Document:

License Agmt dated 06/11/07 by and between us and KCI International VOF GP

 Exhibit 10.15 
 CONFIDENTIAL TREATMENT HAS BEEN REQUESTED FOR CERTAIN REDACTED PROVISIONS OF THIS AGREEMENT. THE REDACTED PROVISIONS ARE IDENTIFIED BY THREE ASTERISKS AND ENCLOSED BY BRACKETS. THE CONFIDENTIAL PORTION HAS BEEN FILED SEPARATELY WITH THE
SECURITIES AND EXCHANGE COMMISSION. 
  

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 LICENSE AGREEMENT 
 THIS LICENSE AGREEMENT (this “Agreement”), made and entered into as of June 11, 2007 (the “Effective Date”), is by and between KCI International VOF GP, a Cayman partnership (“KCI”),
and NovaBay Pharmaceuticals, Inc., a California corporation located at 5980 Horton Street, Suite 550, Emeryville, California 94608 (“NovaBay”), KCI and NovaBay being referred to individually by name or as a “Party” or together
the “Parties”. 
 WHEREAS, NovaBay is the sole owner of U.S. Patent number 6,426,066, entitled “Use of
physiologically balanced, ionized, acidic solution in wound healing” (the “‘066 Patent”) and other Intellectual Property Rights related to the Products for use in the Field; and 
 WHEREAS, NovaBay wishes to grant an exclusive license to KCI under the NovaBay Intellectual Property Rights in order to develop and commercialize
Products for use in the Field on a world-wide basis, and KCI wishes to accept such grant, all on the terms and conditions set forth herein below; 
 NOW THEREFORE, in consideration of the premises and of the faithful performance of the covenants herein contained, the Parties hereto agree as follows: 
 1.    DEFINITIONS 
 Definitions of capitalized terms used in this Agreement shall have the following
meanings when used in the Agreement: 
 1.1    “Affiliate” shall mean with respect to either Party, any entity
controlling, controlled by or under common control with such Party, for so long as such control exists. For purposes of this Section 1.1 only, “control” shall mean (1) direct or indirect ownership of fifty percent (50%) or
more (or, if less than fifty percent (50%), the maximum ownership interest permitted by applicable Law) of the stock or shares having the right to vote for the election of directors of such corporate entity or (2) the possession, directly or
indirectly, of the power to direct, or cause the direction of, the management or policies of such entity, whether through the ownership of voting securities, by contract or otherwise. 
 1.2    “Control” shall mean, with respect to a particular Technology or Patent, possession by the Party granting the
applicable right, license or sublicense to the other Party as provided herein of the power and authority, whether arising by ownership, license, or other authorization, to disclose and deliver the particular Technology to the other Party, and to
grant and authorize under such Technology or Patent the right, license or sublicense, as applicable, of the scope granted to such other Party in this Agreement without giving rise to a violation of the terms of any written agreement with any third
party. “Controlled” and “Controlling” shall have their correlative meanings. 
 1.3    “Cover” shall mean, with respect to any subject matter, the manufacture, use, sale, offering for sale, importation, exportation or other exploitation of such subject matter would infringe a claim of a
Patent at the time thereof. For clarity with respect to a claim within a patent application, “Cover” includes infringing a claim in such patent application as if it was issued as prosecuted in good faith. “Covered” or
“Covering” shall have their correlative meanings. 
  

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 1.4    “Field” shall mean, with respect to Products, all commercial uses of
the Products for wound care, wound healing, wound cleaning, wound debridement, wound disinfection, wound inflammation, wound exudate management, wound granulation, wound re-epithelialization and any other form of wound treatment or wound management
including use in surgical wounds and associated disinfection as well as any other treatments that may be adapted to be assisted by reduced pressure, all in humans, but shall exclude for all purposes any products or uses intended for the eye, ear or
nose (including the prevention or treatment of any infection thereof). 
 1.5    “Intellectual Property
Right(s)” shall mean all rights in, to, or under any intellectual property including, without limitation, Patents, copyrights, trade secrets, proprietary information, and proprietary know-how. 
 1.6    “Law” shall mean, individually and collectively, any and all laws, ordinances, orders, rules, rulings, directives
and regulations of any kind whatsoever of any governmental or regulatory authority within the applicable jurisdiction. 
 1.7    “Licensed Patents” shall mean the ‘066 Patent and all other Patents Controlled by NovaBay as of the Effective Date or during the term of this Agreement that claim (specifically or generically)
subject matter the practice of which is reasonably necessary for or beneficial to the development, manufacture, use, sale or other commercialization of any Product in the Field. 
 1.8    “Licensed Technology” shall mean all Technology Controlled by NovaBay as of the Effective Date or during the term of
this Agreement that is reasonably necessary for or beneficial to the development, manufacture, use, sale or other commercialization of any Product in the Field. 
 1.9    “Net Revenues” shall mean, without duplication, all gross revenue received from third parties by KCI or any of its Affiliates or sublicensees (the “Selling Party”) for
sale or other commercialization of Products that are Covered by a Valid Claim in the jurisdiction in which such commercialization occurs, to the extent attributable, less all reasonably related expenses or other accruals for such Products:
(1) amounts paid to NovaBay (or its designee) by KCI for finished Products or raw materials for such Products, in each case purchased under any supply agreement between the Parties; (2) royalties or the like paid by the Selling Party to
third parties with respect to Patents Covering such Products; (3) discounts, rebates and deductions, or any other consideration accrued to third parties (including group purchasing organizations) with respect to such Products based on volumes
and/or revenues commercialized, or any other similar deductions or the like allowed (whether in cash or trade) to wholesalers or distributors or to other customers for quantity purchases, prompt payments or other special conditions;
(4) credits, write-offs, collection fees, allowances or refunds, not exceeding the original invoice amount, for claims, returns, collections or bad debts, and any other allowances actually given for returned or deficient Products;
(5) transportation expenses, including any and all carriage or insurance charges, packaging, freight, and costs of delivery borne by the Selling Party and not reimbursed by any third party; and (6) sales and use taxes and other fees or
taxes imposed by any government or governmental agency, including, but not limited to any import, export or customs duties, in each case to the extent included in the invoiced price and not reimbursed by any third party and actually taken or
otherwise incurred by Selling Party for such Products. 

  

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Notwithstanding the foregoing, to the extent that sale or other commercialization of Products occurs in a jurisdiction where such Products are not Covered by
a Valid Claim but where such Products would be Covered by a Valid Claim in the United States, Net Revenues will include 50% of gross revenue received from third parties by each Selling Party of such Products in such jurisdiction, less 50% of the
expenses and accruals enumerated in (1) – (6) above with respect to such Products. 
 1.10    “NovaBay Intellectual Property Rights” shall mean all Intellectual Property Rights which NovaBay owns or has the legal right to sublicense to KCI as of the Effective Date or during the term of this
Agreement. 
 1.11    “Patent(s)” shall mean all forms of proprietary rights granted by a government with
respect to a design or an invention, including patents and certificates of addition, utility models, and enforceable patent applications, i.e., those under which injunctive relief is available, as well as, any continuation, continuation-in-part,
division, extension, renewal, revival, or reissue thereof or substitution therefor. 
 1.12    “Product(s)”
shall mean any product comprising any formulation containing hypochlorous acid as its principal active ingredient including that product known by NovaBay as “NVC-101”. 
 1.13    “Technology” shall mean any and all information and tangible materials comprising (i) ideas, discoveries,
inventions, improvements or trade secrets, (ii) research and development data, such as medicinal chemistry data, preclinical data, pharmacology data, chemistry data (including analytical, product characterization, manufacturing, and stability
data), toxicology data, pre-clinical data, analytical and quality control data and stability, (iii) databases, practices, methods, techniques, specifications, formulations, formulae, knowledge, (iv) techniques, methods, formulas,
processes, manufacturing information, (iv) research materials, reagents and biological materials. Technology shall exclude any Patent rights with respect thereto. 
 1.14    “Territory” shall mean world-wide. 
 1.15    “Valid Claim” shall mean a claim of any issued, unexpired patent within the Licensed Patents which has not been dedicated to the public, disclaimed, abandoned or held invalid or unenforceable by a court
or other government agency of competent jurisdiction. 
  

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 1.16    Additional Definitions. Each of the following definitions shall have
the meanings defined in the corresponding sections of this Agreement indicated below: 
  

							
	 Definitions
	  	Section	  	Definitions	  	Section
				
	 Accounting Period
	  	3.5	  	Confidential Information	  	8.1
				
	 Agreement
	  	Preamble	  		  	
				
	 Developed Property
	  	6.1	  	KCI Property	  	6.2
				
	 $ or Dollars
	  	4.3	  	NovaBay	  	Preamble
				
	 Effective Date
	  	Preamble	  	NovaBay Indemnitee	  	9.2
				
	 Indemnitee
	  	9.3	  	NovaBay Marks	  	2.5
				
	 Invalidity Action
	  	7.5	  	NovaBay Property	  	6.2
				
	 JAMS
	  	12.7	  	‘066 Patent	  	Preamble
				
	 Joint Property
	  	6.2	  	Parties	  	Preamble
				
	 KCI
	  	Preamble	  	Party	  	Preamble
				
	 KCI Indemnitee
	  	9.1	  		  	

 1.17    Interpretation. Unless specified to the contrary, references to
Sections or Exhibits mean the particular Sections or Exhibits to this Agreement and references to this Agreement include all Exhibits hereto. Unless context otherwise clearly requires, whenever used in this Agreement: (i) the words
“include” or “including” shall be construed as incorporating, also, “but not limited to” or “without limitation;” (ii) the word “day” or “year” means a calendar day or year unless
otherwise specified; (iii) the word “notice” means notice in writing (whether or not specifically stated) and shall include notices, consents, approvals and other written communications contemplated under this Agreement; (iv) the
words “hereof,” “herein,” “hereby” and derivative or similar words refer to this Agreement (including any Exhibits); (v) the word “or” shall be construed as the inclusive meaning identified with the
phrase “and/or;” (vi) provisions that require that a Party, the Parties or a committee hereunder “agree,” “consent” or “approve” or the like shall require that such agreement, consent or approval be
specific and in writing, whether by written agreement, letter, approved minutes or otherwise; (vii) words of any gender include the other gender; (viii) words using the singular or plural number also include the plural or singular number,
respectively; and (ix) references to any specific Law or article, section or other division thereof, shall be deemed to include the then-current amendments thereto or any replacement thereof. 
 2.    LICENSE AND SERVICES 
 2.1    License Grant. 
 (a) Subject to the terms and conditions of this Agreement, NovaBay hereby
grants to KCI a royalty-bearing, exclusive license under: (i) the Licensed Patents and (ii) Licensed Technology in both cases (i) and (ii) to make, have made, use, sell, offer to sell, import, and otherwise distribute and dispose
of Products in each case solely in the Field throughout the Territory. KCI shall have the right to exercise the foregoing license through its Affiliates and KCI shall remain responsible for the compliance of such Affiliate with the applicable terms
of this Agreement. 
  

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 (b) The licenses granted under Section 2.1(a) include the right to sublicense for specific markets
within the scope thereof to third parties. 
 (i)    KCI shall promptly notify NovaBay of the grant of each sublicense
and the name of each sublicensee. 
 (ii)    KCI shall be responsible for the failure by its sublicensees to comply
with, and KCI guarantees the compliance by each of its Sublicensees with, all relevant restrictions, limitations and obligations in this Agreement. 
 (c) For clarity, it is understood that, notwithstanding the foregoing, the licenses granted under Section 2.1(a) shall not extend to any active ingredient included within a Product other than hypochlorous acid.

 2.2    No Other Rights. Each Party acknowledges that the rights and licenses granted under Section 2.1 and
elsewhere in this Agreement are limited to the scope expressly granted. Accordingly, except for the rights expressly granted under this Agreement, no right, title, or interest of any nature whatsoever is granted whether by implication, estoppel,
reliance, or otherwise, by either Party to the other Party. All rights with respect to Technology, Patents or other Intellectual Property Rights that are not specifically granted herein are reserved to the owner thereof. 
 2.3    Services. NovaBay shall provide consulting services to KCI for the purposes of supporting KCI’s development and
commercialization of Products hereunder at KCI’s reasonable request and expense (wherein such expense is approved in advance by KCI in writing) and on a time and materials basis at a rate of [***] for NovaBay employees and at the contracted
rate for third party contractors approved by KCI. Such consulting services shall be provided by NovaBay employees that are reasonably acceptable to KCI; however, NovaBay shall have the right to determine the specific personnel to perform such
consulting. KCI shall have sole discretion for all decisions regarding any clinical or comparative studies to be undertaken with respect to any Product, but shall share the protocol with NovaBay representatives at least 30 days prior to commencing
any such study for NovaBay’s review and comment. NovaBay shall provide KCI with any input, comments, and feedback regarding such protocol within 10 business days from the date such protocol is disclosed to NovaBay. Without limiting KCI’s
right in the previous sentence, it shall consider NovaBay’s comments to any such protocol in good faith. 
 2.4    Patent Marking. KCI shall mark (or cause to be marked) all Products commercialized hereunder with appropriate Licensed Patent numbers or indicia to the extent permitted by applicable Law, in those countries
in which such notices impact recoveries of damages or remedies available with respect to infringements of Patents. 
  

