Document:

EX-10.9

 Exhibit 10.9 

[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been
requested with respect to the omitted portions. 
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NOVAN PATENT AND KNOW-HOW LICENSE AGREEMENT 

THIS NOVAN PATENT AND KNOW-HOW LICENSE AGREEMENT (this “Agreement”) is made as of December 29, 2015 (the “Effective
Date”) by and between Novan, Inc., a Delaware corporation with a principal place of business at 4222 Emperor Boulevard, Suite 200, Durham, NC 27703 (“Novan”), and KNOW Bio, LLC, a North Carolina limited
liability company with a principal place of business at 627 Davis Drive, Suite 400, Morrisville, NC 27560 (“Licensee”). Novan and Licensee may each be referred to as a “Party,” and together as the
“Parties.” 
 RECITALS 

WHEREAS, as of the Effective Date, Licensee is a wholly-owned subsidiary of Novan; 

WHEREAS, following the Effective Date, Novan is transferring all of the ownership interests in Licensee to the stockholders of Novan on
a pro rata basis, and Novan will no longer have any ownership interest in Licensee; 
 WHEREAS, Novan owns certain Patents and
Know-How related to pharmaceutical and medical device applications of nitric oxide, and Licensee is interested in further developing and commercializing such Patents and Know-How in the Licensee Field (each as defined below); 

WHEREAS, contemporaneously with this Agreement, Novan and Licensee are, among other things, entering into three separate license
agreements, under which Novan is granting to Licensee a license under certain other Patents owned by Novan and sublicenses under certain Patents licensed by Novan from third parties, in each case in the Licensee Field; and 

WHEREAS, subject to the terms and conditions set forth in this Agreement, Novan is willing to grant to Licensee a license under the
Novan Patents and to Novan Know-How to further develop and commercialize, on a worldwide basis, Licensed Products (each as defined below) in the Licensee Field. 

NOW, THEREFORE, for good and valuable consideration, receipt of which is hereby acknowledged, the Parties agree as follows: 

AGREEMENT 
 1.
DEFINITIONS. Capitalized terms shall have the meanings ascribed to them below or in this Agreement. 
 1.1
“Affiliate” means, with respect to a Party, any Person directly or indirectly controlling, controlled by, or under common control with, such Party. For purposes of this definition only, the term “controlled” (including
the terms “controlled by” and “under common control with”) as used in this context, means the direct or indirect ability or power to direct or 

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cause the direction of management policies of a Person or otherwise direct the affairs of such Person, whether through ownership of equity, voting securities, beneficial interest, by contract or
otherwise. For clarity, Novan and Licensee shall not be deemed Affiliates. In addition, Affiliate shall not include any Acquirer of a Party or of any of its Affiliates, where “Acquirer” means, with respect to a Party or its
Affiliate, any Third Party that, directly or indirectly, comes to control such Party or such Affiliate, or any Third Party which acquires such Party or such Affiliate, whether by merger or otherwise. 

1.2 “Confidential Information” means information disclosed (whether in writing, electronically, orally or by
observation) by one Party (the “Disclosing Party”) to the other Party (the “Receiving Party”) unless in each case such information, as shown by competent evidence: 

(a) was known to the Receiving Party or to the general public prior to the Disclosing Party’s disclosure, as
demonstrated by contemporaneous written records; 
 (b) became known to the general public, after the Disclosing
Party’s disclosure hereunder, other than through a breach of the confidentiality provisions of this Agreement by the Receiving Party or any Person to whom such Receiving Party disclosed such information; 

(c) was subsequently disclosed to the Receiving Party by a Person having a legal right to disclose, without any
restrictions, such information; or 
 (d) was developed by the Receiving Party independent of the Disclosing
Party’s Confidential Information. 
 For clarity, the Novan Know-How constitutes Confidential Information of Novan, and the Licensee New Nitric Oxide
Know-How and New Device IP constitutes Confidential Information of Licensee. 
 1.3 “Control” means, with respect to
any Know-How or Patents, that a Party or any of its Affiliates owns such Know-How or Patents and has the ability to grant to the other Party access and a license to the foregoing, including on the terms and conditions set forth in this Agreement, as
applicable, without violating the terms of any agreement or other arrangement with any Third Party. The term “Controlled” shall be construed accordingly. 

1.4 “Know-How” means any data, results, technology, business information, technical information and other information
of any type whatsoever, in any tangible or intangible form, including, without limitation, know-how, intellectual property, practices, techniques, analytical methods and other methods, processes, inventions, developments, development reports,
specifications, formulations, formulae, materials or compositions of matter of any type or kind (patentable or otherwise), software, algorithms, marketing reports, expertise, technology, test data (including pharmacological, biological, chemical,
biochemical, toxicological, preclinical and clinical test data), analytical and quality control data, stability data, other study data and procedures, case report forms, data analyses, and information contained in submissions to and information from
ethical committees and regulatory authorities. Know-How includes any rights, including trade secrets, copyright, database rights or design rights, protecting such Know-How. 

  

					
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 1.5 “Licensed Product” means any pharmaceutical products and medical
devices covered by any claim of the Novan Patents or developed utilizing any Novan Know-How, other than any products or devices that incorporate or utilize Novan Particles. For clarity, the products existing as of the Effective Date with the
internal Novan designations NVN1000 and NVN4000 are not Licensed Products. 
 1.6 “Licensee Field” means all
diagnostic, therapeutic, prophylactic and palliative uses for any disease, condition or indication in humans or animals that is outside of the Novan Retained Field. 

1.7 “Licensee New Nitric Oxide Know-How” means, to the extent Controlled by Licensee or any of its Affiliates, any New
Nitric Oxide Know-How that is not New Device IP. 
 1.8 “Licensee New Nitric Oxide Patents” means, to the extent
Controlled by Licensee or any of its Affiliates, any New Nitric Oxide Patents that are not New Device IP. 
 1.9 “New
Device IP” means, to the extent Controlled by Licensee or any of its Affiliates: (a) any Patents that disclose an invention comprising a medical device, and/or a combination of a pharmaceutical product and a medical device, conceived
by Licensee or any of its Affiliates during the New Nitric Oxide Period; and (b) any Know-How that (i) comes to be Controlled by Licensee or any of its Affiliates during the New Nitric Oxide Period and (ii) is necessary for the
practice of such Patents or otherwise directly relates to a medical device, and/or a combination of a pharmaceutical product and a medical device; but [***]. 

1.10 “New Nitric Oxide Know-How” means any Know-How that (i) comes to be Controlled by a Party or any of its
Affiliates during the New Nitric Oxide Period and (ii) is necessary or useful for the practice of New Nitric Oxide Patents Controlled by such Party or otherwise relates to any nitric oxide-releasing chemistries, materials, formulations,
products or devices, or any method of manufacture or use thereof; but [***]. 
 1.11 “New Nitric Oxide Patents”
means any Patents Controlled by a Party or any of its Affiliates that (i) disclose an invention conceived by such Party or any of its Affiliates during the New Nitric Oxide Period and (ii) include claims to any nitric oxide-releasing
chemistries, materials, formulations, products or devices, or any method of manufacture or use thereof; but [***].  
 1.12
“New Nitric Oxide Period” means the period beginning on the Effective Date and ending on the third anniversary of the Effective Date.  

  

					
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 1.13 “Novan Know-How” means, to the extent Controlled by Novan or any
of its Affiliates: (a) all Know-How existing as of the Effective Date that is related to the Novan Patents or the Separately-Licensed Patents; and (b) any New Nitric Oxide Know-How. For clarity, Novan Know-How as of the Effective Date includes
all such Know-How generated as part of Novan’s wound care development program, and includes all data from all Novan development and testing utilizing a wound model or relevant to the Licensee Field, in each case prior to the Effective Date.
Notwithstanding the foregoing, Novan Know-How does not include the Wound Care Device Data or any Know-How that specifically relates to any products or devices that incorporate or utilize Novan Particles (including the products existing as of the
Effective Date with the internal Novan designations NVN1000 and NVN4000) or any method of manufacture or use thereof. 
 1.14
“Novan Particles” means any particles that include: (a) [***]; (b) [***]; (c) [***]; or (d) [***]. 

1.15 “Novan Patents” means, to the extent Controlled by Novan or any of its Affiliates: (a) the Patents set forth
in Appendix A, and any Patents claiming priority from those Patents; and (b) any New Nitric Oxide Patents. Notwithstanding the foregoing, the Novan Patents do not include any claims within such Patents that are directed to any products
or devices that incorporate or utilize Novan Particles (including the products existing as of the Effective Date with the internal Novan designations NVN1000 and NVN4000) or any method of manufacture or use thereof. 

1.16 “Novan Retained Field” means: (a) all diagnostic, therapeutic, prophylactic and palliative uses for any
disease, condition or disorder of the skin, nails, hair or scalp in humans or animals, including [***], as well as any other dermatological diseases, conditions or disorders (including [***]); and (b) all cosmetic uses for the skin, nails, hair
or scalp. Notwithstanding the foregoing, the Novan Retained Field does not include: (i) wound (i.e., [***]) care by use of pharmaceutical products formulated specifically to treat chronic wounds, thermal burns, radiation injury,
accidental injury, surgical sites or scars; or (ii) therapeutic uses for any form of cancer, excluding basal cell carcinoma, squamous cell carcinoma and any forms of precancerous skin lesions or precancerous skin conditions, including actinic
keratosis, actinic cheilitis, cutaneous horn, Bowen disease, radiation dermatosis, and dysplastic nevi. 

  

					
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 1.17 “Patents” means any of the following, whether existing now or in
the future anywhere in the world: (a) patents and patent applications; (b) continuations, continuations-in-part, provisionals, divisionals and substitute applications with respect to any such patent application; (c) any patents issued
based on or claiming priority to any such patent applications; (d) any reissue, reexamination, renewal, patents of addition, or extension (including any supplemental patent certificate) of any such patents; and (e) any confirmation patent
or registration patent or patent of addition based on any such patents. 
 1.18 “Person” means a natural person, a
corporation, a partnership, a trust, a joint venture, a limited liability company, any governmental authority, or any other entity or organization. 

1.19 “Post Grant Proceeding” means any and all proceedings before any patent office in the Territory that involves the
review, examination, analysis or any combination thereof of any issued Patent, including without limitation post grant review proceedings, inter partes review proceedings, supplemental examinations, patent interference proceedings, opposition
proceedings, and reexaminations. 
 1.20 “Prosecute” and “Prosecution” means the
preparation, filing, prosecution and maintenance of Patents, including seeking patent extensions and supplementary protection certificate applications pursuant to 35 U.S.C. § 156 or similar statutes, but excluding Post Grant Proceedings.

 1.21 “PTO” means, as applicable, the United States Patent and Trademark Office or any other relevant patent
office in any country of the Territory other than the United States. 
 1.22 “Separately-Licensed Patents”
means, to the extent Controlled by Novan: (a) the Patents in Appendix B; (b) any other Patents licensed by UNC to Novan under the UNC Agreement after the Effective Date (“Additional UNC Patents”); and (c) any
Patents claiming priority from the foregoing Patents. The Parties will promptly update Appendix C in writing to reflect any additional Patents that become licensed by UNC to Novan under the UNC Agreement after the Effective Date. 

1.23 “Territory” means all countries of the world, or worldwide. 

1.24 “Third Party” means any entity other than Licensee or Novan or an Affiliate of Novan or Licensee. 

1.25 “UNC Agreement” means the Amended, Restated and Consolidated License Agreement dated June 27, 2012 between
Novan and The University of North Carolina at Chapel Hill (“UNC”), as in effect from time to time. 
 1.26
“Wound Care Device Data” means all data assigned by Novan to Licensee pursuant to that certain assignment and assumption agreement of even date herewith, under which Novan assigned to Licensee certain data solely related to the
medical device that was under development by Novan for wound care prior to the Effective Date. 

  

					
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 2. LICENSE GRANTS 

2.1 Exclusive License under Novan Patents. Subject to the terms and conditions of this Agreement, Novan agrees to grant and hereby
grants to Licensee a fully-paid, royalty-free, exclusive (even as to Novan and its Affiliates), sublicensable (through multiple tiers), license in the Territory, under the Novan Patents, to develop, make, have made, use, sell, offer for sale, import
and export Licensed Products in the Licensee Field. 
 2.2 Non-Exclusive License to Novan Know-How. Subject to the terms and
conditions of this Agreement, Novan agrees to grant and hereby grants to Licensee a fully-paid, royalty-free, non-exclusive, sublicensable (through multiple tiers), license in the Territory, to the Novan Know-How, to develop, make, have made, use,
sell, offer for sale, import and export Licensed Products in the Licensee Field. 
 2.3 Exclusive License under Licensee New Nitric Oxide
Patents. Subject to the terms and conditions of this Agreement, Licensee agrees to grant and hereby grants to Novan a fully-paid, royalty-free, exclusive (even as to Licensee and its Affiliates), sublicensable (through multiple tiers), license
in the Territory, under the Licensee New Nitric Oxide Patents, to develop, make, have made, use, sell, offer for sale, import and export products and services in the Novan Retained Field. 

2.4 Non-Exclusive License to Licensee New Nitric Oxide Know-How. Subject to the terms and conditions of this Agreement, Licensee agrees
to grant and hereby grants to Novan a fully-paid, royalty-free, non-exclusive, sublicensable (through multiple tiers), license in the Territory, to the Licensee New Nitric Oxide Know-How, to develop, make, have made, use, sell, offer for sale,
import and export products and services in the Novan Retained Field. 
 2.5 Sublicenses. All sublicenses granted under
Section 2.1 or Section 2.2 of this Agreement must be in writing and must contain provisions that are not inconsistent with the terms and conditions of this Agreement. Licensee promptly shall provide a copy to Novan of any sublicense
entered into hereunder. Licensee shall be directly and primarily responsible and liable for any acts or omissions of its sublicensees in relation to any subject matter of this Agreement. 

2.6 Retained Rights; No Implied Licenses. Only the licenses expressly granted under this Agreement shall be of legal force and effect.
No other licenses shall be created under this Agreement by implication, estoppel or otherwise. For clarity, (i) Novan retains the exclusive rights under the Novan Patents and Novan Know-How in the Territory to develop, make, have made, use,
sell, offer to sell and import any and all products and services in the Novan Retained Field, and (ii) Licensee retains the exclusive rights under the Licensee New Nitric Oxide Patents and Licensee New Nitric Oxide Know-How in the Territory to
develop, make, have made, use, sell, offer to sell and import any and all products and services in the Licensee Field. Novan retains the right under the Novan Patents and Novan Know-How to conduct research and development related to any of the
subject matter claimed in the Novan Patents; provided that such research and development is not conducted for the purpose of commercialization of Licensed Products in the Licensee Field. Licensee retains the right under the Licensee New Nitric Oxide
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research and development related to any of the subject matter claimed in the Licensee New Nitric Oxide Patents; provided that such research and development is not conducted for the purpose of
commercialization of products and services in the Novan Retained Field. In addition, notwithstanding the foregoing, any and all licenses and other rights granted hereunder are limited by and subject to the rights and requirements of the United
States Government which arise out of its sponsorship (if any) of the research which led to the conception or reduction to practice of the inventions covered by Novan Patents or Licensee New Nitric Oxide Patents. To the extent applicable due to any
such sponsorship, the United States Government is entitled, as a right, under the provisions of 35 U.S.C. §§ 200-212 and applicable regulations of Title 37 of the Code of Federal Regulations, to a non-exclusive, nontransferable,
irrevocable, paid-up license to practice or have practiced for or on the behalf of the United States Government any of the Novan Patents or Licensee New Nitric Oxide Patents throughout the world and Licensee and Novan agree to comply and require
compliance therewith with respect to the licenses granted to each of them under this Agreement. 
 2.7 Technology Transfer. 

(a) After the Effective Date, Novan agrees to use reasonable efforts to provide promptly to Licensee a copy of all Novan
Know-How existing as of the Effective Date and requested by Licensee. 
 (b) During the New Nitric Oxide Period, Novan
shall keep Licensee informed of the status of any New Nitric Oxide Patents and New Nitric Oxide Know-How that would be licensed to Licensee under the licenses granted by Novan in this Article 2 by providing, on each [***] anniversary of the
Effective Date during the New Nitric Oxide Period (including on the [***] of the Effective Date), a copy of all such Patents filed by Novan or any of its Affiliates during the preceding [***] period, and a reasonable summary of all such Know-How.

 (c) During the New Nitric Oxide Period, Licensee shall keep Novan informed of the status of any Licensee New Nitric
Oxide Patents and Licensee New Nitric Oxide Know-How that would be licensed to Novan under the licenses granted by Licensee in this Article 2 by providing, on each [***] anniversary of the Effective Date during the New Nitric Oxide Period (including
on the [***] of the Effective Date), a copy of all such Patents filed by Licensee or any of its Affiliates during the preceding [***] period, and a reasonable summary of all such Know-How. 

2.8 Right of First Negotiation. Licensee hereby grants to Novan a right of first negotiation during the New Nitric Oxide Period, as set
forth below in this Section 2.8, with respect to New Device IP. During the New Nitric Oxide Period, if Licensee or any of its Affiliates [***] to sell, out-license or otherwise grant rights in or to any New Device IP for use in any portion or all of
the Novan Retained Field (a “ROFN Opportunity”), then Licensee will notify Novan in writing of its intent to pursue such ROFN Opportunity. At the request of Novan, Licensee will [***]  

  

					
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 [***] and available to Licensee. Within [***] ([***]) days of Novan’s receipt of the written
notice, Novan will respond to Licensee in writing regarding Novan’s interest in the ROFN Opportunity. If Novan indicates interest in pursuing the ROFN Opportunity, then the Parties will negotiate in good faith for a period of at least [***]
([***]) days to enter into a definitive agreement regarding such ROFN Opportunity. If, (i) Novan indicates no interest in the ROFN Opportunity or does not respond to Licensee’s notice of the ROFN Opportunity within such [***] ([***]) day
period, or (ii) Novan and Licensee do not enter into a definitive agreement within such [***] ([***]) day period, then Licensee will be free to pursue the ROFN Opportunity (including in the [***]) and will be deemed to have discharged its
obligations under this Section 2.8 in full with respect to such ROFN Opportunity; provided, however, that if at the end of such [***] ([***]) day period the Parties are actively negotiating the terms of a definitive agreement, then such [***]
([***]) day period may be extended to a mutually acceptable time by the Parties in writing. For clarity, nothing in this Section 2.8 shall be construed as a license or other grant of rights by Novan under any Novan Patents or Novan Know-How,
including in the Novan Retained Field. 
 2.9 Non-Compete During New Nitric Oxide Period. 

(a) Novan. During the New Nitric Oxide Period, Novan and its Affiliates shall not, directly or indirectly, manufacture
commercial quantities of, or market, sell, promote or otherwise commercialize any nitric oxide-releasing chemistries, materials, formulations, products or devices for use in the Licensee Field. 

(b) Licensee. During the New Nitric Oxide Period, Licensee and its Affiliates shall not, directly or indirectly,
manufacture commercial quantities of, or market, sell, promote or otherwise commercialize any nitric oxide-releasing chemistries, materials, formulations, products or devices for use in the Novan Retained Field. The foregoing restriction shall not
apply to the subject matter of any ROFN Opportunity with respect to which Licensee has discharged its obligations under Section 2.8. 

(c) Acquirers. For clarity, the restrictions in Section 2.9(a) and Section 2.9(b) shall not apply to any
Acquirer of either Party or of any of its Affiliates. 
 2.10 Extension of New Nitric Oxide Period. The Parties acknowledge that
the New Nitric Oxide Period may be extended by the Parties if mutually agreed. No extension of the New Nitric Oxide Period shall become effective unless mutually agreed in writing by both Parties. 

3. PATENT PROSECUTION AND ENFORCEMENT OF NOVAN
PATENTS 
 3.1 Prosecution of Novan Patents. 

(a) Prosecution by Novan. Except as provided for in Section 3.1(b), Novan shall have the exclusive right to Prosecute
the Novan Patents, as Novan determines in good faith, [***]. In the event that Novan desires not to continue to Prosecute any of the Novan Patents, Novan shall notify Licensee sufficiently in advance of any deadlines to afford Licensee an
opportunity to request that Novan continue the Prosecution of such Patent prior to such Patent lapsing 

  

					
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or becoming abandoned. If Licensee requests in writing that Novan continue to Prosecute such Novan Patent, then Novan will continue to do so in accordance with this Section 3.1(a), [***].

 (b) Filing of Continuations, Divisionals and National Applications by Licensee. If Licensee desires to file a
continuation, divisional or national Patent application to any of the Novan Patents that Novan has not filed, Licensee will notify Novan of such desire, and Novan may elect to Prosecute such Patent [***]. Novan will notify Licensee of its election
whether or not to Prosecute such Patent within [***] ([***]) days of such notice from Licensee. If Novan does not elect to Prosecute such Patent within such [***] ([***]) day period, then Licensee may Prosecute such Patent [***]. Licensee shall
control the Prosecution of such Patent (whether Prosecuted by Novan or by Licensee) in consultation with Novan; provided, however, that all Prosecution decisions will be subject to Novan’s prior written approval (not to be unreasonably
withheld). In no event will Licensee be permitted to undertake any act in the Prosecution of such Patent that may adversely affect the scope, enforceability or patentability of any other Novan Patent, as determined by Novan in good faith. For
clarity, any Patent Prosecuted by either Party pursuant to this Section 3.1(b) shall be a Novan Patent and owned solely by Novan and licensed under Section 2.1 of this Agreement to Licensee. 

(c) Cooperation in Prosecution. The Party exercising the right to Prosecute Novan Patents pursuant to this
Section 3.1 will (i) use reasonable efforts to apprise the other Party of any significant developments in the Prosecution of such Novan Patent, and (ii) copy the other Party, or have the other Party copied, on all official
correspondence relating to the relevant Novan Patents received from or to be filed with the PTO, within [***] ([***]) days of receipt from the PTO and present a draft of any material proposed response to such correspondence at least [***] ([***])
days prior to filing with the PTO, respectively, including without limitation copies of each patent application, official action, response to official action, declaration, information disclosure statement, terminal disclaimer filing, and request for
reexamination. The Party that is not Prosecuting any particular Novan Patent shall cooperate reasonably with the Party that is conducting Prosecution of such Novan Patent. [***] shall satisfy its obligations under this Section 3.1 to fund
Prosecution costs incurred by [***] by reimbursing [***] on a [***] basis within [***] ([***]) days of receipt of reasonable documentation of such Prosecution costs incurred by Novan in the prior [***]. 

3.2 Post Grant Proceedings. 

(a) Third Party Defense. In the event that Novan becomes aware that a Third Party has filed a Post Grant Proceeding with
respect to any Novan Patent, Novan will notify Licensee in writing to that effect within [***] ([***]) days of becoming aware of such filing. Once such a Post Grant Proceeding has commenced, Novan shall have the first right to respond to and/or
contest such proceeding; provided, however, that if Novan does not take action to respond to and/or contest such proceeding by [***] ([***]) days before the expiration of the time limit, if any, set forth in the applicable laws and regulations for
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and/or contest such proceeding. The Party that responds to and/or contests such Post Grant Proceeding shall provide the other Party: (i) with a copy of any action, communication, letter or
other correspondence issued by the PTO or the Third Party within [***] ([***]) days of receipt thereof; (ii) with a copy of any proposed response, amendment, paper or other correspondence to be filed with the PTO no less than [***] ([***]) days
prior to filing the same in the PTO, unless otherwise agreed by patent counsel for both Parties; provided that the other Party shall have the right to provide suggestions and recommendations regarding the content of the response, amendment, paper or
other correspondence by no later than [***] ([***]) days prior to its filing; and (iii) with a copy of any response, amendment, paper or other correspondence as filed with the PTO no more than [***] ([***]) days after the responding/contesting
Party receives confirmation from the PTO that the response, amendment, paper or other correspondence has been filed. 

(b) Commencement of Post Grant Proceedings. If either Party desires that Novan commence a Post Grant Proceeding with
respect to a Novan Patent, the Party shall notify the other Party of such desire. The Parties shall then consult with each other and consider each other’s input with respect to whether such a Post Grant Proceeding should be commenced. Novan
shall have the sole right to commence a Post Grant Proceeding with respect to a Novan Patent. Should such a proceeding be commenced: (i) Novan shall provide Licensee with a copy of any action, communication, letter or other correspondence
issued by the PTO within at least [***] ([***]) days of receipt thereof; (ii) Novan shall provide Licensee with a copy of any proposed response, amendment, paper, or other correspondence to be filed with the PTO no less than [***] ([***]) days
prior to filing the same in the PTO, unless otherwise agreed by patent counsel for both Parties; provided that Licensee shall have the right to provide suggestions and recommendations regarding the content for the response, amendment, paper or other
correspondence by no later than [***] ([***]) days prior to its filing; (iii) Novan shall provide Licensee with a copy of any response, amendment, paper, or other correspondence as filed with the PTO no more than [***] ([***]) days after Novan
receives confirmation from the PTO that the response, amendment, paper, or other correspondence has been filed. 
 (c)
Decision-Making Authority; Costs. Novan shall have final decision-making authority with respect to all aspects of Post Grant Proceedings related to the Novan Patents. Each Party shall bear its own costs incurred in connection with any Post Grant
Proceeding under this Section 3.2. 
 3.3 Enforcement and Defense of Novan Patents. 

