Document:

Foundry Capacity Agreement dated August 12, 2003

 EXHIBIT 10.1 
  
 CONFIDENTIAL TREATMENT REQUESTED: Certain portions of this document have been omitted pursuant to a request for confidential
treatment and, where applicable, have been marked with an asterisk to denote where omissions have been made. The confidential material has been filed separately with the Commission. 
  
 LEXAR / UMC FOUNDRY CAPACITY AGREEMENT 
  
 This Foundry Capacity Agreement (“Agreement”) is entered into as of August 12, 2003 (“the Effective
Date”) by and between Lexar Media, Inc. (“Lexar” or “Buyer”) incorporated in Delaware, with offices at 47421 Bayside Parkway, Fremont, California 94538; and UMC Group (USA) (“UMC” or “Seller”), with
offices at 488 DeGuigne Drive, Sunnyvale, CA 94085. 
  
 1. DEFINITIONS 
  
 1.1 “Foundry Products” and/or
“Products” shall mean those integrated circuits designed and/or licensed by Lexar, which UMC is to have manufactured for Lexar by UMC-affiliated fabs under this Foundry Capacity Agreement. 
  
 1.2 “UMC Production Capacity” and/or “Production Capacity” shall mean
commercial production capacity in UMC’s facilities in quantities designated as 8-inch equivalent wafer starts during the month involved, manufactured using UMC’s 0.45um, Logic, 1P2M, 5V and/or 0.25um, Logic, 1P3M, 2.5V/5.0V, processes with
no ESD Implant and non-EPI. 
  
 1.3 “Wafers” shall mean Products in
unsorted, PCM tested wafer form. 
  
 2.
FORECASTING AND COMMITMENTS 
  
 2.1 Forecasts. During the
first seven calendar days of each calendar month, Lexar shall provide to UMC by facsimile or other electronic communication a written rolling forecast of its requirements for wafer-outs from UMC’s facilities for the next * (with the first month
of each such forecast being the second calendar month following the month during which the forecast is received (each a “Buyer Forecast”). By way of illustration, a Buyer Forecast provided on January 7 would forecast Lexar’s needs for
wafer-outs during the period *. Each such Buyer Forecast shall show the quantity of wafer outs and the specific technology and/or process for the wafers listed, i.e., at a minimum, Logic, Mix-mode, SRAM, etc.; feature size (in microns); number of
poly layers; number of metal layers; and metal type (collectively, “Technology”). Lexar’s initial wafer and tapeout forecast and Projected 0.25um Product Roadmap for 2H Y2003 and 2004 is attached hereto as Exhibit A, which shall be
deemed to be Lexar’s first Buyer Forecast. 
  
 2.2 Lexar shall make good
faith efforts to ensure that all such Buyer Forecasts are reasonable estimates of its anticipated needs and UMC shall make good faith efforts meet the Buyer Forecasts and upside commitments in this section 2.0. 
  

 Page 1 

 2.3 Notwithstanding anything else, but for only so long as each Buyer Forecast, including any upside amounts, forecasts
fewer than * wafer outs per month, for each and every month of such Buyer Forecast: 
  
 2.3.1 each Buyer Forecast, to the extent accepted by Seller, shall constitute a commitment by Lexar to purchase a minimum of the following percentages of the amounts indicated in such Buyer Forecast (by Technology) to
the extent such Buyer Forecast is accepted by UMC: 
  

	 Month in the forecast

	 	 *

	 	 *

	 	 *

	Minimum percentage commitment for amounts forecast for that month	 	 *%
	 	 *%
	 	 *%

