Document:

Exhibit 10.28

 

AGREEMENT OF LEASE

 

BETWEEN

 

502 WOC PROPERTIES, LP

 

AS LANDLORD

 

AND

 

CONCURRENT PHARMACEUTICALS, INC.

 

AS TENANT

 

 

AGREEMENT OF LEASE

 

THIS AGREEMENT OF LEASE made this 11th day of July, 2002 by and between 502 WOC PROPERTIES, LP, a Pennsylvania limited partnership (hereinafter called “Landlord”), and CONCURRENT PHARMACEUTICALS, INC., a Delaware corporation (hereinafter called “Tenant”).

 

1.             FUNDAMENTAL LEASE PROVISIONS.

 

(a)           “Building”: shall mean the building, consisting of approximately 47,000 rentable square feet, located at 502 West Office Center Drive, Fort Washington, Pennsylvania.

 

(b)           “Property”: shall mean the Building and the parcel(s) of land on which the Building is located, together with all improvements thereon, as more particularly described in Exhibit “A” attached hereto, and as more fully shown and identified on the plan attached hereto as Exhibit “B.”

 

(c)           “Tenant’s RSF”: shall mean the rentable square footage of the Property, which is deemed to be 47,000 rentable square feet. Notwithstanding the foregoing, within ninety (90) days after the Commencement Date (hereinafter defined), Landlord may, at Landlord’s sole cost and expense, cause its architect to measure the Property in accordance with the BOMA measurement standard (which shall take into account the Building’s final loss factor) and to certify the same to Landlord and Tenant. If Landlord’s architect’s determination of Tenant’s RSF differs from the square footage listed above, then Tenant’s RSF shall be deemed to be the rentable square footage of the Property as certified by Landlord’s architect and the Minimum Annual Rent shall be adjusted, to reflect any increase or decrease in actual rentable square footage, retroactive to the Commencement Date.

 

(d)           “Minimum Annual Rent”:

 

	
Period
    	
 
    	
Minimum Annual 
   Rent
    	
 
    	
Monthly Installment
    	
 
    	
Base Rent/R.S.F.
    	
 
    
	
Months 1 through 4
    	
 
    	
$
    	
0.00
    	
 
    	
$
    	
0.00
    	
 
    	
 
    	
 
    
	
Months 5 through 12
    	
 
    	
$
    	
423,000.00
    	
 
    	
$
    	
52,875.00
    	
 
    	
$
    	
13.50 NNN
    	
 
    
	
Months 13 through 14
    	
 
    	
$
    	
0.00
    	
 
    	
$
    	
0.00
    	
 
    	
 
    	
 
    
	
Months 15 through 24
    	
 
    	
$
    	
548,333.30
    	
 
    	
$
    	
54,833.33
    	
 
    	
$
    	
14.00 NNN
    	
 
    
	
Months 25 through 36
    	
 
    	
$
    	
681,500.00
    	
 
    	
$
    	
56,791.67
    	
 
    	
$
    	
14.50 NNN
    	
 
    
	
Months 37 through 48
    	
 
    	
$
    	
705,000.00
    	
 
    	
$
    	
58,750.00
    	
 
    	
$
    	
15.00 NNN
    	
 
    
	
Months 49 through 60
    	
 
    	
$
    	
728,500.00
    	
 
    	
$
    	
60,708.33
    	
 
    	
$
    	
15.50 NNN
    	
 
    
	
Months 61 through 72
    	
 
    	
$
    	
752,000.00
    	
 
    	
$
    	
62,666.67
    	
 
    	
$
    	
16.00 NNN
    	
 
    
	
Months 73 through 84
    	
 
    	
$
    	
775,500.00
    	
 
    	
$
    	
64,625.00
    	
 
    	
$
    	
16.50 NNN
    	
 
    
	
Months 85 through 96
    	
 
    	
$
    	
799,000.00
    	
 
    	
$
    	
66,583.33
    	
 
    	
$
    	
17.00 NNN
    	
 
    
	
Months 97 through 108
    	
 
    	
$
    	
822,500.00
    	
 
    	
$
    	
68,541.67
    	
 
    	
$
    	
17.50 NNN
    	
 
    
	
Months 109 through 120
    	
 
    	
$
    	
846,000.00
    	
 
    	
$
    	
70,500.00
    	
 
    	
$
    	
18.00 NNN
    	
 
    
	
Months 121 through 126
    	
 
    	
$
    	
434,749.98
    	
 
    	
$
    	
72,458.33
    	
 
    	
$
    	
18.50 NNN
    	
 
    

 

(e)           “Initial Term”; “Term”: The initial term (the “Initial Term”) shall be ten (10) years and six (6) months commencing on the Commencement Date and ending on the date (the “Expiration Date”) which is (i) the day immediately preceding the ten (10) year and six (6)

 

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month anniversary of the Commencement Date, if the Commencement Date is the first day of a calendar month, or (ii) the last day of the calendar month in which the ten (10) year and six (6) month anniversary of the Commencement Date occurs, if the Commencement Date is any day other than the first day of a calendar month. The first lease year of the Initial Term shall commence on the Commencement Date and shall end on (i) the day immediately preceding the first anniversary of the Commencement Date, if the Commencement Date is the first day of a calendar month, or (ii) the last day of the month in which the first anniversary of the Commencement Date occurs, if the Commencement Date is any day other than the first day of a calendar month. Each lease year after the first lease year shall be a consecutive twelve (12) month period commencing on the first day of the calendar month immediately following the preceding lease year, except for the final six (6) month period designated in Section 1 (d) as months 121 through 126. The Initial Term including each and every Renewal Term is sometimes referred to herein as the “Term”.

 

(f)            “Renewal Term”: Provided Tenant is not in default of any provision of this Lease beyond any applicable notice and/or cure period set forth herein, Tenant shall have the right to extend this Lease for three (3) individual five (5) year terms by forwarding to Landlord, at least twelve (12) months prior to end of the Term or the then current renewal period, written notice of Tenant’s election to extend this Lease for each such renewal term. Each renewal term shall be on the same terms and conditions of this Lease, except that Minimum Annual Rent shall be calculated as follows:

 

The Minimum Annual Rent for each year of the renewal term shall be computed by adding together the last four (4) months of, the. Minimum Annual Rent during the current lease term, dividing the sum of said number by four (4) (hereinafter the “Averaged Rent”), and multiplying the same by three percent (3%), This, product shall added to the Averaged Rent and said sum shall be the Minimum Annual Rent for that year of the renewal term. This formula shall be repeated for each year of the renewal term.

 

(g)           “Commencement Date”: The Commencement Date of this Lease shall be two (2) days subsequent to Landlord’s acquisition of title to the Property.

 

(h)           “Delivery Date” shall mean the date on which Landlord delivers possession of the Property to Tenant for the commencement of the Tenant Improvements.

 

(i)            “Settlement Representation”: Tenant acknowledges and agrees that Landlord will be acquiring the Property from the current owner of the Property (“Current Owner”). Landlord hereby represents to Tenant that an Agreement of Sale between Landlord and Current Owner was executed on or about April 19, 2002. Landlord further represents to Tenant that settlement is scheduled, pursuant to the terms of said agreement, to occur within sixty (60) days of the date of said Agreement of Sale; pending Landlord’s due diligence examination. In the event Landlord does not acquire title to the Property, this Lease shall be null and void, and Landlord shall have no further obligation or duty to Tenant; nor shall Tenant have any further obligation or duty to Landlord.

 

(j)            “Estimated Delivery Date”: July 15, 2002. However, notwithstanding anything herein to the contrary, in the event Landlord is unable to deliver possession of the Property to Tenant on or before July 31, 2002, then and in that event, Tenant shall have the right, by sending written notice of Tenant’s intent to terminate in accordance with the notice provisions of this Lease, to declare this Lease null and void, and to receive a refund of any deposit monies or other sums paid by Tenant to Landlord pursuant to the terms of this Lease.

 

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In the event Tenant declares this Lease null and void, all right, duties, and obligations of all parties shall terminate immediately, including specifically any rights conferred upon Tenant in Section 2 of this Lease.

 

(k)           “Notice Addresses”:

 

Landlord:     502 WOC Associates, LP.

c/o: Westglen Developments, Inc.

9 Old Lincoln Highway

Suite 104

Malvern, PA 19355

 

With a copy to:           Edward J. Hollin, Esquire

Riley Riper Hollin & Colagreco

240 Daylesford Plaza

P.O. Box 568

Paoli, PA 19301

 

Tenant:         Prior to the Commencement Date:

Concurrent Pharmaceuticals, Inc

4 Tower Bridge, 4th floor

200 Barr Harbor Drive

Conshohocken, PA 19428

Attn: Gregory Lumpkin

 

After the Commencement Date:

Concurrent Pharmaceuticals, Inc.

502 West Office Center Drive

Ft. Washington, PA 19034

Attn: Gregory Lumpkin

 

With a copy to:           Craig L. Finger, Esquire

Fox Rothschild O’Brien & Frankel, LLP

2000 Market Street, 10th Floor

Philadelphia, PA 19103-3291

 

(l)            “Rent Payment Address”:        Wilmington Trust of Pennsylvania

795 East Lancaster Avenue, Suite 6

Villanova, PA 19085

Attention: Commercial Real Estate Lending Department

 

In the event that Landlord’s lender(s) require the Rent to be paid directly to it/them, Tenant agrees to comply with the written requests of said lender(s), and to direct payment to the lockbox so designated by said lender(s), and provided Tenant pays such sums to such lenders Tenant shall be released from its obligations to pay such sums to Landlord.

 

(m)          “Security Deposit”: The initial sum of Two Hundred Thousand Dollars ($200,000.00), which shall be evidenced by the Standby Letter of Credit, as set forth in Section 6 below, shall be held as a Security Deposit hereunder, to secure all of Tenant’s obligations to

 

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Landlord under this Lease. If, on the last day of the Initial Term, no event of default by Tenant as set forth in Section 16 has occurred, the Security Deposit shall be reduced to an amount equal to two (2) months of the then current Minimum Annual Rent and the Standby Letter of Credit shall be reduced accordingly.

 

(n)           “Liquidated Damages Security”: The initial sum of Six Hundred Fifty Thousand Dollars ($650,000.00), as reduced from time to time pursuant to this Section 1(n), which shall be evidenced by the Standby Letter of Credit, which shall secure Tenant’s obligation to pay the liquidated damages sum in accordance with Section 16(j) below. The Liquidated Damages Security shall be reduced (i) by Fifty Thousand Dollars ($50,000.00) commencing on the third (3rd) anniversary of the Effective Date, and on each annual anniversary thereafter, and (ii) by One Hundred Thousand Dollars ($100,000.00) upon Tenant’s completion of a second phase of Tenant Improvements in accordance with Sections 4 and 11 of this Lease, which second phase of construction shall have an estimated cost of Two Million Five Hundred Thousand Dollars ($2,500,000). If, on the last day of the Initial Term, no event of default by Tenant as set forth in Section 16 has occurred, Tenant shall have no further obligation to maintain the Liquidated Damages Security and the Standby Letter of Credit shall be reduced accordingly.

 

(o)           “Standby Letter of Credit”: A letter of credit in the initial amount of Eight Hundred Fifty Thousand Dollars ($850,000.00) which shall serve as the Security Deposit and Liquidated Damages Security, naming Landlord and Wilmington Trust, of Pennsylvania (“Wilmington Trust”) as the beneficiaries, which shall;(l) be issued by a commercial bank approved by Landlord and Wilmington Trust, (2)provide that it,; shall be honored upon presentation at the counters of the issuer of a sight draft accompanied only by the original letter of credit instrument, (3) be transferable by any of the beneficiaries at no cost to it, (4) otherwise be in form reasonably acceptable to Landlord and Wilmington Trust, and (5) provide that it is governed by the provisions of the Pennsylvania Uniform Commercial Code and International Standby Practices ISP98, as published by the International Chamber of Commerce (ISP 98), and that in the event of any conflict between such Code and the ISP 98, the Code shall control. Upon reduction in the Security Deposit in accordance with section 1(m) above, the Standby Letter of Credit shall be reduced accordingly. In addition, upon each such reduction in the Liquidated Damages Security in accordance with Section 1(n) above, Tenant shall have the right to reduce the amount of the Standby Letter of Credit by a like amount, i.e., Fifty Thousand Dollars ($50,000.00) per year, or One Hundred Thousand Dollars ($100,000.00) following completion of the second phase of the Tenant Improvements, as applicable; provided however, except as set forth in this Section 1(o), in no event will the Standby Letter of Credit be reduced to an amount less than Two Hundred Thousand Dollars ($200,000.00), during the Term of this Lease, or any renewal or extension terms. Notwithstanding anything to the contrary contained in this Lease, it shall constitute an event of default under this Lease, and Tenant shall have no right to notice or an opportunity to cure, if the Tenant fails to deliver to Landlord a replacement letter of credit which meets the requirement of this Section 1(o) at least thirty (30) days prior to the expiration of the current Standby Letter of Credit (a “Letter of Credit Default”), provided that, Landlord’s sole remedy for such Letter of Credit Default shall be to present such letter of credit for payment, in which event Landlord shall hold Two Hundred Thousand Dollars ($200,000.00) of the cash proceeds thereof as the Security Deposit, and the balance thereof, if any, as the Liquidated Damages Security. Nothing set forth in the preceding sentence shall be deemed to limit Landlord’s remedies following an event of default by Tenant (other than a Letter of Credit Default) as set forth in Section 16. If there then exists no event of default by Tenant nor any event which, following the passage of time, the giving of notice or both, would be an event of default, and Tenant has not filed a petition seeking relief under the US Bankruptcy

 

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Code nor been the subject of an involuntary petition, Tenant shall have the right to provide a replacement letter of credit in accordance with the terms of this Lease as a substitute for the cash proceeds obtained by Landlord pursuant to the foregoing sentence.

 

(p).  “Permitted Uses”: General Office & Laboratory Use

 

(q)   “Broker”:        Tenant: GMH Real Capital Partners, LP.

Landlord: none.

 

2.             RIGHT OF FIRST REFUSAL TO PURCHASE.

 

(a)           During the Term of this Lease, Landlord shall, if Landlord elects to offer the Property for sale, provide Tenant with thirty (30) days written notice of said intent prior to listing the Property for sale with any commercial broker or offering/advertising the Property for sale to any third party. During such 30-day period, Landlord and Tenant shall negotiate the sale of the property to Tenant. In the event Landlord and Tenant do not enter into an agreement of sale to purchase the Property during the thirty (30) day period, Tenant shall continue to have the right to purchase the Property as set forth more fully below.

 

(b)           If during the Term and after the expiration of the notice period contemplated by subparagraph (a) next-above, if applicable, Landlord shall receive a bona fide offer (for purposes of this Lease, defined as any written proposal to purchase, letter of intent or agreement of sale which sets forth the purchase price, settlement date, financing conditions, if any, and inspection conditions, if any, [“Essential Terms”]) [the “Offer”] from an independent third party to purchase the Property or any portion thereof, which Offer Landlord is willing to accept, Landlord shall deliver a true, correct and complete copy of said Offer to Tenant (except that Landlord may delete the identity of the proposed purchaser). Thereafter, Tenant shall have the right to purchase the Property upon the same terms and conditions as contained in the Offer, provided Tenant shall so indicate its intention to Landlord in writing within fifteen (15) calendar days after the date of Tenant receiving the copy of said Offer and Tenant shall deposit with Landlord’s lender, in an account titled in Landlord’s and Tenant’s names a check in the amount of One Thousand Dollars ($1,000.00) as additional consideration which sum will be credited against the deposit and the purchase price specified in the Offer. In the event Tenant fails to deliver said notice and fails to deposit the One Thousand Dollars ($1,000.00) within said fifteen (15) days, Tenant shall be deemed to have waived its right to purchase the Property pursuant to such Offer. Landlord shall not be required to provide any additional notice to Tenant. Closing of the sale shall take place within the time period provided in the Offer, or, if no determinable date is calculable from the terms of the Offer, within ninety (90) days after the acceptance of the Offer by Tenant. If within said fifteen (15) day period Tenant does not elect to purchase said real property Landlord may proceed to sell said real property to the original offeror upon the Essential Terms contained in the Offer, or as are contained an agreement of sale between Landlord and the prospective purchaser, or such additional Essential Terms as are not materially more favorable to the purchaser than stated in the Offer. Any extension of the inspection period or time for settlement under the Offer or adjustment to the purchase price under the Offer, which are negotiated in good faith in response to the results of the proposed purchaser’s due diligence examination shall not be considered a material change in the Essential Terms. If Landlord shall sell the Property after a failure by Tenant to exercise its right of first refusal set forth in this Section 2, such sale shall be subject to this Lease, and the right of first refusal set forth herein shall continue and shall be applicable to subsequent sales of the Property. In the event Landlord does not settle the sale with the third-party purchaser, the Tenant shall have the right to again exercise a right of first refusal as to any new offers received

 

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by Landlord if from a different third party purchaser, subject to all the provisions of this Lease. Tenant’s rights under this Section 2 shall survive any conveyance of the Property in violation of the terms of this Section 2. Any transfer made to any mortgagee pursuant to a default by Landlord under its obligations to said mortgagee shall not be deemed a transfer in violation of this Section, nor will said transfer be subject to Tenant’s right of first refusal hereunder.

 

(c)           Tenant’s right of first refusal set forth above shall not apply to any transfer of the Property in mortgage foreclosure, by deed in lieu of foreclosure or as part of a settlement with the mortgagee.

 

(d)           Landlord shall have no obligation to notify Tenant of Landlord’s intention to sell and Tenant shall have no right to purchase the Property at any time during which Tenant is in default under any of the provisions of this Lease. The right of first refusal set forth in this Section shall terminate automatically if at any time after Landlord and Tenant enter into an agreement of sale and purchase, pursuant to the terms of this Section, Tenant defaults under any of the provisions of this Lease and Landlord gives Tenant written notice of such default; in which event this Section shall be deemed to be null and void and of no further force or effect. In addition, Tenant’s right of first refusal shall terminate automatically if Tenant transfers this Lease without Landlord’s consent in violation of Section 12 of this Lease.

 

(e)           In the event Tenant elects to exercise its right of first refusal, Tenant shall receive at closing on the Property a credit towards the purchase price from Landlord of Two Hundred Fifty Thousand Dollars ($250,000.00).

 

(f)            In the event, Tenant elects not to ,exercise; its right of first refusal under this Section 2 and Landlord sells the Property to another third party which has no affiliation or relationship with Tenant, which sale occurs during the Term of this Lease, then Tenant shall receive, at time of settlement with said third-party purchaser, the cash sum of Two Hundred Fifty Thousand Dollars ($250,000.00).

 

3.             PROPERTY.

 

Landlord, for the Term, and subject to the provisions and conditions hereof, leases to Tenant and Tenant accepts from Landlord, the Property. Tenant shall not use or occupy, or permit or suffer to be used or occupied, the Property or any part thereof, other than for the Permitted Use.

 

4.             LANDLORD-TENANT IMPROVEMENTS.

 

(a)           Landlord shall make improvements to the Property (collectively “Landlord’s Work”), consisting of the following:

 

(i)            Landlord shall replace and/or repair the roof on the Building at Landlord’s sole cost and expense, in accordance with the requirements set forth in Exhibit “C” hereto;

 

(ii)           Landlord shall replace and/or repair the driveways and parking areas, including repaving the same, at Landlord’s sole cost and expense, in accordance with the requirements set forth on Exhibit “C hereto; and

 

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(iii)         Landlord shall install a 1,500 KVA transformer within sixty (60) days of Landlord’s acquisition of the Property.

 

(b)           Except for Landlord’s Work, Tenant acknowledges that the remainder of the repairs which may be required at the Property will be at Tenant’s sole cost and expense, and, accordingly, Tenant accepts the Property in its “AS-IS” condition, without any representation or warranty by Landlord, expressed or implied, except as expressly set forth in this Lease. All Landlord’s Work shall be performed in a good and workmanlike manner and in accordance with all applicable laws.

 

(c)           Except for Landlord’s Work, Tenant shall perform, at its sole cost and expense, all work which Tenant deems necessary or desirable to prepare the Property for Tenant’s initial occupancy (collectively, the “Tenant Improvements”), which Tenant Improvements shall be subject to the prior written approval of Landlord which approval shall not be unreasonably withheld, conditioned or delayed. All work shall be performed in a good and workmanlike manner and in accordance with all applicable laws. Prior to the commencement of any work within the Property, Tenant shall submit to Landlord, for Landlord’s prior approval, proposed plans and specifications (the “Proposed Tenant’s Plans”) for Tenant’s proposed improvements to the Property, which plans shall be prepared by a registered architect and engineer licensed to do business within the State in which the Property is located. The Proposed Tenant’s Plans shall include all information and specifications necessary for Landlord to fully review the work described therein and shall conform to all applicable laws and requirements of public authorities and insurance underwriters’ requirements. If Landlord disapproves the Proposed Tenant’s Plans, Landlord shall state specifically the reasons for such disapproval, and Tenant shall cause its architect and/or engineer to promptly make any changes in the Proposed Tenant’s Plans reasonably required by Landlord. The Proposed Tenant’s Plans, as finally approved by Landlord, are hereinafter referred to as the “Tenant’s Plans”. Landlord agrees to provide Tenant with Landlord’s approval of Proposed Tenant’s Plan within ten (10) days of submission to Landlord. If Landlord fails to approve or reject said proposed plans within said time period, the Proposed Tenant Plans, as submitted by Tenant, shall be deemed approved by Landlord. Tenant shall be responsible for securing all permits and approvals necessary to construct the Tenant improvements, including specifically the costs of any such permits or approvals. Landlord shall cooperate with Tenant, at no cost to Landlord, in connection with Tenant’s efforts to obtain such permits and approvals.

 

(d)           Landlord and Tenant agree that Landlord shall make available for Tenant Improvements as required in this paragraph, the sum of Four Hundred Six Thousand Dollars ($406,000.00) (the “Tenant Improvement Allowance”). The Tenant Improvement Allowance shall be reserved from the mortgage loan being made to Landlord by. Wilmington Trust, or such other lender holding a first mortgage on the Property. The Tenant Improvement Allowance shall be made available by Landlord to reimburse Tenant for sums expended by Tenant for any Tenant Improvements Tenant makes at the Property. The Tenant Improvement Allowance shall be payable by Landlord to Tenant within ten (10) days after Tenant’s submission to Landlord of paid invoices for the completed office space, as more particularly shown on the plans attached hereto as Exhibit “D”.

 

(e)           Landlord shall have the right to inspect Tenant’s construction of the Tenant Improvements to ensure compliance with the provisions of this Section.

 

(f)            All contractors and subcontractors utilized, or to be utilized, by Tenant for the performance of the Tenant Improvements shall be subject to the prior written approval of

 

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Landlord which approval shall not be unreasonably withheld, conditioned or delayed. Tenant shall submit the names of the Tenant’s proposed contractors to Landlord for Landlord’s prior approval at least ten (10) business days prior to the initial entry into the Building or the Property by Tenant’s contractors. In addition, prior to the initial entry into the Building or the Property by Tenant and by each of Tenant’s contractors, Tenant shall furnish Landlord, at Tenant’s sole cost and expense, with policies of insurance covering Landlord, the Property Manager and their respective agents and employees, with such coverages and in such amounts as Landlord may then require in order to insure Landlord, its beneficiaries or agents against loss or liability for injury or death or damage to property arising out of or related to the construction of the Tenant Improvements. Tenant agrees that Tenant and Tenant’s Contractors and their activities in the Building and Property or otherwise relating to the construction of the Tenant Improvements will not interfere with any activities of Landlord and the tenants and other occupants of the Building.

 

5.             RENT.

 

(a)           During the Term, Tenant shall pay to Landlord the Minimum Annual Rent in the amounts set forth in Section 1 (Fundamental Lease Provisions) above. Such Minimum Annual Rent shall be payable in equal monthly installments in advance on the first day of each calendar month, without deduction or right of setoff, except as provided for in the Lease.

 

(b)           The term “Rent” as used in this Lease shall mean the Minimum Annual Rent, and all other additional rent or other sums payable by Tenant to Landlord under this Lease. All Rent other than the Minimum Annual Rent is referred to herein as “Additional Rent.”

 

(c)           The first installment of Rent shall be payable on the first (1st) day of the fifth (5th) calendar month after the Commencement Date. If the Term begins on a day other than the first day of a calendar month, Rent from such day until the first day of the following calendar month shall be prorated on a per diem basis for each day of such partial month. Additional Rent for items not paid directly by Tenant (including without limitation, real estate taxes, impositions, assessments and insurance premiums, shall be payable on the same date in monthly installments, each in an amount equal to 1/12 of the estimated annual Additional Rent, with an annual adjustment between such estimates paid and the actual annual Additional Rent.

 

(d)           All Rent and other sums due to Landlord hereunder shall be payable to Landlord at the Rent Payment Address specified in Section 1 (Fundamental Lease Provisions), or to such other party or at such other address as Landlord may designate, from time to time, by written notice to Tenant, without demand and without deduction, set-off or counterclaim (except to the extent demand, notice or other right of set off shall be expressly provided for herein). Tenant’s covenant to pay Rent is independent of every other covenant under this Lease.

 

(e)           If Landlord, at any time or times, shall accept said Rent due to it hereunder after the same shall become due and payable, such acceptance shall not excuse delay upon subsequent occasions, or constitute or be construed as, a waiver of any of Landlord’s rights hereunder.

