Document:

masteragreementbetweenfi

Legend: [***] CERTAIN INFORMATION IN THIS DOCUMENT HAS BEEN OMITTED FROM THIS  EXHIBIT BECAUSE IT IS BOTH (I) NOT MATERIAL AND (II) INFORMATION THAT THE COMPANY  TREATS AS PRIVATE OR CONFIDENTIAL.  MASTER AGREEMENT  This MASTER AGREEMENT (“Agreement”) dated as of the first day of the first calendar month following the  last date signed  (“Effective Date”) between Fiserv Solutions, LLC, a Wisconsin limited liability company with  offices located at 255 Fiserv Drive, Brookfield, Wisconsin  53045 (“Fiserv”), and Heartland Financial USA, Inc.,  with offices located at 700 Locust Street, Dubuque, Iowa  52001 USA  (“Heartland”).  The term “Agreement”,  as used herein, includes the main body of the Agreement commencing at the top of this page and through the  signature page (as used in this Agreement, the “Master Agreement”), and all Exhibits, Schedules,  Attachments and Appendices referenced herein.  WHEREAS, Heartland and Fiserv entered into a License and Service Agreement dated June 21, 1996,  subsequently amended, inclusive of all associated exhibits, schedules, appendices, and attachments  (collectively, the “Prior Agreement”);  WHEREAS, Heartland and Fiserv agree that, as of the Effective Date, the Prior Agreement and the Exhibits,  Schedules and other attachments appended thereto are amended and superseded in their entirety with the  terms and conditions of this Agreement;  NOW THEREFOR, in receipt of good and valuable consideration, the sufficiency of which is hereby  acknowledged, Fiserv and Heartland and hereby agree as follows:   Deliverables.     General.  Fiserv, through the employees, agents and/or subcontractors of itself and its Affiliates (as  defined herein) (collectively, “Fiserv Personnel”) agrees to provide to Client, and Client agrees to obtain from  Fiserv, the services (including services provided pursuant to the ASP Services Exhibit, implementation,  conversion, operational and technical support, development, professional, consulting, and training services  provided pursuant to the Professional and Development Services Exhibit (as applicable), maintenance or other  services provided pursuant to the Software Products Exhibit, services provided under the Instant Issuance  Exhibit, and network support services and any other services provided pursuant to the Equipment Exhibit  (“Services”) and products (including Software as defined in the Software Products Exhibit, products provided  pursuant to the Instant Issuance Exhibit and Equipment as defined in the Equipment Exhibit) (“Products”)  (collectively, “Deliverables”) described in the attached Exhibits, subject to the terms set forth in this Agreement  and in the applicable Exhibit(s). For clarity, any reference, in this Agreement or any Exhibit or Schedule hereto,  to the provision of Services, Products and/or Deliverables to Client, shall, unless otherwise stated, include the  provision of such Services, Products and/or Deliverables to Client Affiliates and, as applicable, to employees  and contractors  (subject to Section 3 (Confidentiality and Ownership)) of Client and Client Affiliates. “Affiliate”  means an entity that controls, is controlled by, or is under common control with a party, where “control” means  the direct or indirect ownership of more than 50% of the voting securities of such entity or party.  Each Exhibit  will be deemed to incorporate all of the terms of this Agreement.  Use of the term “Exhibit” throughout this  Agreement shall include any Schedules attached to such Exhibit.  Exhibits and Schedules attached as of the  Effective Date are listed below.   Service Level Exhibit to Master Agreement   Support Response Time Attachment to the Master Agreement   ASP Services Exhibit to Master Agreement  Card Services Schedule to ASP Services Exhibit  Electronic Document Delivery Services Schedule to ASP Services Exhibit  Intelligent WorkplaceSM Platform Services Schedule to the ASP Services Exhibit  

 

Output Solutions Services Schedule to ASP Services Exhibit  Statement Advantage Services Schedule to ASP Services Exhibit  XRoadsTM Services Schedule to ASP Services Exhibit  Zelle® Payment Services Schedule to ASP Services Exhibit   Professional and Development Services Exhibit    Equipment Exhibit to Master Agreement  Network Support Services Schedule to the Equipment Exhibit   Instant Issuance Exhibit to Master Agreement   Software Products Exhibit to Master Agreement  Account Processing Software (Signature) Schedule to Software Products Exhibit  EnAct Software Schedule to Software Products Exhibit  Enterprise Performance Management Software (Prologue) Schedule to Software Products  Exhibit   Holding Company Relationship.  Heartland enters into this Agreement on behalf of itself and each of  its bank Affiliates identified in the applicable Exhibits and/or Schedules as receiving Deliverables under this  Agreement (each, a “Client”).  Heartland shall cause to be performed, and shall be responsible for the  performance, by each bank Affiliate receiving Deliverables as a Client under a particular Exhibit or Schedule  of all “Client” obligations under this Agreement applicable to such Deliverables as if Heartland were itself  receiving such Deliverables, and shall be jointly and severally liable with each such individual bank Affiliate for  all actions and omissions of such bank Affiliates receiving Deliverables as a Client under such Exhibit or  Schedule in connection with this Agreement.  References to “Client” herein shall include Heartland and the  applicable bank Affiliate identified as Client for the Deliverables received by such bank Affiliate.  For the  avoidance of doubt, no bank Affiliate will be liable to Fiserv for the actions or omissions of another bank Affiliate  (including any liability arising from the actions or omissions of another bank Affiliate or its customer).  To the  extent that any provision of this Agreement, including any Exhibit or Schedule or any document incorporated  by reference provides that a Client provides a representation, warranty or covenant with respect to itself, such  bank Affiliate provides such representation, warranty or covenant only with respect to itself or its customers  (as applicable), and not with respect any other bank Affiliate.  The initial Client Affiliates and the Deliverables  used by each such Client Affiliate are as set forth in Appendix A to this Agreement.   Additional Entities and Deliverables.  The parties or their Affiliates may add Deliverables to this  Agreement by adding an appropriate new Exhibit or Schedule to this Agreement via an amendment  incorporating the added Deliverables and/or Affiliates, as applicable.  Fiserv or the designated Fiserv Affiliate  shall provide the Deliverables to Heartland and/or its bank Affiliates designated as Client in the applicable  Exhibit or Schedule as recipients of such Deliverables.  A bank Affiliate’s use of a Deliverable and/or execution  of an amendment to receive such Deliverable or Heartland’s execution of such amendment on the bank  Affiliate’s behalf shall constitute such bank Affiliate’s agreement to be bound by the terms of this Agreement  with respect to such Deliverable.   Facilities.  Fiserv and its Affiliates and subcontractors will supply or provide the (A) Software and  related maintenance services to the Client Location (as defined in the Software Products Exhibit and subject  to the provisions of Section 4 (License) and Section 8 (Client Responsibilities) thereof) and (B) processing  Services under the ASP Services Exhibit from the Fiserv data center, as such may be changed by Fiserv from  time to time in accordance with the next paragraph (“Fiserv Facility(ies)”).  (i) [***] (ii) Fiserv shall be financially responsible for all additional Fiserv costs, taxes or expenses resulting from  any Fiserv-initiated relocation to a new or different Fiserv Facility.  The immediately preceding  sentence shall not apply in the event Client’s requirements result in the need for a relocation to a  new or different Fiserv Facility and the parties mutually agree in writing to make such change.    

 

 Client PII Location.  Except as otherwise expressly set forth in an Exhibit or Schedule, Fiserv will not  store Client PII at any facility outside of the United States without Client’s written consent.  Fiserv and its  subcontractors shall be permitted to access Client PII from a location outside of the United States [***] via  computer networks or systems, and such remote access shall in no event be deemed a breach of this provision.   Fiserv shall not access Client PII from a location outside of the United States and the above listed countries  without Client’s written consent.   Changes.  Fiserv may make changes in its methods of delivering the Deliverables, including in the  standards, processes, operating procedures, methodologies or controls, or associated technologies,  architectures, products, software, equipment, systems or materials provided, operated, managed, supported  or used in connection with the Deliverables, or the type of equipment or software resident at, or, subject to and  in accordance with Section 1(d) (Facilities) of this Master Agreement, the location of, Fiserv’s service center(s)  (collectively, “Changes”); [***]  Disabling Code.  Fiserv will use commercially reasonable efforts to provide the Deliverables to Client  free from any Disabling Code at the time of delivery.  Client shall use commercially reasonable efforts to cause  all materials and/or data provided by Client to Fiserv to be free from Disabling Code at the time of delivery.   For purposes of this Agreement “Disabling Code” means any timer, clock, or counter that may cause software  or any data generated or used by it to be erased, become inoperable or inaccessible, or that may otherwise  cause such software to become temporarily or permanently incapable of performing in accordance with this  Agreement, or subject to control or data access by parties other than Client, including any Disabling Code that  is triggered after use or copying of such software or a component thereof a certain number of times, or after  the lapse of a period of time, or in the absence of a hardware device or after the occurrence or lapse of any  other triggering factor or event or due to external input, including across a computer network.  Disabling Code  includes software commonly referred to as a virus, worm, Trojan horse, backdoor, malware or spyware.  Each  party shall use industry standard virus detection software tools intended to ensure that any data, materials,  files or, in the case of Fiserv, Deliverables, provided to the other party are free of Disabling Code.  In the  event Disabling Code is found in Software as delivered to Client by Fiserv, Fiserv will take reasonable actions,  at no additional charge to Client, to remove such Disabling Code and re-deliver such Software without the  Disabling Code.  In the event Disabling Code is found in Fiserv’s Systems used to provide the Services, Fiserv  will take reasonable actions, at no additional charge to Client, to remove and otherwise address such Disabling  Code. [***] [***] [***] [***]  Cooperation with Third Parties.  Fiserv shall, subject to the confidentiality provisions of Section 3  (Confidentiality and Ownership) of this Master Agreement, cooperate with and work in good faith with Client  and/or Client Third Party providers, as reasonably directed by Client.  Such cooperation may include, as and  to the extent mutually agreed: (i) providing electronic access to Client Data, with query and update capabilities,  (ii) providing written requirements, standards, policies or other documentation for Client’s Third Party provider  to write to Fiserv’s middleware as may be necessary in connection with the Deliverables, (iii) working with the  Client’s Third Party providers to assist  them in writing to Fiserv’s middleware, and (iv) providing any other  cooperation or assistance reasonably requested by Client.  Fiserv shall provide such cooperation and  assistance promptly and in a commercially reasonable manner and shall use commercially reasonable efforts  to support Client’s reasonable plans.  Fiserv and Client shall confer in good faith and agree on the scope of  such cooperation and the extent to which there are associated fees provided that Fiserv shall use commercially  reasonable efforts to minimize such fees.   Client Personnel. Client shall (i) designate appropriate Client personnel for training other Client  personnel in the use of the Deliverables, (ii) supply Fiserv with reasonable access to Client’s site during normal  business hours (or such other hours as mutually agreed between the parties) to the extent necessary for Fiserv  to perform P&D Services (as defined in the Professional and Development Services Exhibit), and (iii)  

 

reasonably cooperate with Fiserv personnel to the extent necessary in connection with Fiserv’s performance  of the Deliverables.   Subcontracting. Client agrees that Fiserv may subcontract any obligations to be performed hereunder;  provided that any such subcontractors, including any Fiserv Affiliates performing any of Fiserv’s obligations  hereunder, shall be required to comply with all applicable terms and conditions of this Agreement, and Fiserv  shall remain primarily liable for the performance of any such subcontractors and Affiliates.  Fiserv shall perform  appropriate due diligence of any potential subcontractor before engaging such subcontractor, and in the event  Fiserv engages a subcontractor, Fiserv shall perform an annual risk assessment of such subcontractor as part  of Fiserv’s vendor management processes.  Fiserv will provide, upon request by Client not more than once per  year, a list of subcontractors that have access to Client Data where a ‘subcontractor’ means a third party  vendor, provider or supplier to whom Fiserv contracts out a specific portion of the Deliverables provided to  Client under this Agreement, and specifically excludes Fiserv Affiliates.  Client will facilitate timely cooperation  with Fiserv’s subcontractors, if any, in order for Fiserv to provide the Deliverables.  [***]  Termination Assistance Services:  Except with respect to Deliverables where Fiserv has provided at  least 18 months prior written notice [***] such Deliverable as of or on a date following the Expiration Date:   [***] (q) Fiserv Use of Third Party Solutions.  Fiserv's providing Deliverables under this Agreement may be  dependent on the products or services of a third party vendor or service provider of Fiserv.  In the case  of Software Products licensed by Client, all such third parties are identified in the applicable Schedule  to the Software Products Exhibit.  In the event Fiserv’s rights to use the third party provider’s products  or services to provide Deliverables to Client are impacted in any way that affects Client’s use of a  Deliverable, Fiserv will (i) work in good faith and use commercially reasonable efforts to (A) remedy  the impact with the applicable third party provider so that Client can continue to use the Deliverables,  or (B) identify and engage a replacement third party product or service to continue providing Client the  Deliverables, and if neither (A) or (B) is possible, then Fiserv may terminate the impacted  Deliverable(s) (provided, Fiserv is terminating the impacted Deliverable(s) for all Fiserv clients then  receiving such Deliverable(s)).  [***]  Fees for Deliverables.   General.  Client agrees to pay Fiserv: (i) fees for Deliverables as specified in the Exhibits, as otherwise  described elsewhere in this Agreement, or as mutually agreed in writing between the parties such as set forth  in a statement of work or other such document, (ii) travel and related expenses pursuant to Section 2(c) (Travel  and Related Expenses), (iii) Taxes as defined in Section 2(d) (Taxes), and (iv) Fiserv’s then current  deconversion charges in connection with Client’s deconversion from the applicable Deliverables.    Increase in Fees.  In addition to any provisions otherwise set forth in an Exhibit or Schedule, Fiserv’s  fees, rates and charges listed in an Exhibit may be increased annually[***]; each such increase shall be limited  to [***] (“Annual Increase”).   Travel and Related Expenses.  Client shall reimburse travel and living expenses reasonably incurred  by Fiserv in connection with the Deliverables, to the extent such travel has been mutually agreed between the  parties.  As applicable, such travel and related expenses shall be incurred in accordance with Fiserv’s then- current corporate travel and expense policy. It is understood and agreed that the travel and related expenses  to be reimbursed by Client represent the actual amount Fiserv is obligated to pay to the applicable third party,  without any Fiserv markup, and that Fiserv has used and will use commercially reasonable efforts to minimize  such travel and related expenses.   Taxes.  Client is responsible for the payment of all sales, use, excise, value added, withholdings and  other taxes and duties however designated that are levied by any taxing authority relating to fees to be paid  by Client in exchange for Fiserv’s provision to Client of the Deliverables (“Taxes”). Fiserv and Client shall work  together to review and revise Fiserv’s invoices, if necessary, to identify and/or separate those items that are  subject to tax from those items that are not subject to tax. Fiserv agrees to reasonably cooperate with and  

 

assist Client in disputing any taxes, at Client’s expense. All fees and other charges under any Exhibit are  exclusive of Taxes.  Client shall reimburse Fiserv for those Taxes that Fiserv is required to remit on behalf of  Client.  In no event shall Taxes include taxes based on Fiserv’s income.  .    Regulatory and Compliance. [***]  Payment Terms. Fiserv shall, except as otherwise provided in the applicable Schedule or Exhibit, on  a monthly basis, deliver a single consolidated invoice listing all amounts payable by Client for Deliverables  received pursuant to this Agreement (including its Exhibits and Schedules) during the prior calendar month.   Each such invoice shall be due and payable within 30 days after Client’s receipt of such invoice; except that  Client may withhold fees invoiced for Deliverables to the extent such fees are disputed by Client in good faith,  provided that Client gives Fiserv written notice and explanation of such good faith dispute within 20 days of  Client’s receipt of such invoice.  Client shall pay Fiserv through the Automated Clearing House unless  otherwise set forth in the Exhibits. [***] Client shall neither make nor assert any right of deduction or set-off  from amounts invoiced. [***] [***] [***]  Confidentiality and Ownership.  The provisions of this Section 3 (Confidentiality and Ownership) survive  any termination or expiration of this Agreement.   Definitions.  (i) “Information” means the following types of information obtained or accessed by or on behalf of a  party to this Agreement or its Affiliates (“Recipient”) from or on behalf of the other party or its  Affiliates (“Discloser”) in connection with this Agreement or any discussions between the parties  regarding new services or products to be added to this Agreement: (A) trade secrets and proprietary  information (including that of any client, supplier or licensor); (B) customer lists, client lists, business  plans, information security plans, business continuity plans, requests for proposals or requests for  information and responses to such requests that the parties may exchange after the Effective Date,  and proprietary software programs; (C) any personally identifiable information (“PII“); (D) users IDs  and passwords of Fiserv Systems and/or Client Systems; (E) any other information received from or  on behalf of Discloser that is marked confidential or that Recipient could reasonably be expected to  know is confidential; and (F) “Client Information” and “Fiserv Information”.    For purposes of this Agreement, “PII” is defined as personally identifiable information that is not  otherwise publicly available.  Information is personally identifiable if it can reasonably be linked to  a particular person, computer, or device, such as the name(s), address, telephone, account, and  social security numbers, including password/authentication information, of Client’s individual  customers or either party’s employees or contractors.  PII does not include information reasonably  believed to be made publicly available and information that is often made public; however, where  an individual has directed that the information not be made public (e.g., an unlisted phone number  or address) or the information has been obtained from the individual rather than a public source,  it should not be considered publicly available.  “Information” does not include any information that: (1) Recipient already possesses without  obligation of confidentiality, develops independently without reference to Discloser’s Information,  or rightfully receives without obligation of confidentiality from a third party; or (2) is or becomes  publicly available without Recipient’s breach of this Agreement.  (ii) “Client Information” means Information for which the Discloser is Client or its Affiliates.  For clarity,  Client Information includes business requirements provided by Client or its Affiliates for Fiserv’s  performance of Development Services.  (iii) “Fiserv Information” means Information for which the Discloser is Fiserv, and specifically includes  all information and documentation regarding the Deliverables, all software Products (including  

