Document:

atrs-ex101_6.htm

EX 10.1

 

 

 

 

 

 

 

 

 

 

 

 

 

 

LEASE AGREEMENT

 

 

 

 

 

BY AND BETWEEN 

 

WHITEWATER PROPERTIES I, LLC

 

as Landlord

 

and

 

ANTARES PHARMA, INC.

 

as Tenant

 

 

 

 

12500 WHITEWATER DRIVE, MINNETONKA, MINNESOTA

 

 

 

 

 

 

 

 

 

 

 

 

 

TABLE OF CONTENTS

 

_____________________________________

 

LEASE AGREEMENT

 

 

 

	
Article 1 – Basic Lease Provisions and Definitions

	
 
	
 
	
 
	
 
	
 

	
 
	
1.1
	
Basic Lease Provisions and Definitions 
	
1

	
 
	
1.2
	
Landlord Address 
	
1

	
 
	
1.3
	
Tenant Address 
	
1

	
 
	
1.4
	
Premises 
	
1

	
 
	
1.5
	
As-Is Building and Premises
	
2

	
 
	
1.6
	
Tenant’s Work
	
2

	
 
	
1.7
	
Delivery Date
	
2

	
 
	
1.8
	
Tenant Access Prior to Delivery Date
	
2

	
 
	
1.9
	
Rent Commencement Date 
	
2

	
 
	
1.10
	
Lease Term 
	
2

	
 
	
1.11
	
Option Period(s) 
	
2

	
 
	
1.12
	
Base Rent 
	
2

	
 
	
1.13
	
Additional Rent 
	
3

	
 
	
1.14
	
Tenant Allowance 
	
3

	
 
	
1.15
	
Permitted Use
	
3

	
 
	
1.16
	
Brokers
	
3

	
 
	
1.17
	
Security Deposit
	
3

	
 
	
 
	
 
	
 

	
Article 2 – Premises and Lease Term

	
 
	
 
	
 
	
 

	
 
	
2.1
	
Premises 
	
3

	
 
	
2.2
	
Lease Term 
	
3

	
 
	
2.3
	
Option to Extend the Lease Term 
	
3

	
 
	
 
	
(a)
	
Option Right 
	
3

	
 
	
 
	
(b)
	
Exercise of Option 
	
3

	
 
	
2.4
	
Delivery and Acceptance of Premises
	
4

	
 
	
 
	
 
	
 

	
Article 3 – Use of the Premises

	
 
	
 
	
 
	
 
	
 

	
 
	
3.1
	
Permitted Uses 
	
4

	
 
	
3.2
	
Prohibited Uses 
	
4

	
 
	
3.3
	
Intentionally omitted
	
5

	
 
	
3.4
	
Intentionally omitted 
	
5

	
 
	
3.5
	
Quiet Enjoyment
	
5

	
 
	
3.6
	
Hazardous Substances
	
5

	
 
	
3.7
	
Compliance With Laws
	
6

	
 
	
3.8
	
Signs 
	
6

	
 
	
 
	
 
	
 

	
Article 4 – Rent 

	
 
	
 
	
 
	
 
	
 

	
 
	
4.1
	
Payment of Rent 
	
7

i

 

 

	
 
	
4.2
	
Estimate and Payment of Additional Rent 
	
7

	
 
	
4.3
	
Tenant’s Audit Right 
	
7

	
 
	
 
	
 
	
 
	
 

	
Article 5 – Operating Costs; Insurance Premiums and Real Estate Taxes

	
 
	
 
	
 
	
 

	
 
	
5.1
	
Operating Costs 
	
8

	
 
	
5.2
	
Insurance Premiums 
	
8

	
 
	
5.3
	
Real Estate Taxes 
	
8

	
 
	
5.4
	
Additional Tax Liability of Tenant 
	
9

	
 
	
5.5
	
Real Estate Tax Appeals 
	
9

	
 
	
 
	
 
	
 

	
Article 6 – Utilities and Services

	
 
	
 
	
 
	
 

	
 
	
6.1
	
Utilities 
	
9

	
 
	
6.2
	
Trash Removal 
	
10

	
 
	
6.3
	
Utility and Service Interruptions 
	
10

	
 
	
6.4
	
Security 
	
11

	
 
	
 
	
 
	
 

	
Article 7 – Construction of the Premises

	
 
	
 
	
 
	
 

	
 
	
7.1
	
Construction Activities Generally 
	
11

	
 
	
7.2
	
Landlord’s Work
	
11

	
 
	
7.3
	
Tenant’s Work 
	
11

	
 
	
 
	
 
	
 

	
Article 8 – Maintenance and Repair

	
 
	
 
	
 
	
 
	
 

	
 
	
8.1
	
Maintenance, Repair and Replacement by Tenant 
	
11

	
 
	
8.2
	
Failure to Maintain by Tenant 
	
12

	
 
	
8.3
	
HVAC Condition, Maintenance, Repair and Replacement
	
12

	
 
	
 
	
(a) 
	
Existing HVAC Condition
	
12

	
 
	
 
	
(b) 
	
HVAC Maintenance, Repair and Replacement by Tenant
	
13

	
 
	
 
	
(c) 
	
Replacement of Existing Office HVAC Units By Landlord During
	
 

	
 
	
 
	
 
	
First Two Lease Years
	
13

	
 
	
8.4
	
Roof Replacement and Roof Access
	
13

	
 
	
 
	
(a)
	
Roof Replacement By Landlord
	
13

	
 
	
 
	
(b)
	
Roof Access and Penetration
	
14

	
 
	
8.5
	
Maintenance, Repair and Replacement by Landlord 
	
14

	
 
	
8.6
	
Tenant’s Self-Management Option
	
15

	
 
	
 
	
(a)
	
Self-Management Option
	
15

	
 
	
 
	
(b)
	
Exercise of Self-Management Option
	
16

	
 
	
 
	
(c)
	
Definition of Self-Manage
	
16

	
 
	
 
	
(d)
	
Landlord’s and Tenant’s Right to Terminate Self-Management
	
16

	
 
	
 
	
 
	
 
	
 

	
Article 9 – Assignment and Subletting

	
 
	
 
	
 
	
 
	
 

	
 
	
9.1
	
Assignment by Tenant 
	
16

	
 
	
9.2
	
Assignment by Landlord 
	
17

	
 
	
 
	
 
	
 
	
 

	
Article 10 – Access by Landlord 

	
 
	
 
	
 
	
 
	
 

	
 
	
10.1
	
Access
	
18

ii

 

 

	
 
	
 
	
 
	
 
	
 

	
Article 11 – Alterations by Tenant 

	
 
	
 
	
 
	
 
	
 

	
 
	
11.1
	
Alterations by Tenant
	
18

	
 
	
 
	
 
	
 
	
 

	
Article 12 – Insurance

	
 
	
 
	
 
	
 
	
 

	
 
	
12.1
	
Property Insurance 
	
19

	
 
	
 
	
(a)
	
Landlord’s Coverage 
	
19

	
 
	
 
	
(b)
	
Tenant’s Coverage 
	
19

	
 
	
12.2
	
Liability Insurance 
	
19

	
 
	
 
	
(a)
	
Tenant’s Coverage 
	
19

	
 
	
 
	
(b)
	
Landlord’s Coverage 
	
19

	
 
	
12.3
	
Workers’ Compensation and Employers Liability Insurance 
	
19

	
 
	
12.4
	
Self-Insurance and Insurance Coverages for Landlord 
	
20

	
 
	
12.5
	
General Insurance Requirements and Certificates 
	
20

	
 
	
 
	
 
	
 
	
 

	
Article 13 – Indemnification, Waiver of Liability and Limitation of Liability

	
 
	
 
	
 
	
 
	
 

	
 
	
13.1
	
Indemnification 
	
20

	
 
	
13.2
	
Waiver of Liability and Subrogation 
	
21

	
 
	
13.3
	
Exception to Waiver of Liability and Subrogation 
	
21

	
 
	
13.4
	
Limitation of Liability 
	
21

	
 
	
 
	
 
	
 
	
 

	
Article 14 – Liens and Encumbrances 

	
 
	
 
	
 
	
 
	
 

	
 
	
14.1
	
Liens and Encumbrances 
	
22

	
 
	
 
	
 
	
 
	
 

	
Article 15 – Default by Tenant

	
 
	
 
	
 
	
 
	
 

	
 
	
15.1
	
Tenant’s Default 
	
22

	
 
	
 
	
(a)
	
Failure to Pay Rent or Other Amounts Due 
	
22

	
 
	
 
	
(b)
	
Failure to Perform and Other Breach 
	
22

	
 
	
 
	
(c)
	
Abandonment 
	
22

	
 
	
 
	
(d)
	
Intentionally omitted
	
22

	
 
	
 
	
(e)
	
Bankruptcy or Appointment of Receiver 
	
22

	
 
	
15.2
	
Landlord’s Remedies upon Tenant’s Default 
	
23

	
 
	
 
	
(a)
	
Termination of the Lease 
	
23

	
 
	
 
	
(b)
	
Right of Reentry without Termination 
	
23

	
 
	
 
	
(c)
	
Damages without Termination 
	
34

	
 
	
 
	
(d)
	
Damages in the Event of Termination 
	
24

	
 
	
15.3
	
Intentionally omitted
	
24

	
 
	
15.4
	
Late Charges 
	
24

	
 
	
15.5
	
Interest 
	
24

	
 
	
15.6
	
Landlord’s Right to Cure 
	
24

	
 
	
 
	
 
	
 
	
 

	
Article 16 – Default by Landlord 

	
 
	
 
	
 
	
 
	
 

	
 
	
16.1
	
Default by Landlord 
	
25

	
 
	
 
	
 
	
 
	
 

iii

 

 

	
Article 17 – Damage by Fire or Other Casualty

	
 
	
 
	
 
	
 
	
 

	
 
	
17.1
	
Repair and Restoration 
	
25

	
 
	
17.2
	
Irreparable or Uninsured Damage 
	
25

	
 
	
17.3
	
Time Period for Repair and Restoration
	
25

	
 
	
17.4
	
Damage During Last Year of Lease Term 
	
26

	
 
	
17.5
	
Termination of Lease 
	
26

	
 
	
 
	
 
	
 
	
 

	
Article 18 – Eminent Domain

	
 
	
 
	
 
	
 
	
 

	
 
	
18.1
	
Eminent Domain 
	
26

	
 
	
18.2
	
Damages 
	
26

	
 
	
 
	
 
	
 
	
 

	
Article 19 – Subordination, Estoppel Certificates and Financial Statements

	
 
	
 
	
 
	
 
	
 

	
 
	
19.1
	
Subordination, Non-Disturbance and Attornment 
	
27

	
 
	
19.2
	
Tenant’s Estoppel Certificate 
	
27

	
 
	
19.3
	
Mortgagee Protection Clause 
	
27

	
 
	
19.4
	
Financial Statements 
	
27

	
 
	
 
	
 
	
 
	
 

	
Article 20– Surrender of Premises 

	
 
	
 
	
 
	
 
	
 

	
 
	
20.1
	
Surrender of Possession 
	
28

	
 
	
20.2
	
Holding Over 
	
28

	
 
	
 
	
 
	
 
	
 

	
Article 21 – Miscellaneous

	
 
	
 
	
 
	
 
	
 

	
 
	
21.1
	
Successors or Assigns 
	
28

	
 
	
21.2
	
Authority of Parties 
	
28

	
 
	
21.3
	
Severability 
	
29

	
 
	
21.4
	
Waiver 
	
29

	
 
	
21.5
	
Construction 
	
29

	
 
	
21.6
	
Exhibits 
	
29

	
 
	
21.7
	
Captions 
	
29

	
 
	
21.8
	
Time 
	
29

	
 
	
21.9
	
Choice of Law 
	
29

	
 
	
21.10
	
Jury Waiver Clause 
	
29

	
 
	
21.11
	
Legal Expenses 
	
29

	
 
	
21.12
	
Recording 
	
29

	
 
	
21.13
	
Notices 
	
30

	
 
	
21.14
	
Brokerage Commissions 
	
30

	
 
	
21.15
	
Submission 
	
30

	
 
	
21.16
	
Force Majeure 
	
30

	
 
	
21.17
	
Entire Agreement/Amendment 
	
30

	
 
	
21.18
	
Survival 
	
30

	
 
	
21.19
	
Counterparts 
	
31

	
 
	
21.20
	
OFAC Representation 
	
31

	
 
	
 
	
 
	
 

iv

 

 

	
Article 22 – Additional Definitions

	
 
	
 
	
 
	
 
	
 

	
 
	
22.1
	
Additional Definitions
	
31

	
 
	
 
	
(a)
	
ADA 
	
31

	
 
	
 
	
(b)
	
Additional Rent
	
31

	
 
	
 
	
(c)
	
Default Rate of Interest 
	
31

	
 
	
 
	
(d)
	
Effective Date 
	
31

	
 
	
 
	
(e)
	
Expiration Date 
	
31

	
 
	
 
	
(f)
	
Force Majeure 
	
32

	
 
	
 
	
(g)
	
Governmental Regulations 
	
32

	
 
	
 
	
(h)
	
Hazardous Substances 
	
32

	
 
	
 
	
(i)
	
HVAC 
	
32

	
 
	
 
	
(j)
	
Insurance Premiums 
	
32

	
 
	
 
	
(k)
	
Lease 
	
32

	
 
	
 
	
(l)
	
Lease Year 
	
32

	
 
	
 
	
(m)
	
Operating Costs 
	
32

	
 
	
 
	
(n)
	
Option(s) 
	
33

	
 
	
 
	
(o)
	
Real Estate Taxes 
	
33

	
 
	
 
	
(p)
	
Rent 
	
33

	
 
	
 
	
(q)
	
Tenant’s Work 
	
33

	
 
	
 
	
(r)
	
Worth 
	
33

	
 
	
 
	
 
	
 
	
 

	
Exhibits

	
 
	
 
	
 
	
 
	
 

	
 
	
Exhibit A-1
	
Legal Description of the Premises
	
 

	
 
	
Exhibit A-2 
	
Depiction of the Premises (outlined area)
	
 

	
 
	
Exhibit B
	
Tenant’s Work
	
 

	
 
	
Exhibit C
	
Premises Furniture, Fixtures and Equipment
	
 

	
 
	
Exhibit D
	
Existing Office HVAC Units
	
 

	
 
	
Exhibit E
	
Amortization Calculator Example
	
 

 

 

 

 

 

v

 

 

COMMERCIAL LEASE AGREEMENT

 

 

THIS COMMERCIAL LEASE AGREEMENT is made and entered into as of July 1, 2019 by and between WHITEWATER PROPERTIES I, LLC, a Minnesota limited liability company (“Landlord”), and ANTARES PHARMA, INC., a Delaware corporation (“Tenant”).  In consideration of the mutual covenants and agreements contained herein, and for other good and valuable consideration, Landlord leases, rents and demises the Premises to Tenant, and Tenant accepts and leases the Premises from Landlord, upon the following terms and conditions:

 

Article 1 – Basic Lease Provisions and Definitions

 

1.1Basic Lease Provisions and Definitions.  This Article is an integral part of this Lease and all of the following terms are incorporated into this Lease in all respects.  In addition to other terms which are defined in Article 22 and elsewhere in this Lease, the following terms when used in this Lease shall have the meanings set forth in this Article. 

 

1.2Landlord Address.  Landlord’s Address is

 

Whitewater Properties I, LLC

c/o Jerome A. Miller

15563 Calmut Avenue N.E.

Prior Lake, MN 55372

Email: jmillerpriorlake@aol.com 

 

or at such other location as allowed under the notice provision of this Lease. 

 

1.3Tenant Address.  Tenant’s Address is as follows:

 

Antares Pharma, Inc.

3905 Annapolis Lane N, Suite 105

Minneapolis, MN 55447

Attn: Senior Vice President, Operations

 

 

With a copy to:

Antares Pharma, Inc.

100 Princeton South, Suite 300

Ewing, NJ 08628

Attn: General Counsel

 

 

or at such other location as identified in writing by such party in accordance with the notice provision of this Lease. 

 

1.4Premises.  The land legally described as set forth in Exhibit A-1, together with all the improvements within the land, including, but not limited to, a two story building (“Building”) of approximately 75,785 square feet, parking areas, driveways and all other improvements on the property, and all easements and rights benefiting or appurtenant to the Premises.  The approximate area of the Premises is depicted in 

 

	
Lease Agreement – Antares Pharma, Inc.
	
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Minnetonka, Minnesota
	
 

 

 

Exhibit A-2 (outlined area), is located at 12500 Whitewater Drive, Minnetonka, Minnesota, PID No. 35-117-22-23-0012.    

 

1.5As-Is Building and Premises.  Landlord shall deliver the Premises in its “as-is” existing condition.  Landlord hereby conveys to Tenant all of Landlord’s right, title and interest in and to the items listed in Section 2 of Exhibit C of this Lease.  Landlord shall have the right, but not the obligation, prior to the Delivery Date, to remove the items listed in Section 1 of Exhibit C from the Premises, and Landlord shall repair any damage caused by such removals.  Landlord shall not provide or construct any improvements to the Premises and shall not be responsible for any repairs to the Premises, except as provided in Section 8. 

 

1.6Tenant’s Work.  Tenant, at its cost, but subject to reimbursement from the Tenant Allowance, shall construct and install signage, exterior, mechanical, utility, interior, finish and certain other improvements to the Building that are described as Tenant’s Work in Exhibit B. 

 

1.7Delivery Date.  The date upon which Landlord delivers possession of the Premises to Tenant in the condition required hereunder.  The “Delivery Deadline” hereunder is July 1, 2019.

 

1.8Tenant Access Prior to Delivery Date.  Prior to the Delivery Date, Landlord may, in Landlord’s sole discretion, provide Tenant with early access to the Premises.  All work being performed by Tenant during the early access period by or on behalf of Tenant must be coordinated between Tenant’s contractor or vendor and Landlord.  Unless approved in writing by Landlord, Tenant shall not be allowed to demo existing improvements, or commence construction of Tenant’s Work until Tenant’s Plans for Tenant’s Work are approved by Landlord, all governmental permits and approvals for Tenant’s Work have been obtained by Tenant, and all other requirements of this Lease are met by Tenant.  Tenant’s early access shall at all times be subject to and governed by all provisions of the Lease, including, but not limited to, Tenant’s indemnification and insurance obligations.  Tenant shall not pay Base Rent or Additional Rent but shall be responsible to pay for all utility services during the early access period.  Except for the work allowed under this Section, Tenant shall perform no other work or activity within the Premises prior to the Delivery Date.

 

1.9Rent Commencement Date.  January 1, 2020.  

 

1.10Lease Term.  The period beginning on the Delivery Date and ending on the date that is the last day of the calendar month that is twelve (12) years after the Rent Commencement Date.  The Lease Term shall be extended to include any exercised Option Period. 

 

1.11Option Period(s).  Option Period is one (1) successive period of three (3) years.

 

1.12Base Rent.  The annual rent payment amounts are set forth below.  

 

	
Lease Year
	
Amount of Annual Base Rent
	
Monthly Base Rent

	
1
	
$180,372
	
$15,031 

	
2
	
$281,160
	
$23,430 

	
3
	
$625,224
	
$52,102 

	
4
	
$638,112
	
$53,176 

	
5
	
$650,232
	
$54,186 

	
6
	
$663,120
	
$55,260 

	
7
	
$676,764
	
$56,397 

	
8
	
$690,396
	
$57,533 

	
9
	
$704,040
	
$58,670 

 

	
Lease Agreement – Antares Pharma, Inc.
	
Page 2

	
Minnetonka, Minnesota
	
 

 

 

	
Lease Year
	
Amount of Annual Base Rent
	
Monthly Base Rent

	
10
	
$718,440
	
$59,870 

	
11
	
$732,840
	
$61,070 

	
12
	
$747,240
	
$62,270 

	
Option Period
	
 
	
 

	
13
	
$762,396
	
$63,533 

	
14
	
$777,552
	
$64,796 

	
15
	
$792,708
	
$66,059

 

1.13Additional Rent.   “Additional Rent” means all payments required to be made by Tenant to Landlord under this Lease other than Base Rent.  Additional Rent includes, but is not limited to, Real Estate Taxes, Insurance Premiums and Operating Costs.   

 

1.14Tenant Allowance.  “Tenant Allowance” means the amount Landlord shall reimburse Tenant for space planning, designing, engineering and constructing Tenant’s Work up to the maximum amount of one million two hundred nine thousand ninety-four and 20/100 dollars ($1,209,094.20), which shall be disbursed to Tenant in accordance with Exhibit B.  

 

1.15Permitted Use.  The Premises may be used for all legally permitted uses, including but not limited to the manufacturing and assembly of pharmaceutical and medical device products

 

 

1.16Brokers.  Landlord’s Broker is Jim DePietro of CBRE.  Tenant’s Broker is Neil Kolatkar of CBRE.  

 

1.17Security Deposit.  None.

 

Article 2 – Premises and Lease Term

 

2.1Premises.  Landlord hereby leases, rents and demises the Premises to Tenant, and Tenant hereby accepts and leases the Premises from Landlord.  Landlord and Tenant acknowledge that the size of the Premises in Section 1.4 is an approximate measurement that Landlord and Tenant have agreed to for purposes of this Lease.  No calculations in this Lease shall change based upon a re-measure of the Premises. 

 

2.2Lease Term.  This Lease shall be for the term defined as the Lease Term in Article 1.  The Lease Term shall commence on the Delivery Date and shall terminate at 11:59 p.m. of the Expiration Date.  Notwithstanding the fact that the Lease Term commences on the Delivery Date, all terms and conditions of this Lease, and all of the obligations of Landlord and Tenant as set forth in this Lease, are binding and of full force and effect from and after the Effective Date.  

 

2.3Option to Extend the Lease Term.

 

(a)Option Right.  Tenant is granted the right to extend the Lease Term for the Option Period pursuant to the terms and conditions set forth herein.  Tenant shall have no right to exercise the Option during any period in which an Event of Default is continuing.

 

(b)Exercise of Option.  To exercise the Option, Tenant shall notify Landlord in writing of its specific exercise of the Option no later than twelve (12) months prior to the Expiration Date.  The option notification shall be given in the manner provided in this Lease for the giving of notices to Landlord.  If Tenant fails to timely provide a proper option notification, Tenant shall have no further 

 

	
Lease Agreement – Antares Pharma, Inc.
	
Page 3

	
Minnetonka, Minnesota
	
 

 

 

or additional right or Option to extend or renew the Lease Term.  In the event Tenant properly exercises its Option, all of the terms and conditions of this Lease shall apply during the Option Period, including, but not limited to, Tenant’s obligation to pay Rent, subject to the following:  (1) the Option exercised by the Tenant shall no longer be available and may not be exercised again by Tenant; (2) no rental concession, reduced or free Rent, tenant allowance or other concession previously granted Tenant by Landlord shall be due or payable to Tenant during or with respect to such Option Period; and (3) Base Rent during the Option Period shall be as set forth in Article 1.  

 

2.4Delivery and Acceptance of Premises.  Landlord covenants and agrees to deliver possession of the Premises to Tenant on or before the Delivery Deadline.  Landlord shall deliver and Tenant shall accept the Premises in its existing condition on an “as is” basis without representation or warranty of any kind except (a) Landlord represents that the loading dock doors and dock packages are in working order on the Delivery Date; (b) the representations and warranties with regard to HVAC contained in Section 8.3 hereof and (c) as expressly provided herein.  Notwithstanding the foregoing, Landlord may, but is not obligated to, remove the items listed in Section 1 of Exhibit C from the Premises before the Delivery Date.  If Landlord fails to deliver possession of the Premises in the condition required hereunder by the Delivery Deadline (subject to Force Majeure), then, for each day of delay thereafter, Tenant shall be entitled to a credit of one (1) day of free Rent against Base Rent due after the Rent Commencement Date.  Notwithstanding any other provisions of this Lease to the contrary, Tenant shall have the right to terminate this Lease without further obligation to Landlord in the event Landlord fails to deliver possession of the Premises in the condition required hereunder by August 1, 2019, by giving written notice to Landlord of such termination at any time after such failure and before Landlord delivers the Premises.  If this Lease is terminated as provided above, both parties shall automatically be released from any further liability or obligation whatsoever arising out of or based upon this Lease, except any obligation that specifically survives termination.  Tenant shall not occupy the Premises prior to the Delivery Date unless the Landlord’s written consent is obtained.  Prior to any occupancy by the Tenant of the Premises, Tenant shall provide notice of its occupancy to Landlord.  Tenant shall be subject to all terms and conditions of this Lease during occupancy of the Premises, shall pay all utility costs incurred during occupancy and shall insure the Premises as required under this Lease, provided, however, Tenant shall not be required to pay Operating Costs or Real Estate Taxes (except the one-time payment provided in Section 5.3) for the period from the Delivery Date to Rent Commencement Date.  Within ten (10) days of Landlord’s request, Landlord and Tenant shall execute a ratification agreement that shall confirm the Delivery Date, the Rent Commencement Date and the expiration date of the Term of this Lease, shall acknowledge the Base Rent, delivery of the Premises in the condition required by this Lease, Tenant’s Plans, and the status of the payment of the Tenant Allowance, consistent with the terms and conditions of this Lease. 

 

Article 3 – Use of the Premises

 

3.1Permitted Uses.  Tenant shall occupy and use the Premises solely for the Permitted Use, subject to both Governmental Regulations and the requirements of this Lease.  Tenant may operate its business 24 hours per day if allowed by Governmental Regulations.  If any governmental or third party approvals are required for the Permitted Use, it shall be Tenant’s responsibility to obtain such approvals.  Tenant shall, at its sole cost and expense, use reasonable efforts to obtain the aforesaid approvals for the Permitted Use.

 

3.2Prohibited Uses.  Tenant shall not use the Premises for any use other than the Permitted Use.  Tenant shall not use or allow the Premises to be used for any unlawful purpose.  Tenant shall not commit or allow to be committed (provided any acts or omissions of Landlord shall not be deemed to have been “allowed” by Tenant) nuisance or waste at or outside the Premises and shall take all reasonable action to prevent odors, emissions, fumes, liquids or other substances or excessive noise or vibrations from escaping or extending beyond the Premises.  Tenant shall not do anything at or outside the Premises, nor bring or keep anything 

 

	
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Minnetonka, Minnesota
	
 

 

 

therein, which will cancel, affect or unreasonably increase the existing rate of any insurance (provided the foregoing shall not apply so long as Tenant is using the Premises for the Permitted Use).  Tenant shall not: (a) keep any live animals except service animals or fish in aquariums at the Premises; or (b) use the Premises as living quarters, sleeping quarters or for lodging purposes; (c) paint or decorate the exterior of the Premises; and (d) alter or modify the exterior walls or structural portions of the Building without the prior written approval of Landlord (which approval shall not be unreasonably withheld, conditioned or delayed), including, but not limited to, the roof, roof membrane, concrete slab, foundation and bearing walls.  Tenant shall not, without the express written permission of Landlord, conduct, or permit to be conducted, any auction, fire, bankruptcy, “going out of business” or other distress sale at or outside the Premises, whether said auction be voluntary, involuntary, pursuant to any assignment for the payment of creditors or pursuant to any bankruptcy or other insolvency proceeding.

 

3.3Intentionally omitted. 

 

3.4Intentionally omitted.  

 

3.5Quiet Enjoyment.  So long as no Event of Default is continuing hereunder, Tenant shall have quiet and peaceful possession and enjoyment of the Premises for the Lease Term, subject to the terms and conditions of this Lease, without interference by any person or entity claiming by, through or under Landlord.

