Document:

Exhibit

MPF® CONSOLIDATED INTERBANK AGREEMENT

by and between

FEDERAL HOME LOAN BANK OF ATLANTA 
FEDERAL HOME LOAN BANK OF BOSTON 
FEDERAL HOME LOAN BANK OF CHICAGO
 FEDERAL HOME LOAN BANK OF DALLAS 
FEDERAL HOME LOAN BANK OF DES MOINES FEDERAL HOME LOAN BANK OF NEW YORK 
FEDERAL HOME LOAN BANK OF PITTSBURGH FEDERAL HOME LOAN BANK OF SAN FRANCISCO FEDERAL HOME LOAN BANK OF TOPEKA

Dated as of July 22, 2016

“Mortgage Partnership Finance,” “MPF,” and “eMPF” are registered trademarks of the Federal Home Loan Bank of Chicago.

TABLE OF CONTENTS
MPF® CONSOLIDATED INTERBANK AGREEMENT                
RECITALS                                        
ARTICLE I. DEFINITIONS                            
Section 1.1.     Certain Definitions                            
ARTICLE II. FHLB PARTICIPATION IN THE MPF PROGRAM        
Section 2.1.    Participation in the MPF Program
Section 2.2.    Applicability of Agreement
Section 2.3.    FHLB Guide
ARTICLE III. MPF PROVIDER RESPONSIBILITIES    
Section 3.1.    Services of the MPF Master Servicer
Section 3.2.    Administration of Non-Member Servicers
Section 3.3.    Loan Funding and Reporting Systems    
Section 3.4.    Reports    
Section 3.5.    MPF Program System Enhancements
Section 3.6.    Quality Control and Loss Mitigation
Section 3.7.    Financial Reporting and Controls
Section 3.8.    Support of MPF Bank PFIs
Section 3.9.    Services of the Custodian
Section 3.10.    Service Level Commitments
ARTICLE IV. MPF BANK RESPONSIBILITIES
Section 4.1.    Administration of the MPF Program
Section 4.2.    Management of Assets    
Section 4.3.    Eligibility and Creditworthiness of PFIs
Section 4.4.    Relationship of the Parties; Restrictions on Transfers    
Section 4.5.    Loan Loss Reserves    
Section 4.6.    Extent of MPF Bank Responsibilities    
ARTICLE V. PROGRAM LOAN FUNDING AND PRICING    
Section 5.1.    Execution of Master Commitments
Section 5.2.    Pricing    
Section 5.3.    Delivery Commitments
Section 5.4.    Alternative Pricing by MPF Bank and Related Delivery Commitments    
Section 5.5.    Transactional Relationships
    

ARTICLE VI. SERVICING TRANSFERS BETWEEN PFIS OF DIFFERENT MPF BANKS    
Section 6.1.    Transfers of Servicing
Section 6.2.    MPF Provider Reliance
ARTICLE VII. MORTGAGE PARTICIPATIONS AMONG MPF BANKS
Section 7.1.    Sale and Purchase of Participations Among MPF Banks
Section 7.2.    Participation Provisions
Section 7.3.    Participant Bank’s Representations
Section 7.4.    Lead Bank’s Representations
Section 7.5.    Covenants
Section 7.6.    Participant Bank’s Default    
Section 7.7.    Lead Bank’s Default
ARTICLE VIII. ADDITIONAL PRODUCTS AND PROVIDER PROGRAM LOANS
Section 8.1.    Use of Additional Products and Provider Program Loans
Section 8.2.    Assignment of Master Commitments
Section 8.3.    Sponsored Accounts
Section 8.4.    Transfer of Servicing of Provider Program Loans
Section 8.5.    Participating in Additional Products
ARTICLE IX. SERVICES FEES
Section 9.1.    MPF Membership Fee
Section 9.2.    Transaction Services Fee
Section 9.3.    Additional Services Fees
Section 9.4.    Counterparty Fees
ARTICLE X. MARKETING AND TRAINING
Section 10.1.    MPF Program Marketing to Members
Section 10.2.    Training
ARTICLE XI. MPF PROGRAM REPRESENTATIONS AND COVENANTS
Section 11.1.    Risk of Loss
Section 11.2.    Default by PFIs; Enforcement
Section 11.3.    Use of Intellectual Property
Section 11.4.    Authorization and Enforceability
Section 11.5.    MPF Provider’s Representations and Warranties
Section 11.6.    Use of Proprietary Information and Confidentiality
Section 11.7.    Additional Covenants

ARTICLE XII. INDEMNIFICATION AND EXCULPATION
Section 12.1.    MPF Bank’s Indemnification Obligations
Section 12.2.    MPF Provider’s Indemnification Obligations
Section 12.3.    Participant Bank’s and Lead Bank’s Indemnification Obligations
Section 12.4.    Additional Product Indemnification Obligations
Section 12.5.    Engagement in the MPF Program Exclusion From Indemnification
Section 12.6.    Exculpations
ARTICLE XIII. TERM AND TERMINATION
Section 13.1.    Term of Agreement and Termination
Section 13.2.    Events of Default    
Section 13.3.    Termination and Other Remedies
Section 13.4.    Obligations Regarding PFIs; Support for Program Loans
Section 13.5.    Survival
Section 13.6.    Termination Relating to Approved Non-Member Servicers
ARTICLE XIV. MISCELLANEOUS
Section 14.1.    Notices
Section 14.2.    The Guides and Other Documents
Section 14.3.    Addresses
Section 14.4.    Effect of Agreement
Section 14.5.    Execution in Counterparts; Delivery of Signatures
Section 14.6.    Governing Law
Section 14.7.    Severability of Provisions
Section 14.8.    Successors and Assigns; No Third-Party Beneficiaries
Section 14.9.    Waivers and Amendments
Section 14.10.    References to Sections, Exhibits and Agreement; Captions
Section 14.11.    Specific Performance
Section 14.12.    Mediation of Disputes; Jurisdiction and Venue
Section 14.13.    No Joint and Several Liability; Necessary Parties
Section 14.14.    Amendment and Restatement
Section 14.15.    Equal Treatment of MPF Banks
ARTICLE XV. SIGNATURES

MPF® CONSOLIDATED INTERBANK AGREEMENT
This MPF Consolidated Interbank Agreement is entered into this 22nd day of July, 2016, (the “Effective Date”) by and among each of the Federal Home Loan Banks that execute this Agreement (each an “MPF Bank” and collectively the “MPF Banks”) and the Federal Home Loan Bank of Chicago in its capacity as the “MPF Provider”. Each of the MPF Banks and the MPF Provider shall hereinafter be referred to as a “Party” and collectively the “Parties”.

RECITALS

WHEREAS, the MPF Program is a program under which MPF Banks purchase residential mortgage loans originated pursuant to the requirements of the Guides from PFIs;

WHEREAS, each MPF Bank has entered into a separate Services Agreement, with the Federal Home Loan Bank of Chicago, in its capacity as the MPF Provider;

WHEREAS, the MPF Banks entered among themselves and with the MPF Provider into a Liquidity Option and Master Participation Agreement;

WHEREAS, the MPF Banks also entered among themselves and with the MPF Provider into Servicing Transfer Agreements;

WHEREAS, the MPF Banks desire to continue their participation in the MPF Program and to consolidate the MPF Agreements into this Agreement, to amend the provisions of the MPF Agreements in part and to transfer certain provisions of the MPF Agreements relating to operating and support procedures to the FHLB Guide, with the intention that this Agreement and the FHLB Guide supersede the MPF Agreements; and

WHEREAS, the MPF Banks intend that each Federal Home Loan Bank that desires to participate in the MPF Program become a Party to this Agreement.

NOW, THEREFORE, in consideration of the foregoing recitals, the mutual promises and agreements herein and other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the Parties hereto agree as follows:

ARTICLE I. DEFINITIONS

Section 1.1. Certain Definitions.

All capitalized terms used in this Agreement, which includes the recitals, shall have the meanings set forth in the Glossary of the FHLB Guide or in the Guides or as defined in this Agreement. In case of any conflict as to the meaning of a capitalized term, the definition in the Glossary of the FHLB Guide shall control.

ARTICLE II. FHLB PARTICIPATION IN THE MPF PROGRAM

Section 2.1. Participation in the MPF Program.

Each Federal Home Loan Bank that executes this Agreement hereby agrees to participate in the MPF Program as an MPF Bank and to offer, at its election, Program Loan products to its PFIs under the terms and conditions of this Agreement and the FHLB Guide.

Section 2.2. Applicability of Agreement.

Each Party acknowledges and agrees that the terms of this Agreement and the FHLB Guide shall apply to all prior, existing and future Program Loans, Master Commitments, Delivery Commitments, participation rights and obligations and any Servicing transfer rights and obligations unless specified otherwise.

Section 2.3. FHLB Guide.

Each Party acknowledges and agrees that the terms of the FHLB Guide, as amended, restated, replaced or otherwise modified from time to time as specified in the FHLB Guide, are incorporated herein by reference and are made an integral part of this Agreement.

(a)Amendments or Supplements. The FHLB Guide may be amended or supplemented from time to time as follows:

(1) Non-Substantive Revisions. Prior to issuing any non-Substantive Revisions to the FHLB Guide, the MPF Provider will consult with the Active MPF Banks after distributing a draft of the proposed non-Substantive Revisions to the Active MPF Banks for review. The MPF Provider will use commercially reasonable best efforts to balance differences of opinions among the Active MPF Banks, taking into account the direction or purpose of the overall MPF Program as established by the MPF Governance Committee, and abide by any additional obligation of the MPF Provider in determining whether and how to incorporate or address any comments from the Active MPF Banks concerning any non-Substantive Revisions. Upon receipt of any draft non- Substantive Revisions to the FHLB Guide, the Active MPF Bank must respond within fifteen Business Days unless a longer time for review and approval is allowed in the transmittal of the draft revisions, or otherwise approved by the MPF Provider in writing; provided, however, that non-Substantive Revisions which must be made to the FHLB Guide to comply with FHFA rules or regulations, third-party investors requirements, Applicable Law, or external matters beyond the control of the MPF Provider, may have a shorter review period, if needed to achieve compliance, but not less than two (2) Business Days (and, for the avoidance of doubt the MPF Provider shall be permitted to make any such revision notwithstanding whether the consent of the Active MPF Banks is obtained). An Active MPF Bank’s review of draft FHLB Guide non- Substantive Revisions and opportunity to comment will be considered completed if there is no response from the Active MPF Bank within the time period specified herein, in the transmittal or otherwise specified in writing by the MPF Provider. The MPF Provider may elect to publish the non-Substantive Revisions without additional review by the Active MPF Banks or, if the MPF Provider deems it appropriate, to provide the MPF Banks an additional review period. Any comments sent by any MPF Bank after publication of any revisions to the FHLB Guide will be logged in by the MPF Provider and considered for inclusion when future revisions are made to the FHLB Guide. If an Active MPF Bank determines the proposed revision should be classified as a Substantive Revision, that Active MPF Bank must object to the non-Substantive Revision classification within two (2) Business Days from 

receipt of the proposed revision. The MPF Provider shall then (i) request the Active MPF Banks to review the proposed revision as a Substantive Revision pursuant to Section 2.3(a)(2) or (ii) refer the proposed revision to the MPF Governance Committee for further action. If the MPF Provider elects a Substantive Revision review, two (2) Business Days will be deducted from the review time provided in Section 2.3(a)(2).

(2) Substantive Revisions. Except for FHLB Guide revisions subject to Section 2.3(a)(3), Substantive Revisions may be made only with the approval of a super majority of the Active MPF Banks, which is defined as 66% of the Active MPF Banks (rounded up to the nearest whole number), (which approval may not be unreasonably withheld or delayed) after distributing a draft of the proposed Substantive Revisions to the Active MPF Banks for review. Upon receipt of any draft Substantive Revisions to the FHLB Guide, each Active MPF Bank must respond within ten (10) Business Days unless a longer time for review and approval is allowed in the transmittal of the draft Substantive Revisions or otherwise approved by the MPF Provider in writing. The MPF Provider shall be permitted to make any changes which must be made to the FHLB Guide to comply with FHFA rules or regulations, third-party investors requirements, Applicable Law, or external matters beyond the control of the MPF Provider without the majority approval of the Active MPF Banks; however, the MPF Provider shall circulate such revisions to the Active MPF Banks for review as provided for non-Substantive Revisions. No response or no substantive objection by an Active MPF Bank to a proposed Substantive Revision within the timeframe specified shall be considered an approval by such Active MPF Bank of the proposed Substantive Revision. In the event that circulation of additional draft Substantive Revisions are necessary, each Active MPF Bank shall respond within five (5) Business Days unless a longer time for review and approval is allowed in the transmittal of the draft Substantive Revisions or otherwise approved by the MPF Provider in writing. For the avoidance of doubt, any proposed revision to an Appendix to the FHLB Guide, including without limitation, to any forms or the Supplemental Information, shall be deemed a non-Substantive Revision.

(3) Revisions to MPF Membership Fee and Transaction Services Fee. Any FHLB Guide revisions related to the MPF Membership Fee or the Transaction Services Fee specified in ARTICLE IX will be decided by the MPF Governance Committee.

(b)Applicability of Amendments and Supplements. Unless otherwise specified, all amendments and supplements to the FHLB Guide shall apply to all existing Program Loans, Participation Interests, Master Commitments and Delivery Commitments.

ARTICLE III. MPF PROVIDER RESPONSIBILITIES

Section 3.1. Services of the MPF Master Servicer.

(a)The MPF Provider shall act as the Master Servicer for each MPF Bank with respect to all Program Loans funded or purchased by the MPF Bank pursuant to the MPF Program. The MPF Provider may discharge this duty by entering into a Master Servicing Agreement with any entity which the MPF Provider deems qualified to act as the MPF Master Servicer. The MPF Provider shall have direct and primary responsibility to the MPF Bank for the performance of the duties of the MPF Master Servicer under the Master Servicing Agreement. The MPF Provider shall perform or cause to be performed the master servicing duties specified in the FHLB Guide, which shall be done in compliance with the provisions of the PFI Agreements, the Guides, and the Servicing Agreements.

(b)As part of its master servicing duties hereunder, the MPF Provider, for the benefit of each MPF Bank, shall use commercially reasonable efforts to enforce the obligations of the MPF Master Servicer under the Master Servicing Agreement in the same manner as the MPF Provider would act if the MPF Provider were the owner of the related Program Loans. Notwithstanding the MPF Provider’s delegation of master servicing obligations to the MPF Master Servicer pursuant to the Master Servicing Agreement, the MPF Provider shall not be relieved from its master servicing obligations hereunder, and the MPF Provider shall remain obligated and primarily liable to the MPF Bank for the master servicing of the Program Loans in accordance with the provisions of this Agreement; provided, however, that the MPF Provider’s liability arising from or related to its master servicing obligations under this Section 3.1 shall be limited solely to liability resulting from the MPF Provider’s or MPF Master Servicer’s negligence or willful misconduct.

Section 3.2. Administration of Non-Member Servicers.

