Document:

Lease Agreement

 Exhibit 10.62 
  
 03/26/2004 
  
 LEASE AGREEMENT 
  
 THIS LEASE is executed this 26th day of March , 2004, by and between DUKE REALTY LIMITED PARTNERSHIP, an Indiana limited partnership doing
business in North Carolina as Duke Realty of Indiana Limited Partnership (“Landlord”), and CHARLES & COLVARD, LTD., a North Carolina corporation (“Tenant”). 
  
 WITNESSETH: 
  
 ARTICLE 1 - LEASE OF PREMISES 
  
 Section 1.01. Basic Lease Provisions and Definitions. 
  
 (a) Leased Premises (shown outlined in Exhibit A hereto): Suite A of the building (the “Building”)
located at 300 Perimeter Park Drive, Morrisville, North Carolina 27560, within Perimeter Park (the “Park”). 
  
 (b) Rentable Area: approximately 16,517 rentable square feet. 
  
 (c) Tenant’s Proportionate Share: 29.67%. 
  

							
	 (d) Minimum Annual Rent:
	  	07/01/2004 – 06/30/2005	  	$	113,554.38	(1)
	 	  	07/01/2005 – 06/30/2006	  	$	23,278.65	(2)
	 	  	07/01/2006 – 06/30/2007	  	$	143,227.20	 
	 	  	07/01/2007 – 06/30/2008	  	$	146,807.88	 
	 	  	07/01/2008 – 06/30/2009	  	$	150,478.08	 
	 	  	07/01/2009 – 06/30/2010	  	$	154,239.96	 
	 	  	07/01/2010 – 06/30/2011	  	$	158,096.05	 

	(1)	represents ten (10) Monthly Rental Installments 

	(2)	represents two (2) Monthly Rental Installments 

  

						
	 (e) Monthly Rental Installments:
	  	07/01/2004 – 08/31/2004	  	$	0.00
	 	  	09/01/2004 – 06/30/2005	  	$	11,355.44
	 	  	07/01/2005 – 04/30/2006	  	$	0.00
	 	  	05/01/2006 – 06/30/2006	  	$	11,639.32
	 	  	07/01/2006 – 06/30/2007	  	$	11,935.60
	 	  	07/01/2007 – 06/30/2008	  	$	12,233.99
	 	  	07/01/2008 – 06/30/2009	  	$	12,539.84
	 	  	07/01/2009 – 06/30/2010	  	$	12,853.33
	 	  	07/01/2010 – 06/30/2011	  	$	13,174.67

  
 (f) Intentionally
Omitted 
  
 (g) Target Commencement Date: 07/01/2004. 

 
 (h) Lease Term: Seven (7) years. 
  
 (i) Security Deposit: $11,355.44. 
  
 (j) Broker(s): Advantis GVA representing Tenant. 
  
 (k) Permitted Use: cutting, storage, and sales of silicon carbide products,
and office and administrative uses reasonably ancillary thereto. 
  
 (l) Address for notices and payments are as follows: 
  

			
	Landlord:            	  	Duke Realty Limited Partnership
	 	  	c/o Duke Realty Corporation
	 	  	Attn.: Raleigh Market – Senior Property Manager
	 	  	1800 Perimeter Park Drive, Suite 200
	 	  	Morrisville, North Carolina 27560

 INDUSTRIAL LEASE 
  

			
	 With a copy to:
	  	Duke Realty Limited Partnership
	 	  	c/o Duke Realty Corporation
	 	  	Attn.: Elizabeth C. Belden, Vice President/Corporate Counsel
	 	  	3950 Shackleford Road, Suite 300
	 	  	Duluth, Georgia 30096
		
	 With Rental Payments to:
	  	Duke Realty Limited Partnership
	 	  	75 Remittance Drive, Suite 3205
	 	  	Chicago, IL 60675-3205
		
	 Tenant:
	  	Charles & Colvard, Ltd.
	 	  	300 Perimeter Park Drive, Suite A
	 	  	Morrisville, North Carolina 27560

  
 (m) Guarantor(s):
None. 
  
 EXHIBITS 
  
 Exhibit A -    Leased Premises 
  
 Exhibit B -    Tenant Improvements 
  
 Exhibit B-1 - Scope of Work 
  
 Exhibit C -    Letter of Understanding 
  
 Exhibit D -    Rules and Regulations 
  
 Section 1.02. Lease of Premises. Landlord hereby leases to
Tenant and Tenant hereby leases from Landlord the Leased Premises, under the terms and conditions herein, together with a non-exclusive right, in common with others, to use the following (collectively, the “Common Areas”): the areas of the
Building and the underlying land and improvements thereto that are designed for use in common by all tenants of the Building and their respective employees, agents, customers, invitees and others.  
  
 ARTICLE 2 - TERM AND POSSESSION 
  
 Section 2.01. Term. The Lease Term shall commence as of the
date (the “Commencement Date”) that Substantial Completion (as defined in Exhibit B hereto) of the Tenant Improvements (as defined in Section 2.02 below) occurs. 
  
 Section 2.02. Construction of Tenant Improvements. Landlord shall construct and install all leasehold
improvements to the Leased Premises (collectively, the “Tenant Improvements”) in accordance with Exhibit B attached hereto and made a part hereof. 
  
 Section 2.03. Surrender of the Premises. Upon the expiration or earlier termination of this Lease, Tenant
shall immediately surrender the Leased Premises to Landlord in broom-clean condition and in good condition and repair, normal wear and tear and casualty excepted. Tenant shall also remove its personal property, trade fixtures and any of
Tenant’s alterations designated by Landlord (including wiring and cabling), promptly repair any damage caused by such removal, and restore the Leased Premises to the condition existing upon the Commencement Date, reasonable wear and tear
excepted. If Tenant fails to do so, Landlord may restore the Leased Premises to such condition at Tenant’s expense, Landlord may cause all of said property to be removed at Tenant’s expense, and Tenant hereby agrees to pay all the costs
and expenses thereby reasonably incurred. All Tenant property which is not removed within ten (10) days following Landlord’s written demand therefor shall be conclusively deemed to have been abandoned by Tenant, and Landlord shall be entitled
to dispose of such property at Tenant’s cost without thereby incurring any liability to Tenant. The provisions of this section shall survive the expiration or other termination of this Lease. 
  
 Section 2.04. Holding Over. If Tenant retains possession of the
Leased Premises after the expiration or earlier termination of this Lease, unless Landlord and Tenant otherwise agree in writing, Tenant shall become a tenant from month to month at one hundred forty percent (140%) of the Monthly Rental Installment
in effect at the end of the Lease Term, and otherwise upon the terms, covenants and conditions herein specified, so far as applicable. Acceptance by Landlord of rent in such event shall not result in a renewal of this Lease, and Tenant shall vacate
and surrender the Leased Premises to Landlord upon Tenant being given thirty (30) days’ prior written notice from Landlord to vacate whether or not said notice is given on the rent paying date. This Section 2.04 shall in no way
constitute a consent by Landlord to any holding over by Tenant upon the expiration or earlier termination of this Lease, nor limit Landlord’s remedies in such event. 
  

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 INDUSTRIAL LEASE 
  

 ARTICLE 3 - RENT 
  
 Section 3.01. Base Rent. Tenant shall pay to Landlord the Minimum Annual Rent in the Monthly Rental
Installments, in advance, without deduction or offset, beginning on the Commencement Date and on or before the first day of each and every calendar month thereafter during the Lease Term. The Monthly Rental Installment for partial calendar months
shall be prorated. 
  
 Section 3.02. Additional
Rent. 
  
 (a) In addition to the Minimum Annual Rent Tenant
shall pay to Landlord for each calendar year during the Lease Term, as “Additional Rent,” Tenant’s Proportionate Share of all costs and expenses incurred by Landlord during the Lease Term for Real Estate Taxes and Operating Expenses
for the Building and Common Areas. 
  
 (b) “Operating
Expenses” shall mean all of Landlord’s expenses for operation, repair, replacement and maintenance to keep the Building and common areas in good order, condition and repair (including all additional direct costs and expenses of operation
and maintenance of the Building which Landlord reasonably determines it would have paid or incurred during such year if the Building had been fully occupied), including, but not limited to, management or administrative fees (not to exceed five
percent (5%) of the gross rental revenue of the Building); utilities; stormwater discharge fees; license, permit, inspection and other fees; fees and assessments imposed by any covenants or owners’ association; security services; insurance
premiums and deductibles; and maintenance, repair and replacement of the driveways, parking areas (including snow removal), exterior lighting, landscaped areas, walkways, curbs, storm conveyance systems, sewer lines, exterior walls, foundation,
structural frame, roof and gutters. The cost of any capital improvement shall be amortized over the useful life of such improvement (as reasonably determined by Landlord in accordance with generally accepted accounting principles), and only the
amortized portion shall be included in Operating Expenses. 
  
 (c)
“Real Estate Taxes” shall include any form of real estate tax or assessment or service payments in lieu thereof, and any license fee, commercial rental tax, improvement bond or other similar charge or tax (other than inheritance, personal
income or estate taxes) imposed upon the Building or common areas (or against Landlord’s business of leasing the Building) by any authority having the power to so charge or tax, together with costs and expenses of contesting the validity or
amount of Real Estate Taxes which at Landlord’s option may be calculated as if such contesting work had been performed on a contingent fee basis (whether charged by Landlord’s counsel or representative; provided, however, that said fees
are reasonably comparable to the fees charged for similar services by others not affiliated with Landlord, but in no event shall fees exceed thirty-three percent (33%) of the good faith estimated tax savings). Additionally, Tenant shall pay, prior
to delinquency, all taxes assessed against and levied upon trade fixtures, furnishings, equipment and all personal property of Tenant contained in the Leased Premises. 
  
 (d) Notwithstanding anything to the contrary contained in this Section 3.02, Operating Expenses shall not include the
following: 
  
 (i) leasing commissions;

  
 (ii) costs and expenses incurred by Landlord
for which Landlord is actually reimbursed by parties other than tenants of the Building, including, without limitation, insurance proceeds; 
  
 (iii) the initial construction cost of the Building or any depreciation thereof; 
  
 (iv) any debt service or costs related to the sale or
financing of the Building or underlying land; 
  
 (v) the cost of improvements provided for any other tenant’s space; 
  
 (vi) any special services rendered to tenants (including Tenant) for which a separate charge is made; and 
  
 (vii) penalties or late fees assessed against Landlord.

  
 Section 3.03. Payment of Additional Rent.
Landlord shall estimate the total amount of Additional Rent to be paid by Tenant during each calendar year of the Lease Term, pro-rated for any partial years. After the first two (two) months of the Lease Term, Tenant shall pay to Landlord each

  

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 month, at the same time the Monthly Rental Installment is due, unless otherwise agreed to, an amount equal to
one-twelfth (1/12) of the estimated Additional Rent for such year. Within a reasonable time after the end of each calendar year, Landlord shall submit to Tenant a statement of the actual amount of such Additional Rent and within thirty (30) days
after receipt of such statement, Tenant shall pay any deficiency between the actual amount owed and the estimates paid during such calendar year. In the event of overpayment, Landlord shall credit the amount of such overpayment toward the next
installments of Minimum Rent. 
  
 Section 3.04. Late
Charges. Tenant acknowledges that Landlord shall incur certain additional unanticipated administrative and legal costs and expenses if Tenant fails to timely pay any payment required hereunder. Therefore, in addition to the other remedies
available to Landlord hereunder, if any payment required to be paid by Tenant to Landlord hereunder is paid after the due date, such unpaid amount shall bear interest from the due date thereof to the date of payment at the prime rate (as reported in
the Wall Street Journal) of interest (“Prime Rate”) plus four percent (4%) per annum. 
  
 Section 3.05. Maximum Increase in Operating Expenses. Notwithstanding anything in this Lease to the contrary, Tenant will be responsible for
Tenant’s Proportionate Share of Real Estate Taxes, insurance premiums, utilities, exterior janitorial services, snow removal, landscaping and management or administrative fees applicable to such expenses (“Uncontrollable Expenses”),
without regard to the level of increase in any or all of the above in any year or other period of time. Tenant’s obligation to pay all other Building Operating Expenses which are not Uncontrollable Expenses (herein “Controllable
Expenses”) shall be limited to a six percent (6%) per annum increase over the amount the Controllable Expenses for the immediately preceding calendar year would have been had the Controllable Expenses increased at the rate of six percent (6%)
in all previous calendar years beginning with the actual Controllable Expenses for the year ending December 31, 2004. 
  
 Section 3.06. Right to Audit. Tenant will be entitled from time to time to audit and verify the operations of the Building and the related
books and records of Landlord to assure that the Operating Expenses from time to time reported by Landlord are in keeping with the provisions of this Article 3. As to any calendar year, any undertaking by Tenant must be initiated within
ninety (90) days of receipt by Tenant of the statement of Additional Rent delivered by Landlord pursuant to Section 3.03 above; and absent fraud or gross negligence on Landlord’s part, the Operating Expenses as timely reported by
Landlord for the calendar year will be deemed controlling upon the expiration of Tenant’s audit and verification rights for such calendar year. In the event of any errors, the appropriate party will make a correcting payment in full to the
other party within thirty (30) days after the determination and communication to all parties of the amount of such error. Notwithstanding the foregoing, Tenant shall be prohibited from using any third party audit firm that is paid on a contingent
fee basis. 
  
 ARTICLE 4 - SECURITY DEPOSIT 
  
 Tenant, upon execution of this Lease, shall deposit with Landlord the
Security Deposit as security for the performance by Tenant of all of Tenant’s obligations contained in this Lease. In the event of a default by Tenant Landlord may apply all or any part of the Security Deposit to cure all or any part of such
default; and Tenant agrees to promptly, upon demand, deposit such additional sum with Landlord as may be required to maintain the full amount of the Security Deposit. All sums held by Landlord pursuant to this section shall be without interest. At
the end of the Lease Term, provided that there is then no uncured default, Landlord shall return the Security Deposit to Tenant. 
  
 ARTICLE 5 - USE 
  
 Section 5.01. Use of Leased Premises. The Leased Premises are to be used by Tenant solely for the Permitted Use and for no other purposes
without the prior written consent of Landlord, which consent shall not be unreasonably withheld. 
  
 Section 5.02. Covenants of Tenant Regarding Use. Tenant shall (i) use and maintain the Leased Premises and conduct its business thereon in a
safe, careful, reputable and lawful manner, (ii) comply with all laws, rules, regulations, orders, ordinances, directions and requirements of any governmental authority or agency, now in force or which may hereafter be in force, including without
limitation those which shall impose upon Landlord or Tenant any duty with respect to or triggered by a change in the use or occupation of, or any improvement or alteration to, the Leased Premises, and (iii) comply with and obey all reasonable
directions of the Landlord, including directions as to the non-exclusive use of parking spaces, as well as the Building rules and regulations that may be adopted by Landlord from time to time. Tenant shall not do or permit anything to be done in or
about the Leased Premises or common areas which constitutes a nuisance or which interferes with the rights of other tenants or injures or annoys them. Landlord shall not be responsible to Tenant for the nonperformance 
  

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 by any other tenant or occupant of the Building of its lease or of any rules and regulations; provided, however, that
Landlord shall uniformly enforce such reasonable directions, rules and regulations. Tenant shall not overload the floors of the Leased Premises. Landlord acknowledges that Tenant’s installation of its safe (the specifications for which have
been heretofore delivered to Landlord) in the Leased Premises shall not overload the floor. All damage to the floor structure or foundation of the Building due to improper positioning or storage of items or materials shall be repaired by Landlord at
the sole expense of Tenant, who shall reimburse Landlord immediately therefor upon demand. Tenant shall not use the Leased Premises, or allow the Leased Premises to be used, for any purpose or in any manner which would invalidate any policy of
insurance now or hereafter carried on the Building or increase the rate of premiums payable on any such insurance policy unless Tenant reimburses Landlord as Additional Rent for any increase in premiums charged. 
  
 Section 5.03. Landlord’s Rights Regarding Use. In addition
to the rights specified elsewhere in this Lease, Landlord shall have the following rights regarding the use of the Leased Premises or the common areas, each of which may be exercised without notice or liability to Tenant, (a) Landlord may install
such signs, advertisements, notices or tenant identification information as it shall deem necessary or proper (provided, however, that Landlord shall not obscure Tenant’s approved signage); (b) Landlord shall have the right at any time to
control, change or otherwise alter the common areas as it shall deem necessary or proper so long as such control, change or alteration does not (i) materially and adversely affect Tenant’s use of the Leased Premises for the Permitted Use, (ii)
decrease the number of parking space allocated to Tenant pursuant to Section 17.05 below, or (iii) obscure Tenant’s approved signage; and (c) Landlord or Landlord’s agent, accompanied by a representative of Tenant (provided one is
made available to Landlord), shall be permitted to inspect or examine the Leased Premises at any reasonable time upon at least twenty-four (24) hours’ prior notice (except in an emergency when no notice shall be required), and Landlord shall
have the right to make any repairs to the Leased Premises which are necessary for its preservation; provided, however, that any repairs made by Landlord that are the responsibility of Tenant hereunder and that Tenant has failed to make within the
applicable cure period shall be at Tenant’s expense, except as provided in Section 7.02 hereof. Landlord shall incur no liability to Tenant for such entry, nor shall such entry constitute an eviction of Tenant or a termination of this
Lease, or entitle Tenant to any abatement of rent therefor. Without limiting the foregoing, Landlord covenants and agrees that in exercising any of its rights under this Section 5.03, Landlord shall use reasonable efforts to minimize any
interference with Tenant’s use of the Leased Premises for the Permitted Use. 
  
 ARTICLE 6 - UTILITIES AND SERVICES 
  
 Tenant shall obtain in its own name and pay directly to the appropriate supplier the cost of all utilities and services serving the Leased Premises, including janitorial services. However, if any services or utilities
are jointly metered with other property, Landlord shall make a reasonable determination of Tenant’s proportionate share of the cost of such utilities and services (at rates that would have been payable if such utilities and services had been
directly billed by the utilities or services providers to Tenant) and Tenant shall pay such share to Landlord within fifteen (15) days after receipt of Landlord’s written statement. Landlord shall not be liable in damages or otherwise for any
failure or interruption of any utility or other building service and no such failure or interruption shall entitle Tenant to terminate this Lease or withhold sums due hereunder. In the event of utility “deregulation”, Landlord may choose
the service provider. Notwithstanding the foregoing, to the extent that (a) such interruption of service is caused by the negligence or willful misconduct of Landlord or its employees and (b) such interruption of service renders the Leased Premises
or any portion of the Leased Premises untenantable for a period of four (4) consecutive business days after Landlord receives written notice from Tenant of such interruption of service, Minimum Annual Rent shall abate with respect to the area which
is affected for each such consecutive day after said four (4) business day period that such area of the Leased Premises is so rendered until such service is restored. The rent abatement shall equal the Monthly Rental Installment due for the period
of the interruption with respect to the square footage affected. Provided, however, to the extent that such interruption is caused or continues as a result of (i) Force Majeure (as defined in Section 16.04 hereof), or (ii) the negligence or
willful misconduct of Tenant, its agents, employees, contractors, subtenants, invitees or assignees, Tenant shall not be entitled to any abatement hereunder. The Leased Premises shall be considered untenantable if Tenant does not use the Leased
Premises or portion thereof affected in the conduct of its normal business operations as a result of said interruption of service to the Leased Premises. It is agreed and understood that Tenant shall not use nor be entitled to use the Leased
Premises or portion thereof affected to conduct its normal business operations during any day for which Landlord is obligated to abate rent hereunder. The abatement herein provided shall be Tenant’s sole and exclusive remedy for interruption of
service. Landlord agrees to use its reasonable efforts to restore such utility service as soon as possible. 
  

