Document:

Exhibit 10.24

 

THIRD AMENDMENT TO SUBLEASE AGREEMENT

 

THIS THIRD AMENDMENT TO SUBLEASE AGREEMENT (this “Third Amendment”), dated this 29th day of December, 2010, is executed by and between Novavax, Inc., a  Delaware Corporation (“Sublandlord”) and PuriCore, Inc., a Delaware Corporation, successor-in-interest to Sterilox Technologies, Inc. (“Subtenant”).

 

RECITALS

 

WHEREAS, pursuant to a Lease Agreement dated July 15, 2004 (“Prime Lease”) Sublandlord leased from Liberty Property Limited Partnership, a Pennsylvania limited partnership (“Prime Landlord”) approximately 32,908 rentable square feet of space on the first and second floors (the “Premises”) of the building located at 508 Lapp Road, Malvern, Pennsylvania 19355 (the “Property”); and

 

WHEREAS, Prime Landlord and Sublandlord entered into an Amendment to Lease Agreement and Consent to Sublease dated June 1, 2006; and

 

WHEREAS, Sublandlord and Subtenant entered into a Sublease Agreement dated April 28, 2006 (the “Original Sublease”) pursuant to which Subtenant agreed to sublease a portion of the Premises (the “Sublease Premises”) from Sublandlord; and

 

WHEREAS, Sublandlord and Subtenant entered into that certain Amendment to Sublease dated October 25, 2006 (the “First Amendment to Sublease”), pursuant to which the parties amended the Original Sublease as more particularly set forth therein;

 

WHEREAS, Sublandlord and Subtenant entered into that certain Second Amendment to Sublease Agreement dated April 22, 2009 (with an effective date of November 1, 2008) (the “Second Amendment to Sublease Agreement”), pursuant to which the Sublease Premises was expanded to include the entire Premises, containing 32,908 rentable square feet, as described above, and including additional amendments to the Original Sublease as more particularly set forth therein;

 

WHEREAS, the Original Sublease, as amended by the First and Second Amendments to Sublease, is hereinafter referred to as the “Sublease”; and

 

WHEREAS, Sublandlord and Subtenant now wish to further amend the Sublease as set forth in this Third Amendment.

 

NOW, THEREFORE, for and in consideration of the agreements of the parties set forth below and intending to be legally bound, Sublandlord, and Subtenant hereby agree as follows:

 

  

1

  

 

	
  

	
1.

	
Incorporation of Recitals.  The parties hereto acknowledge and agree that the recitals hereinabove set forth are true and correct in all respects and that the same are incorporated herein and made a part hereof.

 

	
  

	
2.

	
Representations.

 

	
  

	
(a)

	
Sublandlord  hereby represents and warrants to Subtenant the following facts:

 

	
  

	
(1)

	
Except as modified by this Third Amendment, the Sublease is in full force and effect and constitutes the entire rental agreement between Sublandlord and Subtenant for the Sublease Premises;

 

	
  

	
(2)

	
There are no existing defaults on the part of Sublandlord, or to Sublandlord’s knowledge, Subtenant under the Sublease;

 

	
  

	
(3)

	
Neither Prime Landlord nor Sublandlord is in default under the Prime Lease, and to Sublandlord's knowledge, there exists no state of facts and no event has occurred which, with the passage of time or the giving of notice, or both, would constitute a default by either Prime Landlord or Sublandlord under the Prime Lease; and

 

	
  

	
(4)

	
Sublandlord has paid to Prime Landlord any and all sums owed to Prime Landlord under the Prime Lease as of the date of this Third Amendment;

 

	
  

	
(5)

	
To Sublandlord's knowledge, no part of the Security Deposit has been applied by Prime Landlord to satisfy Sublandlord’s obligations under the Prime Lease;

 

	
  

	
(6)

	
Sublandlord has no knowledge of any environmental condition that affects the use or operation in any way of that portion of the Premises not currently being occupied by Subtenant.