 

3.6Hazardous Substances.  Tenant shall not store, generate, discharge, treat, dispose of, sell, handle or transport any Hazardous Substances on or about the Premises, except for Hazardous Substances commonly utilized in the operation of the Permitted Use, but then only in such quantities and to the extent allowed under Governmental Regulations.  In all events any Hazardous Substances shall be handled and stored in strict compliance with all Governmental Regulations and environmental requirements, and evidence of such compliance shall be given to Landlord if requested by Landlord.  All Hazardous Substances shall be disposed of in accordance with Governmental Regulations and environmental requirements.  In no event shall any Hazardous Substances be disposed of on the Premises through the sewer system serving the Premises or stored underground.  In addition, Tenant shall comply with, and immediately, upon request, provide Landlord with copies of all permits, inspection reports, monitoring reports, licenses, orders, demands, compliance requests, edicts or other documents filed, served, delivered or transmitted either with, to or from the Minnesota Department of Health, Minnesota Pollution Control Agency or the Environmental Protection Agency (or any successor organization) or other governmental body.  If Tenant becomes aware that any Hazardous Substances have been released or are located at or beneath the Premises, Tenant shall immediately give written notice to Landlord of such condition.  At the end of the Lease Term or earlier termination of Tenant's possession of the Premises, Tenant shall remove, at its cost, and in full compliance with all applicable Governmental Regulations and environmental requirements, all Hazardous Substances from the Premises caused or permitted by Tenant.  Tenant agrees to indemnify and hold the Landlord harmless from all claims, lawsuits, costs, expenses, damages or liabilities (including reasonable attorneys’ fees and costs) arising from Tenant’s breach of any of the obligations or representations contained in this Section, including costs of remediation, cleanup and detoxification of the Premises.  Tenant further agrees to indemnify and hold Landlord harmless from all claims, lawsuits, costs, expenses, damages or liabilities (including reasonable attorneys’ fees and costs) as a result of any release of Hazardous Substances caused by Tenant at the Premises, provided that this indemnity obligation is limited to costs, damages and liability for clean-up or remediation of Hazardous Substances, and does not include damages or liability to persons or to Landlord’s business or for incidental or consequential damages such as lost profits or closure of the business resulting from the existence of Hazardous Substances.  For purposes of clarity, in no event shall Tenant’s indemnity in this Section 3.6 apply to Hazardous Substances that were introduced to the Premises 

 

	
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by anyone other than Tenant, Tenant’s employees, contractors, licensees, agents, vendors, customers and invitees. The provisions of this Section shall survive the expiration or termination of this Lease. 

 

To Landlord’s knowledge without investigation, the Premises is free of Hazardous Substances on the Delivery Date, but excluding any Hazardous Substances brought onto the Premises prior to the Delivery Date to Tenant by Tenant or its employees, contractors, licensees, agents, vendors, customers and invitees.  Landlord represents and warrants to Tenant that, to Landlord’s knowledge without investigation, any handling, transportation, storage, treatment or usage of Hazardous Substances that has occurred on the Premises or otherwise within the Building prior to the Delivery Date has been in compliance with all Governmental Regulations.  Landlord agrees to indemnify, defend and hold Tenant harmless from all claims, lawsuits, costs, expenses, damages or liabilities (including reasonable attorneys’ fees and costs) arising from Landlord’s breach of any of the obligations or representations contained in this Section, provided that this indemnity obligation for existing Hazardous Substances is limited to costs, damages and liability for clean-up or remediation of Hazardous Substances, and does not include damages or liability to persons or to Tenant’s business or for incidental or consequential damages such as lost profits or closure of the business resulting from the existence of Hazardous Substances, but the indemnity shall expressly cover Tenant's costs of relocation from the Premises if Tenant relocates because of Hazardous Substances at the Premises.  The provisions of this Section shall survive the expiration or termination of this Lease. 

 

Tenant, at its cost, further agrees to comply with each present and future Governmental Regulations and environmental requirements regulating the collection, sorting, separation, recycling of waste products, garbage, refuse, infectious waste and trash (collectively, the “Waste”) in or about the Premises.  Tenant shall sort and separate the Waste into such containers and categories as required by Governmental Regulations.  Such separate receptacles shall be removed from the Premises in accordance with collection schedules prescribed by Governmental Regulations or otherwise reasonably prescribed by Tenant.

 

3.7Compliance with Laws.  Landlord represents that, to the best of Landlord’s knowledge without investigation, the Building and Premises as constructed by Landlord are in compliance with all Governmental Regulations as of the Delivery Date.  Tenant shall, at its cost, promptly comply with all Governmental Regulations, including Governmental Regulations enacted from and after the Delivery Date, that are applicable to or triggered by: (1) Tenant’s Work; (2) the use of the Premises for the Permitted Use; or (3) any construction or alterations to the Premises made by Tenant, even if such compliance would otherwise be Landlord’s responsibility under Section 8.  Notwithstanding the foregoing, if compliance with Governmental Regulations enacted from and after the Delivery Date is not applicable to or triggered by (1)–(3), and the compliance obligation relates to any item which is the Landlord’s responsibility under the terms and conditions of Section 8, then Landlord shall be responsible for such compliance and the cost shall be paid in accordance with Section 8. 

 

3.8Signs.  Tenant may, at its cost, install and maintain exterior building signs and other signs, including but not limited to (i) signage at the entry to the Building, (ii) monument or pylon signage, (iii) flags and flagpoles, and/or (iv) other signage at the entrance to the Premises parking areas or otherwise on the Premises at all times during the Lease Term.  Tenant’s signs are subject to the following terms and conditions:  (a) prior to the installation, modification or replacement of any signs, Tenant shall obtain the written approval of Landlord to specific signage, which approval shall not be unreasonably withheld, delayed or conditioned; (b) Tenant shall be responsible for all costs to construct and install Tenant’s signs; (c) Tenant shall obtain all requisite licenses, permits and governmental approvals for Tenant’s signs, and Tenant acknowledges that Landlord does not represent that any such licenses, permits and governmental approvals shall be forthcoming; (d) intentionally omitted; (e) Tenant’s signs shall at all times comply with all Governmental Regulations, and Landlord’s approval of Tenant’s signs is not a representation of compliance; (f) Tenant assumes all risk of loss with respect to Tenant’s signs and associated wiring; (g) 

 

	
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upon the expiration or earlier termination of the Lease, Tenant shall, at its sole cost, remove Tenant’s signs and repair and restore the Building to the condition substantially similar to that existed prior to the installation of Tenant’s signs (including attempting to eliminate variations in coloration resulting from varying levels of exposure to the elements).  Landlord shall cooperate with Tenant to maximize sign opportunities, provided that such cooperation does not require additional costs.  Additionally, so long as the same complies with Governmental Regulations, Tenant shall have the right to erect temporary signage or other promotional items that advertise Tenant’s grand opening and other significant promotional events, subject to approval by Landlord as set forth above, and Tenant may, without Landlord’s consent, install any and all signs, displays and other advertising matter within the Premises and up to and on the windows as Tenant elects, in its sole discretion.  

 

Article 4 - Rent

 

4.1Payment of Rent.  Commencing on the Rent Commencement Date, Tenant shall pay to Landlord, without notice or demand and without any offset or deduction (except as set forth herein) and as an independent covenant, Base Rent and Additional Rent in monthly installments, in advance, on or before the first day of each calendar month of the Lease Term.  Base Rent and Additional Rent shall be payable to Landlord at Landlord’s address set forth in Article 1.  If the Lease Term commences on a day other than the first day of a calendar month, the Base Rent and Additional Rent for such month shall be a prorated portion of the monthly amount due, based upon a thirty (30) day month, and shall be due and payable upon the Rent Commencement Date.  If the Lease Term expires on a day other than the last day of a calendar month, the Base Rent and Additional Rent due for such month shall be a prorated portion of the monthly amount due, based upon a thirty (30) day month.  Changes in the amount of Base Rent set forth in Article 1 are effective on the anniversary date of a Lease Year, which date is the first day of a calendar month.

 

4.2Estimate and Payment of Additional Rent.  Prior to the Rent Commencement Date and at the beginning of each calendar year, or as soon as reasonably practical, Landlord shall submit to Tenant a written statement containing Landlord’s estimate of Additional Rent based upon a calendar year.  Tenant shall pay to Landlord on the first day of each calendar month one twelfth (1/12) of the estimate of Additional Rent in accordance with Section 4.1.  Landlord reserves the right, but not the obligation, to revise Landlord’s estimate of Additional Rent at any time during the calendar year.  If a revised estimate is submitted to Tenant, then the next successive payment(s) of Additional Rent shall be adjusted to account for any underpayment or overpayment resulting from the prior estimate.  Within 120 days after the end of each calendar year, Landlord shall submit a statement certified by Landlord as true and correct indicating:  (a) the actual amount of Additional Rent owed by Tenant for such calendar year; and (b) the sum of Tenant’s payments of Additional Rent for such calendar year.  If the certified statement indicates that the sum of Tenant’s payments exceeds the actual amount of Additional Rent owed, then Tenant shall deduct the overpayment from its next payment(s) of Additional Rent or Landlord shall refund any overpayment to Tenant if this Lease has expired without Tenant being reimbursed in full for its overpayment within fifteen (15) days following request from Tenant.  If the certified statement indicates that the actual amount of Additional Rent owed is greater than the sum of Tenant’s payments of Additional Rent, then Tenant shall pay the difference within thirty (30) days after receipt of the statement.

 

4.3 Tenant’s Audit Right.  Tenant shall have the right, at Tenant’s cost, to audit, inspect and copy the books and records of Landlord with respect to any item of Additional Rent or cost that is passed through to Tenant as follows.  Upon receipt by Tenant of the certified statement, Tenant shall have ninety (90) days to notify Landlord in writing of Tenant’s desire to audit, inspect and copy the books and records of Landlord.  Upon such written notification by Tenant, Landlord shall provide Tenant with reasonable access to its books and records at Landlord’s office during normal business hours.  If Tenant does not provide such written notification to Landlord within this ninety (90) day time period, Tenant shall no longer have any right to 

 

	
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audit, inspect and copy the books and records of Landlord with respect to any item of Additional Rent or cost that is passed through to Tenant and shall be deemed to approve the accuracy of the certified statement.  Tenant shall not disclose to any person any information obtained in an audit of Landlord’s books and records, except to Tenant’s accountants, attorneys, lenders, employees and partners.  If the results of the audit show an over charge to Tenant, Landlord shall credit or refund to Tenant any over charge within thirty (30) days after completion of the audit. If the results of the audit show an undercharge to Tenant, then Tenant shall pay the difference within thirty (30) days after Tenant knows of such undercharge.  Any audit by Tenant shall not be conducted by any party that is being paid on any type of contingency basis.  Any audit, inspection or copying of Landlord’s books by Tenant for a calendar year shall be completed and the results of the audit provided to Landlord within one (1) year after the end of the calendar year.  Any rights Tenant may have to a credit or refund for an over charge for a calendar year shall expire one (1) year after the end of the calendar year unless the audit is completed and the results provided to Landlord within this one (1) year time period.  If the audit discloses an overpayment in excess of 5% of the amount properly chargeable to Tenant, then Landlord shall reimburse Tenant for the cost of the audit.  The audit described herein shall be conducted by an auditor selected by Tenant.

 

Article 5 – Operating Costs; Insurance Premiums and Real Estate Taxes

 

5.1Operating Costs.  Tenant shall pay the Operating Costs incurred during or attributable to the Lease Term as Additional Rent beginning on the Rent Commencement Date.   

 

5.2Insurance Premiums.  Tenant shall pay the Insurance Premiums incurred during or attributable to the Lease Term as Additional Rent beginning on the Delivery Date.   

 

5.3Real Estate Taxes.  Tenant shall pay the Real Estate Taxes incurred during or attributable to the Lease Term as Additional Rent as follows: 

 

(a)Tenant shall make a one-time payment of twenty-five thousand and no/100 dollars ($25,000.00) to Landlord on or before October 1, 2019 to reimburse Landlord for a portion of the Real Estate Taxes due and payable for the Premises in 2019.  Landlord shall be responsible for all other Real Estate Taxes due and payable for the Premises in 2019. 

 

(b)In calendar year 2020, Tenant shall pay Landlord the fixed amount of one hundred eighty thousand seven hundred eleven and 54/100 dollars ($180,711.54) in two equal payments of $90,355.77 as Additional Rent on April 15 and September 15 to reimburse Landlord for the Real Estate Taxes due and payable for the Premises in the calendar year 2020 (“Fixed Tax Payment”). Landlord and Tenant agree if the actual amount of Real Estate Taxes due and payable for the Premises in 2020 is: (i) less than the Fixed Tax Payment, then the excess amount of the Fixed Tax Payment paid by Tenant is Landlord’s property, or (ii) more than the Fixed Tax Payment, then Landlord shall pay the additional amount of Real Estate Taxes due and payable in 2020, at Landlord’s cost.

 

(c)Beginning in calendar year 2021 and every year of the Lease Term thereafter, Landlord shall forward a copy of the Real Estate Tax bills for the Premises for the current year to Tenant promptly after receipt by Landlord, and Tenant shall pay the Real Estate Taxes due and payable for the Premises for the current year to Landlord as Additional Rent in two equal payments on April 15 and September 15 of each year during the Lease Term. 

 

If Tenant fails to pay the Real Estate Taxes to Landlord when due hereunder, Tenant shall be responsible for the payment of all late charges, interest and other penalties resulting from such delinquency.  If Tenant pays the Real Estate Taxes to Landlord when due hereunder and Landlord fails to pay the Real 

 

	
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Estate Taxes to the taxing authority when due, Landlord shall be responsible for the payment of all late charges, interest and other penalties resulting from such delinquency.  Real Estate Taxes for the Premises shall be allocated on a per diem basis with adjustment made between the parties as needed at the beginning and end of the Lease Term.  Landlord shall be responsible for the per diem portion of any Real Estate Taxes due and payable relating to the period prior to the Rent Commencement Date, except as provided above in Section 5.3(a) and 5.3(b).  Tenant shall be responsible for the per diem portion of any Real Estate Taxes due and payable relating to the period on and after the Rent Commencement Date, except as provided above in Section 5.3(a) and 5.3(b).  Both parties shall promptly reimburse the other party for any Real Estate Taxes paid by one party but the responsibility of the other party hereunder.  To the extent Landlord or Tenant pays Real Estate Taxes due and payable relating to the time period prior to or following the end of the Lease Term that are not the obligation of the party, Landlord or Tenant, as the case may be, shall promptly reimburse the other so that the payment of Real Estate Taxes due and payable is consistent with the obligations hereunder.  Landlord represents and warrants that the Premises constitutes a separate tax parcel.  Landlord shall pay in full all special assessments, levied or pending as of the Effective Date, against the Premises.  Landlord will pay said special assessments when they are due and payable.  To Landlord’s knowledge,  as of the Effective Date, Landlord has not received any notice of special assessments that will be levied or pending on or before the Rent Commencement Date.  

 

5.4Additional Tax Liability of Tenant.  Tenant agrees to pay all sales or use taxes, transaction privilege taxes, rental occupancy taxes, gross receipts taxes, transit taxes, excise taxes or other taxes charged by any applicable governmental or quasi-governmental authority against Landlord with respect to Rent or any other charges or payments received by Landlord or accruing under this Lease; provided in no event shall Tenant be required to pay any of Landlord’s income taxes.  Tenant shall also pay, before delinquency, all taxes levied, assessed or payable upon all or any part of Tenant’s leasehold improvements, equipment, furniture, fixtures and other personal property located at the Premises, whether taxed separately or part of the Premises.  Tenant shall pay these taxes as Additional Rent.  Tenant shall, upon notice from Landlord, either pay these taxes directly to the taxing authority, or to Landlord on a monthly basis together with Rent, or on some other basis determined by Landlord.  The obligation of Tenant to pay these taxes shall be in addition to the obligation of Tenant to pay Base Rent and Real Estate Taxes.  Tenant shall not, however, be liable to pay any income tax of Landlord or any estate, succession, inheritance or transfer taxes of Landlord.

 

5.5 Real Estate Tax Appeals.  Landlord may, in its sole discretion and at its sole expense (unless consented to by Tenant in writing), retain professional consultants and/or counsel to analyze the Real Estate Taxes and to prosecute any protests, refunds and appeals for any period during the Lease Term.  If Tenant consented to such actions and costs, Tenant shall pay the costs and expenses of such actions as Operating Costs.  Any refund obtained shall first be applied to pay the costs and expenses of the action and then to proportionately reimburse all parties who contributed to the payment of the Real Estate Taxes being refunded, provided that nothing in this Section shall require Landlord to refund any of the Fixed Tax Payment.  Tenant shall have the right to institute tax reduction or other proceedings to challenge Real Estate Taxes or reduce the assessed value of the Premises after receipt of written consent from Landlord (email is sufficient), which shall not be unreasonably withheld, conditioned or delayed, and Landlord shall cooperate with any such contest, appeal or proceeding.   

 

Article 6 – Utilities and Services

 

6.1Utilities.  Landlord represents and warrants that water, gas, electricity, telephone and sanitary sewer are or will be available to the Building as of the Delivery Date.  Tenant shall be responsible for the payment of all utility access, hook-up and connection charges for the Building, including, but not limited to, sewer access charges (SAC) and water access charges (WAC).  Commencing with the Delivery Date, Tenant shall pay when due, directly to the appropriate supplier, all utilities and services supplied to the Building and 

 

	
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Premises, together with all taxes levied or other charges on all utilities and governmental charges based on utility consumption.  Upon request by Landlord, Tenant shall provide Landlord with evidence of payment of the charges for all requested utilities and services supplied to the Building and Premises.  If Tenant fails to pay the utilities and services supplied to the Building and Premises when due, Landlord may, at its option, pay the delinquent and/or future utilities and services supplied to the Building and Premises directly to the appropriate supplier on behalf of Tenant upon thirty (30) day written notice to Tenant with the opportunity by Tenant to cure such failure during the thirty (30) day period.  Upon receipt of an invoice from Landlord, Tenant shall promptly reimburse Landlord for all utilities and services, late charges, interest and penalties paid, together with an additional administrative charge of five percent (5%) calculated on the amount paid by Landlord, plus interest accruing at the Default Rate of Interest from the date of submission of the invoice to Tenant.  

 

Tenant shall not at any time unreasonably overburden or exceed the capacity of the mains, feeders, ducts, conduits or other facilities by which such utilities are supplied to, distributed in or serve the Premises.  If Tenant desires to install any equipment which requires additional utility facilities or utility facilities of a greater capacity than the existing facilities, such installation shall be subject to Landlord’s prior written approval.  If approved by Landlord, Tenant shall be responsible, at its cost, for the installation of all such utility facilities and the utility services provided thereunder.

 

Commencing on the Delivery Date, Tenant shall, at its cost, maintain, repair and replace all utility lines to the point of exclusively serving the Premises, wherever located, and shall keep such utility lines free of grease and other debris.  

 

6.2Trash Removal.  Commencing with the Delivery Date, Tenant shall, at its cost, be responsible to provide a regular service for trash removal from the Premises.  Tenant shall contract directly with a waste management company for the removal of Tenant’s trash and shall furnish its own dumpsters/containers at the Premises.  Tenant shall, at its cost, be responsible for any recycling.  Tenant shall, at its cost, also be responsible for regular pest and vermin control at the Premises.  

 

6.3Utility and Service Interruptions.  Landlord shall not be liable to Tenant for damages if any utilities or services are interrupted or terminated because of repairs, installations, improvements or any other cause.  No interruption or termination of utility services shall relieve Tenant of its obligation to pay Rent or the performance of any other obligation under this Lease.  However, if the Premises, or a material portion of the Premises, are made untenantable for a period in excess of two (2) consecutive business days after Tenant gives Landlord written notice of the interruption, and the interruption or termination is caused by Landlord’s negligence or intentional misconduct, is reasonably within the control of Landlord to correct, and is Landlord’s obligation to correct under this Lease, then Tenant, in addition to all other remedies available to Tenant at law or in equity or under this Lease, shall be entitled to receive a proportionate abatement of Rent (based on how much of the Building is rendered untenantable) payable hereunder during the period beginning on the third (3rd) consecutive business day after Tenant gives Landlord written notice of the interruption and ending on the day the service has been restored.  Further, if the Premises, or a material portion of the Premises, are made untenantable for a period in excess of thirty (30) consecutive calendar days as a result of such interruption, and the interruption is caused by Landlord’s negligence or intentional misconduct, is reasonably within the control of Landlord to correct, and is Landlord’s obligation to correct under this Lease, then Tenant, in addition to all other remedies available to Tenant at law or in equity or under this Lease, shall be entitled to terminate this Lease by written notice to Landlord, and upon such termination, all Rent shall be adjusted as of the date of such termination and each party shall be released thereby without further obligation under this Lease to the other party coincident with the surrender of possession of the Premises to Landlord, except for obligations that expressly survive as specified in this Lease.

 

	
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6.4Security.  Landlord shall have no obligation to provide any security whatsoever for the Premises, Building and/or Tenant’s business therein. Tenant does hereby acknowledge and agree that it shall provide and be solely responsible for its own security, at Tenant’s sole cost, as may be required for the operation of Tenant’s business within the Premises and subject to the terms and conditions of Section 13.2 below, Landlord shall have no liability to any Tenant and its employees, agents or invitees for losses due to theft or burglary, or for damages done by unauthorized persons in the Premises or the Building, or for any injury, trauma or other harm to any person, and neither shall Landlord be required to insure against any such losses.  Tenant shall be responsible for all repairs and replacements of damage and/or destruction of the Premises necessitated by burglary or attempted burglary, or any other illegal or forcible entry into the Premises.  

 

Article 7 – Construction of the Premises

 

7.1Construction Activities Generally.  The construction activities performed by Tenant for the Premises shall be performed in accordance with this Lease and in compliance with all Governmental Regulations. Tenant agrees to defend, indemnify and hold the Landlord harmless from all claims, lawsuits, costs, expenses, damages or liabilities (including reasonable attorneys’ fees and costs) arising or resulting from the performance of its construction activities at the Premises.  The provisions of this Section shall survive the expiration or earlier termination of this Lease.

 

7.2Landlord’s Work.  Intentionally deleted.

 

7.3Tenant’s Work.  Tenant, at its cost and expense, shall proceed with reasonable diligence to perform Tenant’s Work in accordance with Exhibit B and the obligations set forth in this Lease so as to allow Tenant to operate its business for the Permitted Use.  

 

Article 8 – Maintenance AND REPAIR

 

8.1Maintenance, Repair and Replacement by Tenant.  Except for Landlord’s obligations in Section 8.3, 8.4 and 8.5 below, Tenant, at its sole cost, shall maintain the Premises in good order, condition and repair; promptly make all necessary maintenance, repairs and replacements to the Premises; and provide all janitorial services to keep the Premises in a clean, sanitary and safe condition; all in good condition and in accordance with the standards of maintenance followed in other comparable office/warehouses of similar size in the metropolitan area where the Premises is located.  Without limiting the foregoing, Tenant shall, at its cost, perform the following:  

 

	
 
	
a)
	
maintain and repair the roof of the Building in accordance with the standards of maintenance followed in other comparable office/warehouses of similar size in the metropolitan area where the Premises is located and in compliance with all Governmental Regulations, subject to Landlord’s replacement obligations in Section 8.4(a) below; Tenant shall be entitled to the benefit of any warranty applicable to the roof in connection with Tenant’s obligations under this Section; 

 

	
 
	
b)
	
maintain, repair and replace interior walls, partitions, ceilings, fixtures, equipment, lighting, finish work and all non‐structural portions of the Premises, including the painting or refinishing of the interior of the Premises at reasonable intervals; 

 

	
 
	
c)
	
maintain, repair and replace interior doors, windows, entrances, floors, floor coverings, sills, trims, door closures, locks, keys, and moldings of the Premises, including the immediate replacement of all cracked and broken glass; 

 

 

	
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d)
	
maintain, repair and replace fire suppression system, sprinklers (including sprinkler heads), fire protection systems and other life safety equipment and monitoring systems;

 

	
 
	
e)
	
maintain, repair and replace all mechanical systems, including water heaters and elevators (except that HVAC shall be governed by the terms of Section 8.3 below);

 

	
 
	
f)
	
maintain, repair and replace Tenant’s interior and exterior signage and the monument sign; 

 

	
 
	
g)
	
maintain, repair and replace that portion of the utility lines beginning at the transformer and throughout the Building, and including, the meter, and related parts and fixtures that service the Building, including, but not limited to, conduit, pipes, plumbing, drains, grease traps, water heaters, circuit breakers, electrical panel boxes and meters;

 

	
 
	
h)
	
maintain, repair and replace all lighting for Tenant’s signage, including related interior and exterior light bulbs and tubes; 

 

	
 
	
i)
	
maintain, repair and replace interior plumbing, restrooms and restroom fixtures for the Premises; 

 

	
 
	
j)
	
maintain, repair and replace Tenant’s Work; 

 

	
 
	
k)
	
maintain, repair and replace loading dock, dock door and other improvements related to the loading dock;

 

	
 
	
l)
	
maintain, repair and replace any generator and any related improvements, switches and utility lines for such generator; and

 

	
 
	
m)
	
regular pest and vermin control at the Premises and pick-up of any refuse or garbage on a regular basis.

 

8.2  Failure to Maintain by Tenant.  If Tenant fails to maintain the Premises as required by this Lease and such failure continues for a period of thirty (30) days after Tenant’s receipt of notice from Landlord of the same, Landlord may, at its option, enter the Premises and perform such maintenance on behalf of Tenant upon reasonable notice.  Upon receipt of an invoice from Landlord, Tenant shall promptly pay the entire reasonable cost thereof, together with an additional administrative charge of five percent (5%) calculated on the amount paid by Landlord, plus interest accruing at the Default Rate of Interest from the date of submission of the invoice to Tenant, as Additional Rent.

 

8.3  HVAC Condition, Maintenance, Repair and Replacement.  

 

	
 
	
a)
	
Existing HVAC Condition.  As of the Effective Date, Landlord certifies that, to Landlord’s knowledge, each HVAC unit serving the Premises has been serviced and maintained in a commercially reasonable manner.  Prior to the Delivery Date, Landlord shall, at Landlord’s cost, hire a third-party HVAC contractor to inspect the existing HVAC units and shall provide Tenant with documentation from such contractor indicating that the HVAC units are in good working order and condition, subject to ordinary wear and tear.  Landlord represents and warrants that as of the date of the foregoing certification (the “Certification Date”), the HVAC units will be in good working order and condition, subject to ordinary wear and tear.  Landlord shall be responsible, at its expense, without reimbursement from Tenant, for any repairs or replacements to such HVAC units in order to deliver such units in the condition required under this Section 8.3(a) prior to the 

 

	
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Certification Date.  As of the Effective Date, Landlord shall assign any warranties for the HVAC units to Tenant. 

 

	
 
	
b)
	
HVAC Maintenance, Repair and Replacement by Tenant.  Tenant shall, at Tenant’s cost, maintain, repair and replace all existing and future HVAC units for the Premises, subject only to Landlord’s replacement obligations in  Section 8.3(c) below.  Tenant may, at its option, either perform preventive maintenance/service for the HVAC units serving the Premises with appropriately trained and licensed personnel or enter into a preventive maintenance/service contract with a third-party HVAC contractor to provide regularly scheduled maintenance and service of the HVAC units serving the Premises.

