Document:

Commerical Lease between the Company and EWE, Inc.

 Exhibit 10.40 
  

			
	STATE OF ALABAMA )	 	 
	SHELBY COUNTY )	 	LEASE AGREEMENT
	 	 	OFFICE SPACE

  

			
	IN:	 	EWE, Inc., d/b/a Cumberland Centre
	 	 	2683 Pelham Parkway (partial) and
	 	 	2685-A Pelham Parkway
	 	 	Pelham, Alabama 35124

  
 COMMERCIAL
REAL ESTATE LEASE 
  
 THIS AGREEMENT, made and entered into this the
21st day of September, 2004. 
  
 BY AND BETWEEN

  
 EWE, Inc., an Alabama Corporation, offices at 2685-B Pelham Parkway,
Pelham, Alabama 35124, (hereinafter called “LESSOR”), 
  
 and

  
 Durect Corporation, a Delaware Corporation, offices at 10240 Bubb Road,
Cupertino, CA 95014. (hereinafter called “LESSEE”). 
  
 WITNESSETH: 
  

					
	PREMISES	  	1.	  	The LESSOR does hereby rent and lease to the LESSEE the following described space in the above subject buildings located at the referenced address, hereinafter called the “Premises”
(current sketches of the Premises are attached in Exhibit A):

							
	 	  	 	  	 	  	 Building 2683 Pelham Parkway, Pelham, Alabama 35124. The total current conditioned space is
approximately 3,900 square feet downstairs and the
total unconditioned warehouse/storage space is
approximately 2,750 square feet for a total lease space in building 2683 Pelham Parkway of
approximately 6,650 square feet. An additional 2750 square feet of space which is available
for
buildout as conditioned office space upstairs in this building 2683 is not included in this lease and may
be used by LESSOR or separately leased by LESSOR at any time to another prospective tenant,
provided however, that LESSEE shall
have the first right of refusal to lease this additional space at the
same rental rate per square foot as applicable in Section 6 within fifteen (15) days of being notified by
LESSOR of another prospective tenants desire to lease said
space.
  
 Building 2685-A Pelham Parkway, Pelham, Alabama 35124. The total
conditioned space is
approximately 2,250 square feet.
  
 The total lease space
in buildings 2683 and 2685-A is approximately 8,900 square feet.
  

	 USE
	  	2.	  	LESSEE’s business is the development and manufacturing of medical-grade biodegradable polymers and
controlled drug-delivery products. LESSEE warrants that its business is
conducted only with a proper
business license, and in accordance with all applicable rules, laws, and regulations. Premises, subject to
existing easements, if any, shall be used for laboratory, general offices, light manufacturing, such as but
not
limited to pharmaceuticals, medical devices or biodegradable polymers, and warehouse storage and for no
other purpose. Premises shall not be used for any illegal purposes; or in violation of any regulation of any
governmental body; nor
in any manner to create any nuisance or trespass; nor in any manner to vitiate the
insurance or increase the current rate of insurance on the Premises.

  

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	TERM	  	3.	  	 The term of this Lease shall be for five (5) years, to commence on the 1st day of October, 2004 or ten (10) days after
“Delivery of Premises”, whichever first occurs. LESSEE’s obligation to pay rent shall commence on the day and date when the term of this Lease commences.
  

	OPTION TERM	  	4.	  	 Contingent upon LESSEE satisfying all of the following conditions, LESSEE is hereby granted an option to extend the lease term for one (1)
additional period of five (5) full twelve (12) month Lease Years each (the “Extension Term”). The LESSEE may exercise such option by giving written notice to the Landlord at least one hundred eighty (180) days prior to the expiration of
the Term.
  

	 	  	 	  	 Such conditions being that:
  
 (i) LESSEE shall not be in breach of this base beyond any applicable cure period.
  

(ii) LESSEE shall have given notice to Landlord not less than one hundred eighty (180) days prior to the expiration of the Term of LESSEE’s exercise of the option
for the Extension Term; and
  
 Time is of the essence in the exercise of this
option and should LESSEE fail to exercise such option by timely notice, such option shall lapse.
  
 In the event that LESSEE effectively exercises the option herein granted, then all of the terms and provisions of the Lease as are applicable during
the Term shall likewise be applicable during the Extension Term, except:
  
 (a)
LESSEE shall have no further right to renew or extend the lease term after the expiration of the Extension Term;

  

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	 	  	 	  	 	  	 (b) The rent payable during the Extension Term shall be 95% of the fair market value (“FMV”) for rental of the Premises on the date
LESSEE exercises its option hereunder, provided that the rent payable during the Extension Term shall not be less than the rent last payable by LESSEE during the Term and furthermore, the annual rent payable during the Extension Term shall be
adjusted to provide for a 3% increase on each anniversary of the commencement of the Extension Term. LESSOR and LESSEE shall negotiate FMV within thirty (30) days following LESSEE’s written notice as set forth above. In the event LESSOR and
LESSEE cannot agree upon FMV within the thirty-day period set forth above, then each party shall within five (5) days, appoint a licensed commercial real estate broker who is active in commercial and industrial leasing in Pelham, AL and the two
brokers so appointed shall meet within twenty-one (21) days of the second broker’s appointment to make a determination of FMV. The determination of the brokers as set forth herein shall be binding upon LESSOR and LESSEE. If the two brokers
cannot reach agreement within five (5) days of their initial meeting, then the two shall immediately thereafter appoint a third broker with the same qualifications and within twenty-one (21) days of the third brokers’ appointment, all three
brokers shall meet to make a determination of FMV. If agreement cannot be reached, then the two closest opinions of FMV shall be averaged, and the resulting figure shall become the monthly rent for the Extension Term and be binding on LESSOR and
LESSEE. LESSOR and LESSEE shall pay the fee of their respective broker and shall share the cost of the third broker, if necessary. Determination of FMV shall not include any interior improvements made at LESSEE’s sole expense of which LESSOR
requires LESSEE to remove prior to the expiration or earlier termination of this Lease.
  
 References in this Lease to the “term” or the “lease term” shall be understood to refer to both the Term and (if LESSEE’s option therefore is effectively exercised in accordance with the provisions hereof) also the
hereinabove stated Extension Term unless such interpretation is expressly negated.

  

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	HOLDING OVER	  	5.	  	 If LESSEE remains in possession after expiration of the term hereof, with LESSOR’s acquiescence and without any distinct agreement of
parties, LESSEE shall be a month-to-month tenant; and there shall be no renewal of this Lease by operation of law.
  

