section 4.1.3.

1.146VAT” has the meaning set forth in Section 7.7.2.

1.147Working Group” has the meaning set forth in Section 6.2.6.

Article 2
DEVELOPMENT AND REGULATORY ACTIVITIES

2.1Development.

2.1.1Surmodics Development Activities.

(i)As between the Parties, excluding only the Clinical Development that Abbott has the right to conduct pursuant to Section 2.1.2, Surmodics shall be solely responsible for undertaking, and shall use Commercially Reasonable Efforts to complete, all Development in respect of the Product, including (a) the TRANSCEND Clinical Study and corresponding Post-Approval Studies and (b) all other Development, including using Commercially Reasonable Efforts to undertake and complete sufficient Development, to support obtaining and maintaining Regulatory Approvals for the United States and the European Union for use of the Product in the Initial Indication and, in the event that Regulatory Approvals for the United States or the European Union, as applicable, for use of the Product in the [**] can be reasonably obtained through required Post-Approval Studies for the Product in the Initial

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Indication, in the [**], provided that Surmodics’ obligation with respect to the [**] is conditioned on Abbott’s prior agreement in writing to be responsible for any incremental cost related to including Clinical Studies for the [**] in such Post-Approval Studies, and provided further that all Development of the Product by Surmodics shall be conducted under the direction and supervision of the JDC.  

(ii)Schedule 2.1.1(ii) sets forth the list of Surmodics’ current (sub)contractors.  Such (sub)contractors are deemed “Approved Subcontractors.”  Prior to the use of any (sub)contractor other than an Approved Subcontractor, or the expansion of the use of any Approved Subcontractors to new activities hereunder, Surmodics shall propose such (sub)contractor or expansion to the JDC and Surmodics shall take into good faith consideration any comments that Abbott may have regarding such proposal and shall ensure that any corresponding required regulatory filings are made.

(iii)Other than as expressly set out in this Agreement, Surmodics shall be solely responsible for its own costs and expenses in carrying out its Party Development Activities.

(iv)Abbott shall, giving due regard to Abbott’s anticipated expenses and the expected benefits to the Parties, reasonably cooperate with any reasonable requests for assistance from Surmodics with respect to any Development conducted by or on behalf of Surmodics hereunder.

2.1.2Abbott Development Activities.

(i)Subject to the terms and conditions of this Agreement, Abbott shall have the sole right to conduct (a) all Clinical Development as required to obtain or maintain Regulatory Approvals for the Product outside of the United States and the European Union, (b) all Post-Approval Studies related to the Product, other than those certain Post-Approval Studies for which Surmodics is responsible pursuant to Section 2.1.1(i), and (c) all Clinical Development as required to obtain or maintain Regulatory Approvals in the Territory for use of the Product in all indications other than the Initial Indication.  For any Clinical Studies conducted by Abbott under this Agreement, Surmodics shall serve as the “sponsor” of the applicable Clinical Study unless otherwise agreed by Abbott in writing.

(ii)Other than as expressly set out in this Agreement, Abbott shall be solely responsible for its own costs and expenses in carrying out its Party Development Activities.

(iii)Surmodics shall, giving due regard to Surmodics’ anticipated expenses and the expected benefits to the Parties, reasonably cooperate with any reasonable requests for assistance from Abbott with respect to any Development conducted by or on behalf of Abbott hereunder.

2.2Regulatory Activities.

2.2.1All IDEs and Regulatory Approvals shall be held in the name of Surmodics, except in cases in which (i) Surmodics is not permitted by Applicable Law to hold an

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IDE or a Regulatory Approval in a given country, (ii) Surmodics does not meet the requirements of Applicable Law in a given country to hold an IDE or a Regulatory Approval, or (iii) Abbott has the right to obtain and maintain a Regulatory Approval pursuant to Section 2.2.4, in which case ((i), (ii), or (iii)) Abbott may elect for Abbott or its Affiliate or a Third Party mutually agreed by the Parties in writing (with each Party’s agreement not to be unreasonably withheld, conditioned, or delayed) to own or hold such IDEs or Regulatory Approvals, as applicable.

2.2.2Regardless of whether or not Surmodics holds an IDE or Regulatory Approval in a given country or jurisdiction, Surmodics shall be responsible for preparing and submitting all IDEs and Device Approval Applications, supplements thereto, and any other submissions necessary to obtain and maintain any IDE or Regulatory Approval, including preparing any supplements or other filings to support new indications and for conducting all communications with Regulatory Authorities with regard to the Product, including responses to additional information letters or deficiency letters, except (i) those communications relating to Pricing Approvals or relating to the approval of promotional materials for use with the Product and (ii) communications relating to Commercialization or Manufacturing activities of Abbott or its Affiliates or their respective (sub)licensees or (sub)distributors.  Without limiting Surmodics’ obligations under this Section 2.2.2, if Abbott has the right to obtain and maintain a Regulatory Approval pursuant to Section 2.2.4, Abbott shall have the right, but not the obligation, to prepare and submit all IDEs and Device Approval Applications, supplements thereto, and any other submissions necessary to obtain and maintain such Regulatory Approval, including preparing any supplements or other filings to support new indications and for conducting all communications with Regulatory Authorities with regard to the Product with respect to such Regulatory Approval, including responses to additional information letters or deficiency letters.

2.2.3The Parties will confer and cooperate with one another through the JDC with respect to all dealings with Regulatory Authorities and with all aspects of Regulatory Approval for the Product.

2.2.4Surmodics shall obtain and maintain Regulatory Approvals for the Product in the United States and the European Union and shall, upon Abbott's request in respect of a country in the Territory outside of the United States and the European Union, and subject to Abbott’s satisfaction of its obligations, if any, under Section 2.1.2 with respect to such country, use Commercially Reasonable Efforts to obtain and maintain Regulatory Approvals for the Product in such country.  Abbott shall support Surmodics, on Surmodics’ request and as may be reasonably necessary, in obtaining and maintaining Regulatory Approvals for the Product.  The Parties shall mutually agree on a commercially reasonable timeframe to obtain any Regulatory Approval for the Product in any country in the Territory for which Abbott has requested Surmodics obtain and maintain Regulatory Approvals pursuant to this Section 2.2.4.   If Surmodics fails to obtain any such Regulatory Approval for the Product within the mutually agreed timeframe, is not reasonably expected to be able to obtain any such Regulatory Approval for the Product within the mutually agreed timeframe, or fails to maintain any such Regulatory Approval for the Product, Abbott shall have the right, but not the obligation, to obtain and maintain such Regulatory Approvals for the Product in the applicable country, and Surmodics shall provide such support and assistance as Abbott may reasonably request (including by

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providing information or granting rights of reference to Abbott or its Affiliates) in connection with obtaining and maintaining such Regulatory Approvals.  

2.2.5If a Party is the sponsor of a Clinical Study conducted as part of its Party Development Activities, such Party (or its designee) shall have the right and responsibility to fulfil the obligations of a sponsor as specified in 21 C.F.R. Part 812, Subpart C, and the equivalent obligations in other countries or regulatory jurisdictions, including any reports, filings, or communications with Regulatory Authorities that may be required to fulfil such obligations, and the other Party shall support the sponsoring Party, as may be reasonably necessary, in respect of such obligations.

2.2.6Surmodics shall provide Abbott with an opportunity to review and comment on all Regulatory Authority meeting requests and on all submissions, filings, and proposed communications to Regulatory Authorities, in each case relating to the Product in the Territory (collectively, “Product Regulatory Filings”).  Surmodics shall provide access to interim drafts of such Product Regulatory Filings to Abbott via the access methods (such as secure databases) established by the JDC, and Abbott shall provide its comments on such Product Regulatory Filings or on proposed material actions within [**], or such other longer period of time mutually agreed to by the Parties.  In the event that a Regulatory Authority establishes a response deadline for any such Product Regulatory Filing or material action shorter than such period, the Parties shall work cooperatively to ensure the other Party has a reasonable opportunity for review and comment within such deadlines.  Surmodics shall reasonably consider Abbott’s comments, requests and suggestions.  

2.2.7Subject to Section 2.2.8, Surmodics shall provide Abbott with (i) access to or copies of all written or electronic correspondence (other than Product Regulatory Filings) relating to the Development or Commercialization of the Product received after the Effective Date by Surmodics or its designee from, or forwarded by Surmodics or its designee to, the Regulatory Authorities in the Territory, and (ii) copies of all meeting minutes and summaries of all meetings, conferences, teleconferences, and discussions held by Surmodics or its designee after the Effective Date with the Regulatory Authorities in the Territory, including copies of all contact reports produced by Surmodics or its designee, in each case ((i) and (ii)) within [**] of its receipt, forwarding or production of the foregoing, as applicable.  

2.2.8Each Party shall provide the other Party with prior written notice, to the extent such Party has advance knowledge, of any scheduled meeting, conference, or discussion (including any advisory committee meeting) with a Regulatory Authority in the Territory relating to the Product, within [**] after such Party or its designee first receives notice of the scheduling of such meeting, conference, or discussion (or within such shorter period as may be necessary in order to give the other Party a reasonable opportunity to attend as an observer (but not participate in) such meeting, conference, or discussion).  The other Party shall have the right to have two (2) of its representatives attend as an observer (but not participate in) all such meetings, conferences, and discussions.

2.3Regulatory Data.  From time to time within a reasonable time following a request from the other Party, each Party shall promptly provide to such other Party copies of or access to all non-clinical data and Clinical Data generated hereunder, and in the case of

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Surmodics, any other Information, results, and analyses that is Surmodics Know-How, with respect to the Product and that such Party requires to perform its obligations hereunder.  Without limiting the foregoing, Surmodics shall, within [**] after the Effective Date, provide to Abbott, in such form and format as Abbott may reasonably request, copies of all Regulatory Documentation existing as of the Effective Date that relates to the Product.

Article 3
DISTRIBUTION RIGHTS AND OTHER COMMERCIALIZATION MATTERS

3.1Appointment of Abbott as Exclusive Distributor.  Subject to the terms and conditions of this Agreement, Surmodics hereby appoints Abbott as Surmodics’ exclusive distributor of the Product in the Territory during the Term, and Abbott hereby accepts such appointment.  Subject to the terms and conditions of this Agreement, Abbott (itself or through its Affiliates or Distributors) shall have the sole right to Commercialize the Product in the Territory, and Surmodics shall have no right to Commercialize, directly or indirectly, the Product anywhere in the Territory.

3.2(Sub)distributorships.  Abbott shall have the right, in its sole discretion, to appoint its Affiliates, and Abbott and its Affiliates shall have the right, in their sole discretion, to appoint any other Distributors, in the Territory or in any country or other jurisdiction of the Territory, to distribute, market, and sell the Product.  

3.3Commercialization Diligence.  

3.3.1United States.  Abbott shall [**].

3.3.2European Union.  Abbott shall [**].

3.3.3Commercial Launch Plans.  At least [**] prior to the anticipated date of Regulatory Approval of the Product in each of the United States and the European Union, the Parties shall meet to review and discuss Abbott’s commercial launch plan for such region.  

3.3.4Annual Marketing Plans.  For any calendar year in which Abbott plans to Commercialize the Product, Abbott shall draft and provide to Surmodics an annual marketing plan for the promotion, marketing, and sale of the Product for such calendar year through its customary planning process, and the Parties shall meet to review and discuss such annual marketing plan.