  
 2.3.2 UMC will provide
a written response to each Lexar forecast within ten business days of UMC’s receipt. 
  
 2.3.3 Production of Foundry Products shall be pursuant to purchase orders consistent with accepted Buyer Forecasts, or otherwise consistent with this Agreement. Subject to Sections 2.5 and 2.6 below and the other
terms set forth in this Agreement, UMC’s response to each Buyer Forecast shall accept the quantities in each month of the Buyer Forecast to the extent they are * (for months in which up to * wafers have been forecast) or * (for months in which
in excess of * wafers have been forecast) * for the applicable month(s) pursuant to a prior response to a Buyer Forecast. However, UMC may accept and/or reject in whole or in part any additional forecast quantities above the percentages specified
above. To the extent that UMC accepts a Buyer Forecast in excess of the amounts specified above, UMC commits to sell the accepted quantities, subject to adjustments to be made in response to subsequent Buyer Forecasts consistent with this Agreement.
UMC shall have no obligation to sell Products to Lexar except pursuant to purchase orders issued pursuant to accepted Buyer Forecasts. 
  
 2.4 In the event Buyer forecasts in excess of * wafers for any month, including upside, and notwithstanding anything else in this Agreement, no commitments from Seller in
connection with such forecast, including but not limited to responses to such forecasts, shall be binding upon Seller, and Buyer and Seller, should it appear likely that Buyer’s forecasts shall exceed * wafers in any month, shall promptly
renegotiate the table above. 
  
 2.5 To the extent that any Buyer Forecast fails
to forecast the full capacity or quantity if any, allocated or promised to Lexar in response to a prior Buyer Forecast: (i) UMC shall be entitled in its sole and complete discretion to enter commitments with others for such unexercised capacity for
the applicable months and in the amounts not so exercised, and (ii) Lexar will not have any right to require UMC to provide that unexercised capacity to Lexar in the month(s) involved. 
  
 2.6 In the absence of a written agreement to the contrary, capacity pursuant to this Agreement shall be generally linear, without abrupt
changes from month to month and with no bunching or clumping of quantities or orders. 
  
 2.7 Subject to availability, to address engineering issues, and not to address production needs, and provided that Buyer provides adequate forecasting of its anticipated tapeouts requiring hot lot service, UMC shall make commercially
reasonable efforts to provide access to hot lot services. 

 CONFIDENTIAL TREATMENT
REQUESTED: Certain portions of this document have been omitted pursuant to a request for confidential treatment and, where applicable, have been marked with an asterisk to denote where omissions have been made. The confidential material has been
filed separately with the Commission. 
  

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 2.8 All capacity and pricing commitments made by UMC pursuant to this Agreement, any quotation issued during the term of
this Agreement, and any response to any Buyer Forecast, are made in reliance upon Buyer * for the term of this Agreement and any extensions, and are voidable without liability by UMC upon Buyer failing to * for any calendar quarter. For purposes of
this Agreement, UMC shall be considered to be * each quarter only if Buyer *. Buyer shall immediately inform UMC in the event that Buyer fails to * during any quarter during the term of this Agreement and any extension. 
  
 3. ORDERS AND PRODUCTION RELEASE. 
  
 3.1 Lexar shall issue purchase orders by the 15th day of each calendar month for wafer outs
during the calendar month * months hence. By way of illustration, a purchase order is due by January 15th for wafer outs scheduled for *. All purchase orders shall be in writing. Notwithstanding any statement to the contrary in any order-related
documentation, all orders shall be subject to UMC’s Wafer Foundry Standard Terms and Conditions (except to the extent, if any, such terms and conditions are in conflict with this Agreement in which event this Agreement controls), and other than
variances in quantities ordered, no acceptance of a purchase order shall constitute acceptance of any terms at variance with this Agreement or UMC’s Wafer Foundry Standard Terms and Conditions and/or previously accepted forecasts, and purchase
orders shall be null and void as to any such variances. 
  
 3.2 UMC shall
acknowledge in writing, within three (3) business days of receipt of a purchase order, either the acceptance of the order, or the reason such order cannot be accepted, or if UMC wishes to modify such order. If UMC does not provide such
acknowledgment within the time provided, Lexar shall contact UMC to determine the cause for the lack of acknowledgment. 
  