(a) Notice of Infringement. Each Party shall (i) notify the other Party promptly of any conduct on the part of a Third
Party that it deems to be a potential infringement of any Novan Patent or receipt of any notice of a certification filed pursuant to 21 U.S.C. § 355(b)(2)(A) or 355(j)(2)(A)(vii)(IV) or its successor provisions or any similar provision in a
country in the Territory other than the United States (“Paragraph IV Notice”) claiming that any Novan Patents are invalid or otherwise unenforceable, or that infringement of Novan Patents will not arise from the manufacture, use,
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sale of a product by a Third Party (collectively, “Infringement”), and (ii) provide the other Party with such information in its possession regarding the potential
Infringement and/or a copy of any Paragraph IV Notices within [***] ([***]) days of receipt thereof. 
 (b) Enforcement by
Novan. Novan will have the right (but not the obligation), at its sole discretion, to take any and all action it deems necessary to stop any Infringement (or respond to any Paragraph IV Notice), including the bringing of an action based on the
Novan Patents in the Territory. Novan will exclusively control the prosecution or settlement of any such action; provided that if such Infringement is in the Licensee Field and does not involve Novan Particles, Novan agrees not to settle such action
without the prior written approval of Licensee, not to be unreasonably withheld or delayed. Novan will be permitted to bring any such action in the name of Novan only or in the name of both Novan and Licensee. If such Infringement is in the Licensee
Field and does not involve Novan Particles, Licensee shall have the right (but not obligation, other than use of its name as set forth in the immediately preceding sentence) to participate in such action in a consultative capacity through its own
counsel at its cost. Licensee will provide [***] cooperation and assistance requested by Novan in connection with any action taken by Novan with respect to an Infringement, including by making relevant employees, inventors, documents, materials and
information available to Novan. 
 (c) Enforcement by Licensee in the Licensee Field. In the event of a material
Infringement (including a Paragraph IV Notice) in the Licensee Field that does not involve Novan Particles, if Novan does not commence an action based on the Novan Patents within (i) [***] ([***]) days after notice of the Infringement or
(ii) [***] ([***]) days before the expiration of the time limit, if any, set forth by applicable law for the filing of such action in response to a Paragraph IV Notice, whichever comes first, and in the case of an Infringement other than one
arising by reason of a Paragraph IV Notice, such Infringement otherwise has not been abated, Licensee will have the right (but not the obligation), at its sole discretion and expense, to take any and all action it deems necessary to stop such
Infringement (or respond to such Paragraph IV Notice), including the bringing of an action based on the Novan Patents. Licensee will control the prosecution or settlement of any such action in consultation with Novan; provided that Licensee agrees
not to settle any such action without the prior written approval of Novan, not to be unreasonably withheld or delayed. Licensee will be permitted to bring such action in the name of Licensee only or in the name of both Licensee and Novan. Novan
shall have the right (but not obligation, other than use of its name as set forth in the immediately preceding sentence) to participate in such action in a consultative capacity through its own counsel at its cost. Novan will provide [***]
cooperation and assistance requested by Licensee in connection with any action taken by Licensee with respect to an Infringement pursuant to this Section 3.3(c), including by making relevant employees, inventors, documents, materials and
information available to Licensee. 
 (d) Invalidity Claims. In the event that an action or claim alleging invalidity,
unenforceability or non-infringement of any of the Novan Patents shall be brought or made against Novan or Licensee, Novan, at its sole discretion, shall have the right, but not be obligated, within [***] ([***]) days after the commencement of such
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claim, to take or regain control of the action or defend such claim at its own expense. If Novan shall determine not to exercise this right, then Licensee may take over or remain in control of
the action or defense in consultation with Novan; provided that Licensee agrees not to settle any such action or defense without the prior written approval of Novan.  

(e) Infringement Costs and Proceeds. Each Party shall bear its own costs incurred in connection with any action
initiated or defended under this Section 3.3. Any monetary proceeds, damages and other relief obtained by a Party in connection with such an action (“Proceeds”) shall be applied in the following order of priority:
(i) first, to reimburse each Party for such costs paid by that Party in connection with such action, and (ii) second, after application of the foregoing clause (i), the Party that initiated or defended the action [***]. 

(f) Novan Retained Rights. Except as expressly set forth in Section 3.3(c) and Section 3.3(d), Novan retains
all rights with respect to enforcement and defense of the Novan Patents. 
 4. PATENT PROSECUTION AND
ENFORCEMENT OF LICENSEE NEW NITRIC OXIDE PATENTS 

4.1 Prosecution of Licensee New Nitric Oxide Patents. 

(a) Prosecution by Licensee. Except as provided for in Section 4.1(b), Licensee shall have the exclusive right to
Prosecute the Licensee New Nitric Oxide Patents, as Licensee determines in good faith, [***]. In the event that Licensee desires not to continue to Prosecute any of the Licensee New Nitric Oxide Patents, Licensee shall notify Novan sufficiently in
advance of any deadlines to afford Novan an opportunity to request that Licensee continue the Prosecution of such Patent prior to such Patent lapsing or becoming abandoned. If Novan requests in writing that Licensee continue to Prosecute such
Licensee New Nitric Oxide Patent, then Licensee will continue to do so in accordance with this Section 4.1(a), [***]. 

(b) Filing of Continuations, Divisionals and National Applications by Novan. If Novan desires to file a continuation,
divisional or national Patent application to any of the Licensee New Nitric Oxide Patents that Licensee has not filed, Novan will notify Licensee of such desire, and Licensee may elect to Prosecute such Patent [***]. Licensee will notify Novan of
its election whether or not to Prosecute such Patent within [***] ([***]) days of such notice from Novan. If Licensee does not elect to Prosecute such Patent within such [***] ([***]) day period, then Novan may Prosecute such Patent [***]. Novan
shall control the Prosecution of such Patent (whether Prosecuted by Novan or by Licensee) in consultation with Licensee; provided, however, that all Prosecution decisions will be subject to Licensee’s prior written approval (not to be
unreasonably withheld). In no event will Novan be permitted to undertake any act in the Prosecution of such Patent that may adversely affect the scope, enforceability or patentability of any other Licensee New Nitric Oxide Patent, as determined by
Licensee in good faith. For clarity, any Patent Prosecuted by either Party pursuant to this Section 4.1(b) shall be a Licensee New Nitric Oxide Patent and owned solely by Licensee and licensed under Section 2.3 of this Agreement to Novan.

  

					
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 (c) Cooperation in Prosecution. The Party exercising the right to
Prosecute Licensee New Nitric Oxide Patents pursuant to this Section 4.1 will (i) use reasonable efforts to apprise the other Party of any significant developments in the Prosecution of such Licensee New Nitric Oxide Patent, and
(ii) copy the other Party, or have the other Party copied, on all official correspondence relating to the relevant Licensee New Nitric Oxide Patents received from or to be filed with the PTO, within [***] ([***]) days of receipt from the PTO
and present a draft of any material proposed response to such correspondence at least [***] ([***]) days prior to filing with the PTO, respectively, including without limitation copies of each patent application, official action, response to
official action, declaration, information disclosure statement, terminal disclaimer filing, and request for reexamination. The Party that is not Prosecuting any particular Licensee New Nitric Oxide Patent shall cooperate reasonably with the Party
that is conducting Prosecution of such Licensee New Nitric Oxide Patent. [***] shall satisfy its obligations under this Section 4.1 to fund Prosecution costs incurred by [***] by reimbursing [***] on a [***] basis within [***] ([***]) days of
receipt of reasonable documentation of such Prosecution costs incurred by Licensee in the prior [***]. 
 4.2 Post Grant Proceedings.

 (a) Third Party Defense. In the event that Licensee becomes aware that a Third Party has filed a Post Grant
Proceeding with respect to any Licensee New Nitric Oxide Patent, Licensee will notify Novan in writing to that effect within [***] ([***]) days of becoming aware of such filing. Once such a Post Grant Proceeding has commenced, Licensee shall have
the first right to respond to and/or contest such proceeding; provided, however, that if Licensee does not take action to respond to and/or contest such proceeding by [***] ([***]) days before the expiration of the time limit, if any, set forth in
the applicable laws and regulations for such response or contest, then Novan shall have the right to respond to and/or contest such proceeding. The Party that responds to and/or contests such Post Grant Proceeding shall provide the other Party:
(i) with a copy of any action, communication, letter or other correspondence issued by the PTO or the Third Party within [***] ([***]) days of receipt thereof; (ii) with a copy of any proposed response, amendment, paper or other
correspondence to be filed with the PTO no less than [***] ([***]) days prior to filing the same in the PTO, unless otherwise agreed by patent counsel for both Parties; provided that the other Party shall have the right to provide suggestions and
recommendations regarding the content of the response, amendment, paper or other correspondence by no later than [***] ([***]) days prior to its filing; and (iii) with a copy of any response, amendment, paper or other correspondence as filed
with the PTO no more than [***] ([***]) days after the responding/contesting Party receives confirmation from the PTO that the response, amendment, paper or other correspondence has been filed. 

(b) Commencement of Post Grant Proceedings. If either Party desires that Licensee commence a Post Grant Proceeding with
respect to a Licensee New Nitric 

  

					
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Oxide Patent, the Party shall notify the other Party of such desire. The Parties shall then consult with each other and consider each other’s input with respect to whether such a Post Grant
Proceeding should be commenced. Licensee shall have the sole right to commence a Post Grant Proceeding with respect to a Licensee New Nitric Oxide Patent. Should such a proceeding be commenced: (i) Licensee shall provide Novan with a copy of
any action, communication, letter or other correspondence issued by the PTO within at least [***] ([***]) days of receipt thereof; (ii) Licensee shall provide Novan with a copy of any proposed response, amendment, paper, or other correspondence
to be filed with the PTO no less than [***] ([***]) days prior to filing the same in the PTO, unless otherwise agreed by patent counsel for both Parties; provided that Novan shall have the right to provide suggestions and recommendations regarding
the content for the response, amendment, paper or other correspondence by no later than [***] ([***]) days prior to its filing; (iii) Licensee shall provide Novan with a copy of any response, amendment, paper, or other correspondence as filed
with the PTO no more than [***] ([***]) days after Licensee receives confirmation from the PTO that the response, amendment, paper, or other correspondence has been filed. 

(c) Decision-Making Authority; Costs. Licensee shall have final decision-making authority with respect to all aspects of
Post Grant Proceedings related to the Licensee New Nitric Oxide Patents. Each Party shall bear its own costs incurred in connection with any Post Grant Proceeding under this Section 4.2. 

4.3 Enforcement and Defense of Licensee New Nitric Oxide Patents. 

(a) Notice of Infringement. Each Party shall (i) notify the other Party promptly of any conduct on the part of a
Third Party that it deems to be a potential infringement of any Licensee New Nitric Oxide Patent or receipt of any notice of a certification filed pursuant to 21 U.S.C. § 355(b)(2)(A) or 355(j)(2)(A)(vii)(IV) or its successor provisions or any
similar provision in a country in the Territory other than the United States (“Paragraph IV Notice”) claiming that any Licensee New Nitric Oxide Patents are invalid or otherwise unenforceable, or that infringement of Licensee New
Nitric Oxide Patents will not arise from the manufacture, use, import or sale of a product by a Third Party (collectively, “Infringement”), and (ii) provide the other Party with such information in its possession regarding the
potential Infringement and/or a copy of any Paragraph IV Notices within [***] ([***]) days of receipt thereof. 
 (b)
Enforcement by Licensee. Licensee will have the right (but not the obligation), at its sole discretion, to take any and all action it deems necessary to stop any Infringement (or respond to any Paragraph IV Notice), including the bringing of an
action based on the Licensee New Nitric Oxide Patents in the Territory. Licensee will exclusively control the prosecution or settlement of any such action; provided that if such Infringement is in the Novan Retained Field, Licensee agrees not to
settle such action without the prior written approval of Novan, not to be unreasonably withheld or delayed. Licensee will be permitted to bring any such action in the name of Licensee only or in the name of both Novan and Licensee. If such
Infringement is in the Novan Retained Field, Novan shall have the right (but not obligation, other than use of its name as set forth in the immediately preceding sentence) to participate in such action in a consultative

  

					
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capacity through its own counsel at its cost. Novan will provide [***] cooperation and assistance requested by Licensee in connection with any action taken by Licensee with respect to an
Infringement, including by making relevant employees, inventors, documents, materials and information available to Licensee. 

(c) Enforcement by Novan in the Novan Retained Field. In the event of a material Infringement (including a Paragraph IV
Notice) in the Novan Retained Field, if Licensee does not commence an action based on the Licensee New Nitric Oxide Patents within (i) [***] ([***]) days after notice of the Infringement or (ii) [***] ([***]) days before the expiration of
the time limit, if any, set forth by applicable law for the filing of such action in response to a Paragraph IV Notice, whichever comes first, and in the case of an Infringement other than one arising by reason of a Paragraph IV Notice, such
Infringement otherwise has not been abated, Novan will have the right (but not the obligation), at its sole discretion and expense, to take any and all action it deems necessary to stop such Infringement (or respond to such Paragraph IV Notice),
including the bringing of an action based on the Licensee New Nitric Oxide Patents. Novan will control the prosecution or settlement of any such action in consultation with Licensee; provided that Novan agrees not to settle any such action without
the prior written approval of Licensee, not to be unreasonably withheld or delayed. Novan will be permitted to bring such action in the name of Novan only or in the name of both Licensee and Novan. Licensee shall have the right (but not obligation,
other than use of its name as set forth in the immediately preceding sentence) to participate in such action in a consultative capacity through its own counsel at its cost. Licensee will provide [***] cooperation and assistance requested by Novan in
connection with any action taken by Novan with respect to an Infringement pursuant to this Section 4.3(c), including by making relevant employees, inventors, documents, materials and information available to Novan. 

(d) Invalidity Claims. In the event that an action or claim alleging invalidity, unenforceability or non-infringement of
any of the Licensee New Nitric Oxide Patents shall be brought or made against Novan or Licensee, Licensee, at its sole discretion, shall have the right, but not be obligated, within [***] ([***]) days after the commencement of such action or claim,
to take or regain control of the action or defend such claim at its own expense. If Licensee shall determine not to exercise this right, then Novan may take over or remain in control of the action or defense in consultation with Licensee; provided
that Novan agrees not to settle any such action or defense without the prior written approval of Licensee.  
 (e)
Infringement Costs and Proceeds. Each Party shall bear its own costs incurred in connection with any action initiated or defended under this Section 4.3. Any monetary proceeds, damages and other relief obtained by a Party in connection with
such an action (“Proceeds”) shall be applied in the following order of priority: (i) first, to reimburse each Party for such costs paid by that Party in connection with such action, and (ii) second, after application of
the foregoing clause (i), the Party that initiated or defended the action [***]. 

  

					
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 (f) Licensee Retained Rights. Except as expressly set forth in
Section 4.3(c) and Section 4.3(d), Licensee retains all rights with respect to enforcement and defense of the Licensee New Nitric Oxide Patents. 

5. REPRESENTATIONS AND WARRANTIES 

5.1 Power and Authority. Each Party represents and warrants to the other Party that: (a) it has the right, power, and authority to
enter into and perform this Agreement, and to grant the licenses set forth herein, and that the person signing this Agreement on such Party’s behalf has been duly authorized and empowered to enter into this Agreement; (b) the execution and
delivery by such Party of this Agreement and the consummation by such Party of the transactions contemplated hereby have been duly authorized by all necessary corporate action on the part of such Party and no other corporate proceedings on the part
of such Party are necessary to authorize this Agreement or to consummate the transactions contemplated hereby; (c) this Agreement has been duly executed and delivered by such Party and, assuming the due authorization, execution and delivery of
this Agreement by the other Party, constitutes a legal, valid and binding obligation of such Party, enforceable against such Party in accordance with its terms; (d) the execution, delivery, and performance of and compliance with this Agreement
will not, with or without the passage of time or giving of notice, (i) conflict with, or result in any violation of or default or loss of any benefit under, any provision of the certificate of incorporation or bylaws (or other company governing
instruments) of such Party; (ii) conflict with, or result in any violation of or default or loss of any benefit under, any permit, concession, grant, franchise, law, rule or regulation, or any order to which such Party is a party or to which
any of its property is subject; (iii) conflict with, or result in a breach or violation of or default or loss of any benefit under, or accelerate the performance required by, the terms of any agreement, contract, indenture or other instrument
to which such Party is a party or to which any of its property is subject; or (iv) result in the suspension, revocation, impairment, forfeiture or nonrenewal of any material permit, license, authorization or approval applicable to such Party,
its business or operations or any of its assets or properties; and (e) no consent, approval, order or authorization of, or registration, qualification, designation, declaration or filing with, any governmental authority or any other person or
entity is required to be obtained or filed by such Party in connection with the consummation of the transactions contemplated by this Agreement. 

5.2 Disclaimers. EXCEPT AS SET FORTH IN SECTION 5.1 ABOVE, THE NOVAN PATENTS, THE NOVAN KNOW-HOW, THE LICENSEE NEW NITRIC OXIDE PATENTS,
THE LICENSEE NEW NITRIC OXIDE KNOW-HOW AND THE NEW DEVICE IP ARE PROVIDED “AS IS”, AND EACH PARTY DISCLAIMS ALL REPRESENTATIONS AND WARRANTIES WITH RESPECT TO THE NOVAN PATENTS, THE NOVAN KNOW-HOW, THE LICENSEE NEW NITRIC OXIDE PATENTS,
THE LICENSEE NEW NITRIC OXIDE KNOW-HOW AND THE NEW DEVICE IP, WHETHER EXPRESS, IMPLIED OR STATUTORY, INCLUDING, BUT NOT LIMITED TO, ANY WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, TITLE, VALIDITY, NON-INFRINGEMENT,
NON-INTERFERENCE AND/OR QUIET ENJOYMENT, OR ARISING FROM A COURSE OF DEALING, USAGE OR TRADE PRACTICES. WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, EACH PARTY EXPRESSLY DOES NOT REPRESENT OR WARRANT: (A) THE SAFETY OR USEFULNESS FOR ANY

  

					
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PURPOSE OF THE SUBJECT MATTER IT PROVIDES HEREUNDER; (B) THAT ANY PATENT WILL ISSUE ON ANY NOVAN PATENT, LICENSEE NEW NITRIC OXIDE PATENT OR NEW DEVICE IP; OR (C) THE VALIDITY OF ANY
PATENT 
 INCLUDED IN THE NOVAN PATENTS, LICENSEE NEW NITRIC OXIDE PATENTS OR NEW DEVICE IP. 

6. LIMITATION OF LIABILITY. NEITHER PARTY SHALL BE LIABLE TO THE OTHER FOR ANY SPECIAL,
INCIDENTAL, PUNITIVE OR INDIRECT DAMAGES OR LOSS OF PROFITS ARISING FROM OR RELATING TO ANY BREACH OF THIS AGREEMENT, REGARDLESS OF ANY NOTICE OF THE POSSIBILITY OF SUCH DAMAGES. NOTWITHSTANDING THE FOREGOING, NOTHING IN THIS ARTICLE 6 IS INTENDED
TO OR SHALL LIMIT OR RESTRICT THE DAMAGES AVAILABLE FOR A PARTY’S BREACH OF CONFIDENTIALITY OBLIGATIONS IN ARTICLE 7 OR [***].  
 7.
CONFIDENTIALITY. 
 7.1 Confidential Information. The Parties agree that, unless the Receiving Party obtains
the prior written consent of the Disclosing Party, at all times during the term of this Agreement and for a [***] ([***]) year period following its expiration or earlier termination, the Receiving Party will keep completely confidential, will not
publish or otherwise disclose and will not use directly or indirectly for any purpose other than as contemplated by this Agreement any Confidential Information of the Disclosing Party. 

7.2 Limited Disclosure Permitted. Each Party may disclose Confidential Information of the Disclosing Party to the extent that such
disclosure is: 
 (a) required by applicable laws, in the opinion of legal counsel to the Receiving Party; provided,
however, that the Receiving Party will first have given reasonable notice to the Disclosing Party (if practicable) and given the Disclosing Party a reasonable opportunity to obtain a protective order or confidential treatment requiring that the
Confidential Information and documents that are the subject thereof be held in confidence by the recipient or, if disclosed, be used only for purposes required by such law; provided further, however, that if a protective order is not obtained, the
Confidential Information so disclosed will be limited to that information that is legally required to be disclosed by applicable laws; 

(b) made by Receiving Party to a governmental or regulatory authority as required to conduct clinical trials or obtain
or maintain regulatory approval for products or services that are the subject of licenses granted to the Receiving Party under this Agreement; 

(c) made by Receiving Party to a Third Party as may be necessary or useful in connection with the manufacture,
development and commercialization of any products or services that are the subject of licenses granted to the Receiving Party under this Agreement, in connection with financing activities of the Receiving Party, or in

  

					
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 connection with the transfer or sale of all or substantially all of the business of the
Receiving Party to which this Agreement relates to a Third Party, whether by merger, sale of stock, sale or transfer of assets or otherwise; provided, however, that: (i) each such Third Party has, in the reasonable determination of the
Receiving Party, a need to know such Confidential Information and is bound by an agreement containing confidentiality and non-use obligations no less protective than those set forth in this Agreement in any material respect; (ii) the Receiving
Party informs each Third Party receiving Confidential Information of its confidential nature; and (iii) the Receiving Party will be responsible for any breach of this Article 7 by any such Third Parties to the same extent as if the breach were
by the Receiving Party; or 
 (d) made by a Receiving Party in order to comply with applicable securities law
disclosure requirement or any disclosure requirements of any applicable stock market or securities exchange. 
 7.3 Terms of Agreement.
The Parties agree that the material terms of this Agreement shall be considered Confidential Information of both Parties, subject to the special authorized disclosure provisions set forth below in this Section 7.3 (in lieu of the authorized
disclosure provisions set forth in Section 7.2, to the extent of any conflict) and without limiting the generality of the definition of Confidential Information set forth in Article 1. If either Party desires to make a public announcement
concerning the terms of this Agreement, such Party shall give reasonable prior advance notice of the proposed text of such announcement to the other Party for its prior review and approval, such approval not to be unreasonably withheld. A Party
shall not be required to seek the permission of the other Party to repeat or disclose any information as to the terms of this Agreement that has already been publicly disclosed by such Party in accordance with the foregoing or by the other Party, or
any similar or comparable information. Either Party may disclose the terms of this Agreement to such Party’s existing investors, lenders, directors and professional advisors and to potential investors, lenders, acquirors or merger partners and
their professional advisors who are bound by written or professional obligations of non-disclosure and non-use that are at least as stringent as those contained in this Article 7 or are customary for such purpose. Each Party also may disclose the
relevant terms of this Agreement to potential sublicensees who agree to be bound by obligations of non-disclosure and non-use at least as stringent as those contained in this Article 7 in all material respects. 

7.4 Publications. Novan shall have the right to review and comment on any material proposed for disclosure or publication by Licensee,
such as by oral presentation, manuscript or abstract, which includes data generated from the use of the Novan Patents or Novan Know-How or any Confidential Information of Novan. Before any such material is submitted for publication, Licensee shall
deliver a complete copy to Novan at least [***] ([***]) days prior to submitting the material to a publisher or initiating any other disclosure. Novan shall review any such material and give its comments to Licensee within [***] ([***]) days of the
delivery of such material to Novan. Licensee shall comply with Novan’s request to delete references to Novan’s Confidential Information in any such material and agrees to delay any submission for publication or other public disclosure for
a period of up to an additional [***] ([***]) days for the purpose of preparing and filing appropriate Patent applications. 

  

					
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 8. TERM AND TERMINATION 

8.1 Term. The term of this Agreement shall commence on the Effective Date and, unless earlier terminated in accordance with the
provisions of this Article 8, shall expire upon the expiration of the last-to-expire of the Novan Patents. Upon such expiration (but not the earlier termination of this Agreement), the license granted under Section 2.2 shall continue in
perpetuity on a non-exclusive basis in accordance with the terms of this Agreement. 
 8.2 Termination for Breach. Each Party may
terminate this Agreement by written notice to the other Party at any time, if the other Party breaches any provision of this Agreement and fails to cure such breach within thirty (30) days of receipt of a written notice thereof from the
non-breaching Party. 
 8.3 Termination for Patent Challenge. Novan may terminate this Agreement by written notice if Licensee or its
Affiliate or sublicensee directly, or through assistance granted to a Third Party, commences or participates (except as such participation may be required by applicable law) in any interference, pre- or post-grant opposition or other pre- or
post-grant proceeding related to the validity, enforceability and/or patentability of, or challenges the validity or enforceability of, any Novan Patent before any tribunal or patent office. 

8.4 Additional Termination by Licensee. Licensee may terminate this Agreement for any reason or no reason without penalty on ninety
(90) days written notice to Novan. Such termination shall become effective at the end of such ninety (90) day period. 
 8.5
Effect of Termination. Upon termination of this Agreement all licenses granted to Licensee and any sublicenses thereunder will cease to be in effect. In addition, upon termination of this Agreement, each Party shall return to the other Party, or
destroy, all Confidential Information belonging to the other Party, in each case except as necessary for such Party’s continued enjoyment of any license or right that survives termination of this Agreement. 

8.6 Survival. Expiration or termination of this Agreement for any reason will not relieve either Party of any obligation or liability
accruing prior thereto and will be without prejudice to the rights and remedies of either Party with respect to any antecedent breach of the provisions of this Agreement. The provisions of Sections 2.2 (but only in connection with expiration of this
Agreement and not its earlier termination), 2.3, 2.4, 2.5, 2.6, 2.8, 5.2, 8.5, 8.6, 8.7 and 8.8, and Articles 1 (to the extent required to enforce other surviving rights and obligations), 4, 6, 7 and 9, are intended to and shall survive termination
or expiration of this Agreement in accordance with the terms of such Articles or Sections. 
 8.7 Bankruptcy Code. All licenses
granted under this Agreement will be deemed licenses of rights to intellectual property for purposes of Section 365(n) of the United States Bankruptcy Code and a licensee under this Agreement will retain and may fully exercise all of its rights
and elections under the United States Bankruptcy Code. 
 8.8 Additional Remedies. The remedies set forth in this Article 8 or
elsewhere in this Agreement will be in addition to, and will not be to the exclusion of, any other remedies available to the Parties at law, in equity or under this Agreement. 