 

software modifications and documentation, databases, training aids, and all data, code, techniques,  algorithms, methods, logic, architecture, and designs embodied or incorporated therein), and the  terms and conditions of this Agreement.  Fiserv agrees that terms and conditions of this Agreement  specific to Client will not be disclosed to third parties, other than as permitted for Client Information  under Section 3(b) (Obligations) below or in connection with any audit of Fiserv or Client by a  regulator, without Client’s prior consent.   Obligations.  Recipient agrees to hold as confidential all Information it receives from the Discloser.   Recipient will use the same care and discretion to prevent unauthorized disclosure of Information as it uses  with its own similar information that it does not wish disclosed, but in no event less than a reasonable standard  of care and no less than is required by law.  Recipient may only use Information for the lawful purposes  contemplated by this Agreement, including in the case of Fiserv use of Client Information for (A) fulfilling its  obligations under this Agreement, performing, improving and enhancing the Deliverables, and analyzing  Client’s use and adoption of the Deliverable (“Deliverable Use Limitation”), (B) de-identifying and  anonymizing Client Data and aggregating it with de-identified information of other Fiserv clients (such that (1)  neither Client nor any Client Affiliate nor any individual is or can be identified as the subject of or source of  such data and (2) such data may not be reconstructed or reverse engineered to identify Client, Client Affiliates  or any individual) for purposes of developing data analytics models, tools and products to produce data  analytics-based offerings (“Analytics Use Limitation”) and (C) using such Client Information in accordance  with this Agreement for purposes of detecting and preventing fraud which may include Client Data (“Fraud  Detection/Prevention Limitation”).  Client agrees that prior to providing Fiserv access to any PII, Client shall  ensure that any necessary consent has been obtained that is required by law or regulation for Fiserv to access  the and use the PII pursuant to the terms set forth in this Agreement.  Fiserv specifically agrees not to use or  disclose any “non-public personal information” about Client’s customers in any manner prohibited by Title V of  the Gramm-Leach-Bliley Act or the regulations issued thereunder (“GLB”), as applicable to Fiserv (“GLB Use  Limitation”).    (i) Recipient may disclose Information to: (A) its employees and employees of permitted subcontractors  and Affiliates who have a need to know; (B) its attorneys and accountants as necessary in the  ordinary course of its business; and (C) any other person with Discloser’s prior written consent.   Before disclosure to any of the above persons, Recipient will have a written agreement with (or in  the case of clause (B) a professional obligation of confidentiality from) such person sufficient to  require that person to treat Information in accordance with the requirements of this Agreement, and  Recipient will remain responsible for any breach of this Section 3 (Confidentiality and Ownership) by  any of the above persons.  Fiserv as Recipient may also disclose Client Information to third party  vendors designated by Client.    (ii) Recipient may disclose Information to the extent required by law or legal process, provided that: (A)  Recipient gives Discloser prompt notice, if legally permissible, so that Discloser may seek a  protective order; (B) Recipient reasonably cooperates with Discloser (at Discloser’s expense) in  seeking such protective order; and (C) all Information shall remain subject to the terms of this  Agreement in the event of such disclosure.  At Recipient’s option, Information will be returned to  Discloser or destroyed (except as may be contained in back-up files created in the ordinary course  of business that are recycled in the ordinary course of business over an approximate 30- to 90-day  period or such longer period as required by applicable law) at the termination or expiration of this  Agreement or the applicable Exhibit (and any applicable Termination Assistance Services period)  and, upon Discloser’s request, Recipient will certify to Discloser in writing that it has complied with  the requirements of this sentence.    (iii) Recipient acknowledges that any breach of this Section 3 (Confidentiality and Ownership) may  cause irreparable harm to Discloser for which monetary damages alone may be insufficient, and  Recipient therefore acknowledges that Discloser shall have the right to seek injunctive or other  equitable relief against such breach or threatened breach, in addition to all other remedies available  to it at law or otherwise.   (iv) Recipient agrees that it shall notify Discloser as soon as possible upon Recipient becoming aware  of any incident of unauthorized access to Discloser’s Information, Software, or systems.  For clarity,  

 

Fiserv’s obligations with regard to a Security Incident are set forth in Section 4 (Information Security)  below.   Ownership.  (i) Ownership by Client.  Subject to the use rights granted above, as between Fiserv and Client, Client  shall own Client Information, including Client Data (as defined in Section 4(a) (Client Data) of this  Master Agreement).  Client also shall own any data created, generated, or processed from Client  Data by Fiserv in connection with its performance of the Services or by Client in connection with  its receipt of the Deliverables, including data processing input and output.  (ii) Ownership by Fiserv.  Except as provided in Section 3(c)(i) (Ownership by Client) above, unless  the Parties agree otherwise, and with the exception of Client Information, all information, reports,  studies, object and source code (including without limitation the Deliverables and all modifications,  enhancements, additions, upgrades, or other works based thereon or related thereto), flow charts,  diagrams, specifications, and other tangible or intangible material of any nature whatsoever  produced through or as a result of or related to any of the Deliverables (collectively, “Works”), and  all patents, copyrights, and other proprietary rights related to such Works and models, shall be the  sole and exclusive property of Fiserv or its Affiliates or of their third party providers.  Fiserv shall  be the sole and exclusive owner of all derivative works of Works, including all United States and  foreign patent, copyright and other intellectual property rights in such Works.  Nothing in this  Agreement shall convey to Client any title to or ownership of any Deliverables, Works, or models.  Client hereby irrevocably assigns and transfers to Fiserv all rights, title, and interest in any such  Works and models.    (iii) Right to Use.  During the term of the Agreement or the applicable Exhibit (and any Termination  Assistance Services period), Client and its Affiliates may use any Works, other than an Open  Source Component (as defined in the Software Products Exhibit to this Agreement) which is  addressed in the Software Products Exhibit, provided to or rightfully accessed by Client or such  Affiliates solely as and to the extent necessary to receive and/or use the Deliverables, in  compliance with applicable legal and regulatory requirements, and/or to perform functions  associated with their principal lines of business, and shall do so in accordance with the applicable  terms and conditions of this Agreement.  In addition, following the expiration or termination of the  term of the Agreement or the applicable Exhibit (and any Termination Assistance Services period),  Client and its Affiliates may continue to use reports, customer statements and other Works,  excluding Fiserv Software (including object and source code) and Fiserv Systems, to comply with  applicable legal and regulatory requirements and perform functions associated with their principal  lines of business, provided such use is in compliance with the applicable terms and conditions of  this Agreement and provided further that this shall not include the right to continue using Fiserv  Software or Fiserv Systems provided at a fee unless Client agrees to pay such fee.  For clarity,  ownership of Client Data is set forth below in Section 4(a) (Client Data) of this Master Agreement.   Restrictions. Without limiting any other obligation set forth in this Section 3 (Confidentiality and  Ownership), Client shall not use, transfer, distribute, interface, integrate, or dispose of any information or  content contained in Deliverables in any manner that competes with the business of Fiserv.  Except as  expressly authorized in an Exhibit, Client shall not: (i) use the Deliverables to provide services to third parties  (other than Client’s customers or authorized Affiliates, as applicable); or (ii) reproduce, republish or offer any  part of the Deliverables (or compilations based on any part of the Deliverables) for sale or distribution in any  form over or through any medium.   Information Security.  (a) Client Data.  Nothing in this Section 4 (Information Security)  is intended to limit the obligations of  Fiserv under Section 3 (Confidentiality and Ownership) of this Master Agreement with respect to the Client  Information, which the parties acknowledge includes “Client Data”.  “Client Data” means collectively, Client  PII, ‘customer information’ (as defined in GLB), “consumer information” (as defined in GLB), ‘Cardholder Data’  (as defined below) to the extent collected by Fiserv from or on behalf of Client. To the extent that the provisions  

 

pertaining to Client Data in Section 3 (Confidentiality and Ownership) of this Master Agreement and this  Section 4 (Information Security) conflict, the provisions of this Section 4 (Information Security) shall control.  (i) Ownership of Client Data.  For clarity, Client Data shall be and remain, as between the Parties,  the property of Client or its applicable Affiliate(s), if any, regardless of whether Fiserv or Client is  in possession of the Client Data.  Client Data shall be made available to Client, upon its request  and in accordance with the provisions of this Agreement, including Client’s agreement to pay the  associated fees, in accordance with Section 8(g) (Return of Client Files) of this Master Agreement,  in Fiserv’s standard form and format or such other form and format reasonably available and  specifically agreed to in writing between the parties.   (ii) Limitations on Use.  Fiserv agrees that Fiserv Personnel shall not collect, transfer, disseminate,  use or process Client Data for any purpose or to any extent other than as necessary to fulfill  Fiserv’s obligations and rights under this Agreement (collectively, this use limitation together with  the Deliverable Use Limitation, Analytics Use Limitation, Fraud Detection/Prevention Use  Limitation, and GLB Use Limitation above shall be “Client Data Use Limitation”).  Fiserv shall not  (and shall cause Fiserv Personnel to not) collect, use, process, transfer or disseminate Client Data  other than in accordance with the Client Data Use Limitation without the written approval of Client.   Fiserv shall take appropriate action to ensure that Fiserv Personnel having access to Client Data  act in accordance with the terms of this Section 4 (Information Security) and are trained regarding  their handling of information such as Client Data.  In addition, if such Fiserv Personnel have not  already done so, Fiserv shall require such Fiserv Personnel to execute employment agreements,  and for any such personnel hired through subcontractors an appropriate agreement in place with  such subcontractor, having appropriate confidentiality terms in accordance with the requirements  of Section 3(b) (Obligations).   (b)  General.  Fiserv has implemented and shall maintain during the term of this Agreement, including  any period of Termination Assistance Services, a comprehensive written information security program, which  shall include appropriate technical, organizational and physical security measures designed to protect against  the destruction, loss, unauthorized alteration or acquisition of, or unauthorized access or use or other  compromise to, Client Data. The information security program shall be designed to meet, among other things,  the following objectives:  (i) protect the security and confidentiality of customer information (as defined in  GLB); (ii) protect against any anticipated threats or hazards to the security or integrity of such information; (iii)  protect against unauthorized access to or use of such information that could result in substantial harm or  inconvenience to any customer; (iv) ensure the proper disposal of “consumer information” (as defined in  Interagency Guidelines Establishing Information Security Standards (“Interagency Guidelines”);  and (v)  require Fiserv to take appropriate actions to address incidents of unauthorized access to Client’s “sensitive  customer information” (as defined in the Interagency Guidelines), including notification to Client as soon as  possible of any such incident.  The content and implementation of Fiserv’s information security program shall be documented in writing  by Fiserv.  On or before the Effective Date and thereafter within thirty (30) days of Client’s written request,  Fiserv shall provide to Client a summary of Fiserv’s then current written information security program for the  applicable Deliverables received by Client, and thereafter, upon Client’s request, will provide updates on the  status of such information security program. Fiserv also shall permit Client to review the relevant components  of Fiserv’s information security program and/or to inspect Fiserv’s compliance with such program in  accordance with Section 10(e) (Client Audit) of this Master Agreement. Upon Client’s written request, Fiserv  shall allow Client to review any associated audit reports as described in Section 10 (Audit) of this Master  Agreement, summaries of Disaster Recovery test results as set forth in Section 6(c) (Disaster Recovery Test)  of the ASP Services Exhibit, summaries of penetration test results as set forth in Section 4(c) Security Testing  of the ASP Services Exhibit.    To the extent Fiserv makes any modifications to its information security program during the term or any  Termination Assistance Services period, such modification shall comply with all relevant requirements and  obligations under this Agreement and the information security program, as modified, shall be comparable or  superior in all material respects to the one it replaced.  

 

(c) PCI.  Fiserv agrees to comply in all material respects with applicable requirements of PCI-DSS to the  extent Fiserv stores, processes or transmits “cardholder data” or “sensitive authentication data” (as defined in  PCI-DSS) (collectively “Cardholder Data”) on behalf of Client in connection with the Services or to the extent  the Services impact the security of Client’s cardholder data environment. Consistent with Section 3(b)  (Obligations) of this Master Agreement, Fiserv shall use Cardholder Data only for Fiserv’s performance of the  Services and in accordance with this Agreement. Fiserv shall maintain a current PCI-DSS compliance  validation, which Client may verify by examining the list of validated entities on the applicable website.   (d) Security Incident.  If Fiserv confirms or is notified of any incident that has or is reasonably believed to  have resulted in unauthorized possession, acquisition, use, destruction, loss, alteration, theft or disclosure of,  or unauthorized access to Client Data (each such incident, a “Security Incident”), Fiserv shall as soon as  reasonably possible (and in any event within 48 hours or sooner if required by applicable laws after Fiserv  confirms  the Security Incident) notify the Client Relationship Manager, Client’s Information Security Officer  and Client’s Chief Information Officer of such Security Incident and furnish applicable known details.  To the  extent the Security Incident is within Fiserv’s areas of responsibility, Fiserv shall investigate and mitigate the  adverse effects of such Security Incident and shall provide regular updates appropriate to the nature of the  Security Incident to Client.  In addition, to the extent the Security Incident is within Fiserv’s areas of  responsibility, Fiserv shall promptly (and in any event as soon as reasonably practicable) (A) perform a root  cause analysis, (B) prepare a corrective action plan, (C) provide in writing to Client applicable information,  including how and when such Security Incident occurred and what actions Fiserv is taking or has taken to  remedy such Security Incident, and (D) to the extent the Security Incident is within Fiserv’s areas of control,  remediate such Security Incident and take commercially reasonable actions to prevent its recurrence. In each  case, Fiserv shall perform the activities described in the two preceding sentences at no additional charge to  Client to the extent such Security Incident is attributable to the failure of Fiserv or Fiserv Personnel to comply  with Fiserv’s obligations under this Agreement.  To the extent the Security Incident is not attributable to such  a failure on the part of Fiserv or Fiserv Personnel, Fiserv and Client shall confer in good faith and agree on the  terms and fees (if any) associated with doing so (provided that Fiserv uses commercially reasonable efforts to  minimize such fees.  (e) Additional Notice of Security Incident.    (i) Absent Client’s express, written and advance agreement, Fiserv shall not independently notify any  customer, client, vendor, employee or agent of Client or a Client Affiliate (except the Client Chief  Information Officer, Client Information Security Officer, and Client Relationship Manager),  regarding the involvement of Client’s data in any Security Incident, provided that Fiserv may inform  other impacted clients of the involvement of their data in such a Security Incident, and may inform  regulators if required by law or regulation.    (ii) In the event of a confirmed Security Incident involving Cardholder Data, as required by an  applicable industry security organization (e.g. PCI-SSC) or the applicable regulatory agency  having jurisdiction over Client, Client acknowledges and agrees that Fiserv may disclose  information regarding any such Security Incident to such organization and such agency.   In the  event of a breach or intrusion of or otherwise unauthorized access to Cardholder Data stored by  or for Fiserv, Fiserv shall promptly notify Client, in writing, and provide PCI-SSC or its designee  access to Fiserv’s facilities and all pertinent records to conduct a review of Fiserv’s compliance  with these requirements.    (iii) Fiserv shall maintain appropriate business continuity and disaster recovery procedures, as  described in Section 6 (Business Continuity / Disaster Recovery) of the ASP Services Exhibit with  respect to the Services and the Client Data, including Cardholder Data.  (f) [***] (g) Data Encryption.   (i) Fiserv.  Fiserv shall encrypt Client Data in transit using Fiserv’s then-current data encryption  policies and controls.   

 

(ii) Client.  As applicable to the Deliverables received by Client, Client agrees to comply with Fiserv’s  then-current data encryption policies and controls regarding transmission to and from Fiserv of  tapes, images, and records maintained and produced by Fiserv for Client in connection with the  Deliverables (“Client Files”), or other data transmitted to and from Fiserv in connection with the  Deliverables (collectively with Client Files, “Data”).   If Client requests or requires Fiserv to send,  transmit, or otherwise deliver Data to Client or any third party in a non-compliant format or manner,  or Client (or third party on Client’s behalf) sends, transmits or otherwise delivers Data to Fiserv in  a non-compliant format or manner (and such non-compliant transmission or delivery by Client is  not caused by Fiserv’s breach of its information security or other obligations under this  Agreement), then, notwithstanding any other provision of this Agreement:  (i) Client understands  and accepts all risk of transmitting Data in an unencrypted or otherwise noncompliant format; and  (ii) Client releases, discharges, and shall indemnify and hold harmless Fiserv and its employees,  officers, directors, agents, and Affiliates from any and all liability, damage, or other loss under this  Agreement or otherwise suffered by or through Client or any of the indemnified entities arising out  of the transmission, destruction, or loss of such Data, including any information security or privacy  breach related to such Data.  Reserved.    Warranties / Indemnifications.   (a) Warranties By Fiserv.  Fiserv warrants that: (i) no contractual obligations exist that would prevent  Fiserv from entering into this Agreement; (ii) it has the requisite authority to execute, deliver, and perform its  obligations under this Agreement; and (iii) it will comply in all material respects with all laws and regulatory  requirements applicable to Fiserv as a technology solutions provider and/or to the provision of the Deliverables  or the performance of Fiserv’s obligations under this Agreement; and (iv) Fiserv has not given and will not give  commissions, payments, kickbacks, lavish or extensive entertainment or gifts, or other inducements of more  than minimal value to any employee or agent of Client in connection with this Agreement, and that no Fiserv  Affiliate or any officer, director, employee, agent or representative of Fiserv has given such payments, gifts,  entertainment or other item of value to any employee or agent of Client.    (b) Warranties By Client.  Client warrants that: (i) no contractual obligations exist that would prevent  Client from entering into this Agreement; (ii) it has the requisite authority to execute, deliver, and perform its  obligations under this Agreement; (iii) it will comply in all material respects with all laws and regulatory  requirements applicable to Client’s receipt and use of Deliverables under this Agreement (iv) it will comply with  all laws and regulations applicable to Client as a financial institution, as relevant to the Deliverables; and (v)  that the materials provided to Fiserv will be free from any Disabling Code at the time of delivery.    (c) THE WARRANTIES STATED ABOVE AND IN THE EXHIBITS, IF ANY, ARE LIMITED  WARRANTIES AND ARE THE ONLY WARRANTIES MADE BY THE PARTIES.  EXCEPT AS PROVIDED IN  THE AGREEMENT OR APPLICABLE EXHIBITS OR SCHEDULES, FISERV DOES NOT REPRESENT THAT  THE DELIVERABLES MEET CLIENT’S REQUIREMENTS OR THAT THE OPERATION OF THE  DELIVERABLES WILL BE UNINTERRUPTED OR ERROR-FREE.  CLIENT ACKNOWLEDGES THAT IT HAS  INDEPENDENTLY EVALUATED THE DELIVERABLES AND THEIR APPLICATION TO CLIENT’S NEEDS.   FISERV DISCLAIMS, AND CLIENT HEREBY EXPRESSLY WAIVES, ALL OTHER REPRESENTATIONS,  CONDITIONS, AND WARRANTIES, EXPRESS AND IMPLIED, INCLUDING WARRANTIES OF  MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, NON-INFRINGEMENT, AND ANY  ARISING FROM A COURSE OF DEALING OR USAGE OR TRADE.  CLIENT MAY NOT MAKE ANY  WARRANTY OF ANY KIND, EXPRESS OR IMPLIED, ON BEHALF OF FISERV, ITS AFFILIATES OR THEIR  RESPECTIVE THIRD PARTY PROVIDERS OR LICENSORS TO ANY USER OR ANY OTHER PARTY IN  CONNECTION WITH THE DELIVERABLES WITHOUT FISERV’S EXPRESS PRIOR WRITTEN CONSENT.    (d) Client IP Indemnification.    (i) Client shall, at its expense, defend, indemnify, and hold harmless Fiserv and its directors,  officers, and employees from and against any claims, suits, or other proceedings (including  reasonable attorneys’ fees and payment of any final settlement or judgment) brought by third  parties arising from infringement of such third party’s intellectual property rights to the extent  

 

that they are based on Client’s Marks, Client Content (each as defined in Section 13(l) (Marks  and Content) of this Master Agreement), or data supplied to Fiserv by Client, or arising from  any claim that any Derivative Works of the Signature Software and Source Code created by  Authorized Programmers in accordance with Section 2(f) of the Accounting Processing  Software Schedule (or the use of such Derivative Works by Client) infringes or allegedly  infringes on any Third Party’s intellectual property rights (collectively, “Client IP Indemnity  Assets”) (“Client Infringement Claim”) and shall pay all amounts payable by Client under  any judgment, verdict, or court order entered by a court of competent jurisdiction or settlement  agreed upon by Client in any Client Infringement Claim, provided that Fiserv complies with  the Indemnification Procedures below.  If Client IP Indemnity Assets are required for Fiserv’s  provision of the Deliverable(s), in the event that any Client IP Indemnity Assets are alleged  or found to be misappropriated from, or to infringe on the intellectual property rights of, a third  party, or if their use by Fiserv is enjoined, then in addition to the foregoing indemnification  obligation, and at Client’s option and Client’s sole expense, Client shall: (i) secure a license  to enable such Client IP Indemnity Assets to be utilized in a manner consistent with the terms  of this Agreement, (ii) replace the same with other suitable, non-infringing intellectual property  assets, as reasonably determined by Client, (iii) modify the Client IP Indemnity Assets so that  they no longer infringe or misappropriate the rights of such third party, while still meeting the  requirements of this Agreement, or (iv) subject to Section 8(d) (Client Defaults; Early  Termination) of this Master Agreement, authorize Fiserv to cease using such Client IP Assets  and cease providing any Service to the extent it is incapable of performing such Service  without such Client IP Indemnity Assets.  (ii) Notwithstanding the foregoing, Client shall have no liability for nor obligation to indemnify  Fiserv for any Client Infringement Claim pursuant to this Section 6(d) (Client IP  Indemnification) to the extent such Client Infringement Claim arises from:  (A) use of any part of the Client IP Indemnity Assets in combination with third party materials or  third party software not provided or approved by Client in writing;  (B) modifications made by Fiserv or any Fiserv third party, but solely to the extent such  modifications were not approved by Client in writing;  (C) use of other than the current release of Client IP Indemnity Assets if infringement would  have been avoided by use of such current release and Client notified Fiserv of the potential  infringement;  (D) use of the Client IP Indemnity Assets other than in accordance with this Agreement;  (E) use of any part of the Client IP Indemnity Assets for any purpose not related to the provision  to or receipt by Client of Deliverables under this Agreement;  (F) adherence to detailed written specifications or instructions provided by Fiserv that Client is  required to comply with (provided Client notifies Fiserv of the possibility of infringement or  misappropriation if and to the extent the Client Personnel adhering to such specifications or  instructions possess actual knowledge of such possibility); or  (G) [***] (iii) The obligations of Client as set forth in this Section 6(d) (Client IP Indemnification) shall be  Client’s entire liability and Fiserv’s sole and exclusive remedy for Client’s infringement or  misappropriation of the intellectual property rights of a third party and Fiserv hereby expressly  waives any other liability on the part of Client arising therefrom.  (e)     Client Indemnity.  Client shall, at its expense, defend, indemnify and hold harmless Fiserv, its  Affiliates, and their officers, directors, and employees against any claims, actions, damages, and/or liabilities  arising out of:  (i) access to or use of the Fiserv System by Client or its customers in a manner other than as  expressly permitted in the Agreement; and (ii) access to or use of the Fiserv System by any third party(ies)  acting by, through, or on behalf of Client.  The preceding sentence shall not preclude Client’s recovery of  damages from Fiserv pursuant to the terms and subject to the limitations of the Agreement.  (f) Fiserv IP Indemnification.   