 3.3 Unless wafer processing has started, or UMC has incurred engineering or tooling charges, Lexar may cancel or modify a purchase order without penalty by delivering to
UMC a written notice of cancellation or modification within three (3) days of UMC’s receipt of the original purchase order involved; provided however that no such cancellation will relieve Lexar of any obligations under any other applicable
provisions or agreements including without limitation any obligation to comply with loading commitments, Buyer Forecasts (to the extent accepted) and/or purchase orders. Until wafer processing has started, Lexar may request changes to the product
mix within any particular Technology, and UMC shall exert its best efforts to meet such requests. Lexar may at any time request that the scheduled wafer out date for any wafer(s) be accelerated or delayed, and such requests shall be considered on a
case-by-case basis, with the understanding that UMC shall make reasonable efforts to accommodate such requests, but shall not be obligated to do so. 
  
 3.4 Except as provided in Section 3.3 with respect to wafers, which have not been started, cancellation of purchase orders is not permitted. 
  
 3.5 Delivery will be made FCA (Incoterms 2000), Manufacturer’s plant, to a carrier
designated in writing by Lexar or, if Lexar fails to designate a carrier, to a carrier designated by UMC. 
  
 3.6 All wafer-out dates are subject to timely receipt by UMC of fully-approved mask sets and fully-completed purchase orders. 
  
 3.7 UMC’s acceptance of a purchase order shall constitute UMC’s commitment to the wafer start date calculated from the scheduled wafer out date and the agreed
upon lead and manufacturing cycle time. 

 CONFIDENTIAL TREATMENT REQUESTED: Certain
portions of this document have been omitted pursuant to a request for confidential treatment and, where applicable, have been marked with an asterisk to denote where omissions have been made. The confidential material has been filed separately with
the Commission. 
  

 Page 3 

 UMC shall make reasonable efforts to achieve on-time wafer-outs. Subject to these commitments, SELLER SHALL NOT BE LIABLE
FOR ANY DELAYS OR FAILURES TO MEET SCHEDULED OR REQUESTED WAFER OUT DATES. 
  
 4. PRODUCTION WAFER PRICING 
  
 4.1
Provided Lexar’s 2H Y2003 and Y2004 actual wafer usage is in compliance with the terms of this agreement and with Lexar wafer forecast for outlined in Exhibit A, production wafer pricing will be as per Exhibit B attached hereto. 
  
 5. TERM AND TERMINATION 
  
 5.1 This Agreement shall remain in effect until *, and may be extended on an annual basis
for successive * periods by mutual written agreement, provided that such any extension may be terminated by either party, without liability and for any reason including for convenience, by nine months’ written notice to the other. In addition,
this Agreement may be terminated as described below. 
  
 5.2 Without limiting the
foregoing: 
  
 (a) If any party fails to perform or violates any obligation under
this Agreement, upon thirty (30) days’ written notice to the breaching party specifying such default (the “Default Notice”), the party affected by such failure and/or violation may terminate this Agreement as to its responsibilities
and obligations without liability unless: 
  
 (i) The breach
specified in the Default Notice has been cured within the thirty (30) day period, or if the breach is disputed, the amount in dispute is placed in a reasonably secure third party escrow account pending resolution of the dispute; or 
  
 (ii) The default reasonably requires more than (30) days to correct
(specifically excluding any failure to pay money), and the defaulting party has begun substantial corrective action to remedy the default within such thirty (30) day period and diligently pursues such action, in which event, termination shall not be
effective unless sixty (60) days has expired from the date of the defaulting party’s receipt of the Default Notice without such corrective action being completed and the default remedied. 
  
 (b) In the event of a breach of a material provision of this Agreement, the complaining party
shall promptly provide in writing a detailed description of the breach as well as any available information reasonably useful and/or necessary to enable a cure (the “Notice of Breach”). The breaching party shall meet with the complaining
party within seven (7) working days following receipt of this Notice of Breach, and shall submit a plan to cure the breach within twenty (20) days of receipt of such notice. The complaining party will accept or reject the plan in writing (giving
written reasons in the event of rejection) within five days of receipt, provided however that no rejection of such a plan will be determinative as to whether a cure has been effectuated. 
  
