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elanco-tarsussystemicagr

CERTAIN IDENTIFIED INFORMATION HAS BEEN OMITTED FROM THIS DOCUMENT BECAUSE IT IS BOTH NOT  MATERIAL AND WOULD LIKELY CAUSE COMPETITIVE HARM TO THE REGISTRANT  IF PUBLICLY DISCLOSED, AND HAS BEEN MARKED WITH  “[***]” TO INDICATE WHERE OMISSIONS HAVE BEEN MADE.        Exhibit 10.2  AMENDED AND RESTATED LICENSE AGREEMENT    THIS AMENDED AND RESTATED LICENSE AGREEMENT (the “Agreement”), is made and  entered into by and between Elanco Tiergesundheit AG, a Swiss corporation having place of business  at Mattenstrasse 24A, 4058 Basel, Switzerland (“Elanco”) and Tarsus Pharmaceuticals, Inc., a  Delaware corporation having its principal offices at 15440 Laguna Canyon Rd., Suite 160, Irvine, CA  92618 (“Tarsus”) as of June 3, 2022 (the “Amended and Restated Date”), and amends and restates in  its entirety that certain License Agreement made and entered into by and between Elanco and Tarsus as  of September 3, 2020 (the “Effective Date”) (the “Original Agreement”).  Each of Elanco and Tarsus  may be referred to herein as a “Party” and collectively as the “Parties.”    BACKGROUND    A. Elanco is the owner, and has the right to license the Licensed IP (as defined below) on and  subject to the terms and conditions set forth in this Agreement.     B. Tarsus wishes to license the Licensed IP, and Elanco is willing to grant to Tarsus a license  under the Licensed IP, on and subject to the terms and conditions set forth in this Agreement.    C. The Parties wish to clarify certain terms from the Original Agreement.    NOW, THEREFORE, in consideration of the foregoing and the mutual covenants and agreements of  the Parties contained in this Agreement, the Parties, intending to be legally bound, hereby agree as  follows:    1. CERTAIN DEFINITIONS.  In addition to any terms defined elsewhere in this Agreement, the  following terms, when used in this Agreement, shall have the meanings set forth in this Section 1.     1.1 “Affiliate” means, with respect to an entity, any other entity which controls, is controlled by,  or is under common control with such first entity (but only so long as such control exists), whether as  of the Effective Date or any time after the Effective Date.  The term “control”, in relation to an entity,  means the ownership or control, directly or indirectly, of fifty percent (50%) or more of the shares (or  other securities or rights) entitled to vote for the election of directors or other governing authority of  such entity.    1.2 “Applicable Law” means, with respect to any Person or matter, any and all laws, ordinances,  constitutions, regulations, statutes, treaties, rules, codes, licenses, requirements and injunctions adopted,  enacted, implemented, promulgated, issued, entered by or under the authority of any governmental body  having jurisdiction over such Person or matter or any Person’s properties or assets.    1.3 “Change of Control” shall mean any transaction defined as a “Liquidation Event” in the  Restated Certificate.     1.4 “Commercially Reasonable Efforts” of a Party means, with respect to an objective, the  reasonable, diligent, good faith efforts of a Party, (which it may effect through the efforts of its  Affiliates, and sublicensees) of the type to accomplish such objective as a similarly situated (with  respect to size, stage of development, and assets) pharmaceutical company, as the case may be, would  normally use to accomplish a similar objective under similar circumstances, it being understood and  agreed that, with respect to efforts to be expended in relation to a product (including implementation of  development and commercialization strategies), such efforts shall be substantially equivalent to those  

 

    2  efforts and resources that a similarly situated pharmaceutical company, as the case may be, would  typically devote to its own internally discovered compound or product, which compound or product is  at a similar stage in its development or product life and is of similar market and economic potential as  products expected to result from the Compounds at a similar stage in their development or product life,  taking into account the risks of development, the commercial potential for the Product, its proprietary  position and other relevant factors.    1.5 “Compound” means Lotilaner and any salts, stereo isomers, prodrug, ester, metabolite,  solvate, or polymorph thereof, and any derivative of the foregoing containing one or more atoms  substituted with a radioisotope (including a derivative containing deuterium).      1.6 “Confidential Information” means information that is disclosed by one Party (the  “Disclosing Party”) to the other Party (the “Receiving Party”) in connection with this Agreement  (which may include, without limitation, trade secrets, technology, information pertaining to business  operations and strategies, and information pertaining to customers, pricing and marketing information)  or considered confidential under the Eye Care and Dermatology License Agreement as well as all  information provided in the data room by Elanco as of the Effective Date.  Confidential Information  does not include information that: (a) was already known to the Receiving Party prior to disclosure by  the Disclosing Party; (b) is independently developed by the Receiving Party; (c) was or becomes  generally known by the public other than as a result of a breach of this Agreement or the Eye Care and  Dermatology License Agreement by the Receiving Party; or (d) was received by the Receiving Party  from a Third Party who was not, at the time of disclosure, under any obligation to the Disclosing Party  or any of its Affiliates to maintain the confidentiality of such information.      1.7 “Control”, “Controls” or “Controlled by” means, with respect to any item of or right under  any intellectual property, as the context requires, the possession (whether by ownership or license, other  than pursuant to this Agreement) or ability of a Party to grant access to, or a license or sublicense of,  such items or rights.     1.8 “Cover” with respect to any subject matter (e.g. a Licensed Product), means that absent a  license, the making, having made, using, importing, offering to sell or selling such subject matter would  infringe a Valid Claim.    1.9 “Cut-off Date” means the second (2nd) anniversary of the Effective Date.    1.10 “Developed World” means the United States of America, Canada, the countries of the  European Economic Area (which, for clarity, shall be deemed to include the United Kingdom),  Australia, New Zealand and Japan.    1.11 “Developing World” means all countries that are not countries within the Developed World.    1.12 “Elanco Field” means all applications for non-human animals, agricultural applications, seed  treatment applications and urban pest applications related to structural, turf, lawns and gardens,  including treatment of premises and ornamental pest markets but excluding, for clarity, any mosquito  vector control for human disease or any human therapeutics.    1.13 “Enroll” or “Enrollment” with respect to a clinical trial means a patient is dosed with the  applicable investigatory drug.     1.14 “Existing Manufacturer” means a third party that manufactures for which Tarsus pays (or  has paid) Elanco $[***] pursuant to Section 3.1 of the Eye Care and Dermatology License Agreement.    1.15 “Eye Care and Dermatology License Agreement” means that certain License Agreement  entered into by and between Elanco and Tarsus on January 31, 2019, as amended from time to time.    

 

    3  1.16 “FDA” means the U.S. Food and Drug Administration and any successor agency thereto.     1.17 “Field” means all applications for humans other than the treatment, palliation, prevention, or  cure of any disease or condition in eye care or dermatology in humans.    1.18 “First Commercial Sale” for a country means the first commercial sale of a Licensed Product  to a Third Party by Tarsus or any of its Affiliates or sublicensees of such Licensed Product after final  approval by the applicable government authority to market such product for human use in in the Field  in such country (e.g. NDA approval).  “First Commercial Sale” excludes the sale of a Licensed Product  for use in a clinical trial or for expanded access (or similar term) and any sale of any Licensed Product  by Tarsus or any of its Affiliates or sublicensees to or among themselves.     1.19 “INAD” means an Investigational New Animal Drug filed with the FDA or the equivalent  application or filing filed with any equivalent agency or government authority outside of the United  States (including any supra-national agency such as in the European Union) necessary to commence  animal clinical trials in such jurisdiction, and including all regulations at 21 CFR § 511.1, and equivalent  foreign regulations.    1.20 “IND” means an Investigational New Drug Application filed with the FDA or the equivalent  application or filing filed with any equivalent agency or government authority outside of the United  States (including any supra-national agency such as in the European Union) necessary to commence  human clinical trials in such jurisdiction, and including all regulations at 21 CFR § 312 et. esq., and  equivalent foreign regulations.    1.21 “Initial Public Offering” shall mean the closing of the issuance and sale of shares of Tarsus’  capital stock in a public offering pursuant to an effective registration statement under the Securities Act.     1.22 “Know-How” means all know-how relating to the Compound or any Licensed Product,  including, without limitation, inventions (whether patentable or not), technology, discoveries, methods,  techniques, and scientific information, medical information, all manufacturing, preclinical, and clinical  data, materials, samples, protocols, specifications, processes, structures, trade secrets, analytical and  quality control information and procedures, pharmacological, toxicological, and clinical test data and  results, stability data, and studies and procedures.       1.23 “Licensed Know-How” means all Know-How Controlled by Elanco as of the Effective Date.        1.24 “Licensed IP” means the Licensed Patents and the Licensed Know-How.      1.25 “Licensed Patents” means (a) the patents and patent applications set forth in Exhibit A hereto  or otherwise Controlled by Elanco or any of its Affiliates as of the Effective Date and Covering any  product that contains a Compound as an active pharmaceutical ingredient (alone or with other active  ingredients) in any forms, presentations, formulations or dosage strengths,  or any manufacture or use  of the foregoing, (b) any patent or patent application Covering any product that contains a Compound  as an active pharmaceutical ingredient (alone or with other active ingredients) in any forms,  presentations, formulations or dosage strengths, or any manufacture or use of the foregoing where the  patent or patent application Covers Know-How Controlled by Elanco or any of its Affiliates and arises  after the Effective Date and prior to the Cut-off Date; (c) any patent application filed after the Effective  Date on any of the Licensed Know-How; (d) any patent applications claiming priority to any of the  foregoing, including continuations, divisionals, continuation-in-part and foreign patent applications, (e)  all patents issuing from any of the foregoing patent applications described in (a) through (d); and (f) all  reissues, reexaminations, renewals, re-validations, re-registrations, patents of addition, supplementary  patent certificates and extensions of any of the foregoing.  Notwithstanding the foregoing, the Licensed  Patents do not include the Tarsus Patents.         

 

    4  1.26 “Licensed Product” means any product that: (a) contains a Compound as an active  pharmaceutical ingredient (alone or with other active ingredients) in any forms, presentations,  formulations or dosage strengths; or (b) the manufacture, sale, use or importation of which, absent the  license granted to Tarsus from Elanco under this Agreement, would infringe a Valid Claim of a Licensed  Patent.    1.27 “Major European Country” means any of Germany, France, Spain, Italy, and the United  Kingdom.       1.28 “NADA” means a New Animal Drug Application, or any successor applications or  procedures, filed with the FDA for approval to market and sell a product in the United States.     1.29 “NDA” means a New Drug Application, or any successor applications or procedures, filed  with the FDA for approval to market and sell a product in the United States.     1.30 “Net Sales” means, with respect to a Licensed Product, the gross amount invoiced by Tarsus  (including a Tarsus Affiliate) or any sublicensee thereof to unrelated Third Parties, for such Licensed  Product in the Field in the Territory during the Royalty Term in the country of sale, less the following  items applied consistent with U.S. Generally Accepted Accounting Principles:    (a)        Trade, quantity and cash discounts allowed;    (b)       Discounts, refunds, rebates, chargebacks, retroactive price adjustments, and any other  allowances which effectively reduce the net selling price;    (c)      Licensed Product returns and allowances;    (d)       That portion of the sales value associated with drug delivery systems, where  applicable;     (e)       Any tax imposed on the production, sale, delivery or use of the Licensed Product,  including, without limitation, sales, use, excise or value added taxes;    (f)        Wholesaler inventory management fees;    (g)       Allowance for distribution expenses; and    (h)       Any other similar and customary deductions which are in accordance with GAAP.    Such amounts shall be determined from the books and records of Tarsus, Affiliates of Tarsus or any  sublicensee maintained in accordance with U. S. Generally Accepted Accounting Principles  consistently applied.  Tarsus further agrees in determining such amounts, it will use Tarsus’s then  current standard procedures and methodology, including Tarsus's then current standard exchange rate  methodology, utilizing a reputable source such as the Wall Street Journal or Reuters, for the translation  of foreign currency sales into U.S. Dollars.  For purposes of determining Net Sales, (i) sales of a  Licensed Product shall not include transfers, uses or dispositions for charitable, promotional, pre- clinical, clinical, regulatory or governmental purposes, and (ii) sales between or among Tarsus, its  Affiliates and sublicensees for re-sale shall be excluded from the computation of Net Sales, but  subsequent sales by Tarsus, its Affiliates, and sublicensees to third parties shall be included in the  computation of Net Sales.    1.31 “Person” means any individual, corporation, partnership, joint venture, limited liability  company, governmental authority, unincorporated organization, trust, association or other entity.     

