In this task, you're given a passage that represents a legal contract or clause between multiple parties, followed by a question that needs to be answered. Based on the paragraph, you must write unambiguous answers to the questions and your answer must refer a specific phrase from the paragraph. If multiple answers seem to exist, write the answer that is the most plausible.

Q: ALAMOGORDO FINANCIAL CORPORATION 1,101,643 Shares

COMMON STOCK (Par Value $.0l Per Share)

Subscription Price $10.00 Per Share

AGENCY AGREEMENT

___________ __, 2000

Charles Webb & Company, a Division of Keefe, Bruyette & Woods, Inc. 211 Bradenton Avenue Dublin, Ohio 43017

Ladies and Gentlemen:

Alamogordo Financial Corporation, a federal corporation (the Company), AF Mutual Holding Company (the MHC) and Alamogordo Federal Savings and Loan Association, a federally chartered stock savings and loan association (the Bank) with its deposit accounts insured by the Savings Association Insurance Fund (SAIF) administered by the Federal Deposit Insurance Corporation (FDIC), hereby confirm, jointly and severally, their agreement with Charles Webb & Company, a Division of Keefe, Bruyette & Woods, Inc. (the Agent), as follows:

Section 1. The Offering. In accordance with the Stock Issuance Plan adopted by its Board of Directors (the Plan), the Company will offer and sell up to 1,101,643 shares of its common stock, par value, $.01 per share (the Shares or Common Stock), in a subscription offering (the Subscription Offering) to (1) depositors of the Bank with account balances of $50.00 or more as of September 30, 1998 (Eligible Account Holders), (2) the Employee Stock Ownership Plan of the Bank (the ESOP), (3) depositors of the Bank with account balances of $50.00 or more as of December 31, 1999 (Supplemental Eligible Account Holders), and (4) employees, officers and directors of the Bank. To the extent Shares remain unsold in the Subscription Offering, the Company is offering for sale in a community offering (the Community Offering and when referred to together with the Subscription Offering, the Subscription and Community Offering) the Shares not so subscribed for or ordered in the Subscription Offering to members of the general public, with preference given to natural persons residing in the New Mexico counties of Otero and Lincoln

(Other Subscribers), (all such offerees being referred to in the aggregate as Eligible Offerees). It is anticipated that shares not subscribed for in the Subscription and Community Offering will be offered to certain members of the general public on a best efforts basis through a selected dealers arrangement (the Syndicated Community Offering) (the Subscription Offering, Community Offering and Syndicated Community Offering are collectively referred to as the Offering). It is acknowledged that the purchase of Shares in the Offering is subject to the maximum and minimum purchase limitations as described in the Plan and that the Company and the Bank may reject, in whole or in part, any orders received in the Community Offering or Syndicated Community Offering. The Company will issue the Shares at a purchase price of $10.00 per share (the Purchase Price).

The Company has filed with the Securities and Exchange Commission (the Commission) a registration statement on Form S-1 (File No. 333- ) (the Registration Statement) containing a prospectus relating to the Offering for the registration of the Shares under the Securities Act of 1933 (the 1933 Act), and has filed such amendments thereof and such amended prospectuses as may have been required to the date hereof. The term Registration Statement shall include all exhibits thereto, as amended, including post-effective amendments. The prospectus, as amended, on file with the Commission at the time the Registration Statement initially became effective is hereinafter called the Prospectus, except that if any Prospectus is filed by the Company pursuant to Rule 424(b) or (c) of the rules and regulations of the Commission under the 1933 Act (the 1933 Act Regulations) differing from the prospectus on file at the time the Registration Statement initially becomes effective, the term Prospectus shall refer to the prospectus filed pursuant to Rule 424(b) or (c) from and after the time said prospectus is filed with the Commission.

In accordance with Title 12, Parts 575 and 563b of the Code of Federal Regulations (the MHC Regulations), the Company has filed with the Office of Thrift Supervision (the OTS) an Application on Form MHC-2 with respect to the stock issuance (the MHC Application), including the Prospectus and the Valuation Appraisal Report prepared by RP Financial, LC (the Appraisal) and has filed such amendments thereto as may have been required by the OTS. The MHC Application has been approved by the OTS and the related Prospectus has been authorized for use by the OTS.

Section 2. Retention of Agent; Compensation; Sale and Delivery of the Shares. Subject to the terms and conditions herein set forth, the Company and the Bank have retained the Agent to consult with and to advise the Bank, the MHC and the Company, and to assist the Company, on a best efforts basis, in the distribution of the shares of Common Stock in the Offering. The services that the Agent will provide include, but are not limited to (i) training the employees of the Bank who will perform certain ministerial functions in the Subscription and Community Offering regarding the mechanics and regulatory requirements of the stock offering process, (ii) managing the Stock Information Center by assisting interested stock subscribers and by keeping records of all stock orders and (iii) preparing marketing materials.

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On the basis of the representations, warranties, and agreements herein contained, but subject to the terms and conditions herein set forth, the Agent accepts such appointment and agrees to consult with and advise the Company, the MHC and the Bank as to the matters set forth in the letter agreement (Letter Agreement), dated November 29, 1999 between the Company and the Agent (a copy of which is attached hereto as Exhibit A). It is acknowledged by the Company, the MHC and the Bank that the Agent shall not be required to take or purchase any Shares or be obligated to take any action which is inconsistent with all applicable laws, regulations, decisions or orders.

The obligations of the Agent pursuant to this Agreement (other than those set forth in Sections 2(d), 8 and 9 hereof) shall terminate upon the completion or termination or abandonment of the Plan by the Company or upon termination of the Offering, but in no event later than the date (the End Date) which is 45 days after the Closing Date (as hereinafter defined). All fees or expenses due to the Agent but unpaid will be payable to the Agent in next day funds at the earlier of the Closing Date (as hereinafter defined) or the End Date. In the event the Offering is extended beyond the End Date, the Company, the MHC, the Bank and the Agent may agree to renew this Agreement under mutually acceptable terms.

In the event the Company is unable to sell a minimum of 708,050 Shares within the period herein provided, this Agreement shall terminate and the Company shall refund to any persons who have subscribed for any of the Shares, the full amount which it may have received from them plus accrued interest as set forth in the Prospectus; and none of the parties to this Agreement shall have any obligation to the other parties hereunder, except as set forth in this Section 2 and in Sections 6, 8 and 9 hereof.

In the event the Offering is terminated, the Agent shall be reimbursed for its actual accountable out-of-pocket expenses.

If all conditions precedent to the consummation of the Offering, including, without limitation, the sale of all Shares required by the Plan to be sold, are satisfied, the Company agrees to issue, or have issued, the Shares sold in the Offering and to release for delivery certificates for such Shares on the Closing Date (as hereinafter defined) against payment to the Company by any means authorized by the Plan; provided, however, that no funds shall be released to the Company until the conditions specified in Section 7 hereof shall have been complied with to the reasonable satisfaction of the Agent and their counsel. The release of Shares against payment therefor shall be made on a date and at a place acceptable to the Company, the MHC, the Bank and the Agent. Certificates for shares shall be delivered directly to the purchasers in accordance with their directions. The date upon which the Company shall release or deliver the Shares sold in the Offering, in accordance with the terms herein, is called the Closing Date.

The Agent shall receive the following compensation for its services hereunder:

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(a) A management fee of $25,000, payable in four installments of $6,250 on November 29 and December 29, 1999 and January 29 and February 29, 2000. Should the Offering be terminated for any reason not attributable to the action or inaction of the Agent, the Agent shall have earned and be entitled to be paid fees accruing through the stage at which the termination occurred.

(b) A Success Fee of $75,000.

(c) If any of the shares remain available after the Subscription and Community Offerings, at the request of the Bank, the Agent will seek to form a syndicate of registered broker-dealers to assist in the sale of such Common Stock on a best efforts basis, subject to the terms and conditions set forth in the selected dealers agreement. the Agent will endeavor to distribute the Common Stock among dealers in a fashion which best meets the distribution objectives of the Bank and the Plan. the Agent will be paid a fee not to exceed 5.5% of the aggregate Purchase Price of the Shares sold by them. the Agent will pass onto selected broker-dealers,

who assist in the syndicated community, an amount competitive with gross underwriting discounts changed at such time for comparable amounts of stock sold at a comparable price per share in a similar market environment. Fees with respect to purchases affected with the assistance of a broker/dealer other than the Agent shall be transmitted by the Agent to such broker/dealer. The decision to utilize selected broker-dealers will be made by the Bank upon consultation with the Agent. In the event, with respect to any purchases of Shares, fees are paid pursuant to this subparagraph 2(c), such fees shall be in lieu of, and not in addition to, payment pursuant to subparagraph 2(a) and 2(b).

(d) The Company will bear those expenses of the proposed offering customarily borne by issuers, including, without limitation, regulatory filing fees, Blue Sky, and NASD filing and registration fees; the fees of the Company's accountants, attorneys, appraiser, transfer agent and registrar, printing, mailing and marketing and syndicate expenses associated with the Offering; the fees set forth in Section 2; and fees for Blue Sky legal work. If the Agent incurs expenses on behalf of the Company, the Company will reimburse the Agent for such expenses.

The Agent shall be reimbursed for reasonable out-of-pocket expenses, including costs of travel, meals and lodging, photocopying, telephone, facsimile and couriers. The Agent shall also be reimbursed for its fees of underwriter's counsel (including counsel's out-of-pocket expenses) not to exceed $35,000. The selection of such counsel will be done by the Agent, after consultation with the Bank.

Section 3. Prospectus; Offering. The Shares are to be initially offered in the Offering at the Purchase Price as defined and set forth on the cover page of the Prospectus.

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Section 4. Representations and Warranties of the Company, the MHC and the Bank. The Company, the MHC and the Bank jointly and severally represent and warrant to and agree with the Agent as follows:

(a) The Registration Statement which was prepared by the Company, the MHC and the Bank and filed with the Commission was declared effective by the Commission on __________ __, 2000. At the time the Registration Statement, including the Prospectus contained therein (including any amendment or supplement), became effective, the Registration Statement contained all statements that were required to be stated therein in accordance with the 1933 Act and the 1933 Act Regulations, complied in all material respects with the requirements of the 1933 Act and the 1933 Act Regulations and the Registration Statement, including the Prospectus contained therein (including any amendment or supplement thereto), and any information regarding the Company or the MHC or the Bank contained in Sales Information (as such term is defined in Section 8 hereof) authorized by the Company, the MHC or the Bank for use in connection with the Offering, did not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading, and at the time any Rule 424(b) or (c) Prospectus was filed with the Commission and at the Closing Date referred to in Section 2, the Registration Statement, including the Prospectus contained therein (including any amendment or supplement thereto), and any information regarding the Company, the MHC or the Bank contained in Sales Information (as such term is defined in Section 8 hereof) authorized by the Company, the MHC or the Bank for use in connection with the Offering will contain all statements that are required to be stated therein in accordance with the 1933 Act and the 1933 Act Regulations and will not contain an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading; provided, however, that the representations and warranties in this Section 4(a) shall not apply to statements or omissions made in reliance upon and in conformity with written information furnished to the Company, the MHC or the Bank by the Agent or its counsel expressly regarding the Agent for use in the Prospectus or statements in or omissions from any Sales Information or information filed pursuant to state securities or blue sky laws or regulations regarding the Agent.

(b) The MHC Application which was prepared by the Company, the MHC and the Bank and filed with the OTS was approved by the OTS on ___________ ___, 2000, and the related Prospectus has been authorized for use by the OTS. At the time of the approval of the MHC Application, including the

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Prospectus (including any amendment or supplement thereto), by the OTS and at all times subsequent thereto until the Closing Date, the MHC Application, including the Prospectus (including any amendment or supplement thereto), will comply in all material respects with the MHC Regulations, except to the extent waived in writing by the OTS. The MHC Application, including the Prospectus (including any amendment or supplement thereto), does not include any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading; provided, however, that the representations and warranties in this Section 4(b) shall not apply to statements or omissions made in reliance upon and in conformity with written information furnished to the Company, the MHC or the Bank by the Agent or its counsel expressly regarding the Agent for use in the Prospectus contained in the MHC Application or statements in or omissions from any sales information.

(c) The Company and the MHC have registered with the OTS as savings and loan holding companies under the Home Owners' Loan Act, as amended (HOLA).

(d) No order has been issued by the OTS or the FDIC (hereinafter any reference to the FDIC shall include the SAIF) preventing or suspending the use of the Prospectus, and no action by or before any such government entity to revoke any approval, authorization or order of effectiveness related to the Offering is, to the best knowledge of the Company, the MHC or the Bank, pending or threatened.

(e) The MHC is and, as of the Closing Date, will continue to be duly organized and validly existing as a federally chartered mutual holding company under the laws of the United States, duly authorized to conduct its business and own its property as described in the Registration Statement and the Prospectus; as of the Closing Date, the MHC will have obtained all licenses, permits and other governmental authorizations required for the conduct of its business except those that individually or in the aggregate would not materially adversely affect the financial condition, earnings, capital, assets or properties of the Company, MHC and Bank taken as a whole; as of the Closing Date, all such licenses, permits and governmental authorizations will be in full force and effect and the MHC will be in compliance therewith in all material respects; as of the Closing Date, the MHC will be duly qualified as a foreign corporation to transact business in each jurisdiction in which the failure to be so qualified in one or more of such jurisdictions would have a material adverse effect on the financial condition, earnings, capital, assets, properties or business of the Company, MHC and Bank considered as one enterprise.

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(f) The MHC does not own any equity securities or any equity interest in any business enterprise except as described in the Prospectus.

(g) The MHC is not authorized to issue any shares of capital stock.

(h) At the Closing Date, the Plan will have been adopted by the Boards of Directors of the Company, the MHC and the Bank and approved by the members of the Bank, and the offer and sale of the Shares will have been conducted in all material respects in accordance with the Plan, the MHC Regulations, and all other applicable laws, regulations, decisions and orders, including all terms, conditions, requirements and provisions precedent to the Offering imposed upon the Company, the MHC or the Bank by the OTS, the Commission, or any other regulatory authority and in the manner described in the Prospectus. No person has sought to obtain review of the final action of the OTS in approving the Plan or in approving the MHC Application, or any other statute or regulation.

(i) The Bank has been organized and is a validly existing federally chartered savings and loan association in capital stock form of organization, duly authorized to conduct its business and own its property as described in the Registration Statement and the Prospectus; the Bank has obtained all material licenses, permits and other governmental authorizations currently required for the conduct of its business; all such licenses, permits and governmental authorizations are in full force and effect, and the Bank is in all material respects complying with all laws, rules, regulations and orders applicable to the operation of its business; the Bank is existing under the laws of the United States and is duly qualified as a foreign corporation to transact business and is in good standing in each jurisdiction in which its ownership of property or leasing of property or the conduct of its business requires such qualification, unless the failure to be so qualified in one or more of such jurisdictions would not have a material adverse effect on the condition, financial or otherwise, or the business, operations or income of the Bank. The

Bank does not own equity securities or any equity interest in any other business enterprise except as described in the Prospectus or as would not be material to the operations of the Bank. Upon completion of the sale by the Company of the Shares contemplated by the Prospectus, (i) all of the issued and outstanding capital stock of the Bank will be owned by the Company, (ii) the Company will have no direct subsidiaries other than the Bank, and (iii) the Company will be a majority-owned subsidiary of the MHC. The Offering will have been effected in all material respects in accordance with all applicable statutes, regulations, decisions and orders; and, except with respect to the filing of certain post-sale, post-Offering reports, and documents in compliance with the 1933 Act Regulations, the OTS' resolutions or letters of

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approval, all terms, conditions, requirements and provisions with respect to the Offering imposed by the Commission, the OTS, and the FDIC, if any, will have been complied with by the Company, the MHC and the Bank in all material respects or appropriate waivers will have been obtained and all material notice and waiting periods will have been satisfied, waived or elapsed.

(j) The Company has been duly incorporated and is validly existing as a corporation in good standing under the laws of the United States with corporate power and authority to own, lease and operate its properties and to conduct its business as described in the Registration Statement and the Prospectus, and at the Closing Date the Company will be qualified to do business as a foreign corporation in each jurisdiction in which the conduct of its business requires such qualification, except where the failure to so qualify would not have a material adverse effect on the condition, financial or otherwise, or the business, operations or income of the Company. The Company has obtained all material licenses, permits and other governmental authorizations currently required for the conduct of its business; all such licenses, permits and governmental authorizations are in full force and effect, and the Company is in all material respects complying with all laws, rules, regulations and orders applicable to the operation of its business.

(k) The Bank is a member of the Federal Home Loan Bank of Dallas (FHLB- Dallas). The deposit accounts of the Bank are insured by the FDIC up to the applicable limits; and no proceedings for the termination or revocation of such insurance are pending or, to the best knowledge of the Company or the Bank, threatened.

(l) The Company, the MHC and the Bank have good and marketable title to all real property and good title to all other assets material to the business of the Company, the MHC and the Bank, taken as a whole, and to those properties and assets described in the Registration Statement and Prospectus as owned by them, free and clear of all liens, charges, encumbrances or restrictions, except such as are described in the Registration Statement and Prospectus, or are not material to the business of the Company, the MHC and the Bank, taken as a whole; and all of the leases and subleases material to the business of the Company, the MHC and the Bank, taken as a whole, under which the Company, the MHC or the Bank hold properties, including those described in the Registration Statement and Prospectus, are in full force and effect.

(m) The Company and the Bank have received an opinion of their special counsel, Luse Lehman Gorman Pomerenk & Schick with respect to the federal income tax consequences of the Offering and the opinions of

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____________________ with respect to New Mexico income tax consequences of the Offering; all material aspects of the opinions of Luse Lehman Gorman Pomerenk & Schick and _____________________ are accurately summarized in the Registration Statement and will be accurately summarized in the Prospectus; and further represent and warrant that the facts upon which such opinions are based are truthful, accurate and complete.

(n) The Company, the MHC and the Bank have all such power, authority, authorizations, approvals and orders as may be required to enter into this Agreement, to carry out the provisions and conditions hereof and to issue and sell the Shares to be sold by the Company, as provided herein and as described in the Prospectus except approval or confirmation by the OTS of the final appraisal of the Company. The consummation of the Offering, the execution, delivery and performance of this Agreement and the consummation of the transactions herein contemplated have been duly and validly authorized by all necessary corporate action on the part

of the Company, the MHC and the Bank and this Agreement has been validly executed and delivered by the Company, the MHC and the Bank and is the valid, legal and binding agreement of the Company, the MHC and the Bank enforceable in accordance with its terms (except as the enforceability thereof may be limited by bankruptcy, insolvency, moratorium, reorganization or similar laws relating to or affecting the enforcement of creditors' rights generally or the rights of creditors of savings and loan holding companies, the accounts of whose subsidiaries are insured by the FDIC or by general equity principles regardless of whether such enforceability is considered in a proceeding in equity or at law, and except to the extent if any, that the provisions of Sections 8 and 9 hereof may be unenforceable as against public policy).

(o) The Company, the MHC and the Bank are not in violation of any directive received from the OTS, the FDIC, or any other agency to make any material change in the method of conducting their businesses so as to comply in all material respects with all applicable statutes and regulations (including, without limitation, regulations, decisions, directives and orders of the OTS, and the FDIC) and, except as may be set forth in the Registration Statement and the Prospectus, there is no suit or proceeding or charge or action before or by any court, regulatory authority or governmental agency or body, pending or, to the knowledge of the Company, the MHC or the Bank, threatened, which might materially and adversely affect the Offering, the performance of this Agreement or the consummation of the transactions contemplated in the Plan and as described in the Registration Statement and the Prospectus or which might result in any material adverse change in the condition (financial or otherwise), earnings, capital or properties of the

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Company, the MHC and the Bank, or which would materially affect their properties and assets.

(p) The financial statements, schedules and notes related thereto which are included in the Prospectus fairly present the consolidated balance sheet, income statement, statement of changes in equity and cash flows of the Bank at the respective dates indicated and for the respective periods covered thereby and comply as to form in all material respects with the applicable accounting requirements of Title 12 of the Code of Federal Regulations and generally accepted accounting principles (including those requiring the recording of certain assets at their current market value). Such financial statements, schedules and notes related thereto have been prepared in accordance with generally accepted accounting principles consistently applied through the periods involved, present fairly in all material respects the information required to be stated therein and are consistent with the most recent financial statements and other reports filed by the Bank with the OTS. The other financial, statistical and pro forma information and related notes included in the Prospectus present fairly the information shown therein on a basis consistent with the audited and unaudited financial statements of the Bank included in the Prospectus, and as to the pro forma adjustments, the adjustments described therein have been properly applied on the basis described therein.

(q) Since the respective dates as of which information is given in the Registration Statement including the Prospectus: (i) there has not been any material adverse change, financial or otherwise, in the condition of the Company, the MHC or the Bank considered as one enterprise, or in the earnings, capital or properties of the Company, the MHC or the Bank, whether or not arising in the ordinary course of business; (ii) there has not been any material increase in the long-term debt of the Bank or in the principal amount of the Bank's assets which are classified by the Bank as substandard, doubtful or loss or in loans past due 90 days or more or real estate acquired by foreclosure, by deed-in-lieu of foreclosure or deemed in-substance foreclosure or any material decrease in retained earnings or total assets of the Bank nor has the Company, the MHC or the Bank issued any securities (other than in connection with the incorporation of the Company) or incurred any liability or obligation for borrowing other than in the ordinary course of business; (iii) there have not been any material transactions entered into by the Company, the MHC or the Bank; (iv) there has not been any material adverse change in the aggregate dollar amount of the Bank's deposits or its consolidated net worth; (v) there has been no material adverse change in the Company's, the MHC's or the Bank's relationship with its insurance carriers, including, without limitation, cancellation or other termination of the Company's, the

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MHC's or the Bank's fidelity bond or any other type of insurance coverage; (vi) except as disclosed in the Prospectus there has been no material change in management of the Company, the MHC or the Bank, neither of which has any material undisclosed liability of any kind, contingent or otherwise; (vii) the Company, the MHC or the Bank has not sustained any material loss or interference with its respective business or properties from fire, flood, windstorm, earthquake, accident or other calamity, whether or not covered by insurance; (viii) the Company, the MHC or the Bank is not in default in the payment of principal or interest on any outstanding debt obligations; (ix) the capitalization, liabilities, assets, properties and business of the Company, the MHC and the Bank conform in all material respects to the descriptions thereof contained in the Prospectus; and (x) neither the Company, the MHC nor the Bank has any material contingent liabilities, except as set forth in the Prospectus. All documents made available to or delivered or to be made available to or delivered by the Bank, the MHC or the Company or their representatives in connection with the issuance and sale of the Shares, including records of account holders, depositors and other members of the Bank, or in connection with the Agent's exercise of due diligence, except for those documents which were prepared by parties other than the Bank, the MHC, the Company or their representatives, to the best knowledge of the Bank, the MHC and the Company, were on the dates on which they were delivered, or will be on the dates on which they are to be delivered, true, complete and correct in all material respects.

(r) As of the date hereof and as of the Closing Date, neither the Company, the MHC nor the Bank is (i) in violation of its articles of incorporation or charter or bylaws, respectively, or (ii) in default in the performance or observance of any material obligation, agreement, covenant, or condition contained in any material contract, lease, loan agreement, indenture or other instrument to which it is a party or by which it or any of its property may be bound; the consummation of the Offering, the execution, delivery and performance of this Agreement and the consummation of the transactions herein contemplated have been duly and validly authorized by all necessary corporate action on the part of the Company, the MHC and the Bank and this Agreement has been validly executed and delivered by the Company, the MHC and the Bank and is a valid, legal and binding Agreement of the Company, the MHC and the Bank enforceable in accordance with its terms, except as the enforceability thereof may be limited by (i) bankruptcy, insolvency, reorganization, moratorium, conservatorship, receivership or other similar laws now or hereafter in effect relating to or affecting the enforcement of creditors' rights generally or the rights of creditors of federal savings institutions, (ii) general equitable principles, (iii) laws relating to the safety and soundness of insured depository institutions, and (iv) applicable

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law or public policy with respect to the indemnification and/or contribution provisions contained herein, and except that no representation or warranty need be made as to the effect or availability of equitable remedies or injunctive relief (regardless of whether such enforceability is considered in a proceeding in equity or at law). The consummation of the transactions herein contemplated will not: (i) conflict with or constitute a breach of, or default under, or result in the creation of any material lien, charge or encumbrance upon any of the assets of the Company, the MHC or the Bank pursuant to the articles of incorporation of the Company or the charter and bylaws of the Bank and the MHC, or any material contract, lease or other instrument to which the Company, the MHC or the Bank has a beneficial interest, or any applicable law, rule, regulation or order; (ii) violate any authorization, approval, judgement, decree, order, statute, rule or regulation applicable to the Company, the MHC or the Bank, except for such violations which would not have a material adverse effect on the financial condition and results of operations of the Company, the MHC and the Bank on a consolidated basis; or (iii) result in the creation of any material lien, charge or encumbrance upon any property of the Company, the MHC or the Bank.

(s) No default exists, and no event has occurred which with notice or lapse of time, or both, would constitute a default, on the part of the Company, the MHC or the Bank in the due performance and observance of any term, covenant or condition of any indenture, mortgage, deed of trust, note, bank loan or credit agreement or any other instrument or agreement to which the Company, the MHC or the Bank is a party or by which any of them or any of their property is bound or affected, except such defaults which would not have a material adverse affect on the financial condition or results of operations of the Company, the MHC and the Bank on a consolidated basis; such agreements are in full force and effect; and no other party to any such agreements has instituted or, to the best knowledge of the Company, the MHC and the Bank, threatened any action or proceeding wherein the Company, the MHC or the Bank would or might be alleged to be in default

thereunder.

(t) Upon consummation of the Offering, the authorized, issued and outstanding equity capital of the Company will be within the range set forth in the Prospectus under the caption Capitalization, and no Shares have been or will be issued and outstanding prior to the Closing Date (other than Shares held by the MHC); the Shares will have been duly and validly authorized for issuance and, when issued and delivered by the Company pursuant to the Plan against payment of the consideration calculated as set forth in the Plan and in the Prospectus, will be duly and validly issued, fully paid and non-assessable, except for shares purchased by the ESOP with funds

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borrowed from the Company to the extent payment therefor in cash has not been received by the Company; except to the extent that subscription rights and priorities pursuant thereto exist pursuant to the Plan, no preemptive rights exist with respect to the Shares; and the terms and provisions of the Shares will conform in all material respects to the description thereof contained in the Registration Statement and the Prospectus. To the best knowledge of the Company, the MHC and the Bank, upon the issuance of the Shares, good title to the Shares will be transferred from the Company to the purchasers thereof against payment therefor, subject to such claims as may be asserted against the purchasers thereof by third-party claimants.

(u) No approval of any regulatory or supervisory or other public authority is required in connection with the execution and delivery of this Agreement or the issuance of the Shares, except for the approval of the Commission, the OTS and any necessary qualification, notification, registration or exemption under the securities or blue sky laws of the various states in which the Shares are to be offered, and except as may be required under the rules and regulations of the NASD.

(v) The Accounting & Consulting Group L.L.P. which has certified the consolidated audited financial statements and schedules of the Bank included in the Prospectus, has advised the Company, the MHC and the Bank in writing that they are, with respect to the Company, the MHC and the Bank, independent public accountants within the meaning of the Code of Professional Ethics of the American Institute of Certified Public Accountants and Title 12 of the Code of Federal Regulations and Section 571.2(c)(3).

(w) RP Financial LC, which has prepared the Valuation Appraisal Report as of December ___, 1999 (as amended or supplemented, if so amended or supplemented) (the Appraisal), has advised the Company in writing that it is independent of the Company, the MHC and the Bank within the meaning of the MHC Regulations.

(x) The Company, the MHC and the Bank have timely filed all required federal, state and local tax returns; the Company, the MHC and the Bank have paid all taxes that have become due and payable in respect of such returns, except where permitted to be extended, have made adequate reserves for similar future tax liabilities and no deficiency has been asserted with respect thereto by any taxing authority.

(y) The Bank is in compliance in all material respects with the applicable financial record-keeping and reporting requirements of the Currency and

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Foreign Transactions Reporting Act of 1970, as amended, and the regulations and rules thereunder.

(z) To the knowledge of the Company, the MHC and the Bank, neither the Company, the MHC, the Bank nor employees of the Company, the MHC or the Bank have made any payment of funds of the MHC, the Company or the Bank as a loan for the purchase of the Shares or made any other payment of funds prohibited by law, and no funds have been set aside to be used for any payment prohibited by law.

(aa) Prior to the Offering, neither the Company, the MHC nor the Bank has: (i) issued any securities within the last 18 months (except for notes to evidence other bank loans and reverse repurchase agreements or other liabilities in the ordinary course of business or as described in the Prospectus, and except for any shares issued in connection with the incorporation of the Company); (ii) had any material dealings within the 12 months prior to the date hereof with any member of the NASD, or any person related to or associated with such member, other than discussions and meetings relating to the proposed Offering and routine purchases and sales of United States government and

agency securities; (iii) entered into a financial or management consulting agreement except as contemplated hereunder; and (iv) engaged any intermediary between the Agent and the Company, the MHC and the Bank in connection with the offering of the Shares, and no person is being compensated in any manner for such service. Appropriate arrangements have been made for placing the funds received from subscriptions for Shares in a special interest-bearing account with the Bank until all Shares are sold and paid for, with provision for refund to the purchasers in the event that the Offering is not completed for whatever reason or for delivery to the Company if all Shares are sold.

(bb) The Company, the MHC and the Bank have not relied upon the Agent or its legal counsel or other advisors for any legal, tax or accounting advice in connection with the Offering.

(cc) The Company is not required to be registered under the Investment Company Act of 1940, as amended.

(dd) Any certificates signed by an officer of the Company, the MHC or the Bank pursuant to the conditions of this Agreement and delivered to the Agent or their counsel that refers to this Agreement shall be deemed to be a representation and warranty by the Company, the MHC or the Bank to the Agent as to the matters covered thereby with the same effect as if such representation and warranty were set forth herein.

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Section 5. Representations and Warranties of the Agent.

The Agent represents and warrants to the Company, the MHC and the Bank that:

(i) it is a corporation and is validly existing in good standing under the laws of the State of Ohio and licensed to conduct business in the State of Ohio and it has the full power and authority to provide the services to be furnished to the Bank, the MHC and the Company hereunder.

(ii) The execution and delivery of this Agreement and the consummation of the transactions contemplated hereby have been duly and validly authorized by all necessary action on the part of the Agent, and this Agreement has been duly and validly executed and delivered by the Agent and is a legal, valid and binding agreement of the Agent, enforceable in accordance with its terms.

(iii) Each of the Agent and its employees, agents and representatives who shall perform any of the services hereunder shall be duly authorized and empowered, and shall have all licenses, approvals and permits necessary to perform such services.

(iv) The execution and delivery of this Agreement by the Agent, the consummation of the transactions contemplated hereby and compliance with the terms and provisions hereof will not conflict with, or result in a breach of, any of the terms, provisions or conditions of, or constitute a default (or an event which with notice or lapse of time or both would constitute a default) under, the articles of incorporation of the Agent or any agreement, indenture or other instrument to which the Agent is a party or by which it or its property is bound.

(v) No approval of any regulatory or supervisory or other public authority is required in connection with the Agent's execution and delivery of this Agreement, except as may have been received.

(vi) There is no suit or proceeding or charge or action before or by any court, regulatory authority or government agency or body or, to the knowledge of the Agent, pending or threatened, which might materially adversely affect the Agent's performance of this Agreement.

Section 5.l Covenants of the Company, the MHC and the Bank. The Company, the MHC and the Bank hereby jointly and severally covenant with the Agent as follows:

(a) The Company will not, at any time after the date the Registration Statement is declared effective, file any amendment or supplement to the Registration Statement without providing the Agent and its counsel an opportunity to

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review such amendment or supplement or file any amendment or supplement to which amendment or supplement the Agent or its counsel shall reasonably object.

(b) The MHC and Bank will not, at any time after the MHC Application is approved by the OTS, file any amendment or supplement to such

MHC Application without providing the Agent and its counsel an opportunity to review such amendment or supplement or file any amendment or supplement to which amendment or supplement the Agent or its counsel shall reasonably object.

(c) The Company, the MHC and the Bank will use their best efforts to cause any post-effective amendment to the Registration Statement to be declared effective by the Commission and any post-effective amendment to the MHC Application to be approved by the OTS and will immediately upon receipt of any information concerning the events listed below notify the Agent: (i) when the Registration Statement, as amended, has become effective; (ii) when the MHC Application, as amended has been approved by the OTS; (iii) any comments from the Commission, the OTS or any other governmental entity with respect to the Offering or the transactions contemplated by this Agreement; (iv) of the request by the Commission, the OTS or any other governmental entity for any amendment or supplement to the Registration Statement, the MHC Application or for additional information; (v) of the issuance by the Commission, the OTS or any other governmental entity of any order or other action suspending the Offering or the use of the Registration Statement or the Prospectus or any other filing of the Company, the MHC or the Bank under the MHC Regulations, or other applicable law, or the threat of any such action; (vi) the issuance by the Commission, the OTS or any authority of any stop order suspending the effectiveness of the Registration Statement or of the initiation or threat of initiation or threat of any proceedings for that purpose; or (vii) of the occurrence of any event mentioned in paragraph (g) below. The Company, the MHC and the Bank will make every reasonable effort (i) to prevent the issuance by the Commission, the OTS or any state authority of any such order and, if any such order shall at any time be issued, (ii) to obtain the lifting thereof at the earliest possible time.

(d) The Company, the MHC and the Bank will deliver to the Agent and to its counsel two conformed copies of the Registration Statement and the MHC Application, as originally filed and of each amendment or supplement thereto, including all exhibits. Further, the Company, the MHC and the Bank will deliver such additional copies of the foregoing documents to counsel to the Agent as may be required for any NASD and blue sky filings.

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(e) The Company, the MHC and the Bank will furnish to the Agent, from time to time during the period when the Prospectus (or any later prospectus related to this offering) is required to be delivered under the 1933 Act or the Securities Exchange Act of 1934 (the 1934 Act), such number of copies of such Prospectus (as amended or supplemented) as the Agent may reasonably request for the purposes contemplated by the 1933 Act, the 1933 Act Regulations, the 1934 Act or the rules and regulations promulgated under the 1934 Act (the 1934 Act Regulations). The Company authorizes the Agent to use the Prospectus (as amended or supplemented, if amended or supplemented) in any lawful manner contemplated by the Plan in connection with the sale of the Shares by the Agent.

(f) The Company, the MHC and the Bank will comply with any and all material terms, conditions, requirements and provisions with respect to the Offering, and the transactions contemplated thereby, imposed by the Commission, the OTS or the MHC Regulations, and by the 1933 Act, the 1933 Act Regulations, the 1934 Act and the 1934 Act Regulations to be complied with prior to or subsequent to the Closing Date and when the Prospectus is required to be delivered, and during such time period the Company, the MHC and the Bank will comply, at their own expense, with all material requirements imposed upon them by the Commission, the OTS or the MHC Regulations, and by the 1933 Act, the 1933 Act Regulations, the 1934 Act and the 1934 Act Regulations, including, without limitation, Rule 10b-5 under the 1934 Act, in each case as from time to time in force, so far as necessary to permit the continuance of sales or dealing in the Common Stock during such period in accordance with the provisions hereof and the Prospectus.

(g) If, at any time during the period when the Prospectus relating to the Shares is required to be delivered, any event relating to or affecting the Company, the MHC or the Bank shall occur, as a result of which it is necessary or appropriate, in the opinion of counsel for the Company, the MHC and the Bank or in the reasonable opinion of the Agent's counsel, to amend or supplement the Registration Statement or Prospectus in order to make the Registration Statement or Prospectus not misleading in light of the circumstances existing at the time the Prospectus is delivered to a purchaser, the Company, the MHC and the Bank will immediately so inform the Agent and prepare and file, at their own expense, with the Commission and the OTS and furnish to the Agent a reasonable number of copies of an amendment or amendments of, or a supplement or supplements to, the Registration Statement or Prospectus (in form and substance reasonably satisfactory to the Agent and its counsel after a reasonable time for review) which will amend or supplement the Registration Statement or

Prospectus so that as amended

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or supplemented it will not contain an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in light of the circumstances existing at the time the Prospectus is delivered to a purchaser, not misleading. For the purpose of this Agreement, the Company, the MHC and the Bank each will timely furnish to the Agent such information with respect to itself as the Agent may from time to time reasonably request.

(h) The Company, the MHC and the Bank will take all necessary actions, in cooperating with the Agent, and furnish to whomever the Agent may direct, such information as may be required to qualify or register the Shares for offering and sale by the Company or to exempt such Shares from registration, or to exempt the Company as a broker-dealer and its officers, directors and employees as broker-dealers or agents under the applicable securities or blue sky laws of such jurisdictions in which the Shares are required under the MHC Regulations to be sold or as the Agent and the Company, the MHC and the Bank may reasonably agree upon; provided, however, that the Company shall not be obligated to file any general consent to service of process, to qualify to do business in any jurisdiction in which it is not so qualified, or to register its directors or officers as brokers, dealers, salesmen or agents in any jurisdiction. In each jurisdiction where any of the Shares shall have been qualified or registered as above provided, the Company will make and file such statements and reports in each fiscal period as are or may be required by the laws of such jurisdiction.

(i) The Company, the MHC and the Bank will not sell or issue, contract to sell or otherwise dispose of, for a period of 90 days after the Closing Date, without the Agent's prior written consent, any Common Stock other than the Shares or other than in connection with any plan or arrangement described in the Prospectus, including existing stock benefit plans.

(j) The Company shall register its Common Stock under Section 12(g) of the 1934 Act on or prior to the Closing Date pursuant to the Plan and shall request that such registration be effective prior to or upon completion of the Offering. The Company shall maintain the effectiveness of such registration for not less than three years or such shorter period as may be required by the OTS.

(k) During the period during which the Company's Common Stock is registered under the 1934 Act or for three (3) years from the date hereof, whichever period is greater, the Company will furnish to its shareholders as soon as practicable after the end of each fiscal year an annual report of the Company (including a consolidated balance sheet and statements of consolidated

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income, shareholders' equity and cash flows of the Company and its subsidiaries as at the end of and for such year, certified by independent public accountants in accordance with Regulation S-X under the 1933 Act and the 1934 Act).