 

(i) Fiserv shall, at its expense, defend[***] Client and its Affiliates and, the officers, directors,  officials, employees of each of the foregoing from and against any third party claim or actions  based on any allegations that the Deliverables (excluding any Third Party Software (as defined  in the Software Products Exhibit and identified as “Third Party Software” in the specific Schedule  thereto) but including any components provided by Third Party providers of Fiserv that Fiserv  embeds in Deliverables, including Open Source Components) or any other intellectual property  delivered or licensed or to which rights are otherwise acquired hereunder  (collectively, the “IP  Assets”), or any part or parts thereof, infringe or misappropriate the proprietary rights of such  third party (“Infringement Claim”), and shall pay all amounts payable by Client under any  judgment, verdict, or court order entered by a court of competent jurisdiction or settlement  agreed upon by Fiserv in any Infringement Claim, provided that Client complies with the  Indemnification Procedures below.  In the event that any IP Assets are alleged or found to be  misappropriated from, or to infringe on the intellectual property rights of, a third party, or if their  use by Client is enjoined, then in addition to the foregoing indemnification obligation, and at  Fiserv’s option and Fiserv’s sole expense, Fiserv shall:  (i) secure a license to enable such IP  Assets to be utilized in a manner consistent with the terms of this Agreement, (ii) replace the  same with other intellectual property assets with equally suitable, functionally equivalent,  compatible, non-infringing assets or services, as reasonably determined by Fiserv, or (iii) modify  the IP Assets so that they no longer infringe or misappropriate the rights of such third party,  while still meeting the requirements of this Agreement.    Fiserv shall not settle any claim for  which it has assumed the defense pursuant to this Section 6(e) in any manner that requires  Client to admit any fault or liability without the prior written consent of Client, which consent shall  not be unreasonably withheld, conditioned or delayed.  (ii) Notwithstanding the foregoing, Fiserv shall have no liability for nor obligation to indemnify Client  for any Infringement Claim pursuant to this Section 6(e) to the extent such Infringement Claim  arises from:   (A) use of any part of the IP Assets in combination with materials or software not provided or  approved by Fiserv in writing;  (B) modifications made by Client or any third party, but solely to the extent such modifications  were not approved in writing by Fiserv;  (C) use of other than the current release of Software if infringement would have been avoided  by use of such current release and Fiserv notified Client of the potential infringement;  (D) use of the Software other than in accordance with the Software Documentation or this  Agreement, including Software use in violation of Section 4 of the Software Products  Exhibit; or  (E) adherence to detailed written specifications or instructions provided by Client that Fiserv is  required to comply with (provided Fiserv notifies Client of the possibility of infringement or  misappropriation if and to the extent the Fiserv Personnel adhering to such specifications  or instructions possess actual knowledge themselves  of such possibility).   (iii) The obligations of Fiserv as set forth in this Section 6(e) shall be Fiserv’s entire liability and  Client’s sole and exclusive remedy for Fiserv’s infringement or misappropriation of the  intellectual property rights of a third party.  For clarity, this shall not be deemed a force majeure  event and shall not operate or be construed as relieving Fiserv of its performance obligations  under this Agreement, including its obligation to provide the Deliverables in accordance with the  applicable Exhibits and Schedules.   (g) Indemnification Procedures. If any third party makes a claim covered by Section 6(d) (Client IP  Indemnification) or Section 6(f) (Fiserv IP Indemnification) of this Master Agreement and with respect to  indemnification provisions elsewhere in this Agreement which reference this procedure, against an indemnitee  with respect to which such indemnitee intends to seek indemnification under this Section 6  (Warranties/Indemnifications), such indemnitee shall give prompt notice of such claim to the indemnifying  party, including a brief description of the amount and basis therefore, if known. Upon giving such notice, the  indemnifying party shall be obligated to defend such indemnitee against such claim and shall be entitled to  

 

assume control of the defense of the claim with counsel chosen by the indemnifying party. The indemnitee  shall cooperate fully with and assist the indemnifying party in its defense against such claim in all reasonable  aspects. The indemnifying party shall keep the indemnitee fully apprised at all times as to the status of the  defense. Notwithstanding the foregoing, the indemnitee shall have the right to employ its own separate counsel  in any such action, but the fees and expenses of such counsel shall be at the expense of the indemnitee.  Neither the indemnifying party nor any indemnitee shall be liable for any non-monetary settlement of action or  claim effected without its consent. The indemnifying party shall pay all costs of indemnity arising out of or  relating to that defense and any such settlement, compromise, or payment. The indemnitee shall keep the  indemnifying party fully apprise at all times as to the status of the defense.  Limitation of Liability.    [***] IN NO EVENT SHALL EITHER PARTY BE LIABLE FOR LOSS OF GOODWILL, PROFIT,  REPUTATION, OR BUSINESS, OR FOR SPECIAL, INDIRECT, INCIDENTAL, CONSEQUENTIAL,  PUNITIVE, EXEMPLARY, OR TORT DAMAGES, ARISING OUT OF OR RELATING TO THIS AGREEMENT,  REGARDLESS OF WHETHER SUCH CLAIM ARISES IN TORT, CONTRACT, OR OTHERWISE.     EXCEPT FOR CLAIMS RELATED TO THE MISUSE OR MISAPPROPRIATION OF INTELLECTUAL  PROPERTY RIGHTS (INCLUDING ANY BREACH OF LICENSE RESTRICTIONS SET FORTH IN THIS  AGREEMENT), OR THE OBLIGATIONS TO PAY AMOUNTS DUE OR OWING UNDER THIS AGREEMENT,  NEITHER PARTY MAY ASSERT ANY CLAIM AGAINST THE OTHER PARTY RELATED TO THIS  AGREEMENT MORE THAN 2 YEARS AFTER SUCH CLAIM ACCRUED.    [***] THE AGGREGATE LIABILITY OF A PARTY TO THE OTHER PARTY (INCLUDING IN THE  CASE OF HEARTLAND ALL CLIENT AFFILIATES) AND ANY THIRD PARTY FOR ANY AND ALL CLAIMS  AND OBLIGATIONS RELATING TO THIS AGREEMENT SHALL BE LIMITED TO [***]  THE AMOUNT OF  ANY AVAILABLE CAP SHALL BE REDUCED BY AMOUNTS PREVIOUSLY PAID AND APPLIED TO ANY  OTHER CAP, SO THAT IN NO EVENT SHALL FISERV’S AGGREGATE LIABILITY TO CLIENT FOR ANY  AND ALL CLAIMS OR OBLIGATIONS RELATING TO THIS AGREEMENT EXCEED THE INCREASED CAP.     For purposes of this Section 7 (Limitation of Liability), fines or penalties imposed on a party by a  regulator or any governmental agency having valid jurisdiction over such party to the extent arising from (i) in  the case of fines or penalties imposed on Client, Fiserv’s failure to comply with laws or regulatory requirements  applicable to Fiserv as a technology solutions provider and/or to the provision of the Deliverables or the  performance of Fiserv’s obligations under this Agreement or (ii) in the case of fines or penalties imposed on  Fiserv, Client’s failure to comply with laws or regulations applicable to its or any Client Affiliate’s receipt or use  of the Deliverables under this Agreement will be deemed direct damages and recoverable under this Section  7 (Limitation of Liability).   Term and Termination.     Term.  This Agreement shall be effective on the Effective Date and shall remain in effect until the term  of all outstanding Exhibits (including any holdover period) has expired or such Exhibits have terminated, unless  otherwise terminated as provided herein.  The term for Deliverables may be set forth in the applicable Exhibit.   An Exhibit that does not state a term will be effective from its last date of execution until terminated in  accordance with this Agreement or the Exhibit.     Termination.  In addition to termination rights set forth in any Exhibit:  (i) Material Breach.  Either party may, upon written notice to the other, terminate any Schedule if the  other party materially breaches its obligations under that Exhibit or Schedule or under this  Agreement with respect to that Exhibit or Schedule and the breaching party fails to cure such  material breach within [***] following its receipt of written notice stating, with particularity and in  reasonable detail, the nature of the claimed breach [***].  (ii) [***] (iii) [***] 

 

(iv) Unpaid Invoice. With the exception of amounts disputed in good faith pursuant to Section 2(f)  (Payment Terms) of this Master Agreement, if any invoice remains unpaid by Client 30 days after  due and Client fails to cure such payment failure within 30 days following its receipt of written notice  from Fiserv, Fiserv may terminate:  (A) the Exhibit Schedule and/or Client’s access to and use of the  Deliverables to which the payment failure relates; or (B) this Agreement, including all Exhibits and  Schedules if the unpaid amounts constitute a material portion of annual charges due under this  Agreement.  (v) Fiserv Bankruptcy.  Client may terminate this Agreement (i) upon 60 days written notice to Fiserv in  the event Fiserv commits an act of bankruptcy or becomes the subject of any proceeding under the  Bankruptcy Code and such action or proceeding is not dismissed by the end of such 60-day period,  or (ii) upon written notice in the event Fiserv becomes insolvent or if any substantial part of Fiserv's  property becomes subject to any levy, seizure, assignment, application, or sale for or by any creditor  or governmental agency.   Termination for Convenience; Early Termination.  If Client desires to terminate the ASP Services  Exhibit or Software Products Exhibit or a Schedule executed under such Exhibits early or otherwise reduces  (other than as a result of account attrition or volume fluctuation in the ordinary course of business) or terminates  Services under any such Exhibit or Schedule for any reason other than pursuant to Section 8(b) (Termination)  of this Master Agreement, then Client shall provide at least [***] advance written notice to Fiserv and shall pay  a termination fee based on the remaining unused term of the  Services.  [***]  Client Defaults; Early Termination.  If (i) a Schedule is subject to termination by Fiserv for cause for  material breach or failure to pay amounts due and owing, each as set forth in Section 8(b) (Termination) of this  Master Agreement; or (ii) Client deconverts any data or information from the Fiserv System  (other than in the  ordinary course of Client’s business or the business of Client’s Affiliates which would include deconversion of  data or information for any branch location or Client Affiliate bank sold by Heartland so long as such sale is not  of all Client Affiliates), or in violation of this Agreement (“Unauthorized Deconversion”); or (iii) becomes  insolvent or if any substantial part of Client’s property becomes subject to any levy, seizure, assignment,  application, or sale for or by any creditor or governmental agency; then, in any such event, Fiserv may, upon  written notice, terminate (x) the Schedule(s) in whole or in part impacted by such material breach or failure to  pay, or (y) the Schedule(s) impacted by such Unauthorized Deconversion, and, if it exercises such right, Fiserv  shall be entitled to recover from Client as liquidated damages for such early termination an amount equal to  [***]  Liquidated Damages.  The parties agree that Fiserv damages incurred as a result of early termination  of any Services would be difficult or impossible to calculate as of the Effective Date.  Accordingly, the amounts  set forth in Sections 8(c) (Termination for Convenience; Early Termination) and (d) (Client Defaults; Early  Termination) of this Master Agreement represent a reasonable pre-estimate of damages and are not a penalty.   Remedies.  Remedies contained in this Section 8 (Term and Termination) are cumulative and are in  addition to the other rights and remedies available to the parties under this Agreement, by law or otherwise.   Return of Client Files.  Upon expiration or termination of this Agreement or any Exhibit or Schedule to  this Agreement, Fiserv shall furnish to Client such copies of Client Files as Client may request in Fiserv’s  standard formats, or such other format reasonably available and specifically agreed to between the parties,  and shall provide such information and assistance as is reasonable and customary to enable Client to  deconvert from the Fiserv System; provided, however, that Fiserv’s obligation to provide copies of such Client  Files is conditioned on Client’s agreement to return or destroy all Fiserv Information in accordance with Section  3(b) (Obligations) of this Master Agreement and to make the following payments in accordance with the next  sentence: (i) all amounts due and owing as of the requested return date for all Services provided through the  date such Client Files are returned to Client; (ii) Fiserv’s then standard rates for the services necessary to  return such Client Files; and (iii) the termination fee, if any, due as of the requested return date pursuant to  Section 8(c) (Termination for Convenience; Early Termination) or 8(d) (Client Defaults; Early Termination) of  this Master Agreement.  [***]  Termination of Software.  Subject to the other provisions of this Section 8 (Term and Termination) and  Section 1(p) (Termination Assistance Services) above, the termination of the Agreement or the Software  

 

Products Exhibit or any individual Schedule thereto shall automatically, and without further action by Fiserv,  terminate and extinguish the license(s) granted under the applicable Schedule(s) and Fiserv’s obligation to  provide Maintenance Services with respect to such Software.  Unless Client destroys all copies of the Software  and provides written certification to Fiserv of said destruction within 10 days after receipt of written notice from  Fiserv following termination of the applicable Schedule and completion of any requested Termination  Assistance Service, Fiserv shall have the right to take immediate possession of the Software and all copies  thereof wherever located without further notice or demand.    [***]  Assumptions.  Fees set forth in the Exhibits are based on completion of the initial term of all  Deliverables.  If Deliverables are reduced or terminated for any reason other than by Client under Section  8(b)(i) (Material Breach) above, or if Client renegotiates pricing before expiration of the initial term, Client shall  reimburse Fiserv for all credits, rebates, discounts and incentives granted with respect to all Deliverables.  Any  such credits, rebates, discounts and incentives will no longer be granted through the remainder of the term for  any continuing Deliverables.    [***].   Dispute Resolution.  Before initiating legal action against the other party relating to a dispute herein, the  parties agree to work in good faith to resolve disputes and claims arising out of this Agreement.  To this end,  either party may request that each party designate an officer or other management employee with authority to  bind such party to meet to resolve the dispute or claim.  If the dispute is not resolved within 30 days of the  commencement of informal efforts under this paragraph, either party may request that Client’s CFO or COO  meet with the Fiserv Group President (or, in each case, a management employee of comparable level with  authority to bind such party) to meet to resolve the dispute or claim.  If the dispute is not resolved within 30  days of the commencement of the second escalation, either party may pursue formal legal action.  This  paragraph will not apply if expiration of the applicable time for bringing an action is imminent and will not  prohibit a party from pursuing injunctive or other equitable relief to which it may be entitled.   Audit.   Fiserv Operations and Security. Client acknowledges and agrees that Fiserv is subject to certain  examinations by the Federal Financial Institutions Examination Council (“FFIEC”) regulators and agencies.   Client acknowledges and agrees that reports of such examination of Fiserv business units are available to  Client directly from the relevant FFIEC agencies. Fiserv employs an internal auditor responsible for reviewing  the integrity of its processing environments and internal controls. [***]  Independent Audit.  Fiserv provides for periodic independent audits, which shall include the  performance of an annual SSAE 18 SOC1 Type II or SOC2 Type II audit (or similar equivalent audit) by an  independent public accounting firm with respect to Fiserv’s provision of the Services pursuant to the ASP  Services Exhibit from Fiserv Facilities, including Fiserv Facilities from which Fiserv System maintenance,  Fiserv System support and customer support are provided (“Independent Audit”). Unless otherwise agreed  by the Parties, such audit shall be conducted so as to result in an audit opinion for a 12 month period, and  upon Client’s request, Fiserv shall provide a bridge letter covering the period between the report end date and  the Client requested date.  Upon Client’s request, Fiserv shall provide Client with a copy of such independent  audit report and may charge Client a fee for such report [***]  Regulatory Examination.  The Parties acknowledge and agree that the records, systems and personnel  used by Fiserv to provide Deliverables to Client and its Affiliates are subject to examination by federal, state,  and/or other governmental regulatory agencies having jurisdiction over their businesses (including the Federal  Reserve, Federal Deposit Insurance Corporation, and state regulatory authorities, as applicable) to the same  extent as such records, systems and personnel would be subject to such examination if maintained by Client  or its Affiliates on their own premises.  Client agrees that Fiserv may provide Client Information and/or reports  or summaries of Client Information when formally requested to do so by a regulatory or government agency,  provided that if permitted by such requesting agency, Fiserv shall provide to Client written notice of such  request prior to responding.  Fiserv reserves the right to charge Client at Fiserv’s then-current rates for any  assistance provided in response to regulatory requests, government agency requests, and legal process  

