exhibit_10-2.htm


    
      Exhibit
10.2

      LEASE
TERMINATION

      AND

      SURRENDER
AGREEMENT

       

      THIS
LEASE TERMINATION AND SURRENDER AGREEMENT (this “Agreement”) is
entered into as of April 30, 2008, by and between NEWPORT CORPORATE CENTER, LLC,
a Washington limited liability company (“Landlord”) and SCOLR
PHARMA, INC., a Delaware corporation (“Tenant”).

       

      RECITALS

       

      A.           Landlord
and Tenant are parties to that certain Office Lease Agreement dated April 15,
2003 (the “Original
Lease”), as amended by that certain First Amendment to Lease dated
September 15, 2005, (collectively, the “Lease”) with respect
to the lease of certain premises known as Suites 300 and 400 in the Two Newport
Building located at 3625 132nd Avenue
S.E., Bellevue, Washington 98006 (the “Premises”).

       

      B.           The
Lease will expire on August 31, 2008, and Tenant sought to extend the Lease for
an additional five-year term by exercising an option under the
Lease.  Because Landlord desires an early termination of the Lease via
this Agreement, Landlord and Tenant agree herein to extend the Lease an
additional two months, through October 31, 2008, at which point Tenant will then
surrender the Premises to Landlord per the terms of this Agreement.

       

      C.           Landlord
desires an early termination of the Lease because it intends to promptly
demolish the Two Newport Building and construct a new building on such
land.  Tenant is willing to agree to an early termination of the Lease
on the terms and conditions set forth in this Agreement.  Landlord and
Tenant therefore intend to terminate the Lease, resolve all issues and disputes
between them, and provide for the surrender of the Premises to Landlord on the
terms and conditions of this Agreement.

       

      NOW,
THEREFORE, in consideration of the mutual terms, covenants and conditions set
forth herein, the Landlord  and Tenant hereby agree as
follows:

       

      1.           Incorporation of
Recitals.  The above recitals are hereby incorporated by
references.

       

      2.           Termination of
Lease.  Landlord and Tenant hereby agree that the Termination
Date (as defined in the  Lease) and the Lease are hereby extended an
additional two months, through October 31, 2008.  Landlord and Tenant
further agree that effective on the first to occur of (a) the date Tenant
vacates the Premises and surrenders possession thereof to Landlord, or (b)
October 31, 2008 (the first of which to occur is referred to as the "Termination Date"),
the Lease and all options thereunder shall terminate with the same force and
effect as if it had terminated on its scheduled termination date, except as
otherwise provided herein. Tenant shall notify Landlord in writing at least five
(5) business days in advance of the actual date on which it will 

       

      
        
          
          

        

        
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surrender
possession to Landlord.  As of the Termination Date, the parties shall
be released from all obligations under the Lease which first arise after the
Termination Date, except as stated herein.  On the date of the mutual
execution of this Agreement, Tenant shall provide Landlord with a copy of an
executed letter of intent (which may be non-binding) for Tenant’s anticipated
lease of replacement premises (“LOI”), which copy of the LOI provided to
Landlord may be reasonably redacted by Tenant for confidentiality
reasons.  Landlord shall keep the LOI and all terms or conditions
thereof confidential.

       

      3.        Surrender of
Premises.  On or before the Termination Date, Tenant shall
surrender possession of the Premises to Landlord, together with any and all card
keys or other access devices. Prior to such surrender Tenant shall remove from
the Premises all of Tenant's furniture, equipment and personal property and any
collateral in which a lender to Tenant holds a security interest. In connection
with Tenant’s surrender of the Premises, Tenant shall not be obligated to remove
any fixtures, alterations or cabling nor make any repairs or reimburse Landlord
for any repairs to the Premises, but will remove any hazardous waste or related
materials that Tenant has brought onto the Premises (“Tenant’s Hazardous
Waste”).  Tenant shall surrender the Premises in “AS IS”
condition (except as expressly provided in this Agreement) without any
obligation to comply with Section 13.2 of the Lease.  Tenant shall
obtain and file a termination of any Uniform Commercial Code filing covering any
collateral located at the Premises in which any lender to Tenant holds a
security interest, and shall provide Landlord with a copy of the filed
termination statement.  Tenant shall have no further right, title,
interest or benefit in, to or under the Premises and/or the Lease following the
Termination Date, and Landlord may dispose of all furniture, equipment, cabling
or personal property that Tenant leaves on the Premises after the Termination
Date. Tenant shall defend, indemnify and hold Landlord harmless from and against
any expenses, costs (including reasonable attorneys’ fees), losses, claims, or
damages arising from Tenant’s failure to remove Tenant’s Hazardous Waste or
equipment from the Premises by the Termination Date; provided, however, the
foregoing indemnification and defense obligations shall not pertain to any
expenses, costs, attorneys’ fees, losses, claims, or damages arising from
Tenant’s failure to surrender the Premises on or before the Termination Date
because they are addressed elsewhere in this Agreement.