(l) During the period of three years from the date hereof, the Company will furnish to the Agent: (i) as soon as practicable after such information is publicly available, a copy of each report of the Company furnished to or filed with the Commission under the 1934 Act or any national securities exchange or system on which any class of securities of the Company is listed or quoted (including, but not limited to, reports on Forms 10-K, 10-Q and 8-K and all proxy statements and annual reports to stockholders), (ii) a copy of each other non-confidential report of the Company mailed to its stockholders or filed with the Commission, the OTS or any other supervisory or regulatory authority or any national securities exchange or system on which any class of securities of the Company is listed or quoted, each press release and material news items and additional documents and information with respect to the Company, MHC or the Bank as the Agent may reasonably request; and (iii) from time to time, such other nonconfidential information concerning the Company, the MHC or the Bank as the Agent may reasonably request.

(m) The Company, the MHC and the Bank will use the net proceeds from the sale of the Shares in the manner set forth in the Prospectus under the caption Use of Proceeds.

(n) Other than as permitted by the MHC Regulations, the HOLA, the 1933 Act, the 1933 Act Regulations, and the laws of any state in which the Shares are registered or qualified for sale or exempt from registration, neither the Company, the MHC nor the Bank will

distribute any prospectus, offering circular or other offering material in connection with the offer and sale of the Shares.

(o) The Company will use its best efforts to (i) encourage and assist a market maker to establish and maintain a market for the Shares and (ii) list and maintain quotation of the Shares on a national or regional securities exchange or on the Nasdaq Stock Market (Nasdaq) effective on or prior to the Closing Date.

(p) The Bank will maintain appropriate arrangements for depositing all funds received from persons mailing subscriptions for or orders to purchase Shares in the Offering on an interest-bearing basis at the rate described in the Prospectus until the Closing Date and satisfaction of all conditions precedent to the release of the Bank's obligation to refund payments received from

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persons subscribing for or ordering Shares in the Offering in accordance with the Plan and as described in the Prospectus or until refunds of such funds have been made to the persons entitled thereto or withdrawal authorizations canceled in accordance with the Plan and as described in the Prospectus. The Bank will maintain such records of all funds received to permit the funds of each subscriber to be separately insured by the FDIC (to the maximum extent allowable) and to enable the Bank to make the appropriate refunds of such funds in the event that such refunds are required to be made in accordance with the Plan and as described in the Prospectus.

(q) The Company, the MHC and the Bank will take such actions and furnish such information as are reasonably requested by the Agent in order for the Agent to ensure compliance with the NASD's Interpretation Relating to Free Riding and Withholding.

(r) Neither the Company, the MHC nor the Bank will amend the Plan without notifying the Agent prior thereto.

(s) The Company shall assist the Agent, if necessary, in connection with the allocation of the Shares in the event of an oversubscription and shall provide the Agent with any information necessary to assist the Company in allocating the Shares in such event and such information shall be accurate and reliable in all material respects.

(t) Prior to the Closing Date, the Company, the MHC and the Bank will inform the Agent of any event or circumstances of which it is aware as a result of which the Registration Statement and/or Prospectus, as then amended or supplemented, would contain an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein not misleading.

(u) Subsequent to the date the Registration Statement is declared effective by the Commission and prior to the Closing Date, except as otherwise may be indicated or contemplated therein or set forth in an amendment or supplement thereto, neither the Company, the MHC nor the Bank will have: (i) issued any securities or incurred any liability or obligation, direct or contingent, for borrowed money, except borrowings from the same or similar sources indicated in the Prospectus in the ordinary course of its business, or (ii) entered into any transaction which is material in light of the business and properties of the Company and the Bank, taken as a whole.

(v) The facts and representations provided to Luse Lehman Gorman Pomerenk & Schick by the Bank, the MHC and the Company and upon which Luse

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Lehman Gorman Pomerenk & Schick will base its opinion under Section 7(c)(1) are and will be truthful, accurate and complete.

Section 6. Payment of Expenses. Whether or not the Offering is completed or the sale of the Shares by the Company is consummated, the Company, the MHC and the Bank jointly and severally agree to pay or reimburse the Agent for the Company, the MHC and the Bank have agreed to reimburse the Agent for its out-of-pocket expenses, and its legal fees (as specified in Section 2) and to indemnify the Agent against certain claims or liabilities, including certain liabilities under the Securities Act, and will contribute to payments the Agent may be required to make in connection with any such claims or liabilities; and the fees set forth under Section 2. In the event the Company is unable to sell a minimum of 708,050 Shares, the Company, the MHC and the Bank shall promptly reimburse the Agent in accordance with Section 2 hereof.

Section 7. Conditions to the Agent's Obligations. The obligations of the Agent hereunder, as to the Shares to be delivered at the Closing Date, are

subject, to the extent not waived in writing by the Agent, to the condition that all representations and warranties of the Company, the MHC and the Bank herein are, at and as of the commencement of the Offering and at and as of the Closing Date, true and correct in all material respects, the condition that the Company, the MHC and the Bank shall have performed all of their obligations hereunder to be performed on or before such dates, and to the following further conditions:

(a) At the Closing Date, the Company, the MHC and the Bank shall have conducted the Offering in all material respects in accordance with the Plan, the MHC Regulations, and all other applicable laws, regulations, decisions and orders, including all terms, conditions, requirements and provisions precedent to the Offering imposed upon them by the OTS.

(b) The Registration Statement shall have been declared effective by the Commission and the MHC Application and MHC Notice shall be approved by the OTS not later than 5:30 p.m. on the date of this Agreement, or with the Agent's consent at a later time and date; and at the Closing Date, no stop order suspending the effectiveness of the Registration Statement shall have been issued under the 1933 Act or proceedings therefore initiated or threatened by the Commission or any state authority, and no order or other action suspending the authorization of the Prospectus or the consummation of the Conversion shall have been issued or proceedings therefore initiated or, to the Company's, the MHC's or the Bank's knowledge, threatened by the Commission, the OTS, the FDIC, or any state authority.

(c) At the Closing Date, the Agent shall have received:

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(1) The favorable opinion, dated as of the Closing Date and addressed to the Agent and for its benefit, of Luse Lehman Gorman Pomerenk & Schick, special counsel for the Company, the MHC and the Bank, in form and substance to the effect that:

(i) The Company has been duly incorporated and is validly existing as a corporation under the laws of the United States.

(ii) The Company has corporate power and authority to own, lease and operate its properties and to conduct its business as described in the Registration Statement and the Prospectus.

(iii) The Bank has been organized and is a validly existing federally chartered savings and loan association in capital stock form of organization, authorized to conduct its business and own its property as described in the Registration Statement and the Prospectus. All of the outstanding capital stock of the Bank upon completion of the Offering will be duly authorized and, upon payment therefor, will be validly issued, fully paid and non-assessable and will be owned by the Company, free and clear of any liens, encumbrances, claims or other restrictions.

(iv) The Bank is a member of the FHLB-Dallas. The deposit accounts of the Bank are insured by the FDIC up to the maximum amount allowed under law and no proceedings for the termination or revocation of such insurance are pending or, to such counsel's Actual Knowledge, threatened; to the extent that such information constitutes matters of law and legal conclusions, has been reviewed by such counsel and is accurately described in all material respects.

(v) The MHC has been duly organized and is validly existing as a federally chartered mutual holding company, duly authorized to conduct its business and own its properties as described in the Registration Statement and Prospectus.

(vi) Upon consummation of the Offering, immediately upon completion thereof subject to compliance with all conditions imposed by the OTS under the terms of the OTS' approval order, in an amount as described in the Prospectus, the authorized, issued and outstanding capital stock of the Company will be within the range set forth in the Prospectus under the caption Capitalization, and no shares of Common Stock have been issued prior to the Closing Date; at the time of the Offering, the Shares subscribed for pursuant to the Offering will have been duly and validly authorized for issuance, and when issued and delivered by the Company pursuant to the Plan against payment of the consideration calculated as set forth in the Plan and

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Prospectus, will be duly and validly issued and fully paid and non-assessable; the issuance of the Shares is not subject to preemptive rights and the terms and provisions of the Shares conform in all material respects to the description thereof

contained in the Prospectus. To such counsel's Actual Knowledge, upon the issuance of the Shares, good title to the Shares will be transferred by the Company to the purchasers thereof against payment therefor, subject to such claims as may be asserted against the purchasers thereof by third-party claimants.

(vii) The execution and delivery of this Agreement and the consummation of the transactions contemplated hereby, have been duly and validly authorized by all necessary action on the part of the Company, the MHC and the Bank; and this Agreement is a valid and binding obligation of the Company, the MHC and the Bank, enforceable in accordance with its terms, except as the enforceability thereof may be limited by (i) bankruptcy, insolvency, reorganization, moratorium, conservatorship, receivership or other similar laws now or hereafter in effect relating to or affecting the enforcement of creditors' rights generally or the rights of creditors of savings institutions, the deposits of which are insured by the FDIC and their holding companies, (ii) general equitable principles, (iii) laws relating to the safety and soundness of insured depository institutions and their holding companies, and (iv) applicable law or public policy with respect to the indemnification and/or contribution provisions contained herein, including without limitation the provisions of Sections 23A and 23B of the Federal Reserve Act and except that no opinion need be expressed as to the effect or availability of equitable remedies or injunctive relief (regardless of whether such enforceability is considered in a proceeding in equity or at law).

(viii) The MHC Application has been approved by the OTS and the Prospectus has been authorized for use by the OTS, and no action has been taken, and to such counsel's Actual Knowledge none is pending or threatened, to revoke any such authorization or approval.

(ix) The Plan has been duly adopted by the required vote of the directors of the Company, the MHC and the Bank, and based upon the certificate of the inspector of election, by the members of the Bank.

(x) Subject to the satisfaction of the conditions to the OTS' approval of the Offering, no further approval, registration, authorization, consent or other order of any federal regulatory agency is required in connection with the execution and delivery of this Agreement, the issuance of the Shares and the consummation of the Offering, except as may be required under the securities or blue sky laws of various jurisdictions (as to which no opinion need be

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rendered) and except as may be required under the rules and regulations of the NASD and/or the NYSE (as to which no opinion need be rendered). To such counsel's Actual Knowledge, the Offering has been consummated in all material respects in accordance with MHC Regulations, except that no opinion is rendered with respect to (a) the Registration Statement or Prospectus, which are covered by other clauses of this opinion, (b) the satisfaction of the post-Offering conditions in the OTS Regulations or in the OTS approvals of the MHC Application, (c) the securities or blue sky laws of various jurisdictions, and (d) the rules and regulations of the NASD.

(xi) The Registration Statement is effective under the 1933 Act, and no stop order suspending the effectiveness has been issued under the 1933 Act or proceedings therefor initiated or, to such counsel's Actual Knowledge, threatened by the Commission.

(xii) At the time the MHC Application, including the Prospectus contained therein, was approved by the OTS, the MHC Application, including the Prospectus contained therein, complied as to form in all material respects with the requirements of the MHC Regulations, federal law and all applicable rules and regulations promulgated thereunder (other than the financial statements, the notes thereto, and other tabular, financial, statistical and appraisal data included therein, as to which no opinion need be rendered).

(xiii) At the time that the Registration Statement became effective, (i) the Registration Statement (as amended or supplemented, if so amended or supplemented) (other than the financial statements, the notes thereto, and other tabular, financial, statistical and appraisal data included therein, as to which no opinion need be rendered), complied as to form in all material respects with the requirements of the 1933 Act and the 1933 Act Regulations, and (ii) the Prospectus (other than the financial statements, the notes thereto, and other tabular, financial, statistical and appraisal data included therein, as to which no opinion need be rendered) complied as to form in all material respects with the requirements of the 1933 Act, the 1933 Act Regulations, the MHC Regulations and federal law.

(xiv) The terms and provisions of the Shares of the Company conform, in all material respects, to the description thereof contained in the Registration Statement and Prospectus, and the form of certificate used to evidence the Shares is in due and proper form.

(xv) There are no legal or governmental proceedings pending or threatened which are required to be disclosed in the Registration Statement and Prospectus, other than those disclosed therein, and to such counsel's

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Actual Knowledge, all pending legal and governmental proceedings to which the Company, the MHC or the Bank is a party or of which any of their property is the subject, which are not described in the Registration Statement and the Prospectus, including ordinary routine litigation incidental to the Company's, the MHC's or the Bank's business, are, considered in the aggregate, not material.

(xvi) To such counsel's Actual Knowledge, there are no material contracts, indentures, mortgages, loan agreements, notes, leases or other instruments required to be described or referred to in the MHC Application, the Registration Statement or the Prospectus or required to be filed as exhibits thereto other than those described or referred to therein or filed as exhibits thereto in the MHC Application, the Registration Statement or the Prospectus. The description in the MHC Application, the Registration Statement and the Prospectus of such documents and exhibits is accurate in all material respects and fairly presents the information required to be shown.

(xvii) To such counsel's Actual Knowledge, the Company, the MHC and the Bank have conducted the Offering, in all material respects, in accordance with all applicable requirements of the Plan and applicable federal law, except that no opinion is rendered with respect to (a) the MHC Application, the Registration Statement or Prospectus, which are covered by other clauses of this opinion, (b) the satisfaction of the post-Offering conditions in the OTS Regulations or in the OTS approval of the MHC Application, (c) the securities or blue sky laws of various jurisdictions, and (d) the rules and regulations of the NASD. The Plan complies in all material respects with all applicable federal laws, rules, regulations, decisions and orders including, but not limited to, the MHC Regulations; no order has been issued by the OTS, the Commission, the FDIC, or any state authority to suspend the Offering or the use of the Prospectus, and no action for such purposes has been instituted or, to such counsel's Actual Knowledge, threatened by the OTS, the Commission, the FDIC, or any state authority and no person has sought to obtain regulatory or judicial review of the final action of the OTS, approving the Plan, the MHC Application or the Prospectus.

(xviii) To such counsel's Actual Knowledge, the Company, the MHC and the Bank have obtained all material licenses, permits and other governmental authorizations currently required for the conduct of their businesses and all such licenses, permits and other governmental authorizations are in full force and effect, and the Company, the MHC and the Bank are in all material respects complying therewith, except where the failure to have such licenses, permits and other governmental authorizations or the failure to be in compliance therewith would not have a material adverse effect on the

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business or operations of the Bank, the MHC and the Company, taken as a whole.

(xix) To such counsel's Actual Knowledge, neither the Company, the MHC nor the Bank is in violation of its articles of incorporation and bylaws or its Charter and bylaws, as appropriate or, to such counsel's Actual Knowledge, in default or violation of any obligation, agreement, covenant or condition contained in any contract, indenture, mortgage, loan agreement, note, lease or other instrument to which it is a party or by which it or its property may be bound, except for such defaults or violations which would not have a material adverse impact on the financial condition or results of operations of the Company, the MHC and the Bank on a consolidated basis; to such counsel's Actual Knowledge, the execution and delivery of this Agreement, the occurrence of the obligations herein set forth and the consummation of the transactions contemplated herein will not conflict with or constitute a breach of, or default under, or result in the creation or imposition of any lien, charge or encumbrance upon any property or assets of the Company, the MHC or the Bank pursuant to any material contract, indenture,

mortgage, loan agreement, note, lease or other instrument to which the Company, the MHC or the Bank is a party or by which any of them may be bound, or to which any of the property or assets of the Company, the MHC or the Bank are subject; and, such action will not result in any violation of the provisions of the certificate of incorporation or bylaws of the Company or the Charter or bylaws of the MHC or the Bank or, to such counsel's Actual Knowledge, result in any violation of any applicable federal law, act, regulation (except that no opinion with respect to the securities and blue sky laws of various jurisdictions or the rules or regulations of the NASD need be rendered) or order or court order, writ, injunction or decree.

(xx) The Company's articles of incorporation and bylaws comply in all material respects with the regulations of the OTS. The Bank's and MHC's charter and bylaws comply in all material respects with the rules and regulations of the OTS.

(xxi) To such counsel's Actual Knowledge, neither the Company, the MHC nor the Bank is in violation of any directive from the OTS or the FDIC to make any material change in the method of conducting its respective business.

(xxii) The information in the Prospectus under the captions Regulation, The Stock Offering, Restrictions on Acquisition of the Alamogordo Financial and Alamogordo Federal and Description of Capital Stock of the Alamogordo Financial, to the extent that such information constitutes

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matters of law, summaries of legal matters, documents or proceedings, or legal conclusions, has been reviewed by such counsel and is correct in all material respects. The discussion of statutes or regulations described or referred to in the Prospectus are accurate summaries and fairly present the information required to be shown. The information in the Prospectus relating to the tax consequences of the stock offering has been reviewed by such counsel and fairly describes the opinions rendered by Luse Lehman Gorman Pomerenk & Schick and _____________________ to the Company, the MHC and the Bank with respect to such matters.

(xxiii) The Company and the MHC have been duly registered and are in good standing as savings and loan holding companies under the HOLA.

(xxiv) In addition, such counsel shall state that during the preparation of the MHC Application, the Registration Statement and the Prospectus, they participated in conferences with certain officers of, the independent public and internal accountants for, and other representatives of the Company, the MHC and the Bank, at which conferences the contents of the MHC Application, the Registration Statement and the Prospectus and related matters were discussed and, while such counsel have not confirmed the accuracy or completeness of or otherwise verified the information contained in the MHC Application, the Registration Statement or the Prospectus, and do not assume any responsibility for such information, based upon such conferences and a review of documents deemed relevant for the purpose of rendering their view (relying as to materiality as to factual matters on certificates of officers and other factual representations by the Company, the MHC and the Bank), nothing has come to their attention that would lead them to believe that the MHC Application, the Registration Statement, the Prospectus, or any amendment or supplement thereto (other than the financial statements, the notes thereto, and other tabular, financial, statistical and appraisal data included therein as to which no view need be rendered) contained an untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading.

In giving such opinion, such counsel may rely as to all matters of fact on certificates of officers or directors of the Company, the MHC and the Bank and certificates of public officials. The opinion of Luse Lehman Gorman Pomerenk & Schick shall be governed by the Legal Opinion Accord (Accord) of the American Bar Association Section of Business Law (1991). The term Actual Knowledge as used herein shall have the meaning set forth in the Accord. For purposes of such opinion, no proceedings shall be deemed to be pending, no order or stop order shall be deemed to be issued, and no action shall be deemed to be instituted unless, in each case, a director or executive officer of the Company, the MHC or the Bank shall have received a copy of such

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proceedings, order, stop order or action. In addition, such opinion may be limited to present statutes, regulations and judicial interpretations and to

facts as they presently exist; in rendering such opinion, such counsel need assume no obligation to revise or supplement it should the present laws be changed by legislative or regulatory action, judicial decision or otherwise; and such counsel need express no view, opinion or belief with respect to whether any proposed or pending legislation, if enacted, or any proposed or pending regulations or policy statements issued by any regulatory agency, whether or not promulgated pursuant to any such legislation, would affect the validity of the Offering or any aspect thereof. Such counsel may assume that any agreement is the valid and binding obligation of any parties to such agreement other than the Company, the MHC or the Bank.

The favorable opinion, dated as of the Closing Date and addressed to the Agent and for their benefit, of the Bank's local counsel, in form and substance to the effect that, to the best of such counsel's knowledge, (i) the Company, the MHC and the Bank have good and marketable title to all properties and assets which are material to the business of the Company, the MHC and the Bank and to those properties and assets described in the Registration Statement and Prospectus, as owned by them, free and clear of all liens, charges, encumbrances or restrictions, except such as are described in the Registration Statement and Prospectus, or are not material in relation to the business of the Company, the MHC and the Bank considered as one enterprise; (ii) all of the leases and subleases material to the business of the Company, the MHC and the Bank under which the Company, the MHC and the Bank hold properties, as described in the Registration Statement and Prospectus, are in full force and effect; and (iii) the Bank is duly qualified as a foreign corporation to transact business and is in good standing in each jurisdiction in which its ownership of property or leasing of property or the conduct of its business requires such qualification, unless the failure to be so qualified in one or more of such jurisdictions would not have a material adverse effect on the condition, financial or otherwise, or the business, operations or income of the Bank.

(d) At the Closing Date, the Agent shall have received the favorable opinion, dated as of the Closing Date, of Silver, Freedman & Taff, L.L.P., the Agent's counsel, with respect to such matters as the Agent may reasonably require. Such opinion may rely upon the opinions of counsel to the Company, the MHC and the Bank, and as to matters of fact, upon certificates of officers and directors of the Company, the MHC and the Bank delivered pursuant hereto or as such counsel shall reasonably request.

(e) At the Closing Date, the Agent shall receive a certificate of the Chief Executive Officer and the Principal Financial and/or Accounting Officer of the Company, the MHC and the Bank in form and substance reasonably satisfactory to the Agent's Counsel, dated as of such Closing Date, to the effect that: (i) they have carefully reviewed the Prospectus and, in their opinion, at the time the Prospectus became authorized for final use, the Prospectus did not contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading; (ii) since

28

the date the Prospectus became authorized for final use, no event has occurred which should have been set forth in an amendment or supplement to the Prospectus which has not been so set forth, including specifically, but without limitation, any material adverse change in the condition, financial or otherwise, or in the earnings, capital, properties or business of the Company, the MHC or the Bank, and the conditions set forth in this Section 7 have been satisfied; (iii) since the respective dates as of which information is given in the Registration Statement and the Prospectus, there has been no material adverse change in the condition, financial or otherwise, or in the earnings, capital or properties of the Company, the MHC or the Bank, independently, or of the Company, the MHC and the Bank, considered as one enterprise, whether or not arising in the ordinary course of business; (iv) the representations and warranties in Section 4 are true and correct with the same force and effect as though expressly made at and as of the Closing Date; (v) the Company, MHC and the Bank have complied in all material respects with all agreements and satisfied all conditions on their part to be performed or satisfied at or prior to the Closing Date and will comply in all material respects with all obligations to be satisfied by them after the Offering; (vi) no stop order suspending the effectiveness of the Registration Statement has been initiated or, to the best knowledge of the Company, the MHC or the Bank, threatened by the Commission or any state authority; (vii) no order suspending the Offering or the effectiveness of the Prospectus has been issued and no proceedings for that purpose are pending or, to the best knowledge of the Company, the MHC or the Bank, threatened by the OTS, the Commission, the FDIC, or any state authority; and (viii) to the best knowledge of the Company, the MHC or the Bank, no person has sought to obtain review of the final action of the OTS approving the Plan.

(f) Prior to and at the Closing Date: (i) in the reasonable opinion of the Agent, there shall have been no material adverse change in the condition, financial or otherwise, or in the earnings or business of the Company, the MHC or the Bank independently, or of the Company, the MHC and the Bank, considered as one enterprise,

from that as of the latest dates as of which such condition is set forth in the Prospectus other than transactions referred to or contemplated therein; (ii) the Company, the MHC or the Bank shall not have received from the OTS or the FDIC any direction (oral or written) to make any material change in the method of conducting their business with which it has not complied (which direction, if any, shall have been disclosed to the Agent) or which materially and adversely would affect the business, operations or financial condition or income of the Company, the MHC and the Bank taken as a whole; (iii) the Company, the MHC and the Bank shall not have been in default (nor shall an event have occurred which, with notice or lapse of time or both, would constitute a default) under any provision of

29

any agreement or instrument relating to any outstanding indebtedness; (iv) no action, suit or proceeding, at law or in equity or before or by any federal or state commission, board or other administrative agency, shall be pending or, to the knowledge of the Company, the MHC or the Bank, threatened against the Company, the MHC or the Bank or affecting any of their properties wherein an unfavorable decision, ruling or finding would materially and adversely affect the business, operations, financial condition or income of the Company, the MHC and the Bank taken as a whole; and (v) the Shares have been qualified or registered for offering and sale or exempted therefrom under the securities or blue sky laws of the jurisdictions as the Agent shall have reasonably requested and as agreed to by the Company, the MHC and the Bank.

(g) Concurrently with the execution of this Agreement, the Agent shall receive a letter from The Accounting & Consulting Group L.L.P. dated as of the date of the Prospectus and addressed to the Agent: (i) confirming that The Accounting & Consulting Group L.L.P. is a firm of independent public accounts within the meaning of Rule 101 of the Code of Professional Ethics of the American Institute of Certified Public Accountants and applicable regulations of the OTS and stating in effect that in its opinion the consolidated financial statements, schedules and related notes of the Bank as of September 30, 1999 and 1998 and for each of the three years in the period ended September 30, 1998, as are included in the Prospectus and covered by their opinion included therein, comply as to form in all material respects with the applicable accounting requirements and related published rules and regulations of the OTS and the 1933 Act; (ii) stating in effect that, on the basis of certain agreed upon procedures (but not an audit in accordance with generally accepted auditing standards) consisting of a reading of the latest available unaudited interim consolidated financial statements of the Bank prepared by the Bank, a reading of the minutes of the meetings of the Board of Directors and members of the Bank and consultations with officers of the Bank responsible for financial and accounting matters, nothing came to their attention which caused them to believe that: (A) the unaudited financial statements included in the Prospectus are not in conformity with the 1933 Act, applicable accounting requirements of the OTS and generally accepted accounting principles applied on a basis substantially consistent with that of the audited financial statements included in the Prospectus; or (b) during the period from the date of the latest unaudited consolidated financial statements included in the Prospectus to a specified date not more than three business days prior to the date of the Prospectus, except as has been described in the Prospectus, there was any increase in borrowings, other than normal deposit fluctuations, by the Bank; or (c) there was any decrease in the consolidated net assets of the Bank at the date of such letter as compared with amounts

30

shown in the latest unaudited consolidated statement of condition included in the Prospectus; and (iii) stating that, in addition to the audit referred to in their opinion included in the Prospectus and the performance of the procedures referred to in clause (ii) of this subsection (f), they have compared with the general accounting records of the Bank, which are subject to the internal controls of the Bank, the accounting system and other data prepared by the Bank, directly from such accounting records, to the extent specified in such letter, such amounts and/or percentages set forth in the Prospectus as the Agent may reasonably request; and they have reported on the results of such comparisons.

(h) At the Closing Date, the Agent shall receive a letter dated the Closing Date, addressed to the Agent, confirming the statements made by The Accounting & Consulting Group L.L.P. in the letter delivered by it pursuant to subsection (f) of this Section 7, the specified date referred to in clause (ii) of subsection (f)

thereof to be a date specified in such letter, which shall not be more than three business days prior to the Closing Date.

(i) At the Closing Date, the Agent shall receive a letter from RP Financial LC, dated the date thereof and addressed to counsel for the Agent (i) confirming that said firm is independent of the Company, the MHC and the Bank and is experienced and expert in the area of corporate appraisals within the meaning of Title 12 of the Code of Federal Regulations, Section 563b.7(f)(1)(i), (ii) stating in effect that the Appraisal prepared by such firm complies in all material respects with the applicable requirements of Title 12 of the Code of Federal Regulations, and (iii) further stating that their opinion of the aggregate pro forma market value of the Company, the MHC and the Bank expressed in their Appraisal dated as of December __, 1999, and most recently updated, remains in effect.

(j) The Company, the MHC and the Bank shall not have sustained since the date of the latest financial statements included in the Prospectus any material loss or interference with its business from fire, explosion, flood or other calamity, whether or not covered by insurance, or from any labor dispute or court or governmental action, order or decree, otherwise than as set forth or contemplated in the Registration Statement and Prospectus and since the respective dates as of which information is given in the Registration Statement and Prospectus, there shall not have been any change in the long- term debt of the Company, the MHC or the Bank other than debt incurred in relation to the purchase of Shares by the Bank's Eligible Plans, or any change, or any development involving a prospective change, in or affecting the general affairs, management, financial position, stockholders' equity or results of operations of the Company or the Bank, otherwise than as set forth or

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contemplated in the Registration Statement and Prospectus, the effect of which, in any such case described above, is in the Agent's reasonable judgment sufficiently material and adverse as to make it impracticable or inadvisable to proceed with the Subscription Offering or the delivery of the Shares on the terms and in the manner contemplated in the Prospectus.

(k) At or prior to the Closing Date, the Agent shall receive: (i) a copy of the letters from the OTS approving the MHC Application and authorizing the use of the Prospectus; (ii) a copy of the order from the Commission declaring the Registration Statement effective; (iii) certificate of good standing from the OTS evidencing the good standing of the Company; (iv) a certificate from the FDIC evidencing the Bank's insurance of accounts; (v) a certificate of the FHLB-Dallas evidencing the Bank's membership thereof; (vi) a certificate from the OTS evidencing the Company's and the MHC's standing as registered savings and loan holding companies; (vii) a copy of the Bank's federal stock charter; and (viii) a copy of the Company's federal charter; and (viii) a copy of the MHC's federal charter.

(l) Subsequent to the date hereof, there shall not have occurred any of the following: (i) a suspension or limitation in trading in securities generally on the New York Stock Exchange or in the over-the-counter market, or quotations halted generally on the Nasdaq, or minimum or maximum prices for trading have been fixed, or maximum ranges for prices for securities have been required by either of such exchanges or the NASD or by order of the Commission or any other governmental authority; (ii) a general moratorium on the operations of commercial banks, federal savings institutions or a general moratorium on the withdrawal of deposits from commercial banks or federal savings institutions declared by federal authorities; (iii) the engagement by the United States in hostilities which have resulted in the declaration, on or after the date hereof, of a national emergency or war; or (iv) a material decline in the price of equity or debt securities if the effect of such a declaration or decline, in the Agent's reasonable judgement, makes it impracticable or inadvisable to proceed with the Offering or the delivery of the shares on the terms and in the manner contemplated in the Registration Statement and the Prospectus.

(m) At or prior to the Closing Date, counsel to the Agent shall have been furnished with such documents and opinions as they may reasonably require for the purpose of enabling them to pass upon the sale of the Shares as herein contemplated and related proceedings or in order to evidence the occurrence or completeness of any of the representations or warranties, or the fulfillment of any of the conditions, herein contained; and all proceedings taken by the Company, the MHC or the Bank in connection with the Offering and the sale

32

of the Shares as herein contemplated shall be satisfactory in form and substance to the Agent and its counsel.

Section 8. Indemnification.

(a) The Company, the MHC and the Bank jointly and severally agree to indemnify and hold harmless the Agent, its respective officers and directors, employees and agents, and each person, if any, who controls the Agent within the meaning of Section 15 of the 1933 Act or Section 20(a) of the 1934 Act, against any and all loss, liability, claim, damage or expense whatsoever (including but not limited to settlement expenses), joint or several, that the Agent or any of them may suffer or to which the Agent and any such persons may become subject under all applicable federal or state laws or otherwise, and to promptly reimburse the Agent and any such persons upon written demand for any expense (including reasonable fees and disbursements of counsel) incurred by the Agent or any of them in connection with investigating, preparing or defending any actions, proceedings or claims (whether commenced or threatened) to the extent such losses, claims, damages, liabilities or actions: (i) arise out of or are based upon any untrue statement or alleged untrue statement of a material fact contained in the Registration Statement (or any amendment or supplement thereto), preliminary or final Prospectus (or any amendment or supplement thereto), the MHC Application (or any amendment or supplement thereto), or any instrument or document executed by the Company, the MHC or the Bank or based upon written information supplied by the Company, the MHC or the Bank filed in any state or jurisdiction to register or qualify any or all of the Shares or to claim an exemption therefrom, or provided to any state or jurisdiction to exempt the Company as a broker-dealer or its officers, directors and employees as broker-dealers or agent, under the securities laws thereof (collectively, the Blue Sky Application), or any document, advertisement, oral statement or communication (Sales Information) prepared, made or executed by or on behalf of the Company, the MHC or the Bank with their consent or based upon written or oral information furnished by or on behalf of the Company, the MHC or the Bank, whether or not filed in any jurisdiction, in order to qualify or register the Shares or to claim an exemption therefrom under the securities laws thereof; (ii) arise out of or are based upon the omission or alleged omission to state in any of the foregoing documents or information, a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading; or (iii) arise from any theory of liability whatsoever relating to or arising from or based upon the Registration Statement (or any amendment or supplement thereto), preliminary or final Prospectus (or any amendment or supplement thereto), the MHC Application

33

(or any amendment or supplement thereto), any Blue Sky Application or Sales Information or other documentation distributed in connection with the Offering; provided, however, that no indemnification is required under this paragraph (a) to the extent such losses, claims, damages, liabilities or actions arise out of or are based upon any untrue material statement or alleged untrue material statement in, or material omission or alleged material omission from, the Registration Statement (or any amendment or supplement thereto), preliminary or final Prospectus (or any amendment or supplement thereto), the MHC Application (or any amendment or supplement thereto), any Blue Sky Application or Sales Information made in reliance upon and in conformity with information furnished in writing to the Company, the MHC or the Bank by the Agent or its counsel regarding the Agent provided, that it is agreed and understood that the only information furnished in writing to the Company, the MHC or the Bank by the Agent regarding the Agent is set forth in the Prospectus; and, provided further, that such indemnification shall be to the extent permitted by the Commissioner, the OTS, the FDIC and the Board of Governors of the Federal Reserve. The indemnification provided for in this paragraph (a) shall not be applicable with respect to any loss, liability, claim, damage, or expense whatsoever if it is determined by final judgment of a court having jurisdiction over the matter that such loss, liability, claim, damage or expense was primarily a result of the Agent's willful misconduct or gross negligence.

(b) The Agent agrees to indemnify and hold harmless the Company, the MHC and the Bank, their directors and officers and each person, if any, who controls the Company, the MHC or the Bank within the meaning of Section 15 of the 1933 Act or Section 20(a) of the 1934 Act against any and all loss, liability, claim, damage or expense whatsoever (including but not limited to settlement expenses), joint or several, which they, or any of them, may suffer or to which they, or any of them may become subject under all applicable federal and state laws or otherwise, and to promptly reimburse the Company, the MHC, the Bank, and any such persons upon written demand for any expenses (including

reasonable fees and disbursements of counsel) incurred by them, or any of them, in connection with investigating, preparing or defending any actions, proceedings or claims (whether commenced or threatened) to the extent such losses, claims, damages, liabilities or actions: (i) arise out of or are based upon any untrue statement or alleged untrue statement of a material fact contained in the Registration Statement (or any amendment or supplement thereto), the MHC Application (or any amendment or supplement thereto), the preliminary or final Prospectus (or any amendment or supplement thereto), any Blue Sky Application or Sales Information, (ii) are based upon the omission or alleged omission to state in any of the foregoing documents a material fact required to be stated therein

34

or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, or (iii) arise from any theory of liability whatsoever relating to or arising from or based upon the Registration Statement (or any amendment or supplement thereto), preliminary or final Prospectus (or any amendment or supplement thereto), the MHC Application (or any amendment or supplement thereto),or any Blue Sky Application or Sales Information or other documentation distributed in connection with the Offering; provided, however, that the Agent's obligations under this Section 8(b) shall exist only if and only to the extent (i) that such untrue statement or alleged untrue statement was made in, or such material fact or alleged material fact was omitted from, the Registration Statement (or any amendment or supplement thereto), the preliminary or final Prospectus (or any amendment or supplement thereto), the MHC Application (or any amendment or supplement thereto), or any Blue Sky Application or Sales Information in reliance upon and in conformity with information furnished in writing to the Company, the MHC or the Bank by the Agent or its counsel regarding the Agent, provided, that it is agreed and understood that the only information furnished in writing to the Company, the MHC or the Bank by the Agent regarding the Agent is set forth in the Prospectus. The indemnification provided for in this Section 8 (b) shall not be applicable with respect to any loss, liability, claim, damage, or expense whatsoever if it is determined by final judgment of a court having jurisdiction over the matter that such loss, liability, claim, damage or expense was primarily a result of the Company's, the MHC's or the Bank's willful misconduct or gross negligence.

(c) Each indemnified party shall give prompt written notice to each indemnifying party of any action, proceeding, claim (whether commenced or threatened), or suit instituted against it in respect of which indemnity may be sought hereunder, but failure to so notify an indemnifying party shall not relieve it from any liability which it may have on account of this Section 8 or otherwise. An indemnifying party may participate at its own expense in the defense of such action. In addition, if it so elects within a reasonable time after receipt of such notice, an indemnifying party, jointly with any other indemnifying parties receiving such notice, may assume defense of such action with counsel chosen by it and approved by the indemnified parties that are defendants in such action, unless such indemnified parties reasonably object to such assumption on the ground that there may be legal defenses available to them that are different from or in addition to those available to such indemnifying party. If an indemnifying party assumes the defense of such action, the indemnifying parties shall not be liable for any fees and expenses of counsel for the indemnified parties incurred thereafter in connection with such action, proceeding or claim, other than reasonable costs

35

of investigation. In no event shall the indemnifying parties be liable for the fees and expenses of more than one separate firm of attorneys (and any special counsel that said firm may retain) for each indemnified party in connection with any one action, proceeding or claim or separate but similar or related actions, proceedings or claims in the same jurisdiction arising out of the same general allegations or circumstances.

(d) The agreements contained in this Section 8 and in Section 9 hereof and the representations and warranties of the Company, the MHC and the Bank set forth in this Agreement shall remain operative and in full force and effect regardless of: (i) any investigation made by or on behalf of agent or their officers, directors or controlling persons, agent or employees or by or on behalf of the Company, the MHC or the Bank or any officers, directors or controlling persons, agent or employees of the Company, the MHC or the Bank; (ii) delivery of and payment hereunder for the Shares; or (iii) any termination of this

Agreement.