	RENTAL	  	6.	  	 The LESSEE agrees to pay each month, as rent for the Premises to EWE, Inc., Cumberland Centre, 2685-B Pelham Parkway, Pelham, Alabama 35124, or
such other place as the LESSOR may designate, monthly the following sums:
  

	 	  	 	  	 PERIOD                 MONTHLY
                ANNUAL
 RENTAL
 Year 1                     $7,965.00
                    $95,580.00
 Year 2
                    $8,204.00
                    $98,448.00
 Year 3
                    $8,450.00
                    $101,400.00
 Year 4
                    $8,704.00
                    $104,448.00
 Year 5
                    $8,965.00
                    $107,580.00

	 	  	 	  	  
 Which sums shall be payable in advance on the first day of each month
during the rental period of this Lease, or sooner, if accelerated under the subsequent provisions hereof. In the event the rental to be paid hereunder is not paid when due, within five (5) days after written notice that rent is overdue, the LESSOR
shall have the right to impose a late penalty of five percent (5%) of the amount past due. Said five percent (5%) late rent penalty shall be payable by LESSEE immediately upon receiving notice in writing from the LESSOR or his Agent that rent is
past due, and demanding payment of such past due rents, plus penalties.

  

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	 DELAY OF
 POSSESSION
	  	7.	  	 For the purposes of this Agreement, “Delivery of Premises” shall occur immediately on signing this Agreement or when the building
inspector shall issue a certificate of occupancy. If the Lease is executed before the Premises herein become ready for occupancy and LESSOR cannot acquire and/or deliver possession of the Premises by the time the term of this Lease is fixed herein
to begin, LESSEE waives any claim for damages due to such delay and LESSOR waives the payment of any rental until LESSOR delivers possession to LESSEE. If there shall be a delay in the construction or repair of the Premises caused by strikes,
lockouts, riots, acts of God, shortages of labor or materials, national emergency, governmental regulations, or any other cause or causes beyond LESSOR’s control, such delay shall not be in violation of this Lease and the time period set forth
in the Lease for any such work shall at LESSOR’s option be extended for a period of time equal to the period of delay.
  

	POSSESSION DELIVERED	  	8.	  	 It is agreed that the LESSEE’s act of taking possession of the Premises after inspection of same shall be regarded as conclusive proof that
the same are in good repair and in satisfactory condition. The LESSOR makes no representation or warranty that the Premises are suitable for the purposes for which the same are rented. Notwithstanding the above, LESSOR represents that the Premises
are in good condition and repair, the roof water tight and in good condition, and all operating systems in good order and repair.
  

	GOOD ORDER AND REPAIR	  	9.	  	 A) LESSEE shall, at all times during the term of this lease, and at its own cost and expense, repair, replace, and maintain in good, safe, and
substantial condition, all buildings and any improvements thereto on the leased Premises, and shall use all reasonable precaution to prevent waste, damage or injury to the leased Premises.
  
 B) If LESSEE shall fail or neglect to make any repair, LESSOR shall have the right to do so at LESSEE’s expense upon thirty (30) days
prior written notice to LESSEE. LESSEE shall reimburse LESSOR for such repairs as LESSOR makes or causes to be made on the first day of the month following the presentation of LESSOR of a statement for same.

  

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	 	  	 	  	 C) At the end of the term of this lease, or the renewal date thereof, or its sooner termination, LESSEE shall return to the LESSOR the leased
Premises in original condition, less ordinary wear and tear.
  

	LESSEE’S CARE	  	10.	  	 LESSEE shall be liable for and shall hold LESSOR harmless in respect of damage or injury to the leased Premises, or the person or property of the
LESSEE, or the person or property of LESSOR’s other tenants, or anyone else, if due to the act or neglect of LESSEE or anyone in his control or employ. LESSEE shall within a reasonable time of discovery report orally or in writing, and if
orally followed in writing within 30 days of oral report, to LESSOR any defective condition known to it and failure to so report shall make LESSEE responsible for all damages resulting from the failure to report such defective conditions. All
personal property upon the Premises shall be at the risk of LESSEE only, and LESSOR shall not be liable for any damage thereto or theft thereof.
  

	ALTERATIONS AND IMPROVEMENTS	  	11.	  	 LESSEE will make no alteration in, or additions to, said Premises without first obtaining the LESSOR’s written consent except for alterations
that cost less than $20,000 and do not affect the structural parts of the building. All erections, additions, fixtures and improvements, (except only the moveable office, lab, and other furniture, and movable partitions and equipment, including
modular clean rooms of the LESSEE) made in or upon said Premises, either by the LESSEE or the LESSOR, shall be the LESSOR’s property, and shall remain upon said Premises at the termination of said term by lapse of time or otherwise, without
compensation to the LESSEE.
  

	SURRENDER OF PREMISES	  	12.	  	LESSEE agrees to surrender to LESSOR, at the end of the term of this Lease and/or upon any cancellation of this Lease, said leased Premises in as good condition as said Premises were at the
beginning, of the term of this Lease, ordinary wear and tear excepted. LESSEE agrees that, if LESSEE does not surrender to LESSOR said leased Premises at the end of the term of this Lease, or

  

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	 	  	 	  	 upon cancellation of the term of this Lease, then LESSEE will pay to LESSOR all damages the LESSOR may suffer on account of LESSEE’s failure
to so surrender the possession of said leased Premises and will indemnify LESSOR on account of delay of LESSOR in delivering of said Premises to any succeeding LESSEE insofar as such delay is occasioned by failure of LESSEE to so surrender said
Premises. For each month and/or fractional part thereof LESSOR may charge LESSEE for failure to so surrender the possession of said Premises an amount equivalent to one and one-half (1-1/2) times the monthly rental due the last month of the Lease
Term and payable to LESSOR on demand made to LESSEE by LESSOR.
  

	TAXES	  	13.	  	 LESSOR shall pay ad valorem real property taxes on the leased Premises. LESSEE shall pay all personal property taxes, franchise taxes, and other
taxes and assessments due or that may become due on any part of the leased Premises, when due, and shall not allow any such taxes or assessments to ever form a lien on any part of the leased Premises. If LESSEE should fail to pay when due any tax or
assessment on LESSEE’s personal property which might form a lien on any part of the leased Premises, LESSOR may pay same and bill LESSEE for same, which LESSEE shall pay within ten (10) days following presentation of a statement for same to
LESSEE.
  

	UTILITIES	  	14.	  	 A. LESSOR also agrees that it shall furnish a reasonable amount of general office trash pickup to LESSEE consistent with that provided to
other tenants. Such trash shall not include any chemical, manufacturing, or hazardous materials, or any other waste unsuitable for disposal in municipal landfills. It is specifically agreed that LESSOR undertakes to furnish only a reasonable amount
of trash collection consistent with that provided other tenants and that LESSOR reserves the right to adjust the monthly rental to reflect the cost of any extraordinary or excessive trash collection required by LESSEE.
  
 B. All other utilities, including but not limited, to electricity, natural gas, water,
telephones, cable television, and internet access are at the sole expense of LESSEE.

  

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	 	  	 	  	 C. All applications and connections for necessary utility services on the leased Premises shall be made in the name of the LESSEE only, and
LESSEE shall be solely liable for such utility charges as they become due. LESSEE shall hold LESSOR harmless for any lien placed on the leased Premises because of any unpaid utility charge or charges, and shall repay LESSOR for any such charges that
LESSOR pays to prevent or remove any lien on the leased Premises on the first day of the month following presentation of a statement for same to LESSEE.
  