 

requests such as subpoena or search warrant, in each case to the extent related to Client or its Affiliates and/or  Client Information, whether issued during or after the term of this Agreement provided that Fiserv uses  commercially reasonable efforts to minimize such fees.    Billing Records.  Upon Client’s reasonable request in writing no more frequently than once [***], Fiserv  shall provide Client with documentation supporting the amounts invoiced by Fiserv hereunder.  Client shall  specify the period for which such documentation is requested, provided such period may not extend back more  than 12 months from the date of such request.  If such documentation reveals the amounts paid to Fiserv in  the prior 12 months exceed the amounts to which Fiserv is entitled and such amounts are independently  verified, Fiserv shall promptly remit or otherwise credit to Client the amount of such overpayment. Conversely,  if such documentation reveals the amounts paid to Fiserv are less than the amounts owed in the prior 12  months, Client shall promptly remit the amount of such underpayment to Fiserv for such period.  Fiserv  reserves the right to charge Client for any assistance required in connection with an audit at Fiserv’s then- current rates provided that Fiserv notifies Client in advance of any such fees, obtains Client's approval prior to  incurring such fees and uses commercially reasonable efforts to minimize such fees.  [***].  [***].   Hiring and Employment.   Background Checks. Neither party shall knowingly permit any of its employees to have access to the  premises, records or data of the other party when such employee: (i) uses drugs illegally; or (ii) has been  convicted of a crime in connection with a dishonest act or a breach of trust, as set forth in Section 19 of the  Federal Deposit Insurance Act, 12 U.S.C. 1829(a) (a “Conviction”).  Consistent with Fiserv’s employment  practices, newly hired Fiserv employees are required to pass both a pre-employment criminal background  check and are required to pass a pre-employment drug screening, as permitted by law, and Fiserv periodically  confirms that employees have not acquired any Convictions subsequent to hiring.  Upon Client’s reasonable  request and at Client’s expense, Fiserv may perform more frequent confirmation checks or utilize additional  reasonable background checking criteria for those of Fiserv’s employees who will have access to Client  facilities or Client’s networks and computer systems located at Client facilities.  The results of all such  background checks shall be retained solely by Fiserv or the third party performing such screening on behalf of  Fiserv.    Equal Employment.  Fiserv agrees that it shall not discriminate against any employee or applicant for  employment because of race, color, national origin, indigenous status, religion, marital status, sex, sexual  orientation, age, physical or mental disability, veteran status or other characteristics protected by law, and that  it shall comply with all applicable requirements of the Equal Opportunity Clause set forth in Executive Order  11246, as amended, and its implementing instructions, the Rehabilitation Act of 1973, the Vietnam Era  Veterans’ Readjustment Assistance Act of 1974, as well as the equal opportunities and affirmative action  requirements set forth in 41 C.F.R. Part 60-1.4(a) (women and minorities), 41 C.F.R. Part 60-300.5(a) (covered  veterans) and 41 C.F.R. Part 60-741.5(a) (individuals with disabilities).     Client Relationship. Client shall designate one individual to whom all Fiserv communications  concerning this Agreement may be addressed (the “Client Relationship Manager”), who shall have the  authority to act on behalf of Client in all day-to-day matters pertaining to this Agreement.  Client may change  the designated Client Relationship Manager from time to time by providing notice to Fiserv.  Additionally, Client  will designate additional representatives who will be authorized to make certain decisions (e.g., regarding  emergency maintenance) if the Client Relationship Manager is not available.    Requested Replacement.  If Client determines in good faith that the continued assignment to Client at  Client’s facilities of any individual Fiserv Personnel is not in the best interests of Client, then Client shall give  Fiserv notice to that effect requesting that such Fiserv Personnel be replaced, including with reasonable  particularity the reasons for such request.  Promptly after Fiserv’s receipt of such a request by Client, Fiserv  shall investigate the matters stated in the request and discuss its findings with Client.  If requested to do so by  Client, Fiserv shall immediately remove the individual in question from all Client facilities pending completion  of Fiserv’s investigation and discussions with Client.  If, following discussions with Fiserv, Client still reasonably  

 

and in good faith requests replacement of such Fiserv Personnel, Fiserv shall promptly replace such individual  with one of suitable ability and qualifications. In such event, Client shall not be obligated to pay any fees relating  to any training or other knowledge transfer activities or overlaps in periods of employment.  Nothing in this  provision shall operate or be construed to limit Fiserv’s responsibility for the acts or omissions of the Fiserv  Personnel, or be construed as joint employment.   Insurance. Fiserv shall secure and maintain throughout the term of this Agreement at its sole cost and  expense the following insurance coverage with insurance carriers rated “A-VIII” or higher by A. M. Best  Corporation:  (i) Commercial General Liability Insurance covering bodily injury, property damage, and including  contractual liability coverage, with a combined single limit of [***]. per occurrence and [***]. general  aggregate.  (ii) Workers Compensation insurance providing coverage pursuant to statutory requirements; and  Employer's Liability Insurance with limits of [***]. each accident, [***]. policy limit, and [***]. each  employee.   (iii) Commercial Automobile Liability Insurance with combined bodily Injury and property damage limits  of [***]..  (iv) Commercial Umbrella Liability Insurance with per occurrence and aggregate limits of [***]., with the  liability insurance required under Sections 12(i), (ii), and (iii) above scheduled as underlying.  (v) Commercial Crime Insurance, including Employee Dishonesty and Computer Fraud for the theft of  property with limits of [***]. per loss.  The crime insurance should include coverage for third parties,  which shall cover loss of or damage to money, securities, and other property sustained by Client, or  for which Client holds for others, committed by an identified Fiserv employee, acting alone or in  collusion with other persons.  (vi) Professional Liability and/or Technology Errors and Omissions Liability covering acts, errors and  omissions arising out of Fiserv’s performance or failure to perform its services under this Agreement,  including network security and privacy liability coverage, with limits of [***]. per occurrence and in  the aggregate.  (vii) All-risk property insurance covering Fiserv’s real and personal property at replacement cost value.  Upon Client’s written request, Fiserv will endeavor to furnish to Client standard ACORD certificates of  insurance issued by authorized representative(s) of the insurance carrier(s) as evidence of each foregoing  coverage.  Fiserv shall notify Client in the event that any policy for the insurance required above is cancelled  or otherwise terminates, unless that policy is promptly replaced by another policy in accordance with the  foregoing requirements, but in no event greater than 30 days.   General.   Binding Agreement.  This Agreement is binding upon the parties, their participating Affiliates, and their  respective successors and permitted assigns.     Assignment. Neither this Agreement nor any part thereof or interest therein may be sold, assigned,  transferred, pledged, or otherwise disposed of [***].  Entire Agreement; Amendments.  This Agreement, including its Exhibits and Schedules, which are  expressly incorporated herein by reference, constitutes the complete and exclusive statement of the agreement  between the parties as to the subject matter hereof and supersedes all previous agreements with respect  thereto and the terms of all existing or future purchase orders and acknowledgments.  Each party hereby  acknowledges that it has not been induced to enter into this Agreement by virtue of, and is not relying on, any  representation made by the other party not embodied herein, any term sheets or other correspondence  preceding the execution of this Agreement, or any prior course of dealing between the parties, including any  statements concerning product or service usage or the financial condition of the parties.  Section headings are  

 

included for reference only and should not be used to interpret this Agreement or to define, expand, or limit its  terms.  The protections of this Agreement shall apply to actions of the parties performed in preparation for and  anticipation of the execution of this Agreement.  Modifications of this Agreement must be in writing and signed  by duly authorized representatives of the parties.  If the terms of any Exhibit or Schedule conflict with the terms  of this Agreement, this Agreement shall control unless the applicable Exhibit or Schedule expressly states that  its terms control. If the terms of any Schedule conflict with the terms of the Exhibit to which such Schedule is  attached, the terms of the Schedule shall control.   Severability.  If any provision of this Agreement is held to be unenforceable or invalid, the other  provisions shall continue in full force and effect.   Governing Law; Jury Trial Waiver.  This Agreement will be governed by the substantive laws of the  State of New York, without reference to provisions relating to conflict of laws.  The United Nations Convention  on Contracts for the International Sale of Goods shall not apply to this Agreement.  Both parties agree to waive  any right to have a jury participate in the resolution of any dispute or claim between the parties or any of their  respective Affiliates arising under this Agreement.   Force Majeure. With the exception of Client’s payment obligation, neither party shall be responsible  for delays or failures in performance resulting from acts of God, acts of civil or military authority, fire, flood,  strikes, war, epidemics, pandemics, shortage of power, telecommunications or Internet service interruptions  or other acts or causes reasonably beyond the control of that party (each such event a “Force Majeure Event”).   [***]. The party experiencing the Force Majeure Event agrees to give the other party notice promptly following  the occurrence of a force majeure event, and to use diligent efforts to re-commence performance as promptly  as commercially practicable, including, in relation to Fiserv’s performance of the Services pursuant to the ASP  Services Exhibit, using commercially reasonable efforts to perform in accordance with Section 6 (Business  Continuity / Disaster Recovery) of the ASP Services Exhibit, and, where applicable, to adhere to Fiserv  published recovery time objectives (“RTO”s) and recovery point objectives (“RPO”s) for the impacted Service.  [***].   Notices.  Any written notice required or permitted to be given hereunder shall be given by: (i)  Registered or Certified Mail, Return Receipt Requested, postage prepaid; (ii) confirmed facsimile; or (iii)  nationally recognized overnight courier service to the other party (and, in the case of Fiserv, to the Fiserv  General Counsel) at the addresses listed on page 1 or to such other address or person as a party may  designate in writing.  All such notices shall be effective upon receipt.   No Waiver. The failure of either party to insist on strict performance of any of the provisions hereunder  shall not be construed as the waiver of any subsequent default of a similar nature.   Prevailing Party. The prevailing party in any arbitration, suit, or action brought by one party against the  other party to enforce the terms of this Agreement or any rights or obligations hereunder, shall be entitled to  receive, in addition to such other relief as the arbitrators or court may award, its reasonable costs and  expenses, including all attorneys’ fees, expert witness fees, litigation-related expenses and arbitrator and court  or other costs incurred in such proceeding or otherwise in connection with bringing such arbitration, suit, or  action.  For purposes of this Agreement, a party is “prevailing” if that party prevails on the central issue raised  in the action or claim, regardless of the amount of damages awarded or otherwise owed, if any.  A party may  prevail by judgment or decision in that party’s favor, consent decree, settlement agreement or voluntary  dismissal with or without prejudice.   Survival. All rights and obligations of the parties under this Agreement that, by their nature, do not  terminate with the expiration or termination of this Agreement shall survive the expiration or termination of this  Agreement.   Publicity.  Client and Fiserv shall have the right to make general references about each other and the  type of Deliverables being provided hereunder to third parties, such as auditors, regulators, financial analysts,  and prospective customers and clients, provided that in so doing Client or Fiserv does not breach Section 3  (Confidentiality and Ownership) of this Agreement.  Fiserv may issue a press release regarding this  Agreement, including its renewal and the addition of Deliverables, subject to Client’s review and approval,  which shall not be unreasonably withheld or unduly delayed.  

 

 Marks and Content. Neither party shall use the name, trademark, service mark, logo or other identifying  marks (collectively, “Marks”) of the other party or any of its Affiliates in any sales, marketing, or publicity  activities, materials, or website display unless such party includes such Marks in a Deliverable or such party  consents in advance in writing.  Any such authorized or approved use shall at all times comply with such party’s  Trademark Usage Guidelines (or such other requirements and/or guidelines) provided by such party or set  forth on its corporate website and other reasonable requirements issued or otherwise made available by such  party.  Notwithstanding the foregoing, Fiserv will have the right to use Client’s Marks and third party links,  information, specifications, materials, designs, copy or other such works or content provided by Client as and  to the extent required in providing the Deliverables (“Client Content”), so long as Fiserv’s use complies with  any reasonable usage guidelines provided in writing by Client.  Client will provide such Client Content in  accordance with Fiserv’s reasonable guidelines for the Deliverable and will obtain all necessary third party  permissions and licenses required for Fiserv’s use of such content.  If Fiserv must convert any Client Content  into such format (if Fiserv is able to and does so at its own discretion), Client will pay for such conversion at  Fiserv’s Professional Services Rates. Each party shall defend the other party and its Affiliates from any third  party claim or action alleging that the other party’s approved use of the indemnifying party’s Marks or Client- provided content infringes a trademark, copyright, or other proprietary right of such third party as and to the  extent provided in Sections 6(d) (Client IP Indemnification) and 6(f) (Fiserv IP Indemnification) of this Master  Agreement.   Independent Contractors. Client and Fiserv expressly agree they are acting as independent  contractors and under no circumstances shall any of the employees of one party be deemed the employees  of the other for any purpose. Fiserv (or its subcontractors for personnel that are hired by such subcontractor)  shall be solely responsible for the payment of compensation (including provision for employment taxes, federal,  state and local income taxes, workers compensation and any similar taxes) associated with the employment  of, or contracting with, Fiserv Personnel.  Fiserv (or its subcontractors for personnel that are hired by such  subcontractors) shall also be solely responsible for obtaining and maintaining all requisite work permits, visas  and any other documentation for Fiserv Personnel.   Except as expressly authorized herein or in the Exhibits,  this Agreement shall not be construed as authority for either party to act for the other party in any agency or  other capacity, or to make commitments of any kind for the account of or on behalf of the other. Fiserv, and  not Client, shall be responsible and liable for the acts and omissions of Fiserv Personnel, including acts and  omissions constituting negligence, willful misconduct and/or fraud.  Client and not Fiserv shall be responsible  and liable for the acts and omissions of Client and Client’s Affiliates, and its and their employees, agents and/or  subcontractors, including acts and omissions constituting negligence, willful misconduct and/or fraud.   No Third Party Beneficiaries. Except as expressly set forth in any Exhibit hereto, no third party shall  be deemed to be an intended or unintended third party beneficiary of this Agreement.  [***].   Terms and Definitions. The terms defined in this Agreement include the plural as well as the singular  and the derivatives of such terms. Unless otherwise expressly stated, the words “herein,” “hereof,” and  “hereunder” and other words of similar import refer to the Agreement as a whole and not to any particular  Article, Section, Subsection or other subdivision.  Article, Section, Subsection and Attachment references refer  to articles, sections and subsections of, and attachments to, the Agreement, unless specified otherwise.  The  words “include” and “including” shall not be construed as terms of limitation or as an exclusive set of examples.   The word “or” shall not be exclusive.  The words “day”, “month”, “quarter” and “year” mean, respectively,  calendar day, calendar month, calendar quarter and calendar year.  The words “notice” and “notification” and  their derivatives mean notice or notification in writing.  Other terms used in this Agreement are defined in the  context in which they are used and have the meanings there indicated.   Counterparts; Signatures. This Agreement and any Exhibits hereto may be executed in counterparts,  each of which shall be deemed an original and which shall together constitute one instrument. The parties and  their Affiliates may execute this Agreement and any Exhibit or amendment hereto in the form of an electronic  record utilizing electronic signatures, as such terms are defined in the Electronic Signatures in Global and  National Commerce Act (15 U.S.C. § 7001 et seq.). Electronic signatures, or signatures transmitted by  facsimile or electronically via PDF or similar file delivery method, shall each have the same effect as an original  signature.   

 

IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by their duly authorized  representatives as of the Effective Date.  For Client: For Fiserv:  Heartland Financial USA, Inc. Fiserv Solutions, LLC  By: \si1\ By: \si2\ Name: \na1\ Name: \na2\ Title: \Ti1\ Title: Authorized Signatory  Date: \ds1\ Date: \ds2\ 

 

Heartland Financial USA, Inc.  Page 1  Legend: [***] CERTAIN INFORMATION IN THIS DOCUMENT HAS BEEN OMITTED FROM THIS  EXHIBIT BECAUSE IT IS BOTH (I) NOT MATERIAL AND (II) INFORMATION THAT THE COMPANY  TREATS AS PRIVATE OR CONFIDENTIAL.  AMENDMENT 1 TO AGREEMENT  AMENDMENT (“Amendment”) dated as of July 1, 2021 (“Amendment Effective Date”) between Fiserv  Solutions, LLC, a Wisconsin limited liability company with offices located at 255 Fiserv Drive, Brookfield,  WI 53045 (“Fiserv”), and Heartland Financial USA, Inc., with offices located at 700 Locust Street, Dubuque,  Iowa  52001 (“Heartland” or “Client”), to the Master Agreement dated July 1, 2021 between Fiserv and  Client (as amended through the date hereof, the “Agreement”).  WHEREAS, Fiserv and Client entered into the Agreement for Fiserv’s provision of various Deliverables to  Client; and  WHEREAS, Fiserv and Client wish to amend the Agreement to include additional terms;  NOW, THEREFORE, Fiserv and Client hereby agree as follows:  1. Defined Terms.  Unless otherwise defined herein, capitalized terms used herein shall have the same  meanings assigned them in the Agreement.  2. Clarification to Agreement Effective Date.  Notwithstanding anything to the contrary on page 1 of the  Agreement, the Effective Date of the Agreement shall mean July 1, 2021.  3. Correction to Appendix A.  Appendix A to the Master Agreement listing the Deliverables to be provided  to each Client Affiliate is hereby replaced with the following new Appendix A attached to this Amendment.  4. Correction to the Card Services Schedule.  Attachment 1 (Fees) to the Card Services Schedule to ASP  Services Exhibit is hereby amended by deleting the introductory paragraph and replacing it with the  following:  [***] 5. Addition of Service Level and Support Response Time Provisions.  The parties agree that the following  Exhibit and Attachment listed below and attached to this Amendment are hereby added to and incorporated  into the Agreement.   Service Level Exhibit to Master Agreement   Support Response Time Attachment to the Master Agreement  6. Correction to Instant Issuance Exhibit.  The parties agree that: [***] 7. [***] 8. Amendment.  This Amendment is intended to be a modification of the Agreement.  Except as expressly  modified herein, the Agreement shall remain in full force and effect.  In the event of a conflict between the  terms of this Amendment and the Agreement, this Amendment shall control.   SIGNATURE PAGE FOLLOWS 

 

Heartland Financial USA, Inc. Signature Page  IN WITNESS WHEREOF, the parties have caused this Amendment to be executed by their duly authorized  representatives as of the Amendment Effective Date.  For Client: For Fiserv:  Heartland Financial USA, Inc. Fiserv Solutions, LLC  By: \si1\ By: \si2\  Name: \na1\ Name: \na2\  Title: \Ti1\ Title: Authorized Signatory  Date: \ds1\ Date: \ds2\Exhibit 10.2
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Certain identified information has been excluded from the exhibit because it is both (i) not material and (ii) is the type of information that the registrant treats as private or confidential.  Double asterisks denote omissions.
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EXCLUSIVE LICENSE AGREEMENT
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BETWEEN
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THE JOHNS HOPKINS UNIVERSITY
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&
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HANES NEWCO, INC.
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JHU Agreement:  [**]
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LICENSE AGREEMENT
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THIS LICENSE AGREEMENT (the “Agreement”) is entered into by and between THE JOHNS HOPKINS UNIVERSITY, a Maryland corporation having an address at 3400 N. Charles Street, Baltimore, Maryland, 21218-2695 (“JHU”) and Hanes NewCo, Inc., a Delaware corporation having an address at c/o Jeff Wiesen, Mintz Levin Cohn Ferris Glovsky and Popeo PC, One Financial Center, Boston, MA 02111 (“Company”), with respect to the following:
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RECITALS
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WHEREAS, as a center for research and education, JHU is interested in licensing PATENT RIGHTS (hereinafter defined) in a manner that will benefit the public by facilitating the distribution of useful products and the utilization of new processes, but is without capacity to commercially develop, manufacture, and distribute any such products or processes; and
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WHEREAS, a valuable invention entitled [**] was developed during the course of research conducted by [**], and a valuable invention entitled [**] was developed during the course of research conducted by [**], and a valuable invention entitled [**] was developed during the course of research conducted by [**], and a valuable invention entitled [**] was developed during the course of research conducted by [**], and a valuable invention entitled [**] was developed during the course of research conducted by [**] (all hereinafter, “Inventors”); and
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WHEREAS, JHU has acquired through assignment all rights, title and interest, with the exception of certain retained rights by the United States Government, in its interest in said valuable inventions; and
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WHEREAS, Company desires obtain certain rights in such inventions as herein provided, and to commercially develop, manufacture, use and distribute products and processes based upon or embodying said valuable inventions throughout the world;
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NOW THEREFORE, in consideration of the premises and the mutual promises and covenants contained in this Agreement, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto agree as follows:
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ARTICLE 1
DEFINITIONS
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All references to particular Exhibits, Articles or Paragraphs shall mean the Exhibits to, and Paragraphs and Articles of, this Agreement, unless otherwise specified.  For the purposes of this Agreement and the Exhibits hereto, the following words and phrases shall have the following meanings:
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1.1                               “AFFILIATED COMPANY” as used herein in either singular or plural shall mean any corporation, company, partnership, joint venture or other entity, which controls, is controlled by or is under common control with Company.  For purposes of this Paragraph 1.1, control shall mean the direct or indirect ownership of at least fifty- percent (50%).
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1