Section 9. Contribution. In order to provide for just and equitable contribution in circumstances in which the indemnification provided for in Section 8 is due in accordance with its terms but is for any reason held by a court to be unavailable from the Company, the MHC, the Bank or the Agent, the Company, the MHC, the Bank and the Agent shall contribute to the aggregate losses, claims, damages and liabilities (including any investigation, legal and other expenses incurred in connection with, and any amount paid in settlement of, any action, suit or proceeding of any claims asserted, but after deducting any contribution received by the Company, the MHC, the Bank or the Agent from persons other than the other party thereto, who may also be liable for contribution) in such proportion so that the Agent is responsible for that portion represented by the percentage that the fees paid to the Agent pursuant to Section 2 of this Agreement (not including expenses) bears to the gross proceeds received by the Company from the sale of the Shares in the Offering, and the Company, the MHC and the Bank shall be responsible for the balance. If, however, the allocation provided above is not permitted by applicable law or if the indemnified party failed to give the notice required under Section 8 above, then each indemnifying party shall contribute to such amount paid or payable by such indemnified party in such proportion as is appropriate to reflect not only such relative fault of the Company, the MHC and the Bank on the one hand and the Agent on the other in connection with the statements or omissions which resulted in such losses, claims, damages or liabilities (or actions, proceedings or claims in respect thereto), but also the relative benefits received by the Company, the MHC and the Bank on the one hand and the Agent on the other from the Offering (before deducting expenses). The relative fault shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Company, the MHC and/or the Bank on the one hand or the Agent on the other and the parties' relative intent, good faith, knowledge, access to information and opportunity to correct or prevent such statement or omission. The Company, the MHC, the Bank and the Agent agree that it would not be just and equitable if contribution pursuant to this Section 9 were determined by pro-rata allocation or by any other

36

method of allocation which does not take into account the equitable considerations referred to above in this Section 9. The amount paid or payable by an indemnified party as a result of the losses, claims, damages or liabilities (or actions, proceedings or claims in respect thereof) referred to above in this Section 9 shall be deemed to include any legal or other expenses reasonably incurred by such indemnified party in connection with investigating or defending any such action, proceeding or claim. It is expressly agreed that the Agent shall not be liable for any loss, liability, claim, damage or expense or be required to contribute any amount which in the aggregate exceeds the amount paid (excluding reimbursable expenses) to the Agent under this Agreement. It is understood that the above stated limitation on the Agent's liability is essential to the Agent and that the Agent would not have entered into this Agreement if such limitation had not been agreed to by the parties to this Agreement. No person found guilty of any fraudulent misrepresentation (within the meaning of Section 11(f) of the 1933 Act) shall be entitled to contribution from any person who was not found guilty of such fraudulent misrepresentation. The obligations of the Company, the MHC and the Bank under this Section 9 and under Section 8 shall be in addition to any liability which the Company and the Bank may otherwise have. For purposes of this Section 9, each of the Agent's, the Company's, the MHC or the Bank's officers and directors and each person, if any, who controls the Agent or the Company or the MHC or the Bank within the meaning of the 1933 Act and the 1934 Act shall have the same rights to contribution as the Agent, the Company, the MHC or the Bank. Any party entitled to contribution, promptly after receipt of notice of commencement of any action, suit, claim or proceeding against such party in respect of which a claim for contribution may be made against another party under this Section 9, will notify such party from whom contribution may be sought, but the omission to so notify such party shall not relieve the party from whom contribution may be sought from any other obligation it may have hereunder or otherwise than under this Section 9.

Section 10. Survival of Agreements, Representations and Indemnities. The respective indemnities of the Company, the MHC, the Bank and the Agent and the representations and warranties and other statements of the Company, the MHC, the Bank and the Agent set forth in or made pursuant to this Agreement shall remain in full force and effect, regardless of any termination or cancellation of this Agreement or any investigation made by or on behalf of the Agent, the Company, the MHC, the Bank or any controlling person referred to in Section 8 hereof, and shall survive the issuance of the Shares, and any successor or assign of the Agent, the Company, the MHC, the Bank, and any such controlling person shall be entitled to the benefit of the respective agreements, indemnities, warranties and representations.

Section 11. Termination. The Agent may terminate this Agreement by giving the notice indicated below in this Section 11 at any time after this Agreement becomes effective as follows:

(a) In the event the Company fails to sell the required minimum number of the Shares by _________, 2000, and in accordance with the provisions of the Plan or as required by the MHC Regulations, and applicable law, this Agreement shall terminate upon refund by the Company to each person who has subscribed for or ordered any of the Shares the full amount which it may

37

have received from such person, together with interest as provided in the Prospectus, and no party to this Agreement shall have any obligation to the other hereunder, except for payment by the Company, the MHC and/or the Bank as set forth in Sections 2(a), 6, 8 and 9 hereof.

(b) If any of the conditions specified in Section 7 shall not have been fulfilled when and as required by this Agreement unless waived in writing, or by the Closing Date, this Agreement and all of the Agent's obligations hereunder may be cancelled by the Agent by notifying the Company, the MHC and the Bank of such cancellation in writing or by telegram at any time at or prior to the Closing Date, and any such cancellation shall be without liability of any party to any other party except as otherwise provided in Sections 2(a), 6, 8 and 9 hereof.

(c) If the Agent elects to terminate this Agreement as provided in this Section, the Company, the MHC and the Bank shall be notified promptly by telephone or telegram, confirmed by letter.

The Company, the MHC and the Bank may terminate this Agreement in the event the Agent is in material breach of the representations and warranties or covenants contained in Section 5 and such breach has not been cured after the Company, the MHC and the Bank have provided the Agent with notice of such breach.

This Agreement may also be terminated by mutual written consent of the parties hereto.

Section 12. Notices. All communications hereunder, except as herein otherwise specifically provided, shall be mailed in writing and if sent to the Agent shall be mailed, delivered or telegraphed and confirmed to Charles Webb & Company, a Division of Keefe, Bruyette & Woods, Inc., 211 Bradenton, Dublin, Ohio 43017-3514, Attention: Patricia A. McJoynt, Executive Vice President (with a copy to Silver, Freedman & Taff, L.L.P., Attention: Martin L. Meyrowitz, P.C.) and, if sent to the Company, the MHC and the Bank, shall be mailed, delivered or telegraphed and confirmed to the Company, the MHC and the Bank at 500 10th Street, Alamogordo, New Mexico 88310-0690, Attention: Miles Ledgewood, President (with a copy to Luse Lehman Gorman Pomerenk & Schick, Attention: Eric Luse).

Section 13. Parties. The Company, the MHC and the Bank shall be entitled to act and rely on any request, notice, consent, waiver or agreement purportedly given on behalf of the Agent when the same shall have been given by the undersigned. The Agent shall be entitled to act and rely on any request, notice, consent, waiver or agreement purportedly given on behalf of the Company, the MHC or the Bank, when the same shall have been given by the undersigned or any other officer of the Company, the MHC or the Bank. This Agreement shall inure solely to the benefit of, and shall be binding upon, the Agent, the Company, the MHC, the Bank, and their respective successors and assigns, and no other person shall have or be construed to have any legal or equitable right, remedy

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or claim under or in respect of or by virtue of this Agreement or any provision herein contained. It is understood and agreed that this Agreement is the exclusive agreement among the parties hereto, and supersedes any prior agreement among the parties and may not be varied except in writing signed by all the parties.

Section 14. Closing. The closing for the sale of the Shares shall take place on the Closing Date at such location as mutually agreed upon by the Agent and the Company, the MHC and the Bank. At the closing, the Company, the MHC and the Bank shall deliver to the Agent in next day funds the commissions, fees and expenses due and owing to the Agent as set forth in Sections 2 and 6 hereof and the opinions and certificates required hereby and other documents deemed reasonably necessary by the Agent shall be executed and delivered to effect the sale of the Shares as contemplated hereby and pursuant to the terms of the Prospectus.

Section 15. Partial Invalidity. In the event that any term, provision or covenant herein or the application thereof to any circumstance or situation shall be invalid or unenforceable, in whole or in part, the remainder hereof and the application of said term, provision or covenant to any other circumstances or situation shall not be affected thereby, and each term, provision or covenant herein shall be valid and enforceable to the full extent permitted by law.

Section 16. Construction. This Agreement shall be construed in accordance with the laws of the State of Kansas.

Section 17. Counterparts. This Agreement may be executed in separate counterparts, each of which so executed and delivered shall be an original, but all of which together shall constitute but one and the same instrument.

If the foregoing correctly sets forth the arrangement among the Company, the MHC, the Bank and the Agent, please indicate acceptance thereof in

the space provided below for that purpose, whereupon this letter and the Agent's acceptance shall constitute a binding agreement.

Section 18. Entire Agreement. This Agreement, including schedules and exhibits hereto, which are integral parts hereof and incorporated as though set forth in full, constitutes the entire agreement between the parties pertaining to the subject matter hereof superseding any and all prior or contemporaneous oral or prior written agreements, proposals, letters of intent and understandings, and cannot be modified, changed, waived or terminated except by a writing which expressly states that it is an amendment, modification or waiver, refers to this Agreement and is signed by the party

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to be charged. No course of conduct or dealing shall be construed to modify, amend or otherwise affect any of the provisions hereof.

Very truly yours,

ALAMOGORDO FINANCIAL ALAMOGORDO FEDERAL SAVINGS AND CORPORATION LOAN ASSOCIATION

By Its Authorized By Its Authorized Representative: Representative:

- ---------------------------- --------------------------------- Miles Ledgerwood Miles Ledgerwood Chairman Chairman

AF MUTUAL HOLDING COMPANY

By Its Authorized Representative:

- ---------------------------- Miles Ledgerwood Chairman

Accepted as of the date first above written

Charles Webb & Company, a Division Keefe, Bruyette & Woods, Inc.

By Its Authorized Representative:

- ----------------------------- Patricia A. McJoynt Executive Vice President

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Question: Highlight the parts (if any) of this contract related to Insurance that should be reviewed by a lawyer. Details: Is there a requirement for insurance that must be maintained by one party for the benefit of the counterparty?

A: The deposit accounts of the Bank are insured by the FDIC up to the applicable limits; and no proceedings for the termination or revocation of such insurance are pending or, to the best knowledge of the Company or the Bank, threatened.
****
Q: EXHIBIT 4.5

MANUFACTURING OUTSOURCING AGREEMENT

This Manufacturing Outsourcing Agreement (The AGREEMENT) is entered into on January 21st, 2002, by and between Nice Systems Ltd., an Israeli registered corporation no. 52-0036872 having its place of business at 8 Hapnina Street, P.O.B 690, Ra'anana 43107, Israel, (NICE) and Flextronics Israel Ltd., an Israeli registered corporation no. 51-2933045, having its place of business at 1 Hatasiya Str., Ramat Gabriel Industrial Zone, Migdal Haemek 23108, P.O.Box 867, Israel (the CONTRACTOR). NICE and Contractor are collectively referred to as the Parties.

RECITALS

WHEREAS NICE issued a request for information (RFI) version A.2 dated June 17th, 2001 to a number of manufacturers seeking to provide NICE with certain local Manufacturing Outsourcing Services (as defined hereinafter) for the production, testing and delivery in world class quality and capability of NICE' Products, on a turnkey basis, to acquire from NICE inventory related to the operations to be outsourced, and to contract with certain of the contractors performing portions of the remainder of work or to accept assignment of such contracts, all as detailed herein;

WHEREAS the RFI was followed by a request for proposal including a detailed Statement of Work including Exhibits dated 13.8.01 (the RFP);

WHEREAS the Contractor submitted a proposal in response to the RFI and RFP (together the PROPOSAL or the CONTRACTOR'S PROPOSAL);

WHEREAS the bidding process resulted in the selection of Contractor, which represented that it possessed the necessary skills, staffing, experience, resources, and capabilities to provide those certain Manufacturing Outsourcing Services detailed herein in world class quality, capability and manner as set forth herein;

WHEREAS the Parties have completed the pre-contract due diligence, and now wish to contract for the provision of the Manufacturing Outsourcing Services;

NOW THEREFORE, FOR AND IN CONSIDERATION OF THE AGREEMENTS OF THE PARTIES SET FORTH BELOW, NICE AND CONTRACTOR AGREE AS FOLLOWS:

A. DEFINITIONS. The following terms shall have the meanings set forth below:

(i) RFI - shall have the meaning ascribed in the preamble above.

(ii) RFP - shall have the meaning ascribed in the preamble above.

(iii) SOW - Statement of Work document attached to the RFP and forming an integral part thereof including its Exhibits.

(iv) CONTRACTOR'S PROPOSAL or PROPOSAL - shall have the meaning ascribed in the preamble above. It is clarified that for the purpose of Contractor's Proposal in response to the RFI, Contractor hereby declares that such Proposal was valid and correct at the date submitted in all material aspects which are relevant to NICE' decision to choose Contractor as the Manufacturing Outsourcing Services supplier.

(v) PRODUCTS - Digital recording products as defined in APPENDIX A and further detailed in the PDM System, and as shall be amended from time to time by NICE and manufactured by Contractor in accordance herewith.

(vi) MANUFACTURING OUTSOURCING SERVICES - Certain turnkey based purchasing, manufacturing, testing, configuration and delivery services for the Products all as detailed in the Agreement and its Appendices and Exhibits, including but not limited to: purchase of the Product's components which are not supplied by NICE, assembly and production of the Products subject to supervision, control and planning by NICE, execution of Measurements and Procedures, response times, providing infrastructure and resources, allocation of the required manpower, use of the Non Generic Equipment, execution of engineering and integration process, Engineering Changes, integration of NICE Software, implementation of Control and Planning, Engineering Changes and Change Order procedures, packaging requirements, dismantling and disassembly of Products procedure, spare part mechanism, quality control requirements, logistics management including inventory management, adjusting and meeting forecasts, components purchasing procedure, supplies and shipment schedules, issuing orders procedure, preparing export shipments, all of world class quality and capability and as provided herein, on a turnkey basis, and acquisition from NICE of certain inventory related to the operations to be outsourced, and to contract with certain of the contractors supplying components and/or performing portions of the remainder of work or to accept assignment of such contracts, all as detailed herein.

(vii) NICE SOFTWARE - Dedicated software developed by NICE and/or for NICE, in which all Intellectual Property (as defined below) is owned

by NICE.

(viii) PERSONNEL - Contractors' employees, subcontractors, subcontractor's employees and any other person acting on behalf of Contractor.

(ix) AFFILIATE - A corporation, partnership or other business entity which controls, is controlled by, or is under common control of a Party. For the purposes hereof, CONTROL shall mean the holding of more than 50% of the voting rights in the entity in question.

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(x) CUSTOMER/S - NICE distributors, resellers, VAR's (value added resellers), OEM's and similar business partners and/or end-users, which purchase the Products.

(xi) NICE PROPRIETARY INFORMATION - Any and all data and information disclosed by NICE to the Contractor during the term of this Agreement in any form, whether verbally, in writing or in machine readable form or in magnetic media, relating to the business, manufacturing, know-how, Products, NICE Software, any other products, items, components and affairs of NICE including its Affiliates, and including without limitation - documents, prototypes, samples and the NICE' plants and equipment, Products, certain proprietary and confidential information concerning NICE' past, present and future research, development and business activities and the results therefrom, including but not limited to digital recording solutions, applications and services technology. Proprietary Information may also include information disclosed to NICE by third parties. Proprietary Information shall not include data and information which: (i) was or will be, independently of this Agreement, lawfully in the possession of the Contractor without breach of obligation of secrecy of Contractor to NICE, and/or (ii) was or will be, independently of this Agreement, lawfully in the possession of the Contractor without breach of obligation of secrecy of a third party to NICE, or (iii) was in the public domain or was common knowledge at the time of receipt by the Contractor; or (iv) following its disclosure to the Contractor as the receiving Party, has, through no fault on the part of the Contractor, subsequently become part of the public domain or is common knowledge; or (v) is required to be disclosed by the Contractor to comply with applicable laws or governmental regulations, provided that the Contractor provides prior written notice of such disclosure to NICE and takes reasonable and lawful actions, at NICE' expense, to avoid and/or minimize the extent of such disclosure.

CONTRACTOR'S PROPRIETARY INFORMATION - data and information disclosed by Contractor to NICE during the term of this Agreement in any form, whether verbally, in writing or in machine readable form or in magnetic media, relating to the business, manufacturing methods, know-how, systems, price lists, suppliers lists and terms of engagement with suppliers, of Contractor including its Affiliates, and including without limitation documents, and the Contractor's plants and equipment, all information disclosed under audits under this Agreement. Contractor's Proprietary Information may also include information disclosed to Contractor by third parties. Contractor's Proprietary Information shall not include data and information which: (i) was or will be, independently of this Agreement, lawfully in the possession of NICE

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without breach of obligation of secrecy to Contractor, and/or (ii) was or will be, independently of this Agreement, lawfully in the possession of NICE without breach of obligation of secrecy of a third party to Contractor, or (iii) was in the public domain or was common knowledge at the time of receipt by NICE; or (iv) following its disclosure to NICE as the receiving Party, has, through no fault on the part of NICE, subsequently become part of the public domain or is common knowledge; or (v) is required to be disclosed by NICE to comply with applicable laws or governmental regulations, provided that NICE provides prior written notice of such disclosure to Contractor and takes reasonable and lawful actions, at Contractor's expense, to avoid and/or minimize the extent of such disclosure.

(xii) INTELLECTUAL PROPERTY - Trademarks, trade names, logos, domain names, designs, patents, copyrights, inventions, discoveries, technology, know-how, trade secrets, confidential and proprietary information and mask works, all registrations and applications for any and all renewals, reissuances and extensions of, and all goodwill in, the foregoing.

(xiii) PURCHASE ORDER/S or PO/'S- A NICE purchase order ordering manufacture and supply of the Products, issued in accordance herewith.

(xiv) TOTAL LEAD TIME - The Purchase Lead Time, Sub Assembly Lead Time and Production Lead Time together.

(xv) PURCHASE LEAD TIME - The maximum agreed time for purchase of components by Contractor in order to enable production and completion of a Product until the Due Date, being the total of the time required for ordering and delivering all relevant components to Contractor from Contractor's suppliers, subject to the Liability. The initial Purchase Lead Time for each component (including sub-assembly purchased from

suppliers) will be as detailed in APPENDIX C and shall be reviewed and updated as necessary by the parties each Quarter during the duration of this Agreement according to the procedure detailed in this Agreement. The new Purchase Lead Time shall need to be agreed to by both parties, and, once agreed, shall be the binding Purchase Lead Time for the relevant components. The parties will also agree on the Purchase Lead Time regarding each new component to be included in a Product.

(xvi) SUB ASSEMBLY LEAD TIME - The maximum agreed time for completion of sub-assemblies in order to enable production and completion of a Product until the Due Date, beginning at the end of the Purchase Lead Time for all relevant components and ending on successful completion of testing of the relevant sub-assemblies. The initial Sub Assembly Lead Time for each sub-assembly will be as detailed in APPENDIX C and shall be reviewed and updated as necessary by the parties each Quarter during the duration of this Agreement according to the procedure detailed in this Agreement. The new Sub Assembly Lead Time shall need to be agreed to by both parties, and, once agreed, shall be the binding Sub Assembly Lead Time for the relevant Sub Assemblies. The parties will also agree on the Sub Assembly Lead Time regarding each new Sub Assembly to be included in a Product.

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(xvii) PRODUCTION LEAD TIME - The agreed time for completion of a Product until its Due Date, meaning from commencement of assembly (from sub-assemblies if applicable) until successful completion of testing, which shall always be fourteen (14) Days from receipt of the PO.

(xviii) ENGINEERING CHANGES - Engineering change in the Product as detailed in Sections 3.10 and 3.11 to this Agreement.

(xix) ECR - Engineering Change Request issued by NICE or by Contractor.

(xx) ECO - Engineering Change Order issued by NICE at its discretion after an ECR, in accordance with Section 3.11 below.

(xxi) CHANGE ORDERS - Change or changes or amendments in a specific order excluding rescheduling of an order/prices and excluding ECO's, as further detailed in Section 3.5.

(xxii) WARRANTY PERIOD - Thirteen (13) months from the Shipment Date of the Product subject matter of the warranty, unless agreed otherwise by the parties in writing.

(xxiii) BACKUP SITE - Contractor's backup site and/or the third party site, as detailed in APPENDIX G and in Section 2.9 below, designed to be operated in the event of force majeure or other event preventing the performance of the Manufacturing Outsourcing Services at Contractor's plant and to ensure an alternate facility with equivalent standards and availability.

(xxiv) DUE DATE - The date of completion of the Product after completion of all quality and integration tests as detailed for each Product including in APPENDIX J and its classification as finished goods according to the date detailed in the relevant NICE Purchase Order, issued in accordance with this Agreement.

(xxv) SHIPMENT DATE - the date of delivery of Products, properly packed (i.e. in accordance with this Agreement), including all documents required for the export of Products, to the NICE designated freight forwarder at Contractor's Location, which may be any time after the Due Date as determined by NICE, but not to exceed sixty (60) Days from the Due Date.

(xxvi) DAY or DAYS - Calendar days unless specific reference is made to Business Days.

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(xxvii) BUSINESS DAYS - Sunday to Thursday, excluding holidays. Holiday eves shall be regarded as half a business day.

(xxviii) QUARTER - a calendar quarter.

(xxix) EFFECTIVE DATE - January 21st, 2002

(xxx) LIABILITY - components and sub-assemblies for which Contractor has an option of cancellation and/or rescheduling without liability, as detailed in APPENDIX C regarding each component and sub assembly. The cancellation window for VMI (Vendor Management Inventory) Components varies between 0 to 35 Days from ordering by Contractor.

(xxxi) NON GENERIC EQUIPMENT - functional testing equipment and any equipment related thereto.

(xxxii) PDM SYSTEM - NICE' engineering system (PDM) to which Contractor shall be granted access for the purpose of performance of this Agreement and whose contents shall be binding and constitute an integral part of this Agreement, subject to Section 17.1. The contents of the PDM System as at the date hereof which are not governed by Section 17.1 may only be changed further to an ECO issued in accordance herewith.

B. INTERPRETATIONS

As used in this Agreement:

(i) The terms and expressions set out in Section A shall have the meanings ascribed therein.

(ii) The preamble and Appendices and Schedules form an integral part of this Agreement.

(iii) The masculine includes the neuter and the feminine; and the singular includes and plural and vice versa.

(iv) A reference to any statute, enactment, order, regulation or other similar instrument shall be construed as a reference to the statute, enactment, order, regulation or instrument as amended by any subsequent statute, enactment, order, regulation or instrument or as contained in any subsequent re-enactment thereof.

(v) Headings are included in this Agreement for ease of reference only and shall not affect the interpretation or construction of this Agreement.

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(vi) References to Sections, Schedules, Appendices and Exhibits are, unless otherwise provided, references to sections, schedules, appendices and exhibits to this Agreement.

(vii) In the event certain provisions incorporated in the Agreement are contradictory VIS-A-VIS other provisions incorporated in the Appendices and Schedules, the Agreement shall prevail.

(viii) In the event certain provisions incorporated in the Appendices and Schedules are contradictory VIS-A-VIS other provisions incorporated therein, the specific provisions shall take precedence over the general provisions.

C. APPENDICES AND SCHEDULES

(i) Appendix A - Products;

(ii) Appendix B - The Proposal;

(iii) Appendix C - Prices, Purchase and Sub-Assembly Lead Time, cancellation windows, rescheduling period, minimum order, package quantity, labor costs, disassembly fees, Product prices, cancellation fees, ECR and ECO administrative costs [a new version to be completed within a month of signature of the Agreement and thereafter updated in accordance with this Agreement];

(iv) Appendix D - Insurance Certificate;

(v) Appendix E - Non Disclosure Undertaking;

(vi) Appendix F - NICE Inventory purchased by Contractor for the first Quarter (NICE Inventory purchased by Contractor for the second Quarter will be added as an addition to Appendix F at a later date);

(vii) Appendix G - Back Up Site;

(viii) Appendix H - Safety, Security & IT Requirements;

(ix) Appendix I - Spare Parts / Upgrade;

(x) Appendix J - Quality Assurance Requirements;

(xi) Appendix K - NICE Products release policy;

(xiv) Appendix N - RMA Process.

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1. MANUFACTURING OUTSOURCING SERVICES

1.1. SCOPE OF WORK. During the term of and subject to this Agreement, Contractor shall perform the Manufacturing Outsourcing Services including purchase, assemble, manufacture, configure, test and deliver to NICE' freight forwarder in Contractor's facility, under the terms set forth below, and NICE shall purchase from Contractor, and Contractor shall sell to NICE, such quantities of units of the Products according to NICE' Purchase Orders, from time-to-time as detailed below, at the quoted prices set forth in Appendix C. This Agreement or any provision thereof shall not be interpreted as granting Contractor any exclusive rights in respect of the Manufacturing Outsourcing Services or any similar services outsourced by NICE, and shall not prevent NICE, at its sole discretion, from contracting with any third party for such services, subject to the provisions of this Agreement. Notwithstanding anything to the contrary in the Agreement or elsewhere, including NICE' confidentiality obligations towards Contractor, but without derogating from NICE' obligations hereunder, this Agreement shall in no way be construed as preventing NICE from performing the Manufacturing Outsourcing Services or part thereof by itself and/or through others, whether during the

term of this Agreement or thereafter.

1.2. Contractor's obligations to execute the Manufacturing Outsourcing Services pursuant to this Agreement shall commence on the Effective Date, subject to the following provisions:

1.2.1. OUTSOURCING TRANSITION - NICE intends to outsource part of its manufacturing activities to the Contractor, in 3 phases: (1) Training and Authorization, (2) Relocation and (3) Manufacturing Outsourcing Services, as described in this Agreement.

1.2.2. INFRASTRUCTURE. For the execution of this Agreement and the Manufacturing Outsourcing Services, Contractor will set up and establish specific infrastructure including an exclusive area in its production facility as detailed herein. Contractor shall assemble its own workstations using its generic equipment and the Non Generic Equipment to be provided by NICE in good working order. The maintenance of the Non Generic Equipment and keeping it in good working order, except normal wear and tear, shall be Contractor's responsibility, at Contractor's expense. NICE shall have the right to object on reasonable grounds to any material change of the manufacturing facility for any Product.

1.2.3. RELOCATION- Contractor will complete the Relocation process including preparation of production lines

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that will be able to ensure the production capacity according to NICE' forecasts as detailed herein. The completion of the Relocation stage shall be on time in order to enable compliance with the Forecast submitted to Contractor prior to signature of this Agreement and shall be subject to the Control of NICE, without relieving Contractor from its responsibilities hereunder. Upon NICE' approval that the Relocation stage has been completed to its satisfaction, which approval shall not be unreasonably withheld, the Contractor shall commence the Manufacturing Outsourcing Services.

1.2.4. RESOURCES, PERSONNEL, PROJECT MANAGER. Contractor will be responsible for the required resources in order to comply with its undertakings hereunder and to deliver the Manufacturing Outsourcing Services as detailed hereunder. Contractor will perform the Manufacturing Outsourcing Services using only skilled, qualified and experienced personnel to the extent required for the purpose of performing its undertakings pursuant to this Agreement, to be trained and authorized, according to NICE' requirements. Contractor shall not replace at its initiative key Personnel during the duration of this Agreement, to the extent such replacement shall materially impair its ability to perform in compliance herewith and any such replacement shall take place only after consultation with NICE. It is agreed for the purpose hereof, that frequent replacement of key personnel shall be deemed as materially impairing Contractor's ability to perform hereunder. NICE may reject on reasonable grounds any such key personnel employed by Contractor in the performance of its obligations hereunder, and they shall be replaced by Contractor promptly following NICE' first reasoned request. Such personnel shall abide by all of NICE' security, data protection and safety requirements and policies as indicated from time to time by NICE in writing according to Section 17.1.

TheContractor will appoint a dedicated Project Manager who will coordinate with NICE' representative and serve as a single point of contact for NICE in all aspects pertaining to this Agreement. The project manager will not be replaced at Contractor's initiative during the duration of this Agreement to the extent such replacement shall

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materially impair Contractors ability to perform in compliance herewith and any such replacement shall take place only after consultation with NICE. It is agreed for the purpose hereof, that frequent replacement of Contractor's Project Manager shall be deemed as materially impairing Contractor's ability to perform hereunder. The project manager will meet with NICE' representative on a regular basis.

1.2.5. CONTROL AND PLANNING. Without derogating from the aforesaid, Contractor will provide NICE with control capability of the production. NICE shall be entitled to be involved in the planning and establishment of the working environment for all Product lines at the Contractor's premises. Contractor will provide NICE with reports on a daily/ weekly/ monthly basis, as follows: the reports will present all relevant details regarding the production orders, time between phases, disassembled Products, schedules, logistics reports, etc. The reports provided will

present all said data in a clear manner and will include graphic presentations. The reports will enable NICE to verify that all systems are matched and to verify the improvement that is achieved by Contractor. All said reports shall need to be agreed in advance by both Parties.

1.2.6. SUPERVISION AND MONITORING. NICE shall be entitled but not obligated, to supervise and monitor the execution of this Agreement from time to time as set forth herein. NICE shall be entitled, upon prior coordination, to visit any place where the Manufacturing Outsourcing Services are being performed including Contractor's plant/s and to review samples of components and Products. As a result of such supervision, NICE may propose improvements and increase in efficiency in the Manufacturing Outsourcing Services and the Parties will discuss such proposals and their affect on this Agreement. Without derogating from the generality of the aforementioned, any supervision and monitoring rights granted to NICE hereunder are merely intended to secure performance of this Agreement according to its terms and shall not relieve Contractor from its responsibilities hereunder according to this Agreement or impose any responsibility or liability upon NICE which is not explicitly detailed in this Agreement.

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1.2.7. MEASUREMENTS AND PROCEDURES. Contractor will execute all the production stages required for a Product according to NICE' Production File for the particular Product, included in the PDM System.

1.2.8. QUALITY ASSURANCE REQUIREMENTS. The Manufacturing Outsourcing Services performed by Contractor shall be executed according to and comply with all quality control requirements and specifications described in APPENDIX J. Without derogating from Contractor's responsibility as aforementioned, NICE reserves the right to execute quality assurance inspection on Contractor's premises, all as described in APPENDIX J and according to the terms hereof.

1.2.9. BACK-UP SITE. Contractor will ensure the availability of the Back-up Site according to the terms of this Agreement. Attached as APPENDIX G to this Agreement is the undertaking of Flextronics, Inc., North Carolina for a Back Up Site in North Carolina, USA and a transition plan for its operation.

1.2.10. STEERING COMMITTEE. The Parties will appoint a steering committee which shall monitor the execution of this Agreement, comprised of Contractor's project manager, NICE' representative, and relevant personnel of the Parties.

2. COMPONENTS PURCHASING, NICE COMPONENTS AND INVENTORY.

2.1. COMPONENTS PURCHASING. Upon transition to the third phase - Production, the Contractor will be responsible for all purchasing of components and getting equipped with all the materials necessary for the assembly of the Products (except the Non Generic Equipment). At NICE' request, and without derogating from any other provisions of this Agreement, Contractor shall promptly notify NICE, in writing, who are the suppliers of any specific components and under what agreements purchase is effected.

2.2. CONTRACTOR PURCHASE AGREEMENTS. Without derogating from the aforementioned, NICE may, at its sole discretion, decide to be involved and to actively or inactively, participate in negotiations and purchasing agreements of Contractor for components designated for production hereunder. In such event, Contractor will comply with NICE' requirements and instructions and contract accordingly, without imposing any liability on NICE, provided such instructions

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are in accordance with common purchasing practice and in accordance with this Agreement. NICE may, at its election, instruct Contractor not to purchase a relevant component from a specific supplier, provided an alternative supplier exists. APPENDIX C shall be updated accordingly. At NICE' request, Contractor shall notify any relevant supplier that it is purchasing components for NICE Products and shall further furnish the supplier with information requested by such supplier. In any event, Contractor shall report to NICE on its purchasing negotiations and achievements and shall supply NICE, at NICE' request, with a copy of all relevant existing documentation.

2.3. FLEXTRONICS, INC. GLOBAL PURCHASE AGREEMENTS. Nevertheless, in the event that the purchase agreement is signed by Flextronics, Inc. as a global purchase agreement for the Flextronics group, and not as a local agreement of Contractor or as an agreement applying to NICE required components only, then NICE will not participate in the negotiations and will not be entitled to receive copies of such agreement/s. The details relevant to the components purchased under an agreement as above will be included

in APPENDIX C and Contractor hereby declares and undertakes that the details included in APPENDIX C (as amended from time to time according to the provisions of this Agreement) shall be the accurate details from the Flextronics, Inc. global purchase agreements and components and sub assembly prices in APPENDIX C shall be net purchase prices of Contractor without any overhead or uplift. NICE shall be entitled, at its sole discretion, to object in advance to Contractor using any Flextronics, Inc. global purchase agreement and in such event, Contractor shall purchase the components separately, the provisions of Section 2.2. shall apply and APPENDIX C shall be updated accordingly. Contractor undertakes to comply with NICE' instructions and the manufacturer license terms regarding the use and duplication of Microsoft and other third party software supplied by NICE and not to use such software products for any purpose other than in the assembly of the Products. Contractor will copy from the master CD of those software products only the exact number of licenses designated by NICE in writing and for which a license has been issued by NICE.

2.4. NICE DESIGNATED COMPONENTS. NICE may request Contractor to purchase specific components from specific suppliers, provided that the terms of such suppliers are in accordance with common purchasing practices and APPENDIX C shall be updated accordingly.

When purchasing components for Contractor's other customers, Contractor may not represent itself to the suppliers as a NICE outsourcer for the purposes of such purchase.

2.5. NICE SUPPLIED COMPONENTS. NICE may, at its election, supply to Contractor software licenses and software or the like for which NICE has an existing royalty agreement with a third party (except electrical and mechanical components unless agreed otherwise), in lieu of Contractor purchasing same (NICE COMPONENTS). All

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such components will be delivered to Contractor in a mutually agreed package type, and in an agreed upon time and in agreed upon quantities. The parties will agree on the inventory level required by Contractor for each NICE Component and NICE' sole responsibility shall be to renew the inventory upon request. Contractor shall be responsible for ordering additional NICE Components if required above the inventory level and for ensuring that appropriate physical controls of such components are in place and properly administered. Contractor will not charge NICE any charges or overhead for such NICE Components. In the event Contractor has difficulty in purchasing any components which NICE can obtain and NICE has granted its consent to supply such component to Contractor in lieu of Contractor purchasing same, Contractor will not charge NICE any charges or overhead for such Components.

2.6. INVENTORY MANAGEMENT AND USE OF EXISTING INVENTORY. All purchasing of inventory, use of inventory, and management of inventory shall be performed by Contractor according to this Agreement, and APPENDIX C.

2.7. EXISTING NICE INVENTORY. Furthermore, Contractor will purchase from NICE its existing inventory of components available for use in Products for up to six (6) months on a rolling basis, as detailed in APPENDIX F, all of which will be transferred to Contractor's facility on the purchase date, all as detailed hereunder: On the Effective Date Contractor will purchase the inventory included in part I of APPENDIX F. Regarding the remainder of the inventory included in part II of APPENDIX F the following will apply: at the beginning of the first production Quarter hereunder Contractor will purchase the components required under the Forecast issued by NICE for that Quarter regardless of the Total Lead Time for such components; at the beginning of the second production Quarter hereunder Contractor will purchase the components required under the Forecast issued by NICE for that Quarter regardless of the Total Lead Time for such components; Contractor will purchase any components remaining in APPENDIX F after two Quarters as aforementioned, on a current basis as required under the Forecast issued by NICE for the following Quarters but in compliance with the Total Lead Time for such components. Contractor will use said NICE' inventory for the production of the Products rather than purchase such components from third parties, until full use of all NICE inventory. Contractor shall pay NICE the purchase price of such components, as set forth in APPENDIX C hereto, and under payment terms as set forth in Section 8.4. When sold to NICE as part of aProduct, the component prices paid by NICE to Contractor hereunder will be calculated with a reduced overhead of 2%. NICE will and does hereby provide Contractor with all such warranties with respect to the components sold thereby as is required from Contractor under this Agreement with respect to the same components. Furthermore, without derogating from NICE' undertakings hereunder, Contractor will use its international supply chain in order to assist NICE in selling its dead inventory, which is not included in APPENDIX F, and the proceeds from such sales will be shared as follows: 10% Contractor, 90% NICE. Contractor will report to NICE regularly, on such sales.

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2.8. COMPONENT END OF LIFE. Contractor shall take all necessary measures in order to receive immediate updates from its suppliers regarding end of life of any component (i.e types of components which shall no longer be manufactured). Contractor shall notify NICE immediately upon becoming aware of the event of end of life of a component. In such event, NICE shall designate and approve the replacement components to be used instead and the Parties will mutually agree on the required changes in APPENDIX C.

2.9. COMPONENTS FOR NICE INTERNAL REQUIREMENTS. Contractor will occasionally provide services in order to help NICE to obtain components for NICE' internal requirements. Contractor will allow NICE to purchase reasonable quantities from its available inventory at a price agreed in advance, and will help NICE to obtain components from manufacturers/suppliers at the lowest available price (in the case where the components in question are not in the Contractor's inventory).

2.10. It is clarified that nothing in this Agreement shall prevent NICE from contracting directly with Contractor's suppliers and vendors in any agreement, or from purchasing identical components, whether during this Agreement or following its termination or expiration.

3. ORDERING AND OTHER MATTERS

3.1. FORECASTS. NICE shall give Contractor a written forecast of the Products, by type, quantity and expected Due Date (the FORECAST) as follows: A Forecast shall be a rolling forecast for the current Quarter and the two (2) consecutive Quarters, detailed by week. Upon the Effective Date, NICE shall deliver a Forecast for the period commencing on the expected completion of the Relocation Phase for the first Product, for the current Quarter and for the next coming two Quarters and so on thereafter during the term of this Agreement. The Forecast may be updated by NICE on a weekly basis, or more frequently (at NICE' discretion).

A Forecast will not be deemed to constitute a binding purchase order with respect to Products (as opposed to components and sub-assemblies, as set forth in Sections 3.4, 16 and 17.5 of this Agreement). Contractor will manufacture the quantities of Products only according to specific orders and the Production Lead Time. The

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Parties' responsibilities and undertakings arising from NICE' Forecast shall be according to APPENDIX C as amended from time to time according to the provisions of this Agreement. Liability reports will be submitted by Contractor on the 1st of each calendar month and will need to be approved by NICE. It is clarified for the avoidance of doubt, that in any event, any and all purchase obligations of NICE with respect to Products (as opposed to components and sub-assemblies) are limited in any given time during the term of this Agreement, to the PO's only.

Contractor (with NICE' participation) will implement, at its own expense, a full process of Demand Flow Technology, including: (I) Product Synchronization; (II) Sequence of Events; (III) Mix Model; (IV) Demand of Capacity & Take Time; (V) Operations grouping; (VI) Line Design & Balancing. This process will help to determine the Sub Assembly Lead Time and the Production Lead Time. It is clarified that any change in the Production Lead Time detailed in this Agreement shall require NICE' prior written approval; any change in the Sub Assembly Lead Time detailed in this Agreement as a result of which the maximum Sub Assembly Lead Time for the relevant sub-assembly exceeds 30 Days, shall require NICE' prior written approval.

3.2. PURCHASE ORDERS AND ISSUING ORDERS. NICE shall, from time-to-time, issue to Contractor a Purchase Order, according to the Forecast, for Products, by type, quantity and Due Date, as and when it desires to order Products. PO's will be issued at least two (2) weeks prior to the designated Due Date. Each and every order will be entered in NICE' logistic system as a Sales Order. Every Product shall be manufactured according to the Production Lead Time. Commencement of assembly shall be based on Production Lead Times (as per Section A (xvii)) and calculated to meet NICE' delivery requirements. It is clarified that delivery and shipment of Products and NICE' obligation to pay for Products shall only be according to a PO.