 [***] Confidential treatment has been requested for the bracketed portions. The confidential redacted portion has been omitted and filed separately with
the Securities and Exchange Commission. 
  

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 2.5    NovaBay Logo. KCI hereby agrees to the extent allowable under
applicable Law to include NovaBay’s trade name and logo (collectively, the “NovaBay Marks”) on all labels of and package inserts and marketing materials for Product(s) sold by or under authority of KCI. All decisions regarding the
size, location, and placement of the NovaBay Marks shall be at the discretion of KCI, provided that such inclusion of the NovaBay Marks shall be consistent with industry practices for similarly situated third party logos and any reasonable
guidelines provided by NovaBay. Accordingly, NovaBay hereby grants to KCI a non-exclusive, royalty-free license to use the NovaBay Marks solely in connection with the marketing, promotion and sale of the Product(s) in the Field hereunder. If NovaBay
objects to the method of inclusion of the NovaBay Marks or the quality of any Products marketed therewith, NovaBay may require KCI to cease all use of such NovaBay Marks within a commercially reasonable amount of time following NovaBay’s
delivery to KCI of written notice if the Parties cannot reasonably agree on a mutually agreeable resolution of such objection. All ownership and goodwill arising out of the use of the NovaBay Marks shall vest in and inure solely to the benefit of
NovaBay. Notwithstanding anything herein to the contrary, upon NovaBay’s written request, KCI, its Affiliates and sublicensees agree to cease the use of the NovaBay Marks; provided (i) that KCI, its Affiliates and sublicensees may continue
to use any labels, package inserts and marketing materials in existence as of the receipt of such notice and (ii) in such case KCI’s obligation to include the NovaBay Marks on labels, package inserts and marketing materials for Product(s)
shall terminate. NovaBay shall promptly inform KCI of any change of control of NovaBay or the NovaBay Marks. In the event that KCI reasonably determines that an acquirer or party otherwise obtaining control of NovaBay or the NovaBay Marks is a
direct competitor of KCI, KCI shall promptly notify NovaBay thereof and KCI’s obligation to include the NovaBay Marks on labels, package inserts and marketing materials for Product(s) shall terminate. 
 3.    REMUNERATION 
 In
consideration of the licenses granted herein and the disclosures made hereunder, KCI shall pay the following amounts to NovaBay: 
 3.1    Technology Access Fee. KCI shall pay NovaBay Two Hundred Thousand U.S. Dollars (U.S. $200,000) as a non-refundable, non-creditable technology access fee within three (3) business days of the Effective
Date pursuant to wiring instructions provided by NovaBay to KCI by the Effective Date. 
 3.2    Milestone
Payments. KCI shall pay NovaBay the following amounts upon the achievement of the indicated milestones: 
 [***] 
 The payments associated with the milestone events set forth in this Section 3.2 shall each be due and payable to NovaBay within thirty
(30) days of the achievement of the corresponding event. KCI agrees to promptly notify NovaBay of its achievement of each such event. For clarity, each such payment shall be non-refundable and non-creditable. 
  

 [***] Confidential treatment has been
requested for the bracketed portions. The confidential redacted portion has been omitted and filed separately with the Securities and Exchange Commission. 
  

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 3.3    Cost Reimbursement – In addition to the milestone payment set
forth in Section 3.2(1) within thirty (30) days of the first commercial sale of any Product, KCI shall reimburse NovaBay for its direct costs incurred after the Effective Date of the Agreement with respect to scale-up and package
development efforts (that are previously approved in writing by KCI, such approval not to be unreasonably withheld) for the Products, provided that KCI shall in no event be required to reimburse NovaBay for any amount in excess of $100,000 and in no
event shall NovaBay be obligated to incur costs with respect thereto in excess of $100,000 except with regard to consulting services provided by NovaBay and reimbursed by KCI pursuant to Section 2.3. 
 3.4    Royalties. 
 (a) KCI shall pay NovaBay royalties in an amount equal to [***]. 
 (b) KCI’s obligation to pay royalties under this
Section 3.4 shall expire (i) in the United States on a Product-by-Product basis upon the expiration of the last to expire Patent within the Licensed Patents Covering such Product in the United States and (ii) in all other
countries within the Territory on a Product-by-Product and country-by-country basis upon the later of (A) the expiration of the last to expire Patent within the Licensed Patents Covering such Product in such country and (B) if such
Product would have been Covered by Patents within the Licensed Patents in United States had the manufacture, use, sale, offer for sale or importation thereof occurred in the United States, then upon the expiration of the last to expire Patent within
the Licensed Patents so Covering such Product in the United States. 
 (c) If KCI or its Affiliate or sublicensee sells a Product to a third
party to whom it also provides other products or services, KCI or such Affiliate or sublicensee (as applicable) shall not price, discount or otherwise offer (including bundling) the Product in any way that benefits such other products or services at
the expense of such Product. In all events, KCI and its Affiliates and sublicensees shall price and offer Products sold by it hereunder in a manner consistent with standard practices in the medical industry. 
 3.5    Payment Date. Royalty payments due under Section 3.4, if any, are payable sixty (60) days after the end of
each six month period ending on June 30 and December 31 of each year (an “Accounting Period”). 
  

 [***] Confidential treatment has been requested for the bracketed portions. The confidential redacted portion has been omitted and filed separately with
the Securities and Exchange Commission. 
  

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 4. REPORTS AND PAYMENTS 
 4.1    Recordkeeping. KCI shall, and shall obligate its Affiliates and sublicensees to, keep full and accurate records of KCI’s, its Affiliates’ and any sublicensee’s sales of
Products, in sufficient detail to enable NovaBay to determine any amounts payable to NovaBay under this Agreement. Such records shall be kept for three (3) years following the end of the Accounting Period to which each shall pertain at
KCI’s or its Affiliates’ principal place of business, and shall be open for inspection at reasonable times during normal business hours (and upon at least thirty (30) days’ prior written notice) no more than one time per calendar
year by an independent audit firm selected by NovaBay and for the purpose of verifying the accuracy of any payment report required under this Agreement or any amount payable hereunder. NovaBay shall bear all costs associated with such inspections;
provided that if the inspection shows an underpayment of amounts payable hereunder of more than five percent (5%) of the amount due for the applicable Accounting Period, then KCI shall promptly reimburse NovaBay for all reasonable costs
incurred in connection with such inspection. KCI shall promptly pay to NovaBay the amount of any underpayment of royalties revealed by an inspection. Any overpayment of royalties by KCI revealed by an inspection shall be fully-creditable against
future royalty payments under Section 3.4. The opinion of said independent accountants regarding such reports, accountings and payments shall be binding on the parties other than in the case of clear error. 
 4.2    Reports. Within sixty (60) days after the end of each Accounting Period of each year following the first
commercial sale of any Product, KCI shall deliver to NovaBay a true and accurate report, giving such particulars of the business conducted by KCI, its Affiliates and any sublicensees during the preceding two (2) Accounting Periods under this
Agreement as are reasonably pertinent to an accounting for any royalty or other payments hereunder, along with the amount of royalties payable for such Accounting Period. If no payments are due, it shall be so reported. Such delivered report shall
include the following information: (i) the quantity of each Product sold by KCI, Affiliates and sublicensees; (ii) Net Revenues for each Product (by country); and (iii) total royalties payable to NovaBay including a calculation
thereof. In addition within sixty (60) days of the end of the calendar quarters ending March 30 and September 30 of each year, KCI shall provide to NovaBay a written report setting forth the good faith estimate of the royalties
accruing under Section 3.4 during such quarter. 
 4.3    Payment Method. All payments due under this
Agreement to NovaBay shall be made by bank wire transfer in immediately available funds to an account designated by NovaBay. All payments hereunder shall be made in the legal currency of the United States of America, and all references to
“$” or “Dollars” shall refer to United States dollars. Except for (i) the technology access payment which shall be paid in accordance with Section 3.1, (ii) milestone payments which shall be paid in accordance with
Section 3.2 and (iii) royalty payments which shall be paid in accordance with Sections 3.5 and 4.2 and as otherwise provided herein, all payments due to a Party hereunder shall be due and payable within thirty (30) days of an invoice
from the other Party. All amounts referenced hereunder are exclusive of any withholding or similar taxes and payments hereunder shall be made without deduction for such taxes. Accordingly, if any withholding or similar tax is due with respect to
such a payment, such tax shall be payable by KCI to the applicable taxing authority in addition to the amounts set out under this Agreement and KCI shall furnish to NovaBay appropriate evidence of payment of any tax or other amount required by
applicable Law to be deducted from any royalty payment, including any tax or withholding levied by a foreign taxing authority in respect of the payment or accrual of any royalty. 
  

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 4.4    Currency Conversion. If any currency conversion shall be required in
connection with the calculation of amounts payable hereunder, such conversion shall be made using the arithmetic average of the currency conversion rates during the applicable six (6) month Accounting Period as reported in the “Money
Rates” column of The Wall Street Journal (U.S., Eastern Edition). In such case, KCI shall inform NovaBay of such calculation. 
 5.    DISCLOSURE OF PROPRIETARY INFORMATION 
 NovaBay shall use all reasonable efforts to fully disclose
to KCI the Licensed Technology promptly after the Effective Date; and NovaBay agrees to update such disclosure in good faith on a quarterly basis. NovaBay (or its designee) shall diligently prosecute and maintain the Licensed Patents; provided that
if NovaBay (or its designee) elects not to prosecute or maintain any Licensed Patent in the Territory (except where a substitute therefor is promptly filed), NovaBay shall notify KCI at least 60 days prior to the expiration or abandonment of any
such Licensed Patent, and, upon the written request of KCI, shall promptly assign to KCI such Licensed Patent and perform such actions and provide such assistance as may be requested by KCI to transfer, obtain, prosecute, maintain, defend, and
enforce such Licensed Patent; provided that any such assignment shall be subject to and NovaBay hereby retains a fully-paid up, irrevocable, non-exclusive license to exploit the subject matter of any such assigned Licensed Patent for any and all
purposes outside of the Field. 
 6.    DEVELOPED PROPERTY 
 6.1    The following provisions apply to any concepts, ideas, intentions, improvements, conceptions, works of authorship, inventions,
and any Intellectual Property Rights related to any of the foregoing, which are authored, conceived, created, discovered, or developed by the Parties in the course of performing its activities under this Agreement during the term of the Agreement
(the “Developed Property”). 
 6.2    Joint Developments. The Parties shall jointly own all Developed
Property that is authored, conceived, created, discovered, or developed jointly by the Parties (“Joint Property”), except that (i) NovaBay will solely own any such Developed Property respecting the composition of matter or production
of any formulation containing hypochlorous acid (“NovaBay Property”) and (ii) KCI will solely own any such Developed Property respecting the use of reduced pressure wound treatments, whether in conjunction with the Licensed Technology
or on a stand-alone basis (“KCI Property”). NovaBay Property shall be considered Licensed Technology for purposes of this Agreement and exclusively licensed to KCI pursuant to Section 2.1 of this Agreement. NovaBay’s rights in or
to any Joint Property shall be exclusively licensed to KCI pursuant to Section 2.1 of this Agreement. Except as expressly provided in this Agreement, it is understood that neither Party shall have any obligation to account to the other for
profits, or to obtain any approval of the other Party to license, assign or otherwise exploit Joint Property, by reason of joint ownership thereof, and each Party hereby waives any right it may have under the Laws of any jurisdiction to require any
such approval or accounting. 
  