(a)Election of Service. Each MPF Bank may elect, as part of the master servicing duties, that the MPF Provider administer Approved Non-Member Servicers on behalf of the MPF Bank in accordance with this Section 3.2 and as specified in the FHLB Guide. The MPF Bank shall indicate its election by consenting to the transfer of Servicing to an Approved Non-Member Servicer in accordance with the FHLB Guide.

(b)Administration of Approved Non-Member Servicers. The Parties agree that the MPF Provider shall administer Approved Non-Member Servicers on behalf of and for the benefit of the MPF Banks in accordance with the provisions of this Agreement and the FHLB Guide.

(c)Exercise of Administrative Authority. The MPF Provider agrees to exercise the authority granted to it under this Agreement and in the FHLB Guide to administer Approved Non-Member Servicers with appropriate consultation with the MPF Banks that own the affected Program Loans in accordance with the FHLB Guide, in the same manner and with the same care that the MPF Provider would exercise if it owned the assets. The MPF Provider will enforce the Servicing Agreements for the benefit of the MPF Banks that own the Program Loans that are serviced by the Approved Non-Member Servicers.

(d)Costs of Enforcement. Any and all liabilities, costs, expenses and disbursements (including, without limitation, reasonable attorneys' fees and other legal expenses) under this Section 3.2 incurred by any of the Parties in any effort to collect any amounts payable hereunder by another Party, shall be paid by the defaulting Party upon demand of the collecting Party whether or not suit is filed, together with interest thereon from the date due until paid at the MPF Bank Default Rate.

Section 3.3. Loan Funding and Reporting Systems.

The Parties agree that the MPF Provider shall maintain Program Loan purchase funding and reporting systems for use by the MPF Banks as specified in the FHLB Guide.

Section 3.4. Reports.

The MPF Provider agrees to provide the MPF Banks or their PFIs, as applicable, certain reports including PFI reports, management reports, online inquiries and electronic data transmissions as set forth in the FHLB Guide.

Section 3.5. MPF Program System Enhancements.

The Parties agree that changes and enhancements to the MPF Systems and Customized Enhancements shall be implemented as specified in the FHLB Guide.

Section 3.6. Quality Control and Loss Mitigation.

The MPF Provider will perform the same level of quality control review and loss mitigation oversight for the Program Loans acquired from the MPF Bank’s PFIs as the MPF Provider would perform if they were its own Program Loans as provided in the FHLB Guide. The Parties agree that quality control reviews for Program Loans shall be in accordance with the FHLB Guide.

Section 3.7. Financial Reporting and Controls.

The MPF Provider shall provide such reports on its financial reporting and controls as specified in the FHLB Guide.

Section 3.8. Support of MPF Bank PFIs.

The MPF Provider shall be responsible for providing the Operational Matters support to all MPF Banks’ PFIs by establishing an MPF Service Center. The MPF Provider shall ensure that the MPF Service Center is adequately staffed to service the MPF Bank PFIs in a commercially reasonable manner and with no less service than the MPF Provider would have provided if they were its own PFIs. The MPF Service Center operations shall be as described in the FHLB Guide.

Section 3.9. Services of the Custodian.

The MPF Provider shall act as the custodian for the MPF Bank with respect to all Program Loans funded or purchased by the MPF Bank pursuant to the MPF Program. The MPF Provider may discharge this custodian duty with the authority and rights provided to it and subject to the requirements specified in the FHLB Guide. The MPF Provider’s authority and rights shall include its ability to delegate, to one or more entities, its duties and obligations as custodian under the MPF Program. The MPF Provider shall have direct and primary responsibility to the MPF Bank for the performance of the duties of the Master Custodian under the Master Custodian Agreement.

Section 3.10. Service Level Commitments.

The MPF Provider agrees that it shall perform the services specified in this Agreement in accordance with the service levels set forth in the FHLB Guide.

ARTICLE IV. MPF BANK RESPONSIBILITIES

Section 4.1. Administration of the MPF Program.

Each MPF Bank agrees to administer its PFI Agreements in accordance with their terms, including the Guides, the FHLB Guide and all other incorporated documents. Each MPF Bank acknowledges that the MPF Provider and other MPF Banks have an interest in consistent implementation of the MPF Program, and as the drafter of the documents related to the MPF Program, the MPF Provider can provide an authoritative interpretation of such documents in the event of conflict with a PFI over their meaning. The obligations of each MPF Bank under this Section 4.1 shall survive termination of this Agreement.

Section 4.2. Management of Assets.

The PFIs that elect to service Program Loans are obligated under the terms of the PFI Agreements to perform all customary Servicing functions, including loss mitigation and property disposition, with respect to the Program Loans. Each MPF Bank shall have the responsibility for exercising commercially reasonable efforts to enforce the terms of the PFI Agreement and its PFIs’ compliance with the Guides, on behalf of itself, the MPF Provider and such other parties identified in the FHLB Guide.

Section 4.3. Eligibility and Creditworthiness of PFIs.

Unless otherwise stated in this Agreement, the approval of PFIs shall be as set forth in the FHLB Guide. Each MPF Bank shall be responsible for evaluating the eligibility, including the creditworthiness, of each of its PFIs for participation under the MPF Program for both Bank Program Loans and Provider Program Loans. However, any MPF Bank that has acquired or acquires a participation in Bank Program Loans or acquires Program Loans from MPF Bank PFIs shall be responsible for its own credit decision with respect to its investment in such assets. Consistent with applicable law and regulation and as provided in the FHLB Guide, each MPF Bank shall promptly provide notice to the MPF Provider of any material adverse change in the financial condition of any such MPF Bank’s PFIs of which it becomes aware and that such MPF Bank reasonably believes could result in the PFI’s breach of the PFI Agreement.

Section 4.4 Relationship of the Parties; Restrictions on Transfers.

(a)Each MPF Bank will receive and hold all receipts and collections with respect to the Program Loans funded through or purchased from such MPF Bank’s PFIs, for the benefit of itself and any other Participants, in accordance with their respective interests in the Program Loans. Except to the extent of its obligations under Section 3.9, the MPF Provider shall have no fiduciary duty to any MPF Bank. Except to the extent of its obligations under Section 13.4 of this Agreement, each MPF Bank shall have no fiduciary duty to the MPF Provider.

(b)Notwithstanding the foregoing, each MPF Bank agrees that it will not sell or transfer any of its interests in Program Loans or its rights under this Agreement, or any portion thereof, except (i) to another FHLB or member or housing associate of an FHLB, (ii) to an institutional third party investor approved of in writing by the MPF Provider, which approval shall not be unreasonably withheld, conditioned or delayed or (iii) to the PFIs providing the credit enhancement for such Program Loans; provided, however, that servicing must be provided by a PFI or an MPF Program approved Servicer, and unless such covenants and obligations have been assigned to another MPF Bank or other approved investor in such Program Loans, such MPF Bank shall continue to monitor the creditworthiness of its PFIs and, when appropriate 

to protect the interests of the holders of the Program Loans, obtain a perfected security interest in collateral to secure any of its PFIs’ obligations under their respective PFI Agreements. The MPF Provider will continue to provide MPF Product specific reports.

Section 4.5. Loan Loss Reserves.

Each MPF Bank shall maintain its own respective loan loss reserves with respect to the Program Loans.

Section 4.6. Extent of MPF Bank Responsibilities.

Unless specified otherwise, each MPF Bank’s responsibilities under this ARTICLE IV are only to the MPF Provider and not to any other MPF Bank.

ARTICLE V. PROGRAM LOAN FUNDING AND PRICING

Section 5.1. Execution of Master Commitments.

Each MPF Bank agrees to enter into each Master Commitment in accordance with the requirements of the FHLB Guide.

Section 5.2. Pricing.

(a)Pricing of Program Loans. Each MPF Bank may use the Pricing Process as published by the MPF Provider in the FHLB Guide for setting the prices of the Program Loans which such MPF Bank acquires under the MPF Program or which its PFIs sell under any Additional Product on any Business Day. As long as the Pricing Process provides for the MPF Provider to publish suggested base prices for Bank Program Loans, (a) the MPF Provider will utilize a specified pricing methodology and assumptions approved by the MPF Governance Committee to determine such suggested base prices and (b) an MPF Bank will be deemed to have adopted such suggested base prices if such MPF Bank makes no adjustments to the suggested base prices during the period specified in the FHLB Guide.

(1)Under the Pricing Process, each MPF Bank shall be responsible for, and the following shall be deemed to be in the control of each MPF Bank:

(i)setting its own prices for Delivery Commitments whether by adjustment to or adoption of suggested base prices;
		
	(ii)
	adopting a suggested base price as such MPF Bank’s price;

		
	(iii)
	the accuracy of data input by such MPF Bank;

		
	(iv)
	any errors or omissions by such MPF Bank in inputting data; and

		
	(v)
	such MPF Bank’s use of the Pricing Process.

(2)Under the Pricing Process, the MPF Provider shall be responsible for, and the following shall be deemed to be in the control of the MPF Provider:
(i)employing the prices set by each MPF Bank for the indicative prices it posts to the eMPF website in accordance with the FHLB Guide;
(ii)employing the prices set by each MPF Bank in the issuance of Delivery Commitments under such MPF Bank’s Master Commitments; and
		
	(iii)
	publishing pricing for Provider Program Loans in accordance with the FHLB Guide.

Section 5.3. Delivery Commitments.

(a) As provided in the Guides, the MPF Service Center will publish Rate and Fee Schedules for each MPF Bank’s PFIs employing the prices set by such MPF Bank. Rate and Fee Schedules are subject to change as provided for in the Guides. Delivery Commitments will be managed as specified in the Guides and the FHLB Guide.

Section 5.4. Alternative Pricing by MPF Bank and Related Delivery Commitments.

(a) Election of Alternative Pricing by MPF Bank. Each MPF Bank may elect to create MPF Bank Base Price Schedules in accordance with the applicable provisions in the FHLB Guide. An MPF Bank shall indicate its election to create MPF Bank Base  Price Schedules by executing the election form specified in the FHLB Guide (and delivering such form to the MPF Provider) and upon such election such MPF Bank agrees to be subject to the alternative pricing provisions specified in the FHLB Guide and such MPF Bank commits to utilizing its MPF Bank Base Price Schedules on a daily basis and as a regular course of business except for emergencies or as otherwise agreed to by the MPF Provider and such MPF Bank.

Section 5.5. Transactional Relationships.

(a)Maintenance of Accounts at the MPF Provider. Each MPF Bank will establish and maintain a Clearing Account with the MPF Provider.

(b)Funding of Payment Obligations. The MPF Provider hereby consents to each MPF Bank withdrawing funds from such MPF Bank’s Clearing Account from time to time to satisfy the MPF Provider’s payment obligations under this Agreement. Each MPF Bank hereby consents to the MPF Provider withdrawing funds from such MPF Bank’s Clearing Account from time to time to satisfy the MPF Bank’s obligations to pay any fees and any other payment obligation under this Agreement.

(c)Interest on Clearing Account. In accordance with the Master Transactions Agreement between the MPF Provider and each MPF Bank, the MPF Provider will credit to each MPF Bank’s Clearing Account interest on the outstanding balance thereof from time to time in accordance with the Master Transactions Agreement at the MPF Bank Rate. In the event that any withdrawal from an MPF Bank’s Clearing Account shall cause the balance in such account to become negative, such deficit shall be deemed a loan from the MPF Provider to such MPF Bank, payable upon demand and bearing interest at the MPF Bank Default Rate as defined in the Glossary of the FHLB Guide.

ARTICLE VI. SERVICING TRANSFERS BETWEEN PFIS OF DIFFERENT MPF BANKS

Section 6.1. Transfers of Servicing.

(a)The Parties hereby agree that any voluntary or involuntary transfers of Subject Servicing (i) between a PFI of an MPF Bank to a PFI of a different MPF Bank, (ii) from any Person acting as a receiver, trustee or conservator (or similar function) of a PFI of an MPF Bank to a PFI of a different MPF Bank, or (iii) from an MPF Bank to a PFI of a different MPF Bank, shall all be generally in accordance with this Agreement and specifically in accordance with this ARTICLE VI and the related provisions of the FHLB Guide.

(b)Consent to Transfers of Servicing. The Parties agree to consent to any voluntary or involuntary transfer of Subject Servicing in accordance with the requirements specified in the FHLB Guide. The Parties further agree that such consent shall constitute the order of both applicable MPF Banks to the MPF Provider to treat the Assuming PFI as the Servicer of the Serviced Mortgages delivered under the Master Commitment referenced therein, for the purposes of (i) debiting and crediting the Owner Bank’s and Assisting Bank’s respective Clearing Accounts with the MPF Provider with respect to the Serviced Mortgages, (ii) providing MPF Program reports to the applicable MPF Banks with respect to the Serviced Mortgages, and (iii) providing Services under this Agreement with respect to the Serviced Mortgages.

(c)Credit Enhancement Transfers. The Parties agree that in relation to Conventional Bank Program Loans, Credit Enhancements shall be transferred in accordance with the requirements specified in the FHLB Guide.

(d)Assisting Bank Obligations and Responsibilities. The Parties agree that an Assisting Bank’s obligations and responsibilities in relation to the Subject Servicing of the Serviced Mortgages shall be in accordance with the requirements specified in the FHLB Guide.

(e) Review of Assistin g Bank’s Books and Re cor ds . The Parties agree that an Assisting Bank’s books and records may be reviewed, with respect to its obligations and responsibility for the Subject Servicing of the Serviced Mortgages, as provided in the FHLB Guide.

(f) Agreement Re gardin g Use of Assisting Ban k’s Clearing Account . It is understood and agreed that the directions to the MPF Provider set forth in Section 6.1(b) hereof regarding debiting and crediting the Owner Bank’s and Assisting Bank’s Clearing Accounts with respect to the Serviced Mortgages require the MPF Provider to send general ledger entries to the Owner Bank’s and Assisting Bank’s respective general ledgers by means of electronic file reports to reflect the Owner Bank’s interests in, and the Selling PFI’s obligations with respect to, the Serviced Mortgages. Further, it is agreed that the Owner Bank shall have no interest in the Assisting Bank's Clearing Account except as specifically set forth in this Agreement or as may be provided in separate agreements between the Owner Bank and the Assisting Bank. The Owner Bank and Assisting Bank agree that in the event that any debit to the Assisting Bank’s Clearing Account pursuant to this Agreement causes the balance of such account to become negative,  the  Owner  Bank  and  the  Assisting  Bank  shall  reconcile  the  funds  and  the  MPF Provider shall make the appropriate debits and credits to the Owner Bank’s and Assisting Bank’s Clearing Accounts to reflect such reconciliation, and further, if such deficit was not the result of the Assisting Bank’s error or omission, then, in such event, the Owner Bank shall be solely liable for any interest, fees or penalties assessed on such deficit by the MPF Provider; provided, however, that if the deficit was solely the result of the MPF Provider’s error or 

omission, no interest, fees or penalties shall be assessed on such deficit.

(g) Termination of Assuming PFI’ s Servicin g Responsibilities. The Parties agree that termination of an Assuming PFI’s Subject Servicing shall be in accordance with the provisions of the FHLB Guide.