Purchase Orders for Products (and Forecasts for Products) may be delivered to Contractor by any reasonable means, including but not limited to e-mail, computerized systems, etc., postal delivery, courier delivery, facsimile transmission, as shall be notified by NICE in writing and in advance of any relevant PO. For the removal of doubt, a PO shall not be binding upon Contractor until Contractor has confirmed in writing receipt of the PO. Contractor shall, within two Business Days of its receipt of a Purchase Order, accept or reject such Purchase Order in writing; provided, however, that Contractor shall be obligated to

accept all Purchase Orders issued in accordance with the terms hereof for Products with respect to which a price per the quantity ordered has been mutually agreed by the parties. Contractor undertakes that in the event of increase in Product requirements VIS-A-VIS the Forecast (i.e. issuance of PO's exceeding

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the relevant Forecast), Contractor's manufacturing capacity can be increased, at any time, by thirty percent (30%) beyond the then current Forecast. In addition, in as much as purchase of components and purchase of sub assemblies are concerned, NICE may order Products, which are not included in the Forecast, and Contractor will make its best reasonable commercial efforts to accommodate such order in accordance with NICE' request. It is clarified that in any event Contractor will accept all PO's exceeding the Forecast, subject to updating the Due Date based upon the Total Lead Time for obtaining the required components, which are not available in Contractor's inventory. The Due Date for such PO's will be determined according to the time of obtaining the components. For components/Products the prices for which are not previously agreed under APPENDIX C, the price will be agreed in writing prior to acceptance of the PO.

3.3. FORECAST REVIEW. The parties shall hold weekly meetings, in person, at NICE' facility or by conference phone call, for the purpose of discussing NICE' existing and contemplated Forecasts and order requirements and updating the Forecast; provided, however, only written Forecasts and Purchase Orders, or written modifications thereto, shall bind NICE and Contractor pursuant to the terms of this Agreement or otherwise. The parties, as business requirements dictate, may mutually agree upon the use of blanket purchase orders for specific sub-assemblies or components (exceeding the requirements under Forecasts), subject to the terms of this Agreement and such sub-assemblies or components purchased shall be deemed Permitted Components.

3.4. PERMITTED COMPONENTS. Contractor may make purchase commitments to suppliers and assemble components to sub-assemblies based upon the Forecasts received from NICE but subject always to the Total Lead Time, Liability and ABC policies of Contractor (which NICE will be entitled to review and comment on in advance of the relevant purchase). Contractor shall maintain inventory of Permitted Components (as defined below) for use during the Production Lead Time. NICE shall only be obligated to Contractor for components and sub-assemblies ordered and assembled by Contractor, in accordance with the Forecast and in compliance always with the Total Lead Time as detailed in APPENDIX C (as amended from time to time according to this Agreement) or otherwise for inventory of components purchased from NICE under Sections 2.7 or 3.4(A), or purchased in accordance with POs, ECO's or Change Orders (PERMITTED Components), as detailed hereunder. It is clarified that any Forecast updated following the purchase of Permitted Components will not affect their definition as Permitted Components, and NICE' obligations with respect thereto, subject to the Liability.

3.4(A) PURCHASE OF INVENTORY BY NICE.

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NICE will purchase from Contractor inventory of Permitted Components not required (in whole or in part) according to the Forecast for the Quarter immediately following the time at which such inventory is reviewed as detailed below (hereinafter: the FIRST QUARTER) as detailed below. The following terms shall have the definitions ascribed thereto:

(i) DEAD INVENTORY - Permitted Components, the entire quantity of which is not required for assembly of Products in accordance with the Forecast.

(ii) SLOW MOVING INVENTORY - Permitted Components, which are required for assembly of Products for the two consecutive Quarters commencing immediately after the First Quarter, in accordance with the Forecast.

(iii) EXCESS INVENTORY - Permitted Components, which are required for assembly of Products only during the third Quarter after the First Quarter or thereafter, in accordance with the Forecast.

Three (3) days before the beginning of every Quarter, Contractor will issue a report of Dead, Slow Moving and Excess Inventory, and shall detail the price of each Permitted Component included in the report as specified in APPENDIX C, which report will need to be verified by NICE within 2-3 days. Inthe event that in any Quarter, the Dead Inventory, Excess Inventory and Slow Moving Inventory together exceed 15% of the Monthly Consideration (as defined below), NICE will purchase such inventory exceeding 15% from Contractor one day before the beginning of the First Quarter, by payment of the price detailed in APPENDIX C

including a surcharge of 4%. In calculating and determining the inventory falling within the said 15% (which shall not be purchased by NICE) the following priority shall apply: first - all Slow Moving Inventory, second (if not all 15% were covered) - all Excess Inventory, third (if not all 15% were covered) - Dead Inventory. The MONTHLY CONSIDERATION for the purpose hereof shall mean the total actual price due to Contractor from NICE hereunder for all Products during the preceding Quarter, divided by three (3).

The foregoing shall apply only as of Q3 2002 - July 1st 2002 (the first report of inventory as above shall be issued at the end of June 2002), and thereafter on a regular basis.

In the event NICE has purchased any Permitted Component from Contractor as detailed above, Contractor is obligated to repurchase such Permitted Component for production of the next Forecast which requires such Permitted Component in accordance with the relevant procedure of Section 2.7 above (Nice Existing Inventory), at the price sold to NICE by Contractor excluding the surcharge of 4%.

No other compensation or components protection will be provided by NICE except as explicitly detailed above or in Sections 16.7, 16.8 and 17.5 of this Agreement. Upon

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payment of the aforementioned compensation for Permitted Components, such items shall become the property of NICE, and will be promptly delivered to NICE' facility in Israel, and, at NICE' election and expense, shall be delivered to another location in Israel identified to Contractor by NICE or, at NICE' direction, disposed of by Contractor (in any manner selected by Contractor). In any event, Contractor will make best reasonable commercial efforts to decrease levels of inventory of Permitted Components, by agreeing with its suppliers to decrease Purchase Lead Times to 1 - 2 weeks at the most.

3.5. CHANGE ORDERS. Throughout all the assembly phases of a Product during the Production Lead Time and any time before the Due Date, NICE may issue Contractor with a Change Order. The issuance of such Change Order and the execution by Contractor of such Change Order, shall be in accordance with the provisions hereunder. Upon issuance of a Change Order, Contractor will immediately execute it and the Product price shall change in accordance with APPENDIX C. The sole implication of a Change Order will be payment for additional direct labor costs as detailed in APPENDIX C. Replaced components and sub-assemblies will be returned to Contractor's inventory at no charge to NICE (without derogating from the specific provisions of this Agreement under which NICE is obligated to purchase Permitted Components). The Product price will be as after the implementation of the Change Order. For Change Orders issued prior to commencement of the Production Lead Time for any Product no charge will be incurred by NICE. Without derogating from the aforementioned, Contractor will not charge NICE for Change Orders during the first three (3) months of production.

3.6. RESCHEDULING OF RELEASED ORDERS. NICE may, at its discretion, reschedule delivery of units of Products for which a PO has already been issued, by shortening the Due Date, without any implication. In this respect, Contractor is aware that by the last three weeks of every calendar Quarter, a high level of flexibility is required to meet NICE' end of Quarter requirements. Contractor will perform its best reasonable commercial efforts to complete such rescheduled Products at the new requested Due Date. All such rescheduling shall be performed by sending Contractor a written request for rescheduling.

3.7. ORDERS ON HOLD. Prior to the Due Date, NICE may, at its discretion, place Products manufactured according to PO's on hold for a period not to exceed thirty (30) Days from the Due Date, without any implications, by giving a written notice to Contractor. Upon termination of such 30 Day period or earlier if requested by NICE in writing, the Products on hold will be deemed as cancelled and the provisions of Section 3.8 below shall apply.

3.8. CANCELLATION OF PURCHASE ORDERS. NICE may at its discretion, at any time, cancel, in whole or in part, PO's of Products issued

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pursuant to this Agreement subject to the delivery of prior written notice, before the respective Due Date. Contractor, upon receipt of such written notice of cancellation, shall stop work on such units of Products if work has already commenced. Without derogating from any liability to pay for Permitted Components as set forth elsewhere in specific provisions this Agreement, NICE shall have no liability for cancellation of a PO prior to the Production Lead Time of the Product. For cancellation of a PO during the Production Lead Time and until the Due Date, NICE' liability for cancellation shall be limited to the following:

3.8.1. Payment of a fixed cancellation charge for all cancelled units of Products as specified in APPENDIX C. The fixed cancellation charge will be recalculated at the end of the first Quarter, based on the actual average time to disassemble a Product, as determined by Contractor and agreed to by NICE;

3.8.2. All the components/sub-assemblies will be returned to Contractor's inventory at no charge to NICE subject to and in accordance with the terms of this Agreement.

3.8.3. NICE shall not be responsible and shall not pay, in whole or in part, for Products manufactured outside the agreed Production Lead Time and/or without a written NICE Purchase Order.

3.9. Contractor shall use its best reasonable commercial efforts to minimize Change Order charges and cancellation charges by returning components for credit (with NICE' approval), canceling components on order and applying components to other Contractor projects (when possible, at the sole discretion of Contractor) and minimizing all work-in-process.

3.10. ENGINEERING CHANGE REQUESTS (ECR'S). NICE shall be entitled, at its sole discretion, from time to time to request any Engineering Change Requests for any Product and Contractor is obligated to propose ECR's to NICE when applicable at Contractor's opinion. Contractor will respond to all Engineering Change Requests initiated by NICE, according to the terms hereof. Contractor will give NICE written notice, within three (3) Business Days of receiving written notice of such ECR, of the date by which, and at what cost, such ECR could be implemented based on the pricing formula in APPENDIX C, and how the ECR effects existing PO's. Contractor will charge NICE for ECR's in accordance with APPENDIX C (an administrative cost of $25 per ECR of whatever size).

3.11. ENGINEERING CHANGE ORDERS (ECO'S). NICE may, at its discretion, issue ECO's based on Contractor's response to the ECR's or based on negotiated changes to Contractor's response. The administrative cost for an ECO shall be $50 per ECO. Engineering Change Orders effective dates (the date for completion of implementation

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of the ECO) shall be as agreed to by the parties and shall effect the relevant Lead Times and dates accordingly, as detailed in the ECO. Contractor shall approve every ECO issued as above within 2 Business Days. An ECO shall become binding on Contractor upon written confirmation of receipt thereby. Contractor shall not make any design changes or any other changes in the Products without the prior written consent of NICE as reflected in an ECO. The new Product price due to an Engineering Change Order, shall be determined in accordance with APPENDIX C. Contractor shall make all reasonable commercial efforts to minimize costs due to ECO's. Notwithstanding the aforementioned in Sections 3.10. and 3.11., NICE shall not be charged for the first $1,000 due to Contractor in any one month for ECR's and ECO's.

3.12. DISASSEMBLY OF PRODUCTS. From time to time, NICE may order Contractor to disassemble Products after the Due Date. Upon such request issued to Contractor, it shall promptly comply with the request. Dismantled components will be consigned to Contractor's inventory and stored in a special warehouse at Contractor's facility, at no charge to NICE (the RETURNED COMPONENTS). NICE will pay Contractor the original Product price and also a fixed fee for dismantling as detailed in APPENDIX C. Thereafter, Contractor will use the Returned Components first in the assembly of any Products until no inventory of Returned Components remains. Contractor will not charge NICE for any surcharge or overhead for use of Returned Components in a Product.

3.13. SPARE PART MECHANISM. In addition to producing Products hereunder, and in addition to Contractor's responsibilities under its warranty obligation hereunder which are included in the Product price as provided herein, Contractor will supply Spare Parts to Customers upon request, as detailed in APPENDIX I according to the applicable Production Lead Time. The price for spare parts shall be in accordance with APPENDIX C and shall be paid by NICE in accordance herewith.

4. SCOPE; NEW PRODUCTS

4.1. The scope of this Agreement refers to the Products currently detailed in APPENDIX A subject to the provisions of APPENDIX K. The Manufacturing Outsourcing Services will be performed by Contractor on a gradual basis as detailed hereinabove, and until full performance of the Manufacturing Outsourcing Services by Contractor for all Products.

4.2. Quotations by Contractor for new Products will be developed by NICE in coordination with Contractor subject to the mutually agreed upon pricing model set forth in APPENDIX C hereto. Other terms applicable to new Products shall be identical to those applicable to the current Products. Each such quotation requested

by NICE shall be provided to NICE on an expeditious basis. Contractor shall develop a mutually agreeable quality program for each new Product. The provisions of APPENDIX K - NICE Systems Products Release Policy will apply to such new Products subject to the terms hereof.

5. DUE DATE

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5.1. Contractor shall target 100% on time delivery in compliance with the Due Date. Contractor's performance regarding the Due Date shall constitute a material obligation, and is an essential element in this Agreement.

5.2. DELAYS. Immediately upon learning of any possible delays, Contractor will notify NICE as to the cause and extent of such delay. Contractor shall at once, exercise its best reasonable commercial measures to minimize the possible delay, at no additional cost to NICE. Such measures may include, inter alia, acceleration of payments to Contractor's vendors if necessary.

5.3. LIQUIDATED DAMAGES. Any delay from the Due Date of a certain Product in a certain Quarter, not due to a specific written request by NICE or otherwise deriving from a breach of NICE' undertakings hereunder and only to the extent deriving from such breach by NICE, or caused by an event of Force Majeure, and subject to the terms hereof, shall be considered a material breach of Contractor's obligations under this Agreement and shall entitle NICE to the following liquidated damages in addition to any remedy available to NICE under this Agreement or by law:

5.3.1. One percent (1%) of the Product Price for a delay of 3 to 5 Days.

5.3.2. Three percent (3%) of the Product Price for a delay of up to 10 Days.

5.3.3. Five percent (5%) of the Product Price for a delay of 11 Days or more.

5.3.4. For the removal of doubt, when determining the liquidated damages due, the applicable sub-section 5.3.1, 5.3.2 OR 5.3.3 will apply. In any event, the total liquidated damages as per this Section shall not exceed 5% of the Product Price.

5.3.5 The PRODUCT PRICE for the purpose of this Section 5.3. shall mean the total consideration which is due to Contractor for the Products being delayed at the relevant time.

5.3.6. In the event that following the delay, Contractor is in compliance with the Due Dates for two immediately consecutive Quarters and there is no delay whatsoever, Contractor will be reimbursed by NICE for liquidated damages already paid for delay in the previous Quarter (before the said 2 Quarters), if paid, without derogating from the previous delay being regarded as a breach hereunder.

5.3.7 NO RESPONSIBILITY FOR DUE DATE. Notwithstanding the aforementioned, Contractor shall be relived from its responsibility for the Due Date of any specific Product if all the following terms are met:

(1) Contractor notifies Nice promptly in writing of the delay and the detailed reasons for the delay;

(2) Contractor proves that such delay was caused by a worldwide event of component allocation or a worldwide event of Force Majeure (as defined in this Agreement) applying to a manufacturer of necessary components required for assembly of the Product and such components can not be purchased from another manufacturer, since the manufacturer with which Contractor has contracted (directly or through suppliers) is a single source manufacturer worldwide or, if there is more than one source - the above applies to all of them;

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(3) Contractor proves, that it has employed all necessary measures, both upon contracting with the supplier (including but not limited to - contracting other suppliers) and after becoming aware of the delay, in order to ensure proper timely delivery by such supplier and in accordance with the agreed Purchase Lead Time in this Agreement;

(4) Contractor takes all required actions in order to minimize the effects of such occurrence and solve it.

6. SHIPMENT DATE, PACKING AND SHIPPING

6.1. PACKING. Contractor shall package each unit of Product according to the standard NICE packing procedure and specifications in accordance with the PDM System, or, if not specified by NICE, according to good commercial standards. Every shipment to a NICE Customer must include a Packing List issued by the Contractor, attached to the packed Product. The Packing List is derived from the Purchase Order and includes all the packed items in the carton and all software licenses associated with the Product.

6.2. PREPARATION OF EXPORT SHIPMENTS. Contractor will be responsible for preparing the shipment of the final Product to the Customer by arranging the pallets and packing them according to NICE' instructions as set forth in the PDM System.

6.3. DELIVERY. Unless agreed otherwise in the future, Contractor will deliver finished Products to NICE' designated freight forwarder, at Contractor's premises.

6.4. SHIPMENT DATES. The following Shipment dates shall apply: Shipment plans that Contractor receives until 13:00, will be ready until the end of the same Day (except that on weekend days prior coordination will be required); Shipment plans that Contractor receives after 13:00, will be ready until the end of the next Day (except that on weekend days prior coordination will be required).

Contractor's performance regarding the Shipment Date shall constitute a material obligation, and is an essential element in this Agreement.

6.5. INSPECTION. Products will be subject to inspection by NICE, or by certified NICE' distributors according to the following provisions, both prior to the Shipment Date while they are in the finished goods warehouse and after the Shipment Date. During the inspection, NICE may open cartons and boxes and unpack the contents for inspection. An inspection will be coordinated if possible. NICE may inform the Contractor if there is any mismatch in Product quantities or if any damage was caused to the shipment prior to delivery to NICE' freight forwarder in Contractor's facility. In case of a quantity mismatch between the quantity recorded on the packing documents and the actual quantity received, NICE will notify Contractor

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of the mismatch, and, subject to verification by Contractor, Contractor will complete the missing quantity. In case where a shipment is found damaged prior to delivery to NICE' freight forwarder at Contractor's facility, the Contractor will replace or repair the Product and deliver it back to such NICE' freight forwarder at Contractor's facility, at Contractor's expense. If there was no mismatch in quantities or no damage to the shipment (as applicable), NICE will bear all risk and costs associated with the delivery of shipment to Contractor and back.

7. [DELETED]

8. PAYMENTS

8.1. Initial prices as proposed in the Proposal are set out in APPENDIX C. Within one month from signature of this Agreement, the parties will amend the initial APPENDIX C according to components purchase prices and supplier agreements obtained by Contractor, but in no event will the relevant data exceed the data included in the initial APPENDIX C, except with respect to components sold to Contractor by NICE according to APPENDIX F and Section 2.7, or further to changes in APPENDIX C made pursuant to NICE' instructions under Sections 2.2, 2.3 or 2.4 of this Agreement. Contractor will use reasonable commercial efforts to improve the particulars in APPENDIX C and, amongst others, shorten Liability. In the event of lack of agreement on the amended APPENDIX C within one month from the signature date, the initial Appendix C shall continue to apply until agreed otherwise. It is clarified that labor prices in APPENDIX C will not be amended as aforementioned regarding components. Contractor hereby declares and undertakes that the details included in APPENDIX C(as amended from time to time according to the provisions of this Agreement) shall be the accurate details from all of the relevant purchase agreements of Contractor with its suppliers and components and sub assembly prices in APPENDIX C shall be net purchase prices by Contractor without any overhead or uplift. Thereafter, prices may be decreased or increased according to the formula and at the timetables detailed herein below.

8.2. COST ADJUSTMENTS. Product pricing shall remain firm for Products for each Quarter, except as follows or as set forth in Sections, 2.2, 2.3, 2.4, 3.5, 3.8, 3.11, 8.1, 8.3, and hereunder in the various subsections of Section 8.2:

8.2.1. The quoted cost of all components and sub-assemblies in each Product subject to this Agreement is or will be set forth in APPENDIX C or an agreed written amendment thereto.

8.2.2. NICE and Contractor shall continually work to introduce

new cost reduction methods.

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Contractor shall make its best reasonable commercial efforts to reduce the cost of manufacturing Products, by methods such as elimination of components, obtaining alternate sources of materials, redefinition of specifications, and improved assembly or test methods, subject to NICE' written approval. Upon implementation of such methods initiated by Contractor, Contractor will enjoy one hundred percent (100%) of the cost reduction during the first Quarter and thereafter will reduce the price accordingly so that NICE will enjoy one hundred percent (100%) of the cost reduction. NICE will immediately enjoy one hundred percent (100%) of the cost reduction upon implementation of such methods initiated by NICE.

8.2.3. In the event there is a decrease in the cost of a component or sub-assembly purchased by Contractor for the purposes hereof, which affects the purchase price of such Product, Contractor shall document such decrease in costs and provide such information to NICE in writing, in reasonable detail, within three (3) Business Days of Contractor becoming aware of such decrease.

8.2.4. In case of a decrease as aforementioned, the purchase prices in APPENDIX C for units of the affected Product shall be adjusted accordingly.

8.2.5. In the event there is an increase in the cost of a Permitted Component purchased/to be purchased by Contractor for the purposes hereof, which affects the purchase price of such Product, Contractor shall provide NICE with copies of letters as elaborated below, together with a request for a price increase within one (1) Business Days of Contractor becoming aware of such increase. Contractor shall not purchase any such component until NICE approves it in writing. NICE shall approve/disapprove on the same Business Day it was notified by Contractor provided notice was received by 12:00. However, NICE may only reject a price increase if it can show that the Permitted Component is available at the a lower price. There are two permitted types of price increases:

(i) TEMPORARY PRICE INCREASE designated to meet the requested Due Date, in the event of receiving a Purchase Order/Forecast for which the Purchase Lead Time is shorter than the normal Purchase Lead Time of the relevant components detailed in APPENDIX C or due to an Engineering Change Order which affects the Due Date. Contractor shall provide NICE with copies of letters of approach to at least 3 suppliers that are known in the market and accepted commonly (if 3 suppliers exist for such component) and their response. In such event, NICE will pay Contractor the difference between the original price and the actual price for those components purchased after the increase.

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(ii) CONSTANT PRICE INCREASE caused by a change in the market trend. Market trend increase requests will be explained by providing NICE with copies of letters of approach to at least 3 suppliers that are known in the market and accepted commonly (if 3 suppliers exist), and their response. NICE will pay Contractor the difference between the original price and the actual price for those components purchased after the increase within the Quarter, and thereafter APPENDIX C shall be updated accordingly.

8.3. COST REVIEW. During each calendar Quarter, no later than the third week of the Quarter, the parties will jointly review the costs, costs reduction, volume performance of Contractor and NICE, respectively, and other performance parameters to be mutually agreed upon by the parties. The pricing and other details referenced in APPENDIX C shall be jointly reviewed by the parties at an agreed upon frequency and may be modified with the mutual written agreement of the parties.

8.4. PAYMENT TERMS.

8.4.1. Payment by NICE is due current thirty (30) Days from the date of receipt of the invoice, on the 2nd or 16th of the month, whichever is following the invoice date and may be made by check or wire transfer. Purchase Orders, invoices and payments will be presented and effected in US dollars.

8.4.2. Dates of issuance of invoices by Contractor: 1. for Products - upon the actual Due Date of Products. 2. for inventory of Permitted Components - one day before the beginning of the First Quarter as defined in Section 3.4(A). 3. for amounts outstanding upon termination according to the

relevant provisions of this Agreement - upon termination. 4. for other amounts - upon the date on which the payment becomes due under this Agreement.

8.4.3. Payment by Contractor is due current thirty (30) Days from the date of receipt of the invoice, except as set forth in Section 8.4.4(2) below, and may be made by check or wire transfer. Invoices and payments will be presented and effected in US dollars.

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8.4.4. Dates of issuance of invoices by NICE: 1. for inventory of Permitted Components repurchased - at the end of the month in which such components were repurchased by Contractor. 2. for NICE existing inventory purchased by Contractor according to Section 2.7 - upon commencement of the first production Quarter with respect to inventory to be purchased on such date, upon the commencement of the second production Quarter with respect to inventory to be purchased on such date, and the remainder upon the relevant Purchase Lead Times for each component. The payment of said invoices will be made on a current thirty basis from the date of use of such inventory by Contractor based on the most updated Forecast. 3. For Permitted Components purchased from Contractor according to Section 3.4.(A) - upon the relevant Purchase Lead Times for each component. 4. For other amounts - upon the date on which the payment becomes due under this Agreement.

8.5. TAXES. Each party shall deduct such taxes from the payments due to the other party hereunder as required by law including withholding taxes (unless an exemption is provided), and shall promptly furnish such other party with appropriate tax receipts. Each party will be solely responsible for any and all taxes imposed thereon, including, without limitation, all income taxes, sales taxes, goods and services taxes. Israel value added tax shall be added, if applicable, to all amounts payable hereunder and will be paid against submission of appropriate tax invoices.

8.6. The consideration detailed in the Agreement is the full and entire consideration due to Contractor for the services stipulated hereunder and Contractor shall not be entitled to any other payment or reimbursement of expenses of any kind with respect thereto.

9. REPRESENTATIONS AND WARRANTIES

9.1. Contractor hereby warrants to NICE that it has the full corporate power and authority to enter into this Agreement and to perform its obligations hereunder; that no impediment exists to Contractor entering into this Agreement, and no other agreement has been or will be made with any third party which will have a detrimental effect on Contractor's ability to fulfill its obligations under this Agreement.

9.2. Contractor hereby warrants to NICE that it has ascertained the nature of the Manufacturing Outsourcing Services and its own ability to perform such Manufacturing Outsourcing Services, and that all Manufacturing Outsourcing Services provided by Contractor hereunder will be performed in a professional and workmanlike manner by a sufficient number of individuals with appropriate skills and training for the applicable task using systems and processes which are sufficient to accomplish the Contractor performance

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obligations under this Agreement. In addition, without derogating from any undertaking, warranty or representation of NICE included in the Agreement, Contractor acknowledges and agrees that prior to the entering into this Agreement it has had the ability to perform a due diligence investigation into the manufacturing, production, testing and delivery as performed by NICE up to and including the date hereof, that it has in fact performed such an investigation and that based upon the outcome thereof, it believes that it has the professional and other capabilities to perform the Manufacturing Outsourcing Services as set forth herein in a professional and workmanlike manner.

9.3. Contractor further warrants that it is duly licensed, authorized, or qualified to do business and in good standing in every jurisdiction in which a license, authorization, or qualification is required for the ownership or leasing of its assets, of the transactions of business of the character transacted by it except where the failure to be so licensed, authorized, or qualified would not have a material adverse effect on Contractor's ability to fulfill is obligations under this Agreement.

9.4. PRODUCT WARRANTY. Contractor warrants to NICE that each of the Products manufactured, configured or tested by Contractor will have been manufactured, configured and tested in conformance with the Specifications therefor as provided by NICE and be free from defects in workmanship or material for the Warranty Period. It is

clarified for the avoidance of doubt, that the aforesaid warranty of Contractor for the Products applies to the entire Product, including components and workmanship, except when the defect or malfunction results from the design, NICE Software or the Nice Components supplied by NICE under this Agreement if Contractor cannot obtain warranty service for same from the supplier (and Contractor shall notify NICE accordingly), for which NICE shall be responsible.

9.5. Contractor shall be responsible for procurement of components as set forth herein, inspection of components, and safe handling of the components while in-house at Contractor's premises.

9.6. RMA. Should a Product fail to be in conformity with the above warranties during the Warranty Period, NICE shall deliver the Product to Contractor at its expense, Contractor shall repair or replace the Product at no charge (as set forth in Section 9.7 below), and will cover all shipment and delivery costs of therepaired or replaced Product from Contractor's facility to NICE' Customer location (whether in Israel or abroad). In the case that the determination according to Section 9.9 below, is that Contractor's warranty hereunder does not apply, NICE will bare all shipment and delivery costs of the Product/s and their return, and of any repair/replacement costs if requested by NICE, according to APPENDIX C. Detailed procedures to be executed by Contractor concerning the repair of defective/malfunctioning Products subject to the warranty hereunder are included in APPENDIX N - Return Material Authorization (RMA).

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9.7. WARRANTY SERVICE. Contractor shall replace any such Product with a new Product except when the defect is in the NICE proprietary boards, in which case Contractor may repair the Product. Contractor will deliver the repaired or replacement unit to NICE, within seven (7) Days of Contractor's receipt of such Product or parts thereof. NICE may require a shorter repair and replacement time for up to ten percent (10%) of the returned Products for warranty service, and Contractor shall use its best reasonable commercial efforts to accommodate same.

NICE shall provide Contractor a spares forecast for warranty requirements for the period up and until July 1, 2002. If during such period, the spare parts required for warranty service alone exceed the spares forecast provided by NICE, NICE shall sell Contractor the missing spares at the prices specified in APPENDIX C. Nevertheless, NICE shall have no liability in the event the spares forecast exceeds the actual spares used during that period. As of July 1, 2002 purchasing of spares in order to comply with the warranty obligations shall be the sole responsibility of Contractor and no forecast shall be provided.

On or about July 1, 2002 the parties will review the said 7 days timetable, and any changes in such timetable shall need to be agreed in advance in writing, both Parties acting reasonably and in good faith. Nothing contained in the foregoing shall obligate NICE to change such warranty timetable since its Customer obligations are dependent on it.

The units of Products for which action may be required under this warranty shall be returned to Contractor's manufacturing facility, at NICE' expense, with an accompanying Contractor supplied RMA and correction / replacement time shall commence upon return of the defective Product to Contractor's facility. The RMA will include a packing slip only and will not include an invoice.

9.8. ADVANCED RMA. From time to time, NICE may request that the Contractor supply RMA to NICE Customers prior to receipt by Contractor of the failed Products. In such event, replacement time shall be 7 Days of receipt of the RMA and NICE will be responsible for the return of the failed Product or parts thereof, respectively, to the Contractor within sixty (60) Days from the delivery of the said RMA. If the failed Product is not returned within same period, Contractor shall invoice NICE for the replaced Product supplied.

9.9. DETERMINING DEFECT SOURCE. NICE and Contractor will use their best commercial efforts to determine whether a defect in a unit of Product exists and the reason for such defect. In the event of dispute

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whether the source of a defect is subject to Contractor's warranty as detailed in Section 9.4, the parties will assign a joint MRB (Material Review Board) team to determine the source of defect, whose decisions must be mutually agreed to by both parties. NICE shall perform any investigation/examination reasonably requested by Contractor. In the event that the joint MRB team can not reach a mutually agreed decision, Contractor shall be deemed responsible for the warranty repair or replacement, unless Contractor proves otherwise, and NICE shall supply Contractor with all necessary information to assist in

such determination. It is clarified that in the event of a dispute as aforementioned regarding the source of a defect, Contractor shall, nevertheless, continue its warranty obligations in a timely manner and will not withhold delivery of repaired and replaced Products, but may demand further investigation by the MRB team as above.

9.10. WARRANTIES PROVIDED BY THIRD PARTIES. If and to the extent warranties provided by third parties for components or sub-assemblies (forming an integral part of the defective Product sold to NICE hereunder) that Contractor/anyone on its behalf purchases under this Agreement, exceed the Warranty Period hereunder, Contractor shall ensure that NICE will benefit from such warranties included in agreements with suppliers as detailed in Section 2.2 above and use its best reasonable commercial efforts so that NICE may benefit from such warranties included in agreements with suppliers as detailed in Section 2 above, at Contractors' expense. Contractor will cooperate with NICE in its efforts to exercise its rights under such warranties for their entire duration. The aforementioned shall apply both during and after the term of this Agreement.

9.11 POST-WARRANTY RMA. Contractor shall provide post-Warranty RMA services to NICE in accordance with the procedures in APPENDIX N and the prices in APPENDIX C.

9A. NICE REPRESENTATIONS AND WARRANTIES

9A.1. NICE hereby warrants to Contractor that it has the full corporate power and authority to enter into this Agreement and to perform its obligations hereunder; that no impediment exists to NICE entering into this Agreement, and no other agreement has been or will be made with any third party which will have a detrimental effect on NICE' ability to fulfill its obligations under this Agreement.

9A.2 NICE hereby warrants to Contractor that it has the financial ability to perform its obligations under this Agreement.

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10. AUDIT AND ACCESS

10.1. REPORTS. Contractor shall provide to NICE periodical reports in the format acceptable by NICE and agreed by Contractor, which shall be submitted each week, unless agreed otherwise in writing. In addition, NICE may request other reports pertaining to the Outsourcing Manufacturing Services and Contractor will promptly comply with such requests, to the extent reasonable.

10.2. GENERAL. NICE shall have the rights to conduct audits of the Manufacturing Outsourcing Services and related facilities, systems, and records as set forth in this Section 10 for the purpose of auditing Contractor's compliance with the provisions of this Agreement, all subject to the limitations below. The audits shall include the physical equipment designated for the Manufacturing Outsourcing Services provided hereunder, the facility at Contractors' premises designated for the Manufacturing Outsourcing Services including the finished goods warehouse, the inventory designated for the Manufacturing Outsourcing Services provided hereunder and any records, supporting documentation, equipment and information pertaining solely to NICE and this Agreement, provided that with regard to records pertaining to inventory/components, in addition to the particulars detailed in Sections 2.2 and 2.3, NICE will have access to the ERP system at Contractor's facility only (including for the avoidance of doubt, the modules of the ERP system dealing with invoices and invoicing). No documents or data of any kind, or any copies, may be removed from Contractor's facility and all audits shall be performed within such facility only.

10.3. Such audits are expected to occur frequently given the significant security and business practices concerns inherent in the Manufacturing Outsourcing Services and NICE shall have the sole discretion, not to be unreasonably applied, to determine the frequency. NICE agrees to conduct the audits in a reasonable manner so as not to cause undue disruption to Contractor's provision of the Manufacturing Outsourcing Services and such audits shall be conducted during business hours, and shall be coordinated with Contractor. In the course of such audits Contractor shall provide, and shall cause its Permitted Subcontractors to provide, such auditors any reasonable assistance that they may require. Such reasonable assistance shall be provided as part of the Manufacturing Outsourcing Services.

10.4. If any audit by an auditor designated by NICE results in Contractor being notified that it or its Permitted Subcontractors are not in compliance with any law or regulation, Contractor shall, and shall cause its Permitted Subcontractors to, take actions to comply with such law or regulation, at Contractor's or its Permitted Subcontractor's expense.

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10.5. RESULTS OF AUDITS. If, as a result of an audit, NICE determines that Contractor has undercharged or overcharged NICE, NICE shall notify Contractor in writing of the amount of such undercharge or overcharge,

and shall specify the relevant data and the reasoning for its determination. If Contractor agrees in writing, an appropriate adjustment shall promptly be paid to NICE or Contractor. In the event Contractor believes that it has complied with the relevant law, regulation or this Agreement, and has not overcharged or undercharged NICE, it shall so notify NICE in writing upon receipt of NICE' audit results shall specify the relevant data and the reasoning for its determination and the parties will attempt to determine the issue in mutual consent.

10.6. CONTRACTOR RECORD RETENTION AND ACCESS. As part of the Manufacturing Outsourcing Services, Contractor shall (1) retain records and supporting documentation detailed in Section 10.2 above if and to the extent such record retention is required by tax or similar authorities, and/or exists in the ERP system, and/or is common practice in the industry, including but not limited to - production files for the following periods: 7 years for records required by tax or similar authorities and ERP data, 3 years for production files, otherwise as required by law or as is the common practice, and (2) upon notice of no less than five (5) Days from NICE, provide NICE and its designees with reasonable access to such records and documentation for the purpose of conducting NICE' business and reporting. Such access shall only be provided to audit personnel who have signed towards Contractor a non-disclosure undertaking incorporating terms which are substantially the same as those in APPENDIX E.

10.7 All audits of all kind by NICE shall be subject to the confidentiality obligations of NICE to Contractor detailed in this Agreement.

11. SAFETY AND SECURITY, FACILITIES, NON-GENERIC EQUIPMENT

11.1. SAFETY AND SECURITY. Contractor shall maintain and observe, at its premises, all the safety and security requirements detailed in APPENDIX H and ascribed by law.

11.2. SECURITY SERVICES. Contractor shall institute, maintain, and monitor security services for all Manufacturing Outsourcing Services in accordance with APPENDIX H.

Contractor's security procedures shall be subject to audit as set forth in Section 10.

11.3. FACILITY. Contractor's facility at which the Manufacturing Outsourcing Services will be performed shall comply, at a minimum, with the requirements set forth in APPENDIX H.

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11.4. APPROVAL OF LOCATION. NICE shall have the right to approve or disqualify each location at which Contractor is providing any of its services hereunder. Contractor agrees that the Manufacturing Outsourcing Services will be performed in a dedicated space in Contractor's facility in which no production of competing products will be conducted. Access to the NICE production lines will be limited only to Contractor's employees performing the Manufacturing Outsourcing Services and NICE representatives.

11.5. NON GENERIC EQUIPMENT. During the term of this Agreement, the Non Generic Equipment shall be furnished to Contractor (without charge) and used in Contractor's premises for purposes of performing its various obligations under this Agreement, according to the terms hereof. Such Non Generic Equipment shall:

(1) Be clearly marked and identified as NICE' property.

(2) Be safely stored, adequately maintained and insured against loss or damage under Contractor's existing policies detailed in APPENDIX D. In the event such Non Generic Equipment is damaged, lost or destroyed, Contractor shall be liable towards NICE to repair or replace such equipment (at Contractor's choice).

(3) Remain the sole property of NICE, and therefore shall be kept free of liens and encumbrances imposed on Contractor's property.

(4) Be returned to NICE upon request, or upon termination of this Agreement, at the same condition as originally furnished to Contractor except for normal wear and tear. Notwithstanding anything to contrary, if NICE requests to have the Non Generic Equipment returned thereto prior to the termination of the relevant services hereunder, Contractor shall have no liability or obligation for the performance of any obligations hereunder for which such Non Generic Equipment is reasonably required. Contractor shall notify NICE in writing in detail of the aforementioned, promptly upon NICE' request to receive the Non Generic Equipment.

(5) Be used according to NICE' written instructions and information concerning such Non Generic Equipment.

(6) Shall not be used by Contractor for any other purpose except for NICE' needs and shall be dedicated for performance of this Agreement.

(7) Nevertheless, NICE may request Contractor to purchase some Non Generic Equipment by itself and in such event Contractor shall

invoice NICE for the purchase price. Such equipment shall be deemed for all purposes as part of the Non Generic Equipment and shall be sold to NICE upon termination of this Agreement for any reason, at a total sale price of 1$.