1.2                               “EFFECTIVE DATE” of this License Agreement shall mean the date the last party hereto has executed this Agreement.
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1.3                               “EXCLUSIVE LICENSE” shall mean a grant by JHU to Company of its entire right and interest in the PATENT RIGHTS subject to rights retained by the United States Government, if any, in accordance with the Bayh-Dole Act of 1980 (established by P.L. 96-517 and amended by P.L. 98-620, codified at 35 USC § 200 et. seq. and implemented according to 37 CFR Part 401), and subject to the retained right of JHU to make, have made, provide and use for its and The Johns Hopkins Health Systems’ non-commercial academic research and teaching purposes LICENSED PRODUCT(S) and LICENSED SERVICE(S), including the ability to distribute any biological material disclosed and/or claimed in PATENT RIGHTS for nonprofit non-commercial academic research use to non-commercial entities as is customary in the scientific community.
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1.4                               “KNOW-HOW AND MATERIALS” shall mean JHU’s interest in proprietary materials, information, records, and data developed by [**] (including incidental information developed in his laboratory) and at his direction by his laboratory personnel, fellows, and students and that are directly related to the use of and practice of the PATENT RIGHTS, and are (a) subject to the Johns Hopkins Intellectual Property Policy and (b) owned by JHU as of the EFFECTIVE DATE or developed within [**] years from the EFFECTIVE DATE and not subject to any third party rights, including without limitation the materials listed on Exhibit C.  Know-How specifically excludes patentable inventions.
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1.5                               “LICENSED FIELD” shall mean all fields of use.
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1.6                               “LICENSED PRODUCT(S)” as used herein in either singular or plural shall mean any process or method, material, compositions, drug, or other product, the manufacture, use or sale of which would constitute, but for the license granted to Company pursuant to this Agreement, an infringement of a VALID CLAIM of PATENT RIGHTS (infringement shall include, but is not limited to, direct, contributory, or inducement to infringe) in the country of sale.
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1.7                               “LICENSED SERVICE(S)” as used herein in either singular or plural shall mean the performance on behalf of a third party of any method or the manufacture of any product or the use of any product or composition which would constitute, but for the license granted to Company pursuant to this Agreement, an infringement of a VALID CLAIM of the PATENT RIGHTS, (infringement shall include, but not be limited to, direct, contributory or inducement to infringe) in the country of performance of the services.
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1.8                               “NET SALES” shall mean gross sales revenues and fees billed by Company and AFFILIATED COMPANY from the sale of LICENSED PRODUCT(S) less (i) trade, quantity or cash discounts allowed, (ii) refunds, credits or allowances for returns, rejections and recalls; (iii) rebates and chargebacks, (iv) sales, use or other taxes and tariffs, duties or other charges levied by a governmental entity on the production, sale, delivery or use of LICENSED PRODUCT(S), and (iv) packing, freight, shipping and insurance charges.
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In the event that Company or AFFILIATED  COMPANY sells a LICENSED PRODUCT(S) as part of a combination, then:
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2

(i)                                     in the event that Company or AFFILIATED COMPANY sells in a particular country during a particular year a LICENSED PRODUCT(S) together with other non-therapeutic ingredients or substances or as part of a kit, and Company or AFFILIATED COMPANY also sells such LICENSED PRODUCT(S) in such country in such year separately the NET SALES for purposes of royalty payments shall be based on the sales revenues and fees that would be received from the separate sale of the same quantity of LICENSED PRODUCT as is contained in the combination.
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(ii)                                  in the event that Company or an AFFILIATED COMPANY sells, in a particular country during a particular year, a LICENSED PRODUCT for therapeutic purposes in combination with a therapeutically active ingredient which is not a LICENSED PRODUCT (“Other Items”), the NET SALES for purposes of royalty payments shall be calculated as follows:
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(a)                                 If all LICENSED PRODUCTS and Other Items contained in the combination are available separately in the particular country during such year, the NET SALES for purposes of royalty payments will be calculated by multiplying the NET SALES of the combination by the fraction A/A+B, where A is the separately available price of all LICENSED PRODUCTS in the combination in the particular country during such year, and B is the separately available price for all Other Items in the combination in the particular country during such year.
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(b)                                 If the combination includes Other Items which are not sold separately in the particular country during such year (but all LICENSED PRODUCTS contained in the combination are available separately in the particular country during such year), the NET SALES for purposes of royalty payments will be calculated by multiplying the NET SALES of the combination by A/C, where A is as defined above and C is the invoiced price of the combination.
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(c)                                  If the LICENSED PRODUCTS contained in the combination are not sold separately, the parties agree to negotiate a reduction in the royalty rate to reflect the fair value that the LICENSED PRODUCT attributed to the overall product sold.
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The term “Other Items” does not include solvents, diluents, carriers, excipients, buffers or the like used in formulating a product.
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(iii)                               In no event shall:  (1) Company apply the credit in both paragraphs (i) and (ii) above to the same sale of a LICENSED PRODUCT, and (2) the royalty rates be reduced by greater than [**] percent ([**]%) when collectively applying the credits of paragraphs (i) above, (ii) above, and the offset of Paragraph 3 in EXHIBIT A.
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1.9                               “NET SERVICE REVENUES” shall mean gross service revenues and fees billed by Company and AFFILIATED COMPANY for the performance of LICENSED SERVICE(S) less (i) trade, quantity or cash discounts allowed, (ii) refunds, rebates, and chargebacks, (iii) sales or other taxes or charges levied by a governmental entity upon and with specific reference to the LICENSED SERVICE(S).  In the event that Company or AFFILIATED COMPANY sells a LICENSED SERVICE(S) that is also sold separately in combination with other services, the NET SERVICE REVENUES for purposes of royalty payments shall be based on the sales revenues that
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would be received from the separate sale of the same quantity of LICENSED SERVICE(S) as is contained in the combination.
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1.10                        “PATENT RIGHTS” shall mean the patents and applications listed in EXHIBIT D for JHU Ref #[**] and JHU Ref # [**], any patent applications hereafter filed for JHU Ref # [**] and JHU Ref # [**] (all such patent applications for JHU Ref # [**], JHU Ref # [**], JHU Ref # [**] and JHU Ref # [**] hereinafter referred to as “Patent Applications”) and all continuations, divisions, claims of continuations-in-part applications directed to subject matter specifically described in the Patent Applications, continued prosecution applications and reissues, reexaminations, extensions and supplemental protection certificates thereof, and any corresponding foreign patent applications, and any patents, or other equivalent foreign patent rights issuing, granted or registered thereon.  “OPTION PATENT RIGHTS” shall mean the patents and applications listed in EXHIBIT D for JHU Ref # [**] (hereinafter referred to as “Option Patent Applications”) and all continuations, divisions, claims of continuations-in-part applications directed to subject matter specifically described in the Option Patent Applications, continued prosecution applications and reissues, reexaminations, extensions and supplemental protection certificates thereof, and any corresponding foreign patent applications, and any patents, or other equivalent foreign patent rights issuing, granted or registered thereon.  In the event of the exercise by Company of the option set forth in Section 2.5, the OPTION PATENT RIGHTS shall become PATENT RIGHTS for all purposes of this Agreement, except as set forth in Section 2.4.
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1.11                        “SUBLICENSE CONSIDERATION” shall mean consideration of any kind received by the Company or AFFILIATED COMPANIES from a SUBLICENSEE(S) for the grant of a sublicense under this Agreement, including upfront fees, running royalties on LICENSED PRODUCT(S) and LICENSED SERVICE(S), milestone fees based on SUBLICENSEE achievements, and any premium paid by the SUBLICENSEE(S) over Fair Market Value for stock of the Company or an AFFILIATED COMPANY in consideration for such sublicense; provided that SUBLICENSE CONSIDERATION shall not include amounts paid to the Company or an AFFILIATED COMPANY by the SUBLICENSEE(S) for milestone payments based on Company achievements (but only if (i) Company owes a milestone payment to JHU for that same achievement or (ii) the Company did not receive payments (other than the milestone payment) from the SUBLICENSEE for product development, research work, clinical studies or regulatory approvals performed by or for the Company or AFFILIATED COMPANIES to achieve the event resulting in the milestone payment), loans, equity investments at Fair Market Value, payments for product development, research work, clinical studies and regulatory approvals performed by or for the Company or AFFILIATED COMPANIES (including third parties on their behalf), each pursuant to a specific agreement providing for a work plan and reasonable budget.  The term “Fair Market Value” shall mean (i) if the stock is publicly traded, the average price that the stock in question is publicly trading at for [**] days prior to the announcement of its purchase by the SUBLICENSEE(S), (ii) if the stock is not publicly traded, and the Company or AFFILIATED COMPANY has had a private equity financing (including a financing with debt securities convertible to equity) within [**], the value of such stock as determined by the most recent such private financing through a financial investor (an entity whose sole interest in the Company or AFFILIATED COMPANY is financial, including an investment entity owned or controlled by a pharmaceutical company or other operating company that makes an investment separate from a sublicense granted to its parent company) of the Company or AFFILIATED COMPANY that issued the shares, or (iii) if the stock is not publicly traded, and the
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Company or AFFILIATED COMPANY has not had a private equity financing (including a financing with debt securities convertible to equity) through a financial investor (as defined above) within [**], a value to be agreed upon by the Company and JHU, or if they fail to agree within [**] days after the sale of the stock to the SUBLICENSEE, by an independent appraisal firm selected by the Company.
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1.12                        “SUBLICENSEE(S)” as used herein in either singular or plural shall mean any person or entity other than an AFFILIATED COMPANY to which Company or an AFFILIATED COMPANY has granted a sublicense under this Agreement.
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1.13                        “VALID CLAIM” shall mean either:  (a) a claim of an issued and unexpired patent included within the PATENT RIGHTS which has not been revoked or held unenforceable, unpatentable or invalid by a decision of a court or other governmental agency of competent jurisdiction, unappealable or unappealed within the time allowed for appeal, and which has not been disclaimed, denied or admitted to be invalid or unenforceable through reexamination, reissue, disclaimer or otherwise; or (b) a claim of a pending patent application included within the PATENT RIGHTS, which claim has not been abandoned or finally disallowed without the possibility of appeal or refiling of such application, and has been pending for less than [**] years from the date such claim was filed in a first national filing non-provisional patent application in the country of interest and has not been (i) canceled, (ii) withdrawn from consideration, (iii) finally determined to be unallowable by the applicable governmental authority (and from which no appeal is or can be taken), or (iv) abandoned.
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ARTICLE 2
LICENSE GRANT
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2.1                               Grant.  Subject to the terms and conditions of this Agreement, JHU hereby grants to Company
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(i)                                     a world-wide EXCLUSIVE LICENSE to research, develop, make, have made, use, have used, import, have imported, offer for sale, have offered for sale, sell and have sold the LICENSED PRODUCT(S) and to provide and have provided the LICENSED SERVICE(S) in the United States and worldwide under the PATENT RIGHTS in the LICENSED FIELD, and
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(ii)                                  a world-wide nonexclusive license to use the KNOW HOW AND MATERIALS in the LICENSED FIELD, provided that JHU will not grant a license to KNOW HOW AND MATERIALS to any other commercial entity.
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This Grant shall apply to the Company and any AFFILIATED COMPANY.  If any AFFILIATED COMPANY exercises rights under this Agreement, such AFFILIATED COMPANY shall be bound by all terms and conditions of this Agreement, including but not limited to indemnity and insurance provisions and royalty payments, which shall apply to the exercise of the rights, to the same extent as would apply had this Agreement been directly between JHU and the AFFILIATED COMPANY.  In addition, Company shall remain fully liable to JHU for all acts and obligations of AFFILIATED COMPANY such that acts of the AFFILIATED COMPANY shall be considered acts of the Company.
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KNOW HOW AND MATERIALS will be transferred from time-to-time by JHU’s Inventor, [**], at his discretion, and shall not be sold, invoiced, provided, or otherwise transferred, separately from PATENT RIGHTS.
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2.2                               Sublicense.  Company may sublicense to others under this Agreement, subject to the terms and conditions of this Paragraph 2.2.  As a condition to its validity and enforceability, each sublicense agreement shall:  (a) incorporate by reference the terms and conditions of this Agreement, (b) be consistent with the terms, conditions and limitations of this Agreement, (c) name JHU as an intended third party beneficiary of the obligations of SUBLICENSEE without imposition of obligation or liability on the part of JHU or its Inventors to the SUBLICENSEE, and (d) specifically incorporate Paragraphs 6.2 “Representations by JHU”, 7.1 “Indemnification”, 10.1 “Use of Name”, 10.4 “Product Liability” into the body of the sublicense agreement, and cause the terms used in therein to have the same meaning as in this Agreement..  Company shall provide to JHU a copy of each fully executed sublicense agreement, within [**] days of execution by both Company and proposed SUBLICENSEE.  To the extent that any terms, conditions or limitations of any sublicense agreement are inconsistent with this Agreement, those terms, conditions and limitations are null and void against JHU.
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2.3                               Government Rights.  The United States Government may have acquired a nonexclusive, nontransferable, irrevocable, paid-up license to practice or have practiced for or on behalf of the United States the inventions described in PATENT RIGHTS throughout the world.  To the extent that the inventions claimed in the PATENT RIGHTS were funded by grants, awards or contracts with the United States government, the rights granted herein are additionally subject to:  (i) the requirement that any LICENSED PRODUCT(S) produced for use or sale within the United States shall be substantially manufactured in the United States (unless a waiver under 35 USC § 204 or equivalent is granted by the appropriate United States government agency), (ii) the right of the United States government to require JHU, or its licensees, including Company, to grant sublicenses to responsible applicants on reasonable terms when necessary to fulfill health or safety needs, and, (iii) other rights acquired by the United States government under the laws and regulations applicable to the grant/contract award under which the inventions were made.
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2.4                               Improvements.  Subject to any third party, including U.S. Government, obligations of JHU under any agreement under which any Improvement is made, JHU will notify Company in writing of any Improvement within [**] days of disclosure to the JHU technology transfer office.  Company will have a right of first negotiation for [**] days to amend this Agreement to add the Improvement and related patent rights, know how and materials to this Agreement.  JHU and Company will negotiate in good faith on reasonable terms for adding the Improvement to this Agreement.  For purposes hereof, “Improvement” shall mean an invention (i) made in the laboratory of [**], (ii) that would infringe the PATENT RIGHTS if made used, imported or sold without a license to PATENT RIGHTS, (iii) pertaining to mucosal delivery using mucus penetrating nanoparticles or microparticles, and (iv) reported to the JHU technology transfer office within [**] from the EFFECTIVE DATE; provided, however, that if the OPTION PATENT RIGHTS become PATENT RIGHTS upon exercise of the option set forth in Section 2.5, the OPTION PATENT RIGHTS shall not be included in PATENT RIGHTS for purposes of this Section 2.4.
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2.5                               Option for OPTION PATENT RIGHTS.  JHU hereby grants to Company an exclusive option for a period of [**] months from the EFFECTIVE DATE to add the OPTION PATENT RIGHTS to the definition of PATENT RIGHTS hereunder.  Such option may be exercised by written notice to JHU at any time during such [**] month period, and upon the giving of such written notice, the OPTION PATENT RIGHTS shall become PATENT RIGHTS for all purposes of this Agreement, except as set forth in Section 2.4.
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ARTICLE 3
FEES, ROYALTIES, & PAYMENTS
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3.1                               License Fee.  Company shall pay to JHU within [**] days of the EFFECTIVE DATE of this Agreement a license fee as set forth in Exhibit A.  JHU will not submit an invoice for the license fee, which is nonrefundable and shall not be credited against royalties or other fees.
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3.2                               Minimum Annual Royalties.  Company shall pay to JHU minimum annual royalties as set forth in Exhibit A.  These minimum annual royalties shall be due, without invoice from JHU, within [**] days of [**] of each year, commencing with [**] Running royalties accrued under Paragraph 3.3 and percentage of SUBLICENSE CONSIDERATION accrued under Paragraph 3.4 and paid to JHU during the one year period preceding [**] of each year, commencing with [**] shall be credited against the minimum annual royalties due on that anniversary date.
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3.3                               Running Royalties.  Company shall pay to JHU a running royalty as set forth in Exhibit A, for each LICENSED PRODUCT(S) sold, and for each LICENSED SERVICE(S) provided, by Company, AFFILIATED COMPANIES, based on NET SALES and NET SERVICE REVENUES for the term of this Agreement.  Such payments shall be made quarterly, as set forth in Section 5.1(a).  All non-US taxes related to LICENSED PRODUCT(S) or LICENSED SERVICE(S) sold under this Agreement shall be paid by Company and shall not be deducted from royalty or other payments due to JHU, but shall be deducted from gross sales revenues and fees and gross service revenues and fees in the calculation of NET SALES and NET SERVICE REVENUES to the extent such taxes have been included in gross sales revenues and fees and gross service revenues and fees.  JHU shall be responsible for paying any and all taxes (other than withholding taxes or deduction of tax at source required by applicable law to be paid by Company) levied on it by account of its receipt of any payments it receives under this Agreement.  If applicable laws require that taxes be withheld or deducted at source from any amounts due to JHU under this Agreement, the Company shall (a) deduct these taxes from the remittable amount, (b) pay the taxes to the proper taxing authority, and (c) deliver to JHU a statement including the amount of tax withheld and justification therefor, and such other information as may be necessary for tax credit purposes.  Company shall cooperate with JHU in any action by JHU for a refund of such taxes withheld.
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In order to insure JHU the full royalty payments contemplated hereunder, Company agrees that in the event any LICENSED PRODUCT(S) shall be sold by the Company to an AFFILIATED COMPANY, by an AFFILIATED COMPANY to the Company, or among AFFILIATED COMPANIES the royalties to be paid hereunder for such LICENSED PRODUCT(S) shall be based upon the greater of:  1) the NET SALES at which the purchaser of LICENSED PRODUCT(S) resells such product to the end user, 2) the NET SERVICE REVENUES received
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from using the LICENSED PRODUCT(S) in providing a service, or 3) the NET SALES of LICENSED PRODUCT(S) paid by the purchaser.
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In the event that consideration in lieu of money is received by Company or an AFFILIATED COMPANY from the sale of LICENSED PRODUCT(S), the fair market value of such consideration shall be included in the determination of NET SALES for such sale.  Such fair market value shall be determined by the Company or AFFLILIATED COMPANY, as applicable, in good faith.
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3.4                               Sublicense Consideration.  In addition to the running royalty as set forth under Paragraph 3.3, Company shall pay to JHU a percentage of SUBLICENSE CONSIDERATION as set forth in Exhibit A.  This percentage of SUBLICENSE CONSIDERATION shall be due, without the need for invoice from JHU, within [**] days after the end of each calendar quarter in which sublicense consideration is received.
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3.5                               Milestones.  Company shall pay to JHU milestones as set forth in Exhibit A.  These milestones shall be due, without invoice from JHU, within [**] days of achievement of such milestone.
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3.6                               Patent Reimbursement.  Company will reimburse JHU for the costs of preparing, filing, maintaining and prosecuting PATENT RIGHTS incurred prior to the EFFECTIVE DATE (“PRIOR PATENT COSTS”) (currently estimated at about $ [**]).  In the event the OPTION PATENT RIGHTS become PATENT RIGHTS upon exercise of the option set forth in Section 2.5, the sum of $[**] shall be added to the PRIOR PATENT COSTS.  Company shall pay without invoice from JHU $[**] per month until the sooner of (i) all PRIOR PATENT COSTS have been paid or (ii) Company has raised a total of $[**], at which time the balance of unpaid PRIOR PATENT COSTS shall be due within [**] days.
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In accordance with Paragraph 4.1 below, Company will reimburse JHU, within [**] days of the receipt of an invoice from JHU, for all costs associated with the preparation, filing, maintenance, and prosecution of PATENT RIGHTS and the OPTION PATENT RIGHTS incurred by JHU subsequent to the EFFECTIVE DATE of this Agreement.
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3.7                               Form of Payment.  All payments under this Agreement shall be made in U.S. Dollars by either check or wire transfer.
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3.8                               Payment Information.  All check payments from Company to JHU shall be sent to:
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Director
Johns Hopkins Technology Transfer
The Johns Hopkins University
100 N. Charles Street, 5th Floor
Baltimore, MD 21201
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Attn:  JHU Agrmt# [**]
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8