(h)Value of Servicing Rights as Collateral for PFI Obligations. The Parties agree that the value and extent of the Servicing Rights as collateral for an Assuming PFI’s obligations and the rights and obligations of any Party with respect to such collateral shall be determined in accordance with provisions of the FHLB Guide.

(i)CE Collateral and Additional Collateral. The Parties agree that the extent and method that CE Collateral or additional collateral held by an Assisting Bank to secure an Assuming PFI’s obligations to the Assisting Bank and Owner Bank shall be applied or apportioned between the Assisting Bank and the Owner Bank in accordance with provisions of the FHLB Guide. It is understood and agreed that the Assisting Bank will comply with the Acquired Member Assets Regulation (12 CFR § 955.3 or any successor regulation) with respect to requiring the Assuming PFI to pledge collateral to secure its CE obligations.

Section 6.2. MPF Provider Reliance.

The MPF Provider shall have the right to rely on any executed Consent to Sale or Consent to Transfer in dealing with the Owner Bank and the Assisting Bank specified therein, including, without limitation, in debiting and crediting their respective Clearing Accounts.

ARTICLE VII. MORTGAGE PARTICIPATIONS AMONG MPF BANKS

Section 7.1. Sale and Purchase of Participations Among MPF Banks.

The Parties hereby agree that the sale and purchase of Participation Interests among MPF Banks and related support services provided by the MPF Provider shall be generally in accordance with this Agreement and specifically in accordance with this ARTICLE VII and the related provisions of the FHLB Guide. MPF Banks may contract directly with each other for the sale and purchase of participations, provided, however, that the MPF Provider acknowledges such agreements and the services the MPF Provider provides to support such agreement align with the framework of this Agreement.

Section 7.2. Participation Provisions.

(a)Participation Interest. Subject to the provisions of this ARTICLE VII and the participation provisions specified in the FHLB Guide, the Lead Bank hereby sells and assigns to the Participant Bank, and the Participant Bank hereby purchases and accepts from the Lead Bank, a Participation Interest in its Designated Loans, the Notes and the other Loan Documents evidencing and securing such Designated Loans upon the terms and conditions stated herein as further evidenced by a Participation Certificate. THIS SALE IS MADE BY THE LEAD BANK WITHOUT RECOURSE, REPRESENTATION OR WARRANTY OF ANY KIND, EITHER EXPRESSED OR IMPLIED, EXCEPT AS MAY OTHERWISE BE EXPRESSLY CONTAINED HEREIN.

(1)The execution of this Agreement, the performance of the terms or provisions hereof, and the performance or exercise of any obligations or rights pursuant hereto (including, without limitation, the Participant Bank’s purchase of and ownership interest in its Participation Interest in any Designated Loan and any Loan Documents) shall not cause the Participant Bank to be deemed the owner, holder, purchaser or seller of any security (as that term is defined in the Securities Act of 1933 or the Securities Exchange Act of 1934) issued, owned, purchased or sold by the Lead Bank, either as principal or as agent for the Borrower.

(2)The Participant Bank is purchasing and acquiring legal and equitable ownership of its Participation Interest in the Designated Loans and is not making a loan to the Lead Bank, and no debtor-creditor relationship exists between them as a result of the terms of this ARTICLE VII.

(b)Loan Fees. The Participant Bank shall be entitled to its Participation Interest in any Loan Fees received by the Lead Bank in connection with any Designated Loan. The Lead Bank will pay such amount to the Participant Bank promptly upon the Lead Bank’s receipt of such Loan Fees. The Participant Bank shall be entitled to its Participation Interest in any prepayment premium received by the Lead Bank in connection with a Designated Loan.

(c) Participant Bank ’s Right to its S hare of Principal a nd Int erest P a yments . After the purchase by the Participant Bank of its Participation Interest with respect to a Designated Loan and the funding of such Designated Loan to or for the benefit of the Borrower or acquisition by the Lead Bank, Participant Bank shall be entitled to its Participation Interest in all principal and interest received by Lead Bank with respect to such Designated Loan, subject to its obligation to pay its share of (i) the Credit Enhancement Fees payable under the applicable PFI Agreement, (ii) Agent Fees under the PFI Agreement, (iii) all other costs and expenses incurred or payable by the Lead Bank in respect of such Designated Loan or the Master Commitment or PFI Agreement to which such Designated Loan relates, and (iv) all Administrative Costs; however, the foregoing shall be subject to the allocation of Realized Losses as provided for in Section 7.2(e). Furthermore, if at any time, all or any of the amounts payable by the Lead Bank described in clauses (i) through (iv) above shall be in excess of principal and interest received by the Lead Bank at such time, the Participant Bank will pay the Participant Bank’s Share of such amounts to the Lead Bank upon demand.

(d)Collections, Disbursements to Participant Bank and Administration. The collections, distribution, allocation or rescission of payments and any and all administration matters relating to the Participation Interest and the Designated Loans shall be as specified in the FHLB Guide. Administration matters include powers granted to, and obligations of, the Lead Bank or MPF Provider to effectuate the collections, distribution, allocation or rescission of payments relating to the Participation Interest and Designated Loans.

		
	(e)
	Allocation of Realized Losses.

(1)Allocation of Realized Loss for Participations On or After January 1, 2010. This Section 7.2(e)(1) is applicable only to participations under Master Commitments entered into on or after January 1, 2010, and notwithstanding the transfer of the Participation Interest in the Designated Loans of any Master Commitment to the Participant, the Parties acknowledge that their respective First Loss Accounts must absorb any Realized Losses for that Master Commitment whether arising from the Designated Loans or not, further that all Realized Losses occurring after exhaustion of all Participants’ First Loss Accounts shall be paid by the applicable PFI to the extent of its Credit Enhancement obligation on a first come, first paid basis, and that recovery or recoupment of Realized Losses from performance-based Credit Enhancement 

Fees under certain MPF Program products is described in the FHLB Guide. The administration of Realized Losses under this Agreement is illustrated in the FHLB Guide. In addition and without limiting the forgoing, the Parties acknowledge and agree that Realized Losses for each Master Commitment subject to Participation Interest shall be shared as follows:

(i)first from any Reported Gain available for the Master Commitment;
(ii)second from the Participants’ First Loss Accounts on a Pro Rata Basis until such accounts are exhausted;
		
	(iii)
	third from the Credit Enhancement obligation of the applicable PFI, if any;

and
		
	(iv)
	lastly, any Residual Realized Losses shall be shared by the Participants on

a Pro Rata Basis.

(2)Allocation of Realized Loss for Participations Prior to January 1, 2010. This Section 7.2(e)(2) is applicable only to participations under Master Commitments subject to Designated Delivery Commitments entered into prior to January 1, 2010, and notwithstanding the transfer of the Participation Interest in the Designated Loans of any Master Commitment to the Participant Bank, the Lead Bank and Participant Bank acknowledge that their respective First Loss Accounts must cover any Realized Losses for that Master Commitment whether arising from the Designated Loans or not, further that all Realized Losses occurring after exhaustion of all First Loss Accounts shall be paid by the applicable PFI to the extent of its Credit Enhancement obligation on a first Realized Loss come, first Realized Loss paid basis, and that recovery or recoupment of Realized Losses from performance-based Credit Enhancement Fees under certain MPF Program products is described in the FHLB Guide. The administration of Realized Losses under this Agreement is illustrated in the FHLB Guide. In addition and without limiting the forgoing, the Parties acknowledge and agree that Realized Losses for each Master Commitment shall be shared as follows:

(i)For MPF Program products with a First Loss Account based on a percentage of each Program Loan acquired under a Master Commitment, such as MPF 100, MPF 125 and MPF Plus, the Realized Losses arising from all the Program Loans acquired under the Master Commitment shall be paid from the following sources:
(A)first from any Reported Gain available for the Master Commitment;

(B)second from the Participants’ First Loss Accounts on a Pro Rata Basis until all First Loss Accounts are exhausted;

(C)next from the Credit Enhancement obligation of the PFI (including any supplemental mortgage insurance paid for by the PFI); and

(D)lastly, any Residual Realized Losses shall be shared by the Participants based on their respective Participation Shares in the Master Commitment so that each Participant Bank and the Lead Bank pays an amount equal to the Residual Realized Losses multiplied by its respective Participation Share in the Master Commitment (on the Loss Allocation Date);

(ii)For MPF Program products with a First Loss Account that increases over time in proportion to the change in outstanding principal balance of the Program Loans acquired under a Master Commitment, such as Original MPF, the Realized Losses arising from all the Program Loans acquired under the Master Commitment shall be paid from the following sources:

(A)first from any Reported Gain available for the Master Commitment;

(B)second from the Participants’ First Loss Accounts based on the amounts of their respective First Loss Accounts for the Master Commitment so that each Participant Bank and the Lead Bank pays an amount equal to the Realized Losses multiplied by the ratio of its First Loss Account to the total First Loss Account for the Master Commitment (accrued through the Loss Allocation Date) until all First Loss Accounts of the Parties are exhausted;

		
	(C)
	third from the Credit Enhancement obligation of the PFI; and

(D)lastly, any Residual Realized Losses shall be shared by the Participants based on their respective allocations to the total First Loss Account for the Master Commitment so that each Participant Bank and the Lead Bank pays an amount equal to the Residual Realized Losses multiplied by its respective percentage of the total First Loss Account for the Master Commitment (accrued through the Loss Allocation Date). For example, if a Master Commitment had a total First Loss Account of $100,000 (accrued through the Loss Allocation Date for a Realized Loss), and the Participant Bank’s FLA was $25,000 and the Lead Bank’s First Loss Account was $75,000, then the Participant Bank would pay 25% of the Residual Realized Loss and the Lead Bank would pay 75% of the Residual Realized Loss.

(iii)Government Loans. The Program Loans acquired under certain Master Commitments subject to this ARTICLE VII may be Government Loans, and given the PFI’s obligation to absorb all Unreimbursed Servicing Expenses, the Parties do not anticipate incurring any Realized Losses in connection with such Master Commitments but in the event such Realized Losses are incurred and are not recovered from the PFI or any insurance or guaranty of the Government Loans, then the Parties agree that they will share such Realized Losses based on their respective Participation Shares in the Master Commitment so that each Participant Bank and the Lead Bank pays an amount equal to the Realized Losses multiplied by its respective Participation Share in the Master Commitment (on the Loss Allocation Date).

(3)Allocation in the Event of a Failure of a PFI or Servicer. The Parties agree that the allocation of losses in the event of a failure of a PFI or Servicer shall be as specified in the FHLB Guide.

(f)Termination of the Participant Bank ’s Right to Acq uire Additional Participation Interests. At such time as this Agreement expires or terminates, the Participant Bank’s right to acquire Participation Interests in Designated Delivery Commitments will terminate; provided, however, that no such termination shall be effective with respect to any unfunded Designated Delivery Commitments existing on or prior to the date of such termination.

(g)Interest in Loan Documents. Provisions concerning interest in the Loan Documents shall be specified in the FHLB Guide.

(h)Participation Support Services by the MPF Provider. In addition to any support services provided for elsewhere in this Agreement, the MPF Provider shall provide to the Lead Bank and Participating Bank such support services in accordance with the provisions in the FHLB Guide. Support services include bookkeeping, furnishing of Participation Certificates, reports and administration services in connection with the Participation Interest.

(i)Participation Share. The MPF Provider shall be able to rely on the written direction of the MPF Bank delivered in accordance with the FHLB Guide to confirm to any Participant participating in Program Loans acquired by the MPF Bank that such Participant is vested in its Participation Share in each such Program Loan upon its acquisition by the MPF Bank, without the need for further documentation, upon the deposit of funds equal to the Participant’s Participation Share to the MPF Bank’s Clearing Account.

		
	(j)
	Costs and Expenses.

(1) Administrative  Costs  and  Costs  of  Enforcements.    The  Participant  Bank agrees to, promptly upon demand, indemnify and reimburse the Lead Bank for the Participant Bank’s Participation Interest of Administrative Costs which may be incurred or paid by the Lead Bank as specified in the FHLB Guide. The Participant Bank and the Lead Bank further agree that the costs of enforcement, which include all amounts specified in the FHLB Guide, incurred in any effort to collect any amounts payable under this ARTICLE VII shall be paid in accordance with this Agreement.

(2) Payment Through Clearing Account.  To effect payment of any amount owed
by the Participant Bank under this Section 7.2(j), the Lead Bank shall draw against the Participant Bank’s Clearing Account from time to time (whether or not any such draw shall cause the balance in the Participant Bank’s Clearing Account to become negative). In the event that any withdrawal from the Participant Bank’s Clearing Account shall cause the balance in such account to become negative, such deficit shall be governed by the provisions of Section 7.6.

(k)Unconditional Obligations.  The Participant Bank and the Lead Bank agree that their respective obligations under this Agreement are, and at all times and in all events shall be,
absolute,  irrevocable  and  unconditional  and  shall  not  be  affected   by  any  intervening circumstances occurring after the date hereof or by, among other things, any of the following:

(1) any act or omission of any kind by any PFI, any Borrower, any guarantor or
any other person (except for a breach by the other party); or

(2) any set off, counterclaim or defense to payment which the Participant Bank or
Lead Bank may have or have had against the other party unrelated to this Agreement; or

(3) the existence of any event of default hereunder or under any of the Loan
Documents, PFI Agreements, Master Commitments, the Guides or any other agreement (except this Agreement), instrument or document referred to in or executed and delivered pursuant to any thereof; or

(4) any    change    of any    kind whatsoever in the financial position or creditworthiness of the Lead Bank, the Participant Bank, any Borrower, any PFI, any guarantor or any other person.

Section 7.3 Participant Bank’s Representations .

Each Participant Bank agrees to purchase all Participation Interests upon the representations and warranties specified in the FHLB Guide, which shall inure to the benefit of the Lead Bank. Such representations and warranties include, but may not be limited to, the nature of investment in the Participation Interest, that the Participant Bank is a sophisticated investor, the extent that it assumes all risk of loss and that it understands that there is no public market for the Participation Interests.

Section 7.4. Lead Bank’s Representations.

Each Lead Bank makes the following representations, which shall inure to the benefit of the Participant Bank: (i) the Lead Bank is the owner of the Program Loans and of the Participation Interests to be sold to Participant Bank hereunder, and the Lead Bank’s interest in the Program Loans and the Participation has not been encumbered or hypothecated; (ii) Lead Bank has received all necessary regulatory approvals to engage in the MPF Program; and (iii) each Participation Interest to be sold to the Participant Bank hereunder is free and clear of any adverse claim from any person or entity claiming by or through the Lead Bank.

Section 7.5. Covenants.

Without limiting any other requirements in this ARTICLE VII, the Parties agree that the sale and purchase of Participation Interests shall also be subject to the Parties’ respective obligations under the covenants specified in the FHLB Guide, which include covenants relating to the funding of Participant Bank’s Participation Interest, allocations to First Loss Accounts and delivery of Confirmations.