       

      If Tenant fails to surrender
possession of the Premises to Landlord by the Termination Date as required under
this Agreement, then Tenant shall pay Landlord Liquidated Damages (defined
below) as Landlord’s exclusive damage remedy and Landlord may specifically
enforce the terms of this Agreement, including bringing an unlawful detainer
action to evict Tenant from the Premises.  Tenant will stipulate to an
Eviction Judgment (“Judgment”) and Writ of Restitution (“Writ”) in the form
attached hereto as Exhibits 1 and 2, and agrees
Landlord may enter the Judgment and enforce the Writ without obligation to
demonstrate damage or post a bond if, and only if, Tenant fails to surrender the
Premises by the Termination Date.  Landlord shall be entitled to an
award of attorney fees, costs and expenses in such action.  Landlord
shall not have the right to enter the Judgment or enforce the Writ unless Tenant
fails to surrender possession of the Premises by the Termination Date, and
Landlord shall defend, indemnify and hold Tenant harmless from and against any
expenses, costs (including reasonable attorneys’ fees), losses, claims, or
damages arising from Landlord’s 

       

      
        
          
          

        

        
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wrongfully
entering the Judgment or wrongfully enforcing or attempting to enforce the
Writ. Landlord and
Tenant shall continue to respect the terms and conditions of the Lease until the
Termination Date, and, in particular, Tenant shall comply with its obligation to
insure the Premises as provided in Article 8 of the
Original Lease until the Termination Date.

       

      4.           Consideration.   In
recognition that Tenant has and will, in connection with this Agreement and
early vacation of the Premises, incur substantial risks and costs including,
without limitation, risks and costs arising from the disruption of its business,
personnel and operations, loss of continuity, interruption, and delay to its
research and development programs, duplication of equipment, relocation of its
offices, moving expenses, relocation and re-engineering of information
technology infrastructure, negotiating and entering into a new lease for
replacement premises, brokers’ fees and commissions, attorneys fees, replacement
of furniture and cabling, and various other related costs and expenses, Landlord
shall pay Tenant a termination fee in the amount of Four Million One Hundred
Thousand Dollars ($4,100,000.00) (the "Termination Fee").
Landlord shall pay the Termination Fee by wire transfer or in other immediately
available federal funds as follows: (i) One Million Dollars (US$1,000,000.00) on
the date of the execution of this Agreement by all parties, provided Tenant
furnishes the LOI required in Paragraph 2 of this Agreement (the “Initial
Portion”), and (ii) Three Million
One Hundred Thousand Dollars (US$3,100,000.00) (the “Deferred Portion”) on
the date Tenant surrenders the Premises; provided, however, that Landlord shall
be entitled to offset against the Deferred Portion (i) any Liquidated Damages
owing pursuant to this Agreement, (ii) any unpaid rent or operating expenses
owing under the Lease accruing from the date of the mutual execution of this
Agreement to the Termination Date (but only to the extent any such unpaid rent
or operating expenses owing under the Lease are not also offset against the
Deposit), and (iii) Landlord’s actual expenses of removing Tenant’s Hazardous
Waste or equipment which Tenant has not removed from the Premises by the
Termination Date, or Landlord’s actual expenses incurred in enforcing the Writ;
provided, further, that  any offset to the Deferred Portion pursuant
to the foregoing item (iii) for the removal of Tenant’s Hazardous Waste or
equipment shall not exceed, in the aggregate, $100,000, nor shall it delay
payment of the balance of the Deferred Portion, and if there is any Tenant’s
Hazardous Waste or equipment not removed from the Premises by Tenant by the
Termination Date, then Landlord may withhold from the payment of  the
Deferred Portion the reasonably estimated cost of the removal thereof up to a
maximum of $100,000.00 in the aggregate and Landlord shall cause the removal
thereof from the Premises within sixty (60) days from the Termination Date and
promptly thereafter pay Tenant the balance of such withheld amount remaining
after paying for the cost of removal of Tenant’s Hazardous Waste and equipment;
provided, further, Landlord shall not be entitled to any other offsets against
the Deferred Portion.  If Landlord fails to pay the Initial Portion
when due, Tenant may terminate this Agreement by written notice to Landlord or
bring suit to enforce this Agreement, and if Tenant does not terminate this
Agreement, then Tenant shall be entitled to an offset against rent and other
amounts owing under the Lease as such payments come due until such Initial
Amount (and interest thereon) is fully paid.