	REGULATIONS, LAWS, AND INSURANCE	  	15.	  	 LESSEE shall promptly execute and comply with all statutes, ordinances, rules, orders, regulations and requirements of the federal, state, county,
and city governments, and of any and all their departments and bureaus, applicable to the use of said Premises and shall also promptly comply with and execute all rules, order and regulations of the Fire Underwriters’ Association for the
Prevention of Fires at LESSEE’s own cost and expense as to any alterations by LESSEE.
  
 A. During the term of this lease and during any extension or renewal thereof, LESSEE shall obtain and maintain at its expense the following types and amounts of insurance:
  
 1) PROPERTY INSURANCE. LESSEE shall keep all improvements, and
equipment on the leased Premises, including all alterations, and additions, insured against loss of damage by fire, smoke, explosion, rain, wind, flood, lightning, vandalism, theft, water, falling objects, missiles of any description, and collision
with any vehicle or object (including wind driven objects and debris). The insurance shall be in an amount of at least 90% of the replacement value for such improvements and additions and alterations or other appurtenances including all damages from
sign, glass, awnings, fixtures and situated on, in or used in connection with the Premises.

  

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	 	  	 	  	 2) PUBLIC LIABILITY INSURANCE. LESSEE shall procure and maintain insurance against liability for bodily injury and
property damage with minimum limits of liability of not less than $1,000,000.00 in respect to injuries to any one person, not less than $1,000,000.00 in respect to any one accident, and not less than $500,000.00 in respect to property damage. LESSOR
shall be named as additional insured on LESSEE’s policy.
  
 3) OTHER INSURANCE. If not included in the policies provided for above, LESSEE shall procure separate and additional policies of insurance to insure against plate glass damage in the leased Premises, if any.
  
 A) All insurance provided by LESSEE as required above shall be
carried in favor of LESSOR and LESSEE as their respective interests may appear. All insurance shall be written with responsible companies satisfactory to LESSOR, and LESSEE shall provide LESSOR with copies or certificates of all policies required
herein and a receipt showing one year’s paid-up premium on same. All policies shall require thirty (30) days’ notice by certified or registered mail to LESSOR of any cancellation or change affecting any interest of LESSOR.
  
 B) If LESSEE shall fail or refuse to provide any insurance
required above, LESSOR may either terminate the lease at once by written notice to LESSEE by mail or hand delivery (effective upon mailing, or upon receipt by hand delivery), or procure the required insurance and bill LESSEE for same. LESSEE shall
pay LESSOR for any insurance so procured by LESSOR on the first day of the month following LESSOR’s presentation to LESSEE of a statement for same.
  
 C) Additionally, LESSEE agrees to pay any increase in the amount of LESSOR’s insurance premiums on the Premises over and above the
rate now in force that may be caused by LESSEE’s use or occupancy of the Premises.
  

	DESTRUCTION OR DAMAGE	  	16.	  	In the case the leased Premises are injured or damaged by fire or other cause as to be untenantable, LESSOR

  

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	 	  	 	  	shall have the right at its option to either terminate this Lease or to repair and restore the Premises within one hundred eighty (180) days to a tenantable condition, and the rent shall
abate during the period said Premises are untenantable. Should said Premises not be restored within one hundred eighty (180) days from the date of the fire or other cause rendering them untenantable, the LESSEE shall have the option to terminate
this Lease by giving fifteen (15) days notice of his intent to do so, and this Lease shall be terminated on the day so designated by LESSEE unless the LESSOR makes the Premises tenantable in the interim.
			
	CONDEMNATION	  	17.	  	In the event LESSOR, during the term of this Lease, shall be required by the City, County, State, the order or decree of any court, or any other governmental authority, to repair, alter,
remove, condemn, reconstruct, or improve any part of the Premises then such repairing, alterations, removal, reconstruction or improvement may be made by and at the expense of the LESSOR, and shall not in any way affect the obligations or covenants
of the LESSEE herein contained, and the LESSEE hereby waives all claims for damages (except abatement of rent as provided for below) because of such repairing, alterations, removal, reconstruction or improvement; provided, however, that should the
repairs, alterations, removal, reconstruction or improvements required, ordered or decreed render said Premises, or the building wherein they are located, untenantable thereby, unless said repairs, alterations, removal, reconstruction or
improvements be made within ninety (90) days after the date of the notice of requirements order or decree, then either party hereto, upon written notice to the other party given not later than one hundred (100) days after the date of said notice of
requirement, order, or decree, may terminate this Lease, in which case rent shall be apportioned and paid to the date said Premises or building were rendered untenantable. The LESSOR shall be entitled to receive all of the proceeds of any total or
partial taking of the Premises by eminent domain or condemnation, including any part of such award as may be attributed to the unexpired leasehold interest or other rights of the LESSEE in the Premises, and the LESSEE hereby assigns and transfers to
the LESSOR all the LESSEE’s rights to receive any part of such proceeds.

  

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	 INDEMNITY
 OF LESSOR
	  	18.	  	LESSEE covenants, throughout the term of this Lease, or any extension thereof, to protect and save harmless the LESSOR, his servants, agents and employees, partners, their respective heirs,
executors, administrators, or personal representatives from any and all liability for, including but not limited to, claims for damages to the, improvements, and equipment on the leased Premises, including all alterations, and additions, uninsured
losses or insurance deductibles, losses due to business interruption, or injury or death of persons, sustained by LESSEE, his agents, assigns or employees, or by any third party, in, on, or about the leased Premises.
			
	 PERSONAL
 PROPERTY
	  	19.	  	 All personal property of LESSEE in the leased Premises shall be and remain at LESSEE’s personal risk, and LESSOR shall not be liable for any
damages to nor loss of such personal property arising from acts of negligence of any other persons; nor from the leaking of the roof; nor from the bursting, leaking, or overflowing of water, sewer, or steam pipe; nor from the heating or plumbing
fixtures; nor from electric wires or fixtures; nor from any other cause whatsoever.
  
 If the LESSEE shall not remove all his effects from said Premises at any termination of this Lease, LESSOR may, at its option, remove all or part of said effects in any manner that LESSOR shall choose and store the same without liability to
LESSOR for all expenses incurred either in such removal or the cost of storage of said effects. If said effects are not claimed within thirty (30) days after termination of the Lease and storage has not been paid, LESSOR may cause effects to be sold
to satisfy the costs of storing said effects and payment of past due rents. Upon any termination of this Lease wherein LESSEE shall be liable in any amount due under this Lease from LESSEE to LESSOR, (including the expense of the removal and sale),
any surplus shall be remitted to LESSEE.