3.4Booking of Sales; Distribution.  Subject to the terms and conditions of this Agreement, Abbott shall have the sole right to invoice and book sales, establish all terms of sale (including pricing and discounts) and warehousing, distribute the Product in the Territory, and perform or cause to be performed all related services.  Without limiting the foregoing, Abbott shall handle all returns, recalls, corrections, removals, order processing, invoicing, collection, distribution, and inventory management with respect to the Product in the Territory.

3.5Pricing Approvals and Approvals of Promotional Materials.  As between the Parties, in the United States and the Core European Countries, Abbott shall use Commercially Reasonable Efforts to make submissions for Pricing Approvals and for any

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approvals sought from a Regulatory Authority with regard to promotional materials in respect of the Product as reasonably necessary to Commercialize the Product.  Surmodics shall, and shall cause its Affiliates to, cooperate with and provide support to Abbott and its Affiliates as reasonably requested by Abbott in respect of the preparation and submission of any Regulatory Documentation that is reasonably required in connection with such submissions for Pricing Approvals, including by drafting such dossiers as Abbott may request.  

3.6Product Trademarks.  

3.6.1Preparation of Marketing Materials and Determination of Product Trademarks.  Subject to the terms and conditions of the remainder of this Section 3.6, as between the Parties, Abbott shall be solely responsible for preparing all advertising, promotional sales, social media and other related literature and materials (“Marketing Materials”) to promote or market the Product.  Abbott shall ensure that all Marketing Materials comply with all Applicable Law in the applicable countries in the Territory.  Abbott shall have the sole right to determine the Product Trademarks and Other Abbott Trademarks to be used with respect to the Exploitation of the Product on a worldwide basis; provided, however, that

(i)Abbott shall use the Existing SurVeil Trademark and the Existing Serene Trademark on all Product Labeling in the United States and the European Union, with such usage of the Existing SurVeil Trademark occurring in the tradename of the Product,

(ii)for any country outside the United States and the European Union, (1) if the Existing SurVeil Trademark or the Existing Serene Trademark is registered by Surmodics in such country, Abbott shall use the Existing SurVeil Trademark or the Existing Serene Trademark, as applicable, on all Product Labeling in such country, with any such usage of the Existing SurVeil Trademark occurring in the tradename of the Product, or (2) if the Existing SurVeil Trademark or the Existing Serene Trademark is not registered by Surmodics in such country, Abbott shall decide in its reasonable discretion (with such decision for China or Japan subject to Surmodics’ consent (not to be unreasonably withheld, conditioned, or delayed)) whether to use the Existing SurVeil Trademark or the Existing Serene Trademark, as applicable, on Product Labeling in such country, with any such usage on the Product Labeling of the Existing SurVeil Trademark occurring in the tradename of the Product,

(iii)Abbott shall identify Surmodics as the manufacturer on all Product Labeling (to the extent Surmodics is the manufacturer thereof),

(iv)Abbott may use the Existing SurVeil Trademark and the Existing Serene Trademark on Marketing Materials for the Product and may identify Surmodics as the manufacturer thereon (to the extent Surmodics is the manufacturer thereof), and

(v)Abbott may use Abbott trade dress and logos and Other Abbott Trademarks on the Marketing Materials for the Product as deemed appropriate in Abbott’s sole discretion.  

3.6.2Replacement Trademark.  Notwithstanding anything to the contrary in Section 3.6.1, in the event that the Existing SurVeil Trademark is not reasonably likely to be registered in the United States and each country in the European Union on or before

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the first receipt of Regulatory Approval in the United States or the European Union, Abbott may select a replacement Trademark, provided that such replacement Trademark is reasonably acceptable to Surmodics. Such replacement Trademark shall be owned by Surmodics, and, from and after acceptance by Surmodics, shall be deemed to be the Existing SurVeil Trademark for all purposes under this Agreement.    

3.6.3Surmodics Covenants.  Surmodics shall not, and shall not permit its Affiliates to, (i) use any Product Trademark or Other Abbott Trademark, other than the Existing Serene Trademark, for the purpose of commercializing any product (other than the Product sold to Abbott or its Affiliates), (ii) use in their respective businesses, any Trademark that is confusingly similar to, misleading or deceptive with respect to or that dilutes any (or any part) of the Product Trademarks or Other Abbott Trademarks, other than the Existing Serene Trademark, (iii) commit any act which endangers, destroys, or similarly affects, in any material respect, the value of the goodwill pertaining to the Product Trademarks or Other Abbott Trademarks, other than the Existing Serene Trademark, or (iv) attack, dispute, or contest the validity of or ownership of any Product Trademark or Other Abbott Trademark, other than the Existing Serene Trademark, anywhere in the Territory.  

3.6.4Abbott Covenants.  Abbott shall not, and shall not permit its Affiliates to, (i) use the Existing SurVeil Trademark or the Existing Serene Trademark for the purpose of commercializing any product (other than the Product sold to Abbott or its Affiliates or pursuant to a separate agreement with Surmodics or one of its Affiliates), (ii) use in their respective businesses, any Trademark that is confusingly similar to, misleading or deceptive with respect to or that dilutes any (or any part) of the Existing SurVeil Trademark or the Existing Serene Trademark, (iii) commit any act which endangers, destroys, or similarly affects, in any material respect, the value of the goodwill pertaining to the Existing SurVeil Trademark or the Existing Serene Trademark, or (iv) attack, dispute, or contest the validity of or ownership of the Existing SurVeil Trademark or the Existing Serene Trademark, anywhere in the Territory.  

Article 4
MANUFACTURING AND SUPPLY

4.1Supply.

4.1.1Obligation to Supply.  During the Term and subject to the terms and conditions of this Agreement, Surmodics shall Manufacture and supply the Product to Abbott or its Affiliates at the Transfer Price in effect at the time the applicable PO is placed as set forth herein.  

4.1.2POs and Delivery. Abbott may, from time to time, order a quantity of the Product from Surmodics by submitting a purchase order (“PO”) to Surmodics, subject to the requirements set forth in Schedule 4.1.2.  For any PO accepted by Surmodics pursuant to Section 4.1.4, Surmodics shall deliver the Product to Abbott on the delivery date(s) specified in such PO.  Surmodics shall have the right to vary the quantity of Product shipped pursuant to a PO to the extent reasonably necessary to avoid dividing production lots, provided, however, that any such variance shall not exceed [**] of the quantities specified in the PO.  The Product shall be delivered [**] (Incoterms 2010) origin, provided that Surmodics shall, in

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accordance with Abbott’s instructions and as agent for Abbott, (a) at Abbott’s expense, use Commercially Reasonable Efforts to obtain any export license or other official authorization necessary to export the Products, and (b) act as the exporter of record or principal party in interest for customs and export reporting and compliance purposes, but with Abbott to reimburse Surmodics for the amount of any customs duties or other similar payments that may be made by Surmodics pursuant to Applicable Law in connection with the export of the Product. Surmodics shall also cooperate and provide assistance to Abbott or Abbott’s designee for purposes of obtaining any license or approval required for the import of Product into a country in the Territory, including upon Abbott’s request and at Abbott’s expense obtaining any necessary certificates of free sale for medical devices from the applicable Regulatory Authority. Surmodics shall, with all shipments of the Product, provide to Abbott or its designee an invoice with respect thereto along with a certificate of conformance (the form of which shall be mutually agreed upon by the Parties) verifying compliance with the Specifications and the QSRs.  Subject to Section 4.1.10, Abbott shall pay all undisputed amounts on each invoice within [**] of receipt thereof.  In the event of a conflict between the terms and conditions of any PO and this Agreement, the terms and conditions of this Agreement shall prevail.  

4.1.3Forecasts.  Within [**], Abbott shall provide Surmodics with a good faith estimate of [**] order volume to support the commercial launch of the Product in the European Union, and thereafter shall update such good faith estimate from time to time until Abbott provides the first Forecast.  Within [**], Abbott shall provide Surmodics with a good faith estimate of [**] order volume to support the commercial launch of the Product in the United States, and thereafter shall update such good faith estimate from time to time until Abbott provides the first Forecast that contains any of the U.S. Launch Quantity (defined below).  Commencing [**] in advance of the first day of the calendar month in which the commercial launch of the Product in any country in the Territory is expected to occur (such date that is [**] in advance, the “Commercial Forecast Commencement Date”), and prior to the first day of each calendar month thereafter during the Term, Abbott shall provide Surmodics a rolling [**] forecast of anticipated purchases of the Product (the “Forecast).  [**].  The initial Forecast shall be accompanied by a PO for the first [**] thereof.  Each subsequent Forecast shall be accompanied by a PO for the [**] of each such Forecast.  Any specification of the mix of SKUs that may be reflected in the [**] of any Forecast shall be non-binding and shall not restrict the mix of SKUs in any month of any subsequent Forecast.  Once a PO is placed, there shall be no further changes in the mix of SKUs for such PO without the prior express written consent of Surmodics. [**] Abbott shall reasonably identify in its Forecast the specific quantities in the specific months in such Forecast that are intended for the commercial launch of the Product in the European Union or the United States, as applicable (such identified commercial launch quantities, the “EU Launch Quantity” or the “U.S. Launch Quantity”, as applicable).  

4.1.4Order Acceptance.  Subject to the terms and conditions of this Agreement, Surmodics shall be required to accept within [**] any PO consistent with the terms and conditions of this Agreement placed by Abbott so long as, if an applicable Forecast exists, the quantity of Product ordered on such PO for delivery in any month, together with the quantity of all other Product ordered by Abbott for delivery in such month, does not exceed [**] of the quantity of the Product indicated in any binding portion of any Forecast in respect of such month.  Abbott may place a PO for additional quantities of Product above such [**] threshold, provided that Abbott shall identify such additional quantities as “Good Faith Efforts Orders”

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(such identified additional quantities, the “Good Faith Efforts Orders”) and Surmodics shall use good faith efforts to fill such Good Faith Efforts Orders.  If Surmodics fails to provide acceptance of a PO to Abbott within such [**] period, Surmodics will be deemed to have accepted such PO.

4.1.5Shortages.  In the event of any shortage experienced by Surmodics or its Affiliates with respect to any inputs or capacity that may reasonably be expected to affect Surmodics’ ability to satisfy its Manufacturing and supply obligations hereunder, Surmodics shall allocate its available inputs and capacity to the Manufacture of the Product to ensure that Abbott actually receives at least as high of a percentage of the Product ordered by Abbott pursuant to Section 4.1.2 and accepted by Surmodics in accordance with Section 4.1.4 as [**]. Surmodics shall notify Abbott as soon as it becomes aware of circumstances that could reasonably be expected to result in any such shortage. The obligations of this Section 4.1.5 shall not apply after Surmodics’ receipt of any notice of termination for convenience from Abbott pursuant to Section 13.3.2.

4.1.6Approved Supplier.  The Parties acknowledge that Surmodics is already, as of the Effective Date, an Abbott approved supplier.  Surmodics shall use reasonable efforts to maintain its status as an Abbott approved supplier and to maintain the approved status of Surmodics’ applicable manufacturing facility(ies), provided that Abbott’s requirements for Surmodics to maintain its approved supplier status are generally consistent with Abbott’s corresponding requirements for suppliers of other products to Abbott.  Surmodics acknowledges that execution of a mutually agreed upon Quality Agreement in respect of this Agreement is a requirement to maintain its status as an Abbott approved supplier.

4.1.7Changes to Specifications and Manufacturing.