  

					
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 9. GENERAL 

9.1 Independent Contractors. The Parties are and at all times will be and remain independent contractors as to each other, and at no
time will either Party be deemed to be the agent or employee of the other. No joint venture, partnership, agency, or other relationship will be created or implied as a result of this Agreement. 

9.2 Governing Law. Any questions, claims, disputes, or litigation concerning or arising from this Agreement shall be governed by the
laws of the State of North Carolina without giving effect to the conflicts of laws principles of that state or other country. Subject to Section 9.3, all disputes with respect to this Agreement shall be brought and heard exclusively either in
the North Carolina state courts located in Durham County, North Carolina, or the federal district court for the Middle District of North Carolina located in Wake County, North Carolina. The Parties each consent to the in personam jurisdiction
and venue of such courts exclusively. 
 9.3 Dispute Resolution. 

(a) Organization Resolution. The Parties will try to settle their differences amicably between themselves. In the event
of any controversy or claim arising out of or relating to any provision of this Agreement or the performance or alleged non-performance of a Party of its obligations under this Agreement (“Dispute”), a Party may notify the other
Party in writing of such Dispute. Upon a Party’s receipt of written notice of a Dispute, the Dispute will be referred to the respective representatives of the Parties with authority to resolve the Dispute. If the designated representatives of
the Parties are unable to resolve the Dispute within [***] ([***]) days of receipt of the written notice by the other Party, the Dispute will be referred to the Chief Executive Officers of each of the Parties (or any other representative designated
by the board of directors of the applicable Party) who will use their good faith efforts to resolve the Dispute within [***] ([***]) days after it was referred to the Chief Executive Officers (or other such representative). 

(b) Arbitration. Any Dispute that is not resolved as provided in Section 9.3(a), whether before or after termination of
this Agreement, will be resolved by final and binding arbitration. Each Party may refer such Dispute for arbitration by written notice to the other Party. Such Disputes will be finally settled by the American Arbitration Association
(“AAA”) under its Commercial Arbitration Rules and Mediation Procedures (the “Rules”), or by such other arbitration tribunal or arbitration rules as the Parties may agree upon. Arbitration proceedings will be held
in Raleigh, North Carolina, U.S.A, or in another place which is mutually agreeable to the Parties. The arbitration shall be conducted and the award shall be rendered in English. The arbitration will be conducted by three (3) arbitrators agreed to by
the Parties within [***] ([***]) days of receipt by respondents of the request for arbitration or, in default of such agreement, according to the Rules’ Expedited Procedures for the Appointment and Qualifications of Arbitrators. [***] selected
shall be a lawyer with pharmaceutical and medical device industry legal experience. During the period beginning with the selection of the arbitrators and ending upon the conclusion of the arbitration proceedings, the Parties may conduct such
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 Rules; provided, however, that the Parties shall be entitled, without any further showing of
good cause to the arbitrators, to [***]. In conducting the arbitration, the arbitrators will apply the Rules as they apply to matters of evidence. The decision by the arbitrators shall be final and binding upon the Parties, their successors and
permitted assigns and the Parties will comply with such decision in good faith. The award may be entered and enforced in any court having jurisdiction. Without limitation of the foregoing, each Party hereby submits itself to the jurisdiction of the
courts of the place where the arbitration is held, but only for the entry of judgment with respect to the decision of the arbitrators hereunder. The fees and expenses of the arbitrators, the fees and expenses of a court reporter, and any expenses
for a hearing room, will be [***]. The Parties will otherwise bear [***]. 
 (c) [***] Arbitration for Certain Matters.
Notwithstanding the foregoing provisions of Section 9.3(b), any Disputes related to [***] of this Agreement shall be resolved through binding arbitration administered by the AAA as follows: 

(i) Within [***] ([***]) days of receipt by respondent of the request for arbitration, the Parties shall designate in
writing a single arbitrator to resolve the dispute. If the Parties cannot agree on an arbitrator within such [***]-day period, or if the arbitrator agreed to by the Parties declines to serve, an arbitrator shall be selected, within [***] ([***])
days after notice from either Party of such inability to agree on an arbitrator willing to serve, by the AAA. The arbitrator shall be a lawyer with pharmaceutical and medical device industry legal experience who is available to serve on the
timetable established in this Section 9.3(c), and shall not be an Affiliate, or an employee, consultant, legal advisor, officer, director or stockholder of, or have any conflict of interest with respect to, any Party. Arbitration proceedings
will be held in Raleigh, North Carolina, U.S.A, or in another place which is mutually agreeable to the Parties 
 (ii)
The Party submitting a dispute to arbitration shall include with its notice pursuant to Section 9.3(b) a written summary of the disputed issues, not to exceed [***] ([***]) pages per disputed issue, and a proposed ruling on the merits of
each such issue. Within [***] ([***]) days thereafter, the other Party shall provide a written response, not to exceed [***] ([***]) pages per disputed issue, as well as such other Party’s proposed ruling on the merits of each disputed issue,
to the Party initiating such arbitration and to the arbitrator. 
 (iii) Within [***] ([***]) days after the selection
of the arbitrator and in any event within [***] ([***]) days after the notice initiating the arbitration, the arbitrator and the Parties shall meet. During such meeting, the arbitrator shall establish a schedule for discovery. Unless the Parties
otherwise agree, the arbitrator shall limit discovery by each Party to [***] 

  

					
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	[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted
portions.

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 [***]. The Parties shall have [***] ([***]) days to respond to written discovery.
Depositions shall be scheduled at the mutual convenience of the Parties and the witnesses; provided that all discovery shall be conducted so as to be completed within [***] ([***]) days after the initiation of arbitration. 

(iv) The arbitrator shall set a date for a hearing, which shall be no later than [***] ([***]) days after the notice
initiating the arbitration pursuant to Section 9.3(b). At the hearing, in accordance with a schedule established by the arbitrator, the Parties shall present evidence with respect to each of the disputed issues. 

(v) Within [***] ([***]) days following the close of the hearing, the Parties shall submit post-hearing briefs to the
arbitrator. The post-hearing briefing shall not exceed twenty double-spaced pages. Within [***] ([***]) days after the timely submission of post-hearing briefs, the arbitrator shall enter a written award that rules on each disputed issue and that
sets forth the grounds for the decision, applying the law of the State of North Carolina. The determination of the arbitrator as to the resolution of any dispute shall be binding and conclusive upon all Parties. Either Party may bring an action in
any court of competent jurisdiction to enforce a final award entered by the arbitrator. The Parties expressly agree that the state and federal courts located in the State of North Carolina have jurisdiction to confirm the arbitration award and enter
judgment thereon. The Parties hereby waive any and all objections and defenses to such jurisdiction regardless of the nature of such objection or defense. 

(vi) The (i) [***], (ii) [***] and (iii) [***], shall be borne by the non-prevailing Party or, if neither
Party is the prevailing Party as to all disputed issues, by the Parties in inverse proportion to the proportion of the dispute on which they prevailed, respectively, as determined by the arbitrator. Prior to such determination, each Party shall bear
its own [***] and [***]; provided that the arbitrator shall, in his or her final award, require the non-prevailing Party (or the Party that prevails on [***]) to reimburse the other Party for the excess share of such costs and expenses borne by such
other Party prior to such determination. 
 (vii) Except as modified by this Section 9.3(c), Disputes subject to
arbitration hereunder shall be governed by the Rules. 
 (d) Confidentiality. Except as may be required by applicable
law, neither a Party nor the arbitrator(s) may disclose the existence, content or results of any arbitration award without the prior written consent of both Parties, unless to protect or pursue a legal right. 

  

					
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	[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted
portions.

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 (e) Disputes Not Subject to Arbitration. 

(i) IP Disputes. Notwithstanding the Parties’ agreement to arbitrate, unless the Parties agree in writing in any
particular case, claims and disputes between the Parties relating to or arising out of, or for which resolution depends in whole or in part on a determination of the interpretation, validity, enforceability or infringement of, Patents or the
misappropriation of trade secrets, shall not be subject to arbitration under this Agreement, and the Parties may pursue whatever rights and remedies may be available to them under law or equity, including litigation in a court of competent
jurisdiction, with respect to such claims and disputes. 
 (ii) Emergency Relief. Notwithstanding the Parties’
agreement to arbitrate, the Parties hereby agree that either Party may apply to any court of law or equity of competent jurisdiction for specific performance or injunctive relief to enforce or prevent any violation of this Agreement. Without
prejudice to such provisional remedies as may be available under the jurisdiction of a court, the arbitral tribunal under this Section 9.3 shall have full authority to grant provisional remedies and to direct the Parties to request that any
court modify or vacate any temporary or preliminary relief issued by such court, and to award damages for the failure of any Party to respect the arbitral tribunal’s orders to that effect. 

9.4 No Assignment. Neither Party may assign, delegate or otherwise transfer, in whole or in part, any rights or obligations under this
Agreement, by operation of law or otherwise, without the other Party’s express prior written consent, which shall not be unreasonably withheld; provided, however, that a Party may assign or transfer its rights and delegate its obligations under
this Agreement without such consent: (a) to the transferee or successor entity to such Party upon the transfer or sale of all or substantially all of the business of such Party to which this Agreement relates to a Third Party, whether by
merger, sale of stock, sale or transfer of assets or otherwise; or (b) to an Affiliate, provided that the assigning Party shall remain liable and responsible to the other Party for the performance and observance of all such duties and
obligations by such Affiliate for so long as such entity remains an Affiliate of the assigning Party. In the case of any permitted assignment or transfer of or under this Agreement, this Agreement shall be binding upon, and inure to the benefit of,
the transferees, successors and assigns of the Parties hereto. Any attempted assignment, delegation, or transfer in violation of the foregoing will be null and void. In connection with any assignment or transfer of this Agreement by a Party, the
Patents and Know-How licensed by such Party to the other Party under this Agreement shall not include any Patents or Know-How Controlled by the transferee, successor or assignee of, or any Acquirer of, such Party (or any Affiliate thereof, excluding
Licensee as a result of such transaction) prior to such assignment or transfer or developed outside of any activities under this Agreement. 

9.5 Compliance with Laws. Each Party will comply with all applicable federal, state, provincial and local laws, rules, and regulations
in performance of its obligations under this Agreement. 

  

					
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 9.6 Notices. All notices or reports permitted or required under this Agreement will be
in writing and will be delivered by personal delivery, telecopier, facsimile transmission, or by certified or registered mail, return receipt requested, and shall be deemed given upon personal delivery, five days after deposit in the mail, or upon
acknowledgment of receipt of electronic transmission. Notices shall be sent to the addresses set forth below. Either party may amend its address upon written notice to the other. 

 

			
	If to Novan:	  	If to Licensee:
		
	Novan, Inc.	  	KNOW Bio, LLC
	4222 Emperor Boulevard, Suite 200	  	627 Davis Drive, Suite 400
	Durham, NC 27703	  	Morrisville, NC 27560
	Attn: [***]	  	Attn: [***]

 9.7 Waivers; Amendment. No waiver of any terms or conditions of this Agreement will be valid or binding
on a Party unless such Party makes the waiver in writing. Any such waiver shall constitute a waiver only with respect to the specific matter described therein and shall in no way impair the rights of the Party granting such waiver in any other
respect or at any other time. The failure of one Party to enforce any of the provisions of this Agreement, or the failure to require at any time the performance of the other Party of any of the provisions of this Agreement, will in no way be
construed to be a present or future waiver of such provisions, nor in any way affect the ability of a Party to enforce each and every provision thereafter. This Agreement may not be altered, amended, modified, or otherwise changed in any way except
by a written instrument signed by the authorized representatives of each Party. 
 9.8 Severability. If any provision of this
Agreement is found or held to be invalid or unenforceable by any tribunal of competent jurisdiction, then the meaning of such provision will be construed, to the extent feasible, so as to render the provision enforceable, and if no feasible
interpretation would save such provision, it will be severed from the remainder of this Agreement, which will remain in full force and effect. 

9.9 Construction. The headings of sections of this Agreement are included solely for convenience of reference and are not to be used to
interpret, construe, define, or describe the scope of any aspect of this Agreement. As used in this Agreement, the word “including” means “including but not limited to”. Each Party represents that it has had the opportunity to
participate in the preparation of this Agreement, and any rule of construction to the effect that ambiguities are to be resolved against the drafting Party will not be followed in connection with the construction or interpretation of this Agreement.
For purposes of this Agreement, the word “will” shall be equivalent in meaning to the word “shall,” both of which describe an act or forbearance which is mandatory under this Agreement. The word “may” describes an act
or forbearance which is optional under this Agreement. Unless otherwise expressly stated to the contrary herein, all remedies are cumulative, and the exercise of any express remedy by either Party does not by itself waive such Party’s right to
exercise its other rights and remedies available at law or in equity. 
 9.10 Entire Agreement. This Agreement, including its
attached exhibit, constitutes the entire agreement and final understanding of the Parties with respect to the subject matter hereof, and supersedes any other and all prior or contemporaneous negotiations, representations, understandings,
discussions, offers, and agreements between the Parties, whether written or oral, 

  

					
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	[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted
portions.

 Execution Copy 

 

 express or implied, relating in any way to the subject matter hereof. This Agreement is intended by the
Parties to be a complete and wholly integrated expression of their understanding and agreement. 
 9.11 Counterparts. This Agreement
may be executed in counterparts (by facsimile transmission or in Adobe Portable Document Format (PDF) sent by electronic mail), each of which will be considered an original, but all of which together will constitute one and the same instrument.

 Signature Page to Follow 

  

					
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 IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed by their
duly authorized representatives. 
  

									
	Novan, Inc.	 		 	KNOW Bio, LLC
					
	By:	 	 /s/ Nathan Stasko
	 		 	By:	 	 /s/ Neal Hunter

	Name:	 	Nathan Stasko, PhD	 		 	Name:	 	Neal Hunter
	Title:	 	President	 		 	Title:	 	Managing Director

  

					
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 Appendix A 

Novan Patents 
 [***] 

  

					
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portions.

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 [***] 

  

					
	Confidential Information	  	30	 	
	
	[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted
portions.

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 Appendix B 

Separately-Licensed Patents 

[***] 

  

					
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	[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted
portions.

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 Appendix C 

Additional UNC Patents 

[***] 

  

					
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	[***] Certain information in this document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been requested with respect to the omitted
portions.EX-10.10

 Exhibit 10.10 

LEASE AGREEMENT 
 BY AND BETWEEN

 CROWN ROYAL ASSOCIATES, LLC, 

a Delaware limited liability company 

(AS LANDLORD) 
 AND 

NOVAN, INC., 
 a Delaware
Corporation 
 (AS TENANT) 

 TABLE OF CONTENTS 

 

							
	 	 	 	  	Page	 
			
	 1.
	 	 BASIC LEASE TERMS
	  	 	1	  
			
	 2.
	 	 DESCRIPTION OF PREMISES
	  	 	3	  
			
	 3.
	 	 TERM; COMMENCEMENT DATE; DELIVERY OF PREMISES
	  	 	3	  
			
	 4.
	 	 RENT
	  	 	5	  
			
	 5.
	 	 ALTERATIONS AND IMPROVEMENTS BY TENANT
	  	 	8	  
			
	 6.
	 	 USE OF PREMISES
	  	 	8	  
			
	 7.
	 	 TAXES ON LEASE AND TENANT’S PROPERTY
	  	 	11	  
			
	 8.
	 	 FIRE AND EXTENDED COVERAGE INSURANCE
	  	 	11	  
			
	 9.
	 	 LANDLORD’S COVENANT TO REPAIR AND REPLACE
	  	 	12	  
			
	 10.
	 	 TENANT’S COVENANT TO REPAIR
	  	 	13	  
			
	 11.
	 	 TRADE FIXTURES AND EQUIPMENT
	  	 	13	  
			
	 12.
	 	 UTILITIES
	  	 	13	  
			
	 13.
	 	 DAMAGE OR DESTRUCTION OF PREMISES
	  	 	14	  
			
	 14.
	 	 GOVERNMENTAL REQUIREMENTS
	  	 	15	  
			
	 15.
	 	 MUTUAL WAIVER OF SUBROGATION
	  	 	15	  
			
	 16.
	 	 SIGNS AND ADVERTISING
	  	 	15	  
			
	 17.
	 	 INDEMNIFICATION AND LIABILITY INSURANCE
	  	 	15	  
			
	 18.
	 	 LANDLORD’S RIGHT OF ENTRY
	  	 	17	  
			
	 19.
	 	 EMINENT DOMAIN
	  	 	17	  
			
	 20.
	 	 EVENTS OF DEFAULT AND REMEDIES
	  	 	17	  
			
	 21.
	 	 SUBORDINATION
	  	 	18	  
			
	 22.
	 	 ASSIGNMENT AND SUBLETTING
	  	 	19	  
			
	 23.
	 	 TRANSFER OF LANDLORD’S INTEREST
	  	 	20	  
			
	 24.
	 	 COVENANT OF QUIET ENJOYMENT
	  	 	20	  

							
			
	 25.
	 	 ESTOPPEL CERTIFICATES
	  	 	21	  
			
	 26.
	 	 PROTECTION AGAINST LIENS
	  	 	21	  
			
	 27.
	 	 MEMORANDUM OF LEASE
	  	 	21	  
			
	 28.
	 	 LANDLORD’S LIEN
	  	 	21	  
			
	 29.
	 	 FORCE MAJEURE
	  	 	22	  
			
	 30.
	 	 REMEDIES CUMULATIVE — NONWAIVER
	  	 	22	  
			
	 31.
	 	 HOLDING OVER
	  	 	22	  
			
	 32.
	 	 NOTICES
	  	 	22	  
			
	 33.
	 	 LEASING COMMISSION
	  	 	22	  
			
	 34.
	 	 LANDLORD DEFAULT
	  	 	23	  
			
	 35.
	 	 MISCELLANEOUS
	  	 	24	  
			
	 36.
	 	 SEVERABILITY
	  	 	27	  
			
	 37.
	 	 RIGHT OF FIRST OFFER FOR SUITE 460
	  	 	27	  
			
	 38.
	 	 OPTION TO RENEW
	  	 	28	  

  
 ii 

 LEASE AGREEMENT 

THIS LEASE AGREEMENT (the “Lease”) made and entered into as of the 21st day of
December 2010 (the “Effective Date”) by and between Crown Royal Associates, LLC, a Delaware limited liability company, hereinafter called “Landlord,” and Novan, Inc., hereinafter called “Tenant.” 

W I T N E S S E T H: 

In consideration of the mutual covenants and agreements contained herein, the parties hereto agree for themselves, their successors and
assigns, as follows: 
 1. BASIC LEASE TERMS. 

The following terms shall have the following meanings in this Lease: 

(a) Premises: Approximately 12,147 rentable square feet of space known as Suite 470 within the Building, outlined in
blue on Exhibit “A” hereto. 
 (b) Building: Royal Center I, located in the Imperial Center Business
Park in Durham, North Carolina. 
 (c) Business Park: Imperial Center Business Park. 

(d) Common Areas: All areas of the Building or the Business Park available for the common use or benefit of all tenants
primarily or to the public generally, as designated and determined by Landlord from time to time, including without limitation, parking areas, driveways, sidewalks, loading docks, the lobby, common corridors, elevators (if applicable), stairwells,
entrances, public restrooms, and other similar areas of the Building, as designated and determined by Landlord from time to time. 

(e) Commencement Date: March 1, 2011 (subject to adjustment pursuant to Section 3 of this Lease). 

(f) Term; Expiration Date: The “Term” of this Lease shall be a period of five (5) years and six (6) months
commencing as of the Commencement Date (or the Adjustment Date, as the case may be) and expiring sixty-six (66) full calendar months thereafter (the “Expiration Date”). If the Term is extended for the Renewal Term described in Section 38
hereof, the Expiration Date shall also be deemed extended to the expiration of the Renewal Term. 
 (g) Minimum Rent:

  

													
	 PERIOD
	  	RATE	 	  	MONTHLY
MINIMUM RENT	 	  	ANNUAL
MINIMUM RENT	 
	 	  	(per rentable
square foot)	 	  	 	 	  	 	 
				
	 Initial Lease Year
	  	$	14.50	  	  	$	14,677.63	  	  	$	176,131.50	  
	 Lease Year 2
	  	$	14.90	  	  	$	15,082.53	  	  	$	180,990.30	  
	 Lease Year 3
	  	$	15.31	  	  	$	15,497.55	  	  	$	185,970.57	  
	 Lease Year 4
	  	$	15.73	  	  	$	15,922.69	  	  	$	191,072.31	  

													
	 PERIOD
	  	RATE	 	  	MONTHLY
MINIMUM RENT	 	  	ANNUAL
MINIMUM RENT	 
	 	  	(per rentable
square foot)	 	  	 	 	  	 	 
				
	 Lease Year 5
	  	$	16.16	  	  	$	16,357.96	  	  	$	196,295.52	  
	 Partial Lease Year 6 (months 61-66)
	  	$	16.60	  	  	$	16,803.35	  	  	$	100,820.10	  

 (subject to adjustment as provided in Section 2). Notwithstanding the foregoing schedule, Tenant shall receive
a rent credit in an amount equal to the first six (6) payments of Minimum Rent required to be paid by Tenant hereunder, such rent credit to be applied to Tenant’s first six (6) payments of Annual Rent due hereunder. 

(h) Tenant’s Proportionate Share: A fraction, the numerator of which shall be the number of rentable square feet
within the Premises and the denominator of which shall be the number of rentable square feet within the Building, currently estimated to be 28.19% (12,147÷43,092), subject to Section 3 below. 

(i) Tenant’s Estimated Share of Operating Expenses: For the calendar year beginning January 1, 2011, the amount of
Tenant’s estimated proportionate share of all Operating Expenses shall be Thirty-Three Thousand Seven Hundred Sixty-Eight and 66/100 Dollars ($33,768.66), which represents $2.78 per rentable square foot of the Premises per annum, payable in
advance in equal monthly installments of Two Thousand Eight Hundred Fourteen and 6/100 Dollars ($2,814.06). 
 (j) Notice
Addresses: 
  

			
	Landlord:	  	 Crown Royal Associates, LLC
 c/o Tri Properties,
Inc.
 4309 Emperor Boulevard, Suite 110
 Durham, North Carolina
27703

		
	with a copy to:  	  	 Crown Royal Associates, LLC
 18201 Von Karman
Avenue
 Suite 950
 Irvine, California 92612

		
	Tenant:	  	 Novan, Inc.
 4222 Emperor Boulevard, Suite
470
 Durham, North Carolina 27703

 (k) Security Deposit: See Section 35(f). 

(l) Brokers: Tri Properties, Inc. and Cassidy Turley 

(m) Guarantor(s): None 

(n) Parking: Tenant shall have the non-exclusive right to use 2.58 unreserved parking spaces per 1,000 rentable square
feet of the Premises in the surface parking areas adjacent to the Building, or in areas otherwise designated by Landlord, which constitute a portion of the Common Areas, subject to the provisions of this Lease. 

  
 2 

 2. DESCRIPTION OF PREMISES. 

Landlord hereby leases to Tenant, and Tenant hereby accepts and rents from Landlord, the Premises within the Building located in the Business
Park; together with the nonexclusive right to use the Common Areas in accordance with the terms and conditions of this Lease. Landlord and Tenant hereby stipulate that the Premises contains the number of square feet specified in Section 1(a) above,
except that the square feet of the Premises and the Building are subject to verification from time to time by Landlord’s architect/space planner. In the event that Landlord’s architect/space planner determines that the amounts thereof
shall be different from those set forth in this Lease, all amounts, percentages and figures appearing or referred to in this Lease based upon such incorrect amount (including, without limitation, the amount of the Minimum Rent and Tenant’s
Proportionate Share shall be modified in accordance with such determination. If such determination is made, Landlord will give notice thereof to Tenant. Landlord may deliver to Tenant a Commencement Letter in a form substantially similar to that
attached hereto as Exhibit “B”, which Tenant shall execute and return to Landlord within five (5) days after receipt thereof. Failure of Tenant to timely execute and deliver the Commencement Letter shall constitute an acknowledgment
by Tenant that the statements included in such notice are true and correct, without exception. 
 3. TERM; COMMENCEMENT DATE; DELIVERY
OF PREMISES. 
 (a) Term. 

This Lease shall be effective as of the Effective Date. Unless otherwise adjusted as hereinbelow provided, the Term shall commence on the
Commencement Date and expire on the Expiration Date. In the event the Commencement Date is a day other than the first day of a calendar month, the Term shall be extended and shall expire on that date which is sixty-six (66) full calendar months from
the first day of the first full calendar month immediately following the Commencement Date (the “Adjustment Date”). As used herein, the term “Lease Year” shall mean each consecutive twelve-month period of the Term, beginning with
the Commencement Date or any anniversary thereof; provided, however, in the event the Commencement Date is a day other than the first day of a calendar month, the first Lease Year shall be that period commencing on the Commencement Date and
continuing until the first anniversary of the Adjustment Date and each succeeding Lease Year shall be a twelve-month period beginning with each subsequent anniversary of the Adjustment Date. 

(b) Commencement Date. 

Notwithstanding anything contained herein to the contrary, the Commencement Date shall be deemed to be the earlier of: (a) the date Tenant, or
any person occupying any portion of the Premises with Tenant’s permission, commences business operations from the Premises, or (b) the first business day following the date of Landlord’s delivery of the Premises to Tenant upfitted in
substantial accordance with Exhibit “C” hereto or the date upon which Landlord would have delivered the Premises to Tenant upfitted in substantial accordance with Exhibit “C” but for delays attributable to Tenant or
Tenant’s Invitees (as hereinafter defined). Landlord currently estimates that subject to Force Majeure, and the acts or omissions of Tenant or Tenant’s Invitees, Landlord will be in a position to deliver the Premises upfitted in
substantial accordance with the Exhibit “C” on or before March 1, 2011 (the “Target Date”). Notwithstanding anything contained herein to the contrary, in no event shall Landlord’s completion of the Tenant Improvements
be dependent upon, or the Commencement Date delayed because of, the installation of any special equipment or improvements to the Premises to be supplied and installed by Tenant. 