 5.3 If UMC terminates this Agreement for breach, UMC shall be entitled to payment in full upon delivery of all completed Products
manufactured to outstanding purchase orders, as well as to reimbursement for all reasonable direct costs incurred for up to one month’s work then in progress. 

 CONFIDENTIAL TREATMENT REQUESTED: Certain portions of this document have been omitted pursuant to a request for confidential treatment and, where applicable, have
been marked with an asterisk to denote where omissions have been made. The confidential material has been filed separately with the Commission. 
  

 Page 4 

 6. COUNTERPARTS: FAX SIGNATURES. This Agreement may be executed in one or more counterparts, each of which shall be
deemed an original and all of which, taken together, shall constitute one and the same instrument. Any counterpart signed by an authorized representative of a party and delivered to the other party by telecopier shall be deemed an original
counterpart and duly delivered. 
  
 7. MODIFICATION AND WAIVER. No modification to
this Agreement, nor any waiver of any rights, will be effective unless assented to in writing by the party to be charged, and the waiver of any breach or default shall not constitute a waiver of any other right hereunder or any subsequent breach or
default. 
  
 8. FORCE MAJEURE. Neither party shall be responsible for delay or
failure in performance to the extent caused by any government act, law, regulation, order or decree, by communication line or power failures beyond its control, or by fire, flood or other natural disasters, nor shall any such delay or failure be
considered to be a breach of this Agreement, provided that such party shall use commercially reasonable efforts to resume performance as soon as reasonably practicable thereafter. 
  
 9. SEVERABILITY. In the event that it is determined by a court of competent jurisdiction that any provision of this Agreement is invalid,
illegal, or otherwise unenforceable, such provision will be enforced as nearly as possible in accordance with the stated intention of the parties, while the remainder of this Agreement will remain in full force and effect and bind the parties
according to its terms. To the extent any provision cannot be enforced in accordance with the stated intentions of the parties, such provisions will be deemed not to be a part of this Agreement. 
  
 10. ENTIRE AGREEMENT. This Agreement and UMC’s Wafer Foundry Standard Terms and
Conditions together constitute the entire and exclusive agreement between the parties hereto with respect to the subject matter hereof and supersede any prior representations, understandings and agreements between the parties with respect to such
subject matter. 
  
 11. MISCELLANEOUS. This Agreement may not be assigned by
either party without the express written consent of the other party, which may be given or withheld at the sole discretion of the other party. This Agreement shall be binding upon and for the benefits of the undersigned parties and any permitted
successors or assigns. Failure to enforce any provision of this Agreement shall not constitute a waiver of any term hereof. This Agreement may be executed in counterparts and delivered by facsimile. 
  
 12. GOVERNING LAW/VENUE. This Agreement shall in all respects be interpreted, enforced and
governed by and under the laws of the State of California, without regard to its conflict of laws rules. The language of this Agreement shall be construed as a whole according to its fair meaning, and not strictly for or against either of the
parties. Except for requests for injunctive or other equitable relief, which may be heard in any court of competent jurisdiction, any disputes hereunder shall be adjudicated only by courts located in San Jose, California, or the Northern District of
California, as appropriate, to whose exclusive jurisdiction the parties hereby consent. 
  

 Page 5 

 ACCORDINGLY, each Party to this Agreement represents and warrants that the representatives signing on their respective
behalf is authorized to enter into this Agreement and to bind that Party to its terms. 
  

	 LEXAR MEDIA, Inc.

		
	By:	 	/s/ Brian T. McGee
	 	

	Name:	 	Brian T. McGee
	 	

	Title:	 	Chief Financial Officer
	 	

  

	 UMC GROUP (USA)

		
	By:	 	/s/ Tony Yu
	 	

	Name:	 	Tony Yu
	 	

	Title:	 	Vice President
	 	

  

 Page 6 

 Exhibit A 
  

Lexar’s Wafer and Tapeout Forecast, and Projected 0.25um Product Roadmap for 
 2H Y2003 and 2004 
 (Monthly 8” equivalent wafer-outs) 
  