 

	
  

	
(b)

	
Subtenant hereby represents and warrants to Sublandlord the following facts:

 

	
  

	
(1)

	
Except as modified by this  Third Amendment, the Sublease is in full force and effect and constitutes the entire rental agreement between Sublandlord and Subtenant for the Sublease Premises;

 

	
  

	
(2)

	
Subtenant is in full and complete possession of the Sublease Premises; and

 

	
  

	
(3)

	
There are no existing defaults on the part of Subtenant, or to Subtenant’s knowledge, Sublandlord, under the Sublease.

 

  

2

  

 

	
  

	
3.

	
Option to Renew.  Subtenant hereby exercises its Option, as described in Section 5 of the Second Amendment to Sublease Agreement.  The Option Term shall commence on October 1, 2011 and shall continue for a period of two years (2) and eleven (11) months, expiring on August 31, 2014.  The parties hereto acknowledge and agree that the Option Term set forth herein is one (1) month less than the length of the Option Term as originally set forth in the Second Amendment to Sublease Agreement.  Subtenant shall have no further right to extend the term of the Sublease.

 

	
  

	
4.

	
Rent for the Option Term.  Notwithstanding anything to the contrary set forth in the Second Amendment to Sublease Agreement, Subtenant shall pay to Sublandlord, in the manner set forth in Section 6 of the Second Amendment to Sublease Agreement, the following Subrent for the remainder of the Term and for the Option Term:

 

	
Period

	 	
Amount psf

	 	 	
Annual Amount

	 
	  	 	 	 	 	 	 
	
01/01/11 – 10/31/11

	 	$	8.51	 	 	$	280,047.08	 
	  	 	 	 	 	 	 	 	 
	
11/01/11 – 10/31/12

	 	$	8.73	 	 	$	287,286.84	 
	  	 	 	 	 	 	 	 	 
	
11/01/12 – 10/31/13

	 	$	8.94	 	 	$	294,197.52	 
	  	 	 	 	 	 	 	 	 
	
11/01/13 – 08/31/14

	 	$	9.17	 	 	$	301,766.36	 

 

Subtenant shall make all payments of Subrent to Sublandlord on the first day of each month via ACH wire transfer.

 

	
  

	
5.

	
Operating Expenses/Utilities.  For the remainder of the Term and continuing through the Option Term, Subtenant shall continue to reimburse Sublandlord for all Operating Expenses and Utilities pursuant to Section 6(b) of the Second Amendment to Sublease Agreement.

 

	
  

	
6.

	
Security Deposit/Letter of Credit.  Section 6(d) of the Sublease is hereby deleted, and the following new paragraph (d) is substituted in lieu thereof:

 

“d.  In lieu of a cash security deposit, Subtenant shall deliver to Sublandlord, simultaneously with the execution of this Third Amendment, a 12-month irrevocable Letter of Credit (the ‘Letter of Credit’), renewable automatically on an annual basis at the commencement of each new calendar year during the remaining Term of the Sublease and including the Option Term, in a form acceptable to Sublandlord, by a reputable bank which is a member of the United States Federal Reserve System (the ‘Issuing Bank’), in the amount of One Hundred Thousand Dollars ($100,000.00), with the first half of the Letter of Credit ($50,000.00) required by January 1, 2011, and the second $50,000.00 required by March 1, 2011.  Subtenant may provide two separate Letters of Credit, if necessary, which shall collectively be deemed the ‘Letter of Credit’.”

 

  

3

  

 

	
  

	
7.

	
Brokerage Commissions.  Sublandlord and Subtenant represent to each other that neither party has engaged a broker or other person who may be owed a commission in connection with the transactions contemplated by this Third Amendment other than Scheer Partners, which represents Sublandlord and will be paid separately by Sublandlord pursuant to a separate written agreement, and no other broker is entitled to a leasing commission in connection with the transaction effectuated hereby.  Sublandlord and  Subtenant shall indemnify and hold each other harmless against all claims, damages, costs or expenses, including reasonable attorney’s fees and litigation costs, resulting directly or indirectly from any claim by any other party for brokerage or similar fees or commissions arising as a result of its agreement or actions relating to the transaction effectuated hereby.

 

	
  

	
8.