  
 3 

 (c) Access License. 

Landlord acknowledges that Tenant wishes to be permitted entry into the Premises prior to the Commencement Date in order to place or install
fixtures, furniture, and equipment, including certain cabling and wiring necessary for Tenant’s use and occupancy of the Premises (collectively, the “Work”). Beginning approximately fourteen (14) days prior to the Commencement Date,
Tenant shall be permitted, and Landlord hereby grants to Tenant a limited non-exclusive license (“Access License”) therefor, to enter into the Premises for purposes of performing the Work. The Access License shall be subject to the terms
and conditions of this Lease. Tenant shall ensure that Tenant’s performance of the Work does not disturb other tenants or create a nuisance, and shall be solely responsible for all costs associated with the Work. Tenant shall repair any damage
to the Building resulting from the Work in a prompt and diligent manner. The performance of the Work shall be at Tenant’s sole risk and expense, and Landlord shall not be liable for any loss, damage, casualty, injury, death, or any other
liability resulting from the Work. Tenant shall indemnify and save harmless Landlord from and against any such liability for damages, costs, and expenses, including reasonable attorneys’ fees, from injury or death to any person or damage to any
property resulting from the Access License. In no event shall the Commencement Date be delayed due to the Work or the Access License. 

(d) Delivery of Premises. 

Landlord will supervise the design, construction and installation of the initial improvements in the Premises (the “Tenant
Improvements”) in substantial accordance with the specifications therefor set forth on that certain drawing attached hereto as Exhibit “C” (the “Plans”), and the following terms and conditions. In connection with
any request by Landlord relating to the Tenant Improvements (including, without limitation, the design and construction thereof), Tenant shall adequately respond to (and approve or reasonably disapprove) such request within three (3) business days
after notice from Landlord; failure to so respond shall be deemed Tenant’s consent to the matter in question. Additionally, any failure to timely respond shall constitute a tenant delay which would accelerate the Commencement Date, as provided
above. 
 Landlord shall deliver the Premises to Tenant upon substantial completion of the Tenant Improvements. As used, herein the terms
“substantially complete” or “substantial completion” shall mean that the Tenant Improvements have been completed (i) in a good and workmanlike manner, (ii) subject only to “punch list” items that do not materially
interfere with Tenant’s use of the Premises, (iii) in compliance with laws, and (iv) in accordance with the Plans, certified by Landlord’s engineer or architect inspecting the work. With regard to the punch list items referred to in the
preceding sentence, Landlord shall reasonably and diligently complete such work following delivery of the Premises to Tenant. If Landlord for any reason whatsoever cannot deliver possession of the Premises to Tenant in accordance with the terms
hereof on or before the Target Date as hereinabove specified, including delays attributable to the failure of the existing tenant(s) of the Premises to vacate said Premises in accordance with its lease(s), this Lease shall not be void or voidable
nor shall Landlord be liable to Tenant for any loss or damages resulting therefrom; but in that event, except to the extent that any such delay is attributable to Tenant or its agents, employees, contractors, affiliates, partners, subcontractors,
licensees, invitees or subtenants (hereinafter collectively referred to as “Tenant’s Invitees”), the Commencement Date shall be adjusted to be the date when Landlord does in fact deliver possession of the Premises to Tenant in
accordance with the terms hereof. 

  
 4 

 In connection with the Tenant Improvements, Landlord shall, on a one-time basis only, contribute
up to a maximum of Five and 50/100 Dollars ($5.50) per rentable square foot of the Premises (the “Tenant Improvement Allowance”) toward the costs of installing the Tenant Improvements. In the event that either prior to the commencement of
the installation of the Tenant Improvements or at any time during or following the installation of the Tenant Improvements, the cost of the Tenant Improvements exceeds the Tenant Improvement Allowance, then Tenant shall promptly deliver the
necessary funds to defray such excess cost to Landlord no later than fifteen (15) days after Landlord demands same. 
 Landlord anticipates
that certain personal property and equipment, which property is benches and casework, hoods, automatic transfer switch, air compressor, vacuum pump, one phone/data rack, dishwasher and refrigerator in breakroom, lab glass-washer, 75KW generator,
fire extinguishers, all existing phone, data and security cabling in the Premises, and the Sonitrol security system (collectively, the “Property”), installed by the current occupant of the Premises will be abandoned therein by such
occupant, and Tenant has expressed its desire to use the Property during the Term in connection with its operation from the Premises. Tenant’s use of the Property shall be at Tenant’s sole risk, cost, and expense. Landlord makes no
representation or warranty whatsoever concerning the Property, and Tenant shall accept the same in its as-is, where-is, condition and with all faults. Tenant shall be solely responsible for the repair and maintenance of the Property during the Term.
At the expiration of this Lease, provided that no Event of Default has occurred or is continuing, Landlord shall transfer to Tenant any interest of Landlord in the Property, and Tenant shall remove the same from the Premises and repair any damages
to the Premises resulting therefrom in accordance with this Lease. In the event such interest is not transferred to Tenant as set forth in the preceding sentence due to an Event of Default, upon Landlord’s request, Tenant shall remove the
Property from the Premises and dispose of same as Landlord shall reasonably direct, and shall repair any damages to the Premises resulting from the Property and its removal in accordance with this Lease. 

4. RENT. During the Term, Tenant shall pay to Landlord, in care of Landlord’s agent, Tri Properties, Inc. at the notice
address set forth in Section 1(j) herein, without notice, demand, reduction (except as may be applicable pursuant to the Sections of this Lease entitled Damage or Destruction of Premises” and “Eminent Domain”), setoff or any defense,
a total rent (the “Annual Rent”) consisting of the sum total of the following rent components set forth in this Section. 

(a) Minimum Rent. 

Beginning with the Commencement Date and continuing through the Expiration Date or earlier termination of this Lease, subject to the terms of
this Lease, Tenant shall pay Minimum Rent in accordance with the schedule set forth in Section 1(g) in equal monthly installments each in advance on or before the first day of each month. If the Commencement Date is a date other than the first day
of a calendar month, the Minimum Rent shall be prorated daily from such date to the first day of the next calendar month and paid on or before the Commencement Date. 

(b) Additional Rent. 

[Intentionally Deleted] 

(c) Operating and Maintenance Expenses. 

  
 5 

 Tenant shall pay Tenant’s Proportionate Share (as set forth in Section 1(h)) of the costs
and expenses paid or incurred by Landlord each calendar year in the ownership, management, operation, repair replacement and maintenance of the Premises, Building, Common Areas and the rest of the Business Park (collectively, the “Operating
Expenses”). For purposes hereof, Operating Expenses shall include without limitation, all: (i) ad valorem taxes (or any tax hereafter imposed in lieu thereof) levied on the Premises, the Building, the Common Areas or any improvements thereon,
and all assessments and reassessments relating to the foregoing, plus any and all real estate taxes and other similar charges on real property or improvements, assessments, reassessments, water and sewer charges, and all other charges assessed,
reassessed or levied upon the Building, Business Park and/or appurtenances thereto and the parking or other facilities thereof, or the real property thereunder or attributable thereto or on the rents, issues, profits or income received or derived
therefrom which are assessed, reassessed or levied by the United States, the State of North Carolina or any local government authority or agency or any political subdivision thereof, and shall include Landlord’s reasonable legal fees, costs and
disbursements incurred in connection with proceedings for reduction of tax expenses or any part thereof, (ii) insurance premiums and policy deductibles paid with respect to the Building, including, without limitation, fire and extended coverage
insurance and liability insurance and any other insurance carried by Landlord in connection with the Premises, Building and/or Business Park, (iii) personal property taxes applicable to the Building or the Premises, (iv) any reasonable fees or costs
incurred in connection with protesting any tax assessment, (v) all utilities and services, including, without limitation, electricity, gas, heat and air conditioning, standard janitorial service and window cleaning, (vi) building management
(including management fees not to exceed four percent (4%) of Minimum Rent), (vii) the cost of grass mowing, shrub care and general landscaping, irrigation systems, maintenance and repair to parking and loading areas (including storage of
materials), driveways, sidewalks, exterior lighting, garbage collection and disposal, snow removal, water and sewer, plumbing, signs and other facilities serving or benefiting the Premises or the Building, (viii) the cost of all services rendered by
third parties with respect to the Premises, Building and the Common Areas and all costs paid or incurred by Landlord in providing any of the services to be provided by Landlord pursuant to the terms of this Lease; (ix) costs of all capital
improvements (including replacement of the roof), repairs or equipment to the Building which are either required under any governmental law or regulation or which reduce Operating Expenses; provided that the cost of any such capital improvements,
repairs or equipment shall be amortized on a straight line basis over a reasonable period of time, with interest (all as reasonably determined in accordance with generally accepted accounting principles as reasonably interpreted by Landlord), (x)
Common Area operating, ownership, management, replacement, repair and maintenance costs, and (xi) the Building’s proportionate share of the reasonable costs and expenses paid or incurred by Landlord in the operation, ownership, management,
replacement, repair and maintenance of the Business Park, including without limitation, the reasonable costs and expenses associated with the creation, maintenance and operation of Business Park amenities made available for the common use and
enjoyment of the tenants of the Business Park from time to time. 
 (d) Payment of Operating Expenses. 

Tenant shall pay to Landlord in advance each month, along with Tenant’s installments of Minimum Rent (and Additional Rent, if applicable)
an amount (the “Tenant Contribution”) equal to one-twelfth (1/12) of Tenant’s Proportionate Share of the Operating Expenses as hereinabove described for any calendar year (including any applicable partial calendar year). Landlord will
make reasonable efforts to provide Tenant with Landlord’s estimate of Tenant’s Contribution for the upcoming calendar year on or before December 15 of each calendar year during the Term hereof. Not more than twice during any calendar
year, Landlord may in good faith revise Tenant’s Proportionate Share of the Operating Expenses and upon Tenant’s receipt of a revised statement, Tenant shall pay Operating Expenses on the basis of such statement. If Landlord fails to
notify Tenant of the revised amount of Tenant’s Contribution by such date, Tenant shall continue to pay the monthly installments of Tenant’s Contribution, if any, last payable by Tenant until notified by Landlord of such new estimated
amount. No later than May 1 of each calendar 

  
 6 

 
year of the Term, Landlord shall endeavor to deliver to Tenant a written statement setting forth the actual amount of Tenant’s Contribution for the preceding calendar year. The failure of
Landlord to timely furnish any statement or other invoice for any calendar year shall not preclude Landlord from subsequently enforcing its rights to collect the same. Tenant shall pay the total amount of any balance due shown on such statement
within thirty (30) days after its delivery. In the event such annual costs decrease for any such year, Landlord shall reimburse Tenant for any overage paid. For the calendar year in which this Lease commences, Tenant’s Contribution shall be
prorated from the Commencement Date through December 31 of such year. Further, Tenant shall be responsible for the payment of Tenant’s Contribution for the calendar year in which this Lease expires, prorated from January 1 thereof
through the Expiration Date. Upon the Expiration Date, Landlord may elect either (i) to require Tenant to pay any unpaid estimated amount within thirty (30) days after the Expiration Date, which estimate shall be made by Landlord based upon actual
and estimated costs for such year, or (ii) to withhold the Security Deposit until the exact amount payable by Tenant is determinable, at which time Tenant shall promptly pay to Landlord any deficiencies, or Landlord shall return any excess Security
Deposit to Tenant, within thirty (30) days after such determination is made. Even though the Term has expired and Tenant has vacated the Premises, when the final determination is made of Tenant’s Proportionate Share of the Operating Expenses
for the calendar year in which this Lease terminates Tenant shall immediately pay to Landlord an amount as calculated pursuant to the provisions of this subsection (d). In no event shall Tenant’s Contribution increase in any calendar year by
more than seven percent (7%) over Tenant’s Contribution in the immediately preceding calendar year due to increases in expenses over which Landlord has reasonable control, as opposed to costs and expenses which Landlord does not have reasonable
control (“Uncontrollable Expenses”). Uncontrollable Expenses include taxes, insurance costs, snow removal expenses, stormwater fees and similar governmentally or quasi-governmentally imposed fees, and utility expenses. The provisions of
this subsection (d) shall survive the expiration or earlier termination of the Term, including Landlord’s obligation to refund any overage if applicable. 

(e) Documentary Tax. 

In the event that any documentary stamp tax, sales tax or any other tax or similar charge (exclusive of any income tax payable by Landlord as
a result hereof) becomes applicable to the rental, leasing or letting of the Premises, whether local, state or federal, and is required to be paid due to the execution hereof or otherwise with respect to this Lease or the payments due hereunder, the
cost thereof shall be borne by Tenant and shall be paid promptly and prior to same becoming past due. Tenant shall provide Landlord with copies of all paid receipts respecting such tax or charge promptly after payment of same. 

(f) Late Payment. 

If any monthly installment of Minimum Rent, Additional Rent (if any) or any other sum due and payable pursuant to this Lease remains due and
unpaid five (5) days after said amount becomes due, Tenant shall pay as additional rent hereunder a late payment charge equal to five percent (5%) of such past due amount. All unpaid rent and other sums of whatever nature owed by Tenant to Landlord
under this Lease shall bear interest from the tenth (10th) day after the due date thereof until paid at the lesser of two percent (2%) per annum above the “prime rate” as published in The Wall Street Journal from time to time (the
“Prime Rate”) or the maximum interest rate per annum allowed by law. Acceptance by Landlord of any payment from Tenant hereunder in an amount less than that which is currently due shall in no way affect Landlord’s rights under this
Lease and shall in no way constitute an accord and satisfaction. 

  
 7 

 5. ALTERATIONS AND IMPROVEMENTS BY TENANT. 

Tenant shall make no alterations, installations, improvements, changes or additions (collectively, “Alterations”) which are
structural to the Premises or the Building (or Business Park) (or to the mechanical or other systems or equipment of the Building) and shall make no Alterations of any kind respecting the Premises or the Building which are visible from the exterior
of the Premises without Landlord’s prior written consent, to be granted or withheld in Landlord’s sole and absolute discretion. Any other alterations, shall be made by or on behalf of Tenant only with the prior written consent of Landlord,
which consent shall not be unreasonably withheld or delayed. Any Alterations approved by Landlord must be performed in accordance with the terms hereof, using only contractors or mechanics approved by Landlord in writing and upon the approval by
Landlord in writing of fully detailed and dimensioned plans and specifications pertaining to the Alterations in question, to be prepared and submitted by Tenant at its sole cost and expense, Tenant shall at its sole cost and expense obtain all
necessary approvals and permits pertaining to any Alterations approved by Landlord, Tenant shall cause all Alterations to be performed in a good and workmanlike manner, in conformance with all applicable federal, state, county and municipal laws,
rules and regulations, pursuant to a valid building permit, and in conformance with Landlord’s construction rules and regulations. All Alterations, including without limitation all partitions, walls, railings, carpeting, floor and wall
coverings and other fixtures (excluding, however, Tenant’s trade fixtures as described in the Section entitled “Trade Fixtures and Equipment” below) made by, for, or at the direction of Tenant shall, when made, become the property of
Landlord, at Landlord’s sole election (but without obligation) and shall, unless otherwise specified by Landlord at the time Landlord gives its consent thereto, remain upon the Premises at the expiration or earlier termination of this Lease.

 Notwithstanding anything contained herein to the contrary, all Alterations undertaken by Tenant shall be consistent with the
then-existing quality, color scheme (where appropriate), general aesthetic appearance and tenor of the balance of the Building and, in any event, Landlord may withhold its consent to any proposed Alteration by Tenant unless Tenant agrees to remove
said Alteration at the end of the Term and/or restore the Premises to the condition in which it existed prior to the undertaking of the proposed Alteration. Further, all Alterations, including without limitation the Tenant Improvements, whether
undertaken by Tenant or Landlord shall be subject to a fee (the “Construction Management Fee”) equal to Five percent (5%) of the total cost of planning and constructing any Alterations. Tenant agrees to pay Landlord the Construction
Management Fee within ten (10) days after receipt of Landlord’s invoice therefor. 
 6. USE OF PREMISES. 

(a) Tenant shall use the Premises only for general laboratory, research and development, and manufacturing purposes with ancillary office use
and for no other purpose whatsoever. Tenant shall comply with all laws, ordinances, orders, regulations or zoning classifications of any lawful governmental authority, agency or other public or private regulatory authority (including insurance
underwriters or rating bureaus) having jurisdiction over the Premises. Tenant shall not do any act or follow any practice relating to the Premises, the Building or the Common Areas which shall constitute a nuisance or detract in any way from the
reputation of the Business Park as a first-class real estate development comparable to other comparable buildings in the Raleigh/Durham market taking into account rent and other relevant factors. Tenant’s duties in this regard shall include
allowing no noxious or offensive odors, fumes, gases, smoke, dust, steam or vapors, or any loud or disturbing noise or vibrations to originate in or emit from the Premises. In addition, Tenant shall not conduct a sale of any personal property on or
about the Premises, the Building or in the Common Areas without the prior written consent of Landlord. Subject to the initial construction of the Tenant Improvements, Tenant hereby agrees that the Premises shall be taken “As Is”,
“With All Faults”, “Without any Representations or Warranties”, and Tenant hereby agrees and warrants that it has investigated and inspected the condition of the Premises and the suitability of same for Tenant’s purposes,
and Tenant does hereby waive and disclaim any objection to, cause of action based upon, or 

  
 8 

 
claim that its obligations hereunder should be reduced or limited because of the condition of the Premises or the Building (or Business Park) or the suitability of same for Tenant’s
purposes. Tenant acknowledges that neither Landlord nor any manager, broker agent nor any employee of Landlord has made any representations or warranty with respect to the or the Building (or Business Park) or with respect to the suitability of the
same for the conduct of Tenant’s business and Tenant expressly warrants and represents that Tenant has relied solely on its own investigation and inspection of the Premises and the Building (and Business Park) in its decision to enter into
this Lease and let the Premises in the above-described condition. The taking of possession of the Premises by Tenant shall conclusively establish that the Premises and the Building (and Business Park) were at such time in satisfactory condition.

 (b) Without limiting the generality of (a) above, and excepting only cleaning materials used by Tenant in its ordinary day to day
business operations (but not held for sale, storage or distribution) and customarily used in facilities such as the Building, and then only to the extent used, stored (but not any bulk storage), transported, and disposed of strictly in accordance
with all applicable laws, regulations and manufacturer’s recommendations, the Premises shall not be used for the treatment, storage, transportation to or from, use or disposal of toxic or hazardous wastes, materials, or substances, or any other
substance that is prohibited, limited or regulated by any governmental or quasi-governmental authority or that, even if not so regulated, could or does pose a hazard to health and safety of the occupants of the Building or surrounding property
(collectively “Hazardous Substances”). 
 Notwithstanding the foregoing, for so long as Tenant is able to continuously insure
against Landlord’s actual or potential losses stemming from Tenant’s introduction of Hazardous Materials to the Premises or Building as set forth in the following paragraph of this Section, Tenant may utilize, other than radioactive
substances, Hazardous Substances in its operation from the Premises, provided that such utilization occurs only after Tenant procures and continuously maintains all required licenses and permits related to such use and such use is and remains in
compliance with all applicable laws, regulations and manufacturer’s recommendations and the terms and conditions of this paragraph. With regard to pathogens Tenant may utilize pathogens classified in Risk Groups 1 and 2 pursuant to National
Institutes of Health (“NIH”) Guidelines and the World Health Organization (“WHO”) Laboratory Biosafety Manual regarding “Classification of Infectious Microorganisms by Risk Group.” provided that Tenant shall comply with
all NIH, WHO, and all other applicable governmental and regulatory guidelines, recommendations, and requirements. The introduction of pathogens classified in Risk Groups 3 and 4 to the Premises shall require Landlord’s prior written approval,
to be granted or denied in Landlord’s sole and subjective discretion. In all events Tenant shall obtain and provide to Landlord copies of all permits or other certifications in connection with Tenant’s activities. Tenant shall promptly
provide to Landlord the results of all Environmental Protection Agency and all other governmental or regulatory authority inspections with regard to the Premises and Tenant’s operation therein, and Tenant shall immediately provide to Landlord,
upon the occurrence of any spill or contamination within the Premises that would require Tenant to notify any governmental or regulatory agency, a copy of Tenant’s notice to such agency. In addition, without limitation, Tenant shall be liable
for, and shall indemnify, defend and hold Landlord and its agents, employees, lenders, managers, affiliates, partners and members harmless from, all costs, damages, liabilities and expenses (including reasonable attorneys’ fees) incurred in
connection with the use, storage, discharge or disposal of any Hazardous Substances by Tenant or Tenant’s Invitees, or any breach of this Section 6. Prior to execution of this Lease (and thereafter, on or before each anniversary of the
Commencement Date), Tenant shall complete the Hazardous Materials Disclosure Certificate attached hereto as Exhibit “E” and deliver a fully executed copy of same to Landlord for its review. 

  
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 At all times from and after the date that Tenant first takes occupancy of the Premises and
thereafter throughout the Term, Tenant shall, at its sole cost and expense, keep in force insurance in coverages and amounts not less than that set forth below: 
  

													
	Coverage	  	Each Pollution
Condition Limit	 	  	Coverage Aggregate
Limit	 	  	 Self-Insured

Retention
	 
				
	 A. Pollution Legal Liability
	  	$	2,000,000	  	  	$	2,000,000	  	  	$	25,000	  
				
	 B. On-Site and Off-Site Clean-up Costs
	  	$	2,000,000	  	  	$	2,000,000	  	  	$	25,000	  
				
	 C. Contracting Services Pollution Liability
	  	$	0	  	  	$	0	  	  	$	0	  
				
	 D. Non-Owned Disposal Site
	  	$	2,000,000	  	  	$	2,000,000	  	  	$	25,000	  
				
	 E. In-Bound and Out-Bound Contingent Transportation
	  	$	2,000,000	  	  	$	2,000,000	  	  	$	25,000	  

 Each such policy shall have a policy term of not less than five (5) years. All insurance required of Tenant
shall be with company(ies) licensed to do business in North Carolina and as shall from time to time be reasonably acceptable to Landlord (and to any lender having a mortgage interest in the Premises) and naming Landlord and Landlord’s agent as
a named insured (and, if requested by Landlord from time to time, naming Landlord’s mortgagee as a named insured). All policies of insurance required to be maintained by Tenant shall be with companies rated A-X or better in the most current
issue of Best’s Insurance Reports, have a deductible of Twenty-Five Thousand and No/100 Dollars ($25,000.00) or less, and shall include endorsements for terrorism and pre-existing conditions. Tenant shall first furnish to Landlord copies of
policies or certificates of insurance evidencing the required coverage prior to taking occupancy of the Premises and thereafter prior to each policy renewal date. All policies required of Tenant hereunder shall contain a provision whereby the
insurer is not allowed to cancel or not renew coverage without first giving sixty (60) days’ written notice to Landlord. If at any time there are changes to the insurance policies obtained by Tenant which would render such policies not in
compliance with the terms of this Section without Landlord’s prior written consent, or if a lapse in coverage is anticipated. Landlord may then obtain insurance consistent with the requirements of this Section and recover Landlord’s costs
thereby incurred upon demand from Tenant as additional rent. Landlord may request of Tenant’s insurer or of Tenant, and Tenant shall cause to be provided to Landlord, confirmation in a manner satisfactory to Landlord of Tenant’s
procurement of insurance as required by this Section on not more than two (2) occasions during any Lease Year; provided, however, Tenant shall cause such confirmation to be provided at any time following an Event of Default upon Landlord’s
request. 
 Upon not later than the date which is fourteen (14) days prior to the Commencement Date, Landlord shall provide to Tenant a
customary Phase 1 Environmental Site Assessment concerning the Premises (the “Phase 1”) and the recommendations, if any, provided by the provider of such Phase 1 to perform a Phase 2 Environmental Site Assessment (a “Phase 2”).
If such provider recommends a Phase 2, Landlord may, in its sole and absolute discretion, elect to obtain a Phase 2. If Landlord does not elect to obtain a Phase 2, then Landlord shall notify Tenant thereof, and Landlord and Tenant shall each be
permitted to terminate this Lease by written notice to the other party hereto received by such party within fifteen (15) business days following Landlord’s notice to Tenant that Landlord shall not obtain a Phase 2, whereupon this Lease shall be
of no further force or effect. If Landlord obtains a Phase 2 and such Phase 2 reveals that Hazardous Substances requiring remediation are present upon the Premises, and if Landlord notifies Tenant that Landlord in its sole and absolute discretion
will not perform such remediation, then Landlord and Tenant shall each be permitted to terminate this Lease upon written notice to the other party hereto received by such party within fifteen (15) business days following Landlord’s notice to
Tenant that Landlord shall not perform such remediation, whereupon this Lease shall be of no further force or effect. In the event of termination of this Lease pursuant to this paragraph, all indemnities and other provisions which state that such
provision shall survive termination of this Lease shall survive such termination. 

  
 10 

 (c) Tenant shall exercise due care in its use and occupancy of the Premises and shall not commit
or allow waste to be committed on any portion of the Premises; and at the expiration or earlier termination of this Lease, Tenant shall deliver the Premises to Landlord in the same condition in which it existed as of the Commencement Date, ordinary
wear and tear, alone excepted. Further, at the expiration or earlier termination of this Lease, Tenant shall, at its sole cost and expense, remove all telecommunications and computer cabling installed by or on behalf of Tenant or any of
Tenant’s Invitees, within the Premises or any other portion of the Building at Landlord’s request. In the event Tenant fails to remove such cabling within ten (10) business days after the expiration or earlier termination of this Lease,
Landlord may elect to remove same and Tenant shall promptly reimburse Landlord for all costs incurred by Landlord in connection with the removal of such equipment plus an administration fee equal to ten percent (10%) of such cost. In the event
Tenant fails to promptly pay such amounts, Landlord shall be entitled to deduct such amounts from the Security Deposit prior to returning same to Tenant. 