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 INDUSTRIAL LEASE 
  

 ARTICLE 7 - MAINTENANCE AND REPAIRS 
  
 Section 7.01. Tenant’s Responsibility. During the Lease
Term, Tenant shall, at its own cost and expense, maintain the Leased Premises in good condition, including interior janitorial services, regularly servicing and promptly making all repairs and replacements thereto, including but not limited to the
electrical systems (including light bulb replacement), heating and air conditioning systems (the “HVAC systems”), plate glass, floors, windows and doors, and plumbing systems, and shall obtain a preventive maintenance contract on the HVAC
systems, and provide Landlord with a copy thereof. The preventive maintenance contract shall meet or exceed Landlord’s standard maintenance criteria, and shall provide for the inspection and maintenance of the heating, ventilating and air
conditioning system on not less than a semi-annual basis. 
  
 Section 7.02. Landlord’s Responsibility. During the Lease Term, Landlord shall maintain in good condition and repair, and replace as necessary, the roof, exterior walls, foundation and structural frame of the Building and
the parking and landscaped areas, the costs of which shall be included in Operating Expenses to the extent provided in Section 3.02; provided, however, that to the extent any of the foregoing items require repair because of the negligence,
misuse, or default of Tenant, its employees, agents, customers or invitees, Landlord shall make such repairs solely at Tenant’s expense. 
  
 Section 7.03. Alterations. Tenant shall not permit alterations in or to the Leased Premises unless and until the plans have been approved by
Landlord in writing (which approval shall not be unreasonably withheld, conditioned or delayed); provided, however, that Tenant shall have the right to make alterations to the Leased Premises without obtaining Landlord’s prior written consent
provided that (a) such alterations do not exceed Ten Thousand Dollars ($10,000.00) in cost in any one instance and Sixty Thousand Dollars ($60,000.00) in cost in the aggregate during the Lease Term; (b) such alterations are non-structural in nature;
and (c) Tenant provides Landlord with prior written notice of its intention to make such alterations stating in reasonable detail the nature, extent and estimated cost of such alterations together with the plans and specifications for the same. All
alterations to the Leased Premises shall become a part of the realty and the property of Landlord, and shall not be removed by Tenant. Tenant shall ensure that all alterations shall be made in accordance with all applicable laws, regulations and
building codes, in a good and workmanlike manner and of quality equal to or better than the original construction of the Building. No person shall be entitled to any lien derived through or under Tenant for any labor or material furnished to the
Leased Premises, and nothing in this Lease shall be construed to constitute a consent by Landlord to the creation of any lien. If any lien is filed against the Leased Premises for work claimed to have been done for or material claimed to have been
furnished to Tenant, Tenant shall cause such lien to be discharged of record within thirty (30) days after filing. Tenant shall indemnify Landlord from all costs, losses, expenses and attorneys’ fees in connection with any construction or
alteration and any related lien. Notwithstanding anything contained herein to the contrary, Tenant shall have no obligation hereunder to remove any alterations or improvements which have been made by Tenant with the express written consent of
Landlord, unless, at the time of granting such consent, Landlord has expressly required the removal of such alterations or improvements. 
  
 ARTICLE 8 - INDEMNITY AND INSURANCE 
  
 Section 8.01. Release. All of Tenant’s trade fixtures, merchandise, inventory and all other personal property in or about the Leased
Premises, the Building or the Common Areas, which is deemed to include the trade fixtures, merchandise, inventory and personal property of others located in or about the Leased Premises or Common Areas at the invitation, direction or acquiescence
(express or implied) of Tenant (all of which property shall be referred to herein, collectively, as “Tenant’s Property”), shall be and remain at Tenant’s sole risk. Landlord shall not be liable to Tenant or to any other person
for, and Tenant hereby releases Landlord from (a) any and all liability for theft or damage to Tenant’s Property, and (b) any and all liability for any injury to Tenant or its employees, agents, contractors, guests and invitees in or about the
Leased Premises, the Building or the Common Areas, except to the extent of personal injury caused directly by the negligence or willful misconduct of Landlord, its agents, employees or contractors. Nothing contained in this Section 8.01 shall
limit (or be deemed to limit) the waivers contained in Section 8.06 below. In the event of any conflict between the provisions of Section 8.06 below and this Section 8.01, the provisions of Section 8.06 shall prevail.
This Section 8.01 shall survive the expiration or earlier termination of this Lease. 
  
 Section 8.02. Indemnification by Tenant. Tenant shall protect, defend, indemnify and hold Landlord, its agents, employees and contractors harmless from and against any and all claims, damages, demands,
penalties, costs, liabilities, losses, and expenses (including reasonable attorneys’ fees and expenses at the trial and appellate levels) to the extent (a) arising out of or relating to any act, omission, negligence, or willful misconduct of
Tenant or Tenant’s agents, employees, contractors, customers or invitees in or about the Leased Premises, the Building or the Common Areas, (b) arising out of or relating 
  

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 to any of Tenant’s Property, or (c) arising out of any other act or occurrence within the Leased Premises, in
all such cases except to the extent of personal injury (but not property loss or damage) caused directly by the negligence or willful misconduct of Landlord, its agents, employees or contractors. Nothing contained in this Section 8.02 shall
limit (or be deemed to limit) the waivers contained in Section 8.06 below. In the event of any conflict between the provisions of Section 8.06 below and this Section 8.02, the provisions of Section 8.06 shall prevail.
This Section 8.02 shall survive the expiration or earlier termination of this Lease. 
  
 Section 8.03. Indemnification by Landlord. Landlord shall protect, defend, indemnify and hold Tenant, its agents, employees and contractors harmless from and against any and all claims, damages, demands,
penalties, costs, liabilities, losses and expenses (including reasonable attorneys’ fees and expenses at the trial and appellate levels) to the extent arising out of or relating to any act, omission, negligence or willful misconduct of Landlord
or Landlord’s agents, employees or contractors. Nothing contained in this Section 8.03 shall limit (or be deemed to limit) the waivers contained in Section 8.06 below. In the event of any conflict between the provisions of
Section 8.06 below and this Section 8.03, the provisions of Section 8.06 shall prevail. This Section 8.03 shall survive the expiration or earlier termination of this Lease. 
  
 Section 8.04. Tenant’s Insurance. 
  
 (a) During the Lease Term (and any period of early entry or occupancy or
holding over by Tenant, if applicable), Tenant shall maintain the following types of insurance, in the amounts specified below: 
  
 (i) Liability Insurance. Commercial General Liability Insurance (which insurance shall not exclude blanket contractual liability, broad form
property damage, personal injury, or fire damage coverage) covering the Leased Premises and Tenant’s use thereof against claims for bodily injury or death and property damage, which insurance shall provide coverage on an occurrence basis with a
combined single limit of not less than $3,000,000 per occurrence, and with general aggregate limits of not less than $10,000,000 for each policy year, which limits may be satisfied by any combination of primary and excess or umbrella per occurrence
policies. 
  
 (ii) Casualty Insurance. Special Form
Insurance (which insurance shall not exclude flood or earthquake) in the amount of the full replacement cost of Tenant’s Property and betterments (including alterations or additions performed by Tenant pursuant hereto, but excluding those
improvements, if any, made pursuant to Section 2.02 above), which insurance shall include an agreed amount endorsement waiving coinsurance limitations. 
  

(iii) Worker’s Compensation Insurance. Worker’s Compensation insurance in amounts required by applicable law. 
  
 (iv) Business Interruption Insurance. Business Interruption Insurance
covering rental income of one (1) year. 
  
 (b) All insurance
required by Tenant hereunder shall (i) be issued by one or more insurance companies reasonably acceptable to Landlord, licensed to do business in the State in which the Leased Premises is located and having an AM Best’s rating of A IX or
better, and (ii) provide that said insurance shall not be (A) changed in any way that would make such insurance not in compliance with this Section 8.04, (B) canceled, or (C) permitted to lapse, in each case on less than thirty (30)
days’ prior written notice to Landlord. In addition, Tenant’s insurance shall protect Tenant and Landlord as their interests may appear, naming Landlord, Landlord’s managing agent, and any mortgagee requested by Landlord, as
additional insureds under its commercial general liability policies. On or before the Commencement Date (or the date of any earlier entry or occupancy by Tenant), and thereafter, within thirty (30) days prior to the expiration of each such policy,
Tenant shall furnish Landlord with certificates of insurance in the form of ACORD 27, evidencing all required coverages, together with a copy of the endorsements to Tenant’s commercial general liability policies naming the appropriate
additional insureds. If Tenant fails to carry such insurance and furnish Landlord with such certificates of insurance or copies of insurance policies (if applicable), Landlord may obtain such insurance on Tenant’s behalf and Tenant shall
reimburse Landlord upon demand for the cost thereof as Additional Rent. 
  
 Section 8.05. Landlord’s Insurance. During the Lease Term, Landlord shall maintain the following types of insurance, in the amounts specified below (the cost of which shall be included in Operating Expenses): 

 
 (a) Liability Insurance. Commercial General Liability Insurance
(which insurance shall not exclude blanket, contractual liability, broad form property damage, personal injury, or fire damage 
  

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 coverage) covering the Common Areas against claims for bodily injury or death and property damage, which insurance
shall provide coverage on an occurrence basis with a combined single limit of not less than $3,000,000 per occurrence, and with general aggregate limits of not less than $10,000,000 for each policy year, which limits may be satisfied by any
combination of primary and excess or umbrella per occurrence policies. 
  
 (b) Casualty Insurance. Special Form Insurance (which insurance shall not exclude flood or earthquake) in the amount of the full replacement cost of the Building, including, without limitation, any improvements, if any, made pursuant
to Section 2.02 above, but excluding Tenant’s Property and any other items required to be insured by Tenant pursuant to Section 8.04 above. 
  

Section 8.06. Waiver of Subrogation. Notwithstanding anything contained in this Lease to the contrary, Landlord and Tenant hereby waive
any rights each may have against the other on account of any loss of or damage to their respective property, the Leased Premises, its contents, or other portions of the Building or Common Areas arising from any risk which is required to be insured
against by Sections 8.04(a)(ii) and 8.05(b) above. The special form coverage insurance policies maintained by Landlord and Tenant as provided in this Lease shall include an endorsement containing an express waiver of any rights of
subrogation by the insurance company against Landlord and Tenant, as applicable. 
  
 ARTICLE 9 - CASUALTY 
  
 In the event of total or partial destruction of the Building or the Leased Premises by fire or other casualty, Landlord agrees promptly to restore and repair same; provided, however, Landlord’s obligation hereunder with respect to the
Leased Premises shall be limited to the reconstruction of such of the leasehold improvements as were originally required to be made by Landlord pursuant to Section 2.02 above, if any. Rent shall proportionately abate during the time that the
Leased Premises or part thereof are unusable because of any such damage. Notwithstanding the foregoing, if the Leased Premises are (a) so destroyed that they cannot be repaired or rebuilt within one hundred eighty (180) days from the casualty date;
or (b) destroyed by a casualty that is not covered by the insurance required hereunder or, if covered, such insurance proceeds are not released by any mortgagee entitled thereto or are insufficient to rebuild the Building and the Leased Premises;
then, in case of a clause (a) casualty, either Landlord or Tenant may, or, in the case of a clause (b) casualty, then Landlord may, upon thirty (30) days’ written notice to the other party, terminate this Lease with respect to matters
thereafter accruing. Tenant waives any right under applicable laws inconsistent with the terms of this paragraph. Notwithstanding the provisions of this paragraph, if any such damage or destruction occurs within the final year of the term hereof,
then Landlord, in its sole discretion, may, without regard to the aforesaid one hundred eighty (180) day period, terminate this Lease by written notice to Tenant. 
  
 ARTICLE 10 - EMINENT DOMAIN 
  

If all or any substantial part of the Building or common areas shall be acquired by the exercise of eminent domain, Landlord may terminate this Lease
by giving written notice to Tenant on or before the date that actual possession thereof is so taken. If all or any part of the Leased Premises or parking area shall be acquired by the exercise of eminent domain so that the Leased Premises shall
become unusable by Tenant for the Permitted Use, Tenant may terminate this Lease as of the date that actual possession thereof is so taken by giving written notice to Landlord. All damages awarded shall belong to Landlord; provided, however, that
Tenant may claim dislocation damages if such amount is not subtracted from Landlord’s award. 
  
 ARTICLE 11 - ASSIGNMENT AND SUBLEASE 
  
 Section 11.01. Tenant shall not assign this Lease or sublet the Leased Premises in whole or in part without Landlord’s prior written consent,
which consent shall not be unreasonably withheld, delayed or denied. In the event of any assignment or subletting, (a) Tenant shall remain primarily liable hereunder, and (b) if the entire Leased Premises is assigned or sublet, any extension,
expansion, rights of first offer, rights of first refusal or other options granted to Tenant under this Lease shall be rendered void and of no further force or effect. The acceptance of rent from any other person shall not be deemed to be a waiver
of any of the provisions of this Lease or to be a consent to the assignment of this Lease or the subletting of the Leased Premises. Without in any way limiting Landlord’s right to refuse to consent to any assignment or subletting of this Lease,
Landlord reserves the right to refuse to give such consent if in Landlord’s opinion (x) the Leased Premises are or may be in any way adversely affected; (y) the business reputation of the proposed assignee or subtenant is unacceptable; or (z)
the financial worth of the proposed assignee or subtenant is insufficient to meet the obligations under the proposed assignment or sublease. In the event that Tenant sublets the Leased Premises or any part thereof, or assigns this Lease and at any
time receives rent and/or other consideration which exceeds that which Tenant would at that time be obligated to pay to Landlord, Tenant shall pay to Landlord 50% of the gross excess in such rent less 
  

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 INDUSTRIAL LEASE 
  

 reasonable cost of subleasing (including commissions, advertising costs, legal costs, and tenant improvement costs)
as such rent is received by Tenant and 50% of any other consideration received by Tenant (excluding any consideration received in connection with a sale of Tenant’s assets) from such subtenant in connection with such sublease or, in the case of
any assignment of this Lease by Tenant, Landlord shall receive 50% of any consideration paid to Tenant by such assignee in connection with such assignment. In addition, should Landlord agree to an assignment or sublease agreement, Tenant will pay to
Landlord on demand the sum of $500.00 to partially reimburse Landlord for its costs, including reasonable attorneys’ fees, incurred in connection with processing such assignment or subletting request. Notwithstanding any provision of this Lease
to the contrary, should Tenant receive consent from Landlord to sublease or assign its interest in the Premises and seek to sublease or assign its interest in the Premises in accordance with this paragraph, Tenant shall not use the name of Landlord
or any insignia of Landlord in any of its advertising for such sublease or assignment. 
  
 Section 11.02. Permitted Transferee. Notwithstanding anything to the contrary contained in Section 11.01 above, Tenant shall have the right, without Landlord’s consent, but upon ten (10) days
prior notice to Landlord, to (a) sublet all or part of the Leased Premises to any related corporation or other entity which controls Tenant, is controlled by Tenant or is under common control with Tenant; (b) assign all or any part of this Lease to
any related corporation or other entity which controls Tenant, is controlled by Tenant, or is under common control with Tenant, or to a successor entity into which or with which Tenant is merged or consolidated or which acquires substantially all of
Tenant’s assets or property; or (c) effectuate any public offering of Tenant’s stock on the New York Stock exchange or in the NASDAQ over the counter market, provided that in the event of a transfer pursuant to clause (b), the tangible net
worth after any such transaction is not less than the tangible net worth of Tenant as of the date hereof and provided further that such successor entity assumes all of the obligations and liabilities of Tenant (any such entity hereinafter referred
to as a “Permitted Transferee”). For the purpose of this Article 11 (i) “control” shall mean ownership of not less than fifty percent (50%) of all voting stock or legal and equitable interest in such corporation or entity,
and (ii) “tangible net worth” shall mean the excess of the value of tangible assets (i.e. assets excluding those which are intangible such as goodwill, patents and trademarks) over liabilities. Any such transfer shall not relieve Tenant of
its obligations under this Lease. Nothing in this paragraph is intended to nor shall permit Tenant to transfer its interest under this Lease as part of a fraud or subterfuge to intentionally avoid its obligations under this Lease (for example,
transferring its interest to a shell corporation that subsequently files a bankruptcy), and any such transfer shall constitute a Default hereunder. 
  
 ARTICLE 12 - TRANSFERS BY LANDLORD 
  
 Section 12.01. Sale of the Building. Landlord shall have the right to sell the Building at any time during the Lease Term, subject only to
the rights of Tenant hereunder; and such sale shall operate to release Landlord from liability hereunder after the date of such conveyance. In the event a transferee shall agree to assume the obligations and liabilities of Landlord under the Lease
prior to the date of the transfer, Landlord shall be released from all obligations and liabilities under the Lease. 
  
 Section 12.02. Estoppel Certificate. Within ten (10) business days following receipt of a written request from Landlord, Tenant shall
execute and deliver to Landlord, without cost, any instrument which Landlord deems reasonably necessary or desirable to confirm the subordination of this Lease and an estoppel certificate in such form as Landlord may reasonably request certifying
(i) that this Lease is in full force and effect and unmodified or stating the nature of any modification, (ii) the date to which rent has been paid, (iii) that there are not, to Tenant’s knowledge, any uncured defaults or specifying such
defaults if any are claimed, and (iv) any other matters or state of facts reasonably required respecting the Lease. Such estoppel may be relied upon by Landlord and by any purchaser or mortgagee of the Building. 
  
 Section 12.03. Subordination. Landlord shall have the right to
subordinate this Lease to any mortgage presently existing or hereafter placed upon the Building by so declaring in such mortgage provided that the holder of said mortgage agrees not to disturb Tenant’s possession of the Leased Premises so long
as Tenant is not in default hereunder, as evidenced by a subordination, non-disturbance agreement signed by said holder. Promptly following Landlord’s request, Tenant shall execute such a subordination and non-disturbance agreement
(“SNDA”). Notwithstanding the foregoing, if the mortgagee shall take title to the Leased Premises through foreclosure or deed in lieu of foreclosure, Tenant shall be allowed to continue in possession of the Leased Premises as provided for
in this Lease so long as Tenant shall not be in default. Tenant acknowledges that such SNDA may provide that (i) in the event the mortgagee files suit to foreclose the mortgage, the mortgagee will not join Tenant in the foreclosure proceedings so
long as Tenant is not in default under any of the terms, covenants and conditions of the Lease, (ii) in the event mortgagee succeeds to the interest of mortgagor, as Landlord, and Tenant is not in default under the terms, covenants or conditions of
the Lease, the mortgagee shall be bound to Tenant under all of the terms, covenants and conditions of the Lease, (iii) Tenant agrees to attorn to mortgagee, and (iv) Tenant agrees to give mortgagee notice of Landlord’s default and opportunity
to cure. 
  

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 ARTICLE 13 - DEFAULT AND REMEDY 
  
 Section 13.01. Default. The occurrence of any of the following shall be a “Default”: 
  
 (a) Tenant fails to pay any Monthly Rental Installment or Additional Rent
within five (5) business days following written notice from Landlord on the first occasion in any twelve (12) month period, and (ii) within five (5) business days after the same is due on any subsequent occasion within said twelve (12) month period,
or Tenant fails to pay any other amounts due Landlord from Tenant within ten (10) days after the same is due. 
  
 (b) Tenant fails to perform or observe any other term, condition, covenant or obligation required under this Lease for a period of thirty (30) days after
notice thereof from Landlord; provided, however, that if the nature of Tenant’s default is such that more than thirty days are reasonably required to cure, then such default shall be deemed to have been cured if Tenant commences such
performance within said thirty-day period and thereafter diligently completes the required action within a reasonable time. 
  