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 7.    PATENT INFRINGEMENT 
 7.1    Notice. Each Party shall notify the other Party promptly in writing if it becomes aware of any alleged or potential
infringement of the Licensed Patents within the scope of this Agreement. Such notice must be in writing and will provide all material information related to such alleged or potential infringement. 
 7.2    In-Field Infringement. If any Licensed Patent is infringed by a third party in connection with the manufacture, use,
sale, offer for sale or import of a Product within the Field, KCI shall have the first right, but not the obligation, to bring suit and to take action against such infringer in its own name, or in the name of NovaBay. NovaBay agrees to be a party to
any suit or action KCI determines to initiate. Additionally, NovaBay agrees that NovaBay shall provide any information, assistance, access to documents, witnesses, or things that KCI determines within its sole discretion are needed for any such suit
or action. NovaBay shall have enforcement rights in the event KCI elects not to so enforce the Licensed Patents or does not initiate such action within 90 days of NovaBay’s request to do so. 
 7.3    Ex-Field Infringement. Subject to contractual restrictions on NovaBay in any agreement with any third party existing as
of the Effective Date, KCI shall have the right to participate in the defense and enforcement of any Licensed Patent outside the Field if the outcome of such defense or enforcement could materially impact KCI’s commercialization of Products
within the Field, as reasonably determined in good faith by the Parties. 
 7.4    Expenses; Recoveries. Half of
all amounts expended by KCI in enforcement or defense of Licensed Patents within the Field in a country shall be offset against royalties with respect to sale of Products in such country; except, however, the offset for legal fees and expenses
incurred for such enforcement or defense during any Accounting Period would be capped to only accrue up to 25% of the amount of royalties otherwise accruing during that same period. To the extent offsets are accrued but not applied as a credit, any
offsets provided herein may be carried forward to subsequent reporting periods. Any recovery received as a result of any enforcement action to enforce the Licensed Patents shall be used first to reimburse the Parties for the costs and expenses
(including attorneys’ and professional fees) incurred in connection with such action (and not previously reimbursed), and the remainder of the recovery shall be shared (to the extent the same represents damages from sales of Products within the
Field in the Territory) seventy-five percent (75%) to the Party controlling such action and twenty-five percent (25%) to the other Party. It is understood that any such remainder which is a recovery from such an action, whether controlled
by KCI or NovaCal, which do not represent damages from sales of Products within the Field in the Territory, shall inure solely and be paid over to NovaBay. 
 7.5    Patent Challenge. If KCI intends to challenge the validity or enforceability of any Licensed Patent (any, a “Invalidity Action”), (i) it shall notify NovaBay at
least ninety (90) days in advance of bringing any Invalidity Action with respect thereto and provide NovaBay the basis therefor. 
  

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 8.    CONFIDENTIALITY 
 8.1    Confidential Information. “Confidential Information” shall mean any and all information of or about a Party
considered by that Party to be confidential or proprietary that is disclosed by such Party to the other Party hereunder and, if written, marked as “confidential” or “proprietary,” and if oral, identified as
“confidential” or “proprietary” at the time of initial disclosure thereof. Confidential Information which is conveyed orally must be confirmed in writing within twenty (20) days of the oral communication and identified as
“confidential” in order to be entitled to the provisions of this Section 8. Any disclosures of study protocols, product evaluations, royalty reports, notices, and product descriptions provided by KCI to NovaBay shall automatically be
deemed to be Confidential Information of KCI hereunder, regardless of how or whether they are marked. Similarly any disclosures of specifications or formulations for or methods, compositions or systems for manufacture, packaging or use of any
Product provided by NovaBay to KCI shall automatically be deemed to be Confidential Information of NovaBay hereunder, regardless of how or whether they are marked. Notwithstanding the foregoing, information of or about a Party shall not be
considered Confidential Information with respect to such Party to the extent that: 
 (a) such information was lawfully in such other
Party’s possession or control prior to the time such information was disclosed to such other Party; 
 (b) such information was
developed by such other Party independently of and without reference to Confidential Information of the disclosing Party; 
 (c) such
information was lawfully obtained by such other Party from a third party under no obligation of confidentiality to the disclosing Party; or 
 (d) such information is or becomes publicly known otherwise than through a breach by such other Party. 
 8.2    Confidentiality. As of the Effective Date, solely with respect to disclosures of information that take place subsequent to the Effective Date, the terms of this Agreement supercede and replace the terms of
the Amended Evaluation Agreement entered into by and between the Parties as of December 4, 2006. Beginning on the Effective Date and for five (5) years after the expiration or termination of this Agreement, each Party shall maintain
Confidential Information provided by the other Party in confidence, and shall not disclose, divulge or otherwise communicate such Confidential Information to others, or use it for any purpose other than as permitted under this Agreement.
Notwithstanding anything herein to the contrary, neither Party shall disclose any Confidential Information to the other Party that the disclosing Party considers to be a trade secret or requiring confidentiality beyond the confidentiality period set
forth herein. The receiving Party shall have the right to disclose Confidential Information received from the other Party to governmental agencies to the extent reasonably required or desirable to secure approval for marketing of Products (provided
that the receiving Party shall use reasonable efforts to secure confidential treatment thereof), and to preclinical and clinical investigators and potential sublicensees where reasonably necessary or desirable for their information to the extent
normal and usual in the custom of the trade and under a confidentiality agreement with provisions governing confidentiality and non-use the 

  

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same as those contained herein. In addition, each Party may use and disclose Confidential Information of the other Party as follows: (i) under
appropriate confidentiality provisions substantially equivalent to those in this Agreement, in connection with the performance of its obligations or exercise of its rights under this Agreement and (ii) solely with the prior written consent of
such other Party, which shall not be unreasonably withheld, to the extent such disclosure is reasonably necessary in filing for, prosecuting or maintenance of Patents in accordance with this Agreement, (iii) prosecuting or defending litigation,
or (iv) otherwise required by applicable Law (including filing taxes), provided, however, that if a Party is required by Law to make any such disclosure of the other Party’s Confidential Information it will, except where inappropriate or
impracticable for necessary disclosures (for example, in the event of medical emergency), give reasonable advance notice to the other Party of such disclosure requirement and, except to the extent inappropriate in the case of patent applications,
will use its reasonable efforts to secure confidential treatment of such Confidential Information required to be disclosed. Each of the Parties agrees not to disclose to any third party the terms and conditions of this Agreement without the prior
approval of the other Party, except in each case under circumstances that reasonably protect the confidentiality therefor or to the extent required by applicable Law. Without limiting the foregoing, KCI may disclose the terms and conditions of this
Agreement as KCI shall reasonably deem necessary to commercialize the Products. Any information and data generated by a Party in connection with the testing, development, and commercialization efforts of such Party shall be owned by such Party and
deemed to be Confidential Information of such Party hereunder. NovaBay shall not publish the results of any test or comparison of the Products without the prior written authorization of KCI, not to be unreasonably withheld or conditioned.
Notwithstanding the provisions of this Section 8, KCI shall have the right to make one or more press releases regarding the existence of this Agreement and the arrangement contemplated hereby and NovaBay shall have the right to make one or more
press releases regarding the existence of this Agreement and the arrangement contemplated hereby subject to KCI’s written approval, such approval not to be unreasonably withheld. In the event that either Party intends to file or otherwise
disclose with Agreement with the Security and Exchange Commission (or similar regulatory body in any jurisdiction), such Party shall use good faith effort to seek confidential treatment for royalty percentages set forth in this Agreement prior to
such filing or other disclosure; provided that if the Security and Exchange Commission or other regulatory body rejects such treatment, then such Party shall have the right to so file or disclose this Agreement without such treatment. 
 9.    INDEMNIFICATION 
 9.1    By NovaBay. NovaBay shall indemnify and hold KCI and its directors, officers, employees, consultants, Affiliates and sublicensees (each, a “KCI Indemnitee”) harmless from and against any and all
damages incurred or suffered by a KCI Indemnitee as a result of third party claims, actions or proceedings to the extent such claims are a consequence of the breach of any representation, warranty or covenant by NovaBay hereunder. 
 9.2    By KCI. KCI shall indemnify and hold NovaBay and its directors, officers, employees, consultants and Affiliates (each,
a “NovaBay Indemnitee”) harmless from and against any and all damages incurred or suffered by a NovaBay Indemnitee as a result of third party claims, actions or proceedings to the extent such claims are a consequence of (i) the breach
of any representation, warranty or covenant by KCI hereunder or (ii) any product liability claims 

  

 12 

 
or claims of personal injury or property damage arising from the manufacture, packaging (including labeling), use, sale, or distribution of any Products by
or under the authority of KCI, in each case except for claims that arise as a result of a formulation of a Product specified in writing by NovaBay or as a result of the compliance with any written instructions, specifications, or guidelines provided
by NovaBay . 
 9.3    Procedure. If a KCI Indemnitee or NovaBay Indemnitee (each, an “Indemnitee”)
seeks indemnification under this Section 9, it shall give prompt notice of the claim to the indemnifying Party and the exclusive right to defend and settle such claim; provided that that the indemnifying Party shall not settle any such claim,
action or proceeding that admits fault, wrongdoing or damages on behalf of the Indemnitee without the prior written consent of the Indemnitee, provided such consent shall not be unreasonably withheld. The Indemnitee shall reasonably cooperate with
the indemnifying Party, at the indemnifying Party’s request and expense, with respect to such claims and shall have the right to participate, at its own expense and with counsel of its choice, in the defense of any claim or suit that has been
assumed by the indemnifying Party. 
 9.4    Insurance. Each Party shall obtain and maintain, during the term of
this Agreement and for three (3) years thereafter, comprehensive general liability insurance, including products liability insurance and coverage for clinical trials, with reputable and financially secure insurance carriers, or self insurance
in a form and at levels consistent with industry standards based upon such Party’s activities hereunder and indemnification obligations hereunder, with the other Party named as an additional insured, as applicable. Such liability insurance or
self-insurance shall be maintained on an occurrence basis to provide such protection after expiration or termination of the policy itself or this Agreement. Each Party shall furnish to the other Party on request certificates issued by the insurance
company setting forth the amount of the liability insurance (or evidence of self insurance) and a provision that the other Party hereto shall receive thirty (30) days’ written notice prior to termination or material reduction to the level
of coverage. 
 10.    DEFAULT; TERMINATION 
 10.1    Term. This Agreement shall become effective on the Effective Date and, unless earlier terminated as provided in this Section 10, shall expire on the expiration of the last
royalty obligation of KCI pursuant to Section 3.4(b), at which time the license grant under Section 2.1 hereof shall become non-exclusive, fully-paid and irrevocable and shall survive such expiration. The licenses granted in
Section 2.1 of this Agreement shall be exclusive during the term of this Agreement. 
 10.2    Termination
Rights. 
 (a) KCI shall have the right to terminate this Agreement and its obligations hereunder, with or without cause, upon sixty
(60) days written notice to NovaBay. 
 (b) NovaBay shall have the right to terminate the Agreement in the event that the Product launch
milestone set forth in Section 3.2 has not been met within eighteen (18) months of the Effective Date of the Agreement, unless the failure to meet such launch milestone is due in whole or in part to the actions or inactions of NovaBay.

  

 13 

 (c) Either Party may terminate this Agreement in the event the other Party materially breaches this
Agreement, and such breach shall have continued for sixty (60) days after notice thereof was provided to the breaching Party by the non-breaching Party. Any such termination shall become effective at the end of such sixty (60) day period
unless the breaching Party has cured any such breach prior to the expiration of the sixty (60) day period. Nonpayment of any amounts disputed in good faith under this Agreement shall not give rise to a termination right under this
Section 10.2. 
 10.3    Post-termination/expiration. Within sixty (60) days of the expiration or
termination of this Agreement for any reason, KCI shall submit all reports required by Section 4 and pay NovaBay all fees and royalties due or accrued up to and including the date of expiration or termination. Upon expiration or termination of
this Agreement for any reason, nothing herein shall be construed to release either Party from any obligation that matured prior to the effective date of such expiration or termination; and Sections 1, 2.5 (fifth sentence), 4.1 (for the period set
forth therein) 6, 8, 9, 10, 11, and 12 (except 12.2) shall survive any such expiration or termination in accordance with their respective terms. Termination does not relieve KCI of its obligations to pay any amounts specified in Section 3 that
have accrued as of the date of such termination. 
 10.4    Effects of Certain Terminations. If KCI electively
terminates this Agreement in its entirety pursuant to Section 10.2(a) or NovaBay terminates this Agreement pursuant to Section 10.2(b) or 10.2(c), then: 
 (a) At NovaBay’s request and expense, KCI shall promptly assign and transfer to NovaBay all regulatory filings and approvals for Products (collectively, “Regulatory Documents”) that are held or
controlled by or under authority of KCI or its Affiliates or sublicensees, and shall take such actions and execute such other instruments, assignments and documents as may be necessary to effect the transfer of rights under the Regulatory Documents
to NovaBay. KCI shall cause each of its sublicensees to transfer any such Regulatory Documents to NovaBay if this Agreement terminates. If applicable Law prevents or delays the transfer of ownership of any Regulatory Documents to NovaBay, KCI shall
grant, and does hereby grant, to NovaBay an exclusive and irrevocable right of access and reference to such Regulatory Documents, and shall cooperate fully to make the benefits of such Regulatory Documents available to NovaBay and/or its
designee(s). Within sixty (60) days after notice of such termination, KCI shall provide to NovaBay copies of all such Regulatory Documents, and of all Technology Controlled by KCI pertaining to any Product, or the manufacture thereof. NovaBay
shall be free to use and disclose such Regulatory Documents and Technology in connection with the exercise of its rights and licenses under this Section 10.4. 
 (b) At the request and expense of NovaBay, KCI agrees to use commercially reasonably efforts to cooperate with NovaBay and its designee(s) to facilitate the ability of NovaBay and/or its designee(s) to begin
manufacture and sale of the Products for application in the Field. Upon request by NovaBay, KCI shall transfer to NovaBay some or all quantities of Products in its or its Affiliates’ possession (as requested by NovaBay), within thirty
(30) days 

  