(i)Changes to Specifications.  The initial specifications for the Product are set forth on Schedule 4.1.7(i) hereto (the “Specifications”).  Specifications may only be amended by written agreement of the Parties on a timetable mutually agreed by the Parties; provided, however, that Surmodics shall not withhold its consent to making any change required or requested by a Regulatory Authority or reasonably required by Applicable Law.

(ii)Changes to Manufacturing.  Surmodics shall notify Abbott in writing at least [**] prior to (A) making any proposed change or relocation of the manufacturing site for the Product or (B) engaging or substituting any Third Party to perform any of Surmodics’ obligations hereunder.  Relocation of the manufacturing site or engagement or substitution of a Third Party to perform any of Surmodics’ obligations hereunder shall require the prior written consent of Abbott.  Upon receipt by Abbott of any such request for consent, Abbott shall respond in writing within [**] following its receipt of notice from Surmodics.  Any new facility or Third Party to be utilized by Surmodics shall be subject to a new and separate audit by Abbott quality assurance personnel in accordance with Section 4.1.8, and Surmodics shall use Commercially Reasonable Efforts to have the new manufacturing site or Third Party become acceptable to Abbott quality policies within [**] of relocating Product Manufacture or engaging such Third Party.  Except as otherwise provided herein, no relocation or engagement or substitution of a Third Party to perform any of Surmodics’ obligations hereunder shall relieve

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Surmodics of its obligations to timely deliver the Product in accordance with the Specifications hereunder.

4.1.8Quality Assurance Inspections. Surmodics shall, from time to time during the Term and upon reasonable advance written notice from Abbott, no more than [**] (plus such additional inspections as are reasonably advisable, in Abbott’s reasonable discretion, due to a Complaint of a serious nature whereby information received by Abbott reasonably suggests that the Product may not meet its specifications for safety or quality), allow representatives of Abbott to tour and inspect during regular business hours the non-confidential and non-proprietary portions of all facilities utilized by Surmodics in Development, Manufacturing, testing, quality control, packaging and shipping of the Product sold to Abbott under this Agreement for the purposes of verifying Surmodics’ compliance with all Applicable Laws; provided that such representatives enter into Surmodics’ standard nondisclosure agreement prior to entering such facilities.  Abbott shall provide reasonable notice of such inspection or audit and shall not unreasonably interfere with Surmodics’ operations under the circumstances.  During such visits, Surmodics shall provide reasonable access to its manufacturing quality control documentation and shall reasonably cooperate with such representatives.  Abbott shall cause all such representatives to comply with Surmodics’ policies regarding visitors to such facilities, and Abbott shall be responsible for any noncompliance therewith.  Surmodics shall use reasonable efforts to cure any deficiencies in Surmodics’ compliance with Applicable Law identified by Abbott as a result of such inspections and audits.  

4.1.9Quality Agreement. The Parties shall each use reasonable efforts to complete and mutually agree upon a quality agreement that describes the relationship of the Parties hereunder and the responsibilities of each Party regarding quality systems practices and activities concerning the Product (the “Quality Agreement”), within [**] of the execution of this Agreement by both Parties.  The Quality Agreement will be reviewed, revised and approved by senior quality assurance representatives from both Parties on a periodic basis, as required.  Without limiting the foregoing, the Quality Agreement shall be amended (or a separate agreement entered into) in connection with each Option Exercise Agreement.  In the event of a conflict between the terms and conditions of this Agreement and the Quality Agreement, the terms and conditions of this Agreement shall control.

4.1.10Non-Conforming Product.

(i)In General. Within [**] of Surmodics’ delivery of a quantity of the Product, Abbott may inspect and reject any such quantities of the Product supplied hereunder which do not conform to the applicable Specifications or Surmodics’ warranty for the Product set forth in Section 11.2.13 at the time of delivery (a “Non-Conforming Product”); provided that such Non-Conforming Product has not become non-conforming due to any action or omission by Abbott.

(ii)Return and Replacement. Abbott shall return any Non-Conforming Product quantities to Surmodics at Surmodics’ expense, and Surmodics shall, at Abbott’s option, promptly either (A) reimburse Abbott for the Transfer Price paid by Abbott with respect to such Non-Conforming Product or (B) supply Abbott with a conforming quantity of the Product at Surmodics’ expense. In the event of a dispute with respect to whether the

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Product is in fact non-conforming, and should the Parties fail to otherwise resolve the dispute, the Parties shall submit the Product to a mutually acceptable independent Third Party for evaluation. The determination of the Product’s conformance or non-conformance to the Specifications by such independent Third Party shall be binding upon the Parties. Should the independent Third Party determine that the Product is conforming, Abbott shall pay all independent Third Party and shipping costs incurred by Surmodics, and should such independent Third Party confirm that the Product is Non-Conforming Product, Surmodics shall pay all independent Third Party costs. Any such Third Parties shall be required to enter into a confidentiality agreement with Surmodics and Abbott with terms no less restrictive than those provided herein for Confidential Information.

4.2Supply Assurance.  As soon as reasonably practical after Regulatory Approval of the Product, Surmodics shall secure and maintain a secondary source of supply of the Product with sufficient capacity within a reasonable timeframe to meet Abbott’s reasonably projected commercial demand for the Product, at Surmodics’ sole expense, which may be at another Surmodics facility.

4.3Right to Manufacture; Manufacturing Technology Transfer.  

4.3.1Right to Manufacture.  Notwithstanding anything to the contrary in this Agreement, from and after the occurrence of any [**] (each, a “Manufacturing Transfer Event”), Abbott shall have the right to Manufacture (or have Manufactured by its designee (which designee may only be an Affiliate or, solely with respect to the services listed on Schedule 2.1.1(ii), a Third Party service provider)) the Product to be used for Development or Commercialization pursuant to this Agreement (and may use and sell any saleable validation or qualification lots or batches Manufactured as part of any Technology Transfer); provided that Abbott shall not directly or indirectly Manufacture (or have Manufactured) unless and until the occurrence of a Manufacturing Transfer Event.  

4.3.2Manufacturing Technology Transfer.  

(i)Notwithstanding anything to the contrary in this Agreement, from and after the earlier of [**] the occurrence of a Manufacturing Transfer Event (each, a “Technology Transfer Event”), Abbott shall be entitled to request and receive from Surmodics a Technology Transfer, Surmodics shall use Commercially Reasonable Efforts to effect, and to work with Abbott and its Affiliates to effect, such Technology Transfer, and Surmodics shall use Commercially Reasonable Efforts [**] under Applicable Law and in accordance with the timeline set forth in the implementation plan agreed by the Parties pursuant to Section 4.3.2(iv).  Surmodics shall also provide any inputs or components that are needed to conduct the Technology Transfer.  In furtherance thereof, within [**] following Abbott’s request for a Technology Transfer, the Parties shall enter into a commercially reasonable supply agreement for the supply [**], and such raw materials, coating reagents, and components as are reasonably requested by Abbott and are reasonably necessary in order for Abbott to Manufacture the Product (the “Supplied Materials”), [**].  As part of the Technology Transfer, Surmodics shall transfer to Abbott or its Affiliate the applicable Surmodics Know-How regarding [**], and the assembly of the raw materials, components and coatings comprising the Product into the Product, all as described in the Technology Transfer and any other Surmodics Know-How that is

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reasonably necessary to Manufacture the Product (except for any Surmodics Know-How for the manufacture of Supplied Materials, to the extent such Supplied Materials are actually supplied by Surmodics to Abbott pursuant to a supply agreement entered into pursuant to this Section 4.3.2(i)) (the “Manufacturing Process”), and shall provide such support as reasonably necessary to Abbott or its Affiliate, as applicable, to use and practice the Manufacturing Process for the Product, including by [**]. Abbott shall have the right to continue to order Product from Surmodics hereunder after any such Technology Transfer.  

(ii)Without limiting the foregoing, following any transaction described in Section 4.3.1(ii) or Section 4.3.1(iii), Abbott shall have the right to submit binding POs including quantities of Product that exceed the quantities that Surmodics is required to accept pursuant to Section 4.1.4, and Surmodics shall use Commercially Reasonable Efforts to fulfill such POs, provided that Surmodics’ failure to fulfill any quantities of Product ordered pursuant to such POs that exceed the quantities that Surmodics is required to accept pursuant to Section 4.1.4 shall be disregarded for purposes of determining whether there has been a Supply Disruption hereunder, and provided further that Surmodics shall not, in respect of its obligation to use Commercially Reasonable Efforts to fulfill such POs, be required to use any efforts that Surmodics reasonably expects would increase its overall average Manufacturing cost per unit of Product in order to fulfill any quantities of Product ordered pursuant to such POs that exceed the quantities that Surmodics is required to accept pursuant to Section 4.1.4.  

(iii)Without limiting the foregoing, following a Technology Transfer Event, Abbott shall have the right to, at any time, by giving written notice to Surmodics, request that Surmodics procure, and Surmodics shall use Commercially Reasonable Efforts to procure, at Abbott’s cost and expense (including [**], at which time, following request by Abbott, Surmodics shall promptly [**].  Upon expiration or termination of this Agreement, Surmodics shall [**].  

(iv)Within [**] following the Effective Date, Surmodics shall develop and provide to Abbott a high level plan describing the steps to be carried out in connection with a Technology Transfer.  The Parties shall then cooperate to complete, within [**] of the Effective Date, the preparation of a reasonable implementation plan for a Technology Transfer, with such plan to include (a) specific timelines and milestones that are consistent with completion of the Technology Transfer within [**] (exclusive of any [**]) of Abbott’s request, if any, for a Technology Transfer pursuant to this Section 4.3.2, and (b) a list of [**], including a description of [**].  The Parties shall memorialize such implementation plan in a writing that is acknowledged by each Party.

Article 5
COMPLIANCE AND RELATED MATTERS

5.1Compliance.  Each Party shall perform, or cause to be performed, any and all of the activities to be performed by such Party hereunder in good scientific manner and in compliance with all Applicable Law.

5.2Records.  Surmodics shall, and shall require that its Affiliates and its or their applicable subcontractors, maintain records in sufficient detail and in good scientific

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manner appropriate for patent and regulatory purposes, and in compliance with Applicable Law (including 21 C.F.R. Part 820), which shall be complete and accurate and shall properly reflect all work done and results achieved in the performance of Surmodics’ Development and Manufacturing activities hereunder.  Without limiting the foregoing, such records shall include batch records, validation data, and quality control data in respect of the Manufacture of the Product.  Such records shall be retained by Surmodics for at least [**] after the expiration or termination of this Agreement, or for such longer period as may be required by Applicable Law.  Upon request, Surmodics shall provide copies of such records to Abbott.  Abbott shall also have the right, during normal business hours and upon reasonable notice, to inspect and copy such records.  Abbott shall maintain such records and the information disclosed therein in confidence in accordance with Article 10.

5.3Authorized Representative.  As and to the extent necessary in order to comply with Applicable Law in connection with Surmodics’ Development and Manufacturing activities hereunder, Surmodics shall appoint an authorized representative in the EEA, provided that, unless otherwise agreed in writing by the Parties through a separate agreement, Surmodics shall not, and shall require that its Affiliates shall not, appoint Abbott or any of its Affiliates as Surmodics’ or its Affiliates’ authorized representative in the EEA in connection with any of Surmodics’ Development or Manufacturing activities hereunder.