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12. CONFIDENTIAL INFORMATION, INTELLECTUAL PROPERTY AND INTELLECTUAL PROPERTY INDEMNIFICATION, PUBLICITY

12.1 OWNERSHIP AND LICENSE RIGHTS. NICE or its customers, partners, suppliers, and contractors shall be the sole owner of all NICE Proprietary Information and NICEIntellectual Property (as defined below) to which Contractor has access in the performance of the Manufacturing Outsourcing Services including but not limited to - in connection with the Products. Except for the licenses granted herein, Contractor or anyone on its behalf shall not acquire any right, title, or interest to the NICE Proprietary Information and/or NICE Intellectual Property. Especially, but without limitation, NICE shall remain the owner of all NICE Proprietary Information and NICE Intellectual Property in connection with the design of the Products and the NICE Software. For the purposes hereof, NICE INTELLECTUAL PROPERTY shall mean Intellectual Property conceived, created, reduced to practice or developed by NICE and/or for NICE by a third party, and/or for NICE by Contractor (including anyone on its behalf) in accordance with this Agreement, for the purpose of performing the Manufacturing Outsourcing Services.

12.2. CONFIDENTIALITY BY CONTRACTOR. Contractor will provide the Manufacturing Outsourcing Services in a manner that complies with the Confidentiality requirements of APPENDIX E. Contractor shall not: transfer to others, copy or duplicate, sub-license, sell, publish, display or otherwise make available in any form or disclose, the NICE Proprietary Information and/or the NICE Software and/or the NICE Intellectual Property, to any third party, except to suppliers/manufacturers of components and/or sub assemblies that require specifications for their supply, in which case they shall be required by Contractor to execute a Confidentiality Agreement in the form of APPENDIX E VIS-A-VIS NICE. Contractor shall use the same degree of care with respect to NICE Proprietary Information as it uses in protecting its own proprietary information and trade secrets.

Without derogating from the aforementioned, Contractor shall not, in any way or manner, directly or indirectly, engineer, reverse engineer, compile, decompile or reverse assemble the NICE Software, or analyze or otherwise examine the NICE Software for the purpose of reverse engineering.

12.3. In addition, Contractor shall not disclose the NICE Proprietary Information to any Personnel, except on a need to know basis as required in order to implement this Agreement. Contractor undertakes to procure that its Personnel and Permitted Subcontractors engaged in performance of this Agreement (except subcontractor's employees who do not have access to the NICE production lines at Contractor's premises), and reasonably designated by NICE in advance in writing, have signed a non-disclosure agreement in the form of APPENDIX E, prior to receipt of any NICE Proprietary Information.

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12.3A Notwithstanding anything to the contrary, Contractor shall have no liability with respect to disclosure of NICE Proprietary Information if such information came into the possession of the Contractor independently of this Agreement, through a breach of obligation of secrecy of a third party to NICE, of which Contractor was not aware and should not have been aware if Contractor had exercised due care.

12.4. CONFIDENTIALITY BY NICE. NICE shall not: transfer to others, copy or duplicate, sub-license sell, publish, display or otherwise make available in any form or disclose, the Contractor's Proprietary Information, to any third party, except for the purpose of performing this Agreement. NICE shall use the same degree of care with respect to such Contractor's Proprietary Information as it uses in protecting its own proprietary information and trade secrets. All rights in Contractor's Proprietary Information, shall remain solely with Contractor. Notwithstanding the aforesaid, it is agreed that any manufacturing methods applied by Contractor, which are Contractor's Proprietary Information, may be used by NICE itself (including its Affiliates) (but may not be transferred/disclosed to any third party) and by signing this Agreement Contractor hereby grants NICE a personal, non exclusive, non transferable, perpetual license to use such manufacturing methods.

12.4A Notwithstanding anything to the contrary, NICE shall have no liability with respect to disclosure of Contractor Proprietary Information if such information came into the possession of NICE independently of this Agreement, through a breach of obligation of secrecy of a third party to Contractor, of which NICE was not aware and should not have been aware if NICE had exercised due care.

12.5. LEGAL OBLIGATION TO DISCLOSE. In the event a party is required to disclose Proprietary Information of the other party, by applicable law

or by any government in the exercise of its lawful authority, the party so required shall (i) promptly notify the other party in writing, and, at the other party's expense: (ii) use reasonable and lawful efforts to resist making any disclosure of Proprietary Information not approved by the other party, (iii) use reasonable and lawful efforts to limit the amount of Proprietary Information to be disclosed pursuant to any such disclosure, and (iv) cooperate with the other party to obtain a protective order or other appropriate relief to minimize the further dissemination of any Proprietary Information to be disclosed pursuant to any such disclosure.

12.6. INTELLECTUAL PROPERTY INDEMNIFICATION BY CONTRACTOR. Contractor shall indemnify, hold harmless and defend NICE from and against any and all damages (including all damages awarded to a third party and payable by NICE), costs, losses, and expenses (including settlement awards and reasonable attorney's fees) arising from any claim or suit made against NICE or a third party which NICE is obligated to indemnify, by a third party based on the allegation that the Products infringe or violate any Intellectual Property right due to the components and/or sub assemblies supplied by Contractor hereunder and/or the manufacturing processes and methods as performed by Contractor hereunder. Contractor shall include in all its agreements with suppliers/ manufacturers provisions regarding Intellectual Property indemnification substantially similar to those included in this Agreement, providing inter alia that they are freely assignable to NICE without any modification or consent.

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Nevertheless, in the event NICE designates specific components to be purchased by Contractor hereunder and the manufacturer/supplier of such NICE designated components refuses to grant Contractor indemnification for infringement of Intellectual Property rights, despite Contractor performing its best reasonable commercial efforts to obtain such indemnification (which Contractor shall prove to NICE by submission of copies of its correspondence with the manufacturer including the manufacturer's response), then if NICE approves purchase of such components, Contractor shall not be responsible for Intellectual Property indemnification due to those specific components.

For the removal of doubt, Contractor shall not be liable for any infringement of an Intellectual Property right due to any NICE Proprietary Information, NICE Intellectual Property, NICE Software, Non Generic Equipment (if used in accordance with the instructions provided by NICE), and due to performance as is of NICE written instructions including specifications and design.

Contractor's indemnification as provided under this Section shall apply only if: Contractor is notified promptly in writing of any notice of a claim or of a threatened or actual suit; and is given control of the defense thereof and all related settlement negotiations; and, NICE provides, at Contractor's request and expense, all reasonable cooperation and assistance for the defense and negotiations of the claim. Nevertheless, in the event the claim or suit is based on the allegation that the Products infringe or violate any Intellectual Property right due to the components and/or sub assemblies supplied by Contractor hereunder which were designated by Nice as aforementioned, and the supplier / manufacturer of the infringing component has an indemnity undertaking as above towards Contractor; (i) which is assignable to NICE and Contractor promptly assigns to NICE such indemnification undertaking from its supplier / manufacturer; (ii) which is unassignable to NICE but Contractor notifies NICE promptly in writing of any notice of the claim or of a threatened or actual suit; and gives NICE on behalf of Contractor and NICE' chosen counsel control of the defense thereof and all related settlement negotiations; then in both such instances Contractor shall not be responsible for Intellectual Property indemnification with respect thereto. In all other events, Contractor shall conduct the litigation as aforementioned.

12.7. Following establishment of infringement of Intellectual Property by a competent authority including at interlocutory proceedings, whether Contractor is responsible therefor or not, NICE may issue an ECR and Contractor will handle such ECR and the corresponding ECO promptly in accordance with Sections 3.10, 3.11.

12.8. INTELLECTUAL PROPERTY INDEMNIFICATION BY NICE. NICE shall indemnify,

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hold harmless and defend Contractor from and against any and all damages (including all damages awarded to a third party and payable by Contractor), costs, losses, and expenses (including settlement awards and reasonable attorney's fees) arising from or in connection with any claim or suit made against Contractor or a third party which Contractor is obligated to indemnify, by a third party based on an allegation that the Products and/or the NICE Software infringe or violate any Intellectual Property right, including due to the use of any NICE Proprietary Information, NICE Intellectual Property, NICE Software, Non Generic Equipment (if used in accordance with the instructions provided by NICE), or due to performance as is of any NICE written instructions including specifications and design, but

excluding any allegation that the Products infringe or violate any Intellectual Property right due to the components and/or sub assemblies supplied by Contractor hereunder and/or the manufacturing processes and methods as performed by Contractor hereunder for which Contractor is liable as per Section 12.6. above.

NICE' indemnification as provided under this Agreement shall apply only if: NICE is notified promptly in writing of any notice of a claim or of a threatened or actual suit; and is given control of the defense thereof and all related settlement negotiations; and, Contractor provides, at NICE' request and expense, all reasonable cooperation and assistance for the defense and negotiations of the claim.

12.9. EMPLOYEE AND CONTRACTOR INDEMNIFICATION. Each of the parties agrees that it will indemnify the other party against any and all claims hereafter brought or asserted by any person against the other party relating to any alleged or actual action or omission to act by the indemnifying party arising from, or in connection with, such person's status as an employee or independent Contractor of the indemnifying person or the termination of such status.

12.10. PUBLICITY. Except with the express written consent of NICE, Contractor shall not make any press announcement or publicize this Agreement or any matters relating to any of the transactions contemplated hereby or use NICE' name or trademark in any way whatsoever, except to the extent required to comply with applicable laws or governmental regulations, provided that Contractor acts according to Section 12.5.

13. INSURANCE

13.1. Contractor shall be liable for the total or partial loss of or damage to the components and/or the Products in so far as such loss or damage has occurred while in Contractor's possession and until delivery of the Products to NICE' freight forwarder at Contractor's facility.

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13.2. Without limiting any of the obligations or liabilities of Contractor, whether under this Agreement or by law, subject to any limitations hereunder, Contractor shall maintain, and shall cause any subcontractors engaged by Contractor to provide services under this Agreement to maintain, at Contractor's own expense, as long as this Agreement is in effect, insurance policies of the kind and limits as set forth in APPENDIX D to this Agreement. The expense of such insurance shall be borne by Contractor. The Contractor shall keep in force the policies specified in sections 1 and 3 to the Insurance Certificate valid as long as Contractor's legal liability EXISTS IN CONNECTION WITH OPERATIONS ACCORDING TO THE AGREEMENT.

It is Contractor's responsibility to ensure that the insurance requirements set forth in APPENDIX D to this Agreement remain in effect for the term of this Agreement.

13.3. Within ten (10) Days of the execution of this Agreement, Contractor shall furnish to NICE certificates of insurance evidencing full compliance with the insurance requirements as set forth in APPENDIX D to this Agreement. Certificates of Insurance shall be kept current throughout the entire term of this Agreement.

13.4. The carrying of any insurance required hereunder shall not be interpreted as relieving Contractor of any responsibility and/or undertaking to NICE according to the provisions of this Agreement or by law. Contractor shall give prompt notice of all losses or claims of which Contractor has knowledge which may be in any way related to this Agreement and Contractor shall assist and cooperate with any insurance company in the adjustment or litigation of all claims arising under this Agreement or by law and indemnifiable by Contractor under this Agreement or by law.

13.5. NICE shall include in its property policies a waiver of subrogation clause against the Contractor, its directors and any one on its behalf, provided that such waiver will not be valid towards a person which caused malicious damage.

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15. FUNDAMENTAL BREACH AND REMEDIES

15.1. Except as provided in Sections 15.2 and 15.3, any breach by any Party of this Agreement which was not remedied within forty-five (45) Days from the date of notice, shall be regarded as a fundamental breach.

15.2. Notwithstanding the aforementioned in Section 15.1, any delay in the Due Date and/or Shipment Date, which was not remedied within thirty (30) Days from the date of notice for the first delay, and any subsequent delay upon notice (i.e. any second delay, even if the first one was less then 30 days) shall be regarded as a fundamental breach.

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15.3. Notwithstanding the aforementioned in Section 15.1, unjust delay in payment by NICE exceeding sixty (60) Days from the date of notice for the first delay, exceeding seven (7) Days from the date of notice for

the second delay (i.e. any second delay, even if the first one was less then 60 days) and exceeding the date of notice for any subsequent delay (i.e. any subsequent delay, even if the second one was less then 7 days) , shall be regarded as a fundamental breach. Notwithstanding, any delay in any payment by NICE shall bear a default interest, as of the first Day of delay, to be compounded daily, at the rate applicable at Bank Hapoalim B.M. at the relevant time for unauthorized overdrawn current accounts.

15.4. Notwithstanding anything to the contrary contained herein or otherwise, Contractor's liability to NICE for any indirect, special, incidental, exemplary or consequential damages as a result of any claim arising under this Agreement or in connection therewith, regardless of whether Contractor has been advised of the possibility of such damages, shall not exceed five million US dollars ($5,000,000) in the aggregate for all claims, except for infringement of Intellectual Property rights for which Contractor is liable under Section 12.6. This Section shall not be construed or used in the construction of this Agreement as imposing on Contractor any liability for which it is not otherwise liable. Further, this Section shall not be construed as derogating from any applicable law which cannot be changed or waived by contract.

15.5. Notwithstanding anything to the contrary contained herein, NICE' liability to Contractor for any indirect, special, incidental, exemplary or consequential damages as a result of any claim arising under this Agreement or in connection therewith, regardless of whether NICE has been advised of the possibility of such damages, shall not exceed five million US dollars ($5,000,000) in the aggregate for all claims, except for infringement of Intellectual Property rights for which NICE is liable under Section 12.8. This Section shall not be construed or used in the construction of this Agreement as imposing on NICE any liability for which it is not otherwise liable. Further, this Section shall not be construed as derogating from any applicable law which cannot be changed or waived by contract.

16. TERM AND TERMINATION

16.1. TERM AND TERMINATION. The initial term of this Agreement shall commence on the Effective Date and extend for three (3) years thereafter (INITIAL TERM), with an automatic renewal for an indefinite period of time (EXTENDED TERM), unless terminated by the parties according to Sections 16.2. or 16.3. herein.

16.2. Notwithstanding the aforesaid in Section 16.1. and any possible implication to the contrary herein or as a result of the course of conduct of the parties, NICEshall be entitled, at its sole discretion, to terminate this Agreement, in whole or in part, at any time during the Initial Term or the Extended Term, with or without cause, upon a prior written notice of termination to Contractor of not less than forty-five (45) Days.

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16.3. Notwithstanding the aforesaid in Section 16.1. and any possible implication to the contrary herein or as a result of the course of conduct of the parties, Contractor shall be entitled, at its sole discretion, to terminate this Agreement only during the Extended Term, with or without cause, upon a prior written notice of termination to NICE of not less than six (6) months.

16.4. Either party shall be entitled to terminate this Agreement, following a fundamental breach of this Agreement by the other party.

16.5. Either party shall be entitled to terminate this Agreement upon the other party seeking an order for relief under the bankruptcy laws of the State of Israel or similar laws of any other jurisdiction, a composition with or assignment for the benefit of creditors, or dissolution or liquidation. NICE shall be entitled to terminate this Agreement upon the merger or acquisition of all or substantially all the business or assets of Contractor (except if within the Flextronix's group and provided Contractor remains an Israeli entity).

16.6. EFFECT OF TERMINATION.

16.6.1. Upon notice of termination of this Agreement for any reason whatsoever, the parties shall execute rapidly and efficiently the procedure for termination of the Manufacturing Outsourcing Services by Contractor and the transfer of production to NICE as set forth hereunder and agreed between the parties, provided that Contractor will not be required to incur additional costs for the purpose of assisting NICE in the case of termination. During the notice period, Contractor will continue performance of the Manufacturing Outsourcing Services regarding all PO's received according to the Forecast and will, simultaneously, assist NICE and cooperate with it in the transfer of the Manufacturing Outsourcing Services to NICE or anyone designated by NICE and NICE will continue in performing all its obligations hereunder.

16.6.2. Upon termination of this Agreement for any reason whatsoever, without derogating from the generality of the aforesaid, NICE shall be entitled to receive from Contractor, at no charge, subject to the confidentiality obligations hereunder and Contractor's Proprietary Information, all information, know-how, samples, documentation and data, in any form or medium, in

connection with the Manufacturing Outsourcing Services, whether prepared by NICE or by Contractor, and all NICE Proprietary Information which is in the possession of Contractor or anyone on its behalf, including its Permitted Subcontractors. Upon termination of this Agreement, Contractor shall return any such information to NICE notwithstanding the provisions of Section 10.6. above.

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16.6.3. Upon termination of this Agreement for any reason whatsoever, all Non Generic Equipment and NICE Returned Components as detailed in Section 3.12. above, will be immediately returned to NICE.

16.6.4. It is clarified that upon termination, for any reason whatsoever, Contractor shall still be obligated to supply warranty services according to this Agreement to all Products supplied, this for the duration of the Warranty Period for each Product and the relevant provisions of this Agreement applying to warranty shall survive termination.

16.7. EFFECT OF TERMINATION. Upon termination of this Agreement, except in the event of termination by NICE due to breach by Contractor, NICE shall pay Contractor as follows: (i) 100% of the contract price for all finished Products in Contractor's possession or which have been delivered/being delivered to NICE, which are subject to a Purchase Order in accordance with the terms of this Agreement; (ii) 104% of the cost in APPENDIX C of all inventory of Permitted Components in Contractor's possession, which are not returnable to the vendor / supplier according to APPENDIX C or usable for other customers (as determined by Contractor in its sole discretion), whether in raw form or work in process; (iii) 104% of the cost in APPENDIX C of all inventory and inventory on order of Permitted Components which is not cancelable according to APPENDIX C; (iv) any vendor cancellation charges incurred with respect to inventory of Permitted Components accepted for cancellation or return by the vendor, and (v) disassembly charges and payments as per Section 3.8 (Cancellation of PO) resulting from the cancellation of PO's due to termination, and (vi) 100% of any other costs and payments payable by NICE hereunder at the time of termination under the specific provisions of this Agreement. Contractor will use reasonable commercial efforts to return unused inventory and to cancel pending orders for such inventory, and to otherwise mitigate the amounts payable by NICE hereunder.

16.8. Upon termination of this Agreement by NICE due to breach by Contractor, NICE shall be obligated to pay Contractor as follows: (i) 100% of the contract price for all finished Products in Contractor's possession for which the Due Date has occurred and which have been supplied to NICE' freight forwarder, which are subject to a Purchase Order in accordance with the terms of this Agreement; (ii) 100% of the cost in APPENDIX C of all inventory of Permitted Components in Contractor's possession, which are not returnable to the vendor / supplier according to APPENDIX C or usable for other customers (as determined by Contractor in its sole discretion); provided however that in the event Contractor fails to supply the Products and/or Permitted Components to NICE, for any reason whatsoever, within 14 days after receipt of NICE' request, NICE shall be released from the obligation to pay for the Products and /or Permitted Components as provided for above. (iii) 100% of the cost in Appendix C of all inventory and inventory on order of Permitted Components, which is not cancelable according to Appendix C. Contractor will use reasonable commercial efforts to return unused inventory and to cancel pending orders for such inventory, and to otherwise mitigate the amounts payable by NICE hereunder.

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16.9. Neither party shall have any other liability, including payment obligations, resulting from the termination for convenience of this Agreement.

17. MISCELLANEOUS.

17.1. ENTIRE AGREEMENT. This Agreement, Schedules, Exhibits and Appendices constitute the entire agreement between the parties in connection with its subject matter and supersede all prior communications and agreements between the parties relating to its subject matter. Notwithstanding anything to the contrary, no documents, procedures, methods or policies shall bind the Parties unless they are in writing and signed by both parties, except that all the technical documentation included in the PDM System may be changed as provided in Section A (xxxii). Any change in NICE' procedures or policies, shall bind Contractor after it is notified of same, unless the change is material, in which case Contractor can object to the change on reasonable grounds detailed in writing.

17.2. AMENDMENT. This Agreement may only be amended, varied or modified by the prior agreement in writing of NICE and Contractor. Any such amendment, variation or modification shall be binding upon the parties and upon their successors and assigns. Work procedures and technical documents may be signed by any representative on behalf of each of the parties and need not be signed by authorized signatories of the parties.

17.3. ASSIGNMENT. This Agreement shall be binding upon and inure to the benefit of the parties and their respective successors and permitted assigns. Neither party shall in any way sell, transfer, assign, sub-contract or otherwise dispose of any of the rights, privileges, duties and obligations granted or imposed upon it under this Agreement. However, NICE may, at its discretion, transfer and/or assign any of its rights, privileges, duties and obligations granted or imposed upon it under this Agreement to any NICE Affiliate, provided that NICE remains responsible towards Contractor, jointly and severally with the Affiliate, for all of its obligations hereunder so assigned, and provided further that the assignee signs this Agreement.

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It is further clarified that NICE may choose, by written notice to Contractor, to enable any NICE Affiliate to act on NICE' behalf and in its name under this Agreement directly VIS-A-VIS Contractor, without relieving NICE as the sole contractual party from responsibility for performance of the Agreement. Notwithstanding the foregoing, Upon NICE' prior written approval and upon the terms and limitations of such approval, Contractor may sub-contract some of its obligations (PERMITTED SUBCONTRACTORS), provided, however, that Contractor shall remain obligated under this Agreement. Contractor shall provide to NICE material qualifications and identification details of such Permitted Subcontractors. Contractor shall at all times remain fully responsible for the performance of all obligations of Contractor hereunder, jointly and severally with the Permitted Subcontractors. In selecting subcontractors to assist Contractor in the performance of this Agreement, Contractor shall comply with all reasonable NICE vendor screening requirements which are provided to it, and Contractor shall also comply with its own vendor screening requirements.

17.4. SEVERABILITY. If any provision of this Agreement is held invalid, illegal or unenforceable for any reason by any court of competent jurisdiction, such provision shall be separable from the remainder of the provisions hereof which shall continue in full force and effect as if this Agreement had been executed with the invalid provisions eliminated.

17.5. FORCE MAJEURE.

17.5.1. Neither party shall be liable to the other for any delay in performance or failure to perform, in whole or in part, due to war or act of war (whether an actual declaration is made or not), riot, civil commotion, act of public enemy, fire, flood, or other act of God, act of any governmental authority, or similar causes beyond the reasonable control of such party which could not have been foreseen or prevented. If any event of force majeure occurs, the Party affected by such event shall promptly notify the other Party of such event in writing and take all reasonable actions to avoid the effect of such event.

17.5.2. Nevertheless, if any event of force majeure occurs for a consecutive period of fourteen (14) Days preventing Contractor from performing the Manufacturing Outsourcing Services, and Contractor has not managed to set up the Manufacturing Outsourcing Services at the Backup Site, NICE may, at its discretion, elect to perform the Manufacturing Outsourcing Services or any part thereof by itself and/or through others, without derogating from its other rights and remedies, if applicable. In such event: (a) Contractor shall assist NICE by putting at its use, at NICE' request, Contractor Personnel who are involved in the performance of this Agreement, to the extent possible, at a charge to be agreed based on the labor rates in APPENDIX C; (b) without derogating from any other obligations of NICE hereunder as at such date to purchase Permitted Components, NICE shall purchase from Contractor the additional Permitted Components in Contractor's inventory, which are required, at NICE' discretion, for manufacturing during the force majeure period. The price and payment terms for purchase of such Permitted Components shall be according to the provisions of Section 3.4(A) above, which shall apply mutatis mutandis.

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17.5.3. If the event of force majeure exists for more than 90 days, each party shall have the right to terminate this Agreement and the provisions of Sections 16.2. and 16.3. regarding the notice period required shall apply mutatis mutandis, and thereafter Section 16 regarding effects of termination shall apply.

17.6. RELATIONSHIP. NICE and Contractor acknowledge and agree that this Agreement shall not constitute, create or give effect to a joint venture, pooling arrangement, principal/agency relationship, partnership relationship or formal business organization of any kind and neither Contractor and/or NICE shall have the right to bind the other without the other's express prior written consent. Contractor will render the Manufacturing Outsourcing Services as an independent contractor and no employee - employer relationship shall exist between Contractor and/or the Personnel and/or anyone on its behalf and NICE.

17.7. MANAGEMENT CHANGES. Contractor shall notify NICE immediately upon the occurrence of any material change in the conduct of business of Contractor or in the composition of its management, which has a

material adverse affect on Contractor's ability to perform this Agreement.

17.8. WAIVER. The failure of either party to insist upon strict performance of any provision of this Agreement, or the failure of either party to exercise any right or remedy to which it is entitled hereunder, shall not constitute a waiver thereof and shall not cause a diminution of the obligations established by this Agreement. A waiver of any default shall not constitute a waiver of any subsequent default. No waiver of any of the provisions of this Agreement shall be effective unless it is expressly stated to be a waiver and communicated to the other party in writing in accordance with the provisions of this Agreement.

17.9. DISPUTE RESOLUTION. Any dispute arising out of or relating to this Agreement or the breach, termination or validity thereof shall be settled in accordance with one of the following procedures. Contractor and NICE shall use the procedures in the following order of priority.

43

17.9.1. In the event of any dispute, controversy or claim of any kind or nature arising under or in connection with this Agreement (including but not limited to disputes as to the creation, validity, interpretation, breach or termination of this Agreement) (a DISPUTE), then upon the written notice of either Party, the Dispute will be submitted to the project manager on behalf of each party to be escalated, in case the parties are unable to resolve such Dispute, to the parties C.E.O.'s

17.9.2. Any dispute that the parties are unable to resolve pursuant to Section 17.9.1. within 30 Days, will be submitted exclusively to the competent courts in the Tel-Aviv-Jaffa District in Israel.

17.9.3. Without derogating from rights of termination as detailed in this Agreement, it is clarified that Contractor will continue to provide the Manufacturing Outsourcing Services and NICE shall continue to perform its obligations hereunder during any litigation, mediation or legal proceedings commenced pursuant to this Section 17.9. above and the existence of a Dispute shall not enable Contractor to stop work or services or otherwise not timely perform its obligations or enable NICE to stop payments or otherwise not timely perform its obligations.

17.9.4. The foregoing shall not affect the right of the parties to seek injunctions before the competent Court.

17.10. Wherever in this Agreement it is provided that the Parties agree to negotiate/review/change any term hereof (including prices), the parties will usetheir best commercial efforts and negotiate in good faith in order to reach such agreement. If the parties fail to agree, no change will be made to the last agreed terms and they shall continue to apply, except as otherwise specifically and explicitly provided herein, and except that the provisions of Section 8.2. and all its subsections will apply with regard to details included in APPENDIX C.

17.11. LAW AND JURISDICTION. This Agreement shall be governed by and construed in accordance with the laws of the state of Israel, without giving effect to choice of law rules.

44

17.12. SCHEDULES AND APPENDICES. Each Schedule and Appendix hereto is incorporated herein by this reference. The parties may amend any Schedule and Appendix from time-to-time by entering into a separate written agreement, referencing such Schedule and Appendix and specifying the amendment thereto, signed by an authorized representative of each of the parties.

17.13. SET-OFF. NICE shall only be entitled to setoff any amount due to Contractor against any amount due from Contractor to NICE, if the setoff amount is: (i) due according to this Agreement and is subject to an invoice lawfully issued hereunder; or (ii) liquidated damages according to this Agreement. In the event of setoff, Contractor shall receive, at the same time, a written notice signed by vice president operations of NICE detailing the setoff. Contractor shall not be entitled to setoff any amount due to NICE from Contractor hereunder against any amount due from NICE to Contractor according to this Agreement. The setoff provisions in this Agreement are in lieu of any setoff rights under any applicable law but shall not be construed as derogating from any other right or remedy.

17.14. LIEN. Each party hereby waives any right of lien it may have under applicable law.

17.15. COMMUNICATION AND NOTICES. Except as otherwise expressly provided in this Agreement, no communication from one party to the other shall have any validity under this Agreement unless made in writing by or on behalf of an authorized official of Contractor or, as the case may be, by or on behalf of an authorized official of NICE. Each party shall, from time to time, provide the other with a list of personnel designated as authorized officials for the purposes of this Section 17.15. Any notice or other communication which either party hereto is required or authorized by this Agreement to give or make to the other

shall be given or made either by registered mail, or by courier or by facsimile transmission confirmed by electronic confirmation, addressed to the other party to the address referred to in the preamble. Notices shall be deemed delivered within seven (7) Days of dispatch of the notice by registered mail, or upon delivery by courier, or one Business Day after sent if sent by facsimile transmission.

IN WITNESS WHEREOF, the parties have duly executed this Agreement as of the date first above written:

/s/ /s/ ------------------------ ------------------------ NICE SYSTEMS LTD. FLEXTRONICS ISRAEL LTD.

45

NICE SYSTEMS LTD. FLEXTRONICS ISRAEL LTD.

(Nice-Nice Flex Master Manufacturing Outsourcing Agreement Final)

46
Question: Highlight the parts (if any) of this contract related to Insurance that should be reviewed by a lawyer. Details: Is there a requirement for insurance that must be maintained by one party for the benefit of the counterparty?

A: Without limiting any of the obligations or liabilities of Contractor, whether under this Agreement or by law, subject to any limitations hereunder, Contractor shall maintain, and shall cause any subcontractors engaged by Contractor to provide services under this Agreement to maintain, at Contractor's own expense, as long as this Agreement is in effect, insurance policies of the kind and limits as set forth in APPENDIX D to this Agreement. The expense of such insurance shall be borne by Contractor. The Contractor shall keep in force the policies specified in sections 1 and 3 to the Insurance Certificate valid as long as Contractor's legal liability EXISTS IN CONNECTION WITH OPERATIONS ACCORDING TO THE AGREEMENT.
****
Q: CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THIS EXHIBIT BECAUSE IT IS NOT MATERIAL AND WOULD LIKELY CAUSE COMPETITIVE HARM TO THE REGISTRANT IF PUBLICLY DISCLOSED. [***] INDICATES THAT INFORMATION HAS BEEN REDACTED.

PROMOTION AGREEMENT

by and between

JANSSEN BIOTECH, INC.

and

IMMUNOMEDICS, INC.

Dated as of: April 5, 2019

TABLE OF CONTENTS

ARTICLE 1 DEFINITIONS 1

ARTICLE II BRAND PLAN 10 2.1 Brand Plan Generally 10 2.2 Contents of Brand Plan 10

ARTICLE III PROMOTION 12 3.1 Scope 12 3.2 Detailing Requirements 13 3.3 Sales Representatives 14 3.4 Promotional Materials 15 3.5 Product Sales 16 3.6 Product Recall 16 3.7 Product Return 17

ARTICLE IV GOVERNANCE 17 4.1 Authority 17 4.2 Joint Commercial Team 17 4.3 BALVERSA Sales Advisory Team 18

ARTICLE V COMPENSATION 18 5.1 Definitions 18 5.2 Service Fees 18 5.3 Milestones 19 5.4 Costs 20 5.5 Reports and Payments 20

ARTICLE VI REGULATORY MATTERS 21 6.1 Regulatory Approvals 21 6.2 Pharmacovigilance Procedures 22 6.3 Product Complaints 22 6.4 Post-Marketing Surveillance 22 6.5 Product Medical Inquiries 22 6.6 Companion Diagnostic Inquiries 22 6.7 Access, Affordability and Patient Support Inquiries 23

ARTICLE VII BOOKS, RECORDS AND AUDIT RIGHTS 23 7.1 Books and Records 23 7.2 Books and Records Audits 23

ARTICLE VIII TERM AND TERMINATION 24 8.1 Term; Termination 24 8.2 Effect of Termination or Expiration 26 8.3 Suspension of Product Promotion 28

ARTICLE IX CONFIDENTIALITY; RESTRICTIVE COVENANTS 28 9.1 Confidentiality 28 9.2 Exclusivity 31 9.3 Restrictions on Promotions 31 9.4 Limitation on Soliciting Employees 31

ARTICLE X INTELLECTUAL PROPERTY 32 10.1 Use of Trademarks 32 10.2 Ownership of Intellectual Property Rights 32 10.3 Prosecution and Maintenance 33 10.4 Enforcement against Infringement 33 10.5 Third Party Infringement Claims 33

ARTICLE XI REPRESENTATIONS AND WARRANTIES; CERTAIN COVENANTS 33 11.1 Representations of Authority 33 11.2 Consents 33 11.3 No Conflict 33 11.4 Enforceability 33 11.5 Sales Representatives and Other Company Employees 34 11.6 Other Compliance Matters 34 11.7 Infringement of Third Party Intellectual Property; Clinical Trial Data 36 11.8 Disclaimer 36

ARTICLE XII INDEMNIFICATION; LIMITS ON LIABILITY 37 12.1 Scope of Indemnification 37 12.2 Notice and Control of Actions 38 12.3 Limitations on Liability 39

ARTICLE XIII DISPUTE RESOLUTION 39 13.1 Disputes 39 13.2 Negotiation 39 13.3 Mediation 40 13.4 Arbitration 40 13.5 Confidentiality 42

ARTICLE XIV MISCELLANEOUS 42 14.1 Press Announcements 42 14.2 Force Majeure Event 42 14.3 Independent Contractors 43 14.4 Performance by Affiliates 43 14.5 Notices 43 14.6 Entire Agreement 44 14.7 Amendments; Assignment 44

14.8 Non-Waiver of Rights 14.9 Further Assurances and Cooperation 14.1 Severability 14.11 Binding Effect 14.12 Counterparts; Facsimile Signatures 14.13 Third Party Beneficiaries 14.14 Governing Law 14.15 Construction

Schedule 1.16 Janssen Universal Calendar

Schedule 6.2 Pharmacovigilance Provisions

Exhibit A Brand Plan

Exhibit B Detailing Requirements

Exhibit C Records and Information Management Requirements

Exhibit D Health Care Compliance Provisions

PROMOTION AGREEMENT

This PROMOTION AGREEMENT (this Agreement) dated as of April 5, 2019 (the Effective Date), is entered into by and between Janssen Biotech, Inc., a corporation organized under the laws of Pennsylvania (Janssen) and Immunomedics, Inc., a corporation organized under the laws of Delaware (Company).

WHEREAS, before the Effective Date, Janssen submitted an application for approval to market and/or sell the Product (defined below) for the Initial Indication (defined below) in the Territory (defined below); and

WHEREAS, Janssen now wishes to engage Company to Promote (defined below) the Product for the Initial Indication in the Territory and Company wishes to be so engaged, subject to and upon the terms and conditions set forth in this Agreement;

NOW, THEREFORE, in consideration of the mutual representations, warranties, covenants and undertakings contained in this Agreement, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties, intending to be legally bound, agree as follows:

ARTICLE I DEFINITIONS

Unless otherwise defined herein, capitalized terms used in this Agreement have the meanings set forth in this Article I.

1.1 Acquirer has the meaning set forth in Section 9.2.

1.2 Acquisition has the meaning set forth in Section 9.2.

1.3 Action means any claim, action, cause of action or suit (whether in contract or tort or otherwise), litigation (whether at law or in equity, whether civil or criminal), assessment, arbitration, investigation, hearing, charge, complaint, demand, notice or proceeding from, by or before any Governmental Authority.

1.4 Affiliate means with respect to a Party, any Person that is directly or indirectly controlling, controlled by or under common control with such Party at the time that the determination of affiliation is made. For the purposes of this definition, control of a Person means (a) beneficial ownership of at least fifty percent (50%) of the voting securities or other comparable equity interests of such Person (whether directly or pursuant to any option, warrant or other similar arrangement) or (b) the possession, directly or indirectly, of the power to direct the management and policies of such Person, whether through the ownership of voting securities, by contract, declaration of trust or otherwise, and the terms controlling and controlled shall have meanings correlative to the foregoing.

1.5 Agreement has the meaning set forth in the preamble to this Agreement.

1.6 Approval Date means the date upon which Marketing Approval is received for

the Product for the Initial Indication.

1.7 Audit Report has the meaning set forth in Section 7.2.2.

1.8 Audited Party has the meaning set forth in Section 7.2.1.

1.9 Auditing Party has the meaning set forth in Section 7.2.2.

1.10 Balversa-only Target has the meaning set forth in Exhibit B.

1.11 Baseline has the meaning set forth in Section 5.1.1.

1.12 Books and Records has the meaning set forth in Section 7.1.

1.13 Brand Plan has the meaning set forth in Section 2.1.

1.14 BSAT has the meaning set forth in Section 4.3.1.

1.15 Business Day means any day other than a Saturday or a Sunday or other day on which commercial banks are authorized or required to be closed in New York, New York.

1.16 Calendar Quarter means a calendar quarter based on that certain universal calendar system used by Janssen and each of its Affiliates for internal business purposes (a copy of which calendar for 2019 and 2020 is attached hereto as Schedule 1.16), such that each Calendar Quarter ends on the last date of the calendar quarter indicated on Schedule 1.16 (the Quarter End Date) and begins on the date following the Quarter End Date of the preceding Calendar Quarter.

1.17 Calendar Year means a calendar year based on that certain universal calendar system used by Janssen and each of its Affiliates for internal business purposes (a copy of which calendar for 2019 and 2020 is attached hereto as Schedule 1.16), such that each Calendar Year ends on the fourth Quarter End Date for such year and begins on the date following the fourth Quarter End Date of the preceding Calendar Year.

1.18 Call means an in-person visit by an adequately trained sales representative to the office of a health care professional in the Territory for the purpose of promoting or presenting one or more pharmaceutical products.

1.19 Call Plan has the meaning set forth in Section 2.2.3.

1.20 CPR Mediation Procedure has the meaning set forth in Section 13.3.1.

1.21 CPR Rules has the meaning set forth in Section 13.4.

1.22 Companion Diagnostic means the diagnostic test approved by FDA concurrently with the Product for use in conjunction with the Product.

1.23 Company has the meaning set forth in the preamble to this Agreement.

1.24 Company Indemnified Parties has the meaning set forth in Section 12.1.1.

1.25 Company Internal Detail Reporting System means the data and records collected by Company and its Affiliates, in accordance with its standard business practice, to monitor Details made by Sales Representatives, which, with respect to the Product, include the date a Detail was made, the name of the Target to whom the Detail was made, the indication(s) for which the Product was presented, and the identity of the Sales Representative who delivered the Detail.

1.26 Company Product means the drug that is being developed by Company on the Effective Date, known as IMMU- 132 or sacituzumab govitecan.

1.27 Company Product Approval Date means the date upon which Marketing Approval is first received in the Territory for the Company Product.

1.28 Company Trademark means any Trademark owned by Company or any of its Affiliates.

1.29 Competing Product means any pharmaceutical product that is (a) approved specifically for use, in the treatment of urothelial cancer in any patient population in the Territory or (b) a fibroblast growth factor receptor inhibitor. If the Parties agree to extend the Term beyond the Expiration Date, Competing Product shall not include Company Product after the Expiration Date.