or such other addresses which JHU may designate in writing from time to time.  Checks are to be made payable to “The Johns Hopkins University”.  Wire transfers may be made through:
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[**]
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[**]
Transit/Routing/ABA number:  [**]
SWIFT code:  [**]
CHIPS ABA number:  [**]
Account Number: [**]
Type of Account:  Depository
Reference:  [**]
(JHU Agrmt. # [**]
Attn:  Financial Manager
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Company shall be responsible for any and all costs associated with wire transfers.
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Via ACH
[**]
Transit/routing/ABA number:  [**]
Account number:  [**]
Type of account:  depository
CTX format is preferred; CCD+ is also accepted
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3.9                               Late Payments.  In the event that any payment due hereunder is not made when due, the payment shall accrue interest beginning on the tenth day following the due date thereof, calculated at the annual rate of the sum of (a) [**] percent ([**]%) plus (b) the prime interest rate quoted by The Wall Street Journal on the date said payment is due, the interest being compounded on the last day of each calendar quarter, provided however, that in no event shall said annual interest rate exceed the maximum legal interest rate for corporations.  Each such payment when made shall be accompanied by all interest so accrued.  Said interest and the payment and acceptance thereof shall not negate or waive the right of JHU to seek any other remedy, legal or equitable, to which it may be entitled because of the delinquency of any payment including, but not limited to termination of this Agreement as set forth in Paragraph 9.2, subject to the cure provisions set forth therein.
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ARTICLE 4
PATENT PROSECUTION, MAINTENANCE, & INFRINGEMENT
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4.1                               Prosecution & Maintenance.  JHU, at Company’s expense, shall file, prosecute and maintain all patents and patent applications specified under PATENT RIGHTS and, subject to the terms and conditions of this Agreement, Company shall be licensed thereunder.  Title to all such patents and patent applications shall reside in JHU.  JHU shall have full and complete control over all patent matters in connection therewith under the PATENT RIGHTS, provided however, that JHU shall (a) cause its patent counsel to timely copy Company on all official actions and written correspondence with any patent office, and (b) allow Company an opportunity to comment and advise JHU.  JHU shall consider and reasonably incorporate all comments and advice unless
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detrimental to JHU’s intellectual property rights.  By concurrent written notification to JHU and its patent counsel at least [**] days in advance (or later at JHU’s discretion) of any filing or response deadline, or fee due date, Company may elect not to have a patent application filed in any particular country or not to pay expenses associated with prosecuting or maintaining any patent application or patent, provided that Company pays for all costs incurred up to JHU’s receipt of such notification.  Failure to provide such notification can be considered by JHU to be Company’s authorization to proceed at Company’s expense.  Upon such notification, JHU may file, prosecute, and/or maintain such patent applications or patent at its own expense and for its own benefit, and any rights or license granted hereunder held by Company, AFFILIATED COMPANIES or SUBLICENSEE(S) relating to the PATENT RIGHTS which comprise such patent applications or patent and/or apply to the particular country, shall terminate.
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4.2                               Notification.  Each party will notify the other promptly in writing when any infringement by another is uncovered or suspected.
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4.3                               Infringement.  Company shall have the first right to enforce any patent within PATENT RIGHTS against any infringement or alleged infringement thereof, and shall at all times keep JHU informed as to the status thereof.  Before Company commences an action with respect to any infringement of such patents, Company shall give careful consideration to the views of JHU and to potential effects on the public interest in making its decision whether or not to sue.  Thereafter, Company may, at its own expense, institute suit against any such infringer or alleged infringer and control and defend such suit in a manner consistent with the terms and provisions hereof and recover any damages, awards or settlements resulting therefrom, subject to Paragraph 4.5.  If required by law, JHU shall permit action under this Section to be brought in its name, including being joined as party-plaintiff.  However, no settlement, consent judgment or other voluntary final disposition of the suit that concedes the invalidity or unenforceability of any patent within PATENT RIGHTS may be entered into without the prior written consent of JHU, which consent shall not be unreasonably withheld.  This right to sue for infringement shall not be used in an arbitrary or capricious manner.  JHU shall reasonably cooperate in any such litigation at Company’s expense.
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If Company elects not to enforce any patent within the PATENT RIGHTS, then it shall so notify JHU in writing within [**] days of receiving notice that an infringement exists, and JHU may, in its sole judgment and at its own expense, take steps to enforce any patent and control, settle, and defend such suit in a manner consistent with the terms and provisions hereof, and recover, for its own account, any damages, awards or settlements resulting therefrom.  However, no settlement, consent judgment or other voluntary final disposition of the suit that concedes the invalidity or unenforceability of any patent within PATENT RIGHTS may be entered into without the prior written consent of Company, which consent shall not be unreasonably withheld.
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4.4                               Patent Invalidity Suit.  If a declaratory judgment action is brought naming Company as a defendant and alleging invalidity of any of the PATENT RIGHTS, JHU may elect to take over the sole defense of the action at its own expense.  Company shall cooperate fully with JHU in connection with any such action.
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4.5                               Recovery.  Any recovery by Company under Paragraph 4.3 shall be deemed to reflect loss of commercial sales, and Company shall pay to JHU [**] percent ([**]%) of the
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recovery, net of all reasonable costs and expenses associated with each suit or settlement.  If the cost and expenses exceed the recovery, then [**] of the excess shall be credited against royalties payable by Company to JHU hereunder in connection with sales of LICENSED PRODUCT covered in the PATENT RIGHTS which are the subject of the infringement suit, in the country of such legal proceedings, provided, however, that any such credit under this Paragraph shall not exceed [**] percent ([**]%) of the royalties otherwise payable to JHU with regard to sales in the country of such action in any one calendar year, with any excess credit being carried forward to future calendar years.
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4.6                               Cooperation.  Each party agrees to cooperate in any action under this Article which is controlled by the other party, provided that the controlling party reimburses the cooperating party promptly for any costs and expenses incurred by the cooperating party in connection with providing such assistance.
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ARTICLE 5
OBLIGATIONS OF THE PARTIES
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5.1                               Reports.  Company shall provide to JHU the following written reports according to the following schedules.
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(a)                                 Company shall provide quarterly Royalty Reports, substantially in the format of Exhibit B and due within [**] days of the end of each calendar quarter following the first commercial sale of a LICENSED PRODUCT or LICENSED SERVICE by Company, an AFFILIATED COMPANY or a SUBLICENSEE(S).  Royalty Reports shall disclose (i) the amount of LICENSED PRODUCT(S) and LICENSED SERVICE(S) sold, the total NET SALES and NET SERVICE REVENUES of such LICENSED PRODUCT(S) and LICENSED SERVICE(S), and the running royalties due to JHU as a result of NET SALES and NET SERVICE REVENUES by Company and AFFILIATED COMPANIES thereof and (ii) the amount of SUBLICENSE CONSIDERATION received and the percentage thereof payable to JHU pursuant to Section 3.4.  Payment of any such royalties and percentage of SUBLICENSE CONSIDERATION due shall accompany such Royalty Reports.
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(b)                                 Until Company, an AFFILIATED COMPANY or a SUBLICENSEE(S) has achieved a first commercial sale of a LICENSED PRODUCT or LICENSED SERVICE, or received FDA market approval, Company shall provide [**] Diligence Reports, due within [**] days of the end of [**] following the EFFECTIVE DATE of this Agreement.  These Diligence Reports shall describe Company’s, AFFILIATED COMPANIES or any SUBLICENSEE(S)’s technical efforts towards meeting its obligations under the terms of this Agreement.
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(c)                                  Company shall provide [**] Reports within [**] days of the end of [**] following the EFFECTIVE DATE of this Agreement.  [**] Reports shall include:
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(i)                                     evidence of insurance as required under Paragraph 10.4, or, a statement of why such insurance is not currently required, and
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(ii)                                  identification of all AFFILIATED COMPANIES which have exercised rights pursuant to Paragraph 2.1, or, a statement that no AFFILIATED COMPANY has exercised such rights, and
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(iii)                               notice of all FDA approvals of any LICENSED PRODUCT(S) or LICENSED SERVICE(S)  obtained by COMPANY,  AFFILIATED  COMPANY or SUBLICENSEE, the patent(s) or patent application(s) licensed under this Agreement upon which such product or service is based, and the commercial name of such product or service, or, in the alternative, a statement that no FDA approvals have been obtained.
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5.2                               Records.  Company shall make and retain, for a period of [**] years following the period of each report required by Paragraph 5.1, true and accurate records, files and books of account containing all the data reasonably required for the full computation and verification of sales and other information required in Paragraph 5.1.  Such books and records shall be in accordance with generally accepted accounting principles consistently applied.  Company shall permit the inspection of such records, files and books of account by an independent certified public accountant selected by JHU and acceptable to Company in its reasonable judgment during regular business hours upon [**] business days’ written notice to Company.  Such inspection shall not be made more than [**].  All costs of such inspection shall be paid by JHU, provided that if any such inspection shall reveal that an error has been made in the amount of payments hereunder for any calendar year equal to [**] percent ([**]%) or more of such payments, such costs shall be borne by Company.  As a condition to entering into any such agreement, Company shall include in any agreement with its AFFILIATED COMPANIES which permits such party to make, use, sell or import the LICENSED PRODUCT(S) or provide LICENSED SERVICE(S), a provision requiring such party to retain records of sales of LICENSED PRODUCT(S) and records of LICENSED SERVICE(S) and other information as required in Paragraph 5.1 and permit an independent certified public accountant selected by JHU and acceptable to Company in its reasonable judgment to inspect such records as required by this Paragraph.
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5.3                               Commercially Reasonable Efforts.  Company shall exercise commercially reasonable efforts to develop and to introduce the LICENSED PRODUCT(S) and LICENSED SERVICE(S) into the commercial market, through itself, its AFFILIATED COMPANIES and/or its SUBLICENSEE(S), consistent with sound and reasonable business practice and judgment.  Beginning on the EFFECTIVE DATE Company shall spend, at a minimum, a total of $[**] USD over a [**] year period on research and development activities related to potential LICENSED PRODUCTS.  In addition, Company shall have [**] of a LICENSED PRODUCT prior to the [**] of the EFFECTIVE DATE.  Following the introduction of a LICENSED PRODUCT or LICENSED SERVICE into the commercial market, and until the expiration or termination of this Agreement, Company shall endeavor to keep LICENSED PRODUCT(S) and LICENSED SERVICE(S) reasonably available to the public consistent with sound and reasonable business practice and judgment.  Company shall also exercise commercially reasonable efforts to develop LICENSED PRODUCT(S) suitable for different indications within the LICENSED FIELD, consistent with sound and reasonable business practice and judgment.
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5.4                               Patent Acknowledgement.  Company agrees that all packaging containing individual LICENSED PRODUCT(S) sold by Company, AFFILIATED COMPANIES and SUBLICENSEE(S) of Company will be marked with the number of the applicable patent(s) licensed hereunder in accordance with each country’s patent laws to the extent reasonably practical.
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ARTICLE 6
REPRESENTATIONS
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6.1                               Duties of the Parties.  JHU is not a commercial organization.  It is an institute of research and education.  Therefore, JHU has no ability to evaluate the commercial potential of any PATENT RIGHTS or LICENSED PRODUCT or other license or rights granted in this Agreement.  It is therefore incumbent upon Company to evaluate the rights and products in question, to examine the materials and information provided by JHU, and to determine for itself the validity of any PATENT RIGHTS, its freedom to operate, and the value of any LICENSED PRODUCTS or LICENSED SERVICES or other rights granted.
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6.2                               Representations by JHU.  JHU warrants that it has good and marketable title to its interest in the inventions claimed under PATENT RIGHTS with the exception of certain retained rights of the United States Government, which may apply if any part of the JHU research was funded in whole or in part by the United States Government.  JHU does not warrant the validity of any patents or that practice under such patents shall be free of infringement.  EXCEPT AS EXPRESSLY SET FORTH IN THIS PARAGRAPH 6.2, COMPANY, AFFILIATED COMPANIES AND SUBLICENSEE(S) AGREE THAT THE PATENT RIGHTS ARE PROVIDED “AS IS”, AND THAT JHU MAKES NO REPRESENTATION OR WARRANTY WITH RESPECT TO THE PERFORMANCE OF LICENSED PRODUCT(S) AND LICENSED SERVICE(S) INCLUDING THEIR SAFETY, EFFECTIVENESS, OR COMMERCIAL VIABILITY.  JHU DISCLAIMS ALL WARRANTIES WITH REGARD TO PRODUCT(S) AND SERVICE(S) LICENSED UNDER THIS AGREEMENT, INCLUDING, BUT NOT LIMITED TO, ALL WARRANTIES, EXPRESSED OR IMPLIED, OF MERCHANTABILITY AND FITNESS FOR ANY PARTICULAR PURPOSE.  NOTWITHSTANDING ANY OTHER PROVISION OF THIS AGREEMENT, JHU ADDITIONALLY DISCLAIMS ALL OBLIGATIONS AND LIABILITIES ON THE PART OF JHU AND INVENTORS, FOR DAMAGES, INCLUDING, BUT NOT LIMITED TO, DIRECT, INDIRECT,   SPECIAL,   AND   CONSEQUENTIAL   DAMAGES,   ATTORNEYS’ AND EXPERTS’ FEES, AND COURT COSTS (EVEN IF JHU HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES, FEES OR COSTS), ARISING OUT OF OR IN CONNECTION WITH THE MANUFACTURE, USE, OR SALE OF THE PRODUCT(S) AND SERVICE(S) LICENSED UNDER THIS AGREEMENT.  COMPANY, AFFILIATED COMPANIES AND SUBLICENSEE(S) ASSUME ALL RESPONSIBILITY AND LIABILITY FOR LOSS OR DAMAGE CAUSED BY A PRODUCT AND/OR SERVICE MANUFACTURED, USED, OR SOLD BY COMPANY, ITS SUBLICENSEE(S) AND AFFILIATED COMPANIES WHICH IS A LICENSED PRODUCT(S) OR LICENSED SERVICE(S) AS DEFINED IN THIS AGREEMENT.
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6.3                               Prior Assignment of Rights.  The Parties acknowledge the Assignment of Rights Agreement dated December 8, 2005 among JHU, [**] (the “Assignment Agreement”).  JHU agrees (i) that as between JHU on the one hand and [**] on the other hand, [**] are the absolute owners of the patent rights that are the subject of the Assignment Agreement, and JHU will not exercise any right it may have to terminate said Assignment Agreement, (ii) JHU is not entitled to receive any part of any stock in the Company issued to [**], and (iii) the Company will not be obligated to make any payment (including without limitation, royalties and milestones) to JHU with respect to the patent assigned under the Assignment Agreement.
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ARTICLE 7
INDEMNIFICATION
​
7.1                               Indemnification.  JHU and the Inventors would have no legal liability exposure to third parties if JHU did not license the LICENSED PRODUCT(S) and LICENSED SERVICE(S), and any royalties JHU and the Inventors may receive is not adequate compensation for such legal liability exposure.  Therefore, JHU requires Company to protect JHU and Inventors from such exposure to the same manner and extent to which insurance, if available, would protect JHU and Inventors.  Furthermore, JHU and the Inventors will not, under the provisions of this Agreement or otherwise, have control over the manner in which Company or its AFFILIATED COMPANIES or its SUBLICENSEE(S) or those operating for its account or third parties who purchase LICENSED PRODUCT(S) or LICENSED SERVICE(S) from any of the foregoing entities, develop, manufacture, market or practice the inventions of LICENSED PRODUCT(S) and LICENSED SERVICE(S).  Therefore, Company, AFFILIATED COMPANY and SUBLICENSEE, each solely with respect to its own practice of such inventions, shall indemnify, defend with counsel reasonably acceptable to JHU, and hold JHU, The Johns Hopkins Health Systems, their present and former trustees, officers, Inventors of PATENT RIGHTS, agents, faculty, employees and students harmless as against any judgments, fees, expenses, or other costs arising from or incidental to any product liability or other lawsuit, claim, demand or other action brought as a consequence of its own practice of said inventions, whether or not JHU or said Inventors, either jointly or severally, is named as a party defendant in any such lawsuit and whether or not JHU or the Inventors are alleged to be negligent or otherwise responsible for any injuries to persons or property.  Practice of the inventions covered by LICENSED PRODUCT(S) and LICENSED SERVICE(S), by an AFFILIATED COMPANY, SUBLICENSEE, or an agent or a third party on behalf of or for the account of Company or by a third party who purchases LICENSED PRODUCT(S) and LICENSED SERVICE(S) from Company, shall be considered Company’s practice of said inventions for purposes of this Paragraph.  The obligation of Company to defend and indemnify as set out in this Paragraph shall survive the termination of this Agreement, shall continue even after assignment of rights and responsibilities to an affiliate or sublicensee, and shall not be limited by any other limitation of liability elsewhere in this Agreement.
​
ARTICLE 8
CONFIDENTIALITY
​
8.1                               Confidentiality.  If necessary, the parties will exchange information, which they consider to be confidential.  The recipient of such information agrees to accept the disclosure of said information which is marked as confidential at the time it is sent to the recipient, and to employ all reasonable efforts to maintain the information secret and confidential, such efforts to be no less than the degree of care employed by the recipient to preserve and safeguard its own confidential information, and in any event no less than a reasonable degree of care.  The information shall not be disclosed or revealed to anyone except employees, consultants, collaborators, investors and prospective investors of the recipient who have a need to know the information and who have entered into a secrecy agreement with the recipient under which such employees are required to maintain confidential the proprietary information of the recipient and such employees shall be advised by the recipient of the confidential nature of the information and that the information shall be treated accordingly.
​
​

14

The obligations of this Paragraph 8.1 shall also apply to AFFILIATED COMPANIES and/or SUBLICENSEE(S) provided such information of JHU by Company.  JHU’s, Company’s, AFFILIATED COMPANIES, and SUBLICENSEES’ obligations under this Paragraph 8.1 shall extend until [**] years after the termination of this Agreement.
​
8.2                               Exceptions.  The recipient’s obligations under Paragraph 8.1 shall not extend to any part of the information:
​
a.                                      that can be demonstrated to have been in the public domain or publicly known and readily available to the trade or the public prior to the date of the disclosure; or
​
b.                                      that can be demonstrated, from written records to have been in the recipient’s possession or readily available to the recipient from another source not under obligation of secrecy to the disclosing party prior to the disclosure; or
​
c.                                       that becomes part of the public domain or publicly known by publication or otherwise, not due to any unauthorized act by the recipient; or
​
d.                                      that is demonstrated from written records to have been developed by or for the receiving party without reference to confidential information disclosed by the disclosing party.
​
e.                                       that is required to be disclosed by law, government regulation or court order.
​
8.3                               Right to Publish.  JHU may publish manuscripts, abstracts or the like describing the PATENT RIGHTS and inventions contained therein provided confidential information of Company as defined in Paragraph 8.1, is not included or without first obtaining approval from Company to include such confidential information.  Otherwise, JHU and the Inventors shall be free to publish manuscripts and abstracts or the like directed to the work done at JHU related to the licensed technology without prior approval.
​
ARTICLE 9
TERM & TERMINATION
​
9.1                               Term.  The term of this Agreement shall commence on the EFFECTIVE DATE and shall continue, in each country, until the date of expiration of the last to expire patent included within PATENT RIGHTS in that country or if no patents issue then for a term of twenty (20) years from the EFFECTIVE DATE of this Agreement.
​
9.2                               Termination By Either Party.  This Agreement may be terminated by either party, in the event that the other party (a) files or has filed against it a petition under the Bankruptcy Act that is not dismissed within [**] days, makes an assignment for the benefit of creditors, has a receiver appointed for it or a substantial part of its assets and such receivership is not terminated within [**] days, or otherwise takes advantage of any statute or law designed for relief of debtors or (b) fails to perform or otherwise breaches any of its obligations hereunder, if, following the giving of notice by the terminating party of its intent to terminate and stating the grounds therefor, the party receiving such notice shall not have cured the failure or breach within [**] days; provided, however, that, except where the alleged breach is for failure to pay a fixed amount due
​
​