 (c) Tenant shall assign or sublet all or a portion of the Leased Premises in contravention of the provisions of Article 11 of this Lease. 
  
 (d) All or substantially all of Tenant’s assets in the Leased Premises
or Tenant’s interest in this Lease are attached or levied under execution (and Tenant does not discharge the same within sixty (60) days thereafter); a petition in bankruptcy, insolvency or for reorganization or arrangement is filed by or
against Tenant (and Tenant fails to secure a stay or discharge thereof within sixty (60) days thereafter); Tenant is insolvent and unable to pay its debts as they become due; Tenant makes a general assignment for the benefit of creditors; Tenant
takes the benefit of any insolvency action or law; the appointment of a receiver or trustee in bankruptcy for Tenant or its assets if such receivership has not been vacated or set aside within thirty (30) days thereafter; or, dissolution or other
termination of Tenant’s corporate charter if Tenant is a corporation. 
  
 (e) Tenant shall fail to vacate the Leased Premises upon termination of the Lease. 
  
 Section 13.02. Remedies. Upon the occurrence of any Default, Landlord shall have the following rights and remedies, in addition to those
allowed by law or in equity, any one or more of which may be exercised without further notice to Tenant: 
  
 (a) Landlord may apply the Security Deposit or re-enter the Leased Premises and cure any default of Tenant, and Tenant shall reimburse Landlord as
additional rent for any costs and expenses which Landlord thereby incurs; and Landlord shall not be liable to Tenant for any loss or damage which Tenant may sustain by reason of Landlord’s action. 
  
 (b) Landlord may terminate this Lease or, without terminating this Lease,
terminate Tenant’s right to possession of the Leased Premises as of the date of such Default, and thereafter (i) neither Tenant nor any person claiming under or through Tenant shall be entitled to possession of the Leased Premises, and Tenant
shall immediately surrender the Leased Premises to Landlord; and (ii) Landlord may lawfully re-enter the Leased Premises and dispossess Tenant and any other occupants of the Leased Premises by any lawful means and may remove their effects, without
prejudice to any other remedy which Landlord may have. Landlord shall have the right to lawfully secure the Premises against unauthorized entry and allow Tenant supervised access to the Leased Premises to remove those items belonging to Tenant which
are not the subject of a security interest by Landlord. Upon the termination of this Lease, Landlord may declare the present value (discounted at the Prime Rate) of all rent which would have been due under this Lease for the balance of the Lease
Term to be immediately due and payable, whereupon Tenant shall be obligated to pay the same to Landlord, together with all loss or damage which Landlord may sustain by reason of Tenant’s default (“Default Damages”), which shall
include without limitation expenses of preparing the Leased Premises for re-letting, demolition, repairs, Tenant Improvements, brokers’ commissions and attorneys’ fees, it being expressly understood and agreed that the liabilities and
remedies specified in this subsection (b) shall survive the termination of this Lease. 
  
 (c) Landlord may, without terminating this Lease, re-enter the Leased Premises and re-let all or any part thereof for a term different from that which would otherwise have constituted the balance of the Lease Term and
for rent and on terms and conditions different from those contained herein, Landlord shall have the right to secure the Premises against unauthorized entry, allow Tenant 
  

 10 

 INDUSTRIAL LEASE 
  

 supervised access to the Leased Premises to remove those items belonging to Tenant which are not the subject of a
security interest by Landlord and Tenant shall be immediately obligated to pay to Landlord as liquidated damages the present value (discounted at the Prime Rate) of the difference between the rent provided for herein and that provided for in any
lease covering a subsequent re-letting of the Leased Premises, for the period which would otherwise have constituted the balance of the Lease Term, together with all of Landlord’s Default Damages. 
  
 (d) Landlord may sue for injunctive relief or to recover damages for any loss
resulting from the Default. 
  
 Section 13.03.
Landlord’s Default and Tenant’s Remedies. Landlord shall be in default if it fails to perform any term, condition, covenant or obligation required under this Lease for a period of thirty (30) days after written notice thereof from
Tenant to Landlord; provided, however, that if the term, condition, covenant or obligation to be performed by Landlord is such that it cannot reasonably be performed within thirty (30) days, such default shall be deemed to have been cured if
Landlord commences such performance within said thirty-day period and thereafter diligently undertakes to complete the same. Upon the occurrence of any such default, Tenant may sue for injunctive relief or to recover damages for any loss directly
resulting from the breach, but Tenant shall not be entitled to terminate this Lease or withhold, offset or abate any sums due hereunder. As to Landlord’s maintenance and repair obligations under Section 7.02 above, if Landlord has not
cured or commenced to cure a maintenance or repair default set forth in said notice from Tenant within said 30-day period, Tenant may undertake all reasonable action to cure Landlord’s failure of performance. If Tenant elects to cure said
default, Tenant shall, prior to commencement of said work, provide to Landlord a specific description of the work to be performed by Tenant and the name of Tenant’s contractor. Any materials used shall be of equal or better quality than
currently exists in the Building and Tenant’s contractor shall be adequately insured and of good reputation. Landlord agrees to reimburse Tenant on demand for all reasonable, third party out-of-pocket expenses incurred by Tenant in connection
therewith, provided that Tenant delivers to Landlord adequate bills or other supporting evidence substantiating said cost. 
  
 Section 13.04. Limitation of Landlord’s Liability. If Landlord shall fail to perform any term, condition, covenant or obligation
required to be performed by it under this Lease and if Tenant shall, as a consequence thereof, recover a money judgment against Landlord, Tenant agrees that it shall look solely to Landlord’s right, title and interest in and to the Building for
the collection of such judgment; and Tenant further agrees that no other assets of Landlord shall be subject to levy, execution or other process for the satisfaction of Tenant’s judgment. 
  
 Section 13.05. Nonwaiver of Defaults. Neither party’s
failure or delay in exercising any of its rights or remedies or other provisions of this Lease shall constitute a waiver thereof or affect its right thereafter to exercise or enforce such right or remedy or other provision. No waiver of any default
shall be deemed to be a waiver of any other default. Landlord’s receipt of less than the full rent due shall not be construed to be other than a payment on account of rent then due, nor shall any statement on Tenant’s check or any letter
accompanying Tenant’s check be deemed an accord and satisfaction. No act or omission by Landlord or its employees or agents during the Lease Term shall be deemed an acceptance of a surrender of the Leased Premises, and no agreement to accept
such a surrender shall be valid unless in writing and signed by Landlord. 
  
 Section 13.06. Attorneys’ Fees. If either party defaults in the performance or observance of any of the terms, conditions, covenants or obligations contained in this Lease and the non-defaulting
party obtains a judgment against the defaulting party, then the defaulting party agrees to reimburse the non-defaulting party for reasonable attorneys’ fees incurred in connection therewith. 
  
 ARTICLE 14 - LANDLORD’S RIGHT TO RELOCATE TENANT 
  
 Intentionally Omitted 
  
 ARTICLE 15 - TENANT’S RESPONSIBILITY REGARDING 
 ENVIRONMENTAL LAWS AND HAZARDOUS SUBSTANCES. 
  
 Section 15.01. Definitions. 
  
 (a) “Environmental Laws” - All present or future federal, state and municipal laws, codes, orders, decrees, ordinances, rules and regulations as
well as the rules and regulations of the Federal Environmental Protection Agency or any other federal, state or municipal agency or governmental board or entity regulating, relating to, or imposing liability or standards of conduct concerning any
hazardous, toxic or dangerous, waste, substance, or material, gas or petroleum product. 
  

 11 

 INDUSTRIAL LEASE 
  

 (b) “Hazardous Substances” - For purposes of this Lease, “Hazardous Substances”
means and includes any hazardous or toxic substance, pollutant, contaminant, gas, or petroleum product defined as such in (or for purposes of) any Environmental Laws. 
  
 Section 15.02. Compliance. Tenant, at its sole cost and expense, shall promptly comply with the Environmental
Laws including any notice from any source issued pursuant to the Environmental Laws or issued by any insurance company which shall impose any duty upon Tenant with respect to the use, occupancy, maintenance or alteration of the Leased Premises
whether such notice shall be served upon Landlord or Tenant. 
  
 Section 15.03. Restrictions on Tenant. Tenant shall operate its business and maintain the Leased Premises in compliance with all Environmental Laws. Tenant shall not cause or permit the use, generation, release, manufacture,
refining, production, processing, storage or disposal of any Hazardous Substances on, under or about the Leased Premises, or the transportation to or from the Leased Premises of any Hazardous Substances, except as necessary and appropriate for its
Permitted Use in which case the use, storage or disposal of such Hazardous Substances shall be performed in compliance with the Environmental Laws and the highest standards prevailing in the industry. 
  
 Section 15.04. Notices, Affidavits, Etc. Tenant shall
immediately notify Landlord of (i) any violation by Tenant, its employees, agents, representatives, customers, invitees or contractors of the Environmental Laws on, under or about the Leased Premises, or (ii) the presence or suspected presence of
any Hazardous Substances on, under or about the Leased Premises and shall immediately deliver to Landlord any notice received by Tenant relating to (i) and (ii) above from any source. Tenant shall execute affidavits, representations and the like
within five (5) days of Landlord’s request therefor concerning Tenant’s best knowledge and belief regarding the presence of any Hazardous Substances on, under or about the Leased Premises. 
  
 Section 15.05. Landlord’s Rights. Landlord and its agents
shall have the right, but not the duty, upon advance notice (except in the case of emergency when no notice shall be required) to inspect the Leased Premises and conduct tests thereon to determine whether or the extent to which there has been a
violation of Environmental Laws by Tenant or whether there are Hazardous Substances on, under or about the Leased Premises. In exercising its rights herein, Landlord shall use reasonable efforts to minimize interference with Tenant’s business
but such entry shall not constitute an eviction of Tenant, in whole or in part, and Landlord shall not be liable for any interference, loss, or damage to Tenant’s property or business caused thereby. 
  
 Section 15.06. Tenant’s Indemnification. Tenant
shall indemnify Landlord and Landlord’s managing agent from any and all claims, losses, liabilities, costs, expenses and damages, including attorneys’ fees, costs of testing and remediation costs, incurred by Landlord in connection with
any breach by Tenant of its obligations under this Article 15. The covenants and obligations under this Article 15 shall survive the expiration or earlier termination of this Lease. Notwithstanding anything contained in this Article 15 to the
contrary, Tenant shall not have any liability to Landlord under this Article 15 resulting from any conditions existing, or events occurring, or any Hazardous Substances existing or generated, at, in, on, under or in connection with the Leased
Premises prior to the Commencement Date of this Lease except to the extent Tenant exacerbates the same. 
  
 Section 15.07. Landlord’s Representation. To the best of Landlord’s knowledge and belief Landlord represents that as of the
Commencement Date of the term hereof, the Leased Premises and Common Areas shall either be in compliance with all governmental codes, ordinances, rules and regulations (including but not limited to all environmental laws) or, if required at such
time, shall be brought into such compliance. 
  
 ARTICLE 16 -
MISCELLANEOUS 
  
 Section 16.01. Benefit of Landlord
and Tenant. This Lease shall inure to the benefit of and be binding upon Landlord and Tenant and their respective successors and assigns. 
  
 Section 16.02. Governing Law. This Lease shall be governed in accordance with the laws of the State where the Building is located.

  
 Section 16.03. Guaranty. In consideration of
Landlord’s leasing the Leased Premises to Tenant, Tenant shall provide Landlord with a Guaranty of Lease executed by the guarantor(s) described in the Basic Lease Provisions, if any. 
  
 Section 16.04. Force Majeure. Landlord and Tenant (except with respect to the payment of any monetary
obligation) shall be excused for the period of any delay in the performance of any 
  

 12 

 INDUSTRIAL LEASE 
  

 obligation hereunder when such delay is occasioned by causes beyond its control, including but not limited to work
stoppages, boycotts, slowdowns or strikes; shortages of materials, equipment, labor or energy; unusual weather conditions; or acts or omissions of governmental or political bodies. 
  
 Section 16.05. Examination of Lease. Submission of this instrument for examination or signature to Tenant does
not constitute a reservation of or option for Lease, and it is not effective as a Lease or otherwise until execution by and delivery to both Landlord and Tenant. 
  
 Section 16.06. Indemnification for Leasing Commissions. The parties hereby represent and warrant that the only
real estate brokers involved in the negotiation and execution of this Lease are the Brokers. Each party shall indemnify the other from any and all liability for the breach of this representation and warranty on its part and shall pay any
compensation to any other broker or person who may be entitled thereto. Landlord shall pay any commissions due the Brokers based on this Lease pursuant to separate agreements between Landlord and the Brokers. 
  
 Section 16.07. Notices. Any notice required or permitted to be
given under this Lease or by law shall be deemed to have been given if it is written and delivered in person or by overnight courier or mailed by certified mail, postage prepaid, to the party who is to receive such notice at the address specified in
Article 1. If delivered in person, notice shall be deemed given as of the delivery date. If sent by overnight courier, notice shall be deemed given as of the first business day after sending. If mailed, the notice shall be deemed to have been given
on the date which is three business days after mailing. Either party may change its address by giving written notice thereof to the other party. 
  
 Section 16.08. Partial Invalidity; Complete Agreement. If any provision of this Lease shall be held to be invalid, void or unenforceable,
the remaining provisions shall remain in full force and effect. This Lease represents the entire agreement between Landlord and Tenant covering everything agreed upon or understood in this transaction. There are no oral promises, conditions,
representations, understandings, interpretations or terms of any kind as conditions or inducements to the execution hereof or in effect between the parties. No change or addition shall be made to this Lease except by a written agreement executed by
Landlord and Tenant. 
  
 Section 16.09. Financial
Statements. In the event that Tenant is no longer a publicly traded company, Tenant shall provide to Landlord on an annual basis, within ninety (90) days following the end of Tenant’s fiscal year, a copy of Tenant’s most recent
financial statements prepared as of the end of Tenant’s fiscal year. Such financial statements shall be signed by Tenant who shall attest to the truth and accuracy of the information set forth in such statements. All financial statements
provided by Tenant to Landlord hereunder shall be prepared in conformity with generally accepted accounting principles, consistently applied. Landlord agrees that it shall maintain the confidentiality of such financial statements during the Lease
Term; provided, however, that said obligation shall not be construed so as to prohibit Landlord from disclosing the contents of the financial statements to (a) officers and employees of Landlord and those agents, attorneys and consultants of
Landlord reasonably requiring access, (b) actual or prospective lenders, purchasers, investors or shareholders of Landlord, (c) any entity or agency required by law, or (d) any entity or agency which is reasonably necessary to protect
Landlord’s interest in any action, suit or proceeding brought by or against Landlord and relating to the subject matter of this Lease. 
  
 Section 16.10. Representations and Warranties. The undersigned represent and warrant that (i) such party is duly organized, validly existing
and in good standing (if applicable) in accordance with the laws of the state under which it was organized and if such state is not the state in which the Leased Premises is located, that it is authorized to do business in such state; and (ii) the
individual executing and delivering this Lease has been properly authorized to do so, and such execution and delivery shall bind such party. 
  
 ARTICLE 17 – SPECIAL PROVISIONS 
  
 Section 17.01. Option To Extend. 
  
 (a) Grant and Exercise of Option. Provided that (i) Tenant has not been in default beyond any applicable notice and cure period hereunder at any
time during the Lease Term, (ii) the creditworthiness of Tenant is then acceptable to Landlord, (iii) Tenant originally named herein (or its Permitted Transferee) remains in possession of and has been continuously operating in the entire Leased
Premises throughout the Lease Term and (iv) the current use of the Leased Premises is consistent with the Permitted Use hereunder, Tenant shall have the option to extend the Lease Term for three (3) successive periods of five (5) years each (the
“Extension Term(s)”). The leasing of the Leased Premises for the Extension Term shall be upon the same terms and conditions contained in the Lease for the original Lease Term except (i) this provision giving three (3) extension options
shall be amended to reflect the remaining options to extend, if any, (ii) any 
  

 13 

 INDUSTRIAL LEASE 
  

 improvement allowances or other concessions applicable to the Leased Premises during the original Lease Term shall
not apply to the Extension Term, and (iii) the Minimum Annual Rent shall be adjusted as set forth below (the “Rent Adjustment”). Tenant shall exercise such option by delivering to Landlord, no later than nine (9) months prior to the
expiration of the then current Lease Term, written notice of Tenant’s desire to extend the Lease Term. Tenant’s failure to timely exercise such option shall waive it and any succeeding option. If Tenant properly exercises its option to
extend, Landlord shall notify Tenant of Landlord’s determination of the Rent Adjustment no later than eight (8) months prior to the commencement of the Extension Term. Tenant shall have thirty (30) days following its receipt of Landlord’s
notice to notify Landlord in writing that Tenant objects to the Rent Adjustment and that Tenant either (x) retracts its option to extend the Lease Term, or (y) elects to determine the Rent Adjustment through an appraisal process. If Tenant elects
option (x) above, the Lease Term shall expire on its scheduled expiration date and Tenant’s option to extend shall be void and of no further force and effect. If Tenant elects option (y) above, the Rent Adjustment shall be determined in
accordance with the appraisal process set forth in subsection (c) below. If Tenant fails to notify Landlord of such election within said thirty (30) day period, Tenant shall be deemed to have accepted the Rent Adjustment set forth in Landlord’s
notice to Tenant. 
  
 (b) Rent Adjustment. The Minimum
Annual Rent for the applicable Extension Term shall be reasonably determined by Landlord based on the monthly rent charged to prospective renewing tenants for comparable buildings (e.g., age, physical condition, number of stories, total size,
comparable location) in the area in which the Leased Premises are located, taking into account all financial terms, including without limitation, base rent, free rent, escalations, work contributions and allowances and leasing and brokerage
commissions. 
  
 (c) Appraisal Process. If, pursuant to
subsection (a) above, Tenant elects to determine the Rent Adjustment through an appraisal process, the Rent Adjustment shall be determined as follows: 
  
 (i) Selection of Appraisers. Landlord and Tenant shall, within ten (10) days after Landlord’s receipt of Tenant’s election, each select
an appraiser to determine the Fair Market Value Rent for the Leased Premises. Each appraiser so selected shall be either an MAI appraiser or a licensed real estate broker, each having at least ten years prior experience in the appraisal or leasing
of comparable space in the metropolitan area in which the Leased Premises are located and with a working knowledge of current rental rates and practices. 
  
 (ii) Appraisal. Upon selection, Landlord’s and Tenant’s appraisers shall work together in good faith to agree upon the Rent Adjustment.
The estimate chosen by such appraisers shall be binding on both Landlord and Tenant. If the two appraisers cannot agree upon the Rent Adjustment for the Leased Premises within twenty (20) days after their appointment, then, within ten (10) days
after the expiration of such twenty (20) day period, the two appraisers shall select a third appraiser meeting the above criteria. Once the third appraiser has been selected as provided for above, then such third appraiser shall within ten (10) days
after appointment make its determination of which of the appraisers’ two estimates most closely reflects Rent Adjustment and such estimate shall be binding on both Landlord and Tenant as the Rent Adjustment for the applicable Extension Term.
The parties shall share equally in the costs of the third arbitrator. 
  
 (d) Monthly Rental. The Monthly Rental Installments shall be an amount equal to one-twelfth (1/12) of the Minimum Annual Rent for the applicable Extension Term and shall be paid at the same time and in the same manner as provided in
the Lease. 
  
 (e) Amendment. If Tenant properly exercises
its option to extend, Landlord and Tenant shall execute an amendment to the Lease reflecting the terms and conditions of the applicable Extension Term. 
  