 

    5  1.32 “Phase 1 Clinical Trial” means a clinical trial, the principal purpose of which is preliminary  determination of safety of a Licensed Product in healthy individuals or patients and that otherwise  satisfies the description in 21 C.F.R. §312.21(a) in the United States or, if applicable, its foreign  equivalent.     1.33 “Phase 2 Clinical Trial” means a clinical trial phase 2a, 2b or adaptive design for an  indication in the Field that (a) occurs after a separate Phase 1 Clinical Trial for such indication, and (b)  is predominantly designed to evaluate clinical efficacy for a pharmaceutical product (and is not a clinical  trial that is predominantly a safety study (e.g., a phase 1b/2a clinical trial)), in a manner that is generally  consistent with 21 C.F.R. § 312.21(b), as amended (or its successor regulation) and/or any analogous  applicable law outside of the United States, as applicable.    1.34 “Phase 3 Clinical Trial” means a pivotal clinical trial for an indication in the Field that (a)  occurs after a separate Phase 2 Clinical Trial for such indication, and (b) has a defined dose or a set of  defined doses of a pharmaceutical product designed to ascertain efficacy and safety of such product, in  a manner that is generally consistent with 21 C.F.R. § 312.21(c), as amended (or its successor  regulation) and/or any analogous applicable law outside of the United States, as applicable.      1.35 “Prescription Product” for a Licensed Product in a country means such product cannot be  sold to a consumer without a prescription from a licensed healthcare practitioner in such country.    1.36 “Regulatory Approval” in a particular country means all approvals (including any applicable  governmental price and reimbursement approvals), licenses, registrations, and authorizations of any  federal, national, multinational, state, provincial or local Regulatory Authority, department, bureau and  other governmental entity that are necessary for the marketing and sale of a Licensed Product in a  country.    1.37 “Regulatory Authority” means any applicable governmental authority responsible for  granting Regulatory Approvals or pricing approvals for Licensed Products, including the FDA, the  European Medicines Agency and any corresponding national or regional regulatory authorities.    1.38 “Regulatory Materials” means any regulatory application, submission, notification,  communication, correspondence, registrations, approvals and other filings made to or received from a  Regulatory Authority relating to any Licensed Product, including, without limitation, INADs, INDs  clinical trial applications, NADAs, NDAs and any other marketing authorizations.     1.39 “Regulatory Materials Receipt” means the date on which Elanco provides Tarsus with the  Regulatory Materials in existence as of the Effective Date that are reasonably necessary to research,  develop, make, use or otherwise exploit Licensed Products in the Field in the Territory.  Such materials  include, without limitation, [***], FDA approval letter, and FDA correspondence related to 21Sep18  Safety Communication.    1.40 “Restated Certificate” means Tarsus’ Amended and Restated Certificate of Incorporation on  file with the Secretary of State of the State of Delaware.     1.41 “Royalty Term” means, with respect to any Licensed Product in a given country, the period  of time commencing on the date of the First Commercial Sale of such Licensed Product in such country  and ending on the latest of: (a) expiry of the last-to-expire of the Licensed Patents which has at least  one (1) Valid Claim Covering such Licensed Product in such country; (b) the expiration of regulatory  exclusivity for such Licensed Product in such country; and (c) ten (10) years after first commercial sale  of such Licensed Product in such country.        1.42 “SEC” means the U.S. Securities and Exchange Commission.     

 

    6  1.43 “Securities Act” means the United States Securities Act of 1933, as amended.    1.44 “Sensitive Transfer” means a transfer to a new supplier requiring either a technology transfer,  a method transfer or another form of transfer of Licensed Know-How.    1.45 “Sublicense Revenue” means payments that Tarsus receives in consideration for a sublicense  of rights under the Licensed IP in the Field.    1.46 “Tarsus IP” means the Tarsus Patents and the Tarsus Know-How.  Tarsus IP does not include  the Licensed IP.    1.47 “Tarsus Know-How” means Know-How Controlled by Tarsus as of the Effective Date,  excluding Licensed Know-How.    1.48 “Tarsus Patents” means (a) patents and patent applications Controlled by Tarsus as of the  Effective Date and related to the Compound and Licensed Product; (b) any patent applications claiming  priority to any of the foregoing, including continuations, divisionals, continuation-in-part (to the extent  the claims thereof are entitled to such priority) and foreign patent applications, and (c) all patents issuing  from any of the foregoing patent applications described in (a) through (b), including all reissues,  reexaminations and extensions thereof. Notwithstanding the foregoing, the Tarsus Patents do not  include the Licensed Patents.    1.49 “Territory” means the entire world.    1.50 “Third Party” means any Person other than a Party or an Affiliate of a Party.    1.51 “Valid Claim” means any claim of any issued and unexpired Licensed Patent that has not  been disclaimed, abandoned, revoked or held unpatentable, invalid or unenforceable by final decision  of a court or other governmental body of competent jurisdiction, which decision is unappealable or  unappealed within the time allowed for appeal.  “Valid Claim” shall include any pending claim of any  Licensed Patent that has been pending for less than seven (7) years but shall exclude pending claims  that have been pending, without approval, for seven (7) years or more.    2. LICENSE GRANT; UPSTREAM AGREEMENTS.      2.1 Elanco License.  Elanco hereby grants to Tarsus and its Affiliates an exclusive (even as to  Elanco), perpetual, sublicensable (through multiple tiers), royalty-bearing license, under the Licensed  IP, to research, develop, make, use, sell, offer for sale, import and otherwise exploit Licensed Products  in the Field in the Territory.  Each sublicensee shall agree to comply with the following terms and  conditions of this Agreement:  Section 2.3, allowing an audit pursuant to Section 6.6, Section 9.2(b)  (with respect to the activities of sublicensee and its Affiliates), and Section 10 (with respect to the  Confidential Information of Elanco). Tarsus remains fully responsible and liable under this Agreement  irrespective of any sublicense.    2.2 Tarsus License.  Tarsus hereby grants to Elanco a worldwide non-exclusive, perpetual,  sublicensable (through multiple tiers), royalty-free license, under the Tarsus IP, to research, develop,  make, use, sell, offer for sale, import and otherwise exploit Compounds and Licensed Products in the  Elanco Field.  Tarsus may sublicense any or all rights and/or obligations under this Agreement.     2.3 Right of Reference; Samples.  Each Party has right to reference and receive access to all  Regulatory Materials for the Compound (and any chemical alteration or improvement of the Compound  (e.g. pursuant to Section 8.3)) that are Controlled by the other Party, its Affiliates, or its sublicensees,  whether existing as of the Effective Date, generated from any activities of the Parties in connection with  this Agreement, solely for the purposes set forth in this Agreement, or otherwise existing after the  Effective Date.  Elanco will provide Tarsus with reasonable samples of (a) Elanco’s chemical alterations  

 

    7  or improvements of the Compound, (b) the Compound’s related substances, and/or (c) reference  standards for the Compound, in each case, after Tarsus’s request(s) from time to time.  Tarsus shall pay  Elanco for such samples at an amount equal to [***] paid by Elanco for such samples plus [***]%  thereof.    3. REGULATORY TRANSFER; KNOW-HOW TRANSFER.       3.1 The Parties acknowledge their respective obligations regarding Know-How transfer as set  forth in Section 3.1 of that certain Amended and Restated Licensed Agreement effective between the  Parties as of even date herewith (the “Eye Care and Dermatology License Agreement”). In the event  that the Eye Care and Dermatology License Agreement is terminated before the obligations of Eye Care  and Dermatology License Agreement Section 3.1 are complete, within the later of [***] days following  the date Tarsus provided Elanco the Initial Equity Grant or [***]  days following termination of the Eye  Care and Dermatology License Agreement, Elanco shall provide all information regarding the Licensed  Know-How that is Controlled by Elanco as of the Effective Date and is reasonably necessary to  research, develop, make, use, or otherwise exploit Licensed Products in the Field in the Territory.  Additionally, if Tarsus engages a third party other than Siegfried to manufacture the Licensed Product  and such manufacture requires material manufacturing Know-How not previously provided to Tarsus  then Elanco shall provide (or cause Siegfried to provide) such Know-How and Tarsus shall pay Elanco  [***]. Total hours of Elanco support will be capped at [***] hours (the “Hours Cap”), and total costs  paid by Tarsus will be capped at [***] dollars (the “Dollars Cap”); for the avoidance of doubt, the  Parties’ respective obligations in this Section 3.1 will be calculated cumulatively under this Agreement  and the Eye Care and Dermatology License Agreement. If either the Hours Cap or the Dollars Cap is  reached and Tarsus requests additional assistance, the Parties will meet to mutually decide on further  support. Payment by Tarsus will be made to Elanco within thirty (30) days after the earlier to occur of  (a) the Dollars Cap is reached, and (b) the Parties mutually agree that Tarsus has received all of such  Know-How. For purposes of clarity, all costs charged by Siegfried in conjunction with the transfer of  Know-How will be borne by Tarsus. Provided in any case that Elanco shall only be obliged to provide  information to a third party that has been selected in compliance with Section 8.4.      3.2 Promptly after the Effective Date, Elanco shall provide Tarsus with all  Regulatory Materials  that are reasonably necessary to research, develop, make, use or otherwise exploit Licensed Products in  the Field in the Territory, but, in any case,  Elanco shall not be required to provide any particular  Regulatory Material to Tarsus more than once.  Elanco shall continually provide Tarsus with any  relevant updates to the Regulatory Materials promptly after their creation or receipt (as the case may  be).    4. DEVELOPMENT AND COMMERCIALIZATION.    4.1 General; Diligence.  Following the Effective Date, as between the Parties, Tarsus, at its  expense, shall be responsible for conducting (or causing its Affiliates or sublicensees to conduct) the  development and commercialization of the Licensed Products in the Field in the Territory. Tarsus shall  use Commercially Reasonable Efforts to develop the Licensed Products and seek and obtain Regulatory  Approval for Licensed Products in the Field in the Territory. A summary of the currently intended  development activities is attached as Exhibit B.  Elanco’s sole and exclusive remedy for Tarsus’s breach  of the foregoing sentence is termination of this Agreement pursuant Section 11.2.    4.2 Regulatory. As between the Parties, Tarsus (or its Affiliates or sublicensees) shall be solely  responsible, for all regulatory matters relating to the development and commercialization of the  Licensed Products in the Field in the Territory and shall coordinate and control the related regulatory  strategy and interactions with Regulatory Authorities for the Licensed Products at its own cost. Each  Party shall keep the other Party informed about the regulatory process and status for Licensed Products  and shall immediately or no later than five (5) business days inform the other Party of any human  exposure serious adverse event (as defined in 21 CFR 312.32 and CFR 514.3) or such other matters  

 

    8  agreed to in any pharmacovigilance or that would otherwise reasonably be expected to materially  adversely affect the other Party’s regulatory process for the Licensed Products.    4.3 Progress Reports.  Within [***] days after January 1 of each year prior to First Commercial  Sale, Tarsus shall submit to Elanco a progress report covering in reasonable detail the activities of  Tarsus including a listing of serious adverse events, its Affiliates and sublicensees, as applicable, related  to the development, regulatory status and commercialization of the Licensed Products in the Territory.   All reports provided by Tarsus to Elanco under this Section 4.3 shall be considered Tarsus’s  Confidential Information.     4.4 Reversion of Rights.       (a) If neither Tarsus nor any of its Affiliates or sublicensees achieve any of the milestones set  forth in Exhibit C (each a “Diligence Milestone”) by the corresponding achievement deadline date set  forth in Exhibit C except for reasons outside of Tarsus’ reasonable control, Elanco shall (as its sole and  exclusive remedy for such failure) have the right to terminate the Agreement if such Diligence  Milestone remains unmet one hundred twenty (120) days after Elanco provides Tarsus notice of such  failure.       (b) Tarsus may, at its option, increase all of the milestone dates set forth in Exhibit C one time  by [***] months by making a one-time payment of $[***].     (c) In the case of termination pursuant to Section 4.4(a), Elanco shall be granted nonexclusive,  sublicensable rights to the Tarsus Know-How and Tarsus Licensed Patents to develop, manufacture,  and commercialize the Compound and Licensed Products in the Field and be provided with Tarsus  Know-How (including such regulatory documentation corresponding to the Licensed Product) but not  any other assets of Tarsus.  Such rights shall be fully paid and royalty free.    4.5 Development Cooperation.  The Parties acknowledge and agree that, in order to  develop Licensed Products in the Field, Tarsus will need to conduct non-human animal studies.  Tarsus  agrees to coordinate and cooperate with Elanco, via the JSC (as defined in Section 5 below), to develop  and perform such studies in a manner that minimizes the commercial risk to Elanco’s commercial  products for the Elanco Field that include the Compound. Tarsus should explore all possible alternatives  to performing non-human animal studies in dogs, for example by choosing another animal species. In  the event that dog studies are absolutely needed, Tarsus will inform and consult with Elanco, before  conducting the studies and regularly provide an overview of all current and future clinical studies  relating to the Compound to the Joint Steering Committee.    5. JOINT STEERING COMMITTEE.      (a) The parties shall establish a joint steering committee (the “Joint Steering Committee” or  “JSC”) consisting of two (2) representatives from each party, which shall serve as a way for Tarsus to  inform (and seek advice from) Elanco in the development and Regulatory Approval efforts for the  Licensed Product in the Territory and other efforts under this License Agreement.  Each party will  provide the other Party Notice with the name, title, email address, telephone number of their respective  Joint Steering Committee Members. The JSC shall meet as needed but not less than on a quarterly basis  (or such other frequency as determined by the JSC). The JSC shall be of advisory nature only and shall  ensure that Elanco is being kept informed on Tarsus development progress. Tarsus is responsible for  and takes final decisions on development and commercialization.    (b) The Joint Steering Committee meetings will be at times agreed by the Parties and will be  in such form (e.g. in person, telephone, or video conference) as the members of the Joint Steering  Committee agree.      