15

under this agreement (such as the License Fee, Minimum Annual Royalty or the $[**] monthly patent cost reimbursement payment set forth in Section 3.6), in the event the party receiving the notice disputes the alleged failure to perform or breach in good faith, such [**] day cure period shall commence upon determination by a court of competent jurisdiction (or arbitrator if the parties agree to arbitrate the matter) that the alleged failure to perform or breach exists.  In no event, however, shall such notice or intention to terminate be deemed to waive any rights to damages or any other remedy which the party giving notice of breach may have as a consequence of such failure or breach.
​
9.3                               Termination by Company.  Company may terminate this Agreement and the license granted herein, for any reason, upon giving JHU ninety (90) days written notice.  Company may terminate its license with respect to any particular patent or patent application with 60 days’ notice to JHU and Exhibit D shall be considered amended accordingly.  Company will not be required to reimburse JHU for patent costs incurred after the 60-day notice period for such patents or patent applications.
​
9.4                               Obligations and Duties upon Termination.  If this Agreement is terminated, both parties shall be released from all obligations and duties imposed or assumed hereunder to the extent so terminated, except as expressly provided to the contrary in this Agreement.  Upon termination, both parties shall cease any further use of the confidential information disclosed to the receiving party by the other party.  Termination of this Agreement, for whatever reason, shall not affect the obligation of either party to make any payments for which it is liable prior to or upon such termination.  Termination shall not affect JHU’s right to recover unpaid royalties, fees, reimbursement for patent expenses, or other forms of financial compensation incurred prior to termination.  Upon termination Company shall submit a final royalty report to JHU and any royalty payments, fees, unreimbursed patent expenses and other financial compensation due JHU shall become immediately payable.  Furthermore, upon termination of this Agreement, all rights in and to the licensed technology shall revert immediately to JHU at no cost to JHU.  Upon termination of this Agreement, any SUBLICENSEE(S) shall become a direct licensee of JHU, provided that JHU’s obligations to SUBLICENSEE(S) are no greater than JHU’s obligations to Company under this Agreement.  Company shall provide written notice of such to each SUBLICENSEE(S) with a copy of such notice provided to JHU.
​
ARTICLE 10
MISCELLANEOUS
​
10.1                        Use of Name.  Except as required by applicable law or regulations, Company, AFFILIATED COMPANIES and SUBLICENSEE(S) shall not use the name of The Johns Hopkins University or The Johns Hopkins Health System or any of its constituent parts, such as the Johns Hopkins Hospital or any contraction thereof or the name of Inventors in any advertising, promotional, sales literature or fundraising documents without prior written consent from an authorized representative of JHU, or, in the case of the name of an Inventor, from such Inventor; provided that the Company may disclose the existence of this Agreement and the terms hereof and the fact that [**] is a founder of the Company and a faculty member of JHU without such consent.  Company, AFFILIATED COMPANIES and SUBLICENSEE(S) shall allow at least [**] days notice of any proposed public disclosure for JHU’s review and comment or to provide written consent.
​
​

16

10.2                        No Partnership.  Nothing in this Agreement shall be construed to create any agency, employment, partnership, joint venture or similar relationship between the parties other than that of a licensor/licensee.  Neither party shall have any right or authority whatsoever to incur any liability or obligation (express or implied) or otherwise act in any manner in the name or on the behalf of the other, or to make any promise, warranty or representation binding on the other.
​
10.3                        Notice of Claim.  Each party shall give the other or its representative immediate notice of any suit or action filed, or prompt notice of any claim made, against them arising out of the performance of this Agreement or arising out of the practice of the inventions licensed hereunder.
​
10.4                        Product Liability.  Prior to initial human testing or first commercial sale of any LICENSED PRODUCT(S) or LICENSED SERVICE(S) as the case may be in any particular country, Company shall establish and maintain, covering the Company’s liability in each country in which Company, an AFFILIATED COMPANY or SUBLICENSEE(S) shall test or sell LICENSED PRODUCT(S) and LICENSED SERVICE(S), product liability or other appropriate insurance coverage in the minimum amount of [**] dollars ($[**]) per claim and will annually present evidence to JHU that such coverage is being maintained.  Upon JHU’s request, Company will furnish JHU with a Certificate of Insurance of each product liability insurance policy obtained.  JHU shall be listed as an additional insured in Company’s said insurance policies.  If such Product Liability insurance is underwritten on a ‘claims made’ basis, Company agrees that any change in underwriters during the term of this Agreement will require the purchase of ‘prior acts’ coverage to ensure that coverage will be continuous throughout the term of this Agreement.
​
10.5                        Governing Law.  This Agreement shall be construed, and legal relations between the parties hereto shall be determined, in accordance with the laws of the State of Maryland applicable to contracts solely executed and wholly to be performed within the State of Maryland without giving effect to the principles of conflicts of laws.  Any disputes between the parties to this Agreement shall be brought in the state or federal courts of Maryland.  Both parties agree to waive their right to a jury trial.
​
10.6                        Notice.  All notices or communication required or permitted to be given by either party hereunder shall be deemed sufficiently given if mailed by registered mail or certified mail, return receipt requested, or sent by overnight courier providing evidence of delivery, such as Federal Express, to the other party at its respective address set forth below or to such other address as one party shall give notice of to the other from time to time hereunder.  Mailed notices shall be deemed to be received on the third business day following the date of mailing.  Notices sent by overnight courier shall be deemed received the following business day.
​
If to Company:
​
Mintz, Levin, Cohn, Ferris,
Glovsky and Popeo, P.C.
One Financial Center
Boston, MA 02111
Attn:  Jeffrey M. Wiesen, Esq.
​
​

17

	

	​

	

	With a Copy to:
	  
	Mintz, Levin, Cohn, Ferris,

	 
	​
	Glovsky and Popeo, P.C.

	 
	​
	One Financial Center

	 
	​
	Boston, MA 02111

	 
	​
	Attn: Jeffrey M. Wiesen, Esq.

	 
	​
	 

	If to JHU:
	​
	Director

	 
	​
	Technology Transfer

	 
	​
	Johns Hopkins University

	 
	​
	100 N. Charles Street

	 
	​
	5th Floor

	 
	​
	Baltimore, MD 21201

	 
	​
	Attn: Agrmt [**]

​
10.7                        Compliance with All Laws.  In all activities undertaken pursuant to this Agreement, both JHU and Company covenant and agree that each will in all material respects comply with such Federal, state and local laws and statutes, as may be in effect at the time of performance and all valid rules, regulations and orders thereof regulating such activities.
​
10.8                        Successors and Assigns.  Neither this Agreement nor any of the rights or obligations created herein, except for the right to receive any remuneration hereunder, may be assigned by either party, in whole or in part, without the prior written consent of the other party, except that either party shall be free to assign this Agreement in connection with its merger or consolidation or any sale of substantially all of its assets without the consent of the other.  This Agreement shall bind and inure to the benefit of the successors and permitted assigns of the parties hereto.
​
10.9                        No Waivers; Severability.  No waiver of any breach of this Agreement shall constitute a waiver of any other breach of the same or other provision of this Agreement, and no waiver shall be effective unless made in writing.  Any provision hereof prohibited by or unenforceable under any applicable law of any jurisdiction shall as to such jurisdiction be deemed ineffective and deleted herefrom without affecting any other provision of this Agreement.  It is the desire of the parties hereto that this Agreement be enforced to the maximum extent permitted by law, and should any provision contained herein be held by any governmental agency or court of competent jurisdiction to be void, illegal and unenforceable, the parties shall negotiate in good faith for a substitute term or provision which carries out the original intent of the parties.
​
10.10                 Entire Agreement; Amendment.  Company and JHU acknowledge that they have read this entire Agreement and that this Agreement, including the attached Exhibits constitutes the entire understanding and contract between the parties hereto and supersedes any and all prior or contemporaneous oral or written communications with respect to the subject matter hereof, all of which communications are merged herein.  It is expressly understood and agreed that (i) there being no expectations to the contrary between the parties hereto, no usage of trade, verbal agreement or another regular practice or method dealing within any industry or between the parties hereto shall be used to modify, interpret, supplement or alter in any manner the express terms of this Agreement; and (ii) this Agreement shall not be modified, amended or in any way altered except by an instrument in writing signed by both of the parties hereto.
​
​

18

10.11                 Delays or Omissions.  Except as expressly provided herein, no delay or omission to exercise any right, power or remedy accruing to any party hereto, shall impair any such right, power or remedy to such party nor shall it be construed to be a waiver of any such breach or default, or an acquiescence therein, or in any similar breach or default be deemed a waiver of any other breach or default theretofore or thereafter occurring.  Any waiver, permit, consent or approval of any kind or character on the part of any party of any breach or default under this Agreement, or any waiver on the part of any party of any provisions or conditions of this Agreement, must be in writing and shall be effective only to the extent specifically set forth in such writing.  All remedies either under this Agreement or by law or otherwise afforded to any party, shall be cumulative and not alternative.
​
10.12                 Force Majeure.  If either party fails to fulfill its obligations hereunder (other than an obligation for the payment of money), when such failure is due to an act of God, or other circumstances beyond its reasonable control, including but not limited to fire, flood, civil commotion, riot, war (declared and undeclared), revolution, or embargoes, then said failure shall be excused for the duration of such event and for such a time thereafter as is reasonable to enable the parties to resume performance under this Agreement, provided however, that in no event shall such time extend for a period of more than [**] days.
​
10.13                 Further Assurances.  Each party shall, at any time, and from time to time, prior to or after the EFFECTIVE DATE of this Agreement, at reasonable request of the other party, execute and deliver to the other such instruments and documents and shall take such actions as may be required to more effectively carry out the terms of this Agreement.
​
10.14                 Survival.  All representations, warranties, covenants and agreements made herein and which by their express terms or by implication are to be performed after the execution and/or termination hereof, or are prospective in nature, shall survive such execution and/or termination, as the case may be.  This shall include Paragraphs 3.7 (Late Payments), 5.2 (Records), and Articles 6, 7, 8, 9, and 10.
​
10.15                 No Third Party Beneficiaries.  Nothing in this Agreement shall be construed as giving any person, firm, corporation or other entity, other than the parties hereto and their successors and permitted assigns, any right, remedy or claim under or in respect of this Agreement or any provision hereof.
​
10.16                 Headings.  Article headings are for convenient reference and not a part of this Agreement.  All Exhibits are incorporated herein by this reference.
​
10.17                 Counterparts.  This Agreement may be executed in counterparts, each of which shall be deemed an original and all of which when taken together shall be deemed but one instrument.
​
IN WITNESS WHEREOF, this Agreement shall take effect as of the EFFECTIVE DATE when it has been executed below by the duly authorized representatives of the parties.
​
​

19

	

	​

	

	

	THE JOHNS HOPKINS UNIVERSITY
	  
	HANES NEWCO, INC.

	 
	​
	 

	/s/ Wesley D. Blakeslee 
	​
	/s/ Robert Paull

	Wesley D . Blakeslee, J.D.
	​
	Name:
	Robert Paull

	Executive Director
	​
	Title:
	CEO

​
​
	Johns Hopkins Technology Transfer
	  
	 

	10 Nov. 2009 
	​
	November 9th, 2009

	(Date)
	​
	(Date)

​
I have read and agree to abide by the terms of this Agreement:
​
	/s/ [**] 
	  
	11/11/09 

	[**]
	​
	Date

​
​

20

EXHIBIT A.                           LICENSE FEE & ROYALITIES.
EXHIBIT B.                           SALES & ROYALTY REPORT FORM.
EXHIBIT C.                           MATERIALS.
EXHIBIT D.                           PATENT APPLICATIONS.
​
​

21

EXHIBIT A
​
LICENSE FEE & ROYALTIES
​
1.                                      License Fee:  The license fee due under Paragraph 3.1 is
​
(i)                                     [**] dollars ($[**]), and
​
(ii)                                  shares of Company stock in such amounts that after issuance of those shares JHU shall own [**] percent ([**]%) of the total pre-financing outstanding shares of Company.  After that, the JHU equity interest shall be diluted at the same rate as the founders’ shares through subsequent rounds of equity financing.  JHU will become a party to Company’s Investor Rights Agreement on the same basis as Company’s founders.
​
2.                                      Minimum Annual Royalties:  The minimum annual royalties pursuant to Paragraph 3.2 are:
​
	[**] year:
	  
	[**] dollars ($[**]).

	 
	 
	 

	[**] year:
	 
	[**] dollars ($[**]).

	 
	 
	 

	[**] year and each year thereafter until Launch Year:
	 
	Fifty thousand dollars ($50,000).

	 
	 
	 

	Launch Year and each year thereafter:
	 
	One hundred thousand dollars ($100,000).

​
“Launch Year” shall mean the year of the first commercial sale of a LICENSED PRODUCT in the U.S., EU or Japan.
​
3.                                      Royalties:  The running royalty rate payable under Paragraph 3.3 is:
​
	

	

	

	

	Portion of Annual Sales
	  
	Royalty Rate
	 

	0-$[**]
	 
	[**]
	%

	$[**]-$[**]
	 
	[**]
	%

	>$[**]
	 
	[**]
	%

​
For those annual sales exceeding $[**]:  In the event that Company is required to pay running royalties on any patent rights not licensed hereunder (“Other Payments”) in order to commercialize a LICENSED PRODUCT or LICENSED SERVICE, Company may offset [**]% of such Other Payments actually paid against royalty payments owed to JHU, provided that that the royalty payment to JHU shall not fall below [**]% of that which would otherwise be due JHU for that LICENSED PRODUCT or LICENSED SERVICE.
​
4.                                      Sublicense consideration:  The percent of SUBLICENSE CONSIDERATION payable under Paragraph 3.4 is:
​

22

[**]% for any sublicense executed prior to [**] months after the EFFECTIVE DATE;
​
[**]% for any sublicense executed between [**] months after the EFFECTIVE DATE and [**] months after the EFFECTIVE DATE; and
​
[**]% for any sublicense executed more than [**] months after the EFFECTIVE DATE.
​
In the event that (i) Company sublicenses PATENT RIGHTS together with patent rights owned by Company and necessary to commercialize a LICENSED PRODUCT, the above percentages will be reduced by [**]% and (ii) Company pays a portion of sublicensing revenue to a third party under a third-party license for patent rights necessary to commercialize a LICENSED PRODUCT, Company may offset [**]% of such amounts actually paid against percentage of SUBLICENSE CONSIDERATION payments owed to JHU; provided that the percentage of SUBLICENSE CONSIDERATION payments to JHU shall not fall below [**]%.
​
5.                                      Milestones:  The milestones payable under Paragraph 3.5 are:
​
(i)                                     [**] upon [**]
​
(ii)                                  $[**] upon [**]
​
(iii)                               $[**] upon [**]
​
(iv)                              $[**] upon [**]
​
(v)                                 $[**] upon [**]
​
Each milestone payment shall be paid for the first three LICENSED PRODUCTS to achieve such milestone and no milestone payments shall be required for subsequent LICENSED PRODUCTS.  Milestone payments for the second and third LICENSED PRODUCTS shall be reduced by [**]%.
​
​
​

23

FIRST AMENDMENT
TO EXCLUSIVE LICENSE AGREEMENT
​
This First Amendment to Exclusive License Agreement is entered into by and between The Johns Hopkins University (“JHU”) and Kala Pharmaceuticals, Inc., formerly known as Hanes NewCo, Inc, a Delaware corporation (“Kala” or “Company”).
​
WHEREAS, Hanes NewCo, Inc. and JHU entered into an Exclusive License Agreement dated November 10, 2009 (“Agreement”) pursuant to which JHU licensed certain patent rights and know-how to Hanes NewCo, Inc.
​
WHEREAS, Hanes NewCo, Inc. changed its name to Kala Pharmaceuticals, Inc. on December 11, 2009.
​
WHEREAS, the parties wish to amend the Agreement on the terms set forth herein;
​
NOW, THEREFORE, in consideration of the mutual covenants and agreements set forth below, the parties agree as follows:
​
1.                                      Capitalized terms used herein and not defined herein shall have the respective meanings ascribed to such terms in the Agreement.
​
2.                                      Each of the parties hereby agrees to amend the agreement to substitute Kala Pharmaceuticals, Inc. in place of Hanes NewCo, Inc. every place such name appears in the Agreement.
​
3.                                      As of the First Amendment Date, Section 2.4 of the Agreement shall be superseded in its entirety by the following:
​
“Commencing on the First Amendment Date, Company may, within [**] days following the end of a calendar quarter, by email to Director, Technology Licensing [email: [**] or [**]]. request information about any Improvements that were disclosed to the JHU technology transfer office during the previous calendar quarter.  Within [**] days after receipt of such email, JHU shall notify Company in writing of any such Improvements; provided, however, that if an invention disclosure describing an Improvement also contains disclosure for one or more additional inventions which are not Improvements (“Other Inventions”), then JHU may redact information on such Other Inventions.  Subject to any third party, including U.S. Government, obligations of JHU under any agreement under which any Improvement is made, Company will have a right of first negotiation to amend this Agreement to add the Improvement and related patent rights, know how and materials to this Agreement; provided, that Company notifies JHU of Company’s interest in exercising such right of first negotiation within [**] days after receipt of written notice from JHU of such Improvement.  JHU and Company will negotiate in good faith on reasonable terms for adding the Improvement to this Agreement.  For purposes hereof, “Improvement” shall mean an invention:  (i) made in the laboratory of [**]; (ii) that would infringe the PATENT RIGHTS if made, used, imported or sold without a license to PATENT RIGHTS; (iii) pertaining to mucosal delivery using mucus penetrating nanoparticles or microparticles; and (iv) reported to the JHU technology transfer office within [**] years from the First Amendment Date.”
​
4.                                      In Section 10.6, change the addresses for notices to the Company to the following:
​
	“If to Company:
	  
	Kala Pharmaceuticals, Inc.

	 
	​
	135 Beaver Street #309

	 
	​
	Waltham, MA 02453

	 
	​
	Attn: Chief Executive Officer

	 
	​
	With a Copy to: General Counsel”

​
5.                                      In all other respects the Agreement shall remain in full force and effect.
​
6.                                      This First Amendment shall be effective as of the date the last party hereto has executed this First Amendment (the “First Amendment Date”).
​
7.                                      For the convenience of the parties hereto, this Amendment may be executed in two counterparts, each of which shall be deemed to be an original, but both of which together shall constitute one and the same instrument, without necessity of production of the others.  Signatures may be exchanged by facsimile or electronic transmission and each of the parties to this Amendment agrees that it will be bound by its own facsimile signature and that it accepts the facsimile signature of the other party.