 Section 17.02. Right of First Refusal. Provided that (i) Tenant has not been in default beyond any applicable notice and cure period
hereunder at any time during the Lease Term, (ii) the creditworthiness of Tenant is then acceptable to Landlord, (iii) Tenant originally named herein (or its Permitted Transferee) remains in possession of and has been continuously operating in the
entire Leased Premises throughout the Term and (iv) the current use of the Leased Premises is consistent with the Permitted Use hereunder, and subject to any rights of other tenants to the Refusal Space (hereafter defined) superior to Tenant,
Landlord shall notify Tenant in writing (“Landlord’s Notice”) upon Landlord’s receipt of a bona fide offer that Landlord desires to accept from an unrelated third party (a “Bona Fide Offer”) to lease any space in the
Building (the “Refusal Space”). Landlord’s Notice shall describe in detail the terms of said Bona Fide Offer. Tenant shall have five (5) business days from its receipt of Landlord’s Notice to deliver to Landlord a written
acceptance agreeing to lease the Refusal Space on the terms and conditions set forth in the Bona Fide Offer including leasing such other space as may be the subject of such Bona Fide Offer. In the event Tenant fails to notify Landlord of its
acceptance within said five (5) business day period, such failure shall be conclusively deemed a waiver 
  

 14 

 INDUSTRIAL LEASE 
  

 of Tenant’s rights under this Section 17.02 and a rejection of the Refusal Space, whereupon Landlord
shall be free to lease the Refusal Space to the tenant described in said Bona Fide Offer. In the event Tenant accepts the Refusal Space on the terms and conditions set forth in the Bona Fide Offer, Landlord and Tenant shall enter into a lease
amendment incorporating such Refusal Space and the increase in Tenant’s Proportionate Share. It is understood and agreed that Tenant’s rights under this Section 17.02 shall not be construed to prevent any tenant in the Building from
extending or renewing its lease. 
  
 Section 17.03.
Option To Terminate. Provided that (i) Tenant has not been in default beyond any applicable notice and cure period hereunder at any time during the Lease Term, and (ii) Tenant originally named herein (or its Permitted Transferee) remains in
possession of and has been continuously operating in the entire Leased Premises throughout the Term, Tenant shall have a one time right to terminate the Lease effective as of the end of the sixtieth (60th) month of the Lease Term. In order to exercise such termination right, Tenant shall notify Landlord of such exercise in writing at least twelve (12) months
prior to the effective date of such termination, and together with such notice, Tenant shall pay to Landlord $192,000.00. In the event Tenant fails to notify Landlord by such notice deadline, Tenant shall be deemed to have waived Tenant’s
termination right for the remainder of the term of the Lease and any extensions thereof. 
  
 Section 17.05. Parking. Landlord shall make available to Tenant a number of automobile parking spaces (on an unassigned, non-exclusive basis) in the parking area established for the Building based on a
formula of three (3) parking spaces for each 1,000 square feet of rentable area within the Leased Premises, rounded to the nearest whole number of spaces. 
  
 Section 17.06. Signage. 
  
 (a) Suite. Landlord, at its cost and expense, shall provide Tenant with Building standard suite signage on or near the door of the Leased Premises.

  
 (b) Building. Tenant shall have the right to install a
Building mounted identification sign with Tenant’s name and/or logo on the parapet of the Building (the “Sign”). The Sign shall be installed, maintained and repaired by Tenant at Tenant’s sole cost and expense and shall comply
with all laws, rules, regulations, ordinances and covenants applicable to the Building. Landlord shall have the right to approve the Sign, including the location, size, color and style, which approval shall not be unreasonably withheld. Upon the
expiration or early termination of this Lease, Tenant shall remove the Sign and repair any damage caused by such removal at Tenant’s sole cost and expense. 
  

Section 17.07. ADA. Subject to the last sentence hereof, Landlord, at its sole cost and expense, shall be responsible for causing the
Building to comply with Title III of the American With Disabilities Act of 1990 (the “ADA”), or the regulations promulgated thereunder (as the ADA is in effect and pertains to the general public), as of the Commencement Date. During the
Lease Term, Tenant hereby agrees that it shall be responsible, at its sole cost and expense, for causing the Building, the Common Area and the Leased Premises to comply with the ADA as a result of (i) any special requirements of the ADA relating to
accommodations for individual employees, invitees and/or guests of Tenant, and (ii) any alterations made to the Leased Premises by Tenant. 
  
 Section 17.08. HVAC. 
  
 (a) Landlord hereby warrants that the heating, ventilation and air-conditioning systems servicing the Leased Premises (the “HVAC”) shall be in
good working order as of the Commencement Date. 
  
 (b)
Notwithstanding anything to the contrary set forth in Section 7.01 of this Lease, at such time, if at all, as the cost incurred by Tenant to repair the HVAC in a given calendar year exceeds $5,000.00, in the aggregate, (i) Tenant shall
promptly notify Landlord, which notice shall be accompanied by copies of paid invoices evidencing such cost, and (ii) Landlord shall perform all further repairs required to the HVAC during such calendar year at Landlord’s sole cost and expense;
provided, however, that in the event such repair is needed as a result of Tenant’s failure to maintain the HVAC properly or the negligence or willful misconduct of Tenant or Tenant’s agents, employees, contractors or invitees, Tenant shall
be required to perform the necessary repairs at its sole cost and expense. 
  
 (c) Notwithstanding anything to the contrary set forth in Section 7.01 of this Lease, and without limiting anything set forth in subsection (b) above, in the event that, during the Lease Term, a particular
component of the HVAC requires repair or replacement and the estimated cost for such repair or replacement exceeds $2,000.00 (i) Tenant shall promptly notify Landlord of the need for such repair or replacement, (ii) Landlord shall perform such
repair or replacement at its cost and expense (subject to 
  

 15 

 INDUSTRIAL LEASE 
  

 clause (iii) below), and (iii) Tenant shall reimburse Landlord, as Additional Rent, for the cost of such replacement
up to $2,000.00; provided, however, that in the event such replacement is needed as a result of Tenant’s failure to maintain the HVAC properly or the negligence or willful misconduct of Tenant or Tenant’s agents, employees, contractors or
invitees, Tenant shall be required to perform the necessary replacement at its sole cost and expense. 
  
 Section 17.09. Memorandum of Lease. The parties agree that this Lease may not be recorded but that either party may request that the other
execute a Memorandum of Lease which may be recorded. The parties agree to remove the Memorandum of Lease of record upon the expiration or earlier termination of this Lease. In the event of an early termination as a result of Tenant’s default
and vacation of the Leased Premises, Tenant agrees that Landlord can unilaterally remove the Memorandum of Lease of record. 
  
 (SIGNATURES CONTAINED ON THE FOLLOWING PAGE) 
  

 16 

 INDUSTRIAL LEASE 
  

 IN WITNESS WHEREOF, the parties hereto have executed this Lease under seal as of the day and year
first above written. 
  

									
	 LANDLORD:

	
	 DUKE REALTY LIMITED PARTNERSHIP,
 an Indiana limited partnership doing business in North
 Carolina as Duke Realty of Indiana Limited Partnership

		
	 By:
	 	 Duke Realty Corporation,

	 	 	 its General Partner

				
	 	 	 By:
	 	 /s/ H. Andrew Kelton

	 	 [SEAL]

	 	 	 Printed:
	 	 H. Andrew Kelton
	 	 
	 	 	 Title:
	 	 Senior Vice-President
	 	 
	
	 TENANT:

	
	 CHARLES AND COLVARD, LTD., a

	 North Carolina corporation

				
	 	 	 By:
	 	 /s/ James R. Braun

	 	 [SEAL]

	 	 	 Printed:
	 	 James R. Braun
	 	 
	 	 	 Title:
	 	 V.P.-Finance, CFO, Secretary
	 	 

  
 END OF
EXECUTION SIGNATURES 
  

 17 

 INDUSTRIAL LEASE 
  

 EXHIBIT B-1 (Continued) 
  
 TENANT ALTERNATES 
  

 INDUSTRIAL LEASE 
  

 EXHIBIT B 
  
 TENANT IMPROVEMENTS 
  
 1. Landlord’s Obligations. Tenant has personally inspected the Leased Premises and accepts the same “AS IS” without
representation or warranty by Landlord of any kind and with the understanding that Landlord shall have no responsibility with respect thereto except to construct and install within the Leased Premises, in a good and workmanlike manner and in
compliance with all applicable federal, state, county and municipal laws, ordinances and codes in effect as of the date of the Lease, the Tenant Improvements, in accordance with this Exhibit B. 
  
 2. Construction Drawings. On or before the thirtieth (30th) day following the date hereof, Landlord shall prepare and submit to Tenant a set of construction drawings (the
“CD’s”) covering all work to be performed by Landlord in constructing and installing the Tenant Improvements, which shall be based on the scope of work attached as Exhibit B-1 hereto. Tenant shall have five (5) business
days after receipt of the CD’s in which to review the CD’s and to give to Landlord written notice of Tenant’s approval of the CD’s or its requested changes to the CD’s. Tenant shall have no right to request any changes to
the CD’s that would increase the scope of work (unless Tenant pays for any increase in cost resulting from such requested changes) or materially alter the exterior appearance or basic nature of the Building or the Building systems. If Tenant
fails to approve or request changes to the CD’s within five (5) business days after its receipt thereof, Tenant shall be deemed to have approved the CD’s and the same shall thereupon be final. If Tenant requests any changes to the
CD’s, Landlord shall make those changes which are reasonably requested by Tenant and shall within ten (10) days of its receipt of such request submit the revised portion of the CD’s to Tenant. Tenant may not thereafter disapprove the
revised portions of the CD’s unless Landlord has unreasonably failed to incorporate reasonable comments of Tenant and, subject to the foregoing, the CD’s, as modified by said revisions, shall be deemed to be final upon the submission of
said revisions to Tenant. Tenant shall at all times in its review of the CD’s, and of any revisions thereto, act reasonably and in good faith. Without limiting the foregoing, Tenant agrees to confirm Tenant’s consent to the CD’s in
writing within three (3) business days following Landlord’s written request therefor. 
  
 3. Schedule and Early Occupancy. Landlord shall provide Tenant with a proposed schedule for the construction and installation of the Tenant Improvements and shall notify Tenant of any material changes to said
schedule. Tenant agrees to coordinate with Landlord regarding the installation of Tenant’s phone and data wiring and any other trade related fixtures that will need to be installed in the Leased Premises prior to Substantial Completion. In
addition, if and to the extent permitted by applicable laws, rules and ordinances, Tenant shall have the right to enter the Leased Premises for thirty (30) days prior to the scheduled date for Substantial Completion (as may be modified from time to
time) in order to install fixtures (such as racking) and otherwise prepare the Leased Premises for occupancy, which right shall expressly exclude making any structural modifications. During any entry prior to the Commencement Date (a) Tenant shall
comply with all terms and conditions of this Lease other than the obligation to pay rent, (b) Tenant shall not interfere with Landlord’s completion of the Tenant Improvements, (c) Tenant shall cause its personnel and contractors to comply with
the terms and conditions of Landlord’s rules of conduct (which Landlord agrees to furnish to Tenant upon request), and (d) Tenant shall not begin operation of its business. Tenant acknowledges that Tenant shall be responsible for obtaining all
applicable permits and inspections relating to any such entry by Tenant. 
  
 4. Change Orders. Tenant shall have the right to request changes to the CD’s at any time following the date hereof by way of written change order (each, a “Change Order”, and collectively,
“Change Orders”). Provided such Change Order is reasonably acceptable to Landlord, Landlord shall prepare and submit promptly to Tenant a memorandum setting forth the impact on cost and schedule resulting from said Change Order (the
“Change Order Memorandum of Agreement”). Tenant shall, within three (3) business days following Tenant’s receipt of the Change Order Memorandum of Agreement, either (a) execute and return the Change Order Memorandum of Agreement to
Landlord, or (b) retract its request for the Change Order. At Landlord’s option, Tenant shall pay to Landlord (or Landlord’s designee), within ten (10) days following Landlord’s request, any increase in the cost to construct the
Tenant Improvements resulting from the Change Order, as set forth in the Change Order Memorandum of Agreement. Landlord shall not be obligated to commence any work set forth in a Change Order until such time as Tenant has delivered to Landlord the
Change Order Memorandum of Agreement executed by Tenant and, if applicable, Tenant has paid Landlord in full for said Change Order. 
  
 5. Tenant Delay. Notwithstanding anything to the contrary contained in the Lease, if Substantial Completion of the Tenant Improvements is delayed
beyond the Target Commencement Date as a result of Tenant Delay (as hereinafter defined), then, for purposes of determining the 
  

 1 

 INDUSTRIAL LEASE 
  

 Commencement Date, Substantial Completion of the Tenant Improvements shall be deemed to have occurred on the date
that Substantial Completion of the Tenant Improvements would have occurred but for such Tenant Delay. Without limiting the foregoing, Landlord shall use commercially reasonable speed and diligence to Substantially Complete the Tenant Improvements on
or before the Target Commencement Date. 
  
 6. Penalty.
Notwithstanding anything to the contrary contained in this Exhibit B, and provided that this Lease is executed by Tenant on or before March 26, 2004, in the event that the Tenant Improvements are not Substantially Complete on or before
the date that is fifteen (15) days following the Target Commencement Date, as such date may be extended as a result of Delay, as hereinafter defined (the “Outside Date”), Tenant shall receive one (1) day of free rent for each day after the
Outside Date that the Tenant Improvements are not Substantially Complete. For purposes of this Lease, “Delay” shall mean (i) Tenant Delay, and (ii) such additional time as is equal to the time lost by Landlord or Landlord’s
contractors or suppliers as a result of Force Majeure, as described in Section 16.04 of the Lease. Except as set forth in this Paragraph 6, no liability whatsoever shall arise or accrue against Landlord by reason its failure to Substantially
Complete the Tenant Improvements on or before the Target Commencement Date. 
  
 7. Letter of Understanding. Promptly following the Commencement Date, Tenant shall execute Landlord’s Letter of Understanding in substantially the form attached hereto as Exhibit C and made a
part hereof, acknowledging (a) the Commencement Date of this Lease, and (b) except for any punchlist items, that Tenant has accepted the Leased Premises. If Tenant takes possession of and occupies the Leased Premises, Tenant shall be deemed to have
accepted the Leased Premises and that the condition of the Leased Premises and the Building was at the time satisfactory and in conformity with the provisions of this Lease in all respects, subject to any punchlist items. 
  
 8. Moving Allowance. Landlord shall pay to Tenant a moving allowance
of $4.50 per rentable square foot within the Leased Premises at such time as all of the following events have occurred: (i) Tenant has taken occupancy of the Leased Premises and has begun operating Tenant’s business therein, and (ii) Tenant has
executed and delivered to Landlord the Letter of Understanding required under Paragraph 7 of this Exhibit B above. 
  
 9. Definitions. For purposes of this Lease (a) “Substantial Completion” (or any grammatical variation thereof) shall mean completion of
construction of the Tenant Improvements, subject only to punchlist items to be identified by Landlord and Tenant in a joint inspection of the Leased Premises prior to Tenant’s occupancy, as established by a certificate of occupancy for the
Leased Premises or other similar authorization issued by the appropriate governmental authority, and (b) “Tenant Delay” shall mean any delay in the completion of the Tenant Improvements attributable to Tenant, including, without limitation
(i) Tenant’s failure to meet any time deadlines specified herein, (ii) Change Orders, (iii) the performance of any other work in the Leased Premises by any person, firm or corporation employed by or on behalf of Tenant, or any failure to
complete or delay in completion of such work, (iv) Landlord’s inability to obtain an occupancy permit for the Leased Premises because of the need for completion of all or a portion of improvements being installed in the Leased Premises directly
by Tenant, and (v) any other act or omission of Tenant. 
  
 10.
Warranty. Landlord hereby warrants to Tenant, which warranty shall survive for the one (1) year period following the Commencement Date, that (i) the materials and equipment furnished by Landlord’s contractors in the completion of the
Tenant Improvements will be of good quality and new, and (ii) such materials and equipment and the work of such contractors shall be free from defects not inherent in the quality required or permitted hereunder. This warranty shall exclude damages
or defects caused by Tenant, its agents, employees or contractors, improper or insufficient maintenance, improper operation or normal wear and tear under normal usage. 
  
 11. Amortization. In the event Tenant elects to have Landlord construct and install any one or more of the
alternatives set forth in Exhibit B-1 hereto, the cost of such alternative(s) (the “Alternative Cost”) shall be paid by Tenant in equal monthly installments over the initial Lease Term at the same time and in the same manner
as the Monthly Rental Installments. At the request of either party, Landlord and Tenant shall enter into an amendment to this Lease confirming the Alternative Cost and the amount of said monthly payments. Notwithstanding anything to the contrary
contained herein, upon an early termination of the Lease for any reason (including, but not limited to, casualty or condemnation) other than for a Landlord default, Tenant shall immediately pay to Landlord the then unpaid portion of the Alternative
Cost. 
  
 END OF EXHIBIT B 
  
  

 2 

 INDUSTRIAL LEASE 
  

 EXHIBIT C 
  
 RULES AND REGULATIONS 
  
 1. The sidewalks, common areas, and public portions of the Building, such as entrances, passages, courts, elevators, vestibules, stairways, corridors or
halls, and the streets, alleys or ways surrounding or in the vicinity of the Building shall not be obstructed by Tenant, even temporarily, or encumbered by Tenant or used for any purpose other than ingress to and egress from the Premises.

  
 2. No awnings or other projections shall be attached to the
outside walls of the Building. 
  
 3. No sign, advertisement,
notice or other lettering shall be exhibited, inscribed, painted or affixed by Tenant on any part of the outside of the Premises or Building unless approved by Landlord. Signs on entrance doors shall, at Tenant’s expense, be inscribed, painted
or affixed for each tenant by sign makers approved by Landlord. In the event of the violation of the foregoing by Tenant, Landlord may remove same without notice to Tenant or any liability therefor, and may charge the expense incurred by such
removal to Tenant. 
  
 4. The sashes, sash doors, skylights,
windows, heating, ventilating and air conditioning vents and doors that reflect or admit light and air into the halls, passageways or other public places in the Building shall not be covered or obstructed by Tenant. 
  
 5. No show cases or other articles shall be put in front of or affixed to any
part of the exterior of the Building, nor placed in the public halls, corridors, or vestibules without the prior written consent of Landlord. 
  
 6. The bathrooms and plumbing fixtures shall not be used for any purposes other than those for which they were designed, and no sweepings, rubbish, rags,
or other substances shall be thrown therein. All damages resulting from any misuse of the bathrooms or fixtures shall be the responsibility of Tenant. 
  
 7. Tenant shall not in any way deface any part of the Premises or the Building. 
  
 8. No bicycles, vehicles, or animals of any kind shall be brought into or kept in or about the Premises, or in the Building.
No cooking shall be done or permitted by Tenant on the Premises except in conformity with all applicable laws, statutes, regulations and ordinances and then only in the area designated as a kitchen, if any, on the Premises of Tenant, which is to be
primarily used by Tenant’s employees for heating beverages and light snacks. Notwithstanding the foregoing, Tenant shall have the right to cook outdoors in connection with outdoor functions and picnics with Landlord’s prior written
approval. Except for those odors emitted through the normal use of a toaster or microwave, Tenant shall not cause or permit any unusual or objectionable odors to be produced upon or permeate from the Premises. 
  
 9. Intentionally Omitted. 
  
 10. No space in the Building shall be used for the sale of merchandise,
goods, or property of any kind at auction. 
  
 11. Tenant shall
not make, or permit to be made, any unseemly or disturbing noises or disturb or interfere with occupants of the Building or neighboring buildings or premises or those having business with them, whether by the use of any musical instrument, radio,
talking machine, unmusical noise, whistling, singing, or in any other way. Tenant shall not throw anything out of the doors, windows or skylights or down the passageways. 
  