Section 7.6. Participant Bank’s Default.
If the Participant Bank shall default in or otherwise fail to meet its obligations to provide Defaulted Funds, then the Lead Bank may advance funds to the PFI or the Borrower in an amount not exceeding the amount of such Defaulted Funds. If the Lead Bank makes any such advance, then the Participant Bank shall immediately reimburse the Lead Bank upon demand. Any sums due from the Participant Bank to the Lead Bank (including, without limitation, Defaulted Funds and the Participant Bank’s Share of costs and expenses under Section 7.2(j)) shall: (i) accrue interest, payable upon demand, at the MPF Bank Default Rate; and (ii) shall be paid in full, together with interest thereon, from any moneys (including, without limitation, all payments of principal, interest, expenses or fees, whether obtained from or on behalf of the Borrower, voluntarily or otherwise) which would have been payable to the Participant Bank in the absence of the Participant Bank’s default, prior to the Participant Bank’s receiving such moneys. In addition, the Lead Bank may draw against funds from the Participant Bank’s Clearing Account from time to time to satisfy the Participant Bank’s obligations under this Section 7.6 (whether or not any such withdrawal shall cause the balance in the Participant Bank’s Clearing Account to become negative) upon giving the Participant Bank concurrent notice. In such event, the provisions of Section 5.5 shall be applicable. Such payments to the Lead Bank shall be first applied to accrued interest and then to the repayment of the amounts initially owed to the Lead Bank. The Participant Bank shall remain obligated to fund all other amounts under this ARTICLE VII. The Lead Bank’s remedies and rights under this Agreement and the FHLB Guide are cumulative and concurrent and in addition to every other available right, power or remedy at law or in equity.

Section 7.7. Lead Bank’s Default.

Any sums due from the Lead Bank to the Participant Bank shall be payable upon demand and shall accrue interest, payable upon demand, at the MPF Bank Default Rate. In addition, the Participant Bank may draw against funds from the Lead Bank’s Clearing Account from time to time to satisfy the Lead Bank’s obligations under this Section 7.7 (whether or not any such withdrawal shall cause the balance in the Lead Bank’s Clearing Account to become negative) upon giving the Lead Bank concurrent notice. In such event, the provisions of Section 5.5 shall be applicable. Such payments to the Participant Bank shall be first applied to accrued interest and then to the repayment of the amounts initially owed to the Participant Bank. The Lead Bank shall remain obligated to fund all other amounts under this ARTICLE VII. The Participant Bank’s remedies and rights under this Agreement and the FHLB Guide are cumulative and concurrent and in addition to every other available right, power or remedy at law or in equity.

ARTICLE VIII. ADDITIONAL PRODUCTS AND PROVIDER PROGRAM LOANS

Section 8.1. Use of Additional Products and Provider Program Loans.

Each MPF Bank agrees to follow the requirements and obligations specified in this Agreement, the FHLB Guide and Guides when offering Additional Products and Provider Program Loans to its PFIs, including, but not limited to, requirements or obligations relating to monitoring, reporting or indemnification.

Section 8.2. Assignment of Master Commitments.

Each MPF Bank agrees to assign to the MPF Provider each Additional Product MC that such MPF Bank executes with its PFIs in accordance with the provisions specified in the FHLB Guide.

Section 8.3. Sponsored Accounts.

Each MPF Bank shall establish a Sponsored Account for each Additional Product type of which its PFI is a Servicer of the Provider Program Loans delivered under an Additional Product MC. An MTA Addendum specific to the particular Additional Product shall be signed by such MPF Bank and the MPF Provider, and joined in by such MPF Bank’s PFI, as a condition of the PFI activating the respective Additional Product MC. Every Sponsored Account will be a non- interest bearing custodial principal and interest account for the benefit of the PFI pursuant to the respective MTA Addendum. Any overdraft of a Sponsored Account shall be governed by the applicable MTA Addendum and any costs or fees associated with the Sponsored Account are payment obligations of the MPF Bank and such payments will be effectuated pursuant to Section 5.5.

Section 8.4. Transfer of Servicing of Provider Program Loans.

The Parties agree that any transfers of servicing of Provider Program Loans or of Additional Products among PFIs from other MPF Banks’ districts will be governed by the FHLB Guide.

Section 8.5. Participating in Additional Products.

(a) MPF Bank’s Clearing Account . All Provider Program Loan repurchases, advances, account fees, indemnification payments and any other payments or fees due to the MPF Provider related to Additional Products are payment obligations of the applicable MPF Bank and such payments will be effectuated pursuant to Section 5.5. All Provider Program Loan purchases will be effectuated pursuant to Section 5.5.

(b)No Liability. Without limiting any provision in this Agreement, each MPF Bank hereby disclaims and shall not assume liability for the performance by the MPF Provider of its obligations under any Additional Product agreements between the MPF Provider and an Additional Product counterparty and the MPF Provider is not assuming any liability for the performance by any MPF Bank of its obligations under this Agreement, any PFI Agreement and any Additional Product agreements between such MPF Bank and an Additional Product counterparty or its PFIs.

ARTICLE IX. SERVICES FEES

Section 9.1. MPF Membership Fee.

Each MPF Bank agrees to pay a fee for the membership and participation in the MPF Program. The amount of such fee and payment schedule shall be determined as set forth in the FHLB Guide.

Section 9.2. Transaction Services Fee.
Each MPF Bank shall pay a monthly Transaction Services Fee to the MPF Provider as compensation for the Services to be provided to the MPF Bank. The rate and amount of the Transaction Services Fee shall be determined as set forth in the FHLB Guide.

Section 9.3. Additional Services Fees. In the event an MPF Bank requests the MPF Provider to provide any Additional Services other than the Services specified in the FHLB Guide as regular or standard services, such MPF Bank shall pay the fees for such Additional Services as provided in the FHLB Guide or as may be agreed to between such MPF Bank and the MPF Provider.

Section 9.4. Counterparty Fees.

The MPF Provider shall pay an MPF Bank a Counterparty Fee as set forth in the FHLB Guide.

ARTICLE X. MARKETING AND TRAINING

Section 10.1. MPF Program Marketing to Members.

The Parties agree that marketing of the MPF Program to Members shall be in accordance with the provisions of the FHLB Guide.

Section 10.2. Training.

The Parties agree that the responsibility for training of PFIs and the availability of training for PFIs or MPF Bank employees, which administer each MPF Bank’s responsibilities under the MPF Program, shall be in accordance with and as provided for in the FHLB Guide.

ARTICLE XI. MPF PROGRAM REPRESENTATIONS AND COVENANTS

Section 11.1. Risk of Loss.

Each MPF Bank assumes all risk of loss in connection with its investment in Program Loans, and its execution of each PFI Agreement and each Master Commitment except for any losses arising directly from the negligence or willful misconduct of the MPF Provider in its provision of the Services pursuant to this Agreement or breach of its fiduciary duties specified in Section 3.9; provided, however, that such assumption of risk is not intended to waive or release the liability of any person or entity that is not a party to this Agreement. In the event that an MPF Bank approves any Approved Non-Member Servicer or non-PFI servicer to service Program Loans it owns, such MPF Bank assumes all the risk of loss in connection with such Approved Non-Member Servicer or non-PFI servicer’s discharge of its Servicing obligations; provided that nothing herein shall limit the ability of such MPF Bank to seek indemnification from such Approved Non-Member Servicer or non-PFI servicer for any breach of Servicing obligation under any agreement.

Section 11.2. Default by PFIs; Enforcement.
Each of the Parties is entitled to assume that no PFI default or event which, with the giving of notice or lapse of time, or both, would constitute such a default, has occurred and is continuing unless such Party (i) has actual knowledge of such default or event, or (ii) has been notified in writing that such a default or event has occurred. For the avoidance of doubt, no duty to notify or inform Parties that are not directly affected by such default or event shall be implied by this Section 11.2.

Section 11.3. Use of Intellectual Property.

Each MPF Bank covenants and agrees that the use of any and all intellectual property related to the MPF Program shall be in accordance with rights and requirements specified in the FHLB Guide.

Section 11.4. Authorization and Enforceability.

Each of the Parties represents to the MPF Provider and any other applicable Parties that
(i) all necessary corporate and other action has been taken to authorize it to execute, and to perform its obligations under, this Agreement, and (ii) all necessary regulatory approvals to engage in the MPF Program have been obtained and (iii) this Agreement is the legal, valid and binding obligation of such Party, enforceable against it in accordance with its terms, subject to any applicable bankruptcy, insolvency, reorganization pursuant to the Federal Home Loan Bank Act, as amended, moratorium and other similar laws affecting the rights of creditors generally and general equitable principles.

Section 11.5. MPF Provider’s Representations and Warranties.

In addition to the above representations, the MPF Provider represents and warrants that it shall timely perform the Services in a commercially reasonable manner and with the same care, skill, prudence and diligence with which it would service and administer if it was its own portfolio of Mortgages. Further, the MPF Provider represents to each MPF Bank and warrants that the MPF Program is compliant with all applicable state and federal laws, including consumer laws, and rules and regulations; provided, however, that the MPF Provider makes no representations or warranties with respect to actions taken at the direction of, or matters within the control of, each MPF Bank including, but not limited to, transactions customized at the request or direction of such MPF Bank. Further, the MPF Provider represents to each MPF Bank 

and warrants that all copyrights, trademarks, service marks, patents and other intellectual property rights used in the MPF Program do not infringe upon the rights of any third parties.

Section 11.6. Use of Proprietary Information and Confidentiality.

Each Party has been and may hereafter be furnished with Confidential Information. Each Party agrees (i) to keep the Confidential Information confidential using reasonable means, not less than those used to protect its own Confidential Information, (ii) to not disclose the Confidential Information, without the prior written approval of the other Party to whom the Confidential Information relates (“Related Party”), to anyone other than to its officers or employees who have a need to know its contents to perform their duties in connection with the MPF Program, to any member of its Board of Directors, to its regulators, to any Participant or approved investor in Program Loans acquired from the MPF Bank or its PFIs, or to those third party agents who agree to be bound by the terms of this Section 11.6, as evidenced by a written statement or agreement in form and substance reasonably satisfactory to the Related Party, and
(i)upon completion of its use of the Confidential Information or at any time upon the Related Party’s request, to promptly return or destroy the Confidential Information, including all copies made thereof in any format and all notes pertaining to the same; provided, however, that each Party shall be permitted to retain a copy of any Confidential Information in accordance with its record retention policies and procedures or as required by law, regulation or court order. The Party shall certify to the Related Party that all Confidential Information was properly returned or destroyed in accordance with this Section 11.6. For purposes of this Section 11.6, when transmitting or providing access to “nonpublic personal information” (as that term is defined in Title V of the Gramm-Leach-Bliley Act (15 U.S.C. § 6809)), each Party shall use a secure method that is generally accepted as preventing unauthorized access such as encrypted transmission or providing secure, password protected web-access. Each Party further agrees that if it is served with process or any other governmental or regulatory request for the Confidential Information (excluding an examination request by the FHFA), it will immediately notify the General Counsel of the Related Party that disclosed such Confidential Information, prior to complying with such process, order or request, unless prohibited by applicable law, regulation or court order. Each MPF Bank agrees to provide the MPF Provider and any Related Party prompt notice of any breach or compromise of the security or confidentiality of any Confidential Information or nonpublic personal information. The MPF Provider shall notify any Related Party of any theft of hardware containing any Confidential Information or nonpublic personal information even if such information is encrypted. Upon such notice, the Related Party shall not disclose any information about the breach or attempted breach without the consent of the MPF Provider unless required by applicable law.

Section 11.7. Additional Covenants.

The  Parties  acknowledge  and  agree  to  all  the  additional  MPF  Program  covenants, representations and warranties specified in the FHLB Guide.

ARTICLE XII. INDEMNIFICATION AND EXCULPATION

Section 12.1. MP F Bank ’s Indemni fic a ti on Obligations.

(a)Indemnification. In addition to any other remedy under this Agreement, and with respect to each Program Loan owned by an MPF Bank, each MPF Bank agrees to indemnify, defend and hold harmless the MPF Provider, its affiliates and each stockholder, director, officer, employee and agent, if any, thereof from and against any and all loss, damage, liability or expense, including, without limitation, costs and reasonable attorneys’ fees and expenses, to which it may be put or which it may incur by reason of, or in connection with any of the following:

(1)any misrepresentation made by such MPF Bank in this Agreement, or any breach by such MPF Bank of its warranties or obligations set forth in this Agreement;

(2)the collection, payment or transfer of cash or other funds between an Owner Bank and Assisting Bank, one of which is the indemnifying MPF Bank;

(3)with respect to services provided under Section 3.2, any act or omission of an Approved Non-Member Servicer;

(4)the origination, Servicing, loss mitigation, purchase or sale of a Bank Program Loan that the MPF Bank’s PFI sold or serviced or any breach or purported breach by a PFI that is a member of such MPF Bank, or the PFI’s predecessor in interest, of its representations or warranties, covenants, obligations, duties or responsibilities with respect to a Bank Program Loan; provided that the indemnification under this Section 12.1(a)(3) does not include any liability of the MPF Provider that arises directly and solely from: (i) gross negligence or willful misconduct by the MPF Provider or (ii) ordinary negligence of the MPF Provider in handling funds; or

(5)any act or omission of a non-PFI servicer in Servicing Program Loans, where such MPF Bank consents to the Servicing of such non-PFI servicer for any MPF product, and regardless of whether the MPF Provider acknowledges or consents to the Servicing.

(b)Exclusions. The MPF Bank indemnification under Section 12.1 (a) (1)-(2) does not include indemnification for the following: (1) consequential or punitive damages and (2) with respect to the MPF Provider’s obligation in its capacity as an Owner Bank or an Assisting Bank with respect to its corresponding Assisting Bank or Owner Bank.

Section 12.2. MPF Provider’s Indemnification Obligations.

(a)Indemnification. In addition to any other remedy under this Agreement, the MPF Provider agrees to indemnify, defend and hold harmless each MPF Bank, its affiliates and each stockholder, director, officer, employee and agent, if any, thereof from and against any and all loss, damage, liability or expense, including, without limitation, costs and reasonable attorneys’ fees and expenses, to which it may be put or which it may incur by reason of, or in connection with any and all of the following: (i) any misrepresentation made by the MPF Provider set forth in this Agreement; or (ii) any breach by the MPF Provider of any of its representations, warranties or obligations set forth in this Agreement.

(b)Exclusions. The MPF Provider’s indemnification under this Section 12.2 (a) does not include indemnification for consequential or punitive damages.

Section 12.3. Participant Bank’s and Lead Bank’s Indemnification Obligations.

(a)Participant Bank’s Indemnification. In addition to any other remedy under this Agreement, any Participant Bank agrees to indemnify, defend and hold harmless the Lead Bank, its affiliates and each stockholder, director, officer, employee and agent, if any, thereof from and against any and all loss, damage, liability or expense, including, without limitation, costs and reasonable attorneys' fees and expenses, to which it may be put or which it may incur by reason of, or in connection with, any of the following: (i) any misrepresentation made by such Participant Bank in this Agreement; (ii) any breach by such Participant Bank of any of its warranties in this Agreement; or (iii) any failure by such Participant Bank to fulfill any covenants or agreements set forth in this Agreement.