(d) Tenant’s use and occupancy of the Premises shall include the use in common with others entitled thereto of the Common Areas and all
other improvements provided by Landlord for the common use of the Building tenants, and any other common facility as may be designated from time to time by the Landlord, subject, however, to the terms and conditions of this Lease and to the Rules
and Regulations. Subject to the terms hereof, Tenant and its employees, agents, customers, and invitees shall have the non-exclusive use (in common with other benefiting tenants) to use the Common Areas for purposes intended and the non-exclusive
use of the adjacent surface parking areas in accordance with Section 1(n) herein. Tenant shall not at any time interfere with the use of the Common Areas by Landlord, another tenant or any other person entitled to use the same. Landlord reserves the
right, from time to time, to alter any of the Common Areas, to exercise control and management of the same, and to establish, modify, change and enforce such reasonable Rules and Regulations as Landlord in its sole and absolute discretion may deem
desirable for the management of the Building or the Common Areas. 
 (e) Tenant shall save Landlord harmless from any claims, liabilities,
penalties, fines, costs, expenses or damages resulting from the failure of Tenant to comply with the provisions of this Section 6. 
 (f)
Tenant’s obligations (including, without limitation, indemnity obligations) under this Section 6 shall survive the termination or expiration of this Lease. 

7. TAXES ON LEASE AND TENANT’S PROPERTY. 

Tenant shall pay any taxes, documentary stamps or assessments of any nature which may be imposed or assessed upon this Lease, Tenant’s
occupancy of the Premises or Tenant’s trade fixtures, equipment, machinery, inventory, merchandise or other personal property located on the Premises and owned by or in the custody of Tenant as promptly as all such taxes or assessments may
become due and payable without any delinquency. 
 8. FIRE AND EXTENDED COVERAGE INSURANCE. 

Landlord shall maintain, subject to reimbursement by Tenant as provided in Section 4 hereof, fire and casualty special form “all
risk” insurance, with extended coverage (including boiler and machinery coverage), covering the Building equal to at least one hundred (100%) of the replacement cost thereof. Additionally, Landlord shall keep in force during the term of this
Lease insurance in such amounts and coverages as Landlord deems appropriate from time to time, subject to reimbursement by Tenant as provided in Section 4 hereof, Tenant shall not do or cause to be done or permit on the Premises or in the

  
 11 

 
Building anything deemed hazardous on account of fire and Tenant shall not use the Premises, the Common Areas or the Building in any manner which will cause an increase in the premium rate for
any insurance in effect on the Building or a part thereof. If, because of anything done, caused to be done permitted or omitted by Tenant or Tenant’s Invitees, the premium rate for any kind of insurance in effect on the Building or any part
thereof shall be raised, Tenant shall pay Landlord on demand the amount of any such increase in premium which Landlord shall pay for such insurance and if Landlord shall demand that Tenant remedy the condition which caused any such increase in an
insurance premium rate, Tenant shall remedy such condition within five (5) days after receipt of such demand. Tenant shall maintain and pay for all fire and extended coverage insurance on its contents in the Premises, including trade fixtures,
equipment, machinery, merchandise or other personal property belonging to or in the custody of Tenant. In addition, at all times during the Term, Tenant shall procure and maintain business income and extra expense coverage in such amounts as will
reimburse Tenant for direct or indirect loss or earnings attributable to any loss caused by fire or other casualty or cause including, but not limited to, vandalism, theft and water damage of any type. Tenant shall first furnish to Landlord copies
of insurance policies or certificates of insurance evidencing the required coverage prior to the Commencement Date and thereafter prior to each policy renewal date. 

Notwithstanding anything herein to the contrary, Landlord reserves the right for itself, successors and assigns to self-insure against any
risk required hereunder to be insured or otherwise assumed by Landlord so long as any such program of self-insurance affords the same coverage of risks and benefits which would be afforded in the event Landlord procured insurance from a third-party
insurer. 
 9. LANDLORD’S COVENANT TO REPAIR AND REPLACE. 

(a) During the Term, Landlord shall maintain, as part of Operating Expenses, the Common Areas, and the structural portions of the Building,
meaning the foundation, roof (including the roof membrane), exterior walls and subflooring, and shall also maintain, repair, and replace the central plumbing and electrical systems and all other utility systems serving the entire Building up to the
respective applicable points of entry of same into the Premises. Notwithstanding the foregoing, Tenant shall reimburse Landlord within thirty (30) days after demand for any costs or expenses relating to the foregoing, required or requested by Tenant
or Tenant’s Invitees, or otherwise necessitated by the negligence, misconduct, or acts or omissions of Tenant or Tenant’s Invitees unless such amounts are paid to Landlord pursuant to an insurance policy. 

(b) Landlord shall not be liable for any failure to make any repairs or replacements or to perform any maintenance required of Landlord
hereunder unless such failure shall persist for an unreasonable period of time after written notice from Tenant setting forth the need for such repair(s) or replacement(s) in reasonable detail has been received by Landlord. Except as set forth in
the Sections of this Lease entitled “Damage or Destruction of Premises” and “Eminent Domain” there shall be no abatement of rent. There shall be no liability of Landlord by reason of any injury to or interference with
Tenant’s business arising from the making of any repairs, replacements, alterations or improvements to any portion of the Building or the Premises, or to fixtures, appurtenances and equipment therein except to the extent caused directly by
Landlord’s gross negligence or willful misconduct. To the extent permitted under applicable law, Tenant waives the right to make repairs at Landlord’s expense under any law, statute or ordinance now or hereafter in effect. 

  
 12 

 10. TENANT’S COVENANT TO REPAIR. 

Tenant shall be responsible for the repair, replacement and maintenance in good order and condition of all parts and components of the
Premises (other than those specified for repair, replacement and maintenance by Landlord in Section 9(a) above), including without limitation the plumbing wiring, electrical systems, HVAC system, glass and plate glass, equipment and machinery
constituting fixtures, unless such repairs or replacements are required as a result of the gross negligence or willful misconduct of Landlord, its agents, or employees, in which event Landlord shall be responsible for repair or replacement. At the
end of the Term, Tenant shall return the Premises to Landlord in the same condition in which it existed as of the Commencement Date, excepting only normal wear and tear, and repairs required to be made by Landlord hereunder. Tenant’s duty to
maintain the HVAC system shall specifically include the duty to enter into and maintain at Tenant’s sole expense during the entire term of this Lease a contract for the routine and periodic maintenance and regular inspection of such HVAC system
the replacement of filters as recommended and the performance of other recommended periodic servicing in accordance with applicable manufacturer’s standards and recommendations. Such contract: (a) shall be with a reputable contractor reasonably
satisfactory to Landlord; (b) shall satisfy the requirements for routine and periodic maintenance, if any, necessary to keep all applicable manufacturer’s warranties in full force and effect; and (c) shall provide that in the event this Lease
expires or is earlier terminated for any reason whatsoever that said contract shall be immediately terminable by Landlord or Tenant without any cost, expense or other liability on the part of Landlord. Tenant agrees to deliver a copy of the HVAC
maintenance contract to Landlord within ten (10) days after the Commencement Date. Landlord represents to Tenant that the HVAC system serving the Premises will be in good working order as of the Commencement Date. 

11. TRADE FIXTURES AND EQUIPMENT. 

Prior to installation, Tenant shall furnish to Landlord notice of all trade fixtures and equipment which it intends to install within the
Premises and the installation of same shall be subject to Landlord’s consent not to be unreasonably withheld, conditioned or delayed. Any trade fixtures and equipment installed in the Premises at Tenant’s expense and identified by Tenant
in notice to Landlord shall remain Tenant’s personal property and Tenant shall have the right at any time during the Term to remove such trade fixtures and equipment. Upon removal of any trade fixtures or equipment, Tenant shall immediately
restore the Premises to substantially the same condition in which it existed when the Premises was delivered to Tenant by Landlord, and ordinary wear and tear alone excepted. Any trade fixtures not removed by Tenant at the expiration or an earlier
termination of the Lease shall, at Landlord’s sole election, either (i) become the property of Landlord, in which event Landlord shall be entitled to handle and dispose of same in any manner Landlord deems fit without any liability or
obligation to Tenant or any other third party with respect thereto, or (ii) be subject to Landlord’s removing such property from the Premises and storing same, all at Tenant’s expense and without any recourse against Landlord with respect
thereto. Without limiting the generality of the foregoing, the following property shall in no event be deemed to be “trade fixtures” and Tenant shall not remove any such property from the Premises under any circumstances, regardless of
whether installed by Landlord or Tenant (except to the extent otherwise designated by Landlord, in its sole and absolute discretion): (a) any air conditioning, air ventilating or heating fixtures or equipment; (b) any lighting fixtures or equipment;
(c) any carpeting or other permanent floor coverings; (d) any paneling or other wall coverings; (e) plumbing fixtures and equipment; or (f) permanent shelving. 

12. UTILITIES. 

Landlord shall have the right from time to time to select the company or companies providing electricity, gas, fuel, local telephone,
telecommunication and any other utility services to the Building. Notwithstanding anything to the contrary contained in this Lease, Tenant shall contract directly and timely pay (prior to delinquency) for all electricity, gas, fuel, telephone,
telecommunications, water, 

  
 13 

 
sewer, fire sprinkler charges, and all other utility services used on or from the Premises together with any taxes, penalties, surcharges or similar charges relating to such services. If any
electricity or other utility service which is provided by Landlord (in its sole and absolute discretion) to the Premises is not separately metered to the Premises or is not otherwise separately accounted for and billed to Tenant, the cost therefor
with respect to the Premises shall be determined by Landlord, in Landlord’s good faith discretion, and Tenant shall pay all costs therefor within twenty (20) days after demand by Landlord (which demand may be made from time to time and at any
time). Notwithstanding any contrary provision contained herein, Landlord shall in no case be liable or in any way be responsible for damages or loss to Tenant arising from the failure of, diminution of or interruption in electrical power, natural
gas, fuel, sewer, water, or garbage collection services, other utility service or building service of any kind to the Premises. Notwithstanding anything to the contrary contained in this Lease, Tenant shall contract directly with a janitorial
service and shall pay for all janitorial services used on or for the Premises. All janitorial services and employees utilized by Tenant shall be subject to Landlord’s prior reasonable consent. Tenant shall have no right whatsoever to use or
access space on the Building rooftop or in Building risers, equipment rooms and/or equipment closets. 
 13. DAMAGE OR DESTRUCTION OF
PREMISES. 
 If the Premises are damaged by fire or other casualty, but are not rendered untenantable for Tenant’s business,
either in whole or in part, Landlord shall cause such damage to be repaired without unreasonable delay and the Annual Rent shall not abate. If by reason of such casualty the Premises are rendered untenantable for Tenant’s business, either in
whole or in part, Landlord shall cause the damage to the physical structure of the Building (excluding any tenant improvements or alterations therein) to be repaired or replaced without unreasonable delay, and, in the interim, the Annual Rent shall
be proportionately reduced as to such portion of the Premises as is rendered untenantable, however, Tenant must vacate the portion of the Premises deemed untenantable during the period of Landlord’s repairs for such abatement of Annual Rent to
be effective. Any such abatement of rent shall not create an extension of the Term. Provided, however, if by reason of such casualty, the Premises are rendered untenantable in some material portion, and Landlord, in its commercially
reasonable estimation, determines that the amount of time required to repair the damage using due diligence is in excess of two hundred ten (210) days (as measured from the date of casualty), then Landlord shall provide written notice thereof to
Tenant, to be given to Tenant within seventy-five (75) days following the date of such casualty, and either party shall then have the right to terminate this Lease by giving written notice of termination within thirty (30) days after the date of
said notice from Landlord. In such event, the Annual Rent shall (i) abate as of the date of such casualty in proportion to the part of the Premises rendered untenantable, and (ii) abate entirely as of the effective date of the termination of this
Lease. Notwithstanding the foregoing, in the event the casualty giving rise to an election to terminate is caused by the negligence, misconduct or acts or omissions of Tenant or Tenant’s Invitees, Tenant shall have no right to terminate this
Lease. Notwithstanding the other provisions of this Section, in the event there should be a casualty loss to the Premises during the last two (2) Lease Years of the Term, Landlord may, at its option, terminate this Lease by giving written notice to
Tenant within thirty (30) days after the date of the casualty and the Annual Rent shall abate as of the date of such notice. Except as provided herein, Landlord shall have no obligation to rebuild or repair in case of fire or other casualty, and no
termination under this Section shall affect any rights of Landlord or Tenant hereunder arising from the prior defaults of the other party. Tenant shall give Landlord immediate notice of any fire or other casualty in the Premises. Notwithstanding
anything contained in this Section to the contrary, in no event shall Landlord be required to expend more funds in connection with the repair or restoration of the Premises than the amount received by Landlord from the proceeds of any insurance
policies maintained by Landlord. 

  
 14 

 14. GOVERNMENTAL REQUIREMENTS. 

Tenant shall comply with all statutes, ordinances, codes, laws, rules, regulations, orders and directives of any Governmental Agency (defined
below) as now or later amended (collectively, “Governmental Requirements”), including, without limitation, Access Laws (defined below) relating to the Premises (including, without limitation, Tenant’s use, occupancy and operation
thereof) and all other covenants, conditions and restrictions and other matters of record. For purposes hereof, (a) “Governmental Agency” is defined as the United States of America, the State of North Carolina, any county, city, district,
municipality or other governmental subdivision, court or agency or quasi-governmental agency having jurisdiction over the Premises or Building and/or Business Park and any board, agency or authority associated with any such governmental entity,
including the fire department having jurisdiction over the Premises, Building and/or Business Park, and (b) “Access Laws” is defined as the Americans With Disabilities Act of 1990 (including, without limitation, the Americans with
Disabilities Act Accessibility Guidelines for Building and Facilities) and all other Governmental Requirements relating to the foregoing. 

15. MUTUAL WAIVER OF SUBROGATION. 

For the purpose of waiver of subrogation, the parties mutually release and waive unto the other all rights to claim damages, costs or expenses
for any injury to property caused by a casualty or any other matter whatsoever in, on or about the Premises if the amount of such damage, cost or expense has been paid to such damaged party under the terms of any policy of insurance or would have
been paid if the injured party had carried the insurance required of it hereunder. All insurance policies earned with respect to this Lease, if permitted under applicable law, shall contain a provision whereby the insurer waives, prior to loss, all
rights of subrogation against either Landlord or Tenant. 
 16. SIGNS AND ADVERTISING. 

Landlord shall install, at Tenant’s sole cost and expense, tenant identification signage in accordance with Building standards, at or
near the Tenant’s suite entrance to the Premises within the Building and upon the exterior Building parapet. Tenant shall, at Tenant’s sole cost and expense, maintain such signage in good working order and keep such signage clearly visible
during Tenant’s normal business hours. All signage (including, without limitation, size, location, design, content, specifications and color) shall be subject to the prior written consent of Landlord, which consent shall not be unreasonably
withheld must conform to all applicable signage criteria and is subject to all governmental requirements and approvals. 
 In order to,
among other things, provide architectural control for the Building and the Business Park, Tenant shall not install any exterior signs, marquees, billboards, outside lighting fixtures and/or other decorations on the Building, the Premises, or the
Common Areas. Landlord shall have the right to remove any such sign or other decoration and restore fully the Building, the Premises, or the Common Areas at the cost and the expense of Tenant if any such exterior work is done without Landlord’s
prior written approval, which approval Landlord shall be entitled to withhold or deny in its sole and absolute discretion. Tenant shall not permit, allow or cause to be used in, on or about the Premises any sound production devices, mechanical or
moving display devices, bright lights, or other advertising media, the effect of which would be visible or audible from the exterior of the Premises. 

17. INDEMNIFICATION AND LIABILITY INSURANCE. 

Tenant shall indemnify, defend and hold Landlord and Landlord’s partners, members, affiliates, partners, lenders, agents, directors,
shareholders, employees and principals (collectively, “Landlord Parties”) harmless from any and all claims, suits, demands, actions, fines, damages, and liabilities, and all costs and expenses thereof (including without limitation
reasonable attorneys’ fees) (collectively, 

  
 15 

 
“Claims”) arising or resulting from Tenant’s use of the Premises or the Building (or Business Park) or from the conduct of its business or from any activity, work or thing which
may be permitted or suffered by Tenant in or about the Premises or the Building (or Business Park) and shall further indemnify, defend and hold Landlord and the Landlord Parties harmless from and against any and all Claims arising or resulting from
any breach or default in the performance of any obligation on Tenant’s part to be performed under this Lease or arising from any negligence or willful misconduct of Tenant or any of its agents, affiliates, contractors, employees, licensees,
subtenants or invitees, patrons, customers or members in or about the Building or Business Park and from any and all costs, attorneys’ fees and costs, expenses and liabilities incurred in the defense of any claim or any action or proceeding
brought thereon, including negotiations in connection therewith. The provisions of this Section 17(a) shall survive expiration or termination of this Lease. 

At all times during the term of this Lease, Tenant shall, at its sole cost and expense, keep in force the following insurance: 

(i) public liability insurance under the terms of a commercial general liability policy (occurrence coverage) in the amount of not less than
Three Million and No/100 Dollars ($3,000,000.00) per occurrence including owners and contractors protective coverage, blanket contractual coverage including both oral and written contracts, and personal injury coverage, covering the insuring
provisions of this Lease; 
 (ii) a policy of standard fire, extended coverage and special extended coverage insurance (all risks),
including a vandalism and malicious mischief endorsement, sprinkler leakage coverage (if the Premises include sprinklers) in an amount equal to the full replacement value new without deduction for depreciation of all (A) Tenant Improvements,
Alterations, fixtures and other improvements in the Premises, including but not limited to all mechanical, plumbing, heating, ventilating, air conditioning, electrical, telecommunication and other equipment, systems and facilities, and (B) trade
fixtures, furniture, equipment and other personal property installed by or at the expense of Tenant; and 
 (iii) Worker’s
Compensation coverage as required by law 
 All insurance required of Tenant shall be with such company(ies) licensed to do business in
North Carolina and as shall from time to time be reasonably acceptable to Landlord (and to any lender having a mortgage interest in the Premises) and naming Landlord and Landlord’s agent as an additional insured (and, if requested by Landlord
from time to time, naming Landlord’s mortgagee as an additional insured). In the event Tenant employs any contractor to perform any work in the Premises, Tenant shall provide Landlord with insurance certificates naming Landlord and such other
parties as Landlord may designate as additional insureds under policies of builders risk and general liability insurance and shall also provide Landlord with evidence of satisfactory workers compensation coverage in accordance with applicable
statutory requirements. All policies of insurance required to be maintained by Tenant shall be with companies rated A-X or better in the most current issue of Best’s Insurance Reports and shall have a deductible of Twenty-Five Thousand and
No/100 Dollars ($25,000.00) or less. Such insurance shall include, without limitation, personal injury and contractual liability coverage for the performance by Tenant of the indemnity agreements set forth in this Lease. Tenant shall first furnish
to Landlord copies of policies or certificates of insurance evidencing the required coverage prior to the Commencement Date and thereafter prior to each policy renewal date. All policies required of Tenant hereunder shall contain a provision whereby
the insurer is not allowed to cancel or change materially the coverage without first giving thirty (30) days’ written notice to Landlord. 

  
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 18. LANDLORD’S RIGHT OF ENTRY. 

Landlord, and those persons authorized by it, shall have the right to enter the Premises at all reasonable times and upon twenty four (24)
hours notice to Tenant and if escorted by Tenant’s representative and following Tenant’s reasonable protocol (except in the event of an emergency) for the purposes of making repairs, alterations or improvements as Landlord deems necessary
or desirable making connections, installing utilities, providing services to the Premises or for any other tenant, making inspections or showing the same to prospective purchasers, lenders, or prospective tenants, as well as at any time without
notice in the event of emergency involving possible injury to property or persons in or around the Premises or the Building. During the last nine (9) months of the Term, Landlord may actively market the Premises and may place in or upon the Premises
notices indicating that the Premises is available to be leased. 
 19. EMINENT DOMAIN. 

If any substantial portion of the Premises is taken under the power of eminent domain (including any conveyance made in lieu thereof) or if
such taking shall materially impair the normal operation of Tenant’s business, then either party shall have the right to terminate this Lease by giving written notice of such termination within thirty (30) days after such taking. If neither
party elects to terminate this Lease, Landlord shall repair and restore the Premises to the best possible tenantable condition (but only to the extent of any condemnation proceeds made available to Landlord) and the Annual Rent shall be
proportionately and equitably reduced as of the date of the taking. All compensation awarded for any taking (or the proceeds of a private sale in lieu thereof) shall be the property of Landlord whether such award is for compensation for damages to
the Landlord’s or Tenant’s interest in the Premises, and Tenant hereby assigns all of its interest in any such award to Landlord; provided, however, Landlord shall not have any interest in any separate award made to Tenant for loss of
business, moving expenses or the taking of Tenant’s trade fixtures or equipment if a separate award for such items is made to Tenant and such separate award docs not reduce the award to Landlord. Notwithstanding the foregoing, in no event shall
Tenant be entitled to any compensation for the loss of its leasehold estate. 
 20. EVENTS OF DEFAULT AND REMEDIES. 

(a) Upon the occurrence of any one or more of the following events (the “Events of Default, any one an “Event of Default”),
Landlord shall have the right to exercise any rights or remedies available in this Lease, at law and in equity. Events of Default shall be: 

(i) Tenant’s failure to pay any rent or other sum of money payable hereunder within five (5) days after the same becomes due; 

(ii) Tenant’s failure to timely perform any of the terms, covenants or conditions contained in Section 21
(“Subordination”) or Section 25 (“Estoppel Certificates”) of this Lease; 
 (iii) Tenant’s failure
to perform any other of the terms, covenants or conditions contained in this Lease (which are not addressed in (i) or (ii) above or (iv), (v) or (vi) below) if not remedied within thirty (30) days after receipt of written notice thereof, or if such
failure cannot be remedied within such period, Tenant does not within thirty (30) days after written notice thereof commence such act or acts as shall be necessary to remedy the default and shall not thereafter diligently prosecute such cure and
complete such act or acts within ninety (90) days after written notice thereof; 
 (iv) Tenant shall become bankrupt or insolvent, or file
any debtor proceedings, or file pursuant to any statute a petition in bankruptcy or insolvency or for reorganization, or file a petition for the appointment of a receiver or trustee for all or substantially all of Tenant’s assets and such
petition or appointment shall not have been set aside within sixty (60) days from the date of such petition or appointment, or if Tenant makes an assignment for the benefit of creditors, or petitions tor or enters into an arrangement; 

  
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 (v) Tenant vacates or abandons the Premises for a period of thirty (30) days or more; 

(vi) Intentionally deleted; or 

(vii) Tenant’s written repudiation or anticipatory breach of this Lease. 

(b) In addition to its other rights and remedies, Landlord, upon an Event of Default by Tenant, shall have the immediate right, after any
applicable grace period expressed herein, to terminate and cancel this Lease and/or terminate Tenant’s right of possession and reenter and remove all persons and properties from the Premises and dispose of such property as it deems fit, all
without being guilty of trespass or being liable for any damages caused thereby. If Landlord reenters the Premises, it may either terminate this Lease or, from time to time without terminating this Lease, terminate Tenant’s right of possession
and make such alterations and repairs as may be necessary or appropriate to relet the Premises and relet the Premises upon such terms and conditions as Landlord deems advisable without any responsibility on Landlord whatsoever to account to Tenant
for any surplus rents collected. No retaking of possession of the Premises by Landlord shall be deemed as an election to terminate this Lease unless a written notice of such intention is given by Landlord to Tenant at the time of reentry; but,
notwithstanding any such reentry or reletting without termination, Landlord may at any time thereafter elect to terminate for such previous default. In the event of an elected termination by Landlord, whether before or after reentry, Landlord may
recover from Tenant damages, including the costs of recovering the Premises and any costs incurred in reletting the Premises, and Tenant shall remain liable to Landlord for the total Annual Rent (which may at Landlord’s election be accelerated
to be due and payable in full as of the Event of Default and recoverable as damages in a lump sum) as would have been payable by Tenant hereunder for the remainder of the term less the rents actually received from any reletting or, at
Landlord’s election, less the reasonable rental value of the Premises for the remainder of the term. In determining the Annual Rent which would be payable by Tenant subsequent to default, except with respect to Minimum Rent (which shall be
calculated in accordance with Section 1(g) hereof), the Annual Rent for each Lease Year of the unexpired term shall be equal to the Annual Rent payable by Tenant for the last Lease Year prior to the default, subject to any adjustments thereto
provided for herein. If any rent owing under this Lease is collected by or through an attorney, Tenant agrees to pay Landlord’s reasonable attorneys’ fees to the extent allowed by applicable law. Landlord shall use reasonable efforts to
mitigate its damages. 
 21. SUBORDINATION. 