  

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	 DEFAULT
 REMEDIES
	  	20.	  	 In the event:
  
 (a)    The rent specified in Paragraph Seven (7) is not paid at the time (within ten (10) days) of
written notice to LESSEE that rent is past due and place due;
  
 (b)    the leased Premises shall be deserted or vacated;
  
 (c)    the LESSEE shall fail to comply with any term, provision, condition, or covenant of this Lease,
other than payment of rent, or any of the Rules and Regulations now or hereafter established for the government of the building, and shall not cure such failure within thirty (30) days after notice of the LESSEE of such failure to comply;

 
 (d)    any petition
is filed by or against LESSEE under any section or chapter of the National Bankruptcy Act, as amended;
  
 (e)    LESSEE shall make an assignment for benefit of creditors;
  
 (f)     LESSEE
shall become insolvent or make a transfer in fraud of creditors;
  
 (g)    a receiver is appointed for a substantial part of the assets of LESSEE;
  
 (h)    the leasehold interest is levied on under execution;
  

	 	  	 	  	 In any such events, upon giving twenty-four (24) hours written notice to LESSEE, LESSOR shall have the option to do any of the following, in
addition to, and not in limitation of, any other remedy permitted by law or by this Lease:
  
 (i) terminate this Lease, in which event LESSEE shall immediately surrender the Premises to LESSOR, but if LESSEE shall fail so to do, LESSOR may, without further notice and without prejudice to any other
remedy LESSOR may have for possession or arrearages in rent or damages for breach of contract, enter upon the Premises and expel or remove LESSEE and his effects, by force if necessary, without being liable to prosecution or any claim for damages
therefor, and LESSEE agrees to indemnify LESSOR for all loss and damage which LESSOR may suffer by reason of such lease termination, whether through inability to relet the Premises or through decrease in rent, or otherwise; in

  

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	 	  	 	  	 the event of such termination, LESSOR may, at its option declare the entire amount of the rent which would be due and payable during the remainder
of the term of this Lease to be due and payable immediately, in which event, LESSEE agrees to pay the same at once, together with all rents theretofore due, at the office of EWE, Inc. provided, however, that such payments shall not constitute a
penalty or forfeiture or liquidated damages, but shall merely constitute a payment in advance of the rent for the remainder of said term. Upon making such payment LESSEE shall receive from LESSOR all rents received by LESSOR from other tenants on
account of said Premises during the term of this Lease, provided, however, that the monies to which the LESSEE shall become so entitled shall in no event exceed the entire amount payable by LESSEE to LESSOR under the preceding sentence of this
subparagraph.
  
 (ii) enter the leased Premises as the
agent of the LESSEE, by force if necessary, without being liable to prosecution or any claim for damages therefor, and relet the Premises as the agent of the LESSEE, and receive the rent therefor, and the LESSEE shall pay the LESSOR any deficiency
that may arise by reason of such re-letting, on demand, at any time and from time to time at the office of EWE, Inc.
  
 Pursuit of any of the foregoing remedies shall not preclude pursuit of any of the other remedies herein provided or any other remedies provided by law.
  

	RIGHT OF ENTRY	  	21.	  	LESSOR, or any of his agents, shall have the right to enter said Premises during normal working hours to examine the same or to make such repairs, additions, or alterations as may be deemed
necessary for the safety, comfort, or preservation thereof, or of said building, or to exhibit the Other Space, or to exhibit said Premises at any time within one hundred eighty (180) days before the expiration of this Lease. Said right of entry
shall likewise exist for the purpose of removing plaques, signs, fixtures, alterations, or additions which do not conform to this Agreement.

  

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	ASSIGNMENT	  	22.	  	Neither LESSEE nor its successors or assigns shall assign, mortgage, pledge, or encumber this lease or sublet the Premises in whole or in part, or permit the Premises to be occupied or used
by others, nor shall this lease be assigned or transferred by operation of law without the prior written consent of LESSOR in each instance, which consent shall not be unreasonably withheld. If the lease is assigned or transferred, or if all or part
of the premises are sublet or occupied by anyone other than LESSEE, LESSOR may, after default by LESSEE, collect rent from the assignee, transferee, subtenant, or other occupant and apply the net amount collected to the rent reserved herein, but no
such assignment, subletting, occupancy or collection shall be deemed a waiver of any agreement or condition thereof, or the acceptance of the assignee, transferee, subtenant, or occupant as a new lessee. Notwithstanding anything to the contrary in
this Lease, LESSEE may, without LESSOR’s prior written consent assign the Lease to: (i) a successor corporation related to the LESSEE by merger, consolidation, non-bankruptcy reorganization, or (ii) a purchaser of substantially all of
LESSEE’s assets. The above is referenced as a “Permitted Transfer” LESSEE shall continue to be liable hereunder in all respects after any Transfer, including without limitation a Permitted Transfer and those to which LESSOR consents,
as though there had been no Transfer unless specifically released in writing by LESSOR.
			
	 ATTORNEY’S
 FEES
	  	23.	  	LESSEE agrees to pay all attorney’s fees, court costs, and expenses the Lessor incurs in enforcing any of the obligations of the LESSEE under this Lease, or in any litigation or
negotiation in which the LESSOR shall become involved through or on account of this Lease.
			
	WAIVER	  	24.	  	No waiver of any condition or covenant of this Lease by LESSOR shall be deemed to imply or constitute a further waiver by LESSOR of any other condition or covenant of this Lease. The rights
and remedies created by this Lease are cumulative and the use of one remedy shall not be taken to exclude or waive the right to the use of another.
			
	 RULES AND
 REGULATIONS
	  	25.	  	The present rules and regulations in regard to the Premises are attached hereto and made a part hereof as

  

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	 	  	 	  	though fully set out herein. LESSOR reserves the right to change these rules and regulations. The LESSEE shall faithfully observe and perform such rules and regulations, as modified or
supplemented from time to time by the LESSOR, and the LESSEE shall further be responsible for the compliance with such rules and regulations by the LESSEE’s employees, its invitees, agents, servants, or visitors.
			
	PARKING	  	26.	  	LESSOR has the right to designate and assign parking spaces for LESSEE and its employees.
			
	 SPECIAL
 STIPULATIONS
	  	27.	  	LESSOR reserves the right to designate other agents or offices to collect the rents and all other monies due LESSOR under this Lease.
			
	 SECURITY
 DEPOSIT
	  	28.	  	LESSEE agrees to deposit with LESSOR a sum equal to the first month’s rent ($7,965.00), as security for the faithful performance and observance by LESSEE of the terms, provisions and
conditions of this Lease. It is agreed that in the event LESSEE defaults in respect of any of the terms, provisions, and conditions of this Lease, including, but not limited to, the payment of rent and additional rent, LESSOR may use, apply or
retain the whole or any part of the security so deposited to the extent required for the payment of any rent and additional rent or any other sums as to which LESSEE is in default or for any sum which LESSOR may expend or may be required to expend
by reason of LESSEE’s default in respect of any of the terms, covenants and conditions of this Lease, including, but not limited to, any damages or deficiency in the reletting of the Premises, whether such damages or deficiency accrued before
or after summary proceedings or other reentry by LESSOR. In the event that LESSEE shall fully and faithfully comply with all the terms, provisions, covenants and conditions of this Lease, the security shall be returned to LESSEE without interest,
after the expiration of the Lease and after delivery of entire possession of the Premises to LESSOR.
			