 14 

 
after the effective date of such termination; provided, however, that NovaBay shall reimburse KCI for the out-of-pocket costs that KCI actually incurred to
manufacture or otherwise acquire the quantities so provided to NovaBay. If any Product was manufactured by any third party for KCI, or KCI had contracts with vendors which contracts are necessary or useful for NovaBay to take over responsibility for
the Products in the Territory, then KCI shall to the extent possible and requested in writing by NovaBay, introduce NovaBay to such vendors and otherwise use commercially reasonable efforts to facilitate similar arrangements with NovaBay. If KCI or
its Affiliate manufactured any Product at the time of termination, then upon NovaBay’s request and if manufacturing facilities and supply arrangements remain available to KCI, KCI (or its Affiliate) shall manufacture Product sufficient for
NovaBay (or its designee’s) reasonable requirements for six (6) months, at one hundred thirty percent (130%) of the fully-burdened manufacturing cost therefor. Except with regard to the manufacturing set forth herein, nothing in this
Section 10.4(b) shall require KCI to spend more than 50 man hours assisting NovaBay as provided hereunder; provided, however, that KCI may agree to spend more than such 50 man hours in its sole discretion if requested by NovaBay. 
 11.    REPRESENTATIONS, WARRANTIES, AND COVENANTS 
 11.1    Corporate Existence and Power. As of the Effective Date, each Party represents, warrants, and covenants to the other that it (a) is a duly organized entity, validly existing and
in good standing under the laws of the jurisdiction in which it is incorporated or organized, and (b) has full corporate power and authority and the legal right to own and operate its property and assets and to carry on its business as it is
now being conducted and as contemplated in this Agreement, including, without limitation, the right to grant the licenses granted hereunder. 
 11.2    Authority and Binding Agreement. As of the Effective Date, each Party represents, warrants, and covenants to the other that it (a) has the corporate power and authority and the legal right to enter
into this Agreement and perform its obligations hereunder, (b) has taken all necessary corporate action on its part required to authorize the execution and delivery of the Agreement and the performance of its obligations hereunder, and
(c) the Agreement has been duly executed and delivered on behalf of such Party, and constitutes a legal, valid, and binding obligation of such Party and is enforceable against it in accordance with its terms. 
 11.3    Additional NovaBay Representations and Warranties. As of the Effective Date, NovaBay represents, warrants, and
covenants to KCI as follows: 
 (a) There are no other persons whose consent to this Agreement or whose joinder is necessary to make fully
effective or non-infringing the obligations of or the practice of rights granted by NovaBay under this Agreement; 
 (b) NovaBay owns the
entire right, title, and interest in the Licensed Patents and has full and sole power and authority to grant the rights and licenses granted in this Agreement and perform NovaBay’s duties and obligations under this Agreement. There are no other
patents owned or licensable by NovaBay or its Affiliates that are necessary to practice the subject matter of the Licensed Patents as contemplated hereunder. NovaBay has not licensed, and is not obligated to license, and shall not license after the
Effective Date, the Licensed Patents to any third party in the Field; 
  

 15 

 (c) To the knowledge of NovaBay, there are no pending or threatened claims, disputes, litigation or
proceedings challenging NovaBay’s right, title or interest in, or use of, or otherwise related to the Licensed Patents or the Licensed Technology; 
 (d) Any issued Patent included or issuing from the Licensed Patents is valid and subsisting and NovaBay has not and shall not withhold any information relevant to the patentability of any patent application within the
Licensed Patent from the United States Patent & Trademark Office. NovaBay has no knowledge of prior art or other information pertinent to the patentability of the Licensed Patents other than that already publicly disclosed in the
prosecution of the respective patents or applications, nor of any other facts which, to the best of NovaBay’s knowledge, might have a materially adverse effect on the validity or enforceability under any applicable Laws of the claims of any of
the patents or applications licensed under this Agreement; 
 (e) KCI’s practice of the invention claimed by the Licensed Patents in the
Field will not infringe the Intellectual Property Rights of any third party. The formulation of any Product specified by NovaBay will not infringe the Intellectual Property Rights of any third party. The manufacture, use, or sale of Products in the
Field will not infringe the Intellectual Property Rights of any third party. Notwithstanding the foregoing, NovaBay does not warrant: (i) that KCI’s manufacture, use, or sale of Products with other products or components will not infringe
the Intellectual Property Rights of any third party solely where infringement arises from the inclusion of such other products or components; or (ii) the noninfringement of the Intellectual Property Rights of any third party where infringement
would not have arisen but for the manufacture or packaging of Products in a manner that is contrary to the Authorized Manufacturing and Packaging Guidelines. "Authorized Manufacturing and Packaging Guidelines" shall mean a set of written
specifications, guidelines, and instructions of NovaBay sufficient to allow KCI to manufacture and package Products in a commercially viable manner that is subject to KCI’s written approval, which shall not be unreasonably withheld. The
Authorized Manufacturing and Packaging Guidelines shall refer to this Agreement and be signed by both parties. NovaBay shall provide KCI with a proposed version of such Authorized Manufacturing and Packaging Guidelines within 30 days from the
Effective Date. If the Parties have not agreed on the Authorized Manufacturing and Packaging Guidelines within 120 days of the Effective Date, KCI shall have the right to terminate this Agreement upon written notice and NovaBay shall refund the
Technology Access Fee set forth in Section 3.1 within 30 days of the date of such written notice. 
 11.4    Disclaimer of Warranties. EXCEPT AS SET FORTH IN THIS SECTION 11, KCI AND NOVABAY EXPRESSLY DISCLAIM ANY WARRANTIES OR CONDITIONS, EXPRESS, IMPLIED, STATUTORY OR OTHERWISE, WITH RESPECT TO THE SUBJECT
MATTER OF THIS AGREEMENT (INCLUDING THE PRODUCTS, LICENSED PATENTS AND LICENSED TECHNOLOGY), INCLUDING ANY WARRANTY OF MERCHANTABILITY, NONINFRINGEMENT, OR FITNESS FOR A PARTICULAR PURPOSE. 
  

 16 

 12.    MISCELLANEOUS 
 12.1    Entire Agreement. This Agreement constitutes the entire understanding between the Parties with respect to the subject
matter hereof and supersedes all prior and contemporaneous discussions, agreements and writings in respect hereto. 
 12.2    Non-Competition. During the term of this Agreement, neither NovaBay nor its Affiliates shall themselves compete with (or license, assist, consult for, participate with, finance, or lend their name or
reputation to any third party competing with) KCI or its subsidiaries in the Field in the Territory, in each case specifically respecting the commercialization of any formulation containing hypochlorous acid as an ingredient except as an incidental
by-product. Any agreement entered into by NovaBay after the Effective Date with any third party regarding the commercialization of a formulation containing hypochlorous acid shall expressly restrict any marketing, sale, distribution, or use of such
formulation in the Field. During the term of this Agreement, KCI shall not develop, commercialize or license (itself or through any third party) any formulation containing hypochlorous acid as its principal active ingredient in the Field in the
Territory other than the Products pursuant to this Agreement. 
 12.3    Amendment and Waiver. This Agreement may
be amended and any of its terms or conditions may be waived only by a written instrument executed by the Parties or, in the case of a waiver, by the Party waiving compliance. Neither the failure of a Party at any time or times to require performance
of any provision hereof nor the waiver by a Party of any condition shall be deemed as a further or continuing waiver of such condition or term or of any other condition or term. 
 12.4    Notices. All payments, notices, reports and/or other communications to be given by one Party to the other shall be in
writing and shall be sufficiently made or given if mailed via certified mail with the US Postal Service, postage prepaid (such mailed notice to be effective on the date of sending), or by Federal Express (such notice sent by Federal Express to be
effective as of the date when it is deposited with such courier) or transmitted by facsimile (receipt verified), to the Party to which it is directed at its address or facsimile number shown below or such other address or facsimile number as such
Party will have last given by notice to the other Party 
  

	 	•	 	 for KCI at: KCI International VOF GP, c/o KCI USA, Inc., 8023 Vantage Drive, San Antonio, Texas 78230, Attention: Legal Department; Fax: (210) 255-6969;

  

	 	•	 	 for NovaBay at: NovaBay Pharmaceuticals, Inc., 5980 Horton Street, Suite 550, Emeryville, California 94608, Attention: President; Fax: (415) 329-2034 and

  

	 	•	 	 copy to: Wilson Sonsini Goodrich & Rosati Professional Corporation, 650 Page Mill Road, Palo Alto, CA 94304-1050, Attention: Ian B. Edvalson; Fax:
(650) 493-6811. 

 12.5    Governing Law. This Agreement shall be governed by and construed
and interpreted in accordance with the internal substantive Laws of New York, without giving effect to any choice or conflicts of laws rule or provision that would result in the application of the substantive law of any other jurisdiction.

  

 17 

 12.6    Assignment. This Agreement shall be binding upon and shall inure to
the benefit of the Parties hereto and their respective successors and assigns; provided, however, that neither Party may assign any of its rights, duties or obligations hereunder without the prior written consent of the other Party, except that no
prior written consent shall be required in the event that: (i) either Party assigns this Agreement to an Affiliate (except that the original entity shall remain responsible for the performance of such Affiliate); (ii) substantially all of
the outstanding shares of such Party or its assets related to the subject matter of this Agreement are acquired by a third party; or (iii) such Party merges with a third party and in each such event the assignee agrees in writing to be bound by
the terms and conditions of this Agreement. Any attempted assignment not in compliance with this Section 12.6 shall be of no force or effect. 
 12.7    Dispute Resolution. Other than with respect to the right of a Party to seek immediate injunctive relief or to seek a court’s determination as to the validity or scope of any claim of a Licensed
Patent, any dispute between the Parties arising out of this Agreement or the performance of any of the Parties under this Agreement shall be resolved by binding arbitration conducted by Judicial Arbitration and Mediation Services
(“JAMS”) in accordance with the applicable JAMS rules by a single arbitrator. If the Parties are unable to agree on an arbitrator, the arbitrator shall be selected by JAMS. The costs of such arbitration shall be shared equally by
the Parties, and each Party shall bear its own expenses in connection with the arbitration. The parties shall use good faith efforts to complete arbitration under this Section 12.7 within sixty (60) days following the initiation of such
arbitration. The arbitrator shall establish reasonable additional procedures to facilitate and complete such arbitration within such sixty (60) day period. 
 12.8    Severability. If any provision(s) of this Agreement are or become invalid, are ruled illegal by any court of competent jurisdiction, or are deemed unenforceable under then current
applicable Law from time to time in effect during the term hereof, it is the intention of the Parties that the remainder of this Agreement shall not be affected thereby. It is further the intention of the Parties that in lieu of each such provision
which is invalid, illegal or unenforceable, there be substituted or added as part of this Agreement a provision which shall be as similar as possible in economic and business objectives as intended by the Parties to such invalid, illegal or
enforceable provision, but shall be valid, legal and enforceable. 
 12.9    Independent Contractors. Each
Party represents that it is acting on its own behalf as an independent contractor and is not acting as an agent for or on behalf of any third party. This Agreement and the relations hereby established by and between NovaBay and KCI do not constitute
a partnership, joint venture, franchise, agency or contract of employment. Neither Party is granted, and neither Party shall exercise, the right or authority to assume or create any obligation or responsibility on behalf of or in the name of the
other Party or its Affiliates. 
 12.10    Interpretation. Captions of the sections and subsections of this
Agreement are for reference purposes only and do not constitute terms or conditions of this Agreement and shall not limit or affect the meaning or construction of the terms and conditions hereof. 
  

 18 

 12.11    Counterparts. This Agreement may be executed in counterparts,
each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. In making proof of this Agreement, it shall not be necessary to produce or account for more than one such counterpart. 
 (The remainder of this page intentionally left blank. Signature Page follows.) 
  

 19 

 The Parties have duly executed this Agreement as of the Effective Date. 
  

											
	KCI INTERNATIONAL VOF GP
	
	By: EUROPEAN MEDICAL DISTRIBUTORS, L.P., its General Partner

											
	
	       By: KCI INTERNATIONAL HOLDINGS, LLC, its General Partner

  

					
		 	By:	 	/s/ MARTIN J. LANDON
		 		 	Martin J. Landon, Vice President

  

			
	
	NOVABAY PHARMACEUTICALS, INC.
		
	Signature:	 	/s/ RAMIN NAJAFI, PH.D.
		
	Date:	 	June 14, 2007

  

 20Tax Sharing Agreement, dated June 30, 2007

 Exhibit 10.1 
 TAX SHARING AGREEMENT 
 between 
 MORGAN STANLEY, 
 on behalf of itself 
 and the members 
 of the Distributing
Group, 
 and 
 DISCOVER FINANCIAL SERVICES, 
 on behalf of itself 
 and the members 
 of the Controlled Group 
 This Agreement is entered into as of the 30th day of June, 2007 between Morgan Stanley (“Distributing”), a Delaware corporation, on
behalf of itself and the members of the Distributing Group, as defined below, and Discover Financial Services (“Controlled”), a Delaware corporation, on behalf of itself and the members of the Controlled Group, as defined below.