 2H Y2003 
  
 a)- Wafer Forecast 

	 Jul

	 	 Aug

	 	 Sep

	 	 Oct

	 	 Nov

	 	 Dec

	 *
	 	*	 	*	 	*	 	*	 	*

  
 b)- Tapeout Forecast (by technology)

	 Jul

	 	 Aug

	 	 Sep

	 	 Oct

	 	 Nov

	 	 Dec

	 	 	 	 	*	 	 	 	 	 	*

  
 Y2004

  
 a)- Wafer Forecast 

	 Jan

	 	 Feb

	 	 Mar

	 	 Apr

	 	 May

	 	 Jun

	 	 Jul

	 	 Aug

	 	 Sep

	 	 Oct

	 	 Nov

	 	 Dec

	 *
	 	*	 	*	 	*	 	*	 	*	 	*	 	*	 	*	 	*	 	*	 	*

  
 b)- Tapeout Forecast (by technology)

	 Jan

	 	 Feb

	 	 Mar

	 	 Apr

	 	 May

	 	 Jun

	 	 Jul

	 	 Aug

	 	 Sep

	 	 Oct

	 	 Nov

	 	 Dec

	 *
	 	 	 	*	 	 	 	*	 	 	 	 	 	 	 	 	 	 	 	 	 	 

  
 c)- Projected 0.25um Product Roadmap

 CONFIDENTIAL TREATMENT REQUESTED: Certain portions of this document have been omitted
pursuant to a request for confidential treatment and, where applicable, have been marked with an asterisk to denote where omissions have been made. The confidential material has been filed separately with the Commission. 
  

 Page 7 

 Exhibit B 
  

Production Wafer Pricing 
  
 ALL PRICING HEREIN IS EXCLUSIVE OF LICENSE FEES AND ROYALTIES PAYABLE IN CONNECTION WITH DESIGN COMPONENTS, INCLUDING BUT NOT LIMITED TO THE *. 
  
 Wafer Pricing: For 8” wafers: 
  
 A- UMC’s generic 0.45um, Logic, 1P2M, 5V process with no ESD Implant, no polyimide and
non-EPI. 
  
 Pricing for production wafers pursuant to purchase orders placed from
* through * is $*. Beginning with wafers pursuant to purchase orders placed on or after *, shall be pursuant to the table below, provided however that if Lexar tapes out a * product (intended for production, and not merely a test chip or proof of
concept) (“Qualified Tapeout”) to UMC by *, the pricing will remain at $*. In the event that Lexar fails to do so, however, the wafer pricing will be pursuant to the table below for all wafers pursuant to purchase orders placed through *.
In the event that Lexar tapes out a Qualified Tapeout between * and *, pricing shall revert to $* for wafers pursuant to purchase orders placed on * and thereafter. In the event Lexar has not taped out a Qualified Tapeout by *, the parties will
renegotiate pricing at that time for wafers pursuant to purchase orders placed thereafter. 
  
 Production Wafer Price Table: (based on monthly purchase orders placed) 
  

	 Monthly PO Wafer Qty.

	  	 Price

	 £ *
	  	$    *
	 *
	  	$    *
	 3 *
	  	$    *

  
 B- UMC’s generic 0.25um, Logic,
1P3M, 2.5V/5.0V process with no ESD Implant, no polyimide and non-EPI, 20 mask layers, 22 photo steps process. 

 CONFIDENTIAL TREATMENT REQUESTED: Certain portions of this document have been omitted pursuant to a request for confidential treatment and, where applicable, have been marked with an asterisk to denote where
omissions have been made. The confidential material has been filed separately with the Commission. 
  

 Page 8 

 Production Wafer Price Table: (based on monthly purchase orders placed) 
  

	 Monthly PO Wafer Qty.

	  	 Base Price*
 (* Wafers)

	 £ *
	  	$             *
	 *
	  	                *
	 3 *
	  	$             *

  
 * Above mentioned Base Price is for
wafers which do NOT include the *. 
  
 Pricing for the above mentioned 0.25um
process for wafers which include the * will be per UMC Quotation # LEX051303-025LOGIC-B, dated May 13, 2003. 