 

    9  (c) A party may change one or more of its representatives to the Steering Committee at any  time. Members of the Joint Steering committee may be represented at any meeting by another member  of the Steering committee or by a proxy. Either Party may permit additional employees and consultants  to attend and participate in the Joint Steering Committee, subject to the confidentiality provisions of the  agreement.  Each Party is responsible for travel costs for their representatives associated with attending  in person JSC meetings.    (d) The Joint Steering Committee will be responsible for keeping accurate minutes of its  deliberations that record decisions and all actions recommended or taken.  Within thirty (30) business  days of each JSC meeting, the Parties will be provided with draft minutes of such meeting.  Minutes  will be deemed approved unless a Joint Steering Committee representative of either Party objects to the  accuracy of such minutes.  In the event that any such objection is not resolved by the Joint Steering  Committee such minutes will be amended to reflect the unresolved objection.  All records of the Joint  Steering Committee will be considered confidential information  and available to both Parties.       6. PAYMENTS TO ELANCO.     6.1 Equity Grants.     (a) Initial Equity Grant. Tarsus will grant to Elanco 1,652,346 shares of Tarsus’ Common  Stock (the “Common Stock”) within thirty (30) days of the Effective Date (the “Initial Equity Grant”).  (b) Tarsus Representations and Warranties. In connection with the Initial Equity Grant,  Tarsus hereby represents and warrants to Elanco that as of the date hereof, pursuant to the terms of the  Restated Certificate, (i) all outstanding shares of the Tarsus’ Series A Preferred Stock (the “Series A  Preferred Stock”) and Series B Preferred Stock (the “Series B Preferred Stock” and collectively with  the Series A Preferred Stock the “Preferred Stock”) currently are convertible into one (1) share of  Common Stock, (ii) all shares of Common Stock and Preferred Stock currently have one (1) vote for  all matters presented to the stockholders for approval, (iii) the issuance, sale and delivery of the Initial  Equity Grant and the Subsequent Equity Grant have been duly authorized by all requisite action of  Tarsus, and, when issued, sold and delivered in accordance with this Agreement, the Common Stock  will be validly issued and outstanding, fully paid and nonassessable, (iv) no authorization, consent,  approval or other order of, or declaration to or filing with, any governmental agency or body (other than  filings required to be made under applicable federal and state securities laws) or any other person, entity  or association is required for the valid authorization, execution, delivery and performance by Tarsus of  this Agreement and the valid authorization, issuance, sale and delivery of the Common Stock and (v)  subject in part to the truth and accuracy of Elanco’s representations set forth in Section 6.1(c) below,  the offer, sale and issuance of the Common Stock as contemplated by this Agreement are exempt from  the registration requirements of any applicable state and federal securities laws.        (c) Elanco Representations and Warranties. In connection with the Initial Equity Grant  Elanco hereby represents and warrants to Tarsus that, as of the date hereof, Elanco is an “accredited  investor” within the meaning of SEC Rule 501 of Regulation D of the Securities Act, as presently in  effect.     (d) Subsequent Equity Grant.  Upon the eighteen (18) month anniversary of the Effective  Date (the “Subsequent Grant Date”), if this Agreement has not been terminated prior to such date and  Tarsus has not provided notice of termination pursuant to Section 11.2(e), then Tarsus will grant to  Elanco, (i) in the event that Tarsus has not yet completed an Initial Public Offering, a number of shares  of Tarsus’ Common Stock equal to $3,000,000 divided by the price per share of Tarsus’ Preferred Stock  purchased for cash in its most recent bona fide equity financing prior to the Subsequent Grant Date or  (ii) in the event that Tarsus has completed an Initial Public Offering, a number of shares of Tarsus’  Common Stock equal to $3,000,000 divided by the price of one (1) share of Tarsus’ Common Stock  sold in such Initial Public Offering (the “Subsequent Equity Grant” and, collectively with the Initial  Equity Grant, the “Equity Grants”); provided, however, that if Tarsus is acquired in a Change of Control  

 

    10  following such Initial Public Offering but before the Subsequent Grant Date, and Tarsus has not  provided notice of termination pursuant to Section 11.2(e), then immediately prior to such Change of  Control Elanco shall receive a number of shares of Tarsus’ Common Stock equal to $3,000,000 divided  by the price of one (1) share of Tarsus’ Common Stock sold in such Initial Public Offering; and  provided, further, however, that if Tarsus is acquired in a Change of Control prior to the Subsequent  Grant Date and Tarsus has neither completed an Initial Public Offering nor provided notice of  termination pursuant to Section 11.2(e)  then immediately prior to such Change of Control Elanco shall  receive a number of shares of Tarsus’ Common Stock equal to $3,000,000 divided by the price per share  of Tarsus’ Preferred Stock purchased for cash in its most recent bona fide equity financing prior to  such  Change of Control.  Termination of this Agreement pursuant to Section 11.2(a) shall be Elanco’s sole  and exclusive remedy and Tarsus’s sole and exclusive liability for a breach of this Section 6.1(d).    (e) “Market Stand-Off” Agreement. Elanco hereby agrees that it will not, without the prior  written consent of the managing underwriter, during the period commencing on the date of the public  filing of the registration statement relating to the Initial Public Offering (the “Stand-Off Effective  Date”) and ending on the date specified by Tarsus and the managing underwriter (such period not to  exceed [***] days from the date that such registration statement is declared effective by the SEC) (i)  lend, offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or  contract to sell, grant any option, right or warrant to purchase, or otherwise transfer or dispose of,  directly or indirectly, any shares of Tarsus’ capital stock or any securities convertible into or exercisable  or exchangeable for Tarsus’ capital stock (“Registrable Securities”) held immediately prior to the  Stand-Off Effective Date, or (ii) enter into any swap or other arrangement that transfers to another, in  whole or in part, any of the economic consequences of ownership of Tarsus’ capital stock, whether any  such transaction described in clause (i) or (ii) above is to be settled by delivery of securities, in cash or  otherwise. The underwriters in connection with Tarsus’ Initial Public Offering are intended third party  beneficiaries of this Section 6.1(e) and shall have the right, power and authority to enforce the  provisions hereof as though they were a party hereto. Elanco further agrees to execute such agreements  as may be reasonably requested by the underwriters in the Initial Public Offering that are consistent  with this Section 6.1(e) or that are necessary to give further effect thereto, including, without limitation,  the lock-up agreement in the form attached hereto as Exhibit D (the “Lock-up Agreement”). In order  to enforce the foregoing covenant, Tarsus may impose stop-transfer instructions with respect to the  Registrable Securities of Elanco (and the shares or securities of every other person subject to the  foregoing restriction) until the end of such period. Elanco further agrees that a legend reading  substantially as follows shall be placed on all certificates representing all shares of Tarsus’ capital stock  (whether issued pursuant to the Equity Grants or otherwise) held by Elanco (and the shares or securities  of every other person subject to the restriction contained in this Section 6.1(e)):    THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO  A LOCK-UP PERIOD AFTER THE EFFECTIVE DATE OF THE ISSUER’S  REGISTRATION STATEMENT FILED UNDER THE ACT, AS AMENDED, AS  SET FORTH IN AN AGREEMENT BETWEEN TARSUS AND THE ORIGINAL  HOLDER OF THESE SECURITIES, A COPY OF WHICH MAY BE OBTAINED  AT THE ISSUER’S PRINCIPAL OFFICE. SUCH LOCK-UP PERIOD IS BINDING  ON TRANSFEREES OF THESE SHARES.       6.2 Milestones.     (a) First Indication Development Milestones.  Tarsus shall pay to Elanco the following  one-time milestone payments upon the first achievement of the applicable milestone event set forth  below by Tarsus or any of its Affiliates or sublicensees after the Effective Date:    (i) [***] dollars upon the [***] of [***];    (ii) [***] dollars upon the [***] of [***];  

 

    11    (iii) [***] dollars upon the [***] of [***];    (iv) [***] dollars upon the [***] of [***];    (v) [***] dollars upon the [***] of [***]; and    (vi) [***] dollars upon the [***] of [***].    Each of the foregoing milestone payments set forth in this Section 6.2(a) shall be paid no more than  once, irrespective of how many Licensed Products achieve each milestone or how many times a  Licensed Product achieves such milestone.   Accordingly, in no event shall Tarsus pay Elanco more  than ten million dollars ($10,000,000) in the aggregate pursuant to this Section 6.2(a).  Each milestone  payment due pursuant to this Section 6.2(a) shall be paid within [***] days after the achievement of the  applicable milestone.    (b) Development Milestones for Other Indications.  Tarsus shall pay to Elanco the  following one-time milestone payments upon the first achievement of the applicable milestone event  set forth below by Tarsus or any of its Affiliates or sublicensees after the Effective Date:    (i) [***] dollars upon the [***] of [***];    (ii) [***] dollars upon the [***] of [***];    (iii) [***] dollars upon the [***] of [***];    (iv) [***] dollars upon the [***] of [***];    (v) [***] dollars upon the [***] of [***]; and    (vi) [***] dollars upon the [***] of [***].    Each of the foregoing milestone payments set forth in this Section 6.2(b) shall be paid no more than  once, irrespective of how many Licensed Products achieve each milestone or how many times a  Licensed Product achieves such milestone.  Accordingly, in no event shall Tarsus pay Elanco more than  six million five hundred thousand dollars ($6,500,000) in the aggregate pursuant to this Section 6.2(b).   Each milestone payment due pursuant to this Section 6.2(b) shall be paid within [***] days after the  achievement of the applicable milestone.    (c)  Sales Milestones for Sales in the Developed World.  Tarsus shall pay to Elanco the  following one-time milestone payments upon the first achievement of the applicable milestone event  set forth below:    (i) [***] dollars after the first calendar year in which Net Sales [***] for such  calendar year exceed [***] dollars;    (ii) [***] dollars after the first calendar year in which Net Sales [***] for such  calendar year exceed [***] dollars; and    (iii) [***] dollars after the first calendar year in which Net Sales [***] for such  calendar year exceed [***] dollars.    Each of the foregoing milestone payments set forth in this Section 6.2(c) shall be paid no  more than once, irrespective of how many times each milestone is achieved.  Accordingly, in no event  shall Tarsus pay Elanco more than sixty five million dollars ($65,000,000) in the aggregate pursuant to  

 

    12  this Section 6.2(c).  Each milestone payments due pursuant to this Section 6.2(c) shall be paid within  [***] days after the close of the calendar quarter in which such milestone is achieved.    (d) Upon Tarsus’s First Commercial Sale of a Licensed Product in the Developing World,  Elanco and Tarsus shall negotiate reasonably and in good faith to determine sales milestones for sales  of the Licensed Product in the Developing World.  In any event, such milestones payments shall not  exceed (individually or in the aggregate) the milestone payments under Section 6.2(c) and the Net Sales  thresholds for each milestone payment shall not be less than the Net Sales Thresholds under 6.2(c).      6.3 Sublicense Revenue.      (a) Sublicense Revenue.  Tarsus shall pay Elanco a percentage of all Sublicense Revenue.   The percentage of such Sublicense Revenue that shall be paid to Elanco shall be as follows (with the  appropriate tier being determined for Sublicense Revenue at the time such Sublicense Revenue becomes  due to Tarsus, and with such percentage of Sublicense Revenue becoming due to Elanco at the time  such Sublicense Revenue is received by Tarsus):    (i) Until first dosing of a Licensed Product in a [***]: [***]%;    (ii) After first dosing of a Licensed Product in a [***] until first dosing  of a [***]: [***]%;    (iii) After first dosing of a Licensed Product in a [***] until first [***] of  a Licensed Product: [***]%; or     (iv) After first [***] of a Licensed Product and thereafter: [***]%.    (b) Sublicense Revenue Exclusions.  Notwithstanding the foregoing, none of the following  shall be deemed Sublicense Revenue: [***].  Any assignment of this Agreement, change of control or  sale of a program involving rights under the Agreement shall not in any way be deemed the grant of a  sublicense. Tarsus shall not act in bad faith to intentionally structure Sublicense Revenue or a sublicense  as such in a manner that is intended to prevent payments of Sublicense Revenue to Elanco becoming  due.      (c) Neither Tarsus nor any of its Affiliates shall act in bad faith to delay invoicing,  payments, or the achievement milestones under this Agreement, or any sublicensing agreement  permitted hereunder, for the purpose of reducing (or eliminating) Sublicense Revenue which would  otherwise be shared with Elanco under this Agreement. In such case, if, absent such bad faith, such  invoice, payment, or milestone could have been sent or achieved before [***], then such invoice,  payment, or milestone shall be deemed sent or achieved prior to [***] for all purposes of Section 6.3(a).    6.4 Royalties.      (a) Royalty Rate. Subject to the other terms of this Section 6.4, for each calendar year  during the Royalty Term Tarsus shall pay:    (i) a [***] percent royalty on the first [***] dollars  of Net Sales of a Licensed  Product in [***] in such calendar year;    (ii) a [***] percent royalty on the next [***] dollars of Net Sales of a Licensed  Product [***] in such calendar year (i.e. the portion of such Net Sales between US$[***] and $[***] in  such calendar year);   