       

      
        
          
          

        

        
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      On the
date the Deferred Portion is due, Landlord shall also reimburse Tenant
$17,954.59 for the security deposit paid under the Lease (“Deposit”) by wire
transfer or in other immediately available federal funds; provided, however,
that Landlord shall be entitled to offset against the Deposit any unpaid rent or
operating expenses owing under the Lease accruing from the date of the mutual
execution of this Agreement to the Termination Date (but only to the extent any
such unpaid rent or operating expenses owing under the Lease are not also offset
against the Deferred Portion); provided, further, Landlord shall not be entitled
to any other offsets against the Deposit.

       

      On the
date of the execution of this Agreement by all parties, provided Tenant
furnishes the LOI as required in Paragraph 2 of this Agreement, Landlord shall
deposit the Deferred Portion and the Deposit, by wire transfer or in other
immediately availabale federal funds, in trust with the law firm of Carney
Badley Spellman, P.S. (“Trust Depository”) to be held by the Trust Depository in
its trust account and disbursed to Tenant as and when the Deferred Portion and
the Deposit, or applicable portions thereof, are required to be paid by Landlord
to Tenant pursuant to this Agreement.  The Trust Depository shall sign
this Agreement to confirm its agreement to hold the Deferred Portion and the
Deposit in trust in its trust account and to disburse such funds to Tenant as
herein provided.

       

      If
Landlord fails to pay the Termination Fee or any portion thereof when due,
Landlord shall pay interest on the Termination Fee, or unpaid portion thereof,
at the rate of eighteen percent (18%) per annum from its due date until
paid.  If Landlord fails to reimburse the Deposit or any portion
thereof when due, Landlord shall pay interest on the Deposit, or unpaid portion
thereof, at the rate of eighteen percent (18%) per annum from its due date until
paid. 

       

      If Tenant
does not surrender possession of the Premises on or before October 31, 2008,
Landlord may offset against the Deferred Portion $20,000.00 per day  as liquidated damages
for each day after October 31, 2008 that Tenant remains in possession of the
Premises (“Liquidated
Damages”), which Liquidated Damages shall constitute Landlord’s sole and
exclusive damage remedy for Tenant’s failure to vacate the Premises by October
31, 2008, except as otherwise expressly stated in this
Agreement.  Landlord and Tenant agree that these Liquidated Damages
are a reasonable estimate of the damages Landlord is likely to incur if Tenant
fails to vacate the Premises by October 31, 2008.  Such Liquidated
Damages includes any rent, operating expenses, holdover rent or other damages,
charges or amounts that would otherwise be payable by Tenant pursuant to the
Lease (but excludes any unpaid rent and operating expenses owing under the Lease
accruing from the date of the mutual execution of this Agreement to the
Termination Date), and this provision regarding Liquidated Damages supersedes
any provision in the Lease with respect thereto if Tenant remains in possession
of the Premises after October 31, 2008.