 

(f)            Additional Rent shall include, but not be limited to, all taxes, assessments, impositions and insurance premiums associated with the Property, and any items which Landlord must pay due to Tenant’s failure to make payment, or as otherwise required by this Lease, except such amounts or costs which are the sole obligation of Landlord as provided for in Sections 4 and 7(b) of this Lease, which amounts or costs shall be excluded from Additional Rent.

 

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6.             SECURITY DEPOSIT. As additional security for the full and prompt performance by Tenant of the terms and covenants of this Lease, including without limitation the recovery by Landlord of all amounts due and owing under this Lease, Tenant has deposited (or shall deposit upon execution hereof by Tenant) with the Landlord, the Security Deposit, which shall not constitute Rent for any month (unless so applied by Landlord on account of Tenant’s default) or a measure of Tenant’s liability for damages. Upon a default by Tenant hereunder, which is not cured within any notice and/or cure period set forth herein, Landlord shall have the right, without prejudice to any other remedy, to apply so much of the Security Deposit as is necessary to cure such default or pay any expenses (including, without limitation, reasonable attorney’s fees) incurred as a result of such default, or to satisfy any claim of judgment for damages Tenant shall, upon demand, restore any portion of said Security Deposit applied by Landlord to the cure of any default by Tenant hereunder, and to also restore or secure a replacement letter of credit in conformity with this Lease. Landlord shall not commingle the Security Deposit with the other account(s) of Landlord. To the extent that Landlord has not applied said sum on account of a default, the Security Deposit shall be returned (with interest) to Tenant within thirty (30) days following the later to occur of: (a) the Expiration Date, and (b) and the date that Tenant surrenders possession the Property in accordance with the terms of this Lease. The Security Deposit shall be in the form of a Standby Letter of Credit, as defined in this Lease.

 

7.             MAINTENANCE OBLIGATION.

 

(a)           Tenant’s Maintenance Obligation. Tenant shall be responsible for the maintenance, repair and replacement of all systems, including specifically, plumbing (only such plumbing as is internal to the building and does not extend beyond the exterior walls of the Building shall be Tenant’s obligation), sprinkler, electric from the secondary side of the transformer into the Building, an annual service/maintenance contract for the elevator and maintenance associated therewith (but not the obligation or replace the elevator—which obligation shall be the responsibility of Landlord) and HVAC systems, as well as all landscaping, utilities, cleaning and repair of the Property, excluding the physical structure of the Building, the paved surfaces of the parking lot and driveway areas. Notwithstanding anything herein, Tenant shall be responsible for the cleaning, ice removal and snow removal on the paved surfaces and driveway areas. Tenant acknowledges that Landlord will cause to be installed a new roof at the Property. Tenant shall consult with, and follow the directions and instructions of, Landlord’s roofing contractor prior to entering upon, working upon, or penetrating the roof for any reason to ensure continued compliance with the warranty provisions of the new roof. In the event Tenant fails to so act, and the roof warranty is voided, Tenant shall be responsible for any roof repairs required to reinstate the warranty. Any item which Tenant fails to repair, may be repaired by Landlord, after notice to cure has been provided, and the cost thereof shall be Additional Rent. Landlord represents to Tenant that as of the date of this Lease, all such systems are in good and workmanlike condition and in good operating condition.

 

(b)           Landlord’s Maintenance Obligations. Except as expressly set forth in Section 7(a) above, Landlord shall be responsible for the maintenance, replacement and repair of the physical structure of the Building, and the Property, including, without limitation, the roof, foundation, floor slabs other structural supports of the Building, the parking lot and all other paved surfaces and driveway areas (excluding the cleaning, ice removal and snow removal for any paved surfaces or driveways). Landlord’s sole responsibility and maintenance obligation with regard to the elevator shall only be for the replacement of the elevator in the Building if the maintenance company performing the service work indicated that the replacement of the elevator is required for code or safety reasons and for the cost of bringing the elevator in

 

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compliance with any applicable rules, regulations or ordinances. None of the costs of this Section 7(b) shall be passed through to Tenant as part of any Additional Rent or maintenance charge.

 

8.             UTILITIES SEPARATELY CHARGED TO PROPERTY. In addition to the Minimum Annual Rent and Additional Rent, Tenant shall pay for all utilities (including, without limitation, water, sewer, gas and electricity) that are consumed within the Property. Tenant shall pay all utility bills within ten (10) days after receipt by Tenant. Landlord shall have the right to access to the Property from time to time to install or remove utility facilities.

 

9.             TRIPLE NET LEASE. It is agreed that this Lease is a “net, net, net” lease and that all costs, expenses and obligations of every kind and nature whatsoever relating to the Property, the Building and the Property which may arise or become due during the Term shall be Tenant’s responsibility and obligation excepting only the cost of Landlord’s Work as described in Section 4 above and the maintenance, replacement and repair of the physical structure of the Building described in Section 7 above. It is the purpose and intent of Landlord and Tenant that the Minimum Annual Rent provided for pursuant to the terms of this Lease be absolutely net to Landlord and that all costs and expenses and obligations of every kind and nature whatsoever relating to the Property, the Building and the Property be Tenant’s obligation, excepting the cost of Landlord’s Work as described in Section 4 above and those costs identified in Section 7(b) above which shall be the obligation of Landlord.

 

10.          CARE OF PROPERTY. Tenant agrees, on behalf of itself, its employees and agents that it shall:

 

(a)            Comply at all times with any and all federal, state and local statutes, regulations, ordinances, and other requirements of any of the constituted public authorities and insurers insuring the Building relating to Tenant’s use, occupancy or alteration of the Property;

 

(b)           Not overload, damage or deface the Property or do any act which might make void or voidable any insurance on the Property or the Building or which may render an increased or extra premium payable for insurance (and without prejudice to any right or remedy of Landlord regarding this subparagraph, Landlord shall have the right to collect from Tenant, upon demand, any such increase or extra premium);

 

(c)           Not make any alteration of or addition to the Property without the prior written approval of Landlord, except for interior, nonstructural alterations of a decorative nature that do not exceed more than Two Dollars ($2.00) per rentable square foot of the Property in the aggregate during a one (1) year period. Any interior partitions or other alterations affecting the efficiency of the Building’s electrical, plumbing or HVAC systems shall not be considered “of a decorative nature” within the meaning of the preceding sentence, All alterations performed in the Property by Tenant, whether or not requiring Landlord’s consent, shall be performed: (i) at Tenant’s sole cost and expense, (ii) by contractors and subcontractors approved in advance in writing by Landlord, (iii) in a good and workmanlike manner and in accordance with all applicable laws and ordinances, and (iv) excepting interior painting and floor and wall coverings, and installation of decorative hardware only after providing written notice to Landlord at least ten (10) days prior to performing such alterations. Upon completion, all alterations to the Property by Tenant shall be the property of Tenant until the expiration or earlier termination of this Lease. Upon the expiration or earlier termination of this Lease, all such alterations shall remain at the Property and become the property of Landlord without payment by Landlord therefor. Notwithstanding the foregoing, Landlord, at Landlord’s option, shall have the right to require that

 

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any or all of such alterations be removed upon the expiration or earlier termination of the Lease by providing written notice thereof to Tenant, at the time of Landlord’s approval of proposed Tenant’s plans for alterations or before the expiration of the ten (10) day notice period, a list of items which Landlord will require Tenant to remove at the end of the term, or any renewal or extension thereof; provided, however, that Tenant shall have no obligation to remove any roof top HVAC equipment, boilers, duct work, fume hoods, partitions, wiring, lab counter top and cabinetry, light fixtures and electrical distribution panels. In the event Tenant installs an item which is indicated on the Tenant’s proposed plans, which Landlord does not indicate to Tenant that Tenant must remove, they shall remain at the end of the Term and shall become the property of Landlord. Landlord hereby approves the Tenant Improvements more particularly shown on the plans attached hereto as Exhibit “D”.

 

(d)                                    Not install any equipment of any kind whatsoever which might necessitate any changes, replacements or additions to any of the heating, ventilating, air-conditioning, electric, sanitary, elevator or other systems serving the Property or any other portion of the Building, or to any of the services required of Landlord under this Lease, without the prior written approval of Landlord, and in the event such consent is granted, such replacements, changes or additions shall be paid for by Tenant at Tenant’s sole cost and expense. At the expiration or earlier termination of this Lease, Tenant shall pay Landlord’s cost of restoring such systems to their condition prior to such replacements, changes or additions.

 

(e)                                  Not place signs on the Property which do not comply with all local zoning and/or land use ordinances of any local municipal body, and which have not been approved, by Landlord, in writing, which approval shall not be unreasonably withheld.

 

(f)                                      Not install or authorize the installation of any coin operated vending machine, except for the dispensing of snacks, coffee, and similar items to the employees of Tenant for consumption upon the Property; and

 

11.                               MECHANICS’ LIENS. Prior to Tenant performing any alterations to the Property for which a lien could be filed against the Property or the Building, and specifically Landlord’s interest in the Building and Property, Tenant shall have its contractor execute and file in the appropriate public office a Waiver of Mechanics’ Lien, in form satisfactory to Landlord, and provide Landlord with a true, correct and complete copy thereof. Tenant shall, within ten (10) days after notice from Landlord, discharge any mechanics’ lien for materials or labor claimed to have been furnished to the Property on Tenant’s behalf (except for work contracted for by Landlord) and shall indemnify and hold harmless Landlord from any and all claims, costs, damages, loss, liabilities and expenses (including, without limitation, reasonable attorney’s fees) incurred by Landlord in connection therewith. Tenant hereby acknowledges and agrees that any work performed on behalf of Tenant or contracted for by Tenant, whether or not required or contemplated by this Lease, is not intended for the immediate use and/or benefit of Landlord.

 

12.                               SUBLETTING AND ASSIGNING.

 

(a)                                 Tenant shall not assign this Lease or sublet all or any portion of the Property, whether voluntarily or by operation of law, without first obtaining the prior written consent of Landlord and Wilmington Trust or Landlord’s then current mortgagee (“Mortagee”), which consent shall not be unreasonably withheld by Landlord and Mortgagee. Tenant acknowledges that it shall be reasonable for Landlord to withhold its consent if, by way of example and not limitation, the reputation or financial responsibility of a proposed assignee or subtenant is

 

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unsatisfactory to Landlord or Mortgagee, or if Tenant is in default in the payment or performance of any of its obligations hereunder. Any assignment or sublease in violation of this Section shall be void at the option of Landlord and shall constitute an event of default hereunder without the opportunity for notice or cure by Tenant.

 

(b)                                 A merger, consolidation or transfer or sale by Tenant of all or a majority of the voting shares, partnership interests or other controlling interests in Tenant shall be deemed an assignment of this Lease by Tenant not requiring Landlord’s prior written consent pursuant to subparagraph (a) above, so long as the assignee has equal or better cash flow, net worth, and asset and debt ratios as Tenant. Notwithstanding the foregoing, so long as Tenant is not in default under this Lease, upon thirty (30) days prior written notice to Landlord, Tenant shall have the right, without Landlord’s consent, to sublet all or a portion of the Property or to assign this Lease to any entity which is an Affiliate (as hereinafter defined) of Tenant provided said Affiliate otherwise meets the minimum requirements of this Section 12(b). As used herein, “Affiliate” shall mean any entity that directly owns more than fifty percent (50%) of the voting shares, partnership interests or other controlling interests in Tenant.

 

(c)                                  Notwithstanding the foregoing, any such subletting or assignment (whether or not requiring Landlord’s and Mortgagee’s consent) shall not in any way relieve or release Tenant from liability for the payment and performance of all obligations under this Lease. Furthermore, no assignment will be valid unless the assignee shall execute and deliver to Landlord an assumption of liability agreement in form reasonably satisfactory to Landlord and such assignee, including an assumption by the assignee of all of the obligations of Tenant and the assignee’s ratification of and agreement to be bound by all the provisions of this Lease; and no, subletting will be valid unless Tenant and the subtenant have executed and delivered to Landlord a sublease agreement pursuant to which such subtenant agrees that the sublease shall be subject to all of the terms and conditions of this Lease.

 

(d)                                 Tenant shall pay to Landlord, as Additional Rent hereunder, fifty percent (50%) of all sublease rents or other sums or economic consideration received by Tenant from such sublease (after deducting Tenant’s reasonable costs of reletting), excluding any legal costs associated with any merger or acquisition, whether denominated as rentals or otherwise, in excess of the monthly sums which Tenant is required to pay under this Lease.

 

13.                                   FIRE OR CASUALTY. In the event that the whole or a substantial part of the Building or the Property is damaged or destroyed by fire or other casualty, then, within forty-five (45) days after the date that Landlord receives notice of such fire or other casualty, Landlord shall provide written notice to Tenant as to the estimated time period for the restoration of the damage. In the event that Landlord’s notice provides that the repairs to the Property shall require more than two hundred seventy (270) days to complete, after the completion of the insurance claim adjustment period, then Landlord or Tenant shall have the right to terminate this Lease by providing written notice thereof to the other party within thirty days (30) after completion of the insurance claim adjustment. In the event that the damage can be repaired within such two hundred seventy (270) days or in the event neither Landlord nor Tenant has elected to terminate this Lease in accordance with the foregoing sentence, Landlord shall thereupon cause the damage (excepting, however, Tenant’s furniture, fixtures, equipment and other personal property in, and all alterations and improvements performed by Tenant to, the Property, which shall be Tenant’s responsibility to restore) to be repaired with reasonable speed, subject to delays which may arise by reason of adjustment of loss under insurance policies and for delays beyond the reasonable control of Landlord. In the event Landlord is unable to complete all the repairs within said Two Hundred Seventy (270) day period described

 

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above, Tenant shall receive a pro rata reduction in Rent equal to the percentage of space Tenant cannot occupy until such time as the additional space in the Building is competed. In the event any mortgagee, having the right to do so, shall direct that the insurance proceeds are to be applied to reduce the mortgage debt rather than to the repair of such damage, this Lease shall, at the option of Landlord, be terminated effective as of the date of casualty. To the extent and for the time that the Property are rendered untenantable on account of fire or other casualty, the Rent shall proportionately abate.

 

14.                               EMINENT DOMAIN. If the whole or a substantial part of the Building or the Property is taken or condemned for a public or quasi-public use under any statute or by right of eminent domain by any competent authority or sold in lieu of such taking or condemnation, such that in the opinion of Landlord the Building is not economically operable as before without substantial alteration or reconstruction, this Lease shall automatically terminate on the date that the right to possession shall vest in the condemning authority (the “Taking Date”), with Rent being adjusted to said Taking Date, and Tenant shall have no claim against Landlord for the value of any unexpired term of this Lease. Except as set forth below in this Section 14, Tenant shall have no claim against Landlord and no claim or right to any portion of any amount that may be awarded as damages or paid as a result of any taking, condemnation or purchase in lieu thereof; all rights of Tenant thereto are hereby assigned by Tenant to Landlord. If any part of the Property is so taken or condemned and this Lease is not terminated in accordance with the foregoing provisions of this Section, this Lease shall automatically terminate as to the portion of the Property so taken or condemned, as of the Taking Date, and this Lease shall continue in full force as to the remainder of the Property, with Rent abating only to the extent of the Property so taken or condemned; provided, however, that if the remaining portion of the Property is no longer suitable for the Permitted Use, then Tenant shall have the right to terminate this Lease by providing written notice thereof to Landlord within thirty (30) days after the Taking Date. Landlord hereby grants unto Tenant, and Tenant reserves the right to claim, in the event of any eminent domain proceeding, relocation damages and expenses, as well as a loss of any personal property installed by Tenant at the Property. Said claim for Tenant shall be permitted only to the extent that said claim does not reduce the actual damage award to Landlord.

 

15.                               INSOLVENCY. (a) The appointment of a receiver or trustee to take possession of all or a portion of the assets of Tenant, or (b) an assignment by Tenant for the benefit of creditors, or (c) the institution by or against Tenant of any proceedings for bankruptcy or reorganization under any state or federal law (unless in the case of involuntary proceedings, the same shall be dismissed within forty-five (45) days after institution), or (d) any execution issued against Tenant which is not stayed or discharged within fifteen (15) days after issuance of any execution sale of the assets of Tenant, shall constitute a breach of this Lease by Tenant. Landlord in the event of such a breach, shall have, without need of further notice, the rights enumerated in Section 16 herein.

 

16.                               DEFAULT.

 

(a)                                 If (i) Tenant shall fail to pay Rent or any other sum payable to Landlord hereunder when due and such failure continues for more than five (5) days after written notice thereof from Landlord to Tenant (provided, however, that Landlord shall not be required to provide written notice to Tenant more than two times during any twelve month period); or (ii) any of the events or a breach by Tenant specified in Section 15 occurs; or (iii) Tenant sublets the Property or assigns this Lease in violation of the provisions of Section 12 hereof; or (iv) Tenant fails to maintain the insurance required pursuant to Section 18 hereof and such failure is not cured within thirty (30) days after written notice thereof from Landlord to Tenant or five (5) days

 

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prior to the expiration of any such policy of insurance, whichever is earlier; or (v) Tenant fails to pay, and maintain with, Landlord the Security Deposit within the time periods prescribed by Section 6 hereof; or (vi) Tenant fails to perform or observe any of the other covenants, terms or conditions contained in this Lease and such failure continues for more than thirty (30) days after written notice thereof from Landlord (or such longer period as is reasonably required to correct any such default, provided Tenant promptly commences and diligently continues to effectuate a cure and in all events completes such cure within ninety (90) days of such notice from Landlord); then and in any of said cases (notwithstanding any former breach of covenant or waiver thereof in a former instance), Landlord, in addition to all other rights and remedies available to it by law or equity or by any other provisions hereof, may at any time thereafter:

 

(i)                                declare to be immediately due and payable, a sum equal to the Accelerated Rent Component (as hereinafter defined), and Tenant shall remain liable to Landlord as hereinafter provided;

 

(ii)                                  terminate this Lease upon written notice to Tenant and, on the date specified in said notice, this Lease and the term hereby demised and all rights of Tenant hereunder shall expire and terminate and Tenant shall thereupon quit and surrender possession of the Property to Landlord in the condition elsewhere herein required, and Tenant shall remain liable to Landlord as hereinafter provided; and/or

 

(iii)                                in the event Tenant has failed to timely pay Rent and such failure is not cured within the notice and cure period set forth in Section 16(a)(i) above, Landlord may enter upon and repossess the Property, by force, summary proceedings, ejectment or otherwise, and dispossess Tenant and remove Tenant and all other persons and property from the Property, without being liable to Tenant for prosecution or damages therefor, and Tenant shall remain liable to Landlord as hereinafter provided.

 

(b)                                 For purposes herein, the Accelerated Rent Component shall mean the aggregate of:

 

(i)                                     all Rent and other charges, payments, costs and expenses due from Tenant to Landlord and in arrears at the time of the election of Landlord to recover the Accelerated Rent Component;

 

(ii)                                   the Minimum Annual Rent reserved for the then entire unexpired balance of the Term (taken without regard to any early termination of the Term by virtue of any default or any early termination rights set forth herein), plus all other charges, payments, costs and expenses herein agreed to be paid by Tenant up to the end of the Term which shall be capable of precise determination at the time of Landlord’s election to recover the Accelerated Rent Component; and

 

(iii)                                Landlord’s good faith estimate of all charges, payments, costs and expenses herein agreed to be paid by Tenant up to the end of the Term which shall not be capable of precise determination as aforesaid (and for such purposes no estimate of any component of the Additional Rent to accrue pursuant to the provision of Section 5 hereof shall be less than the amount which would be due if each such component continued at the highest monthly rate or amount in effect during the twelve (12) months immediately preceding the default).

 

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If Tenant tenders the Accelerated Rent Component reduced to present value at the rate of 8% within thirty (30) days from the date Landlord issues a written notice of the Accelerated Rent Component, such payment shall satisfy the Accelerated Rent Component in full.

 

(c)                                     In any case in which Landlord shall have entered upon and repossessed the Property, Landlord may (but shall be under no obligation to attempt to) relet all or any portion of the Property for and upon such terms as Landlord, in its sole discretion, shall determine. Landlord need not consider any proposed tenant offered by Tenant in connection with such reletting. For the purpose of such reletting, Landlord may decorate or make reasonable repairs, changes, alterations or additions to the Property to the extent deemed desirable or convenient by Landlord. All costs of reletting, including, without limitation, the cost of such repairs, changes, alterations and additions, brokerage commissions and reasonable legal fees, shall be charged to and be payable by Tenant as Additional Rent hereunder. Any sums collected by Landlord from any new tenant shall be credited against the balance of the Minimum Annual Rent and Additional Rent due hereunder as aforesaid.

 

(d)                                 Landlord shall in no event be responsible or liable for any failure to relet the Property or any part thereof, or for any failure to collect any Rent due upon a reletting.

 

(e)                                  Tenant shall pay upon demand all of Landlord’s costs, charges and expenses, including the reasonable fees and out-of-pocket expenses of counsel, agents and others retained by Landlord, incurred in enforcing Tenant’s obligations hereunder or incurred by Landlord in any litigation, negotiation or transaction in which tenant causes Landlord, without Landlord’s fault, to become involved or concerned.

 

(f)                                   CONFESSION OF JUDGMENT FOR POSSESSION. IN THE EVENT OF A DEFAULT BY TENANT, WHICH IS NOT CURED WITHIN AND NOTICE AND/OR CURE PERIOD SET FORTH HEREIN, AND IN ADDITION TO ANY AND ALL OTHER RIGHTS AND REMEDIES OF WHICH THE LANDLORD MAY BE POSSESSED, THE LANDLORD MAY CAUSE A JUDGMENT IN EJECTMENT TO BE ENTERED AGAINST THE TENANT FOR POSSESSION OF THE PROPERTY, AND FOR THAT PURPOSE THE TENANT AUTHORIZES AND EMPOWERS ANY PROTHONOTARY, CLERK OF COURT OR ATTORNEY OF ANY COURT OF RECORD TO APPEAR FOR THE TENANT AND TO CONFESS JUDGMENT AGAINST THE TENANT IN EJECTMENT FOR POSSESSION OF THE PROPERTY AND AGREES THAT THE LANDLORD MAY COMMENCE AN ACTION PURSUANT TO THE PENNSYLVANIA RULES OF CIVIL PROCEDURE FOR THE ENTRY OF AN ORDER IN EJECTMENT FOR POSSESSION OF THE PROPERTY, AND THE TENANT FURTHER AGREES THAT A WRIT OF POSSESSION PURSUANT THERETO MAY ISSUE FORTHWITH, FOR WHICH AUTHORIZATION TO CONFESS JUDGMENT AND FOR THE ISSUANCE OF A WRIT OR WRITS OF POSSESSION PURSUANT THERETO, THIS LEASE, OR A TRUE AND CORRECT COPY THEREOF, SHALL BE SUFFICIENT WARRANT. TENANT FURTHER COVENANTS AND AGREES THAT IF FOR ANY REASON WHATSOEVER, AFTER SAID ACTION SHALL HAVE BEEN COMMENCED, THE ACTION SHALL BE TERMINATED AND THE POSSESSION OF THE PROPERTY SHALL REMAIN IN OR BE RESTORED TO THE TENANT, THE LANDLORD SHALL HAVE THE RIGHT UPON ANY SUBSEQUENT DEFAULT, WHICH IS NOT CURED WITHIN ANY NOTICE AN/OR CURE PERIOD SET FORTH HEREIN OR UPON THE TERMINATION OF THIS LEASE AS SET FORTH ABOVE TO COMMENCE SUCCESSIVE ACTIONS OR POSSESSION OF THE PROPERTY AND TO CAUSE THE ENTRY OF SUCCESSIVE JUDGMENTS BY CONFESSION IN EJECTMENT FOR POSSESSION OF THE PROPERTY.

 

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/s/ John J. Baldwin 
    
	
 
    	
TENANT 
    	
[ILLEGIBLE]
    

 

(i)                                      In any procedure or action to confess judgment in ejectment for possession of the Property, if the Landlord shall first cause to be filed in such action an affidavit or averment of the facts constituting a default by Tenant, or the occurrence of a condition precedent, the happening of which default or occurrence authorizes, permits, or empowers the Landlord to cause the entry of judgment by confession, such affidavit or averment shall be conclusive evidence of such default by Tenant or occurrence; and if a true copy of this Lease be filed in such procedure or action, it shall not be necessary to file the original warrant of attorney, any rule of Court, custom, or practice to the contrary notwithstanding.

 

 

	
 
    	
/s/ John J. Baldwin 
    
	
 
    	
TENANT 
    	
[ILLEGIBLE]
    

 

(ii)                                   Tenant hereby releases the Landlord, and any and all attorneys who may appear for Landlord or Tenant in any action by confession from all errors in any procedure or action to enter judgment by confession by virtue of the warrant of attorney contained herein, and any liability therefor. Tenant further authorizes the Prothonotary or any Clerk of Court to issue a Writ of Execution or other process, and further agrees that Tenant may be dispossessed of the Property either at the end of the Term, or sooner termination of this Lease, for non-payment of rent, or for any other reason. TENANT SPECIFICALLY WAIVES THE RIGHT TO ANY NOTICE TO QUIT REQUIRED BY ANY STATUTE, RULE OR REGULATION OF ANY STATE, INCLUDING SPECIFICALLY THE COMMONWEALTH OF PENNSYLVANIA.