5.4Safety Data. Each Party shall provide the other Party with all information that is Controlled by such Party and that is necessary to allow the other Party to comply with its safety-related reporting rights and responsibilities in the Territory, including, as applicable, any device-related problems or adverse events from pre-clinical or clinical laboratory, animal toxicology and pharmacology studies, Clinical Studies (including evaluations of unanticipated adverse device effects, as defined in 21 C.F.R. § 812.150), and commercial experiences with the Product (including medical device report (“MDR”) reportable events, as defined in 21 C.F.R. § 803.3), in each case in the form reasonably requested by such other Party.

5.5Complaints.  If Abbott receives a Complaint regarding the Product, Abbott shall forward the Complaint information to Surmodics promptly, but in any event no more than [**] from receipt of such Complaint by Abbott. In the event a Complaint is reported directly to Surmodics, Surmodics shall forward the Complaint via email to the Abbott contact at [**] within [**] solely for Abbott’s internal quality control tracking purposes. Abbott shall cooperate with Surmodics as reasonably necessary to collect customer information regarding Complaints regarding the Product in order to satisfy Regulatory Authority inquiries. Surmodics shall have the right to make the final determination of whether any Complaint represents an event that must be reported to FDA as an MDR, and shall have the sole right and responsibility to make any such MDR report to FDA and to make any equivalent reports to other Regulatory Authorities.  Without limiting the foregoing, Abbott shall be responsible for carrying out in its reasonable discretion all customer support and resolution of Complaints; provided that Surmodics shall provide reasonable assistance in connection therewith upon Abbott’s reasonable request.

5.6Notification Regarding Regulatory Inquiries and Potential Adverse Events.  Each Party shall promptly inform the other Party of any formal or informal inquiry by any Regulatory Authority relating to the Product sold hereunder.  If either Party becomes aware

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of any problem or adverse condition in the Product purchased hereunder (including any failure of the Product, change in the statistically demonstrated reliability of the Product, other material information relevant to the reliability of the Product or any liability claims related to the Product or any other event that would reasonably be expected to have a material adverse effect on the manufacture, marketing or sale of the Product), such Party will (subject to compliance with Applicable Laws) promptly notify the other Party of such problem or adverse condition.  Without limitation to the foregoing, Surmodics shall immediately notify Abbott if, at any time, it discovers that any quantities of the Product delivered hereunder do not conform to the Product warranty set forth in Section 11.2.13.

5.7Recalls.  Each Party shall promptly report in writing to the other Party any failure of the Product, change in the statistically demonstrated reliability of the Product, concerns regarding safety of the Product, other material information relevant to the reliability of the Product or any liability claims related to the Product or any other event that might reasonably be expected to have a material adverse effect on the Manufacture, marketing or sale of the Product of which either Party becomes aware (collectively, “Product Concerns”). The Party that Manufactured the applicable quantity of the Product shall be responsible for evaluating all Product Concerns, and shall use Commercially Reasonable Efforts to take such actions or make such changes in the Product or the Manufacturing thereof as may be necessary or desirable in light of such Product Concerns.  The other Party shall reasonably cooperate with the manufacturing Party in any such evaluation and actions or changes. If either Party reasonably believes that a recall of the Product, in whole or in part, or the issuance of an advisory letter regarding reliability of or defects in the Product is advisable or necessary, it will, prior to making a final determination concerning any such recall or issuance of an advisory letter, promptly notify the other Party and the Parties will promptly and in good faith discuss such proposed recall or advisory letter; provided, however, that either Party may, in good faith, initiate a recall or issue an advisory letter.  In making a determination to initiate a recall or issue an advisory letter, the applicable Party shall follow the same processes and procedures that it customarily follows with respect to determinations concerning recalls or advisory letters involving product that is manufactured and sold by such Party.  In the event the Parties do not agree regarding the advisability or necessity of any such recall or advisory letter and Abbott’s Quality Assurance policies or procedures would, in Abbott’s reasonable judgment, prohibit Abbott from placing further orders with Surmodics for the Product or from shipping the Product to customers, Abbott shall notify Surmodics, and the Parties shall then proceed as provided in Section 13.3.1(i).  In the event of a recall or advisory letter, the Party whose act or omission gave rise to such recall or advisory letter: (A) shall, at its own expense, use its reasonable efforts to promptly correct the problems that caused the recall or advisory letter; and (B) shall be responsible for and shall reimburse the other Party for all the reasonable out-of-pocket costs and expenses of the recall or advisory letter, including costs of goods, payments to customers, notification, and shipping and handling.  In all other cases, each Party shall bear its own costs for the recall or advisory letter.  Notwithstanding the foregoing, nothing in this Section 5.7 shall be construed to limit or prevent a Party from complying with the requirements of any law, regulation, or order of a Regulatory Authority.  

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Article 6
JOINT DEVELOPMENT COMMITTEE

6.1Joint Development Committee.

6.1.1Formation.  As soon as practical after the Effective Date, the Parties shall establish a joint development committee (the “JDC”).  The JDC shall consist of three (3) representatives from each of the Parties, each with the requisite experience and seniority to enable such person to make decisions on behalf of the Parties with respect to the issues falling within the jurisdiction of the JDC.  From time to time, each Party may substitute one or more of its representatives to the JDC on written notice to the other Party.  Abbott shall select from its representatives the chairperson for the JDC.  From time to time, Abbott may change the representative who will serve as chairperson on written notice to Surmodics.

6.1.2Specific Responsibilities.  The JDC shall, consistent with the rights and obligations of the Parties set forth in this Agreement, develop the strategies for and oversee the Development, but not the Manufacturing or Commercialization, of the Product in the Territory, and shall serve as a forum for the coordination of Development, but not Manufacturing or Commercialization, activities for the Product for the Territory.  In particular, the JDC shall:

(i)review and provide input regarding the Development of and Regulatory Approvals for the Product for the Initial Indication and the [**] in the United States and the European Union;

(ii)oversee all Clinical Studies and Post-Approval Studies for the Product for the Initial Indication and the [**] in the United States and the European Union;

(iii)review, provide input and direction regarding, and oversee strategies for obtaining Regulatory Approvals, including Regulatory Approvals for Product Labeling for indications in addition to the Initial Indication, for the Product in the United States and the European Union;

(iv)review, provide input and direction regarding, and oversee strategies for obtaining Regulatory Approvals, including Regulatory Approvals for Product Labeling, for the Product in the Territory outside of the United States and the European Union for any indication;

(v)review the progress reports made by each Party pursuant to Section 6.1.3;

(vi)establish a common secure information exchange platform for the purpose of electronically sharing information accessible to each Party for the receipt, review, investigation, recording, communication, and exchange (as between the Parties) of Clinical Data and other Information arising from Clinical Studies and regulatory activities; and

(vii)perform such other functions as are set forth herein or as the Parties may mutually agree in writing, except where in conflict with any provision of this Agreement.

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6.1.3Development Reports; Updates.  Each Party shall provide the JDC with (i) on at least a Calendar Quarter basis, unless otherwise agreed by the Parties, reports in reasonable detail regarding the status of Clinical Studies being conducted by it and any of its other Party Development Activities, and (ii) additional notifications regarding key events relating to the Development of the Product as may be requested by the JDC from time to time.

6.2General Provisions Applicable to JDC.

6.2.1Meetings and Minutes.  The JDC shall meet quarterly, or as otherwise agreed to by the Parties, with the location of such meetings alternating between locations designated by Surmodics and locations designated by Abbott.  The chairperson of the JDC shall be responsible for calling meetings on no less than [**] notice.  Each Party shall make all proposals for agenda items and shall provide all appropriate information with respect to such proposed items at least [**] in advance of the applicable meeting; provided that under exigent circumstances requiring input by the JDC, a Party may provide its agenda items to the other Party within a shorter period of time in advance of the meeting, or may propose that there not be a specific agenda for a particular meeting, so long as the other Party consents to such later addition of such agenda items or the absence of a specific agenda for such meeting.  The chairperson of the JDC shall prepare and circulate for review and approval of the Parties minutes of each meeting within [**] after the meeting.  The Parties shall agree on the minutes of each meeting promptly, but in no event later than the next meeting of the JDC.

6.2.2Procedural Rules.  The JDC shall have the right to adopt such standing rules as are necessary for its work, to the extent that such rules are not inconsistent with this Agreement.  A quorum of the JDC shall exist whenever there is present at a meeting at least one (1) representative appointed by each Party.  JDC members may attend a meeting either in person or by telephone, video conference or similar means in which each participant can hear what is said by, and be heard by, the other participants.  Representation by proxy shall be allowed.  The JDC shall take action by consensus of the representatives present at a meeting at which a quorum exists, with each Party having a single vote irrespective of the number of representatives of such Party in attendance, or by a written resolution signed by at least one (1) representative appointed by each Party.  Employees or consultants of either Party that are not representatives of the Parties on the JDC may attend meetings of the JDC; provided, however, that such attendees (i) shall not participate in matters reviewed by the JDC, and (ii) are bound by obligations of confidentiality and non-disclosure equivalent to those set forth in Article 10.

6.2.3Limitations on Authority.  Each Party shall retain the rights, powers, and discretion granted to it under this Agreement and no such rights, powers, or discretion shall be delegated to or vested in the JDC unless such delegation or vesting of rights is expressly provided for in this Agreement or the Parties expressly so agree in writing.  The JDC shall not have the power to amend, modify, or waive compliance with this Agreement, which may only be amended or modified as provided in Section 14.10 or compliance with which may only be waived as provided in Section 14.13.

6.2.4Disbanding. Subject to Section 14.3.2, the JDC shall continue to exist until the Parties mutually agree to disband the JDC.  If the JDC is disbanded, the JDC shall be terminated and shall have no further rights or obligations under this Agreement, and thereafter

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any requirement of either Party to provide Information or other materials to the JDC shall be deemed a requirement to provide such Information or other materials to the other Party upon such other Party’s reasonable request in order to facilitate the carrying out of such other Party’s obligations under this Agreement.

6.2.5Internal Decisions.  The Parties recognize that each Party possesses an internal structure (including various committees, teams and review boards) that will be involved in administering such Party’s activities under this Agreement.  Nothing contained in this Article 6 shall prevent a Party from making, in a manner consistent with the terms and conditions of this Agreement, routine day-to-day decisions relating to the conduct of those activities for which it has a performance obligation or other obligations hereunder.

6.2.6Working Groups.  From time to time, the JDC may establish and delegate duties to sub-committees or directed teams (each, a “Working Group”) on an “as-needed” basis to oversee particular projects or activities.  Each such Working Group shall be constituted and shall operate as the JDC determines; provided that each Working Group shall have equal representation from each Party, unless otherwise mutually agreed.  Working Groups may be established on an ad hoc basis for purposes of a specific project or on such other basis as the JDC may determine.  Each Working Group and its activities shall be subject to the oversight, review and approval of, and shall report to, the JDC.  In no event shall the authority of the Working Group exceed that specified for the JDC.  All decisions of a Working Group shall be by consensus.  

6.2.7Expenses.  Each Party shall be responsible for all travel and related costs and expenses for its members and other representatives to attend meetings of, and otherwise participate on, the JDC or any Working Group.

Article 7
PAYMENTS AND RECORDS

7.1Initial Payment.  No later than [**] following the Effective Date, Abbott shall pay Surmodics an amount equal to twenty-five million Dollars ($25,000,000).