       

      5.           Release.  As
additional consideration for the parties' agreements hereunder, each party
releases any and all claims, demands, and causes of action, known or unknown,
liquid or contingent, now or hereafter acquired, it may have against the other
party arising out of or relating to the Lease (including any early termination


       

      
        
          
          

        

        
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      thereof),
options under the Lease, Tenant's use or occupancy of the Premises, or
Landlord's management and operations of the Premises (hereafter "released
claims").  The foregoing release shall not include (a) any obligations
expressly stated in this Agreement, (b) indemnity obligations provided under the
Lease with respect to events that occur prior to the Termination Date, (c)
amounts remaining due and obligations under the Lease accruing prior to the
Termination Date, or (d) Landlord’s actual expenses of removing any Tenant’s
Hazardous Waste or equipment which Tenant has not removed from the Premises by
the Termination Date, or Landlord’s actual expenses incurred in enforcing the
Writ.

      


      These
releases extend to and inure to the benefit of the Landlord and Tenant and the
following Additional Released Parties: all of the Landlord's and Tenant's
guarantors, shareholders, directors, officers, members, managers, agents,
employees, representatives, attorneys, parents, subsidiaries, affiliates,
predecessors, successors, transferees, assigns and related entities
thereof.  Each party represents and warrants that it has full right,
power and authority to enter into these releases, that it owns or has the right
to release each and all of the released claims that it purports to release, and
that it has not transferred any interest in any released claims to any third
party.

       

      The
parties further represent, warrant and agree that (a) they understand they are
releasing potentially unknown claims, (b) these releases are fairly and
knowingly made, (c) these releases are voluntarily made, without any undue
influence, (d) these releases are supported by adequate consideration, and (e)
each party has disclosed all claims known to it, to the other.  The
parties acknowledge that this release includes any and all claims, direct or
indirect, which might otherwise be made under any applicable local, state or
federal authority including but not limited to, any claim arising under the City
of Bellevue's laws, the Washington statutes or laws, and any local or municipal
laws or regulations, including without limitation those relating to wages, hours
or discrimination, and any federal laws and regulations prohibiting
discrimination, and any state, or federal, securities laws, all as amended; and
any regulations under such authority and any applicable statutory, contract,
tort, or common law theories.

       

      Landlord
represents and warrants to Tenant that Landlord is the owner of the
Two Newport Building, has not assigned its rights under the Lease, and
is not obligated to obtain the consent or approval of any person or entity in
order to enter into or perform its obligations under this
Agreement.

       

      6.           Attorneys'
Fees.  Landlord and Tenant shall each bear their own costs and
expenses with respect to the negotiation, preparation and execution of this
Agreement. If any action, suit, arbitration or other proceeding of any nature
whatsoever, including, without limitation, any proceeding under the U.S.
Bankruptcy Code, is brought to interpret or enforce the terms of this Agreement
or otherwise with respect to this Agreement, the substantially prevailing party
shall be entitled, in addition to all other damages, to receive an award of
reasonable attorneys' fees, expenses, costs and court costs, including fees and
costs of appeal.

       

      
        
          
          

        

        
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      7.           Legal
Representation.  Each party acknowledges that it has been
represented by counsel, or has had an opportunity to obtain the representation
of counsel, with respect to this Agreement. Each party represents to the other
that that party has read and understood the terms hereof and the consequences of
executing this Agreement and that no representations have been made to that
party to induce the execution of this Agreement except as stated herein. Each
party waives any right it may have to require the provisions of this Agreement
to be construed against the party who drafted the same.

       

      8.           Authority.  Each
person signing this Agreement on behalf of a party represents and warrants that
he or she is authorized to execute and deliver this Agreement, and that upon
such person's execution and delivery hereof and the execution and delivery
hereof by the other parties, this Agreement will become binding upon such
party.

       

      9.           Submission Not an
Offer.  Tenant acknowledges and agrees that submission of this
Agreement to Tenant for review and execution is not an offer and that this
Agreement shall not be effective until it has been fully executed and delivered
by both parties.