 

	
 
	
c)
	
Replacement of Existing Office HVAC Units By Landlord During First Two Lease Years.  In the event that, at any time on or before the last day of the second (2nd) Lease Year any of the eleven (11) existing HVAC units serving the office portion of the Building, which are identified and depicted on Exhibit D (“Existing Office HVAC Units”), need to be replaced (which need shall be determined in the manner set forth below), Landlord will consult with Tenant regarding the need for replacement of an Existing Office HVAC Unit and Landlord shall obtain Tenant’s prior written approval as to the specifications for the replacement, but such replacement specifications must be comparable to the Existing Office HVAC Units, and Tenant’s approval shall not be unreasonably withheld, conditioned or delayed.  Once Landlord has obtained Tenant’s approval, Landlord shall promptly replace the unit.  The cost of each such replacement unit together with interest at the rate of eight percent (8%) per annum shall be amortized over a period of five (5) years.  Tenant shall reimburse Landlord for such costs as part of Operating Costs in fixed monthly payments during the remaining Lease Term.  Once an Existing Office HVAC Unit is replaced, future replacement of the HVAC unit is the Tenant’s responsibility in accordance with Section 8.3(b).  Notwithstanding anything to the contrary in this Lease, if Landlord replaces the Existing Office HVAC Unit(s) after the Certification Date but before the Rent Commencement Date, Landlord may still charge Tenant for the full replacement costs plus interest amortized over five (5) years in accordance with this Section as part of Operating Costs beginning on the Rent Commencement Date.

 

For purposes of this Section 8.3, the Existing Office HVAC Units need to be replaced if an HVAC contractor selected by Tenant (and reasonably acceptable to Landlord) determines that either (i) the cost of repair and maintenance (excluding the cost of the preventive maintenance/service contract and any maintenance included therein) for any single component of the Existing Office HVAC Unit will exceed twenty-five percent (25%) of the cost of replacing the unit or (ii) the total annual cost of repair and maintenance (excluding the cost of the preventive maintenance/service contract and any maintenance included therein) for the Existing Office HVAC Unit will exceed fifty percent (50%) of the cost of replacing the unit.     

 

8.4  Roof Replacement and Roof Access.

 

	
 
	
a)
	
Roof Replacement By Landlord.  In the event that, at any time during the Lease Term, the roof needs to be replaced (which need shall be determined in the manner set forth below), Landlord will consult with Tenant regarding the need for replacement of the roof and Landlord shall obtain Tenant’s prior written approval as to the specifications for the replacement, but such replacement specifications must be comparable to the existing roof, and Tenant’s approval shall not be unreasonably withheld, conditioned or delayed.  Once Landlord has obtained Tenant’s approval, Landlord shall promptly replace the roof.  The cost of the roof shall be amortized over a period of twenty-five (25) years with interest of five percent (5%) per annum.  Tenant shall reimburse Landlord for the roof replacement as Operating Costs in fixed monthly payments during the 

 

	
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remaining Lease Term (including exercised Option Period(s)), which payment Landlord shall calculate using the  amortization calculator attached as Exhibit E, with the actual cost of roof replacement inserted.  The replacement cost shown on Exhibit E is not binding on Landlord or Tenant.  Notwithstanding anything to the contrary contained in this Lease, any amortization of roof replacement costs shall be paid only during the remaining Lease Term (including exercised Option Period(s)) and shall not extend beyond the Lease Term (including exercised Option Period(s)).  For example, if the roof is replaced in the one hundredth (100th) month of the Lease Term, then Tenant will pay the fixed monthly payment as part of Operating Costs for the forty-four (44) remaining months of the Lease Term (plus exercised Option Period(s)).

 

For purposes of this Section 8.4, the roof needs to be replaced if Tenant’s total annual cost of repair and maintenance for the roof exceeds twenty-five percent (25%) of the cost of replacing the roof.

 

	
 
	
b)
	
Roof Access and Penetration.  Neither Tenant nor its contractors or agents shall without the prior written approval of Landlord, which approval shall not be unreasonably withheld, conditioned or delayed penetrate or modify the roof or roof membrane (email notice is acceptable).  Any actions by Tenant or its contractors or agents related to the roof shall be performed so that the rights of Landlord under any roofing bond or roofing guaranty then in force shall not be affected or voided.  Tenant shall be solely responsible for all damages to Landlord resulting from any actions by Tenant or its contractors or agents related to the roof.

 

8.5Maintenance, Repair and Replacement by Landlord.  Landlord shall maintain, repair and replace, at Landlord’s cost, without inclusion in Operating Expenses, the structural portions, footings and foundations of the Building, except any of the foregoing that are included in Tenant’s Work, if any.  Unless included in Tenant’s Work, Landlord shall also be responsible for the following, which Tenant shall pay as Operating Costs:  

 

	
 
	
a)
	
maintain, repair and replace the exterior doors, windows, entrances, walls of the Building;

 

	
 
	
b)
	
maintain, repair and replace trash dumpsters, enclosure, doors, locks and pad; 

 

	
 
	
c)
	
maintain, repair and replace traffic and directional markers and signs;

 

	
 
	
d)
	
maintain, repair and replace picnic tables, patios, decks, railings and other improvements and amenities for outdoor use;

 

	
 
	
e)
	
maintain, repair and replace bike racks, storage areas, shelters and other commuter improvements;

 

	
 
	
f)
	
maintain, repair and replace exterior lighting (including building and parking lot fixtures and poles, and including bulb replacement);

 

	
 
	
g)
	
maintain, repair and replace all parking areas, drive lane areas, curbing, and islands within the Premises, including pot hole repair, pavement patching, seal coating, restriping, repaving, cleaning, snow and ice removal; the cost of a total replacement of the parking and drive lane areas shall be amortized over a period of fifteen (15) years together with interest of five percent (5%) per annum during the remaining Lease Term in the same manner as demonstrated by the example in Section 8.4(a) above; and Tenant shall reimburse Landlord for such costs as part of Operating Costs in fixed monthly payments during the remaining Lease Term (including exercised Option Period(s));

 

 

	
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h)
	
maintain, repair and replace sidewalks, walkways, trails and corridors, including cleaning, snow and ice removal; 

 

	
 
	
i)
	
maintain and replace flowers, plants, trees and other landscaping (including mowing, watering, pruning and trimming);

 

	
 
	
j)
	
maintain, repair and replace landscaping improvements (including rock walls, fencing, and outdoor designs) and landscaping irrigation systems (including repair, maintenance and replacement of heads); 

 

	
 
	
k)
	
maintain, repair and replace exterior drainage facilities and related improvements utilized for the drainage and storage of storm water;

 

	
 
	
l)
	
maintain, repair and replace retaining walls and water features, if any; and

 

	
 
	
m)
	
maintain, repair and replace that portion of the utility lines on the Premises up to the transformer, but excluding (aa) the transformer; (bb) any generator and any related improvements, switches and utility lines for said generator; (cc) the Building meter; (dd) maintenance, repairs and replacement that is the responsibility of the utility company; and (ee) maintenance, repair or replacement that is a result of Tenant’s actions and not subject to the terms and conditions of Section 13.2 hereof.

 

At Tenant’s request, Landlord will consult with Tenant regarding the need for replacements of the foregoing items nearing the end of their useful life, such consult to include estimated costs of any such replacements, and Landlord will perform the requested replacement if Tenant demonstrates to Landlord’s reasonable satisfaction that either (A) the cost of repair and maintenance for any single component will exceed twenty-five percent (25%) of the cost of replacing such item or (B) the total annual cost of repair and maintenance for such item will exceed fifty percent (50%) of the cost of replacing such item. 

 

Landlord shall perform the maintenance, repair and replacements in good order and in accordance with the standards of maintenance followed in other comparable office/warehouses of similar size in the metropolitan area where the Premises is located and in compliance with all Governmental Regulations.  Landlord shall not be required to commence any such maintenance, repair or replacement until after notice (email notice is sufficient) from Tenant that the same is necessary, which notice, except in case of an emergency, shall allow Landlord a reasonable time in which to commence and complete such maintenance or repair.  Landlord shall use commercially reasonable efforts to perform such maintenance or repair with minimum inconvenience, annoyance, disturbance and loss of business to Tenant as may be reasonably possible under the circumstances consistent with accepted construction practices, but in no event shall Landlord be required to incur any additional expenses for work to be done during hours or days other than regular business hours and days.  Landlord’s obligations under this Section shall be subject to Tenant’s maintenance, repair and replacement obligations under this Lease and further subject to the casualty provisions of this Lease.   

 

	
8.6
	
Tenant’s Self-Management Option.  

 

(a)Self-Management Option.  Tenant is granted the one-time option to Self-Manage (defined below) the Premises pursuant to the terms and conditions set forth herein (“Self-Management Option”).  If the Self-Management Option is properly exercised, Tenant shall Self-Manage the Premises from the Self-Management Effective Date to the earlier of (i) the Self-Management Termination Date; and (ii) the expiration or termination of this Lease.  Tenant shall have no right 

 

	
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to exercise the Self-Management Option during any period in which an Event of Default is continuing.  

 

(b)Exercise of Self-Management Option.  To exercise the Self-Management Option, Tenant shall notify Landlord in writing of its exercise of the Self-Management Option no later than thirty-six (36) months prior to the Expiration Date.  The option to Self-Manage shall be effective the first day of the first month that is thirty (30) days after Landlord receives the notice (“Self-Management Effective Date”).  The exercise notification shall be given in the manner provided in this Lease for the giving of notices to Landlord.  The notice shall reference this Section and identify the Self-Management Effective Date.  If Tenant fails to timely provide a proper option notification, Tenant shall have no further or additional right to Self-Manage.   If Tenant opts to Self-Manage, the definition of Operating Costs shall change in accordance with Section 22.1(m).

 

(c) Definition of Self-Manage.  “Self-Manage” means that Tenant is responsible for all maintenance, repairs and replacements at the Premises including all of Landlord’s obligations in Section 8 in accordance with the standards provided in this Lease, except the following Landlord obligations, which shall remain Landlord’s obligations: (i) maintenance, repair and replacement of structural portions, footings and foundations of the Building; (ii) certain replacement of Existing Office HVAC Units under Section 8.3(c); (iii) certain replacement of the roof under Section 8.4(a); and (iv) total replacement of all parking and drive lane areas under Section 8.5(g).

 

(d)Landlord’s and Tenant’s Right to Terminate Self-Management.  Tenant shall have the right to terminate its Self-Management rights hereunder at any time after thirty (30) days’ notice.  Tenant’s right to Self-Manage shall be in effect until the date that is thirty (30) days after one of the following occurs (each a “Self-Management Termination Date”): 

 

(i) Tenant delivers written notice to Landlord that Tenant will no longer Self-Manage; 

 

(ii)  Tenant fails to maintain the Premises as required by this Lease and such failure continues after Tenant’s receipt of notice from Landlord of the same; or 

 

(iii) Landlord notifies Tenant that a third-party lender or buyer of the Premises requires Landlord to terminate the Self-Management Option as a condition to lending to Landlord or purchasing the Premises, respectively.  

 

The definition of Operating Costs shall change on the Self-Management Termination Date in accordance with Section 22.1(m).  If the Self-Management Termination Date occurs, Tenant shall not have any additional option to Self-Manage.

 

Article 9 – Assignment and Subletting

 

9.1Assignment by Tenant.  Except for Permitted Transfers, Tenant shall not assign or transfer this Lease or sublet any portion of the Premises, whether voluntarily or by operation of law, without the prior written approval of Landlord, which approval shall not be unreasonably withheld, conditioned or delayed.  Landlord’s approval shall be granted if the following items are fulfilled:  (a) the proposed assignee or subtenant is subject to all the terms, covenants and conditions of this Lease and agrees to assume the obligations of Tenant under this Lease; (b) the proposed assignee or subtenant and its guarantors as required by Landlord shall have a total financial worth that is equal to or greater than the financial worth of Tenant and reasonable evidence of this financial worth has been provided to Landlord or is publicly available; (c) the proposed assignee or subtenant is not negotiating with Landlord to lease space at other property owned 

 

	
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by Landlord or any other entity that is related to or an affiliate of Landlord; (d) the proposed assignee or subtenant will not materially alter the operation and use of the Premises in the reasonable opinion of Landlord; (e) the use of the Premises by the proposed assignee or subtenant will not violate any then existing agreement affecting the Premises;  (f) the proposed assignee or subtenant is not in default of any other lease or agreement with Landlord; (g) Tenant shall remain primarily responsible and liable for all obligations under this Lease; and (h) Tenant and the proposed assignee or subtenant shall execute an assignment or sublease reasonably acceptable to Landlord that incorporates the terms of this Section.  Notwithstanding anything in this Lease to the contrary, the issuance, transfer or sale of stock in Tenant shall not be deemed an assignment or transfer of lease.  Tenant shall provide Landlord with notice of any assignment or sublease prior to consummation (or for Permitted Transfers where confidentiality requirements prohibit advance notice, as soon as reasonably practicable thereafter).  No lease assignment, sublease or other transfer by Tenant shall relieve assignor Tenant of its liability to Landlord under this Lease unless Landlord, in its sole discretion, agrees in writing to release Tenant from liability under this Lease.  Tenant shall pay all reasonable attorneys’ fees incurred by Landlord with respect to any assignment or sublease, whether or not approved by Landlord, not to exceed $2,000.   

 

Notwithstanding the foregoing, Tenant may assign this Lease or sublet its interest in all or part of the Premises (a “Permitted Transfer”) to the following types of entities (a “Permitted Transferee”) without the written consent of Landlord, provided that the total financial worth of any proposed assignee or subtenant plus any guarantors of this Lease shall be equal to or greater than the financial worth of Tenant and reasonable evidence of this financial worth has been provided to Landlord or is publicly available:

 

	
 
	
(a)
	
An Affiliate of Tenant;

 

	
 
	
(b)
	
Any corporation, limited partnership, limited liability partnership, limited liability company or other business entity in which or with which Tenant, or its corporate successors or assigns, is merged or consolidated, in accordance with applicable statutory provisions governing merger and consolidation of business entities; or

 

	
 
	
(c)
	
Any corporation, limited partnership, limited liability partnership, limited liability company or other business entity acquiring all or substantially all of Tenant’s assets.

 

Tenant shall promptly notify Landlord of any such Permitted Transfer. Tenant shall remain liable for the performance of all of the obligations of Tenant hereunder, or if Tenant no longer exists because of a merger, consolidation, or acquisition, the surviving or acquiring entity shall expressly assume in writing the obligations of Tenant hereunder.  Additionally, the Permitted Transferee shall comply with all of the terms and conditions of this Lease, including the Permitted Use. No later than thirty (30) days after the effective date of any Permitted Transfer, Tenant agrees to furnish Landlord with (A) copies of the instrument effecting any of the foregoing Transfers, and (B) evidence of insurance as required under this Lease with respect to the Permitted Transferee.  The occurrence of a Permitted Transfer shall not waive Landlord’s rights as to any subsequent Transfers. For purposes of this section, “Affiliate” means any legal entity which, directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with Tenant.  “Control” means the power to direct or cause the direction of the management and policies of the controlled entity through the ownership of fifty (50%) or more of the voting securities or other ownership interest in such controlled entity.

 

9.2Assignment by Landlord.  The interest of Landlord in this Lease may be sold, conveyed, assigned or otherwise transferred without the consent of Tenant.  Upon any such transfer of Landlord’s interest in this Lease, and assumption of such interest and the obligations hereunder by Landlord’s transferee,  

 

	
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Landlord shall have no further obligation under this Lease or to Tenant, except to the extent any obligation accrued prior to the date of such transfer.  

 

Article 10 – Access by Landlord

 

10.1Access.  Upon not less than 48 hours prior notice, Landlord and Landlord’s employees, agents and contractors shall have the right to enter the Premises at any time to examine the same, to show the Premises to prospective purchasers and lenders, to make repairs as Landlord is allowed to perform under the terms of this Lease.  Landlord shall use reasonable efforts to minimize the disturbance or inconvenience to Tenant’s business at the Premises.  In the event of an emergency, no prior notice shall be required, but Landlord shall provide reasonable notice to Tenant after Landlord has entered the Premises. Landlord acknowledges that Tenant may be subject to certain data or privacy restrictions (the “Privacy Restrictions”), and that the Privacy Restrictions may require Tenant to ensure the safety and confidentiality of patient medical records or other data or products. Landlord further acknowledges that, in order for Tenant to comply with applicable Laws, Tenant must restrict access to the portions of the Premises where patient medical records or other private data or products are kept or stored. Landlord hereby agrees that, notwithstanding the rights granted to Landlord pursuant to this Lease, Landlord or Landlord’s employees, agents, representatives, or contractors may not enter those areas of the Premises designated by Tenant as locations where patient medical records or other private data or products are kept and/or stored, or any other secured areas of the Premises unless Landlord is accompanied by an authorized representative of Tenant.

 

Article 11 – Alterations by Tenant

 

11.1Alterations by Tenant.  Other than alterations, additions or improvements that are necessary for Tenant to perform its maintenance obligations under this Lease and alterations, additions or improvements that are part of the Tenant’s Work, Tenant shall not make any alterations, additions or improvements to the structure of the Premises or the Building without Landlord’s prior written consent, which consent shall not be unreasonably withheld, conditioned or delayed.  To the extent not restricted by the foregoing, Tenant shall have the right to make any alterations, additions or improvements in or to the Premises which do not alter the basic character of the Building or overload or damage such Building without the consent of the Landlord.  Tenant shall provide Landlord with written notice of such alterations, additions and improvements when the total annual cost of alterations, additions and improvements is equal to or greater than $200,000.  Within ten (10) days of receiving such notice, Landlord may notify Tenant if Landlord will require Tenant to remove such improvement at the expiration or earlier termination of the Lease.  Landlord’s failure to send timely notice shall be deemed to mean that Landlord does not require Tenant to remove the alteration.  All alterations, additions and improvements to which Landlord consents or are otherwise permitted hereunder shall be made by Tenant at its cost and shall comply with all Governmental Regulations.  Tenant shall indemnify and hold Landlord harmless from all claims, lawsuits, costs, expenses, damages or liabilities (including reasonable attorneys’ fees and costs) arising or resulting from Tenant’s alterations, additions or improvements.  

 

Tenant shall be permitted to surrender the Premises at the termination of this Lease without removal of alterations, additions and improvements installed by or on behalf of Tenant (including Tenant’s Work), but excluding any item that Landlord notified Tenant it must remove in accordance with the paragraph above, which Tenant must remove at Tenant's sole cost and expense, and repair or restore any damage caused by the installation and removal of such alterations, additions and improvements.  Tenant must leave the fire suppression system and the power supply to the Building in good working order and in compliance with Governmental Regulations.  Ownership of all alterations, additions and improvements shall remain with Tenant until the Expiration Date or sooner termination of this Lease.  The preceding sentence does not apply to Tenant's trade fixtures, equipment and personal property; all of which belong to Tenant and shall 

 

	
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be removed at termination of the Lease, including any generator.  Landlord’s approval of any alteration, addition or improvement shall not be deemed an acceptance or approval of any item that is in violation of Governmental Regulations and shall not be a representation of compliance.

 

Article 12 – Insurance

 

12.1Property Insurance.  

 

(a)Landlord’s Coverage.  Landlord shall carry and maintain reasonable limits of property insurance for the Premises.  Property insurance coverage shall include: (1) special form insurance against direct cause of physical loss, including the cost of debris removal, in the amount of not less than the full insurable replacement cost of the structure and its improvements (excluding the cost of excavations, foundations and footings), together with an agreed-amount endorsement, a replacement cost endorsement and a waiver of subrogation endorsement; (2) broad form or comprehensive boiler and machinery insurance on all equipment and pressure-fired vessels or apparatus at the Building which provides for full repair and replacement cost coverage; (3) business income and loss of rent insurance covering risk of loss due to the occurrence of any hazards insured against under the policies required under this Section in an amount equal to Base Rent and Additional Rent for a minimum twelve (12) month period; and (4) any additional insurance required by any mortgagee of Landlord.  In addition, Landlord may carry and maintain additional insurance at the commercially reasonable election of Landlord, including flood, earthquake and terrorism insurance.  All costs for such insurance shall be payable by Tenant as Insurance Premiums.

 

(b)Tenant’s Coverage.  Tenant shall, at its sole cost and expense, carry and maintain a special form policy of property insurance with respect to the Premises in the amount of not less than the full insurable replacement cost of Tenant’s Work and Tenant’s leasehold improvements, merchandise, trade fixtures, furniture, equipment and personal property.  Tenant acknowledges and agrees that the property insurance obtained by Landlord under this Lease will not provide adequate, or any, coverage for these items and that Landlord shall have no obligation to insure such items. 

 

12.2Liability Insurance.  

 

(a)Tenant’s Coverage.  Tenant, at its sole cost and expense, shall carry and maintain a policy of commercial general liability insurance with respect to the Premises and the business operated by Tenant in which the per occurrence combined single limit of liability shall not be less than One Million Dollars ($1,000,000).  The policy shall include the Landlord and Landlord’s mortgagee, if any, as additional insureds.  The above‐described limit of liability shall be adequate so long as Tenant also maintains an umbrella policy of insurance with per occurrence limits of liability of not less than Five Million Dollars ($5,000,000).  

 

(b)Landlord’s Coverage.  Landlord shall carry and maintain commercial general liability insurance insuring the Premises in such amounts and under such terms in commercially reasonable amounts consistent with similar projects in the geographic area in which the Premises are located.

 

12.3Workers’ Compensation and Employers Liability Insurance.  Tenant shall keep in full force and effect, at its sole cost and expense, workers’ compensation insurance in accordance with the laws of the state where the Premises is located.  Tenant shall also keep in full force and effect, at its sole cost and expense, employers liability insurance in the amount of One Million Dollars ($1,000,000) bodily injury per accident and One Million Dollars ($1,000,000) bodily by disease both as a policy limit and per employee.

 

 

	
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12.4Self-Insurance and Insurance Coverages for Landlord.  Landlord may self-insure (which shall be defined as assuming all insurance risk) some or all of the insurance coverages described in this Article or elsewhere in this Lease, or may satisfy such insurance coverages under any blanket policy carried by it, under a separate policy therefor, or under any combination of self-insurance, primary insurance and umbrella or blanket insurance carried by Landlord.  In the event of self-insurance the premium cost equivalency of such policy or policies shall be part of the Insurance Premiums.  In the event of blanket insurance, Landlord shall reasonably allocate a portion of the cost of the premium for the blanket insurance policy to the Insurance Premiums.  Any insurance maintained by Landlord may include deductibles, coverage amounts, self-insured retentions or the like in amounts determined by Landlord in its discretion.

 

12.5General Insurance Requirements and Certificates.  All insurance policies shall be with an insurance company or companies qualified to do business in the state where the Premises is located.  Notwithstanding the above, the requirement to carry such insurance and endorsements shall be subject to a commercially reasonable deductible and the reasonable availability and expense of such insurance or endorsements.  To the extent possible, the insurance policies shall:  (a) provide that the policy may not be canceled or materially reduced in amount or coverage without at least thirty (30) days prior written notice to the additional insureds; (b) provide that an act or omission of one of the insured or additional insured which would void or otherwise reduce coverage shall not reduce or void the coverage as to any other insured or additional insured; and (c) be “occurrence” based and not “claims made” based.  Tenant shall deliver to Landlord certificates of insurance issued by the insurance carrier for each policy of insurance required to be maintained by Tenant under this Lease that expressly evidence the insurance coverages required under this Lease and that are reasonably acceptable to Landlord.  All insurance certificates and endorsements shall be delivered to Landlord prior to occupancy of the Premises by Tenant and, thereafter, within 10 days upon written request by Landlord during the term of this Lease.

 

Article 13 – Indemnification, Waiver of LIABILITY

AND LIMITATION OF LIABILITY

 

13.1Indemnification.  Tenant shall indemnify and hold Landlord and Landlord’s employees and agents harmless from and against and all third party claims, lawsuits, costs, expenses, damages or liabilities for injury to persons or damage to property and all reasonable attorneys’ fees and other costs related thereto that:  (a) arise from any breach or default by Tenant of this Lease; (b) arise from any negligent or intentional misconduct of Tenant in, about or to the Premises; (c) arise from any accident, injury, occurrence or damage in the Premises, except to the extent arising out of the negligence or intentional misconduct of Landlord or Landlord’s representatives, agents, contractors, or employees; or (d) arise from any lien for labor or material furnished to the Premises by Tenant. Notwithstanding the foregoing, Tenant’s indemnification obligations under Section 13.1(a)-(d) shall not apply to the extent Landlord is required to provide indemnity in Section 13.1(1)-(2).  Landlord shall indemnify and hold Tenant, and Tenant’s employees and agents, harmless from and against all third party claims, lawsuits, costs, expenses, damages or liabilities for injury to persons or damage to property and all reasonable attorneys’ fees and other costs related thereto that:  (1) arise from any breach or default by Landlord of this Lease; or (2) arise from any negligent or intentional misconduct of Landlord in, about or to the Premises. Notwithstanding the foregoing, Landlord’s indemnification obligations under Section (1)-(2) shall not apply to the extent Tenant is required to provide indemnity in Section 13.1(a)-(d). The obligations of Tenant and Landlord under this Section shall survive the expiration or earlier termination of this Lease.

 

Each party hereto agrees to notify the other party within a reasonable time period given the circumstances of the claim, but no later than thirty (30) days after receipt of any claims made for which the other party might be liable under the indemnification provisions under this Lease; provided, however, that failure to notify the indemnifying party within such period shall not relieve the indemnifying party of its 

 

	
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obligations except to the extent the indemnifying party is materially prejudiced by such failure.  The indemnifying party will have the right, but not the obligation, to select counsel of its choice and control the defense of any such claim and to negotiate, and settle such claims.  The indemnified party will be entitled to participate in the defense of such matter and to employ counsel at its own expense to assist therein; provided, however, that if the indemnifying party defends the indemnified party, the indemnifying party will have final decision-making authority regarding all aspects of the defense of any claim.  The party seeking indemnification will provide the indemnifying party with such information and assistance as the indemnifying party may reasonably request, at the expense of the indemnifying party.  Neither party will be responsible or bound by any settlement of any claim or suit made without its prior written consent; provided, however, that the indemnified party will not unreasonably withhold or delay such consent.

 

13.2Waiver of Liability and Subrogation.  Tenant hereby releases, waives and discharges Landlord and Landlord’s employees and agents from all liabilities, claims and rights of recovery for any loss or damage to property in, on or about the Premises, including, but not limited to, Tenant’s trade fixtures, equipment, personal property and any loss of use or business interruption, from any casualty or other cause whatsoever, regardless whether a result of the negligence of Landlord or otherwise.  Landlord hereby releases, waives and discharges Tenant and Tenant’s employees and agents from all liabilities, claims and rights of recovery for any loss or damage to property in, on or about the Premises, and for any loss of use or business interruption, from any casualty or other cause whatsoever, regardless whether a result of the negligence of Tenant or otherwise.  This Section shall not be deemed to release, waive or discharge any liability for intentional misconduct.  This Section shall be inapplicable to the extent prohibited by law or if it would have the effect, but only to the extent it would have the effect, of invalidating any insurance coverage of Landlord or Tenant.  Tenant and Landlord shall give notice to their respective insurance carriers that this release and waiver of liability and subrogation is contained in this Lease and agree to include such release and waiver in the coverage provided by any property insurance policies maintained by the parties for the Premises.  The waivers set forth in this Section control to the extent in conflict with the indemnification provisions set forth in this Lease.

 

13.3Exception to Waiver of Liability and Subrogation.  Notwithstanding Section 13.2 and any other provisions in this Lease to the contrary, maintenance, repairs, replacements to the Premises or Building that are made necessary by the negligence or intentional misconduct of Tenant or its agents, employees or invitees, shall be made by Tenant at the sole cost of Tenant. 