1.30 Confidential Information of a Party means (a) all non-public or proprietary information and data (including clinical data, technology, trade secrets, design specifications, dossiers, manufacturing formulae, manufacturing procedures and instructions, methods and processes, formats, designs, applications and programs, raw material supply arrangements, projections, prescriber and target data, pharmacy data, sales data, analyses, rebate agreements, promotion plans, detailing information, financial statements, customer and target lists, marketing plans, budgets, Third Party contracts, market research data, pricing, reimbursement and costs relating to the Product) that is disclosed by or on behalf of such Party or any of its Affiliates to the other Party, any of its Affiliates or any of their respective employees, agents or contractors pursuant to or in connection with this Agreement and (b) any other non- public or proprietary information and data that is expressly deemed in this Agreement to be Confidential Information of such Party, whether or not disclosed by or on behalf of such Party to the other Party, any of its Affiliates or any of their respective employees, agents or contractors, in each case ((a) and (b)) without regard to whether any of the foregoing is marked confidential or proprietary, or in oral, written, graphic or electronic form.

1.31 Cumulative Net Sales has the meaning set forth in Section 5.1.1.

1.32 Cure Period has the meaning set forth in Section 8.1.4.

1.33 Detail means an in-person presentation of the Product and its uses for the Initial Indication made by an adequately trained sales representative during a Call to one or more Health Care Professionals in the Territory during which the sales representative describes the Product and such use(s) in a fair and balanced manner consistent with (a) the Product Label and Insert and any Promotional Materials approved in accordance with this Agreement, and (b) the other requirements of this Agreement, the Promotion Rules and applicable Laws, but shall not include reminder details or e-details, as such terms are generally understood in the pharmaceutical industry in the Territory, or any presentations made at conventions, consulting programs or similar gatherings, other than a pre-arranged or scheduled meeting at such gathering between the sales representative and a Health Care Professional. When used as a verb, Detail means to deliver the presentation described in this definition. Detailing shall have a corresponding meaning.

1.34 Detailing Period means each of the following periods: (a) the period beginning on the Start Date and ending on September 30, 2019; (b) October 1, 2019 through December 31, 2019; and (c) January 1, 2020 through March 31, 2020.

1.35 Diligent Efforts means, with respect to an activity to be undertaken by a Party pursuant to this Agreement, the level of efforts and resources normally used by such Party with respect to a pharmaceutical product owned or controlled by such Party, or to which such Party has similar rights, which product is of similar market potential and strategic value and is at a similar stage in its development or life as is the Product, taking into account all relevant factors, including issues of safety, efficacy, product profile, the competitiveness of the marketplace, the proprietary position of the Product, regulatory matters, profitability of the Product and other relevant commercial factors.

1.36 Disclosing Party has the meaning set forth in Section 9.1.3.

1.37 Disputes has the meaning set forth in Section 13.1.

1.38 Dual Target has the meaning set forth in Exhibit B.

1.39 Effective Date has the meaning set forth in the preamble to this Agreement.

1.40 Expiration Date means March 31, 2020.

1.41 FDA means the United States Food and Drug Administration or any successor agency thereto.

1.42 Fee Notice has the meaning set forth in Section 5.5.1.

1.43 First Position Detail means, with respect to any product, a detail or presentation that is dedicated solely to such product and constitutes at least 70% of the total presentation time for all products presented during a Call in which such product is the first product presented to the health care professional.

1.44 Force Majeure has the meaning set forth in Section 14.2.

1.45 GAAP means United States generally accepted accounting principles applied on a consistent basis. Unless otherwise defined or stated, financial terms shall be calculated by the accrual method under GAAP.

1.46 Governmental Authority means any government (including any national, federal, state or local government), or political subdivision thereof, or any multinational or other organization, authority, agency or commission entitled to exercise any administrative, executive, judicial, legislative, police, regulatory or taxing authority or power, any court or tribunal, or any governmental arbitrator or arbitral body (or any department, bureau or division of any of the foregoing).

1.47 Health Care Professional means a health care professional with prescribing authority who treats urothelial cancer.

1.48 Indemnified Party has the meaning set forth in Section 12.2.1.

1.49 Indemnifying Party has the meaning set forth in Section 12.2.1.

1.50 Initial Indication means the first indication for which the Product receives Marketing Approval in the Territory, which the Parties expect to be treatment of adult patients with locally advanced or metastatic urothelial carcinoma which has (a) susceptible FGFR 3 or 2 genetic alterations and (b) progressed during or following at least one line of prior platinum-containing chemotherapy including within 12 months of neoadjuvant or adjuvant platinum-containing chemotherapy, where patients are selected for therapy based on an FDA-approved companion diagnostic for the Product; provided, however, that, with respect to any such indication for which the Product receives Marketing Approval from the FDA, Initial Indication shall be defined by the exact wording used in the Product Label and Insert as so approved.

1.51 Janssen has the meaning set forth in the preamble to this Agreement.

1.52 Janssen Brand Usage Guidelines means Janssen's group guidelines on the Janssen brand visual and verbal identity as they apply to the Trademarks of Janssen and its Affiliates and the use of other companies' names and logos, as notified to Company by Janssen from time to time.

1.53 Janssen Indemnified Parties has the meaning set forth in Section 12.1.2.

1.54 Joint Commercial Team has the meaning set forth in Section 4.2.1.

1.55 Launch Date means the date of the commercial launch of the Product in the Territory selected by Janssen. As of the Effective Date, the Parties expect that the Launch Date shall be on or about May 1, 2019.

1.56 Laws means all laws, statutes, rules, regulations, ordinances and other pronouncements having the effect of law in any country, state, province, county, city or other political subdivision, and includes any rule or regulation of any Governmental Authority that may be in effect from time to time in the Territory.

1.57 License Agreement means that certain Collaboration and License Agreement between Janssen Pharmaceutica N.V. and Astex Therapeutics Limited executed in June 2008, as amended, pursuant to which Janssen was granted a license under one or more patents covering the Product.

1.58 Losses has the meaning set forth in Section 12.1.1.

1.59 Marketing Approval means, with respect to any product, approval by the FDA of an NDA for such product. 1.60 Milestone Event has the meaning set forth in Section 5.3.

1.61 Milestone Payment has the meaning set forth in Section 5.3.

1.62 Minimum Number of Details Requirement has the meaning set forth in Exhibit B.

1.63 Minimum PDE Requirement has the meaning set forth in Exhibit B.

1.64 Minimum Reach Requirement has the meaning set forth in Exhibit B.

1.65 Minimum Top Target Requirement has the meaning set forth in Exhibit B.

1.66 NDA means, with respect to any product, a New Drug Application for such product and all supplements to such New Drug Application filed pursuant to the requirements of the FDA.

1.67 Net Sales means [***].

1.68 Other Company Employees has the meaning set forth in Section 2.2.2(a).

1.69 Party means each of Janssen and Company, which together are referred to as the Parties.

1.70 Passing Score has the meaning set forth in Section 2.2.2(c).

1.71 Payee Party means, with regards to a payment pursuant to this Agreement, the Party that receives such payment from the other Party under this Agreement.

1.72 Paying Party means, with regards to a payment pursuant to this Agreement, the Party that makes such payment to the other Party under this Agreement.

1.73 PDE shall mean, with respect to any product, a primary detail equivalent, which consists of either a First Position Detail of such product or two Second Position Details of such product, such that a First Position Detail shall count as [***] PDE and a Second Position Detail shall count as [***] PDE. 1.74 Performance Failure Notice has the meaning set forth in Section 3.2.4(b). 1.75 Person means, as applicable, an individual, sole proprietorship, partnership, limited partnership, limited liability partnership, corporation, limited liability company, business trust, joint stock company, trust, incorporated association, joint venture or similar entity or organization, including a Governmental Authority.

1.76 PMS has the meaning set forth in Section 6.4.

1.77 Product means any or each of the tablets containing erdafitinib as its sole active ingredient in a dosage amount of 3 mg, 4 mg or 5 mg and that is currently expected to be approved by the FDA for the Initial Indication, as currently manufactured by or on behalf of Janssen or its Affiliate and planned to be marketed under the trademark BALVERSA™️.

1.78 Product Complaint means an oral, written or electronic communication from any Person that implies dissatisfaction regarding the identity, purity, quality or stability of the Product.

1.79 Product Label and Insert means (a) all labels and other written, printed or graphic material affixed to any container, packaging or wrapper utilized with the Product; and (b) any written material physically accompanying the Product, including the Product package inserts.

1.80 Product-Specific Training means training with respect to (a) sales and scientific materials regarding the disease state information on urothelial cancer, (b) currently available clinical data supporting use of the Product for the treatment of urothelial cancer, and (c) clinical data for products that compete with the Product.

1.81 Product Trademarks means any Trademarks as may be selected by Janssen and its Affiliate, in their sole discretion, for use in connection with the Product in the Territory, including any Trademark owned or controlled by Janssen or its Affiliates that includes the name BALVERSA. For purposes of clarity, the term Product Trademark shall not include the corporate names and logos of either Party.

1.82 Promotion means the (a) Detailing of the Product in the Territory for the Initial Indication and (b) performance of the other promotional activities for the Product set forth in the Brand Plan. Promote and Promoting, when used as a verb, means to engage in such Promotion.

1.83 Promotion Rules means: (a) the PhRMA Code on Interactions with Health Care Professionals; and (b) upon reasonable notice by Janssen to Company, any other similar rules,

policies or procedures with respect to the promotion of pharmaceutical products in the Territory that Janssen deems necessary or advisable to follow (including Janssen's compliance policies).

1.84 Promotional Materials has the meaning set forth in Section 3.4.2.

1.85 Quarter End Date has the meaning set forth in Section 1.16.

1.86 Receiving Party has the meaning set forth in Section 9.1.3.

1.87 Regulatory Approval means all technical, medical and scientific licenses, registrations, authorizations and approvals (including Marketing Approvals and labeling approvals) of all applicable Regulatory Authorities necessary for the commercial distribution, marketing, promotion, offer for sale, use, import and sale of a pharmaceutical product in a regulatory jurisdiction.

1.88 Regulatory Authority means any authority, agency, commission, official or other instrumentality inside or outside the Territory, including the FDA, having jurisdiction over the manufacture of Product for sale in the Territory, or over the commercial distribution, marketing, promotion, offer for sale, use, import or sale of the Product in the Territory.

1.89 Remediation Plan has the meaning set forth in Section 3.2.4(b).

1.90 Sales Force has the meaning set forth in Section 3.3.2(a).

1.91 Sales Representative means a sales representative used by Company to perform Details of the Product for the Initial Indication to Health Care Professionals in the Territory. Sales Representative shall not include any key account manager, medical science liaison or regional sales manager.

1.92 Second Position Detail means, with respect to any product, a detail or presentation that is dedicated solely to such product and constitutes at least 30% of the total presentation time for all products presented during a Call in which such product is the second product presented to the health care professional.

1.93 Service Fee has the meaning set forth in Section 5.1.

1.94 Start Date means the first date upon which Sales Representatives are able to Detail the Product in accordance with this Agreement and as approved by Janssen, which may be before, on or after the Launch Date.

1.95 Supplementary Training means supplemental training relating to a Product, including refresher training, training regarding any emerging Product safety information, or new Promotional Materials or Product messaging.

1.96 Target means a Health Care Professional who treats patients for locally advanced

or metastatic urothelial cancer and is included in the Target List in accordance with this Agreement.

1.97 Target List has the meaning set forth in Section 2.2.1.

1.98 Tax or Taxes means any present or future taxes, levies, imposts, duties, charges, assessments or fees of any nature (including interest, penalties and additions thereon or thereto) that are imposed upon a Party by a Governmental Authority or other taxing authority under any applicable Laws.

1.99 Term has the meaning set forth in Section 8.1.1.

1.100 Territory means the United States of America, including its territories and possessions.

1.101 Third Party means any Person other than a party to this Agreement or any of its Affiliates.

1.102 Trademark means any trademark, trade dress, trade name, brand name, logo, corporate name or service mark, used in connection with any product or service.

1.103 Training Activities Plan has the meaning set forth in Section 2.2.2(a). ARTICLE II BRAND PLAN 2.1 Brand Plan Generally. A written plan for the marketing and promotion of the Product for the Initial Indication in the Territory pursuant to this Agreement for Calendar Year 2019 is attached to this Agreement as Exhibit A (the Brand Plan). If the Launch Date is delayed beyond May 1, 2019, Janssen shall update the Brand Plan to adjust the Parties' obligations appropriately to reflect such delay. Janssen shall have the sole authority and responsibility for updating the Brand Plan for Calendar Year 2020. Janssen shall use reasonable efforts to deliver the Brand Plan for Calendar Year 2020 to the Joint Commercial Team by no later than November 30, 2019.

2.2 Contents of Brand Plan. The Brand Plan shall include: (a) a description of the Target List; (b) the Training Activities Plan; (c) a description of the Call Plan; and (d) a description of the sales and promotional materials (including Health Care Provider and patient education sales materials and, where applicable, non-personal promotional materials) to be used during the relevant year in connection with the Product. The Brand Plan shall also include plans for other non-Detailing activities, if any, to be conducted in relation to the Product during the period covered by the Brand Plan, such as attendance at medical conferences and Janssen sales meetings, marketing plans for advisory boards and publication plans.

2.2.1 Target List. Prior to the Launch Date, Janssen shall provide to Company, in electronic form, a list that sets forth: (x) the name of each Target to which the Sales Representatives will perform Details; and (y) the priority classification of each such Target (high, medium or low). Such list, as amended from time to time by Janssen, shall be the Target List. Janssen shall furnish with or as part of the Target List the claims data upon which the Target priority classification was based if (a) Janssen is able to obtain an agreement with the relevant Third Party to provide such data to Company and (b) the Parties agree on which Party will bear the costs of providing such data to Company.

2.2.2 Training Activities Plan.

(a) Training Activities Plan. The Brand Plan includes a plan that sets forth all of the training that Janssen deems necessary or advisable for the Sales Representatives and any other employees of Company conducting activities under this Agreement (such other employees, the Other Company Employees) to complete prior to conducting activities under this Agreement (the Training Activities Plan). The Training Activities Plan shall indicate which Party is responsible for providing such training, when such training will be provided and how such training will be provided (e.g., in person or remotely, which may include live audio/video conference calls, or electronically such as via learning management systems). The initial Training Activities Plan includes a plan for conducting and completing the Product-Specific Training and (as applicable) state Law compliance training of the Sales Representatives before the Launch Date. The initial Training Activities Plan also includes a plan for conducting and completing before the Launch Date compliance training of the Sales Representatives and the Other Company Employees in a manner consistent with all applicable pharmaceutical industry standards. Janssen may update the Training Activities Plan from time to time to include any additional training that Janssen deems necessary or advisable to refresh or update the knowledge of the Sales Representatives and the Other Company Employees.

(b) Training Responsibilities. Janssen shall conduct all Product-Specific Training to the Sales Representatives and Other Company Employees. Company shall at all times ensure that each Sales Representative and Other Company Employee (including Sales Representatives and Other Company Employee that are engaged after Launch Date) has received the Product- Specific Training and any other training set forth in the Training Activities Plan.

(c) Examination. Janssen shall administer to each Sales Representative an examination of the Product- Specific Training topics and any other training topics that Janssen deems necessary or advisable. The first such examination of the Sales Representatives shall occur no later than the Launch Date. Janssen shall determine the minimum score that is considered a minimum passing score for each examination (the Passing Score). Company shall ensure that, before conducting any Detailing of the Product pursuant to this Agreement, each Sales Representative has completed the Product-Specific Training and other training described in the Training Activities Plan and has achieved a Passing Score on such examination. Upon Company's request, Janssen shall provide, as soon as reasonably practicable, additional remedial training and re-testing of Sales Representatives who fail to achieve a Passing Score. Any Sales Representative

who does not obtain a Passing Score on such an examination shall not be permitted by Company to perform in-person presentations of the Product unless and until such Sales Representative is re-tested and achieves a Passing Score.

2.2.3 Call Plan. Janssen shall develop and provide to Company an annual plan that describes the amount, frequency and reach of Detailing to be performed by the Sales Representatives to the Targets on the Target List (the Call Plan).

ARTICLE III PROMOTION

3.1 Scope.

3.1.1 Engagement; Obligations.

(a) Janssen hereby engages Company on a non-exclusive basis to Promote the Product for the Initial Indication in the Territory on the terms, and subject to the conditions, set forth in this Agreement, and Company hereby accepts such engagement. Company shall not Promote the Product for any indication other than the Initial Indication. Company shall not conduct any promotion or marketing activities with respect to the Product that are not set forth in the Brand Plan without the prior written consent of Janssen. Janssen and its Affiliates retain the right to Detail and otherwise promote the Product in the Territory.

(b) Each Party shall perform the obligations and activities assigned to it in, and comply with the applicable provisions of, the Brand Plan and this Agreement.

3.1.2 Retained Rights. Any rights of Janssen or any of its Affiliates related to the Product that are not expressly granted to Company hereunder shall be retained by Janssen or such Affiliate, including all decision-making and other authority relating to Product development, regulatory matters, medical affairs, distribution, manufacturing and supply, Product strategy, marketing, sales, pricing, discounting, reimbursement, life cycle management, positioning, marketing messages and other commercialization matters. Janssen shall book sales of the Product in the Territory and shall have the sole right and responsibility to manufacture the Product and to distribute the Product in the Territory. Company shall not distribute or sell the Product in the Territory, and nothing herein shall be construed to provide Company with any rights to develop, manufacture, supply, distribute or sell the Product in the Territory.

3.1.3 Compliance with Laws. Company shall ensure that all of its personnel involved in the activities set forth under this Agreement comply with all applicable Laws and the Promotion Rules. Company shall ensure that the Sales Representatives and Other Company Employees Promote the Product at all times in accordance with applicable Laws and the Promotional Materials provided and approved by Janssen, refrain from making any false or misleading statements about the Product and refrain from discussing any unapproved uses of the Product.

3.2 Detailing Requirements.

3.2.1 General. Subject to Janssen fulfilling its obligations under Section 2.2.2(b) to provide the initial training and under Section 3.4 to deliver the Promotional Materials, Company shall begin promoting and Detailing the Product for the Initial Indication to the Targets on the Start Date. Company shall perform Detailing during the Term in accordance with this Section 3.2, the Call Plan and the Detailing requirements set forth on Exhibit B. For reference, the term Detail is defined in Section 1.33.

3.2.2 Minimum Detailing Requirements. At a minimum, Company shall cause its Sales Force to satisfy the Minimum Number of Details Requirement, the Minimum Reach Requirement and, if applicable, the Minimum PDE Requirement and the Minimum Top Target Requirement set forth in Exhibit B in each Detailing Period. Company shall ensure that the Sales Force satisfies the Positioning Requirements set forth on Exhibit B. Details that do not satisfy the Positioning Requirements set forth on Exhibit B will not be counted for purposes of determining whether the Minimum Number of Details Requirement, the Minimum Reach Requirement, the Minimum PDE Requirement or the Minimum Top Target Requirement has been satisfied.

3.2.3 Effects of Failure to Meet Minimum Detailing Requirements. If Company fails to achieve the Minimum Number of Details Requirement, the Minimum Reach Requirement or, if applicable, the Minimum PDE Requirement or the Minimum Top Target Requirement in any Detailing Period, Janssen shall have the right to terminate this Agreement by giving thirty (30) days' notice, unless:

(a) Company complied with and performed its Detailing activities in accordance with any Remediation Plans developed by Company and approved by Janssen during such Detailing Period; or

(b) if (i) neither Party provided a Performance Failure Notice under Section 3.2.4 during such Detailing Period and (ii) Company performs additional Details in the first month after such Detailing Period such that, if such Details had been performed during such Detailing Period, they would have been sufficient to cure the failure to achieve the Minimum Number of Details Requirement, the Minimum Reach Requirement, the Minimum PDE Requirement or the Minimum Top Target Requirement, as applicable. To avoid double-counting, such additional Details will not be taken into account when determining whether Company satisfies the Minimum Number of Details Requirement, Minimum Reach Requirement or, if applicable, the Minimum PDE Requirement or the Minimum Top Target Requirement in the then-current Detailing Period.

For clarity, (i) Company must achieve all of the applicable foregoing minimum requirements in order to avoid giving rise to Janssen's rights and remedies under this Section 3.2.3, and (ii) such rights shall be in addition to any other rights and remedies that may be available to Janssen under applicable Laws in the event of any such failure on the part of Company.

3.2.4 Monthly Detailing Reports.

(a) No later than [***] ([***]) Business Days following the end of each month during the Term, Company shall report to Janssen the number of Details performed (and any other information necessary to determine whether the requirements set forth in Section 3.2.2 and Exhibit B have been satisfied) during such month by the Sales Representatives in accordance with this Agreement and the Call Plan, as reported by the Company Internal Detail Reporting System. The Joint Commercial Team shall review and discuss Company's performance of its Detailing obligations on a monthly basis.

(b) In the event that either Party believes, based on such reports, review or discussion, that Company will fail to achieve the Minimum Number of Details Requirement, the Minimum Reach Requirement or, if applicable, the Minimum PDE Requirement or the Minimum Top Target Requirement under Section 3.2.2 for the then-current Detailing Period, such Party will promptly notify the other Party in writing (a Performance Failure Notice) and Company shall develop a plan to avoid such a failure within fifteen (15) Business Days after the end of the applicable month, which plan will be subject to Janssen's approval, not to be unreasonably withheld or delayed (as so approved, a Remediation Plan).

(c) For clarity, the Joint Commercial Team shall have no authority to extend the time for performance or reduce the Minimum Number of Details Requirement, the Minimum Reach Requirement or, if applicable, the Minimum PDE Requirement or the Minimum Top Target Requirement without an amendment to this Agreement.

3.2.5 Ride-Alongs. Members of Janssen's team shall have the right to conduct ride-alongs with the Sales Representatives for purposes of monitoring the Details delivered by the Sales Representatives upon Janssen's request. Janssen will give reasonable notice to Company sales management of each request.

3.3 Sales Representatives.

3.3.1 Qualifications. Company shall ensure that each Sales Representative: (i) is a full-time employee of Company and a full-time member of its sales force; (ii) possesses skills, training and experience that are consistent with industry standards applicable to the promotion of an oncological pharmaceutical product; (iii) has completed the Product-Specific Training and other sales training described in this Agreement and the Brand Plan and achieved a Passing Score on an examination in accordance with Section 2.2.2(c); and (iv) has become adequately equipped and knowledgeable with respect to the Product, as determined in accordance with Company's then-current standards for sales personnel selling pharmaceutical products in the Territory. No sales representative or other individual may be used by Company to perform in-person presentations of

the Product in the Territory unless and until such individual satisfies the conditions described in clauses (i) - (iv) above.

3.3.2 Size of Sales Force.

(a) At all times during the Term, Company shall use reasonable efforts to deploy and maintain a sales force (the Sales Force) of at least [***] ([***]) Sales Representatives who satisfy the conditions described in Section 3.3.1.

(b) Company shall notify Janssen (i) at least [***] ([***]) days in advance of any planned reduction by Company in the size of the Sales Force to less than [***] ([***]) Sales Representatives and (ii) promptly if the number of Sales Representatives on the Sales Force decreases to less than [***] ([***]). In either event, Company shall provide Janssen with a plan to continue meeting the Minimum Number of Details Requirements, Minimum Reach Requirements, Minimum PDE Requirements and, if applicable, Minimum Top Target Requirements under Section 3.2.2.

(c) If the average number of Sales Representatives on the Sales Force is less than twenty-five (25) over any forty-five (45)-day period, Janssen will have the right to terminate this Agreement by giving thirty (30) days' notice.

3.3.3 Subcontracting. Company may not subcontract with or otherwise use any Affiliate or Third Party to perform any Detailing or any of its other obligations under this Agreement without the prior written consent of Janssen.

3.3.4 Compensation of Sales Force. In the event Company elects to provide incentives to Sales Representatives, such incentives will be appropriate, in accordance with the applicable Laws, and, in the aggregate, competitive in the marketplace with respect to the products promoted by the Sales Representatives. Janssen shall not have any responsibility for or authority over the hiring, supervision, termination or compensation of the Sales Representatives or any other Company employees or for any employee benefits of such employees.

3.3.5 Additional Obligations. Company shall ensure that the Sales Representatives do not identify or represent themselves as employees or agents of Janssen or any Affiliate of Janssen.

3.4 Promotional Materials.

3.4.1 Positioning and Messages. Janssen shall develop and, as deemed advisable or necessary by Janssen from time to time, update product positioning and core selling messages for the Promotion of the Product. Janssen agrees to consider in good faith Company's feedback in the development of any such updates to such messaging.

3.4.2 Promotional Materials Development and Approval. Janssen shall be solely responsible for developing and providing to Company (at Janssen's cost) all promotional materials

for use in connection with the Promotion of the Product (the Promotional Materials) and agrees to provide Company with sufficient quantities of the materials based on market demand and expected levels of Detailing efforts. Janssen agrees to consider in good faith Company's feedback in the development of any new promotional materials during the Term. Such Promotional Materials shall comply with all applicable Laws and may include written sales and advertising materials, detail aids, brochures, hand-outs, reprints, booth panels and any other promotional support items. Company shall use only the Promotional Materials provided by Janssen and the Product Label and Insert in its Promotion of the Product in the Territory. Company shall not add any Company Trademark to the Promotional Materials or otherwise alter the Promotional Materials in any way. Company shall not develop or use any other promotional materials in its Promotion of the Product.

3.4.3 Janssen Right to Use Promotional Materials. Nothing in this Agreement shall restrict Janssen's right to use any Promotional Materials for the purposes of promoting the Product in the Territory.

3.4.4 Revisions. Janssen may revise, update or develop additional Promotional Materials from time to time during the Term, as deemed necessary and appropriate by Janssen, including based on: (i) changes in the Product Label and Insert; (ii) requirements or mandates of the FDA or other Regulatory Authorities or any Laws; or (iii) changes in the Promotion Rules.

3.4.5 Revocation of Approval. If, at any time, Janssen notifies Company in writing that it no longer approves the use of specified Promotional Materials, Company shall immediately take action to remove the Promotional Materials from use by Sales Representatives and either (i) destroy such materials or (ii) return them to Janssen. The cost of such return shall be borne by Janssen.

3.5 Product Sales. Janssen shall have sole authority and responsibility for sale and distribution of the Product in the Territory. Company shall not, and shall not permit the Sales Representatives or Other Company Employees to, solicit or accept orders for the Product or otherwise engage in any distribution, sale or offer for sale of the Product, any Product samples or any other product containing erdafitinib, but rather shall promptly direct any orders that it receives for Product or Product samples, and cause the Sales Representatives and Other Company Employees to direct promptly any such orders they may receive, to Janssen or any Third Party designated by Janssen.

3.6 Product Recall. Janssen shall have sole authority and responsibility for any recall or withdrawal of the Product in the Territory. Following a decision by Janssen to conduct any such recall or withdrawal of the Product: (a) Janssen shall immediately notify Company of such decision, (b) Company shall immediately cease Detailing and all other promotion of the Product and (c) as soon as reasonably practicable, Janssen provide Company with a prepared statement for use in response to any inquiries regarding such recall or withdrawal. Company shall use such prepared statement to respond to any inquiries received with regard to the recall or withdrawal and shall not make any other statement regarding such recall or withdrawal except as required by

applicable Law. In the event of a recall or withdrawal, the obligations of the Parties under this Agreement (other than Janssen's obligation to pay Service Fees or Milestone Payments to Company) will be suspended solely to the extent and for so long as necessary until the circumstances that were the reasons for the recall or withdrawal have been resolved.

3.7 Product Return. Janssen shall have the sole authority, right and responsibility to accept and handle, either directly or indirectly, any request to return Product in the Territory. Company shall not solicit the return of any Product and shall promptly direct any attempted returns and cause the Sales Representatives and Other Company Employees to direct promptly any attempted returns to Janssen or any Third Party designated by Janssen.

ARTICLE IV GOVERNANCE

4.1 Authority. Janssen shall have sole decision-making authority with respect to all matters relating to the promotion and Detailing of the Product in the Territory under this Agreement (including making changes to the Brand Plan), but Janssen may not exercise such decision-making authority with respect to a change to the Brand Plan that would materially increase Company's Detailing obligations or materially increase Company's non-Detailing obligations.

4.2 Joint Commercial Team.

4.2.1 Formation; Purpose. Simultaneously with the execution of this Agreement the Parties shall establish a joint commercial team (the Joint Commercial Team) solely as a forum for the Parties' representatives to discuss Company's execution of the Brand Plan, potential changes to the Brand Plan and the promotion and Detailing of the Product to the Targets in the Territory. The Joint Commercial Team will have no decision-making authority. During the meetings of the Joint Commercial Team, the Parties may make recommendations to one another with respect to Company's execution of the Brand Plan, potential changes to the Brand Plan and the promotion and Detailing of the Product to the Targets in the Territory.

4.2.2 Membership. The Joint Commercial Team shall consist of at least three (3) representatives of each Party, appointed by such Party from among its (or its Affiliates') employees that have a level of experience customary for a committee of this type. Either Party may remove and replace any member that it appointed, with or without cause, at any time by prior notice to the other Party. The Joint Commercial Team shall at all times be chaired by a representative of Janssen. The chairperson shall be responsible for calling meetings, preparing and circulating an agenda in advance of each meeting, and preparing and issuing minutes of each meeting within thirty (30) days thereafter or within a timeframe agreed by the Parties.

4.2.3 Meetings. The Joint Commercial Team shall meet monthly. Meetings of the Joint Commercial Team may be held in person or by audio or video teleconference with the consent of each Party. Each Party shall bear its own costs associated with the attendance of its appointees at such meetings. Each Party shall ensure that at least two (2) of its appointed members

(or their alternates) attend each meeting. Other employee representatives of each Party may attend meetings of the Joint Commercial Team.

4.3 BALVERSA Sales Advisory Team.

4.3.1 Formation; Purpose. Upon request by Janssen, the Parties shall establish a BALVERSA Sales Advisory Team (the BSAT). The BSAT will serve solely as an advisory forum and will have no decision-making authority.

4.3.2 Membership. The BSAT shall consist of at least one Sales Representative per region, at least two (2) regional managers of Company and at least one representative of Janssen's BALVERSA marketing team. Either Party may remove and replace any member that it appointed, with or without cause, at any time by prior notice to the other Party. The BSAT shall at all times be chaired by a representative of Janssen. The chairperson shall be responsible for calling meetings.

4.3.3 Meetings. The BSAT shall meet every other week during the first sixty (60) days after the Launch Date and monthly for the rest of the Term, with each meeting not to exceed ninety (90) minutes in duration. Meetings of the BSAT shall be held by audio or video teleconference and the parties agree to make reasonable efforts to ensure the meetings do not interfere with territory detailing time. Each Party shall bear its own costs associated with the attendance of its appointees at such meetings. Other employee representatives of each Party may attend meetings of the BSAT.

ARTICLE V COMPENSATION

5.1 Definitions.

5.1.1 Baseline means (i) with respect to Calendar Year 2019, [***] Dollars ($[***]); and (ii) with respect to Calendar Year 2020, [***]Dollars ($[***]).

5.1.2 Cumulative Net Sales means, with respect to any Calendar Quarter, the aggregate amount of Net Sales that were made during such Calendar Quarter and any prior Calendar Quarter(s) during the same Calendar Year.

5.2 Service Fee. In partial consideration of Company's Promotion of the Product in accordance with the terms of this Agreement, and subject to the terms and conditions of this Agreement, with respect to each Calendar Quarter during Calendar Year 2019 and Calendar Year 2020, Janssen shall pay Company a service fee (the Service Fee), as follows:

(a) with respect to each Calendar Quarter during Calendar Year 2019, an amount equal to (i) [***] percent ([***]%) of that portion of Cumulative Net Sales that is greater than the Baseline for Calendar Year 2019, less (ii) the total Service Fees that have been invoiced by Company to Janssen for all preceding Calendar Quarters of Calendar Year 2019; and

(b) with respect to each Calendar Quarter during Calendar Year 2020, an amount equal to (i) [***] percent ([***]%) of that portion of Cumulative Net Sales that is greater than the Baseline for Calendar Year 2020, less (ii) the total Service Fees that have been invoiced by Company to Janssen for all preceding Calendar Quarters of Calendar Year 2020.

Unless and until the Cumulative Net Sales exceed the Baseline for a particular Calendar Year, the Service Fee shall be zero. The foregoing calculation method is intended to ensure that each Service Fee for a Calendar Quarter includes a true-up amount of all Service Fees earned year-to-date in the same Calendar Year.

5.3 Milestones.

5.3.1 In partial consideration of Company's Promotion of the Product in accordance with the terms of this Agreement, and subject to the terms and conditions of this Agreement, Janssen shall pay Company milestone payments in accordance with this Section 5.3. Janssen shall notify Company in the applicable Fee Notice the first time the Cumulative Net Sales in the applicable Calendar Year exceed the amounts set forth in the following table (each, a Milestone Event). Janssen shall pay to Company the applicable milestone payments set forth in the table below (each, a Milestone Payment) within [***] ([***]) days after receipt of an invoice from Company with respect to achievement of each Milestone Event. Each Milestone Payment shall be non-refundable and non-creditable.

Milestone Event Milestone Payment Upon the first occasion that Cumulative Net Sales in Calendar Year 2019 exceed US$[***] US$[***] Upon the first occasion that Cumulative Net Sales in Calendar Year 2019 exceed US$[***] US$[***] Upon the first occasion that Cumulative Net Sales in Calendar Year 2019 exceed US$[***] US$[***] Upon the first occasion that Cumulative Net Sales in Calendar Year 2020 exceed US$[***] US$[***]

5.3.2 Each Milestone Payment shall be payable only once upon the first occurrence of the relevant Milestone Event, even if the Milestone Event occurs multiple times.

In the event Regulatory Approval of the Product for the Initial Indication in the Territory is delayed beyond May 18, 2019, or in the event commercial availability of the Product is delayed beyond June 1, 2019, Janssen agrees to make proportional adjustments to the Milestone Events in 2019, Milestone Payments in 2019 and the Baseline for 2019

consistent with the period of delay in Regulatory Approval or commercial availability, whichever is greater, as shown in the following sample calculation.

Sample Calculation:

Example: Regulatory Approval date is June 18, 2019 - 30 days delayed approval

New Baseline for Calendar Year 2019: $[***] - ($[***] X [***] days / [***] days) = $[***]

New Milestone Event and Payment for First 2019 Milestone: Cumulative Net Sales: $[***] - ($[***]X [***] days / [***] days) = $[***] Payment: $[***] - ($[***] X [***] days / [***] days) = $[***]

5.4 Costs. Unless otherwise expressly stated in this Agreement, each Party shall bear and be responsible for all internal and out-of-pocket costs and expenses incurred by such Party in the performance of this Agreement.

5.5 Reports and Payments.

5.5.1 After the end of each Calendar Quarter of Calendar Year 2019 and 2020, Janssen shall calculate in good faith, based on Janssen's Books and Records and in accordance with Janssen's customary and consistently-applied accounting practices, the Net Sales in such Calendar Quarter and for such Calendar Year in the aggregate, as well as the Cumulative Net Sales and the Service Fee for such Calendar Quarter. Janssen shall deliver to Company, within thirty (30) days following the last day of such Calendar Quarter, a report setting forth the Cumulative Net Sales, the Service Fee and, if applicable, the Milestone Payment for such Calendar Quarter (the Fee Notice).

5.5.2 Following receipt of a Fee Notice from Janssen pursuant to Section 5.5.1, Company shall invoice Janssen for the amount of the Service Fee payable with respect thereto, if any.

5.5.3 Subject to Janssen obtaining appropriate consents from its Third Party specialty pharmacy partner, and the Parties reaching mutual agreement on the allocation between them of the associated costs, if any, Janssen shall provide prescriber level unit sales data generated from the specialty pharmacy partner on a weekly basis for the Company to track business trends, direct resources, measure sales force effectiveness, detailing sensitivity, and to design an effective sales incentive program.

5.5.4 If a Party incurs any costs that are the responsibility of the other Party under this Agreement, such Party shall invoice the other Party for such costs promptly following the

Calendar Quarter during which such costs were incurred. Such invoice shall include reasonable documentation of the costs for which the invoicing Party is seeking reimbursement.

5.5.5 All invoices delivered in accordance with Section 5.5.2 or 5.5.4 shall be paid by the Paying Party within [***] ([***]) days after receipt of such invoice.

5.5.6 All payments hereunder will be paid in U.S. Dollars and made available by bank wire transfer, in immediately available funds, to the account designated in writing by the Payee Party from time to time. Any changes to such account designation shall be made at least thirty (30) Business Days before the due date of the applicable payment.

5.6 Tax Matters. The Paying Party shall make all payments to the Payee Party under this Agreement without deduction or withholding for any Taxes except to the extent that any such deduction or withholding is required by any Law in effect at the time of payment. Each Party shall otherwise be responsible for its own income taxes and corporate taxes and any other Taxes payable by such Party arising under or in connection with this Agreement and shall pay all such Taxes and file any applicable tax returns on a timely basis. Any Tax required to be withheld on amounts payable under this Agreement shall timely and promptly be paid by the Paying Party on behalf of the Payee Party to the appropriate Governmental Authority, and the Paying Party shall furnish the Payee Party with proof of payment of such Tax. Any such Tax required to be withheld shall be an expense of and borne by the Payee Party. If any such Tax is assessed against and paid by the Paying Party, then the amount of such Tax withheld shall be treated as paid by the Paying Party to the Payee Party and the Payee Party shall indemnify and hold harmless the Paying Party from and against such Tax. Both Parties will cooperate with respect to all documentation required by any taxing authority or reasonably requested by the Paying Party to secure a reduction in the rate of applicable withholding Taxes.

ARTICLE VI REGULATORY MATTERS

6.1 Regulatory Approvals.

6.1.1 Obligations of Janssen. Janssen, either itself or through one of its Affiliates, shall use Diligent Efforts to obtain Regulatory Approval of the Product for the Initial Indication in the Territory and to maintain the validity of such Regulatory Approval throughout the Term, including the submission of any additional information requested by any Regulatory Authority in connection with such Regulatory Approval. Janssen shall have no obligation to file any application for Regulatory Approval for the Product in respect of any indication other than the Initial Indication.

6.1.2 Rights of Janssen. Janssen shall be the holder of any and all Regulatory Approvals for the Product in the Territory and shall retain sole authority over all regulatory matters relating to the Product in the Territory.

6.1.3 Communications with Regulatory Authorities. As between Janssen and Company, Janssen shall have the sole authority and responsibility for communicating with any Regulatory Authority regarding any Regulatory Approval of the Product in the Territory or any application or filing therefor, or regarding any other obligation to any Regulatory Authority in relation to the Product. Except as expressly set forth herein or as required by applicable Law or as approved in advance by Janssen in writing, Company shall not communicate directly with any Regulatory Authority regarding the Product or otherwise take any action concerning any application, registration, authorization or approval under which the Product is manufactured, imported, maintained, marketed, reimbursed or sold in the Territory.