7.2Milestones.  In partial consideration of the rights granted by Surmodics to Abbott hereunder and subject to the terms and conditions set forth in this Agreement, within [**] of the occurrence of each milestone specified in Section 1 of Schedule 7 (each, a “Milestone”), Abbott shall pay to Surmodics the corresponding amount specified for such Milestone, provided that such amount may be reduced by the operation of Section 3 of Schedule 7 (such amount, as it may be reduced, a “Milestone Payment”).  Each Milestone Payment shall be payable pursuant to this Section 7.2 only upon the first achievement of the applicable Milestone and no amounts shall be due for subsequent or repeated achievements of such Milestone.  Surmodics shall use Commercially Reasonable Efforts to achieve each Milestone.  The maximum aggregate amount payable by Abbott pursuant to this Section 7.2 for the Product is the amount set forth in Section 2 of Schedule 7, provided that such amount may be reduced by the operation of Section 3 of Schedule 7.  The milestone payments for each Option Product will be agreed by the Parties and set forth in the applicable Option Exercise Agreement.

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7.3Net Profits Payment.  Subject to any applicable terms of this Agreement, for each Calendar Quarter, Abbott shall pay to Surmodics the amount of Net Profits Payment calculated in accordance with Section 4 of Schedule 7 for such Calendar Quarter, if any.

7.4Net Profit Share Payments and Reports.  Abbott shall calculate all amounts payable to Surmodics pursuant to Section 7.3 (if any) at the end of each Calendar Quarter commencing with the Calendar Quarter in which the First Commercial Sale of the Product has occurred, which amounts shall be converted to Dollars, in accordance with Section 7.5, for purposes of Net Profits/Net Losses calculations hereunder.  Any such payment shall be made within [**] after the end of each such Calendar Quarter.  Each profit-sharing payment due to Surmodics shall be accompanied by a report setting forth the amount of the applicable Net Profits (or Net Losses for such Calendar Quarter, or for prior Calendar Quarters to the extent not yet offset against Net Profit Payments as described in Section 4 of Schedule 7) for each Product in each country in the Territory during the applicable Calendar Quarter (including such amounts expressed in local currency and as converted to Dollars) and a calculation in reasonably specific detail of the amount due to Surmodics hereunder based on the Net Profit Payment for such Calendar Quarter (including Net Losses for such Calendar Quarter, or for prior Calendar Quarters to the extent not yet offset against Net Profits as described in Section 4 of Schedule 7).

7.5Mode of Payment.  All payments to either Party under this Agreement shall be made by deposit of Dollars (or in the case of the Transfer Price, Euros) in the requisite amount to such bank account as the receiving Party may from time to time designate by notice to the paying Party.  For any currency conversions required hereunder, the paying Party shall make the conversion using its or its Affiliate’s standard conversion methodology consistent with Accounting Standards.

7.6Offsets.  Each Party shall have the right to offset any amount owed by the other Party to such Party under or in connection with this Agreement against any payments owed by such Party to such other Party under this Agreement.  Such offsets shall be in addition to any other rights or remedies available under this Agreement or Applicable Law.

7.7Taxes.

7.7.1General.  The initial payment hereunder, Milestone Payments, Transfer Price payments hereunder, and profit-sharing payments hereunder, and other amounts payable by Abbott to Surmodics hereunder (each, a “Payment”), shall be paid free and clear of any and all taxes, except for any withholding taxes required by Applicable Law.  Except as provided in this Section 7.7, Surmodics shall be solely responsible for paying any and all taxes (other than withholding taxes required by Applicable Law to be deducted from Payments and remitted by Abbott) levied on account of, or measured in whole or in part by reference to, any Payments it receives.  Abbott shall deduct or withhold from the Payments any taxes that it is required by Applicable Law to deduct or withhold.  Notwithstanding the foregoing, if Surmodics is entitled under any applicable tax treaty to a reduction of rate of, or the elimination of, applicable withholding tax, it may deliver to Abbott or the appropriate governmental authority (with the assistance of Abbott to the extent that this is reasonably required and is expressly requested in writing) the prescribed forms necessary to reduce the applicable rate of withholding

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or to relieve Abbott of its obligation to withhold such tax and Abbott shall apply the reduced rate of withholding or dispense with withholding, as the case may be; provided that Abbott has received evidence, in a form satisfactory to Abbott, of Surmodics’ delivery of all applicable forms (and, if necessary, its receipt of appropriate governmental authorization) at least [**] prior to the time that the Payments are due.  If, in accordance with the foregoing, Abbott withholds any amount, it shall pay to Surmodics the balance when due, make timely payment to the proper taxing authority of the withheld amount and send to Surmodics proof of such payment within [**] following such payment.  

7.7.2Value Added Tax. Notwithstanding anything contained in Section 7.7.1, this Section 7.7.2 shall apply with respect to value added tax (“VAT”).  All Payments are exclusive of VAT.  If any VAT is chargeable in respect of any Payments, Abbott shall pay VAT at the applicable rate in respect of any such Payments following the receipt of a VAT invoice in the appropriate form issued by Surmodics in respect of those Payments, such VAT to be payable on the later of the due date of the Payments to which such VAT relates and [**] after the receipt by Abbott of the applicable invoice relating to such VAT.

7.8Financial Records.  Abbott shall, and shall cause its Affiliates to, keep complete and accurate books and records pertaining to Net Profit Payments in sufficient detail to calculate all amounts payable hereunder and to verify compliance with its obligations under this Agreement.  Such books and records shall be retained by Abbott and its Affiliates until the later of (i) [**] after the end of the period to which such books and records pertain, and (ii) the expiration of the applicable tax statute of limitations (or any extensions thereof), or for such longer period as may be required by Applicable Law.

7.9Audits.

7.9.1Procedures.  At the request of Surmodics, Abbott shall, and shall cause its Affiliates to, permit an independent auditor designated by Surmodics and reasonably acceptable to Abbott, at reasonable times and upon reasonable notice, to audit the books and records maintained pursuant to Section 7.8 to ensure the accuracy of all reports and payments made hereunder.  Such examinations may not (i) be conducted for any Calendar Quarter more than [**] after the end of such Calendar Quarter, (ii) be conducted more than [**] period (unless a previous audit during such [**] period revealed an underpayment (or with respect to any reimbursement, an overpayment) with respect to such period) or (iii) be repeated for any Calendar Quarter.  Except as provided below, the cost of this audit shall be borne by Surmodics, unless the audit reveals a variance of more than [**] ([**]%) from the reported amounts, in which case Abbott shall bear the cost of the audit.  Unless disputed pursuant to Section 7.9.2, if such audit concludes that (x) additional amounts were owed by Abbott, Abbott shall pay the additional amounts or (y) excess payments were made by Abbott, Surmodics shall reimburse such excess payments, in either case ((x) or (y)), within [**] after the date on which such audit is completed by Surmodics.

7.9.2Audit Dispute.  In the event of a dispute with respect to any audit under Section 7.9.1, the Parties shall work in good faith to resolve the dispute.  If the Parties are unable to reach a mutually acceptable resolution of any such dispute within [**], the dispute shall be submitted for resolution to a certified public accounting firm jointly selected by each

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Party or to such other Person as the Parties shall mutually agree (the Auditor).  The decision of the Auditor shall be final and the costs of such arbitration as well as the initial audit shall be borne between the Parties in such manner as the Auditor shall determine.  Not later than [**] after such decision and in accordance with such decision, the audited Party shall pay the additional amounts or the auditing Party shall reimburse the excess payments, as applicable.

7.9.3Confidentiality.  The receiving Party shall treat all information subject to review under this Section 7.9 in accordance with the confidentiality provisions of Article 10 and the Parties shall cause the Auditor to enter into a reasonably acceptable confidentiality agreement with the audited Party obligating such firm to retain all such financial information in confidence pursuant to such confidentiality agreement.

7.10No Other Compensation.  Each Party hereby agrees that the terms of this Agreement fully define all consideration, compensation and benefits, monetary or otherwise, to be paid, granted or delivered by one Party to the other Party in connection with the transactions contemplated herein. Neither Party previously has paid or entered into any other commitment to pay, whether orally or in writing, any of the other Party’s employees, directly or indirectly, any consideration, compensation or benefits, monetary or otherwise, in connection with the transaction contemplated herein.

Article 8
LICENSES AND OPTIONS

8.1Licenses Granted to Abbott. Subject to the terms and conditions of this Agreement (including Section 8.2), and subject to any applicable limitations on the (sub)licenses granted to Surmodics under the In-License Agreements, Surmodics (on behalf of itself and its Affiliates) hereby grants to Abbott:

8.1.1an exclusive (except with respect to rights of Surmodics and its Affiliates as provided in Section 8.5.1) license (or sublicense), with the right to grant sublicenses in accordance with Section 8.2, under the Surmodics Product Patents, the Surmodics Other Patents, the Surmodics Know-How, and Surmodics’ interests in the Joint Patents and the Joint Know-How, to Manufacture the Product in the Territory;

8.1.2an exclusive (except with respect to rights of Surmodics and its Affiliates as provided in Section 8.5.1) license (or sublicense), with the right to grant sublicenses in accordance with Section 8.2, under the Surmodics Product Patents, the Surmodics Other Patents, the Surmodics Know-How, and Surmodics’ interests in the Joint Patents and the Joint Know-How, to Develop the Product in the Territory;

8.1.3an exclusive (except with respect to rights of Surmodics and its Affiliates as provided in Section 8.5.1) license (or sublicense), with the right to grant sublicenses in accordance with Section 8.2, under the Surmodics Product Patents, the Surmodics Other Patents, the Surmodics Know-How, and Surmodics’ interests in the Joint Patents and the Joint Know-How, to Commercialize the Product in the Territory;

8.1.4an exclusive (except with respect to rights of Surmodics and its Affiliates as provided in Section 8.5.1) license, with the right to grant sublicenses in accordance

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with Section 8.2, to use the Existing SurVeil Trademark and the Existing Serene Trademark to Develop the Product, to Manufacture the Product, and to Commercialize the Product, in each case, in the Territory (the goodwill for which shall inure to the sole benefit of Surmodics); and

8.1.5an exclusive (except with respect to rights of Surmodics and its Affiliates as provided in Section 8.5.1) license and right of reference, with the right to grant sublicenses and further rights of reference in accordance with Section 8.2, under the Regulatory Approvals and any other Regulatory Documentation that Surmodics or its Affiliates may Control with respect to the Product to Develop the Product, to Manufacture the Product, and to Commercialize the Product, in each case, in the Territory.

8.2Sublicenses.  Abbott shall have the right to grant sublicenses (or further rights of reference), through multiple tiers of sublicensees, under the licenses and rights of reference granted to Abbott in Section 8.1 to its Affiliates and, solely with respect to the services listed on Schedule 2.1.1(ii), Third Party service providers (in the case of Manufacturing (sub)licenses or rights of reference) or to its Affiliates, contract research organizations, and applicable Distributors (in the case of Development or Commercialization (sub)licenses or rights of reference); provided that any such sublicenses or rights of reference shall be consistent with the terms and conditions of this Agreement.

8.3Options Granted to Abbott.

8.3.1Specification of Endpoints and Study Criteria for Option Products.  For each Option Product, Surmodics shall, at a reasonably appropriate time during the development of such Option Product, provide a draft of the safety and efficacy endpoints, and the criteria, for the first-in-human clinical study for such Option Product to Abbott.  The Parties shall meet and discuss such endpoints and criteria as reasonably requested by either Party. Surmodics shall reasonably consider Abbott’s comments, if any, and shall provide final safety and efficacy endpoints, and criteria, for the first-in-human clinical study for such Option Product to Abbott promptly following finalization thereof.  