 

13.4Limitation of Liability.  In the event of a sale or lease of any land comprising the Premises, or the transfer or assignment of Landlord’s interest in this Lease, upon assumption of the obligations hereunder by such transferee accruing after the date of the assignment and assumption, the transferring Landlord shall be released from all further obligations subsequently accruing under this Lease, but shall remain liable for any obligations accruing prior to the date of transfer that the transferring Landlord was required to perform prior to the date of transfer.  Except to the extent caused by Landlord’s intentional misconduct, Tenant agrees to look solely to Landlord’s equity interest in the Premises and the rents, issues, profits and proceeds therefrom that have not yet been distributed, as it may then be encumbered, for the recovery of any judgment against Landlord.  It is specifically understood and agreed that Landlord and Landlord’s partners, whether general or limited (if Landlord is a partnership) or its directors, governors, officers, managers, members or shareholders (if Landlord is a limited liability company or corporation), shall never be personally liable for any such judgment.  Landlord and Tenant each hereby waives any and all rights, claims and remedies against the other party for consequential damages or injury or damage to, or interference with such party’s business, including but not limited to, compensation or claims for inconvenience, loss of profits, loss of rents or other revenues, loss of business opportunity, loss of goodwill or loss of use, except that Landlord does not waive the foregoing in the event the damages arise from a third party claim against Landlord for failing to deliver the 

 

	
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Premises on time and such failure is due to Tenant holding over.  The waiver set forth in this Section controls to the extent in conflict with the indemnification provisions set forth in this Lease.

 

Article 14 – Liens and Encumbrances

 

14.1Liens and Encumbrances.  Tenant shall keep the Premises free from any liens arising out of any construction work performed by or on behalf of Tenant, including Tenant’s Work, materials furnished by or on behalf of Tenant or any other obligations incurred by Tenant.  If any such lien is filed against the Premises, Tenant shall give Landlord prompt written notice and shall cause the same to be discharged of record by payment, bond, order of a court of competent jurisdiction or otherwise, within thirty (30) days after imposition of the lien. Tenant shall not cause any mortgage, deed of trust, pledge, security agreement, financing statement or other encumbrance to be placed, filed or recorded against the Premises or Tenant’s leasehold estate, except for Tenant's trade fixtures, furniture, equipment and personal property.  Tenant may grant a security interest in Tenant’s trade fixtures, furniture, equipment and personal property to its banking or financing institution.

 

Article 15 – Default by Tenant

 

15.1Tenant’s Default.  The occurrence of any one or more of the following events set forth in this Section shall constitute a default and breach of this Lease by Tenant (each, an “Event of Default”):

 

(a)Failure to Pay Rent or Other Amounts Due.  The failure by Tenant to make any payment of Rent, as and when due; provided that Tenant shall have the opportunity to cure such default for a period of five (5) business days after written notice of the default from Landlord to Tenant.  Notwithstanding the above, if Tenant fails to make any payment and notice of this failure has already been given to Tenant at least two (2) times within the previous twelve (12) months, no notice shall be required to be given to Tenant by Landlord during this twelve (12) month period before exercising the remedies available to Landlord.  

 

(b)Failure to Perform and Other Breach.  The failure by Tenant to observe, perform or comply with any of the terms or conditions of this Lease (other than those described in subsections 15.1 (a), (c), or (e)); provided that Tenant shall have the opportunity to cure such default for a period of sixty (60) days after written notice of the default from Landlord to Tenant, or for a longer time period up to ninety (90) days in the event the cure of such failure reasonably requires more than sixty (60) days to complete and Tenant promptly commences the cure of such failure within the sixty (60) day period and, thereafter, diligently pursues the cure to completion within the ninety (90) day period.    

 

(c)Abandonment.  In the event that Tenant abandons the Premises.

 

(d)Intentionally omitted.

 

(e)Bankruptcy or Appointment of Receiver.  If (1) Tenant files a petition in bankruptcy or for reorganization or rearrangement under any state or federal bankruptcy or other statute, law or regulation, (2) Tenant makes a general assignment or general arrangement for the benefit of creditors, (3) a petition in bankruptcy or for reorganization or rearrangement is filed against Tenant under any state or federal bankruptcy or other statute, law or regulation and is not dismissed within sixty (60) days, and (4) a custodian, receiver or trustee is appointed to take possession of any substantial part of Tenant’s assets located at the Premises or other locations and such appointment is not vacated within sixty (60) days. 

 

	
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15.2Landlord’s Remedies upon Tenant’s Default.  If an Event of Default is continuing hereunder, Landlord shall be entitled to take any action it deems advisable under one or more of the provisions of this Section, as well as to take any action available at law or in equity, which remedies shall be cumulative and not alternative (subject to the limitation of damages set forth herein), including, but not limited to, the following:

 

(a)Termination of the Lease.  Landlord may give a written termination notice to Tenant specifying a date on which this Lease shall terminate, and, on such date, this Lease shall terminate.

 

(b)Right of Reentry without Termination.  Landlord may, without further notice and at its option, terminate Tenant’s right of possession of the Premises without terminating this Lease.  In the event that Landlord terminates Tenant’s right of possession of the Premises without terminating this Lease, then Landlord may reenter and repossess the Premises, with or without process of law, and remove and dispose of all personal property fixtures, furnishings, and signs from the Premises without liability for damages and at Tenant’s cost.  In such event, Landlord may, but is not obligated to, without notice and at its option, relet the Premises or any part of the Premises upon such terms and conditions acceptable to Landlord in its sole discretion and may collect and receive the rents from such reletting.  Landlord shall not be required to accept any tenant offered by Tenant or to observe any instructions given by Tenant about reletting.  Landlord may make repairs necessary to put the Premises in the condition required hereunder at surrender.  Reentry, repossession or reletting by Landlord shall not terminate this Lease or release Tenant, in whole or in part, from any obligations under this Lease, including Tenant’s obligation to pay Rent.  Notwithstanding Landlord’s exercise of its right to terminate Tenant’s right of possession of the Premises without terminating this Lease, Landlord may at any time thereafter elect to terminate this Lease.  

 

(c)Damages without Termination.  In the event that this Lease remains in effect without termination, Tenant shall pay to Landlord:  (1) the Rent that would be payable under this Lease by Tenant until the end of the Lease Term; plus (2) all reasonable costs directly or indirectly incurred by Landlord relating to Tenant’s default and Landlord’s repossession and restoration of the Premises, including, but not limited to: reasonable attorneys’ fees and legal costs; collection costs; interest at the Default Rate of Interest; repair costs; the unamortized balance of any Tenant Allowance paid to Tenant and the brokerage commissions incurred by Landlord related to the execution of this Lease prorated on a straight line basis over the Term plus interest at the Default Rate of Interest; and the unamortized portion of any abated/credited Rent prorated on a straight line basis over the Term plus interest at the Default Rate of Interest; less (3) the rent received by Landlord, if any, from any reletting.  The rent received by Landlord from reletting shall be applied (i) first to the payment of any indebtedness of Tenant to Landlord other than Rent, and (ii) second to the payment of any costs incurred by Landlord as set forth in subsection (c)(2) above, and (iii) third to the payment of Rent.  If the rent received by Landlord from reletting is insufficient to satisfy the payment of Rent when due under this Lease, then Tenant shall pay Landlord the deficiency.  The deficiency shall be calculated and paid monthly.  If the rent received by Landlord from reletting is greater than the amount necessary for the payment of rent, the full amount of such excess shall be retained by Landlord and shall in no event be payable to Tenant.  Tenant will pay damages monthly on the day Rent is payable under this Lease, and Landlord shall be entitled to recover the same from Tenant on each such day.  Tenant agrees that Landlord shall be entitled to periodically sue Tenant for sums due under this Lease or which become due prior to judgment and that such suit or recovery of any amount due Landlord shall not be a defense to any subsequent action brought for any amount not previously reduced to judgment in favor of Landlord.  Landlord shall have no affirmative obligation to mitigate its damages in the event of any default by Tenant.

 

	
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(d)Damages in the Event of Termination.  Upon termination of this Lease, Landlord, at its option, may elect to receive as damages the sum of:  (1) the amount of the unpaid Rent owed by Tenant under this Lease as of the date of termination; (2) the Worth of the unpaid Rent that would have been owed by Tenant under the Lease for the balance of the Lease Term after the date of termination minus the Worth of the then-present fair rental value of the Premises for the balance of the Lease Term after termination; and (3) all reasonable costs directly or indirectly incurred by Landlord relating to Tenant’s default and Landlord’s repossession of the Premises, including, but not limited to:  reasonable attorneys’ fees and legal costs; collection costs; interest at the Default Rate of Interest; repairs necessary to put the Premises in the condition required hereunder; the unamortized balance of any Tenant Allowance paid to Tenant and the brokerage commissions incurred by Landlord related to the execution of this Lease prorated on a straight line basis plus interest at the Default Rate of Interest over the Term; and the unamortized portion of any abated/credited Rent prorated on a straight line basis over the Term plus interest at the Default Rate of Interest.  Landlord shall be entitled to recover damages under this subsection in addition to the damages collected in the event of reentry to the extent such damages do not duplicate Landlord’s recovery, and all such recoveries shall be subject to the limitation of damages set forth herein.  Tenant’s obligations under this subsection shall survive the expiration or earlier termination of this Lease.  Landlord shall have no affirmative obligation to mitigate its damages in the event of any default by Tenant.

 

15.3Intentionally omitted.  

 

15.4Late Charges.  Tenant hereby acknowledges that late payment by Tenant of Rent will cause Landlord to incur costs not contemplated by this Lease, the exact amount of which will be extremely difficult to ascertain.  Accordingly, if any amount of Rent from Tenant shall not be received by Landlord on or before five (5) business days after the date such amount is due (whether or not Tenant is in default under this Lease), then Tenant shall pay to Landlord a late charge equal to five percent (5%) of such amount past due.  Acceptance of late charges by Landlord shall in no event constitute a waiver of Tenant’s default with respect to such overdue amount, nor prevent Landlord from exercising any of its rights and remedies under this Lease.  Acceptance of late payments of Rent by Landlord shall not prevent Landlord from obtaining late charges under this subsection.

 

15.5Interest.  Notwithstanding anything to the contrary contained in this Lease, if any amount of Rent from Tenant shall not be received by Landlord on or before the date such amount is due (whether or not Tenant is in default under this Lease), then Tenant shall pay to Landlord interest on the amount unpaid at the Default Rate of Interest from the date such amount is due.

 

15.6Landlord’s Right to Cure.  If Tenant fails to perform any maintenance or other obligation of Tenant under this Lease and such failure continues for a period of thirty (30) days after Tenant’s receipt of notice of the same from Landlord, then Landlord may, at its option, perform the maintenance or other obligation on behalf of Tenant upon reasonable notice to Tenant.  Upon receipt of an invoice from Landlord, Tenant shall promptly pay all reasonable costs incurred by Landlord to perform the maintenance or other obligation of Tenant, together with an additional administrative charge of five percent (5%) calculated on the amount paid by Landlord, plus interest accruing at the Default Rate of Interest from the date of submission of the invoice to Tenant, as Additional Rent.

 

Article 16 – Default by Landlord

 

 

	
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16.1Default by Landlord.  Landlord shall not be in default unless Landlord fails to observe, perform or comply with any of the terms or conditions of this Lease within sixty (60) days after written notice from Tenant to Landlord specifying with particularity the failure; provided that in the event the cure of such failure reasonably requires more than sixty (60) days to complete, then Landlord shall not be in default if Landlord promptly commences the cure of such failure within the sixty (60) day period and, thereafter, diligently pursues the cure to completion, not to exceed a total of ninety (90) days (referred to herein as a “Landlord Default”).  During the continuance of a Landlord Default, Tenant shall be entitled to take any action it deems advisable under one or more of the provisions of this Section, as well as to take any action available at law or in equity, which remedies shall be cumulative and not alternative (subject to the limitation of damages set forth herein).  Tenant shall further have the right to cure such default and, if such default involves the expenditure of money, Tenant shall have the right to deduct the cost thereof together with an administrative fee of five percent (5%), from the Rent due or accruing hereunder. 

 

Article 17 – Damage by Fire or Other Casualty

 

17.1Repair and Restoration.  In the event of a casualty to the Premises, Landlord shall repair and restore the Premises to a condition substantially similar to the condition prior to the casualty, excluding repair and restoration of Tenant’s Work (“Repair and Restoration” or “Repair and Restore” for purposes of this Article) unless Landlord or Tenant terminates this Lease as provided in this Article.  If casualty renders the whole or any material portion of the Premises uninhabitable, Rent shall be equitably abated from the date of casualty until the date that is the earlier of the date Tenant reopens for business or the date forty-five (45) days after substantial completion of the Repair and Restoration.   Rent shall not be equitably abated for any casualty that does not materially affect Tenant’s use and occupancy of the Premises.  The extent of Landlord’s obligation to Repair and Restore the Premises shall be limited to the amount of actual insurance proceeds available to Landlord.  Tenant shall proceed with reasonable diligence, at its sole cost and expense, to repair and restore its improvements, including the improvements defined as Tenant’s Work, trade fixtures, furniture, equipment and signs to a condition substantially similar to the condition prior to the casualty.  In no event shall Landlord be obligated to repair or restore Tenant’s Work or any trade fixtures, furniture, equipment or signs of Tenant. 

 

17.2Irreparable or Uninsured Damage.  If casualty renders the whole or any material portion of the Premises uninhabitable and the Repair and Restoration of the Premises cannot reasonably be expected to be substantially completed within two hundred ten (210) days from the date of the casualty, or if casualty renders the whole or any material portion of the Premises untenable and the casualty is uninsurable under the property insurance policy required under this Lease, or if Landlord’s mortgagee shall require that the insurance proceeds be used to prepay its mortgage rather than to pay the cost of Repair and Restoration, or if the amount of actual insurance proceeds available to Landlord from the property insurance policy required under this Lease does not equal or exceed the cost of Repair and Restoration, then Landlord, at its sole option, by written notice to Tenant within forty-five (45) days from the date of the casualty, may terminate this Lease.  Rent shall be equitably abated from the date of the casualty until termination of this Lease.  Any limitation on Landlord’s obligation to rebuild following casualty based on the availability of insurance proceeds shall in no event be deemed to include a deficiency in insurance proceeds by reason of:  (a) Landlord’s failure to carry the insurance required by this Lease; or (b) the amount of any deductible.  

 

17.3 Time Period for Repair and Restoration.  If Landlord or Tenant does not terminate this Lease as provided in this Article, Landlord shall use reasonable efforts to substantially complete the Repair and Restoration within two hundred ten (210) days from the date of the casualty.  In the event that the Repair and Restoration is not substantially completed within two hundred forty (240) days from the date of the casualty, then Tenant may terminate this Lease by written notice to Landlord within thirty (30) days following such one year period.  Such right of termination shall be Tenant’s sole and exclusive remedy.

 

	
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17.4Damage During Last Year of Lease Term.  Notwithstanding anything to the contrary contained in Section 17.1, in the event the Premises shall be damaged or destroyed by casualty within one (1) year of the Expiration Date and the cost to complete the Repair and Restoration is in excess of thirty percent (30%) of the full replacement cost of the Premises (excluding the cost of excavations, footings and foundations) or the Repair and Restoration cannot be completed within ninety (90) days from the date of casualty, either party shall have the option to terminate this Lease by giving written notice to the other party within thirty (30)  days following the date of the casualty effective on the date of such notice.  

 

17.5Termination of Lease.  In the event of termination of this Lease pursuant to this Article, Rent shall be apportioned on a per diem basis and paid to the date of casualty.  All obligations of Landlord and Tenant incurred prior to such termination, including Tenant’s obligation to pay Rent, shall survive termination.  Upon termination, all prepaid rents and/or deposits shall be returned to Tenant and neither Landlord nor Tenant shall have any future obligations or responsibilities under this Lease.  In the event that Landlord provides notice of termination under this Section for casualty during the last year of the Lease Term under Section 17.4, Tenant shall be able to exercise its Option rights under this Lease, if any, and Landlord’s notice of termination shall not be effective provided Tenant exercises said Option within thirty (30) days of receipt of Landlord’s notice of termination.  In the event of termination under any other section of this Article, Tenant shall not be entitled to exercise its Option rights under this Lease.

 

Article 18 – Eminent Domain

 

18.1Eminent Domain.  If all of the Premises, or a material portion defined as more than thirty percent (30%) of the Building, are taken by the power of eminent domain,  Landlord or Tenant may terminate this Lease by written notice given to the other party prior to the consummation of the eminent domain process.  This Lease shall terminate as of the earlier of the date Tenant is required to vacate the Premises or the date title of the taken property passes from Landlord to another party.  All obligations of Landlord and Tenant incurred prior to such termination, including Tenant’s obligation to pay Rent, shall survive termination.  The term “eminent domain” shall include the taking or damaging of property by, through or under any governmental or quasi‐governmental authority, and any purchase or acquisition in lieu thereof, whether or not the taking or damaging is by the government or any other person.  If a partial taking of the Premises occurs and this Lease is not terminated pursuant to this Section, then the terms of this Lease shall be equitably modified to account for such partial taking.

 

18.2Damages.  Landlord reserves all rights to the entire damage award or payment for any taking by eminent domain.  Tenant hereby grants and assigns to Landlord any right Tenant may now have or hereafter acquires to such damages and agrees to execute and deliver instruments of assignment that Landlord may reasonably request.  Tenant shall, however, have the right to claim from the condemning authority all compensation that may be recoverable by Tenant for relocation and for any loss incurred by Tenant in removing Tenant’s trade fixtures, furniture, equipment or personal property, or for damage to Tenant’s business, loss of business, and/or loss of leasehold interest, and the unamortized costs of leasehold improvements paid for by Tenant.  Each party shall seek its own award, as limited above, at its own cost, and neither shall have any right to the award made to the other.  If the condemning authority refuses to issue separate awards, Tenant shall be entitled to a portion of the single award equitably representing the ratio that the amount of Tenant’s damages awarded or agreed upon bears to the total amount of damages awarded or agreed upon in the condemnation proceeding.  All such amounts to be reasonably agreed to by the parties if the condemning authority does not provide such allocation.  Tenant shall make no claim against Landlord for damages for termination of its leasehold interest in the Premises, for interference with its business or for any loss resulting from a taking by eminent domain.  

 

 

	
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Article 19 – Subordination, Estoppel Certificates

And Financial Statements

 

19.1Subordination, Non-Disturbance and Attornment.  So long as Tenant’s rights hereunder are not disturbed, Tenant hereby subordinates its rights under this Lease to the lien of any mortgage, deed of trust or other security instrument, now or hereafter in force, against the Premises, and to all advances made or to be made thereon.  Tenant shall provide evidence of this subordination of its interest by executing a commercially reasonable Subordination, Non-Disturbance and Attornment Agreement within twenty (20) days after Landlord’s request so long as the same does not materially increase Tenant’s obligations hereunder or materially decrease Tenant’s rights hereunder.  So long as Tenant’s rights hereunder are not disturbed, Tenant agrees to attorn and recognize any new owner succeeding to the interest of Landlord in the Premises as its landlord under this Lease, whether or not this Lease has priority over the new owner’s interest in the Premises.   

 

19.2Tenant’s Estoppel Certificate.  Tenant agrees, within ten (10) days after Landlord’s request, to execute an estoppel certificate in a form reasonably acceptable to Landlord or any third party relying on said estoppel certificate. 

 

19.3Mortgagee Protection Clause.  Tenant will use commercially reasonable efforts to give any mortgagees, trustees or other holders of any security interest in the Premises, by certified or registered mail, a copy of any notice of failure served upon Landlord prior to default.  In the event that Landlord does not cure a failure within the time provided for in this Lease, the holder of a security interest shall have an additional thirty (30) days within which to cure the failure prior to default; provided that the holder of a security interest shall have more time to cure the failure if it commences performance within the thirty (30) day period and thereafter diligently pursues the cure to completion.  Tenant shall not exercise its remedies under this Lease until Tenant has provided such holder of a security interest with the opportunity to cure set forth herein.  

 

19.4Financial Statements.  For so long as Tenant is a publicly held corporation, all financial information is available online, and Tenant shall not be required to provide any additional financial information to Landlord.  In the event that at any time during the Lease Term Tenant is not a publicly held corporation, then, within fifteen (15) business days of written request from Landlord, Tenant agrees to provide Landlord with:  (a) Tenant’s then available annual financial statements describing its financial condition prepared in the ordinary course of business for the Tenant’s most recent fiscal year (including, but not limited to, any balance sheet, statement of income and notes to its financial statements, if any), all certified by Tenant as being true and correct; and (b) Tenant’s then available interim financial statements (whether internally prepared or accountant prepared),  if any, describing its financial condition prepared in the ordinary course of business for the most recent time period, all certified by Tenant as being true and correct.  Landlord will limit its request for financial statements to no more than once each calendar year and for the limited purposes of financing or refinancing any loan secured by the Premises, or the selling or transferring of any interest of Landlord in the Premises or this Lease, and as frequently as Landlord reasonable desires during the continuance of an Event of Default by Tenant of this Lease.  Landlord and Tenant agree and acknowledge that Tenant will not be obligated to prepare or produce any financial statements outside Tenant’s ordinary course of business.  Any information provided to Landlord pursuant to the requirements of this Section shall be held by Landlord in strict confidence and Landlord will not disclose any aspect of Tenant’s financial statements to any other person or entity, except to those necessary to finance, refinance or sell the Premises.  For the avoidance of doubt, the obligations of this Section 19.4 shall not apply so long as Tenant is a publicly held corporation.

 

Article 20 – Surrender of Premises

 

	
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20.1Surrender of Possession.  On or before the Expiration Date or sooner termination of this Lease, Tenant, at its cost and expense, shall (a) peaceably surrender the Premises broom clean, good order, condition and repair consistent with Tenant's duty to make repairs as herein provided, and (b) remove all alterations that Tenant is required to remove under Section 11, and repair all damage caused by any of the foregoing removal.  Tenant shall have no obligation to remove Tenant’s Work or any subsequent alterations made to the Premises, except as required under Section 11.  All property not removed by such date shall be deemed abandoned and may be removed, stored or disposed of by Landlord, at the cost and expense of Tenant.  Landlord shall not be responsible for the preservation or safekeeping of such property.  Tenant shall pay to Landlord, upon demand, all expenses incurred in such removal, storage or disposal of such property and all costs incurred by Landlord to cause the Premises to be in the condition required under this Section.  Upon the Expiration Date or sooner termination of this Lease, ownership of all modifications, improvements, alterations, additions, fixtures, furniture, equipment and personal property not already owned by Landlord that have been made or installed by either Landlord or Tenant upon the Premises shall vest in Landlord and be surrendered with the Premises.  Tenant shall promptly surrender all keys to the Premises to Landlord at the place then fixed for the payment of Base Rent and shall inform Landlord of combinations to any vaults, locks and safes left at the Premises.  The acceptance of keys to the Premises by the Landlord, its agents, employees, contractors or any other person on Landlord’s behalf, shall not be deemed an acceptance of  surrender of the Premises or constitute a termination of this Lease.

 

20.2Holding Over.  If Tenant holds over or remains in possession of the Premises after the Expiration Date without the execution of a new Lease, no tenancy or interest in the Premises shall result from Tenant’s hold over or possession and Tenant shall be subject to immediate eviction and removal.  No notice to Tenant shall be required prior to the commencement of any legal action to gain possession of the Premises.  During any hold over or possession, Tenant shall be subject to the applicable terms and conditions set forth in this Lease, except that Base Rent shall escalate to one hundred fifty percent (150%) of the Base Rent that Tenant was obligated to pay Landlord under this Lease immediately prior to the Expiration Date prorated for the number of days of Tenant’s hold over or possession based on a three hundred sixty-five (365) day year.  Tenant shall pay Landlord for all damages incurred as a result of Tenant’s hold over or possession of the Premises, including, but not limited to, any claims made by a succeeding tenant and Landlord’s attorneys’ fees and costs; provided in no event shall Tenant be liable for (a) punitive damages or (b) consequential, or special damages, unless Tenant was made aware of the circumstance that gave rise to the consequential or special damages and Tenant continued to holdover. 

  

Article 21 – Miscellaneous

 

21.1Successors or Assigns.  All the terms, conditions, covenants and agreements of this Lease shall extend to and be binding upon Landlord, Tenant and their respective heirs, administrators, executors, successors, subtenants, concessionaires and assigns, and upon any person or persons coming into ownership or possession of any interest in the Premises by operation of law or otherwise.

 

21.2Authority of Parties.  If Landlord or Tenant is a corporation, partnership or other form of business entity, each individual executing this Lease on behalf of Landlord or Tenant respectively represents and warrants that: (a) Landlord or Tenant is a duly organized and validly existing entity; (b) Landlord or Tenant has full right and authority to enter into this Lease; (c) the person executing this Lease is duly authorized to execute and deliver this Lease on behalf of the Landlord or Tenant; and (d) this Lease is binding upon Landlord or Tenant in accordance with its terms.  Landlord and Tenant shall provide the other upon request with evidence reasonably confirming the foregoing representations.

 

 

	
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21.3Severability.  If any term, covenant, or condition of this Lease or the application thereof to any person or circumstance is, to any extent, invalid or unenforceable, or in conflict with the law of the jurisdiction, the remainder of this Lease or the application of such term, covenant or condition to persons or circumstances other than those as to which it is held invalid or unenforceable, shall not be affected and each term, covenant or condition of this Lease shall be valid and be enforced to the fullest extent permitted by law.

 

21.4 Waiver.  The failure of either party to enforce any term, covenant, condition or breach of this Lease shall not be deemed a waiver of the right to do so thereafter.  The acceptance by Landlord of Rent shall not be deemed a waiver of any term, covenant, condition or breach of this Lease.  No waiver of any term, covenant, condition or breach shall be effective unless in writing.  A written waiver of any term, covenant, condition or breach of this Lease shall not be deemed a waiver of any subsequent term, covenant, condition or breach, whether such subsequent term, covenant, condition or breach is the same or different, except as specified in writing in the waiver.  

 

21.5 Construction.  Landlord and Tenant and their respective counsel have reviewed and revised this Lease.  Landlord and Tenant acknowledge that the normal rule of construction to the effect that any ambiguities are to be resolved against the drafting party shall not be employed in the interpretation of this Lease.  

 

21.6Exhibits.  All exhibits referenced in this Lease and attached hereto are incorporated into this Lease and made a part of this Lease.  All depictions and drawings contained in any exhibit are for informational purposes only, and are not a warranty, representation or agreement that the Building or Premises will be as shown on the exhibits.

 

21.7Captions.  The captions contained in this Lease are for convenient reference only and shall not affect the construction or interpretation of this Lease.

 

21.8Time.  Time is of the essence of this Lease and each and all of its provisions in which performance is a factor.

 

21.9Choice of Law.  This Lease shall be governed by the laws of the state where the Premises is located.

 

21.10Jury Waiver Clause.  Landlord and Tenant waive their right to trial by jury in any action, proceeding or claim brought by either party against the other, or with the respect to any issue or defense raised therein, including the right to an advisory jury, on any matters whatsoever relating to this Lease, the relationship of Landlord and Tenant, Tenant’s use and occupancy of the Premises, including summary proceedings, possession actions, and any statutory remedy.  Notwithstanding the aforesaid, this jury waiver clause shall not apply to actions, proceedings or claims for personal injury or property damage. 

 

21.11Legal Expenses.  In the event of any litigation (including any counterclaim, cross‐claim, or claim in a bankruptcy or receivership proceeding) for the enforcement of any of the terms and conditions of this Lease, the prevailing party shall be entitled to recover from the other party all third party costs and expenses actually incurred as a result of the litigation, including, but not limited to, attorneys’ fees and costs.  

 

21.12Recording.  Except to the extent required by Governmental Regulations, Tenant shall not record or file this Lease or any assignment or security document pertaining to this Lease.  If Tenant does record the Lease or a related document, Tenant shall only record a memorandum of this Lease that does not include the Rent, and Tenant shall execute a recordable termination of such recorded document upon expiration or earlier termination of this Lease. 