 

(iii)                               The right to enter judgment against Tenant by confession to enforce any provision of this Lease provided for more fully in this Lease generally, may, at the option of any assignee of this Lease be exercised by said assignee of Landlord’s right, title and interest in this Lease in such assignee’s own name, any statute, rule of Court, custom or practice to the contrary notwithstanding.

 

(g)                                  If Rent or any other sum due from Tenant to Landlord shall be overdue for more than five (5) days after notice from Landlord, Tenant shall be obligated to pay to Landlord a late charge equal to the lesser of five (5%) percent of the overdue amount, or the late charge provided for overdue loan payments in Landlord’s then existing mortgage loan for the Property. In addition, overdue payments not made within any applicable grace or notice period shall thereafter bear interest at the rate of ten percent (10%) per annum (or, if lower, the highest legal rate) until paid, and such interest shall continue to accrue after entry of judgment and until full satisfaction.

 

(h)                                 All remedies available to Landlord hereunder and at law and in equity shall be cumulative and concurrent. No termination of this Lease nor taking or recovering possession of the Property shall deprive Landlord of any remedies or actions against Tenant for Rent, for charges or for damages for the breach of any covenant, agreement or condition herein contained, nor shall the bringing of any such action for Rent, charges or breach of covenant, agreement or condition, nor the resort to any other remedy or right for the recovery of Rent, charges or damages for such breach be construed as a waiver or release of the right to insist upon the forfeiture and to obtain possession. No reentering or taking possession of the Property, or making of repairs, alterations or improvements thereto, or reletting thereof, shall be construed as an election on the part of Landlord

 

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to terminate this Lease unless written notice of such election to terminate is given by Landlord to Tenant.

 

(i)                                 No waiver of any provision of this Lease shall be implied by any failure of Landlord to enforce any remedy allowed for the violation of such provision, even if such violation is continued or repeated, and no express waiver shall affect any provision other than the one(s) specified in such waiver and only for the time and in the manner specifically stated. No receipt of monies by Landlord from Tenant after the termination of this Lease shall in any way alter the length of the Term or of Tenant’s right of possession hereunder or after the giving of any notice shall reinstate, continue or extend the Term or affect any notice given to Tenant prior to the receipt of such moneys, it being agreed that after the service of notice or the commencement of a suit or after final judgment for possession of the Property, Landlord may receive and collect any Rent due, and the payment of said Rent shall not waive or affect said notice, suit or judgment. The receipt by Landlord of a lesser amount than the Minimum Annual Rent or any Additional Rent due shall not be construed to be other than a payment on account of the Minimum Annual Rent or Additional Rent then due, and any statement on Tenant’s check or any letter accompanying Tenant’s check to the contrary shall not be deemed an accord and satisfaction, and Landlord may accept such payment without prejudice to Landlord’s right to recover the balance of the Minimum Annual Rent or Additional Rent due or to pursue any other remedies provided in this Lease or otherwise.

 

(j)                                    If following an event of default by Tenant (other than a Letter of Credit Default) as set forth in Section 16 Landlord exercises its remedy to terminate this Lease and recovers possession of the Property, Landlord may recover from Tenant all Rent and other charges, payments, costs and expenses due from Tenant to Landlord and in arrears at the time Landlord terminates this Lease and recovers possession of the Property, plus a sum equal to the then current Liquidated Damages Security as liquidated damages, as Landlord’s sole and exclusive damages, in lieu of Landlord’s actual damages for loss of rent and other damages thereafter accruing as a result of Tenant’s event of default (other than a Letter of Credit Default) as set forth in Section 16, which the parties agree is impossible of precise determination, and the parties agree that such amount is a reasonable, agreed upon estimate of Landlord’s actual damages and not a penalty. Notwithstanding anything to the contrary set forth in this Section 16(j) or elsewhere in this Lease, Landlord shall not be entitled to terminate this Lease, recover possession of the Property and recover the Liquidated Damages Security unless Landlord shall first deliver to Tenant an additional written notice of Landlord’s intention to terminate this Lease, recover possession of the Property and recover the Liquidated Damages Security (the “Additional Notice”) and such event of default is not cured by Tenant within five (5) days after Tenant’s receipt of the Additional Notice. Except as expressly set forth in this Section 16(j), Landlord shall have no right to recover the Liquidated Damages Security.

 

17.                               LANDLORD’S RIGHT TO CURE. Landlord may (but shall not be obligated), on five (5) days notice to Tenant (except that no notice need be given in case of emergency) cure on behalf of Tenant any default hereunder by Tenant, and the cost of such cure (including any attorney’s fees incurred) shall be deemed Additional Rent payable upon demand.

 

18.                               INSURANCE. Tenant shall at all times during the Term, including any renewal or extension thereof, at Tenant’s sole cost and expense, maintain in full force and effect with respect to the Property and Tenant’s use thereof from insurance companies reasonably acceptable to Landlord: (i) commercial general liability insurance, covering injury to person and property in amounts at least equal to Three Million Dollars ($3,000,000) per occurrence and annual aggregate limit for bodily injury and Two Million Dollars ($2,000,000) per occurrence and annual aggregate limit for property damage, with increases in such limits as Landlord may from

 

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time to time reasonably request, and (ii) all-risk or fire and extended coverage insurance upon all furniture, trade fixtures, equipment and other personal property in, and all alterations and improvements performed by Tenant to, the Property for the full replacement value of the same. All liability insurance policies shall name Landlord, the Property Manager and at Landlord’s request any mortgagee of all or any portion of the Property as additional insureds. Tenant shall deliver to Landlord certificates of such insurance at or prior to the Commencement Date, together with evidence of paid-up premiums, and shall deliver to Landlord renewals thereof at least thirty (30) days prior to expiration. All such policies and certificates shall provide that such insurance coverage may not be cancelled or materially amended unless Landlord, the Property Manager and any mortgagee designated by Landlord as aforesaid are given at least thirty (30) days prior written notice of the same. Landlord agrees to maintain property, casualty and liability insurance in such amounts and with such coverages as Landlord determines is prudent (and as Landlord’s bank may require), the cost thereof to be paid by Tenant as part of Additional Rent, and to provide Tenant with a copy of any certificate of insurance. Landlord covenants and agrees that from and after the Commencement Date, Landlord will carry and maintain the following insurance: (a) Commercial general liability insurance covering the Land, the Building and the Property against claims for personal or bodily injury or death or property damage occurring upon, in or about the Land, the Building and the Property (including contractual, indemnity and liability coverage to cover Landlord’s indemnities set forth herein), such insurance to afford protection to the limit of not less than $3,000,000.00 combined single limit or such higher limits as Landlord may elect, at its option, or as Landlord’s mortgage may require Landlord to carry from time to time, on an occurrence basis, in respect to injury or death to any number of persons and broad from property damage .arising out of any one occurrence. This insurance coverage shall extend to any liability of Landlord arising out of the indemnities provided, for in Section 19 of this Lease. Such policy shall be written in the name of Landlord, with Tenant and any other parties reasonably designated by Landlord or Tenant from time to time as additional insureds; and (b) Property insurance on a “special perils” extended coverage basis (including coverage against fire, wind, vandalism, malicious mischief, water damage and sprinkler leakage) covering the Property and the Building in an amount not less than 100% of the full replacement cost thereof, subject to customary deductibles.

 

19.                               LIABILITY.

 

(a)                                 Landlord (for purposes of Sections 19 and 20 only, defined as Landlord and its officers, members, directors, employees, agents, invitees contractors, mortgagees and all their respective successors and assigns) shall not be liable to Tenant (for purposes of Sections 19 and 20 only, defined as Tenant, and its officers, shareholders, directors, employees, agents, contractors, mortgagees and lenders, and their respective successors and assigns), and Tenant hereby releases Landlord for any loss of life, personal injury or damage to property in the Property from any cause whatsoever unless such loss, injury or damage is the result of the negligence or willful misconduct of Landlord. Tenant shall and does hereby indemnify and hold Landlord harmless from and against any and all claims, actions, damages, liability and expenses (including reasonable attorneys’ fees) in connection with any loss of life, personal injury or damage to property in or about the Property or arising out of the use or occupancy of the Property by Tenant, its agents, employees, invitees or contractors, or occasioned in whole or in part by Tenant, its agents, employees, invitees or contractors, except to the extent such loss, injury or damage was caused by the negligence or willful misconduct of Landlord, its agents or employees. Landlord shall and does hereby indemnify and hold Tenant, its agents and employees harmless from and against any and all claims, actions, damages, liability and expenses (including reasonable attorneys fees) in connection with any loss of life or personal injury arising out of the use or occupancy of the Property by Landlord except to the

 

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extent such loss, injury or damage was caused by the negligence or willful misconduct of Landlord. Landlord’s and Tenant’s respective covenants, obligations and liabilities under this Section shall survive the expiration or earlier termination of this Lease. The indemnification obligations under this Paragraph shall not be limited in any way by any limitation on the amount or type of damages, compensation or benefits payable by or for the indemnified party, or any other person, under Workers or Workman’s Compensation statutes, disability benefits statutes or other employee benefit laws. If the party to be indemnified is made a party to any litigation commenced by or against it for which it is to be indemnified, then the indemnifying party shall protect, defend and hold harmless and pay all court costs, penalties, charges, damages, reasonable expenses and reasonable attorney’s fees actually incurred in defending the indemnified party. Notwithstanding the foregoing, the indemnified party, at its election, shall be entitled to defend itself in any such litigation, at the sole cost and expense of such indemnified party.

 

(b)                             Notwithstanding anything to the contrary contained in this Lease, it is expressly understood and agreed by Tenant that none of Landlord’s covenants, undertakings or agreements are made or intended as personal covenants, undertakings or agreements by Landlord and any liability for damage or breach or nonperformance by Landlord, its agents or employees or for the negligence of Landlord, shall be collectible only out of Landlord’s interest in the Building and no personal liability is assumed by, nor at any time may be asserted against, Landlord; all such liability, if any, being expressly waived and released by Tenant. Notwithstanding anything to the contrary contained in this Lease, in no event shall Landlord or Tenant be liable to the other for any consequential damages, lost profits, loss of business or other similar damages, regardless of whether the same arises out of the negligence of a party.

 

20.                       ENVIRONMENTAL MATTERS.

 

(a)                                    Tenant shall conduct, and cause to be conducted, all operations and activity at the Property in compliance with, and shall in all other respects applicable to the Property comply with, all applicable present and future federal, state, municipal and other governmental statutes, ordinances, regulations, orders, directives and other requirements, and all present and future requirements of common law, concerning the environment (hereinafter collectively called “Environmental Statutes”) including, without limitation, (i) those relating to the generation, use, handling, treatment, storage, transportation, release, emission, disposal, remediation or presence of any material, substance, liquid, effluent or product, including, without limitation, hazardous substances, hazardous waste or hazardous materials, (ii) those concerning conditions at, below or above the surface of the ground, (iii) those concerning conditions in, at or outside the Building, and (iv) any items which may be or are regulated or controlled by the Food and Drug Administration (FDA); specifically including any items, products or drugs manufactured or synthesized by Tenant which may, in whole or in part, become regulated or controlled by the FDA or be subject to any Environmental Statute (hereinafter “FDA Regulated Items”).

 

(b)                                 Tenant shall not cause or suffer or permit to occur in, on or under the Property any generation, use, manufacturing, refining, transportation, emission, release, treatment, storage, disposal, presence or handling of hazardous substances, hazardous wastes or hazardous materials (as such terms are now or hereafter defined under any Environmental Statute) or any other material, substance, liquid, effluent or product now or hereafter regulated by any Environmental Statute (all of the foregoing herein collectively called “Hazardous Substances”), including specifically CERCLA, RCRA, HSCA, Clean Streams Law, and any other federal, state or local act, regulation or ordinance, except that construction materials (other than asbestos or polychlorinated biphenyls), office equipment, fuel and similar products (if

 

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contained in vehicles) and cleaning solutions, and other maintenance materials that are or contain Hazardous Substances may be used, generated, handled or stored on the Property, provided such is incident to and reasonably necessary for the operation and maintenance of the Property for the Permitted Use and is in compliance with all Environmental Statutes and all other applicable governmental requirements. Should Tenant, its agents, employees, contractors or invitees cause any release of Hazardous Substances at the Property, Tenant shall immediately notify Landlord in writing and immediately contain, remove and dispose of, such Hazardous Substances and any material that was contaminated by the release and to remedy and mitigate all threats to human health or the environment relating to such release. When conducting any such measures the Tenant shall comply with all Environmental Statutes.

 

(c)                                  Tenant hereby agrees to indemnify and to hold harmless Landlord of, from and against any and all expense, loss or liability suffered by Landlord by reason of Tenant’s breach of any of the provisions of this Section, including, but not limited to, (i) any and all expenses that Landlord may incur in complying with any Environmental Statutes, (ii) any and all costs that Landlord may incur in studying, assessing, containing, removing, remedying, mitigating, or otherwise responding to, the release of any Hazardous Substance, FDA Regulated Item or waste at or from the Property, (iii) any and all costs for which Landlord may be liable to any governmental agency for studying, assessing, containing, removing, remedying, mitigating, or otherwise responding to, the release of a Hazardous Substance, FDA Regulated Item or waste at or from the Property, (iv) any and all fines or penalties assessed, or threatened to be assessed, upon Landlord by reason of a failure of Tenant to comply with any obligations, covenants or conditions set forth in this Section, and (v) any and all legal fees, engineering fees, remediation costs and all other costs incurred by Landlord in connection with any of the foregoing.

 

(d)                                    Tenant’s covenants, obligations and liabilities under this Section shall survive the expiration or earlier termination of this Lease.

 

(e)                                  Landlord shall, prior to the execution of this Lease, deliver to Tenant copies of any TSP, Phase I and/or Phase II reports in Landlord’s possession. These environmental reports shall not constitute a representation, covenant or warranty as to the presence or absence of any hazardous substance or violation of any environmental statute. Landlord makes no representation regarding any hazardous substances at the Property prior to its date of settlement. Landlord represents to Tenant that Landlord will comply with all environmental statutes, as they pertain to the Property, and Landlord hereby agrees to indemnify Tenant as to any violation of any such environmental statute by Landlord (not caused by an act or omission of Tenant) subsequent to the Commencement Date, including a violation asserted against Landlord arising from any pre-Commencement Date condition on the Property (not caused by an act or omission of Tenant). Landlord hereby agrees to indemnify and to hold harmless Tenant of, from and against any and all expense, loss or liability suffered by Tenant by reason of Landlord’s breach of any of the provisions of this Section 20, limited to (i) any and all expenses that Tenant may incur in complying with any Environmental Statutes, (ii) any and all costs that Tenant may incur in studying, assessing, containing, removing, remedying, mitigating, or otherwise responding to, the release of any Hazardous Substance or waste at or from the Property, (iii) any and all costs for which Tenant may be liable to any governmental agency for studying, assessing, containing, removing, remedying, mitigating, or otherwise responding to, the release of a Hazardous Substance or waste at or from the Property, (iv) any and all fines or penalties assessed, or threatened to be assessed, upon Tenant by reason of a failure of Landlord to comply with any obligations, covenants or conditions set forth in this Section, and (v) any and all legal fees and costs incurred by Tenant in connection with any of the foregoing.

 

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Provided, however, that prior to Tenant invoking the indemnification provisions of this Section, Tenant shall provide Landlord with written notice of the asserted violation of the Environmental Statutes, upon receipt of which Landlord shall have a reasonable time to develop and implement an appropriate response and compliance plan for submission to applicable governmental authorities for approval.

 

(f)            Landlord and Tenant acknowledge and agree that prior to Landlord acquiring title to the Property, a prior tenant complained of a possible environmental condition which caused its employees to complain of possible health effects. Tenant acknowledges that Landlord had delivered to Tenant copies of all reports associated with said complaints, in accordance with subparagraph 20 (e) above. In the event of any recurrence of said condition, Landlord’s liability shall be limited to the costs of testing and remediation of said condition.

 

(g)           Landlord’s covenants, obligations and liabilities under this Section shall survive the expiration or termination of this Lease.

 

21.          SUBORDINATION. Subject to the terms of this Section 21, this Lease, and the estate, interest and rights hereby created, shall be subordinate to any mortgage or ground lease now or hereafter placed upon the Property or any estate or interest therein, and to all renewals, modifications, consolidations, replacements and extensions thereof. As an express condition to Tenant’s agreement to subordinate this Lease to any mortgage or ground lease now or hereafter placed upon the Property, Landlord shall obtain an agreement, in recordable form, executed by the holder of such mortgage or ground lease, obligating Tenant to attorn to any party acquiring title or the right of possession under or by virtue of such mortgage or ground lease and obligating any such party acquiring title or the right of possession to be bound by this Lease and all of Tenant’s rights set forth in this Lease and providing that (a) the term of this Lease shall not be terminated or modified in any respect whatsoever nor the rights of Tenant hereunder or its occupancy of the Property be affected in any way (except as set forth in Section 31(c)) should (i) such ground lease be terminated, (ii) such mortgage be foreclosed, or (iii) any other action be instituted in connection with any such mortgage or ground lease, and (b) Tenant shall not be named as a defendant in any foreclosure action or other proceedings which may be instituted by any party to any such mortgage or ground lease, Landlord shall use its best efforts to obtain, within five (5) days after the execution of this Lease, a nondisturbance agreement, in recordable form, containing the aforesaid provisions and executed by Landlord and the holders of any existing mortgages and ground leases.

 

22.          ESTOPPEL STATEMENT. Tenant shall from time to time within five (5) business days after request by Landlord, execute, acknowledge and deliver to Landlord a statement certifying that this Lease is unmodified and in full force and effect (or that the same is in full force and effect as modified, listing any instruments or modifications), the dates to which Rent and other charges have been paid, and whether or not, to the best of Tenant’s knowledge, Landlord is in default or whether Tenant has any claims or demands against Landlord (and, if so, the default, claim and/or demand shall be specified), and such other information reasonably requested by Landlord.

 

23.          RESERVATION OF LANDLORD’S RIGHTS. Notwithstanding anything to the contrary contained herein, Landlord explicitly reserves, without limitation, the following rights, each of which Landlord may exercise without liability to Tenant, and the exercise of any such rights shall not be deemed to constitute an eviction or disturbance of Tenant’s use or possession of the Property and shall not give rise to any claim for setoff or abatement of Rent or any other claim or otherwise affect any of Tenant’s obligations hereunder:

 

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(a)            to decorate or make repairs, alterations, additions or improvements, whether structural or otherwise, in and about the Property, including the Building, and during the continuance of such work, to temporarily close doors, entrance ways, corridors or any other public areas of the Building, or to temporarily suspend services or the use of facilities, so long as the Property are reasonably accessible and usable. Notwithstanding the foregoing, in the event there is a failure to furnish the services specified in this Lease, and if such failure is of a material nature so as to render any portion of the Property substantially unusable for the purposes contemplated by this Lease and Tenant does, in fact, stop using the affected portion of the Property, then if such failure continues to remain uncured for more five (5) consecutive days, after Tenant’s issuance of written notice to Landlord specifying such failure, all Rent for the portion of the Property made substantially unusable by said interruption shall be abated pro rata until such failure is remedied;

 

(b)           to enter the Property at reasonable times during normal business hours and, except in the event of emergency, in which event no notice is required, upon at least twenty-four (24) hours prior notice to inspect the Property and to make repairs, alterations or improvements to the Property or other portions of the Building, provided that Landlord shall use reasonable efforts to avoid material interference to the conduct of Tenant’s business operations therein. Landlord acknowledges and agrees that in the event Landlord must enter the lab areas (defined as any area of the Building where any chemicals or compounds are synthesized as part of Tenant’s business) or any other areas where chemicals are made or used or animals are stored, a Tenant representative shall be required, except, in, the .case of emergencies, to accompany Landlord or its agent for purposes of ensuring the safety of Landlord and to further ensure compliance with FDA Regulations;

 

(c)              to erect, use and maintain pipes, ducts, wiring and conduits, and appurtenances thereto, in and through the Property in reasonable locations, provided that Landlord shall use reasonable efforts to avoid material interference to the conduct of Tenant’s business operations therein;

 

(d)           to exclusively utilize the roofs, telephone, electrical and janitorial closets, equipment rooms, building risers and similar areas that are used by Landlord for the provision of Building services; and

 

(e)           to show the Property to prospective mortgagees and purchasers and, during the twelve (12) months prior to expiration of the Term, to prospective tenants.

 

24.          WAIVER OF SUBROGATION. Landlord and Tenant each release the other, and all those claiming by, under and through them for any loss or damage which may occur to the property of the other, to the extent of such damaged party’s insurance indemnities, even if such loss or damage shall be brought about by the fault or negligence of such other party, or the agent or employees of such other party; provided, however, that this release shall be effective only with respect to loss or damage occurring during such time as the applicable policies of insurance shall contain a clause to the effect that this release shall not affect said policies or the right of the insured to recover thereunder. If any policy does not contain such a clause, the insured party shall, at the written request of the other party to this Lease, have such a clause added to said policy if an endorsement so providing is obtainable.

 

25.          EXPIRATION OF TERM; HOLDING-OVER. Upon or prior to the expiration or earlier termination of this Lease, Tenant shall remove Tenant’s goods and effects and those of

 

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any other person claiming under Tenant, and quit and deliver up the Property to Landlord peaceably and quietly in as good order and condition as existed at the inception of the Term, reasonable use and wear thereof, damage from fire and extended coverage type risks, and repairs which are Landlord’s obligation excepted. Goods and effects not removed by Tenant at the termination of this Lease, however terminated, shall be considered abandoned and Landlord may dispose of and/or store the same as it deems expedient, the cost thereof to be charged to Tenant. Should Tenant continue to occupy the Property after the expiration of the Term, including any renewal or renewals thereof, or after a forfeiture incurred, such tenancy shall (without limitation of any of Landlord’s rights or remedies therefor) be one at sufferance at a minimum monthly rental, for the first month, equal to one hundred twenty-five percent (125%) of the Rent payable over the last four months, and, subsequent to said first month holdover, at the monthly rental rate equal to two hundred percent (200%) of the Rent payable over the last four (4) months of the Term and any extension, renewal or holdover thereof. No holdover by Tenant or payment by Tenant after the expiration or earlier termination of this Lease shall be construed to extend the Term or prevent Landlord from immediate recovery of the Property by summary proceedings or otherwise.

 

26.          SECURITY INTEREST. Landlord shall have and Tenant hereby grants to Landlord a continuing security interest for all rentals and other sums of money becoming due hereunder from Tenant, upon all goods, wares, equipment, fixtures, furniture and inventory and other personal property of Tenant situate in the Property. Tenant hereby authorizes Landlord to file such financing statements and continuation statements as may be reasonable, necessary or conventional to perfect such security interest. Such security interest shall be under, subject and subordinate to any security interest granted by Tenant to any bank, insurance company or other institutional lender advancing funds to Tenant for use by Tenant in acquiring such personal property, or providing working capital financing to Tenant, and Landlord shall execute such subordination agreements as such lender may reasonably require, provided however that such subordination and Landlord’s duty to execute such subordination agreements shall be subject to the lender agreeing to the following with Landlord: (1) if such lender exercises any right or remedy against such personal property while in the Property, it shall do so only after prior written notice to Landlord, and only after covenanting to restore any damage to the Property caused by such removal, and posting such security for the same as Landlord may reasonably require; (2) if this Lease terminates at the expiration of the term, or sooner as a result of a default by Tenant, such lender shall remove such personal property in which it claims an interest, in accordance with the requirements of clause (1) above, within ten (10) days following written notice from landlord, in default of which the Lender shall be deemed to have abandoned the same, and Landlord may retain or remove and dispose of such personal property without liability to Tenant or such lender, at the cost and expense of Tenant, and such lender shall be liable to Landlord for reasonable storage costs until such personal property is removed.

 

27.          FINANCIAL STATEMENTS. Upon the request of any mortgagee, prospective mortgagee or prospective purchaser of the Property, Tenant shall provide to Landlord complete copies of Tenant’s latest audited financial statements, and such other information as may be reasonably requested by Landlord or mortgagee.

 

28.          RENT, USE AND OCCUPANCY TAX. If, during the Term, including any renewal or extension thereof, any tax is imposed upon the privilege of renting or occupying the Property, Tenant’s use of the Property, or upon the amount of rentals collected therefor, Tenant will pay each month, as Additional Rent, a sum equal to such tax or charge that is imposed for such month, but nothing herein shall be taken to require Tenant to pay any income, estate, inheritance or franchise tax imposed upon Landlord.

 

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29.          QUIET ENJOYMENT. Tenant, upon paying the Rent, and observing and keeping all covenants, agreements and conditions of this Lease on its part to be kept, shall quietly have and enjoy the Property during the term of this Lease without hindrance or molestation by anyone claiming by or through Landlord, subject, however, to the exceptions, reservations and conditions of this Lease and of record.

 

30.          NOTICES. All notices required to be given hereunder shall be sent by registered or certified mail, return receipt requested, by Federal Express or other overnight express delivery service or by hand delivery against written receipt or signed proof of delivery, to the respective Notice Addresses set forth in Section 1 (Fundamental Lease Provisions), and to such other person and address as each party may from time to time designate in writing to the other. Notices shall be deemed to have been received on the date delivered when sent by hand delivery, the next day when sent by Federal Express or other overnight express delivery service, and within two (2) business days when sent by registered or certified mail.