6.2 Pharmacovigilance Procedures. The Parties shall comply, and Company shall cause the Sales Representatives and Other Company Employees to comply, with the provisions set forth on Schedule 6.2, which govern the reporting of adverse events/adverse drug reactions associated with the Product, Product quality complaints associated with adverse events and other information concerning the safety of the Product within the Territory.

6.3 Product Complaints. Janssen shall have the sole right and responsibility to accept and handle any Product Complaint associated with the use of the Product. Company shall, and shall cause each of its Sales Representatives and Other Company Employees to, notify Janssen as soon as possible, but no later than 24 hours after the time he or she becomes aware of any Product Complaint associated with the Product, which notice shall include the name of the person making such Product Complaint, the Target that prescribed the Product (if any), and the date the relevant Sales Representative or Other Company Employee received such Product Complaint. Details regarding the process for notifying Janssen of any such Product Complaints shall be as set forth in product complaints standard operating procedures, a copy of which Janssen will provide to Company promptly following the Effective Date.

6.4 Post-Marketing Surveillance. Janssen shall have the sole right to conduct any post marketing surveillance with respect to the Product (PMS), whether such PMS is elected by Janssen or required by applicable Law.

6.5 Product Medical Inquiries. Janssen shall handle all medical questions from members of the medical profession regarding the Product in the Territory. Company shall refer all medical inquiries regarding the Product to Janssen through the established process outlined by Janssen for reporting of medical information requests, a copy of which Janssen will provide to Company promptly following the Effective Date.

6.6 Companion Diagnostic Inquiries. Company shall direct all inquiries relating to the Companion Diagnostic in accordance with the procedures established by Janssen, a copy of which Janssen will provide to Company promptly following the Approval Date.

6.7 Access, Affordability and Patient Support Inquiries. Company shall direct all inquiries relating to access, affordability, or patient support for the Product to the dedicated specialty pharmacy responsible for addressing such questions, in accordance with the procedures

established by Janssen, a copy of which Janssen will provide to Company promptly following the Effective Date.

ARTICLE VII BOOKS, RECORDS AND AUDIT RIGHTS

7.1 Books and Records. Janssen and Company shall each maintain true and complete books and records with respect to the performance of its obligations hereunder, including the Company Internal Detail Reporting System and items underlying all payment obligations and invoices related to this Agreement (the Books and Records). Company shall maintain and manage its Books and Records in accordance with the records and information management requirements set forth on Exhibit C.

7.2 Books and Records Audits.

7.2.1 Right to Audit. Upon [***] ([***]) days prior notice from a Party (the Auditing Party), the other Party (the Audited Party) will permit an independent certified public accounting firm of internationally recognized standing selected by the Auditing Party and reasonably acceptable to the Audited Party, to examine the relevant Books and Records of the Audited Party, as may be reasonably necessary to verify the accuracy of the reports provided by the Audited Party pursuant to Section 3.2.4 or Section 5.5.1, as applicable, and the payments made or invoiced under this Agreement. An examination by each Auditing Party under this Section shall occur not more than once with respect to the Term and will be limited to the pertinent Books and Records for Calendar Year 2019 and Calendar Year 2020.

7.2.2 Scope of Audit. The independent certified public accounting firm will be provided access to the Books and Records of the Audited Party, and such examination will be conducted during the Audited Party's normal business hours. The Audited Party may require the accounting firm to sign a standard non-disclosure agreement before providing the accounting firm access to the Audited Party's facilities or Books and Records. The draft report of the accounting firm will be provided to the Audited Party so that justifying remarks can be included in the final report to be shared with the Auditing Party. Upon completion of the audit, the accounting firm will provide both Parties a final copy of the written report disclosing any discrepancies in the reports submitted by the Audited Party or the payments made or owed by the Audited Party, if any, and shall not include any confidential information (or additional information that is ordinarily not included in the Fee Notice or Detailing reports, as applicable) disclosed to the auditor during the course of the audit (such report, an Audit Report).

7.2.3 Results of Audit. If an Audit Report shows that the Audited Party underpaid or failed to pay any amount due to the Auditing Party, then the Audited Party will pay to the Auditing Party the amount of such underpayment or non-payment. Such payment shall be made within [***] ([***]) days after the Audited Party's receipt of the Audit Report. If an Audit Report shows that Company overstated or otherwise misreported any information relating to Calls and Details, then Janssen shall be entitled to exercise any rights and seek any remedies it would have

had if such information had been accurately reported. If the Audited Party disagrees with the findings of the Audit Report, the Parties will first seek to resolve the matter between themselves, and in the event they fail to reach agreement the dispute resolution provisions outlined in Article XIII shall be followed to resolve the dispute. Any unpaid Service Fees or Milestone Payments finally determined by such resolution to be payable shall be paid within [***] ([***]) days after such final resolution. If an Audit Report shows any overpayment by either Party, such Party will be entitled to receive, at its option, either a refund of such overpayment or a credit equal to such overpayment against the amounts otherwise payable by such Party to the other Party under this Agreement.

7.2.4 Costs of Audit. If an Audit Report shows unpaid Service Fees or Milestones that exceeds [***] percent ([***]%) of the total amount owed by the Audited Party for the period being audited, then the reasonable and documented fees and expenses of such independent public accountant performing the examination shall be paid by the Audited Party, subject to reasonable substantiation thereof. Otherwise, the costs of the examination shall be solely borne by the Auditing Party.

7.3 Compliance Audits. Janssen or an authorized representative of Janssen, and any governmental agency that regulates a Party, may, at reasonable times during the Term and upon reasonable notice to Company, inspect and audit the Books and Records of Company with respect to Company's obligations under this Agreement for the sole purpose of evaluating Company's compliance with Sections 3.1.3, 3.4.2, 11.5 and 11.6 of this Agreement, applicable Laws and the Promotion Rules. The costs of any such audit shall be borne by Janssen, unless such audit reveals noncompliance by Company due to a failure by Company that is not excused by Janssen under this Agreement, in which case Company shall reimburse Janssen for any out-of-pocket costs reasonably incurred in connection with the audit.

ARTICLE VIII TERM AND TERMINATION

8.1 Term; Termination.

8.1.1 Term. This Agreement shall commence on the Effective Date and, unless earlier terminated, shall expire on the Expiration Date (the Term). For the avoidance of doubt, the Parties agree that Janssen's obligations under Section 5.2 (subject to Section 8.2.5) and Section 5.3 (subject to Section 8.2.5) shall remain in effect beyond the Expiration Date.

8.1.2 Failure or Delay in Obtaining Regulatory Approval. This Agreement may be terminated by either Party, before the date that Marketing Approval has been obtained for the Product for the Initial Indication in the Territory, in the event that Janssen withdraws its application for Marketing Approval for the Product for the Initial Indication in the Territory or is notified by FDA that Janssen's application for such Marketing Approval in the Territory has been or will be denied. Further, this Agreement may be terminated by either Party in the event that Marketing Approval for the Product in the Territory is not obtained before June 30, 2019. Any such

termination pursuant to this Section 8.1.2 shall be effective thirty (30) days following written notice of such termination being given to the non-terminating Party.

8.1.3 Termination Scenarios Following Regulatory Approval. Without limiting either Party's rights under Section 8.3, this Agreement may be terminated by either Party with thirty (30) days' prior written notice to the other, in the event that (a) a Governmental Authority requires Janssen to withdraw permanently the Product from the market in the Territory for the Initial Indication or Regulatory Approval for the Product for the Initial Indication is otherwise withdrawn, (b) Janssen permanently withdraws the Product from the market in the Territory for the Initial Indication for safety reasons or (c) promotion and sale of the Product in the Territory for the Initial Indication has been suspended for more than three (3) months or is permanently suspended, in either case, as a consequence of and pursuant to Section 8.3. To the extent practicable, each Party will consult with the other Party before terminating this Agreement pursuant to this Section and will consider the other Party's input in good faith; provided, however, that the decision to withdraw the Product pursuant to clause (b) above will be made by Janssen in its sole discretion, acting in good faith.

8.1.4 Material Breach. This Agreement may be terminated by either Party in the event that the other Party commits a material breach of this Agreement and (a) such breach shall not have been cured within thirty (30) days after the giving of notice of such material breach, unless (i) the specific provision to which such breach relates expressly provides for a different period, or (ii) the Parties mutually agree in writing to an extension of such period (the Cure Period); or (b) such breach, by its nature, is not curable. Unless such breach in clause (a) is cured during the Cure Period, such termination will be effective immediately upon the expiration of the Cure Period without any further action or notice by the non-breaching Party. In the case of a breach in clause (b), such termination will be effective thirty (30) days following written notice of such breach being given to the breaching Party.

8.1.5 Performance Failure. This Agreement may be terminated by Janssen in accordance with Section 3.2.3 or 3.3.2(c).

8.1.6 Competing Products. In the event that Company commits a breach of Section 9.2 or Section 9.3, then Janssen shall have the right to terminate this Agreement in its entirety at any time immediately upon written notice to Company.

8.1.7 Insolvency Proceeding. This Agreement may be terminated by either Party, immediately and without notice, if the other Party at any time (a) commences a voluntary case or other proceeding seeking liquidation, reorganization or other relief with respect to itself or its debts under any bankruptcy, insolvency or other similar Law or seeking the appointment of a trustee, receiver, liquidator, custodian or similar official of it or of any substantial part of its property, or consents to any such relief or to the appointment of or taking possession by any such official in an involuntary case or other proceeding commenced against it, or makes a general assignment for the benefit of creditors, or takes any corporate action to authorize any of the foregoing, (b) has an involuntary case or other proceeding commenced against it seeking liquidation, reorganization or

other relief with respect to it or its debts under any bankruptcy, insolvency or other similar Law or seeking the appointment of a trustee, receiver, liquidator, custodian or other similar official of it or any substantial part of its property, and such involuntary case or other proceeding remains undismissed and unstayed for a period of ninety (90) days; or an order for relief is entered against such Party under applicable bankruptcy Laws, or (c) is insolvent or is generally unable to pay its debts as they become due.

8.1.8 Force Majeure. This Agreement may be terminated by either Party in accordance with Section 14.2.

8.1.9 Health Care Compliance. This Agreement may be terminated by Janssen in accordance with Section 2(d) of Exhibit D.

8.1.10 Third Party Agreement. This Agreement may be terminated by Janssen with effect on December 31, 2019 or January 31, 2020, in either case with fifteen (15) days' advance written notice, and only in the event that Janssen has entered into an agreement with a Third Party that provides for (a) a license, sublicense, assignment, divestiture or other transfer or disposition of substantial rights or assets relating to the Product in the Territory, or (b) a collaboration involving the development and/or commercialization in the Territory of the Product or any other pharmaceutical product that contains erdafitinib. If Janssen terminates this Agreement pursuant to this Section 8.1.10, then Janssen shall, within [***] ([***]) days following the effective date of such termination, pay Company an amount equal to $[***] and, if the Milestone Event listed in the first line of the table in Section 5.3.1 has occurred, Janssen shall pay to Company an additional amount of $[***] (which shall be in addition to the Milestone Payment earned in respect of such Milestone Event).

8.1.11 Company Product Additional Indication. This Agreement may be terminated by Janssen with thirty (30) days' prior written notice in the event that the Company Product is approved by the FDA for use in the treatment of urothelial cancer in any patient population in the Territory.

8.2 Effect of Termination or Expiration.

8.2.1 Materials. Upon the effective date of termination or expiration of this Agreement, Company shall immediately (a) cease, and cause the Sales Representatives and Other Company Employees to cease, all Promotion of the Product, (b) discontinue the use of any Promotional Materials, and (c) discontinue the use of any Janssen sales data, Target List and other documents and data related to the Product provided to Company by Janssen hereunder. As requested by Janssen, Company shall either maintain (subject to the provisions of Section 9.1 and Exhibit C) or promptly destroy (and certify to Janssen the destruction) or return to Janssen all Promotional Materials, all training materials and all other materials related to the Product provided by Janssen pursuant to this Agreement or the Brand Plan. With respect to any information, data, or reports provided by Janssen to Company under this Agreement, including Janssen sales data, that Janssen requests Company to destroy or return, Company shall upon the effective date of

termination or expiration of this Agreement remove such information from its internal systems and certify to Janssen to such removal; provided, however, that such information shall not be required to be removed from inactive back-up computer files created pursuant to standard, automated archiving procedures.

8.2.2 Confidential Information. Following the effective date of termination or expiration of this Agreement, without prejudice to Section 8.2.1, each Party shall use reasonable efforts to return, destroy or maintain (subject to the provisions of Section 9.1 and Exhibit C), at the Disclosing Party's election, all Confidential Information of the other Party (provided that the Receiving Party may keep one copy of such Confidential Information subject to an ongoing obligation of confidentiality for archival purposes only).

8.2.3 Transition Plan. The Parties shall reasonably cooperate in good faith to effect the transition to Janssen of all Product promotional activities to minimize disruptions to customers and patients. In furtherance of the foregoing, and at the request of either Party, the Joint Commercial Team, reasonably in advance of the expected end of the Term shall develop and approve a transition plan that contains, among other things, a plan for notifying Targets and other customers or health care providers of such termination or expiration and transition, and, if applicable, provides for the completion of any events set forth in a Brand Plan which are already scheduled but will take place after the effective date of termination or expiration.

8.2.4 Non-Exclusive Remedies. The consequences set forth in this Section 8.2 are not intended to be the exclusive remedies of the Parties in connection with the breach of or termination of this Agreement.

8.2.5 Compensation in Certain Termination Events. If this Agreement is terminated pursuant to any of the following Sections, Janssen shall not be obligated to pay to Company (a) any Service Fees with respect to any period after the effective date of termination of this Agreement or (b) any Milestone Payments with respect to any Milestone Events that are achieved after the effective date of termination of this Agreement: Section 8.1.4 (if terminated by Janssen for breach by Company), 8.1.5, 8.1.6, 8.1.7 (if terminated by Janssen for the insolvency of Company), 8.1.8 (if terminated by Janssen for Force Majeure applicable to Company), 8.1.9, 8.1.10 (except that this Section 8.2.5 shall not affect Janssen's obligation to pay the amounts set forth in Section 8.1.10 as being payable in accordance with and subject to the conditions set forth in such Section 8.1.10) or 8.1.11.

8.2.6 Survival. Termination or expiration of this Agreement shall not relieve a Party of any liability for any breach that occurred, or of any obligation to make payment that accrued, before or on the effective date of such termination or expiration, nor prejudice either Party's right to obtain performance of any obligation provided for in this Agreement that survives termination or expiration. All provisions of this Agreement which, in accordance with their terms, are intended to have effect after the expiration or termination of this Agreement shall survive such termination or expiration, including: Sections 3.1.2, 3.2.4(a) (with respect to the last month of the Term), 5.2 (subject to Section 8.2.5), 5.3 (subject to Section 8.2.5), 5.5.1, 5.5.2, 5.5.5, 5.5.6, 5.6,

7.1, 7.2, 8.1.1 (last sentence only), 8.1.10 (only if the Agreement is terminated pursuant to Section 8.1.10), 8.2, 9.1, 10.2, 11.8, and Articles XII, XIII and XIV.

8.3 Suspension of Product Promotion

8.3.1 Right to Suspend. Janssen shall have the right to require that both Parties suspend the promotion of the Product in the Territory for the Initial Indication if Janssen decides, in its sole discretion, acting in good faith, that it is necessary to do so due to safety reasons, or to comply with applicable Law or a request or mandate of a Regulatory Authority, or because of any Third Party's claim or potential claim of intellectual property infringement in relation to the Product. In any such event, Company shall cease promoting the Product in the Territory immediately upon Company's receipt of notice from Janssen directing it to do so, and Janssen shall have the right to cease the sale and/or distribution of the Product for so long as promotion thereof is suspended. Janssen shall discuss its decision with Company as soon as it is practicable to do so and consider Company's input in good faith; provided, however, that all decisions regarding such matters shall be made by Janssen in its sole discretion. If Janssen decides to end any such suspension of the promotion, sale or distribution of the Product in the Territory, Janssen shall immediately notify Company of its decision.

8.3.2 Adjustments Due to Suspension. In the event Janssen suspends the promotion and/or sale of the Product in the Territory for the Initial Indication pursuant to Section 8.3.1, and such suspension results in any restriction or prohibition on Detailing activities by Company for a period of one week or more, then the Parties will discuss and attempt to agree upon an appropriate adjustment to Company's Detailing obligations under the Brand Plan and/or the Baselines.

ARTICLE IX CONFIDENTIALITY; RESTRICTIVE COVENANTS

9.1 Confidentiality.

9.1.1 Non-Disclosure and Non-Use. Except to the extent expressly authorized by this Agreement or otherwise agreed in writing, each of Janssen and Company agrees that, during the Term and until the conclusion of the [***] ([***]) year period beginning upon the expiration or earlier termination of this Agreement, such Party shall: (a) maintain in confidence the Confidential Information of the other Party using not less than the efforts such Party uses to maintain in confidence its own confidential or proprietary information of similar kind and value (but not less than reasonable efforts); (b) not disclose the Confidential Information of the other Party to any Third Party; and (c) not use the Confidential Information of the other Party for any purpose other than as provided for in this Agreement.

9.1.2 Certain Information. The Brand Plan (including the Training Activities Plan and Call Plan), the Target List and all information and data contained within such documents is deemed to be the Confidential Information of Janssen. The reports of Details provided by Company pursuant to Section 3.2.4 and all data in the Company Internal Detailing System relating

to the Product are deemed to be (a) the Confidential Information of both Parties during the Term and (b) the Confidential Information of Janssen after the Term.

9.1.3 Exceptions. The obligations of Section 9.1.1 do not apply to any portion of the Confidential Information of a Party (the Disclosing Party) that the other Party (the Receiving Party) can show by competent written evidence:

(a) is already known to the Receiving Party before the time of disclosure by the Disclosing Party, as evidenced by the Receiving Party's written records made or obtained before the date of disclosure; provided, however, that this clause (a) shall not apply to the reports and data described in the second sentence of Section 9.1.2;

(b) is disclosed to the Receiving Party on a non-confidential basis by a Third Party who, to the knowledge of the Receiving Party, is under no obligation to the Disclosing Party (or any of its Affiliates) with respect to confidentiality, secrecy or restriction on the use of such information or data;

(c) is now, or hereafter becomes, through no act or failure of the Receiving Party or any of its Affiliates in violation of this Agreement, generally known or available to the public;

(d) is independently discovered or developed by or on behalf of the Receiving Party or any of its Affiliates (i) not pursuant to or in connection with this Agreement and (ii) without the use of or reference to the Confidential Information of the Disclosing Party as evidenced by the Receiving Party's written records; or

(e) is publicly disclosed by the Disclosing Party, either before or after it is disclosed to the Receiving Party under this Agreement.

9.1.4 Permitted Disclosure. The Receiving Party may disclose the Disclosing Party's Confidential Information only to the extent such disclosure is reasonably necessary in the following instances, or to the extent permitted under the other applicable provisions of this Agreement:

(a) to those of the Receiving Party's Affiliates and its and their respective officers, directors, employees, agents, advisors and consultants who (a) are bound in writing (or, with respect to counsel to the Receiving Party, by professional or ethical obligations) by obligations of confidentiality and non-use substantially similar to and consistent with those of this Section 9.1, (b) need to receive the Confidential Information in order for the Receiving Party to exercise its rights, conduct the activities required by or fulfill its other obligations under this Agreement and (c) are made aware of the confidential nature of the information, and then only to the extent required for the Receiving Party to exercise its rights under, conduct the activities required by or fulfill its other obligations under this Agreement; provided that the Receiving Party shall be responsible and liable for any breach of the provisions of this Section 9.1 by any Person who receives Confidential Information pursuant to this Section 9.1.4(a);

(b) with respect to Janssen as the Receiving Party, to the FDA or other applicable Regulatory Authority where such disclosure is required in connection with any filing, application, or request for any Regulatory Approval of the Product in the Territory;

(c) to the extent that such disclosure is necessary to prosecute litigation for the protection, preservation, or return of Confidential Information or to enforce its rights under this Agreement;

(d) to comply with applicable Law or the rules of any stock exchange on which such Party's securities (or the securities of a Party's Affiliate) are traded, subject to the terms of Section 9.1.5;

(e) with respect to Janssen as the Receiving Party, to counterparties under the License Agreement to the extent such disclosure is required under the License Agreement or is advisable for the purpose of carrying out more fully Janssen's obligations under this Agreement or otherwise increasing Net Sales of the Product in the Territory; or

(f) to comply with court orders or administrative orders pursuant to Law.

In the case of disclosure pursuant to Section 9.1.4(c), 9.1.4(d) or 9.1.4(f), the Receiving Party (i) shall, to the extent reasonably practicable under the circumstances, give reasonable advance notice of the disclosure requirement to the Disclosing Party, so as to provide the Disclosing Party with the opportunity to secure, to the extent available, a protective order (or similar remedy) or other assurance of confidential treatment of the Confidential Information to be disclosed, and (ii) shall reasonably cooperate with the Disclosing Party, at its expense and request, in seeking such protective orders or other relief.

Any permitted use of the Disclosing Party's Confidential Information by the Receiving Party for purposes of its performance hereunder will not be deemed a license or other right of the Receiving Party to use any such Confidential Information for any other purpose. The Receiving Party shall not acquire any right, title, or interest in or to any Confidential Information (including copies and summaries thereof and extracts therefrom, whether tangible or in electronic or other form) of the Disclosing Party by virtue of its disclosure hereunder.

9.1.5 Terms of this Agreement. The terms of this Agreement are deemed to be, and shall be treated by each Party as, Confidential Information of each Party. Either Party may disclose the terms of this Agreement and other information relating to this Agreement or the transactions contemplated by this Agreement to the extent required, in the reasonable opinion of such Party's counsel, to comply with the rules and regulations promulgated by the United States Securities and Exchange Commission, New York Stock Exchange, Nasdaq Stock Market or similar security regulatory authorities or stock market in other countries. If a Party intends to disclose this Agreement or any of its terms or other Confidential Information of the other Party pursuant to this Section 9.1.5, such Party will, except where impracticable or not legally permitted, give reasonable advance notice to the other Party of such disclosure and seek confidential treatment

of portions of this Agreement or such terms or information, as may be reasonably requested by the other Party in a timely manner.

9.1.6 Prior Non-Disclosure Agreement. As of the Effective Date, the terms of this Section 9.1 supersede any prior non-disclosure, secrecy or confidentiality agreement between the Parties (or their Affiliates) relating to the subject matter of this Agreement, including the Mutual Confidentiality Agreement between the Parties dated February 1, 2019. Any information disclosed pursuant to any such prior agreement shall be deemed Confidential Information under this Agreement.

9.2 Exclusivity. During the Term, neither Company nor any of its Affiliates (including, for the avoidance of doubt, any Third Party that becomes an Affiliate of Company after the Effective Date) shall, alone or in collaboration with any Third Party, market, promote, sell, distribute or otherwise commercialize in the Territory any Competing Product without the prior written consent of Janssen. In the event that, after the Effective Date, a Third Party (an Acquirer) either (a) merges with Company, (b) acquires control (as defined in Section 1.4) of Company or (c) acquires substantially all the assets of the Company (each of (a), (b) and (c), an Acquisition), and such Acquirer or any of its Affiliates immediately prior to such Acquisition is commercializing a Competing Product in the Territory, then either Party shall have the right to terminate this Agreement on [***] ([***]) days written notice delivered within [***] ([***]) days of the closing of such Acquisition, and Company shall not be deemed to be marketing, promoting, selling, distributing or commercializing a Competing Product in breach of this Section for so long as it is conducting such activities solely through personnel who are not involved in any activities under this Agreement and do not have access to Janssen's Confidential Information hereunder.

9.3 Restrictions on Promotion. During the Term, Company and its Affiliates (including, for the avoidance of doubt, any Third Party which becomes an Affiliate of Company after the Effective Date) (a) will not, whether alone or in collaboration with any Third Party or for itself or any Third Party, during the promotion of any product, compare such product (other than the Product) with the Product in any aspect nor disparage the Product in any manner, and (b) with respect to any such product that is a product of Company or its Affiliates and that Company or its Affiliates promotes, sells, distributes, or otherwise commercializes using or through a Third Party, will (i) cause any such Third Party, during the promotion of such product, not to compare such product with the Product in any aspect nor disparage the Product in any manner and (ii) not authorize any Third Party to make any such comparison or disparagement.

9.4 Limitation on Soliciting Employees. During the Term, Janssen shall not directly or indirectly solicit for employment any Sales Representative who is an employee of Company, and Company shall not directly or indirectly solicit for employment any employee of Janssen with whom Company has had contact in the course of the evaluation or negotiation of this Agreement or with whom Company interacts during the Term; provided, however, that the foregoing provision will not prohibit either Party from (a) conducting general solicitations of employment in publications (including but not limited to websites, newspapers and/or journals) available to the public, or solicitations through the use of search firms, and which, in any case, are not directed

specifically toward such employees of the other Party or (b) any contact with any such employee of the other Party (i) that was initiated by such employee without any solicitation prior thereto by the contacting Party (other than solicitation permitted by clause (a) of this sentence) or (ii) with whom the contacting Party is already in employment discussions as of the Effective Date, or (iii) by any person other than (A) one who was introduced to, or became aware of, the relevant employee of the other Party solely in connection with this Agreement, and (B) one who is acting at the direction or suggestion of a person described in (A).

ARTICLE X INTELLECTUAL PROPERTY

10.1 Use of Trademarks. Janssen and its Affiliates shall retain all right, title and interest in and to its and their respective Trademarks. Company shall Promote pursuant to this Agreement only under the Product name and other Product Trademarks used by Janssen in the Territory. Janssen hereby grants to Company, during the Term, a non-exclusive, royalty free right to use such Product name and Product Trademarks, and Janssen corporate names and logos, solely to the extent they are included on the Promotional Materials and solely for the purpose of using the Promotional Materials to Promote in the Territory under this Agreement. Company shall not, without the express, prior written consent of Janssen, alter or modify in any manner any Product Trademark or any other Trademark of Janssen. Company agrees to comply with such Janssen standard guidelines regarding the use of the Product Trademarks and any other Trademarks of Janssen, and any amendments thereto, as Janssen provides to Company from time to time after the Effective Date (including the Janssen Brand Usage Guidelines).

10.2 Ownership of Intellectual Property Rights. Company acknowledges and agrees that Janssen or one of its Affiliates (a) is the sole and exclusive owner of all rights in and to the Product Trademarks and any other Trademarks of Janssen, including any form or embodiment thereof, and the goodwill now or hereafter associated therewith, (b) shall own the copyrights to all Promotional Materials and the Product Label and Insert, and (c) has the sole right to assert or control any action to enforce its rights in or to any of the Product Trademarks, any other Trademarks of Janssen or such copyrights and to receive the proceeds of any such action. Company further acknowledges and agrees that it does not, by virtue of this Agreement or its activities hereunder, obtain or acquire any right or interest in the Product Trademarks, any other Trademarks of Janssen, such copyrights, or any other intellectual property right of Janssen or its Affiliates. To the extent that Company, by operation of Law or otherwise, acquires any right (other than pursuant to this Agreement) to any of the Product Trademarks, any other Trademarks of Janssen, such copyrights or such other intellectual property rights, Company shall assign to Janssen all such rights at Janssen's cost and will not claim ownership. Company agrees that it shall not seek to register or obtain ownership rights in any of Janssen's corporate names, logos, or Product Trademarks (or any confusingly similar trademark).

10.3 Prosecution and Maintenance. Janssen will have the right (and not the obligation) to prepare, file, prosecute and maintain any intellectual property right of Janssen or its Affiliates claiming or covering the Product or its use in its sole discretion and at its own cost.

10.4 Enforcement against Infringement. Janssen and Company will each promptly notify the other in writing of any alleged or threatened infringement by a Third Party in the Territory of any intellectual property right of Janssen or its Affiliates claiming or covering the Product or its use in treating urothelial cancer, or any alleged or threatened assertion by a Third Party of invalidity of any of the intellectual property rights of Janssen or its Affiliates claiming or covering the Product or its use in treating urothelial cancer in the Territory, of which such Party becomes aware. Janssen and its Affiliates shall have the sole right (but not the obligation) to prosecute any such infringement in its sole discretion and at its sole cost.

10.5 Third Party Infringement Claims. In the event that Janssen or its Affiliate(s) decides to obtain a license to intellectual property from a Third Party in the Territory in order to commercialize the Product, whether or not due to a Third Party claim, notice, or suit or other inter partes proceeding against Janssen, Company and/or their Affiliates alleging that the commercialization of the Product in the Territory infringes or misappropriates any intellectual property rights of such Third Party, Janssen and its Affiliate(s) shall be solely responsible for the costs associated with such license and Company shall provide reasonable cooperation to Janssen or its applicable Affiliate(s) in procuring and complying with such license.

ARTICLE XI REPRESENTATIONS AND WARRANTIES; CERTAIN COVENANTS

11.1 Representations of Authority. Janssen and Company each represents and warrants to the other Party that, as of the Effective Date, it has full right, power and authority to enter into this Agreement and to perform its respective obligations under this Agreement and that it has the right to grant to the other Party the rights granted pursuant to this Agreement as set forth herein.

11.2 Consents. Janssen and Company each represents and warrants to the other Party that all necessary consents, approvals, and authorizations of all Government Authorities and other Persons required to be obtained by it as of the Effective Date in connection with the execution, delivery, and performance of this Agreement have been obtained by the Effective Date.

11.3 No Conflict. Janssen and Company each represents and warrants to the other Party that the execution and delivery of this Agreement by it and the performance of its obligations hereunder (a) do not conflict with or violate any Laws existing as of the Effective Date as applicable to such Party and (b) do not conflict with, violate, breach, or constitute a default under any of its material contractual obligations existing as of the Effective Date.

11.4 Enforceability. Janssen and Company each represents and warrants to the other Party that, as of the Effective Date, this Agreement is a legal and valid obligation binding upon it and is enforceable against it in accordance with its terms, subject to the laws of bankruptcy, insolvency, and creditors' rights.

11.5 Sales Representatives and Other Company Employees.

11.5.1 Company covenants to Janssen that:

(a) with respect to the Product, the Sales Representatives and Other Company Employees in the Territory shall make no statements, claims, or undertakings to any health care provider with whom they discuss or promote the Product that are not consistent with, nor provide nor use any labeling, literature, or other materials other than, the Product Label and Insert and those Promotional Materials provided and approved for use pursuant to this Agreement; and

(b) it shall ensure that all statements, comments and claims made by the Sales Representatives and Other Company Employees (i) about the Product, including as to efficacy and safety, are truthful and accurate and are consistent with and in strict compliance with the Product Label and Insert and all applicable Laws, and (ii) about Janssen in relation to the Product are truthful, accurate, and in strict compliance with all applicable Laws.

Any statement, claim or comment that is contained in the Promotional Materials or the Product Label and Insert, in each case, as in effect when such statement, claim or comment is made, shall be deemed not to violate this Section 11.5.1.

11.5.2 Company shall perform all Detailing and other promotional activities with respect to the Product in compliance with applicable Laws and the Promotion Rules.

11.6 Other Compliance Matters.

11.6.1 Company represents and warrants that it has established, and covenants that it will maintain during the Term, a compliance program consistent with the Compliance Program Guidance for Pharmaceutical Manufacturers published by the Office of Inspector General, U.S. Department of Health and Human Services.

11.6.2 Company represents and warrants that it has implemented, and covenants that it will maintain during the Term, adequate systems, policies, and procedures governing (1) interactions with health care professionals, (2) material that can be distributed or discussed with health care professionals, (3) the manner in which personnel should handle unsolicited requests for off- label information, and (4) the review and approval of all marketing, promotion, and sales materials, call plans, and incentive compensation structures. Company represents and warrants that such policies and procedures are and will be consistent with applicable Law and with this Agreement. 11.6.3 Company represents and warrants that neither Company, nor any of its employees, officers, directors, or agents, has been debarred by the FDA, is the subject of a conviction described in 21 U.S.C. 335a, or is subject to any similar sanction. Company represents and warrants that it has not, and covenants that it will not engage, in any capacity in connection with this Agreement, any person who has been debarred by FDA, is the subject of a conviction

described in 21 U.S.C. 335a, or is subject to any similar sanction. Company shall promptly inform Janssen in writing if it or any person performing services under this Agreement is debarred or is the subject of a conviction described in 21 U.S.C. 335a, or if any action, suit, claim, investigation, or legal or administrative proceeding is pending or threatened relating to the debarment or such conviction of Company or any such person performing services in connection with this Agreement. Upon written request from Janssen, Company shall, within ten (10) days, provide written confirmation that it has complied with the foregoing obligation.

11.6.4 Company represents and warrants that it is in compliance, and covenants that it will continue to comply during the Term, with all applicable Laws, rules and regulations, including the federal anti-kickback statute (42 U.S.C. 1320a-7b), the related safe harbor regulations, and the Limitation on Certain Physician Referrals, also referred to as the Stark Law (42 U.S.C. 1395nn).

11.6.5 Company shall conduct activities in accordance with applicable state and federal Laws and any applicable regulations regarding Medicare, Medicaid, and other third party-payer programs, if any. Company represents and warrants that (1) it is not excluded from, and has not been convicted of any crime or engaged in any conduct that could result in exclusion from, participation in any state or federal healthcare program, as defined in 42 U.S.C. 1320a-7b(f), for the provision of items or services for which payment may be made by a federal healthcare program; (2) it has not contracted, and will not contract, with any employee, contractor, agent, or vendor to perform work under the Agreement who is excluded from participation in any state or federal healthcare program; and (3) it is not subject to a final adverse action, as defined in 42 U.S.C. 1320a-7a(e) and 42 U.S.C. 1320a- 7a(g), and has no adverse action pending or threatened against it. Company shall notify Janssen of any final adverse action, discovery of contract with an excluded entity or individual, or exclusion within thirty (30) days of such action.

11.6.6 Company will comply with Exhibit D.

11.6.7 Janssen represents and warrants that neither Janssen, nor any of its employees, officers, directors, or agents, has been debarred by the FDA, is the subject of a conviction described in 21 U.S.C. 335a, or is subject to any similar sanction. Janssen represents and warrants that it has not, and covenants that it will not engage, in any capacity in connection with this Agreement, any person who has been debarred by FDA, is the subject of a conviction described in 21 U.S.C. 335a or is subject to any similar sanction. Janssen shall promptly inform Company in writing if it or any person performing services under this Agreement is debarred or is the subject of a conviction described in 21 U.S.C. 335a, or if any action, suit, claim, investigation, or legal or administrative proceeding is pending or threatened relating to the debarment or such conviction of Janssen or any such person performing services in connection with this Agreement.

11.6.8 Janssen represents and warrants that it has established, and covenants that it will maintain during the Term, Promotional Materials which are truthful, accurate, and in strict compliance with all applicable Laws.

11.6.9 Janssen represents and warrants that it is in compliance, and covenants that it will continue to comply during the Term, with all applicable Laws, rules and regulations, including the federal anti-kickback statute (42 U.S.C. 1320a-7b), the related safe harbor regulations, and the Limitation on Certain Physician Referrals, also referred to as the Stark Law (42 U.S.C. 1395nn).

11.6.10 Janssen shall conduct all activities hereunder in accordance with applicable state and federal Laws, including any applicable regulations regarding Medicare, Medicaid, and other third party-payer programs, if any. Janssen represents and warrants that (1) it is not excluded from, and has not been convicted of any crime or engaged in any conduct that could result in exclusion from, participation in any state or federal healthcare program, as defined in 42 U.S.C. 1320a-7b(f), for the provision of items or services for which payment may be made by a federal healthcare program; (2) it has not contracted, and will not contract, with any employee, contractor, agent, or vendor to perform work under the Agreement who is excluded from participation in any state or federal healthcare program; and (3) it is not subject to a final adverse action, as defined in 42 U.S.C. 1320a-7a(e) and 42 U.S.C. 1320a-7a(g), and has no adverse action pending or threatened against it.

11.7 Infringement of Third Party Intellectual Property; Clinical Trial Data. Janssen represents and warrants to Company that, to its knowledge, as of the Effective Date, the manufacture, use, import, or sale of the Product in the Territory for the Initial Indication does not, and will not during the Term, infringe or misappropriate any intellectual property rights of any Third Party. Janssen represents and warrants to Company that, as of the Effective Date, [***].

11.8 Disclaimer. EXCEPT AS OTHERWISE EXPRESSLY SET FORTH IN THIS ARTICLE XI, NEITHER JANSSEN NOR COMPANY, NOR ANY OF THEIR AFFILIATES, MAKES ANY REPRESENTATION OR EXTENDS ANY WARRANTY OF ANY KIND, EITHER EXPRESS OR IMPLIED, TO THE OTHER PARTY IN CONNECTION WITH THE PRODUCT, AND HEREBY DISCLAIMS ALL IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE AND NON-INFRINGEMENT WITH RESPECT TO THE PRODUCT. EACH PARTY HEREBY DISCLAIMS ANY REPRESENTATION OR WARRANTY THAT THE EXPLOITATION OF THE PRODUCT PURSUANT TO THIS AGREEMENT WILL BE SUCCESSFUL OR THAT ANY PARTICULAR SALES LEVEL WITH RESPECT TO THE PRODUCT WILL BE ACHIEVED.

ARTICLE XII INDEMNIFICATION; LIMITS ON LIABILITY

12.1 Scope of Indemnification.

12.1.1 Janssen shall indemnify and hold harmless Company, its Affiliates and its and their respective directors, officers, employees, and agents (collectively, the Company Indemnified Parties), from, against, and in respect of any and all liabilities, costs, fines, penalties, orders of any Governmental Authorities, Taxes, expenses, or amounts paid as damages or in settlement (in each case, including reasonable attorneys' and experts fees and expenses), involving an Action asserted by a Third Party (collectively, Losses), incurred or suffered by the Company Indemnified Parties or any of them and arising out of or resulting from:

(a) any breach by Janssen or any of the other Janssen Indemnified Parties of any representation, warranty or covenant under this Agreement;

(b) the negligence or willful misconduct of Janssen or any of the other Janssen Indemnified Parties in connection with Janssen's performance under this Agreement;

(c) any claim of death or bodily injury resulting from the use of the Product sold in the Territory; or

(d) any recall, withdrawal, product return or suspension of product promotion under Section 3.6, 3.7 or 8.3.

except, in each case ((a), (b) (c), and (d)), to the extent caused by the negligence or willful misconduct of Company or any of the other Company Indemnified Parties or the breach by Company of any of its representations, warranties or covenants set forth herein.