8.3.2BTK Option Product. Subject to the terms and conditions of this Agreement, Surmodics hereby grants to Abbott an exclusive option to obtain exclusive distribution rights for the BTK Option Product during the BTK Option Product Option Period as set forth in this Section 8.3.2, provided, however, that after the end of the first BTK Option Product Option Period there shall not be any subsequent BTK Option Products or BTK Option Product Option Periods.

(i)On or after [**] prior to the expected expiration date of the BTK Option Product Option Period, Abbott may notify Surmodics that it desires Surmodics to enter into good faith negotiations regarding exclusive distribution rights for the BTK Option Product, in which case such negotiations shall commence and continue until the expiration date of the BTK Option Product Option Period or such earlier date on which Abbott provides written notice that it no longer desires to continue such negotiations (which Abbott may do in its sole and absolute discretion at any time).  In the event that the Parties reach agreement regarding such exclusive distribution rights, the terms of such exclusive distribution rights shall be set forth in a separate written agreement (the “BTK Option Product Exercise Agreement”).  Such terms

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shall include (A) the payments to be made to Surmodics upon successful achievement of specified milestones in respect of the BTK Option Product, (B) a work plan for the continued development and clinical evaluation of the BTK Option Product, and (C) the transfer price for the BTK Option Product.  In connection with the commencement of such negotiations, Surmodics would provide Abbott with a data package containing the results of any pre-clinical or clinical studies performed, in whole or in part, to date and such other information as is requested by Abbott, to the extent not previously disclosed to Abbott; provided, however, that the foregoing shall not require Surmodics to prepare, obtain or otherwise provide any information, data or materials other than those that are then in the Control of Surmodics or its Affiliates.  During the BTK Option Product Option Period, Surmodics shall not (and shall cause its Affiliates, representatives and advisors not to) solicit, negotiate, engage in preliminary discussions or enter into any agreement with, any Third Party with respect to any distribution, commercial sublicense or other commercial transaction relating to the BTK Option Product, and shall not disclose to any Third Party for such purpose any non-public information regarding the BTK Option Product.

(ii)After the expiration of the BTK Option Product Option Period, if the Parties have not entered into an BTK Option Product Exercise Agreement, then Surmodics shall be free to enter into an agreement with a Third Party in respect of the BTK Option Product, provided that such agreement with such Third Party does not in any way conflict with any of Abbott’s rights or Surmodics’ obligations under this Agreement.

8.3.3AVF Option Product. Subject to the terms and conditions of this Agreement, Surmodics hereby grants to Abbott an exclusive option to obtain exclusive distribution rights for the AVF Option Product during the AVF Option Product Option Period as set forth in this Section 8.3.3, provided, however, that after the end of the first AVF Option Product Option Period there shall not be any subsequent AVF Option Products or AVF Option Product Option Periods.

(i)On or after [**] prior to the expected expiration date of the AVF Option Product Option Period, Abbott may notify Surmodics that it desires Surmodics to enter into good faith negotiations regarding exclusive distribution rights for the AVF Option Product, in which case such negotiations shall commence and continue until the expiration date of the AVF Option Product Option Period or such earlier date on which Abbott provides written notice that it no longer desires to continue such negotiations (which Abbott may do in its sole and absolute discretion at any time).  In the event that the Parties reach agreement regarding such exclusive distribution rights, the terms of such exclusive distribution rights shall be set forth in a separate written agreement (the “AVF Option Product Exercise Agreement”).  Such terms shall include (A) the payments to be made to Surmodics upon successful achievement of specified milestones in respect of the AVF Option Product, (B) a work plan for the continued development and clinical evaluation of the AVF Option Product, and (C) the transfer price for the AVF Option Product.  In connection with the commencement of such negotiations, Surmodics would provide Abbott with a data package containing the results of any pre-clinical or clinical studies performed, in whole or in part, to date and such other information as is requested by Abbott, to the extent not previously disclosed to Abbott provided, however, that the foregoing shall not require Surmodics to prepare, obtain or otherwise provide any information, data or materials other than those that are then in the Control of Surmodics or its Affiliates.  During the

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AVF Option Product Option Period, Surmodics shall not (and shall cause its Affiliates, representatives and advisors not to) solicit, negotiate, engage in preliminary discussions or enter into any agreement with, any Third Party with respect to any distribution, commercial sublicense or other commercial transaction relating to the AVF Option Product, and shall not disclose to any Third Party for such purpose any non-public information regarding the AVF Option Product.

(ii)After the expiration of the AVF Option Product Option Period, if the Parties have not entered into an AVF Option Product Exercise Agreement, then Surmodics shall be free to enter into an agreement with a Third Party in respect of the AVF Option Product, provided that such agreement with such Third Party does not in any way conflict with any of Abbott’s rights or Surmodics’ obligations under this Agreement.

8.3.4Other SFA Products.  Subject to the terms and conditions of this Agreement, and without limiting Section 8.4, Surmodics hereby grants to Abbott an exclusive option to obtain exclusive distribution rights for [**] (an “Other SFA Product”), if any; provided, however, that “Other SFA Product” shall exclude [**].  If Surmodics files an application for Regulatory Approval for an Other SFA Product, Surmodics shall notify Abbott in writing (such notice, the “Other SFA Product Notice”) reasonably promptly following such filing (or sooner, in Surmodics’ reasonable discretion).  Abbott shall have the right after receipt of the Other SFA Product Notice to notify Surmodics in writing that it desires Surmodics to enter into good faith negotiations regarding exclusive distribution rights for such Other SFA Product, in which case such negotiations shall then commence and continue for a period of [**], provided that Abbott may, in its sole and absolute discretion, end such negotiations by written notice at any time during such [**] period.  In the event that the Parties reach agreement regarding such exclusive distribution rights, the terms of such exclusive distribution rights shall be set forth in a separate written agreement and shall include (A) the payments to be made to Surmodics upon successful achievement of specified milestones in respect of such Other SFA Product, (B) a work plan for the continued development and clinical evaluation of such Other SFA Product, and (C) the transfer price for such Other SFA Product.  In connection with the commencement of such negotiations, Surmodics would provide Abbott with a data package containing the results of any pre-clinical or clinical studies performed, in whole or in part, to date and such other information as is requested by Abbott, to the extent not previously disclosed to Abbott, provided, however, that the foregoing shall not require Surmodics to prepare, obtain or otherwise provide any information, data or materials other than those that are then in the Control of Surmodics or its Affiliates.  During the Term, Surmodics shall not (and shall cause its Affiliates, representatives and advisors not to) solicit, negotiate, engage in preliminary discussions or enter into any agreement with, any Third Party with respect to any distribution, commercial sublicense or other commercial transaction relating to any Other SFA Product, and shall not disclose to any Third Party for such purpose any non-public information regarding any Other SFA Product.  

8.4Exclusivity.  

8.4.1Other than as expressly set forth in this Agreement, or set forth on Schedule 8.4.1, each Party shall not, and shall cause its Affiliates not to, [**] (a “Competing Product”).  Nothing in this Section 8.4.1 shall limit either Party’s right to develop, manufacture or otherwise commercialize any of its technologies, components or products for uses other than in a Competing Product.

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8.4.2If, during the Term, (i) there is a Change in Control of Abbott and immediately prior to the effectiveness of such Change in Control, the Third Party described in the definition of “Change in Control” or its Affiliate is then engaged, directly or indirectly, in any activities that, if carried out by Abbott, would be a breach of the exclusivity obligations set forth in Section 8.4.1, or (ii) as the result of an Acquisition of or by Abbott, Abbott directly or indirectly acquires rights to a Competing Product, then (a) (1Abbott may, at its election, provide written notice to Surmodics within [**] after the effective date of such Change in Control or Acquisition of Abbott’s intent to divest or discontinue commercialization of such Competing Product, and (2if such notice was timely provided, Abbott shall then, within [**] after the effective date of such Change in Control or Acquisition, divest, or cause its Affiliates to divest, as applicable, all rights in the Competing Product, or discontinue commercialization of, and cause its Affiliates to discontinue commercialization of, such Competing Product; or (b) if such notice was not timely provided or such divestiture or discontinuance was not timely executed, then all appointments and licenses granted herein shall convert to non-exclusive appointments and licenses, and, without limiting the foregoing, the exclusivities and restrictions on Surmodics set forth in Article 3 and Sections 8.1 and 8.4.1 shall terminate.

8.4.3If, during the Term, there is a Change in Control of Surmodics and immediately prior to the effectiveness of such Change in Control, the Third Party described in the definition of “Change in Control” or its Affiliate is then engaged, directly or indirectly, in any activities that, if carried out by Surmodics, would be a breach of the exclusivity obligations set forth in Section 8.4.1, then (a) (1) Surmodics may, at its election, provide written notice to Abbott within [**] after the effective date of such Change in Control of Surmodics’ intent to divest or discontinue commercialization of such Competing Product; and (2) if such notice was timely provided, Surmodics shall then, within [**] after the effective date of such Change in Control, divest, or cause its Affiliates to divest, as applicable, all rights in the Competing Product, or discontinue commercialization of, and cause its Affiliates to discontinue commercialization of, such Competing Product; or (b) if such notice was not timely provided or such divestiture or discontinuance was not timely executed, then (1) Abbott shall have the rights set forth in Section 4.3 with respect to a [**], and (2) without limiting the foregoing, the exclusivities and restrictions set forth in Section 8.4.1 shall solely apply to Surmodics and its Affiliates, and all of its and their rights and assets, in each case as determined immediately prior to giving effect to such Change in Control.

8.4.4Each Party acknowledges and agrees that (i) this Section 8.4 has been negotiated by the Parties, (ii) the geographical and time limitations on activities set forth in this Section 8.4 are reasonable, valid and necessary in light of the Parties’ circumstances and necessary for the adequate protection of the business of the Product and (iii) neither Party would have entered into this Agreement without the protection afforded it by this Section 8.4.  If, notwithstanding the foregoing, a court of competent jurisdiction determines that the restrictions set forth in this Section 8.4 are too broad or otherwise unreasonable under Applicable Law, including with respect to duration, geographic scope or space, the court is hereby requested and authorized by the Parties to revise this Section 8.4 to include the maximum restrictions allowable under Applicable Law.

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8.5Retention of Rights.

8.5.1Notwithstanding the exclusive licenses granted to Abbott pursuant to Section 8.1, Surmodics retains the right to practice under the Surmodics Product Patents, the Surmodics Other Patents, the Surmodics Know-How, Surmodics’ interests in the Joint Patents and the Joint Know-How, and Regulatory Approvals and any other Regulatory Documentation that Surmodics or its Affiliates may Control to perform (and to sublicense Third Parties to perform) its obligations under this Agreement (including Development and the Manufacture and supply of the Product to Abbott, as applicable) and, subject to Section 8.4, in connection with its other products and businesses.  Abbott shall not (and shall cause its Affiliates not to) use or exploit the Surmodics Product Patents, the Surmodics Other Patents, the Surmodics Know-How, or the Regulatory Documentation Controlled by Surmodics or its Affiliates for any purpose other than in accordance with the rights and licenses expressly granted hereunder.  Except as expressly provided herein, Surmodics grants no other right or license, including any rights or licenses to the Surmodics Product Patents, the Surmodics Other Patents, the Surmodics Know-How, the Regulatory Documentation, or any other Patent or intellectual property rights.  

8.5.2Except as expressly provided herein, Abbott grants no right or license to any Patent, Regulatory Documentation or any other intellectual property rights.