 W I T N E S S E T H: 
 WHEREAS, pursuant to the tax laws of various jurisdictions, certain members of the Controlled Group presently file certain tax returns on an affiliated, consolidated, combined, unitary, fiscal unity or other, group basis (including as
permitted by Section 1501 of the Internal Revenue Code of 1986, as amended (the “Code”)) with certain members of the Distributing Group; 
 WHEREAS, Distributing and Controlled entered into a Separation and Distribution Agreement, dated as of June 29, 2007 (the “Separation Agreement”), providing for the distribution by Distributing
to its shareholders of all of the common stock of Controlled that is held by Distributing and certain other matters; 
 WHEREAS, Distributing
and Controlled desire to set forth their agreement on the rights and obligations of Distributing, Controlled and the members of the Distributing Group and the Controlled Group, respectively, with respect to (A) the handling and allocation of
federal, state, local and foreign taxes (other than the U.K. taxes governed by the U.K. Tax Sharing Agreement) incurred in taxable periods beginning prior to the Distribution Date, (B) taxes resulting from transactions effected in connection
with the Distribution, including but not limited to the Distribution and the transactions (i) described in or contemplated by the private letter ruling requests, dated March 7, 2007, March 22, 2007 and April 12, 2007
(collectively, with all attachments, exhibits and supplements thereto 

 
dated March 21, 2007, April 17, 2007, April 26, 2007, April 27, 2007 and May 31, 2007, the “Ruling
Request”), submitted by Distributing to the IRS and the FTB (in each case as defined below), (ii) effected pursuant to, or otherwise described in or contemplated by, the Separation Agreement (including, but not limited to, Schedule 1
thereto) or any Ancillary Agreement and (iii) described in or otherwise contemplated by the Form 10 (such transactions described in clauses (i), (ii) and (iii) are collectively referred to as the “Restructuring”), and
(C) various other tax matters; 
 NOW, THEREFORE, in consideration of the mutual covenants and agreements hereinafter set forth, the
parties agree as follows: 
 1. Definitions.  
 (a) As used in this Agreement: 
 “Active Business” shall mean an active trade or business relied upon in the Ruling Request in connection with the Restructuring or the Distribution. 
 “Actually Realized” or “Actually Realizes” shall mean, for purposes of determining the timing of the incurrence of any
Tax liability or the realization of a Refund (or any related income tax or other Tax cost or benefit) in respect of any payment, transaction, occurrence or event, the time at which the amount of income taxes paid (or Refund realized) is increased
above (or reduced below) the amount of income taxes that would otherwise have been required to be paid (or Refund that would otherwise have been realized) but for such payment, transaction, occurrence or event. 
 “Affiliate” of any Person shall mean any individual, corporation, partnership or other entity directly or indirectly owning more than 50
percent (by vote or value) of, owned more than 50 percent (by vote or value) by, or under more than 50 percent (by vote or value) common ownership with, such Person. 
 “After-Tax Amount” shall mean an additional amount necessary to reflect the hypothetical Tax consequences of the receipt or accrual of any payment, using the maximum statutory rate (or rates, in the
case of an item that affects more than one Tax) applicable to the recipient of such payment for the relevant Taxable year, reflecting for example, the effect of the deductions available for interest paid or accrued and for Taxes, such as state and
local income taxes. 
 “AMT” shall mean the alternative minimum tax, within the meaning of Section 55 of the Code.

 “Ancillary Agreement” shall have the meaning ascribed to it in the Separation Agreement. 

 “Code” shall have the meaning ascribed to it in the first “whereas” clause in
this Agreement. 
 “Combined Apportionment Factor” shall mean the apportionment factor reflected on the applicable
consolidated, combined or unitary state or local income tax return and utilized in computing the combined, consolidated or unitary state or local income tax liability. 
 “Company Proceedings” shall mean the ongoing Tax Proceedings between Sears and Controlled. 
 “Consolidated Federal Return” shall mean a Pre-Distribution Period Return filed in respect of federal income taxes by a Consolidated Group. 
 “Consolidated Group” shall mean any group consisting of (i) at least one member of the Distributing Group that filed (or will file) any Pre-Distribution Period Return that reflects the income,
assets or operations of any member of the Controlled Group or (ii) at least one member of the Controlled Group that filed (or will file) any Pre-Distribution Period Return that reflects the income, assets or operations of any member of the
Distributing Group. 
 “Consolidated State Return” shall mean a Pre-Distribution Period Return filed in respect of state or
local income taxes by a Consolidated Group. 
 “Controlled Group” shall mean one or more of Controlled and (i) any
Person that is an Affiliate of Controlled immediately after the Distribution and (ii) to the extent not previously included by (i), any Person that was owned directly or indirectly by Controlled prior to the Distribution for such period of
ownership by Controlled, including for both (i) and (ii) any predecessors thereto; provided, however, that for purposes of determining whether an entity is a member of the Controlled Group, a transfer of beneficial ownership of an entity
shall be treated as a transfer of title, regardless of whether title has actually passed. 
 “Distributing Group” shall mean
one or more of Distributing and its Affiliates other than those entities comprising the Controlled Group. 
 “Distribution”
shall mean the distribution by Distributing of all of the common stock of Controlled that is held by Distributing to Distributing’s shareholders pursuant to the Separation Agreement. 
 “Distribution Date” shall mean the date on which the Distribution shall be effected. 
 “Federal Separate Group Tax Liability” shall mean the product of a Group’s Separate Group Taxable Income, computed for federal
income tax purposes, and the highest federal income tax rate imposed under the Code on the 

 
Taxable income of a corporation for the relevant Taxable period (or portion thereof), reduced by any Tax credits that the Group would be able to use if it
were calculating its federal income Tax liability on a stand-alone basis. 
 “Final Determination” shall mean (i) with
respect to federal income taxes, (A) a “determination” as defined in Section 1313(a) of the Code, or (B) the date of acceptance by or on behalf of the IRS of Form 870-AD (or any successor form thereto), as a final resolution
of Tax liability for any Taxable period, except that a Form 870-AD (or successor form thereto) that reserves the right of the taxpayer to file a claim for Refund or the right of the IRS to assert a further deficiency shall not constitute a Final
Determination with respect to the item or items so reserved; (ii) with respect to Taxes other than federal income taxes, any final determination of liability in respect of a Tax that, under applicable law, is not subject to further appeal,
review or modification through proceedings or otherwise; (iii) with respect to any Tax, any final disposition by reason of the expiration of the applicable statute of limitations; or (iv) with respect to any Tax, the payment of Tax by any
member of the Distributing Group or the Controlled Group, whichever is responsible for payment of such Tax under applicable law, with respect to any item disallowed or adjusted by a Taxing Authority, provided that the provisions of Section 13
hereof have been complied with, or, if such section is inapplicable, that the party responsible under the terms of this Agreement for such Tax is notified by the party paying such Tax that it has determined that no action should be taken to recoup
such disallowed item, and the other party agrees with such determination. 
 “FTB” shall mean the California Franchise Tax
Board. 
 “Gain Group” shall mean a Group with Separate Group Taxable Income for the relevant Taxable period. 
 “Group” shall mean the Controlled Group or the Distributing Group, as appropriate. 
 “IRS” shall mean the Internal Revenue Service. 
 “Loss Group” shall mean a Group that incurs a Separate Group Taxable Loss for the relevant Taxable period. 
 “Overpayment Rate” shall mean the overpayment rate as set forth in Section 6621 of the Code. 
 “Person” shall have the meaning ascribed to it in Section 7701(a)(1) of the Code. 
 “Post-Distribution Period” shall mean any Taxable period (or portion thereof) beginning after the close of business on the Distribution Date. 

 “Pre-Distribution Period” shall mean any Taxable period ending on or before the close of
business on the Distribution Date; provided that if a Taxable period ending after the Distribution Date contains any days which fall prior to or on the Distribution Date, only the portion of such Taxable period up to and including the Distribution
Date shall be included in the Pre-Distribution Period. 
 “Refund” shall mean any refund of taxes, including any reduction
in taxes by means of a credit, offset or otherwise. 
 “Restructuring” shall have the meaning ascribed to it in the third
“whereas” clause in this Agreement; provided, however, that “Restructuring” shall exclude any normal business operations. 
 “Return” shall mean any Tax return, statement, report, form, election, claim or surrender (including estimated Tax returns and reports, extension requests and forms, and information returns and reports) required to be filed
with any Taxing Authority. 
 “Ruling Request” shall have the meaning ascribed to it in the third “whereas” clause
in this Agreement. 
 “Separate Group Taxable Income” shall mean, with respect to a Group, such Group’s Taxable income
computed as if such Group were a separate consolidated, combined or unitary group, and applying such Tax principles, including limitations and carryovers (excluding limits for charitable contributions and dividends received deduction, and accounting
for deferred intercompany transactions consistent with the deferral and recognition rules of Treasury Regulations Section 1.1502-13 (or any successor rule) or analogous state or local rule), that would have been applicable to such Group had
such Group never been part of the Consolidated Group or any other consolidated, combined or unitary group. In the context of state and local tax, Separate Group Taxable Income shall be computed prior to the application of any apportionment formula.
Additionally, to the extent a member of a Group has a net operating loss or any other tax attribute that was created prior to becoming a member of the Group but can be carried forward and used by the Group (in the context of state or local law,
either before or after apportionment, as determined under applicable law), such attribute will factor into such Group’s calculation of Separate Group Taxable Income (taking into account any applicable limitations on the use thereof).

 “Separate Group Taxable Loss” shall mean, with respect to a Group, such Group’s Taxable loss computed as if such
Group were a separate consolidated, combined or unitary group, and applying such Tax principles, including limitations and carryovers (excluding limits for charitable contributions and dividends received deduction, and accounting for deferred
intercompany transactions consistent with the deferral and recognition rules of Treasury 

 
Regulations Section 1.1502-13 (or any successor rule) or analogous state or local rule), that would have been applicable to such Group had such Group
never been part of the Consolidated Group or any other consolidated, combined or unitary group. In the context of state and local tax, Separate Group Taxable Loss shall be computed prior to the application of any apportionment formula. Additionally,
to the extent a member of a Group has a net operating loss or any other Tax attribute that was created prior to becoming a member of the Group but can be carried forward and used by the Group (in the context of state or local law, either before or
after apportionment, as determined under applicable law), such attribute will factor into the Group’s calculation of Separate Group Taxable Loss (taking into account any applicable limitations on the use thereof). 
 “Separation Agreement” shall have the meaning ascribed to it in the second “whereas” clause in this Agreement. 
 “State Separate Group Tax Liability” shall mean, with respect to a particular state or locality, the product of the Group’s
Separate Group Taxable Income and the Combined Apportionment Factor and the State Tax Rate, reduced by any applicable Tax credits that the Group would be able to use if it were calculating its Tax liability on a stand-alone basis. 
 “State Tax Rate” shall mean, with respect to a particular state or locality, the highest applicable tax rate imposed under applicable
law on the Separate Group Taxable Income of the Group for the relevant Taxable period (or portion thereof). 
 “Tax” (and
the correlative meaning, “Taxes,” “Taxing” and “Taxable”) shall mean (A) any tax imposed under Subtitle A of the Code, or any net income, gross income, gross receipts, alternative or add-on
minimum, sales, use, business and occupation, value-added, trade, goods and services, ad valorem, franchise, profits, license, business royalty, withholding, payroll, employment, capital, excise, transfer, recording, severance, stamp, occupation,
premium, property, asset, real estate acquisition, environmental, custom duty, or other tax, governmental fee or other like assessment or charge of any kind whatsoever, together with any interest and any penalty, addition to tax or additional amount
imposed by a Taxing Authority; (B) any liability of a member of the Distributing Group or the Controlled Group, as the case may be, for the payment of any amounts of the type described in clause (A) for any Taxable period resulting from
such member being a part of a consolidated group pursuant to the application of Treasury Regulations Section 1.1502-6 or any similar provision applicable under state, local or foreign law; or (C) any liability of a member of the
Distributing Group or the Controlled Group for the payment of any amounts described in clause (A) as a result of any express or implied obligation to indemnify any other Person. 