This Lease is subject and subordinate to all ground or underlying leases, mortgages and deeds of trust which affect the Premises, Building or
Business Park, regardless of the timing of same, including, without limitation, all renewals, modifications, consolidations, replacements and extensions thereof; provided, however, if the lessor under any such lease or the holder or holders of any
such mortgage or deed of trust shall advise Landlord that they desire or require this Lease to be prior and superior thereto, upon written request of Landlord to Tenant, Tenant agrees to promptly execute, acknowledge and deliver any and all
documents or instruments which Landlord or such lessor, holder or holders deem necessary or desirable for purposes thereof. Landlord shall have the right to cause this Lease to be and become and remain subject and subordinate to any and all ground
or underlying leases, mortgages or deeds of trust which may hereafter be executed covering the Premises, Building or Business Park, or any renewals, modifications, consolidations, replacements or extensions thereof, for the full amount of all
advances made or to be made thereunder and without regard to the time or character of such advances, together with interest thereon and subject to all the terms and provisions thereof. The provisions of this Section 21

  
 18 

 
shall be self-operative and shall not require the execution of any documents (without limiting Tenant’s obligations hereunder). However, Tenant agrees, within ten (10) days after Landlords
written request therefor, to execute, acknowledge and deliver upon request any and all documents or instruments requested by Landlord or necessary or proper to assure the subordination of this Lease to any such mortgages, deed of trust, or leasehold
estates. Tenant agrees that in the event any proceedings are brought for the foreclosure of any mortgage or deed of trust or any deed in lieu thereof, to attorn to the purchaser or any successors thereto upon any such foreclosure sale or deed in
lieu thereof as so requested to do so by such purchaser and to recognize such purchaser as the lessor under this Lease; Tenant shall, within five (5) days after request execute such further instruments or assurances as such purchaser may reasonably
deem necessary to evidence or confirm such attornment. Tenant agrees to provide copies of any notices of Landlord’s default under this Lease to any mortgagee or deed of trust beneficiary whose address has been provided to Tenant and Tenant
shall provide such mortgagee or deed of trust beneficiary a commercially reasonable time after receipt of such notice within which to cure any such default. Tenant waives the provisions of any current or future statute, rule or law which may give or
purport to give Tenant any right or election to terminate or otherwise adversely affect this Lease and the obligations of the Tenant hereunder in the event of any foreclosure proceeding or sale. Prior to the Commencement Date and after receipt of
written request from Tenant, Landlord shall request that its lender provide its customary non-disturbance and attornment agreement to Tenant. 

22. ASSIGNMENT AND SUBLETTING. 

Subject to Permitted Transfers, described below, Tenant shall not assign, sublet, mortgage, hypothecate, pledge or encumber this Lease, the
Premises, or any interest in the whole or in any portion thereof, directly or indirectly (each, a “Transfer”), without the prior written consent of Landlord, which consent shall not be unreasonably withheld or delayed. In the event of any
Transfer, Tenant shall, (i) remain primarily liable for the performance of all terms of this Lease, (ii) pay all reasonable costs incurred by Landlord in connection with such Transfer, including without limitation, attorneys fees and an
administration and processing fee equal to Two Thousand Five Hundred Dollars ($2,500.00), and (iii) pay to Landlord the Transfer Premium, as defined below. Landlord’s consent to one Transfer will not waive the requirement of its consent to any
subsequent assignment or sublease as required herein. Any attempted Transfer by Tenant in violation of the terms and conditions of this Section 22 shall be null and void. Upon notice to Landlord of a proposed sublease or assignment of all or any
portion of the Premises (the “Proposed Space”), Landlord shall have the option, within fifteen (15) days after its receipt of such notice, to terminate this Lease with respect to the Proposed Space, whereupon the parties hereto shall have
no further rights or liabilities with respect to the Proposed Space except as otherwise expressly set forth herein. “Transfer Premium” means fifty percent (50%) of all Annual Rent, other rent and other consideration payable in connection
with a Transfer in excess of the Annual Rent payable by Tenant under this Lease during the term of the Transfer and if such Transfer is for less than all of the Premises, the Transfer Payment shall be calculated on a rentable square foot basis. 

In the event of a proposed assignment of this Lease or subletting of all or a part of the Premises, Tenant shall submit to Landlord, in
writing, (i) the name of the proposed assignee or sublessee, (ii) current financial statements available to Tenant disclosing the financial condition of the proposed assignee or subtenant, (iii) the nature of the business of the proposed assignee or
sublessee, and its proposed use of the Premises (any assignment or subletting being subject to restrictions on use contained in this Lease, the violation of which by the proposed assignee or sublessee shall constitute absolute grounds for
Landlord’s denial of the requested assignment or subletting, such grounds not being the exclusive grounds for denial under clause (iii)) and (iv) the proposed commencement date of the assignment or subletting, together with a copy of the
proposed assignment or sublease. Within twenty (20) business days after its receipt of such notice and all other items required hereunder or reasonably required by Landlord to make an informed decision, Landlord shall either approve or disapprove
such 

  
 19 

 
proposed assignment or sublease in writing. If approved, Landlord shall provide a “Master Consent” agreement to tenant which shall be executed by Tenant and its assignee or sublessee.
Tenant shall promptly deliver a copy of the fully executed assignment or sublease to Landlord upon its receipt of same. 
 Subject to the
requirements of this Section, but without the necessity of Landlord approval, Tenant may assign this Lease upon ten (10) days advance written notice to Landlord to an entity which controls or is controlled by Tenant or in connection with a merger,
consolidation, corporate reorganization, or a sale of all or substantially all of Tenant’s assets (each, a “Permitted Transfer”), provided that: (i) the assignee has a net worth greater than or equal to Tenant’s net worth at the
time of the proposed assignment or at the time of Tenant’s execution of this Lease, whichever is greater, (ii) that such assignee assumes in writing, for the benefit of Landlord, all terms and conditions of this Lease and agrees to perform all
Tenant’s obligations hereunder, (iii) Tenant is not released from its obligations pursuant to this Lease, and (iv) Tenant shall provide a fully executed copy of Landlord’s assignment document to Landlord. Tenant shall deliver the documents
referred to in (ii) and (iv) above at least ten (10) days prior to the effective date of any such assignment. 
 Notwithstanding anything in
this Lease to the contrary, Tenant further agrees that any assignment or sublease shall be subject to the following additional limitations: (i) in no event may Tenant assign this Lease or sublet all or any portion of the Premises to any governmental
or quasi-governmental entity, or an existing Tenant of the Business Park or its subtenant or assignee (unless Landlord consents to such assignment or sublease, in its sole and absolute discretion); (ii) in no event shall the proposed subtenant or
assignee be a person or entity with whom Landlord or its agent is negotiating and to or from whom Landlord, or its agent, has given or received any written or oral proposal within the past six (6) months regarding a lease of space in the Business
Park; and (iii) Tenant shall not publicly advertise the rate for which Tenant is willing to sublet the Premises; and all public advertisements of the assignment of the Lease or sublet of the Premises, or any portion thereof, shall be subject to
prior written approval by Landlord, such approval not to be unreasonably withheld or delayed. Said public advertisement shall include, but not be limited to, the placement or display of any signs or lettering on the exterior of the Premises or on
the glass or any window or door of the Premises or in the interior of the Premises if it is visible from the exterior. 
 23. TRANSFER
OF LANDLORD’S INTEREST. 
 If Landlord shall sell, assign or transfer all or any part of its interest in the Premises or in
this Lease to a successor in interest which expressly assumes the obligations of Landlord hereunder, then Landlord shall thereupon be released or discharged from all covenants and obligations hereunder, and Tenant shall look solely to such successor
in interest for performance of all of Landlord’s obligations and such successor shall be obligated to perform all of Landlord’s obligations under this Lease which accrue after the date of such transfer. Tenant’s obligations under this
Lease shall in no manner be affected by Landlord’s sale, assignment, or transfer of all or any part of such interest(s) of Landlord, and Tenant shall thereafter attorn and look solely to such successor in interest as the Landlord hereunder.

 24. COVENANT OF QUIET ENJOYMENT. 

Subject to the terms of this Lease, Landlord represents that it has full right and authority to lease the Premises and Tenant shall peacefully
and quietly hold and enjoy the Premises for the full Term hereof so long as no Event of Default occurs hereunder. 

  
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 25. ESTOPPEL CERTIFICATES. 

Tenant shall, at any time and from time to time, upon not less than ten (10) business days’ prior written notice from Landlord, execute,
acknowledge and deliver to Landlord a statement in writing certifying the following information, (but not limited to the following information in the event further information is requested by Landlord): (i) that this Lease is unmodified and in full
force and effect (or, if modified, stating the nature of such modification and certifying that this Lease, as modified, is in full force and effect); (ii) the dates to which the rent and other charges are paid in advance, if any; (iii) the amount of
Tenant’s security deposit, if any; (iv) acknowledging that there are not, to Tenant’s knowledge, any uncured defaults on the part of Landlord hereunder, and no events or conditions then in existence which, with the passage of time or
notice or both, would constitute a default on the part of Landlord hereunder, or specifying such defaults, events or conditions, if any are claimed; and (v) such other information as Landlord may reasonably request. It is expressly understood and
agreed that any such statement may be relied upon by any prospective lender, purchaser or encumbrancer of all or any portion of the Premises, Building or Business Park. Tenant’s failure to deliver such statement within such time shall
constitute an admission by Tenant that all statements contained therein are true and correct. Landlord shall, at any time and from time to time, upon not less than ten (10) business days’ prior written notice from Tenant, execute, acknowledge
and deliver to Tenant a statement in writing certifying the following information: (i) that this Lease is unmodified and in full force and effect (or, if modified, stating the nature of such modification and certifying that this Lease, as modified,
is in full force and effect); (ii) the dates to which the rent and other charges are paid in advance, if any; (iii) the amount of Tenant’s security deposit, if any; (iv) acknowledging that there are not, to Landlord’s knowledge, any
uncured defaults on the part of Tenant hereunder, and no events or conditions then in existence which, with the passage of time or notice or both, would constitute a default on the part of Tenant hereunder, or specifying such defaults, events or
conditions, if any are claimed; and (v) such other information concerning the Lease as Landlord may reasonably agree to certify. 
 26.
PROTECTION AGAINST LIENS. 
 Tenant shall do all things necessary to prevent the filing or recording of any mechanics’,
materialmen’s or other types of liens whatsoever, against all or any part of the Premises, Building or Business Park by reason of any claims made by, against, through or under Tenant. If any such lien is filed or recorded, Tenant shall either
cause the same to be discharged of record within thirty (30) days after filing or, if Tenant in its discretion and in good faith determines that such lien should be contested, it shall furnish such security as may be necessary to prevent any
foreclosure proceedings against the Premises during the pendency of such contest. If Tenant shall fail to discharge such lien within said time period or fail to furnish such security, then Landlord may at its election, in addition to any other right
or remedy available to it, discharge the lien by paying the amount claimed to be due or by procuring the discharge by giving security or in such other manner as may be allowed by law. If Landlord acts to discharge or secure the lien then Tenant
shall immediately reimburse Landlord for all sums paid and all costs and expenses (including reasonable attorneys’ fees) incurred by Landlord involving such lien together with interest on the total expenses and costs at an interest rate equal
to the Prime Rate plus five percent (5%). 
 27. MEMORANDUM OF LEASE. 

Upon Tenant’s request, Landlord agrees to execute and deliver to Tenant a Memorandum of Lease in the form attached hereto and
incorporated herein as Exhibit “G.” The recording of such Memorandum shall be at Tenant’s sole cost and expense. 

28. LANDLORD’S LIEN. Intentionally deleted. 

  
 21 

 29. FORCE MAJEURE. 

In the event Landlord or Tenant shall be delayed, hindered or prevented from the performance of any act required hereunder, by reason of
governmental restrictions, scarcity of labor or materials, strikes, fire, or any other reasons beyond its reasonable control, the performance of such act shall be excused for the period of delay, and the period for performance of any such act shall
be extended as necessary to complete performance after the delay period. However, the provisions of this Section shall in no way be applicable to Tenant’s obligations to pay Annual Rent or any other sums, monies, costs, charges or expenses
required by this Lease. 
 30. REMEDIES CUMULATIVE – NONWAIVER. 

Unless otherwise specified in this Lease, no remedy of Landlord or Tenant shall be considered exclusive of any other remedy, but each shall be
distinct, separate and cumulative with other available remedies. Each remedy available under this Lease or at law or in equity may be exercised by Landlord or Tenant from time to time as often as the need may arise. No course of dealing between
Landlord and Tenant or any delay or omission of Landlord or Tenant in exercising any right arising from the other party’s default shall impair such right or be construed to be a waiver of a default. 

31. HOLDING OVER. 

If Tenant remains in possession of the Premises or any part thereof after the expiration of the Term, whether with or without Landlord’s
acquiescence, Tenant shall be deemed only a tenant at will and there shall be no renewal of this Lease without a written agreement signed by both parties specifying such renewal. The “monthly” rent payable by Tenant during any such tenancy
at will period shall be one hundred fifty percent (150%) of the monthly installments of Annual Rent payable during the final Lease Year immediately preceding such expiration. Tenant shall also remain liable for any and all damages, direct and
consequential, suffered by Landlord as a result of any holdover without Landlord’s unequivocal written acquiescence. Nothing contained in this Section 31 shall be construed as consent by Landlord to any holding over of the Premises by Tenant,
and Landlord expressly reserves the right to require Tenant to surrender possession of the Premises to Landlord as provided in this Lease upon the expiration or earlier termination of the Term. If Tenant fails to surrender the Premises upon the
expiration or termination of this Lease, Tenant agrees to compensate for, and indemnify, defend and hold Landlord harmless from all costs, loss, expense or liability, including without limitation, claims made by any succeeding tenant and real estate
brokers claims and attorney’s fees and costs. 
 32. NOTICES. 

Any notice allowed or required by this Lease shall be deemed to have been sufficiently served if the same shall be in writing and transmitted
via certified or registered United States mail, return receipt requested, with proper postage prepaid, via facsimile with proof of transmission or delivered by a nationally recognized overnight courier and addressed to the appropriate party at the
address set forth in Section 1(j) hereof. The addresses of Landlord and Tenant and the party, if any, to whose attention a notice or copy of same shall be directed may be changed or added from time to time by either party giving notice to the other
in the prescribed manner. 
 33. LEASING COMMISSION. 

Landlord and Tenant represent and warrant each to the other that they have not dealt with any broker(s) or any other person claiming any
entitlement to any commission in connection with this transaction except the Broker(s) set forth in Section 1(1) hereof. Tenant agrees to indemnify and save 

  
 22 

 
Landlord and Landlord’s agents and managers harmless from and against any and all claims, suits, liabilities, costs, judgments and expenses, including reasonable attorneys’ fees, for
any leasing commissions or other commissions, fees, charges or payments resulting from or arising out of its actions in connection with this Lease. Landlord agrees to indemnify and save Tenant harmless from and against any and all claims, suits,
liabilities, costs, judgments and expenses, including reasonable attorneys’ fees, for any leasing commissions or other commissions, fees, charges or payments resulting from or arising out of its respective actions in connection with this Lease.
Landlord agrees to be responsible for the leasing commission due Broker(s) pursuant to a separate written agreement between Landlord and Tri Properties, Inc., and to hold Tenant harmless respecting same. 

34. LANDLORD DEFAULT. 

Landlord shall not be in default under this Lease unless Landlord fails to perform obligations required of Landlord within thirty (30) days
after written notice is delivered by Tenant to Landlord and to the holder of any mortgages or deeds of trust (collectively, “Lender”) covering the Premises whose name and address shall have theretofore been furnished to Tenant in writing,
specifying the obligation which Landlord has failed to perform; provided, however, that if the nature of Landlord’s obligation is such that more than thirty (30) days are required for performance, then Landlord shall not be in default if
Landlord or Lender commences performance within such thirty (30) day period and thereafter diligently prosecutes the same to completion. 

Notwithstanding any other provisions of this Lease to the contrary, Tenant shall look solely to Landlord’s equity in the Building, and
not to any other or separate business or non-business assets of Landlord, or any Landlord Parties, for the satisfaction of any claim brought by Tenant against Landlord, and if Landlord shall fail to perform any covenant, term or condition of this
Lease upon Landlord’s part to be performed, and as a consequence of such default, Tenant shall recover a money judgment against Landlord, such judgment shall be satisfied only: (i) out of the proceeds of sale received upon levy against
Landlord’s equity in the Building, and/or (ii) to the extent not encumbered by a secured creditor, out of the rents or other incomes receivable by Landlord from the Building from and after the date of such judgment. Further, in the event the
owner of Landlord’s interest in this Lease is at any time a partnership, joint venture or unincorporated association. Tenant agrees that the members or partners of such partnership, joint venture or unincorporated association shall not be
personally or individually liable or responsible for the performance of any of Landlord’s obligations hereunder. Without limiting the foregoing, no personal liability is assumed by any officer, director, owner, member, shareholder, employee,
agent, and/or representative of Crown Realty & Development, Inc. and its affiliates, including but not limited to Robert A. Flaxman and/or Jaime Sohacheski (and their family members) (collectively, the “Released Parties”) in connection
with this Lease. The parties acknowledge and agree that no claim, cause of action, liability, demand, damage, debt, expense, and/or lien, including but not limited to any involving this Lease, shall be asserted against any of the Released Parties,
whether known or unknown at the time of this Lease or at any time in the future, including after expiration or earlier termination of this Lease. 

With respect to any provisions of this Lease which provide that Landlord shall not unreasonably withhold or delay any consent or approval,
Tenant shall not have, and Tenant hereby waives, any claim for money damages; nor shall Tenant claim any money damages by way of setoff, counterclaim or defense, based upon any allegation of unreasonableness by Landlord. Tenant’s sole remedy
shall be an action or proceeding to enforce any such provisions, or for specific performance, injunction or declaratory judgment. Notwithstanding any contrary provision in this Lease, Landlord shall not be liable under any circumstances for
consequential, special, indirect or punitive damages, including, without limitation, with respect to injury or damage to, or interference with, Tenant’s business, including but not limited to, loss of profits, loss of rents or other revenues,
loss of business opportunity, loss of goodwill or loss of use, in each case, however occurring. 

  
 23 

 35. MISCELLANEOUS. 

(a) Rules and Regulations. 

Landlord shall have the right from time to time to establish reasonable rules and regulations (the “Rules and Regulations”) for
Tenant’s use of the Premises and/or the Building (and Business Park). The Rules and Regulations shall be enforced in a non-discriminatory manner and shall be materially consistent for each occupant of the Building. A copy of Landlord’s
current Rules and Regulations respecting the Premises and/or the Building is attached hereto as Exhibit “D”. Tenant shall abide by and actively enforce on all Tenant’s Invitees such regulations including without limitation
rules governing parking of vehicles in designated areas and during designated times. 
 (b) Evidence of Authority.

 If requested by either party, the other shall furnish appropriate legal documentation evidencing the valid existence and good standing of
such party and the authority of any parties signing this Lease to act for such party. 
 (c) Nature and Extent of
Agreement. 
 This Lease, together with all exhibits hereto, contains the complete agreement of the parties concerning the subject
matter, and there are no oral or written understandings, representations, or agreements pertaining thereto which have not been incorporated herein. This Lease creates only the relationship of landlord and tenant between the parties, and nothing
herein shall be construed to create a partnership or agency relationship or impose upon either party any powers, obligations or restrictions not expressed herein. This Lease shall be construed and governed by the laws of the state in which the
Premises are located. 
 (d) Binding Effect. 

Subject to Section 22 above, this Lease shall be binding upon and shall inure to the benefit of the parties hereto and their respective heirs,
successors and assigns. This Lease shall not be binding on Landlord until executed by an authorized signatory of Landlord and delivered to Tenant. No amendment or modification to this Lease shall be binding upon Landlord unless same is in writing
and executed by an authorized signatory of Landlord. 
 (e) Captions and Headings. 

The captions and headings in this Lease are for convenience and reference only, and they shall in no way be held to explain, modify, or
construe the meaning of the terms of this Lease. 
 (f) Security Deposit. 

Not later that five (5) days after the Effective Date, Tenant shall deliver to Landlord additional security in the form of an irrevocable,
unconditional letter of credit (the “Letter of Credit”) in the amount of $44,032.88 for Landlord’s consideration in entering into this Lease. In the event of an Event of Default by Tenant, the Letter of Credit may be drawn upon to
satisfy Tenant’s obligations under this Lease. The Letter of Credit must be acceptable to Landlord as to form, content, and issuing bank, must 

  
 24 

 
not require any documentation in order to be drawn/valued upon and must contain an explicit waiver by the issuing bank of any statutory, UCP or other rights to delay or defer payment upon demand.
The Letter of Credit shall be for a period of six (6) years, or alternatively shall be for six (6) successive periods of one (1) year each with a provision that if a renewal Letter of Credit is not delivered to Landlord no later than sixty (60) days
prior to the date of expiry on the Letter of Credit, Landlord may draw upon the Letter of Credit. The Letter of Credit must also provide that the issuing bank, upon any presentation of a draft (at sight) for valuation thereon, shall honor such draft
by promptly delivering the amount of the draft, by official bank or cashier’s check to Landlord or, at Landlord’s sole option, by promptly wiring federal funds in the amount of the draft into such account(s) as Landlord may specifically
direct in writing. The Letter of Credit must name Landlord, its successors and assigns, as the beneficiary of said Letter of Credit. All costs for the issuance (or reissuance as required by Landlord in the event of Landlord’s sale of the
Building) of said Letter of Credit shall be paid by Tenant. In the event of Landlord’s sale of the Building, Tenant shall cooperate with Landlord in having the Letter of Credit reissued to the new property owner. In the event that this Lease is
assigned, subject to the provisions set forth in Section 22 hereof, Landlord agrees to release Tenant’s Letter of Credit so long as the assignee provides a replacement letter of credit that is acceptable to Landlord, in Landlord’s sole and
absolute discretion. 
 (g) Right to Relocate. 

Notwithstanding anything in this Lease to the contrary, Landlord reserves the right at any time upon at least sixty (60) days advance written
notice (the “Relocation Notice”) to relocate Tenant to space substantially equivalent to the Premises (with comparable improvements) in either the Building or other building located in the Business Park (the “Relocation Space”).
In such event, Landlord shall reimburse to Tenant Tenant’s reasonable out of pocket moving expenses directly stemming from such relocation. The size, configuration, and upfit of the Relocation Space shall be materially consistent with the
Premises. The Minimum Rent, Additional Rent, Tenant’s Proportionate Share, and any other charges based on the square footage of the Premises shall be increased or decreased to reflect the size of the Relocation Space; provided, however, in no
event shall the Minimum Rent for the Relocation Space exceed one hundred ten percent (110%) of the then applicable Minimum Rent for the Premises. Tenant’s failure to surrender possession of the Premises and relocate to the Relocation Space in
accordance with the terms and conditions of the Relocation Notice shall constitute an immediate and material default under this Lease entitling Landlord, in addition to any other remedies provided herein, to re-enter the Premises and remove all
persons and property therefrom in accordance with applicable law. If Landlord relocates the Premises hereunder, this Lease and each and all of its terms, covenants and conditions shall remain in full force and effect and shall be deemed applicable
to the Relocation Space and the Relocation Space shall thereafter be deemed to be the “Premises” as though Landlord and Tenant had entered into an express written amendment of this Lease with respect thereto. Landlord shall use reasonable
efforts to avoid unnecessary disruption to Tenant’s operation during such relocation process. 
 (h) Representations
and Warranties. 
 The person, persons, and/or entity executing this Lease on behalf of Tenant represents, covenants and warrant to
Landlord as of the date Tenant executes and delivers this Lease that: (a) Tenant is duly constituted, in good standing and qualified to do business in the State of North Carolina, (b) Tenant has paid all corporate taxes (if applicable), (c) Tenant
will file when due all forms, reports, fees and other documents necessary to comply with applicable laws, and (d) the signatories signing on behalf of Tenant have the requisite authority to bind Tenant pursuant to Tenant’s organizational
documents (i.e. partnership agreement, operating agreement or bylaws) or a certified copy of a resolution from Tenant authorizing same. 

  
 25 

 (i) Lease Review. 

The submission of this Lease to Tenant for review does not constitute a reservation of or option for the Premises, and this Lease shall become
effective as a contract only upon execution and delivery by Landlord and Tenant. 
 (j) Attorneys’ Fees. 

In any action to enforce the terms of this Lease, including any suit by Landlord for the recovery of rent or possession of the Premises, the
losing party shall pay the successful party a reasonable sum for attorneys’ fees and costs in such suit and such attorneys’ fees and costs (including in-house attorneys’ fees) shall be deemed to have accrued prior to the commencement
of such action and shall be paid whether or not such action is prosecuted to judgment. Tenant shall also reimburse Landlord for all costs incurred by Landlord in connection with enforcing its rights under this Lease against Tenant following a
bankruptcy by Tenant or otherwise, including without limitation, reasonable legal fees (including in-house attorneys’ fees). 

(k) Financial Disclosures. 

Tenant shall, within ten (10) days after Landlord’s request, but not more frequently than once per Lease Year, and at any time upon an
Event of Default, provide true, complete and accurate financial information and documentation (including, without limitation, income statements and balance sheets), certified as being true and correct by an authorized officer of Tenant, prepared in
accordance with generally acceptable accounting principles, and otherwise in form reasonably satisfactory to Landlord and its lender, about itself and any Guarantor to Landlord. Tenant hereby represents and warrants to Landlord that the financial
statements and other information submitted to Landlord by Tenant prior to the execution hereof are true, complete and accurate, were prepared in accordance with generally accepted accounting principles applied on a consistent basis, and accurately
reflect Tenant’s net worth as of the date hereof. Landlord covenants and agrees to keep such records confidential; provided, however, Landlord may share the information contained within such records with its legal counsel, accountants and
employees, prospective purchasers and lenders, and as may otherwise be required by applicable law. 
 (l) Survival; Time
of the Essence. 
 Any obligations of Tenant occurring prior to the expiration or earlier termination of this Lease shall survive such
expiration or earlier termination, Time is of the essence with respect to the performance of every provision of this Lease. 

(m) OFAC Compliance. 