	
Continuing Agreements; Novation.  Except as expressly modified hereby, the parties hereto ratify and confirm each and every provision of the Sublease as if the same were set forth herein.  In the event that any of the terms and conditions in the Sublease conflict in any way with the terms and provisions hereof, the terms and provisions hereof shall prevail.  The parties hereto covenant and agree that the execution of this Third Amendment is not intended to and shall not cause or result in a novation with regard to the Sublease.

 

	
  

	
9.

	
ENTIRE AGREEMENT.  NO STATEMENTS, AGREEMENTS OR REPRESENTATIONS, ORAL OR WRITTEN, WHICH MAY HAVE BEEN MADE TO EITHER PARTY OR TO ANY EMPLOYEE OR AGENT OF EITHER PARTY, EITHER BY SUCH PARTY OR BY ANY EMPLOYEE, AGENT OR BROKER ACTING ON SUCH PARTY’S BEHALF, WITH RESPECT TO THE MODIFICATION OF THE SUBLEASE, SHALL BE OF ANY FORCE OR EFFECT, EXCEPT TO THE EXTENT STATED IN THIS FIRST AMENDMENT, AND ALL PRIOR AGREEMENTS AND REPRESENTATIONS WITH RESPECT TO THE MODIFICATION OF THE SUBLEASE ARE MERGED HEREIN.

 

	
  

	
10.

	
Capitalized Terms.   Each capitalized term used herein but not defined shall have the meaning ascribed to such term in the Sublease.

 

	
  

	
11.

	
Captions.  The captions herein set forth are for convenience only and shall not be deemed to define, limit or describe the scope or intent of this Third Amendment.

 

	
  

	
12.

	
Governing Law.  The provisions of this Third Amendment shall be construed, interpreted and enforced in accordance with the laws of the Commonwealth of Pennsylvania as the same may be in effect from time to time.

 

	
  

	
13.

	
Counterparts.  This Third Amendment may be executed in any number of counterparts, and each such counterpart shall be deemed to be an original.  It shall not be necessary that the signature of, or on behalf of, each party, or that the signatures of the persons required to bind any party, appear on more than one counterpart.

 

  

4

  

 

	
  

	
14.

	
Sublease by Subtenant.  If Subtenant desires to sublet the Premises pursuant to Section 18 of the Prime Lease, Sublandlord shall use commercially reasonable efforts to assist Subtenant in obtaining the necessary approvals from the Prime Landlord and shall be reasonable in whether or not to provide its own consent to any such sublet.

 

IN WITNESS WHEREOF, the parties hereto have executed this Third Amendment under seal as of the date first above written.

 

	
WITNESS:

	  	
SUBLANDLORD:

	  	  	  
	  	  	
Novavax, Inc.

	  	  	  	  
	    	  	
By:

	
/s/ Frederick W. Driscoll

	  	  	
Name:

	
Frederick W. Driscoll

	  	  	
Title:

	
VP, CFO & Treasurer

	  	  	  	  
	
WITNESS:

	  	
SUBTENANT:

	  	  	  
	  	  	
PuriCore, Inc.

	  	  	  	  
	    	  	
By:

	
/s/ Darren D. Weiss

	  	  	
Name:

	
Darren D. Weiss

	  	  	
Title:

	
Chief Financial Officer

 

  

5TERMINATION AGREEMENT

THIS TERMINATION AGREEMENT (the “Termination Agreement”), is made and entered into as of March 22, 2011, by and among Buddha Steel, Inc., a Delaware corporation (“Buddha”); the majority shareholder of Buddha listed on Schedule A attached hereto and made a part hereof (the “Buddha Shareholder”); Gold Promise (Hong Kong) Group Co., Limited, a Hong Kong Corporation (“Gold Promise”); Hebei Anbang Investment Consultation Co., Ltd., a Chinese company (“HAIC”); and Dachang Hui Autonomous County Baosheng Steel Products Co., Ltd., a Chinese company (“Baosheng Steel”). Buddha, the Buddha Shareholder, Gold Promise, HAIC and Baosheng Steel are sometimes referred to herein collectively as the “Parties” and individually as the “Party”).