	SUB-ORDINATION	  	29.	  	The LESSEE agrees that this Lease shall remain subject to and subordinate to all present and future mortgages

  

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	 	  	 	  	affecting the Premises of which the leased Premises are a part, and the LESSEE shall promptly execute and deliver to the LESSOR such certificate or certificates in writing as the LESSOR may
request, showing the subordination of this Lease to such mortgage or mortgages and in default of the LESSEE’s so doing, the LESSOR shall be and is hereby authorized and empowered to execute such certificate in the name of and as the act and
deed of the LESSEE, this authority being hereby declared to be coupled with an interest and to be irrevocable. Such subordination shall be subject to the nondisturbance of LESSEE if LESSEE is not in breach of the Lease.
			
	 LESSEE’S
 ESTOPPEL
	  	30.	  	LESSEE shall from time to time, upon not less than 10 days’ prior written request by LESSOR, execute, acknowledge and deliver to LESSOR a written statement certifying that this Lease is
unmodified and in full force and effect (or that the same is in full force and effect as modified, listing the instruments of modification), the dates to which the rent and other charges have been paid and whether or not to the best of LESSEE’s
knowledge LESSOR is in default hereunder (and if so, specifying the nature of the default), it being intended that any such statement delivered pursuant to this paragraph of LESSOR’s interest or mortgagee of LESSOR’s interest or assignee
of any mortgage upon LESSOR’s interest in the building.
			
	 EXCULPATION
 CLAUSE
	  	31.	  	Notwithstanding anything to the contrary provided in this Lease or by law, it is specifically agreed and understood between the parties that there shall be absolutely no personal liability on
the part of the LESSOR’s partners, their respective heirs, executors, administrators, or personal representatives with respect to any of the covenants and conditions of this Lease, and LESSEE or any other party claiming by, through or under;
the LESSEE shall look solely to the interests of the LESSOR for the collection of any claim, demand, cost, expense, judgment or other judicial process requiring the payment of money for any default or breach by LESSOR of any of its obligations under
this Lease. No other assets of LESSOR or its general partners shall be subject to levy, execution or other judicial process for the satisfaction of any claim of LESSEE.

  

 17 

					
	ENVIRONMENTAL MATTERS	  	32.	  	 Environmental Compliance. LESSEE and its agents and employees shall use the Premises and conduct any operations thereon in compliance
with all applicable federal, state, and local environmental statutes, regulations, ordinances and any permits, approvals or judicial or administrative orders issued thereunder. Any hazardous substance(s) generated in the normal course of
LESSEE’s business shall be stored and disposed of in compliance with all applicable federal, state, and local environmental statutes, regulations, ordinances and any permits, approvals or judicial or administrative orders issued
thereunder.
  
 Environmental Hazards. LESSEE covenants
that:
  
 (a)     Except in accordance with the first
paragraph of this Section 32, no hazardous substances shall be disposed of, or otherwise deposited in or located on the Premises or the Project, including without limitation, the surface and subsurface waters of the Premises or the
Project;
  
 (b)    No activity shall be undertaken on
the Premises or the Project which would cause:
  
 (1)    the Premises or the Project to become a hazardous waste treatment, storage or disposal facility within the meaning of, or otherwise cause the Premises or the Project to be in violation of the Resource
Conservation and Recovery Act of 1976 (“RCRA”), 42 U.S.C. Section 6901 et seq,. or any similar state law or local ordinance;
  
 (2)    a release or threatened release from any source on the Premises or the Project of Hazardous Substances from the
Premises within the meaning of, or otherwise cause the Premises or the Project to be in violation of, the Comprehensive Environmental Response Compensation and Liability Act, as amended (“CERCLA”), 42 U.S.C. Section 9601 et
seq., or any similar law or local ordinance or any other environmental law; or

  

 18 

					
	 	  	 	  	 (3)    the discharge of pollutants or effluents into any water source or system, or the discharge into
the air of any pollution emissions, which would require a permit under the Federal Water Pollution Control Act (“FWPCA”), 33 U.S.C. Section 1251 et seq., or the Clean Air Act (“CAA”), 42 U.S.C. Section 7401
et seq., or any similar state law or local ordinance;
  
 (c)    There shall be no substances or conditions in or on the Premises or the Project which may support a claim or cause of action under RCRA, CERCLA, any other federal, state or local environmental statutes,
regulations, ordinances or other environmental regulatory requirements or under any common law claim relating to environmental matters, or could result in recovery by any governmental or private party or remedial or removal costs, natural resources
damages, property damages, damages in personal injuries or other costs, expenses or damages, or could result in injunctive relief arising from any alleged injury or threat of injury to health, safety, or the environment; and
  
 (d)    Except in accordance with the first
paragaraph of this Section 32, there shall be no storage tanks or release or threatened releases from such tanks located on the Premises or the Project.
  
 For purposes of this Lease, “Hazardous Substances” shall mean any and all hazardous or toxic substances, hazardous constituents, contaminants, wastes,
pollutants or petroleum (including without limitation crude oil or any fraction thereof), including without limitation hazardous or toxic substances, pollutants and/or contaminants as such terms are defined in CERCLA or RCRA; asbestos or material
containing asbestos; and PCBs, PCB articles, PCB containers PCB N277.

			
	NOTICES	  	33.	  	All notices herein authorized or required to be given to the LESSOR shall be sent by Registered or Certified Mail addressed to EWE, Inc, Cumberland Centre, 2685-B Pelham Parkway, Pelham, Alabama
35124, or to such

  

 19 

					
	 	  	 	  	other place as the LESSOR may from time to time designate in writing to LESSEE. All notices herein authorized or required to be given to the LESSEE shall be addressed to the LESSEE to the
attention of Steven P. Damon, Durect Corporation, 10240 Bubb Road, Cupertino, CA 95014. Notwithstanding, written notice from the LESSOR, mailed or delivered to the Premises leased hereunder, after delivery of the Premises hereunder to LESSEE, shall
also constitute sufficient notice to LESSEE to comply with the terms of this Agreement.
			
	 TERMINATION OF
 PRIOR LEASE;
 ENTIRE WRITTEN
 AGREEMENT
	  	34.	  	 The Commercial Real Estate Lease Agreement entered into by and between LESSOR and Absorbable Polymer Technologies, Inc. commencing the 1st day of
March 2003 is hereby terminated effective upon the commencement of this Lease under Section 3. This Lease contains the entire agreement between the parties hereto and all previous negotiations leading thereto and it may be modified only by an
agreement in writing, signed and sealed by LESSOR and LESSEE. No surrender of the Premises or of the remainder of the term under this Lease shall be valid unless accepted by LESSOR in writing.
  
 This Agreement and all covenants, obligations and conditions hereof shall inure to the
benefit of and shall be binding upon LESSOR, and LESSOR’s successors and assigns. This Agreement and all its covenants, obligations and conditions hereof also shall inure to the benefit of and be binding upon LESSEE and LESSEE’s heirs,
executors, administrators, successors and assigns.

  

 20 

					
	LAW	  	35.	  	This agreement shall be governed by the laws of the State of Alabama.
			
	 IN WITNESS
 WHEREOF,
	  	 	  	LESSOR and LESSEE have hereunto set or caused to be set their respective signatures and seals on this, the day and year first above written.

  

					
	 	 	LESSOR:
		
	 	 	EWE, INC.
			