 “Tax Benefit” shall have the meaning ascribed to it in Section 10(d) of this
Agreement. 
 “Tax Proceeding” shall mean any Tax audit, dispute or proceeding (whether administrative, judicial or
contractual). 
 “Taxing Authority” shall mean any governmental authority (domestic or foreign), including, without
limitation, any state, municipality, political subdivision or governmental agency, responsible for the imposition of any Tax. 
 “U.K. Tax Sharing Agreement” shall mean the Supplemental Tax Sharing Agreement Relating to Direct Tax and VAT in the United Kingdom, dated as of June 30, 2007, between Distributing and Controlled. 
 “Underpayment Rate” shall mean the underpayment rate as set forth in Section 6621 of the Code. 
 (b) Any term used in this Agreement which is not defined in this Agreement shall, to the extent the context requires, have the
meaning assigned to it in the Code or the applicable Treasury regulations thereunder (as interpreted in administrative pronouncements and judicial decisions), in comparable provisions of applicable law or in the Ruling Request. 
 2. Tax Sharing Agreements. Any and all existing Tax sharing agreements or arrangements, written or unwritten, between any member of the
Distributing Group and any member of the Controlled Group, other than this Agreement and the U.K. Tax Sharing Agreement, shall be or shall have been terminated upon consummation of the Distribution. Upon consummation of the Distribution, neither the
members of the Controlled Group nor the members of the Distributing Group shall have any further rights or liabilities thereunder, and this Agreement and the U.K. Tax Sharing Agreement shall be the only Tax sharing agreements between the members of
the Controlled Group and the members of the Distributing Group. Distributing and Controlled shall act in good faith in the performance of this Agreement. 
 3. Federal Income Taxes. 
 (a) Return Filing. 
 (i) Distributing shall prepare and file, or cause to be prepared and filed, Consolidated Federal Returns for which the Consolidated Group
is required or permitted to file a Consolidated Federal Return using, inter alia, information previously provided by Controlled. Controlled shall provide Distributing with all necessary information to file a Consolidated Federal Return not 

 
later than 45 days before such return is due. Each member of the Consolidated Group shall execute and file such consents, elections and other documents as
may be required or appropriate for the filing of such Consolidated Federal Returns. All Tax elections shall be at the sole discretion of Distributing. All income tax computations performed on a consolidated basis will be performed or approved by
Distributing. To the extent reasonably practicable, Distributing shall notify and discuss with Controlled prior to the filing of a Consolidated Federal Return any potential material differences in the information provided by Controlled to be used in
the preparation of such Consolidated Federal Return and the position Distributing intends to take on such Consolidated Federal Return. Not later than 15 days after filing a Consolidated Federal Return, Distributing shall inform Controlled in writing
of any position taken on such Consolidated Federal Return that is materially different from the information provided by Controlled to be used in the preparation of such Consolidated Federal Return. 
 (ii) Distributing shall pay, or cause to be paid, and, subject to the provisions of Section 3(b), shall be responsible for, any and
all federal income taxes due or required to be paid with respect to, or required to be reported on, any such Consolidated Federal Return. 
 (iii) In the event a Consolidated Federal Return is not filed, each relevant member of the Distributing Group and Controlled Group shall be responsible for (i) filing its own Pre-Distribution Period Return in
respect of federal income taxes as a separate entity, including requests for extension, as if this Agreement were not in effect and (ii) making Tax payments (including estimated Tax payments, if necessary). Each such member filing a Return as a
separate entity shall be entitled to any Tax benefit and shall be liable for any Tax burden resulting from the filing of such separate Return. 
 (b) Allocated Tax Charge. 
 (i) Each Group included in the Consolidated Federal Return
shall be responsible for calculating its Separate Group Taxable Income or Separate Group Taxable Loss as if such Group filed a federal income tax Return on a stand-alone basis, and shall bear its Federal Separate Group Tax Liability, if any. For
purposes of such calculation, the deduction for state and local taxes to which each Group is entitled will be determined in a manner consistent with Section 4 of this Agreement. 

 (ii) If the Controlled Group included in the Consolidated Federal Return incurs a
Separate Group Taxable Loss, Distributing shall pay to the Controlled Group (A) the amount, if any, by which the federal income taxes payable with respect to the Consolidated Federal Return are actually reduced by reason of the Controlled
Group’s Separate Group Taxable Loss and (B) any Refund of federal income taxes or other federal income tax benefit attributable to such Separate Group Taxable Loss that is Actually Realized, in each case as determined by Distributing in
its sole discretion (including that any tax benefits of the Distributing Group shall be fully utilized before utilizing any tax benefits of the Controlled Group). To the extent the Controlled Group receives a payment or credit from Distributing in
respect of a Separate Company Taxable Loss pursuant to this Section 3(b)(ii), such loss shall not be carried forward or carried back by the Controlled Group for purposes of determining Separate Group Taxable Income or Separate Group Taxable
Loss in any other Taxable period (or portion thereof). To the extent the Controlled Group does not receive a payment or credit from Distributing in respect of a Separate Group Taxable Loss pursuant to this Section 3(b)(ii), such loss may be
carried forward or carried back, subject to any applicable limitation with respect to carry forward or carry back losses, by the Controlled Group for purposes of determining Separate Group Taxable Income or Separate Group Taxable Loss in another
Taxable period (or portion thereof). 
 (iii) If the Controlled Group included in the Consolidated Federal Return has a
foreign Tax credit or other Tax credit that it is unable to use in its calculation of Federal Separate Group Tax Liability (other than an AMT credit), Distributing shall pay to the Controlled Group (A) the amount, if any, by which the federal
income taxes payable with respect to the Consolidated Federal Return is actually reduced by reason of the Controlled Group’s Tax credit and (B) any Refund of federal income taxes or other federal income tax benefit attributable to such Tax
credit that is Actually Realized, in each case as determined by Distributing in its sole discretion (including that any tax benefits of the Distributing Group shall be fully utilized before utilizing any tax benefits of the Controlled Group). To the
extent the Controlled Group receives a payment or credit from Distributing in respect of a Tax credit pursuant to this Section 3(b)(iii), the Controlled Group’s Federal Separate Group Tax Liability will be adjusted to reflect the fact that
the Controlled Group has previously received the benefit of such credit. To the extent the 

 
Controlled Group does not receive a payment or credit from Distributing in respect of a Tax credit pursuant to this Section 3(b)(iii), such Tax credit
may be carried forward or carried back , subject to any applicable limitation with respect to carry forward or carry back of Tax credits, by the Controlled Group for purposes of calculating its Separate Group Tax Liability in another Taxable period
(or portion thereof). 
 (iv) In the event a Consolidated Group incurs an AMT liability with respect to any Taxable period (or
portion thereof), Distributing shall be solely responsible for such liability. Any Tax benefit arising from the utilization of a consolidated federal AMT credit shall be for the sole benefit of Distributing. 
 4. State and Local Income Taxes. 
 (a) Return Filing. 
 (i) Distributing shall prepare and file, or cause to be prepared
and filed, Consolidated State Returns for which a Consolidated Group is required or permitted to file a Consolidated State Return using, inter alia, information previously provided by Controlled. Controlled shall provide Distributing with all
necessary information to file a Consolidated State Return not later than 21 days before such return is due. Each member of the Consolidated Group shall execute and file such consents, elections and other documents as may be required or appropriate
for the filing of such Consolidated State Returns. All Tax elections shall be made at the discretion of Distributing. All Tax computations performed on a combined, consolidated or unitary basis will be performed or approved by Distributing. To the
extent reasonably practicable, Distributing shall notify and discuss with Controlled prior to the filing of a Consolidated State Return any potential material differences in the information provided by Controlled to be used in the preparation of
such Consolidated State Return and the position Distributing intends to take on such Consolidated Federal Return. Not later than 15 days after filing a Consolidated State Return, Distributing shall inform Controlled in writing of any position taken
on such Consolidated State Return that is materially different from the information provided by Controlled to be used in the preparation of such Consolidated State Return. 
 (ii) Distributing shall pay, or cause to be paid, and, subject to the provisions of Section 4(b), shall be responsible for, any and
all income taxes due or required to be paid with respect to, or required to be reported on, any such Consolidated State Return. 

 (iii) In the event a Consolidated State Return is not filed, each relevant member of the
Distributing Group and Controlled Group shall be responsible for (A) filing its own Return as a separate entity, or its own Return in respect of state and local income Taxes relating to a group consisting solely of members of the Distributing
Group or members of the Controlled Group, as the case may be, on behalf of the separate group, in each case including requests for extension, as if this Agreement were not in effect and (B) making Tax payments (including estimated Tax payments,
if necessary). Each such member filing a Return as a separate entity shall be entitled to any Tax benefit and shall be liable for any Tax burden resulting from the filing of such separate Return. 
 (b) Allocated Tax Charge. 
 (i) Each Group included in a Consolidated State Return shall be responsible for calculating its Separate Group Taxable Income or Separate Group Taxable Loss and shall bear its State Separate Group Tax Liability, if
any. 
 (ii) If the Controlled Group included in a Consolidated State Return incurs a Separate Group Taxable Loss,
Distributing shall pay, or shall cause to be paid, to the Controlled Group (A) the amount, if any, by which the state or local income taxes reflected on such Return are actually reduced by reason of the Controlled Group’s Separate Group
Taxable Loss and (B) any Refund of state or local income taxes or other state or local income tax benefit attributable to such Separate Group Taxable Loss that is Actually Realized, in each case as determined by Distributing in its sole
discretion (including that any tax benefits of the Distributing Group shall be fully utilized before utilizing any tax benefits of the Controlled Group). To the extent the Controlled Group receives a payment or credit from Distributing in respect of
a Separate Group Taxable Loss pursuant to this Section 4(b)(ii), such loss shall not be carried forward or carried back by the Controlled Group for purposes of determining Separate Group Taxable Income or Separate Group Taxable Loss in any
other Taxable period (or portion thereof). To the extent the Controlled Group does not receive a payment or credit from Distributing in respect of a Separate Group Taxable Loss pursuant to this Section 4(b)(ii), such loss may be carried forward
or 

 
carried back, subject to any applicable limitation with respect to carry forward or carry back losses, by the Controlled Group for purposes of determining
Separate Group Taxable Income or Separate Group Taxable Loss in another Taxable period (or portion thereof). 
 (iii) If the
Controlled Group included in a Consolidated State Return has a Tax credit that it is unable to use in its calculation of State Separate Group Tax Liability, Distributing shall pay to the Controlled Group (A) the amount, if any, by which the
state or local income taxes reflected on such Return is actually reduced by reason of the Consolidated Group’s Tax credit and (B) any Refund of state or local income taxes or other state or local income tax benefit attributable to such Tax
credit that is Actually Realized, in each case as determined by Distributing in its sole discretion (including that any tax benefits of the Distributing Group shall be fully utilized before utilizing any tax benefits of the Controlled Group). To the
extent the Controlled Group receives a payment or credit from Distributing in respect of a Tax credit pursuant to this Section 4(b)(i)(C), the Controlled Group’s State Separate Group Tax Liability will be adjusted to reflect the fact that
the Controlled Group has previously received the benefit of such credit. To the extent the Controlled Group does not receive a payment or credit from Distributing in respect of a Tax credit pursuant to this Section 4(b)(iii), such Tax credit
may be carried forward or carried back, subject to any applicable limitation with respect to carry forward or carry back of Tax credits, by the Controlled Group for purposes of calculating its State Separate Group Tax Liability in another Taxable
period (or portion thereof). 
 5. Foreign Income Tax. With respect to the calculation of each Group’s Tax liability for foreign
taxes, other than U.K. taxes governed by the U.K. Tax Sharing Agreement, the principles set forth in Section 4 shall apply mutatis mutandis. 
 6. Estimated Tax Payments. 
 (a) If estimated Tax payments are required with
respect to a Consolidated Group for a Pre-Distribution Period, Distributing shall pay, or cause to be paid, to the IRS, and/or to each relevant state and local Taxing Authority, on behalf of the members of such Consolidated Group, those estimated
Tax payments that are due on the relevant dates prescribed by applicable law. On February 15 (or the proper due date under applicable law) of the year following the current tax year, Distributing 

 
shall pay to the IRS, and to each relevant state and local Taxing Authority, on behalf of the members of any Consolidated Group, the payment, if any,
required to be made with a request for an extension of time in which to file a Consolidated Federal Return or a Consolidated State Return, as the case may be. Each Group’s share of such estimated Tax payments, and payments required to be made
with a request for an extension of time in which to file a Consolidated Federal Return or a Consolidated State Return, shall be determined in a manner consistent with the methods set forth in Sections 3 and 4 of this Agreement. Reimbursement to
Distributing of the Controlled Group’s share of any quarterly estimated tax payments or any payment made with a request for an extension of time in which to file a Consolidated Federal Return or a Consolidated State Return, shall be made within
twenty business days after receiving notice of such liability from Distributing. 
 (b) Notwithstanding the provisions
of Section 6(a), if Distributing requests in writing an advance reimbursement from the Controlled Group of the Controlled Group’s share of a quarterly estimated Tax payment or any payment required to be made with a request for an extension
of time in which to file a Consolidated Federal Return or a Consolidated State Return, which request shall be not more than ten business days and not less than 5 business days prior to the due date of such payment, the Controlled Group shall
reimburse Distributing not later than the due date of such estimated Tax payment. 
 (c) If the Controlled Group is a
Loss Group and if such net operating loss would decrease overall consolidated, combined or unitary Taxable income in respect of the Consolidated Group, Distributing shall pay to the Controlled Group an amount equal to the difference between the Tax
liability of the Distributing Group and the amounts paid to the respective Taxing Authorities 5 business days after all such payments are due to the Taxing Authorities. 
 7. Settlement Procedures; Certain Other Payments. 
 (a) Distributing shall
calculate settlement of the final federal, state, local and foreign Tax liability for all Pre-Distribution Periods, and notify the Controlled Group of such settlement. Subject to Section 21 of this Agreement (relating to dispute resolution
procedures), the Controlled Group shall pay to Distributing its share of such Tax liability, as determined under Sections 3, 4 and 5 of this Agreement, within twenty business days after receiving notice of such Tax liability from Distributing. Any
amounts paid by any member of the Controlled Group pursuant to Section 6 and any amounts receivable by the Controlled Group in respect of a Separate Group Taxable Loss or Tax credit shall be included in 