 

    13    (iii) a [***] percent royalty on the next [***] dollars of Net Sales of a Licensed  Product [***] in such calendar year (i.e. the portion of such Net Sales between US$[***] and $[***] in  such calendar year); and    (iv) a [***] percent royalty on all Net Sales of a Licensed Product [***] in such  calendar year in excess of [***] dollars (i.e. the portion of such Net Sales over $[***] in such calendar  year).     (b) Upon Tarsus’s First Commercial Sale of a Licensed Product in the Developing World,  Elanco and Tarsus shall negotiate reasonably and in good faith to determine royalty rates for Net Sales  of the Licensed Product in the Developing World.  In any event, such royalty rates shall not exceed the  royalty rates under Section 6.4(a) and the Net Sales thresholds for each royalty rate shall not be less  than the Net Sales Thresholds under 6.4(a).    (c) No Multiple Royalties.  No multiple royalties shall be payable hereunder because the  use, manufacture or sale of any Licensed Product is Covered by more than one Valid Claim.     (d) Timing of Payments; Reports.   Commencing with the calendar quarter during which  the First Commercial Sale of the first Licensed Product is made anywhere in the Territory, and for each  calendar quarter thereafter during the Royalty Term during which royalties are due hereunder,  Tarsus  shall provide Elanco with a report that contains the following information for the applicable calendar  quarter, on a Licensed Product-by-Licensed Product and country-by-country basis: (i) the amount of  gross sales of the Licensed Products, (ii) an itemized calculation of Net Sales showing deductions  provided for in the definition of “Net Sales”, (iii) a calculation of the royalty payment due on such sales,  and (iv) the exchange rate for such country.  Tarsus shall provide such report and make corresponding  payment to Elanco within forty five (45) days after the end of each calendar quarter.      (e) Exchange Rate.  When conversion of payments from any foreign currency is required,  such conversion shall be calculated using an exchange rate equal to the rate of exchange published in  the Wall Street Journal on the last business day of the applicable calendar quarter for which payment is  due.      (f) No deductions for third party licenses. No deductions from any payments under this  agreement shall be made because Tarsus is required to make payments, royalty payments or otherwise,  to third parties to obtain rights or licenses to intellectual property rights in respect of a Licensed Product.     (g) Royalty Reduction. If at any time during the Royalty Term for a given Licensed Product  in a given country, there is no Valid Claim Covering such Licensed Product in such country, then the  royalty rate payable by Tarsus pursuant to Section 6.4(a) (or established pursuant to Section 6.4(b))  shall be reduced to [***]percent of the rates set forth in Section 6.4(a) (or Section 6.4(b), as the case  may be).    6.5 Mode of Payment.  Tarsus shall pay all payments to Elanco under this Agreement by wire  transfer of immediately available funds to a USD functional bank account designated in writing by  Elanco, in U.S. Dollars or such other currency as the Parties may mutually agree in writing.     6.6 Quarterly information.     (a) Tarsus Common Stock activity. Until the completion of the Tarsus Initial Public  Offering, for each of the three-month periods ending March 31, June 30, September 30, and December  31, Tarsus shall provide to Elanco (i) the capitalization table as of period-end, no later than fifteen (15)  days following period-end. At a minimum, the capitalization table shall include all equity types (e.g.,  Common Stock, Preferred Stock, etc.). In addition, Tarsus shall provide to Elanco (i) Tarsus’ most  recently available 409A valuation, and (ii) information about all sales and purchases of Tarsus’  

 

    14  Preferred Stock and Common Stock during the respective three-month period. Such information shall  be sufficient for Elanco to calculate its ownership percentage and shall be provided by Tarsus  electronically no later than forty-five (45) days following period-end.   (b) Unaudited financial statements. Until the completion of the Tarsus Initial Public  Offering, for each of the three-month periods ending March 31, June 30, and September 30, Tarsus shall  provide to Elanco unaudited financial statements as of and for the three-month period then ended. The  unaudited financial statements shall be provided by Tarsus electronically no later than forty-five (45)  days following period-end.  At a minimum, the unaudited financial statements shall include a balance  sheet, income statement, and statement of cash flows.    6.7 Annual financial statements.  Until the completion of the Tarsus Initial Public Offering, on  an annual basis, Tarsus shall provide to Elanco audited financial statements as of and for the year then  ended. The audited financial statements shall be provided by Tarsus electronically no later than forty- five (45) business days following period-end. At a minimum, the audited financial statements shall  include a balance sheet, income statement, and statement of cash flows.    6.8 Audit.  Tarsus shall keep or cause to be kept books of account containing all information that  may be necessary for the purpose of calculating amounts payable by Tarsus in connection with this  Agreement for a period of three (3) calendar years following the end of the calendar year during which  such amounts were payable. Elanco may appoint an independent public accountant (on a non- contingency basis and reasonably acceptable to Tarsus; any “Big 4” accountant shall be deemed  acceptable to Tarsus), at Elanco’s expense and subject to such accountant entering into a confidentiality  agreement with Tarsus, to inspect such books of account in order to verify the calculation of any  amounts payable to Elanco hereunder.  Such inspections shall be performed not more frequently than  once in any twelve (12) month period and upon reasonable prior written notice, and shall be conducted  during regular business hours in such a manner as to not unreasonably interfere with Tarsus’s normal  business activities.  Elanco’s accountant may only share with Elanco the report containing the summary  results of its inspection, but not the books of account reviewed by the accountant during the audit, and  such report shall constitute Tarsus’s Confidential Information. If any such inspection reveals that any  payment which should have been paid by Tarsus is greater than those which were actually paid by it  and such underpayment is not disputed by Tarsus, then Tarsus shall promptly pay the underpaid amount  to Elanco.  If the undisputed payments which should have been paid by Tarsus are at least [***] percent  greater than those which were actually paid by Tarsus, then Tarsus shall also reimburse Elanco for the  reasonable out-of-pocket costs of such inspection.     6.9 Taxes.  Each Party shall be solely responsible for the payment of all taxes imposed on its  share of income arising directly or indirectly from its activities or receipt of payments under this  Agreement.  To the extent Tarsus is required to deduct and withhold taxes on any payment to Elanco  hereunder, it shall deduct such amounts from payments to Elanco and pay the amounts of such taxes to  the proper governmental authority in a timely manner and promptly transmit to Elanco an official tax  certificate or other evidence of such withholding sufficient to enable Elanco to claim such payment of  taxes.  Elanco shall provide Tarsus any tax forms that may be reasonably necessary in order for Tarsus  not to withhold tax or to withhold tax at a reduced rate under an Applicable Law or bilateral income tax  treaty.      6.10 Sales Forecast.  Within [***] days after January 1 of each calendar year, Tarsus shall provide  Elanco with Tarsus’s projected Net Sales over the next [***] calendar years.  For clarity, such  projections would be for informational purposes only and the foregoing is not binding on Tarsus in any  way.    7. INTELLECTUAL PROPERTY.       7.1 Prosecution and Maintenance of Licensed Patents.      

 

    15  (a) Elanco shall be solely responsible for prosecution and maintenance of the Licensed  Patents including, but not limited to, the filing of patent applications included therein.  Elanco shall  keep Tarsus reasonably informed with respect to the status and progress of any such applications,  prosecutions and maintenance activities.  Elanco shall consider in good faith the comments of Tarsus  with respect to any such applications and prosecutions and maintenance activities.      (b) Elanco may, in its sole discretion, elect to abandon any issued patent or pending patent  application included in the Licensed Patents, or not file any patent application with respect thereto in  any country.  Prior to any such abandonment or decision not to file in any country, Elanco shall give  Tarsus at least [***] days’ notice and a reasonable opportunity to take over such maintenance,  prosecution or filing.  In such event, Tarsus shall have the right, but not the obligation, to commence or  continue such maintenance, prosecution or filing under its own control and at its sole expense.  Tarsus  shall have no further payment obligations (including with respect to royalties and milestone payments)  or other obligations to Elanco with respect to any such patents or patent applications or patents issuing  from such applications.      7.2 Enforcement of Licensed IP.      (a) During the Royalty Term, each Party shall promptly provide written notice to the other  Party of any actual or alleged infringement or misappropriation in the Field by any Third Party of any  intellectual property rights included in the Licensed IP of which it becomes aware.  Elanco shall have  the first right, but not the obligation, to enforce the Licensed IP against any such infringement or  misappropriation claim in the Field at its own expense and utilizing counsel of its choice.  Elanco shall  neither settle nor voluntarily dispose of any action to enforce the Licensed IP in the Field without  Tarsus’s written consent.  If Elanco desires to voluntarily dispose of any action to enforce the Licensed  IP in the Field then Elanco shall notify Tarsus and offer Tarsus the opportunity to assume control of  such enforcement action (“Voluntary Disposal Notice”).  If Tarsus notifies Elanco of its election to  assume control of such enforcement action then Elanco shall take all reasonable actions necessary to  allow Tarsus to properly do so.  Elanco may voluntarily dispose of such enforcement action if: (i) Tarsus  notifies Elanco that it does not desire to assume control of such enforcement action; or (ii) Tarsus does  not notify Elanco of any election within [***] days after Elanco provides Voluntary Disposal Notice.     (b) With respect to any potential enforcement under subsection (a) above, if Elanco does  not notify Tarsus of its intention to enforce against such alleged infringement or misappropriation within  [***] days of the date Elanco becomes aware of such alleged infringement or misappropriation, or does  not commence prosecution of such claim within [***] days after the date Elanco becomes aware of  such alleged infringement or misappropriation, then, Tarsus shall have the right, but not the obligation,  to prosecute such claim at its own expense and utilizing counsel of its choice.      (c) The enforcing Party shall regularly update the other Party in writing with respect to the  status of any such enforcement actions.  Any recovery of damages by shall be applied (i) first, in  satisfaction of any unreimbursed expenses and legal fees of the enforcing Party, (ii) second, in  satisfaction of any unreimbursed expenses and legal fees of the other Party, and (iii) third, if additional  recoveries remain after all of the unreimbursed expenses and legal fees are fully paid as set forth in (i)  and (ii), the balance remaining with respect to any such recovery shall be retained by (or paid by Elanco  to, as the case may be) Tarsus and such amount shall be treated as Net Sales and subject to the payment  of royalties pursuant to Section 6.3.     (d) At the request of the Party bringing the action, the other Party shall provide reasonable  assistance in connection therewith, including by executing reasonably appropriate documents,  cooperating in discovery and joining as a party plaintiff to the action if required to obtain necessary  standing.      7.3 Improvements. Elanco shall own any invention conceived by or for Elanco from the use of  the Compound or otherwise derived by or for Elanco from the Compound (“Elanco Improvements”).  