 12. Neither Tenant, nor any of Tenant’s servants, employees, agents, visitors, or licensees, shall at any time bring or
keep upon the Premises any inflammable, combustible or explosive fluid, or chemical substance, other than reasonable amounts of cleaning fluids or solvents required in the normal operation of Tenant’s business offices. 
  
 13. No additional locks or bolts of any kind shall be placed upon any of the
doors, walls, accessways, or windows by Tenant (excluding Tenant’s vault and interior swipe cards), nor shall any changes be made in existing locks or the mechanism thereof, without the prior written approval of Landlord and unless and until a
duplicate key or access card, as applicable, is delivered to Landlord. Tenant shall, upon the termination of its tenancy (i) return to Landlord all keys for the Premises and for any area of the Building, or common areas, either furnished to, or
otherwise procured by Tenant, (ii) restore the locks, walls, accessways, windows, and doors to their original condition on the date of this Lease by removing any security measures installed by Tenant, repairing any damage to the Premises or to the
Building as a result of the restoration and removal, and (iii) in the event of the loss of any keys furnished to Tenant by Landlord, Tenant shall pay to Landlord the cost thereof. 
  

 1 

 INDUSTRIAL LEASE 
  

 14. Tenant shall not overload any floor. 
  
 15. Tenant shall not occupy or permit any portion of the Premises to be used
for the possession, storage, manufacture or sale of liquor, narcotics, or tobacco in any form. 
  
 16. Tenant shall be responsible for all persons for whom it issues passes and/or keys and shall be liable to Landlord for all acts of such persons. 
  
 17. The Premises shall not be used for lodging or sleeping or for any immoral or illegal purpose. 
  
 18. The requirements of Tenant will be attended to only by Landlord or the
property manager of the Premises. 
  
 19. Canvassing, soliciting,
and peddling in the Building are prohibited and Tenant shall cooperate to prevent the same. 
  
 20. All paneling, and other wood products not considered furniture shall be of fire retardant materials. 
  
 21. No smoking is permitted in the Premises, or in the Building. Smoking is permitted outside the Building in designated smoking areas. All cigarette
butts and other refuse should be placed in designated containers. 
  
 22. No weapons concealed or visible are permitted in the Premises, in the Building, or on the Land unless such weapon is in the possession of a licensed holder and used specifically for security purposes. 
  
 23. In the event the Premises constitute an outdoor patio, exterior generator
area, or any open area adjacent to the Premises or on the Land designated under the Lease for the exclusive use of Tenant, Tenant shall use furniture and other equipment in any such areas in form, coloring, substance, design and quality subject to
the prior approval of Landlord. In addition, any outdoor patio, exterior generator area, or other open area must be screened on all sides using materials in form, substance, coloring, design, and quality are subject to the prior approval of
Landlord, and must be designed and constructed in accordance in accordance with plans and specifications that are subject to the prior approval of Landlord. 
  
 Whenever the above rules conflict with any of the rights or obligations of Tenant pursuant to the provisions of the Lease, the provisions of the Lease
shall govern. Landlord shall not be responsible to Tenant or liable for the non-observance or violation of any of these Rules and Regulations by any other tenant. 
  
 END OF EXHIBIT C 
  

 2 

 INDUSTRIAL LEASE 
  

 EXHIBIT D 
  
 LETTER OF UNDERSTANDING 
  
 Duke Realty Limited Partnership, an Indiana limited partnership 
 Attention:
                                        
     
 1800 Perimeter Park Drive, Suite 200 
 Morrisville, NC 27560 
  

	 	RE:	Lease Agreement between Duke Realty Limited Partnership, an Indiana limited partnership (“Landlord”) and
                                        
     (“Tenant”) for the Leased Premises located at
                                        
         (the “Leased Premises”), dated ,                      (the
“Lease”). Lease ID No.
                                       
      

  
 Dear Sir or
Madame: 
  
 The undersigned, on behalf of the Tenant, certifies
to the Landlord as follows: 
  
 1. The Commencement Date under
the Lease is
                                        
    . 
  
 2. The Rent
Commencement Date is
                                        
    . 
  
 3. The Expiration
Date of the Lease is
                                        
    . 
  
 4. The Lease
(including amendments or guaranty, if any) is the entire agreement between Landlord and Tenant as to the leasing of the Leased Premises and is in full force and effect. 
  
 5. The Landlord has completed the improvements designated as Landlord’s obligation under the Lease (excluding
punch-list items as agreed upon by the Landlord and Tenant), if any, and Tenant has accepted the Leased Premises as of the Commencement Date. 
  
 6. To the best of the undersigned’s knowledge, there are no uncured events of default by either Tenant or Landlord under the Lease. 
  
 IN WITNESS WHEREOF, the undersigned has caused this Letter of Understanding
to be executed this          day of                     , 200    .

  

			
	 By:
	 	  

	 Printed Name:
	 	  

	 Title:
	 	  

  

 1Asset Purchase Agreement

 Exhibit 10.1 
  
 ASSET PURCHASE AGREEMENT 
  
 Between 
  
 OPTICAL SENSORS INCORPORATED 
  
 and 
  
 SORBA MEDICAL
SYSTEMS, INC. 
  
 Dated: April 14, 2004 

 EXHIBITS 
  

			
	Exhibit 1.1	 	Purchased Assets
		
	Exhibit 2.2	 	Intellectual Property Rights Related to Software
		
	Exhibit 3	 	Disclosure Schedule
		
	Exhibit 5.13	 	Form of Investment Certificate
		
	Exhibit 6.11	 	TGMG Release
		
	Exhibit 6.9	 	Barney Agreement

 ASSET PURCHASE AGREEMENT 
  
 THIS ASSET PURCHASE AGREEMENT (“Agreement”) is made and entered into as of April 14, 2004 by and between
Optical Sensors Incorporated, a Delaware corporation (the “Buyer”) and SORBA Medical Systems, Inc., a Wisconsin corporation (the “Seller”). 
  
 WHEREAS, Seller is engaged in the business of manufacturing and selling a non-invasive hemodynamic medical device known as
the SteorraTM impedance cardiograph, which
encompasses Seller’s proprietary RTeaTM
advanced signal processing technology (the “Steorra Product”); and 
  
 WHEREAS, Seller and Buyer wish to provide for the terms and conditions upon which Seller will sell to Buyer, and Buyer will purchase from Seller, substantially all of the assets of Seller that are used in connection
with, or related to, the design, development, manufacture, marketing and sale of the Steorra Product. 
  
 NOW, THEREFORE, in consideration of the mutual representations, warranties, covenants and respective agreements hereinafter set forth, and for other good
and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows: 
  
 SECTION 1. 
 PURCHASE AND SALE OF
ASSETS 
  

	1.1	Purchase and Sale of Assets. At the Closing Date (as defined below), and upon the terms and conditions of this Agreement, Seller shall sell, transfer, convey, assign
and deliver to Buyer, and Buyer shall purchase from Seller, free and clear of any mortgage, lien, pledge, option, security interest, claim, charge, financing statement or other encumbrance of any kind whatsoever, whether or not of record
(collectively, the “Encumbrances”), all right, title and interest in and to all of the Seller’s assets, wherever located, that are used or held for use in the design, development, manufacture, marketing or sale of the Steorra
Product, other than the Excluded Assets (as defined below), whether or not appearing on the books and records of Seller or the Exhibits hereto (collectively, the “Purchased Assets”), including without limitation those described
below: 

  

	 	(a)	All equipment (excluding office equipment as set forth in Section 1.2), machinery, spare parts, tooling, supplies, rolling stock and other personal property that is used in or
related to the design, development, manufacture, marketing or sale of the Steorra Product, including without limitation those described on Exhibit 1.1 (collectively, the “Equipment”); 

  

	 	(b)	All leases and subleases for equipment, if any, (excluding office equipment as set forth in Section 1.2), machinery, spare parts, tooling, supplies, rolling stock and other personal
property that is used in or related to the design, development, manufacture, marketing or sale of the Steorra Product, including without limitation those described on Exhibit 1.1 (“Personal Property Leases”);

  

	 	(c)	All items of finished goods, work in process, raw and packaging materials, subassemblies and spare and replacement parts that are used in or related to the design, development,
manufacture, marketing or sale of the Steorra Product, including inventory in transit or in storage, rights in inventory on consignment or memorandum, subject to the rights of consignor, and including without limitation the inventory described on
Exhibit 1.1 (the “Inventory”); 

	 	(d)	All patents, patent applications, patent rights, registered and unregistered trademarks, trademark applications, trade names, the names “Steorra” and “RTea,”
service marks, service mark applications, copyrights, computer programs, computer software object codes and source codes and other computer software, inventions, know-how, trade secrets, technology, engineering, electronics and other technical
information, manufacturing and other proprietary processes, trade dress, designs, formulae and any other proprietary information whether owned by Seller or licensed to Seller by third parties and used in or related to the design, development,
manufacture, marketing or sale of the Steorra Product, including without limitation those described on Exhibit 1.1, all documentation and goodwill associated therewith and related thereto and all rights to sue for past infringements
(collectively, the “Intellectual Property Rights”); 

  

	 	(e)	All business and technical information and related books, records and documentation that is used in or related to the design, development, manufacture, marketing or sale of the
Steorra Product, including without limitation files (including without limitation CAD files), computer discs and tapes, laboratory notebooks, operating manuals, instructions for use, clinical data, invoices, credit and sales records, customer lists,
customer prospect lists, supplier and vendor lists (including cost information), business plans and other plans, designs and specifications, all records and documentation related to regulatory submissions, approvals, process and procedures,
accounting books and records, marketing and sales literature, training materials, current price lists and discounts, promotional signs and literature, device history records, bills of manufacturing and manufacturing, inspection and quality control
records and procedures; 

  

	 	(f)	All licenses, permits, authorizations and marketing approvals issued to Seller and used in or related to the design, development, manufacture, marketing or sale of the Steorra
Product, including those issued by the United States Food and Drug Administration (the “FDA”), and without limitation those described on Exhibit 1.1; 

  

	 	(g)	All oral and written contracts, agreements, leases and orders for the purchase or sale of Steorra Products or related services, including without limitation those described on
Exhibit 1.1 (collectively, the “Contracts”); 

  

	 	(h)	All rights due the Seller under all warranties, representations and guarantees made by suppliers, manufacturers and contractors that are used in or related to the design,
development, manufacture, marketing or sale of the Steorra Product; and 

  

	 	(i)	All other assets owned or leased by the Seller that are used in or related to the design, development, manufacture, marketing or sale of the Steorra Product.

  

	1.2	Excluded Assets. Notwithstanding the provisions of Section 1.1, the following assets are excluded from the Purchased Assets and are collectively referred to as the
“Excluded Assets”: 

  

	 	(a)	Cash, money and deposits with financial institutions and other certificates of deposit, commercial paper, notes, evidences of indebtedness, stock, bonds and other investments.

  

	 	(b)	Accounts and notes receivable, deposits, advances, prepaid expenses, manufacturer and supplier rebates and all other receivables. 

  

 2 

	 	(c)	Furniture, furnishing, fixtures, office equipment and any other personal items that are not used in or related to the design, development, manufacture, marketing or sale of the
Steorra Product. 

  

	 	(d)	Any books, records, financial information, accounts and files that are not used in or related to the design, development, manufacture, marketing or sale of the Steorra Product.

  

	1.3	No Assumption of Liabilities. The Buyer is not assuming (and nothing in this Agreement shall be construed as causing or requiring the Buyer to assume), and will not be
liable for, any debts, liabilities, payables, commitments, and/or obligations of any kind or nature whatsoever of the Seller, whether absolute or contingent, liquidated or unliquidated, secured or unsecured, and whether or not accrued, matured,
known or suspected, or related to or arising from the Purchased Assets (all of such liabilities, the “Retained Liabilities”) and whether existing on or arising after the Closing Date or, regardless of when asserted, related to
periods prior to the Closing Date. Retained Liabilities of the Seller shall include without limitation all severance and other deferred wages and other compensation obligations to the Seller’s employees, along with any associated local, state,
or federal taxes, and shall include any liability arising out of or related to any pollution or threat to human health or the environment or any violation of any Environmental and Occupational Safety and Health Law (as defined below) that is
related in any way to the Seller, the Steorra Product or any previous owner’s use of any of the foregoing, and which occurred, existed or related to conditions or circumstances existing prior to the Closing, regardless of whether those matters
are described in the Disclosure Schedule (as defined below). The Seller shall remain fully and solely liable with respect to all of the Retained Liabilities and will timely and fully discharge all Retained Liabilities after the Closing Date,
including, without limitation, all warranty claims relating to Steorra Products purchased from, or services performed by, the Seller on or before the Closing Date, unless otherwise provided in this Agreement. 

  

	1.4	Instruments of Transfer to Buyer. At the Closing, Seller will deliver to Buyer such bills of sale, endorsements, assignments (together with any necessary consents),
and other good and sufficient instruments of conveyance and transfer, in form and substance reasonably satisfactory to Buyer and Seller and their respective counsel, which shall be effective to vest in Buyer valid, legal, good and marketable title
in and to the Purchased Assets, including, without limitation, those deliveries set forth in Section 8.1 below. At any time after the Closing, at the request of the Buyer and without further consideration, the Seller will execute and deliver such
instruments of sale, transfer, conveyance, assignment and confirmation and take such action as the Buyer may reasonably deem necessary or desirable in order to more effectively consummate the transactions contemplated hereby and to vest in the Buyer
good and marketable title to all of the Purchased Assets, to put the Buyer in actual possession and operating control thereof and to assist the Buyer in exercising all rights with respect thereto, without further cost or expense to the Buyer.

  
 SECTION 2. 
 PURCHASE PRICE; CLOSING 
  

	2.1	Purchase Price. In consideration of the purchase of the Purchased Assets and Seller’s covenants and agreements set forth in this Agreement, Buyer agrees (1) to
pay Seller an aggregate amount of cash equal to $300,000; provided, however, that if Buyer agrees to provide any financial assistance to Seller prior to the Closing Date the amount of such financial assistance shall be deducted on a
dollar-for-dollar basis from the $300,000 and the difference shall be paid at Closing (the “Cash Consideration”), and (2) to issue to Seller 425,000 shares of Buyer’s voting common stock (the “Buyer Common Stock”),
with respect to which Buyer will file a registration statement in accordance with Section 5.16 below (the “Share Consideration”), subject to the provisions set forth in this Agreement. The Cash Consideration and the Share
Consideration shall be collectively referred to in this Agreement as the “Purchase Price.” 

  

 3 

	2.2	Payment of Purchase Price. The Purchase Price shall be paid/issued to Seller as follows. On the Closing Date, Buyer shall (1) pay to Seller the balance of the Cash
Consideration and (2) issue to Seller ninety-five percent (95%) of the Share Consideration (or 403,750 shares of Buyer Common Stock). The remaining five percent (5%) of the Share Consideration (or 21,250 shares of Buyer Common Stock) (the
“Holdback Shares”) shall be issued to the Seller immediately following the completion of the physical transfer of all of the Purchased Assets from the Seller to the Buyer pursuant to this Section 2.2; provided, however, that (a) if
all of the Purchased Assets are physically transferred to the Buyer on or prior to the Closing Date, then the Holdback Shares shall be issued to the Seller on the Closing Date; and (b) in the event all of the Purchased Assets are not physically
transferred to the Buyer on or prior to the Closing Date and within 45 days following the Closing Date, then Buyer shall have no obligation to issue, and the Seller shall have no right to receive, the Holdback Shares and such Holdback Shares shall
be forfeited by the Seller. For purposes of this Section 2.2, the physical transfer of the Purchased Assets from the Seller to the Buyer shall be deemed completed after (1) the Seller has packaged and prepared for shipment to the Buyer all of the
Purchased Assets set forth on Exhibit 1.1 attached hereto, (2) the Buyer has witnessed, at the Seller’s premises, the packaging of each of the Purchased Assets set forth on Exhibit 1.1 attached hereto for shipment to the Buyer, (3) to the
extent that any items listed on Exhibit 2.2 attached hereto require the Seller to transfer knowledge and know-how relating to the Intellectual Property Rights, the Seller has responded to each such items in all material respects to the best
of its knowledge and ability, and, to the extent any items listed on Exhibit 2.2 attached hereto are capable of being physically performed by the Seller, the Seller shall have completed such items to the satisfaction of the Buyer, (4) the
Buyer has completed the preparation of a check-off document which acknowledges that it has witnessed the Seller package each of the Purchased Assets set forth on Exhibit 1.1 for shipment to Buyer and it is satisfied that the Seller has accomplished
or adequately responded to each of the items listed on Exhibit 2.2 (such check-off document shall be referred to herein as the “Close Out Document”) and (5) the Buyer confirms that all of the Purchased Assets on Exhibit 1.1 have
been physically received by the Buyer at its premises. 

  

	2.3	Closing Date. Unless this Agreement has been terminated and the transactions contemplated herein have been abandoned pursuant to Section 10, a closing (the
“Closing”) shall take place on or before May 28, 2004 to consummate the transactions contemplated by this Agreement (the “Transaction”); provided, however, that if any of the conditions provided for in Sections 6
and 7 hereof have not been satisfied or waived by such date, then the Closing shall be postponed until such conditions have been satisfied or waived, but in no event shall the Closing occur later than June 30, 2004 (the “Termination
Date”) unless the parties hereto agree in writing to extend the date of such Closing. The Closing will be held at 11:00 a.m. (Milwaukee time) at the offices of the Seller located at 165 Bishops Way, Suite 152, Brookfield, WI 53005 or at
such other place or time as the parties shall mutually agree, at which time and place the documents and instruments necessary or appropriate to effect the Transaction will be exchanged by the parties. The actual date of Closing is referred to herein
as the “Closing Date”. 

  

 4 

 SECTION 3. 
 REPRESENTATIONS AND WARRANTIES OF SELLER 
  
 As a material inducement to Buyer to enter into this Agreement, with the understanding that Buyer will be relying thereon in consummating the Transaction, Seller represents and warrants to Buyer as follows:

  

	3.1	Disclosure Schedule. The disclosure schedule marked as Exhibit 3 hereto (the “Disclosure Schedule”) is divided into sections which correspond
to the subsections of this Section 3. The Disclosure Schedule is accurate and complete and the disclosures in any subsection thereof shall not constitute disclosure for purposes of any other subsection and in any other section or subsection of this
Agreement. If any item on the Disclosure Schedule pertains to more than one representation or warranty, reference or cross-reference to each of such other representations or warranties must be made on the Disclosure Schedule, unless it is reasonably
apparent that such disclosure pertains to more than one representation or warranty. Nothing in the Disclosure Schedule will be deemed adequate to disclose an exception to a representation or warranty made herein, unless the Disclosure Schedule
identifies the exception with reasonable particularity and describes the relevant facts in reasonable detail. 

  

	3.2	Organization and Standing. The Seller (i) is a corporation duly organized, validly existing and in good standing under the laws of the State of Wisconsin, (ii) has all
requisite power and authority to carry on its business as it is now being conducted and to own, lease and operate its properties and assets used in the conduct of its business, and (iii) is duly qualified or licensed to do business as a foreign
corporation in good standing in every other jurisdiction in which the character or location of the properties and assets owned, leased or operated by it or the conduct of its business requires such qualification or licensing, except for
jurisdictions in which the failure to be so qualified or licensed or to be in good standing would not, individually or in the aggregate, have a Material Adverse Effect on Seller. A “Material Adverse Effect” with respect to Seller
shall mean an individual or cumulative material adverse change in, or effect on, the business, customers, or customer relations, operations, properties, condition (financial or otherwise), assets, prospects or liabilities of Seller or is reasonably
expected to be materially adverse to the business, customers or customer relations, operations, properties, condition (financial or otherwise), assets, prospects or liabilities of Seller, or an individual or cumulative material adverse change or
effect that would prevent Seller from consummating the Transaction. Section 3.2 of the Disclosure Schedule contains a list of all jurisdictions in which Seller is qualified or licensed to do business. The Seller has delivered to the Buyer complete
and correct copies of its certificate of incorporation and bylaws, as presently in effect, and Buyer acknowledges receipt of the same. 