8.6Confirmatory Patent License.  Surmodics shall, if requested to do so by Abbott, promptly enter into confirmatory license agreements in the form or substantially the form reasonably requested by Abbott for purposes of recording the licenses granted under this Agreement with such patent offices in the Territory as Abbott reasonably considers appropriate.  Until the execution of any such confirmatory licenses, so far as may be legally possible, Surmodics and Abbott shall have the same rights in respect of the Surmodics Product Patents and the Surmodics Other Patents and be under the same obligations to each other in all respects as if the said confirmatory licenses had been executed.

8.7In-License Agreements.

8.7.1In General.  The Parties acknowledge that the licenses granted by Surmodics in Section 8.1 include sublicenses under the applicable In‑License Agreements (unless and until Abbott provides notice that it does not desire such a sublicense).  For each such sublicense, Abbott agrees to adhere to the terms and conditions of the applicable In-License Agreements as and to the extent such terms and conditions are applicable to Abbott.  Surmodics shall be solely responsible for any payment obligations that may be triggered under any In-License Agreement as a result of the execution of this Agreement or the grant of any rights hereunder or as a result of activities in connection with this Agreement by or on behalf of either Party or its Affiliates, including any activities of its or their (sub)licensees, (sub)distributors, or subcontractors.

8.7.2Proposed In-License Agreements.  If Surmodics or any of its Affiliates becomes a party to an agreement under which it or they obtain (sub)licenses or other rights with respect to any Information, Regulatory Documentation, material, Patents, or other intellectual property rights directed primarily to or reasonably related to the Product, (any such agreement described in this Section 8.7.2, a “Proposed In-License Agreement”), then

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Surmodics shall notify Abbott and shall provide Abbott with a copy of such agreement, provided, however, that Surmodics shall have the right to redact any confidential terms that do not impose obligations on Abbott or restrict or affect Abbott’s rights with respect to the Product from the copy provided to Abbott. Surmodics shall use commercially reasonable efforts to obtain the rights under any Proposed In-License Agreement for Abbott during the Term, to the extent related to Exploitation of the Product.  In the event that Surmodics would be required by the provisions of a Proposed In-License Agreement to impose any obligations on Abbott or its Affiliates beyond those set forth in this Agreement, then Surmodics shall be required to obtain Abbott’s prior written consent to such provisions as applied to the Product prior to executing such Proposed In-License Agreement.  Without limiting the foregoing, Abbott may, in its sole discretion in respect of any Proposed In-License Agreement, notify Surmodics regarding whether such Proposed In-License Agreement will be deemed to be an In-License Agreement; if Abbott so notifies Surmodics, then such Proposed In-License Agreement shall be deemed to be an In-License Agreement for all purposes hereunder, and the Parties shall amend Schedule 11.2.3 to include such Proposed In-License Agreement on such Schedule.

8.8No Impairment. Surmodics shall not, and shall cause its Affiliates not to, grant to any Third Party any (sub)licenses or other rights that conflict with any of the (sub)licenses or other rights granted to Abbott under this Article 8.

Article 9
INTELLECTUAL PROPERTY

9.1Ownership of Intellectual Property.

9.1.1Ownership of Technology.  Subject to Section 9.1.2, [**] (such Information and inventions, “Agreement Inventions”), and (ii) other Information, inventions, Patents, and other intellectual property rights that are owned or otherwise Controlled (other than pursuant to the license grants set forth in Section 8.1) by such Party or its Affiliates prior to the Effective Date of this Agreement, or on or after the Effective Date and which do not arise pursuant to this Agreement as a result of Party Development Activities.  In the event that Abbott determines that it or one of its Affiliates has made an Agreement Invention, Abbott shall promptly notify Surmodics.  In the event that Surmodics believes that Abbott or one of Abbott’s Affiliates has made an Agreement Invention, and Abbott has not yet given notice thereof to Surmodics, Surmodics shall promptly notify Abbott, and the Parties shall meet to discuss.  [**].  Except as set forth herein, Surmodics shall have no right, title, or interest whatsoever in or to any Information, inventions, Patents, or other intellectual property rights that are owned or Controlled (other than pursuant to the license grants set forth in Section 8.1) by Abbott or its Affiliates.  

9.1.2Ownership of Joint Patents and Joint Know-How.  As between the Parties, the Parties shall each own an equal, undivided interest in any and all (i) [**] (the “Joint Know-How”), and (ii) [**] (the “Joint Patents”) and other intellectual property rights with respect to the Information and inventions described in clause (i) or clause (ii).  Joint Patents and Joint Know-How shall be subject to the licenses and other rights granted under Section 8.1, [**].

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9.1.3United States Law. The determination of whether Information and inventions are conceived, discovered, developed, or otherwise made jointly by the Parties for the purpose of allocating proprietary rights (including Patent, copyright or other intellectual property rights) therein, shall, for purposes of this Agreement, be made in accordance with Applicable Law in the United States as such law exists as of the Effective Date irrespective of where such conception, discovery, development or making occurs.

9.1.4Assignment Obligation.  Each Party shall cause all Persons who perform Development or Manufacturing activities on its behalf under this Agreement to be under an obligation to assign (or, if such Party is unable to cause such Person to agree to such assignment obligation despite using reasonable efforts to negotiate such assignment obligation, provide a license, with a right to sublicense through multiple tiers, to Exploit the Product under) their rights in any Information and inventions resulting therefrom to such Party, and shall use commercially reasonable efforts to cause such Persons to assign such rights, in each case except where Applicable Law requires otherwise and except in the case of governmental, not-for-profit and public institutions which have standard policies against such an assignment (in which case, such Party shall obtain a suitable license under such Information and inventions with a right to sublicense through multiple tiers for each applicable Product).

9.2Maintenance and Prosecution.

9.2.1Primary Control. [**] shall (i) have the first right, but not the obligation, to Prosecute the Surmodics Product Patents and the Surmodics Other Patents worldwide using internal or external counsel reasonably acceptable to [**] (with [**] acceptance not to be unreasonably withheld, conditioned, or delayed), (ii) have the first right, but not the obligation, to Prosecute worldwide the Existing SurVeil Trademark using internal or external counsel reasonably acceptable to [**] (with [**] acceptance not to be unreasonably withheld, conditioned, or delayed), and (iii) have the sole right, but not the obligation, to Prosecute the Existing Serene Trademark using counsel selected by it in its sole discretion, in each case for clauses (i) - (iii) at [**] sole cost and expense. [**] shall (A) have the first right, but not the obligation, to Prosecute the Joint Patents worldwide using outside counsel reasonably acceptable to [**] (with [**] acceptance not to be unreasonably withheld, conditioned, or delayed), and (B) have the sole right, but not the obligation, to Prosecute all Product Trademarks worldwide other than the Existing SurVeil Trademark and the Existing Serene Trademark using counsel selected by it in its sole discretion, in each case for clauses (A) - (B) at [**] sole cost and expense.

9.2.2Abandonment.  In the event that (i) [**] decides to abandon a Surmodics Product Patent, Surmodics Other Patent, or the Existing SurVeil Trademark in a country or other jurisdiction in the Territory, or (ii) [**] decides to abandon a Joint Patent in a country or other jurisdiction in the Territory, the abandoning Party shall provide reasonable prior written notice to the other Party of such intention.  Such other Party shall have the right to request assignment of the applicable Patent or Trademark by providing notice to the abandoning Party within [**] after receipt of the notice to abandon.  Upon receipt of the notice requesting assignment, the abandoning Party shall take all reasonable steps to assign the applicable Patent or Trademark to the other Party before abandonment of the applicable Patent or Trademark, and shall provide applicable correspondence with the relevant patent office or trademark office and other documents reasonably related to the Prosecution of such Patent or Trademark, and

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reasonable access to the employees of the abandoning Party, to assist in transition of prosecution and maintenance of the applicable Patent or Trademark.   If a Party assumes control of the Prosecution of a Surmodics Product Patent, Surmodics Other Patent, or Existing SurVeil Trademark following abandonment of the applicable Patent or Trademark by the abandoning Party, then the Party assuming control, on behalf of itself and its Affiliates, shall grant to the abandoning Party and its Affiliates a non-exclusive, perpetual, royalty-free, irrevocable license under such Patent or Trademark in the country or other jurisdiction that was the subject of the applicable abandonment, provided, that rights to the Existing SurVeil Trademark shall continue to be subject to the limitations described in Section 3.6.3.

9.2.3Information Regarding Patent Prosecution. The Parties shall meet not less than [**] during the Term to discuss strategies for Prosecuting the Surmodics Product Patents, the Surmodics Other Patents, and the Joint Patents.

9.2.4Cooperation and Participation for the Joint Patents. The Non-Controlling Party shall, and shall cause its Affiliates to, assist and cooperate with the Controlling Party, as the Controlling Party may reasonably request from time to time, in the Prosecution of the Joint Patents under this Agreement, including that the Non-Controlling Party shall, and shall cause its Affiliates to, (i) offer its comments, if any, at least [**] in advance of the deadline, if any, for the applicable action to be taken by the Controlling Party to which such comments relate, (ii) provide access to relevant documents and other evidence and make its employees available at reasonable business hours (provided that the Controlling Party shall reimburse the Non-Controlling Party for its reasonable and verifiable out-of-pocket costs and expenses incurred in connection therewith) and (iii) as applicable, provide the Controlling Party, upon its request, with copies of any patentability reports generated by the Non-Controlling Party’s counsel with respect to the Joint Patents, including relevant Third Party patents and patent applications (provided that neither Party shall be required to provide legally privileged information with respect to such intellectual property unless and until procedures reasonably acceptable to such Party are in place to protect such privilege).  

9.2.5Patent Term Extension and Supplementary Protection.  As between the Parties, [**] shall have the first right, but not the obligation, to make decisions regarding, and to apply for, patent term extensions specific to the Product in the Territory, including the United States with respect to extensions pursuant to 35 U.S.C. §156 et. seq. and in other jurisdictions pursuant to supplementary protection certificates, and in all jurisdictions with respect to any other extensions that are now or become available in the future, wherever applicable, for the Surmodics Product Patents, the Surmodics Other Patents, and any Joint Patents, in each case including whether or not to do so. [**] may use counsel selected by [**] in its sole discretion for such actions, and they shall be at [**] sole expense.  If [**] fails to apply for and prosecute applications for patent term extensions specific to the Product in any country or other jurisdiction in the Territory, or otherwise fails to respond to inquiries from [**] as to whether [**] has applied for and prosecuted any such application, in each case no later than [**] prior to the next deadline for any action that may be taken with respect thereto, then [**] shall thereupon have the option, in its sole discretion and exercisable upon written notice thereof to [**], to assume the control thereof (including whether or not to do so) using counsel selected by [**] in its sole discretion and at [**] sole cost and expense.

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9.3Enforcement.

9.3.1Notification. Each Party shall promptly notify the other Party in writing of any alleged or threatened infringement of (i) the Surmodics Product Patents by a Third Party’s Exploitation in the Territory of a drug-coated balloon product in the Initial Indication or the [**], (ii) the Surmodics Other Patents by a Third Party’s Exploitation in the Territory of a drug-coated balloon product in the Initial Indication or the [**], except with respect to any such alleged or threatened infringement arising solely from (a) a lubricious coating on the catheter shaft of such product or (b) a lubricious coating on any such product for which such lubricious coating is the only coating, (iii) the Joint Patents, or (iv) the Product Trademarks by a Third Party, in each case of which such Party becomes aware (including alleged or threatened infringement based on the development, commercialization, or an application to market a product in the Territory).  