 

    16  Tarsus shall own any invention conceived by or for Tarsus from the use of the Compound or otherwise  derived by or for Tarsus from the Compound (“Tarsus Improvements”).  Tarsus hereby grants Elanco  an exclusive royalty-free, perpetual license to the Research Inventions and Tarsus Improvements for  applications in the Elanco Field.          8. MANUFACTURE AND SUPPLY.    8.1 Initial Supply Terms.  Each calendar quarter, Tarsus shall supply Elanco with a written,  non-binding forecast showing good faith estimations of its (and its Affiliates’ and sublicensees’)  quarterly requirements for the Compound for the following four (4) calendar quarters (the “Forecast”).   Elanco shall manufacture (or have manufactured) and supply to Tarsus quantities of the Compound as  and when reasonably requested by Tarsus to the extent within the Forecast.  Tarsus’s price for all  Compounds purchased pursuant to this Section 8.1 shall be the price at which Elanco purchases such  Compound plus [***] percent thereof.    8.2 Manufacturing and Supply Agreement.  The Parties agree to enter into a good-faith more  detailed manufacturing and supply agreement within a reasonable timeframe. The supply agreement  should provide for a stated supply price (which price shall represent a small markup over Elanco’s  costs).       8.3 Change of chemistry.     (a) Tarsus acknowledges and agrees that Elanco shall be free to use alternate chemistry  and improve the Compound in its sole discretion without Tarsus consent.       (b) Elanco shall provide Tarsus with [***] prior notice (the “Compound Change Period”)  if Elanco will cease to provide any Compound previously provided to Tarsus pursuant to a chemical  change and will supply Tarsus with any quantities of such Compound requested by Tarsus during the  Compound Change Period (even if such quantities exceed the amount projected in the Forecast).  Elanco  shall notify the JSC as soon as it contemplates possibly ceasing to provide a Compound as previously  provided to Tarsus because of use of alternative chemistry or other changes to the Compound.  The JSC  shall discuss such contemplated changes if Tarsus informs Elanco that it reasonably believes such  change could have a regulatory impact; provided, however, that Elanco shall have the right to make the  final decision regarding such change after discussion by the JSC.    8.4 Have Made Rights.  For clarity, Section 2.1 grants Tarsus the right to have a third party  make the Compound for Tarsus.  Elanco must approve such third party supplier unless: (a) the transfer  to the supplier does not qualify as a Sensitive Transfer; or (b) such supplier is credible and reputable.   Such approval shall not be unreasonably withheld, conditioned, or delayed.  For all purposes of the  foregoing, the following entities and their Affiliates shall be deemed credible and reputable (and shall  not require Elanco consent): [***] (or any Affiliate of the foregoing), [***].      9. INDEMNIFICATION; INSURANCE.    9.1 Indemnification by Elanco.  Elanco shall indemnify, defend and hold harmless Tarsus, its  Affiliates, and its and their respective officers, directors, employees, agents, successors and assigns  against all third party losses, damages, liabilities, deficiencies, claims, actions, judgments, settlements,  interest, awards, penalties, fines, costs or expenses (collectively, “Losses”), resulting from (a) any  action instituted against any of them by any Third Party arising out of from Elanco’s breach of any  representation, warranty or obligations pursuant to this Agreement, or (b) the gross negligence or willful  misconduct of Elanco, except, in each case, to the extent such Losses are Losses for which Tarsus is  obligated to indemnify Elanco pursuant to Section 9.2 or to the extent such Losses arise from the breach  by Tarsus or its Affiliates of its representations, warranties or obligations under this Agreement or from  the failure of any sublicensees to comply with any obligations required of sublicensees under this  Agreement.  

 

    17    9.2 Indemnification by Tarsus.  Tarsus shall indemnify, defend and hold harmless Elanco, its  Affiliates, and its and their respective officers, directors, employees, agents, successors and assigns  against all Losses resulting from (a) Tarsus’s breach of any representation, warranty or obligations  pursuant to this Agreement, ,(b) the gross negligence or willful misconduct of Tarsus; or (c) the  development, making, having made, using, having used, leasing, importing, offering to sell, selling  and/or having sold, any Compound or Licensed Product by Tarsus, its Affiliates and sublicensees or the  failure of any of them to comply with Applicable Law in connection with any such activities, except,  in each case, to the extent Elanco is required to indemnify Tarsus under Section 9.1 for such Losses or  to the extent such Losses arise from the breach by Elanco or its Affiliates of its representations,  warranties or obligations under this Agreement.     9.3 Indemnification Procedure.  The indemnified party shall promptly notify the indemnifying  party in writing of any action for which it intends to seek indemnification hereunder and cooperate  reasonably with the indemnifying party at the indemnifying party’s sole cost and expense.  The  indemnifying party shall have the right, within thirty (30) days after being so notified, to assume the  defense of any action with counsel of its choice that is reasonably satisfactory to the indemnified party.  The indemnifying party shall not settle any action in a manner that adversely affects the rights of any  indemnified party without the indemnified party’s prior written consent, which consent shall not be  unreasonably withheld or delayed. The indemnified party’s failure to provide prompt notice to the  indemnifying party of any action shall not relieve the indemnifying party of its obligations under this  Section 9.3 except to the extent that the indemnifying party can demonstrate that it has been materially  prejudiced as a result of the failure. Subject to the indemnifying party’s right to control the defense and  settlement thereof, the indemnified party may participate in and observe the proceedings at its own cost  and expense with counsel of its own choosing. A Party shall not be responsible for the indemnification  or defense of the other Party to the extent arising from any negligent or intentional acts by such Party,  or the breach by such Party of any representations, obligations or warranty under this Agreement, or  any claims compromised or settled without prior written consent.     9.4 Limitation of Liability. Except with respect to a breach of Section 10, or a Party’s liability  pursuant to Section 9 or Section 7.2, neither Party shall be liable for special, incidental, consequential,  exemplary, punitive, or other indirect or remote damages, or loss of profits, loss of data or loss of use  damages arising in any way out of this Agreement or the exercise of its rights hereunder, whether based  upon warranty, contract, tort, strict liability or otherwise.      10. CONFIDENTIALITY.    10.1 Non-Disclosure and Non-Use.  Each Receiving Party shall:     (a) not disclose any Confidential Information of the Disclosing Party to any Person other  than (i) Persons who have a “need to know” such information for purposes of the Receiving Party’s  performance or exercise of rights under this Agreement, and (ii) any Affiliates or sublicensees (or  potential sublicensees) of the Receiving Party or other Persons working on the Receiving Party’s behalf  (including without limitation consultants, contract manufacturers, and independent contractors),  provided that any such Person agrees to be bound by terms and conditions no less stringent than those  set forth in this Section 10; and      (b) not use any Confidential Information of the Disclosing Party for any purpose other than  in connection with performing its obligations or exercising its rights under this Agreement.      10.2 Disclosure Required by Applicable Law.  Section 10.1 shall not apply to Confidential  Information which the Receiving Party is required by Applicable Law (including, without limitation,  any reporting requirements arising under the federal securities laws or the regulations promulgated by  any national securities exchange on which securities of the Receiving Party are traded), court order, or  similar requirements to disclose, provided that the Receiving Party:   

 

    18    (a) provides the Disclosing Party with prompt written notice thereof such that the  Disclosing Party may seek a protective order or other appropriate remedy with respect to such  Confidential Information, including, without limitation, confidential treatment to the extent available  under any Applicable Law, and the Receiving Party shall provide the Disclosing Party with reasonable  cooperation in order to obtain such a protective order or other remedy, including confidential treatment,  and     (b) discloses only that portion of the Confidential Information that is legally compelled to  disclose.      10.3 Permitted Disclosures.  Section 10.1 shall not prevent either Party from (a) preparing,  filing, prosecuting, defending or maintaining Licensed Patents, (b) disclosing Confidential Information  to Regulatory Authorities to the extent the Receiving Party reasonably believes it is required or desirable  in connection with clinical testing of any Licensed Product or to secure Regulatory Approval for the  development or marketing of any Licensed Product, (c) disclosing Confidential Information to the  extent required by the Securities and Exchange Commission or applicable tax authorities, (d) disclosure  to a Third Party in connection with due diligence by such Third Party, and disclosure to potential Third  Party investors in confidential financing documents, provided that any such Third Party agrees to be  bound by reasonable obligations of confidentiality and non-use, to the extent possible.    11. TERM; TERMINATION.    11.1 Term; Expiration. This Agreement shall commence on the Effective Date and, unless  sooner terminated as provided hereunder, shall expire on a Licensed Product-by-Licensed Product and  country-by-country basis upon the expiration of the Royalty Term with respect to such Licensed Product  in such country.  Following such expiration of the Royalty Term, the license granted by Elanco to Tarsus  in Section 2.1 with respect to such Licensed Product in such country shall become fully-paid, royalty- free, worldwide, exclusive, and perpetual.      11.2 Termination.    (a) Upon any material breach or default of this Agreement by a Party, the other Party shall  have the right to terminate this Agreement upon giving sixty (60) days’ prior written notice thereof to  the breaching Party. Such termination shall become effective thirty (30) days after at the end of such  sixty (60) day period unless the breaching Party shall have cured any such breach or default prior to the  expiration of such sixty (60) day period; or if such breach cannot be reasonably cured within sixty (60)  days, but the breaching Party has commenced reasonable actions to cure such breach, then such longer  period as may be required to cure such breach provided that the breaching Party continues to diligently  cure such breach.  If the material breach or default by the breaching Party applies only to a given  country, the other Party may only terminate this Agreement with respect to such country and thereafter  the Territory shall no longer include the country in which such termination has occurred.    (b) No such termination by a Party pursuant to Section 11.2(a) shall be effective prior to  the resolution of any dispute with respect to the occurrence of any material breach of or default under  this Agreement as to which such Party seeks to exercise such right of termination. If as a result of such  dispute resolution process it is determined that a Party’s notice of breach was proper, then such notice  shall be deemed to have been effective if the breaching Party fails thereafter to cure such breach in  accordance with the determination made in the resolution process within the applicable cure period  following such determination.  If as a result of such dispute resolution process it is determined that the  notice of breach was improper, then no such notice shall be deemed to have been effective and this  Agreement shall remain in effect. All of the terms and conditions of this Agreement shall remain in full  force and effect during the pendency of such dispute resolution process.     

 

    19  (c) Tarsus may terminate this Agreement immediately upon notice to Elanco within thirty  (30) business days after the Effective Date if, in Tarsus’s reasonable discretion, the Regulatory  Materials reveal any fact that would adversely affect the development and/or regulatory approval of a  Licensed Product in any way.     (d) If Tarsus or any of its Affiliates or sublicensees, directly or indirectly, (i) initiates or  requests an interference or opposition proceeding with respect to any Licensed Patents; (ii) makes, files  or maintains any claim, demand, lawsuit, or cause of action to challenge the validity or enforceability  of any Licensed Patents; or (iii) opposes any extension of, or the grant of a supplementary protection  certificate with respect to, any Licensed Patents (any of (i) – (iii) a “Challenge”), Elanco shall have the  right to terminate this Agreement upon thirty (30) days written notice to Tarsus. Any such termination  shall only become effective if Tarsus or its Affiliate or sublicensee, as applicable, has not withdrawn  such action before the end of the above notice period.  Notwithstanding the foregoing, Elanco may not  terminate this Agreement for a direct or indirect Challenge made by a sublicensee if Tarsus terminates  the sublicense to such sublicensee within thirty (30) days after Elanco notifies Tarsus of such Challenge.     (e) Tarsus may terminate this Agreement for any or no reason upon thirty (30) days’ notice.    11.3 Effect of Expiration or Termination.      (a) Upon termination of this Agreement for any reason, the license (and sublicense)  granted to Tarsus under Section 2.1 shall terminate in full with respect to the country(ies) and Licensed  Product(s) which are the subject of such termination.       (b) Notwithstanding subsection (a) above, Tarsus, its Affiliates and/or any sublicensee  thereof may elect to sell all finished Licensed Products and any Licensed Products in the process of  manufacture at the time of such termination for a period not to exceed [***] months after such  termination, provided that Tarsus shall pay or cause to be paid to Elanco all royalty payments in  accordance with Section 6.3 with respect thereto.      (c) Upon termination of this Agreement for any reason and following any request by the  relevant sublicensee (provided that such sublicensee is then in compliance with the applicable terms of  this Agreement in all material respects), any sublicense of the Licensed IP shall become a direct license  between such sublicensee and Elanco  (but shall not obligate Elanco beyond the terms of this  Agreement) and such sublicensee shall assume all of Tarsus’s payment obligations to Elanco under this  Agreement with respect to such sublicensee’s activities (and those of its Affiliates and sublicensees).    (d) Termination or expiration of this Agreement for any reason shall be without prejudice  to any rights that shall have accrued to the benefit of either Party prior to such termination or expiration.   Additionally, the following terms shall survive termination or expiration of this Agreement:  Sections  2.2 (unless terminated by Tarsus pursuant to Section 11.2(a)), 6.6, 6.7, 9, 10, 11, and 13.  Termination  or expiration of this Agreement shall not affect or prejudice any right of either Party to receive payments  due hereunder or for which the event giving rise to such payment obligation has occurred prior the  effectiveness of such termination or expiration or preclude or hinder the terminating Party from also  bringing, amending or pursuing an action against the other Party for damages and all other available  legal and equitable remedies.    (e) Upon termination of this Agreement by Elanco under Section 4.4 (a) or Section 11.2  (a) Tarsus shall as soon as reasonably practicable provide Elanco with copies of all documented  technical and other information Controlled by Tarsus that is both: (i) specific to preclinical  documentation and technical information with respect to a Licensed Product; and (ii) which are  necessary for the development, manufacture and commercialization of the Licensed Product.   Notwithstanding the foregoing, Tarsus shall have no obligation to provide any Regulatory Materials or  clinical information or data and Elanco shall have no right to (and shall not) reference any Regulatory  Materials of Tarsus after such termination.  