 

	
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21.13Notices.  Any notice required or permitted pursuant to this Lease shall be in writing and delivered by (a) personal delivery, (b) reputable overnight delivery service, or (c) United States mail, postage prepaid, either certified or first class mail.  All notices to the Tenant shall be sent to the address of the Premises or to the address contained in Article 1 or to such other address designated by proper notice.  All notices to the Landlord shall be sent to the address contained in Article 1 or to such other address designated by proper notice.   Notices shall be deemed given upon the earlier of the date of actual receipt or (1) as of the earlier of the date of delivery or the date of first attempted delivery if by personal delivery or overnight delivery, or (2) as of the earlier of the date of delivery or the date the post office first leaves notice of the mailing if by certified mail.   Except as expressly provided otherwise in this Lease, no notices may be provided by email.

 

21.14Brokerage Commissions.  Landlord and Tenant each hereby represent and warrant to each other that, except for the Brokers identified in Section 1.16 of this Lease, no person, firm, corporation or other entity is entitled to any brokerage commission or finder’s fee on account of the execution, delivery, and consummation of this Lease.  Tenant hereby agrees to indemnify Landlord and to hold Landlord free and harmless of and from any and all claims, losses, damages, costs, and expenses of whatsoever nature, including attorney’s fees and costs of litigation arising from or relating to any other brokerage commissions or finder’s fees incurred by Tenant in connection with this Lease.  Landlord hereby agrees to indemnify Tenant and to hold Tenant free and harmless of and from any and all claims, losses, damages, costs, and expenses of whatsoever nature, including attorney’s fees and costs of litigation arising from or relating to any other brokerage commissions or finder’s fees incurred by Landlord in connection with this Lease.  These obligations of Landlord and Tenant shall survive the expiration or earlier termination of this Lease.  Commissions payable to the Brokers identified in Section 1.16 of this Lease shall be paid by Landlord pursuant to a separate written agreement between Landlord and Landlord’s Broker dated January 30, 2017, and last amended April 26, 2019.  

 

21.15Submission.  Submission of this Lease by Landlord to Tenant for examination and/or execution shall not in any manner bind Landlord and no obligations of Landlord shall arise under this Lease unless and until this Lease is fully signed and delivered by Landlord and Tenant; provided, however, the execution and delivery by Tenant of this Lease to Landlord shall constitute an offer by Tenant of the terms, covenants and conditions contained in this Lease, which offer may not be revoked for a period of thirty (30) days after such delivery.

 

21.16Force Majeure.  The time period within which any party shall be required to perform any act under this Lease, except for payment of money, shall be extended to the extent that the performance of such act shall be delayed by Force Majeure.    Notwithstanding the foregoing, Force Majeure shall not excuse Tenant from the prompt and timely payment of the Rent when due under this Lease.   

 

21.17Entire Agreement/Amendment.  This Lease, together with its exhibits, is the entire agreement of the parties and all prior oral and written agreements, understandings, representations, warranties, promises and statements of the parties and their respective officers, directors, partners, agents and brokers shall be merged into this Lease with respect to the subject matter of this Lease and its exhibits.  No such prior oral or written agreement, understanding, representation, warranty, promise or statement shall be effective or binding for any reason or purpose unless specifically set forth in this Lease and/or its exhibits.  No provision of this Lease or its exhibits may be amended or modified except by an agreement in writing signed by the parties or their respective successors in interest.

 

21.18Survival.  All obligations of Tenant under this Lease that have accrued but are not fully performed as of the expiration or earlier termination of this Lease shall survive the expiration or earlier termination of 

 

	
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this Lease, including, but not limited to, the obligation to pay Rent and the obligations concerning the condition of the Premises as expressly provided herein.

 

21.19Counterparts.  This Lease may be executed separately and independently in any number of counterparts, each of which when so executed and delivered shall be deemed an original, but such counterparts shall together constitute but one and the same instrument.  Any counterpart of this Lease may be executed and delivered by electronic transmission (including, without limitation, in portable document format (pdf) transmitted by email) and shall have the same force and effect as an original.

 

21.20OFAC Representation.  For purposes hereof, “List” shall mean the Specially Designated Nationals and Blocked Persons List maintained by OFAC and/or on any other similar list maintained by OFAC pursuant to any authorizing statute, executive order or regulation, and “OFAC” shall mean the Office of Foreign Assets Control, Department of the Treasury.  Each party represents and warrants to the other that (a) each Person owning a 10% or greater interest in such party is (1) not currently identified on the List, and (2) is not a person with whom a citizen of the United States is prohibited to engage in transactions by any trade embargo, economic sanction, or other prohibition of United States law, regulation, or Executive Order of the President of the United States and (b) each party has implemented procedures, and will consistently apply those procedures, to ensure the foregoing representations and warranties remain true and correct at all times.  Each party shall comply with all requirements of law relating to money laundering, anti-terrorism, trade embargos and economic sanctions, now or hereafter in effect and shall use reasonable efforts to notify the other in writing if any of the forgoing representations, warranties or covenants are no longer true or have been breached or if such party has a reasonable basis to believe that they may no longer be true or have been breached.  In addition, at the request of a party, the other party shall provide such information as may be requested by the requesting to determine the other party’s compliance with the terms hereof.

 

Article 22 – Additional Definitions

 

22.1Additional Definitions.  Capitalized terms referenced in this Lease shall have the meaning set forth in the Article 1 and as set forth below:

 

(a)“ADA” - Americans with Disabilities Act.

 

(b)“Additional Rent” - Shall have the meaning set forth in Article 1. All payments required to be made by Tenant under any of the terms of this Lease not otherwise specifically defined as Base Rent.  Except as specifically set forth to the contrary in this Lease, all Additional Rent not paid on a monthly basis as set forth in this Lease shall be due within thirty (30) days after written notice by Landlord setting forth the amount due. 

 

(c)“Default Rate of Interest” - The lesser of eight percent (8%) per annum or the maximum rate of interest legally allowed to be charged pursuant to the laws of the state where the Premises is located.

 

(d)“Effective Date” - The date first set forth on page 1 of this Lease.

 

(e)“Expiration Date” - The date which is the last day of the Lease Term; provided that if the Tenant has exercised an Option, the Expiration Date shall be extended through the last day of the latest exercised Option Period.

 

 

	
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(f)“Force Majeure” – An act of God, fire, windstorm, flood, explosion, collapse of structure or other casualty, epidemic, infectious disease, riot, war, terrorism, military power, labor disputes, failure of utility service, court order, inability to obtain materials, adverse weather that is unusual and unanticipated for the period of time, concealed or unknown site conditions not revealed prior to the date of this Lease, or other causes or acts beyond the reasonable control of a party.  The definition of Force Majeure shall not include inadequacy of insurance proceeds, financial inability or the lack of suitable financing.   

 

(g)“Governmental Regulations” - All federal, state, county or municipal laws, ordinances, rules, regulations, directives, orders and/or requirements now in force or which may hereafter be in force with respect to the Premises.

 

(h)“Hazardous Substances” - Any pollutant, toxic or hazardous waste or substance, petroleum product, oil, asbestos, PCB or other substance regulated, prohibited, restricted or controlled by Governmental Regulations related to the protection of health or the environment or posing a risk to the health and safety of a person.

 

(i)“HVAC” - Heating, ventilation and air conditioning system.

 

(j)“Insurance Premiums” - All costs incurred by Landlord for insurance and any deductibles of such insurance pursuant to Article 12 of this Lease.

 

(k)“Lease” - This agreement and its exhibits.  

 

(l)“Lease Year” - A twelve (12) month period starting on the following date and each anniversary date thereafter: (1) the Rent Commencement Date if such date is the first day of the calendar month; or (2) the first day of the calendar month next following the Rent Commencement Date if such date is not the first day of the calendar month.  The first Lease Year shall include the period from the Rent Commencement Date to the first anniversary date and may be for a period longer than twelve (12) months.

 

(m)“Operating Costs” – (i) All costs incurred by Landlord for the operation, maintenance, repair and supervision of the Premises, including, but not limited to, all costs incurred in connection with: (1) Landlord’s obligations under Article 8 of this Lease (but specifically not including those items described in Article 8 which cannot be included in Operating Costs); and (2) a management fee equal to three percent (3%) of Rent (“Management Fee”); or 

 

(ii)  If Tenant properly exercises its Self-Management Option in accordance with Section 8.6, the Operating Costs shall be limited to the following, up to and including the Self-Management Termination Date: (1) an administrative fee equal to $1,000.00 per month (“Administrative Fee”); (2) intentionally omitted; (3) the costs and interest for the replacement of Existing Office HVAC Units in accordance with Section 8.3(c); (4) the costs and interest for the replacement of the roof in accordance with Section 8.4(a); (5) the costs and interest for total replacement of all parking and drive lane areas in accordance with Section 8.5(g); and (6) unpaid Operating Costs incurred under 22.1(m)(i) before the Self-Management Effective Date.  If Landlord or Tenant terminate Tenant’s option to Self-Manage the Premises pursuant to Section 8.6, then, upon the Self-Management Termination Date, Operating Costs shall have the meaning in Section 22.1(m)(i).

 

“Operating Costs” shall not include costs specifically excluded from Operating Costs under this Lease.  In no event shall the term Operating Costs include principal or interest payments on any 

 

	
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loans secured by mortgages on the Premises or any part thereof; depreciation (other than as set forth above); leasing commissions, advertising expenses, and legal fees for the preparation of leases; costs recovered by Landlord pursuant to insurance policies and eminent domain awards; and any management or administrative fee other than the Management Fee (or the Administrative Fee, during any period of Tenant’s Self-Management).  Operating Costs shall also not include costs or expenses of the limited liability company, partnership or other entity comprising the Landlord not directly related to the Premises such as accounting fees, tax return preparation costs, income taxes and compensation paid to officers, executives or partners of Landlord that are not providing services directly related to the Premises.  Operating Costs shall also not include all items and services for which Tenant is expressly required under this Lease to pay, and does pay, directly to third persons.

 

(n)“Option(s)” - The right of Tenant to extend the Lease Term for one or more of the Option Periods.

 

(o)“Real Estate Taxes” - All real estate taxes, special assessments and other governmental charges of any kind with respect to the Premises that are due and payable during the Lease Term.  In the event a special assessment extends beyond the Lease Term, the special assessment may be paid in full by Landlord and amortized over the life of the improvement, which life shall not exceed the greater of ten (10) years or the longest period allowed by applicable law with respect to such assessment.  Only the amortized amount of such special assessment shall be included in the definition of Real Estate Taxes during the Lease Term.  Real Estate Taxes shall not include special assessments for infrastructure or capital improvements related to the initial development of the Premises or surrounding area by Landlord.  Real Estate Taxes shall not include interest or penalties imposed upon Landlord for late payment of Real Estate Taxes due to Landlord, but shall include interest or penalties imposed for late payment of Real Estate Taxes due to Tenant.

 

(p)“Rent” - Base Rent and Additional Rent.

 

(q)“Tenant’s Work” – All improvements to be constructed by Tenant for the Premises so as to allow Tenant to operate its business at the Premises.   

 

(r)“Worth” - The Worth shall be computed by applying the primary credit discount rate of the Federal Reserve Bank of Minneapolis or an equivalent rate selected by Landlord if no longer published as of the date of termination to get a present value. 

 

 

 

signature pages follow

 

	
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IN WITNESS WHEREOF, the parties have made and entered into this Lease as of the Effective Date.

 

 

 

LANDLORD:

 

 

WHITEWATER PROPERTIES I, LLC,

a Minnesota limited liability company 

 

 

 

	
By:
	
/s/ Jerome A. Miller
	
 
	
 

	
Print:
	
Jerome A. Miller 
	
 
	
 

	
Its:
	
Chief Manager 
	
 
	
 

 

 

 

 

 

 

TENANT:

 

ANTARES PHARMA, INC., 

a Delaware corporation

 

 

 

	
By:
	
/s/ Fred Powell
	
 
	
 
	
 

	
 
	
 
	
 
	
 
	
 

	
Print:
	
Fred Powell 
	
 
	
 
	
 

	
 
	
 
	
 
	
 
	
 

	
Its:
	
Executive Vice President and Chief Financial Officer

 

 

 

 

	
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Exhibit A-1 to Lease

 

Legal Description of the Premises

 

Lot 3, Block 1, Minnetonka Corporate Center 2nd Addition, Hennepin County, Minnesota. 

 

Torrens Property

 

 

 

 

A-1-1

 

Exhibit A-2 to Lease

 

Depiction of the Premises (outlined area)

 

 

 

 

A-2-1

 

Exhibit B to Lease

 

Tenant’s Work 

 

1.Tenant’s Work.  Tenant, through its contractor, and at its cost, but subject to reimbursement from the Tenant Allowance, shall be responsible for the construction of all improvements to the Premises for the operation of Tenant’s business at the Premises (“Tenant’s Work”).  Tenant anticipates that the Tenant’s Work will be completed in multiple phases, which shall be identified and defined in Tenant’s Plans (each a “Phase”) for each such Phase. Tenant’s Work shall also include, but not be limited to, the following:  (a) all improvements to be constructed by Tenant at the Premises pursuant to Tenant Plans (as defined below) and the obligations set forth in this exhibit and the Lease; (b) all trade fixtures, equipment, furniture, furnishings, decorating (including wall and floor coverings), telephone equipment, electronic, internet and data cabling, or other personal property; (c) all interior and exterior signs and design elements; (d) interior or exterior identification or way finding improvements and signs; (e) lighting, fire and life safety and building management systems and any other improvements within the Premises needed for the operation of Tenant’s business at the Premises; (f) additional or supplemental HVAC units; (g) improvements or modifications located anywhere within the Premises that are needed for compliance with Governmental Regulations as a result of:  (1) Tenant’s Work; or (2) the use of the Premises for the Permitted Use; or (3) any construction or alterations to the Premises made by Tenant; and (h) all modifications needed to the Premises as a result of changes in Governmental Regulations after the Delivery Date in accordance with Section 3.7 of this Lease.

 

Tenant’s Work shall be undertaken and completed in a good and workmanlike manner and in compliance with the terms of the Lease, this exhibit and all Governmental Regulations.  Tenant shall ensure that all skill and workmanship in Tenant’s Work shall be of uniformly high quality, and in accordance with the good standards of practice.  All improvements for Tenant’s Work shall be a commercial standard comparable to similar buildings in the Minnetonka Corporate Center, which is where the Premises is located.  Prior to commencement of each Phase of Tenant’s Work, Tenant shall also furnish Landlord with a construction schedule that identifies the timing for major components of such Phase of Tenant’s Work and copies of all construction contracts and subcontracts that Tenant receives.  Tenant is authorized to enter the Premises and perform the first phase of Tenant’s Work commencing on the Delivery Date; provided that Tenant may not proceed with any phase of Tenant’s Work until the date that Tenant obtains all approvals of Landlord required under this exhibit, including, but not limited to, the approval by Landlord of Tenant Plans for the first Phase of Tenant’s Work and Tenant’s general contractor.  Upon Tenant’s authorization to enter the Premises and perform Tenant’s Work, Tenant shall proceed with reasonable diligence to complete Tenant’s Work in accordance with Tenant Plans approved by the parties so as to allow Tenant to operate its business. Tenant anticipates that the first Phase of Tenant’s Work will be substantially completed by the Rent Commencement Date.  Tenant shall pay Rent in accordance with the Lease regardless of when Tenant’s Work is substantially completed. 

 

Upon completion of each Phase of Tenant’s Work, Tenant shall notify Landlord that the Phase of Tenant’s Work has been completed and is available for inspection for conformance with the approved Tenant Plans.  Tenant shall provide the following to Landlord upon substantial completion of each Phase of Tenant’s Work:  (i) full and final lien releases from the general contractor and all subcontractors; (ii) a sworn construction statement from the general contractor referencing the total costs incurred for the completion of the current Phase of Tenant’s Work; (iii) to the extent available based on the portion of the Tenant’s Work included in such Phase, a final certificate of occupancy or other similar documentation from the government agency having jurisdiction; and (iv) a written statement from Tenant’s architect or contractor that the current Phase of Tenant’s Work is substantially completed in accordance with Tenant Plans.  All documentation required to be provided to Landlord shall be in a form reasonably acceptable to Landlord.  All improvements defined as Tenant’s Work shall be owned by Tenant until the Expiration Date or sooner termination of this Lease, at which time ownership shall vest in Landlord in accordance with 

B-1

 

Section 11 of the Lease, except that Tenant’s trade fixtures, equipment and personal property (including but not limited to Tenant’s racking and sprinkler systems integrated therein, provided that Tenant replace any sprinklers taken or moved so that the Building sprinkler system complies with Governmental Regulations after Tenant vacates the Premises) shall remain the property of Tenant.   

 

2.Tenant Plans.  Tenant shall, at its cost, subject to reimbursement from the Tenant Allowance as provided below, prepare the plans and specifications necessary for the construction of each Phase of Tenant’s Work (“Tenant Plans”).  Tenant Plans for each Phase of Tenant’s Work must be approved by Landlord prior to the commencement of construction of such Phase.  For purposes of clarity, the parties agree and acknowledge that the Tenant Plans for each Phase of Tenant’s Work will be reviewed and approved separately using the process set forth in this Section 2.  Tenant Plans for each Phase delivered to Landlord shall be completed in sufficient detail to be submitted for building permits and sign permits for such Phase and to serve as the detailed construction drawings and specifications for such Phase.  Tenant Plans shall comply with all Governmental Regulations, including, but not limited to, all building codes and the ADA.  As required by Landlord, Tenant shall submit one set of sepia reproducible or one set of blue line prints to Landlord for approval and coordination.  Within five (5) days of Landlord’s request, Tenant will set a date for a meeting with Tenant’s design team, Tenant’s builder and the Landlord to discuss the Tenant Plans for such Phase.  Landlord shall have fifteen (15) days from receipt of each Phase of Tenant Plans within which to review such Tenant Plans.  Landlord shall not unreasonably withhold its approval of Tenant Plans.  Failure by Landlord to approve or disapprove Tenant Plans within the time limits prescribed herein shall constitute approval by Landlord.  In the event Landlord disapproves or requires changes to Tenant Plans for any given Phase of Tenant’s Work, Tenant shall incorporate Landlord’s reasonable comments into such Tenant Plans within fifteen (15) days and resubmit such revised Tenant Plans to Landlord, who shall then have fifteen (15) days to approve or disapprove the revised Tenant Plans.  In the event Landlord does not approve the same, the procedures set forth herein shall be followed until such time as Landlord has approved such revised Tenant Plans.  Notwithstanding anything contained to the contrary herein in the event that in subsequent reviews of the Tenant Plans Landlord requires changes that were not identified on Landlord’s prior review(s), Landlord shall promptly reimburse Tenant for all costs associated with such plan revisions.  In no event shall Tenant be responsible for payment of any kind to Landlord or Landlord’s architect or other agent for costs incurred by Landlord in connection with Landlord’s review of Tenant’s Plans. 

 

Tenant Plans may be approved by Landlord and Tenant by affixing a signature or initials of an authorized officer or employee of both parties to each page of Tenant Plans or, at Tenant’s option, signature on signature page that identifies the revision number and drawing number of each particular drawing.  The signature or initial of an authorized officer or employee shall be deemed conclusive evidence of approval.  Upon approval of Tenant Plans for any given Phase by Landlord, Tenant shall not materially deviate from such Tenant Plans in the performance of Tenant’s Work, except as approved by Landlord in writing.  Landlord’s approval of any Tenant Plans shall not be deemed an acceptance or approval of any item that is in violation of Governmental Regulations or any restrictions affecting the Premises and shall not be a representation of compliance.  Landlord’s approval of any Tenant Plans shall not constitute a representation or warranty by Landlord as to the adequacy or sufficiency of such Tenant Plans or the improvements to which they relate.  

 

3.Government Permits, Licenses and Approvals.  Tenant shall, at its cost, be responsible to obtain and diligently pursue all permits, licenses and approvals for each Phase of Tenant’s Work (including, but not limited to, permits and approvals for finishing of the construction of the interior of the Premises and all sign permits) prior to commencement of each Phase of Tenant’s Work.  Tenant shall submit all applications for such permits and approvals to the proper governmental authority within thirty (30) days after Landlord’s approval of Tenant Plans for each Phase.   Tenant shall post such permits and licenses at the Premises as required by Governmental Regulations and shall promptly provide Landlord with copies of 

B-2

 

all permits, licenses and approvals.  Upon completion of each Phase of Tenant’s Work, Tenant shall be responsible to obtain the final certificate of occupancy for the Premises and provide an original to Landlord. 

 

4.Tenant’s Representative.  Tenant shall designate a representative knowledgeable in construction matters as Tenant’s representative to coordinate construction and provide any notices or directions to Landlord regarding Tenant Plans and Tenant’s Work.  Tenant shall provide Landlord with the name and contact of the Tenant’s representative prior to commencement of Tenant’s Work.  Tenant’s representative shall have authority to make decisions and commitments on behalf of Tenant with respect to any aspect of or change to Tenant’s Work.  Tenant’s representative shall keep Landlord’s construction representative regularly informed on the progress of Tenant’s Work. 

 

5.Tenant Contractors.  Tenant is responsible for all contracts relating to the construction, completion and payment of Tenant’s Work.  Tenant shall also be responsible for the compliance by Tenant’s general contractors, subcontractors, engineers, material suppliers and vendors (“Tenant Contractors”), and their employees, agents, invitees, vendors and licensees, with the following:  (a) the terms and conditions of this exhibit and all rules and regulations within this exhibit; and (b) intentionally omitted; (c) maintaining insurance covering Landlord as an insured party with such coverages and in such amounts as set forth in this exhibit.  Prior to commencement of Tenant’s Work, Tenant shall also furnish Landlord with a construction schedule that identifies the timing for major components of each Phase of Tenant’s Work and copies of all contracts and subcontracts.  Tenant Contractors must be licensed to do business in the state where the Premises is located.

 

6.Landlord Inspection and Participation.  During the course of construction of Tenant’s Work, Landlord may, upon not less than twenty-four (24) hours prior notice (or such shorter period as may be agreed to on a case-by-case basis by Tenant) and at reasonable times, but shall have no obligation to, inspect and supervise Tenant’s Work and the materials to be used, so long as such inspection or supervision does not unreasonably delay the progress of Tenant’s Work.  Landlord shall not by reason of any inspection or supervision assume or have any responsibility to Tenant or any entity for either the quality of any Tenant’s Work or any loss, injury or damage suffered by anyone by reason of the quality or performance of any Tenant’s Work.  Landlord shall have no responsibility to any person to report any deficiency which may be revealed by any inspection.  Landlord’s construction representative shall be invited to all meetings related to Tenant’s Work in accordance with Section 12(l).  

 

7.Insurance.  Prior to the commencement of Tenant’s Work, Tenant, at its own cost and expense, shall obtain, or require its contractors to obtain, and thereafter maintain so long as such construction activities are being performed, at least the following minimum insurance coverages:  (a) builder’s risk – completed value form builder’s risk policy providing insurance against direct cause of physical loss, including the cost of debris removal, in the amount of not less than the full insurable replacement cost of Tenant’s Work; (b) commercial general liability insurance in the amount of one million dollars ($1,000,000) combined single limit per occurrence and two million dollars ($2,000,000) in the aggregate, including completed operations coverage; (c) automobile liability insurance in the amount of one million dollars ($1,000,000) combined single limit per accident; (d) umbrella liability insurance in the amount of five million dollars ($5,000,000); (e) workers’ compensation insurance in the statutory amount required; and  (f) employers liability insurance in the amount of one million dollars ($1,000,000) bodily injury per accident and one million dollars ($1,000,000) bodily injury by disease both as a policy limit and per employee.  Landlord shall be an additional insured on the policies of builder’s risk and liability insurance required to be maintained by Tenant.  Prior to the commencement of Tenant’s Work, Tenant shall deliver to Landlord’s representative certificates of all required insurance together with evidence of the payment of premiums.  

 

B-3

 

8.Indemnification and Liens.  Tenant shall defend, indemnify and hold Landlord harmless from all claims, lawsuits, costs, expenses, damages or liabilities (including reasonable attorneys’ fees and costs) arising or resulting from the performance of Tenant’s Work or any construction activities of Tenant at the Premises.  Tenant shall keep the Premises free from any liens arising out of any construction work performed by or on behalf of Tenant, including Tenant’s Work, materials furnished by or on behalf of Tenant or any other obligations incurred by Tenant.  In the event that Landlord reasonably believes that Tenant’s Work is not being paid or will not be paid, upon request by Landlord, Tenant shall stop performance of Tenant’s Work until Landlord is furnished with reasonable evidence that Tenant has made provision to pay the full cost of Tenant’s Work.  Tenant shall defend, indemnify and hold Landlord and the Premises harmless from and against all claims in the nature of mechanics’ liens arising out of either any contracts entered into, or any services, labor or materials rendered, with respect to Tenant’s Work or any construction activities performed at the direction of Tenant or its contractors.  The provisions of this Section shall survive the expiration or termination of this Lease.  

 

9.Tenant Allowance.  The Tenant Allowance shall be used solely as a contribution towards payment of the costs of designing, engineering and constructing Tenant’s Work, including but not limited to architectural and engineering services, demolition work, physical improvements, permanent construction of floors, walls, finishes and enhancements to the electrical services and air handling / HVAC services.  Tenant agrees to pay when due any amounts in excess of the Tenant Allowance as necessary to complete Tenant’s Work or any other leasehold improvements for the operation of Tenant’s business at the Premises.  Any unspent Tenant Allowance not able to be used to pay costs for Tenant’s Work shall belong to Landlord.  The Tenant Allowance shall be requested to be disbursed by Tenant and all requirements for disbursement satisfied within thirty-six (36) months after the Delivery Date of the Lease, or the portion of the Tenant Allowance not disbursed will be forfeited with no further obligation on the part of Landlord to pay the Tenant Allowance or change the Base Rent.

 

(a)First Tenant Allowance Disbursement: Space Planning.  After the Effective Date, Landlord shall pay up to nine thousand ninety-four and 20/100 dollars ($9,094.20) of the Tenant Allowance to Tenant within thirty (30) days after Landlord receives a draw request from Tenant that includes: (i) the amount requested; and (ii) invoices or other reasonable evidence from Tenant’s architect or other design professionals performing space planning services for Tenant that substantiate the amount requested. 

 

(b)Second Tenant Allowance Disbursement.  On or after September 1, 2019, Landlord shall pay up to seven hundred fifty thousand and no/100 ($750,000.00) of the Tenant Allowance to Tenant within thirty (30) days after the date Landlord receives a draw request from Tenant that includes: (i) the amount requested; (ii) a sworn construction statement or application for payment that lists all contractors and subcontractors and includes the following for each:  amount of contract; amount previously paid; amount being paid by the current draw; balance to complete; and the amount for which lien waivers have been obtained; (iii) invoices for portions of the Tenant’s Work for which payment has been requested; (iv) partial lien waivers for such work from all persons or entities that could file mechanics’ or materialmen’s liens against the Premises with respect to all work performed or services or materials provided through the date of each such invoice (subject only to receipt of the requested amount), and (v) reasonable evidence that all labor or materials included within the Tenant’s Work for which the request is being submitted has been incorporated into the Premises.

 

(c)Third Tenant Allowance Disbursement.  On or after January 1, 2021, Landlord shall pay up to two hundred twenty-five thousand and no/100 ($225,000.00) of the Tenant Allowance to Tenant within thirty (30) days after the date Landlord receives a draw request from Tenant that includes: (i) the amount requested; (ii) a sworn construction statement or application for payment that lists all contractors and subcontractors and includes the following for each:  amount of contract; amount previously paid; amount being paid by the current draw; balance to complete; and the amount for which lien waivers have been obtained; (iii) invoices for portions of the Tenant’s Work for which payment has been requested; (iv) partial lien waivers for 

B-4

 

such work from all persons or entities that could file mechanics’ or materialmen’s liens against the Premises with respect to all work performed or services or materials provided through the date of each such invoice (subject only to receipt of the requested amount), and (v) reasonable evidence that all labor or materials included within the Tenant’s Work for which the request is being submitted has been incorporated into the Premises.