       

      10.           Miscellaneous.

       

      (a)           Merger/Modification.  This
Agreement constitutes the entire agreement and understanding by and between
Landlord and Tenant with respect to the early surrender of possession of the
Premises and the early termination of the Lease and replaces all prior or
contemporaneous oral or written agreements or understandings pertaining
thereto.  This Agreement may only be modified via written instrument
signed by authorized representatives of Landlord and Tenant.

       

      (b)           Binding
Nature.  This Agreement shall bind and inure to the benefit of
the parties hereto and their respective successors and assigns, provided that
Tenant may not assign its rights under this Agreement except in connection with
an assignment and assumption of all of its rights under the Lease in accordance
with the terms of the Lease.  A Memorandum of this Agreement in
mutually acceptable form, which does not state the amount of the Termination
Fee, shall be signed and acknowledged by Landlord and Tenant concurrently with
the mutual execution of this Agreement and recorded in the real property records
of King County, Washington.

       

      (c)           Confidentiality.  The
amount of the Termination Fee shall be confidential and shall not be disclosed
by Tenant to any third party, except for Tenant's attorneys and accountants, or
as necessary for reporting requirements imposed on Tenant as a public company
(and associated press releases), or as otherwise required by law, subpoena or
court order.  Tenant will not identify Landlord by name in any such
reports or press releases. If Tenant receives a
subpoena or legally binding request for information regarding the termination of
the Lease or this Agreement, it will immediately notify Landlord in
writing.

       

      
        
          
          

        

        
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      (d)           Dispute
Resolution.  This Agreement shall be governed by and construed
in accordance with the substantive and procedural laws of the State of
Washington, without regard to its conflicts of laws provisions. All parties
shall submit and not object to jurisdiction and venue in the King County,
Washington State Superior Court or U.S. Federal District Court located in
Seattle, Washington, in connection with any claims arising out of this
Agreement. The parties intend that this Agreement be enforceable to the greatest
extent permitted by applicable law. Therefore, if any provision of this
Agreement, on its face or as applied to any person or circumstance, is or
becomes unenforceable to any extent, the remainder of this Agreement and the
application of that provision to other persons, circumstances, or extent, will
not be impaired.

       

      (e)           Enforcement.  Except
as otherwise expressly provided in this Agreement, Landlord and Tenant shall be
entitled to enforce the terms of this Agreement by an action for damages for
breach of this Agreement or for an action for specific performance or for
injunctive relief, or both, to prevent the breach or continued breach of this
Agreement.

       

      (f)           Further
Acts.  Time is of the essence in this Agreement.  The
parties agree to take all actions and execute all documents necessary to
effectuate the purposes of this Agreement.

      


      11.           Counterparts.  This
Agreement may be executed in two or more counterparts, each of which shall be
deemed to be an original, but all of which shall constitute one and the same
instrument. Facsimile transmission (or other electronic transmission, including
email of a “pdf” signature) of any signed original hereof, and retransmission of
any such signed facsimile or electronic transmission, shall be the same as
delivery of an original.  At the request of any party, the parties
will confirm facsimile transmitted (or other electronic transmission including
email of a “pdf” signature) signatures by delivering to the other parties a
signed original of this document.

       

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

       

      LANDLORD:

      


      NEWPORT CORPORATE CENTER, LLC,
a

      Washington
Limited Liability Company

      


      


      By: /s/ Gary
Carpenter_____________

            Gary
Carpenter

        Its
_Member
Officer____________

      


      


      By: /s/ Lisa
Rowe________________

            Lisa
Rowe

        Its
VP Leasing, Bentall
authorized agent

       

      
        
          
          

        

        
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      TENANT:

      


      SCOLR PHARMA, INC.,
a

      Delaware
corporation

      


       

      By: /s/ Daniel O.
Wilds_________      

      Its President &
CEO___________

      


      


      TRUST
DEPOSITORY:

      


      Carney Badley Spellman,
P.S.

       

      By: /s/ John R.
McDowall_______

      Its Shareholder/Board
Member___

      



      
        
          
             

             

          

           


        

        
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      LANDLORD'S
ACKNOWLEDGEMENT

      


       

      STATE OF
WASHINGTON                                  )

      )
ss.