 

    20    (f) Upon termination of this Agreement by Elanco under Section 4.4(a) or Section 11.2(a)  or Section 11.2(d), Tarsus shall promptly return all Confidential Information of Elanco.    12. REPRESENTATIONS AND WARRANTIES.    12.1 Mutual Representations and Warranties.  Each Party hereby represents and warrants to  the other Party as follows:    (a) Corporate Existence and Power.  It is a company or corporation duly organized, validly  existing, and in good standing under the laws of the jurisdiction in which it is incorporated, and has full  corporate power and authority and the legal right to own and operate its property and assets and to carry  on its business as it is now being conducted and as contemplated in this Agreement, including, without  limitation, the right to grant the licenses granted by it hereunder.    (b) Authority and Binding Agreement.  As of the Effective Date, (i) it has the corporate  power and authority and the legal right to enter into this Agreement and perform its obligations  hereunder; (ii) it has taken all necessary corporate action on its part required to authorize the execution  and delivery of the Agreement and the performance of its obligations hereunder; and (iii) the Agreement  has been duly executed and delivered on behalf of such Party, and constitutes a legal, valid, and binding  obligation of such Party that is enforceable against it in accordance with its terms.    (c) No Conflict.  It is not a party to any agreement that would materially prevent it from  granting the rights granted to the other Party under this Agreement or performing its obligations under  the Agreement.     12.2 Additional Representations and Warranties of Elanco.  Elanco represents and warrants to  Tarsus as of the Effective Date that:    (a) it has all rights under the Licensed IP to grant the licenses to Tarsus as purported to be  granted pursuant to this Agreement (including, without limitation, without any payment to any Third  Party);    (b) it has not received any written notice from any Third Party asserting or alleging that  any research or development of any Licensed Product by or on behalf of Elanco prior to the Effective  Date infringed or misappropriated the intellectual property rights of such Third Party;     (c) there are no actual, pending, alleged or, to Elanco’s knowledge, threatened adverse  actions, suits, claims, interferences or formal governmental investigations involving the Licensed  Products and/or the Licensed IP by or against Elanco in or before any court or governmental authority;    (d) there are no patents or patent applications Controlled by Elanco or its Affiliates, other  than the Licensed Patents, that would prevent Tarsus or its Affiliates or sublicensees from developing,  manufacturing and/or commercializing Licensed Products as set forth herein or from exploiting the  rights granted under Section 2.1; and    (e)  the Licensed Patents cover the Compound.  12.3 Additional Representations,Warranties and Covenants of Tarsus.    Tarsus represents, warrants and covenants that:     (a) to its knowledge, no employee, consultant, contractor, agent, or other representative  performing services under this Agreement or any agreement between Tarsus and any other Party  

 

    21  contracted by Tarsus to perform work hereunder has been debarred or disqualified, or is under  investigation for being debarred or disqualified by the FDA, EMEA, or other regulatory authority.   Tarsus agrees to promptly notify Elanco if it learns of any such action; and     (b) as of the Effective Date, it has (or reasonably believes it can obtain or contract third  parties to provide) the capability, resources, and expertise to fulfill its obligations under this Agreement  in compliance with Applicable Law to the extent such capability, resources, and expertise would  reasonably be possessed by a company in a similar stage of financing and development as Tarsus.        12.4 No Other Representations or Warranties.  EXCEPT AS EXPRESSLY STATED IN THIS  ARTICLE 12, NO REPRESENTATIONS OR WARRANTIES WHATSOEVER, WHETHER  EXPRESS OR IMPLIED, INCLUDING, WITHOUT LIMITATION, WARRANTIES OF  MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, NON-INFRINGEMENT, OR  NON-MISAPPROPRIATION OF THIRD PARTY INTELLECTUAL PROPERTY RIGHTS, IS  MADE OR GIVEN BY OR ON BEHALF OF EITHER PARTY.  ALL OTHER REPRESENTATIONS  AND WARRANTIES, WHETHER ARISING BY OPERATION OF LAW OR OTHERWISE, ARE  HEREBY EXPRESSLY EXCLUDED.    13. MISCELLANEOUS.    13.1 Relationship of Parties.  Nothing in this Agreement is intended or shall be deemed to  constitute a partnership, agency, employer-employee or joint venture relationship between the Parties.   Each Party’s performance under this Agreement is that of a separate entity.    13.2 Assignment.  Elanco shall be entitled to freely assign this Agreement or any portion thereof.   Tarsus shall not be entitled to assign its rights hereunder without the express written consent of the other  Party, except that Tarsus may assign this Agreement:  (a) to any of the following entities or any of their  Affiliates: [***]; or any entity listed on a publicly traded exchange and with a market capitalization in  excess of US$[***] (each of the foregoing, a “Permitted Assignee”); or (b) to an Affiliate.      13.3 Further Assurances.  At any time or from time to time after the Effective Date, each Party,  at the other Party’s reasonable request, shall execute and deliver such other documents, agreements and  instruments (including instruments of sale, transfer, conveyance, assignment and confirmation), provide  such materials and information and take such other actions as the other Party may reasonably deem  necessary or desirable in order more effectively effectuate the transactions contemplated by this  Agreement.      13.4 Notice.  Any notice or request required or permitted to be given under or in connection with  this Agreement shall be deemed to have been sufficiently given if in writing and personally delivered  or sent by certified mail (return receipt requested), or overnight express courier service (signature  required), prepaid, to the Party for which such notice is intended, at the address set forth for such Party  below:    (a) In the case of Tarsus, to:      [***]    Attn:      with a copy to:    [***]; and    Gunderson Dettmer Stough Villeneuve Franklin and Hachigian LLP  3570 Carmel Mountain Rd   San Diego, CA 92130  

 

    22  Attn: Brendan C. McCarthy  Email: [***]    (b) In the case of Elanco, to:      Elanco US Inc.  2500 Innovation Way N  Greenfield IN 46140  Attn:  Aaron Schacht    Email:  [***]    with a copy to:    Elanco US Inc.  2500 Innovation Way N  Greenfield IN 46140  Attn: General Patent Counsel    or to such other address for such Party as it shall have specified by like notice to the other Party.  If  delivered personally, the date of delivery shall be deemed to be the date on which such notice or request  was given, unless otherwise set forth in this Agreement.  If sent by overnight express courier service,  the date of delivery shall be deemed to be the next business day after such notice or request was  deposited with such service, unless otherwise set forth in this Agreement.  If sent by certified mail, the  date of delivery shall be deemed to be the third business day after such notice or request was deposited  with the U.S. Postal Service, or the foreign equivalent thereto, unless otherwise set forth in this  Agreement.    13.5 Public Announcements.  Except as required by Applicable Law (including, without  limitation, disclosure requirements of the U.S. Securities and Exchange Commission, Nasdaq or any  other stock exchange on which securities issued by Elanco are traded) and as permitted by Section 10.3,  neither Party shall make any public announcement that the Parties have entered into this Agreement,  without the prior written consent of the other Party (which shall not be unreasonably withheld).  A Party  shall be deemed to provide consent to any public announcement if it does not notify the other Party of  its rejection within ten (10) days after receiving such proposed public announcement.     13.6  Waiver; Remedies.  A waiver by either Party of any of the terms and conditions of this  Agreement in any instance must be made expressly in writing and signed by an authorized  representative of such Party.  Any such waiver shall not be deemed or construed to be a waiver of such  term or condition for the future, or of any subsequent breach hereof.  All rights, remedies, undertakings,  obligations and agreements contained in this Agreement shall be cumulative and none of them shall be  in limitation of any other remedy, right, undertaking, obligation or agreement of either Party.    13.7 Severability.  Each provision of this Agreement will be interpreted in such manner as to be  effective and valid under Applicable Law, but if any provision of this Agreement is held to be prohibited  by or invalid under Applicable Law, such provision will be ineffective only to the extent of such  prohibition or invalidity, without invalidating the remainder of this Agreement.    13.8 Amendment.  No amendment, modification or supplement of any provisions of this  Agreement shall be valid or effective unless made in writing and signed by a duly authorized officer of  each Party.    13.9 Governing Law.  This Agreement shall be governed by and interpreted in accordance with  the laws of the State of New York without regard to its principles of conflicts of laws.    

 

    23  13.10 Entire Agreement.  This Agreement, together with the Exhibits hereto, sets forth the entire  agreement and understanding between the Parties as to the subject matter hereof and merges all prior  discussions, negotiations and agreements between them related to the subject matter hereof.  For clarity,  this Agreement does not supersede and replace the Eye Care and Dermatology License Agreement.     13.11 Parties in Interest.  All the terms and provisions of this Agreement shall be binding upon,  inure to the benefit of and be enforceable by the Parties hereto and their respective permitted successors  and permitted assigns.  Nothing in this Agreement, either express or implied, is intended to or shall  confer upon any Third Party any legal or equitable right, benefit or remedy of any nature whatsoever  under or by reason of this Agreement, which right, benefit or remedy such Third Party would not have  independent of this Agreement.    13.12 Counterparts.  This Agreement may be executed simultaneously in any number of  counterparts, any one of which need not contain the signature of more than one Party but all such  counterparts taken together shall constitute one and the same agreement.    13.13 Interpretations and Definitions.  The descriptive headings of this Agreement are for  convenience only, and shall be of no force or effect in construing or interpreting any of the provisions  of this Agreement.  All words and defined terms used in this Agreement shall have the same meaning  whether used in the singular or plural form. When used in this Agreement, (a) the term “day” or “days”  shall mean calendar days, unless otherwise indicated herein, and (b) the term “including” means  “including, without limitation.”  This Agreement has been prepared jointly and shall not be strictly  construed against either Party.      13.14 Eye Care and Dermatology License Agreement.  For clarity, and notwithstanding anything  in this Agreement to the contrary, the Parties acknowledge that Tarsus’s activities under this Agreement  are separate from its activities under the Eye Care and Dermatology License Agreement (and vice versa)  and no Net Sales, sublicense or milestone with respect to a Licensed Product in the Field shall be  deemed Net Sales, a sublicense or a milestone under the Eye Care and Dermatology License Agreement.   Similarly, no Net Sales, sublicense or milestone in the Field (as such term is defined in the Eye Care  and Dermatology License Agreement) shall be deemed Net Sales, a sublicense or a milestone under this  Agreement.      REMAINDER OF PAGE INTENTIONALLY BLANK.  SIGNATURE PAGE FOLLOWS. 

 

    24    IN WITNESS WHEREOF, each of the undersigned has caused this Agreement to be executed by its  duly authorized representative as of the Amended and Restated Date.    TARSUS PHARMACEUTICALS, INC.       By:     /s/ Bobak Azamian                                 Name:        Bobak Azamian                             Title:         Chief Executive Officer                            ELANCO TIERGESUNDHEIT AG      By:        /s/ Olivier Froelich                              Name:     Olivier Froelich                                 Title:      VP External Manufacturing                

 

    25     Exhibit A    Licensed Patents     [***]  

 

      Exhibit B    Summary of the intended development and commercialization activities.    [***] 

 

      Exhibit C    Diligence Milestones    Diligence Milestone Achievement Deadline  [***] [***] months after the Effective Date  [***] [***] months after the Effective Date  [***] [***] years after the Effective Date  [***] [***] years after the Effective Date         

 

    Exhibit D    Lock-up AgreementDocument

Exhibit 10.1

    SUPPLEMENTAL EXECUTIVE
    RETIREMENT BENEFITS AGREEMENT

This Supplemental Executive Retirement Benefits Agreement (this “Agreement”) is made as of the 1st day of October 2022, by and between Red River Bank, a Louisiana banking corporation (the “Bank”), and G. Bridges Hall, IV, an individual (“Executive”).

    RECITALS

    A.     Executive is a valued employee of Bank.

    B.     Bank desires to retain Executive as an employee of Bank and believes that Executive’s long-term contribution to the business of Bank is not fully reflected in the compensation of the Executive.

    C.    Bank desires to provide for the post-retirement needs of its employees in a responsible manner.

    D.    Bank desires to make available to Executive certain supplemental retirement benefits, and Executive desires to enter into an arrangement for such supplemental retirement benefits.

AGREEMENT

    NOW, THEREFORE, the parties hereto, for and in consideration of the foregoing and the mutual promises contained herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, intending to be legally bound hereby, do agree as follows:

1.Supplemental Retirement Benefits.  Bank hereby establishes an unfunded retirement plan, the obligations under which shall be reflected on the general ledger of Bank (the “Retirement Account”).  The Retirement Account shall be an unsecured liability of Bank to Executive, payable only as provided herein from the general funds of Bank.  The Retirement Account is not a deposit or insured by the FDIC and does not constitute a trust account or any other special obligation of Bank and does not have priority of payment over any other general obligation of Bank.