	 	 	By:	 	 /s/

	 	 	Its:	 	Vice President
		
	WITNESS:	 	LESSEE:
		
	 /s/

	 	DURECT CORPORATION
	Jean I Liu	 	 	 	 
	Print Name:	 	By:	 	 /s/

	 	 	Its:	 	CFO

  

 21 

 RULES AND REGULATIONS 
  

	1.	Sidewalks, entries, passages, courts, corridors stairways, etc. shall not be obstructed by LESSEE or its clerks or used by them for other purposes than ingress and egress.

  

	2.	All safes or other heavy articles shall be carried up or into the Premises only at such times and in such manner as shall be prescribed by LESSOR, and LESSOR shall in all
cases have the right to specify the proper weight and position of any such safe or other heavy article. Any damage done to the building by installing or removing any safe or from overloading any floor in any way shall be paid by the LESSEE. Any
repairs or restoration necessitated by defacing or injuring in any way part of the building by LESSEE, its agent(s) or servant(s) shall be paid by LESSEE. 

  

	3.	No sign, advertisement or notice may be inscribed, printed or affixed on any part of the inside or outside of said building unless of such color, size and style and in such place in
or upon said building as shall be designated under prior approval therefor by LESSOR, but there shall be no obligation or duty on LESSOR to allow any sign, advertisement or notice to be inscribed, painted, or affixed on any part of the inside or
outside of said building. No signs on the inside or outside of the building may be altered in any way by LESSEE. Signs on doors will be made for LESSEE by a manufacturer selected by the LESSOR, the cost of said sign paid by the LESSEE.

  

	4.	No LESSEE shall do or permit anything to be done in the said Premises or bring or keep anything therein which will in any way increase the rate of fire insurance on said building or
on property kept therein or obstruct or interfere with the rights of other LESSEEs or in any way injure or annoy them or conflict with the laws relating to fire or with any regulation of the Fire Department or with any insurance policy upon said
building or any part thereof. 

  

	5.	No additional lock, hooks, or attachments shall be placed on any door or window of the building. 

  

	6.	No animals or birds, bicycles, or other vehicles shall be allowed in halls, corridors, elevators. or elsewhere in the building. 

  

	7.	The water closets, wash basins, sinks, and other apparatus shall not be used for any purpose than those for which they are constructed, and no sweepings, rubbish, or other substance
shall be thrown therein nor shall anything be thrown by the tenants, their agents or employees out of the windows, doors, or other openings. 

	8.	The floors, skylights and windows that reflect or admit light into the corridors or passageways or to any place in said building shall not be covered or obstructed by any of the
tenants. 

  

	9.	All tenants and occupants must take care not to leave their windows open when it rains, hails, sleets or snows or in high winds, and for any fault or carelessness in these
respects or any of them, shall make good all injuries or damages sustained by other tenants and to the owner resulting from such default or carelessness. 

  

	10.	If any LESSEE desires telephone, telephonic, or other electronic connections. the LESSOR or its agents will direct the electricians as to where and how the wires may be
introduced and without such directions, no boring or cutting for wires will be permitted. 

  

	11.	No shade or awning shall he put up, no painting done, or any alterations made in any part of the building by putting up or changing any partitions, doors, or windows, nor shall
there be any nailing, boring, screwing into woodwork, walls, or plastering, except for reasonable hanging of pictures, and clocks, nor shall there be any engine, boiler, or other machinery on the Premises without the prior written consent of the
LESSOR in each and every instance. 

  

	12.	LESSEE, its employees, clerks or servants shall not use the Premises for the purpose of lodging rooms or for any immoral or unlawful purposes. 

  

	13.	No room or rooms shall be occupied or used for sleeping or lodging apartments or for any other purpose than the purpose for which same is leased at any time.

  

	14.	No tenant shall permit gambling or unlawful practice or practices of any kind in the leased Premises. 

  

	15.	The LESSOR or any agents or watchmen shall have the right with a passkey or otherwise, to enter any Premises in the building at any time to examine the same or to make such
alterations, repairs, or additions as it shall deem necessary for the safety, preservation, cleanliness or improvement of the building. 

  

	16.	All glass. locks and trimmings in or about the doors and windows and all electric globes and shades, belonging to the building, shall be kept whole, and whenever broken by any
LESSEE, shall be immediately replaced or repaired and put in order by such LESSEE under the direction and to the satisfaction of the LESSOR, and on removal, shall be left whole and in good repair. 

	17.	LESSOR reserves the right to make and enforce such other reasonable rules and regulations as, in its judgment, may be deemed necessary or advisable from time to time to promote the
safety, care, and cleanliness of the Premises and for the preservation of good order therein, so long as such rules and regulations are uniformly enforced. 

  

			
	 Understood and Accepted by LESSEE:
	 	Date:

 Exhibit A 
 Sketches of the PremisesEmployment Agreement

 Exhibit 10.1 
  
 November 1, 2004 
  
 Mr. David C. Peterschmidt 
 c/o Openwave Systems Inc. 
 1400 Seaport Boulevard 
 Redwood City, CA 94063 
  
 Dear Dave: 
  
 On behalf of Openwave Systems, Inc. (the “Company”), we are pleased to confirm to you in writing that the Board of Directors has
unanimously approved the offer that we previously discussed with you to serve as the Company’s President and Chief Executive Officer. The terms of the offer are set forth below, as supplemented by the employment terms set forth in the
Company’s standard forms of Change of Control Severance Agreement (“Change of Control Agreement”), Confidentiality and Invention Assignment Agreement (“Confidentiality Agreement”), and Indemnification Agreement
(“Indemnification Agreement”), copies of which are attached hereto and are referred to herein as the “Executive Offer Documents”. The terms set forth below are effective as of November 2, 2004 (“Effective Date”), except
as otherwise set forth below. 
  
 1. Title and Cash Compensation. 
  
 You will serve as the President and Chief Executive Officer of the Company and possess the
duties, responsibilities and authority customary for such position. You will report to the Company’s Board of Directors (“Board”). Effective November 2, 2004, your monthly base salary will be $41,666.66 per month or $500,000 on an
annualized basis. In addition, you will receive a bonus in an amount equal to two months of your base salary, payable promptly after eight months of your employment with the Company. 
  
 Commencing January 1, 2005, you shall be eligible for a semi-annual incentive cash award from the Company under the Company’s Corporate
Incentive Plan for Executives (“CIP”), based upon a target for each semi-annual period which shall be fifty percent (50%) of your annual base salary (i.e., $250,000 based upon your initial base salary). Your actual annual incentive
cash award may be below, at, or above target (up to a maximum of 150% of your annual base salary) and shall be determined based upon a combination of (a) the Company’s achievement level against financial and performance objectives and (b) an
individual modifier component based upon your individual performance as determined by the Compensation Committee. The terms of the CIP, including the financial and performance objectives for the Company, shall be established by the Compensation
Committee in consultation with the full Board. For the first six full months during which you participate in the CIP, your target bonus will be guaranteed, and you shall receive $125,000 promptly after the Effective Date and an additional $125,000
on or prior to May 2, 2005, provided that in both cases you continue to serve continuously as the Company’s Chief Executive Officer from the Effective Date until the date on which you are entitled to receive the payment. If based on the
achievement of the selected performance criteria you would be entitled to receive an amount greater than the guaranteed bonus, you shall be entitled to receive the excess amount above the guaranteed payments, at the time period specified for
payments under the CIP. 
  