 

31.          MISCELLANEOUS.

 

(a)           Landlord and Tenant each represents and warrants to the other that it has dealt with no broker, agent or other intermediary in connection with this Lease other than Landlord’s Broker and Tenant’s Broker, if any, specified in Section 1 (Fundamental Lease Provisions), and that insofar as each party knows, no other broker, agent or other intermediary negotiated this Lease or introduced Tenant to Landlord or brought the Building to Tenant’s attention for the lease of space therein. Each party agrees to indemnify, defend and hold the other party and its partners, employees, agents, their officers and partners, harmless from and against any claims made by any broker, agent or other intermediary other than Landlord’s Broker or, if applicable, Tenant’s Broker, with respect to a claim for broker’s commission or fee or similar compensation brought by any person in connection with this Lease, provided that the indemnified party has not in fact retained such broker, agent or other intermediary. Landlord agrees to pay all commissions payable to Landlord’s Broker pursuant to a separate, written agreement between Landlord and Landlord’s Broker. If any Tenant’s Broker is specified in Section 1 (Fundamental Lease Provisions), Landlord’s Broker shall pay Tenant’s Broker a co-brokerage commission pursuant to a separate, written agreement between Landlord’s Broker and Tenant’s Broker.

 

(b)           The term “Tenant” as used in this Lease shall be construed to mean tenants in all cases where there is more than one tenant, and the necessary grammatical changes required to make the provisions hereof apply to corporations, limited liability companies, partnerships or individuals, men or women, shall in all cases be assumed as though in each case fully expressed. This Lease shall not inure to the benefit of any assignee, transferee or successor of Tenant except in accordance with the provisions of Section 12 of this Lease. Subject to the foregoing limitation, each provision hereof shall extend to and shall, as the case may require, bind and inure to the benefit of Tenant, its successors and assigns.

 

(c)           The term “Landlord” as used in this Lease means the fee owner of the Building or, if different, the party holding and exercising the right, as against all others to possession of the entire Building. In the event of the voluntary transfer of such ownership or right to a successor-in-interest of Landlord, Landlord shall be freed and relieved of all liability and obligation hereunder which shall thereafter accrue (and, as to any unapplied portion of Tenant’s security deposit, Landlord shall be relieved of all liability therefor upon transfer of such portion to its successor in interest) and Tenant shall look solely to such successor in interest for the performance of the covenants and obligations of the Landlord hereunder (either in terms of

 

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ownership or possessory rights). The successor in interest shall not (i) be liable for any previous act or omission of a prior landlord; (ii) be subject to any rental offsets or defenses against a prior landlord; (iii) be bound by any payment by Tenant of Rent in advance in excess of one (1) month’s Rent; or (iv) be liable for any security not actually received by it. Subject to the foregoing, the provisions hereof shall be binding upon and inure to the benefit of the successors and assigns of Landlord.

 

(d)           If either Landlord or Tenant institutes a suit against the other for violation of or to enforce any covenant or condition of this Lease, the prevailing party shall be entitled to all reasonable costs and expenses incurred by the prevailing party in connection with such litigation, including, without limitation, reasonable attorneys’ fees.

 

(e)           Time is of the essence of this Lease and all of its provisions

 

(f)            If Landlord or Tenant is delayed or prevented from performing any of their respective obligations under this Lease due to strikes, acts of God, shortages of labor or materials, war, terrorism, civil disturbances or other causes beyond the reasonable control of the performing party (“Force Majeure”), the period of such delay or prevention shall be deemed added to the time herein provided for the performance of any such obligation by the performing party. Notwithstanding the foregoing, events of Force Majeure shall not extend any period of time for the payment of Rent or other sums payable by either party or any period of time for the written exercise of an option or right by either party.

 

(g)           Tenant may, with Landlord’s written consent, record a Memorandum of Lease to evidence Tenant’s equitable interest in the Property However, said Memorandum of Lease shall not be recorded or effective until such time as Tenant provides to Landlord such forms as Landlord may reasonably require to extinguish and remove said Memorandum, including, but not limited to, a fully executed termination agreement and power of attorney, in recordable form, which shall be held in escrow by counsel to Landlord.

 

(h)           Any rule of construction to the effect that any ambiguities are to be resolved against the drafting party shall not apply to the interpretation of this Lease or any amendments or exhibits hereto.

 

(i)            This Lease, the exhibits, and any riders attached hereto and forming a part hereof set forth all of the promises, agreements, conditions, warranties, representations, understandings and promises between Landlord and Tenant relative to the Property, the Building, the Property and this leasehold and Tenant expressly acknowledges that Landlord and Landlord’s agents have made no representation, agreements, conditions, warranties, representations, understandings or promises, either oral or written, other than as herein set forth, with respect to the Property, the Building, the Property, this leasehold or otherwise. No alteration, amendment, modification, waiver, understanding or addition to this Lease shall be binding upon Landlord unless reduced to writing and signed by Landlord or by a duly authorized agent of Landlord empowered by a written authority signed by Landlord. Tenant agrees to execute any amendment to this Lease required by a mortgagee of the Building, which amendment does not materially adversely affect Tenant’s rights or obligation hereunder.

 

(j)            The captions of the paragraphs in this Lease are inserted and included solely for convenience and shall not be considered or given any effect in construing the provisions hereof.

 

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(k)           If any provision contained in this Lease shall, to any extent, be invalid or unenforceable, the remainder of this Lease (and the application of such provision to the persons or circumstances, if any, other than those as to which it is invalid or unenforceable) shall not be affected thereby, and each and every provision of this Lease shall be valid and enforceable to the fullest extent permitted by law.

 

(l)            This Lease shall be governed by and construed in accordance with the laws of the Commonwealth of Pennsylvania, without giving effect to the principles of conflict of laws.

 

(m)          This Lease may be executed in two or more counterparts, each of which shall be deemed to be an original hereof, but all of which, taken together, shall constitute one and the same instrument.

 

32.          EXPANSION OPTION. Tenant may elect to expand the Building at any time during the Term of this Lease, or any renewal thereof (hereinafter “Expansion Space”). Tenant shall be responsible for securing the approvals of all municipal and governmental authorities for such Expansion Space. Tenant shall also be required to secure the written consent of Landlord and any mortgagee of Landlord. All rent for the Expansion Space shall be as negotiated by Landlord and Tenant. At the time Tenant seeks approval from Landlord and any mortgagee of Landlord, Tenant shall provide to Landlord and the mortgagee detailed plans and construction specifications for the Expansion Space. Nothing in this paragraph shall create any obligation on any party to either construct the Expansion Space or to grant approval or permission to construct said Expansion Space.

 

33.          LANDLORD’S DEFAULT; TENANT’S REMEDIES.

 

(a)           Landlord shall be in default of this Lease if it fails to perform any provision of this Lease that it is obligated to perform and if the failure to perform is not cured within thirty (30) days after written notice of the default has been given by Tenant to Landlord (or such longer period as is reasonably required to correct any such default, provided Landlord promptly commences and diligently continues to effectuate a cure and in all events completes such cure within ninety (90) days of such notice from Tenant).

 

(b)           If Landlord shall have failed to cure a default by Landlord after expiration of the applicable time, if any, for cure of a particular default, Tenant may, at its election, but without obligation therefor (i) seek specific performance of any obligation of Landlord, after which Tenant shall retain, and may exercise and enforce, any and all rights which Tenant may have against Landlord as a result of such default, (ii) from time to time without releasing Landlord in whole or in part from Landlord’s obligation to perform any and all covenants, conditions and agreements to be performed by Landlord hereunder, cure the default at Landlord’s cost, and/or (iii) exercise any other remedy given hereunder or now or hereafter existing at law or in equity or by statute. Any reasonable cost incurred by Tenant in order to cure such a default by Landlord shall be due immediately from Landlord, together with interest. In addition, should Tenant obtain a monetary judgment against Landlord, Tenant may abate or set off such judgment against Rent next due under this Lease until Tenant has fully recovered the amount of such judgment. Except as set forth in the preceding sentence, Tenant shall not abate or set off against Rent as a result of an event of default by Landlord.

 

34.          DELIVERY FOR EXAMINATION. DELIVERY OF THE LEASE TO TENANT SHALL NOT BIND LANDLORD IN ANY MANNER, AND NO LEASE OR OBLIGATIONS OF

 

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LANDLORD SHALL ARISE UNTIL THIS INSTRUMENT IS SIGNED BY BOTH LANDLORD AND TENANT.

 

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IN WITNESS WHEREOF, the parties hereto have executed this Lease or caused this Lease to be executed by their duly authorized representatives the day and year first above written.

 

 

	
 
    	
 
    	
LANDLORD:
    
	
 
    	
 
    	
 
    
	
Witness:
    	
 
    	
502 WOC PROPERTIES, LP,
    
	
 
    	
 
    	
a Pennsylvania limited partnership
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
502 WOC Management, LLC, a
    
	
 
    	
 
    	
 
    	
Pennsylvania limited liability company, its
    
	
 
    	
 
    	
 
    	
sole general partner
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
/s/ [ILLEGIBLE]
    	
 
    	
By:
    	
/s/ Olin M. Belsinger
    
	
 
    	
 
    	
 
    	
Olin M. Belsinger, Member
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
TENANT:
    
	
 
    	
 
    	
 
    
	
Attest: 
    	
 
    	
CONCURRENT PHARMACEUTICALS, INC.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
/s/ [ILLEGIBLE] 
    	
 
    	
By: 
    	
/s/ John J. Baldwin
    
	
 
    	
 
    	
Name: 
    	
John J. Baldwin
    
	
 
    	
 
    	
Title: 
    	
President
    
					

 

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EXHIBIT “A”

 

PROPERTY

 

30

 

	

    	
 
    	
Fidelity National Title   Insurance Company of New York

 

 

 

 

SCHEDULE C

DESCRIPTION

 
    

File No. 12083

 

ALL THAT CERTAIN lot or piece of ground Situate in Upper Dublin Township, Montgomery County, PA, bounded & described according to a Final Subdivision Recorded Plan prepared by Robert T. Bennett, P.E. & Phillip C. Kretschman, Surveyors dated 10/3/87 last reviewed 4/3/87 & recorded in Plan Book A48 pg. 340 as follows to wit:

 

BEGINNING at a point on the Southeasterly side of West Center Drive, said point being a corner of Lot #19 as shown on the above mentioned plan; thence extending from said beginning point along Lot 19, South 30 degrees 57 minutes 37 seconds East 458.00 feet to a point, a corner of a portion of Lot 33 as shown on the above mentioned plan; thence along the same the (3) following courses & distances (1) South 59 degrees 02 minutes 23 seconds West 356.00 feet to a point, (2) North 30 degrees 57 minutes 37 seconds West 103.00 feet to a point & (3) South 59 degrees 02 minutes 23 seconds West 109.00 feet to a point a corner of Parcel (A). Thence extending along the same North 30 degrees 57 minutes 37 seconds West 355.00 feet to a point on the Southerly side of a 60 feet wide access easement & West Office Center Drive. Thence extending along the same North 59 degrees 02 minutes 23 seconds East 465.00 feet to point being the first mentioned point & place of beginning.

 

BEING Premises A: 502 Office Center Drive.

 

TOGETHER with all & singular the buildings & Improvements, Ways Streets, Alleys, Watercourses, Rights, Liberties, Privileges, Hereditments & Appurtenances, whatsoever thereunto belonging or in any wise appertaining, & the Revisions & Remainder, Rent, Issues & Profits belonging to thereof; and all the Estate, Right, Title, Interest, Property, Claim, & Demand whatsoever of said Grantor in law as equity, or otherwise howsoever, of, in, & to the same of every part thereof.

 

BEING PARCEL #54-00-16380-00-9

 

Property Parcel Number 54-00-16380-00-9 &50-4

 

BEING the same premises which William S. Taylor et al by Deed dated 2/11/02 and recorded 3/15/02 in the office of the Recorder of Deeds in and for the County of MONTGOMERY AT NORRISTOWN, COMMONWEALTH OF PENNSYLVANIA in Deed Book 5400 Page 158 granted and conveyed unto The Chase Manhattan Bank as Trustee for the Registered Holders of Merrill Lynch Mortgage Investors Inc..

 

 

EXHIBIT “B”

 

PLAN

 

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EXHIBIT “C”

 

LANDLORD’S WORK

 

Roof: The roof will be a commercial grade roof that meets local code, eliminates ponding, is free of leaks, and provides a minimum R value of 22. Landlord shall begin replacing the roof within thirty (30) days after receipt of written notice from Tenant, and shall complete the work within seventy-five (75) days after receipt of such notice from Tenant.

 

Parking Lot: The parking lot shall be properly patched to remove holes then resurfaced with a new wear surface of 2” minimum macadam and striped with appropriate signage to meet local codes and necessary for traffic control. Landlord shall begin such work within thirty (30) days after receipt of written notice from Tenant, and shall complete such work within forty-five (45) days after receipt of such notice from Tenant, but in any event no later than November 1, 2002.

 

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EXHIBIT “D”

 

TENANT’S PLANS

 

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EXHIBIT “E”

 

BUILDING RULES AND REGULATIONS

 

1.                                      The sidewalks, entryways, passages, corridors, stairways and elevators shall not be used by Tenant for purposes other than ingress or egress to and from the Property. All safes or other heavy articles shall be carried up or into the leased premises only at such times and in such manner as shall be prescribed by the Landlord and the Landlord shall in all cases have the right to specify a maximum weight and proper position or location of any such safe or other heavy article. The Tenant shall pay for any damage done to the Building by taking in or removing any safe or from overloading any floor in any way. The Tenant shall pay for the cost of repairing or restoring any part of the Building, which shall be defaced or injured by Tenant, its agents or employees.

 

2.                                      No, sign, advertisement or notice shall be inscribed, painted or affixed on any part of the outside of the Building unless of such color, size and style and in such place upon or in the Building as shall first be designated by Landlord.

 

3.                                      Tenant shall not do or permit anything to be done at the Property, or bring or keep anything therein, which will in any way increase the rate of fire insurance on the Building, or on property kept therein, or conflict with the laws relating to fire prevention and safety, or with any regulations of the fire department, or with any rules or ordinances of any Board of Health or other governing bodies having jurisdiction over the Building.

 

4.                                      The water closets and other water fixtures shall not be used for any purpose other than those for which they were constructed, and any damage resulting to them from misuse or abuse by Tenant or its agents, employees or invitees, shall be borne by the Tenant.

 

5.                                      Nothing shall be thrown out of the windows of the Building or down the stairways or other passages.

 

6.                                      Tenants shall not be permitted to use or to keep in the Building any kerosene, camphene, burning fluid or other illuminating materials.

 

7.                                      If Tenant desires telegraphic, telephonic or other electric connections, Landlord or its agents will direct the electricians as to what and how the wires may be introduced, and without such directions no boring or cutting for wires will be permitted.

 

8.                                      No portion of the Building shall be used for the purposes of lodging rooms or for any immoral or unlawful purposes.

 

34

 

EXHIBIT “F”

 

SPECIFICATIONS FOR

JANITORIAL SERVICES

 

All janitorial services shall be sole responsibility of Tenant, at Tenant’s sole expense

 

35

 

	
Client#: 1862
    	
CONCURRE
    
	
ACORDTM CERTIFICATE OF LIABILITY INSURANCE
    	
 
    	
DATE (MM/DD/YY)
    
	
 
    	
07/09/02
    
	
PRODUCER
    	
THIS CERTIFICATE IS ISSUED AS A MATTER OF INFORMATION ONLY   AND CONFERS NO RIGHTS UPON THE CERTIFICATE HOLDER. THIS CERTIFICATE DOES NOT   AMEND, EXTEND OR ALTER THE COVERAGE AFFORDED BY THE POLICIES BELOW.
    
	
(MA)   William Gallagher Assoc.
    
	
Insurance   Brokers, Inc.
    
	
200   State Street, 13th Floor
   Boston, MA 02109-2694
    
	
 
    	
 

INSURERS AFFORDING COVERAGE
    
	
 
    	
 
    
	
INSURED
    	
INSURER   A: St. Paul Fire & Marine Insurance Co.
    
	
Concurrent Pharmaceuticals, Inc.
    	
INSURER   B:
    
	
200 Barr Harbor Drive Suite 400
    	
INSURER C:
    
	
Conshohocken, PA 19428
    	
INSURER D:
    
	
 
    	
INSURER E:
    
				

 

COVERAGES

 

THE POLICIES OF INSURANCE LISTED BELOW HAVE BEEN ISSUED TO THE INSURED NAMED ABOVE FOR THE POLICY PERIOD INDICATED. NOTWITHSTANDING ANY REQUIREMENT, TERM OR CONDITION OF ANY CONTRACT OR OTHER DOCUMENT WITH RESPECT TO WHICH THIS CERTIFICATE MAY BE ISSUED OR MAY PERTAIN, THE INSURANCE AFFORDED BY THE POLICIES DESCRIBED HEREIN IS SUBJECT TO ALL THE TERMS, EXCLUSIONS AND CONDITIONS OF SUCH POLICIES. AGGREGATE LIMITS SHOWN MAY HAVE BEEN REDUCED BY PAID CLAIMS.

 

	
INSR
    	
 
    	
 
    	
 
    	
 
    	
 
    	
POLICY   EFFECTIVE
    	
 
    	
POLICY   EXPIRATION
    	
 
    	
 
    	
 
    
	
LTR
    	
 
    	
TYPE OF   INSURANCE
    	
 
    	
POLICY   NUMBER
    	
 
    	
DATE   (MM/DD/YY)
    	
 
    	
DATE   (MM/DD/YY)
    	
 
    	
LIMITS
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
A
    	
 
    	
GENERAL LIABILITY
    	
 
    	
VP04601227
    	
 
    	
08/30/01
    	
 
    	
08/30/02
    	
 
    	
EACH OCCURRENCE
    	
$
    	
1,000,000
    
	
 
    	
 
    	
x COMMERCIAL GENERAL LIABILITY
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
FIRE DAMAGE (Any one fire)
    	
$
    	
250,000
    
	
 
    	
 
    	
o CLAIMS MADE x OCCUR
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
MED EXP (Any one person)
    	
$
    	
10,000
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
PERSONAL & ADV INJURY
    	
$
    	
1,000,000
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
GENERAL AGGREGATE
    	
$
    	
2,000,000
    
	
 
    	
 
    	
GEN’L AGGREGATE LIMIT   APPLIES PER:
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
PRODUCTS -COMP/OP AGG
    	
$
    	
2,000,000
    
	
 
    	
 
    	
o POLICY o PROJECT o LOC
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
AUTOMOBILE LIABILITY
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
COMBINED SINGLE LIMIT (Ea accident)
    	
$
    	
 
    
	
 
    	
 
    	
o ANY AUTO
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
BODILY INJURY (Per person)
    	
$
    	
 
    
	
 
    	
 
    	
o ALL OWNED AUTOS
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
BODILY INJURY (Per accident)
    	
$
    	
 
    
	
 
    	
 
    	
o SCHEDULED AUTOS
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
o HIRED AUTOS
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
PROPERTY DAMAGE (Per accident)
    	
$
    	
 
    
	
 
    	
 
    	
o NON-OWNED AUTOS
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
GARAGE LIABILITY
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
AUTO ONLY - EA ACCIDENT
    	
$
    	
 
    
	
 
    	
 
    	
o ANY AUTO
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
OTHER THAN
    	
EA ACC
    	
$
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
AUTO ONLY:
    	
AGG
    	
$
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
A
    	
 
    	
EXCESS LIABILITY
    	
 
    	
VP04601227
    	
 
    	
08/30/01
    	
 
    	
08/30/02
    	
 
    	
EACH OCCURRENCE
    	
$
    	
1,000,000
    
	
 
    	
 
    	
o OCCUR o CLAIMS   MADE
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
AGGREGATE
    	
$
    	
1,000,000
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
$
    	
 
    
	
 
    	
 
    	
o DEDUCTIBLE
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
$
    	
 
    
	
 
    	
 
    	
x RETENTION $$10, 000
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
$
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
WORKERS COMPENSATION AND
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
WC STATUTORY
   LIMITS
    	
OTHER
    	
 
    
	
 
    	
 
    	
EMPLOYERS’ LIABILITY
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
E.L. EACH ACCIDENT
    	
$
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
E.L. DISEASE - EA EMPLOYEE
    	
$
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
E.L. DISEASE - POLICY LIMIT
    	
$
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
OTHER
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
															

 

DESCRIPTION OF OPERATIONS/LOCATIONS/VEHICLES/EXCLUSIONS ADDED BY ENDORSEMENT/SPECIAL PROVISIONS

 

502 WOC Associates, L.P. c/o Westglen Developments, Inc. is named as additional insured with respects to the Lease agreement set forth. All coverages are subject to terms and conditions of policy forms. “Endeavor to” wording is stricken and does not apply.

 

	
CERTIFICATE HOLDER
    	
 
    	
ADDITIONAL INSURED; INSURER LETTER:
    	
 
    	
CANCELLATION
    
	
 
    
	
 
    	
502 WOC Associates, L.P.
    	
SHOULD   ANY OF THE ABOVE DESCRIBED POLICIES BE CANCELLED BEFORE THE EXPIRATION DATE   THEREOF, THE ISSUING INSURER WILL ENDEAVOR TO MAIL 30 DAYS WRITTEN   NOTICE TO THE CERTIFICATE HOLDER NAMED TO THE LEFT, BUTFAILURE TO DO SO SHALL   IMPOSE NO OBLIGATION OR LIABILITY OF ANY KIND UPON THE INSURER,ITS AGENTS OR   REPRESENTATIVES.
    
	
 
    	
c/o: Westglen   Developements, Inc
    
	
 
    	
9 Old Lincoln Highway
    
	
 
    	
Suite 104
    
	
 
    	
Malvern, PA 19355
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
AUTHORIZED   REPRESENTATIVE
    
	
 
    	
 
    	
/s/ [ILLEGIBLE]
    
						

 

	
ACORD 25-S (7/97)1 of 2   #15933
    	
AMT © ACORD CORPORATION 1988
    

 

 

IMPORTANT

 

If the certificate holder is an ADDITIONAL INSURED, the policy(ies) must be endorsed. A statement on this certificate does not confer rights to the certificate holder in lieu of such endorsement(s).

 

If SUBROGATION IS WAIVED, subject to the terms and conditions of the policy, certain policies may require an endorsement. A statement on this certificate does not confer rights to the certificate holder in lieu of such endorsement(s).

 

DISCLAIMER

 

The Certificate of Insurance on the reverse side of this form does not constitute a contract between the issuing insurer(s), authorized representative or producer, and the certificate holder, nor does it affirmatively or negatively amend, extend or alter the coverage afforded by the policies listed thereon.

 

 

MEMORANDUM OF LEASE

 

THIS MEMORANDUM OF LEASE (this “Memorandum”) is made and entered into as of this 11th day of July 2002, by and between 502 WOC PROPERTIES, LP, a Pennsylvania limited partnership whose address is c/o Westglen Developments, Inc., 9 Old Lincoln Highway, Suite 104, Malvern, PA 19355 (“Landlord”), and CONCURRENT PHARMACEUTICALS, INC., a Pennsylvania corporation whose address is 502 West Office Center Drive, Fort Washington, PA 19034 (“Tenant”).

 

WITNESSETH:

 

WHEREAS, Landlord is owner of the building consisting of approximately 47,000 rentable square feet (the “Building”), and the parcels of land on which the Building is located, together with all improvements thereon, situate at 502 West Office Center Drive, Fort Washington, Pennsylvania as more particularly described in Exhibit A attached hereto, and as more fully shown and identified on the plan attached hereto as Exhibit B (the “Property”); and

 

WHEREAS, Landlord and Tenant are parties to that certain Agreement of Lease dated July 11, 2002, pursuant to which Landlord leases to Tenant, and Tenant leases from Landlord, the Property (the “Lease”); and

 

WHEREAS, the parties desire to set forth certain terms of the Lease in this Memorandum, and to record this Memorandum in the Office of the Recorder of Deeds of Montgomery County, Pennsylvania.

 

NOW, THEREFORE, in consideration of the mutual covenants and agreements contained herein and in the Lease, and other good and valuable consideration, the receipt of which is hereby acknowledged, and intending to be legally bound hereby, the parties hereto covenant and agree as follows:

 

1.                                      Lease Term.

 

(a)                                 The initial term (the “Initial Term”) shall be ten (10) years and six (6) months commencing on the day that is two (2) business days subsequent to Landlord’s acquisition of the Property (the “Commencement Date”) and ending on the date (the “Expiration Date”) which is (i) the day immediately preceding the ten (10) year and six (6) month anniversary of the Commencement Date, if the Commencement Date is the first day of a calendar month, or (ii) the last day of the calendar month in which the ten (10) year and six (6) month anniversary of the Commencement Date occurs, if the Commencement Date is any day other than the first day of a calendar month. The first lease year of the Initial Term shall commence on the Commencement Date and shall end on (i) the day immediately preceding the first anniversary of the Commencement Date, if the Commencement Date is the first day of a calendar month, or (ii) the last day of the month in which the first anniversary of the Commencement Date occurs, if the Commencement Date is any day other than the first day of a calendar month. Each lease year after the first lease year shall be a consecutive twelve (12) month period commencing on the first day of the calendar month immediately following the preceding lease year, except for the final six (6) month period designated in section 1(d) of the Lease as months 121 through 126. The

 

 

Initial Term including each and every Renewal Term is sometimes referred to herein as the “Term”.