2.Payment of Benefits.

(a)On-Time Retirement.  If Executive remains in the continual full-time employment of Bank (except for such breaks in service prescribed by law, such as the Family and Medical Leave Act, or as otherwise agreed in a writing expressly authorized by the Board of Directors of Bank) until the Full Benefits Date (as defined in Exhibit A hereto), then upon the date (the “Retirement Date”) on or after the Full Benefits Date on which Executive’s employment with the Bank is terminated for any reason other than For Cause (as hereinafter defined), Bank shall pay to Executive the Full Benefit (as defined in Exhibit A hereto) annually, payable in monthly installments beginning on the first business day of the first calendar month after the Retirement Date and on the first business day of each month thereafter until (but including) the fifteenth (15th) anniversary of the Retirement Date.  If Executive becomes deceased after the commencement of payments under this Section 2(a), but prior to the 15th anniversary of the Retirement Date, payments shall continue to be paid to the Executive’s beneficiary, determined in accordance with Section 13, at the same time and in the same form as they would have been paid to Executive had Executive not deceased.

(b)Early Termination.  If Executive voluntarily resigns from full-time employment with Bank before the Full Benefits Date, or if Bank discharges Executive from full-time employment with Bank for any reason other than For Cause before the Full Benefits Date, Bank shall pay to Executive the Limited Benefit (as hereinafter defined) annually, payable in monthly installments beginning on the Full Benefits Date, and thereafter on the first business day of each month thereafter until (but including) the fifteenth (15th) anniversary of the Full Benefits Date.  For the purposes of this Agreement, the “Limited Benefit” shall be the amount set forth on Exhibit A corresponding to the year in which Executive’s employment terminates.  If Executive becomes deceased after the commencement of 
1

Exhibit 10.1

payments under this Section 2(b), but prior to the fifteenth (15th) anniversary of the Full Benefits Date, payments shall continue to be paid to the Executive’s beneficiary, determined in accordance with Section 13, at the same time and in the same form as they would have been paid to Executive had Executive not deceased.

(c)Disability.  If Executive becomes Substantially Disabled (as hereinafter defined) and Executive’s full-time employment with Bank is terminated by Bank prior to the Full Benefits Date as a result, Bank shall pay to Executive the Limited Benefit annually, payable monthly beginning on the first business day of the calendar month following the Disability Determination Date (as hereinafter defined). For purposes of this Agreement, the term “Substantial Disability” shall mean the substantial physical or mental impairment of Executive which materially diminishes Executive’s ability to perform the services theretofore performed by Executive, for a period of six months or more, taking into consideration compliance by Bank with the reasonable accommodation provisions of the Americans with Disabilities Act. The determination of whether Executive is “Substantially Disabled” shall be made by a licensed physician selected by Bank. For purposes of this Agreement, the term “Disability Determination Date” shall mean the date that is thirty (30) days following the date the Substantial Disability is determined.  If Executive becomes deceased after the Disability Determination Date, but prior to the fifteenth (15th) anniversary of the Disability Determination Date, payments shall continue to be paid to the Executive’s beneficiary, determined in accordance with Section 13, at the same time and in the same form as they would have been paid to Executive had Executive not deceased until (but including) the fifteenth (15th) anniversary of the Disability Determination Date.

(d)Discharge for Cause.  Any other provision of this Agreement to the contrary notwithstanding, if Executive’s employment by Bank is terminated as a result of, or in connection with: (i) regulatory suspension or removal of Executive from duty with Bank; (ii) gross and consistent dereliction of duty by Executive; (iii) breach of fiduciary duty involving personal profit by Executive; (iv) willful violation of any banking law or regulation; or (v) conviction of a felony or crime of moral turpitude (any of the foregoing referred to herein as “For Cause”), then Executive shall not be entitled to any supplemental retirement benefits provided for in this Agreement and this Agreement may be terminated by Bank without any liability whatsoever.  The obligation of Bank to make any payments contemplated under this Agreement shall be suspended during the pendency of any indictment, information or similar charge regarding a felony or crime of moral turpitude, during any regulatory or other adjudicative proceeding concerning regulatory suspension or removal or, for a reasonable time (not to exceed ninety days), while the board of directors of Bank seeks to determine whether Executive could have been terminated For Cause even though Executive may have previously retired, resigned, become Substantially Disabled or been discharged other than For Cause.  If during such period the board of directors determines that the Executive could have been discharged For Cause, this subsection (d) shall be applicable as if the Executive had been discharged For Cause.

(e)Death Benefit.  

(i)    Death Prior to Full Benefits Date. If Executive becomes deceased prior to the Full Benefits Date while in full-time employment with Bank or following a termination of employment with Bank for any reason other than discharge For Cause or due to Executive becoming Substantially Disabled, Executive’s beneficiary, as determined in accordance with Section 13, shall receive payment(s) in one of the following forms in accordance with Executive’s election under Section 2(e)(iii): 

        (A)    The Limited Benefit annually, payable in monthly installments beginning on the first business day of the first calendar month after the date of death and on the first business day of each month thereafter until (but including) the fifteenth (15th) anniversary of the date of death. 

        (B)     A lump sum cash payment, payable within 90 days of Executive’s death, equal to the present value of the payments set forth in Section 2(e)(i)(A) calculated as of the date of death based on a reasonable rate of interest as determined by Bank in its sole discretion. 

2

Exhibit 10.1

For purposes of this Section 2(e)(i), the Limited Benefit shall be the value set forth on Exhibit A corresponding to the year in which Executive becomes deceased or, if earlier, the year in which Executive’s employment terminates.  

(ii)    Death Following Full Benefits Date.  If Executive becomes deceased while in full-time employment with Bank following the Full Benefits Date, Executive’s beneficiary, as determined in accordance with Section 13, shall receive payment(s) in one of the following forms in accordance with Executive’s election under Section 2(e)(iii): 
 
        (A)    The Full Benefit annually, payable in monthly installments beginning on the first business day of the first calendar month after the date of death and on the first business day of each month thereafter until (but including) the fifteenth (15th) anniversary of the date of death. 
        (B)    A lump sum cash payment, payable within 90 days of Executive’s death, equal to the present value of the payments set forth in Section 2(e)(ii)(A) calculated as of the date of death based on a reasonable rate of interest as determined by Bank in its sole discretion.

(iii)    Deferral Election.  An election under this Section 2(e) shall be made by Executive within thirty (30) days after Executive first becomes entitled to benefits under this Section 2(e).  If Executive fails to make an election under this Section 2(e)(iii), the default election shall be a lump sum cash payment under Sections 2(e)(i)(B) and 2(e)(ii)(B).

(f)Benefits Mutually Exclusive.  Under no circumstances will Executive become entitled to more than one of the Full Benefit or the Limited Benefit.

(g)Termination of Agreement.  Upon termination of this Agreement pursuant to Section 12(l) of this Agreement before the Full Benefits Date, Bank shall pay to Executive the Limited Benefit (as set forth on Exhibit A corresponding to the year in which the Agreement is terminated).  Upon termination of this Agreement pursuant to Section 12(l) of this Agreement after the Full Benefits Date, Bank shall pay to Executive the Full Benefit.  The benefit under this Section 2(g) shall be payable in monthly installments beginning on the Full Benefits Date, and thereafter on the first business day of each month thereafter until (but including) the fifteenth (15th) anniversary of the Full Benefits Date.  

(h)Payments to Specified Employees.  If the Executive is considered a ‘Specified Employee’ within the meaning of Treasury Regulation section 1.409A-1(i) at the time the Executive becomes entitled to a benefit under Section 2(a), 2(b) or 2(c) of this Agreement, payment of the benefit due under Section 2(a), 2(b) or 2(c) will commence no earlier than the first day of the seventh (7th) month following the Executive’s termination of employment with Bank.

3.Intent of Parties.  Bank and Executive intend that this Agreement shall primarily provide supplemental retirement benefits to Executive as a member of a select group of management or highly compensated employees of Bank for purposes of the Employee Retirement Income Security Act of 1974, as may be amended (“ERISA”).

4.ERISA Provisions.

(a)The following provisions in this Agreement are part of this Agreement and are intended to meet the requirements of the Employee Retirement Income Security Act of 1974 (ERISA).

(b)The “Named Fiduciary” is Bank.

(c)The general corporate funds of Bank are the basis of payment of benefits under this Agreement.

3

Exhibit 10.1

(d)For claims procedure purposes, the “Claims Manager” shall be the Chief Executive Officer of the Bank, or such other person named from time to time by notice to Executive.

(i)If for any reason a claim for benefits under this Agreement is denied by Bank, the Claims Manager shall deliver to the claimant a written explanation setting forth the specific reasons for the denial, pertinent references to the Agreement section on which the denial is based, such other data as may be pertinent and information on the procedures to be followed by the claimant in obtaining a review of his/her claim, all written in a manner calculated to be understood by the claimant for this purpose: 

(1)The claimant’s claim shall be deemed filed when presented orally or in writing to the Claims Manager.

(2)The Claims Manager’s explanation shall be in writing delivered to the claimant within 90 days of the date the claim is filed.

(i)The claimant shall have 60 days following his/her receipt of the denial of the claim to file with the Claims Manager a written request for review of the denial.  For such review, the claimant or his/her representative may submit pertinent documents and written issues and comments.

(ii)The Claims Manager shall decide the issue on review and furnish the claimant with a copy within 60 days of receipt of the claimant’s request for review of his/her claim.  The decision on review shall be in writing and shall include specific reasons for the decision, written in a manner calculated to be understood by the claimant, as well as specific references to the pertinent Agreement provisions on which the decision is based.  If a copy of the decision is not so furnished to the claimant within such 60 days, the claim shall be deemed denied on review. 

(e)The Claims Manager has discretionary authority to determine eligibility for benefits.

5.Funding by Bank.  

(a)Bank shall be under no obligation to set aside, earmark or otherwise segregate any funds with which to pay its obligations under this Agreement.  Executive shall be and remain an unsecured general creditor of Bank with respect to Bank’s obligations hereunder.  Executive shall have no property interest in the Retirement Account or any other rights with respect thereto.

(b)Notwithstanding anything herein to the contrary, Bank has no obligation whatsoever to purchase or maintain an actual life insurance policy with respect to Executive or otherwise.  If Bank determines in its sole discretion to purchase a life insurance policy referable to the life of Executive, neither Executive nor Executive’s beneficiary shall have any legal or equitable ownership interest in, or lien on, such policy or any other specific funding or any other investment or to any asset of Bank.   Bank, in its sole discretion, may determine the exact nature and method of funding (if any) of the obligations under this Agreement.  If Bank elects to fund its obligations under this Agreement, in whole or in part, through the purchase of a life insurance policy, mutual funds, disability policy, annuity, or other security, Bank reserves the right, in its sole discretion, to terminate such method of funding at any time, in whole or in part.

(c)If Bank, in its sole discretion, elects to invest in a life insurance, disability or annuity policy on the life of Executive, Executive shall assist Bank, from time to time, promptly upon the request of Bank, in obtaining such insurance policy by supplying any information necessary to obtain such policy as well as submitting to any physical examinations required therefor. Bank shall be responsible for the payment of all premiums with respect to any whole life, variable, or universal life insurance, disability or annuity policy purchased in connection with this Agreement unless otherwise expressly agreed.

6.[Intentionally Omitted]
4

Exhibit 10.1

    
7.Competition with Bank.  Anything in this Agreement to the contrary notwithstanding (but subject to the following proviso), if Executive, directly or indirectly, at any time after the execution of this Agreement, owns, manages, operates, joins, controls or participates in or is employed by or gives consultation or advice to or extends credit to (other than through insured deposits) or otherwise is connected in any manner, directly or indirectly with, any bank, financial institution, firm, person, sole proprietorship, partnership, corporation, company or other entity (other than the Bank or entities controlled or under common control with the Bank) that provides financial services, including, without limitation, retail or commercial lending services, and has an office in the State of Louisiana, then Bank shall have the option, in its sole and absolute discretion, to terminate Executive’s right to receive any benefits under this Agreement (and, to the extent Executive may already have begun receiving benefits hereunder, terminate Executive’s right to receive any further benefits hereunder); provided, however, that nothing in this Section 7 shall prohibit Executive from owning less than one percent (1%) of the outstanding shares of any company whose common stock is publicly traded.  Any termination of benefits by Bank under the Section 7 shall be made by delivering written notice to Executive specifying the reason for such termination and the effective date of such termination.
   