Recitals:

A.           On April 2, 2010, HAIC, Baosheng Steel and the shareholders of Baosheng Steel entered into a series of contractual arrangements (the “Control Agreements”) pursuant to which Baosheng Steel became a controlled affiliate of HAIC. The Control Agreements consisted of the following agreements:

	
  

	
(i)

	
Consulting Services Agreement

	
  

	
(ii)

	
Operating Agreement

	
  

	
(iii)

	
Voting Rights Proxy Agreement

	
  

	
(iv)

	
Option Agreement

	
  

	
(v)

	
Equity Pledge Agreement

B.           On April 28, 2010, Buddha entered into a Share Exchange Agreement with Gold Promise. The Share Exchange Agreement effected a reverse acquisition by which Buddha acquired all of the shares of Gold Promise and the shareholders of Gold Promise became the controlling shareholders of Buddha.

C.           On March 10, 2011 (the “Notice Date”), Baosheng Steel received notice (the “Notice”) from the Hebei Province Dachang Hui Autonomous County Bureau of Commnerce that the Control Agreements contravene current Chinese management policies related to foreign-invested enterprises and, as a result, are against public policy.

D.           The Parties have each mutually agreed to, and determined that it is fair to, and in their best interests to, terminate the Control Agreements upon the terms and subject to the conditions set forth in this Termination Agreement.

E.           A majority of the Buddha shareholders have approved this Termination Agreement and the transactions contemplated and described hereby, including, without limitation, to rescind the Control Agreements and the transactions contemplated thereby as if they never occurred, upon the terms and subject to the conditions set forth in this Termination Agreement.  In particular, the parties have agreed that, in light of the Notice, Buddha, Gold Promise and HAIC are not entitled to receive any payments under the Control Agreements for services provided thereunder and will, instead, repay to Baosheng Steel all amounts received, if any, for such services.

F.           Effective ab initio, and subject to the terms set forth herein, the Parties agree to rescind the Control Agreements, upon the terms and subject to the conditions set forth in this Termination Agreement.

Agreement

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

1.           Recitals. The above stated Recitals are true and correct and are incorporated by reference into this Agreement.

 

  

 

  

2.           Termination.

(a)           Effective ab initio, each and all of the Control Agreements, in their entirety, are hereby unequivocally rescinded, abrogated, cancelled, void in their inception and of no force or effect whatsoever, and the Parties shall be returned to their positions prior to the entry into such Control Agreements. The obligations of all Parties shall be terminated as if the parties had never entered into the Control Agreements.

(b)           Baosheng Steel is hereby released from any and all liability for any payments due to Buddha, Gold Promise or HAIC under the Control Agreements, both as any such payments may be due and owing and as such payments may in the future become due.

(c)           On the date hereof, Buddha, Gold Promise and HAIC, and each of them, shall repay to Baosheng Steel any and all amounts that Baosheng Steel has previously paid to any of Buddha, Gold Promise or HAIC under the Control Agreements.  The Parties agree that the aggregate amount of such repayment shall be $0.

3.           Representations.

(a)           Each Party has all requisite corporate power and authority to enter into and perform this Termination Agreement and to consummate the transactions contemplated hereby.

(b)           Each Party hereby agrees to indemnify and defend the other Parties and their directors and officers and hold them harmless from and against any and all liability, damage, cost or expense incurred on account of or arising out of the actions of an indemnifying Party for:

(i)           Any breach of or inaccuracy in representations, warranties or agreements herein;

(ii)          Any action, suit or proceeding based on a claim that any of said representations, warranties or agreements were inaccurate or misleading or otherwise cause for obtaining damages or redress from an indemnifying Party or any of its directors or officers.

(c)           The representations, warranties and agreements contained in this Termination Agreement shall be binding on each Party’s successors, assigns, heirs and legal representatives and shall inure to the benefit of the respective successors and assigns of the other Parties.

4.           Time of the Essence. The Parties agree and stipulate that time is of the essence with respect to compliance with each and every item set forth in this Termination Agreement.

5.           Report on Form 8- K. The Parties agree that Buddha will file a Form 8-K with the SEC within four (4) days of the date hereof reporting this Termination Agreement.