 

(b)                                 Provided Tenant is not in default of any provision of this Lease beyond any applicable notice and/or cure period set forth herein, Tenant shall have the right to extend this Lease for three (3) individual five (5) year terms by forwarding to Landlord, at least twelve (12) months prior to end of the Term or the then current renewal period, written notice of Tenant’s election to extend this Lease for each such renewal term.

 

2.                                      Right of First Refusal to Purchase. Section 2 of the Lease provides as follows:

 

“(a)                           During the Term of this Lease, Landlord shall, if Landlord elects to offer the Property for sale, provide Tenant with thirty (30) days written notice of said intent prior to listing the Property for sale with any commercial broker or offering/advertising the Property for sale to any third party. During such 30-day period, Landlord and Tenant shall negotiate the sale of the property to Tenant. In the event Landlord and Tenant do not enter into an agreement of sale to purchase the Property during the thirty (30) day period, Tenant shall continue to have the right to purchase the Property as set forth more fully below.

 

(b)                                 If during the Term and after the expiration of the notice period contemplated by subparagraph (a) next-above, if applicable; Landlord shall receive a bona fide offer (for purposes of this Lease, defined as any written proposal to purchase, letter of intent or agreement of sale which sets forth the purchase price, settlement date, financing conditions, if any, and inspection conditions, if any, [“Essential Terms”]) [the “Offer”] from an independent third party to purchase the Property or any portion thereof, which Offer Landlord is willing to accept, Landlord shall deliver a true, correct and complete copy of said Offer to Tenant (except that Landlord may delete the identity of the proposed purchaser). Thereafter, Tenant shall have the right to purchase the Property upon the same terms and conditions as contained in the Offer, provided Tenant shall so indicate its intention to Landlord in writing within fifteen (15) calendar days after the date of Tenant receiving the copy of said Offer and Tenant shall deposit with Landlord’s lender, in an account titled in Landlord’s and Tenant’s names a check in the amount of One Thousand Dollars ($1,000.00) as additional consideration which sum will be credited against the deposit and the purchase price specified in the Offer. In the event Tenant fails to deliver said notice and fails to deposit the One Thousand Dollars ($1,000.00) within said fifteen (15) days, Tenant shall be deemed to have waived its right to purchase the Property

 

2

 

pursuant to such Offer. Landlord shall not be required to provide any additional notice to Tenant. Closing of the sale shall take place within the time period provided in the Offer, or, if no determinable date is calculable from the terms of the Offer, within ninety (90) days after the acceptance of the Offer by Tenant. If within said fifteen (15) day period Tenant does not elect to purchase said real property Landlord may proceed to sell said real property to the original offeror upon the Essential Terms contained in the Offer, or as are contained an agreement of sale between Landlord and the prospective purchaser, or such additional Essential Terms as are not materially more favorable to the purchaser than stated in the Offer. Any extension of the inspection period or time for settlement under the Offer or adjustment to the purchase price under the Offer, which are negotiated in good faith in response to the results of the proposed purchaser’s due diligence examination shall not be considered a material change in the Essential Terms. If Landlord shall sell the Property after a failure by Tenant to exercise its right of first refusal set forth in this Section 2, such sale shall be subject to this Lease, and the right of first refusal set forth herein shall continue and shall be applicable to subsequent sales of the Property. In the event Landlord does not settle the sale with the third-party purchaser, the Tenant shall have the right to again exercise a right of first refusal as to any new offers received by Landlord if from a different third party purchaser, subject to all the provisions of this Lease. Tenant’s rights under this Section 2 shall survive any conveyance of the Property in violation of the terms of this Section 2. Any transfer made to any mortgagee pursuant to a default by Landlord under its obligations to said mortgagee shall not be deemed a transfer in violation of this Section, nor will said transfer be subject to Tenant’s right of first refusal hereunder.

 

(c)                                  Tenant’s right of first refusal set forth above shall not apply to any transfer of the Property in mortgage foreclosure, by deed in lieu of foreclosure or as part of a settlement with the mortgagee.

 

(d)                                 Landlord shall have no obligation to notify Tenant of Landlord’s intention to sell and Tenant shall have no right to purchase the Property at any time during which Tenant is in default under any of the provisions of this Lease. The right of first refusal set forth in this Section shall terminate automatically if at any time after Landlord and Tenant enter into an agreement of sale and purchase, pursuant to the terms of this Section, Tenant defaults under any of the provisions of this Lease and Landlord gives Tenant written notice of such default; in which event this Section shall be deemed to

 

3

 

be null and void and of no further force or effect. In addition, Tenant’s right of first refusal shall terminate automatically if Tenant transfers this Lease without Landlord’s consent in violation of Section 12 of this Lease.

 

(e)                                  In the event Tenant elects to exercise its right of first refusal, Tenant shall receive at closing on the Property a credit towards the purchase price from Landlord of Two Hundred Fifty Thousand Dollars ($250,000.00).

 

(f)                                   In the event, Tenant elects not to exercise its right of first refusal under this Section 2 and Landlord sells the Property to another third party which has no affiliation or relationship with Tenant, which sale occurs during the Term of this Lease, then Tenant shall receive, at time of settlement with said third-party purchaser, the cash sum of Two Hundred Fifty Thousand Dollars ($250,000.00).”

 

3.                                      Miscellaneous.

 

(a)                                 It is the intention of this Memorandum to give notice of the existence of, and of certain terms and conditions of, the Lease, and this Memorandum is not intended to supersede, diminish, add to or change any of the terms and conditions of the Lease.

 

(b)                                 All of the terms and conditions of the Lease are incorporated herein by this reference to the same extent as set forth herein at length, and the failure to include any such terms or conditions shall not prejudice Landlord’s or Tenant’s rights with respect thereto.

 

(c)                                  All capitalized terms not separately defined herein, shall have the meanings that are ascribed to them in the Lease.

 

4

 

IN WITNESS WHEREOF, the parties have executed this Memorandum as of the day and year set forth above.

 

 

	
Witness:
    	
 
    	
LANDLORD:
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
502 WOC PROPERTIES, LP,
    
	
 
    	
 
    	
a Pennsylvania limited partnership
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
502 WOC Management, LLC, a
    
	
 
    	
 
    	
Pennsylvania limited liability company, its sole
    
	
 
    	
 
    	
general partner
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
/s/ [ILLEGIBLE]
    	
 
    	
By:
    	
/s/ Olin M. Belsinger
    
	
 
    	
 
    	
 
    	
Olin M. Belsinger, Member
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Attest:
    	
 
    	
TENANT:
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
CONCURRENT PHARMACEUTICALS, INC.,
    
	
 
    	
 
    	
a Pennsylvania corporation
    
	
 
    	
 
    	
 
    
	
By: 
    	
/s/ [ILLEGIBLE] 
    	
 
    	
By: 
    	
/s/ John J. Baldwin 
    
	
 
    	
 
    	
 
    	
[ILLEGIBLE]
    	
, President
    
							

 

5

 

	
COMMONWEALTH OF PENNSYLVANIA 
    	
:
    	
 
    
	
 
    	
:
    	
ss
    
	
COUNTY OF CHESTER 
    	
:
    	
 
    

 

On this, the 12th day July, 2002, before me, the undersigned officer, personally appeared OLIN M. BELSINGER, who acknowledged himself to be the Member of 502 WOC MANAGEMENT, LLC, a Pennsylvania limited liability company, the sole general partner of 502 WOC PROPERTIES, LP, a Pennsylvania limited partnership, and that he, being authorized to do so, executed the foregoing instrument for the purposes therein contained by signing the name of the partnership by himself as such officer.

 

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

 

 

	
 
    	
 
    	
/s/ Beverly J. Ellis
    
	
 
    	
 
    	
Notary Public
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
[Notarial Seal]
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
Notarial Seal
    
	
 
    	
 
    	
Beverly J. Ellis, Notary   Public
    
	
 
    	
 
    	
Tredyffrin Twp., Chester   County
    
	
 
    	
 
    	
My Commission Expires Sept.   19, 2005
    
	
 
    	
 
    	
Member, Pennsylvania   Association of Notaries
    

 

 

	
COMMONWEALTH OF PENNSYLVANIA 
    	
:
    	
 
    
	
 
    	
:
    	
ss
    
	
COUNTY OF                                 
    	
:
    	
 
    

 

On this, the 11 day of July 2002, before me, the undersigned officer, personally appeared JOHN J. BALDWIN, who acknowledged himself to be the (Vice) President of CONCURRENT PHARMACEUTICALS, INC., a Pennsylvania corporation, and that he, being authorized to do so, executed the foregoing instrument for the purposes therein contained by signing the name of the corporation by herself as such officer.

 

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

 

 

	
 
    	
 
    	
/s/ Jacqueline A.   Brokenborough
    
	
 
    	
 
    	
Notary Public
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
[Notarial Seal]
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
Notarial Seal
    
	
 
    	
 
    	
Jacqueline A.   Brokenborough, Notary Public
    
	
 
    	
 
    	
WestConshohockenBoro,MontgomeryCounty
    
	
 
    	
 
    	
My Commission Expires Sept.   6, 2004
    
	
 
    	
 
    	
Member, Pennsylvania   Association of Notaries
    

 

 

EXHIBIT A

 

PROPERTY

 

 

	

    	
 
    	
Fidelity National Title Insurance Company of New York

 

 

 

 

SCHEDULE C

DESCRIPTION
    

 

File No. 12083

 

ALL THAT CERTAIN lot or piece of ground Situate in Upper Dublin Township, Montgomery County, PA, bounded & described according to a Final Subdivision Recorded Plan prepared by Robert T. Bennett, P.E. & Phillip C. Kretschman, Surveyors dated 10/3/87 last reviewed 4/3/87 & recorded in Plan Book A48 pg. 340 as follows to wit:

 

BEGINNING at a point on the Southeasterly side of West Center Drive, said point being a corner of Lot # 19 as shown on the above mentioned plan; thence extending from said beginning point along Lot 19, South 30 degrees 57 minutes 37 seconds East 458.00 feet to a point, a corner of a portion of Lot 33 as shown on the above mentioned plan; thence along the same the (3) following courses & distances (1) South 59 degrees 02 minutes 23 seconds West 356.00 feet to a point, (2) North 30 degrees 57 minutes 37 seconds West 103.00 feet to a point & (3) South 59 degrees 02 minutes 23 seconds West 109.00 feet to a point a corner of Parcel (A). Thence extending along the same North 30 degrees 57 minutes 37 seconds West 355.00 feet to a point on the Southerly side of a 60 feet wide access easement & West Office Center Drive. Thence extending along the same North 59 degrees 02 minutes 23 seconds East 485.00 feet to point being the first mentioned point & place of beginning.

 

BEING Premises A: 502 Office Center Drive.

 

TOGETHER with all & singular the buildings & Improvements, Ways Streets, Alleys, Watercourses, Rights, Liberties, Privileges, Hereditments & Appurtenances, whatsoever thereunto belonging or in any wise appertaining, & the Revisions & Remainder, Rent, Issues & Profits belonging to thereof; and all the Estate, Right, Title, Interest, Property, Claim, & Demand whatsoever of said Grantor in law as equity, or otherwise howsoever, of, in, & to the same of every part thereof.

 

BEING PARCEL # 54-00-16380-00-9

 

 

BEING UPI# 54-00-16380-00-9 &50-4

 

BEING the same premises which William S. Taylor et al by Deed dated 2/11/02 and recorded 3/15/02 in the office of the Recorder of Deeds In and for the County of MONTGOMERY AT NORRISTOWN, COMMONWEALTH OF PENNSYLVANIA in Deed Book 5400 Page 158 granted and conveyed unto The Chase Manhattan Bank as Trustee for the Registered Holders of Merrill Lynch Mortgage Investors Inc..

 

 

EXHIBIT B

 

SITE PLAN

 

 

 

 

FIRST AMENDMENT TO LEASE AGREEMENT

 

THIS FIRST AMENDMENT TO LEASE AGREEMENT (this “First Amendment”) is made as of this 17th day of September 2003, by and between 502 WOC PROPERTIES, LP, a Pennsylvania limited partnership (“Landlord”), and CONCURRENT PHARMACEUTICALS, INC., a Delaware corporation (“Tenant”).

 

WITNESSETH:

 

WHEREAS, Landlord and Tenant entered into that certain Lease Agreement dated July , 2002 (the “Lease”), pursuant to which Landlord leased to Tenant, and Tenant leased from Landlord, certain property located at 502 West Office Center Drive, Fort Washington, Pennsylvania, as more particularly described in the Lease; and

 

WHEREAS, Landlord and Tenant desire to clarify certain provisions set forth in the Lease as set forth in this First Amendment.

 

NOW, THEREFORE, in consideration of the foregoing and of the mutual promises herein contained, the parties hereto, intending to be legally bound hereby, agree as follows:

 

1.              Initial Term; Lease Year. Landlord and Tenant hereby acknowledge that the Initial Term of the Lease commenced on July 17, 2002, and shall expire on January 16, 2013. Landlord and Tenant hereby further acknowledge that the current lease year, as determined in accordance with Section l.(e) of the Lease, commenced on August 1, 2003.

 

2.              Minimum Annual Rent. Notwithstanding anything to the contrary set forth in Section 1.(d) of the Lease, Minimum Annual Rent shall be paid in accordance with the following rent schedule:

 

	
Period
    	
 
    	
Minimum Annual
   Rent
    	
 
    	
Monthly Installment
    	
 
    	
Base Rent/R.S.F.
    	
 
    
	
7/17/02-11/16/02
    	
 
    	
$
    	
0.00
    	
 
    	
$
    	
0.00
    	
 
    	
$
    	
0.00
    	
 
    
	
11/17/02-7/31/03
    	
 
    	
$
    	
423,000.00
    	
 
    	
$
    	
52,875.00
    	
 
    	
$
    	
13.50 NNN
    	
 
    
	
8/1/03-9/30/03
    	
 
    	
$
    	
0.00
    	
 
    	
$
    	
0.00
    	
 
    	
$
    	
0.00
    	
 
    
	
10/1/03-7/31/04
    	
 
    	
$
    	
548,333.30
    	
 
    	
$
    	
54,833.33
    	
 
    	
$
    	
14.00 NNN
    	
 
    
	
8/1/04-7/31/05
    	
 
    	
$
    	
681,500.00
    	
 
    	
$
    	
56,791.67
    	
 
    	
$
    	
14.50 NNN
    	
 
    
	
8/1/05-7/31/06
    	
 
    	
$
    	
705,000.00
    	
 
    	
$
    	
58,750.00
    	
 
    	
$
    	
15.00 NNN
    	
 
    
	
8/1/06-7/31/07
    	
 
    	
$
    	
728,500.00
    	
 
    	
$
    	
60,708.33
    	
 
    	
$
    	
15.50 NNN
    	
 
    
	
8/1/07-7/31/08
    	
 
    	
$
    	
752,000.00
    	
 
    	
$
    	
62,666.67
    	
 
    	
$
    	
16.00 NNN
    	
 
    
	
8/1/09-7/31/10
    	
 
    	
$
    	
775,500.00
    	
 
    	
$
    	
64,625.00
    	
 
    	
$
    	
16.50 NNN
    	
 
    
	
8/1/9-7/31/10
    	
 
    	
$
    	
799,000.00
    	
 
    	
$
    	
66,583.33
    	
 
    	
$
    	
17.00 NNN
    	
 
    
	
8/1/10-7/31/11
    	
 
    	
$
    	
822,500.00
    	
 
    	
$
    	
68,541.67
    	
 
    	
$
    	
17.50 NNN
    	
 
    
	
8/1/11-7/31/12
    	
 
    	
$
    	
846,000.00
    	
 
    	
$
    	
70,500.00
    	
 
    	
$
    	
18.00 NNN
    	
 
    
	
8/1/12-12/31/12
    	
 
    	
$
    	
434,749.98
    	
 
    	
$
    	
72,458.33
    	
 
    	
$
    	
18.50 NNN
    	
 
    
	
1/1/13-1/16/13
    	
 
    	
N/A
    	
 
    	
$
    	
37,411.78
    	
 
    	
$
    	
18.50 NNN
    	
 
    

 

 

3.              Except as expressly modified herein, all other terms, provisions and conditions of the Lease shall continue unmodified and shall remain in full force and effect

 

4.              This First Amendment may be executed in one or more counterparts, and all counterparts together shall be construed as one document.

 

5.              This First Amendment has been duly authorized, validly executed and delivered by the parties hereto, and constitutes the legal, valid and binding obligation of the parties hereto, enforceable against them in accordance with its terms.

 

6.              This First Amendment shall bind and inure to the benefit of the parties hereto and their respective successors and assigns.

 

7.              All capitalized terms not expressly defined in this First Amendment shall have the meanings ascribed to such terms in the Lease.

 

[Signatures on following page(s)]

 

2

 

IN WITNESS WHEREOF, the parties hereto, intending to be legally bound hereby, have executed this First Amendment as of the day and year first above written.

 

	
 
    	
 
    	
LANDLORD:
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
502 WOC PROPERTIES, LP,
    
	
 
    	
 
    	
a Pennsylvania limited partnership
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
502 WOC Management, LLC, a Pennsylvania limited liability company,   its sole general partner
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
Olin M. Belsinger
    
	
 
    	
 
    	
 
    	
Olin M. Belsinger, Member
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
TENANT:
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
CONCURRENT PHARMACEUTICALS, INC.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
Gregory M. Lumpkin
    
	
 
    	
 
    	
Name:
    	
Gregory M. Lumpkin
    
	
 
    	
 
    	
Title:
    	
CFO, Vice President of Finance & Administration
    

 

3EX-10.1

 Exhibit 10.1 

EXECUTION COPY 

COMMON STOCK PURCHASE AGREEMENT 

COMMON STOCK PURCHASE AGREEMENT (the “Agreement”), dated as of August 12, 2014 by and between APRICUS
BIOSCIENCES, INC., a Nevada corporation (the “Company”), and ASPIRE CAPITAL FUND, LLC, an Illinois limited liability company (the “Buyer”). Capitalized terms used herein and not otherwise defined herein
are defined in Section 10 hereof. 
 WHEREAS: 

Subject to the terms and conditions set forth in this Agreement, the Company wishes to sell to the Buyer, and the Buyer wishes to buy from the
Company, up to Twenty-Two Million Dollars ($22,000,000) of the Company’s common stock, par value $0.001 per share (the “Common Stock”). The shares of Common Stock to be purchased hereunder are referred to herein as the
“Purchase Shares.” 
 NOW THEREFORE, the Company and the Buyer hereby agree as follows: 

1. PURCHASE OF COMMON STOCK. 

Subject to the terms and conditions set forth in this Agreement, the Company has the right to sell to the Buyer, and the Buyer has the
obligation to purchase from the Company, Purchase Shares as follows: 
 (a) Initial Purchase; Commencement of Purchases of Common
Stock. Immediately upon Commencement (as defined below), the Buyer shall purchase from the Company 1,159,824 Purchase Shares and upon receipt of such Purchase Shares pay to the Company as the purchase price therefor, via wire transfer, Two
Million Dollars ($2,000,000) (such purchase the “Initial Purchase” and such Purchase Shares are referred to herein as “Initial Purchase Shares”). Upon issuance and payment therefor as provided herein, such Initial
Purchase Shares shall be validly issued and fully paid and non-assessable. Thereafter, the purchase and sale of Purchase Shares hereunder shall occur from time to time upon written notices by the Company to the Buyer on the terms and conditions as
set forth herein following the satisfaction of the conditions (the “Commencement”) as set forth in Sections 6 and 7 below (the date of satisfaction of such conditions, the “Commencement Date”). 

(b) The Company’s Right to Require Regular Purchases. Subject to the terms and conditions of this Agreement, on any given Business
Day after the Commencement Date, the Company shall have the right but not the obligation to direct the Buyer by its delivery to the Buyer of a Purchase Notice from time to time, and the Buyer thereupon shall have the obligation, to buy the number of
Purchase Shares specified in such notice, up to a maximum of 100,000 Purchase Shares, on such Business Day (as long as such notice is delivered on or before 5:00 p.m. Eastern time on such Business Day) (each such purchase, a “Regular
Purchase”) at the Purchase Price on the Purchase Date; however, in no event shall the Purchase Amount of a Regular Purchase exceed Five Hundred Thousand Dollars ($500,000) per Business Day, unless the Buyer and the Company mutually agree.
The Company and the Buyer may mutually agree to increase the number of Purchase Shares that may be sold per Regular Purchase to as much as an additional 2,000,000 Purchase Shares per Business Day. The Company may deliver additional Purchase Notices
to the Buyer from time to time so long as the most recent purchase has been completed. The share amounts in the first and second sentences of this Section 1(b) shall be 

 
appropriately adjusted for any reorganization, recapitalization, non-cash dividend, stock split, reverse stock split, or other similar transaction. 

(c) VWAP Purchases. Subject to the terms and conditions of this Agreement, in addition to purchases of Purchase Shares as described in
Section 1(b) above, with one Business Day’s prior written notice, the Company shall also have the right but not the obligation to direct the Buyer by the Company’s delivery to the Buyer of a VWAP Purchase Notice from time to time, and
the Buyer thereupon shall have the obligation, to buy the VWAP Purchase Share Percentage of the trading volume of the Common Stock on the VWAP Purchase Date up to the VWAP Purchase Share Volume Maximum on the VWAP Purchase Date (each such purchase,
a “VWAP Purchase”) at the VWAP Purchase Price. The Company may deliver a VWAP Purchase Notice to the Buyer on or before 5:00 p.m. Eastern time on a date on which the Company also submitted a Purchase Notice for a Regular Purchase of
at least 100,000 Purchase Shares to the Buyer. A VWAP Purchase shall automatically be deemed completed at such time on the VWAP Purchase Date that the Sale Price falls below the VWAP Minimum Price Threshold; in such circumstance, the VWAP Purchase
Amount shall be calculated using (i) the VWAP Purchase Share Percentage of the aggregate shares traded on the Principal Market for such portion of the VWAP Purchase Date prior to the time that the Sale Price fell below the VWAP Minimum Price
Threshold and (ii) a VWAP Purchase Price calculated using the volume weighted average price of Common Stock sold during such portion of the VWAP Purchase Date prior to the time that the Sale Price fell below the VWAP Minimum Price Threshold.
Each VWAP Purchase Notice must be accompanied by instructions to the Company’s Transfer Agent to immediately issue to the Buyer an amount of Common Stock equal to the VWAP Purchase Share Estimate, a good faith estimate by the Company of the
number of Purchase Shares that the Buyer shall have the obligation to buy pursuant to the VWAP Purchase Notice. In no event shall the Buyer, pursuant to any VWAP Purchase, purchase a number of Purchase Shares that exceeds the VWAP Purchase Share
Estimate issued on the VWAP Purchase Date in connection with such VWAP Purchase Notice; however, the Buyer will immediately return to the Company any amount of Common Stock issued pursuant to the VWAP Purchase Share Estimate that exceeds the number
of Purchase Shares the Buyer actually purchases in connection with such VWAP Purchase. Upon completion of each VWAP Purchase Date, the Buyer shall submit to the Company a confirmation of the VWAP Purchase in form and substance reasonably acceptable
to the Company. The Company may deliver additional VWAP Purchase Notices to the Buyer from time to time so long as the most recent purchase has been completed. 

(d) Payment for Purchase Shares. For each Regular Purchase, the Buyer shall pay to the Company an amount equal to the Purchase Amount
as full payment for such Purchase Shares via wire transfer of immediately available funds on the same Business Day that the Buyer receives such Purchase Shares. For each VWAP Purchase, the Buyer shall pay to the Company an amount equal to the VWAP
Purchase Amount as full payment for such Purchase Shares via wire transfer of immediately available funds on the third Business Day following the VWAP Purchase Date. All payments made under this Agreement shall be made in lawful money of the United
States of America via wire transfer of immediately available funds to such account as the Company may from time to time designate by written notice in accordance with the provisions of this Agreement. Whenever any amount expressed to be due by the
terms of this Agreement is due on any day that is not a Business Day, the same shall instead be due on the next succeeding day that is a Business Day. 

(e) Purchase Price Floor. The Company and the Buyer shall not effect any sales under this Agreement on any Purchase Date where the
Closing Sale Price is less than the Floor Price. “Floor Price” 

  
 -2- 

 
means $1.00 per share of Common Stock, which shall be appropriately adjusted for any reorganization, recapitalization, non-cash dividend, stock split, reverse stock split or other similar
transaction. 
 (f) Records of Purchases. The Buyer and the Company shall each maintain records showing the remaining Available
Amount at any given time and the dates and Purchase Amounts for each purchase, or shall use such other method reasonably satisfactory to the Buyer and the Company to reconcile the remaining Available Amount. 