            Notwithstanding the preceding, this Section 7 shall not apply following a Change in Control.  For purposes of this Agreement, a “Change in Control” shall occur in the event of (i) a change in the ownership of the capital stock of Bank, or of Red River Bancshares, Inc. (“Company”) whereby a person or group (within the meaning of Code section 409A) (a “Person”) acquires, directly or indirectly, ownership of a number of shares of capital stock of Bank or of Company which, together with capital stock already held by such Person, constitutes fifty percent (50%) or more of the total fair market value or of the combined voting power of Bank’s or of Company’s outstanding capital stock then entitled to vote generally in the election of the directors; provided, however, that if a Person already owns fifty percent (50%) or more of the total fair market value or of the combined voting power of Bank’s or of Company’s outstanding capital stock then entitled to vote generally in the election of the directors, the acquisition of additional capital stock by such Person is not considered a Change in Control of Bank or of Company; or (ii) a change in the effective control of Company whereby a majority of the persons who were members of the Board of Directors of Company are, within a twelve (12) month period, replaced by individuals whose appointment or election to Company’s Board of Directors is not endorsed by a majority of Company’s Board of Directors prior to such appointment or election; or (iii) a change in the ownership of the assets of Bank or of Company, whereby a Person acquires (or has acquired during a twelve (12) month period ending on the date of the most recent acquisition by such Person) assets of Bank or of Company that have a  total gross fair market value equal to or more than fifty percent (50%) of the total gross fair market value of all of the assets of Bank or of Company immediately prior to such acquisition or acquisitions; provided, however, that there is no Change in Control if assets are transferred to an entity that is controlled by the shareholders of Bank or of Company immediately after the transfer, nor is it a Change in Control if Bank or Company transfers assets to: (A) a shareholder of Bank or of Company (immediately before the asset transfer) in exchange for or with respect to the shareholder’s capital stock in Bank; (B) an entity, fifty percent (50%) or more of the total value or voting power of which is owned, directly or indirectly, by Bank or Company; (C) a Person that owns, directly or indirectly, fifty percent (50%) or more of the total value or voting power of all the outstanding capital stock of Bank or of Company; or (D) an entity, at least fifty percent (50%) of the total value or voting power of which is owned, directly or indirectly, by a Person described in paragraph (C) of this Section 7(iii).

8.Employment of Executive; Other Agreements.   The benefits provided for herein for Executive are supplemental retirement benefits and shall not be deemed to modify, affect or limit any salary or salary increases, bonuses, profit sharing or any other type of compensation of Executive in any manner whatsoever.  No provision contained in this Agreement shall in any way affect, restrict or limit any existing employment agreement between Bank and Executive, nor shall any provision or condition contained in this Agreement create specific employment rights of Executive or limit the right of Bank to discharge Executive with or without cause.   Except as otherwise provided therein, nothing contained in this Agreement shall affect the right of Executive to participate in or be covered by or under any qualified or non-qualified pension, profit sharing, group, bonus or other supplemental compensation, retirement or fringe benefit plan constituting any part of Bank’s compensation structure whether now or hereinafter existing.

5

Exhibit 10.1

9.Confidentiality.  In further consideration of the mutual promises contained herein, Executive agrees that the terms and conditions of this Agreement, except as such may be disclosed in financial statements and tax returns, or in connection with estate planning, are and shall forever remain confidential until the death of Executive and Executive agrees that he/she shall not reveal the terms and conditions contained in this Agreement at any time to any person or entity, other than his/her financial and professional advisors unless required to do so by a court of competent jurisdiction.

10.Leave of Absence.  Bank may, in its sole discretion, permit Executive to take a leave of absence for a period not to exceed one year.  Any such leave of absence must be approved by the board of directors of Bank and reflected in its minutes.  During this time, Executive will still be considered to be in the employ of Bank for purposes of this Agreement.

11.Withholding.  Executive is responsible for payment of all taxes applicable to compensation and benefits paid or provided to Executive under this Agreement, including federal and state income tax withholding, except Bank shall be responsible for payment of all employment (FICA) taxes due to be paid by Bank pursuant to Internal Revenue Code § 3121(v) and regulations promulgated thereunder (i.e., FICA taxes on the present value of payments hereunder which are no longer subject to vesting).  Executive agrees that appropriate amounts for withholding may be deducted from the cash salary, bonus or other payments due to Executive by Bank.  If insufficient cash wages are available or if Executive so desires, Executive may remit payment in cash for the withholding amounts.

12.Miscellaneous Provisions.

(a)Counterparts.  This Agreement may be executed simultaneously in any number of counterparts.  Each counterpart shall be deemed to be an original, and all such counterparts shall constitute one and the same instrument.  This Agreement may be executed and delivered by facsimile transmission of an executed counterpart.

(b)Construction. As used in this Agreement, the neuter gender shall include the masculine and the feminine, the masculine and feminine genders shall be interchangeable among themselves and each with the neuter, the singular numbers shall include the plural, and the plural the singular.  The term “person” shall include all persons and entities of every nature whatsoever, including, but not limited to, individuals, corporations, partnerships, governmental entities and associations.  The terms “including,” “included,” “such as” and terms of similar import shall not imply the exclusion of other items not specifically enumerated.

(c)Severability.  If any provision of this Agreement or the application thereof to any person or circumstance shall be held to be invalid, illegal, unenforceable or inconsistent with any present or future law, ruling, rule or regulation of any court, governmental or regulatory authority having jurisdiction over the subject matter of this Agreement, such provision shall be rescinded or modified in accordance with such law, ruling, rule or regulation and the remainder of this Agreement or the application of such provision to the person or circumstances other than those as to which it is held inconsistent shall not be affected thereby and shall be enforced to the greatest extent permitted by law.

(d)Governing Law.  This Agreement is made in the State of Louisiana and shall be governed in all respects and construed in accordance with the laws of the State of Louisiana, without regard to its conflicts of law principles, except to the extent superseded by the Federal laws of the United States.  

(e)Binding Effect.  This Agreement is binding upon the parties, their respective successors, assigns, heirs and legal representatives. Without limiting the foregoing this Agreement shall be binding upon any successor of Bank whether by merger or acquisition of all or substantially all of the assets or liabilities of Bank. This Agreement may not be assigned by any party without the prior written consent of each other party hereto.  This Agreement has been approved by the Board of Directors of Bank and Bank agrees to maintain an executed counterpart of this Agreement in a safe place as an official record of Bank.

(f)No Trust.  Nothing contained in this Agreement and no action taken pursuant to the provisions of this Agreement shall create or be construed to create a trust of any kind, or a 
6

Exhibit 10.1

fiduciary relationship between Bank and Executive, Executive’s designated beneficiary or any other person.

(g)Assignment of Rights.  None of the payments provided for by this Agreement shall be subject to seizure for payment of any debts or judgments against Executive or any beneficiary; nor shall Executive or any beneficiary have any right to transfer, modify, anticipate or encumber any rights or benefits hereunder; provided, however, that the undistributed portion of any benefit payable hereunder shall at all times be subject to set-off for debts owed by Executive to Bank.

(h)Entire Agreement.  This Agreement (together with its exhibits, which are incorporated herein by reference) constitutes the entire agreement of the parties with respect to the subject matter hereof and all prior or contemporaneous negotiations, agreements and understandings, whether oral or written, are hereby superseded, merged and integrated into this Agreement.

(i)Notice.  Any notice to be delivered under this Agreement shall be given in writing and delivered by hand, or by first class, certified or registered mail, postage prepaid, addressed to the Bank or the Executive, as applicable, at the address for such party set forth below or such other address designated by notice.

Bank:        Red River Bank
        1412 Centre Court Drive, Suite 301
        Alexandria, LA  71301
        Attn:    Chief Executive Officer

Executive:    G. Bridges Hall, IV
        ____________________
        ____________________

(j)Non-waiver.  No delay or failure by either party to exercise any right under this Agreement, and no partial or single exercise of that right, shall constitute a waiver of that or any other right.

(k)Headings.  Headings in this Agreement are for convenience only and shall not be used to interpret or construe its provisions.

(l)Amendment and Termination.  No amendments or additions to this Agreement shall be binding unless in writing and signed by both parties; provided, however, that Bank shall have the right to unilaterally amend this Agreement to the extent necessary to obtain favorable tax treatment under Section 409A of the Internal Revenue Code of 1986, as amended.  No waiver of any provision contained in this Agreement shall be effective unless it is in writing and signed by the party against whom such waiver is asserted.  

                Bank may terminate this Agreement in its entirety at any time by written notice to the Executive, provided that such termination and the payment of any benefit upon such termination complies with the requirements of Code section 409A and the regulations and guidance issued thereunder.  Upon termination of the Agreement, benefits will be paid in accordance with Section 2 of the Agreement.  Notwithstanding the foregoing, Bank may accelerate the payment of any benefit under this Agreement in the event of termination of the Agreement, provided that termination of the Agreement and payment of benefits in connection therewith complies with the requirements of Treasury Regulation sections 1.409A-3(j)(4)(ix)(A), (B) and (C), permitting acceleration of the time of payment in connection with plan terminations.  If Bank accelerates the timing of payment under this Section 12(l), Bank shall pay the Executive the then present value of the payments due to the Executive under Section 2 of the Agreement.   In such case, the present value of the Executive’s benefit shall be determined using the interest rate published by the Pension Benefit Guaranty Corporation for private sector payments of immediate annuities under PBGC Reg. § 4022.7(e)(2) or any successor provision applicable to the month in which payment will be made.  No discount shall be made for mortality.

7

Exhibit 10.1

(m)Seal. The parties hereto intend this Agreement to have the effect of an agreement executed under the seal of each.

13.Beneficiary Designation.  Executive may from time to time name any beneficiary or beneficiaries to receive Executive’s interest in this Agreement in the event of the Executive’s death. Each designation will revoke all prior designations by Executive, shall be in a form reasonably prescribed by Bank (as defined in Exhibit B hereto) and shall be effective only when filed by Executive in writing with Bank during Executive’s lifetime.  If Executive fails to designate a beneficiary, then Executive’s designated beneficiary shall be deemed to be Executive’s estate.

[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK.]

8

Exhibit 10.1

IN WITNESS WHEREOF, the parties hereto have executed, or caused to be executed, this Agreement as of the day and year first above written.

BANK:

    RED RIVER BANK

By /s/ R. Blake Chatelain
Its President/CEO

EXECUTIVE:

/s/ G. Bridges Hall IV    
    G. Bridges Hall, IV

STATE OF LOUISIANA    )
    :
RAPIDES PARISH    )

I, the undersigned, a notary public in and for said parish in said state, hereby certify that R Blake Chatelain, whose name as President and CEO of Red River Bank, a Louisiana banking corporation, is signed to the foregoing instrument, and who is known to me, acknowledged before me on this day that, being informed of the contents of said instrument, he/she, as such officer and with full authority, executed the same voluntarily for and as the act of said corporation.

Given under my hand and official seal this 27th day of July, 2022.

/s/ Julia Callis    
    Notary Public
[NOTARIAL SEAL]    My commission expires:upon death

STATE OF LOUISIANA    )
    :
RAPIDES PARISH    )

I, the undersigned, a notary public in and for said parish in said state, hereby certify that G. Bridges Hall, IV, whose name is signed to the foregoing instrument, and who is known to me, acknowledged before me on this day that, being informed of the contents of said instrument, he/she executed the same voluntarily on the day the same bears date.

Given under my hand and official seal this 28th day of July, 2022.

/s/ Julia Callis    
    Notary Public
[NOTARIAL SEAL]    My commission expires: upon death
9

Exhibit 10.1

 Exhibit A

Vesting Schedule – G. Bridges Hall, IV

“Full Benefit” = $50,000

“Full Benefits Date” = December 25, 2038

                   Year                           Limited Benefit
						
	October 1, 2022 to September 30, 2023	$2,778
	October 1, 2023 to September 30, 2024	$5,556
	October 1, 2024 to September 30, 2025	$8,333
	October 1, 2025 to September 30, 2026	$11,111
	October 1, 2026 to September 30, 2027	$13,889
	October 1, 2027 to September 30, 2028	$16,667
	October 1, 2028 to September 30, 2029	$19,444
	October 1, 2029 to September 30, 2030	$22,222
	October 1, 2030 to September 30, 2031	$25,000
	October 1, 2031 to September 30, 2032	$27,778
	October 1, 2032 to September 30, 2033	$30,556
	October 1, 2033 to September 30, 2034	$33,333
	October 1, 2034 to September 30, 2035	$36,111
	October 1, 2035 to September 30, 2036	$38,889
	October 1, 2036 to September 30, 2037	$41,667
	October 1, 2037 to September 30, 2038	$44,444
	October 1, 2038 to December 24, 2038	$47,222

The undersigned G. BRIDGES HALL, IV, (the “Executive”), hereby acknowledges that he or she has reviewed this Exhibit A to the Supplemental Executive Retirement Benefits Agreement and that all the information set forth in this Exhibit A is true and correct in all material respects.

/s/ G. Bridges Hall IV                        7/28/22
G. BRIDGES HALL, IV                    DATE

Accepted:                        Red River Bank

Date: 7/28/22                        By: R. Blake Chatelain

                            Its: President and CEO

10

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