      COUNTY OF
KING                                                 )

       

      I certify
that I know or have satisfactory evidence that the persons appearing before me
and making this acknowledgment are the persons whose true signatures appear on
this document.

       

      On this 30th day of April, 2008, before
me personally appeared Gary Carpenter, to me known to be a Member/Officer of
NEWPORT CORPORATE CENTER, LLC, the limited liability company that executed the
within and foregoing instrument, and acknowledged the said instrument to be the
free and voluntary act and deed of said limited liability company, for the uses
and purposes therein mentioned, and on oath stated that he/she was authorized to
execute said instrument.

       

      WITNESS
my hand and official seal hereto affixed the day and year first above
written.

      


      [Seal]

      /s/ John R.
McDowall                                                                  

       

      John R.
McDowall                                                                  

                                      [Type or Print Notary
Name]

      Notary
Public in and for the State of 

      Washington,
residing at Seattle

      My
Commission Expires: Jan. 15,
2009

       

      



      
        
          
             

             

          

           


        

        
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      STATE OF
WASHINGTON                                  )

      )
ss.

      COUNTY OF
KING                                                 )

       

      I certify
that I know or have satisfactory evidence that the persons appearing before me
and making this acknowledgment are the persons whose true signatures appear on
this document.

       

      On this 30th day
of April, 2008,
before me personally appeared Lisa Rowe, to me known to be the Vice-President of
Leasing of NEWPORT CORPORATE CENTER, LLC, the limited liability company
that executed the within and foregoing instrument, and acknowledged the said
instrument to be the free and voluntary act and deed of said limited liability
company, for the uses and purposes therein mentioned, and on oath stated that
he/she was authorized to execute said instrument.

       

      WITNESS
my hand and official seal hereto affixed the day and year first above
written.

      


      [Seal]

      /s/ John R.
McDowall                                                                  

       

      John R.
McDowall                                                                  

                                      [Type or Print Notary
Name]

      Notary
Public in and for the State of 

      Washington,
residing at Seattle

      My
Commission Expires: Jan. 15,
2009

      


      



      
        
          
             

             

          

           


        

        
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      TENANT’S
ACKNOWLEDGEMENT

      


      


      


      STATE OF
WASHINGTON           )

                                  )  ss.

      COUNTY OF
KING                  )

      


      


      On this 30th
day of April, 2008, before me, a Notary Public in and for the State of
Washington, personally appeared Daniel O. Wilds,
personally known to me (or proved to me on the basis of satisfactory evidence)
to be the person who executed this instrument, on oath stated that he was
authorized to execute the instrument, and acknowledged it as the President & CEO
of SCOLR PHARMA, INC., to be the free and voluntary act and deed of said
corporation for the uses and purposes mentioned in the instrument.

      


      IN WITNESS WHEREOF, I have hereunto set
my hand and official seal the day and year first above written.

      


      


      [Seal]

      /s/ Sarah M.
Schaeffer                                                                           

      
        	
                 
      

              	
                NOTARY
      PUBLIC in and for the State of 

                Washington,
      residing at Bothell,
      WA

              


      

      My appointment expires 4/30/2011

      Print Name Sarah M.
Schaeffer                                                                           

      



      
        
          
             

             

          

           


        

        
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      EXHIBIT
1

      


      (Judgment)

      


      


      


      


      


      


      SUPERIOR
COURT FOR THE STATE OF WASHINGTON

      IN THE
COUNTY OF KING

      


      
        	
                NEWPORT
      CORPORATE CENTER, LLC, a Washington limited liability
company,

                 

                Plaintiff,

                 

                v.

                 

                SCOLR
      PHARMA, INC., a Delaware corporation,

                 

                Defendant.

                 

              	
                 

                 

                NO.

                 

                CONFESSION
      OF JUDGMENT

                 

              


      

      


      Defendant
SCOLR Pharma, Inc., a Delaware corporation (“SCOLR”) confesses judgment in favor
of plaintiff Newport Corporate Center, LLC, a Washington limited liability
company (“Newport”) as shown by the following facts:

      1.                      Newport
and SCOLR were parties to an Office Lease Agreement dated April 15, 2003, as
amended by the First Amendment to Lease dated September 15, 2005 and as extended
via the Lease Termination and Surrender Agreement dated April 30, 2008
(collectively the “Lease”), with respect to the lease of certain premises known
as Suites 300 and 400 in the Two Newport Building, located at 3625 132nd Avenue
S.E., Bellevue, Washington 98006 (the “Premises”).