  

	3.3	Authority. Seller has full power and authority to enter into, execute, deliver and perform this Agreement and each of the agreements and instruments to be delivered
pursuant hereto and to carry out the transactions contemplated herein. The board of directors and the shareholders of the Seller have taken all action required by law, its organizational documents or otherwise to authorize the execution, delivery
and performance of this Agreement and the consummation of the Transaction. No other proceedings on the part of Seller or its shareholders are necessary to approve and authorize the execution and delivery of this Agreement and the other documents
delivered pursuant hereto and the consummation of the Transaction. This Agreement has been duly and validly executed by Seller. This Agreement is a valid and binding obligation of Seller, and, when executed and delivered, such other agreements and
instruments to be delivered by Seller pursuant hereto will be valid and binding agreements and instruments of Seller, enforceable against it in accordance with their respective terms. 

  

 5 

	3.4	Capitalization. The authorized capital stock of Seller consists of 3,160,000 shares of common stock, $0.01 par value per share (the “Seller Common
Stock”). As of the date hereof, and at and as of the Closing Date, 1,660,473 shares of Seller Common Stock are, and will be, issued and outstanding. Section 3.4 of the Disclosure Schedule lists the registered and beneficial owners of the
Seller Common Stock (collectively, the “Shareholders”) and the number of shares of such stock held by such Shareholders (collectively, the “Seller Shares”). Except as set forth in Section 3.4 of the Disclosure
Schedule all of the Shareholders are accredited investor (as defined in, and determined in accordance with, Rule 501(a) of Regulation D under the Securities Act of 1933, as amended (the “Act”)). The Seller Shares represent all of
the issued and outstanding capital stock of Seller. All of the Seller Shares are validly issued, fully paid and nonassessable and are without, and were not issued in violation of, preemptive rights. Each shareholder listed on Section 3.4 of the
Disclosure Schedule owns the Seller Shares listed on the Disclosure Schedule as being owned by him, her or it, free and clear of all Encumbrances, and there are no agreements relating to any of the shareholders’ ownership of such Seller Shares.
Except as set forth in Section 3.4 of the Disclosure Schedule, there are no options, warrants or other rights, agreements, arrangements or commitments of any character relating to the issued or unissued capital stock of Seller or obligating the
Seller to issue or sell any shares of capital stock of, or other equity interests in, the Seller. All securities of the Seller subject to issuance as aforesaid, upon issuance on the terms and conditions specified in the instruments pursuant to which
they are issuable, will be duly authorized, validly issued, fully paid and nonassessable. There are no outstanding contractual obligations of Seller to repurchase, redeem or otherwise acquire any securities of Seller or to provide funds to, or make
any investment (in the form of a loan, capital contribution or otherwise) in, any other entity or person. 

  

	3.5	Non-Contravention. Except as set forth in Section 3.5 of the Disclosure Schedule, neither the execution, delivery and performance of this Agreement nor the
consummation of the Transaction will (i) violate any provisions of any of the Seller’s certificate of incorporation or bylaws, (ii) violate, conflict with, constitute a default under, or give rise to any right of termination of any agreement or
instrument to which the Seller is a party or by which it or its assets or properties are bound or (iii) violate any statute or law or any judgment, decree, order, regulation or rule of any court or governmental authority applicable to the Seller.

  

	3.6	Consents and Approvals. Except as set forth in Section 3.6 of the Disclosure Schedule, no consent, approval, order or authorization of or from, or registration,
notification, declaration or filing with (hereinafter sometimes separately referred to as a “Consent” and sometimes collectively as “Consents”) any individual or entity, including any foreign, federal, state or
local governmental or quasi-governmental, administrative, regulatory or judicial court, department, commission, agency, board, bureau, instrumentality or other authority (an “Authority”), is required in connection with the
execution, delivery or performance of this Agreement or the consummation by Seller of any of the documents being entered into by Seller related to, or arising from, the Transaction. 

  

	3.7	Undisclosed Liabilities. Except as set forth in Section 3.7 the Disclosure Schedule, the Seller does not have any liabilities, obligations or claims of any kind
whatsoever, whether secured or unsecured, accrued or unaccrued, fixed or contingent, matured or unmatured, known or unknown, direct or indirect, contingent or otherwise and whether due or to become due (referred to individually herein as a
“Liability” and collectively as “Liabilities”), including, without limitation, any Liability arising out of any injury to individuals or property as a result of the ownership, possession or use of the Steorra Products.

  

 6 

	3.8	Absence of Certain Changes. Except as set forth in Section 3.8 of the Disclosure Schedule, Seller has owned and operated the Purchased Assets in the ordinary course of
business and consistent with past practice. Without limiting the generality of the foregoing, except as set forth in Section 3.8 of the Disclosure Schedule: (a) Seller has not experienced any change which constitutes a Material Adverse Effect or
experienced any event or failed to take any action which reasonably could be expected to result in a Material Adverse Effect; (b) Seller has not suffered (i) any loss, damage, destruction or other casualty (whether or not covered by insurance) or
(ii) any loss of officers, employees, dealers, distributors, independent contractors, customers or suppliers which had or may reasonably be expected to result in a Material Adverse Effect; (c) Seller has not sold, transferred, or otherwise disposed
of any of its assets or properties other than in the ordinary course of business; (d) Seller has not disposed of or permitted the lapse of any license, permit, authorization, marketing approval, patent, trademark, trade name, or copyright owned by
it; and (e) Seller has not incurred any liabilities other than in the ordinary course of business. 

  

	3.9	Purchased Assets. Except as set forth in Section 3.9 of the Disclosure Schedule, Seller has good, valid and marketable right, title and interest in and to all of the
Purchased Assets, free and clear of any Encumbrances, with the unrestricted right to sell, assign, transfer and convey good title to all of the Purchased Assets to Buyer in the manner contemplated herein. The Purchased Assets constitute all of the
assets, both tangible and intangible, held for use or used primarily in connection with the design, development, manufacture, marketing and sale of the Steorra Product by Seller and the Purchased Assets are sufficient to enable Buyer to design,
develop, manufacture, market and sell the Steorra Product. Except as set forth in Section 3.9 of the Disclosure Schedule, Seller (i) has not experienced any change which has had a Material Adverse Effect on the Purchased Assets, (ii) has not
experienced any event or failed to take any action which reasonably could be expected to have a Material Adverse Effect on the Purchased Assets, or (iii) is not aware of any facts which could have a Material Adverse Effect on the Purchased Assets.
Except as set forth in Section 3.9 of the Disclosure Schedule, the Purchased Assets are in good operating condition and repair (ordinary wear and tear excepted) fit for the intended purposes and no material maintenance, replacement or repair has
been deferred or neglected. 

  

	3.10	Intellectual Property Rights. The Seller owns or has the unrestricted right to use all Intellectual Property Rights used in or necessary or required for the design,
development, manufacture, marketing or sale of the Steorra Product. All Intellectual Property Rights are listed or described in Section 3.10 of the Disclosure Schedule. The use of all Intellectual Property Rights necessary or required for the
design, development, manufacture, marketing or sale of the Steorra Product does not and will not infringe or violate any intellectual property rights of any person or entity. Except as described in Section 3.10 of the Disclosure Schedule, the Seller
(i) does not own or use any Intellectual Property Rights pursuant to any written license agreement; and (ii) has not granted any person or entity any rights, pursuant to written license agreement or otherwise, to use the Intellectual Property
Rights. The Seller has taken all measures to maintain the confidentiality of all of the Intellectual Property Rights the value of which is contingent, in whole or in part, upon the maintenance of the confidentiality thereof.

  

	3.11	Inventories. The Inventory consists of finished goods, work in process, raw and packaging materials and spare and replacement parts (which are either currently used in
production of products or are products currently offered for sale by Seller) all of which (i) meet Seller’s specifications and industry standards applicable to such inventories, including not having an expired shelf life, and (ii) are usable or
salable in the ordinary course of Seller’s business. 

  

	3.12	Insurance. Section 3.12 of the Disclosure Schedule contains an accurate and complete list of all policies of insurance owned or held by Seller. Except as set forth in
Section 3.12 of the 

  

 7 

 Disclosure Schedule, all present policies are in full force and effect and all premiums with respect
thereto have been paid. The Seller has been covered during the past six years by insurance in scope and amount customary and reasonable for the business in which it has engaged during the aforementioned period. 
  

	3.13	No Litigation or Adverse Events. No suit, action or legal, administrative, arbitration or other proceeding, or investigation by any governmental agency, pertaining to
the Purchased Assets, the Contracts or the Transaction is pending or, to the knowledge of the Seller, has been threatened, nor do any facts exist which could reasonably be expected to lead to any such proceedings. 

  

	3.14	Benefit Plans. There are no facts or circumstances which could, directly or indirectly, subject the Buyer or any of its affiliates to any Liability of any nature with
respect to any pension, welfare, incentive, perquisite, paid time off, severance or other benefit plan, policy, practice or agreement sponsored, maintained or contributed to by the Seller or any affiliate, to which the Seller or any affiliate is a
party or with respect to which the Seller or any affiliate could have any Liability. 

  

	3.15	Environmental. Except as set forth in Section 3.15 of the Disclosure Schedule, the design, development, manufacture, marketing and sale of the Steorra Products does
not involve the handling, manufacture, treatment, storage, use, generation, emission, release, discharge, refining, dumping or disposal of any Environmentally Regulated Materials (whether legal or illegal, accidental or intentional, direct or
indirect). The term “Environmentally Regulated Materials” means any element, compound, pollutant, contaminant, substance, material or waste, or any mixture thereof, designated, listed, referenced, regulated or identified pursuant to
any Environmental and Occupational Safety and Health Law. The term “Environmental and Occupational Safety and Health Law” means any common law or duty, caselaw or other law, that (i) regulates, creates standards for or imposes
liability or standards of conduct concerning any element, compound, pollutant, contaminant, or toxic or hazardous substance, material or waste, or any mixture thereof, or relates in any way to emissions or releases into the environment or ambient
environmental conditions, or conduct affecting such matters, or (ii) is designed to provide safe and healthful working conditions or reduce occupational safety and health hazards. Such laws shall include, but not be limited to, the National
Environmental Policy Act, 42 U.S.C. § § 4321 et seq., the Comprehensive Environmental Response, Compensation, and Liability Act, 42 U.S.C. § § 9601 et seq., the Resource Conservation and Recovery Act, 42 U.S.C. § § 6901
et seq., the Federal Water Pollution Control Act, 33 U.S.C. § § 1251 et seq., the Federal Clean Air Act, 42 U.S.C. § § 7401 et seq., the Toxic Substances Control Act, 15 U.S.C. § § 2601 et seq., the Emergency Planning
and Community Right to Know Act, 42 U.S.C. § 11011, the Hazard Communication Act, 29 U.S.C. § § 651 et seq., the Occupational Safety and Health Act, 29 U.S.C. § § 651 et seq., the Federal Insecticide, Fungicide and
Rodenticide Act, 7 U.S.C. § 136, and any caselaw interpretations, amendments or restatements thereof, or similar enactments thereto, as is now or at any time hereafter may be in effect, as well as their international, state and local
counterparts. 

  

	3.16	Products and Warranties. Except as set forth in Section 3.16 of the Disclosure Schedule, each product manufactured, sold, leased, or delivered by Seller has been in
conformity with all applicable contractual commitments and all express and implied warranties, and meets or exceeds the standards required by all laws now in effect and there is no pending or, to the Seller’s knowledge, threatened legislation,
ordinance or regulation, which if adopted, would have a Material Adverse Effect upon the products sold by Seller. Seller has no Liability (and there is no basis for any present or any future action, suit, proceeding, hearing, investigation, charge,
complaint, claim or demand against it giving rise to any Liability) for replacement or repair of any product manufactured, sold, leased or delivered by Seller or other damages in connection 

  

 8 

 therewith. Section 3.16 of the Disclosure Schedule sets forth the terms and conditions of the
Seller’s standard warranty for the Steorra Products sold by the Seller. No product manufactured, sold, leased, or delivered by Seller is subject to any guaranty, warranty or other indemnity beyond the applicable standard terms and conditions of
sale or lease set forth in Section 3.16 of the Disclosure Schedule. Except as set forth in Section 3.16 of the Disclosure Schedule, no customer, purchaser or other third party that acquired any Steorra Products prior to the Closing Date has any
rights, by warranty or otherwise, to require the Seller to repair or replace such Steorra Products. 
  

	3.17	Orders, Commitments and Returns. Except as set forth in Section 3.17 of the Disclosure Schedule, all accepted and unfulfilled orders for the sale of products and the
performance of services entered into by Seller and all outstanding material contracts or material commitments for the purchase of supplies, materials and services were made in bona fide transactions in the ordinary course of business. Except as set
forth in Section 3.17 of the Disclosure Schedule, there are no claims against Seller to return products by reason of alleged over-shipments, defective products or otherwise, or of products in the hands of customers, retailers or distributors under
an understanding that such products would be returnable. 

  

	3.18	Compliance with Law; Permits. Except as set forth in Section 3.18 of the Disclosure Schedule, Seller does not require the Consent of any Authority to permit Seller to
operate its business in the manner in which Seller is presently operating such business, and Seller possesses all permits, licenses and other authorizations from all Authorities necessary to permit it to operate the business in the manner in which
it is presently conducted and the consummation of the Transaction will not prevent Buyer from being able to continue to use such permits and operating rights. 

  

	3.19	Taxes. Except as set forth in Section 3.19 of the Disclosure Schedule, Seller has filed (or caused to be filed) all tax reports and returns required to be filed by
Seller and has paid (or caused to be paid) all taxes properly due in connection therewith, including interest and penalties. There are no liens, Encumbrances, claims or charges of any kind for taxes on any Purchased Assets. For purposes of this
Section 3.19, “tax” will mean and include taxes, additions to tax, penalties, interest, fines, duties, withholdings, assessments and charges assessed or imposed by any governmental authority, including, but not limited to, all
federal, state, county, local and foreign income, profits, gross receipts, import, ad valorem, real and personal property, premium franchise, transfer, windfall profits, environmental, minimum or alternative, accumulated profits, license,
occupation, sales, use, value added, stamp, capital stock, net worth, transfer, withholding, payroll, employment, excise, custom, duty and any other taxes, obligations and assessments of any kind whatsoever; “tax” will also include any
liability arising as a result of being (or ceasing to be) a member of any affiliated, consolidated, combined or unitary group as well as any liability under any tax allocation, tax sharing, tax indemnity or similar agreement.

  

	3.20	Brokers. Except as set forth in Section 3.20 of the Disclosure Schedule, Seller has not engaged or employed any broker, finder, financial advisor or investment banker
or incurred any liability for any brokerage fee or commission, finders fee, financial advisory fee or investment banker fee, in connection with the Transaction, including, without limitation, the solicitation of the Shareholders to approve the
Transaction, nor is there any basis known to Seller for any such fee or commission to be claimed by any person or entity. Seller is solely responsible for all amounts and obligations owed any party listed in Section 3.20 of the Disclosure Schedule.

  

	3.21	Contracts; No Default. Except as set forth in Section 3.21 of the Disclosure Schedule, the Seller does not have any written or oral contracts, commitments, agreements,
arrangements or proposals 

  

 9 

 with any person or business which relates in any way to the Purchased Assets or the Steorra Products.
True and complete copies (or summaries, in the case of oral items) of all items disclosed pursuant to this Section 3.21 have been made available to Buyer for review. Except as set forth in Section 3.21 of the Disclosure Schedule, all such items are
valid and enforceable by and against the Seller in accordance with their respective terms, except to the extent of applicable bankruptcy, reorganization, solvency, moratorium, fraudulent conveyance and other laws affecting the rights of creditors
generally or the availability of specific performance, injunctive relief and other equitable remedies; and the Seller is not in breach, violation or default in the performance of any of their obligations thereunder, and no facts or circumstances
exist which, whether with the giving of due notice, lapse of time or both, would constitute such a breach, violation or default thereunder or thereof. 
  

	3.22	Clinical and Regulatory Matters. Seller has delivered to Buyer all data that Seller has generated or obtained from any research, animal, human clinical or market
trials related to the Steorra Product. All such data is true and complete and accurately reflects the results of such studies. Seller has delivered to Buyer true and complete copies of all foreign and domestic regulatory filings, correspondence and
responses from regulatory agencies related to the Steorra Product including, but not limited to, the premarket approval application for the Steorra Products that Seller has filed with the FDA. Seller has previously disclosed to Buyer in writing all
third-party complaints relating to or associated with the Steorra Product. Seller has evaluated all such Steorra Product complaints and taken all necessary action to remedy such complaints. Seller has provided Buyer with all documentation relating
to such Steorra Product complaints and all actions taken by Seller to remedy such complaints. 

  

	3.23	Investment Representations. The Seller also represents and warrants to Buyer that: 

  

	 	(a)	The Seller and the Shareholders have obtained all information about the Buyer as they believe relevant to their decision to acquire the shares of Buyer Common Stock to be issued
pursuant to this Agreement. The Seller and the Shareholders have also had the opportunity to ask questions of, and to receive answers from, the Buyer, its officers and directors, or other agents or representatives of the Buyer concerning the
business and affairs of the Buyer and to obtain any additional information necessary to verify such information, and the Seller and the Shareholders have received such information concerning the Buyer as they consider necessary or advisable in order
to form a decision regarding acquiring the Buyer Common Stock. 

  

	 	(b)	The Seller and the Shareholders realize that their acquisition of the Buyer Common Stock involves a high degree of risk, and they are able to bear the economic risk of their
acquisition of the Buyer Common Stock, including the total loss of their investment in such shares. The Seller and Shareholders are experienced and knowledgeable in financial and business matters and are capable of evaluating the merits and risks of
acquiring the Buyer Common Stock. 

  

	 	(c)	The Seller has, or will have at or prior to the Closing Date, received a completed and executed Investment Certificate in the form attached hereto as Exhibit 5.13 from each of the
Shareholders. 

  

	 	(d)	The state in which the Seller’s principal office is located is the state set forth in the Seller’s address in Section 11.1 below. The state in which the Shareholders
reside, or, if applicable, where their principal office is located is the state set forth in the Investment Certificate completed by each such Shareholder and as set forth in Section 3.23 of the Disclosure Schedule. 

  

 10 

	 	(e)	The Seller and the Shareholders understand that: (i) the Buyer has engaged legal counsel to represent the Buyer in connection with the transactions contemplated by this Agreement;
(ii) legal counsel engaged by the Buyer does not represent the Seller or the Shareholders or any of their respective interests; and (iii) neither the Seller not any Shareholder is relying on legal counsel engaged by the Buyer. The Seller and the
Shareholders have had the opportunity to engage, and obtain advice from, their own respective legal counsel with respect to an investment in the Buyer Common Stock. 

  

	 	(f)	Except as set forth in Section 3.23 of the Disclosure Schedule, the Seller and each of the Shareholders is an “Accredited Investor” as defined in Rule 501(a) of Regulation
D under the Act. To the extent that any of the Shareholders are not “Accredited Investors” as defined in Rule 501(a) of Regulation D under the Act, the Seller represents that no more than 25 non-Accredited Investor Shareholders are located
in Wisconsin and that there are no more 35 non-Accredited Investor Shareholders in total. 