(b)Lead Bank’s Indemnification Obligation. In addition to any other remedy under this Agreement, each Lead Bank agrees to indemnify, defend and hold harmless each Participant Bank participating in a participation by such Lead Bank, such Participant Bank’s affiliates and each stockholder, director, officer, employee and agent, if any, thereof from and against any and all loss, damage, liability or expense, including, without limitation, costs and reasonable attorneys’ fees and expenses, to which it may be put or which it may incur by reason of, or in connection with, any and all of the following: (i) any misrepresentation made by the Lead Bank in this Agreement; (ii) any breach by Lead Bank of any of its warranties in this Agreement; or (iii) any failure by the Lead Bank to fulfill any covenants or agreements set forth in this Agreement or arising out of the sale or distribution of any of the Participation Certificates by it in violation of the Securities Act of 1933, as amended, or any applicable state securities or blue sky laws.

Section 12.4. Additional Product Indemnification Obligations.

(a)In addition to any other remedy under this Agreement, and with respect to any Additional Product, each MPF Bank agrees to indemnify, defend and hold harmless the MPF Provider, its affiliates and each stockholder, director, officer, employee and agent, if any, thereof from and against any and all loss, damage, liability or expense, including, without limitation, costs and reasonable attorneys’ fees and expenses, to which it may be put or which it may incur by reason of, or in connection with any and all of the following:

(1)such MPF Bank’s breach of its obligations under any Addendum to the PFI Agreement, this Agreement or the FHLB Guide;

(2)the origination, Servicing, loss mitigation, purchase or sale of a Provider Program Loan that the MPF Bank’s PFI sold or serviced or any breach or purported breach by a PFI that is a member of such MPF Bank, or the PFI’s predecessor in interest, of its representations or warranties, covenants, obligations, duties or responsibilities with respect to an Additional Product; provided that the indemnification under this Section 12.4(a)(3) does not include any liability of the MPF Provider that arises directly and solely from: (i) gross negligence or willful misconduct by the MPF Provider or (ii) ordinary negligence of the MPF Provider in handling funds;

(3)any breach by such MPF Bank of its obligations under any Additional Product agreements between such MPF Bank and an Additional Product counterparty;

(4)any payments obligations owed by the MPF Provider to an Additional Product counterparty that a PFI is contractually responsible to pay to such MPF Bank under the PFI Agreement and fails to pay; or

(5)any act or omission of a non-PFI servicer in Servicing Program Loans, where such MPF Bank consents to the Servicing of such non-PFI servicer for any MPF product, and regardless of whether the MPF Provider acknowledges or consents to the Servicing.

Section 12.5. Engagement in the MPF Program Exclusion From Indemnification.

The Parties agree that any indemnification under this Agreement does not include indemnification for any loss, damage, liability or expense arising out of any litigation challenging the authority of the MPF Provider or any MPF Bank to engage in the MPF Program.

Section 12.6. Exculpations.

The Parties agree that their respective exculpation rights and obligations relating to their engagement in the MPF Program, including as a Lead Bank, a Participant Bank, an Assisting Bank, an Owner Bank or the MPF Provider, shall be as specified in the FHLB Guide.

ARTICLE XIII. TERM AND TERMINATION

Section 13.1. Term of Agreement and Termination.

(a)Unless terminated earlier as provided in this ARTICLE XIII, this Agreement shall continue in force until terminated, without cause, by a Party giving all other Parties at least one hundred eighty (180) days’ prior written notice; provided, however, that failure to give notice to any Party shall not affect notice given to another Party. For avoidance of any doubt, written notice of termination shall only terminate this Agreement as between the MPF Bank providing such notice and all other existing Parties to this Agreement, and the Agreement shall remain in full force and effect among all such other existing Parties. If the MPF Provider provides written notice of termination to an MPF Bank, the written notice of termination shall only terminate this Agreement as between such MPF Bank and all other existing Parties to this Agreement, and the Agreement shall remain in full force and effect among all such other existing Parties.

(b)Notwithstanding the termination of this Agreement by any Party for any reason, the obligations of the terminating Party, the MPF Provider and any other Party thereby affected by the termination shall continue with respect to all Program Loans funded or purchased under this Agreement pursuant to Delivery Commitments issued prior to such termination, including, without limitation, the MPF Provider shall provide the services for each Program Loan acquired by an MPF Bank, and such MPF Bank shall pay the applicable Transaction Services Fees, continuously from the date of such termination until the earliest of:

(1)the Program Loan's principal and interest have been paid in full in accordance with the requirements of the PFI Agreement; or

(2)the Program Loan has been foreclosed or liquidated, the security property therefor properly disposed of, and the claim settled with the PFI;

		
	(3)
	an MPF Bank sells its Program Loans to another MPF Bank; or

(4) in accordance with the procedures set forth in the FHLB Guide, the MPF Provider’s obligations are (i) transferred to a third party by agreement of such MPF Bank and the MPF Provider, (ii) transferred to a third party on written direction of the FHFA or (iii) with the consent of the MPF Provider, 

assumed by such MPF Bank.

(c)Upon the termination of this Agreement for any reason, each MPF Bank agrees to use commercially reasonable efforts to promptly return to the MPF Provider all marketing and operational materials previously provided by the MPF Provider, and no longer needed by such MPF Bank to fulfill its remaining obligations hereunder, unless other mutually acceptable arrangements have been made.

Section 13.2. Events of Default.

It shall be an Event of Default under this Agreement if any Party, with respect to another Party, fails to perform its obligations or breaches any of its covenants under this Agreement and such failure to perform or breach is not cured (i) within sixty (60) days from the date the non- breaching party gives written notice of such default, if the default is capable of being cured within such time limit, or (ii) within a reasonable time after notice if the cure is commenced within the sixty (60) day period and diligently pursued thereafter.

Section 13.3. Termination and Other Remedies.

(a)Remedies for the MPF Bank’s Default . Without limiting the effect of Section 12.1 or Section 12.4, upon the occurrence of an Event of Default caused by any MPF Bank, (i) the MPF Provider shall have the right, subject to the requirements of Section 13.1(b), to terminate this Agreement with respect to such MPF Bank, and (ii) the MPF Bank shall pay to the MPF Provider an amount equal to the MPF Provider’s actual and direct damages arising from and accruing during the continuance of the Event of Default, but the MPF Bank shall have no responsibility for any consequential or punitive damages.

(b)Remedies for the MPF Provider’s Default . Without limiting the effect of Section 12.2, upon the occurrence of an Event of Default caused by the MPF Provider, each MPF Bank shall have the right, subject to the requirements of Section 13.1(b), to terminate this Agreement with respect to such MPF Bank. Until the MPF Provider’s obligations to provide the Services terminates as provided in Section 13.1(b), such MPF Bank shall continue to pay the Transaction Services Fee for the Services after a termination in accordance with the provisions of the FHLB Guide at the time of such termination. Further, the MPF Provider shall pay to such MPF Bank an amount equal to the MPF Bank’s actual and direct damages arising from the Event of Default, but the MPF Provider shall have no responsibility for any consequential or punitive damages.

(c)Trigger Event. Upon the occurrence of a Trigger Event, this Agreement shall terminate with respect to the applicable MPF Bank or MPF Banks, and the provisions of Section 13.1(b) shall apply.

Section 13.4. Obligations Regarding PFIs; Support for Program Loans.

(a)An MPF Bank’s covenant to monitor the credit and maintain collateral to secure its PFIs’ obligations set forth in this Section 13.4 shall apply and shall survive the expiration or termination of this Agreement as well as the sale of the Program Loans by such MPF Bank unless such covenants and obligations have been assigned to another MPF Bank or other approved investor in such Program Loans in accordance with Section 4.4.

(b)Each MPF Bank agrees (i) to notify the MPF Provider of any material adverse changes, of which it becomes aware, in the financial condition of those PFIs who service or provide credit enhancements for any Program Loans in which any other MPF Bank has an interest and authorizes the MPF Provider to share such information with the relevant MPF Banks or other Participants, and (ii) to share relevant credit assessments and information on those PFIs with the MPF Provider.

(c)Each MPF Bank agrees to obtain a perfected security interest in collateral for the benefit of itself and any Participants and/or Owner Banks, except when prohibited by law, as the MPF Bank reasonably determines may be necessary to secure the obligations of the MPF Bank’s PFIs under their respective PFI Agreements or any other credit agreement, securing each PFI’s obligations under its PFI Agreement.

(d)Without limiting the rights of the MPF Provider and any other MPF Bank under this Agreement and the FHLB Guide, the MPF Provider shall not have an interest in any (i) other property taken as security for any other credit, loan or financial accommodation made or furnished to any PFI by any MPF Bank in which the Participant has no participation interest; (ii) property now or hereafter in the MPF Bank’s possession or under the MPF Bank’s control other than by reason of any PFI Agreement; or (iii) deposits or other indebtedness which may be or might become security for performance or payment of any obligations and liabilities of any PFI under the PFI Agreement by reason of the general description contained in any instrument other than the PFI Agreement held by such MPF Bank or by reason of any right of setoff, counterclaim, banker’s lien or otherwise.

Section 13.5. Survival.

Without limiting any other express survival provisions contained in this Agreement, all representations and warranties and the indemnifications contained in this Agreement shall survive the termination of this Agreement.

Section 13.6. Termination Relating to Approved Non-Member Servicers.

The  Parties  agree  that  additional  termination  provisions  relating  to  Approved  Non- Member Servicers shall be in accordance with the provisions of the FHLB Guide.

ARTICLE XIV. MISCELLANEOUS

Section 14.1. Notices.

Whenever notice is required under this Agreement or by applicable law, it must be given as provided in the FHLB Guide, unless otherwise expressly provided in this Agreement.

Section 14.2. The Guides and Other Documents.
The MPF Provider shall provide access to the Guides, including, without limitation, any amendments, restatements, replacements or other modifications thereto, or any pronouncements with respect thereto as provided in the FHLB Guide.

Section 14.3. Addresses.

For purposes of this Agreement, the address, telephone and facsimile numbers for the MPF Bank and the electronic transmission information for the MPF Provider and the MPF Banks are as set forth in the FHLB Guide. Any change in notice addresses must be given in writing and given as provided in the FHLB Guide, but such change shall be effective only upon actual receipt.

Section 14.4. Effect of Agreement.

The MPF Provider will have no obligation or responsibility to any MPF Bank except as specifically stated in this Agreement or the FHLB Guide. This Agreement constitutes the entire agreement among the Parties, and no representation, promise, inducement or statement of intent has been made by any Party which is not embodied in this Agreement or the incorporated FHLB Guide. For the avoidance of doubt, this Agreement is not intended to create rights and obligations between or among the MPF Banks unless specifically provided in this Agreement. In addition, the Parties agree that this Agreement is supplemented by any Custody Addendum and any Confidentiality Agreement with respect to LEVELS information. In the event of any conflict or inconsistency between the provisions of this Agreement and the provisions of the FHLB Guide, this Agreement shall control.

Section 14.5. Execution in Counterparts; Delivery of Signatures.

This Agreement, and any amendments, waivers, consents or supplements related hereto, may be executed in any number of counterparts and by different Parties hereto in separate counterparts, each of which when so executed and delivered shall be deemed an original, but all of which counterparts taken together shall constitute one and the same instrument. Signature pages may be detached from multiple separate counterparts and attached to a single counterpart so that all signature pages are attached to the same document. Delivery of a signature page to, or an executed counterpart of, this Agreement (or any amendment, waiver, consent or supplement related hereto) by facsimile, email transmission of a scanned image, or other electronic means, shall be effective as delivery of an originally executed counterpart.

Section 14.6. Governing Law.

This Agreement shall be construed and enforced in accordance with the statutory and common law of the United States of America. To the extent federal law incorporates or defers to state law, or does not apply, the relevant state law shall be the law of the State of Illinois (without regard to conflicts of law principles) applicable to agreements to be performed in the State of Illinois.

Section 14.7. Severability of Provisions.
Any provision of this Agreement which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof or affecting the validity or enforceability of such provision in any other jurisdiction.

Section 14.8. Successors and Assigns; No Third-Party Beneficiaries.

Subject to the terms of Section 4.4, this Agreement shall be binding upon and inure to the benefit of the MPF Provider and each MPF Bank and their respective successors and permitted assigns. Although the provisions of this Agreement may benefit Persons that are not Parties including, without limitation, PFIs, Members, Servicers or other Persons engaged in the MPF Program, none of them is an intended third-party beneficiary of this Agreement and they shall have no rights under this Agreement. For the avoidance of any doubt, there are no intended or implied third-party beneficiaries to this Agreement.

Section 14.9. Waivers and Amendments.

No delay on the part of any Party in the exercise of any right, power or remedy shall operate as a waiver thereof, nor shall any single or partial exercise by one Party of any right, power or remedy preclude other or further exercise thereof, or the exercise of any other right, power or remedy. No amendment to, modification or waiver of, or consent with respect to, any provision of this Agreement shall be effective unless in writing and executed and delivered by the Party against whom enforcement of such amendment, modification, waiver, or consent is sought.

Section 14.10. References to Sections, Exhibits and Agreement; Captions.

Unless otherwise indicated either expressly or by context, any reference in this Agreement to a “Section” or “Exhibit” shall be deemed to refer to a Section of or Exhibit to this Agreement. All references herein to this “Agreement” shall, as of any time after the date hereof, be deemed to include all amendments hereto, which have been made prior to such time in accordance with Section 14.9. Article and Section captions used in this Agreement are for convenience only, and shall not affect the construction of this Agreement.

Section 14.11. Specific Performance.

The Parties hereto recognize and agree that it may be impossible to measure in money the damages which will accrue to any Party hereto or its successors or assigns by reason of a failure to perform any of the obligations arising under this Agreement. Therefore, if a Party or its successors or assigns shall institute any action or proceeding to enforce any provision hereof, any Party against whom such action or proceeding is brought hereby agrees that specific performance may be sought and obtained for any breach of this Agreement, without the necessity of proving actual damages.

Section 14.12. Mediation of Disputes; Jurisdiction and Venue.

(a)No  Party  shall  institute  a  proceeding  before  any  tribunal  to  resolve  any controversy or claim arising out of or relating to this Agreement, or the breach, termination or
invalidity thereof (a “Dispute”), before such Party has sought to resolve the dispute through mediation. If the applicable Parties do not promptly agree on a mediator, any such Party may request the Director of the FHFA to appoint a mediator. All mediation proceedings under this Agreement shall be held in Washington, D.C. or such other location as the applicable Parties may agree upon. If the mediator is unable to facilitate a settlement of the Dispute within a reasonable time, as determined by the mediator, the mediator shall issue a written statement to the applicable Parties to that effect and the complaining Party may then pursue any other remedy available to it at law or in equity. The fees and expenses of the mediator shall be paid by the Party initiating mediation, unless the applicable Parties agree otherwise, but the paying Party shall 

be entitled to a judgment for reimbursement of such fees and expenses if it prevails against any other Party on all material issues in a judicial proceeding.