 
determining the payments due from the Controlled Group. If the sum of any payments by the Controlled Group pursuant to Section 6, and any amounts
receivable by the Controlled Group in respect of a Separate Group Taxable Loss or Tax credit exceed its Tax liability, such excess shall be refunded to the Controlled Group. Interest will be due on any underpayment or overpayment of Tax, computed
from the date on which a final Return is filed, (i) if owed by the Controlled Group to Distributing on an underpayment, at the Underpayment Rate and (ii) if owed by Distributing to the Controlled Group on an overpayment, the Overpayment
Rate. 
 (b) If a portion or all of an unused loss or Tax credit is allocated to a member of the Consolidated Group,
pursuant to Treasury Regulations Section 1.1502-21(b) or Treasury Regulations Section 1.1502-79, and is carried back or forward to a Taxable year in which such member filed a separate Return or consolidated, combined or unitary Return with
an affiliated group that is not a Consolidated Group, any Refund or reduction in Tax liability arising from such carry back or carryover shall be retained by such member, subject to future audit adjustments. Notwithstanding the foregoing,
Distributing, in its sole discretion, shall determine whether an election shall be made to relinquish the entire carry back period with respect to part or all of a consolidated net operating loss for any Pre-Distribution Period in accordance with
Treasury Regulations Section 1.1502-21(b)(3). 
 (c) Notwithstanding Section 7(b) above, no member of the
Controlled Group shall make any election to carry back any Tax item from a Post-Distribution Period to a Pre-Distribution Period without Distributing’s consent. In the event that Distributing consents to the carry back of any Tax item by a
member of the Controlled Group from a Post-Distribution Period to a Pre-Distribution Period or in the event that a member of the Controlled Group is required by applicable law to carry back a Tax item from a Post-Distribution Period to a
Pre-Distribution Period, Distributing shall currently compensate the Controlled Group only for a Tax item that is carried back which does not result in the loss or deferral of any Tax attribute of any member of the Distributing Group. In the event
that such item of a member of the Distributing Group is only deferred, Distributing shall make a payment to the Controlled Group in respect of such deferred item at the time the Distributing Group Actually Realizes the deferred Tax attribute. To the
extent the Distributing Group suffers a permanent loss of such Tax attribute, no payment shall be made to the Controlled Group. 
 (d) Controlled and Distributing hereby acknowledge and agree that Sections 6 and 7(a) are applicable only with respect to Pre-Distribution Periods for which no final Return has been filed prior to the date hereof. 

 (e) In accordance with the past practice of Controlled and Distributing,
Controlled shall continue to make payments to Distributing in respect of the exercise of options on Distributing stock and the conversion of restricted Distributing stock units (i) prior to the Distribution, by employees of Controlled and the
members of the Controlled Group, and (ii) after the Distribution, by former employees of Controlled and the members of the Controlled Group. 
 8. Other Taxes. All federal, state, local, foreign and other Taxes that are not otherwise expressly dealt with herein or in the U.K. Tax Sharing Agreement, and the filing of any Returns with respect to such Taxes, shall be the
responsibility of the Person who is liable for such Taxes or is responsible for filing such Returns under applicable law. 
 9. Certain
Representations and Covenants. 
 (a) Controlled Representations. Controlled and each member of the Controlled
Group represents that as of the date hereof, and covenants that on the Distribution Date, there is no plan or intention: 
 (i) to liquidate Controlled or to merge or consolidate Controlled, or any member of the Controlled Group conducting an Active Business, with any other person subsequent to the Distribution, 
 (ii) to sell or otherwise dispose of any asset of Controlled or any member of the Controlled Group subsequent to the Distribution, in a
manner that would result in any increased Tax liability or reduction of any Tax asset of the Distributing Group or any member thereof, 
 (iii) to take any action inconsistent with the written information and representations furnished to the IRS or the FTB in connection with the Ruling Request, or to counsel in connection with any opinion being
delivered by counsel with respect to the Distribution or the Restructuring, regardless of whether such information and representations were included in the ruling issued by the IRS or FTB or in the opinion of counsel, 
 (iv) to repurchase stock of Controlled in a manner contrary to the requirements of IRS Revenue Procedure 96-30, as modified by IRS Revenue
Procedure 2003-48, or in a manner contrary to the representations made in the Ruling Request, 

 (v) to take any action that management of Controlled knows, or should have known, is
reasonably likely to contravene any agreement with a Taxing Authority entered into prior to the Distribution Date to which any member of the Controlled Group or the Distributing Group is a party, or 
 (vi) to enter into any negotiations, agreements, or arrangements with respect to transactions or events (including stock issuances,
pursuant to the exercise of options or otherwise, option grants, the adoption of, or authorization of shares under, a stock option plan, capital contributions, or acquisitions, but not including the Distribution) which may cause the Distribution to
be treated as part of a plan pursuant to which one or more Persons acquire directly or indirectly Controlled stock representing a “50-percent or greater interest” within the meaning of Section 355(d)(4) of the Code. 
 (b) Controlled Covenants. Controlled covenants to Distributing that, without either (i) the prior written consent of
Distributing, (ii) a supplemental private letter ruling issued by the IRS, or (iii) an unqualified written opinion of tax counsel selected by Distributing (in the case of (ii) and (iii), satisfactory to Distributing in its sole
discretion): 
 (i) during the twelve-month period following the Distribution Date, neither Controlled, nor any member of the
Controlled Group conducting an Active Business, will liquidate, merge or consolidate with any other Person, 
 (ii) during the
two-year period following the Distribution Date, Controlled will not sell, exchange, distribute or otherwise dispose of its assets or those of any member of the Controlled Group in a manner that would result in any increased Tax liability or
reduction of any Tax asset of the Distributing Group or any member thereof, 
 (iii) following the Distribution, Controlled
will, for a minimum of twelve months, continue each Active Business, 
 (iv) Controlled will not, nor will it permit any
member of the Controlled Group to, take any action inconsistent with the information and representations furnished to the IRS or the FTB in connection with the Ruling Request, or to counsel in connection with any opinion being delivered by counsel
with respect to the Distribution or the Restructuring, regardless of whether such information and representations were included in the ruling issued by the IRS or FTB or in the opinion of counsel, 

 (v) Controlled will not take any action that management of Controlled knows, or should
have known, is reasonably likely to contravene any agreement with a Taxing Authority entered into prior to the Distribution Date to which any member of the Controlled Group or the Distributing Group is a party, 
 (vi) during the two-year period following the Distribution Date, Controlled will not repurchase stock of Controlled in a manner contrary
to the requirements of IRS Revenue Procedure 96-30, as modified by IRS Revenue Procedure 2003-48, or in a manner contrary to the representations made in the Ruling Request, 
 (vii) other than to the extent such action is required by the Separation Agreement, on or after the Distribution Date, Controlled will
not, nor will it permit any member of the Controlled Group to, make or change any accounting method, amend any Return or take any Tax position on any Return, take any other action or enter into any transaction that results in any increased Tax
liability or reduction of any Tax asset of the Distributing Group or any member thereof in respect of any Pre-Distribution Period, and 
 (viii) during the two-year period following the Distribution Date, Controlled will not enter into any transaction or make any change in its equity structure (including stock issuances, pursuant to the exercise of
options or otherwise, options grants, the adoption of, or authorization of shares under, a stock option plan, capital contributions, or acquisitions, but not including, the Distribution) which may cause the Distribution to be treated as part of a
plan (or series of related transactions) pursuant to which one or more Persons acquire directly or indirectly Controlled stock representing a “50-percent or greater interest” within the meaning of Section 355(d)(4) of the Code.

 Controlled agrees that, regardless of whether Distributing consents to, or receives a ruling or opinion with respect to, any action
referred to in this Section 9(b), Distributing is to have no liability for any Tax resulting from any such action and Controlled agrees to indemnify and hold harmless the Distributing Group against any such Tax. Controlled shall also bear all
costs incurred by Distributing in connection with obtaining any opinion of 

 
counsel, a supplemental private letter ruling or in connection with Distributing’s determination of whether or not to grant any written consent required
under this Section 9(b). 
 10. Indemnities. 
 (a) Controlled Indemnity. Controlled and each member of the Controlled Group will jointly and severally indemnify Distributing and
the members of the Distributing Group against, and hold them harmless from: 
 (i) any income tax liability of the Controlled
Group as determined in accordance with this Agreement; 
 (ii) any liability or damage resulting from a breach by Controlled
or any member of the Controlled Group of any representation or covenant made by Controlled herein; 
 (iii) any income tax
liability (a) resulting from the Distribution or any portion of the Restructuring that is intended to qualify as tax free to Distributing or its shareholders under Sections 355 and/or 368(a)(1)(D) of the Code (or similar provisions of state
law) from failing to so qualify and (b) that is attributable to any action of Controlled or any member of the Controlled Group, other than any action required by the Separation Agreement or any Ancillary Agreement (including any exhibits or
schedules thereto), without regard to whether Distributing has consented to such action; 
 (iv) any Taxes imposed on
Distributing or any member of the Distributing Group in respect of the Special Dividend to the extent Controlled or any member of the Controlled Group has received a Refund with respect to such Taxes; and 
 (v) all liabilities, costs, expenses (including, without limitation, reasonable expenses of investigation and attorneys’ fees and
expenses), losses, damages, assessments, settlements or judgments arising out of or incident to the imposition, assessment or assertion of any income tax liability or damage described in (i), (ii), (iii) or (iv), including those incurred in the
contest in good faith in appropriate proceedings relating to the imposition, assessment or assertion of any such income tax, liability or damage. 
 (b) Distributing Indemnity. Distributing and each member of the Distributing Group will jointly and severally indemnify Controlled and the members of the Controlled Group against, and hold them harmless from:

 (i) any income tax liability of the Consolidated Group, other than any such liabilities described in Section 10(a);

 (ii) any Taxes imposed on Controlled or any member of the Controlled Group under Treasury
Regulation 1.1502-6 (or similar provision of state, local or foreign law) solely as a result of Controlled or any such member being or having been a member of a Consolidated Group to the extent payment is first sought by a Taxing Authority from a
member of the Controlled Group; 
 (iii) any liability or damage resulting from a breach by Distributing or any member of the
Distributing Group of any representation or covenant made by Distributing herein; and 
 (iv) all liabilities, costs, expenses
(including, without limitation, reasonable expenses of investigation and attorneys’ fees and expenses), losses, damages, assessments, settlements or judgments arising out of or incident to the imposition, assessment or assertion of any income
tax liability or damage described in (i), (ii) or (iii) including those incurred in the contest in good faith in appropriate proceedings relating to the imposition, assessment or assertion of any such income tax, liability or damage.