 

(d)Fourth Tenant Allowance Disbursement.  On or after January 1, 2022, Landlord shall pay up to two hundred twenty-five thousand and no/100 ($225,000.00) of the Tenant Allowance to Tenant within thirty (30) days after the date Landlord receives a draw request from Tenant that includes: (i) the amount requested; (ii) a sworn construction statement or application for payment that lists all contractors and subcontractors and includes the following for each:  amount of contract; amount previously paid; amount being paid by the current draw; balance to complete; and the amount for which lien waivers have been obtained; (iii) invoices for portions of the Tenant’s Work for which payment has been requested; (iv) partial lien waivers for such work from all persons or entities that could file mechanics’ or materialmen’s liens against the Premises with respect to all work performed or services or materials provided through the date of each such invoice (subject only to receipt of the requested amount), and (v) reasonable evidence that all labor or materials included within the Tenant’s Work for which the request is being submitted has been incorporated into the Premises.

 

In addition to the above, upon completion of all Phases Tenant’s Work, Tenant shall provide Landlord with all of the following in a form reasonably acceptable to Landlord:  (a) full and final lien releases from the general contractor and all subcontractors; (b) a sworn construction statement from the general contractor referencing the total costs incurred for the completion of Tenant’s Work; (c) a written statement from Tenant’s architect or contractor that Tenant’s Work is substantially completed in accordance with Tenant Plans; (d) invoices or other evidence from the third parties performing Tenant’s Work that substantiates:  (1) the completion of the Tenant’s Work; and (2) the costs incurred to complete the Tenant’s Work; and (e) a copy of the certificate of occupancy for Tenant’s Work, if available.  Notwithstanding anything to the contrary herein, Landlord shall not be obligated to pay any portion of the Tenant Allowance as long as any Event of Default is continuing hereunder.  If Landlord fails to pay any portion of the Tenant Allowance when due, Tenant may offset any balance due against Rent then due or thereafter accruing under this Lease, provided that Tenant is not in Default under the Lease. 

 

10.Construction Management Fee.  Provided that Tenant uses construction administration services from Tenant’s architecture firm and also hires a third party construction management and service company to manage, inspect and supervise Tenant’s Work, then Landlord shall not charge Tenant a construction management fee for oversight of Tenant’s Work.  However, Landlord may, in its discretion, inspect Tenant’s Work and the costs of any such inspection shall be the responsibility of Landlord.

 

11.Intentionally omitted.

 

12.Miscellaneous Requirements.  Tenant shall, at its cost, comply with the following: 

 

	
 
	
(a)
	
Construction Drawings.  If Tenant obtains “as-built” construction drawings for some or all of Tenant’s Work, Tenant shall provide Landlord with a copy.  If Tenant does not obtain “as-built” construction drawings, then Tenant shall provide Landlord with a copy of the marked-up construction drawings showing the completed Tenant’s Work. 

	
 
	
(b)
	
Operation Manuals.  Upon Landlord’s written request and contemporaneously with Tenant’s vacation of the Premises, Tenant shall provide Landlord with operation and maintenance manuals and copies of warranties for all equipment installed at the Premises that will remain at the Premises when Tenant vacates.

B-5

 

	
 
	
(c)
	
Intentionally omitted.

	
 
	
(d)
	
Intentionally omitted.

	
 
	
(e)
	
Clean-up.  Tenant shall keep the Premises and adjacent areas reasonably free from accumulations of debris caused by Tenant’s construction and its contractors and/or agents.  Tenant shall arrange for services to be provided for the removal of debris and regular clean-up during the period of Tenant’s construction activity.  Landlord may require clean-up if Landlord receives an official notice from a governmental entity and reserves the right to do clean-up at the reasonable expense of Tenant if Landlord’s request for clean-up in this regard is not complied with within the time period required by such official governmental notice.  At the completion of Tenant’s Work, Tenant shall promptly cause the removal all rubbish and all tools, equipment and surplus materials (including paint, wall coverings and carpet) from and about the Premises and shall leave the Premises in the condition required under the Lease.  

	
 
	
(f)
	
Deliveries.  Tenant shall be responsible for all deliveries and unloading of all materials pertaining to Tenant’s construction activities. 

	
 
	
(g)
	
Damage. Tenant shall be responsible for any damage caused by Tenant’s construction activities to the Premises or any property of Landlord and shall repaired any such damage, at its cost, to the satisfaction of Landlord.

	
 
	
(h)
	
Tenant shall impose and enforce all provisions in this Exhibit on any contractor, subcontractor, material supplier, vendor, architect, engineer, designer, workmen or agent performing any of Tenant’s construction activities, and shall be responsible for any violations of these provisions by such persons.  

	
 
	
(i)
	
Tenant shall clean and replace as needed all HVAC filters clogged by dust or other debris from Tenant’s construction activities.  

	
 
	
(j)
	
Tenant’s Work shall not in any way alter or modify the exterior appearance of the Building, except for Tenant’s signage, the generator installed outside, equipment installed on the roof pursuant to the Tenant Plans, and as otherwise set forth in the Tenant Plans, or damage or compromise the structural integrity of the Building unless approved in writing by Landlord, which approval shall not be unreasonably withheld, conditioned or delayed.   Tenant’s Work shall not include any penetration of the roof or roof membrane without the prior written approval and supervision of Landlord, which approval shall not be unreasonably withheld, conditioned or delayed. 

	
 
	
(k)
	
During the period of Tenant’s construction, Tenant shall provide and pay for the consumption of all utilities to the Premises.

B-6

 

	
 
	
(l)
	
Landlord shall be invited to all construction meetings that occur between Tenant and the contractor after the Tenant Plans have been approved.  If Landlord’s presence at the meetings unreasonably delays the progress of construction per the approved Tenant Plans, then Landlord may no longer attend the meetings, however, Tenant shall provide Landlord with the minutes from each meeting with the contractor within two (2) day of the meeting.  related to Tenant’s Work.  

	
 
	
(m)
	
Upon completion of Tenant’s Work, Tenant shall notify Landlord that Tenant’s Work has been completed and is available for inspection for conformance with the approved Tenant’s Plans.  

 

 

 

 

 

 

B-7

 

Exhibit C to Lease

 

Premises Furniture, Fixtures and Equipment 

 

	
1.
	
Items that can be removed by Landlord:

 

	
 
	
a.
	
The roughly 12 desk/office furniture systems located in the private offices of the front office area.

 

	
 
	
b.
	
Miscellaneous tables and chairs located in the open office areas, as of 5/15/19.

 

	
 
	
c.
	
Cabinetry, countertops, cubicles, furniture, and appliances can be removed from the Development Lab area (#210) that measures roughly 101’ x 41’.

 

	
 
	
d.
	
G-15 lift and miscellaneous construction tools and supplies located in the fenced-in warehouse area on 5/15/2019.

 

	
 
	
e.
	
The high pressure steam boiler and its associated components.

 

	
 
	
f.
	
Roughly 50 linear feet of magnetic whiteboards in the warehouse conference room.

 

	
2.
	
Items specifically noted to remain in the Premises:

 

	
 
	
a.
	
1st Floor Breakroom chairs and tables (roughly 10 tables and 20 chairs).

 

	
 
	
b.
	
Break room refrigerators (2 refrigerators).

 

	
 
	
c.
	
Chairs and tables in the 2nd floor Conference Room (#100) on 5/15/2019 (6 tables & 12 chairs).

 

	
 
	
d.
	
Chairs and tables in the 2nd floor Conference Room (#103) on 5/15/2019 (1 tables & 12 chairs), which is the room we met in, on 5/15/2019.

 

	
 
	
e.
	
Chairs in the 2nd floor Conference Room (#123) on 5/15/2019 (14 chairs).

 

	
 
	
f.
	
Pallet Racking in the warehouse as of 5/15/2019.

 

	
 
	
g.
	
Office whiteboards and TV’s that were hanging on the walls on 5/15/2019.

 

	
 
	
h.
	
All exterior patio furniture at the Premises on 5/15/2019.

 

	
 
	
i.
	
The existing pallet wrapping machine near the dock area (note: landlord provides no warranty).

 

	
 
	
j.
	
The PH balancing/water treatment system/equipment and its associated stainless steel tank.

 

 

C-1

 

Exhibit D to Lease

 

Existing Office HVAC Units

 

 

 

D-1

 

EXHIBIT E to Lease

 

Amortization Calculator Example

 

 

E-1

 

 

 

 

E-2

 

 

E-3

 

 

 

E-4

 

 

 

E-5

 

 

 

E-6

 

 

 

 

E-7

 

 

 

E-8EX-10.1

 Exhibit 10.1 

Execution Copy 

FLX BIO, INC. 
 AMENDED
AND RESTATED INVESTORS’ RIGHTS AGREEMENT 
 This AMENDED AND RESTATED INVESTORS’ RIGHTS AGREEMENT (the
“Agreement”) is made as of the 18th day of December, 2018, by and among FLX Bio, Inc., a Delaware corporation (the “Company”), and the investors listed on
Schedule A hereto, each of which is herein referred to as an “Investor” and collectively as the “Investors” and amends and restates in its entirety the Prior Agreement (as defined below). 

RECITALS 
 WHEREAS,
on the date of this Agreement, the Company and certain of the Investors have entered into that certain Series C-2 Preferred Stock Purchase Agreement (the “Series C Agreement”); 

WHEREAS, in order to induce such Investors to purchase Series C-2 Preferred Stock, par value
$0.0001 per share (the “Series C-2 Preferred Stock”) and invest funds in the Company pursuant to the Series C-2 Agreement, the Investors and the Company
hereby agree that this Agreement shall govern the rights of the Investors to cause the Company to register shares of Common Stock, par value $0.0001 per share (the “Common Stock”), issued or issuable to them and certain other
matters as set forth herein; 
 WHEREAS, certain of the Investors (the “Prior Investors”) are holders of the
Company’s Series A Preferred Stock (the “Series A Preferred Stock”), Series B Preferred Stock (the “Series B Preferred Stock”) and, Series C Preferred Stock (the
“Series C Preferred Stock” and together with the Series A Preferred Stock, Series B Preferred Stock and Series C-2 Preferred Stock, the “Preferred Stock”); 

WHEREAS, the Prior Investors and the Company are parties to an Investors’ Rights Agreement dated December 15th, 2017 (the
“Prior Agreement”); and 
 WHEREAS, the parties to the Prior Agreement desire to amend and restate the Prior
Agreement and accept the rights and covenants hereof in lieu of their rights and covenants under the Prior Agreement. 
 NOW,
THEREFORE, THE PARTIES HEREBY AGREE AS FOLLOWS: 
 1. Definitions. For purposes of this Agreement: 

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

(b) The term “Affiliate” means, with respect to any Person, any other Person who or which, directly or indirectly, controls,
is controlled by, or is under common control with such specified Person, including, without limitation, any general partner, officer, director or manager of such Person and any venture capital fund now or hereafter existing that is controlled by one
or more general partners or managing members of, or is under common investment management with, such Person. 

  
 1. 

 (c) The term “Board” means the Company’s Board of Directors, as
constituted from time to time. 
 (d) The term “Form S-3” means such form under
the Act as in effect on the date hereof or any registration form under the Act subsequently adopted by the SEC that permits inclusion or incorporation of substantial information by reference to other documents filed by the Company with the SEC. 

(e) The term “Free Writing Prospectus” means a free-writing prospectus, as defined in Rule 405. 

(f) The term “Holder” means any Person owning or having the right to acquire Registrable Securities or any assignee thereof
in accordance with Section 2.10 of this Agreement. 
 (g) The term “Initial Offering” means the Company’s first
firm commitment underwritten public offering of its Common Stock under the Act. 
 (h) The term “1934 Act” means the
Securities Exchange Act of 1934, as amended. 
 (i) The term “Person” shall mean any individual, corporation, partnership,
trust, limited liability company, association or other entity. 
 (j) The terms “register,” “registered,”
and “registration” refer to a registration effected by preparing and filing a registration statement or similar document in compliance with the Act, and the declaration or ordering of effectiveness of such registration statement or
document. 
 (k) The term “Registrable Securities” means (i) the Common Stock issuable or issued upon conversion of
the Preferred Stock, and (ii) any Common Stock of the Company issued as (or issuable upon the conversion or exercise of any warrant, right or other security that is issued as) a dividend or other distribution with respect to, or in exchange
for, or in replacement of, the shares referenced in (i) above, excluding in all cases, however, any Registrable Securities sold by a Person in a transaction in which his rights under Section 2 of this Agreement are not assigned. In
addition, the number of shares of Registrable Securities outstanding shall equal the aggregate of the number of shares of Common Stock outstanding that are, and the number of shares of Common Stock issuable pursuant to then exercisable or
convertible securities that are, Registrable Securities. 
 (l) The term “Restated Certificate” shall mean the
Company’s Amended and Restated Certificate of Incorporation, as amended and/or restated from time to time. 
 (m) The term
“Rule 144” shall mean Rule 144 under the Act. 
 (n) The term “Rule 144(b)(1)(i)” shall mean subsection
(b)(1)(i) of Rule 144 under the Act as it applies to Persons who have held shares for more than one (1) year. 

  
 2. 

 (o) The term “Rule 405” shall mean Rule 405 under the Act. 

(p) The term “SEC” shall mean the Securities and Exchange Commission. 

2. Registration Rights. The Company covenants and agrees as follows: 

2.1 Request for Registration. 

(a) Subject to the conditions of this Section 2.1, if the Company shall receive at any time after the earlier of (i) five (5) years
after the date of this Agreement or (ii) six (6) months after the effective date of the Initial Offering, a written request from the Holders of at least thirty percent (30%) of the Registrable Securities then outstanding (for purposes of this
Section 2.1, the “Initiating Holders”) that the Company file a registration statement under the Act covering the registration of Registrable Securities with an anticipated aggregate offering price of at least $20,000,000, then
the Company shall, within twenty (20) days of the receipt thereof, give written notice of such request to all Holders, and subject to the limitations of this Section 2.1, use its commercially reasonable efforts to effect, as soon as
practicable, the registration under the Act of all Registrable Securities that the Holders request to be registered in a written request received by the Company within twenty (20) days of the mailing of the Company’s notice pursuant to
this Section 2.1(a). 
 (b) If the Initiating Holders intend to distribute the Registrable Securities covered by their request by
means of an underwriting, they shall so advise the Company as a part of their request made pursuant to this Section 2.1, and the Company shall include such information in the written notice referred to in Section 2.1(a). In such event the
right of any Holder to include its Registrable Securities in such registration shall be conditioned upon such Holder’s participation in such underwriting and the inclusion of such Holder’s Registrable Securities in the underwriting (unless
otherwise mutually agreed by a majority in interest of the Initiating Holders and such Holder) to the extent provided herein. All Holders proposing to distribute their securities through such underwriting shall enter into an underwriting agreement
in customary form with the underwriter or underwriters selected for such underwriting by the Company (which underwriter or underwriters shall be reasonably acceptable to those Initiating Holders holding a majority of the Registrable Securities then
held by all Initiating Holders). Notwithstanding any other provision of this Section 2.1, if the underwriter advises the Company that marketing factors require a limitation on the number of securities underwritten (including Registrable
Securities), then the Company shall so advise all Holders of Registrable Securities that would otherwise be underwritten pursuant hereto, and the number of shares that may be included in the underwriting shall be allocated to the Holders of such
Registrable Securities pro rata based on the number of Registrable Securities held by all such Holders (including the Initiating Holders). In no event shall any Registrable Securities be excluded from such underwriting unless all other securities
are first excluded. Any Registrable Securities excluded or withdrawn from such underwriting shall be withdrawn from the registration. 

  
 3. 

 (c) Notwithstanding the foregoing, the Company shall not be required to effect a
registration pursuant to this Section 2.1: 
 (i) in any particular jurisdiction in which the Company would be required to execute a
general consent to service of process in effecting such registration, unless the Company is already subject to service in such jurisdiction and except as may be required under the Act; or 

(ii) after the Company has effected two (2) registrations pursuant to this Section 2.1, and such registrations have been declared
or ordered effective; or 
 (iii) during the period starting with the date sixty (60) days prior to the Company’s good faith
estimate of the date of the filing of and ending on a date one hundred eighty (180) days following the effective date of a Company-initiated registration subject to Section 2.2 below, provided that the Company is actively employing in good
faith its commercially reasonable efforts to cause such registration statement to become effective; or 
 (iv) if the Initiating Holders
propose to dispose of Registrable Securities that may be registered on Form S-3 pursuant to Section 2.3 hereof; or 

(v) if the Company shall furnish to Holders requesting a registration statement pursuant to this Section 2.1 a certificate signed by the
Company’s Chief Executive Officer or Chairman of the Board stating that in the good faith judgment of the Board, it would be seriously detrimental to the Company and its stockholders for such registration statement to be effected at such time,
in which event the Company shall have the right to defer such filing for a period of not more than ninety (90) days after receipt of the request of the Initiating Holders; provided that such right shall be exercised by the Company not
more than once in any twelve (12) month period; and provided further that the Company shall not register any securities for the account of itself or any other stockholder during such ninety (90) day period (other than a registration
relating solely to the sale of securities of participants in a Company stock plan, a registration relating to a corporate reorganization or transaction under Rule 145 of the Act, a registration on any form that does not include substantially the
same information as would be required to be included in a registration statement covering the sale of the Registrable Securities, or a registration in which the only Common Stock being registered is Common Stock issuable upon conversion of debt
securities that are also being registered). 
 2.2 Company Registration. 

(a) If (but without any obligation to do so) the Company proposes to register (including for this purpose a registration effected by the
Company for stockholders other than the Holders) any of its stock or other securities under the Act in connection with the public offering of such securities (other than (i) a registration relating to a demand pursuant to Section 2.1 of
this Agreement or (ii) a registration relating solely to the sale of securities of participants in a Company stock plan, a registration relating to a corporate reorganization or transaction under Rule 145 of the Act, a registration on any form
that does not include substantially the same information as would be required to be included in a registration statement covering the sale of the Registrable Securities, or a registration in which the only Common Stock being registered is Common
Stock issuable upon conversion of debt securities that are also being registered), the Company shall, at such time, promptly give each Holder written notice of such registration. Upon the written request of each Holder given within twenty
(20) days after mailing of such notice by the Company in accordance with Section 4.5 of this Agreement, the Company shall, subject to the provisions of Section 2.2(c) of this Agreement, use its commercially reasonable efforts to cause
to be registered under the Act all of the Registrable Securities that each such Holder requests to be registered. 

  
 4. 

 (b) Right to Terminate Registration. The Company shall have the right to terminate
or withdraw any registration initiated by it under this Section 2.2 prior to the effectiveness of such registration whether or not any Holder has elected to include securities in such registration. The expenses of such withdrawn registration
shall be borne by the Company in accordance with Section 2.6 hereof. 
 (c) Underwriting Requirements. In connection with any
offering involving an underwriting of shares of the Company’s capital stock, the Company shall not be required under this Section 2.2 to include any of the Holders’ securities in such underwriting unless they accept the terms of the
underwriting as agreed upon between the Company and the underwriters selected by the Company (or by other Persons entitled to select the underwriters) and enter into an underwriting agreement in customary form with such underwriters, and then only
in such quantity as the underwriters determine in their sole discretion will not jeopardize the success of the offering by the Company. If the total amount of securities, including Registrable Securities, requested by stockholders to be included in
such offering exceeds the amount of securities sold other than by the Company that the underwriters determine in their sole discretion is compatible with the success of the offering, then the Company shall be required to include in the offering only
that number of such securities, including Registrable Securities, that the underwriters determine in their sole discretion will not jeopardize the success of the offering. In the event that the underwriters determine that less than all of the
Registrable Securities requested to be registered can be included in such offering, then the Registrable Securities that are included in such offering shall be apportioned pro rata among the selling Holders based on the number of Registrable
Securities held by all selling Holders or in such other proportions as shall mutually be agreed to by all such selling Holders. Notwithstanding the foregoing, in no event shall (i) any Registrable Securities be excluded from such offering
unless all other stockholders’ securities have been first excluded from the offering, and (ii) the amount of securities of the selling Holders included in the offering be reduced below thirty percent (30%) of the total amount of securities
included in such offering, unless such offering is the Initial Offering, in which case the selling Holders may be excluded if the underwriters make the determination described above and no other stockholder’s securities are included in such
offering. For purposes of the preceding sentence concerning apportionment, for any selling stockholder that is a Holder of Registrable Securities and that is a venture capital fund, partnership or corporation, the affiliated venture capital funds,
partners, members, retired partners and stockholders of such Holder, or the estates and family members of any such partners, members and retired partners and any trusts for the benefit of any of the foregoing Persons shall be deemed to be a single
“selling Holder,” and any pro rata reduction with respect to such “selling Holder” shall be based upon the aggregate amount of Registrable Securities owned by all such related entities and individuals. 

  
 5. 

 2.3 Form S-3 Registration. In case the
Company shall receive from the Holders of at least twenty percent (20%) of the Registrable Securities (for purposes of this Section 2.3, the “S-3 Initiating Holders”) a written request or
requests that the Company effect a registration on Form S-3 and any related qualification or compliance with respect to all or a part of the Registrable Securities owned by such Holder or Holders, the Company
shall: 
 (a) promptly give written notice of the proposed registration, and any related qualification or compliance, to all other Holders;
and 
 (b) use its commercially reasonable efforts to effect, as soon as practicable, such registration and all such qualifications and
compliances as may be so requested and as would permit or facilitate the sale and distribution of all or such portion of such Holders’ Registrable Securities as are specified in such request, together with all or such portion of the Registrable
Securities of any other Holders joining in such request as are specified in a written request given within fifteen (15) days after receipt of such written notice from the Company; provided, however, that the Company shall not be obligated to
effect any such registration, qualification or compliance, pursuant to this Section 2.3: 
 (i) if Form
S-3 is not available for such offering by the Holders; 
 (ii) if the Holders, together with the
holders of any other securities of the Company entitled to inclusion in such registration, propose to sell Registrable Securities and such other securities (if any) at an aggregate price to the public (net of any underwriters’ discounts or
commissions) of less than $5,000,000; 
 (iii) if the Company shall furnish to all Holders requesting a registration statement pursuant to
this Section 2.3 a certificate signed by the Company’s Chief Executive Officer or Chairman of the Board stating that in the good faith judgment of the Board, it would be seriously detrimental to the Company and its stockholders for such
registration statement to be effected at such time, in which event the Company shall have the right to defer such filing for a period of not more than ninety (90) days after receipt of the request of the
S-3 Initiating Holders; provided that such right shall be exercised by the Company not more than once in any twelve (12) month period; and provided further that the Company shall not
register any securities for the account of itself or any other stockholder during such ninety (90) day period (other than a registration relating solely to the sale of securities of participants in a Company stock plan, a registration relating
to a corporate reorganization or transaction under Rule 145 of the Act, a registration on any form that does not include substantially the same information as would be required to be included in a registration statement covering the sale of the
Registrable Securities, or a registration in which the only Common Stock being registered is Common Stock issuable upon conversion of debt securities that are also being registered); 

(iv) if the Company has, within the twelve (12) month period preceding the date of such request, already effected two
(2) registrations on Form S-3 pursuant to this Section 2.3; 
 (v) in any particular
jurisdiction in which the Company would be required to qualify to do business or to execute a general consent to service of process in effecting such registration, qualification or compliance, unless the Company is already subject to service in such
jurisdiction and except as may be required under the Act; 

  
 6. 

 (vi) if the Company, within thirty (30) days of receipt of the request of such S-3 Initiating Holders, gives notice of its bona fide intention to effect the filing of a registration statement with the SEC within one hundred twenty (120) days of receipt of such request (other than a
registration effected solely to qualify an employee benefit plan or to effect a business combination pursuant to Rule 145), provided that the Company is actively employing in good faith its commercially reasonable efforts to cause such
registration statement to become effective; or 
 (vii) during the period starting with the date thirty (30) days prior to the
Company’s good faith estimate of the date of the filing of and ending on a date ninety (90) days following the effective date of a Company-initiated registration subject to Section 2.2 of this Agreement, provided that the
Company is actively employing in good faith its commercially reasonable efforts to cause such registration statement to become effective. 

(c) If the S-3 Initiating Holders intend to distribute the Registrable Securities covered by their
request by means of an underwriting, they shall so advise the Company as a part of their request made pursuant to this Section 2.3 and the Company shall include such information in the written notice referred to in Section 2.3(a). The
provisions of Section 2.1(b) of this Agreement shall be applicable to such request (with the substitution of Section 2.3 for references to Section 2.1). 

(d) Subject to the foregoing, the Company shall file a registration statement covering the Registrable Securities and other securities so
requested to be registered as soon as practicable after receipt of the request or requests of the S-3 Initiating Holders. Registrations effected pursuant to this Section 2.3 shall not be counted as
requests for registration effected pursuant to Section 2.1 of this Agreement. 
 2.4 Obligations of the Company. Whenever
required under this Section 2 to effect the registration of any Registrable Securities, the Company shall, as expeditiously as reasonably possible: 

(a) prepare and file with the SEC a registration statement with respect to such Registrable Securities and use its commercially reasonable
efforts to cause such registration statement to become effective, and, upon the request of the Holders of a majority of the Registrable Securities registered thereunder, keep such registration statement effective for a period of up to one hundred
twenty (120) days or, if earlier, until the distribution contemplated in the Registration Statement has been completed; 
 (b) prepare
and file with the SEC such amendments and supplements to such registration statement and the prospectus used in connection with such registration statement as may be necessary to comply with the provisions of the Act with respect to the disposition
of all securities covered by such registration statement; 
 (c) furnish to the Holders such number of copies of a prospectus, including a
preliminary prospectus and any Free Writing Prospectus, in conformity with the requirements of the Act, and such other documents as they may reasonably request in order to facilitate the disposition of Registrable Securities owned by them; 

  
 7. 

 (d) use its commercially reasonable efforts to register and qualify the securities covered
by such registration statement under such other securities or Blue Sky laws of such jurisdictions as shall be reasonably requested by the Holders, provided that the Company shall not be required in connection therewith or as a condition thereto to
qualify to do business or to file a general consent to service of process in any such states or jurisdictions; 
 (e) in the event of any
underwritten public offering, enter into and perform its obligations under an underwriting agreement, in usual and customary form, with the managing underwriter of such offering; 

(f) notify each Holder of Registrable Securities covered by such registration statement at any time when a prospectus or Free Writing
Prospectus (to the extent prepared by or on behalf of the Company) relating thereto is required to be delivered under the Act of the happening of any event as a result of which the prospectus included in such registration statement, as then in
effect, includes an untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary to make the statements therein not misleading in the light of the circumstances then existing, and, at the request
of any such Holder, the Company will, as soon as reasonably practicable, file and furnish to all such Holders a supplement or amendment to such prospectus or Free Writing Prospectus (to the extent prepared by or on behalf of the Company) so that, as
thereafter delivered to the purchasers of such Registrable Securities, such prospectus will not contain an untrue statement of a material fact or omit to state any fact necessary to make the statements therein not misleading in light of the
circumstances under which they were made; 
 (g) cause all such Registrable Securities registered pursuant to this Section 2 to be
listed on a national exchange or trading system and on each securities exchange and trading system on which similar securities issued by the Company are then listed; and 

(h) provide a transfer agent and registrar for all Registrable Securities registered pursuant to this Agreement and a CUSIP number for all
such Registrable Securities, in each case not later than the effective date of such registration. 
 Notwithstanding the provisions of this
Section 2, the Company shall be entitled to postpone or suspend, for a reasonable period of time, the filing, effectiveness or use of, or trading under, any registration statement if the Company shall determine that any such filing or the sale
of any securities pursuant to such registration statement would in the good faith judgment of the Board: 
 (i) materially impede, delay or
interfere with any material pending or proposed financing, acquisition, corporate reorganization or other similar transaction involving the Company for which the Board has authorized negotiations; 

(ii) materially and adversely impair the consummation of any pending or proposed material offering or sale of any class of securities by the
Company; or 
 (iii) require disclosure of material nonpublic information that, if disclosed at such time, would be materially harmful to
the interests of the Company and its stockholders; provided, however, that during any such period all executive officers and directors of the Company are also prohibited from selling securities of the Company (or any security of any of
the Company’s subsidiaries or affiliates). 