 2. Equity Awards. 
  
 On the Effective date, the Compensation Committee will grant to you (a) an option to
purchase five hundred thousand (500,000) shares of Company common stock (the “Option”) and (b) a restricted stock award of two hundred fifty thousand (250,000) shares of Company common stock (the “Restricted Stock Award”). The
Option shall have an exercise price equal to the fair market value of the Company common stock on the date of grant and shall vest over a four year period, with twenty five percent (25%) of the shares subject to the Option vesting on the first
anniversary of the Effective Date, and an additional one forty-eighth (1/48th) of the shares subject to the Option
vesting each month thereafter on the first day of such subsequent month. The Restricted Stock Award shall vest over four years in four equal installments of 62,500 shares each on the first four anniversaries of the Effective Date. All vesting for
the Option and the Restricted Stock Award shall be contingent upon your continued employment with the Company on the applicable vesting date. Except as otherwise expressly set forth in this letter agreement, the Option and the Restricted Stock Award
will be granted under and subject to the terms of the Company’s standard form of non-qualified stock option agreement and restricted stock award agreement. 

 You should be aware that you will incur federal and state income taxes as a result of your receipt or the vesting of the
Restricted Stock Award, with the timing of such income contingent upon whether you timely make an election under Section 83(b) of the Internal Revenue Code of 1986, as amended (an “83(b) election”). It is entirely your choice whether you
make an 83(b) election and you should consult with your own tax and financial advisors in that regard. The Company will not provide you with any assistance in paying your taxes on the Restricted Stock Award, regardless of whether or not you make an
83(b) election. 
  
 In addition, if you are terminated by the Company without
Cause (as defined in Exhibit A) (a) the next sixty two thousand five hundred (62,500) shares under the Restricted Stock Award due to vest within the next twelve (12) months, if any such shares remain unvested, shall accelerate and vest upon
termination of your employment, subject to your execution of an effective release of claims in the form set forth at Exhibit B. 
  
 3. Other Benefits. 
  
 If your employment is terminated by the Company without Cause (as defined in Exhibit A), provided that you sign an effective release of claims substantially in the form set forth at Exhibit B (with the
final terms and conditions of the form as reasonably determined by the Company) and confirm in writing your agreement to be bound by the non-compete terms set forth at Exhibit C and the terms of the Confidentiality Agreement, with such
reasonable changes to the non-compete terms as the Company may require to revise the list of competitors but without increasing the number of competitors, and to otherwise update the non-compete terms as appropriate at the date of such confirmation,
you will receive, in lieu of any cash severance based upon your base salary or target incentive cash bonus payable under the Executive Severance Benefit Policy, the following benefits: (1) twelve (12) months’ base salary based upon rates then
in effect for you and paid over the next year in equal installments in accordance with the Company’s regular payroll periods, (2) your annual target incentive cash award based upon the target annual bonus then in effect for you and paid over
the next year in equal installments in accordance with the Company’s regular payroll periods, and (3) full payment by the Company of your COBRA premiums for health care coverage for you and your covered spouse and dependents for a period not to
exceed twelve months. In the event that your employment is terminated by the Company at a time that would entitle you to benefits under the Change of Control Agreement, your benefits under that agreement shall be reduced by the benefits you receive
hereunder, as described in further detail in your Change of Control Agreement. 
  
 As an employee, you also will continue to be eligible to receive our standard employee benefits except to the extent that this letter agreement provides you with more valuable benefits than the Company’s standard policies. 

 
 4. Additional Terms. 
  
 You should be aware that your employment with the Company is for no specified period and constitutes “at will” employment. As a
result, you are free to resign at any time, for any reason or for no reason. Similarly, the Company is free to conclude its employment relationship with you at any time, with or without cause, subject to the severance obligations under or referred
to in this letter. 
  
 The terms of this offer letter may only be changed by
written agreement, although the Company may from time to time, in its sole discretion, adjust the salaries and benefits paid to you and its other employees. This offer letter will be governed by the internal laws of the State of California.

 Please review the terms of this letter and the Executive Offer Documents to make sure they are consistent with your
understanding. Should you have any questions with regard to any of the items indicated above or the terms of the Executive Offer Documents, please contact Susan Gonzalez, the Company’s Vice President of Human Resources. Kindly indicate your
agreement with the terms contained in this offer letter and the Executive Offer Documents by signing and returning the original signed offer letter and the Executive Offer Documents as appropriate so that they are received by Ms. Gonzalez no later
than November 2, 2004. 
  

					
			
	 /S/ BERNARD PUCKETT
	 	  	 	  
	 Bernard Puckett
 Chairman of the Board
	 	 	 	 
			
	Agreed and Accepted:	 	 	 	 
			
	 /S/ DAVID C. PETERSCHMIDT
	 	  	 	 November 1, 2004

	 David C. Peterschmidt
	 	 	 	 Date

  
 EXHIBIT A

  
 Definitions 
  
 “Cause” shall mean (i) gross negligence or willful misconduct in the
performance of your duties to the Company; (ii) repeated unexplained or unjustified absences from the Company; (iii) a material and willful violation of any federal or state law which if made public would injure the business or reputation of the
Company as reasonably determined by the Board of Directors of the Company; (iv) refusal or willful failure to act in accordance with any specific lawful direction or order of the Board of Directors of the Company or written order or formal written
policy of the Company; (v) unsatisfactory performance after prior written notice and a reasonable opportunity to cure the unsatisfactory performance in accordance with the Company’s policies, (vi) commission of any act of fraud with respect to
the Company; (vii) conviction of a felony or a crime involving moral turpitude causing material harm to the standing and reputation of the Company, in each case as reasonably determined by the Board of Directors of the Company. 

  
 EXHIBIT B

  
 Form of Release 
  
 This general release of claims (“Release”) is being executed pursuant to the terms
set forth in that Letter Agreement relating to employment terms dated November 1, 2004, between me and the Company (the “Agreement”), which Agreement I have previously executed. Certain capitalized terms used in this Release are defined in
the Agreement. 
  
 I hereby confirm my obligations under the form
of the Company’s Confidential Information and Invention Assignment Agreement, which I have previously signed. 
  