(b)Each Party consents to the exercise of jurisdiction over its person and its property by any court of competent jurisdiction situated in the City of Chicago, State of Illinois (whether it be a court of the State of Illinois or a court of the United States of America situated in Illinois) for the enforcement of this Agreement or in any other controversy, dispute or question arising hereunder, and such Party waives any and all personal or other rights to object to such jurisdiction for such purposes. Each Party, for itself and its successors and assigns, waives any objection which it may have to the laying of venue of any such action, suit or proceeding in any such court; provided, that the provisions of this paragraph shall not be deemed to preclude any other appropriate forum. If such litigation is commenced at any time, the applicable Parties agree that service of process may be made, and personal jurisdiction over the other Party obtained, by service of a copy of the summons, complaint and other pleadings required to commence such litigation by United States certified or registered mail, return receipt requested, addressed to such Party at its address for notices as provided in this Agreement. The applicable Parties waive all claims of lack of effectiveness or error by reason of any such service.

Section 14.13. No Joint and Several Liability; Necessary Parties.

No Party to this Agreement shall be jointly and severally liable for any breach of any other Party under this Agreement. No Party to this Agreement shall be deemed a necessary party to any proceeding or litigation simply by reason of being a Party of this Agreement. The Parties agree that in the event of any dispute or disagreement among Parties relating to this Agreement that require any type of proceeding or litigation to resolve the dispute or disagreement, only the Parties among whom such dispute has arisen shall be made a party to any proceeding or litigation.

Section 14.14. Amendment and Restatement

This Agreement amends, restates, replaces and supersedes in their entirety the MPF Agreements. Each Party to this Agreement (a) agrees that all references to the MPF Agreements that are included in any other agreement or other document executed or delivered by any Party in connection with the MPF Program shall be deemed to be references to this Agreement, as amended from time to time, and (b) hereby amends all such MPF Agreements and other documents to the extent necessary or appropriate to reflect such changed references.

Section 14.15. Equal Treatment of MPF Banks.
The MPF Program is a cooperative program among the MPF Banks and the MPF Provider. Consequently, the MPF Provider and each MPF Bank agree that any amendment or modification to this Agreement offered by or to any Active MPF Bank shall be promptly offered to all other Active MPF Banks.

[SIGNATURE PAGE(S) FOLLOWS]

ARTICLE XV. SIGNATURES

IN  WITNESS WHEREOF, the  MPF Provider  and  each  MPF  Bank has  caused this Agreement to be executed by its duly authorized officers, as of the date first above written.

MPF PROVIDER and MPF BANK:
FEDERAL HOME LOAN BANK OF CHICAGO

By:  ____________________     
Name: __________________
Title: ___________________

MPF BANK: FEDERAL HOME LOAN BANK OF ATLANTA

By:  ________________    By: _______________
Name: ______________    Name:_____________
Title: _______________    Title:______________

MPF BANK: FEDERAL HOME LOAN BANK OF BOSTON

By:  ________________    By: _______________
Name: ______________    Name:_____________
Title: _______________    Title:______________

MPF BANK: FEDERAL HOME LOAN BANK OF DALLAS

By:  ________________    By: _______________
Name: ______________    Name:_____________
Title: _______________    Title:______________

MPF BANK: FEDERAL HOME LOAN BANK OF DES MOINES

By:  ________________    By: _______________
Name: ______________    Name:_____________
Title: _______________    Title:______________

MPF BANK: FEDERAL HOME LOAN BANK OF PITTSBURGH

By:  ________________    By: _______________
Name: ______________    Name:_____________
Title: _______________    Title:______________

MPF BANK: FEDERAL HOME LOAN BANK OF NEW YORK

By:  ________________    By: _______________
Name: ______________    Name:_____________
Title: _______________    Title:______________

MPF BANK: FEDERAL HOME LOAN BANK OF SAN FRANCISCO

By:  ________________    By: _______________
Name: ______________    Name:_____________
Title: _______________    Title:______________

MPF BANK: FEDERAL HOME LOAN BANK OF TOPEKA

By:  ________________    By: _______________
Name: ______________    Name:_____________
Title: _______________    Title:______________EXCLUSIVE LICENSE AGREEMENT

Portions herein identified by [*****] have been omitted pursuant to a request for confidential treatment under Rule 24b-2 of the Securities Exchange Act of 1934, as amended.  A complete copy of this document has been filed separately with the Securities and Exchange Commission.

EXHIBIT 10.1

EXCLUSIVE LICENSE AGREEMENT

This License Agreement (the "Agreement") is entered into and made effective as of the last dated signature below (the "Effective Date") between University of Miami, a Florida not-for-profit corporation, having business offices at 1951 NW 7th Avenue, (C234), Miami, Florida 33136 ("UNIVERSITY") and Zolovax, Inc., a for-profit company organized under the laws of Delaware and wholly owned subsidiary of Heat Biologics, Inc., having business offices at 801 Capitola Drive, Bay 12, Durham, NC 27713 ("LICENSEE"). For purposes of this Agreement, each of UNIVERSITY and LICENSEE may be individually referred to as a "Party," and collectively referred to as the "Parties."

BACKGROUND

UNIVERSITY has been assigned and owns all rights and title to certain inventions as described in patent application(s) and the UNIVERSITY invention disclosure document in Appendix A. UNIVERSITY wants to have the invention perfected and marketed as soon as possible so that resulting products may be available for public use and benefit. LICENSEE wants to acquire an exclusive license for the Patent Rights for the purposes of making, having made, and sell, using and selling Products and practicing the invention(s) disclosed and claimed in the Patent Rights, in the Territory and in the Field of Use as set forth and defined below.

1.

DEFINITIONS

1.1

"Field of Use" shall mean GP96-lg-based vaccines.

1.2

"Net Sales" shall be calculated as set forth in this section, and shall mean gross amounts invoiced by LICENSEE and/or its Sublicensees on commercial sales of Products or use of Process after regulatory approval, if applicable, thereof to third parties (excluding Sublicensees), less deductions for the following, determined in accordance with generally accepted accounting principles:

(a)

sales and excise taxes, value added taxes, and duties which fall due and are paid by the purchaser as a direct consequence of such sales and any other governmental charges imposed upon the importation, use or sale of Products, but only to the extent that such taxes and duties are actually included and itemized in the gross sales amounts invoiced to and specifically paid by the purchaser over and above the price of the Products;

(b)

trade, quantity and cash discounts actually allowed and taken;

(c)

allowances or credits to customers on account of shelf adjustments, failure to supply, rejection, withdrawal, recall or return of Products or on account of retroactive price reductions affecting Products, to the extent that such allowances or credits are actually allowed and taken;

(d)

amounts not collectible after reasonable collection efforts;

(e)

any charges for freight, postage, shipping or transportation or for shipping insurance;

(f)

rebates and charge backs specifically related to Products on an actual credited or paid basis, including those granted to government agencies (such rebates and charge backs to be accrued as an estimate in the month in which the related Products are sold by using generally accepted accounting principles) to the extent that such rebates and charge backs are actually allowed and taken; and,

Page 1 of 17

Portions herein identified by [*****] have been omitted pursuant to a request for confidential treatment under Rule 24b-2 of the Securities Exchange Act of 1934, as amended.  A complete copy of this document has been filed separately with the Securities and Exchange Commission.

(g)

sales contract administrative fees, fees paid to distributors, wholesaler fees or service charges and other payments to customers or other third parties in connection with the sale of Products, to the extent actually allowed and taken.

1.3

"Patent Rights" shall mean:

(a)

the patent application(s) specifically set forth in Appendix A and any United States Patent(s) that issue therefrom or inventions originally disclosed therein or specifically described in the patents and/or any data that subsequently reduces such inventions to practice (including any and all further related provisional applications (i.e. that are subsequently combined with the patent application(s) specifically set forth in Appendix A for conversion to non­provisional application), divisionals, continuations, and continuations-in-part solely to the extent that all of the claims of any such continuations-in-part are wholly supported by the patent application(s) and/or invention disclosure(s) set forth in Appendix A) together with re-examinations or reissue of such United States Patent(s); Parties agree to negotiate in good faith terms and conditions of licensing any improvements on a case by case basis.

(b)

any foreign (non-United States) patent applications claiming priority to any patent application(s) specifically set forth in Appendix A and any patents issuing therefrom or on inventions originally disclosed therein or specifically described in the patents (including any and all divisionals, continuations, and continuations-in-part solely to the extent that all of the claims of any such continuations-in-part are wholly supported by the patent application(s) and/or invention disclosure(s) set forth in Appendix A) together with any re­ examinations or reissue of such foreign patent(s).

1.4

"Product" shall mean any product or part thereof made, used or sold by the LICENSEE or a Sublicensee of the LICENSEE, which:

(a)

is covered by (i) an issued, unexpired claim contained in the Patent Rights that has not been revoked or held unenforceable or invalid by a decision of a court or Governmental Authority of competent jurisdiction from which no appeal can be taken, or with respect to which an appeal is not taken within the time allowed for appeal, and that has not been disclaimed or admitted to be invalid or unenforceable through reissue, disclaimer or otherwise, or (ii) a pending claim contained in the Patent Rights that has not been pending for more than [*****] years and has not been abandoned, disclaimed, allowed to lapse or finally determined to be unallowable by the applicable government authority in a decision from which no appeal can be taken or from which no appeal is taken within the time allowed for appeal in the country in which any Products is made, used or sold;

(b)

is manufactured by using a Process which is covered by (a) an issued, unexpired claim contained in the Patent Rights that has not been revoked or held unenforceable or invalid by a decision of a court or Governmental Authority of competent jurisdiction from which no appeal can be taken, or with respect to which an appeal is not taken within the time allowed for appeal, and that has not been disclaimed or admitted to be invalid or unenforceable through reissue, disclaimer or otherwise, or (b) a pending claim contained in the Patent Rights that has not been pending for more than [*****] years and has not been abandoned, disclaimed, allowed to lapse or finally determined to be unallowable by the applicable government authority in a decision from which no appeal can be taken or from which no appeal is taken within the time allowed for appeal in the country in which any licensed Process is used or in which such Process or portion thereof is used or sold.

Page 2 of 17

Portions herein identified by [*****] have been omitted pursuant to a request for confidential treatment under Rule 24b-2 of the Securities Exchange Act of 1934, as amended.  A complete copy of this document has been filed separately with the Securities and Exchange Commission.

1.5

"Process" shall mean any process used by the LICENSEE or a Sublicensee of the LICENSEE which is covered by an issued, unexpired claim or pending claim contained in the Patent Rights.

1.6

"Sublicensee" as used in this Agreement shall mean any third party to whom LICENSEE has granted a license to make, have made, use and/or sell the Product or the Process under the Patent Rights, provided LICENSEE has requested and obtained prior written approval from UNIVERSITY, which approval shall not be unreasonably withheld. Sublicensee shall agree in writing with LICENSEE to accept the conditions and restrictions agreed to by LICENSEE in this Agreement, and LICENSEE shall, within thirty (30) days of request by UNIVERSITY, provide to UNIVERSITY a fully signed, non-redacted copy of each agreement executed by a Sublicensee, with all exhibits, appendixes, attachments and any amendments thereto, as applicable.

1.7

"Territory" shall mean the world.

1.8

"Technology" means the "Patent Rights" and additional technology, information, or other materials that will be provided by UNIVERSITY to LICENSEE, at LICENSEE's expense. Technology may or may not be confidential in nature.

2.

GRANT

2.1

UNIVERSITY hereby grants to LICENSEE and LICENSEE hereby accepts an exclusive license, subject to any rights of the government in the Territory for the Field of Use, with the right to sublicense, under the Patent Rights and a nonexclusive license to the know-how developed as of Effective Date by Natasa Strbo and Laura Romero (the "Inventors") that is not encumbered by any third party rights, which is necessary to practice the Patent Rights to research, develop, make, have made, use, commercialize, market, promote, distribute, export, sell, offer to sell , or otherwise offer to dispose of Products in the Field of Use in the Territory and import the Product(s) and to practice the Process(es) described and/or claimed in the Patent Rights.

2.2

UNIVERSITY retains a non-sublicensable, non-exclusive, royalty-free, perpetual, irrevocable, worldwide right to make and to use the subject matter described and/or claimed in the Patent Rights for non-commercial, internal research, or educational purposes. Further, the United States Government may also have certain rights, title and/or interest in/to the licensed patent(s) and/or patent application(s), including but not limited to the rights to use the licensed patent(s) and/or patent application(s) for internal, non-commercial and educational purposes only.

2.3

Subject to a third party's rights, LICENSEE shall have the right of first negotiation to future patent(s) and patent application(s) the practice of which would infringe at least one claim within the "Patent Rights", which is developed from the Inventors' laboratory owned or controlled by UNIVERSITY.

3.

ROYALTIES AND OTHER CONSIDERATION

3.1

In consideration of the license herein granted, LICENSEE shall pay fees and royalties to UNIVERSITY as follows:

(a)

License issue fee of $[*****]) is due to UNIVERSITY within sixty (60) days of the Effective Date of this Agreement.

(b)

Past patent expenses incurred by UNIVERSITY in the amounts and at the times as set forth in Appendix B.

(c)

Running royalty in an amount equal to [*****] of the annual Net Sales of the Product(s) leased or sold by or for LICENSEE or its Sublicensees ("Running Royalty"), subject

Page 3 of 17

Portions herein identified by [*****] have been omitted pursuant to a request for confidential treatment under Rule 24b-2 of the Securities Exchange Act of 1934, as amended.  A complete copy of this document has been filed separately with the Securities and Exchange Commission.

to reduction as set forth in the next sentence. In the event LICENSEE is required to pay royalties to a third party or third parties for the same Product or Process as licensed under this Agreement, then LICENSEE may reduce the Running Royalty by [*****] for each one dollar ($1.00) in royalties which LICENSEE is obligated to pay to a third party or third parties under such licenses, provided however, that the royalties payable to UNIVERSITY under this section shall not be reduced to less than [*****] of annual Net Sales of the Product(s) leased or sold by or for LICENSEE or its Sublicensees. If, in any one calendar year, LICENSEE is not able to fully recover its [*****] portion of the payments due to a third party, it shall be entitled to carry forward such right of off-set to future calendar years with respect to the excess amount. [*****].

However, the parties agree that Licensee may only apply one of the aforementioned (i) royalty rate reduction of not less than [*****] of annual Net Sales or (ii) Combination Product reduction of Net Sales, as described above, at Licensee's option. For clarity, Licensee may either apply a royalty rate reduction in connection with royalties to a third party or third parties or a Combination Product reduction of Net Sales, as described above. In any event, the royalty rate shall not be less than [*****].

(d)

By the first (1st) day of each anniversary of the Effective Date and until expiration or termination of this Agreement, LICENSEE agrees to pay UNIVERSITY an annual fee of:

(i)

[*****] on the third (3rd) and fourth (4th) anniversaries;

(ii)

[*****] on the fifth (5th) and sixth (6th) anniversaries;

(iii)

[*****] on the seventh (7th) and eighth (8th) anniversary;

(iv)

[*****] on the ninth (9th) and tenth (10th) anniversaries; and

(v)

[*****] on the eleventh (11th) anniversary and every anniversary thereafter. This amount shall be decreased by [*****] in the event that clinical trials are ongoing but regulatory authority approval has not been granted, despite best efforts on part of LICENSEE.

Such annual fees are creditable towards any other consideration, including royalty and milestone payments that are, as set forth herein, due to the UNIVERSITY by LICENSEE.