  
 8. 

 In the event of the suspension of effectiveness of any registration statement pursuant to
this Section 2.4, the applicable time period during which such registration statement is to remain effective shall be extended by that number of days equal to the number of days the effectiveness of such registration statement was suspended.

 2.5 Information from Holder. It shall be a condition precedent to the obligations of the Company to take any action pursuant to
this Section 2 with respect to the Registrable Securities of any selling Holder that such Holder shall furnish to the Company such information regarding itself, the Registrable Securities held by it, and the intended method of disposition of
such securities as shall be reasonably required to effect the registration of such Holder’s Registrable Securities. 
 2.6 Expenses
of Registration. All expenses other than underwriting discounts and commissions incurred in connection with registrations, filings or qualifications pursuant to Sections 2.1, 2.2 and 2.3 of this Agreement, including, without limitation, all
registration, filing and qualification fees, printers’ and accounting fees, fees and disbursements of counsel for the Company and the reasonable fees and disbursements of one counsel for the selling Holders (not to exceed $40,000) shall be
borne by the Company. Notwithstanding the foregoing, the Company shall not be required to pay for any expenses of any registration proceeding begun pursuant to Section 2.1 or Section 2.3 of this Agreement if the registration request is
subsequently withdrawn at the request of the Holders of a majority of the Registrable Securities to be registered (in which case all participating Holders shall bear such expenses pro rata based upon the number of Registrable Securities that were to
be included in the withdrawn registration) unless, in the case of a registration requested under Section 2.1 of this Agreement, the Holders of a majority of the Registrable Securities agree to forfeit their right to one demand registration
pursuant to Section 2.1 of this Agreement; provided, however, that if at the time of such withdrawal, the Holders have learned of a material adverse change in the condition, business or prospects of the Company from that known to
the Holders at the time of their request and have withdrawn the request with reasonable promptness following disclosure by the Company of such material adverse change, then the Holders shall not be required to pay any of such expenses and shall
retain their rights pursuant to Sections 2.1 and 2.3 of this Agreement. 
 2.7 Delay of Registration. No Holder shall have any right
to obtain or seek an injunction restraining or otherwise delaying any such registration as the result of any controversy that might arise with respect to the interpretation or implementation of this Section 2. 

2.8 Indemnification. In the event any Registrable Securities are included in a registration statement under this Section 2: 

(a) To the extent permitted by law, the Company will indemnify and hold harmless each Holder, the partners, members, officers, directors and
stockholders of each Holder, legal counsel and accountants for each Holder, any underwriter (as defined in the Act) for such Holder and each Person, if any, who controls such Holder or underwriter within the meaning of the Act or the 1934 Act,
against any losses, claims, damages or liabilities (joint or several) to 

  
 9. 

 
which they may become subject under the Act, the 1934 Act, any state securities laws or any rule or regulation promulgated under the Act, the 1934 Act or any state securities laws, insofar as
such losses, claims, damages, or liabilities (or actions or proceedings, whether commenced or threatened, in respect thereof) arise out of or are based upon any of the following statements, omissions or violations (collectively, a
“Violation”): (i) any untrue or alleged untrue statement of a material fact contained in such registration statement, including any preliminary prospectus, final prospectus, or Free Writing Prospectus contained therein or any
amendments or supplements thereto, any issuer information (as defined in Rule 433 of the Act) filed or required to be filed pursuant to Rule 433(d) under the Act or any other document incident to such registration prepared by or on behalf of the
Company or used or referred to by the Company, (ii) the omission or alleged omission of a material fact required to be stated in such registration statement, or necessary to make the statements therein not misleading or (iii) any violation
or alleged violation by the Company of the Act, the 1934 Act, any state securities laws or any rule or regulation promulgated under the Act, the 1934 Act or any state securities laws, and the Company will reimburse each such Holder, underwriter,
controlling Person or other aforementioned Person for any legal or other expenses reasonably incurred by them in connection with investigating or defending any such loss, claim, damage, liability, action or proceeding as such expenses are incurred;
provided, however, that the indemnity agreement contained in this Section 2.8(a) shall not apply to amounts paid in settlement of any such loss, claim, damage, liability, action or proceeding if such settlement is effected without
the consent of the Company (which consent shall not be unreasonably withheld), nor shall the Company be liable in any such case for any such loss, claim, damage, liability, action or proceeding to the extent that it arises out of or is based upon a
Violation that occurs in reliance upon, and in conformity with, written information furnished expressly for use in connection with such registration by any such Holder, underwriter, controlling Person or other aforementioned Person. 

(b) To the extent permitted by law, each selling Holder, severally and not jointly, will indemnify and hold harmless the Company, each of its
directors, each of its officers who has signed the registration statement, each Person, if any, who controls the Company within the meaning of the Act, legal counsel and accountants for the Company, any underwriter, any other Holder selling
securities in such registration statement and any controlling Person of any such underwriter or other Holder, against any losses, claims, damages or liabilities (joint or several) to which any of the foregoing Persons may become subject, under the
Act, the 1934 Act, any state securities laws or any rule or regulation promulgated under the Act, the 1934 Act or any state securities laws, insofar as such losses, claims, damages or liabilities (or actions or proceedings, whether commenced or
threatened, in respect thereof) arise out of or are based upon any Violation, in each case to the extent (and only to the extent) that such Violation occurs in reliance upon and in conformity with written information furnished by such Holder
expressly for use in connection with such registration; and each such Holder will reimburse any Person intended to be indemnified pursuant to this Section 2.8(b) for any legal or other expenses reasonably incurred by such Person in connection
with investigating or defending any such loss, claim, damage, liability, action or proceeding as such expenses are incurred; provided, however, that the indemnity agreement contained in this Section 2.8(b) shall not apply to
amounts paid in settlement of any such loss, claim, damage, liability, action or proceeding if such settlement is effected without the consent of the Holder (which consent shall not be unreasonably withheld), and provided that in no event shall any
indemnity under this Section 2.8(b) exceed the net proceeds from the offering received by such Holder. 

  
 10. 

 (c) Promptly after receipt by an indemnified party under this Section 2.8 of notice of
the commencement of any action or proceeding (including any governmental action or proceeding) for which a party may be entitled to indemnification, such indemnified party will, if a claim in respect thereof is to be made against any indemnifying
party under this Section 2.8, deliver to the indemnifying party a written notice of the commencement thereof and the indemnifying party shall have the right to participate in and, to the extent the indemnifying party so desires, jointly with
any other indemnifying party similarly noticed, to assume the defense thereof with counsel mutually satisfactory to the parties; provided, however, that an indemnified party (together with all other indemnified parties that may be
represented without conflict by one counsel) shall have the right to retain one (1) separate counsel, with the fees and expenses to be paid by the indemnifying party, if representation of such indemnified party by the counsel retained by the
indemnifying party would be inappropriate due to actual or potential differing interests between such indemnified party and any other party represented by such counsel in such proceeding. The failure to deliver written notice to the indemnifying
party within a reasonable time of the commencement of any such action or proceeding, if prejudicial to its ability to defend such action or proceeding, shall relieve such indemnifying party of liability to the indemnified party under this
Section 2.8 to the extent of such prejudice, but the omission to so deliver written notice to the indemnifying party will not relieve such indemnifying party of any liability that it may have to any indemnified party otherwise than under this
Section 2.8. 
 (d) If the indemnification provided for in this Section 2.8 is held by a court of competent jurisdiction to be
unavailable to an indemnified party with respect to any loss, liability, claim, damage or expense referred to herein, then the indemnifying party, in lieu of indemnifying such indemnified party hereunder, shall contribute to the amount paid or
payable by such indemnified party as a result of such loss, liability, claim, damage or expense in such proportion as is appropriate to reflect the relative fault of the indemnifying party on the one hand and the indemnified party on the other hand
in connection with the statements or omissions that resulted in such loss, liability, claim, damage or expense, as well as any other relevant equitable considerations; provided, however, that (i) no contribution by any Holder,
when combined with any amounts paid by such Holder pursuant to Section 2.8(b), shall exceed the net proceeds from the offering received by such Holder and (ii) no Person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Act) will be entitled to contribution from any Person who was not guilty of such fraudulent misrepresentation; and provided further that in no event shall a Holder’s liability pursuant to this
Section 2.8(d), when combined with the amounts paid or payable by such Holder pursuant to Section 2.8(b), exceed the proceeds from the offering received by such Holder (net of any expenses paid by such Holder). The relative fault of the
indemnifying party and the indemnified party shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to
information supplied by the indemnifying party or by the indemnified party and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. 

(e) Notwithstanding the foregoing, to the extent that the provisions on indemnification and contribution contained in the underwriting
agreement entered into in connection with the underwritten public offering are in conflict with the foregoing provisions, the provisions in the underwriting agreement shall control. 

  
 11. 

 (f) The obligations of the Company and Holders under this Section 2.8 shall survive
the completion of any offering of Registrable Securities in a registration statement under this Section 2 and otherwise. 
 2.9
Reports Under the 1934 Act. With a view to making available to the Holders the benefits of Rule 144 and any other rule or regulation of the SEC that may at any time permit a Holder to sell securities of the Company to the public
without registration or pursuant to a registration on Form S-3, the Company agrees to: 
 (a) make
and keep public information available, as those terms are understood and defined in Rule 144, at all times after the effective date of the Initial Offering; 

(b) file with the SEC in a timely manner all reports and other documents required of the Company under the Act and the 1934 Act; and 

(c) furnish to any Holder, so long as the Holder owns any Registrable Securities, forthwith upon request (i) a written statement by the
Company that it has complied with the reporting requirements of Rule 144 (at any time after ninety (90) days after the effective date of the first registration statement filed by the Company), the Act and the 1934 Act (at any time after it has
become subject to such reporting requirements), or that it qualifies as a registrant whose securities may be resold pursuant to Form S-3 (at any time after it so qualifies), (ii) a copy of the most recent
annual or quarterly report of the Company and such other reports and documents so filed by the Company and (iii) such other information as may be reasonably requested to avail any Holder of any rule or regulation of the SEC that permits the
selling of any such securities without registration or pursuant to such form. 
 2.10 Assignment of Registration Rights. The rights
to cause the Company to register Registrable Securities pursuant to this Section 2 may be assigned (but only with all related obligations) by a Holder to a transferee or assignee of such securities that (a) is an Affiliate,
subsidiary, parent, partner, limited partner, retired partner, member or stockholder of a Holder, (b) is a Holder’s family member or trust for the benefit of an individual Holder or any of such Holder’s family members, or
(c) after such assignment or transfer, holds at least one million shares of Registrable Securities (appropriately adjusted for any stock split, dividend, combination or other recapitalization), provided: (i) the Company is, within a
reasonable time after such transfer, furnished with written notice of the name and address of such transferee or assignee and the securities with respect to which such registration rights are being assigned; (ii) such transferee or assignee
agrees in writing to be bound by and subject to the terms and conditions of this Agreement, including, without limitation, the provisions of Section 2.12 of this Agreement; and (iii) such assignment shall be effective only if immediately
following such transfer the further disposition of such securities by the transferee or assignee is restricted under the Act. 
 2.11
Limitations on Subsequent Registration Rights. From and after the date of this Agreement, the Company shall not, without the prior written consent of the Holders holding at least fifty-five percent (55%) of the Registrable Securities then
held by all Holders, enter into any agreement with any holder or prospective holder of any securities of the Company that would allow such holder or prospective holder (a) to include any of such securities in any registration filed under
Section 2.1, Section 2.2 or Section 2.3 of this Agreement, unless under the terms of such agreement, such holder or prospective holder may include such securities in any such registration only to the extent that the inclusion of such
securities will not reduce the amount of the Registrable Securities of the Holders that are included or (b) to demand registration of their securities. 

  
 12. 

 2.12 “Market Stand-Off”
Agreement. 
 (a) Each Holder hereby agrees that it will not, without the prior written consent of the managing underwriter, during the
period commencing on the date of the final prospectus relating to the Initial Offering and ending on the date specified by the Company and the managing underwriter (such period not to exceed one hundred eighty (180) days) (i) lend, offer,
pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase, or otherwise transfer or dispose of, directly or indirectly, any shares of Common Stock
or any securities convertible into or exercisable or exchangeable for Common Stock (whether such shares or any such securities are then owned by the Holder or are thereafter acquired), or (ii) enter into any swap or other arrangement that
transfers to another, in whole or in part, any of the economic consequences of ownership of the Common Stock, whether any such transaction described in clause (i) or (ii) above is to be settled by delivery of Common Stock or other securities,
in cash or otherwise. The foregoing provisions of this Section 2.12 shall apply only to the Initial Offering, shall not apply to the sale of any shares to an underwriter pursuant to an underwriting agreement, and shall only be applicable to the
Holders if all officers, directors and greater than one percent (1%) stockholders of the Company enter into similar agreements. The underwriters in connection with the Initial Offering are intended third-party beneficiaries of this Section 2.12
and shall have the right, power and authority to enforce the provisions hereof as though they were a party hereto. Each Holder further agrees to execute such agreements as may be reasonably requested by the underwriters in the Initial Offering that
are consistent with this Section 2.12 or that are necessary to give further effect thereto. Any discretionary waiver or termination of the restrictions of any or all of such agreements by the Company or the underwriters shall apply to all
Holders subject to such agreements pro rata based on the number of shares subject to such agreements. 
 In order to enforce the foregoing
covenant, the Company may impose stop-transfer instructions with respect to the Registrable Securities of each Holder (and the shares or securities of every other Person subject to the foregoing restriction) until the end of such period. 

(b) Each Holder agrees that a legend reading substantially as follows shall be placed on all certificates representing all shares or
securities of the Company of each Holder (and the shares or securities of every other Person subject to the restriction contained in this Section 2.12): 

THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO A LOCK-UP PERIOD AFTER THE EFFECTIVE DATE
OF THE ISSUER’S REGISTRATION STATEMENT FILED UNDER THE ACT, AS AMENDED, AS SET FORTH IN AN AGREEMENT BETWEEN THE COMPANY AND THE ORIGINAL HOLDER OF THESE SECURITIES, A COPY OF WHICH MAY BE OBTAINED AT THE ISSUER’S PRINCIPAL OFFICE. SUCH LOCK-UP PERIOD IS BINDING ON TRANSFEREES OF THESE SHARES. 

  
 13. 

 2.13 Termination of Registration Rights. No Holder shall be entitled to exercise any
right provided for in this Section 2: (a) after five (5) years following the consummation of the Initial Offering, (b) as to any Holder, such earlier time after the Initial Offering at which such Holder (i) can sell all shares
held by it in compliance with Rule 144(b)(1)(i) or (ii) holds one percent (1%) or less of the Company’s outstanding Common Stock and all Registrable Securities held by such Holder (together with any Affiliate of the Holder with whom such
Holder must aggregate its sales under Rule 144) can be sold in any three (3) month period without registration in compliance with Rule 144 or (c) after the consummation of a Liquidation Event, as that term is defined in the Restated
Certificate. 
 3. Covenants of the Company. 

3.1 Delivery of Financial Statements. 

(a) The Company shall, upon request, deliver to each Investor (or transferee of an Investor) that holds at least one million four hundred
thousand (1,400,000) shares of Registrable Securities (appropriately adjusted for any stock split, dividend, combination or other recapitalization) (a “Major Investor”): 

(i) as soon as practicable, but in any event within one hundred eighty (180) days after the end of each fiscal year of the Company, an
income statement for such fiscal year, a balance sheet of the Company and statement of stockholders’ equity as of the end of such year, and a statement of cash flows for such year, such year-end financial
reports to be in reasonable detail, prepared in accordance with generally accepted accounting principles (“GAAP”), and, from and after the date that the Company begins auditing its financial statements upon request by the Board,
audited and certified by independent public accountants of nationally recognized standing selected by the Company; 
 (ii) as soon as
practicable, but in any event within forty-five (45) days after the end of each of the first four (4) quarters of each fiscal year of the Company, an unaudited income statement and statement of cash flows for such fiscal quarter and an
unaudited balance sheet as of the end of such fiscal quarter, all prepared in accordance with GAAP (except that such financial statements may (A) be subject to normal year-end audit adjustments and
(B) not contain all notes thereto that may be required in accordance with GAAP); 
 (iii) as soon as practicable, but in any event
within forty-five (45) days after the end of each of the first four (4) quarters of each fiscal year of the Company, a statement showing the number of shares of each class and series of capital stock and securities convertible into or
exercisable for shares of capital stock outstanding at the end of the period, the Common Stock issuable upon conversion or exercise of any outstanding securities convertible or exercisable for Common Stock and the exchange ratio or exercise price
applicable thereto, and the number of shares of issued stock options and stock options not yet issued but reserved for issuance, if any, all in sufficient detail as to permit the Major Investors to calculate their respective percentage equity
ownership in the Company; 

  
 14. 

 (iv) within thirty (30) days of the end of each month, an unaudited income statement
for such month, and an unaudited balance sheet as of the end of such month, all prepared in accordance with GAAP (except that such financial statements may (A) be subject to normal year-end audit
adjustments and (B) not contain all notes thereto that may be required in accordance with GAAP); 
 (v) as soon as practicable, but in
any event at least thirty (30) days prior to the end of each fiscal year, a budget and business plan for the next fiscal year, prepared on a monthly basis, including balance sheets, income statements and statements of cash flows for such months
and, as soon as prepared, any other budgets or revised budgets prepared by the Company; and 
 (vi) such other information relating to the
financial condition, business or corporate affairs of the Company as the Major Investor may from time to time request, provided, however, that the Company shall not be obligated under this subsection (v) or any other subsection of
Section 3.1 to provide information that (A) it deems in good faith to be a trade secret or similar confidential information or (B) the disclosure of which would adversely affect the attorney-client privilege between the Company and
its counsel. 
 (b) Notwithstanding anything else in this Section 3.1 to the contrary, the Company may cease providing the information
set forth in this Section 3.1 during the period starting with the date thirty (30) days before the Company’s good-faith estimate of the date of filing of a registration statement if it reasonably concludes it must do so to comply with
the SEC rules applicable to such registration statement and related offering; provided that the Company’s covenants under this Section 3.1 shall be reinstated at such time as the Company is no longer actively employing its
commercially reasonable efforts to cause such registration statement to become effective. 
 3.2 Inspection. The Company shall permit
each Major Investor, at such Major Investor’s expense, to visit and inspect the Company’s properties, to examine its books of account and records and to discuss the Company’s affairs, finances and accounts with its officers, all at
such reasonable times as may be requested by the Major Investor; provided, however, that the Company shall not be obligated pursuant to this Section 3.2 to provide access to any information that (A) it deems in good faith to
be a trade secret or similar confidential information or (B) the disclosure of which would adversely affect the attorney-client privilege between the Company and its counsel. 

3.3 Observer Rights. As long as Topspin Fund, LP (“Topspin”) owns not less than fifty percent (50%) of the shares of
Series B Preferred Stock it purchased pursuant to the Series B Preferred Stock Purchase Agreement, dates as of April 21, 2016 (the “Series B Agreement”), and not less than fifty percent (50%) of the shares of Series C
Preferred Stock it is purchasing pursuant to the Series C Agreement (as each may be adjusted for any stock split, dividend, combination or other recapitalization)(or an equivalent amount of Common Stock issued upon conversion thereof), the Company
shall invite one representative of Topspin to attend all meetings of its Board in a nonvoting observer capacity and, in this respect, shall give such representatives copies of all notices, minutes, consents, and other materials that it provides to
its directors and, as long as The Regents of The University of California (“UC Regents”) owns not less than fifty percent (50%) of the shares of Series B Preferred Stock it purchased pursuant to the Series B Agreement and not less
than fifty percent (50%) of the shares of Series C Preferred Stock 

  
 15. 

 
it is purchasing under the Series C Agreement (as each may be adjusted for any stock split, dividend, combination or other recapitalization)(or an equivalent amount of Common Stock issued upon
conversion thereof), the Company shall invite one representative of UC Regents to attend all meetings of its Board in a nonvoting observer capacity and, in this respect, shall also give such representatives copies of all notices, minutes, consents,
and other materials that it provides to its directors; provided, however, that such representatives shall agree to hold in confidence and trust and to act in a fiduciary manner with respect to all information so provided unless
otherwise required by law; and provided further, that the Company reserves the right to withhold any information and to exclude such representatives from any meeting or portion thereof if access to such information or attendance at
such meeting could adversely affect the attorney-client privilege between the Company and its counsel or result in disclosure of trade secrets or a conflict of interest, or if such Investor or its representative is a competitor of the Company. 

3.4 Termination of Information, Inspection and Observation Covenants. The covenants set forth in Sections 3.1, 3.2 and 3.3 shall
terminate and be of no further force or effect upon the earlier to occur of (a) the consummation of a Qualified Public Offering, as that term is defined in the Restated Certificate, (b) the occurrence of a Stockholder Automatic Conversion,
as that term is defined in the Restated Certificate, (c) when the Company first becomes subject to the periodic reporting requirements of Sections 12(g) or 15(d) of the 1934 Act, whichever event shall first occur and (d) the consummation
of a Liquidation Event, as that term is defined in the Restated Certificate. 
 3.5 Right of First Offer. Subject to the terms and
conditions specified in this Section 3.5, the Company hereby grants to each Major Investor a right of first offer with respect to future sales by the Company of its Shares (as hereinafter defined). For purposes of this Section 3.5, the
term “Major Investor” includes any general partners and Affiliates of a Major Investor. A Major Investor shall be entitled to apportion the right of first offer hereby granted it among itself and its partners and Affiliates in such
proportions as it deems appropriate. 
 Each time the Company proposes to offer any shares of, or securities convertible into or
exchangeable or exercisable for any shares of, its capital stock (“Shares”), the Company shall first make an offering of such Shares to each Major Investor in accordance with the following provisions: 

(a) The Company shall deliver a notice in accordance with Section 4.5 (“Notice”) to the Major Investors stating
(i) its bona fide intention to offer such Shares, (ii) the number of such Shares to be offered and (iii) the price and terms upon which it proposes to offer such Shares. 

(b) By written notification received by the Company within twenty (20) calendar days after the giving of Notice, each Major Investor may
elect to purchase, at the price and on the terms specified in the Notice, up to that portion of such Shares that equals the proportion that the number of shares of Registrable Securities issued and held by such Major Investor (assuming full
conversion and exercise of all convertible and exercisable securities then outstanding) bears to the total number of shares of Common Stock of the Company then outstanding (assuming full conversion and exercise of all convertible and exercisable
securities then outstanding) (such amount, a “Pro Rata Share”). At the expiration of such twenty (20) 

  
 16. 

 
calendar day period, the Company shall promptly, in writing, notify each Major Investor that elects to purchase all the shares available to it (a “Fully-Exercising Investor”) of
any other Major Investor’s failure to do likewise. During the ten (10) calendar day period commencing after the Company has given such notice to the Fully-Exercising Investors, each Fully-Exercising Investor may elect to purchase that
portion of the Shares for which Major Investors were entitled to subscribe, but which were not subscribed for by the Major Investors, that is equal to the proportion that the number of shares of Registrable Securities issued and held by such
Fully-Exercising Investor bears to the total number of shares of Common Stock issued and held, or issuable upon conversion of the Preferred Stock then held, by all Fully-Exercising Investors who wish to purchase some of the unsubscribed shares. 

(c) If all Shares that Major Investors are entitled to obtain pursuant to Section 3.5(b) of this Agreement are not elected to be
obtained as provided in Section 3.5(b) of this Agreement, the Company may, during the ninety (90) day period following the expiration of the period provided in Section 3.5(b) of this Agreement, offer the remaining unsubscribed portion
of such Shares to any Person or Persons at a price not less than that, and upon terms no more favorable to the offeree than those, specified in the Notice. If the Company does not enter into an agreement for the sale of the Shares within such
period, or if such agreement is not consummated within sixty (60) days of the execution thereof, the right provided hereunder shall be deemed to be revived and such Shares shall not be offered unless first reoffered to the Major Investors in
accordance herewith. 
 (d) The right of first offer in this Section 3.5 shall not be applicable to (i) the issuance or sale of
shares of Common Stock (or options therefor) to employees, directors, consultants and other service providers for the primary purpose of soliciting or retaining their services pursuant to plans or agreements approved by the Board; (ii) the
issuance of securities pursuant to the sale of securities pursuant to a registration statement filed by the Company under the Act in connection with the firm commitment underwritten offering of its securities to the general public or a Stockholder
Automatic Conversion (as defined in the Restated Certificate); (iii) the issuance of securities pursuant to the conversion or exercise of convertible or exercisable securities outstanding on the date hereof; (iv) the issuance of securities in
connection with a bona fide business acquisition by the Company, whether by merger, consolidation, sale of assets, sale or exchange of stock or otherwise, provided such acquisition is approved by the Board; (v) the issuance and sale of Series C-2 Preferred Stock pursuant to the Series C-2 Agreement; (vi) the issuance of stock, warrants or other securities or rights pursuant to any equipment leasing arrangement
or debt financing arrangement, which arrangement is approved by the Board and is primarily for non-equity financing purposes; (vii) the issuance of stock, warrants or other securities or rights to Persons
or entities with which the Company has business relationships, provided such issuances are approved by the Board and are primarily for non-equity financing purposes or (viii) the issuance of
securities that are issued with unanimous approval of the Board and the Board specifically states that such securities shall not be subject to this Section 3.5. In addition to the foregoing, the right of first offer in this Section 3.5
shall not be applicable with respect to any Major Investor in any subsequent offering of Shares if (i) at the time of such offering, the Major Investor is not an “accredited investor,” as that term is then defined in Rule 501(a) of
the Act and (ii) such offering of Shares is otherwise being offered only to accredited investors. 

  
 17. 

 (e) The rights provided in this Section 3.5 may not be assigned or transferred by any
Major Investor; provided, however, that UC Regents or a Major Investor that is a venture capital fund may assign or transfer such rights to its Affiliates. 

(f) The covenants set forth in this Section 3.5 shall terminate and be of no further force or effect upon the consummation of
(i) Qualified Public Offering, (ii) a Stockholder Automatic Conversion or (ii) a Liquidation Event, as such capitalized terms are defined in the Restated Certificate. 

3.6 Proprietary Information and Inventions Agreements. The Company shall require all present and future employees and consultants to
execute and deliver a Proprietary Information and Inventions Agreement in substantially the form approved by the Board or a consulting agreement containing substantially similar proprietary rights assignment and confidentiality provisions. 