9.3.2Primary Control. [**] shall have the first right, but not the obligation to prosecute and control any claim, suit, proceeding, or action against a Third Party (an “Action”) with respect to alleged or threatened infringement of (i) the Surmodics Product Patents by a Third Party’s Exploitation in the Territory of a drug-coated balloon product in the Initial Indication or the [**], (ii) the Surmodics Other Patents by a Third Party’s Exploitation in the Territory of a drug-coated balloon product in the Initial Indication or the [**], except with respect to any such alleged or threatened infringement arising solely from (a) a lubricious coating on the catheter shaft or (b) a lubricious coating on any such product for which such lubricious coating is the only coating, or (iii) the Joint Patents, in each case for clauses (i) – (iii) using counsel selected by [**] in its sole discretion and at [**] sole expense. [**] shall have the sole right, but not the obligation, to prosecute and control any Action with respect to alleged or threatened infringement by a Third Party of any Product Trademarks other than the Existing Serene Trademark, using counsel selected by [**] in its sole discretion and at [**] sole expense. [**] shall have the sole right, but not the obligation, to control any Action in connection with alleged or threatened infringement by a Third Party of the Existing Serene Trademark, using counsel selected by [**] in its sole discretion and at [**] sole expense.  

9.3.3Secondary Control.  With respect to the Actions described in Section 9.3.2, if the Party that has the first right to prosecute and control any such Action does not take commercially reasonable steps toward such Action (including by engaging counsel or communicating with the applicable Third Party) by the earlier of (i) [**] following the notice provided pursuant to Section 9.3.1 of such alleged or threatened infringement, or (ii) [**] before the time limit, if any, set forth in Applicable Laws for filing of such actions provided such [**] period date occurs after the notice provided pursuant to Section 9.3.1 of  such alleged or threatened infringement, then the Secondary Party may prosecute and control such Action. In the event a Secondary Party assumes control of an Action under this Section 9.3.3, such Party shall do so at its sole cost and expense (but subject to Sections 9.7, 9.8, and 9.9), using counsel selected by it at its sole discretion.    This Section 9.3.3 shall not apply as to any Action as to which a Party has sole rights under Section 9.3.2.  

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9.4Defense and Third Party Rights.

9.4.1Notification.  Each Party shall promptly notify the other Party in writing (i) of any Invalidity Claim, or (ii) if the Exploitation of the Product in the Territory pursuant to this Agreement results in, or is reasonably expected to result in, any Third Party Infringement Claim of which it becomes aware.  

9.4.2Primary Control. [**] shall have the first right, but not the obligation, to defend and control the defense of (i) Invalidity Claims, (ii) Third Party Patent Infringement Claims, and (iii) Third Party Trademark Infringement Claims (except those for the Existing SurVeil Trademark or the Existing Serene Trademark), in each case using counsel selected by [**] in its sole discretion and at [**] sole expense. [**] shall have the sole right, but not the obligation, to defend and control the defense of Third Party Trademark Infringement Claims for the Existing SurVeil Trademark, using counsel selected by [**] in its sole discretion and at [**] sole expense. [**] shall have the sole right, but not the obligation, to defend and control the defense of any Third Party Trademark Infringement Claim for the Existing Serene Trademark, using counsel selected by [**] in its sole discretion and at [**] sole expense. A Party’s rights under this Section 9.4.2 shall include having the right to negotiate and obtain a license or other rights from a Third Party to such Third Party Rights as necessary or desirable for [**] or its [**] (sub)licensees, (sub)distributors, subcontractors, or customers to Exploit the Product.

9.4.3Secondary Control.  With respect to Actions and license rights described in Section 9.4.2, if [**] or its designee gives written notice to [**], within a reasonable amount of time after notice of such Action, that [**] elects not to defend, or otherwise fails to initiate and maintain the defense of such Action within such time periods so that [**] is not prejudiced by any delays, [**] may conduct and control the defense of such Action including having the right to negotiate and obtain a license or other rights from a Third Party to such Third Party Rights as necessary or desirable for [**] or its [**] (sub)licensees, (sub)distributors, subcontractors, or customers to Exploit the Product, such defense to be at the sole cost and expense of [**] (but subject to Sections 9.7, 9.8, and 9.9), using counsel selected by it at its sole discretion. A Party’s rights under this Section 9.4.3 shall include having the right to negotiate and obtain a license or other rights from a Third Party to such Third Party Rights as necessary or desirable for [**] or its [**] (sub)licensees, (sub)distributors, subcontractors, or customers to Exploit the Product provided, that nothing in this Section 9.4.3 shall apply as to any Action or license rights as to which a Party has sole rights under Section 9.4.2.  

9.5Information. The Controlling Party for an Action described in Section 9.2.5, Section 9.3 or Section 9.4 shall keep the Non-Controlling Party reasonably informed with regard to such Action, including by providing the Non-Controlling Party with a copy of material communications to and from any adverse party, court or tribunal with respect to such Action, and by providing the Non-Controlling Party drafts of any material filings or responses sufficiently in advance of submitting such filings or responses so as to allow for a reasonable opportunity for review and comment thereon. The Controlling Party shall consider in good faith the comments, requests and suggestions of the Non-Controlling Party with respect to such drafts and with respect to strategies for prosecuting any such Action.

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9.6Cooperation and Participation.  With regard to Actions of the type described in Section 9.2.5, Section 9.3 and Section 9.4, the Non-Controlling Party shall, and shall cause its Affiliates to, assist and cooperate with the Controlling Party, as the Controlling Party may reasonably request from time to time, in the prosecution of such Action, including that the Non-Controlling Party shall, and shall cause its Affiliates to, (i) offer its comments, if any, at least [**] in advance of the deadline, if any, for the applicable action to be taken by the Controlling Party to which such comments relate, (ii) provide access to relevant documents and other evidence and make its employees available at reasonable business hours (provided that the Controlling Party shall reimburse the Non-Controlling Party for its reasonable and verifiable out-of-pocket costs and expenses incurred in connection therewith) and (iii) furnish a power of attorney solely for the purpose of joining in, or be named as a necessary party to an Action; provided that neither Party shall be required to provide legally privileged information with respect to such Action unless and until procedures reasonably acceptable to such Party are in place to protect such privilege; and  provided, further, that, except with respect to the Joint Patents, the Controlling Party shall reimburse the Non-Controlling Party for its reasonable costs and expenses incurred and accrued in connection therewith).  The Non-Controlling Party in any Action described in Section 9.3 or Section 9.4 shall have the right to join as a party to such Action and participate with its own counsel at its own expense; provided that the Controlling Party shall retain control of such Action.  With respect to any negotiation to obtain a license or other right to a Third Party Right, the Controlling Party in such negotiations shall consult with the Non-Controlling Party and the Non-Controlling Party shall reasonably cooperate with the Controlling Party.

9.7Settlement.  With respect to (i) Actions of the type described in Section 9.3 and Section 9.4, and (ii) any negotiation of a license or other right to a Third Party Right, the Controlling Party shall have the right to settle such claim or finalize and execute such agreement for a license or other right; provided that neither Party shall have the right to settle any such Action if such settlement (A) [**], (B) [**], (D) [**], (E) [**], or (F) [**], in each case ((A)-(F)), without the prior express written consent of the Non-Controlling Party (which consent shall not be unreasonably withheld, conditioned or delayed).

9.8Recovery.  Except as otherwise agreed by the Parties in connection with a cost sharing arrangement, any recovery realized as a result of an Action of the type described in Section 9.3 or Section 9.4, whether by way of settlement or otherwise shall be first allocated to reimburse the Parties for their reasonable costs and expenses incurred and accrued in making such recovery (which amounts shall be allocated pro rata based on the reasonable costs and expenses incurred and accrued by each Party if insufficient to cover the totality of such expenses). Any remainder after such reimbursement is made shall be divided by the Parties as follows:  [**].

9.9Liabilities.  All losses, damages (including, royalties, up-front payments, milestones and other consideration paid or otherwise assessed), liabilities, costs and expenses (including reasonable attorneys’ fees and expenses) of the Controlling and Non-Controlling Parties (and their respective Affiliates, and the respective directors, officers, employees and agents) resulting from an Action of the type described in Section 9.3 or Section 9.4 shall constitute the “Third Party Infringement Claim Losses”.  All payments (including, royalties, up-front payments, milestones and other consideration paid or otherwise assessed), costs and

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expenses (including reasonable attorneys’ fees and expenses) of the Party or Affiliate of a Party which executes an agreement for a license or other right to a Third Party Right shall constitute the “Third Party Right Payments”. [**] The Parties shall reimburse each other, on a monthly basis or such other timeframe as may be mutually agreed, as necessary to effect the foregoing allocation.  Without limiting the generality of Section 7.6, Abbott may offset Third Party Infringement Claim Losses and the Third Party Right Payments paid or incurred by Abbott for which Surmodics is responsible.   

9.10Inventor’s Remuneration.  As between the Parties, each Party shall be solely responsible for any remuneration that may be due under any applicable inventor remuneration laws to any inventors who are employees of such Party or its Affiliates or are otherwise conducting activities on behalf of such Party or its Affiliates.  The Parties agree that activities by or on behalf of Surmodics under this Agreement shall not constitute activities on behalf of Abbott or its Affiliates.

9.11Patent Marking.  For Product Manufactured by Surmodics hereunder, Surmodics shall, for each Surmodics Product Patent that covers the Product, place (or cause to be placed) all appropriate patent notices or markings on the Product itself or on such other media as are considered reasonable in Surmodics’ reasonable discretion.  In the event that Abbott Manufactures any Product hereunder, Abbott shall, for each Surmodics Product Patent that covers the Product and that is notified to Abbott as covering the Product by Surmodics, place (or cause to be placed) all appropriate patent notices or markings on the Product itself or on such other media as are considered reasonable in Abbott’s reasonable discretion.  Each Party shall ensure that all patent notices or markings placed (or caused to be placed) by it pursuant to this Section 9.11 are in conformance with such Party’s customary procedures and policies for similar products and with Applicable Law (including patent law) of the country of manufacture, use or sale of the applicable Product.

Article 10
CONFIDENTIALITY

10.1Confidentiality Obligations.  At all times during the Term and for a period of [**] following termination or expiration of this Agreement, each Party shall and shall cause its Affiliates and its and their respective officers, directors, employees, (sub)contractors, (sub)distributors and agents to, keep confidential and not publish or otherwise disclose to a Third Party and not use, directly or indirectly, for any purpose, any Confidential Information furnished or otherwise made known to it, directly or indirectly, by the other Party, except to the extent such disclosure or use is expressly permitted by the terms of this Agreement.  “Confidential Information” means any technical, business or other information provided by or on behalf of one Party to the other Party in connection with this Agreement, whether prior to, on or after the Effective Date, including Information relating to the Product (including the Regulatory Documentation), any Development or Commercialization of the Product, any know-how with respect thereto, or the scientific, regulatory or business affairs or other activities of either Party.  Notwithstanding the foregoing, during the Term, any Information relating to the Product or the Exploitation thereof that is owned or Controlled by Surmodics or any of its Affiliates and that is exclusively licensed to Abbott pursuant to Section 8.1 shall be deemed to be the Confidential Information of both Parties (and both Parties shall be deemed to be the receiving Party and the

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disclosing Party with respect thereto)