(g) Taxes. The Company shall pay any and all transfer, stamp or similar taxes that may be payable with respect to the issuance and
delivery of any shares of Common Stock to the Buyer made under this Agreement. 
 (h) Compliance with Principal Market Rules.
Notwithstanding anything in this Agreement to the contrary, and in addition to the limitations set forth in Section 1(e), the total number of shares of Common Stock that may be issued under this Agreement, including the Commitment Shares (as
defined in Section 4(e) hereof), shall be limited to 7,616,680 shares of Common Stock (the “Exchange Cap”), which equals 19.99% of the Company’s outstanding shares of Common Stock as of the date hereof, unless stockholder
approval is obtained to issue more than such 19.99%. The Exchange Cap shall be appropriately adjusted for any stock dividend, stock split, reserve stock split or similar transactions. The foregoing limitation shall not apply if stockholder approval
has not been obtained and at any time the Exchange Cap is reached and at all times thereafter the average price paid for all shares issued under this Agreement is equal to or greater than $1.97 (the “Minimum Price”), a price equal
to the Closing Sale Price on the Business Day prior to the date hereof (in such circumstance, for purposes of the Principal Market, the transaction contemplated hereby would not be “below market” and the Exchange Cap would not apply).
Notwithstanding anything to the contrary in this Agreement or otherwise, the Company shall not be required or permitted to issue, and the Buyer shall not be required to purchase, any shares of Common Stock under this Agreement if such issuance would
breach the Company’s obligations under the rules or regulations of the Principal Market. The Company will, in its sole discretion, determine whether to obtain stockholder approval to issue more than 19.99% of its outstanding shares of Common
Stock. 
 (i) Beneficial Ownership Limitation. The Company shall not issue, and the Buyer shall not purchase any shares of Common
Stock under this Agreement, if such shares proposed to be issued and sold, when aggregated with all other shares of Common Stock then owned beneficially (as calculated pursuant to Section 13(d) of the Exchange Act and Rule 13d-3 promulgated
thereunder) by the Buyer and its affiliates would result in the beneficial ownership by the Buyer and its affiliates of more than 19.99% of the then issued and outstanding shares of Common Stock of the Company. 

(j) Compliance with Nevada Law. Notwithstanding anything to the contrary in this Agreement or otherwise, the Company shall not be
required or permitted to issue, and the Buyer shall not be required to purchase, any shares of Common Stock under this Agreement if such issuance would cause the number of issued and outstanding shares of Common Stock to exceed the number of shares
of Common Stock then authorized in the Articles of Incorporation (as defined below). 
 2. BUYER’S REPRESENTATIONS AND WARRANTIES.

 The Buyer represents and warrants to the Company that as of the date hereof and as of the Commencement Date: 

  
 -3- 

 (a) Investment Purpose. The Buyer is entering into this Agreement and acquiring the
Commitment Shares and the Purchase Shares (the Purchase Shares and the Commitment Shares are collectively referred to herein as the “Securities”), for its own account for investment only and not with a view towards, or for resale in
connection with, the public sale or distribution thereof; provided however, by making the representations herein, the Buyer does not agree to hold any of the Securities for any minimum or other specific term. 

(b) Accredited Investor Status. The Buyer is an “accredited investor” as that term is defined in Rule 501(a)(3) of Regulation
D under the 1933 Act. 
 (c) [Intentionally Omitted.] 

(d) Information. The Buyer has been furnished with all materials relating to the business, finances and operations of the Company and
materials relating to the offer and sale of the Securities that have been reasonably requested by the Buyer, including, without limitation, the SEC Documents (as defined in Section 3(f) hereof). The Buyer understands that its investment in the
Securities involves a high degree of risk. The Buyer (i) is able to bear the economic risk of an investment in the Securities including a total loss, (ii) has such knowledge and experience in financial and business matters that it is
capable of evaluating the merits and risks of the proposed investment in the Securities and (iii) has had an opportunity to ask questions of and receive answers from the officers of the Company concerning the financial condition and business of
the Company and other matters related to an investment in the Securities. Neither such inquiries nor any other due diligence investigations conducted by the Buyer or its representatives shall modify, amend or affect the Buyer’s right to rely on
the Company’s representations and warranties contained in Section 3 below. The Buyer has sought such accounting, legal and tax advice as it has considered necessary to make an informed investment decision with respect to its acquisition of
the Securities. 
 (e) No Governmental Review. The Buyer understands that no United States federal or state agency or any other
government or governmental agency has passed on or made any recommendation or endorsement of the Securities or the fairness or suitability of the investment in the Securities nor have such authorities passed upon or endorsed the merits of the
offering of the Securities. 
 (f) [Intentionally Omitted.] 

(g) Organization. The Buyer is a limited liability company duly organized and validly existing in good standing under the laws of the
jurisdiction in which it is organized, and has the requisite organizational power and authority to own its properties and to carry on its business as now being conducted. 

(h) Validity; Enforcement. This Agreement has been duly and validly authorized, executed and delivered on behalf of the Buyer and is a
valid and binding agreement of the Buyer enforceable against the Buyer in accordance with its terms, subject as to enforceability to (i) general principles of equity and to applicable bankruptcy, insolvency, reorganization, moratorium,
liquidation and other similar laws relating to, or affecting generally, the enforcement of applicable creditors’ rights and remedies and (ii) public policy underlying any law, rule or regulation (including any federal or state securities
law, rule or regulation) with regards to indemnification, contribution or exculpation. The execution and delivery of the Transaction Documents by the Buyer and the consummation by it of the 

  
 -4- 

 
transactions contemplated hereby and thereby do not conflict with the Buyer’s certificate of organization or operating agreement or similar documents, and do not require further consent or
authorization by the Buyer, its managers or its members. 
 (i) Residency. The Buyer is a resident of the State of Illinois. 

(j) No Prior Short Selling. The Buyer represents and warrants to the Company that at no time prior to the date of this Agreement has
any of the Buyer, its agents, representatives or affiliates engaged in or effected, in any manner whatsoever, directly or indirectly, any (i) “short sale” (as such term is defined in Section 242.200 of Regulation SHO of the
Securities Exchange Act of 1934, as amended (the “1934 Act”)) of the Common Stock or (ii) hedging transaction, which establishes a net short position with respect to the Common Stock. 

3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. 

The Company represents and warrants to the Buyer that as of the date hereof and as of the Commencement Date: 

(a) Organization and Qualification. The Company and its “Subsidiaries” (which for purposes of this Agreement means any entity
in which the Company, directly or indirectly, owns more than 50% of the voting stock or capital stock or other similar equity interests) are corporations or limited liability companies duly organized and validly existing in good standing under the
laws of the jurisdiction in which they are incorporated or organized, and have the requisite corporate or organizational power and authority to own their properties and to carry on their business as now being conducted. Each of the Company and its
Subsidiaries is duly qualified as a foreign corporation or limited liability company to do business and is in good standing in every jurisdiction in which its ownership of property or the nature of the business conducted by it makes such
qualification necessary, except to the extent that the failure to be so qualified or be in good standing could not reasonably be expected to have a Material Adverse Effect. As used in this Agreement, “Material Adverse Effect” means any
material adverse effect on any of: (i) the business, properties, assets, operations, results of operations or financial condition of the Company and its Subsidiaries, if any, taken as a whole, or (ii) the authority or ability of the
Company to perform its obligations under the Transaction Documents (as defined in Section 3(b) hereof). The Company has no material Subsidiaries except as set forth on Schedule 3(a). 

(b) Authorization; Enforcement; Validity. (i) The Company has the requisite corporate power and authority to enter into and
perform its obligations under this Agreement, the Registration Rights Agreement and each of the other agreements entered into by the parties on the Commencement Date and attached hereto as exhibits to this Agreement (collectively, the
“Transaction Documents”), and to issue the Securities in accordance with the terms hereof and thereof, (ii) the execution and delivery of the Transaction Documents by the Company and the consummation by it of the transactions
contemplated hereby and thereby, including without limitation, the issuance of the Commitment Shares and the reservation for issuance and the issuance of the Purchase Shares issuable under this Agreement, have been duly authorized by the
Company’s Board of Directors or duly authorized committee thereof, do not conflict with the Company’s Articles of Incorporation or Bylaws (as defined below), and do not require further consent or authorization by the Company, its Board of
Directors, except as set forth in this Agreement, or its stockholders, (iii) this Agreement has been, and each other Transaction Document shall be on the Commencement Date, duly executed and delivered by the Company and (iv) this Agreement
constitutes, and each other Transaction Document upon its execution on behalf of the 

  
 -5- 

 
Company, shall constitute, the valid and binding obligations of the Company enforceable against the Company in accordance with their terms, except as such enforceability may be limited by
(y) general principles of equity or applicable bankruptcy, insolvency, reorganization, moratorium, liquidation or similar laws relating to, or affecting generally, the enforcement of creditors’ rights and remedies and (z) public
policy underlying any law, rule or regulation (including any federal or states securities law, rule or regulation) with regards to indemnification, contribution or exculpation. The Board of Directors of the Company or duly authorized committee
thereof has approved the resolutions (the “Signing Resolutions”) substantially in the form as set forth as Exhibit B attached hereto to authorize this Agreement and the transactions contemplated hereby. The Signing Resolutions are
valid, in full force and effect and have not been modified or supplemented in any material respect. The Company has delivered to the Buyer a true and correct copy of the Signing Resolutions as approved by the Board of Directors of the Company. 

(c) Capitalization. As of the date hereof, the authorized capital stock of the Company consists of (i) 75,000,000 shares of Common
Stock, par value $0.001, of which as of the date hereof, 38,102,451 shares are issued and outstanding, zero shares are held as treasury shares, 3,701,171 shares are reserved for future issuance pursuant to the Company’s equity incentive plans,
of which approximately 1,911,688 shares remain available for future option grants or stock awards, 6,660,298 shares are issuable and reserved for issuance pursuant to securities (other than stock options or equity based awards issued pursuant to the
Company’s stock incentive plans) exercisable or exchangeable for, or convertible into, shares of Common Stock and 3,773,671 shares of our Common Stock are subject to outstanding options, and (ii) 10,000,000 shares of preferred stock, with
per share liquidation preferences set forth on Schedule 3(c), of which as of the date hereof zero shares are issued and outstanding. All of such outstanding shares have been, or upon issuance will be, validly issued and are fully paid and
non-assessable. Except as disclosed in Schedule 3(c), (i) no shares of the Company’s capital stock are subject to preemptive rights or any other similar rights or any liens or encumbrances suffered or permitted by the Company,
(ii) there are no outstanding debt securities of the Company or any of its Subsidiaries, (iii) there are no outstanding options, warrants, scrip, rights to subscribe to, calls or commitments of any character whatsoever relating to, or
securities or rights convertible into, any shares of capital stock of the Company or any of its Subsidiaries, or contracts, commitments, understandings or arrangements by which the Company or any of its Subsidiaries is or may become bound to issue
additional shares of capital stock of the Company or any of its Subsidiaries or options, warrants, scrip, rights to subscribe to, calls or commitments of any character whatsoever relating to, or securities or rights convertible into, any shares of
capital stock of the Company or any of its Subsidiaries, (iv) there are no material agreements or arrangements under which the Company or any of its Subsidiaries is obligated to register the sale of any of their securities under the 1933 Act
(except the Registration Rights Agreement), (v) there are no outstanding securities or instruments of the Company or any of its Subsidiaries which contain any redemption or similar provisions, and there are no contracts, commitments,
understandings or arrangements by which the Company or any of its Subsidiaries is or may become bound to redeem a security of the Company or any of its Subsidiaries, (vi) there are no securities or instruments containing anti-dilution or
similar provisions that will be triggered by the issuance of the Securities as described in this Agreement and (vii) the Company does not have any stock appreciation rights or “phantom stock” plans or agreements or any similar plan or
agreement. The Company has furnished or made available to the Buyer true and correct copies of the Company’s Articles of Incorporation, as amended and as in effect on the date hereof (the “Articles of Incorporation”), and the
Company’s Bylaws, as amended and as in effect on the date hereof (the “Bylaws”). 

  
 -6- 

 (d) Issuance of Securities. The Commitment Shares have been duly authorized and, upon
issuance in accordance with the terms hereof, the Commitment Shares shall be (i) validly issued, fully paid and non-assessable and (ii) free from all taxes, liens and charges with respect to the issuance thereof. Upon issuance and payment
therefore in accordance with the terms and conditions of this Agreement, the Purchase Shares shall be validly issued, fully paid and non-assessable and free from all taxes, liens and charges with respect to the issue thereof, with the holders being
entitled to all rights accorded to a holder of Common Stock. 
 (e) No Conflicts. Except as disclosed in Schedule 3(e), the
execution, delivery and performance of the Transaction Documents by the Company and the consummation by the Company of the transactions contemplated hereby and thereby (including, without limitation, the reservation for issuance and issuance of the
Purchase Shares) will not (i) result in a violation of the Articles of Incorporation, any certificate of designation relating to any outstanding series of preferred stock of the Company or the Bylaws or (ii) conflict with, or constitute a
default (or an event which with notice or lapse of time or both would become a default) under, or give to others any rights of termination, amendment, acceleration or cancellation of, any agreement, indenture or instrument to which the Company or
any of its Subsidiaries is a party, or result, to the Company’s knowledge, in a violation of any law, rule, regulation, order, judgment or decree (including federal and state securities laws and regulations and the rules and regulations of the
Principal Market applicable to the Company or any of its Subsidiaries) or by which any property or asset of the Company or any of its Subsidiaries is bound or affected, except in the case of conflicts, defaults, terminations, amendments,
accelerations, cancellations and violations under clause (ii), which could not reasonably be expected to result in a Material Adverse Effect. Except as disclosed in Schedule 3(e), neither the Company nor its Subsidiaries is in violation of any term
of or in default under its Articles of Incorporation, any certificate of designation relating to any outstanding series of preferred stock of the Company or Bylaws or their organizational charter or bylaws, respectively. Except as disclosed in
Schedule 3(e), neither the Company nor any of its Subsidiaries is in violation of any term of or is in default under any material contract, agreement, mortgage, indebtedness, indenture, instrument, judgment, decree or order or any statute, rule or
regulation applicable to the Company or its Subsidiaries, except for possible violations, defaults, terminations or amendments that could not reasonably be expected to have a Material Adverse Effect. The business of the Company and its Subsidiaries
is not being conducted, and shall not be conducted, in violation of any law, ordinance, or regulation of any governmental entity, except for possible violations, the sanctions for which either individually or in the aggregate could not reasonably be
expected to have a Material Adverse Effect. Except as specifically contemplated by this Agreement, reporting obligations under the 1934 Act, or as required under the 1933 Act or applicable state securities laws or the filing of a Listing of
Additional Shares Notification Form with the Principal Market, the Company is not required to obtain any consent, authorization or order of, or make any filing or registration with, any court or governmental agency or any regulatory or
self-regulatory agency in order for it to execute, deliver or perform any of its obligations under or contemplated by the Transaction Documents in accordance with the terms hereof or thereof. Except as disclosed in Schedule 3(e) and for reporting
obligations under the 1934 Act, all consents, authorizations, orders, filings and registrations which the Company is required to obtain pursuant to the preceding sentence shall be obtained or effected on or prior to the Commencement Date. Except as
disclosed in Schedule 3(e), the Company is not subject to any notices or actions from or to the Principal Market other than routine matters incident to listing on the Principal Market and not involving a violation of the rules of the Principal
Market. Except as disclosed in Schedule 3(e), to the Company’s knowledge, the Principal Market has not commenced any delisting proceedings against the Company. 

  
 -7- 

 (f) SEC Documents; Financial Statements. Except as disclosed in Schedule 3(f), since
July 1, 2013, the Company has filed all reports, schedules, forms, statements and other documents required to be filed by it with the SEC pursuant to the reporting requirements of the 1934 Act (all of the foregoing filed prior to the date
hereof and all exhibits included therein and financial statements and schedules thereto and documents incorporated by reference therein being hereinafter referred to as the “SEC Documents”). As of their respective dates (except as
they have been correctly amended), the SEC Documents complied in all material respects with the requirements of the 1934 Act and the rules and regulations of the SEC promulgated thereunder applicable to the SEC Documents, and none of the SEC
Documents, at the time they were filed with the SEC (except as they may have been properly amended), contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make
the statements therein, in light of the circumstances under which they were made, not misleading. As of their respective dates (except as they have been properly amended), the financial statements of the Company included in the SEC Documents
complied as to form in all material respects with applicable accounting requirements and the published rules and regulations of the SEC with respect thereto. Such financial statements have been prepared in accordance with generally accepted
accounting principles, consistently applied, during the periods involved (except (i) as may be otherwise indicated in such financial statements or the notes thereto or (ii) in the case of unaudited interim statements, to the extent they
may exclude footnotes or may be condensed or summary statements) and fairly present in all material respects the financial position of the Company as of the dates thereof and the results of its operations and cash flows for the periods then ended
(subject, in the case of unaudited statements, to normal year-end audit adjustments). Except as disclosed in Schedule 3(f) or routine correspondence, such as comment letters and notices of effectiveness in connection with previously filed
registration statements or periodic reports publicly available on EDGAR, to the Company’s knowledge, the Company or any of its Subsidiaries are not presently the subject of any inquiry, investigation or action by the SEC. 

(g) Absence of Certain Changes. Except as disclosed in Schedule 3(g), since March 31, 2014, there has been no material adverse
change in the business, properties, operations, financial condition or results of operations of the Company or its Subsidiaries taken as a whole. For purposes of this Agreement, neither a decrease in cash or cash equivalents nor losses incurred in
the ordinary course of the Company’s business shall be deemed or considered a material adverse change. The Company has not taken any steps, and does not currently expect to take any steps, to seek protection pursuant to any Bankruptcy Law nor
does the Company or any of its Subsidiaries have any knowledge or reason to believe that its creditors intend to initiate involuntary bankruptcy or insolvency proceedings. The Company is financially solvent and is generally able to pay its debts as
they become due.  
 (h) Absence of Litigation. Except as disclosed in Schedule 3(h), to the Company’s knowledge, there
is no action, suit, proceeding, inquiry or investigation before or by any court, public board, government agency, self-regulatory organization or body pending or, to the knowledge of the Company or any of its Subsidiaries, threatened against the
Company, the Common Stock or any of the Company’s Subsidiaries or any of the Company’s or the Company’s Subsidiaries’ officers or directors in their capacities as such, which could reasonably be expected to have a Material
Adverse Effect (each, an “Action”). A description of each such Action, if any, is set forth in Schedule 3(h). 
 (i)
Acknowledgment Regarding Buyer’s Status. The Company acknowledges and agrees that the Buyer is acting solely in the capacity of arm’s length purchaser with respect to the Transaction Documents and the transactions contemplated
hereby and thereby. The Company further acknowledges that the Buyer is not acting as a financial advisor or fiduciary of the Company (or in any 

  
 -8- 

 
similar capacity) with respect to the Transaction Documents and the transactions contemplated hereby and thereby and any advice given by the Buyer or any of its representatives or agents in
connection with the Transaction Documents and the transactions contemplated hereby and thereby is merely incidental to the Buyer’s purchase of the Securities. The Company further represents to the Buyer that the Company’s decision to enter
into the Transaction Documents has been based solely on the independent evaluation by the Company and its representatives and advisors. 

(j) Intellectual Property Rights. To the Company’s knowledge, the Company and its Subsidiaries own or possess adequate rights or
licenses to use all material trademarks, trade names, service marks, service mark registrations, service names, patents, patent rights, copyrights, inventions, licenses, approvals, governmental authorizations, trade secrets and other intellectual
property rights (collectively, “Intellectual Property”) necessary to conduct their respective businesses as now conducted, except as set forth in Schedule 3(j) or to the extent that the failure to own, possess, license or otherwise
hold adequate rights to use Intellectual Property would not, individually or in the aggregate, have a Material Adverse Effect. Except as disclosed in Schedule 3(j), to the Company’s knowledge, none of the Company’s active and registered
Intellectual Property have expired or terminated, or, by the terms and conditions thereof, will expire or terminate within two years from the date of this Agreement. The Company and its Subsidiaries do not have any knowledge of any infringement by
the Company or its Subsidiaries of any Intellectual Property of others, or of any such development of similar or identical trade secrets or technical information by others with respect to the Company’s or its Subsidiaries’ Intellectual
Property and, except as set forth on Schedule 3(j), there is no claim, action or proceeding being made or brought against, or to the Company’s knowledge, being threatened against, the Company or its Subsidiaries regarding Intellectual Property,
which could reasonably be expected to have a Material Adverse Effect. 
 (k) Environmental Laws. To the Company’s knowledge, the
Company and its Subsidiaries (i) are in material compliance with any and all applicable foreign, federal, state and local laws and regulations relating to the protection of human health and safety or the environment and with respect to
hazardous or toxic substances or wastes, pollutants or contaminants (“Environmental Laws”), (ii) have received all material permits, licenses or other approvals required of them under applicable Environmental Laws to conduct
their respective businesses and (iii) are in material compliance with all terms and conditions of any such permit, license or approval, except where, in each of the three foregoing clauses, the failure to so comply or receive such approvals
could not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect. 
 (l) Title. The Company and
its Subsidiaries have good and marketable title to all personal property owned by them that is material to the business of the Company and its Subsidiaries, in each case free and clear of all liens, encumbrances and defects except such as are
described in Schedule 3(l) or such as do not materially affect the value of such property and do not interfere with the use made and proposed to be made of such property by the Company and any of its Subsidiaries or could not reasonably be expected
to have, individually or in the aggregate, a Material Adverse Effect. Any real property and facilities held under lease by the Company and any of its Subsidiaries, to the Company’s knowledge, are held by them under valid, subsisting and
enforceable leases with such exceptions as are not material and do not interfere with the use made and proposed to be made of such property and buildings by the Company and its Subsidiaries. 

(m) Insurance. The Company and each of its Subsidiaries are insured by insurers of recognized financial responsibility against such
losses and risks and in such amounts as management of 

  
 -9- 

 
the Company believes to be reasonable and customary in the businesses in which the Company and its Subsidiaries are engaged. To the Company’s knowledge, since January 1, 2012, neither
the Company nor any such Subsidiary has been refused any insurance coverage sought or applied for and neither the Company nor any such Subsidiary, to the Company’s knowledge, will be unable to renew its existing insurance coverage as and when
such coverage expires or to obtain similar coverage from similar insurers as may be necessary to continue its business at a cost that would not reasonably be expected to have a Material Adverse Effect. 

(n) Regulatory Permits. The Company and its Subsidiaries possess all material certificates, authorizations and permits issued by the
appropriate federal, state or foreign regulatory authorities necessary to conduct their respective businesses as currently conducted, and neither the Company nor any such Subsidiary has received any written notice of proceedings relating to the
revocation or modification of any such material certificate, authorization or permit. 
 (o) Tax Status. The Company and each of its
Subsidiaries has made or filed all federal and state income and all other material tax returns, reports and declarations required by any jurisdiction to which it is subject (unless and only to the extent that the Company and each of its Subsidiaries
has set aside on its books reserves reasonably adequate for the payment of all unpaid and unreported taxes or filed valid extensions) and has paid all taxes and other governmental assessments and charges that are material in amount, shown or
determined to be due on such returns, reports and declarations, except those being contested in good faith and has set aside on its books reserves reasonably adequate for the payment of all taxes for periods subsequent to the periods to which such
returns, reports or declarations apply. To the Company’s knowledge, there are no unpaid taxes in any material amount claimed to be due by the taxing authority of any jurisdiction. 

(p) Transactions With Affiliates. Except as set forth on Schedule 3(p) and other than the grant or exercise of stock options or any
other equity securities offered pursuant to duly adopted stock or incentive compensation plans as disclosed on Schedule 3(c), none of the officers, directors or employees of the Company is presently a party to any transaction with the Company or any
of its Subsidiaries (other than for services as employees, officers and directors and reimbursement for expenses incurred on behalf of the Company), including any contract, agreement or other arrangement providing for the furnishing of services to
or by, providing for rental of real or personal property to or from, or otherwise requiring payments to or from any officer, director or such employee or, to the knowledge of the Company, any corporation, partnership, trust or other entity in which
any officer, director, or any such employee has a material interest or is an officer, director, trustee or general partner. 
 (q)
Application of Takeover Protections. The Company and its board of directors have taken or will take prior to the Commencement Date all necessary action, if any, in order to render inapplicable any control share acquisition, business
combination, poison pill (including any distribution under a rights agreement) or other similar anti-takeover provision under the Articles of Incorporation or the laws of the state of its incorporation, which is or could become applicable to the
Buyer as a result of the transactions contemplated by this Agreement, including, without limitation, the Company’s issuance of the Securities and the Buyer’s ownership of the Securities. 

(r) Registration Statement. The Shelf Registration Statement (as defined in Section 4(a) hereof) has been declared effective by
the SEC, and no stop order has been issued or is pending or, to the knowledge of the Company, threatened by the SEC with respect thereto. As of the date hereof, the 

  
 -10- 

 
Company has a dollar amount of securities registered and unsold under the Shelf Registration Statement, which is not less than the sum of (i) the Available Amount and (ii) the market
value of the Commitment Shares on the date hereof. 
 4. COVENANTS. 

(a) Filing of Form 8-K and Prospectus Supplement. The Company agrees that it shall, within the time required under the 1934 Act, file a
Current Report on Form 8-K disclosing this Agreement and the transaction contemplated hereby. The Company shall file within two (2) Business Days from the date hereof a prospectus supplement to the Company’s existing shelf registration
statement on Form S-3 (File No. 333-178832, the “Shelf Registration Statement”) covering the sale of the Commitment Shares and Purchase Shares (the “Prospectus Supplement”) in accordance with the terms of the
Registration Rights Agreement between the Company and the Buyer, dated as of the date hereof (the “Registration Rights Agreement”). The Company shall use commercially reasonable efforts to keep the Shelf Registration Statement and
any New Registration Statement (as defined in the Registration Rights Agreement) effective pursuant to Rule 415 promulgated under the 1933 Act and available for sales of all Securities to the Buyer until such time as (i) it no longer qualifies
to make sales under the Shelf Registration Statement, (ii) the date on which all the Securities have been sold under this Agreement and no Available Amount remains thereunder, or (iii) the Agreement has been terminated. The Shelf
Registration Statement (including any amendments or supplements thereto and prospectuses or prospectus supplements, including the Prospectus Supplement, contained therein) shall not contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein, or necessary to make the statements therein, in light of the circumstances in which they were made, not misleading. 