(e)

Royalties are payable on a country-by-country basis beginning on the date of first commercial sale and ending on expiration of the last to expire Patent Rights in such country.

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3.2

All payments hereunder shall be made in U.S. dollars.

3.3

In the event that any taxes, withholding or otherwise, are levied by any taxing authority in connection with accrual or payment of any royalties payable to UNIVERSITY under this Agreement, the LICENSEE shall be solely responsible to pay such taxes to the local tax authorities on behalf of UNIVERSITY, as a nonprofit, tax-exempt organization as defined in Section 501(c)(3) of the Internal Revenue Code. Should LICENSEE be required under any law or regulation of any government entity or authority to withhold or deduct any portion of the payments on royalties due to UNIVERSITY, then the sum payable to UNIVERSITY shall be increased by the amount necessary to yield to UNIVERSITY an amount equal to the sum it would have received had no withholdings or deductions been made. UNIVERSITY shall cooperate reasonably with LICENSEE in the event LICENSEE elects to assert, at its own expense, any exemption from any such tax or deduction.

3.4

SUBLICENSING: If LICENSEE receives any fees, minimum royalties, equity ownership, securities, or other payments in consideration for any rights granted under a sublicense of the Patent Rights, and such payments are not based directly upon the amount or value of Products or Processes sold by the Sublicensee nor represent payment of costs to LICENSEE for a development program which LICENSEE is obligated to perform under such sublicense, then LICENSEE shall pay UNIVERSITY [*****] of such payments; provided that this [*****]shall not apply to royalty payments on Net Sales of Product, which shall be calculated as described in Section 3.1.(c) or amounts paid for purchase of securities of LICENSEE to the extent such payment does not exceed the fair market value of such securities.

3.5

Notwithstanding the Sublicensee's payment obligation to LICENSEE, LICENSEE shall be directly responsible for all royalties and payments due pursuant to this section 3.

4.

COMMERCIAL DILIGENCE AND MILESTONES

4.1

LICENSEE shall use commercially reasonable efforts to develop, manufacture, market and sell Product in the Territory and will exert commercially reasonable efforts to create a demand for Product.

4.2

LICENSEE agrees to submit annual reports, as to its efforts to develop Product and markets for Product. Such reports shall include assurance by LICENSEE of its intent to actively develop commercial embodiments of the Patent Rights and a summary of its efforts in this regard.

4.3

LICENSEE, at its sole expense, shall make commercially reasonable efforts to accomplish the following:

(a)

by the first day of the [*****] anniversary of Effective Date, pre-IND meeting with FDA (or correlate submission to regulatory organization in other country);

(b)

by the first day of the [*****] anniversary of Effective Date, IND submission to FDA (or correlate submission to regulatory organization in other country); and

(c)

by the first day of the [*****] anniversary of Effective Date, first subject treated in a phase I clinical trial

(d)

LICENSEE, upon written request to UNIVERSITY, may be granted an extension of one or more of the above milestones (a)-(c) by six (6) months up to three (3) times for a total possible extension of eighteen (18) months provided LICENSEE pays UNIVERSITY a payment of a [*****] fee per extension. If LICENSEE extends a particular milestone, all subsequent milestones will be extended by the same time period.

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(e)

The Parties agree to the following milestones and payments but not more than once even if the milestone is accomplished for more than one Product in the Territory. For the avoidance of doubt, if the same milestone is achieved by a Sublicensee of the Patent Rights, then UNIVERSITY shall share in any payments LICENSEE receives from a Sublicensee according to section 3.4 above, and the following milestones and payments will not be due. The following milestone payments shall not be creditable towards any other monies UNIVERSITY is due from LICENSEE, including but not limited to: payment of past patent costs, payment of future patent costs, royalty payments, and royalty payments associated with a Sublicensee's sale of any Product(s):

(f)

Upon dosing of the first patient in the first phase I clinical trial conducted by Licensee based upon the Patent Rights in the Field of Use, LICENSEE shall pay UNIVERSITY an additional amount of [*****]

(g)

Upon dosing of the first patient in the first phase II clinical trial conducted by Licensee based upon the Patent Rights in the Field of Use, LICENSEE shall pay UNIVERSITY an additional amount of [*****]

(h)

Upon dosing of the first patient in the first phase III clinical trial conducted by Licensee based upon the Patent Rights in the Field of Use, LICENSEE shall pay UNIVERSITY an additional amount of [*****]

(i)

Upon receiving marketing approval by the first regulatory authority for the first product developed by Licensee based upon the Patent Rights in the Field of Use, LICENSEE shall pay UNIVERISTY an additional amount of [*****]

4.4

In the event that either Party is prevented from performing under the Agreement as a result of an act of God, hurricane, war, or terrorism, any delays in or failure of performance under the Agreement shall be excused if and to the extent that such delays or failures are beyond such Party's reasonable control. UNIVERSITY and LICENSEE shall notify the other promptly upon learning of any event that may result in any delay or failure to perform. If the force majeure event occurs and continues to prevent substantial performance for more than ninety (90) days the other Party has the right to terminate this Agreement.

4.5

[*****]

5.

SPONSORED RESEARCH. LICENSEE will in good faith negotiate with the UNIVERSITY Office of Research Administration to have UNIVERSITY conduct certain preclinical proof of concept studies that will be required for partnering the licensed Patent Rights and which LICENSEE believes are best performed by the UNIVERSITY. The result of these negotiations will be memorialized in a separate agreement signed by both Parties.

6.

TERM. The term of this Agreement shall commence on the Effective Date and shall remain in effect until the date on which all issued patents and filed patent applications within the Patent Rights have expired or been abandoned and no royalties are due pursuant to section 3, unless this Agreement is terminated earlier in accordance with any of the other provisions of section 15.1. For the purposes of clarity, after the expiration of the last to expire Patent Rights in such country, LICENSEE shall retain a fully-paid-up, royalty free and irrevocable license to practice such Patent Rights in such country.

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7.

UNITED STATES LAWS

7.1

LICENSEE understands that the Patent Rights may have been developed under a funding agreement with the Government of the United States of America and, if so, that the Government may have certain rights relative thereto. This Agreement is explicitly made subject to the Government's rights under any agreement and any applicable law or regulation. If there is a conflict between an agreement, applicable law or regulation and this Agreement, the terms of the Government agreement, applicable law or regulation shall prevail. Specifically, this Agreement is subject to all of the terms and conditions of Title 35 United States Code Sections 200 through 212 (to the extent applicable), including an obligation that Product(s) sold or produced in the United States be "manufactured substantially in the United States," and LICENSEE agrees to take all reasonable action necessary on its part as licensee to enable UNIVERSITY to satisfy its obligation thereunder, relating to the Patent Rights.

7.2

It is understood that UNIVERSITY and LICENSEE are subject to United States laws and regulations controlling the export of technical data, computer software, laboratory prototypes and other commodities (including the Arms Export Control Act, as amended and the Export Administration Act of 1979), and that its obligations hereunder are contingent on compliance with applicable United States export laws and regulations. The transfer of certain technical data and commodities may require a license from the cognizant agency of the United States Government and/or written assurances by LICENSEE that LICENSEE shall not export data or commodities to certain foreign countries without prior approval of such agency. UNIVERSITY neither represents that a license shall or shall not be required nor that, if required, it shall be issued. LICENSEE represents and warrants that it will comply with, and will cause its Sublicensees to comply with all United States export control laws, rules and regulations. LICENSEE is solely responsible for any violation of such laws and regulations by itself or its Sublicensees, and it will indemnify, defend and hold UNIVERSITY harmless for the consequences of any such violation.

8.

PATENT PROTECTION

8.1

Licensee shall pay for one hundred percent (100%) of the costs of patent preparation, prosecution and maintenance after the Effective Date, including all interferences, reissues, re­ examinations, oppositions or requests for patent term extensions. LICENSEE shall reimburse UNIVERSITY one hundred percent (100%) of third party expenses incurred by and paid for by UNIVERSITY in seeking and securing the Patent Rights prior to the Effective Date, according to the schedule set forth in Appendix B.

8.2

Subject to UNIVERSITY's authority, LICENSEE, during the term of this Agreement, is responsible for the prosecution, maintenance and enforcement of the Patent Rights in UNIVERSITY's name, for UNIVERSITY's benefit, whereby LICENSEE: (a) shall keep UNIVERSITY informed in writing of all material actions taken in this regard to permit UNIVERSITY an opportunity to review and comment thereon (b) shall consider in good faith, take into account and implement the reasonable comments made by UNIVERSITY, (c) shall not add inventors who do not have an obligation to assign their ownership interest to the UNIVERSITY to any patent or patent application among the Patent Rights without the permission of UNIVERSITY, (d) shall not abandon prosecution of any pending patent applications or fail to maintain issued patents without providing UNIVERSITY the opportunity to assume control of prosecution and maintenance of the Patent Rights as provided below, and (e) shall notify UNIVERSITY no less than forty-five (45) days where reasonably practical prior to any deadline for action set forth by the US Patent and Trademark Office or its foreign counterparts (a "Patent Office") and promptly if not reasonably practical. In the event LICENSEE desires to abandon prosecution or

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maintenance of any Patent Rights filed in a particular country, LICENSEE shall provide UNIVERSITY with no less than sixty (60) days written notice prior to the Patent Office deadline for action in which LICENSEE shall document: (i) the patent/patent application number; (ii) the patent/patent application title; (iii) the country in which such patent/patent applications is issued/pending. Unless otherwise agreed to by the Parties, upon UNIVERSITY's receipt of such written notice, any and all rights granted to LICENSEE by UNIVERSITY to said patent/patent application in said country shall promptly terminate. For clarity, upon such termination of rights under such patent/patent application, UNIVERSITY shall be free to license, sell, assign, dispose of, and/or take any other action with respect to the rights to said patent/patent application at its sole and absolute discretion and with no obligation to LICENSEE. UNIVERSITY shall provide to LICENSEE reasonable assistance in the prosecution, maintenance and enforcement of the Patent Rights, at LICENSEE's request and expense.

8.3

Upon learning of any infringement of Patent Rights by third parties in any country, LICENSEE and UNIVERSITY will promptly inform each other, as the case may be, in writing of that fact and will supply the other with any available evidence pertaining to the infringement. LICENSEE, at its own expense, shall have the option to take whatever steps are necessary to stop the infringement at its expense and recover damages and will be entitled to retain all damages so recovered. If LICENSEE brings suit against an alleged infringer and UNIVERSITY is a necessary party to such suit, UNIVERSITY agrees to be named in such suit at LICENSEE's expense. In the event that UNIVERSITY and LICENSEE mutually agree to bring suit, costs and expenses shall be shared equally and any recovery in excess of expenses shall be shared equally. In any event, no settlement, consent, judgment or other voluntary final disposition of the suit that would materially or adversely affect the interests of the UNIVERSITY may be entered into without the consent of UNIVERSITY. In the event LICENSEE does not take steps to stop the infringement within ninety (90) days after notice of same by either Party, UNIVERSITY shall have the right to take whatever steps it deems necessary to stop the infringement at its expense and recover damages therefore, and will be entitled to retain all damages so recovered. Each Party shall provide to the Party enforcing any Patent Rights reasonable assistance in such enforcement, at such enforcing Party's request and expense.

9.

INDEMNIFICATION AND LIMITATION OF LIABILITY

9.1

LICENSEE will defend, indemnify and hold harmless the UNIVERSITY, its trustees, officers, faculty, employees and students ("University lndemnitees") against any and all losses, expenses, claims, actions, lawsuits and judgments thereon (including attorney's fees through the appellate levels) (collectively "Liabilities") which may be brought against University Indemnities by third parties as a result of or arising out of: (a) any negligent act or omission of LICENSEE, its Sublicensees, or its or their agents or employees, or (b) the use, production, manufacture, sale, lease, consumption or advertisement by LICENSEE, its Sublicensees or its or their agents or employees of any Products; provided, however, LICENSEE shall not indemnify or hold harmless any University lndemnitee from any Liabilities to the extent that such Liabilities are finally determined to have resulted from the willful negligent acts or omissions of such University lndemnitee.

9.2

LICENSEE will defend, indemnify and hold harmless the University Indemnities against any and all judgments and damages arising from any and all third party claims of infringement which may be asserted against University Indemnities because of the manufacture, use, promotion and sale of Products. LICENSEE will bear all costs and expenses incurred in connection with the defense of any such claims or as a result of any settlement made or judgment rendered on the

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basis of such claims. LICENSEE agrees to provide attorneys which shall be approved by University Indemnities at their sole and absolute discretion to defend against any actions brought or filed against any University lndemnitee hereunder with respect to the subject of indemnity contained herein, whether or not such actions are rightfully brought; provided, however, that any University lndemnitee shall have the right to retain its own counsel, at the reasonable expense of LICENSEE, if representation of such University lndemnitee by counsel retained by LICENSEE would be inappropriate because of conflict of interests or otherwise. LICENSEE agrees to keep UNIVERSITY informed of the progress in the defense and disposition of such claim, and to consult with UNIVERSITY prior to any proposed settlement.

9.3

UNIVERSITY shall have no further liability to LICENSEE for any loss or damages LICENSEE may incur as a result of the invalidity of UNIVERSITY's Patent Rights.

9.4

UNIVERSITY shall have no responsibility with respect to LICENSEE's own trademarks and trade name, and LICENSEE in respect to the use thereof will defend, indemnify and hold harmless UNIVERSITY against any and all third party claims.

9.5

UNIVERSITY is not liable for any special, consequential, lost profit, expectation, punitive or other indirect damages in connection with any claim arising out of or related to this Agreement, whether grounded in tort (including negligence), strict liability, contract, or otherwise.

9.6

This Agreement to reimburse and indemnify under the circumstances set forth above shall continue after the expiration or termination of this Agreement.

10.

WARRANTIES. UNIVERSITY MAKES NO WARRANTIES, EXPRESS OR IMPLIED, AND HEREBY DISCLAIMS ALL SUCH WARRANTIES, AS TO ANY MATIER WHATSOEVER, INCLUDING, WITHOUT LIMITATION, THE CONDITION OF ANY INVENTION (S) OR PRODUCT, WHETHER TANGIBLE OR INTANGIBLE, LICENSED UNDER THIS AGREEMENT; OR THE MERCHANTABILITY, OR FITNESS FOR A PARTICULAR PURPOSE OF THE INVENTION OR PRODUCT; OR THAT THE USE OF THE LICENSED PRODUCT WILL NOT INFRINGE ANY PATENTS, COPYRIGHTS, TRADEMARKS, OR OTHER RIGHTS; PROVIDED HOWEVER, UNIVERSITY WARRANTS THAT IT HAS NOT LICENSED THE PATENT RIGHTS TO ANY THIRD PARTY.

11.

REPORTS AND RECORDS

11.1

Prior to first Net Sale, LICENSEE agrees to provide UNIVERSITY with an annual written report specifying the progress of research, development, and marketing activities. Commencing with the first (1st) calendar quarter after the first Net Sale, the LICENSEE shall provide to UNIVERSITY a written report specifying during the preceding calendar quarter (a) the number or amount of Products sold hereunder by LICENSEE and its Sublicensees, (b) the total billings for all Product(s) sold, (c) deductions as applicable to calculate Net Sales, (d) total royalties due, (e) names and addresses of all Sublicensees. Such reports shall be due within fifty (5O) days following the last day of each calendar quarter in each year during the term of this Agreement. Each such report shall be accompanied by payment in full of the amount due UNIVERSITY in United States dollars.