 If a member of the Distributing Group ceases to be an Affiliate of Distributing as a result of a sale of its stock to a third party
(whether or not treated as a sale or exchange of stock for Tax purposes), such member of the Distributing Group shall be released from its obligations under this Agreement upon such sale and neither Distributing nor any member of the Distributing
Group shall have any obligation to indemnify Controlled or any member of the Controlled Group under Section 10(b)(iii) for any liability or damage attributable to actions taken by such Affiliate after such sale. 
 (c) Discharge of Indemnity. Controlled, Distributing and the members of the Controlled Group and Distributing Group, respectively,
shall discharge their obligations under Sections 10(a) and 10(b) hereof, respectively, by paying the relevant amount within 30 days of demand therefor. Any such demand shall include a statement showing the amount due under Section 10(a) or
10(b), as the case may be. Items described in Section 10(a)(i) and 10(b)(i) shall be calculated as set forth in Sections 3 and 4. Notwithstanding the foregoing, if either Controlled, Distributing or any member of the Controlled Group or
Distributing Group disputes in 

 
good faith the fact or the amount of its obligation under Section 10(a) or Section 10(b), then no payment of the amount in dispute shall be
required until any such good faith dispute is resolved in accordance with Section 21 hereof; provided, however, that any amount not paid within 30 days of demand therefor shall bear interest as provided in Section 14. 
 (d) Tax Benefits. If an indemnification obligation of any member of the Distributing Group or any member of the Controlled Group,
as the case may be, under this Section 10 with respect to a Consolidated Group arises in respect of an adjustment that makes allowable to a member of the Controlled Group or a member of the Distributing Group, respectively, any deduction,
amortization, exclusion from income or other allowance (a “Tax Benefit”) which would not, but for such adjustment, be allowable, then any payment by any member of the Distributing Group or any member of the Controlled Group,
respectively, pursuant to this Section 10 shall be an amount equal to (x) the amount otherwise due but for this subsection (d), minus (y) the present value of the product of the Tax Benefit multiplied (i) by the maximum
applicable federal, foreign, state or local, as the case may be, corporate Tax rate in effect at the time such Tax Benefit becomes allowable to a member of the Controlled Group or a member of the Distributing Group (as the case may be) or
(ii) in the case of a credit, by 100 percent. The present value of such product shall be determined by discounting such product from the time the Tax Benefit becomes allowable at a rate equal to the Prime Rate as published in the Wall Street
Journal, Eastern Edition. 
 11. Guarantees. Distributing or Controlled, as the case may be, shall guarantee or otherwise
perform the obligations of each member of the Distributing Group or the Controlled Group, respectively, under this Agreement. 
 12.
Communication and Cooperation. 
 (a) Consult and Cooperate. Controlled and Distributing shall consult and
cooperate (and shall cause each member of the Controlled Group or the Distributing Group, respectively, to cooperate) fully at such time and to the extent reasonably requested by the other party in connection with all matters subject to this
Agreement. Such cooperation shall include, without limitation, 
 (i) the retention, and provision on reasonable request, of
any and all information including all books, records, documentation or other information pertaining to Tax matters relating to the Distributing Group and the Controlled Group, any necessary explanations of information, and access to personnel, until
one year after the expiration of the applicable statute of limitation (giving effect to any extension, waiver, or mitigation thereof); 

 (ii) the execution of any document that may be necessary (including to give effect to
Section 13) or helpful in connection with any required Return or in connection with any audit, proceeding, suit or action; and 
 (iii) the use of the parties’ best efforts to obtain any documentation from a governmental authority or a third party that may be necessary or helpful in connection with the foregoing. 
 (b) Provide Information. Distributing and Controlled shall keep each other fully informed with respect to any material development
relating to the matters subject to this Agreement. 
 (c) Tax Attribute Matters. Distributing and Controlled shall
promptly advise each other with respect to any proposed Tax adjustments relating to a Consolidated Group, which are the subject of an audit or investigation, or are the subject of any proceeding or litigation, and which may affect any Tax liability
or any Tax attribute of Distributing, Controlled, the Distributing Group, the Controlled Group or any member of the Controlled Group or the Distributing Group (including, but not limited to, basis in an asset or the amount of earnings and profits).

 (d) In the event that any Taxes are imposed or threatened to be imposed on Distributing or any member of the
Distributing Group in respect of the Special Dividend, Controlled shall, at the written request of Distributing, use its reasonable best efforts to obtain a Refund of any Taxes paid by Controlled or a member of the Controlled Group with respect to
amounts received by Controlled or a member of the Controlled Group that give rise to a payment of the Special Dividend. 
 13. Audits and
Contest. 
 (a) Distributing or Controlled shall promptly notify the other in writing upon the receipt of any
notice of Tax Proceeding from the relevant Taxing Authority that could reasonably result in an indemnity obligation of a party under this Agreement; provided, that a party’s right to indemnification under this Agreement shall not be limited in
any way by a failure to so notify, except to the extent that the indemnifying party is materially prejudiced by such failure. 
 (b) Notwithstanding anything in this Agreement to the contrary, Distributing shall have full control over all matters relating to any Return or any Tax Proceeding relating to any Tax matters of at least one member 

 
of the Distributing Group. Except as provided in Section 13(c), Distributing shall have absolute discretion with respect to any decisions to be made, or
the nature of any action to be taken, with respect to any matter described in the preceding sentence. Distributing shall act in good faith in the performance of this Section 13(b). Controlled may, at its own expense, participate in any such Tax
Proceeding. 
 (c) 
 (i) Upon request, during the course of any Tax Proceeding relating to a Tax liability or damage described in Section 10(a), Controlled shall from time to time furnish Distributing with evidence reasonably
satisfactory to Distributing of Controlled’s ability to pay the amount for which it could reasonably be expected to be responsible pursuant to Section 10(a). If at any time during such Tax Proceeding Distributing determines that Controlled
could not pay such amount, then Controlled shall be required to furnish a guarantee or performance bond satisfactory to Distributing in an amount equal to the amount for which Controlled could reasonably be expected to be responsible pursuant to
Section 10(a). 
 (ii) Notwithstanding anything to the contrary in this Agreement, in the event a Tax Proceeding involves
an issue that is common to both the Distributing Group and the Controlled Group, Distributing shall use its best efforts to settle such issues on behalf of the Distributing Group and the Controlled Group on a consistent basis. 
 (iii) Notwithstanding anything to the contrary in this Agreement, with respect to any Tax Proceeding involving issues relating solely to a
Tax liability of one or more members of the Controlled Group (taking into account the parties’ obligations under Section 10), Controlled shall have control over such Tax Proceeding. 
 (d) The indemnified party agrees to give notice to the indemnitor of the assertion of any claim, or the commencement of any suit,
action or proceeding in respect of which indemnity may be sought hereunder within 30 days of such assertion or commencement, or such earlier time that would allow the indemnitor to timely respond to such claim, suit action or proceeding. 

(e) With respect to Returns relating to Taxes solely attributable to one or more members of the Controlled Group (taking into
account the 

 
parties’ obligations under Section 10), Controlled and the members of the Controlled Group shall have full control over all matters relating to any
Tax Proceeding in connection therewith. Controlled and the members of the Controlled Group shall have absolute discretion with respect to any decisions to be made, or the nature of any action to be taken, with respect to any matter described in the
preceding sentence. 
 (f) Controlled and Distributing shall jointly control the conduct of the Company Proceedings.
Controlled shall not agree to any settlement in respect of the Company Proceedings without the consent of Distributing, which consent shall not be unreasonably withheld. 
 14. Payments. 
 (a) Mechanics. All payments to be made hereunder shall be made
in immediately available funds. Except as otherwise provided, all payments required to be made pursuant to this Agreement will be due 30 days after the receipt of notice of such payment or, where no notice is required, 30 days after the fixing of
liability or the resolution of a dispute. Payments shall be deemed made when received. Any payment that is not made by the Distributing Group when due shall bear interest at Overpayment Rate for each day until paid. Any payment that is not made by
the Controlled Group when due shall bear interest at the Underpayment Rate for each day until paid. If, pursuant to a Final Determination, any amount paid by Distributing or the members of the Distributing Group or Controlled or the members of the
Controlled Group, as the case may be, pursuant to this Agreement results in any increased Tax liability or reduction of any Tax asset of Controlled or any member of the Controlled Group or Distributing or any member of the Distributing Group,
respectively, then Distributing or Controlled, as appropriate, shall indemnify the other party and hold it harmless from any interest or penalty attributable to such increased Tax liability or the reduction of such Tax asset and shall pay to the
other party, in addition to amounts otherwise owed, the After-Tax Amount. With respect to any payment required to be made or received under this Agreement, Distributing has the right to designate, by written notice to Controlled, which member of the
Distributing Group will make or receive such payment. 
 (b) Tax Treatment. The parties agree that payments made
pursuant to this Agreement shall be treated for all Tax purposes as adjustments to the amount contributed by Distributing to Controlled in connection with the Restructuring immediately prior to the Distribution, or, if appropriate, as distributions
from Controlled to MSDCI and, except as otherwise required by law, none of the parties shall take any position inconsistent with such treatment. 

 15. Notices. Any notice, demand, claim, or other communication under this Agreement shall be in
writing and shall be deemed to have been given upon the delivery or mailing, thereof, as the case may be, if delivered personally or sent by certified mail, return receipt requested, postage prepaid, to the parties at the following addresses (or at
such other address as a party may specify by notice to the other): 
 If to Distributing or the Distributing Group, to: 
 Morgan Stanley 
 1585 Broadway 
 New York, NY 10036 
 Attn: Harvey B. Mogenson,
Global Head of Tax 
 Facsimile: (212) 507-3643 
 With a copy to: 
 Davis Polk & Wardwell 
 450 Lexington Avenue 
 New York, NY 10017

 Attn: Paul Kingsley, Esq./Jeffrey Small, Esq. 
 Facsimile: (212) 450-3277/(212) 450-3500 
 If to Controlled or the Controlled Group, to: 
 Discover Financial Services 
 2500 Lake Cook
Road 
 Riverwoods, IL 60015 
 Attn: General Counsel - Contracts 
 Facsimile: (224) 405-4584 
 16. Costs and Expenses. 
 (a) Except as expressly set forth in this Agreement, each party shall bear its own costs and expenses incurred pursuant to this Agreement. For purposes of this Agreement, costs and expenses shall include, but not be limited to,
reasonable attorneys’ fees, accountant fees and other related professional fees and disbursements. Notwithstanding anything to the contrary in this Agreement, each of the Controlled Group and the Distributing Group will be responsible for its
allocable portion, as determined by Distributing, of (i) all costs and expenses attributable to filing any Return that reflects the income, assets or operations of the Controlled Group or the Distributing Group, respectively, and any Return

 
required to be filed in connection with the Restructuring, and (ii) all costs and expenses incurred by Distributing or Controlled, respectively, in
complying with the provisions of Section 12 of this Agreement. 
 (b) With respect to all Tax Proceedings,
including any pending litigation with any Taxing Authority, costs shall be allocated in good faith by Distributing. Each party hereto shall be liable for its allocable portion of such costs as provided in Section 10. 
 17. Effectiveness; Termination and Survival. This Agreement shall become effective upon the consummation of the Distribution. All rights and
obligations arising hereunder shall survive until they are fully effectuated or performed and, provided, further, that notwithstanding anything in this Agreement to the contrary, this Agreement shall remain in effect and its provisions shall survive
for one year after the full period of all applicable statutes of limitation (giving effect to any extension, waiver or mitigation thereof) and, with respect to any claim hereunder initiated prior to the end of such period, until such claim has been
satisfied or otherwise resolved. 
 18. Section Headings. The headings contained in this Agreement are inserted for convenience only
and shall not constitute a part hereof or in any way affect the meaning or interpretation of this Agreement. 
 19. Entire Agreement;
Amendments and Waivers. 
 (a) Entire Agreement. This Agreement contains the entire understanding of the parties
hereto with respect to the subject matter contained herein. No alteration, amendment, modification, or waiver of any of the terms of this Agreement shall be valid unless made by an instrument signed by an authorized officer of each of Distributing
and Controlled, or in the case of a waiver, by the party against whom the waiver is to be effective. 
 (b) Amendments and
Waivers. No failure or delay by any party in exercising any right, power or privilege hereunder shall operate as a waiver hereof nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of
any right, power or privilege. This Agreement shall not be waived, amended or otherwise modified except in writing, duly executed by all of the parties hereto. 
 20. Governing Law and Interpretation. This Agreement shall be construed and enforced in accordance with the laws of the State of New York without giving, effect to laws and principles relating to conflicts of
law. 
 21. Dispute Resolution. In the event of any dispute relating to this Agreement, including but not limited to whether a
transaction is part of the 

 
Restructuring and whether a Tax liability is a liability of the Distributing Group or the Controlled Group, the parties shall work together in good faith to
resolve such dispute within 30 days. If the parties are unable to resolve such dispute within 30 days, such dispute shall be resolved by an accounting firm whose selection shall be reasonably satisfactory to both parties and whose fees and costs
shall be shared equally by Distributing and Controlled. 
 22. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same Agreement. 
 23.
Assignments; Third Party Beneficiaries. Except as provided below, this Agreement shall be binding upon and shall inure only to the benefit of the parties hereto and their respective successors and assigns, by merger, acquisition of assets or
otherwise (including but not limited to any successor of a party hereto succeeding to the Tax attributes of such party under applicable law). This Agreement is not intended to benefit any person other than the parties hereto and such successors and
assigns, and no such other person shall be a third party beneficiary hereof. If, during the period beginning on the Distribution Date and ending upon the expiration of the survival period set forth in Section 17, any Person becomes an Affiliate
of Controlled, such Affiliate shall be bound by the terms of this Agreement and Controlled shall provide evidence to Distributing of such Affiliate’s agreement to be bound by the terms of this Agreement. 
 24. Authorization, etc. Each of the parties hereto hereby represents and warrants that it has the power and authority to execute, deliver and
perform this Agreement, that this Agreement has been duly authorized by all necessary corporate action on the part of such party, that this Agreement constitutes a legal, valid and binding obligation of each such party, and that the execution,
delivery and performance of this Agreement by such party does not contravene or conflict with any provision or law or of its charter or bylaws or any agreement, instrument or order binding on such party. 
 [Remainder of page intentionally left blank.] 

 IN WITNESS WHEREOF, the parties have executed and delivered this Agreement as of the day and year first
written above. 
  

			
	 Distributing on its own behalf and on behalf of the members of the Distributing Group.

		
	 By:
	 	 /s/ Robert W. Scully

	 Name:
	 	 Robert W. Scully

	 Title:
	 	 Co-President

	
	 Controlled on its own behalf and on behalf of the members of the Controlled Group.

		
	 By:
	 	 /s/ David W. Nelms

	 Name:
	 	 David W. Nelms

	 Title:
	 	 Chief Executive Officer

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