       

      
        
          
          

        

        
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      2.                      Newport
desired an early termination of the Lease because it intended to demolish the
Two Newport Building and construct a new building on such land, and
SCOLR was agreeable to such an early termination of the Lease on the terms and
conditions of the Termination Agreement (defined below).  Therefore,
Newport and SCOLR entered into a Lease Termination and Surrender Agreement dated
as of April 30, 2008 (the “Termination Agreement”), whereby they agreed to an
early termination of the Lease and surrender of the Premises by
SCOLR.

      3.                      Pursuant
to paragraph 3 of the Termination Agreement, SCOLR was to surrender possession
of the Premises to Newport no later than October 31, 2008 (the “Termination
Date”).  SCOLR confesses that, in the event it has not surrendered
possession of the Premises to Newport on or before the Termination Date, it will
be in breach of the Termination Agreement and guilty of unlawful detainer with
no further legal right to the Premises.  If SCOLR has not surrendered
possession of the Premises to Newport on or before the Termination Date, SCOLR
authorizes this Court to enter judgment in favor of Newport whereby a Writ of
Restitution in the form of the attached Exhibit A (“Writ”)
shall be issued returnable within twenty (20) days after the date of its issue,
restoring to Newport possession of the Premises.

      4.                      Paragraph
6 of the Termination Agreement provides that Newport is entitled to an award of
reasonable attorneys’ fees, expenses, costs and court costs if it institutes
legal action to enforce the terms of the Termination Agreement and is the
substantially prevailing party in such action.  Accordingly, SCOLR
further confesses that if SCOLR has not surrendered possession of the Premises
to Newport on or before the Termination Date it will be in default thereunder
and Newport’s reasonable attorneys’ fees, expenses, costs and court


       

      
        
          
          

        

        
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costs
expended in enforcing the Writ and evicting SCOLR from the Premises shall be
included in the judgment in favor of Newport.

       

      DATED
this 30th
day of April,
2008.

      


      SCOLR
PHARMA, INC., a Delaware corporation

      


       
/s/ Daniel O. Wilds

      By: Daniel O.
Wilds______________

      Its  President &
CEO_____________

      


      


      


      ACKNOWLEDGMENT

      


      SCOLR PHARMA, INC., by and through its
President &
CEO (title), Daniel O. Wilds
(name), verify under oath that I have the authority to bind SCOLR PHARMA, INC.
to this Confession of Judgment and that it is authorized by me acting in my
corporate capacity.  I also verify that the facts outlined above are
true to the best of my knowledge and belief.

      


      DATED
this 30th day of April,
2008.

      


      SCOLR
PHARMA, INC., a Delaware corporation

      


      /s/
Daniel O. Wilds

      By: Daniel O.
Wilds__________________ 

        Its  President &
CEO  ________________

      

      


      


      STATE OF
WASHINGTON               )

      ) ss.

      COUNTY OF
KING                            
 )

      


      On this 30th
day of April,
2008, before me personally appeared Daniel O. Wilds, the
President &
CEO of SCOLR PHARMA, INC., who executed the within and foregoing
instrument, and acknowledged said instrument to be the free and voluntary act
and deed of said corporation, for the uses and purposes therein mentioned, and
on oath stated that he was authorized to execute said
instrument.

      


      IN WITNESS WHEREOF, I have hereunto set
my hand and affixed my official 

       

      
        
          
          

        

        
          14

          
            

          

        

        
          
          

        

      

       

      seal the
day and year first above written.