11.2

For a period of three (3) years from the date of each report pursuant to section 11.1, LICENSEE, shall keep records adequate to verify each such report and accompanying payment made to UNIVERSITY under this Agreement, and an independent Certified Public Accountant or Accounting Firm selected by UNIVERSITY and acceptable to LICENSEE may have access, on reasonable notice during regular business hours, not to exceed twice per year, to such records to verify such reports and payments. LICENSEE's acceptance of UNIVERSITY's selection of said Certified Public Accountant or Accounting firm shall not be unreasonably withheld. Such Accountant or Accounting Firm shall not disclose to UNIVERSITY any information other than that

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information relating solely to the accuracy of, or necessity for, the reports and payments made hereunder and shall sign LICENSEE'S standard confidentiality agreement prior to obtaining access to any records. The fees and expense of the Certified Public Accountant or Accounting Firm performing such verification shall be borne by UNIVERSITY unless in the event that the audit reveals an underpayment of royalty or sublicensing fees by more than five (5%) percent, in which case the cost of the audit shall be paid by LICENSEE.

12.

MARKING AND STANDARDS

12.1

LICENSEE agrees to mark and have its Sublicensees mark any and all Products (or their containers or labels) that are made, sold, or otherwise disposed of by LICENSEE or Sublicensees under the license granted in this Agreement, in accordance with and to the extent required by the applicable patent marking statute; provided that LICENSEE does not need to mark Products (or their containers or labels) if such Products are used solely for LICENSEE's own internal research purposes and/or used for validation studies on LICENSEE's behalf.

12.2

LICENSEE shall act in good faith to maintain satisfactory standards in respect to the nature of the Product manufactured and/or sold by LICENSEE. LICENSEE, shall act in good faith to ensure that all Products manufactured and/or sold by it shall be of a quality which is appropriate to Products of the type here involved. LICENSEE agrees that similar provisions shall be included by sublicenses of all tiers.

13.

ASSIGNMENT

13.1

Permitted Assignment. LICENSEE may assign or delegate its rights or obligations under this Agreement only under the following circumstances:

(a)

By providing UNIVERSITY with written notice of the proposed assignment, including the proposed assignee's contact information, at least thirty (30) days prior to the date of assignment, and obtaining UNIVERSITY's express written consent to the proposed assignment, which consent shall not be unreasonably withheld; or

(b)

As part of a sale or change of control, regardless of whether such a sale or change of control occurs through an asset sale, stock sale, merger or other combination, or any other transfer of: (i) LICENSEE's entire or substantially all of the business; or (ii) that part of LICENSEE's business that exercises all rights granted under this Agreement.

13.2

Conditions of Assignment. Prior to any assignment, (i) the proposed assignee must agree in writing to UNIVERSITY to be bound by this Agreement, and ( ii) LICENSEE must pay UNIVERSITY an assignment fee in the amount of [*****] due within thirty (30) days of assignment agreement execution. [*****]

13.3

Any Other Assignment by Licensee. Any attempt by LICENSEE to assign this Agreement that fails to comply with Section 13.1and 13.2 are null and void.

14.

NOTICE. Any notice, payment, report or other correspondence (hereinafter collectively referred to as "correspondence") required or permitted to be given hereunder shall be mailed by certified mail or delivered by hand to the Party to whom such correspondence is required or permitted to be given hereunder. If mailed, any such notice shall be deemed to have been given when mailed as evidenced by the postmark at point of mailing. If delivered by hand, any such correspondence shall be deemed to have been given when received by the Party to whom such correspondence is given, as evidenced by written and dated receipt of the receiving Party.

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All correspondence to LICENSEE shall be addressed as follows: 

Chief Executive Officer

Zolovax, Inc.

801 Capitola Drive, Bay 12

Durham, NC 27713

All correspondence to UNIVERSITY shall be addressed, in duplicate, as follows: 

FOR NOTICE:

Assistant Vice President

Financial Operations University of Miami

1320 South Dixie Highway, Suite 1230 

Gables One Tower

Coral Gables, FL 33146

WITH A COPY TO:

Office of the General Counsel 

University of Miami

1320 South Dixie Highway, Suite 1250 

Gables One Tower

Coral Gables, FL 33146

FOR NOTICE AND PAYMENT:

Office of Technology Transfer 

University of Miami

1951 NW 7th Avenue, Suite 300

Miami, FL 33136

Either Party may change the address to which correspondence to it is to be addressed by notification as provided herein.

15.

MISCELLANEOUS PROVISIONS

15.1

TERMINATION

(a)

LICENSEE shall have the right to terminate this Agreement upon sixty (60) days prior written notice to UNIVERSITY. Such termination will not relieve Licensee of Licensee's obligation to pay any royalties or license fees owed at the time of such termination.

(b)

UNIVERSITY and LICENSEE shall have the right to terminate this Agreement if the other Party commits a material breach of an obligation under this Agreement and fails to cure any such breach within thirty (30) days of receipt of written notice from non-breaching Party. A material breach shall include but not be limited to the following: (a) failure to deliver to UNIVERSITY any payment at the time such payment is due under this Agreement, (b) failure to meet or achieve milestone schedule, (c) failure to possess and maintain required insurance coverage. UNIVERSITY shall have the right to terminate this Agreement in the event LICENSEE provides a false report and continues in default for more than thirty (30) days after receiving written notice of such default or false report. Such termination shall be effective upon further written notice to the breaching Party after failure by the breaching

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Party to cure. If UNIVERSITY commits a material breach or defaults, then LICENSEE has no duty to continue the payment of royalties as set forth in section 3 of this Agreement.

(c)

The license and rights granted in this Agreement have been granted on the basis of the special capability of LICENSEE to perform research and development work leading to the manufacture and marketing of the Product(s). Accordingly, LICENSEE covenants and agrees that in the event any proceedings under the Bankruptcy Act or any amendment thereto, be commenced by or against LICENSEE, and, if against LICENSEE, said proceedings shall not be dismissed with prejudice before either an adjudication in bankruptcy or the confirmation of a composition, arrangement, or plan of reorganization, or in the event LICENSEE shall be adjudged insolvent or make an assignment for the benefit of its creditors, or if a writ of attachment or execution be levied upon the license hereby created and not be released or satisfied within ten (10) days thereafter, or if a receiver be appointed in any proceeding or action to which LICENSEE is a party with authority to exercise any of the rights or privileges granted hereunder and such receiver be so discharged within a period of forty-five (45) days after his appointment, any such event shall be deemed to constitute a breach of this Agreement by LICENSEE and, UNIVERSITY, at the election of UNIVERSITY, but not otherwise, ipso facto, and without notice or other action by UNIVERSITY, shall terminate this Agreement and all rights of LICENSEE hereunder and all rights of any and all persons claiming under LICENSEE.

(d)

Any termination of this Agreement shall be without prejudice to UNIVERSITY's right to recover all amounts accruing to UNIVERSITY prior to such termination and cancellation. Except as otherwise provided, should this Agreement be terminated for any reason, LICENSEE shall have no rights, express or implied, under any intellectual property rights which are the subject matter of this Agreement, nor have the right to recover any royalties paid UNIVERSITY hereunder. Upon termination, LICENSEE shall have the right to dispose of Products then in their possession and to complete existing contracts for such Products, so long as contracts are completed within six (6) months from the date of termination, subject to the payment of royalties to UNIVERSITY as provided in section 3 hereof. Failure to terminate on any basis shall not prejudice or impact the UNIVERSITY's rights and ability to subsequently terminate for the same or a related basis.

15.2

INSURANCE

(a)

Prior to the commencement of clinical trials, LICENSEE must maintain commercial general liability insurance in the amounts of not less than One Million Dollars ($1,000,000) per incident and $1,000,000 annual aggregate. After the commencement of the first clinical trial for the first Product but prior to the first commercial sale of a Licensed Product, LICENSEE must maintain commercial general liability insurance of not less than One Million Dollars ($1,000,000) per incident and clinical trials liability insurance of not less than Three Million Dollars ($3,000,000). After the first commercial sale of a Product, LICENSEE must maintain commercial general liability insurance in the amounts of not less than Three Million Dollars ($3,000,000) per incident and Five Million Dollars ($5,000,000) annual aggregate. Immediately prior to the commencement of the first clinical trial for the first Product, UNIVERSITY, its employees and agents, will be named as additional insured. After the first commercial sale of a Product, LICENSEE shall maintain products liability/completed operations and clinical trials insurance coverage in the amount of Ten Million Dollars ($10,000,000).

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(b)

LICENSEE shall not cancel such insurance without thirty (30) days prior notice to UNIVERSITY. Such cancellation without replacement insurance being obtained shall be cause for termination.

(c)

The terms of this provision shall extend beyond termination of the agreement.

15.3

USE OF NAME. LICENSEE shall not use the name of the University of Miami, or any of its trustees, faculty, students or employees, or any adaptation thereof, in any publication, including advertising, promotional or sales literature without the prior written consent of Mr. Humberto M. Speziani, Assistant Vice President, Financial Operations, 1320 South Dixie Highway, Suite 1230, Gables One Tower, Coral Gables, FL 33146.

15.4

GOVERNING LAW. This Agreement shall be considered as having been entered into in the State of Florida, United States of America, and shall be construed and interpreted in accordance with the laws of the State of Florida. In any action or proceeding arising out of or relating to this Agreement (an "Action"), each of the Parties hereby irrevocably submits to the jurisdiction of any federal or state court sitting in Miami, Florida, and further agrees that any Action shall be heard and determined in such Florida federal court or in such state court. Each Party hereby irrevocably waives, to the fullest extent it may effectively do so, the defense of an inconvenient forum to the maintenance of any Action in Miami, Florida.

15.5

CAPTIONS. The captions and section headings of this Agreement are solely for the convenience of reference and shall not affect its interpretation.

15.6

SEVERABILITY. Should any part or provision of this Agreement be held unenforceable or in conflict with the applicable laws or regulations of any jurisdiction, the invalid or unenforceable part or provision shall be replaced with a provision which accomplishes, to the extent possible, the original business purpose of such part or provision in valid and enforceable manner, and the remainder of the Agreement shall remain binding upon the Parties hereto.

15.7

SURVIVAL

(a)

The provisions of section 1, 7, 9, 10, 12, 14, 15.3, 15.4, 15.9 and 15.13 shall survive the termination or expiration of this Agreement and shall remain in full force and effect.

(b)

The provisions of this Agreement which do not survive termination or expiration hereof (as the case may be) shall, nonetheless, be controlling on, and shall be used in construing and interpreting, the rights and obligations of the Parties hereto with regard to any dispute, controversy or claim which may arise under, out of, in connection with, or relating to this Agreement.

(c)

Sublicenses in good standing shall survive termination of this license as a direct license from UNIVERSITY, provided that Sublicensees assume the obligations set forth in the definitive agreement. UNIVERSITY will enter into a direct agreement with such Sublicensees upon LICENSEE's written request.

15.8

AMENDMENT. No amendment or modification of the terms of this Agreement shall be binding on either Party unless reduced to writing and signed by an authorized officer of the Party to be bound.

15.9

NON-WAIVER. No failure or delay on the part of a Party in exercising any right hereunder will operate as a waiver of, or impair, any such right. No waiver of any of the provisions of this Agreement shall be effective unless it is in writing, and signed by the Party against whom it is asserted, and any such written waiver shall only be applicable to the specific instance to which it

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relates and shall not be deemed to be a continuing or future waiver. No single or partial exercise of any such right will preclude any other or further exercise thereof or the exercise of any other right. No waiver of any such right will be deemed a waiver of any other right hereunder.

15.10

INDEPENDENT CONTRACTOR RELATIONSHIP. This Agreement is not intended to create nor shall be construed to create any relationship between LICENSEE and UNIVERSITY other than that of independent entities contracting for the purpose of effecting provisions of this Agreement. It is further expressly agreed that no work, act, commission or omission of any Party, its agents, servants or employees, pursuant to the terms and conditions of this Agreement, shall be construed to make or render any Party, its agents, servants or employees, an agent, servant, representative, or employee of, or joint venturer with, the other Party. Neither Party shall have any right to bind or obligate the other Party in any way nor shall it represent that it has any right to do so.

15.11

REPRESENTATION BY COUNSEL. Each Party acknowledges that it has had the opportunity to be represented by counsel of such Party's choice with respect to this Agreement. In view of the foregoing and notwithstanding any otherwise applicable principles of construction or interpretation, this Agreement shall be deemed to have been drafted jointly by the Parties and in the event of any ambiguity, shall not be construed or interpreted against the drafting Party.

15.12

NO THIRD PARTY BENEFICIARIES. No third persons or entities are intended to be or are third party beneficiaries of or under this Agreement, including, without limitation, Sublicensees. Nothing in this Agreement shall be construed to create any liability on the part of the Parties or their respective directors, officers, shareholders, employees or agents, as the case may be, to any such third parties for any act or failure to act of any Party hereto.

15.13

CONFIDENTIALITY. Parties shall hold each other's Confidential Information in confidence and shall not disclose Confidential Information to any third party without each other's prior written consent. "Confidential Information" means any information disclosed by Party that is not generally known to the public or, by its nature, should be reasonably considered confidential. The Parties acknowledge and agree that a breach of this section would cause irreparable harm and that either Party shall be entitled to seek equitable relief from such breach without the obligation of posting a bond or proving actual damages.

The Parties agree to keep the terms of this Agreement confidential provided that each Party may disclose this Agreement to its authorized agents and investors who are bound by similar confidentiality provisions and to the extent required by law.

15.14

ENTIRE AGREEMENT. This Agreement constitutes the entire agreement between the Parties hereto respecting the subject matter hereof, and supersedes and terminates all prior agreements respecting the subject matter hereof, whether written or oral, and may be amended only by an instrument in writing executed by both Parties hereto.

[Signature Page Follows]

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IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be executed by their respective officers thereunto duly authorized to be effective as of the Effective Date.

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APPENDIX A

TECHNOLOGIES/INTELLECTUAL PROPERTY

To include Patents:

·

Provisional patent application entitled: "VECTORS AND VACCINE CELLS FOR IMMUNITY AGAINST ZIKA VIRUS" and filed 11-0ct-2016 with the US Patent and Trademark Office and assigned application number 62/406,506.

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APPENDIX B

SUMMARY OF CURRENT OUTSTANDING PATENT COSTS

			
	UM Technology Number

	Current Outstanding Balance

	Payment terms: Outstanding patent

	UMIP-114

	[*****]

	N A

As of the Effective Date, the UNIVERSITY has not received invoices related to the preparation and filing of the provisional patent application listed within Appendix A. LICENSEE agrees that the costs relating to this work shall be considered as costs incurred during the term of this Agreement and shall be payable as per Section 8.2. This cost to prepare and file the provisional patent is estimated to not exceed [*****].

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