(b) Blue Sky. The Company shall take such action, if any, as is reasonably necessary in order to obtain an exemption for or to qualify
(i) the initial sale of the Securities to the Buyer under this Agreement and (ii) any subsequent sale of the Securities by the Buyer, in each case, under applicable securities or “Blue Sky” laws of the states of the United States
in such states as is reasonably requested by the Buyer from time to time, and shall provide evidence of any such action so taken to the Buyer. 

(c) Listing. The Company shall promptly secure the listing of all of the Securities upon each national securities exchange and
automated quotation system that requires an application by the Company for listing, if any, upon which shares of Common Stock are then listed (subject to official notice of issuance) and shall maintain such listing, so long as any other shares of
Common Stock shall be so listed. The Company shall use its commercially reasonable efforts to maintain the Common Stock’s listing on the Principal Market. Neither the Company nor any of its Subsidiaries shall take any action that would be
reasonably expected to result in the delisting or suspension of the Common Stock on the Principal Market, unless the Common Stock is immediately thereafter traded on the New York Stock Exchange, the NYSE MKT, the NASDAQ Global Select Market, the
NASDAQ Capital Market, or the OTCQB or OTCQX market places of the OTC Markets. The Company shall pay all fees and expenses in connection with satisfying its obligations under this Section. 

(d) Limitation on Short Sales and Hedging Transactions. The Buyer agrees that beginning on the date of this Agreement and ending on the
date of termination of this Agreement as provided in Section 11(k), the Buyer and its agents, representatives and affiliates shall not in any manner whatsoever enter into or effect, directly or indirectly, any (i) “short sale”
(as such term is defined in 

  
 -11- 

 
Section 242.200 of Regulation SHO of the 1934 Act) of the Common Stock or (ii) hedging transaction, which establishes a net short position with respect to the Common Stock. 

(e) Issuance of Commitment Shares. In connection with the Commencement, the Company shall issue to the Buyer as consideration for the
Buyer entering into this Agreement 255,161 shares of Common Stock (the “Commitment Shares”). The Commitment Shares shall be issued without any restrictive legend whatsoever or prior sale requirement. 

(f) Due Diligence. The Buyer shall have the right, from time to time as the Buyer may reasonably deem appropriate, to perform
reasonable due diligence on the Company during normal business hours and subject to reasonable prior notice to the Company. The Company and its officers and employees shall provide information and reasonably cooperate with the Buyer in connection
with any reasonable request by the Buyer related to the Buyer’s due diligence of the Company, including, but not limited to, any such request made by the Buyer in connection with (i) the filing of the prospectus supplement described in
Section 4(a) hereof and (ii) the Commencement; provided, however, that at no time is the Company required to disclose material nonpublic information to the Buyer or breach any obligation of confidentiality or non-disclosure to a third
party or make any disclosure that could cause a waiver of attorney-client privilege. Each party hereto agrees not to disclose any Confidential Information of the other party to any third party and shall not use the Confidential Information of such
other party for any purpose other than in connection with, or in furtherance of, the transactions contemplated hereby. Each party hereto acknowledges that the Confidential Information shall remain the property of the disclosing party and agrees that
it shall take all reasonable measures to protect the secrecy of any Confidential Information disclosed by the other party. 
 5. TRANSFER
AGENT INSTRUCTIONS. 
 All of the Purchase Shares to be issued under this Agreement shall be issued without any restrictive legend
unless the Buyer expressly consents otherwise. The Company shall issue irrevocable instructions to the Transfer Agent, and any subsequent transfer agent, to issue Common Stock in the name of the Buyer for the Purchase Shares (the
“Irrevocable Transfer Agent Instructions”). The Company warrants to the Buyer that no instruction other than the Irrevocable Transfer Agent Instructions referred to in this Section 5, will be given by the Company to the
Transfer Agent with respect to the Purchase Shares and that the Commitment Shares and the Purchase Shares shall otherwise be freely transferable on the books and records of the Company as and to the extent provided in this Agreement and the
Registration Rights Agreement. 
 6. CONDITIONS TO THE COMPANY’S RIGHT TO COMMENCE SALES OF SHARES OF COMMON STOCK UNDER THIS
AGREEMENT. 
 The right of the Company hereunder to commence sales of the Purchase Shares is subject to the satisfaction of each of the
following conditions on or before the Commencement Date (the date that the Company may begin sales of Purchase Shares): 
  

	 	(a)	The Buyer shall have executed each of the Transaction Documents and delivered the same to the Company; 

  

	 	(b)	 The representations and warranties of the Buyer shall be true and correct as of the Commencement Date as though made at that time (except for
representations and 

  
 -12- 

	 	
warranties that speak as of a specific date, which shall be true and correct in all material respects as of such specific date) and the Buyer shall have performed, satisfied and complied in all
material respects with the covenants and agreements required by this Agreement to be performed, satisfied or complied with by the Buyer at or prior to the Commencement Date, and the Company shall have received a certificate, executed by a duly
authorized officer of the Buyer, dated as of the Commencement Date, to the foregoing effect; and 

  

	 	(c)	The Prospectus Supplement shall have been delivered to the Buyer and no stop order with respect to the registration statement covering the sale of shares to the Buyer shall be pending or threatened by the SEC.

 7. CONDITIONS TO THE BUYER’S OBLIGATION TO MAKE PURCHASES OF SHARES OF COMMON STOCK. 

The obligation of the Buyer to buy Purchase Shares under this Agreement is subject to the satisfaction of each of the following conditions on
or before the Commencement Date (the date that the Company may begin sales of Purchase Shares) and once such conditions have been initially satisfied, there shall not be any ongoing obligation to satisfy such conditions after the Commencement has
occurred: 
 (a) The Company shall have executed each of the Transaction Documents and delivered the same to the Buyer; 

(b) The Company shall have issued to the Buyer the Initial Purchase Shares and the Commitment Shares; 

(c) The Common Stock shall be authorized for quotation on the Principal Market, trading in the Common Stock shall not have been within the
last 365 days suspended by the SEC or the Principal Market, other than a general halt in trading in the Common Stock by the Principal Market under halt codes indicating pending or released material news, and the Securities shall be approved for
listing upon the Principal Market; 
 (d) The Buyer shall have received the opinion of the Company’s legal counsel dated as of the
Commencement Date in customary form and substance; 
 (e) The representations and warranties of the Company shall be true and correct in all
material respects (except to the extent that any of such representations and warranties is already qualified as to materiality in Section 3 above, in which case, such representations and warranties shall be true and correct without further
qualification) as of the date of this Agreement and as of the Commencement Date as though made at that time (except for representations and warranties that speak as of a specific date, which shall be true and correct in all material respects as of
such specific date) and the Company shall have performed, satisfied and complied in all material respects with the covenants, agreements and conditions required by the Transaction Documents to be performed, satisfied or complied with by the Company
at or prior to the Commencement Date. The Buyer shall have received a certificate, executed by the CEO, President or CFO of the Company, dated as of the Commencement Date, to the foregoing effect in the form attached hereto as Exhibit A;

  
 -13- 

 (f) The Board of Directors of the Company or a duly authorized committee thereof shall have
adopted resolutions substantially in the form attached hereto as Exhibit B which shall be in full force and effect without any amendment or supplement thereto as of the Commencement Date; 

(g) The Irrevocable Transfer Agent Instructions, in form acceptable to the Buyer shall have been delivered to and acknowledged in writing by
the Company and the Buyer and have been delivered to the Transfer Agent; 
 (h) The Company shall have delivered to the Buyer a certificate
evidencing the incorporation and good standing of the Company in the State of Nevada issued by the Secretary of State of the State of Nevada as of a date within ten (10) Business Days of the Commencement Date; 

(i) [Intentionally Omitted.] 

(j) The Company shall have delivered to the Buyer a secretary’s certificate executed by the Secretary of the Company, dated as of the
Commencement Date, in the form attached hereto as Exhibit C; 
 (k) The Shelf Registration Statement shall have been declared
effective under the 1933 Act by the SEC and no stop order with respect thereto shall be pending or threatened by the SEC. The Company shall have prepared and delivered to the Buyer a final and complete form of prospectus supplement, dated and
current as of the Commencement Date, to be used in connection with any issuances of any Commitment Shares or any Purchase Shares to the Buyer, and to be filed by the Company within two (2) Business Days after the Commencement Date pursuant to
Rule 424(b). The Company shall have made all filings under all applicable federal and state securities laws necessary to consummate the issuance of the Commitment Shares and the Purchase Shares pursuant to this Agreement in compliance with such
laws; 
 (l) No Event of Default has occurred and is continuing, or any event which, after notice and/or lapse of time, would become an
Event of Default has occurred; 
 (m) On or prior to the Commencement Date, the Company shall take all necessary action, if any, and such
actions as reasonably requested by the Buyer, in order to render inapplicable any control share acquisition, business combination, stockholder rights plan or poison pill (including any distribution under a rights agreement) or other similar
anti-takeover provision under the Articles of Incorporation or the laws of the state of its incorporation, that is or could become applicable to the Buyer as a result of the transactions contemplated by this Agreement, including, without limitation,
the Company’s issuance of the Securities and the Buyer’s ownership of the Securities; 
 (n) The Company shall have provided the
Buyer with the information reasonably requested by the Buyer in connection with its due diligence requests made prior to, or in connection with, the Commencement, in accordance with the terms of Section 4(f) hereof; and 

  
 -14- 

 8. INDEMNIFICATION. 

In consideration of the Buyer’s execution and delivery of the Transaction Documents and acquiring the Securities hereunder and in
addition to all of the Company’s other obligations under the Transaction Documents, the Company shall defend, protect, indemnify and hold harmless the Buyer and all of its affiliates, members, officers, directors, and employees, and any of the
foregoing person’s agents or other representatives (including, without limitation, those retained in connection with the transactions contemplated by this Agreement) (collectively, the “Indemnitees”) from and against any and
all actions, causes of action, suits, claims, losses, costs, penalties, fees, liabilities and damages, and expenses in connection therewith (irrespective of whether any such Indemnitee is a party to the action for which indemnification hereunder is
sought), and including reasonable attorneys’ fees and disbursements (the “Indemnified Liabilities”), incurred by any Indemnitee as a result of, or arising out of, or relating to (a) any misrepresentation or breach of any
representation or warranty made by the Company in the Transaction Documents or any other certificate, instrument or document contemplated hereby or thereby, (b) any breach of any covenant, agreement or obligation of the Company contained in the
Transaction Documents or any other certificate, instrument or document contemplated hereby or thereby, or (c) any cause of action, suit or claim brought or made against such Indemnitee and arising out of or resulting from the execution,
delivery, performance or enforcement of the Transaction Documents or any other certificate, instrument or document contemplated hereby or thereby, other than with respect to Indemnified Liabilities which directly and primarily result from (A) a
breach of any of the Buyer’s representations and warranties, covenants or agreements contained in this Agreement, or (B) the gross negligence, bad faith or willful misconduct of the Buyer or any other Indemnitee. To the extent that the
foregoing undertaking by the Company may be unenforceable for any reason, the Company shall make the maximum contribution to the payment and satisfaction of each of the Indemnified Liabilities which is permissible under applicable law. 

9. EVENTS OF DEFAULT. 

An “Event of Default” shall be deemed to have occurred at any time as any of the following events occurs: 

(a) during any period in which the effectiveness of any registration statement is required to be maintained pursuant to the terms of the
Registration Rights Agreement, the effectiveness of such registration statement lapses for any reason (including, without limitation, the issuance of a stop order) or is unavailable to the Company for sale of all of the Registrable Securities (as
defined in the Registration Rights Agreement) to the Buyer in accordance with the terms of the Registration Rights Agreement, and such lapse or unavailability continues for a period of ten (10) consecutive Business Days or for more than an
aggregate of thirty (30) Business Days in any 365-day period, which is not in connection with a post-effective amendment to any such registration statement or the filing of a new registration statement; provided, however, that in connection
with any post-effective amendment to such registration statement or filing of a new registration statement that is required to be declared effective by the SEC, such lapse or unavailability may continue for a period of no more than thirty
(30) consecutive Business Days, which such period shall be extended for an additional thirty (30) Business Days if the Company receives a comment letter from the SEC in connection therewith; 

(b) the suspension from trading or failure of the Common Stock to be listed on a Principal Market for a period of three (3) consecutive
Business Days; 

  
 -15- 

 (c) the delisting of the Common Stock from the Principal Market, and the Common Stock is not
immediately thereafter trading on the New York Stock Exchange, the NYSE MKT, the NASDAQ Global Select Market, the NASDAQ Global Market, the OTC Bulletin Board, or the OTCQB or OTCQX market places of the OTC Markets; 

(d) the failure for any reason by the Transfer Agent to issue Purchase Shares to the Buyer within five (5) Business Days after the
applicable Purchase Date that the Buyer is entitled to receive; 
 (e) the breach of any representation, warranty, covenant or other term or
condition under any Transaction Document if such breach could reasonably be expected to have a Material Adverse Effect and except, in the case of a breach of a covenant which is reasonably curable, only if such breach continues uncured for a period
of at least five (5) Business Days; 
 (f) if any Person commences a proceeding against the Company pursuant to or within the meaning of
any Bankruptcy Law; 
 (g) if the Company pursuant to or within the meaning of any Bankruptcy Law; (A) commences a voluntary case,
(B) consents to the entry of an order for relief against it in an involuntary case, (C) consents to the appointment of a Custodian of it or for all or substantially all of its property, (D) makes a general assignment for the benefit
of its creditors or (E) becomes insolvent; 
 (h) a court of competent jurisdiction enters an order or decree under any Bankruptcy Law
that (A) is for relief against the Company in an involuntary case, (B) appoints a Custodian of the Company or for all or substantially all of its property, or (C) orders the liquidation of the Company or any Subsidiary; or 

(i) if at any time after the Commencement Date, the Exchange Cap is reached unless and until stockholder approval is obtained pursuant to
Section 1(h) hereof. The Exchange Cap shall be deemed to be reached at such time if, upon submission of a Purchase Notice or VWAP Purchase Notice under this Agreement, the issuance of such shares of Common Stock would exceed that number of
shares of Common Stock which the Company may issue under this Agreement without breaching the Company’s obligations under the rules or regulations of the Principal Market. 

In addition to any other rights and remedies under applicable law and this Agreement, including the Buyer termination rights under Section 11(k) hereof,
so long as an Event of Default has occurred and is continuing, or if any event which, after notice and/or lapse of time, would become an Event of Default, has occurred and is continuing, or so long as the Closing Sale Price is below the Floor Price,
the Company may not require and the Buyer shall not be obligated to purchase any shares of Common Stock under this Agreement. If pursuant to or within the meaning of any Bankruptcy Law, the Company commences a voluntary case or any Person commences
a proceeding against the Company, a Custodian is appointed for the Company or for all or substantially all of its property, or the Company makes a general assignment for the benefit of its creditors, (any of which would be an Event of Default as
described in Sections 9(f), 9(g) and 9(h) hereof) this Agreement shall automatically terminate without any liability or payment to the Company without further action or notice by any Person. No such termination of this Agreement under
Section 11(k)(i) shall affect the Company’s or the Buyer’s obligations under this Agreement with respect to pending purchases and the Company and the Buyer shall complete their respective obligations with respect to any pending
purchases under this Agreement. 

  
 -16- 

 10. CERTAIN DEFINED TERMS. 

For purposes of this Agreement, the following terms shall have the following meanings: 

(a) “1933 Act” means the Securities Act of 1933, as amended. 

(b) “Available Amount” means initially Twenty-Two Million Dollars ($22,000,000) in the aggregate which amount shall be
reduced by the Purchase Amount (including the Initial Purchase) each time the Buyer purchases shares of Common Stock pursuant to Section 1 hereof. 

(c) “Bankruptcy Law” means Title 11, U.S. Code, or any similar federal or state law for the relief of debtors. 

(d) “Business Day” means any day on which the Principal Market is open for trading during normal trading hours (i.e., 9:30
a.m. to 4:00 p.m. Eastern Time), including any day on which the Principal Market is open for trading for a period of time less than the customary time. 

(e) “Closing Sale Price” means the last closing trade price for the Common Stock on the Principal Market as reported by the
Principal Market. 
 (f) “Confidential Information” means any information disclosed by either party to the other party,
either directly or indirectly, in writing, orally or by inspection of tangible objects (including, without limitation, documents, prototypes, protocols, development plans, commercialization plans, samples, compounds, formulations, preclinical study
and clinical trial results, plant and equipment), which is designated as “Confidential,” “Proprietary” or some similar designation. Information communicated orally shall be considered Confidential Information if such information
is confirmed in writing as being Confidential Information within ten (10) Business Days after the initial disclosure. Confidential Information may also include information disclosed to a disclosing party by third parties. Confidential
Information shall not, however, include any information which (i) was publicly known and made generally available in the public domain prior to the time of disclosure by the disclosing party; (ii) becomes publicly known and made generally
available after disclosure by the disclosing party to the receiving party through no action or inaction of the receiving party; (iii) is already in the possession of the receiving party at the time of disclosure by the disclosing party as shown
by the receiving party’s files and records immediately prior to the time of disclosure; (iv) is obtained by the receiving party from a third party without a breach of such third party’s obligations of confidentiality; (v) is
independently developed by the receiving party without use of or reference to the disclosing party’s Confidential Information, as shown by documents and other competent evidence in the receiving party’s possession; or (vi) is required
by law to be disclosed by the receiving party, provided that the receiving party gives the disclosing party prompt written notice of such requirement prior to such disclosure and assistance in obtaining an order protecting the information from
public disclosure. 
 (g) “Custodian” means any receiver, trustee, assignee, liquidator or similar official under any
Bankruptcy Law. 
 (h) “Maturity Date” means the date that is twenty-four (24) months from the Commencement Date. 

  
 -17- 

 (i) “Person” means an individual or entity including any limited liability
company, a partnership, a joint venture, a corporation, a trust, an unincorporated organization and a government or any department or agency thereof. 

(j) “Principal Market” means the NASDAQ Capital Market; provided however, that in the event the Company’s Common Stock
is ever listed or traded on the New York Stock Exchange, the NYSE MKT, the NASDAQ Global Select Market, the NASDAQ Global Market, the OTC Bulletin Board, or under the OTCQB or OTCQX market places of the OTC Markets, then the “Principal
Market” shall mean such other market or exchange on which the Company’s Common Stock is then listed or traded. 
 (k)
“Purchase Amount” means, with respect to any particular purchase made hereunder, the portion of the Available Amount to be purchased by the Buyer pursuant to Section 1 hereof as set forth in a valid Purchase Notice or VWAP
Purchase Notice which the Company delivers to the Buyer. 
 (l) “Purchase Date” means with respect to any Regular Purchase
made hereunder, the Business Day of receipt by the Buyer of a valid Purchase Notice that the Buyer is to buy Purchase Shares pursuant to Section 1(b) hereof. 

(m) “Purchase Notice” shall mean an irrevocable written notice from the Company to the Buyer directing the Buyer to buy
Purchase Shares pursuant to Section 1(b) hereof as specified by the Company therein at the applicable Purchase Price on the Purchase Date. 

(n) “Purchase Price” means the lesser of (i) the lowest Sale Price of the Common Stock on the Purchase Date or
(ii) the arithmetic average of the three (3) lowest Closing Sale Prices for the Common Stock during the twelve (12) consecutive Business Days ending on the Business Day immediately preceding such Purchase Date (to be appropriately
adjusted for any reorganization, recapitalization, non-cash dividend, stock split, reverse stock split or other similar transaction). 
 (o)
“Sale Price” means any trade price for the shares of Common Stock on the Principal Market during normal trading hours, as reported by the Principal Market. 

(p) “SEC” means the United States Securities and Exchange Commission. 

(q) “Transfer Agent” means the transfer agent of the Company as set forth in Section 11(f) hereof or such other person
who is then serving as the transfer agent for the Company in respect of the Common Stock. 
 (r) “VWAP Minimum Price
Threshold” means, with respect to any particular VWAP Purchase Notice, the Sale Price on the VWAP Purchase Date equal to the greater of (i) 80% of the Closing Sale Price on the Business Day immediately preceding the VWAP Purchase Date
or (ii) such higher price as set forth by the Company in the VWAP Purchase Notice. 
 (s) “VWAP Purchase Amount”
means, with respect to any particular VWAP Purchase Notice, the portion of the Available Amount to be purchased by the Buyer pursuant to Section 1(c) hereof as set forth in a valid VWAP Purchase Notice which requires the Buyer to buy the VWAP
Purchase Share Percentage of the aggregate shares traded on the Principal Market during normal trading hours on the VWAP Purchase Date up to the VWAP Purchase Share Volume Maximum, subject to the VWAP Minimum Price Threshold. 

  
 -18- 

 (t) “VWAP Purchase Date” means, with respect to any VWAP Purchase made
hereunder, the Business Day following the receipt by the Buyer of a valid VWAP Purchase Notice that the Buyer is to buy Purchase Shares pursuant to Section 1(c) hereof. 

(u) “VWAP Purchase Notice” shall mean an irrevocable written notice from the Company to the Buyer directing the Buyer to buy
Purchase Shares on the VWAP Purchase Date pursuant to Section 1(c) hereof as specified by the Company therein at the applicable VWAP Purchase Price with the applicable VWAP Purchase Share Percentage specified therein. 

(v) “VWAP Purchase Share Percentage” means, with respect to any particular VWAP Purchase Notice pursuant to Section 1(c)
hereof, the percentage set forth in the VWAP Purchase Notice which the Buyer will be required to buy as a specified percentage of the aggregate shares traded on the Principal Market during normal trading hours up to the VWAP Purchase Share Volume
Maximum on the VWAP Purchase Date subject to Section 1(c) hereof but in no event shall this percentage exceed thirty percent (30%) of such VWAP Purchase Date’s share trading volume of the Common Stock on the Principal Market during
normal trading hours. 
 (w) “VWAP Purchase Price” means the lesser of (i) the Closing Sale Price on the VWAP Purchase
Date; or (ii) ninety-seven percent (97%) of volume weighted average price for the Common Stock traded on the Principal Market during normal trading hours on (A) the VWAP Purchase Date if the aggregate shares traded on the Principal
Market on the VWAP Purchase Date have not exceeded the VWAP Purchase Share Volume Maximum, or (B) the portion of the VWAP Purchase Date until such time as the sooner to occur of (1) the time at which the aggregate shares traded on the
Principal Market has exceeded the VWAP Purchase Share Volume Maximum, or (2) the time at which the sale price of Common Stock falls below the VWAP Minimum Price Threshold (to be appropriately adjusted for any reorganization, recapitalization,
non-cash dividend, stock split, reverse stock split or other similar transaction). 
 (x) “VWAP Purchase Share Estimate”
means the number of shares of Common Stock that the Company has in its sole discretion irrevocably instructed its Transfer Agent to issue to the Buyer via the Depository Trust Company (“DTC”) Fast Automated Securities Transfer
Program in connection with a VWAP Purchase Notice pursuant to Section 1(c) hereof and issued to the Buyer’s or its designee’s balance account with DTC through its Deposit Withdrawal At Custodian (DWAC) system on the VWAP Purchase Date
(to be appropriately adjusted for any reorganization, recapitalization, non-cash dividend, stock split, reverse stock split or other similar transaction). 

(y) “VWAP Purchase Share Volume Maximum” means a number of shares of Common Stock traded on the Principal Market during
normal trading hours on the VWAP Purchase Date equal to: (i) the VWAP Purchase Share Estimate, divided by (ii) the VWAP Purchase Share Percentage (to be appropriately adjusted for any reorganization, recapitalization, non-cash dividend,
stock split, reverse stock split or other similar transaction). 
 11. MISCELLANEOUS. 

(a) Governing Law; Jurisdiction; Jury Trial. The corporate laws of the State of Nevada shall govern all issues concerning the relative
rights of the Company and its stockholders. All other questions concerning the construction, validity, enforcement and interpretation of this Agreement and the other 

  
 -19- 

 
Transaction Documents shall be governed by the internal laws of the State of Illinois, without giving effect to any choice of law or conflict of law provision or rule (whether of the State of
Illinois or any other jurisdictions) that would cause the application of the laws of any jurisdictions other than the State of Illinois. Each party hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in
the City of Chicago, for the adjudication of any dispute hereunder or under the other Transaction Documents or in connection herewith or therewith, or with any transaction contemplated hereby or discussed herein, and hereby irrevocably waives, and
agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such suit, action or proceeding is brought in an inconvenient forum or that the venue of such suit,
action or proceeding is improper. Each party hereby irrevocably waives personal service of process and consents to process being served in any such suit, action or proceeding by mailing a copy thereof to such party at the address for such notices to
it under this Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any manner permitted by law.
EACH PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION HEREWITH OR ARISING OUT OF THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED
HEREBY. 
 (b) Counterparts. This Agreement may be executed in two or more identical counterparts, all of which shall be
considered one and the same agreement and shall become effective when counterparts have been signed by each party and delivered to the other party; provided that a facsimile or pdf (or other electronic reproduction) signature shall be considered due
execution and shall be binding upon the signatory thereto with the same force and effect as if the signature were an original, not a facsimile or pdf (or other electronic reproduction) signature. 