 I, on behalf of myself and my heirs, estate, executors, administrators, successors and assigns, do hereby release, acquit and forever discharge Openwave,
its parents and subsidiaries, and their officers, directors, agents, servants, employees, shareholders, successors, assigns and affiliates, of and from any and all claims, liabilities, demands, causes of action, costs, expenses, attorneys fees,
damages, indemnities and obligations of every kind and nature, in law, equity, or otherwise, known and unknown, suspected and unsuspected, disclosed and undisclosed (other than my rights under the Agreement and any claim for indemnification I may
have as a result of any third party action against me based on my employment with the Company), arising out of or in any way related to agreements, events, acts or conduct at any time prior to and including the date I execute this Release,
including, but not limited to: all such claims and demands directly or indirectly arising out of or in any way connected with my employment with the Company or the termination of that employment, including but not limited to, claims of intentional
and negligent infliction of emotional distress, any and all tort claims for personal injury, claims or demands related to salary, bonuses, commissions, stock, stock options, or any other ownership interests in the Company, vacation pay, fringe
benefits, expense reimbursements, severance pay, or any other form of compensation; claims pursuant to any federal, state or local law or cause of action including, but not limited to, the federal Civil Rights Act of 1964, the federal Age
Discrimination in Employment Act of 1967 (“ADEA”), the federal Employee Retirement Income Security Act of 1974, the federal Rehabilitation Act of 1973, the federal Americans with Disabilities Act of 1990, the federal Fair Labor Standards
Act, the federal Family Medical Leave Act, the California Fair Employment and Housing Act, and any amendments to the foregoing laws; tort law; contract law; wrongful discharge; discrimination; fraud; defamation; emotional distress; and breach of the
implied covenant of good faith and fair dealing; provided, however, that nothing in this paragraph shall be construed in any way to release the Company from its obligation to indemnify me pursuant to the Company’s indemnification
obligation pursuant to agreement, its bylaws or applicable law. 
  
 I agree that the claims released pursuant to this Release include all claims against individual employees of Openwave, whether or not such employees were acting within the scope of their employment. 
  
 I acknowledge that I have read and understand Section 1542 of the California
Civil Code which reads as follows: 
 “A general release does not extend to claims which the creditor does not know or suspect to exist in his favor
at the time of executing the release, which if known by him must have materially affected his settlement with the debtor.” I hereby expressly waive and relinquish all rights and benefits under that section and any law of any jurisdiction of
similar effect with respect to my release of any claims I may have against the Company. 
  
 At Openwave’s request, I agree to cooperate fully in connection with any legal matter, proceeding or action relating to Openwave. 

 I acknowledge that I am knowingly and voluntarily waiving and releasing any rights I may have under ADEA.
I also acknowledge that the consideration given under the Agreement for the waiver and release in the preceding paragraph hereof is in addition to anything of value to which I was already entitled. I further acknowledge that I have been advised by
this writing, as required by the ADEA, that: (A) my waiver and release do not apply to any rights or claims that may arise on or after the date I execute this Release; (B) I have the right to consult with an attorney prior to executing this Release;
(C) I have twenty-one (21) days to consider this Release (although I may choose to voluntarily execute this Release earlier); (D) I have seven (7) days following my execution of this Release to revoke the Release; and (E) this Release shall not be
effective until the date upon which the revocation period has expired, which shall be the eighth (8th) day after I
execute this Release. 
  

			
	EXECUTIVE
	
	 
	 David C. Peterschmidt

		
	 Date:
	 	 

  
 EXHIBIT C

  
 Non-Compete Terms 
  
 Reference is made to that certain letter agreement relating to employment terms between you
and the Company, dated             , 2004 (the “Employment Agreement”). If your employment is terminated without cause as more fully described in the Employment Agreement,
the Company has agreed to provide you with certain payments and benefits to which you would not otherwise be entitled. As a necessary condition to your entitlement to such payments, you have agreed not to compete with the Company as more fully
described below. Should you violate the terms set forth below, the Company shall not be required to make any future payments to you under the severance provisions of the Employment Agreement or otherwise and shall be entitled to recover prior
payments made to you under such provisions. 
  
 In your role as President and
Chief Executive Officer of the Company, you acknowledge that you have acquired knowledge of sensitive and confidential information relating to product development road maps, marketing plans, competitive plans and pricing strategies, trade secrets
and other confidential information of the Company (the “Confidential Information”). Were you to directly or indirectly be engaged in any business in direct competition with the Company or its subsidiaries, you acknowledge that Confidential
Information could readily be used by you and provide the competing business with a significant competitive advantage against the Company. 
  
 Therefore, you agree that during your employment with the Company and for a period ending twelve (12) months from the termination of your employment with the Company, you
will not, without the written consent of the Company, whether as an individual, proprietor, partner, stockholder, officer, employee, director, consultant, joint venturer, investor, lender, or in any other capacity whatsoever, in all cities,
counties, states, and countries worldwide, in which the business of the Company or its affiliates is then being conducted or its products are being sold: 
  
 engage in any business role (at or with 7/24 Solutions, Access Japan, Comverse, Logica CMG, Ericsson, Hewlett Packard, Microsoft, Nortel, Nokia, Opera
Software ASA, Siemens, Symbian or Qualcomm (or any of their subsidiaries or affiliates controlled by or under common control with the respective entity)) with a business, division, or product group that is in Competition with the existing business
of the Company or its subsidiaries 
  
 A business, division, or product group
shall be deemed to be in “Competition” with the Company or its subsidiaries if it is engaged in or has taken concrete steps toward engaging in the business of providing (A) software or systems that enable Internet connectivity, or enables
or provides data services, on mobile devices (such as messaging and location or location related services) to communication service providers or enterprise customers, whether the software is located on the server or the client (e.g., mobile device),
or (B) messaging software to communication service providers, Internet service providers or enterprise customers, either as carried on or being developed by the Company or its affiliates as of the date of your termination. 
  
 Notwithstanding the foregoing, you may own, directly or indirectly, solely as a passive
investment, securities of any entity traded on any national securities exchange or automated quotation system if you are not a controlling person of, or a member of a group which controls such entity, and you do not, directly or indirectly,
“beneficially own” (as defined in Rule 13d-3 of the Securities Exchange Act of 1934, as amended, without regard to the sixty (60) day period referred to in Rule 13d-3(d)(1)(i)) one percent (1.0%) or more of any class of securities of such
entity. The Company understands that you expect to serve as a member of the board of directors of certain other companies and agrees not to unreasonably withhold consent for you to serve in such capacities either during or after your employment with
the Company. 
  
 You acknowledge that the Company may be irreparably harmed if you
if you default in your obligations under this Exhibit C and that it would be extremely impracticable to measure the resulting damages. Accordingly, the Company, in addition to any other available rights or remedies, may sue in equity for
specific performance to enforce its rights under this Exhibit C, and you expressly waive the defense that a remedy in damages will be adequate for such a default. 

 The parties intend that the covenants and agreements contained in this Exhibit C and the Employment Agreement
shall be deemed to be a series of separate covenants and agreements. If, in any judicial proceeding, a court shall refuse to enforce all of the separate covenants deemed included in this Exhibit C and the Employment Agreement, then such
unenforceable covenants shall be deemed eliminated from the provisions of this Agreement for the purpose of such proceeding to the extent necessary to permit the remaining separate covenants to be enforced in such proceeding. If any one or more of
the covenants contained in this Agreement is for any reason held to be excessively broad as to duration, geographical scope, activity or subject, the parties request that the applicable court construe it by limiting and reducing it, so as to be
enforceable to the extent compatible with the applicable law as then in effect.

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