  

	 	(g)	The Seller and the Shareholders are acquiring, or will acquire, the shares of Buyer Common Stock pursuant to this Agreement for investment purposes only and for their own respective
accounts and not with a view to, or for resale in connection with, any distribution or public offering. 

  

	 	(h)	The Seller and the Shareholders understand and acknowledge (i) that, while the Buyer has agreed pursuant to the provisions of Section 5.16 to file a registration statement covering
the resale of the Buyer Common Stock by the Shareholders, none of the shares of the Buyer Common Stock to be issued in connection with the transactions contemplated by this Agreement will be registered as of the Closing Date under the Act, or under
any applicable state securities laws, and that such shares will be issued in connection with the transactions contemplated by this Agreement in reliance on exemptions from the registration requirements of the Act and applicable state securities
laws, (ii) that the reliance of the Buyer upon these exemptions is predicated in part upon the representations by the Seller made in this Section 3.23, (iii) that the shares of Buyer Common Stock may not be sold, assigned or transferred except
pursuant to an appropriate registration statement under the Act and any applicable state securities laws or an appropriate exemption such registration requirements, and (iv) that a legend reflecting these restrictions will be placed on any
certificates representing such shares of Buyer Common Stock. 

  

	3.24	Disclosure. There is no material fact as of the date hereof which has not been disclosed in writing to Buyer by the Seller related to the Seller, the Purchased Assets,
the operations, properties, financial condition or prospects of the Seller’s business or the design, development, manufacture, marketing and sale of the Steorra Product that has or could reasonably be expected to have a Material Adverse Effect
on Seller or the Purchased Assets. The representations and warranties contained in this Section 3 or elsewhere in this Agreement or any document delivered pursuant hereto will not be affected or deemed waived by reason of the fact that Buyer or its
respective representatives knew (other than as a result of the express disclosures contained in the Disclosure Schedule) or should have known that any such representation or warranty is or might be inaccurate in any respect.

  

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 SECTION 4. 
 REPRESENTATIONS AND WARRANTIES OF BUYER 
  
 Buyer represents and warrants to Seller as follows: 
  

	4.1	Corporate Organization. Buyer is a corporation duly organized, validly existing and in good standing under the law of the State of Delaware. 

 

	4.2	Authority. Buyer has full corporate power and authority to enter into this Agreement and to carry out, and perform in accordance with the terms of, the Transaction.
The board of directors of Buyer has taken all action required by law, its certificate of incorporation and bylaws or otherwise to authorize the execution, delivery and performance of this Agreement and the consummation of the Transaction. No other
corporate proceedings on the part of Seller are necessary to approve and authorize the execution and delivery of this Agreement and the other documents delivered pursuant hereto and the consummation of the Transaction. This Agreement has been duly
and validly executed by Buyer. This Agreement is a valid and binding obligation of Buyer, and, when executed and delivered, such other agreements and instruments to be delivered by Buyer pursuant hereto will be valid and binding agreements and
instruments of Buyer, enforceable against it in accordance with its and their terms, respectively. 

  

	4.3	Non-Contravention. Neither the execution, delivery and performance of this Agreement nor the consummation of the Transaction will: (i) violate any provisions of any of
the Buyer’s certificate of incorporation or bylaws, (ii) violate, conflict with, constitute a default under, or give rise to any right of termination of any agreement or instrument to which the Buyer is a party or by which its assets or
properties are bound or (iii) violate any statute or law or any judgment, decree, order, regulation or rule of any court or governmental authority applicable to the Buyer. 

  

	4.4	Brokers. Buyer has not engaged or employed any broker, finder or financial advisor, or incurred any liability for any brokerage fee or commission, finder’s fee or
financial advisory fee, in connection with the transactions contemplated hereby, nor is there any basis known to Buyer for any such fee or commission to be claimed by any person or entity. 

  
 SECTION 5. 
 COVENANTS 
  
 Buyer on the one hand, and Seller on the other hand, agree as follows: 
  

	5.1	Continuity of Business. Except as set forth in Section 5.1 of the Disclosure Schedule, from the date hereof until Closing, the Seller shall conduct its business and
the operations related to the Steorra Product and the Purchased Assets according to its ordinary and usual course of business. 

  

	5.2	Further Assurances and Cooperation. Each party hereto shall, at and after the Closing, execute and deliver, or cause to be executed and delivered, such documents and
take, or cause to be taken, such actions as the other party may reasonably request in order to consummate more effectively the Transaction. If Buyer decides to use the name “Steorra” or “RTea” Seller will take such action as
Buyer reasonably requests to assist Buyer in so doing. 

  

	5.3	Public Announcement. None of the parties hereto shall make any public announcement with respect to the Transaction or this Agreement, except to governmental agencies
as counsel shall deem necessary to comply with applicable law, rule or regulation, without the prior written consent of the other party, which shall not be unreasonably withheld or delayed. 

  

 12 

	5.4	No Solicitation of Alternate Transaction. Seller shall not, and shall ensure that Seller’s shareholders, directors and officers shall not, directly or indirectly,
solicit, initiate or encourage discussions or negotiations with, provide any nonpublic information to, or enter into any agreement with, any third party concerning any exchange offer, merger, consolidation, sale of substantial assets or a
significant amount of assets, sale of securities, liquidation, dissolution or similar transactions involving the Seller or the Steorra Product. 

  

	5.5	Tax Matters. 

  

	 	(a)	Seller shall provide Buyer with any clearance certificates or similar documents which may be required by any state taxing authority. 

  

	 	(b)	Seller and Buyer shall (i) each provide the other with such assistance as may reasonably be requested by either of them in connection with the preparation of any Tax Return, audit
or other examination by any taxing authority or judicial or administrative proceedings relating to liability for Taxes, (ii) each retain and provide the other with any records or other information which may be relevant to such Tax Return, audit or
examination, proceeding or determination, and (iii) each provide the other with any final determination of any such audit or examination, proceeding or determination that affects any amount required to be shown on any Tax Return of the other for any
period. 

  

	 	(c)	Seller will be solely responsible for all sales, use, transfer or documentary taxes and recording and filing fees applicable to the transactions contemplated by this Agreement.
 

  

	 	(d)	Seller shall request that records in possession of its accountants be retained by them for the customary retention period established by the firm (but not less than the applicable
statute of limitations period), and that such records be made available to Buyer on request with Seller’s approval (which approval shall not be unreasonably withheld). 

  

	5.6	Full Access to Buyer. Prior to the Closing and for a period ending on the later of (i) twelve months after the Closing Date or (ii) the date on which any
indemnification claims by Buyer have been finally resolved, Seller shall furnish the Buyer and any authorized representatives and agents of the Buyer such additional financial and operating data and other information as Buyer shall, from time to
time, reasonably request relating to the Purchased Assets or the Steorra Products, provided, however, any such additional information shall not affect or otherwise diminish or obviate in any respect any of the representations and warranties of
Seller herein. 

  

	5.7	Third Party Agreements. Seller shall obtain all necessary consents from third parties with respect to any agreements of Seller upon request by Buyer.

  

	5.8	Expenses. Except as otherwise provided herein, each party hereto shall pay its own expenses incident to this Agreement and the Transaction, including, without
limitation, fees and expenses of legal counsel, accountants, investment bankers, brokers or finders, printers, copiers, consultants or other representatives for services used, hired or rendered hereunder. 

  

	5.9	Confidentiality. Seller will not use or disclose to third parties any confidential information relating to the Purchased Assets or the Steorra Product provided that
(a) Seller may use or disclose any such information which has been publicly disclosed (other than by Seller after the date hereof) and (b) to the extent Seller may be legally compelled to disclose any such information, Seller may disclose such
information if Seller shall have afforded Buyer the opportunity to obtain an appropriate protective order, or other satisfactory assurance of confidential treatment, for the information required to be so disclosed. 

  

 13 

	5.10	Bulk Transfers. The parties hereto agree to waive the requirements of the Uniform Commercial Code concerning bulk transfers, as in effect in the various states in
which the Purchased Assets are located. 

  

	5.11	Regulatory Matters. Seller acknowledges that, subject to the other provisions of this Section 5.11, following the Closing, Buyer will have the sole authority and
discretion to file, obtain and maintain all Consents from any Authority required to manufacture or sell the Steorra Product. Seller will cooperate with and provide assistance to Buyer as may be reasonably necessary for Buyer to obtain any such
Consents. 

  

	5.12	Seller Shareholders’ Meeting. Following the execution and delivery of this Agreement, Seller will mail to the Shareholders a Notice of Special Meeting and an
Information Statement describing the Agreement and the Transaction (collectively, the “Information Statement”), the form and content of which shall be acceptable to Buyer and Buyer’s counsel and shall conform to all applicable
laws, for the purpose of duly calling a special meeting of the Shareholders (the “Seller Shareholders’ Meeting”) to consider and vote upon the approval and adoption of this Agreement and the Transaction, and Seller will use
commercially reasonable efforts to hold the Seller Shareholders’ Meeting as soon as practicable after the date of this Agreement. 

  

	5.13	Investment Certificates. The Seller shall prepare and deliver to its shareholders along with the Information Statement an investment certificate in the form attached
hereto as Exhibit 5.13 (the “Investment Certificate”), which form shall be acceptable to Buyer and Buyer’s counsel, to be completed and returned by each of the Shareholders. The Seller agrees that it shall obtain a
completed Investment Certificate from each Shareholder prior to the Closing. 

  

	5.14	Liquidation and Distribution. 

  

	 	(a)	Within 12 months following the Closing, Seller will file a notice of intent to dissolve (the “Notice of Dissolution”) with the Secretary of State of Wisconsin
pursuant to the Sections 180.1401 through 180.1440 of the Wisconsin Business Corporation Law (the “WBCL”) and distributed out all its assets, including the shares of Buyer Common Stock issued pursuant to this Agreement, to its shareholders
on a pro rata basis in accordance with their percentage ownership of the outstanding capital stock of Seller in connection with such dissolution of the Seller in accordance with and pursuant to all applicable laws. Following the filing of the Notice
of Dissolution, Seller will not carry on the business for which it was established or any other business, except as may be necessary or incidental to the winding up of its affairs. 

  

	 	(b)	After filing the Notice of Dissolution with the Secretary of State of Wisconsin pursuant to the WBCL, Seller will (i) collect or make provisions of all known debts owing to Seller,
(ii) pay or make provisions for all known debts, obligations and liabilities of Seller according to their priorities, unless otherwise required under the WBCL (iii) provide notice to creditors of Seller and claimants and (iv) file Articles of
Dissolution with the Secretary of State of Wisconsin pursuant and subject to the WBCL. 

  

	5.15	Satisfaction of Liabilities. On the date this Agreement is executed by the parties, Seller shall provide Buyer a list of all of its outstanding creditors who are owed
more than Ten Thousand Dollars ($10,000) as of the date of this Agreement and the amounts owed to each of such 

  

 14 

 creditors as of the date of this Agreement (the “Creditors List”). Seller agrees that it
shall not incur any additional liabilities to any one creditor in excess of Ten Thousand Dollars ($10,000) between the date of this Agreement and the Closing without the prior consent of the Seller. 
  

	5.16	Registration of Buyer Common Stock. The Buyer, at its expense, will prepare, with the cooperation of the Shareholders, and file with the Securities and Exchange
Commission (the “SEC”) a registration statement (the “Registration Statement”) covering the resale by the Shareholders of the shares of Buyer Common Stock to be issued pursuant to this Agreement within thirty (30) days
following the distribution of the Buyer Common Stock to the Shareholders pursuant to Section 5.14 above. Buyer may satisfy its obligations under this Section 5.16 by filing an amendment (the “Amendment”) to its Registration
Statement on Form SB-2 (Registration No. 333-71076) to include the shares of Buyer Common Stock issued hereunder. The Buyer will cause the Amendment to comply as to form in all material respects with the applicable provisions of the Act, and the
rules and regulations thereunder, and the WBCL. The Shareholders will furnish to the Buyer all information concerning such Shareholders as the Buyer may reasonably request in connection with the preparation of the Amendment. Buyer will use its
reasonable best efforts to cause the Registration Statement to become effective as promptly as practicable and to keep the Registration Statement effective with respect to the Buyer Common Stock issued pursuant to this Agreement until all shares of
the Buyer Common Stock are eligible for immediate sale by the Shareholders under Rule 144(k) promulgated under the Act. Prior to the filing of the Amendment, Buyer will take all action required under any applicable federal or state securities laws
in connection with the issuance of the shares of Buyer Common Stock pursuant to this Agreement. The Buyer will promptly advise the Shareholders after it receives notice that the Amendment has been filed with the SEC or after it receives notice of
the issuance of any stop order, the suspension of the qualification of the shares of Buyer Common Stock issuable pursuant to this Agreement or any request by the SEC for amendment of the Registration Statement or comments thereon and responses
thereto or requests by the SEC for additional information. At no time shall the Buyer have any obligation or liability, or become obligated or liable, for any information provided by the Shareholders for inclusion in the Amendment to the
Registration Statement. 

  

	5.17	Shareholder Lock-up Agreements. Each Shareholder will agree by executing the Investment Certificate that for the six-month period following the date the Amendment to
the Registration Statement is filed with the SEC such Shareholder shall not sell, offer to sell, contract to sell (including, without limitation, any short sale), grant any option to purchase or otherwise transfer or dispose of any shares of Buyer
Common Stock held by such Shareholder, directly or indirectly, for the six-month period. The Buyer may impose stop-transfer instructions during such stand-off period with respect to the shares of Buyer Common Stock of each Shareholder subject to
this restriction if necessary to enforce such restrictions. 

  

	5.18	Transfer of Purchased Assets Prior to Closing. Promptly following the execution of this Agreement, the Seller shall deliver all of the Purchased Assets to the Buyer in
accordance with the procedures set forth in Section 2.2 above. Title to such Purchased Assets, however, shall not pass to the Buyer until the Buyer has paid in full the Purchase Price, with the exception of the Holdback Shares, if any, to the
Seller. In addition, upon the execution of this Agreement, Seller shall automatically grant to the Buyer for the Term (as defined herein) a royalty-free, full paid-up, exclusive right and license to use all of the Intellectual Property Rights
included in the Purchased Assets (the “License”). The term of the License (the “Term”) shall be from the execution of this Agreement until (1) Closing Date or (2) the termination of this Agreement pursuant to
Section 10 below, whichever shall occur first. In the event this Agreement is terminated prior to the Closing Date in accordance with Section 10, the Buyer shall promptly return all of the Purchased Assets 

  

 15 

 to the Seller, and Buyer agrees that, in the event the Purchased Assets are returned to the Seller, it
will not infringe, in any respects, upon the Intellectual Property Rights described in Section 1.1(d) herein in perpetuity. 
  

	5.19	Financial Assistance. If prior to the Closing the Seller requests financial assistance from the Buyer, the Buyer agrees to provide such assistance but only if the
following conditions are satisfied (1) the Seller has obtained and delivered to Buyer irrevocable proxies (in a form satisfactory to both the Buyer and Seller) from Shareholders holding a number of shares of Seller common stock sufficient to adopt
and approve this Agreement and the Transaction under the WBCL as of the record date for determining the Shareholders who are entitled to notice of and to vote at the Seller Shareholders Meeting, and any adjournments thereof, such proxies granting
Jill Barney, the Seller’s President and Chief Executive Officer, the right to vote such shares of Seller common stock as set forth in the proxies, (2) Jill Barney executes a voting agreement (in a form satisfactory to both the Buyer and the
Seller) agreeing to vote any such proxies given to her from the Shareholders pursuant to this Section 5.19 in favor of this Agreement and the Transaction and as otherwise specifically set forth in such voting agreement, (3) the amount of financial
assistance does not exceed $200,000, (4) the amount of such financial assistance is deducted from the Cash Consideration to be paid at the Closing pursuant to Section 2.1 above and (5) the Buyer has received a copy of the executed TGMG Release (as
defined below) from the Seller. The Seller covenants and agrees that any financial assistance provided to the Seller pursuant to this Section 5.19 will be used solely to satisfy outstanding liabilities on the Creditor List. 

  
 SECTION 6. 
 CONDITIONS PRECEDENT TO BUYER’S OBLIGATION TO CLOSE. 
  

Buyer’s obligation to purchase the Purchased Assets and to take the other actions required to be taken by Buyer at the Closing is subject to the
satisfaction, at or prior to the Closing, of each of the following conditions (any of which may be waived by Buyer, in whole or in part, in Buyer’s sole discretion): 
  

	6.1	Accuracy of Representations. All of the representations and warranties of Seller contained in Section 3 of this Agreement must have been accurate in all material
respects as of the date of this Agreement, and must be accurate in all material respects as of the Closing Date as if made on the Closing Date. 

  

	6.2	Seller’s Performance. 

  

	 	(a)	All of the covenants and obligations that Seller is required to perform or to comply with pursuant to this Agreement at or prior to the Closing must have been duly performed and
complied with in all material respects. 

  

	 	(b)	Each document required to be delivered by Seller pursuant to any applicable provision of this Agreement must have been delivered, and each of the other covenants and obligations of
such persons must have been performed and complied with in all respects. 

  

	 	(c)	Buyer must have received from Seller all information concerning the Seller and the Purchased Assets reasonably required by the Buyer. 

  

	6.3	Officer’s Certificate. Seller shall furnish Buyer with a certificate dated the Closing Date signed on behalf of the Company by its President or its Chief
Financial Officer to the effect that the conditions set forth in Section 6.1 and 6.2 have been satisfied and that all of the obligations and liabilities listed on the Creditors List have satisfied in full. 

  

 16 

	6.4	Consents. Each of the Consents required to complete the Closing and the transactions contemplated thereby must have been obtained and must be in full force and effect.

  

	6.5	Additional Documents. There shall have been delivered to Buyer a certificate of the Secretary of the Seller certifying the articles of incorporation and bylaws of
Seller and the resolutions adopted by the board of directors and shareholders of Seller approving the transactions contemplated by this Agreement and the Transaction, as such approval is required under the WBCL, as well as such other documents as
Buyer may reasonably request for the purpose of (a) evidencing the accuracy of any of Seller’s representations and warranties, (b) evidencing the performance by Seller of, or the compliance by Seller with, any covenant or obligation required to
be performed or complied with by such persons, (c) evidencing the satisfaction of any condition referred to in this Section 6, or (d) otherwise facilitating the consummation or performance of any of the Transactions. 

  

	6.6	No Proceedings. Since the date of this Agreement, there must not have been commenced or threatened against Buyer, or against any Person affiliated with Buyer, any
proceeding (a) involving any challenge to, or seeking damages or other relief in connection with, this Agreement or the Transactions, or (b) that may have the effect of preventing, delaying, making illegal, or otherwise interfering with any of the
Transactions, including, without limitation, any claims brought by any creditors or shareholders of the Seller. 

  

	6.7	Legislation. No law or regulation (including applicable federal and state securities laws and regulations) will have been enacted which prohibits, restricts or delays
the consummation of the transactions contemplated by this Agreement or any of the conditions to the consummation of such transactions. 

  

	6.8	Taxes. Buyer shall have received certificates from an appropriate officer of the Seller confirming payment by the Seller of any sales Taxes due with regard to the
operation of the Seller’s business prior to the Closing. 

  

	6.9	Barney Agreement. Buyer and Jill Barney (“Barney”) shall have executed and delivered a consulting agreement, substantially in the form attached hereto
as Exhibit 6.9, which shall be effective as of the date of this Agreement (the “Barney Agreement”). 

  

	6.10	Investment Certificates. Buyer shall have received a copy of each completed and executed Investment Certificate from each of the shareholders of the Seller, which
shall confirm that not more than 35 shareholders of the Seller are not “Accredited Investors” as defined in Rule 501(a) of Regulation D under the Act. 