3.7 Employee Agreements. Unless approved by the Board, all future employees of the Company who shall purchase, or receive options to
purchase, shares of Common Stock following the date hereof shall be required to execute stock purchase or option agreements providing for (a) vesting of shares over a four (4) year period with the first twenty five percent (25%) of such
shares vesting following twelve (12) months of continued employment or services, and the remaining shares vesting in equal monthly installments over the following thirty six (36) months thereafter and (b) a one hundred and eighty (180)-day lockup period (plus an additional period of up to eighteen (18) days) in connection with the Initial Public Offering. The Company shall retain a right of first refusal on transfers until the Initial
Public Offering and the right to repurchase unvested shares at cost. 
 3.8 Insurance. The Company has as of the date hereof
directors and officers liability insurance in an amount and on terms and conditions satisfactory to the Board, and will use its commercially reasonable efforts to cause such insurance policy to be maintained until such time as the Board determines
that such insurance should be discontinued. 
 3.9 Indemnification Matters. The Company hereby acknowledges that one (1) or more
of the directors nominated to serve on the Board by the Investors (each a “Fund Director”) may have certain rights to indemnification, advancement of expenses and/or insurance provided by one or more of the Investors and certain of
their affiliates (collectively, the “Fund Indemnitors”). The Company hereby agrees (a) that it is the indemnitor of first resort (i.e., its obligations to any such Fund Director are primary and any obligation of the Fund
Indemnitors to advance expenses or to provide indemnification for the same expenses or liabilities incurred by such Fund Director are secondary), (b) that it shall be required to advance the full amount of expenses incurred by such Fund Director and
shall be liable for the full amount of all expenses, judgments, penalties, fines and amounts paid in settlement by or on behalf of any such Fund Director to the extent legally permitted and as required by the Restated Certificate or Bylaws of the
Company (or any agreement between the Company and such Fund Director), without regard to any rights such Fund Director may have against the Fund Indemnitors, and, (c) that it irrevocably waives, relinquishes and releases the Fund Indemnitors
from any and all claims against the Fund Indemnitors for contribution, subrogation or any other recovery of any kind in respect thereof. The Company further agrees that no advancement or payment by the Fund Indemnitors on behalf of

  
 18. 

 
any such Fund Director with respect to any claim for which such Fund Director has sought indemnification from the Company shall affect the foregoing and the Fund Indemnitors shall have a right of
contribution and/or be subrogated to the extent of such advancement or payment to all of the rights of recovery of such Fund Director against the Company. 

3.10 Successor Indemnification. If the Company or any of its successors or assignees consolidates with or merges into any other Person
and is not the continuing or surviving corporation or entity of such consolidation or merger, then to the extent necessary, proper provision shall be made so that the successors and assignees of the Company assume the obligations of the Company with
respect to indemnification of members of the Board as in effect immediately before such transaction, whether such obligations are contained in the Company’s Bylaws, the Restated Certificate, or elsewhere, as the case may be. 

3.11 Confidentiality. Each Investor agrees, severally and not jointly, to use the same degree of care as such Investor uses to protect
its own confidential information for any information obtained pursuant to this Agreement or otherwise as a stockholder of the Company which the Company identifies in writing as being proprietary or confidential and such Investor acknowledges that it
will not, unless otherwise required by law or the rules of any national securities exchange, association or marketplace, disclose such information without the prior written consent of the Company except such information that (a) was in the
public domain prior to the time it was furnished to such Investor, (b) is or becomes (through no willful improper action or inaction by such Investor) generally available to the public, (c) was in its possession or known by such Investor
without restriction prior to receipt from the Company, (d) was rightfully disclosed to such Investor by a third party without restriction or (e) was independently developed without any use of the Company’s confidential information.
Notwithstanding the foregoing, each Investor that is a limited partnership or limited liability company may disclose such proprietary or confidential information to any former partners or members who retained an economic interest in such Investor,
current partner of the partnership or any subsequent partnership under common investment management, limited partner, general partner, member or management company of such Investor (or any employee or representative of any of the foregoing) (each of
the foregoing Persons, a “Permitted Disclosee”) or legal counsel, accountants or representatives for such Investor. Furthermore, nothing contained herein shall prevent any Investor or any Permitted Disclosee from
(i) entering into any business, entering into any agreement with a third party, or investing in or engaging in investment discussions with any other company (whether or not competitive with the Company), provided that such Investor or Permitted
Disclosee does not, except as permitted in accordance with this Section 3.11, disclose or otherwise make use of any proprietary or confidential information of the Company in connection with such activities, or (ii) making any disclosures
required by law, rule, regulation or court or other governmental order. 
 3.12 Termination of Certain Covenants. The covenants set
forth in Sections 3.6 and 3.7 shall terminate and be of no further force or effect upon the consummation of (a) the consummation of the sale of securities pursuant to a registration statement filed by the Company under the Act in connection
with the firm commitment underwritten offering of its securities to the general public or (b) a Liquidation Event, as that term is defined in the Restated Certificate. 

  
 19. 

 3.13 Right to Conduct Activities. The Company hereby agrees and acknowledges that
(i) Schroder Adveq Technology VIII L.P. (together with its Affiliates, “Schroder”) and (ii) GV 2017, L.P. and GV 2019 L.P. (together with their Affiliates, “GV”) are professional investment organizations,
and as such review the business plans and related proprietary information of many enterprises, some of which may compete directly or indirectly with the Company’s business (as currently conducted or as currently propose to be conducted). The
Company hereby agrees that, to the extent permitted under applicable law, Schroder and GV shall not be liable to the Company for any claim arising out of, or based upon, (i) the investment by Schroder or GV in any entity competitive with the
Company, or (ii) actions taken by any partner, officer, employee or other representative of Schroder or GV to assist any such competitive company, whether or not such action was taken as a member of the board of directors of such competitive
company or otherwise, and whether or not such action has a detrimental effect on the Company; provided, however, that the foregoing shall not relieve (x) any of the Investors from liability associated with the unauthorized disclosure of the
Company’s confidential information obtained pursuant to this Agreement, or (y) any director or officer of the Company from any liability associated with his or her fiduciary duties to the Company. 

4. Miscellaneous. 
 4.1
Successors and Assigns. Except as otherwise provided herein, the terms and conditions of this Agreement shall inure to the benefit of and be binding upon the respective successors and assigns of the parties (including transferees of any
shares of Registrable Securities). Nothing in this Agreement, express or implied, is intended to confer upon any party other than the parties hereto or their respective successors and assigns any rights, remedies, obligations or liabilities under or
by reason of this Agreement, except as expressly provided in this Agreement. 
 4.2 Governing Law. This Agreement shall be governed
by and construed under the laws of the State of California as applied to agreements among California residents entered into and to be performed entirely within California. 

4.3 Counterparts; Facsimile. This Agreement may be executed by electronic signature and in two (2) or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute one (1) and the same instrument. Counterparts may be delivered by facsimile, electronic mail (including pdf) or other transmission method and any counterpart so
delivered shall be deemed to have been duly and validly delivered and be valid and effective for all purposes. 
 4.4 Titles and
Subtitles. The titles and subtitles used in this Agreement are used for convenience only and are not to be considered in construing or interpreting this Agreement. 

4.5 Notices. All notices and other communications given or made pursuant hereto shall be in writing and shall be deemed effectively
given upon the earlier to occur of actual receipt or: (a) upon personal delivery to the party to be notified, (b) when sent by confirmed electronic mail or facsimile if sent during normal business hours of the recipient; if not, then on
the next business day, (c) five (5) days after having been sent by registered or certified mail, return receipt requested, postage prepaid, or (d) one (1) day after deposit with a nationally recognized overnight courier, specifying next
day delivery, with written verification of receipt. All notices and other communications shall be sent to the Company at 561 Eccles Avenue, South San Francisco, CA 94080, Attention: Chief Executive Officer and to the other parties at the addresses
set forth on the signature pages attached hereto (or at such other addresses as shall be specified by notice given in accordance with this Section 4.5). 

  
 20. 

 4.6 Expenses. If any action at law or in equity is necessary to enforce or interpret
the terms of this Agreement, the prevailing party shall be entitled to reasonable attorneys’ fees, costs and necessary disbursements in addition to any other relief to which such party may be entitled. 

4.7 Entire Agreement; Amendments and Waivers. This Agreement (including the Exhibits hereto, if any) constitutes the full and entire
understanding and agreement among the parties with regard to the subjects hereof and thereof. Any term of this Agreement (other than Section 3.1, Section 3.2, Section 3.3, Section 3.4 and Section 3.5) may be amended and the
observance of any term of this Agreement may be waived (either generally or in a particular instance and either retroactively or prospectively) only with the written consent of the Company and the Investors holding at least fifty-five percent (55%)
of the Registrable Securities. The provisions of Section 3.1, Section 3.2, Section 3.3, Section 3.4 and Section 3.5 may be amended or waived (either generally or in a particular instance and either retroactively or
prospectively) only with the written consent of the Company and the Major Investors holding at least fifty-five percent (55%) of the Registrable Securities then held by all of the Major Investors. Any amendment or waiver effected in accordance with
this paragraph shall be binding upon each holder of any Registrable Securities, each future holder of all such Registrable Securities and the Company; provided, that any amendment materially and adversely changing the rights or obligations of a
Major Investor in a manner different from all other Major Investors shall require the written consent of such Investor. 
 4.8
Severability. Whenever possible, each provision of this Agreement shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Agreement shall be held to be prohibited by or invalid under
applicable law, such provision shall be ineffective only to the extent of such prohibition or invalidity, without invalidating the remainder of such provision or the remaining provisions of this Agreement. 

4.9 Aggregation of Stock. All shares of Registrable Securities held or acquired by affiliated entities (including affiliated venture
capital funds or venture capital funds under common investment management) or Persons shall be aggregated together for the purpose of determining the availability of any rights under this Agreement. 

4.10 Additional Investors. Notwithstanding Section 4.7, no consent shall be necessary to add additional Investors as signatories
to this Agreement and to update Schedule A accordingly, provided that such Investors have purchased Series C-2 Preferred Stock pursuant to the subsequent closing provisions of Section 1.3 of the
Series C-2 Agreement. 
 4.11 Amendment of Prior Agreement. The Prior Agreement is hereby
amended and superseded in its entirety and restated herein. Such amendment and restatement is effective upon the execution of this Agreement by the Company and the parties required for an amendment pursuant to Section 4.7 of the Prior
Agreement. Upon such execution, all provisions of, rights granted and covenants made in the Prior Agreement are hereby waived, released and superseded in their entirety by the provisions hereof and shall have no further force or effect. 

  
 21. 

 [Remainder of page intentionally left blank] 

 

  
 22. 

 IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first
written. 
  

					
		 	FLX BIO, INC.
			
	               	 	By: 	 	/s/ Brian Wong

 
					
		 	Name:	 	Brian Wong
		 	Title:	 	Chief Executive Officer
		
	Address: 	 	 
		
		 	 

 SIGNATURE PAGE TO INVESTORS’
RIGHTS AGREEMENT 
 FOR FLX BIO, INC. 

 IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first
written. 
  

					
		 	INVESTOR:
		
		 	AJU LIFE SCIENCE 3.0 VENTURE FUND
			
	               	 	By: 	 	/s/ Ji-won Kim

 
					
		 	Name:	 	Ji-won Kim
		 	Title:	 	CEO
	Address: 	 	 201 Teheran-ro, 5th Floor

Gangnam-gu, Seoul, Korea 06141

  

					
		 	AJU GOOD VENTURE FUND
			
	               	 	By: 	 	/s/ Ji-won Kim

 
					
		 	Name:	 	Ji-won Kim
		 	Title:	 	CEO
	Address: 	 	 201 Teheran-ro, 5th Floor

Gangnam-gu, Seoul, Korea 06141

 SIGNATURE PAGE TO INVESTORS’
RIGHTS AGREEMENT 
 FOR FLX BIO, INC. 

 IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first
written. 
  

					
		 	INVESTORS:
		
		 	HARTFORD HEALTHCARE CORPORATION DEFINED BENEFIT MASTER TRUST
		
	                	 	By:   /s/ David J.
Holmgren                        

 
					
		 	Name: 	 	David J. Holmgren
		 	Title:	 	Chief Investment Officer
	Address:	 	80 Seymour Street
		 	Hartford, CT 06102

  

					
		 	HARTFORD HEALTHCARE ENDOWMENT, LLC
		
	                	 	By:   /s/ David J.
Holmgren                        

 
					
		 	Name: 	 	David J. Holmgren
		 	Title:	 	Chief Investment Officer
	Address:	 	80 Seymour Street
		 	Hartford, CT 06102

 SIGNATURE PAGE TO INVESTORS’
RIGHTS AGREEMENT 
 FOR FLX BIO, INC. 

 IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first
written. 
  

					
		 	INVESTOR:
		
		 	 SCHRODER ADVEQ 

TECHNOLOGY VIII L.P.

		
		 	By: Schroder Adveq Technology
Management VIII L.P., its general partner
		
		 	By: Schroder Adveq Management Jersey Ltd., its general partner
			
	               	 	By: 	 	/s/ Mark Nieuwenhuis /s/ Monika Pinel

 
					
		 	Name:	 	Mark Nieuwenhuis Monika Pinel
		 	Title:	 	Director Authorized Signatory
	Address: 	 	 Schroder Adveq Technology VIII L.P.

50 Lothian Road
 Festival Square

Edinburgh EH3 9WJ
 Scotland

 SIGNATURE PAGE TO INVESTORS’
RIGHTS AGREEMENT 
 FOR FLX BIO, INC. 

 IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first
written. 
  

					
		 	INVESTOR:
		
		 	PONOI CAPITAL, LP
		 	By:	 	Ponoi Management, LLC
		 	Its:	 	General Partner
			
	              	 	By: 	 	/s/ James Evangelista

 
					
		 	Name:	 	James Evangelista
		 	Title:	 	 
	Address:	 	1700 Owens Street, Suite 500
		 	San Francisco, CA 94158

  

					
		 	PONOI CAPITAL II, LP
		 	By:	 	Ponoi II Management, LLC
		 	Its:	 	General Partner
			
	              	 	By: 	 	/s/ James Evangelista

 
					
		 	Name:	 	James Evangelista
		 	Title:	 	 
	Address:	 	1700 Owens Street, Suite 500
		 	San Francisco, CA 94158

 SIGNATURE PAGE TO INVESTORS’
RIGHTS AGREEMENT 
 FOR FLX BIO, INC. 

 IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first
written. 
  

					
		 	INVESTOR:
		
		 	KPCB HOLDINGS, INC., AS NOMINEE
			
	               	 	By: 	 	/s/ Jason Doren

 
					
		 	Name:	 	Jason Doren
		 	Title:	 	 
		
	Address: 	 	 
		
		 	 

 SIGNATURE PAGE TO INVESTORS’
RIGHTS AGREEMENT 
 FOR FLX BIO, INC. 

 IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first
written. 
  

					
		 	INVESTOR:
		
		 	TOPSPIN FUND, LP
			
	               	 	By: 	 	/s/ Steven J. Winick

 
					
		 	Name:	 	Steven J. Winick
		 	Title:	 	 
	Address: 	 	3 Expressway Plaza
		 	Roslyn Heights, NY 11577

 SIGNATURE PAGE TO INVESTORS’
RIGHTS AGREEMENT 
 FOR FLX BIO, INC. 

 IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first
written. 
  

					
		 	INVESTOR:
		
		 	TOPSPIN BIOTECH FUND II, LP
			
	              	 	By:	 	/s/ Steven J. Winick

 
					
		 	Name:	 	Steven J. Winick
		 	Title:	 	 
		
	Address:	 	 
		
		 	 

 SIGNATURE PAGE TO INVESTORS’
RIGHTS AGREEMENT 
 FOR FLX BIO, INC. 

 IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first
written. 
  

					
		 	INVESTOR:
		
		 	CELGENE CORPORATION
			
	              	 	By:	 	/s/ Robert Hershberg

 
					
		 	Name:	 	Robert Hershberg
		 	Title:	 	EVP, BD
	Address:	 	86 Morris Avenue
		 	Summit, NJ 07901

 SIGNATURE PAGE TO INVESTORS’
RIGHTS AGREEMENT 
 FOR FLX BIO, INC. 

 IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first
written. 
  

					
		 	INVESTOR:
		
		 	CELGENE SWITZERLAND LLC
			
	              	 	By:	 	/s/ Kevin Mello

 
					
		 	Name:	 	Kevin Mello
		 	Title:	 	Manager
	Address:	 	30 Woodbourne Ave
		 	Pembroke BDA

 SIGNATURE PAGE TO INVESTORS’
RIGHTS AGREEMENT 
 FOR FLX BIO, INC. 

 IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first
written. 
  

					
		 	INVESTOR:
		
		 	THE REGENTS OF THE UNIVERSITY OF CALIFORNIA
			
	              	 	By: 	 	 /s/ Jagdeep Singh Bachher

					
		 	Name:	 	Jagdeep Singh Bachher
		 	Title:	 	Chief Investment Officer
	Address:	 	1111 Broadway
		 	Oakland, CA 94607

 SIGNATURE PAGE TO INVESTORS’
RIGHTS AGREEMENT 
 FOR FLX BIO, INC. 

 IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first
written. 
  

					
		 	INVESTOR:
		
		 	GV 2019, L.P.
		
		 	 By: GV 2019 GP, L.P., its General Partner

By: GV 2019 GP, L.L.C., its General Partner

			
	               	 	By: 	 	 /s/ Daphne Chang

 
					
		 	Name:	 	Daphne Chang
		 	Title:	 	Authorized Signatory
	Address: 	 	 Attn: GV Legal Department
 1600
Amphitheatre Parkway
 Mountain View, CA 94043

 SIGNATURE PAGE TO INVESTORS’
RIGHTS AGREEMENT 
 FOR FLX BIO, INC. 

 IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first
written. 
  

					
		 	INVESTOR:
		
		 	GV 2017, L.P.
		
		 	 By: GV 2017 GP, L.P., its General Partner

By: GV 2017 GP, L.L.C., its General
Partner

			
	               	 	By: 	 	 /s/ Daphne Chang

 
					
		 	Name:	 	Daphne Chang
		 	Title:	 	Authorized Signatory
	Address: 	 	 Attn: GV Legal Department
 1600
Amphitheatre Parkway
 Mountain View, CA 94043

 SIGNATURE PAGE TO INVESTORS’
RIGHTS AGREEMENT 
 FOR FLX BIO, INC. 

 IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first
written. 
  

					
		 	INVESTOR:
		
		 	KRAVIS INVESTMENT PARTNERS LLC
			
	               	 	By: 	 	 /s/ Henry R. Kravis

					
		 	Name:	 	Henry R. Kravis
		 	Title:	 	Member
		
	Address: 	 	  

		
		 	  

 SIGNATURE PAGE TO INVESTORS’
RIGHTS AGREEMENT 
 FOR FLX BIO, INC. 

 IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first
written. 
  

					
		 	INVESTOR:
		
		 	FRANKLIN BERGER
			
	               	 	By: 	 	 /s/ Franklin Berger

					
		 	Name:	 	
		 	Title:	 	individual
	Address: 	 	257 Park Avenue, 15th Floor
		 	New York, NY 10010

 SIGNATURE PAGE TO INVESTORS’
RIGHTS AGREEMENT 
 FOR FLX BIO, INC. 

 IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first
written. 
  

					
	              	 	INVESTOR:
		
		 	THE WONG FAMILY TRUST DATED
FEBRUARY 4, 2008
			
		 	By: 	 	/s/ Brian Wong

 
					
	              	 	Name:	 	Brian Wong
		 	Title:	 	Trustee
		
	Address:	 	 
		
		 	 

 SIGNATURE PAGE TO INVESTORS’
RIGHTS AGREEMENT 
 FOR FLX BIO, INC. 

 IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first
written. 
  

					
	              	 	INVESTOR:
		
		 	RIEFLIN FAMILY TRUST U/A DTD 4/3/00,
WILLIAM J. RIEFLIN AND PRUDENCE
H.
RIEFLIN, TRUSTEES
			
		 	By: 	 	/s/ William J. Rieflin

 
					
		 	Name:	 	William J. Rieflin
		 	Title:	 	Trustee
		
	Address:	 	 
		
		 	 

 SIGNATURE PAGE TO INVESTORS’
RIGHTS AGREEMENT 
 FOR FLX BIO, INC. 

 IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first
written. 
  

					
	              	 	INVESTOR:
		
		 	THE COLUMN GROUP II, LP
			
		 	By:	 	The Column Group II GP, LP
		 	Its:	 	General Partner
			
		 	By:	 	The Column Group, LLC
		 	Its:	 	General Partner

 
					
			
	              	 	By: 	 	/s/ James Evangelista

 
					
		 	Name:	 	James Evangelista
		 	Title:	 	 
	Address:	 	1700 Owens Street, Suite 500
		 	San Francisco, CA 94158

 SIGNATURE PAGE TO INVESTORS’
RIGHTS AGREEMENT 
 FOR FLX BIO, INC. 

 IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date
first written above. 
  

					
	              	 	INVESTOR:
		
		 	HUADONG MEDICINE (HONG KONG) INVESTMENT HOLDING CO., LTD
			
		 	By: 	 	/s/ Honglan Ma

 
					
		 	Name:	 	Honglan Ma
		 	Title:	 	Director
	Address:	 	ROOM 1405, 14/F., LUCKY
		 	CENTRE, 165 WANCHAI
		 	ROAD,WANCHAI HONG
		 	KONG

 SIGNATURE PAGE TO INVESTORS’
RIGHTS AGREEMENT 
 FOR FLX BIO, INC. 

 IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first
written. 
  

					
	                	 	INVESTOR:
		
		 	THE TRUSTEES OF COLUMBIA UNIVERSITY
IN THE CITY OF
NEW YORK
		
		 	By:  /s/ Julius
Mercado                                

 
					
		 	Name:	 	Julius Mercado
		 	Title:	 	Chief Operating Officer
		 	Columbia Investment Management
		 	Company, LLC
	Address:	 	405 Lexington Avenue, 63rd Floor
		 	New York, NY 10174

 SIGNATURE PAGE TO INVESTORS’
RIGHTS AGREEMENT 
 FOR FLX BIO, INC. 

 IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first
written above. 
  

			
	 INVESTOR:
  

T. ROWE PRICE NEW HORIZONS FUND, INC.
 T. ROWE PRICE NEW
HORIZONS TRUST
 T. ROWE PRICE U.S. EQUITIES TRUST

MASSMUTUAL SELECT FUNDS MASSMUTUAL SELECT T. ROWE PRICE SMALL AND MID CAP BLEND FUND

Each account, severally not jointly
  

By: T. Rowe Price Associates, Inc., Investment Adviser or Subadviser, as applicable

			
		
	By:	 	/s/ Alexander Roik

 
			
	Name:	 	Alexander Roik

 
			
	Title:	 	Vice President

 
			
	
	 Address:
 T. Rowe Price Associates,
Inc.
 100 East Pratt Street Baltimore, MD 21202
 Attn: Andrew
Baek, Vice President
 Phone: 410-345-2090

E-mail: Andrew_Baek@troweprice.com

 SIGNATURE PAGE TO INVESTORS’
RIGHTS AGREEMENT 
 FOR FLX BIO, INC. 

 IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first
written above. 
  

			
	 INVESTOR:
  

T. ROWE PRICE HEALTH SCIENCES FUND, INC.
 TD MUTUAL
FUNDS - TD HEALTH SCIENCES FUND
 VALIC COMPANY I - HEALTH SCIENCES FUND

T. ROWE PRICE HEALTH SCIENCES PORTFOLIO
 Each account,
severally not jointly
  
 By: T. Rowe Price Associates, Inc., Investment Adviser or
Subadviser, as applicable

 
			
		
	By:	 	/s/ John Hall

 
			
	Name:	 	John Hall

 
			
	Title:	 	Vice President

 
			
	
	 Address:
 T. Rowe Price Associates,
Inc.
 100 East Pratt Street Baltimore, MD 21202
 Attn: Andrew
Baek, Vice President
 Phone: 410-345-2090

E-mail: Andrew_Baek@troweprice.com

 SIGNATURE PAGE TO INVESTORS’
RIGHTS AGREEMENT 
 FOR FLX BIO, INC. 

 SCHEDULE A 

SCHEDULE OF INVESTORS 
 Topspin Biotech
Fund II, LP 
 The Regents of the University of California 

The Wong Family Trust Dated February 4, 2008 
 KPCB
Holdings, Inc., as nominee 
 The Rosen 1996 Family Trust Dated June 28, 1996 

Juan Carlos Jaen and Anita Galeana, as trustees of the Juan Carlos Jaen and Anita Galeana 2000 Trust 

G&H Partners 
 Brandon Reid Rosen Trust U/A/D 11-22-1996 
 Connor Edwin Rosen Trust U/A/D
11-22/1996 
 Cameron Clark Rosen Trust U/A/D
06-22-1999 
 Sharlene Stein Trust A Restated
03-16-2005 
 Brian Landan 

Tim Yuen and Samantha Stein Leah Stein 
 Harvey S. Rosen and
Marsha E. Novick, Jt Ten WROS Bruce Irwin Rosen 
 Manolita Galeana, as Trustee of the Manolita Galeana November 4, 1993 Revocable Living Trust 

Frank E. Galeana 
 Frederick J. Dotzler and Cassandra L. Dotzler
Trustees of the Dotzler Family Trust UDT Dated August 9, 2001 
 Rieflin Family Trust u/a dtd 4/3/00, William J. Rieflin and Prudence H. Rieflin,
Trustees 
 Yasunori Kaneko & Yumi Kaneko, trustees of the Kaneko Family Trust dated January 20, 1992 

Judy Maria Wong 
 Gary Goodman and Bradley Matteoni 

Karl Handelsman 
 Nigel and Josephine Walker Living Trust dtd.
02/19/2013 
 Tim Sullivan and Jana Sullivan 

 Julio Medina 

Shichang Miao 
 Lorelei & Frank Chambers 

R. L. Freitas & R. G. Freitas CO-TTEE Robert Freitas Rita Freitas Rev Tst 

Larry Martial Etcheverry and Ariel Anne Etcheverry Family Trust U/A dtd March 8, 2005 

Mollie & Kurt Jurgenson 
 McEvoy-Worsencroft Family
Trust u/a/d 7-29-94 Mary Tsay 
 Jennifer Berrueta Vergara Cozad
Investments, LP 
 Mark E. and Patricia M. Hayes, Community Property 

Jack G. Simke 
 Robin D. Raphael-Simke 

John David Jaen, Trustee of the 2013 Irrevocable Juan Jaen Family Trust, Dated December 7, 2013 

John David Jaen, Trustee of the 2013 Irrevocable Anita Galeana Family Trust, Dated December 7, 2013 

The Board of Trustees of the Leland Stanford Junior University (SEVF II) 

Celgene Corporation 
 AMGEN Inc. 

The Column Group II, LP 
 Celgene Switzerland LLC 

Kravis Investment Partners LLC 
 PENSCO Trust Company LLC
Custodian FBO Dr. Leo A. Guthart Roth IRA 
 Ponoi Capital, LP 

Topspin Fund, LP 
 GV 2017, L.P. 

FV PE Holdings, LLC 
 Franklin Berger 

Aju Life Science 3.0 Venture Fund 

 Aju Good Venture Fund 

Hartford HealthCare Corporation Defined Benefit Master Trust 

Hartford HealthCare Endowment, LLC 
 Schroder Adveq Technology
VIII L.P. 
 Ponoi Capital II, LP 
 GV 2019, L.P. 

Huadong Medicine (Hong Kong) Investment Holding Co., Ltd. 
 The
Trustees of Columbia University in the City of New York 
 T. Rowe Price New Horizons Fund, Inc. 

T. Rowe Price New Horizons Trust 
 T. Rowe Price U.S. Equities
Trust 
 MassMutual Select Funds - MassMutual Select T. Rowe Price Small and Mid Cap Blend Fund 

T. Rowe Price Health Sciences Fund, Inc. TD Mutual Funds - TD Health Sciences Fund VALIC Company I - Health Sciences Fund 

T. Rowe Price Health Sciences Portfolio

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