(c) Headings. The headings of this Agreement are for convenience of reference and shall not form part of, or affect the interpretation
of, this Agreement. 
 (d) Severability. If any provision of this Agreement shall be invalid or unenforceable in any jurisdiction,
such invalidity or unenforceability shall not affect the validity or enforceability of the remainder of this Agreement in that jurisdiction or the validity or enforceability of any provision of this Agreement in any other jurisdiction. 

(e) Entire Agreement. This Agreement and the Registration Rights Agreement supersede all other prior oral or written agreements between
the Buyer, the Company, their affiliates and persons acting on their behalf with respect to the matters discussed herein, and this Agreement, the other Transaction Documents and the instruments referenced herein contain the entire understanding of
the parties with respect to the matters covered herein and therein and, except as specifically set forth herein or therein, neither the Company nor the Buyer makes any representation, warranty, covenant or undertaking with respect to such matters.
The Company acknowledges and agrees that is has not relied on, in any manner whatsoever, any representations or statements, written or oral, other than as expressly set forth in this Agreement. 

(f) Notices. Any notices, consents or other communications required or permitted to be given under the terms of this Agreement must be
in writing and will be deemed to have been delivered: (i) upon receipt when delivered personally; (ii) upon receipt when sent by facsimile (provided confirmation of transmission is mechanically or electronically generated and kept on file
by the sending party); or (iii) one (1) Business Day after timely deposit with a nationally recognized overnight delivery 

  
 -20- 

 
service, in each case properly addressed to the party to receive the same. The addresses and facsimile numbers for such communications shall be: 

If to the Company: 
 Apricus
Biosciences, Inc. 
 11975 El Camino Real, Suite 300 

San Diego, CA 92130 
 Telephone:
858-222-8041 
 Facsimile: 

Attention: Richard W. Pascoe, CEO 

Email: 
 With a copy (which shall
not constitute notice) to: 
 Latham & Watkins LLP 

12670 High Bluff Drive 
 San
Diego, CA 92130 
 Telephone: 858-523-5435 

Facsimile: 858-523-5450 

Attention: Cheston J. Larson, Esq. 

Email: cheston.larson@lw.com 

If to the Buyer: 
 Aspire Capital
Fund, LLC 
 155 North Wacker Drive, Suite 1600 

Chicago, IL 60606 
 Telephone:
312-658-0400 
 Facsimile: 312-658-4005 

Attention: Steven G. Martin 

Email: smartin@aspirecapital.com 

With a copy to (which shall not constitute delivery to the Buyer): 

Morrison & Foerster LLP 

2000 Pennsylvania Avenue, NW, Suite 6000 

Washington, DC 20006 
 Telephone:
202-778-1611 
 Facsimile: 202-887-0763 

Attention: Martin P. Dunn, Esq. 

Email : mdunn@mofo.com 

If to the Transfer Agent: 
 Wells
Fargo Shareowner Services 
 1110 Centre Pointe Curve, Suite 101 

Mendota Heights, MN 55120 

Telephone: 651-450-4120 

Facsimile: 651-450-4078 

Attention: Suzanne M. Swits 

Email: Suzanne.m.swits@wellsfargo.com 

  
 -21- 

 or at such other address and/or facsimile number and/or to the attention of such other person as the recipient
party has specified by written notice given to each other party one (1) Business Day prior to the effectiveness of such change. Written confirmation of receipt (A) given by the recipient of such notice, consent or other communication,
(B) mechanically or electronically generated by the sender’s facsimile machine containing the time, date, and recipient facsimile number or (C) provided by a nationally recognized overnight delivery service, shall be rebuttable
evidence of receipt in accordance with clause (i), (ii) or (iii) above, respectively. 
 (g) Successors and Assigns. This
Agreement shall be binding upon and inure to the benefit of the parties and their respective successors and assigns. The Company shall not assign this Agreement or any rights or obligations hereunder without the prior written consent of the Buyer,
including by merger or consolidation. The Buyer may not assign its rights or obligations under this Agreement. 
 (h) No Third Party
Beneficiaries. This Agreement is intended for the benefit of the parties hereto and their respective permitted successors and assigns, and is not for the benefit of, nor may any provision hereof be enforced by, any other person. 

(i) Publicity. The Buyer shall have the right to approve before issuance any press release, SEC filing or any other public disclosure
made by or on behalf of the Company whatsoever with respect to, in any manner, the Buyer, its purchases hereunder or any aspect of this Agreement or the transactions contemplated hereby; provided, however, that the Company shall be entitled, without
the prior approval of the Buyer, to make any press release or other public disclosure (including any filings with the SEC) with respect to such transactions as is required by applicable law and regulations so long as the Company and its counsel
consult with the Buyer in connection with any such press release or other public disclosure at least one (1) Business Day prior to its release. The Buyer must be provided with a copy thereof at least one (1) Business Day prior to any
release or use by the Company thereof. 
 (j) Further Assurances. Each party shall do and perform, or cause to be done and performed,
all such further acts and things, and shall execute and deliver all such other agreements, certificates, instruments and documents, as the other party may reasonably request in order to carry out the intent and accomplish the purposes of this
Agreement and the consummation of the transactions contemplated hereby. 
 (k) Termination. This Agreement may be terminated only as
follows: 
 (i) By the Buyer any time an Event of Default exists without any liability or payment to the Company. However, if
pursuant to or within the meaning of any Bankruptcy Law, the Company commences a voluntary case or any Person commences a proceeding against the Company, a Custodian is appointed for the Company or for all or substantially all of its property, or
the Company makes a general assignment for the benefit of its creditors, (any of which would be an Event of Default as described in Sections 9(f), 9(g) and 9(h) hereof) this Agreement shall automatically terminate without any liability or payment to
the Company without further action or notice by any Person. No such termination of this Agreement under this Section 11(k)(i) shall affect the Company’s or the Buyer’s obligations under this Agreement with respect to pending purchases
and the Company and the Buyer shall complete their respective obligations with respect to any pending purchases under this Agreement. 

  
 -22- 

 (ii) In the event that the Commencement shall not have occurred the Company shall
have the option to terminate this Agreement for any reason or for no reason without any liability whatsoever of either party to the other party under this Agreement except as set forth in Section 11(k)(viii) hereof. 

(iii) In the event that the Commencement shall not have occurred within ten (10) Business Days of the date of this
Agreement, due to the failure to satisfy any of the conditions set forth in Sections 6 and 7 above with respect to the Commencement, either party shall have the option to terminate this Agreement at the close of business on such date or thereafter
without liability of either party to any other party; provided, however, that the right to terminate this Agreement under this Section 11(k)(iii) shall not be available to either party if such failure to satisfy any of the conditions set forth
in Sections 6 and 7 is the result of a breach of this Agreement by such party or the failure of any representation or warranty of such party included in this Agreement to be true and correct in all material respects. 

(iv) At any time after the Commencement Date, the Company shall have the option to terminate this Agreement for any reason or
for no reason by delivering notice (a “Company Termination Notice”) to the Buyer electing to terminate this Agreement without any liability whatsoever of either party to the other party under this Agreement. The Company Termination
Notice shall not be effective until one (1) Business Day after it has been received by the Buyer. 
 (v) This Agreement
shall automatically terminate on the date that the Company sells and the Buyer purchases the full Available Amount as provided herein, without any action or notice on the part of any party and without any liability whatsoever of any party to any
other party under this Agreement. 
 (vi) If by the Maturity Date for any reason or for no reason the full Available Amount
under this Agreement has not been purchased as provided for in Section 1 of this Agreement, this Agreement shall automatically terminate on the Maturity Date, without any action or notice on the part of any party and without any liability
whatsoever of any party to any other party under this Agreement. 
 Except as set forth in Sections 11(k)(i) (in respect of an Event of
Default under Sections 9(f), 9(g) and 9(h)), 11(k)(iv) and 11(k)(v), any termination of this Agreement pursuant to this Section 11(k) shall be effected by written notice from the Company to the Buyer, or the Buyer to the Company, as the case
may be, setting forth the basis for the termination hereof. The representations and warranties of the Company and the Buyer contained in Sections 2, 3 and 5 hereof, the indemnification provisions set forth in Section 8 hereof and the agreements
and covenants set forth in Sections 4(e) and 11, shall survive the Commencement and any termination of this Agreement. No termination of this Agreement shall affect the Company’s or the Buyer’s rights or obligations (i) under the
Registration Rights Agreement which shall survive any such termination in accordance with its terms or (ii) under this Agreement with respect to pending purchases and the Company and the Buyer shall complete their respective obligations with
respect to any pending purchases under this Agreement. 
 (l) No Financial Advisor, Placement Agent, Broker or Finder. The Company
represents and warrants to the Buyer that it has not engaged any financial advisor, placement agent, broker or finder in connection with the transactions contemplated hereby. The Buyer represents and warrants to the

  
 -23- 

 
Company that it has not engaged any financial advisor, placement agent, broker or finder in connection with the transactions contemplated hereby. Each party shall be responsible for the payment
of any fees or commissions, if any, of any financial advisor, placement agent, broker or finder engaged by such party relating to or arising out of the transactions contemplated hereby. Each party shall pay, and hold the other party harmless
against, any liability, loss or expense (including, without limitation, attorneys’ fees and out of pocket expenses) arising in connection with any such claim. 

(m) No Strict Construction. The language used in this Agreement will be deemed to be the language chosen by the parties to express
their mutual intent, and no rules of strict construction will be applied against any party. 
 (n) Failure or Indulgence Not Waiver.
No failure or delay in the exercise of any power, right or privilege hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any such power, right or privilege preclude other or further exercise thereof or of any
other right, power or privilege. 
 * * * * * 

  
 -24- 

 IN WITNESS WHEREOF, the Buyer and the Company have caused this Common Stock Purchase
Agreement to be duly executed as of the date first written above. 
  

			
	 THE COMPANY:
  

APRICUS BIOSCIENCES, INC.

		
	By:	 	/S/ RICHARD W. PASCOE
	Name: Richard W. Pascoe
	Title: Chief Executive Officer

  

			
	 BUYER:
  

ASPIRE CAPITAL FUND, LLC

	BY: ASPIRE CAPITAL PARTNERS, LLC
	BY: SGM HOLDINGS CORP.

  

			
	By:	 	/S/ STEVEN G. MARTIN
	Name: Steven G. Martin
	Title: President

  
 -25- 

 SCHEDULES 
  

			
	Schedule 3(a)	 	Subsidiaries
	Schedule 3(c)	 	Capitalization
	Schedule 3(e)	 	Conflicts
	Schedule 3(f)	 	1934 Act Filings
	Schedule 3(g)	 	Material Changes
	Schedule 3(h)	 	Litigation
	Schedule 3(j)	 	Intellectual Property
	Schedule 3(l)	 	Title
	Schedule 3(p)	 	Transactions with Affiliates

 EXHIBITS 
  

			
	Exhibit A	  	Form of Officer’s Certificate
	Exhibit B         	  	Form of Resolutions of Board of Directors of the Company
	Exhibit C	  	Form of Secretary’s Certificate

 DISCLOSURE SCHEDULES 

These disclosure schedules (the “Disclosure Schedules”) have been prepared and delivered in connection with the execution and delivery of the
Common Stock Purchase Agreement (the “Agreement”), dated as of August 12, 2014, by and between Aspire Capital Fund, LLC (“Buyer”), and Apricus Biosciences, Inc. (the “Company”). Capitalized
terms used, but not otherwise defined, in these Disclosure Schedules have the meanings ascribed to them in the Agreement. The inclusion of any information in the Company Disclosure Schedule shall not be deemed to be an admission or acknowledgment
that such information is required by the terms hereof to be disclosed, is material, or is outside the ordinary course of business. 

Schedule 3(a) 

Subsidiaries 
 Subsidiaries of Apricus
Biosciences, Inc. 
  

	 	1.	NexMed (U.S.A.), Inc., incorporated in Delaware on June 18, 1997. 

  

	 	2.	NexMed Holdings, Inc., incorporated in Delaware on February 28, 1997. 

  

	 	3.	NexMed International Limited, incorporated in the British Virgin Islands on August 2, 1996. 

  

	 	4.	Apricus Pharmaceuticals USA, Inc. (formerly Topotarget USA, Inc.), incorporated in Delaware on July 12, 2006 and acquired by Apricus Biosciences, Inc. on December 29, 2011. 

Schedule 3(c) 

Capitalization 
  

	 	1.	Options issued pursuant to the Company’s 2012 Stock Long Term Incentive Plan (see Exhibit A of the Registrant’s Definitive Proxy Statement filed on April 6, 2012). 

 

	 	2.	Options issued pursuant to the Company’s 2006 Stock Incentive Plan (see Annex A of the Company’s Definitive Proxy Statement filed with the Securities and Exchange Commission on April 6, 2006).

  

	 	3.	Amended and Restated 7% Convertible Note Due December 31, 2014 with The Tail Wind Fund Ltd. (see Exhibit 10.17 to the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on
March 18, 2013). 

	 	4.	Amended and Restated 7% Convertible Note Due December 31, 2014 with Solomon Strategic Holdings, Inc. (see Exhibit 10.18 to the Company’s Annual Report on Form 10-K filed with the Securities and Exchange
Commission on March 18, 2013). 

  

	 	5.	Amended and Restated 7% Convertible Note Due December 31, 2014, with Tail Wind Advisory & Management Ltd. (see Exhibit 10.19 to the Company’s Annual Report on Form 10-K filed with the Securities and
Exchange Commission on March 18, 2013). 

  

	 	6.	Warrants issued pursuant to a financing transaction, dated September 17, 2010 (see Exhibit 4.6 of Amendment No. 2 to the Company’s Registration Statement on Form S-1 (File No. 333-169132) filed with
the Securities and Exchange Commission on September 28, 2010). 

  

	 	7.	Warrants issued pursuant to a financing transaction (see Exhibit 4.7 of Amendment No. 2 to the Company’s Registration Statement on Form S-1 (File No. 333-169132) filed with the Securities and Exchange
Commission on September 28, 2010). 

  

	 	8.	Warrants issued pursuant to a financing transaction (see Exhibit 4.1 to the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on February 13, 2012). 

 

	 	9.	Warrants issued pursuant to a financing transaction (see Exhibit 1.1 to the Company’s Current Report on From 8-K filed with the Securities and Exchange Commission on May 24, 2013). 

Schedule 3(e) 
 Conflicts

 None. 
 Schedule 3(f) 

1934 Act Filings 
 None. 

Schedule 3(g) 
 Material
Changes 
 None. 

 Schedule 3(h) 

Litigation 
 See Part II, Item 1 of
the Company’s Form 10Q filed on August 11, 2014. 
 Schedule 3(j) 

Intellectual Property 
 None. 

Schedule 3(l) 
 Title

 None. 
 Schedule 3(p) 

Transactions with Affiliates 
 None. 

 EXHIBIT A 

FORM OF OFFICER’S CERTIFICATE 

This Officer’s Certificate (“Certificate”) is being delivered pursuant to Section 7(e) of that certain Common Stock
Purchase Agreement dated as of August 12, 2014 (the “Common Stock Purchase Agreement”), by and between APRICUS BIOSCIENCES, INC., a Nevada corporation (the “Company”), and ASPIRE CAPITAL FUND,
LLC, an Illinois limited liability company (the “Buyer”). Terms used herein and not otherwise defined shall have the meanings ascribed to them in the Common Stock Purchase Agreement. 

The undersigned,
                    ,
                     of the Company, hereby certifies as follows: 

1. I am the
                             of the Company and make the statements contained in this Certificate in
my capacity as such; 
 2. The representations and warranties of the Company are true and correct in all material respects
(except to the extent that any of such representations and warranties is already qualified as to materiality in Section 3 of the Common Stock Purchase Agreement, in which case, such representations and warranties are true and correct without
further qualification) as of the date when made and as of the Commencement Date as though made at that time (except for representations and warranties that speak as of a specific date); 

3. The Company has performed, satisfied and complied in all material respects with covenants, agreements and conditions
required by the Transaction Documents to be performed, satisfied or complied with by the Company at or prior to the Commencement Date. 

4. The Company has not taken any steps, and does not currently expect to take any steps, to seek protection pursuant to any
Bankruptcy Law nor does the Company or any of its Subsidiaries have any knowledge or reason to believe that its creditors intend to initiate involuntary bankruptcy or insolvency proceedings. The Company is financially solvent and is generally able
to pay its debts as they become due. 
 IN WITNESS WHEREOF, I have hereunder signed my name on this
         day of                         . 

 

					
		  	 	  	
		  	Name:	  	
		  	Title:	  	

 The undersigned as Secretary of APRICUS BIOSCIENCES, INC., a Nevada corporation, hereby certifies that
                     is the duly elected, appointed, qualified and acting
                     of
                                         
                                         
           and that the signature appearing above is his/her genuine signature. 

			
	   
	 	  

	Secretary	 	

 EXHIBIT B 

FORM OF COMPANY RESOLUTIONS 

FOR SIGNING PURCHASE AGREEMENT 

WHEREAS, management has reviewed with the Board of Directors the background, terms and conditions of the transactions subject to the Common
Stock Purchase Agreement (the “Purchase Agreement”) by and between the Company and Aspire Capital Fund, LLC (“Aspire”), including all materials terms and conditions of the transactions subject thereto, providing for
the purchase by Aspire of up to Twenty-Two Million Dollars ($22,000,000) of the Company’s common stock, par value $0.001 per share (the “Common Stock”); and 

WHEREAS, after careful consideration of the Purchase Agreement, the documents incident thereto and other factors deemed relevant by the Board
of Directors, the Board of Directors has determined that it is advisable and in the best interests of the Company to engage in the transactions contemplated by the Purchase Agreement, including, but not limited to, the issuance of 255,161] shares of
Common Stock to Aspire as a commitment fee (the “Commitment Shares”) and the sale of shares of Common Stock to Aspire up to the available amount under the Purchase Agreement (the “Purchase Shares,” and together with
the Commitment Shares, the “Aspire Shares”). 
 Transaction Documents 

NOW, THEREFORE, BE IT RESOLVED, that the transactions described in the Purchase Agreement are hereby approved and the Chief Executive Officer
and Chief Financial Officer (the “Authorized Officers”) are severally authorized to execute and deliver the Purchase Agreement, and any other agreements or documents contemplated thereby including, without limitation, a registration
rights agreement (the “Registration Rights Agreement”) providing for the registration of the shares of the Company’s Common Stock issuable in respect of the Purchase Agreement on behalf of Aspire, with such amendments, changes,
additions and deletions as the Authorized Officers may deem to be appropriate and approve on behalf of, the Company, such approval to be conclusively evidenced by the signature of an Authorized Officer thereon; and 

FURTHER RESOLVED, that the terms and provisions of the Registration Rights Agreement by and among the Company and Aspire are hereby approved
and the Authorized Officers are authorized to execute and deliver the Registration Rights Agreement (pursuant to the terms of the Purchase Agreement), with such amendments, changes, additions and deletions as the Authorized Officer may deem
appropriate and approve on behalf of, the Company, such approval to be conclusively evidenced by the signature of an Authorized Officer thereon; and 

FURTHER RESOLVED, that the terms and provisions of the Form of Transfer Agent Instructions (the “Instructions”) are hereby
approved and the Authorized Officers are authorized to execute and deliver the Instructions (pursuant to the terms of the Purchase Agreement), with such amendments, changes, additions and deletions as the Authorized Officers may deem appropriate and
approve on behalf of, the Company, such approval to be conclusively evidenced by the signature of an Authorized Officer thereon; and 

 Execution of Purchase Agreement 

FURTHER RESOLVED, that the Company be and it hereby is authorized to execute the Purchase Agreement providing for the purchase of common stock
of the Company having an aggregate value of up to $22,000,000; and 
 Issuance of Common Stock 

FURTHER RESOLVED, that the Company is hereby authorized to issue the Commitment Shares to Aspire as Commitment Shares and that upon issuance
of the Commitment Shares pursuant to the Purchase Agreement, the Commitment Shares shall be duly authorized, validly issued, fully paid and non-assessable; and 

FURTHER RESOLVED, that the Company is hereby authorized to issue shares of Common Stock upon the purchase of Purchase Shares up to the
available amount under the Purchase Agreement in accordance with the terms of the Purchase Agreement and that, upon issuance of the Purchase Shares pursuant to the Purchase Agreement, the Purchase Shares will be duly authorized, validly issued,
fully paid and non-assessable; and 
 FURTHER RESOLVED, that the officers of the Company be, and each of them hereby is, authorized and
directed, for and on behalf of the Company, to execute and deliver one or more stock certificates representing any Aspire Shares sold under the Purchase Agreement in such form as may be approved by such officers, or to cause any such Aspire Shares
to be delivered through electronic book entry; and 
 FURTHER RESOLVED, that the consideration for the Aspire Shares, as set forth in the
Purchase Agreement, is deemed to constitute fair and adequate consideration, and payment in full, for such shares; and 
 FURTHER RESOLVED,
that the issuance by the Company of the Aspire Shares pursuant to the Purchase Agreement is hereby authorized and approved for all purposes under Nevada Revised Statutes 78.411 through 78.444, inclusive; and 

FURTHER RESOLVED, that the prior issuances by the Company of shares of Common Stock (including the outstanding shares of Common Stock as
reflected in the Purchase Agreement or any registration statement or prospectus relating to the Aspire Shares) are hereby authorized, approved, ratified and confirmed in all respects, and all such shares have been validly issued and are fully paid
and non-assessable; and 
 Listing of Shares on the NASDAQ Capital Market 

FURTHER RESOLVED, that the officers of the Company with the assistance of counsel be, and each of them hereby is, authorized and directed to
take all necessary steps and do all other things necessary and appropriate to effect the listing of the Aspire Shares on the NASDAQ Capital Market; and 

 Approval of Actions 

FURTHER RESOLVED, that, without limiting the foregoing, the Authorized Officers are, and each of them hereby is, authorized and directed to
proceed on behalf of the Company and to take all such steps as deemed necessary or appropriate, with the advice and assistance of counsel, to cause the Company to consummate the agreements referred to herein and to perform its obligations under such
agreements; and 
 FURTHER RESOLVED, that the Authorized Officers be, and each of them hereby is, authorized, empowered and directed on
behalf of and in the name of the Company, to take or cause to be taken all such further actions and to execute and deliver or cause to be executed and delivered all such further agreements, amendments, documents, certificates, reports, schedules,
applications, notices, letters and undertakings and to incur and pay all such fees and expenses as in their judgment shall be necessary, proper or desirable to carry into effect the purpose and intent of any and all of the foregoing resolutions, and
that all actions heretofore taken by any officer or director of the Company in connection with the transactions contemplated by the agreements described herein are hereby approved, ratified and confirmed in all respects. 

 EXHIBIT C 

FORM OF SECRETARY’S CERTIFICATE 

This Secretary’s Certificate (the “Certificate”) is being delivered pursuant to Section 7(k) of that certain Common
Stock Purchase Agreement dated as of August 12, 2014 (the “Common Stock Purchase Agreement”), by and between APRICUS BIOSCIENCES, INC., a Nevada corporation (the “Company”) and ASPIRE CAPITAL FUND,
LLC, an Illinois limited liability company (the “Buyer”), pursuant to which the Company may sell to the Buyer up to Twenty-Two Million Dollars ($22,000,000) of the Company’s Common Stock, par value $0.001 (the
“Common Stock”). Terms used herein and not otherwise defined shall have the meanings ascribed to them in the Common Stock Purchase Agreement. 

The undersigned,
                                    , Secretary of the
Company, hereby certifies as follows in his capacity as such: 
 1. I am the Secretary of the Company and make the statements
contained in this Secretary’s Certificate. 
 2. Attached hereto as Exhibit A and Exhibit B are true, correct and
complete copies of the Company’s bylaws (“Bylaws”) and Articles of Incorporation (“Articles of Incorporation”), in each case, as amended through the date hereof, and no action has been taken by the Company, its
directors, officers or stockholders, in contemplation of the filing of any further amendment relating to or affecting the Bylaws or Articles. 

3. Attached hereto as Exhibit C are true, correct and complete copies of the resolutions duly adopted by the Board of Directors
of the Company on                         , 2014 at which a quorum was present and acting throughout. Such resolutions
have not been amended, modified or rescinded and remain in full force and effect and such resolutions are the only resolutions adopted by the Company’s Board of Directors, or any committee thereof, or the stockholders of the Company relating to
or affecting (i) the entering into and performance of the Common Stock Purchase Agreement, or the issuance, offering and sale of the Purchase Shares and the Commitment Shares and (ii) and the performance of the Company of its obligation
under the Transaction Documents as contemplated therein. 
 4. As of the date hereof, the authorized, issued and reserved
capital stock of the Company is as set forth on Exhibit D hereto. 
 IN WITNESS WHEREOF, I have hereunder signed my name on this
         day of
                                . 

 

							
		  		  	 	  	
		  		  	                                      
  , Secretary	  	

 The undersigned as
                         of Apricus Biosciences, Inc., a Nevada corporation, hereby certifies that
                                     is the duly elected,
appointed, qualified and acting Secretary of
                                         
                                         
                              , and that the signature appearing above is his/her genuine
signature.

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