6.           Counterparts and Fax Signatures. This Termination Agreement may be executed by fax signature and in multiple counterparts, each of which shall be deemed an original and all of which taken together shall be deemed a single instrument.

7.           Benefit. This Termination Agreement shall be binding upon and shall inure only to the benefit of the Parties hereto, and their permitted assigns hereunder. This Termination Agreement shall not be assigned by any Party without the prior written consent of the other Party.

8.           Severability. In the event that any particular provision or provisions of this Termination Agreement or the other agreements contained herein shall for any reason hereafter be determined to be unenforceable, or in violation of any law, governmental order or regulation, such unenforceability or violation shall not affect the remaining provisions of such agreements, which shall continue in full force and effect and be binding upon the respective Parties hereto.

  

2

  

 

9.           Execution Knowing and Voluntary. In executing this Termination Agreement, the Parties severally acknowledge and represent that each: (a) has fully and carefully read and considered this Termination Agreement; (b) has been or has had the opportunity to be fully apprized by its attorneys of the legal effect and meaning of this document and all terms and conditions hereof; (c) is executing this Termination Agreement voluntarily, free from any influence, coercion or duress of any kind.

10.           Attorneys’ Fees. In the event that any Party institutes any action or suit to enforce this Agreement or to secure relief from any default hereunder or breach hereof, the breaching Party or Parties shall reimburse the non-breaching Party or Parties for all costs, including reasonable attorneys’ fees, incurred in connection therewith and in enforcing or collecting any judgment rendered therein.

11.           Governing Law, Forum and Consent to Jurisdiction. This Termination Agreement shall be construed, interpreted and governed in accordance with the laws of the People’s Republic of China. Each of the Parties hereto hereby irrevocably and unconditionally submits for itself and its property in any legal action or proceeding relating to or arising in connection with this Termination Agreement to the exclusive general jurisdiction of the Courts of the People’s Republic of China.

14.           Entire Agreement. This Termination Agreement represents the entire agreement between the Parties relating to the subject matter hereof and supersedes any prior oral or written agreements or undertakings between the Parties to such matters. This Termination Agreement alone fully and completely expresses the agreement of the Parties relating to the subject matter hereof. There are no other courses of dealing, understanding, agreements, representations or warranties, written or oral, except as set forth herein. This Termination Agreement may not be amended, canceled, revoked or otherwise modified except by written agreement executed by all of the Parties hereto.

[Remainder of Page Intentionally Blank]

[Signature Pages Follow]

 

  

3

  

 

IN WITNESS WHEREOF, the Parties hereto have caused this Termination Agreement to be executed by their respective duly authorized officers or representatives and entered into as of the date first above written.

	  	
Buddha Steel, Inc.

	 	 
	  	
By:

	
/s/ Hongzhong Li

	  	
Name:  

	
Hongzhong Li

	  	
Its:

	
Chief Executive Officer

	 	 
	  	
Gold Promise (Hong Kong) Group Co., Limited

	  	  	
By:        

	
Buddha Steel, Inc., sole shareholder

	  	  
	  	  	  	By:	/s/ Hongzhong Li
	  	  	  	Name:  	Hongzhong Li
	  	  	  	Its:	Chief Executive Officer
	  	  
	  	
Hebei Anbang Investment Consultation Co., Ltd.

	  	  	
By:

	
Gold Promise (Hong Kong) Group Co., Limited, sole

	 	 
shareholder

	  	  	  	
By:

	Buddha Steel, Inc., sole shareholder
	  	  	  	  	  	  
	  	  	  	  	
By:

	
/s/ Hongzhong Li

	  	  	  	  	
Name:  

	
Hongzhong Li

	  	  	  	  	
Its:

	
Chief Executive Officer

	  	  
	  	
Dachang Hui Autonomous County Baosheng Steel Products Co.,

Ltd.

	  	  
	  	
By:

	
/s/ Hongzhong Li

	  	
Name:  

	
Hongzhong Li

	  	
Its:

	
Chief Executive Officer

 

  

4

  

 

SCHEDULE A

Buddha Shareholder:

Crowning Elite Limited

 

  

5

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