  

	6.11	TGMG Release. Buyer shall have received a satisfaction and release, in the form attached hereto as Exhibit 6.11, executed by each of NorthStar Growth Partners,
the successor to The George Messina Group, LLC (referred to herein as “TGMG”), George Messina and Glenn Isensee (the “TGMG Release”). 

  

	6.12	Opinion of Seller’s Counsel. Buyer will have received an opinion from Mr. Thomas E. Aul. Esq., counsel to Seller, dated the Closing Date, in the form and
substance acceptable to Buyer and Buyer’s legal counsel. 

  

 17 

	6.13	Dissenting Shareholders. Buyer will have received a certificate signed by a duly authorized executive officer of the Seller certifying that the Seller has not received
notice that Shareholders holding 5% or more of the outstanding Shares desire or intend to exercise dissenters’ rights pursuant to the WBCL. 

  
 SECTION 7. 
 CONDITIONS PRECEDENT TO SELLER’S OBLIGATION TO CLOSE. 
  
 Seller’s obligation to sell the Purchased Assets and to take the other actions required to be taken by Seller at the Closing is subject to the satisfaction, at or prior to the Closing, of each of the following conditions (any of which
may be waived by Seller, in whole or in part, in Seller’s sole discretion): 
  

	7.1	Accuracy of Representations. All of Buyer’s representations and warranties in this Agreement must have been accurate in all material respects as of the date of
this Agreement and must be accurate in all material respects as of the Closing Date as if made on the Closing Date. 

  

	7.2	Buyer’s Performance. 

  

	 	(a)	All of the covenants and obligations that Buyer is required to perform or to comply with pursuant to Agreement at or prior to the Closing must have been performed and complied with
in all material respects. 

  

	 	(b)	Buyer must have delivered each of the documents required to be delivered by Buyer pursuant to an applicable provision of this Agreement and must have paid/issued the Purchase Price
pursuant to Section 2. 

  

	7.3	Additional Documents. There shall have been delivered to Seller a certificate of the Secretary of the Buyer certifying the resolutions adopted by the board of
directors of Buyer approving this Agreement and the Transaction, as well as such other documents as Seller may reasonably request for the purpose of (a) evidencing the accuracy of any of Buyer’s representations and warranties, (b) evidencing
the performance by Buyer, or the compliance by Buyer with, any covenant or obligation required to be performed or complied with by such persons, (c) evidencing the satisfaction of any condition referred to in this Section 7, or (d) otherwise
facilitating the consummation or performance of the Transactions. 

  
 SECTION 8. 
 CLOSING DELIVERIES 
  

	8.1	Deliveries of Seller. At the Closing, Seller will deliver the following documents to Buyer: 

  

	 	(a)	Certified resolutions of Seller’s board of directors and shareholders approving this Agreement and all other documents being entered into by Seller related to, or arising from,
the Transaction; 

  

	 	(b)	A certificate, from a duly authorized officer of Seller, certifying that all representations and warranties made herein by Seller are true and correct as of the date of this
Agreement and as of the Closing Date; that there are no undisclosed facts or occurrences that may have a Material Adverse Effect on the business, financial condition or prospects of Seller; and as to such other information as is reasonably requested
by Buyer; 

  

	 	(c)	An opinion of Mr. Thomas E. Aul. Esq., counsel to Seller; 

  

 18 

	 	(d)	All bills of sale and instruments of conveyance, transfer and assignment, dated as of the Closing Date, as shall be sufficient to transfer to and vest in Buyer good, valid, and
marketable title to the Purchased Assets free and clear of any Encumbrances; 

  

	 	(e)	Certificate of Good Standing of Seller, issued by the Secretary of State of the State of Wisconsin dated within five (5) days of Closing; 

  

	 	(f)	The Barney Agreement; 

  

	 	(g)	The TGMG Release; 

  

	 	(h)	The Close Out Document described in Section 2.2 above; 

  

	 	(i)	Documents evidencing transfer of Intellectual Property Rights in form and content satisfactory to Buyer; and 

  

	 	(j)	Such other documents as Buyer may reasonably request to effectuate the Transaction. 

  

	8.2	Deliveries of Buyer. At the Closing, Buyer will deliver to Seller the following: 

  

	 	(a)	Certified resolutions of Buyer’s board of directors approving this Agreement and all other documents being entered into by Seller related to, or arising from, the Transaction;

  

	 	(b)	The Cash Consideration; 

  

	 	(c)	A stock certificate issued in the Seller’s name representing either (1) ninety-five percent (95%) of the Share Consideration or (2) one hundred percent (100%) of the Share
Consideration, depending upon whether the Purchased Assets have been physically transferred to the Buyer pursuant to Section 2.2 above, together with an undertaking to re-issue the same, at its expense, to the Shareholders, as directed by the
Seller; 

  

	 	(d)	The Barney Agreement; and 

  

	 	(e)	Such other documents as Seller may reasonably request to effectuate the Transaction. 

  
 SECTION 9. 
 SURVIVAL OF REPRESENTATIONS AND WARRANTIES; INDEMNIFICATION 
  

	9.1	Survival of Representations and Warranties. Notwithstanding any investigation made by or on behalf of Buyer or the results of any such investigation and
notwithstanding the participation of Buyer in the Closing, the representations and warranties of Seller contained in this Agreement, or in any exhibit, schedule, certificate or other instrument furnished by Seller at or in connection with the
Closing, and the indemnification obligations of Seller with respect thereto, shall terminate on the first anniversary of the Closing Date; provided, however, that the representations and warranties of Seller contained in Section 3.15 (under
the heading “Environmental”) and 3.19 (under the heading “Taxes”), and the indemnification obligations of Seller with respect thereto, shall survive until six (6) months after the expiration of the applicable statute of
limitations. The representations and warranties of Buyer contained in this Agreement, or in any certificate or other instrument delivered pursuant to this Agreement, and the indemnification obligations of Buyer with respect thereto, shall terminate
on the first anniversary of the Closing Date. The covenants set forth in this Agreement shall survive the Closing indefinitely. The respective expiration dates for the survival of representations and warranties shall be referred to as the
(“Expiration Date”). 

  

 19 

	9.2	Indemnification by Buyer. Buyer agrees to indemnify and hold Seller, its employees, officers, directors, agents and representatives harmless from and against any and
all loss, liability or damage and actions and against all claims in respect thereof (including reasonable attorneys fees, amounts paid in settlement and reasonable costs of investigation herein referred to collectively as “Losses”
or individually as “Loss”) to which Seller may become subject to or which it may suffer or incur as a result of or in connection with (i) any untrue representation of, or breach of warranty by, Buyer in any part of this Agreement,
notice of which is given to Buyer on or prior to the relevant Expiration Date; (ii) any nonfulfillment of any covenant, agreement or undertaking of Buyer in any part of this Agreement, including the provisions of Section 5.18; (iii) the use of the
Purchased Assets by the Buyer during the period beginning on the date of this Agreement and ending on the Closing Date; and (iv) any and all reasonable costs and expenses, including reasonable legal fees and expenses, in connection with enforcing
the indemnification rights of Seller pursuant to this Section 9.2. 

  

	9.3	Indemnification by Seller. Seller agrees to indemnify and hold Buyer and its employees, officers, directors, agents and representatives harmless from and against any
and all Loss or Losses to which Buyer or any of the foregoing may become subject to or which it or they may suffer or incur, directly or indirectly, as a result of or in connection with (i) any untrue representation or breach of warranty by Seller
in any part of this Agreement, notice of which is given to Seller on or prior to the relevant Expiration Date; (ii) the breach of or nonfulfillment of any covenant, agreement or undertaking of Seller in this Agreement; (iii) any Retained
Liabilities, including, without limitation, any liabilities or obligations arising out of or in connection with the TGMG Agreement; (iv) the use, ownership or operation of the assets of Seller and the conduct of the Seller’s business prior to
the Closing Date, other than as set forth in Section 9.2; (v) any Loss for Taxes of Seller with respect to any tax period or portion thereof ending on or before the Closing Date; (vi) any Loss relating to or arising out of alleged product failures,
product warranties or guaranties with respect to any products sold by the Seller prior to the Closing Date, whether known or unknown; and (vii) any and all costs and expenses including reasonable legal fees and expenses, incurred in connection with
enforcing the indemnification rights of Buyer pursuant to this Section 9.3. 

  

	9.4	Claims for Indemnification. 

  

	 	(a)	General. The parties intend that all indemnification claims be made as promptly as practicable by the party seeking indemnification (the “Indemnified
Party”). Whenever any claim shall arise for indemnification hereunder, the Indemnified Party shall promptly notify the party from whom indemnification is sought (the “Indemnifying Party”) of the claim, and the facts
constituting the basis for such claim, but in no event later than thirty (30) days after the Indemnified Party acquires knowledge of the claim. The failure to so notify the Indemnifying Party shall not relieve the Indemnifying Party of any liability
that it may have to the Indemnified Party except to the extent the Indemnifying Party demonstrates that the defense of such action is prejudiced thereby. If the Indemnifying Party is of the opinion that the Indemnified Party is not entitled to
indemnification, or is not entitled to indemnification in the amount claimed in such notice, it shall deliver, within twenty (20) days after the receipt of such notice, a written objection to such claim and written specifications in reasonable
detail of the aspects or details objected to, and the grounds for such objection. If the Indemnifying Party shall file timely written notice of objection to any claim for indemnification, the validity and amount of such claim shall

  

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 be determined by arbitration pursuant to Section 11.6. If timely notice of objection is not delivered or
if a claim by an Indemnified Party is admitted in writing by an Indemnifying Party or if an arbitration award is made in favor of an Indemnified Party, the Indemnified Party, as a non-exclusive remedy, shall have the right to set-off the amount of
such claim or award against any amount yet owed, whether due or to become due by the Indemnified Party or any subsidiary thereof to any Indemnifying Party by reason of this Agreement or any agreement or arrangement or contract to be entered into at
the Closing. 
  

	 	(b)	Claims by Third Parties. With respect to claims made by third parties, the Indemnifying Party shall be entitled to assume control of the defense of such action or claim with
counsel reasonably satisfactory to the Indemnified Party; provided, however, that: 

  

	 	(i)	the Indemnified Party shall be entitled to participate in the defense of such claim and to employ counsel at its own expense to assist in the handling of such claim;

  

	 	(ii)	no Indemnifying Party shall consent to (i) the entry of any judgment or enter into any settlement that does not include as an unconditional term thereof the giving by each claimant
or plaintiff to each Indemnified Party of a release from all liability in respect to such claim or (ii) if, pursuant to or as a result of such consent or settlement, injunctive or other equitable relief would be imposed against the Indemnified Party
or such judgment or settlement could materially interfere with the business, operations or assets of the Indemnified Party; and 

  

	 	(iii)	if the Indemnifying Party does not assume control of the defense of such claim in accordance with the foregoing provisions within five (5) days after receipt of notice of the claim,
the Indemnified Party shall have the right to defend such claim in such manner as it may deem appropriate at the cost and expense of the Indemnifying Party, and the Indemnifying Party will promptly reimburse the Indemnified Party therefore in
accordance with this Section 9; provided that the Indemnified Party shall not be entitled to consent to the entry of any judgment or enter into any settlement of such claim that does not include as an unconditional term thereof the giving by each
claimant or plaintiff to each Indemnifying Party of a release from all liability in respect of such claim without the prior written consent of the Indemnifying Party if, pursuant to or as a result of such consent or settlement, injunctive or other
equitable relief would be imposed against the Indemnifying Party or such judgment or settlement could materially interfere with the business, operations or assets of the Indemnifying Party. 

  

	 	(c)	Remedies Cumulative. The remedies provided herein shall be cumulative and shall not preclude assertion by any party of any rights or the seeking of any other remedies against
any other party. 

  

	 	(d)	Disclosure. No action by an Indemnified Party to determine the extent of indemnified liability, including voluntary disclosure to Authorities or potential claimants, shall in
any way affect such Indemnified Party’s right to indemnification from the Indemnifying Party. 

  

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 SECTION 10. 
 TERMINATION 
  

	10.1	Termination Events. This Agreement may, by notice given on or before the Closing Date, in the manner hereinafter provided, be terminated and the transactions contemplated
herein may be abandoned: 

  

	 	(a)	By the Buyer if (i) Buyer is not in material breach of its representations, warranties or covenants under this Agreement and (ii) there has been a breach by Seller of any of its
representations, warranties or covenants under this Agreement that has a Material Adverse Effect on the Steorra Product or the Purchased Assets such that the conditions in Section 6.1 and 6.2 hereof will not be satisfied; provided, however, that if
such a breach is curable by Seller through its reasonable best efforts and such cure is reasonably likely to be accomplished prior to the Termination Date, then, for so long as Seller continues to exercise such reasonable best efforts, Buyer may not
terminate this Agreement under this Section 10.1(a); or 

  

	 	(b)	By Seller if (i) Seller is not in material breach of its representations, warranties or covenants under this Agreement and (ii) there has been a material breach by the Buyer of any
of its representations, warranties or covenants under this Agreement such that the conditions in Section 7.1 and 7.2 hereof will not be satisfied; provided, however, that if such a breach is curable by Buyer through its reasonable best efforts and
such cure is reasonably likely to be accomplished prior to the Termination Date, then, for so long as Buyer continues to exercise such reasonable best efforts, Seller may not terminate this Agreement under this Section 10.1(b); or

  

	 	(c)	By Buyer if the requisite number of Shareholders as required by law do not approve this Agreement and the Transaction at the Shareholder Meeting; or 

  

	 	(d)	By mutual written consent of the Buyer and the Seller; or 

  

	 	(e)	By Buyer on or after the Termination Date or such later date as may be established pursuant to Section 2.4, if any of the conditions provided for in Section 6 of this Agreement have
not been satisfied or waived in writing by the Buyer prior to such date; or 

  

	 	(f)	By Seller on or after the Termination Date or such later date as may be established pursuant to Section 2.4, if any of the conditions provided for in Section 7 of this Agreement
have not been satisfied or waived in writing by the Seller prior to such date. 

  

	10.2	Effect of Termination. Each party’s right of termination hereunder is in addition to any other rights it may have hereunder or otherwise. In the event of the
termination of this Agreement pursuant to any subsection of Section 10.1, the obligations of the parties to consummate the transactions contemplated by this Agreement will expire, and the parties hereto will have no further obligation or liability
to each other, except that the obligations set forth in Section 5.9 (Confidentiality), Section 5.8 (Expenses) and Section 11 (Miscellaneous) or this Section 10.2 (Effect of Termination) will survive termination of this Agreement. Notwithstanding the
foregoing, if this Agreement is terminated by Buyer or Seller (in either case, the “Terminating Party”), due to the nonsatisfaction of one or more conditions to the Terminating Party’s obligations under this Agreement as a
result of the other party’s failure to comply with any provision of this Agreement or pursuant to any subsection of Section 10.1 that is caused by a breach of the other party, the Terminating Party’s right to pursue all legal remedies for
breach of contract and damages will also survive such termination unimpaired. 

  

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 SECTION 11. 
 MISCELLANEOUS 
  

	11.1	Notices. Any notice, demand, request or other communication under this Agreement shall be in writing and shall be deemed to have been given on the date of service if
personally served or on the fifth (5th) day after mailing if mailed by registered or certified mail, return receipt requested, addressed as follows (or to such other address of which either of the parties hereto shall have notified the other party
hereto in accordance herewith): 

  

			
	To Buyer:	 	Optical Sensors Incorporated
	 	 	7615 Golden Triangle Drive, Suite C
	 	 	Minneapolis, Minnesota 55344
	 	 	Attn: Paulita LaPlante
	 	 	(952) 944-5857 (Phone)
	 	 	(952) 914-9441 (Fax)
	
	with an additional copy thereof to:
		
	 	 	Thomas A. Letscher
	 	 	Oppenheimer Wolff & Donnelly LLP
	 	 	Plaza VII, Suite 3300
	 	 	45 South Seventh St.
	 	 	Minneapolis, MN 55402
	 	 	(612) 607-7000 (Phone)
	 	 	(612) 607-7100 (Fax)
		
	To Seller:	 	Jill Barney
	 	 	SORBA Medical Systems, Inc., President
	 	 	165 Bishops Way, Suite 152
	 	 	Brookfield, WI 53005
	 	 	(262) 827-2740 (Phone)
	 	 	(262) 827-2759 (Fax)
	
	with an additional copy thereof to:
		
	 	 	Mr. Thomas E. Aul, Esq.
	 	 	Attorney at Law
	 	 	815 Genesee Street
	 	 	Delafield, WI 53017
	 	 	(262) 646-5600 (Phone)
	 	 	(262) 646-5601 (Fax)

  

 23 

	11.2	Governing Law. This Agreement shall be construed in accordance with, and governed by, the laws of the State of Minnesota without regard to the conflicts of laws
principles that might otherwise apply. 

  

	11.3	Counterparts. This Agreement may be executed in any number of counterparts, each of which shall constitute an original and all of which shall constitute one agreement.

  

	11.4	Amendment or Modification. This Agreement may not be modified or amended except by a written instrument duly executed by each of the parties hereto.

  

	11.5	Assignment and Successors. This Agreement and all of the provisions hereof shall be binding upon and inure to the benefit of the parties hereto and their respective
successors and permitted assigns, but neither this Agreement nor any of the rights, interests or obligations hereunder shall be assigned (whether voluntarily, involuntarily, by operation of law or otherwise) by any of the parties hereto without the
prior written consent of the other parties, provided, however, that Buyer may assign, without Seller’s consent, its rights and obligations under this Agreement, in whole or in any part, and from time to time.

  

	11.6	Arbitration. Any controversy or claim arising out of or relating to this Agreement, or the making, performance or interpretation thereof, including without limitation
alleged fraudulent inducement thereof, will be settled by binding arbitration in Minneapolis, Minnesota by a single arbitrator in accordance with the Complex Rules of the American Arbitration Association. Judgment upon any arbitration award may be
entered in any court having jurisdiction thereof and the parties consent to the jurisdiction of the courts of the State of Minnesota for this purpose. 

  

	11.7	Entirety of Agreement; Exhibits. This Agreement, including the schedules and exhibits hereto, states the entire agreement of the parties with respect to the Purchased
Assets conveyed and liabilities assumed hereunder, merges all prior negotiations, agreements and understandings, if there be any, and states in full all representations and warranties which have induced this Agreement, there being no representations
or warranties other than those herein stated. The Exhibits referred to in this Agreement are intended to be an integral part of this Agreement. 

  

	11.8	Headings. The headings of the sections and subsections of this Agreement are inserted for convenience only and shall not constitute a part hereof.

  

	11.9	Severability. If any provision hereof is held by any court of competent jurisdiction to be illegal, void or unenforceable, such provision will be of no force and
effect, but the illegality or unenforceability will have no effect upon and will not impair the enforceability of any other provision of this Agreement. 

  

	11.10	No Third Party Beneficiaries. Except as expressly permitted by this Agreement, nothing in this Agreement will confer any rights upon any person or entity which is not
a party or permitted assignee of a party to this Agreement. 

  
 [Remainder of page intentionally left blank] 
  

 24 

 IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the day and
year first above written. 
  

			
	Buyer:
	
	OPTICAL SENSORS INCORPORATED
		
	By:	 	 /s/ Paulita LaPlante

	Name:	 	Paulita LaPlante
	Title:	 	President and Chief Executive Officer
	
	Seller:
	
	SORBA MEDICAL SYSTEMS, INC.
		
	By:	 	 /s/ Jill A. Barney

	Name:	 	Jill A. Barney
	Title:	 	President

  

 25

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