12.1.2 Company shall indemnify and hold harmless Janssen, its Affiliates, and its and their respective directors, officers, employees, and agents (collectively, the Janssen Indemnified Parties), from, against and in respect of any and all Losses incurred or suffered by the Janssen Indemnified Parties or any of them and arising out of or resulting from:

(a) any breach by Company or any of the other Company Indemnified Parties of any representation, warranty or covenant under this Agreement; or

(b) the negligence or willful misconduct of Company or any of the other Company Indemnified Parties in connection with Company's performance under this Agreement;

except in each case ((a) and (b)), to the extent caused by the negligence or willful misconduct of Janssen or any of the other Janssen Indemnified Parties or the breach by Janssen of any of its representations, warranties or covenants set forth herein.

12.2 Notice and Control of Actions.

12.2.1 A Person entitled to indemnification under this Article XII (an Indemnified Party) shall give prompt written notification to the Person from whom indemnification is sought (the Indemnifying Party) of the assertion of any Action by a Third Party for which indemnification may be sought (it being understood and agreed, however, that the failure by an Indemnified Party to give such notice of a Third Party Action as provided in this Section 12.2.1 shall not relieve the Indemnifying Party of its indemnification obligation under this Agreement except and only to the extent that such Indemnifying Party is actually prejudiced as a result of such failure to give notice).

12.2.2 Within thirty (30) days after delivery of such notification, the Indemnifying Party may, upon written notice thereof to the Indemnified Party, assume control of the defense of such Action with counsel reasonably satisfactory to the Indemnified Party; provided, however, that the Indemnifying Party shall not have the right to control the defense of any Action against any Indemnified Party involving criminal charges or tax matters. If the Indemnifying Party does not assume control of the defense of an Action, the Indemnified Party shall control such defense.

12.2.3 The Party not controlling such defense shall reasonably cooperate with the other Party at such other Party's request and expense, and may participate therein at its own expense; provided, however, that if the Indemnifying Party assumes control of such defense and the Indemnified Party reasonably concludes, based on advice from counsel, that the Indemnifying Party and the Indemnified Party have conflicting interests with respect to such Action, the Indemnifying Party shall be responsible for the reasonable fees and expenses of counsel to the Indemnified Party solely in connection with such Action; provided further, however, that in no event shall the Indemnifying Party be responsible for the fees and expenses of more than one counsel for all Indemnified Parties.

12.2.4 The Party controlling such defense shall keep the other Party advised of the status of such Action and the defense thereof and shall consider recommendations made by the other Party with respect thereto.

12.2.5 The Indemnified Party shall not agree to any settlement of such Action, consent to any judgment in respect thereof or admit any liability with respect thereto, without the prior written consent of the Indemnifying Party, which shall not be unreasonably withheld or delayed.

12.2.6 The Indemnifying Party shall not agree to any settlement of such Action or consent to any judgment in respect thereof without the prior written consent of the Indemnified Party, which shall not be unreasonably withheld or delayed; provided, however, that no such consent shall be required with respect to any such settlement, compromise or consent to judgment that (a) involves solely the payment of money damages as to which the Indemnifying Party has acknowledged its obligation to indemnify hereunder, (b) does not involve any claim for injunctive

or other equitable relief, and (c) effects a full and unconditional release of the Indemnified Party with respect to all claims related to the Action.

12.3 Limitations on Liability. SUBJECT TO AND WITHOUT LIMITING THE INDEMNIFICATION OBLIGATIONS OF EACH PARTY WITH RESPECT TO THIRD PARTY ACTIONS UNDER SECTIONS 12.1 AND 12.2, AND EXCEPT WITH RESPECT TO LIABILITY ARISING FROM BREACH OF SECTION 9.1 BY A PARTY, NO PARTY OR ANY OF ITS AFFILIATES WILL BE LIABLE TO THE OTHER PARTY OR ITS AFFILIATES UNDER ANY CONTRACT, WARRANTY, NEGLIGENCE, TORT, STRICT LIABILITY OR OTHER LEGAL OR EQUITABLE THEORY FOR ANY SPECIAL, INDIRECT, INCIDENTAL, PUNITIVE, MULTIPLIED OR CONSEQUENTIAL DAMAGES, OR OTHER DAMAGES FOR LOSS OF PROFIT, SALES OR FEES, ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT OR ITS SUBJECT MATTER. FURTHER, SUBJECT TO AND WITHOUT LIMITING THE INDEMNIFICATION OBLIGATIONS OF EACH PARTY WITH RESPECT TO THIRD PARTY ACTIONS UNDER SECTIONS 12.1 AND 12.2, AND EXCEPT WITH RESPECT TO LIABILITY ARISING FROM BREACH OF SECTION 9.1 BY A PARTY OR ARISING FROM THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF A PARTY, EACH PARTY'S AGGREGATE LIABILITY TO THE OTHER PARTY FOR ALL CASES AND CONTROVERSIES ARISING OUT OF THE SUBJECT MATTER OF THIS AGREEMENT, REGARDLESS OF THE CAUSE OF ACTION AND WHETHER BROUGHT IN CONTRACT, TORT (INCLUDING NEGLIGENCE), STRICT LIABILITY OR OTHERWISE, WILL BE LIMITED TO $[***]. THE AMOUNT OF SERVICE FEES AND MILESTONE PAYMENTS PAID OR DUE TO COMPANY UNDER THIS AGREEMENT WILL NOT BE INCLUDED IN THE CALCULATION OF SUCH AGGREGATE LIABILITY AMOUNT.

12.4 Insurance. Company agrees to comply with Exhibit E attached hereto, which is incorporated herein by this reference.

ARTICLE XIII DISPUTE RESOLUTION

13.1 Disputes. All disputes, claims or controversies (other than matters that are expressly stated herein to require the consent of either or both Parties) arising from or related to this Agreement, or to the interpretation, application, breach, termination or validity of this Agreement, whether based on contract, tort, statute, or other theory of liability (Disputes), shall be resolved in accordance with this Article XIII. It is the intent of the Parties that all Disputes relating in any way to this Agreement should be resolved in accordance with this Article, including Disputes that may involve the parent companies, subsidiaries, and other Affiliates of any Party.

13.2 Negotiation. Before any Dispute may be submitted to mediation or arbitration as provided below, the Dispute shall be referred to the President of Janssen and the Chief Executive Officer of Company for discussion and attempted resolution. No statements made by either Party during such discussions will be used by the other Party or admissible in arbitration or any other

subsequent proceeding for resolving the dispute. If such executives do not resolve the Dispute within thirty (30) days of such referral by either Party, then either Party may, upon written notice to the other Party, submit the Dispute to mediation pursuant to Section 13.3 and binding arbitration pursuant to Section 13.4.

13.3 Mediation.

13.3.1 The Parties shall first attempt in good faith to resolve any Dispute that is not resolved pursuant to Section 13.2 by confidential mediation in accordance with the then current Mediation Procedure of the International Institute for Conflict Prevention and Resolution (CPR Mediation Procedure) (http://www.cpradr.org) before initiating arbitration. The CPR Mediation Procedure shall control, except where the CPR Mediation Procedure conflicts with these provisions, in which case these provisions control. The mediator shall be chosen pursuant to the CPR Mediation Procedure. The mediation shall be conducted in English in New York, New York. At the request of either Party (and at the shared expense of the Parties), the mediation shall have simultaneous translation from and into English.

13.3.2 Either Party may initiate mediation with respect to any Dispute that is not resolved pursuant to Section 13.2 by written notice to the other Party. The Parties agree to select the mediator within twenty (20) days of the notice and the mediation will begin promptly after the selection. The mediation will continue until the mediator or either Party, declares in writing, no sooner than after the conclusion of one full day of a substantive mediation conference attended on behalf of each Party by a senior business person with authority to resolve the Dispute, that the Dispute cannot be resolved by mediation. In no event, however, shall mediation continue more than sixty (60) days from the initial notice by a Party to initiate meditation unless the Parties agree in writing to extend that period.

13.3.3 Any period of limitations that would otherwise expire between the initiation of mediation and its conclusion shall be extended until twenty (20) days after the conclusion of the mediation.

13.4 Arbitration. If the Parties fail to resolve a Dispute by mediation under Section 13.3 and either Party desires to pursue resolution of the Dispute, the Dispute shall be submitted by either Party for resolution in arbitration pursuant to the then current CPR Rules for Non-Administered Arbitration of International Disputes (CPR Rules) (http://www.cpradr.org), except where they conflict with these provisions, in which case these provisions control. CPR is designated as the Neutral Organization for all purposes.

13.4.1 Language/Location. The arbitration shall be conducted in English in New York, New York.

13.4.2 Selection of Arbitrators.

(a) The arbitrators will be chosen from the CPR Panels of Distinguished Neutrals, unless a candidate not on the CPR Panels of Distinguished Neutrals is approved by both

Parties. Each arbitrator shall be a lawyer with at least fifteen (15) years' experience with a law firm or corporate law department of over twenty-five (25) lawyers or who was a judge of a court of general jurisdiction. To the extent that the Dispute requires special expertise, the Parties will so inform CPR prior to the beginning of the selection process.

(b) The arbitration tribunal shall consist of three (3) arbitrators, chosen in accordance with Rules 5.3 and 6 of the CPR Rules. If, however, the aggregate award sought by the Parties is less than five million United States dollars (USD $5,000,000) and equitable relief is not sought, a single arbitrator shall be chosen in accordance with Rules 5.3 and 6 of the CPR Rules.

(c) Candidates for the arbitrator position(s) may be interviewed by representatives of the Parties in advance of their selection, provided that all Parties are represented.

(d) The Parties agree to select the arbitrator(s) within forty-five (45) days of initiation of the arbitration.

13.4.3 Conduct of Proceedings.

(a) The hearing will be concluded within nine (9) months after selection of the arbitrator(s) and the award will be rendered within 60 days of the conclusion of the hearing, or of any post hearing briefing, which briefing will be completed by both sides within 45 days after the conclusion of the hearing. In the event the Parties cannot agree upon a schedule, then the arbitrator(s) shall set the schedule following the time limits set forth above as closely as practical.

(b) The arbitrator(s) shall be guided, but not bound, by the IBA Rules on the Taking of Evidence in International Commercial Arbitration (www.ibanet.org).

(c) The hearing will be concluded in ten hearing days or less. Multiple hearing days will be scheduled consecutively to the greatest extent possible. A transcript of the testimony adduced at the hearing shall be made and shall be made available to either Party.

13.4.4 Applicable Law. The arbitrator(s) shall decide the merits of any Dispute in accordance with the law governing this Agreement, without application of any principle of conflict of laws that would result in reference to a different law. The arbitrator(s) may not apply principles such as amiable compositeur or natural justice and equity.

13.4.5 Award.

(a) The arbitrator(s) shall render a written opinion stating the reasons upon which the award is based. The arbitrator(s) may award the costs and expenses of the arbitration as provided in the CPR Rules, but each Party shall bear its own attorney fees.

(b) The award may be entered and enforced in any court of competent jurisdiction. If a court is called upon to enforce an award in a court proceeding, the Parties consent

to the court's requiring the Party resisting enforcement to pay the reasonable attorneys' fees and costs incurred in that proceeding by the Party seeking enforcement.

13.4.6 Provisional Relief. Any Party may seek emergency, interim, or provisional relief prior to the appointment of the arbitrator(s) from any court of competent jurisdiction, without waiver of the agreements to mediate and arbitrate. After appointment of the arbitrator(s), any request for emergency, interim, or provisional relief shall either be addressed to the arbitrator(s), which shall have the power to enter an interim award granting relief using the standards provided by applicable law, or to a court, but only with the permission of the arbitrator(s). Any interim award of the arbitrator(s) may be enforced in any court of competent jurisdiction.

13.4.7 WAIVER. EACH PARTY HERETO WAIVES: (A) ITS RIGHT TO TRIAL OF ANY ISSUE BY JURY, (B) WITH THE EXCEPTION OF RELIEF MANDATED BY STATUTE, ANY CLAIM FOR THE TYPES OF DAMAGES EXCLUDED BY SECTION 12.3 (SUBJECT TO THE EXCEPTIONS SPECIFIED IN SUCH SECTION), AND (C) ANY CLAIM FOR ATTORNEY FEES, COSTS AND PREJUDGMENT INTEREST.

13.5 Confidentiality. All proceedings and decisions of the mediator(s) and/or arbitrator(s) shall be deemed Confidential Information of each of the Parties and shall be subject to Section 9.1.

ARTICLE XIV MISCELLANEOUS

14.1 Press Announcements. Neither Party, nor any of its Affiliates, shall issue any press release or make any other public statement relating to the terms and conditions of this Agreement or the relationship contemplated hereunder without the prior written consent of the other Party. Notwithstanding the foregoing, each Party (or its applicable Affiliate) may make any disclosure relating to the Product or the terms and conditions of this Agreement that such Party (or Affiliate), in the opinion of its counsel, is obligated to make pursuant to Laws applicable to publicly-traded companies, including, inter alia, regulations of the Securities and Exchange Commission, the New York Stock Exchange or the Nasdaq Stock Market. In such event, the announcement shall be brief and factual (to the extent consistent with applicable Laws), and the Party required to make such disclosure shall, to the extent practicable, notify the other Party of the method and content of such disclosure a reasonable period of time (at least five (5) Business Days if possible) in advance thereof, so as to allow such other Party to review it for the use of its name and disclosure of Confidential Information.

14.2 Force Majeure Event. All incidents of force majeure, being circumstances beyond the reasonable control of either Party and which have, or may have, a material effect on the ability of such Party to perform under this Agreement, including, failure of power or other utility or sanitary supplies; fire; flood; earthquake; other natural disaster; explosion; riot; strike or lock-out of such Party's workforce; civil insurrection or unrest; terrorist activity; war (whether declared or not); and regulations of any Governmental Authority, in each case, to the extent beyond the

reasonable control of such Party (Force Majeure), shall, for the duration and to the extent of the effects caused thereby, release such Party from the performance of its contractual obligations hereunder. The Party who has suffered the Force Majeure shall notify the other Party without delay of any such incident(s) occurring, and the Parties shall discuss the effects and extent of such incident(s) on this Agreement and the measures to be taken. Each Party shall use Diligent Efforts to avoid or restrict Force Majeure and to mitigate any loss therefrom. In the event of an incident or incidents of Force Majeure, the Party whose performance has been affected thereby shall as soon as reasonably possible resume performance of its obligations hereunder. If any Force Majeure substantially prevents, hinders, or delays performance by a Party in a manner and to an extent that would, but for this Section, constitute a material breach or give rise to a right of termination hereunder, and the performance is not materially restored within one hundred eighty (180) days, the other Party may terminate this Agreement upon written notice to such Party.

14.3 Independent Contractors. Nothing in this Agreement shall create or imply an association, partnership, or joint venture between the Parties, it being agreed and understood that the Parties are independent contractors; and neither Party, with respect to a Third Party, shall have the power or authority to bind or obligate the other Party in any way. Neither Party shall have any responsibility for the hiring, termination or compensation of the other Party's employees or for any employee benefits of such employee. No employee or representative of a Party shall have any authority to bind or obligate the other Party to this Agreement for any sum or in any manner whatsoever, or to create or impose any contractual or other liability on the other Party without said Party's approval.

14.4 Performance by Affiliates. To the extent that this Agreement purports to impose obligations on the Affiliates of a Party, such Party agrees to cause its Affiliates to perform such obligations. Company shall not use an Affiliate to exercise any of its rights or perform any of its obligations or duties hereunder without Janssen's prior written consent. Janssen may use an Affiliate to exercise its rights or perform its obligations and duties hereunder with prior written notice to Company. If either Janssen or Company uses an Affiliate to exercise any of its rights or perform any of its obligations or duties hereunder, as the case may be, such Party shall remain liable hereunder for the prompt payment and performance of all of its obligations hereunder.

14.5 Notices.

14.5.1 All notices, statements, requests or other documents that either Party shall be required or shall desire to give to the other hereunder shall be in writing and shall be given by the Parties only as follows: (a) by personal delivery; (b) by facsimile, receipt confirmed; (c) by addressing it as indicated below, and by depositing it certified mail, postage prepaid, in the mail, first class (airmail if the address is outside of the country in which such notice is deposited); or (d) by addressing it as indicated below, and by delivering it toll prepaid to a recognized courier service (e.g., Federal Express or DHL).

14.5.2 If so delivered, transmitted by facsimile, mailed, or couriered, each such notice, statement, request or other document shall, except as herein expressly provided, be

conclusively deemed to have been given when personally delivered or faxed during a Business Day, or on the fifth (5th) Business Day after the date of mailing, or on the second (2nd) Business Day after delivery to a courier service, as the case may be. The address of a Party shall be the address of which the other Party actually receives written notice pursuant to this Section 14.5 and until further notice such addresses are:

If to Janssen, to:

Janssen Biotech, Inc. 800 Ridgeview Dr. Horsham, PA 19044 Attention: President, Oncology Facsimile: [***]

With a copy (which shall not constitute notice) to:

Office of the General Counsel Johnson & Johnson One Johnson & Johnson Plaza New Brunswick, NJ 08933 Attn: General Counsel, Pharmaceuticals Fax No.: [***]

If to Company, to:

Immunomedics, Inc. 300 The American Road Morris Plains, NJ 07950 Attn: General Counsel

14.6 Entire Agreement. This Agreement, including the exhibits and schedules attached hereto (which are hereby incorporated by reference), sets forth the entire agreement and understanding between the Parties as to the subject matter hereof and supersedes all agreements or understandings, oral or written, made between the Parties before the Effective Date with respect to the subject matter hereof. 14.7 Amendments; Assignment. This Agreement may not be revised, amended, supplemented, or varied except by an instrument in writing signed by Janssen and Company. Neither this Agreement nor any rights or obligations of a Party may be assigned, delegated or otherwise transferred by such Party without the prior written consent of the other Party; provided, however, that Janssen may, without such consent but with prior written notice to Company, assign, delegate and transfer this Agreement or all or any of its rights and obligations under this Agreement to (a) any Third Party that acquires substantially all Janssen's assets relating to the Product in the

Territory or (b) any Affiliate of Janssen. Any attempted assignment, transfer or delegation not in accordance with this Section shall be void.

14.8 Non-Waiver of Rights. Failure of a Party to enforce any of the provisions of or any rights with respect to this Agreement shall in no way be considered a waiver of such provisions or rights or in any way affect the validity of this Agreement. The failure of either Party to enforce any of such provisions or rights shall not preclude or prejudice such Party from later enforcing or exercising the same or any other provisions or rights which it may have under this Agreement. The waiver of any provision, right or obligation under this Agreement shall be effective only if in a written instrument signed by the Party to be bound thereby.

14.9 Further Assurances and Cooperation. Each Party agrees that after the Effective Date it will execute and deliver, or cause its Affiliates to execute and deliver, such further documents and instruments as may be reasonably necessary or proper to fully effectuate this Agreement and the transactions contemplated hereby.

14.10 Severability. This Agreement is intended to be valid and effective under any Laws and, to the extent permissible under Law, shall be construed in a manner to avoid violation of or invalidity under any Laws. Should any provisions of this Agreement be or become invalid, illegal, or unenforceable under any Laws, the other provisions of this Agreement shall not be affected and shall remain in full force and effect, and, to the extent permissible under the Laws, any such invalid, illegal, or unenforceable provision shall be deemed amended lawfully to conform with the intent of the Parties.

14.11 Binding Effect. This Agreement shall be binding upon and inure to the benefit of the Parties hereto and their respective successors and permitted assigns.

14.12 Counterparts; Facsimile Signatures. This Agreement may be executed in counterparts, each of which counterparts, when so executed and delivered, will be deemed to be an original, and all of which counterparts, taken together, will constitute one and the same instrument even if all parties have not executed the same counterpart. Signatures provided by any photocopy and transmitted by facsimile or other electronic means will be deemed to be original signatures.

14.13 Third Party Beneficiaries. The provisions of this Agreement are not intended legally to benefit or be enforceable by any Person who is not a party to this Agreement, and no such Person shall obtain any right under any such provisions or shall by reason of such provisions make any claim against a party to this Agreement.

14.14 Governing Law. The interpretation, construction and performance of this Agreement, and the rights granted and obligations arising hereunder, shall be governed in accordance with the substantive laws of the State of New York, without regard to its conflicts of law rules.

14.15 Construction. Except where expressly stated otherwise in this Agreement, the following rules of interpretation apply to this Agreement: (a) include, includes, and including are not limiting and mean include, includes, and including, without limitation; (b) definitions contained in this Agreement are applicable to the singular as well as the plural forms of such terms; (c) references to an agreement, statute, regulation, or instrument mean such agreement, statute, regulation, or instrument as from time to time amended, modified, or supplemented; (d) references to a Person are also to its successors and permitted assigns; (e) references to an Article, Section, Exhibit, or Schedule refer to an Article or Section of, or any Exhibit or Schedule to, this Agreement unless otherwise indicated; (f) the word will shall be construed to have the same meaning and effect as the word shall; (g) the use of any gender shall be applicable to all genders; and (i) the words hereof and hereunder, and words of similar import, shall be construed to refer to this Agreement as an entirety and not to any particular provision. The captions of this Agreement are for convenience of reference only and in no way define, describe, extend, or limit the scope or intent of this Agreement or the intent of any provision contained in this Agreement. Any reference in this Agreement to a matter or action being subject to the mutual agreement or mutual consultation of the Parties, or words of similar import, shall not be construed as an agreement that the Parties shall agree to such matter or action. The language of this Agreement shall be deemed to be the language mutually chosen by the Parties and no rule of strict construction shall be applied against either Party on the basis that such Party drafted this Agreement or any portion hereof.

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IN WITNESS WHEREOF, the Parties have executed this Agreement as of the Effective Date.

JANSSEN BIOTECH, INC. By: /s/Reshema Keups-Polanco Name: Reshema Keups-Polanco Title: VP, Sales and Marketing, Solid Tumor

IMMUNOMEDICS, INC. By: /s/Jared Freedberg Name: Jared Freedberg Title: General Counsel

Schedule 1.16

Janssen Universal Calendar

Schedule 6.2

Pharmacovigilance Provisions

1 Definitions

1.1 Adverse Event (AE) means any untoward medical occurrence in a patient or a clinical-trial subject administered a medicinal product and which does not necessarily have to have a causal relationship with this treatment. An adverse event can therefore be any unfavourable and unintended sign (for example, an abnormal laboratory finding), symptom, or disease temporally associated with the use of a medicinal product, whether or not considered related to this medicinal product.

1.2 Agreement means the Promotion Agreement to which this Schedule is attached.

1.3 Applicable Law means the applicable laws, rules, regulations, including any guidelines or other requirements of any Regulatory Authority in the relevant country of the Territory, and industry guidelines or codes of conduct that may apply to the review and analysis of safety information, the reporting of safety information to Regulatory Authorities and the maintenance of records thereof.

1.4 Company Employee means any employee of Immunomedics, Inc. or any of its Affiliates conducting activities under the Agreement.

1.5 Date of First Receipt means the date of receipt or coming into possession or control of safety information, which contains at a minimum a suspect medicinal product and a suspect event i.e. an incomplete case. Unless otherwise indicated in the Applicable Law the Regulatory Clock Start Date or Day Zero for regulatory reporting, is the date the minimum criteria for reporting as defined by the Applicable Law becomes available (i.e., an identifiable subject/ patient, identifiable reporter, suspect product, and event).

1.6 Incomplete Case means a case that does not contain minimum criteria for reporting (as defined by the Applicable Law) to a Regulatory Authority (i.e., an identifiable subject/ patient, identifiable reporter, suspect medicinal product, and event), but at a minimum contains a suspect medicinal product and a suspect event. Such reports are entered on the safety database maintained by Janssen as potential cases of value for signal detection purposes.

1.7 Personal Data means any information relating to an identified or identifiable natural person.

1.8 Product has the meaning set forth in Section 1.77 of the Agreement.

1.9 Product Quality Complaint (PQC) Any written, electronic or oral communication that alleges deficiencies related to the identity, quality, durability, reliability, safety, effectiveness or performance of a product after it is released for distribution.

1.10 Regulatory Authority means any applicable federal, national, regional, state, provincial or local regulatory agencies, departments, bureaus, commissions, councils or other government entities regulating or otherwise exercising authority with respect to the Product in the relevant Territory.

1.11 Special Situation Occurrences or reports that may not contain an adverse event, which must still be collected and reported in order to meet regulatory safety reporting requirements and Janssen policies:

Overdose of Product, Pregnancy exposure (maternal and paternal), Exposure to the Product from breastfeeding, Suspected abuse/misuse of the Product, Inadvertent or accidental exposure to the Product (including occupational exposure), Any failure of expected pharmacological action (i.e. lack of effect) of the Product, Unexpected therapeutic or clinical benefit from use of the Product, Medication error (includes potential, intercepted or actual) involving the Product with or without patient/consumer exposure to the Product, (e.g. name confusion) OR that caused an unintended effect or could cause an intended effect (e.g. adult medicine given to a young child), Suspected transmission of an infectious agent via Product, Expired drug use and falsified medicine,

Off-label use - situations where the Product is intentionally used for a medical purpose not in accordance with the authorized product information.

Off-label use without an associated AE, Special Situation, UE or AEPQC should be collected only when it is specifically and voluntarily brought to the attention of a Company Employee in an unsolicited manner by a reporter e.g., Health Care Professional or data obtained from databases where off-label use may be systematically collected (e.g., reimbursement database in US), and in accordance with local procedure in compliance with local laws and regulations. Follow-up of off-label use is not required.

1.12 Territory means the United States of America, including its territories and possessions.

1.13 Undesirable Effect (UE) shall mean an adverse reaction for human health attributable to the normal or reasonably foreseeable use of a cosmetic product.

Note: All capitalized terms used but not defined in this Schedule shall have the meanings ascribed to them (if any) in the Agreement.

2 Reporting Requirements

2.1 If any Company Employee receives or otherwise comes into possession or control of any information about the Product, regardless of source, relating to an Adverse Event (AE), Special Situation, AE associated with a Product Quality Complaint (AEPQC), Undesirable Effect (UE) or an Incomplete Case, such Company Employee shall provide such information immediately, but in no case later than twenty-four (24) hours from the Date of First Receipt by the Company Employee, to Janssen by using the Janssen Online Complaint Form available at Janssensafety.com. For the avoidance of doubt, all information regarding Incomplete Cases should also be provided immediately, but in no case later than twenty-four (24) hours from the date the Company Employee receives such information.

3 Training

4.1 Company shall ensure that all Company Employees are trained in the reporting of AEs, Special Situations, AEPQC or UEs, prior to the start of performing services under the Agreement and at least annually thereafter if such services remain in effect, to ensure

compliance with this Schedule and the Applicable Law. This includes, but is not limited to, monitoring applicable AE, Special Situation, AEPQC and UE training, and maintaining documentation of such training. Such training shall be conducted in the manner set forth in the Agreement using materials to be provided by Janssen. Janssen may require Company Employees to complete additional training provided by Janssen when there is a change in the governing contracts and/or processes or changes in Company's personnel.

5 [Intentionally Omitted.]

5 Retention Policy

5.1 Company shall maintain and archive records of all source documentation generated by the activity (records, questionnaires, reports), personnel training records and other relevant information relating to its obligations under this Schedule for a period consistent with Section 7.1 of the Agreement (including Exhibit C thereto) and Applicable Law. Company must have appropriate storage capabilities (e.g., preventing accidental damage of physical records and appropriate back up of electronic storage systems) if storing original AE, Special Situations, AEPQC and UE documentation. Notwithstanding the above, before Company destroys any safety records it will notify Janssen of its intention to do so, affording Janssen the opportunity to retain such records if it so wishes.

6 Audit

6.1 Without prejudice to Section 7.5 of the Agreement, Janssen or its designee shall have the right to audit Company to verify Company's compliance with this Schedule and the Applicable Law, provided that Janssen provides Company with at least [***] ([***]) calendar days prior written notice. The Parties shall agree upon the scope of the audit with a written audit plan to be submitted by Janssen [***] ([***]) calendar days prior to the audit. Company will allow such access to its facilities, systems, personnel and records, in whatever form and in any location (including locations owned or operated by a third party) as may reasonably be necessary to enable Janssen or its designee to evaluate and ensure compliance with this Schedule and the Applicable Law. Janssen shall communicate audit findings in a written audit report in a timely manner. The Parties undertake to cooperate with each other to diligently investigate and resolve any such audit findings.

7 Data Privacy

7.1 In the performance of the above safety activities, both Parties will comply with all Applicable Laws in respect of data privacy in order to protect Personal Data.

7.2 Each Party shall collect, use and disclose any Personal Data obtained in the course of performing the safety activities under this Schedule solely for the purposes of complying with the regulatory obligations as described in this Schedule, or as otherwise required by Applicable Law or by a court order. Both Parties will use electronic, physical and any other safeguards appropriate to the nature of the information to prevent any use or disclosure of Personal Data other than as provided for above. Both Parties will also take reasonable precautions to protect the Personal Data from accidental, unauthorised, or unlawful alteration or destruction.

7.3 Each Party shall notify the other Party promptly of any accidental, unauthorised, unlawful destruction, loss, alteration, or disclosure of, or access to the Personal Data, and take immediate steps to rectify any such security breach.

8 Follow Up

8.1 Janssen will be responsible to diligently follow up on safety information.

9 Miscellaneous

9.1 Notwithstanding the above, in the event any Company Employee is informed of AE, Special Situations, AEPQC or UE related to the use of any other products of Janssen or its Affiliates that such Company Employee is aware of, such Company Employee shall report these to Janssen (in the same manner as any such report relating to the Products) within twenty-four (24) hours of the Date of First Receipt of such information by such Company Employee.

CONTACT DETAILS

For Janssen Name: Company: Telephone: Fax: Email:

For Company Name: Company: Telephone: Fax: Email:

EXHIBIT A

Brand Plan

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EXHIBIT B

Detailing Requirements

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EXHIBIT C

Records and Information Management (RIM) Requirements

1. Maintenance. Company shall maintain and manage all paper and electronic records, files, documents, work papers and other information in any form provided by Janssen or generated pursuant to this Agreement (the Files and Work Papers): (a) in accordance with Janssen's records management policies (which may be changed by JBI from time to time and communicated to Company), including as set forth in RIM Requirements below, (b) separately from files generated, managed or maintained by Company under agreements with other customers, (c) as required by applicable statutes and regulations, and (d) as set out in any preservation request issued to Company by Janssen.

2. Preservation. Company shall comply promptly and fully with any request from Janssen, for any reason, to preserve Files and Work Papers or to promptly deliver such materials to Janssen. Steps to comply include, when requested by Janssen, periodic meetings to identify and implement documented procedures to preserve or deliver such data. Files and Work Papers created or modified by Company in electronic format must be delivered to Janssen in the same electronic format or as otherwise directed by Janssen.

3. Third Party Requests. Upon receipt from Third Parties of any request, demand, notice, subpoena, order, or other legal information- request for any Files and Work Papers, Company shall take all reasonable steps to protect Janssen's legal rights in any response to such request and, to the extent that Company legally may do so, shall immediately notify Janssen, shall provide Janssen with a copy of such request, and shall meet and cooperate with Janssen in the implementation of procedures to comply with the request.

4. RIM Requirements. This section specifies RIM requirements applicable to Files and Work Papers that Company personnel create, maintain, manage or manipulate on behalf of Janssen. Company is responsible for understanding and complying with Janssen's RIM requirements.

a. Records and Information Management requirements shall be applied consistently and regularly.

b. Company's Files and Work Papers:

i) shall be created, stored and managed throughout their lifecycle using proper protection;

ii) shall be protected and access controlled according to their value as described in the Johnson & Johnson Supplier Information Security Requirements;

iii) shall be retained in accordance with the Johnson & Johnson

Enterprise Retention Schedule, which defines retention requirements for business, legal, regulatory and privacy purposes; and

iv) relevant to litigation or an investigation and subject to a legal hold shall be retained and preserved, regardless of the retention requirement set forth in the Johnson & Johnson Enterprise Retention Schedule.

c. Company shall ensure that the Files and Work Papers are retained upon the departure of personnel employed by Company.

d. Janssen or the applicable Janssen Affiliate shall provide written approval prior to the disposition (disposal or deletion) of any Files and Work Papers.

e. Company personnel with access to Janssen's network shall annually complete Records and Information Management training as specified by Janssen.

EXHIBIT D

Health Care Compliance Provisions

1. HCP is defined as (i) any person who is licensed by a state to provide health care services directly or indirectly to patients, such as a physician, a nurse, a technician, a psychologist, or a lab specialist and/or (ii) any person or organization to whom a Party markets its products and services that is in a position to influence the selection of the products furnished or purchased, including but not limited to hospitals and health systems, administrators, procurement personnel, group purchasing organizations, pharmacy benefit managers, and business people.

2. Company shall, with respect to each HCP engaged under this Agreement:

a. Ensure that the HCP's services are provided in compliance with all applicable laws and regulations, including but not limited to laws and regulations pertaining to the promotion of products regulated by the United States Food and Drug Administration (FDA); laws, regulations and guidance pertaining to federal and state anti-kickback and submission of false claims to governmental or private health care payors (collectively, Health Care Compliance or HCC); state and federal laws and regulations relating to the protection of individual and patient privacy; and any other laws and regulations applicable to such services.

b. Ensure that HCP's services are provided in compliance with Janssen's written policies and procedures of which Company is provided notice, including, but not limited to, policies and procedures related to FDA and Health Care Compliance and the protection of individual and patient privacy (collectively, Janssen Policies). The requirements of this Agreement and any additional policies attached to this Agreement shall constitute Janssen Policies of which Janssen provides notice to Company.

c. Comply with professional and/or employment rules (such as conflicts of interest or ethics policies) established by Company or a professional organization or institution with which HCP is affiliated when the provision of services by an HCP is subject to such rules, including, as applicable, obtaining any required approval(s) prior to providing services and making any required reports.

3. Company shall provide notice to each HCP of the following:

The Physician Payments Transparency Requirements of the Patient Protection and Affordable Care Act of 2010 (codified at 42 U.S.C. 1320a-7h) and implementing regulations, require certain pharmaceutical, medical device, and other companies to annually report to the Centers for Medicare and Medicaid Services (CMS) certain information about payments and transfers of value provided directly or indirectly to U.S. physicians and teaching hospitals, which CMS will make publicly available. This includes any payments or transfers of value that Janssen provides indirectly through Company to U.S. physicians and teaching hospitals. As required by law, Janssen will report to CMS information about payments and transfers of value that Company

provides to U.S. physicians and teaching hospitals pursuant to this Agreement. This includes any portion of any payment or transfer of value that Janssen furnishes to Company which Company then provides directly or indirectly to U.S. physicians or teaching hospitals, including its employees, agents, or contractors. Information that Janssen must report includes the identity and business address of each relevant U.S. physician or teaching hospital, the value and purpose of any payments or transfers of value that are furnished, and any other information as may be required by law. To enable Janssen to comply with its legal obligations, Company shall track, maintain, and provide Janssen information and data related to any payments or transfers of value that Company provides to U.S. physicians and teaching hospitals under this Agreement. Company shall provide such information and data in the form and manner that Janssen requests in a timely manner. Janssen may also report information about compensation, payments or transfers of value that Company provides to U.S. physicians and teaching hospitals as otherwise required by law and Janssen reserves the right to post on a website accessible to the public such information, whether or not required by law.

4. In accordance with Janssen's request, Company shall, within thirty (30) days thereafter, provide or upload to Janssen's health care compliance data system (the Totality Third Party Company Portal) or any similar system, all compliance documents and data templates related to services. Data requirements regarding Totality Third Party Company Portal can be found at https://totalitygateway.jnj.com. Compliance documents and data templates include the following:

a. Copies of written agreements including compensation terms, with each HCP providing services.

b. Documentation indicating that each HCP providing services is not excluded or debarred and, for any health care practitioner, duly licensed under state law, as set forth above. Company shall obtain such documentation prior to engaging such HCP to provide services.

c. Documentation of services provided by such HCP (e.g., a written report, comments collected at a meeting, presentation materials, etc.).

d. HCP data templates capturing details on HCP value exchange. Value exchanges shall include, without limitation, any gifts, meals, compensation, travel reimbursement and patient-related materials provided to HCPs in connection with this Agreement.

e. Documentation that shows that Company provided notice to each HCP that information provided pursuant to this Agreement may be made publicly available at any time at the sole discretion of Janssen.

f. Electronic report of overall expenses paid to or on behalf of each HCP and electronic copies of all original receipts documenting such expenses; and

g. Written evidence of any required ethics or other authorizations allowing HCPs employed by federal, state or local government agencies, including but not limited to pharmacy and therapeutics committees, to provide services under this Agreement.

5. In the event that Janssen is charged any fee or penalty because Company failed to comply with the requirements set forth in this Exhibit, Company agrees to reimburse Janssen for such fees or penalties. Janssen reserves the right to reduce or not pay any invoice in the event that Company fails to comply with the requirements set forth in this Exhibit.

6. Company shall produce and send to Janssen electronic reports each month in which payments were made or gifts or meals were provided to HCPs by Company on behalf of Janssen, listing the following:

a. value of any gifts, meals, compensation paid, and/or entertainment provided to HCPs, whether their services were obtained through a written agreement or not;

b. nature, purpose and date of payments or other items of value provided; and

c. names, addresses, and federal Tax I.D. number of HCPs who were paid remuneration for services relating to Janssen.

7. Company shall report any violations of the compliance obligations set forth in this Agreement to Janssen at the name and address listed in Section 14.5 (Notices) or through the Vendor & Distributor Hotline at 1-800-556-2496.

8. Company, at its expense, shall ensure that all personnel and subcontractors involved in providing services attend and participate in training and educational programs reasonably scheduled by Janssen. Company, at its expense, agrees to train and periodically provide refresher training to all its new and current personnel and subcontracted personnel providing services regarding the compliance obligations set forth in this Agreement, including any Janssen Policies applicable to services. Company shall, upon request, provide Janssen with a record of the training provided and the dates training was attended by any Company personnel and subcontractors.

EXHIBIT E

Insurance Requirements

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Question: Highlight the parts (if any) of this contract related to Covenant Not To Sue that should be reviewed by a lawyer. Details: Is a party restricted from contesting the validity of the counterparty's ownership of intellectual property or otherwise bringing a claim against the counterparty for matters unrelated to the contract?

A:
Company agrees that it shall not seek to register or obtain ownership rights in any of Janssen's corporate names, logos, or Product Trademarks (or any confusingly similar trademark).
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