(1) Tenant represents and warrants that to the best of Tenant’s knowledge after reasonable inquiry: (a) Tenant and each person or entity
owning an interest in Tenant is (i) not currently identified on the Specially Designated Nationals and Blocked Persons List maintained by the Office of Foreign Assets Control, Department of the Treasury (“OFAC”) and/or on any other similar
list maintained by OFAC pursuant to any authorizing statute, executive order or regulation (collectively, the “List”), and (ii) not a person or entity with whom a citizen of the United States is prohibited to engage in transactions by any
trade embargo, economic sanction, or other prohibition of United States law, regulation, or Executive Order of the President of the United States, (b) none of the funds or other assets of Tenant constitute property of, or are beneficially owned,
directly or indirectly, by any Embargoed Person (as hereinafter defined), (c) no Embargoed Person has any interest of any nature whatsoever in Tenant (whether directly or indirectly), (d) none of the funds of Tenant have been derived from any

  
 26 

 
unlawful activity with the result that the investment in Tenant is prohibited by law or that the Lease is in violation of law, and (e) Tenant has implemented procedures, and will consistently
apply those procedures, to ensure the foregoing representations and warranties remain true and correct at all times. The term “Embargoed Person” means any person, entity or government subject to trade restrictions under U.S. law, including
but not limited to, the International Emergency Economic Powers Act, 50 U.S.C. §1701 et seq., The Trading with the Enemy Act, 50 U.S.C. App. 1 et seq., and any Executive Orders or regulations promulgated thereunder with the
result that the investment in Tenant is prohibited by law or Tenant is in violation of law. 
 (2) Tenant covenants and agrees (a) to
comply with all requirements of law relating to money laundering, anti-terrorism, trade embargos and economic sanctions, now or hereafter in effect, (b) to immediately notify Landlord in writing if any of the representations, warranties or covenants
set forth in this paragraph or the preceding paragraph are no longer true or have been breached or if Tenant has a reasonable basis to believe that they may no longer be true or have been breached, (c) not to use funds from any “Prohibited
Person” (as such term is defined in the September 24, 2001 Executive Order Blocking Property and Prohibiting Transactions With Persons Who Commit, Threaten to Commit, or Support Terrorism) to make any payment due to Landlord under the Lease and
(d) at the request of Landlord, to provide such information as may be requested by Landlord to determine Tenant’s compliance with the terms hereof. 

(3) Tenant hereby acknowledges and agrees that Tenant’s inclusion on the List at any time during the Lease Term shall be a material
default of the Lease. Notwithstanding anything herein to the contrary, Tenant shall not permit the Premises or any portion thereof to be used or occupied by any person or entity on the List or by any Embargoed Person (on a permanent, temporary or
transient basis), and any such use or occupancy of the Premises by any such person or entity shall be a material default of the Lease. 
 In connection with
this Lease or any proposed Assignment of this Lease or sublease. Tenant shall provide to Landlord the names of the persons holding an ownership interest in Tenant or any proposed assignee or sublessee, as applicable, for purposes of compliance with
Presidential Executive Order 13224 (issued September 24, 2001), as amended. 
 36. SEVERABILITY 

If any term or provision of this Lease or the application thereof to any person or circumstance shall, to any extent, be invalid or
unenforceable, the remainder of this Lease, or the application of such term or provision to persons or circumstances other than those as to which it is held invalid or unenforceable, shall not be affected thereby, and each term and provision of this
Lease shall be valid and enforced to the fullest extent permitted by law notwithstanding the invalidity of any other term or provision hereof. 

37. RIGHT OF FIRST OFFER FOR SUITE 460 

In the event that that certain premises containing approximately 7,009 square feet and known as Suite 460 of the Building, shown outlined in
bold on Exhibit “F” hereto, becomes available for lease during the Term, Landlord shall so notify Tenant thereof prior to leasing such space to other parties. Tenant, for a period often (10) business days following receipt of such
notice, may elect to lease such adjacent space at Landlord’s then-current rental rates and upon such other terms and conditions as are reasonably agreed upon by Landlord and Tenant. If Tenant does not elect to lease such space prior to the
expiration of such ten (10) business day period, or if Landlord and Tenant do not enter into a lease for such space within thirty (30) days after Landlord’s notice to Tenant that such space is available, Landlord may then enter into a lease for
such space with other parties. 

  
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 38. OPTION TO RENEW 

a. Notice and Exercise. Provided no default has occurred under the Lease and Tenant has not assigned the Lease nor sublet all or any
portion of the Premises, Tenant is hereby granted the option to extend the Term for one (1) additional period of five (5) Lease Years (the “Renewal Term”) commencing upon the Expiration Date on the same terms and conditions as contained in
the Lease (Tenant accepting the Premises in its “AS-IS” condition) and as otherwise provided in this Section. The option shall be exercised only by delivery of written notice (the “Renewal Notice”) to Landlord no later than nine
(9) months prior to the Expiration Date. The Minimum Rent for the Premises for the Renewal Term shall be the then fair market rent (“Market Rate”) applicable to the Premises, with increases for each Lease Year of the Renewal Term based
upon then-current market conditions, as described below. Tenant’s occupancy of the Premises during the Renewal Term shall be subject to all other terms and conditions of the Lease, expressly including, without limitation, the obligation to pay
Tenant’s Proportionate Share of Operating Expenses and all other amounts due under the Lease. 
 b. Determination of Market
Rate. For purposes of this Section, the term “Market Rate” shall mean the annual amount per rentable square foot that comparable landlords of comparable buildings have accepted in then-current transactions between non-affiliated
parties from non-equity tenants of comparable credit-worthiness, for comparable space in the RTP/1-40 submarket of the Durham, North Carolina market, for a comparable use, for a comparable period of time (“Comparable Transactions”). In any
determination of Comparable Transactions appropriate consideration shall be given to the annual rental rates per rentable square foot, the standard of measurement by which the rentable square footage is measured, the ratio of rentable square feet to
usable square feet, the type of escalation clause implemented, the extent of the tenant’s liability under the lease, abatement provisions reflecting free rent and/or no rent during the period of construction or subsequent to the commencement
date as to the space in question, parking considerations, length of the lease term, credit guarantees, size and location of premises being leased, building standard work letter and/or tenant improvement allowances, if any, or any other tenant
concessions and other generally applicable conditions of tenancy for such Comparable Transactions. 
 Landlord shall determine the Market
Rate by using its good faith judgment. Landlord shall provide written notice of such amount within thirty (30) days (but in no event later than forty-five (45) days) after Tenant provides notice to Landlord exercising Tenant’s option right
which requires a calculation of the Market Rate. Tenant shall have fifteen (15) days (“Tenant’s Review Period”) after receipt of Landlord’s notice of the Market Rate within which to accept such Market Rate or to object thereto in
writing. Failure of Tenant to accept or reject in writing such rent within Tenant’s Review Period shall conclusively be deemed its approval of the Market Rate determined by Landlord. In the event Tenant does not accept Landlord’s
determination of the Market Rate, Landlord and Tenant shall attempt to agree upon such Market Rate using good faith efforts. If Landlord and Tenant fail to reach agreement within fifteen (15) days following Tenant’s Review Period (“Outside
Agreement Date”), then each party shall, within ten (10) business days following the Outside Agreement Date, choose an appraiser who shall by profession be a real estate appraiser or broker who shall have been active over the five (5) year
period ending on the date of such appointment in the leasing of comparable commercial properties in the vicinity of the Premises. If Tenant does not choose an appraiser as set forth in the preceding sentence, such appointment shall be made by
Landlord in its reasonable discretion. The appraisers shall jointly determine the Market Rate for the Premises. If within thirty (30) days following appointment of the two (2) appraisers, as described above, the two (2) appraisers are unable to
agree upon the Market Rate, a third independent appraiser shall be chosen within ten (10) days thereafter by the 

  
 28 

 
mutual consent of the first two (2) appraisers or, if such first two (2) appraisers fail to agree upon the appointment of a third appraiser, such appointment shall be made by Landlord in its
reasonable discretion. The Market Rate determined by the third appraiser so appointed and chosen shall be given within ten (10) days after the selection of such third appraiser. If three (3) appraisers shall be appointed and the determination of one
appraiser is disparate from the median of all three (3) appraisers by more than twice the amount by which the other determinations are disparate from the median, then the determination of such appraiser shall be excluded, the remaining two (2)
determinations shall be averaged and such average shall be binding and conclusive on Landlord and Tenant; otherwise the average of all three (3) determinations shall be binding and conclusive on Landlord and Tenant. The fees and expenses of the
appraiser to be appointed by Tenant shall be paid by Tenant, the fees and expenses of the appraiser to be appointed by Landlord shall be paid by Landlord, and the fees and expenses of the third appraiser shall be divided equally between Landlord and
Tenant. In the event that the Market Rate is not determined prior to the Expiration Date, Tenant shall pay as Minimum Rent during such period of time between the Expiration Date and determination of the Market Rate, a monthly amount equal to the
monthly Minimum Rent applicable immediately prior to the Expiration Date multiplied by 110%, together with Tenant’s payment of Tenant’s Proportionate Share of Operating Expenses and all other amounts due under the Lease. Immediately after
the Market Rate is determined, Landlord and Tenant shall execute an amendment to the Lease regarding the Renewal Term and the new Minimum Rent shall be adjusted effective as of the commencement date of the Renewal Term. 

[Signatures appear on following page] 

  
 29 

 
			
	“LANDLORD”
	
	Crown Royal Associates, LLC,
	a Delaware limited liability company
		
	By:	 	 

  

		 	  

	Name:	 	 Robert Flaxman

	Its:	 	 Auth Signor

		
	By:	 	  

	Name:	 	  

	Its:	 	  

  

			
	“TENANT”
	
	Novan, Inc.
	a Delaware corporation
		
	By:	 	 

  

		 	  

	Name:	 	 Nathan Stasko

	 Its:
	 	 President

		
	By:	 	  

	Name:	 	  

	Its:	 	  

  
 30 

 EXHIBIT “A” 

PREMISES 
  
 

 
 Royal Center I 

Suite 470 
 4222 Emperor

 Boulevard 

 EXHIBIT “B” 

NOTICE OF LEASE TERM DATES 
  

									
	TO:	 	  
	 		 	DATE:	 	  

		 	  
	 		 		 	
		 	  
	 		 		 	
		
	RE:	 	Lease dated             , 200    ,
between                                        
                                        
(“Landlord”), and
                                        
                                        
(“Tenant”), concerning Suite                     , located at
                                        
..

 Ladies and Gentlemen: 

In accordance with the Lease, Landlord wishes to advise and/or confirm the following: 

1. That the Premises have been accepted herewith by the Tenant as being substantially complete in accordance with the Lease and that there is
no deficiency in construction. 
 2. That the Tenant has taken possession of the Premises and acknowledges that under the provisions of the
Lease the Term of said Lease shall commence as of                     for a term
of                     ending on
                    . 
 3. That in
accordance with the Lease, Minimum Rent commenced to accrue on                     . 

4. If the Commencement Date of the Lease is other than the first day of the month, the first billing will contain a prorata adjustment. Each
billing thereafter shall be for the full amount of the monthly installment as provided for in said Lease. 
 5. Rent is due and payable in
advance on the first day of each and every month during the Term of said Lease. Your rent checks should be made payable to                      at
                                        . 

6. The exact number of rentable square feet within the Premises is
                    square feet. 
 7.
Tenant’s Proportionate Share, as adjusted based upon the exact number of rentable square feel within the Premises is     %. 
  

					
	AGREED AND ACCEPTED:	 	
		
	TENANT:	 	
	  
	 	,
	a	 	  

					
			
	By:	 	  
	 	
	Its:	 	  
	 	

 EXHIBIT “C” 

PLANS 
  
 

 

 

 

  
 2 

 EXHIBIT “D” 

RULES AND REGULATIONS 
 The
following rules and regulations have been adopted by the Landlord for the care, protection and benefit of the Building and for the general comfort and welfare of the tenants. These Rules and Regulations shall remain in full force and effect until
Tenant is notified in writing by Landlord of any changes and amendments. To the extent any of the Rules and Regulations set forth herein are inconsistent with the provisions of the Lease, the terms and conditions of the Lease shall prevail. 

1. The sidewalks, entrances, halls, passages, elevators and stairways shall not be obstructed or used by Tenant for any other purpose than for
ingress and egress. All loading and unloading of goods, furniture, fixtures, equipment and supplies shall be done only in areas and through entrances designated for such purposes. 

2. Toilet rooms and other plumbing facilities shall not be used for any purpose other than those for which they are constructed and no foreign
substance of any kind shall be disposed of therein. All repairs required due to breakage, stoppage or damage resulting from a violation of this provision shall be at Tenant’s sole expense. 

3. Tenant shall not do anything in the Premises, or bring or keep anything therein, which shall in any way conflict with any law, ordinance,
rule or regulation affecting the occupancy and use of the Premises, which are or may hereafter be enacted or promulgated by any public authority or by the Board of Fire Underwriters. 

4. Tenant shall at all times maintain an adequate number of suitable fire extinguishers on the Premises for use in case of local fires,
including electrical fires. 
 5. Tenant shall keep the Premises heated at a temperature sufficiently high to prevent freezing of water in
pipes and fixtures. 
 6. Trucks shall not be allowed to remain overnight in the Common Areas whether loaded, unloaded or otherwise, without
Landlord’s prior written consent. 
 7. All garbage and refuse shall be placed for collection in containers specified by Landlord
outside the Premises or Building. Tenant shall pay the cost of removal of any of Tenant’s refuse or rubbish. 
 8. Tenant shall, at
Tenant’s expense, provide for regular pest extermination to the Premises and shall provide Landlord with a copy of such extermination contract. 

9. In order to insure proper use and care of the Premises, neither the Tenant nor agent nor employee of Tenant shall: 

(a) Allow any furniture, packages or articles of any kind to remain in corridors except for short periods incidental to moving
same in or out of Building or to cleaning or rearranging occupancy of leased space. 
 (b) Mark or defile elevators, toilet
rooms, walls, windows, doors or any part of the Building, 

 (c) Except for “seeing-eye” dogs, keep animals or birds on the
Premises. 
 (d) Deposit waste paper, dirt or other substances in corridors, stairways, elevators, toilets, restrooms, or any
other part of the Building not leased by Tenant. 
 (e) Except for pictures, wall hangings and other customary decorations
and items which would not cause permanent damage to the structural elements of the Building, fasten any article, drill holes, drive nails or screws into walls, floors, doors, or partitions or otherwise mar or deface them by paint, papers or
otherwise, without Landlord’s prior written consent. 
 (f) Operate any machinery within the Building except customary
warehouse, training and office equipment, such as computers, dictaphones, calculators, electric typewriters, televisions, video cassette recorders and the like. Special equipment or machinery used in the trade or profession of the Tenant may be
operated only with Landlord’s prior written consent. 
 (g) Leave Premises unoccupied without locking all exterior doors
and turning off all water outlets. 
 (h) Burn any trash, refuse, debris or garbage of any kind in or about the Premises or
Building. 
 (i) Attach awnings, air-conditioning units or other fixtures to the outside walls or window sills, or otherwise
affix such so as to project from the Premises or Building without Landlord’s prior written consent. 
 (j) Except for
Tenant’s installation of a key card security system, install additional locks or bolts of any kind on any doors or windows of the Premises without Landlord’s prior written consent. On the termination of Tenant’s tenancy, Tenant shall
deliver to Landlord all keys to the Premises, either furnished to or otherwise procured by Tenant. 
 (k) Install or operate
any engine, boiler, machinery, or stove, or use oil or any burning fluid (other than gas) for heating, warming or lighting, or use any lighting other than incandescent or fluorescent electric lights, on the Premises without Landlord’s prior
written consent. All stoves permitted in the Premises shall be placed and installed according to city ordinances. No articles deemed extra hazardous on account of fire, and no explosives, shall be brought into the Premises. 

(1) Use loudspeakers, televisions, radios or other devices in such a manner as to be heard outside the Premises, or make, or
permit to be made, any unseeming or disturbing noises, nuisance or other activity objectionable to other tenants. 
 (m) Use
the Premises for the purpose of lodging or sleeping rooms, or for any illegal purposes. 
 (n) Install any aerial, antenna,
satellite dish or other equipment or structure on the roof or exterior walls of the Premises, or on the grounds without, in each instance, the prior written consent of Landlord. Any installation so made without such prior written consent shall be
subject to removal without notice at any time, at Tenant’s expense. 

  
 2 

 10. Landlord shall have the right to prohibit any advertising by Tenant which, in its opinion,
shall damage the reputation of the Building or its desirability, and upon written notice from Landlord, Tenant shall discontinue any such advertising. 

11. Except for deliveries in the ordinary course of Tenant’s business, Landlord reserves the right to designate the time when and method
whereby freight, furniture, safes, goods, merchandise and other articles may be brought into, moved or taken from the Building and the Premises leased by Tenant; and workmen employed, designated or approved by Landlord must be employed by Tenants
for repairs, painting, material moving and other similar work that may be done on the Premises. 
 12. Tenant will reimburse Landlord for
the cost of repairing any damage to the Premises or other parts of the Building caused by Tenant or the agents or employees of Tenant, including replacing any glass broken. 

13. Tenant shall not install in the Premises any metal safes or permit any concentration of excessive weight in any portion thereof without
first having obtained the written permission of Landlord. 
 14. Landlord reserves the right at all times to exclude newsboys, loiterers,
vendors, solicitors and peddlers, from the Building or Common Areas and to require registration, satisfactory identification and credentials from all person seeking access to any part of the Building or Common Areas outside of ordinary business
hours. Ordinary business hours shall mean Monday through Friday, 7:30 a.m. to 6:30 p.m. and 8:00 a.m. through 1:00 p.m. on Saturday, except on legal holidays. Landlord shall exercise its best judgment in the execution of such control but shall not
be held liable for the granting or refusal of such access. Landlord reserves the right to exclude the general public from the Building after ordinary business hours and on weekends and holidays. 

15. The attaching of wires to the outside of the Building is absolutely prohibited, and no wires shall be run or installed in any part of the
Building without the Landlord’s permission and direction. 
 16. Requests for services of janitors or other Building employees must be
made to the Landlord. Agents or employees of Landlord shall not perform any work or do anything outside of their regular duties unless under special instructions from Landlord. 

17. Signs or any other tenant identification shall be in accordance with building standard signage. No signs of any nature shall be placed in
the windows so as to be visible from the exterior of the Building. All signs not approved in writing by Landlord shall be subject to removal without notice. 

18. Except as otherwise set forth in the Lease, any improvements or alterations to the Premises by Tenant shall be approved in advance by
Landlord and all such work, if approved, shall be done at Tenant’s sole expense under the supervision of Landlord. 
 19. Tenant shall
have a non-exclusive right to use of all driveways and parking areas designated for Tenant and Tenant’s employees, if deemed necessary by Landlord. 

20. If additional drapes or window decorations are desired by Tenant, they shall be approved by Landlord and installed at Tenant’s
expense under the direction of Landlord. Lining on drapes visible from the exterior shall be of a color approved by Landlord. 
 21. The
possession of weapons, including concealed handguns, is strictly forbidden on the Premises and Building. 

  
 3 

 22. Tenant shall not use nor permit the use of the Common Areas by its employees, agents or
invitees for the purpose of displaying or selling personal property, automobiles, equipment, furniture, fixtures, merchandise or any other item whether owned by Tenant or its employees, agents or invitees. 

23. Landlord reserves the right to rescind, amend, alter or waive any of the foregoing rules and regulations at any time in a reasonable and
nondiscriminatory manner, or make such other reasonable and non-discriminatory rules and regulations as, in its sole judgment it deems necessary, desirable or proper for its best interest and for the best interests of the tenants, or as may from
time to time be necessary for the safety, care and cleanliness of the Premises, the Building or adjacent areas, and for the preservation of good order therein. Any such rescission, amendment, alteration or waiver of any rules or regulations or
creation of any such new rules or regulations shall be effective five (5) days after all tenants have been given written notice thereof. Landlord shall not be responsible to any tenant for the nonobservance or violation by any other tenant of any of
these rules and regulations at any time. 

  
 4 

 EXHIBIT “E” 

HAZARDOUS MATERIALS DISCLOSURE CERTIFICATE 
 Your
cooperation in this matter is appreciated. Initially, the information provided by you in this Hazardous Materials Disclosure Certificate is necessary for the Lessor (identified below) to evaluate and finalize a lease agreement with you as Lessee.
After a lease agreement is signed by you and the Lessor (the “Lease Agreement”), on an annual basis in accordance with the provisions of Section 6 of the signed Lease Agreement, you are to provide an update to the information
initially provided by you in this certificate. The information contained in the initial Hazardous Materials Disclosure Certificate and each annual certificate provided by you thereafter will be maintained in confidentiality by Lessor subject to
release and disclosure as required by (i) any lenders and owners and their respective environmental consultants, (ii) any prospective purchaser(s) of all or any portion of the property on which the Premises are located, (iii) Lessor to defend itself
or its lenders, partners or representatives against any claim or demand, and (iv) any laws, rules, regulations, orders, decrees, or ordinances, including, without limitation, court orders or subpoenas. Any and all capitalized terms used herein,
which are not otherwise defined herein, shall have the same meaning ascribed to such term in the signed Lease Agreement. Any questions regarding this certificate should be directed to, and when completed, the certificate should be delivered to: 

 

					
	 Lessor:
	  	                                     	  	
		  	 c/o Tri Properties, Inc.
	  	
		  	 4309 Emperor Blvd., Suite 110
	  	
		  	 Durham, North Carolina
	  	
		  	 Attn: Property Manager
	  	
		  	 Phone: (919) 941-9616
	  	

 Name of (Prospective) Lessee: Novan, Inc. 

Mailing Address: PO Box 110023, Research Triangle Park, North Carolina 27709 

Contact Person, Title and Telephone Number(s): Jeff Hunter, Vice President of Operations, 919-485-8080, ext 23 

Contact Person for Hazardous Waste Materials Management and Manifests and Telephone Number(s): Heather Durand, Lab Manager, hdurand@novanonline.com,
Current Phone: 919-485-8080 ext. 34 
 Address of (Prospective) Premises: 4222 Emperor Boulevard, Suite 470, Durham, NC 27703 

Length of (Prospective) initial Term: 66 Months 

  
 1 

	1.	GENERAL INFORMATION: 

 Describe the initial proposed operations to take place in, on, or about
the Premises, including, without limitation, principal products processed, manufactured or assembled, services and activities to be provided or otherwise conducted. Existing Lessees should describe any proposed changes to ongoing operations.
(Attached additional sheets if necessary). 
 Research & development of prospective active pharmaceutical ingredients for drug and/or
medical device products. 
  

	2.	USE, STORAGE AND DISPOSAL OF HAZARDOUS MATERIALS 

  

	 	2.1	Will any Hazardous Materials be used TM, generated TM, stored TM or disposed of TM in, on or about the Premises? (Note: Generally all storage will be required to be fully contained). Existing
Lessees should describe any Hazardous Materials which continue to be used, generated, stored or disposed of in, or about the Premises. 

  

							
	 Wastes
	  	 Yes TM
	    	 No TM
	  	
		  	  
	    		  	
	 Chemical Products
	  	 Yes TM
	    	 No TM
	  	
		  	  
	    		  	
	 Other
	  	 Yes TM
	    	 No TM
	  	
		  	  
	    		  	

 It yes is marked attached all MSDS’s and please explain: (MSDS’s Attached TM). Please see
accompanying CD for all MSDS’s. Wastes have no MSDS; Novan will generate chemical and biohazardous waste. Other hazardous materials include BSL-2 (biosafety level 2) microorganisms classified in Risk Groups 1 and 2 pursuant to NIH and
WHO guidelines. 
  

	 	2.2	If yes is marked in Section 2.1, attach a list of any Hazardous Materials to be used, generated, stored or disposed of in, on or about the Premises, including the applicable hazard class and an estimate of the
quantities of each such Hazardous Materials at any given time; estimated annual throughput; the proposed location(s) and method of storage, including container sizes and types (excluding nominal amounts of ordinary household cleaners and janitorial
supplies which are not regulated by any Environmental Laws); and the proposed location(s) and method of disposal for each Hazardous Material, including, the estimated frequency, and the proposed contractors or subcontractors. Existing Lessees should
attach a list setting forth the information requested above and such list should include actual data from ongoing operations and the identification of any variations in such information from the prior year’s certificate. This list is attached
to this exhibit. Attach a Site Plan indicating all storage areas - (Attached TM). 

  

	3.	STORAGE TANKS AND SUMPS 

  

	 	3.1	Is any above or below ground storage of gasoline, diesel, petroleum, or other Hazardous Materials in tanks or sumps proposed in, on or about the Premises? Existing Lessees should describe any such actual or proposed
activities, including any required SPCC Plan. 

 Yes
TM                    No TM 

If yes, please explain: N/A 

  
 2 

	4.	WASTE MANAGEMENT 

  

	 	4.1	Has your company been issued an EPA Hazardous Waste Generator I. D. Number? Existing Lessees should describe any additional identification numbers issued since the previous certificate. 

Yes TM                    No
TM 
 Describe RCRA status: Novan is currently identified as a small quantity generator (SQG) of hazardous waste with the EPA. The
current EPA ID number is NCR000148874 and the permit is attached. 
  

	 	4.2	Has your company filed a biennial or quarterly report as a hazardous waste generator? Existing Lessees should describe any new reports filed. 

Yes TM                    No
TM 
 If yes, attach a copy of the most recent report filed. (Attached TM). 

 

	5.	WASTEWATER TREATMENT AND DISCHARGE 

  

	 	5.1	Will your company discharge wastewater or other wastes to: 

  

							
	NO	 	storm drain?	 	NO	  	sewer?
	NO	 	surface water?	 	NO	  	facility treatment plant?
	NO	 	grounds	 	Yes	  	no wastewater or other
	 (i.e., compressor blow-down)
	 	 wastes discharged

 Existing Lessees should indicate any actual discharges. If so, describe the nature of any proposed or actual
discharge(s). (Note: Generally, discharges to storm drains will be prohibited without prior review and approval from Landlord). 

N/A 
  

	6.	AIR DISCHARGES 

  

	 	6.1	Do you plan for any air filtration systems or stacks to be used in your company’s operations in, on or about the Premises that will discharge into the air; and will such air emissions be monitored? Existing Lessees
should indicate whether or not there are any such air filtration systems or stacks in use in, on or about the Premises which discharge into the air and whether such air emissions are being monitored. 