      


      [Seal]

      /s/ Sarah M.
Schaeffer                                                               

       

      Sarah M.
Schaeffer (Print Name)

      Notary
Public in and for the State of 

      Washington,
residing at Bothell,
WA

      My
Commission Expires: 4/30/2011

      


      


      


      Attachment:

      


      Exhibit
A – Writ of Restitution

      



      
        
          
             

             

          

           


        

        
          15

          
            

          

        

        
           


        

      


      EXHIBIT
2

      


      (Writ
– Exhibit A to the Confession of Judgment)

       

      


      


      


      


      


      


      SUPERIOR
COURT FOR THE STATE OF WASHINGTON

      IN THE
COUNTY OF KING

      


      
        	
                NEWPORT
      CORPORATE CENTER, LLC, a Washington limited liability
company,

                 

                Plaintiff,

                 

                v.

                 

                SCOLR
      PHARMA, INC., a Delaware corporation,

                 

                Defendant.

                 

              	
                 

                 

                NO.  

                 

                WRIT OF RESITUTION

                 

              


      

      


      


      STATE
OF WASHINGTON
TO:                                                                KING
COUNTY SHERIFF

      GREETINGS:

      Whereas on the _____ day of
___________, 2008, in the above-entitled action, the King County Superior Court
entered an Order directing the issuance of a Pre-Judgment Writ of Restitution,
restoring to plaintiff real property located at Suites 300 and 400 in the Two
Newport Building located at 3625 132nd Avenue
S.E., Bellevue, Washington  98006 (hereinafter the
“Premises”).

      Now, therefore, you are hereby
commanded to deliver to plaintiff Newport possession of the real property and
leasehold interest located at Suites 300 and 400 in the 

       

      
        
          
          

        

        
          16

          
            

          

        

        
          
          

        

      

       

      Two
Newport Building located at 3625 132nd Avenue
S.E., Bellevue, Washington  98006, which building is located on the
land legally described on the attached Exhibit 1, and to make return of this
writ according to law returnable in twenty days after date of
issuance.  Provided, that if return is not possible within 20 days,
the return of this writ shall automatically be extended an additional 20 days.
The Sheriff is authorized to break and enter if necessary.

      WITNESS the
Honorable                                                                                                           
of said Superior Court and the seal of said Court affixed this day of
____________________, 2008.

       County Clerk

       By Deputy

      


      


      Sealed this ____ day of __________,
2008.

      By
Deputy                                                        

      


      


      Presented
by:

      


      CARNEY
BADLEY SPELLMAN, P.S.

      


      


      By ________________________

      
        John R.
McDowall, WSBA #25128

        Attorneys for Plaintiff
Newport                                                             

      


      
        
          
             

             

          

           


        

        
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      EXHIBIT
1

      TO WRIT
OF RESTITUTION

      


      


      LOT 4 OF
REVISED SHORT PLAT NO. 278125, ACCORDING TO THE SHORT PLAT RECORDED UNDER KING
COUNTY RECORDING NO. 8112079004, BEING A REVISION OF SHORT PLATS RECORDED UNDER
RECORDING NO. 8101270743 AND 7809200912;

      


      TOGETHER
WITH AN EASEMENT FOR INGRESS, EGRESS AND UTILITIES, 30 FEET IN WIDTH DESCRIBED
AS EASEMENT “X” AS DELINEATED ON SHORT PLANT NO. 278125 REVISION, RECORDED UNDER
RECORDING NO. 8112079004;

      


      AND
TOGETHER WITH AN EASEMENT FOR INGRESS, EGRESS AND UTILITIES, 30 FEET IN WIDTH
DESCRIBED AS EASEMENT “Y” AS DELINEATED ON SHORT PLANT NO. 278125 REVISION,
RECORDED UNDER RECORDING NO. 8112079004;

      


      AND
TOGETHER WITH ACCESS EASEMENTS AS DESCRIBED IN PARAGRAPH 1.1 AND EXHIBITS “E”
AND “F” OF DECLARATION RECORDED UNDER KING COUNTY RECORDING NO.
9102130456;

      


      AND
TOGETHER WITH THOSE EASEMENT RIGHTS GRANTED IN DOCUMENTS RECORDED UNDER RECODING
NOS. 9012040117 AND 9211232100;

      


      SITUATE
IN THE CITY BELLEVUE, COUNTY OF KING, STATE OF WASHINGTON.

       

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