1

​
8.                                      Amendment Fee.  Company shall pay to JHU within [**] days of the First Amendment Date [**] dollars ($[**]) as an amendment fee.  JHU will not submit an invoice for the amendment fee, which is nonrefundable and shall not be credited against royalties or other fees.
​
This Agreement may be executed in one or more counterparts each of which shall be deemed an original but all of which together shall constitute one and the same instrument.
​
	

	

	​

	

	

	KALA PHARMAEUTICALS, INC.
	  
	THE JOHNS HOPKINS UNIVERSITY

	 
	​
	 

	 
	​
	 

	By:
	/s/ Guillaume Pfefer
	​
	By:
	/s/ Wesley D. Blakeslee

	​
	duly authorized
	​
		duly authorized

	 
	 
	​
	 
	 

	Guillaume Pfefer
	​
	Wesley D. Blakeslee, J.D.

	 
	​
	 

	CEO
	​
	Executive Director

	 
	​
	 

	Date:
	​
	Johns Hopkins Technology Transfer

	 
	​
	 

	 
	​
	Date: 11/19/2012

	​
	​

​
​

2

SECOND AMENDMENT
TO EXCLUSIVE LICENSE AGREEMENT
​
This Second Amendment to Exclusive License Agreement (“Second Amendment”) is entered into by and between The Johns Hopkins University, a Maryland corporation having an address at 3400 N. Charles Street, Baltimore, MD 21218-2695 (“JHU”), and Kala Pharmaceuticals, Inc., formerly known as Hanes NewCo, Inc, a Delaware corporation having an address at 100 Beaver Street, Suite 201, Waltham, MA 02453 (“Kala” or “Company”).
​
WHEREAS, Kala and JHU entered into an Exclusive License Agreement dated November 10, 2009, as amended by a First Amendment (the “First Amendment”) dated November 19, 2012 (as so amended, the “Agreement”), pursuant to which JHU licensed certain patent rights and know-how to Kala;
​
WHEREAS, the Exclusive License Agreement provides for milestone payments to JHU upon the achievement by Company of certain clinical trial milestones with respect to Licensed Products;
​
WHEREAS, JHU, Company, and GrayBug LLC are discussing, as of the Second Amendment Date (as defined below), the proposed terms of a draft Settlement and License Agreement between JHU.  Company, and GrayBug LLC (as may be modified by JHU, Company, and GrayBug, the “Proposed Settlement Terms”).  (GrayBug LLC is hereinafter referred to as “GrayBug”).
​
WHEREAS, Company and JHU wish to amend the Agreement on the terms set forth herein;
​
NOW, THEREFORE, in consideration of the mutual covenants and agreements set forth below, the Company and JHU agree as follows:
​
1.                                      As of the Second Amendment Dale, Section 3.5 of the Agreement shall be superseded in its entirety by the following:
​
“Company shall pay to JHU milestones as set forth in Exhibit A.  These milestones shall be due, without invoice from JHU, within [**] days of achievement of such milestone; provided however, if any of the milestones set forth in Exhibit A are achieved prior to [**], the milestone payment for such milestone shall not be due until the earlier of (i) [**] days after execution by JHU, Company, and GrayBug of the Proposed Settlement Terms and (ii) [**].  Notwithstanding anything to the contrary in this Agreement or its exhibits, upon execution of the Proposed Settlement Terms by JHU, Company, and GrayBug, each milestone achieved prior to the execution of the Proposed Settlement Terms shall be subject to any payment reductions set forth in the executed Proposed Settlement Terms as if such milestones were achieved by Company after the execution of the Proposed Settlement Terms.”
​
2.                                      This Second Amendment shall be effective as of May 22, 2014 (the “Second Amendment Date”).
​
3.                                      In all other respects the Agreement shall remain in full force and effect.
​
4.                                      Neither Company nor JHU is required to pay an amendment fee in connection with the execution of this Second Amendment.
​
This Agreement may be executed in one or more counterparts each of which shall be deemed an original but all of which together shall constitute one and the same instrument.
​
	

	

	​

	

	

	KALA PHARMACEUTICALS, INC.
	  
	THE JOHNS HOPKINS UNIVERSITY

	 
	​
	 

	 
	​
	 

	By:
	/s/ Guillaume Pfefer 
	​
	By:
	/s/ Steven L. Kousouris

	​
	duly authorized
	​
	​
	duly authorized

	 
	​
	 

	[Guillaume Pfefer]
	​
	[Wesley D. Blakeslee, J.D.] Steven L. Kousouris

	 
	​
	 

	President &CEO
	​
	[Executive Director] Sr. Director

	 
	​
	 

	Date: 5/23/2014
	​
	Johns Hopkins Technology Transfer

	 
	​
	 

	 
	​
	Date: 5/23/2014

​

3

THIRD AMENDMENT
TO EXCLUSIVE LICENSE AGREEMENT
​
This Third Amendment to Exclusive License Agreement (“Third Amendment”) is entered into by and between The Johns Hopkins University, a Maryland corporation having an address at 3400 N. Charles Street, Baltimore, MD 21218-2695 (“JHU”), and Kala Pharmaceuticals, Inc., formerly known as Hanes NewCo, Inc., a Delaware corporation having an address at 100 Beaver Street, Suite 201, Waltham, MA 02453 (“Kala” or “Company”).
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WHEREAS, Kala and JHU entered into an Exclusive License Agreement dated November 10, 2009, as amended by a First Amendment (the “First Amendment”) dated November 19, 2012 and a Second Amendment (the “Second Amendment”) effective as of May 22, 2014 (as so amended, the “Agreement”), pursuant to which JHU licensed certain patent rights and know-how to Kala and modified certain milestones, respectively;
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WHEREAS, Paragraph 2.5 and certain other provisions of the Exclusive License Agreement reference “OPTION PATENT RIGHTS” and Company declined in 2010 to license such rights;
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WHEREAS, the parties are joint owners of the patent rights relating to the invention entitled [**] and the parties wish to amend the Agreement to add such jointly owned patent rights, and to amend the terms of the Agreement as set forth herein regarding each party’s rights with respect to the patent rights for such invention;
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WHEREAS, JHU, Company, and GrayBug LLC (“GrayBug”) are discussing proposed terms for a Settlement and License Agreement between JHU, Company and GrayBug (as may be modified by JHU, Company and GrayBug, the “Settlement Agreement”);
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WHEREAS, the parties wish to amend the Agreement on the terms set forth herein;
NOW, THEREFORE, in consideration of the mutual covenants and agreements set forth below, the parties agree as follows:
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1.                                      Capitalized terms used herein and not defined herein shall have the respective meanings ascribed to such terms in the Agreement.
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2.                                      The parties agree that notwithstanding that no date is associated with Kala’s signature to the First Amendment, the parties agree that the “First Amendment Date” as defined in the First Amendment is November 19, 2012.
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3.                                      As of the Third Amendment Date, the second “Whereas” recital of the Agreement shall be superseded in its entirety by the following:
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“WHEREAS, a valuable invention entitled [**] was developed during the course of research conducted by [**], and a valuable invention entitled [**] was developed during the course of research conducted by [**], and a valuable invention entitled [**] was developed during the course of research conducted by [**], and a valuable invention entitled [**] was developed during the course of research conducted for
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Company by [**], and conducted for JHU by [**] (all of the individuals in this paragraph who are officially affiliated with JHU, “Inventors”); and”
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4.                                      As of the Third Amendment Date, the third “Whereas” recital of the Agreement shall be superseded in its entirety by the following
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“WHEREAS, JHU has acquired through assignment all rights, title and interest, with the exception of Kala’s ownership interest in connection with JHU Ref. #[**] and certain retained rights by the United States Government, in its interest in said valuable inventions; and”
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5.                                      As of the Third Amendment Date, a new Section 1.14 shall be added to the Agreement as follows:
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‘“KALA/JHU JOINTLY OWNED PATENT RIGHTS’ shall mean the issued patents and patent applications listed in EXHIBIT D for JHU Ref # [**] (all such patent applications for JHU Ref # [**] hereinafter referred to as “JOINT PATENT APPLICATIONS”) and all continuations, divisions, claims of continuations-in-part applications directed to subject matter specifically described in the Joint Patent Applications, continued prosecution applications and reissues, reexaminations, extensions and supplemental protection certificates thereof, and any corresponding foreign patent applications, and any patents, or other equivalent foreign patent rights issuing, granted or registered thereon.”
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6.                                      As of the Third Amendment Date, the definitions “LICENSED PRODUCTS” in Section 1.6 of the Agreement and “LICENSED SERVICES” in Section 1.7 of the Agreement are amended such that the phrase “the license granted to Company pursuant to this Agreement” in each definition shall include the addition of “or the Company’s ownership interest” as follows:
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“but for the license granted to Company pursuant to this Agreement or the Company’s ownership interest,”
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7.                                      As of the Third Amendment Date, Section 1.10 of the Agreement shall be superseded in its entirety by the following:
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““PATENT RIGHTS” shall mean the issued patents and patent applications listed in EXHIBIT D for JHU Ref # [**] (including, without limitation, JHU Ref. # [**]), JHU Ref # [**], JHU Ref # [**], JHU Ref # [**], and KALA/JHU JOINTLY OWNED PATENT RIGHTS (all such patent applications for JHU Ref # [**] (including, without limitation, JHU Ref. # [**]), JHU Ref # [**], JHU Ref # [**], JHU Ref # [**] and JOINT PATENT APPLICATIONS hereinafter referred to as “Patent Applications”) and all continuations, divisions, claims of continuations-in-part applications directed to subject matter specifically described in the Patent Applications, continued prosecution applications and reissues, reexaminations, extensions and supplemental protection certificates thereof, and any corresponding foreign patent applications, and any patents, or other equivalent foreign patent rights issuing, granted or registered thereon.”
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8.                                      As of the Third Amendment Date, the following sentence shall be added to the end of Section 2.2 of the Agreement:
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“The sublicensing restrictions set forth in this Section 2.2 shall not apply to Company’s right to sublicense Company’s interest in KALA/JHU JOINTLY OWNED PATENT RIGHTS.”
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9.                                      Section 4.1 of the Agreement shall not apply to KALA/JHU JOINTLY OWNED PATENT RIGHTS.  Notwithstanding anything to the contrary in Section 4.1 of the Agreement, Company and JHU jointly own the KALA/JHU JOINTLY OWNED PATENT RIGHTS.
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10.                               As of the Third Amendment Date, the following sentence shall be added to the end of Section 4.4 of the Agreement:
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“Notwithstanding anything to the contrary in this Section 4.4, if a declaratory judgment action is brought naming Company as a defendant and alleging invalidity of any of the KALA/JHU JOINTLY OWNED PATENT RIGHTS, Company shall have the first right to defend such action; provided that Company elects to take over the sole defense of the action at its own expense.  JHU shall cooperate fully with Company in connection with any such action.”
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11.                               As of the Third Amendment Date, the first sentence of Section 4.5 of the Agreement shall be amended to read:
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“Any recovery by Company under Paragraph 4.3 shall be deemed to reflect loss of commercial sales, and Company shall pay to JHU [**] percent ([**]%) of the recovery, net of all reasonable costs and expenses associated with each suit or settlement; provided, however, that, with respect to any recovery by Company under Paragraph 4.3 for infringement of KALA/JHU JOINTLY OWNED PATENT RIGHTS, but no PATENT RIGHTS other than KALA/JHU JOINTLY OWNED PATENT RIGHTS, Company shall pay to JHU [**] percent ([**]%) of the recovery, net of all reasonable costs and expenses associated with each suit or settlement.”
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12.                               As of the Third Amendment Date, a new Section 4.7 shall be added to the Agreement as follows:
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“Prosecution and Maintenance of Kala/JHU Jointly Owned Patent Rights.  Notwithstanding anything to the contrary in this Agreement, except as provided below, Company, at Company’s expense, shall file, prosecute and maintain all patents and patent applications specified under the KALA/JHU JOINTLY OWNED PATENT RIGHTS.  Title to all such patents and patent applications shall reside in Company and JHU.  Company shall have control over all patent matters in connection therewith under the KALA/JHU JOINTLY OWNED PATENT RIGHTS, provided however, that COMPANY shall (a) cause its patent counsel to timely copy JHU on all official actions and written correspondence with any patent office, and (b) allow JHU an opportunity to comment and advise Company.
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Company shall consider and reasonably incorporate all comments and advice unless detrimental to Company’s intellectual property rights.  Upon signed written notification by Company to JHU that it will not file, prosecute, and/or maintain such patent applications or patent in a particular country, JHU shall have the first right to file, prosecute and/or maintain such patent applications or patent in such country at JHU’s expense and JHU’s interest in such patent applications or patent shall no longer be licensed to Company.”
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13.                               As of the Third Amendment Date, Section 9.4 of the Agreement is hereby amended, such that to the extent that any PATENT RIGHTS are jointly owned between the parties, such PATENT RIGHTS to the extent owned by Kala, including Kala’s ownership interest in KALA/JHU JOINTLY OWNED PATENT RIGHTS, shall remain with Kala upon termination of the Agreement, and shall not transfer to JHU, and any licensee(s) under Kala’s ownership interest of such PATENT RIGHTS shall remain a licensee(s) of Kala; provided that to the extent that a SUBLICENSEE was granted a license by Kala under JHU’s ownership interest in such jointly owned PATENT RIGHTS, such SUBLICENSEE shall automatically become a direct licensee of JHU solely with respect to JHU’s ownership interest in such jointly owned PATENT RIGHTS upon such termination, provided that JHU’s obligations to such SUBLICENSEE(S) are no greater than JHU’s obligations to Company under this Agreement.
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14.                               As of the Third Amendment Date, the following sentence shall be added to the end of Section 10.1 of the Agreement:
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“Notwithstanding anything to the contrary in this Section 10.1, Kala shall have the right to disclose the name of The Johns Hopkins University or The Johns Hopkins Health System or any of its constituent parts or any Inventors to exercise Kala’s rights under Section 4.7 to file, prosecute and/or maintain the KALA/JHU JOINTLY OWNED PATENT RIGHTS.”
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15.                               As of the Third Amendment Date, the address for notices to Company in Section 10.6 shall be changed to the following:
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	“If to Company:
	  
	Kala Pharmaceuticals, Inc.

	 
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	100 Beaver Street, Suite 201

	 
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	Waltham, MA 02453

	 
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	Attn: Chief Executive Officer

	 
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	With a Copy to: General Counsel”

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16.                               As of the Third Amendment Dale, Section 2 in Exhibit A of the Agreement shall be amended as follows:
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“Launch Year and each year thereafter:  One hundred thousand dollars ($100,000),” shall be omitted and replaced with “Launch Year and each year thereafter:  One hundred fifty thousand dollars ($150,000).”
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17.                               As of the Third Amendment Date, the following paragraph shall be added to the end of Section 3 of Exhibit A of the Agreement:
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“Notwithstanding anything to the contrary in this Agreement or its exhibits, if the only VALID CLAIMS of PATENT RIGHTS that cover the LICENSED PRODUCT or LICENSED SERVICE are VALID CLAIMS of KALA/JHU JOINTLY OWNED PATENT RIGHTS, then only [**]% of the NET SALES or the NET SERVICE REVENUES of such LICENSED PRODUCT or LICENSED SERVICE shall apply for purposes of the royalty calculation as set forth in this Section 3.3 of the Agreement and Section 3 of this Exhibit A.”
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18.                               As of the Third Amendment Date, the following paragraph shall be added to the end of Section 4 of Exhibit A of the Agreement:
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“Notwithstanding anything to the contrary in this Agreement or its exhibits, the SUBLICENSE CONSIDERATION for any sublicense of only KALA/JHU JOINTLY OWNED PATENT RIGHTS, shall be reduced by [**]% as applied to any obligations of Company under this Agreement.  For clarity, the preceding paragraph regarding offsets for a third-party license shall apply after the reduction of SUBLICENSE CONSIDERATION set forth in this paragraph.”
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19.                               As of the Third Amendment Date, the following paragraph shall be added to the end of Section 5 of Exhibit A of the Agreement:
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“Notwithstanding anything to the contrary in this Agreement or its exhibits, each milestone payment in this Section 5 shall be reduced by [**]% if the only VALID CLAIMS of PATENT RIGHTS that cover the LICENSED PRODUCT are VALID CLAIMS of KALA/JHU JOINTLY OWNED PATENT RIGHTS; such [**]% reduction is in addition to any reductions that already apply to the second and third LICENSED PRODUCTS that achieve the applicable milestone.”
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20.                               As of the Third Amendment Date, Exhibit D of the Agreement shall be superseded in its entirety by the updated Exhibit D (“Amended Exhibit D”) attached hereto.
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21.                               As of the Third Amendment Date, (a) Paragraph 2.5 shall be deleted in its entirety, (b) the clause “provided, however, that if the OPTION PATENT RIGHTS become PATENT RIGHTS upon exercise of the option set forth in Section 2.5, the OPTION PATENT RIGHTS shall not be included in PATENT RIGHTS for purposes of this Section 2.4” in the last sentence of Section 2.4 of the Agreement shall be deleted in its entirety, (c) the second sentence of Section 3.6 of the Agreement shall be deleted in its entirety, and (d) the second paragraph of Section 3.6 of the Agreement shall be amended to read as follows:
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“In accordance with Paragraph 4.1 below, Company will reimburse JHU, within [**] days of the receipt of an invoice from JHU for all costs associated with the preparation, filing, maintenance, and prosecution of PATENT RIGHTS incurred by JHU subsequent to the EFFECTIVE DATE of this Agreement.”
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22.                               In all other respects the Agreement shall remain in full force and effect.
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23.                               This Third Amendment shall be effective as of the date the last party hereto has executed this Third Amendment (the “Third Amendment Date”).
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24.                               For the convenience of the parties hereto, this Amendment may be executed in two counterparts, each of which shall be deemed to be an original, but both of which together shall constitute one and the same instrument, without necessity of production of the others.  Signatures may be exchanged by facsimile or electronic transmission and each of the parties to this Amendment agrees that it will be bound by its own facsimile signature and that it accepts the facsimile signature of the other party.
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25.                               Amendment Fee.  Company shall pay to JHU within [**] days of the Third Amendment Date [**] dollars ($[**]) as an amendment fee (the “Third Amendment Fee”).  JHU will not submit an invoice for the Third Amendment Fee, which shall not be credited against royalties or other fees.  The Third Amendment Fee shall be refunded to Company in full if this Third Amendment is terminated according to Section 26.
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26.                               Termination due to no Settlement.  In the event the Settlement Agreement is not executed by JHU, Company, GrayBug, and any other required parties, on or before January I, 2015, each section of this Third Amendment, except for the last sentence of Section 25, shall terminate and the applicable sections in the Agreement shall revert to the language as of immediately prior to the Third Amendment Date; provided that (A) Exhibit D of the Agreement shall be superseded in its entirety by the Amended Exhibit D (but excluding JHU Ref [**]) attached hereto, and (B) each party shall retain its rights as a co-owner in any patent rights jointly owned by Kala and JHU relating to JHU Ref [**].
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This Third Amendment may be executed in one or more counterparts each of which shall be deemed an original but all of which together shall constitute one and the same instrument.
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	KALA PHARMAEUTICALS, INC.
	  
	THE JOHNS HOPKINS UNIVERSITY

	 
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	By:
	/s/ Charles McDermott 
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	By:
	/s/ Steven L. Kousouris

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	duly authorized
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	duly authorized

	 
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	Charles McDermott
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	Director
	Steve Kousouris 

	 
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	Sr. Director, Administration

	Chief Business Officer and Interim President
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	Johns Hopkins Technology Transfer

	 
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	Date:
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	Johns Hopkins Technology Transfer

	 
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	August 26, 2014
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	Date: 8/26/2014

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