Yes TM                    No
TM 
 If yes, please explain: N/A 

  
 3 

	 	6.2	Do you propose to operate any of the following types of equipment, or any other equipment requiring an air emissions permit? Existing Lessees should specify any such equipment being operated in, on or about the
Premises. 

  

							
	NO	  	 Spray booth(s)
	  	NO	  	 Incinerator(s)

	NO	  	 Dip tank(s)
	  	NO	  	 Drycleaning

	NO	  	 Drying oven(s)
	  	NO	  	 Other (please describe)

		  		  	YES	  	 No Equipment Requiring Air Permits

 If yes, please explain: N/A 
  

	 	6.3	Do any of your operations generate an obvious odor: 

 Yes
TM                    No TM 

If yes, please explain: N/A 
  

	7.	HAZARDOUS MATERIALS DISCLOSURES 

  

	 	7.1	Has your company prepared or will it be required to prepare a Hazardous Materials management plan (“Management Plan”) pursuant to Fire Department or other governmental or regulatory agencies’
requirements. Existing Lessees should indicate whether or not a Management Plan is required and has been prepared. 

 Yes
TM                    No TM 

If yes, attach a copy of the Management Plan. Existing Lessees should attach a copy of any required updates to the Management Plan. Attach
Hazard Communication Plan. 
  

	 	7.2	(CA Only) Are any of the Hazardous Materials, and in particular chemicals, proposed to be used in your operations in or about the premises regulated under Proposition ‘65? Existing tenants should indicate whether
or not there are any new hazardous materials being used which are regulated under Proposition ‘65. 

 Yes
TM                    No TM 

If yes, please explain: N/A 
  

	8.	ENFORCEMENT ACTIONS AND COMPLAINTS 

  

	 	8.1	 With respect to Hazardous Materials or Environmental Laws, has your company ever been subject to any agency
enforcement actions, administrative orders, or consent decrees designated as a PRP or has your company received requests for information, notice or 

  
 4 

	 	
demand letters (cited in, violation of any environmental regulation), or any other inquiries regarding its operations? Existing Lessees should indicate whether or not any such actions, orders or
decrees have been, or are in the process of being, undertaken or if any such requests have been received. 

 Yes
TM                     No TM 

			
	
	If yes, describe the actions, orders or decrees and any continuing compliance obligations imposed as a result of these actions, orders or decrees and also describe any requests, notices or demands, and attach a copy of
all such documents. Existing Lessees should describe and attach a copy of any new actions, orders, decrees, requests, notices or demands not already delivered to Lessor pursuant to the provisions of Section
                     of the signed Lease Agreement.
	  

	  

  

	 	8.2	Have there ever been, or are there now pending, any lawsuits against your company regarding any environmental or health and safety concerns? 

Yes TM                     No
TM 

			
	
	If yes, describe any such lawsuits and attach copies of the complaint(s), cross-complaint(s), pleadings and all other documents related thereto as requested by Lessor. Existing Lessees should describe and attach a copy
of any new complaint(s), cross-complaint(s), pleadings and other related documents not already delivered to Lessor pursuant to the provisions of Section
                     of the signed Lease Agreement.
	  

	  

  

	 	8.3	Have there been any problems or complaints from past or current landlords, adjacent tenants, owners or other neighbors at your company’s current facility with regard to environmental or health and safety or odor
concerns? Existing Lessees should indicate whether or not there have been any such problems or complaints from adjacent tenants, owners or other neighbors at, about or near the Premises. 

Yes TM                     No
TM 

			
	
	If yes, please describe. Existing Lessees should describe any such problems or complaints not already disclosed to lessor under the provisions of the signed lease.
	  

	  

  

	 	8.4	Please provide the addresses for each space leased by your Company in the past ten years the name and phone number of each lessor. 

 

	
	79 T.W. Alexander Dr. Research Commons Building 4401, Suite 105 Research Triangle Park, NC 27709, Highwoods Properties, Tom Fritsch – 919-875-6664

  
 5 

	9.	PERMITS AND LICENSES 

  

	 	9.1	Attach copies of all Hazardous Materials permits and licenses issued to your company with respect to its proposed operations in, on or about the Premises, including, without limitation, any wastewater discharge permits,
air emissions permits, and use permits or approvals. Existing Lessees should attach copies of any new permits and licenses as well as any renewals of permits or licenses previously issued. 

 

	10.	STATE AND LOCAL REQUIREMENTS 

  

	 	10.1	(This Section reserved for any requirements unique to a State or Local control agency) 

 The undersigned hereby
acknowledges and agrees that this Hazardous Materials Disclosure Certificate is being delivered in connection with, and as required by, Lessor in connection with the evaluation and finalization of a Lease Agreement and will be attached thereto as an
exhibit. The undersigned further acknowledges and agrees that this Hazardous Materials Disclosure Certificate is being delivered in accordance with, and as required by, the provisions of Section 6 of the Lease Agreement. The undersigned further
acknowledges and agrees that the Lessor and its partners, lenders and representatives may, and will, rely upon the statements, representations, warranties, and certifications made herein and the truthfulness thereof in entering into the Lease
Agreement and the continuance thereof throughout the term, and any renewals thereof, of the Lease Agreement. I, Nathan Stasko, acting with full authority to bind the (proposed) Lessee and on behalf of the (proposed) Lessee, certify, represent and
warrant that the information contained in this certificate is true and correct. 
  

			
	(PROSPECTIVE) Lessee:
		
	By:	 	 

		 	  

		
	 Title
	 	 President

		
	 Date
	 	

  
 6 

 EXHIBIT “F” 

SUITE 460 
 

 
 Royal Center I 

Suite 460 
 4222 Emperor Boulevard

 Durham, NC 

 EXHIBIT “G” 

FORM MEMORANDUM OF LEASE 
 Prepared by and return
after recording to: 
  

			
	STATE OF	 	  

			
	COUNTY OF	 	  

 MEMORANDUM OF LEASE 

THIS MEMORANDUM is of that certain unrecorded Lease Agreement dated             ,
20     including all Exhibits and Addenda thereto, as amended (“Lease”), by and between
                                        , a
                                        
(“Landlord”) and
                                        ,
                                        
(“Tenant”). 
 W I T N E S S E T H: 

For good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, pursuant to the terms and conditions set
forth in the Lease, Landlord leases to Tenant, and Tenant takes and hires from Landlord, the demised premises comprised of approximately              square feet being Suite
            , in that certain building known as                      and located at
                                        
(“Premises”) for a term beginning on                              and continuing for a term
of                      (    ) years, with a renewal option for an additional period of five (5) years. 

The provisions set forth in said unrecorded Lease, together with all the Exhibits and Addenda attached thereto, and any amendments entered
into by the parties subsequent to this Memorandum between Landlord and Tenant are hereby incorporated into this Memorandum by reference. This Memorandum is not a complete summary of the Lease, and the provisions contained herein shall not be
construed to interpret the terms thereof. In the event of a conflict between this Memorandum and the unrecorded Lease, said Lease shall control. Upon the earlier of the expiration of the stated Lease term including any renewal terms or any earlier
termination of the term of the Lease, this Memorandum shall automatically terminate. Landlord shall have the right to record a confirmation of termination date without the need for the joinder of the tenant to confirm the date of termination of the
Lease. 

 IN WITNESS WHEREOF, Landlord and Tenant have executed this Memorandum of Lease on the
     day of             , 20    . 
  

			
	“LANDLORD”
		
	By:	 	  

  

			
	STATE OF	 	  

			
		
	COUNTY OF	 	  

 I certify that the following person personally appeared before me this day, acknowledging that he or she
voluntarily signed the foregoing document for the purpose stated therein and in the capacity indicated:
                                         

 

							
	Date:	 	  
	 		 	
				
		 		 		 	  

		 		 		 	Official Signature of Notary
				
		 		 		 	  

		 		 		 	Insert name of Notary, printed or typed

  
 2 

 
			
	“TENANT”
		
	By:	 	  

  

			
	STATE OF	 	  

			
		
	COUNTY OF	 	  

 I certify that the following person personally appeared before me this day, acknowledging that he or she
voluntarily signed the foregoing document for the purpose stated therein and in the capacity indicated:
                                         

 

									
	Date:	 	  
	 		 	
				
		 		 		 	  

		 		 		 	Official Signature of Notary
				
		 		 		 	  

		 		 		 	Insert name of Notary, printed or typed
				
	(OFFICIAL SEAL)	 		 	My Commission Expires:	 	  

  
 3 

 FIRST AMENDMENT TO LEASE AGREEMENT 

THIS FIRST AMENDMENT TO OFFICE LEASE AGREEMENT (this “Amendment”) is made as of August 27th, 2013 (the “Effective Date”) by and between CROWN ROYAL ASSOCIATES, LLC, a Delaware limited liability company (“Landlord”) and NOVAN,
INC., a Delaware corporation (“Tenant”). 
 W I T N E S S E T H: 

WHEREAS, Landlord and Tenant entered into that certain Lease Agreement dated December 21, 2010 (the “Lease”)
for certain premises known as Suite 470 of the Royal Center I building, located at 4222 Emperor Boulevard, in Durham, North Carolina, 27703, which premises contain approximately 12,147 rentable square feet of space (the “Original
Premises”); 
 WHEREAS, Landlord wishes to lease to Tenant, and Tenant wishes to lease from Landlord, a portion of
certain additional space known as Suite 200 of the Royal Center II building, located at 4222 Emperor Boulevard in Durham, North Carolina, 27703, which premises contain approximately 7,220 rentable square feet (the “Expansion
Premises”), as shown or described on Exhibit A attached hereto and incorporated herein; and 
 WHEREAS, Landlord
and Tenant desire to amend the Lease to include the Expansion Premises as part of the Original Premises on terms as hereinafter set forth. 

NOW, THEREFORE, in consideration of the foregoing and for other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, Landlord and Tenant agree as follows: 
 1. Recitals. The foregoing recitals are true and correct and are
herein incorporated by this reference. 
 2. Expansion Premises. Landlord leases to Tenant, and Tenant leases from Landlord, the
Expansion Premises. Beginning upon the Expansion Premises Commencement Date (as hereinafter defined) all references in the Lease to the “Premises” shall mean the Original Premises and the Expansion Premises collectively containing 19,367
square feet. Tenant accepts the Expansion Premises in its “AS-IS” condition and neither Landlord nor its agents have made any representations whatsoever with respect to the Expansion Premises. 

3. Term. The term of the lease of the Expansion Premises shall begin upon the earlier of: (a) the date Tenant, or any person occupying
any portion of the Expansion Premises with Tenant’s permission, commences business operations from the Expansion Premises, or (b) the first business day following the date of Landlord’s delivery of the Expansion Premises to Tenant but for
delays attributable to Tenant or Tenant’s Invitees (the “Expansion Premises Commencement Date”) and shall expire upon the current Expiration Date. Landlord currently estimates that subject to Force Majeure, and the acts
or omissions of Tenant or Tenants Invitees, Landlord will be in a position to deliver the Expansion Premises on or before October 1, 2013 (the “Target Date”). 

4. Rent. Effective upon the Expansion Premises Commencement Date, Tenant shall pay Minimum Rent for the Expansion Premises pursuant to
the schedule set forth below. 

									
	 PERIOD
	  	RATE	 	  	Monthly MINIMUM
RENT	 
	 Expansion Premises Commencement Date to 2/28/14
	  	$	12.00 per r.s.f.	  	  	$	7,220.00	  
	 3/1/14 to 2/28/15
	  	$	12.36 per r.s.f.	  	  	$	7,436.60	  
	 3/1/15 to 2/29/16
	  	$	12.73 per r.s.f.	  	  	$	7,659.22	  
	 3/1/16 to 8/31/16
	  	$	13.11 per r.s.f	  	  	$	7,887.85	  

 The foregoing rent schedule is not intended to and shall not include Tenant’s payment of Tenant’s
Proportionate Share of Operating Expenses and all other amounts due under the Lease calculated based upon the square footage of the Premises, all of which shall be determined by Landlord as set forth in the Lease. 

Notwithstanding the foregoing schedule, and provided no event of default has occurred, Tenant shall receive a rent credit in an amount equal
to the first two (2) payments of monthly Minimum Rent for the Expansion Premises required to be paid by Tenant hereunder (the “Abated Rent”), such rent credit to be applied to Tenant’s first two (2) payments of monthly
Minimum Rent for the Expansion Premises. The total Abated Rent shall not exceed Fourteen Thousand Four Hundred Forty and 00/100 Dollars ($14,440.00). 

5. Building. Upon the Effective Date hereof, Section 1(b) in the Basic Lease Terms of the Lease shall be deleted in its entirety and
replaced with the following: 
 “Royal Center I (“Royal Center I”) and Royal Center II (“Royal Center II”), located
in the Imperial Center Business Park in Durham, North Carolina. In this Lease, any references to the “Building” shall mean both Royal Center I and Royal Center II.” 

6. Tenant’s Proportionate Share: Upon the Expansion Premises Commencement Date, Section 1(h) of the Lease is hereby deleted in its
entirety and replaced with the following: 
 (a) Original Premises: Tenant agrees that Tenant’s Proportionate Share for the
Original Premises (as defined herein) shall be a fraction, the numerator of which shall be the number of rentable square feet within the Original Premises and the denominator of which shall be the number of rentable square feet within Royal Center
I, currently estimated to be 28.19% (12,147 ÷ 
 43,092), subject to Section 2 below.” 

(b) Expansion Premises: Tenant agrees that Tenant’s Proportionate Share for the Expansion Premises (as defined herein) shall be a
fraction, the numerator of which shall be the number of rentable square feet within the Expansion Premises and the denominator of which shall be the number of rentable square feet within Royal Center II, currently estimated to be 22.20% (7,220
32,514), subject to Section 2 below.” 
 7. Early Access. Landlord acknowledges that Tenant wishes to be permitted entry into
the Expansion Premises two (2) weeks prior to the anticipated Expansion Premises Commencement Date in order to install Tenant’s furniture, fixtures, and/or equipment (the “Work”). Promptly following the execution and
delivery of this Lease, Tenant shall be permitted, and Landlord hereby grants to Tenant a limited non-exclusive license (“Access License”) therefor, to enter into the Expansion Premises for purposes of performing the Work.
The Access License shall be subject to the terms and conditions of this Lease. Tenant shall ensure that Tenant’s performance of the Work does not disturb other tenants, create a nuisance and Tenant shall be solely responsible for all costs
associated with the Work. Tenant shall repair any damage to the Building resulting from the Work in a prompt and diligent manner. The performance 

  
 2 

 
of the Work shall be at Tenant’s sole risk and expense, and Landlord shall not be liable for any loss, damage, casualty, injury, death, or any other liability resulting from the Work. Tenant
shall indemnify and save harmless Landlord from and against any such liability for damages, costs, and expenses, including reasonable attorneys’ fees, from injury or death to any person or damage to any property resulting from the Access
License. In no event shall the Expansion Premises Commencement Date be delayed due to the Work or the Access License. 
 8. Broker.
Landlord and Tenant represent and warrant each to the other that they have not dealt with any broker(s) or any other person claiming any entitlement to any commission in connection with this transaction except Tri Properties, Inc. (the
“Broker”). Tenant agrees to indemnify and save Landlord and Landlord’s agents and managers harmless from and against any and all claims, suits, liabilities, costs, judgments and expenses, including reasonable
attorneys’ fees, for any leasing commissions or other commissions, fees, charges or payments resulting from or arising out of its actions in connection with this Amendment or other premises. Landlord agrees to indemnify and save Tenant harmless
from and against any and all claims, suits, liabilities, costs, judgments and expenses, including reasonable attorneys’ fees, for any leasing commissions or other commissions, fees, charges or payments resulting from or arising out of its
actions in connection with this Amendment or other premises. Landlord agrees to be responsible for the leasing commission due Broker pursuant to a separate written agreement between Landlord and Broker, and to hold Tenant harmless respecting same.

 9. Full Force and Effect. The Lease, as modified by this Amendment, shall continue, as modified, in full force and effect and is
hereby ratified and confirmed as if fully set forth herein. This Amendment shall constitute a present and binding agreement between the parties hereto which shall be effective as of the Effective Date. Upon the Effective Date, any future reference
to the Lease shall mean the Lease as amended by this Amendment. 
 10. Defined Terms. Capitalized terms used but not defined in this
Amendment shall have the meanings ascribed to them in the Lease. 
 11. Authority. Each party represents and warrants that all
consents or approvals required of third parties for the execution, delivery and performance of this Amendment have been obtained and each party has the right and authority to enter into and perform its covenants contained in this Amendment. Upon
request of either party hereto, the other party shall provide evidence of such party’s authority to consummate the transactions contemplated hereby and to execute and deliver this Amendment. 

12. Entire Agreement. This Amendment and the Lease represent the entire agreement between Landlord and the Tenant regarding the subject
matter hereof and may not be contradicted by evidence of prior, subsequent or contemporaneous oral agreements of the parties. No amendment or modification hereto shall be valid and binding unless expressed in writing and executed and delivered by
both parties hereto. 
 13. Counterparts. This Amendment may be executed in any number of counterparts, each of which shall be deemed
to be an original and all of which together shall comprise by one and the same instrument. 
 14. Captions. The Section captions of
this Amendment have been inserted only as a matter of convenience and for reference and in no way define, limit, or describe the scope or intent of this Amendment. 

15. Time of the Essence. Time is of the essence with respect to the performance of every provision of this Amendment. 

[Signatures on Following Page] 

  
 3 

 IN WITNESS WHEREOF, Landlord and Tenant have executed this Amendment as of the Effective
Date. 
  

			
	LANDLORD:
	
	CROWN ROYAL ASSOCIATES, LLC,
a Delaware limited liability company
		
	By:	 	

		 	  

		
	Name:	 	Robert Flaxman
		 	  

		
	Title:	 	Auth. Signor
		 	  

	
	TENANT:
	
	 NOVAN, INC.,
 a Delaware
corporation

		
	By:	 	

		 	  

		
	Name:	 	Jeff N. Hunter
		 	  

		
	Title:	 	Vice President of Operations
		 	  

  
 4 

 Exhibit A 

Expansion Premises 
  

 
 Royal Center II 

4222 Emperor Boulevard 
 Suite 200

 Durham, NC 

  
 A-1 

 SECOND AMENDMENT TO LEASE AGREEMENT 

THIS SECOND AMENDMENT TO LEASE AGREEMENT (this “Agreement”) is made and entered into as of the 27 day of August, 2015, by and
between DURHAM ROYAL CENTER, LLC, a Delaware limited liability company (“Landlord”) and NOVAN, INC., a Delaware corporation (“Tenant”). 

STATEMENT OF PURPOSE 

WHEREAS, Landlord’s predecessor in title and Tenant entered into a Lease Agreement dated as of December 21, 2010 as amended by that First
Amendment to Lease Agreement dated August 27, 2013 (collectively, the “Lease”) for certain premises containing approximately nineteen thousand three hundred sixty-seven (19,367) rentable square feet of space located at Suite 200 and Suite
470 in the building known as Royal Center I located at 4222 Emperor Boulevard, Durham, North Carolina, as more particularly described in the Lease (the “Premises”). The Premises consists of Suite 470 of containing 12,147 rentable square
feet (“Suite 470”) and Suite 200 containing 7,220 rentable square feet (“Suite 200”). 
 WHEREAS, DURHAM HOPSON ROAD,
LLC, an affiliate of Landlord, and Tenant are entering into a new lease for certain premises containing approximately 51,350 rentable square feet located at 4105 Hopson Road, Durham, NC (the “New Lease”). 

WHEREAS, in connection with the execution of the New Lease, Landlord and Tenant now desire to grant Tenant the right to terminate the Lease
and to otherwise amend the Lease as hereinafter provided. 
 NOW, THEREFORE, in consideration of the statement of purpose, the mutual
covenants contained herein and other valuable consideration, the receipt of which is hereby acknowledged, the parties hereto agree as follows: 

1. Termination of Lease. Landlord and Tenant hereby agree that the Lease shall be terminated effective as of ten (10) days after the
Rent Commencement Date of Phase II as defined under the New Lease (the “Termination Date”) and that thereafter, Tenant shall have no further right to occupy or possess the Premises. On or before the Termination Date, Tenant shall deliver
all keys to the Premises and any other means of access to Landlord, and shall surrender the Premises, free of all occupants and subtenancies, in a “broom clean” condition with all of Tenant’s personal property and all debris or trash
removed from the Premises and otherwise in compliance with the terms and conditions of the Lease regarding the condition of the Premises as of the expiration or earlier termination of the Lease term unless otherwise agreed in writing by Landlord.
Specifically, Tenant must remove any leased furniture, fixtures or equipment located in or about the Premises prior to the Termination Date. Notwithstanding anything contained in the Lease to the contrary, Tenant agrees, at its sole cost and
expense, to remove from the Premises prior to the Termination Date, all cabling and telecommunications equipment installed by Tenant within the walls of the Premises (provided that Tenant shall not be required to remove telecommunications fiber
owned and operated by parties other than Tenant, or any fiber connection between Suite 470 and Suite 200), all security and monitoring systems within the walls of the Premises and all of Tenant’s graphics, if any, on the windows of the
Premises, and thereafter to restore the Premises to the condition in which it existed prior to the installation of such materials (ordinary wear and tear excepted, but Tenant shall repair any damage including patching any holes and repainting
surfaces) unless otherwise agreed in writing by Landlord. Tenant may elect whether to remove the six foot walk in hood in Room 135 from the Premises, but not any associated equipment such as the HVAC and exhaust system, at its sole discretion
provided Tenant repairs all damage caused by removal, restores the Premises, caps utility connections, and encloses any holes left by such removal as reasonably directed by 

 
Landlord. Other than as stated herein, Landlord acknowledges and agrees that Tenant shall have no other obligations to remove any other alterations or improvements, or to restore the Premises to
its prior condition. Within twenty (20) business days after the Termination Date, as such date may be extended upon written approval by the Landlord, any other personal property or equipment remaining in the Premises as of the Termination Date may
be retained or disposed of by Landlord in Landlord’s sole and absolute discretion at Tenant’s costs. In the event Tenant fails to vacate the Premises and return same to Landlord on or before the Termination Date in accordance with the
terms hereof, Tenant shall be deemed a holdover tenant in accordance with the terms and conditions of the Lease and shall be liable for any and all damages suffered by Landlord as a result of Tenant’s failure to return the Premises to Landlord
as herein required. 
 2. Extension of the Termination Date. By written notice given to Landlord on or before February 1, 2016,
Tenant may elect to extend the Termination Date until August 31, 2017 (the “Extension Period”) for Suite 470 or Suite 200 or for both Suite 470 and Suite 200 (the “Extension Notice”). The Extension Notice shall specify if Tenant
is extending the Termination Date for only Suite 470 or Suite 200 or if Tenant is extending for both suites. Minimum Rent for Suite 470 during the Extension Period shall be at an annual rate of $17.06 per rentable square foot and Minimum Rent for
Suite 200, if applicable, during the Extension Period shall be at an annual rate of $13.47 per rentable square foot. For clarification purposes, the Renewal Term provided under Section 38 of the Lease is hereby terminated for all purposes. 

3. Deposit. The “Deposit” which Tenant posted in accordance with the Lease shall be returned within thirty (30) days after
the Termination Date, as such date may be extended. 
 4. Obligations of Tenant. As a condition to the effectiveness of this
Agreement, Tenant agrees to execute the New Lease as of the date hereof in consideration of Landlord’s willingness to execute this Agreement and in the event the New Lease is not fully executed Landlord may terminate this Agreement upon written
notice to Tenant. 
 5. Release. Except as otherwise provided herein, Landlord, for itself and its successors and assigns, does
hereby release and discharge Tenant, its employees, agents and officers from all claims, costs, actions and causes of action arising out of or related to the Lease including any and all further obligations and liabilities arising out of or relating
to the Lease accruing from and after the Termination Date and provided Tenant complies with the terms of this Agreement Tenant shall not have any further monetary liability or obligations under the Lease from and after the Termination Date other
than reconciliation of the Tenant Contribution, if applicable. Tenant, for itself and its successors and assigns, does hereby release and discharge Landlord, its employees, agents, officers and successors and assigns from all claims, costs, actions
and causes of action arising out of or related to the Lease. 
 6. Representations and Warranties of Tenant. Tenant owns the entire
leasehold interest granted by the Lease and has not assigned its leasehold interest, subleased the Premises nor granted a security interest in its leasehold interest that is the subject of the Lease and Tenant certifies that there are no tenants or
other persons or entities having a right to possession of the Premises or any portion thereof after Tenant vacates the Premises. On or before the Termination Date, Tenant shall satisfy, or obtain releases of, all outstanding liens or financing
statements encumbering Tenant’s leasehold interest in the Premises. 
 7. Broker. Notwithstanding anything contained herein to
the contrary, in no event shall any broker receive any compensation or commission relative to this Agreement. 

 8. Expenses. In the event that Tenant defaults under any of its obligations set forth
above, Landlord shall be entitled to employ all rights and remedies available to it for enforcement of such obligations, and Tenant shall be responsible for paying any and all costs and expenses of the Landlord, including reasonable attorneys’
fees in enforcing the obligations of Tenant hereunder. 
 9. Benefits and Binding Effect. This Agreement shall be binding upon and
shall inure to the benefit of the parties hereto and their respective successors and assigns. 
 10. Counterparts. This Agreement may
be executed in one or more counterparts, each of which shall be deemed an original hereof, and all of which shall be considered one and the same instrument. 

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

			
	“LANDLORD”
	
	DURHAM ROYAL CENTER, LLC,
	a Delaware limited liability company
		
	By:	 	 

		
	Its:	 	Authorized Signatory
		 	  

		
	Date:	 	8/27/2015
		 	  

	
	“TENANT”
	
	NOVAN, INC.,
	a Delaware corporation
		
	By:	 	 

		
	Its:	 	Vice President of Technical Operations & Secretary
		 	  

		
	Date:	 	8/27/2015

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