 CONFIDENTIAL TREATMENT REQUESTED: Certain portions of this document have been omitted pursuant to a request for confidential treatment and, where applicable, have been marked with an asterisk to denote where
omissions have been made. The confidential material has been filed separately with the Commission. 
  

 Page 9LEASE AMENDMENT NUMBER TWO

 Exhibit 10.1 
  
 LEASE AMENDMENT NUMBER TWO 
  
 This LEASE AMENDMENT NUMBER TWO entered into this 12 day of May, 2003 (the “Second Amendment”), by and between AP SOUTHEAST PORTFOLIO
PARTNERS, L.P., a Delaware limited partnership (the “Landlord”) and CLOSURE MEDICAL CORPORATION, a Delaware corporation (the “Tenant”). 
  
 W I T N E S S E T H: 
  
 WHEREAS, Tenant and Landlord entered into that certain Net Lease dated February 14, 1997 (the “Original Lease”), as amended by that certain
Commencement Agreement and First Amendment to Lease dated August 15, 1997 (the “First Amendment”), the Original Lease and the First Amendment collectively referred to as the “Lease”, for space comprising approximately 49,145
rentable square feet (the “Original Premises”), located at 5250 Green’s Dairy Road, Raleigh, Wake County, North Carolina; and 
  
 WHEREAS, the parties hereto desire to alter and modify said Lease in the manner hereinafter set forth, 
  
 NOW THEREFORE, in consideration of the mutual and reciprocal promises
contained herein and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, Landlord and Tenant hereby agree to amend the Lease as follows: 
  

	1.	Premises. Effective on December 1, 2003 (the “Expansion Premises Commencement Date”), Section 2.2, entitled “Premises”, shall be amended to include the
space to be occupied by Tenant as depicted on Exhibit A-1 attached hereto. 

  

	2.	Square Footage and Address. Effective on the Expansion Premises Commencement Date, Section 2.3, entitled “Square Footage”, shall be amended to include in the
Premises approximately 19,357 additional square feet, located in the Building, and as shown in Exhibit A-1 (the “Expansion Premises”). Collectively, the Original Premises and the Expansion Premises shall constitute approximately 68,502
rentable square feet, collectively the “Premises”. 

  

	3.	Term. Effective on the Expansion Premises Commencement Date, Article III of the Lease, entitled “Term”, shall be amended to extend the Lease so that the Termination
Date of the Lease is November 30, 2008. 

  

	4.	Term. Effective on the Expansion Premises Commencement Date, Article III of the Lease, entitled “Term”, shall be amended to extend the Lease so that the Termination
Date of the Lease is November 30, 2008. 

  

	5.	Base Rent. Effective on the Expansion Premises Commencement Date, Section 4.1 of the Lease, entitled “Base Rent”, shall be amended to provide that cumulative Base
Rent from the Expansion Premises Commencement Date, through the extended Term shall be $3,769,524.36, to be payable in equal monthly installments in accordance with the following rent schedule (which shall replace the rent schedule provided in
Exhibit H of the Lease): 

  

	 MONTHS

	  	 Original Premises
 Monthly Rent

	  	 Expansion Premises
 Monthly Rent

	  	 TOTAL MONTHLY
 RENT

	  	 CUMULATIVE
 RENT

	 12/1/03-7/31/04
	  	$	43,129.24	  	$	16,985.77	  	$	60,115.01	  	$	480,920.08
	 8/1/04-7/31/05
	  	$	44,046.21	  	$	17,356.78	  	$	61,402.99	  	$	736,835.88
	 8/1/05-7/31/06
	  	$	44,990.61	  	$	17,727.79	  	$	62,718.40	  	$	752,620.80
	 8/1/06-7/31/07
	  	$	45,963.27	  	$	18,098.79	  	$	64,062.06	  	$	768,744.72
	 8/1/07-7/31/08
	  	$	45,963.27	  	$	18,098.79	  	$	64,062.06	  	$	768,744.72
	 8/1/08-11/30/08
	  	$	46,928.60	  	$	18,485.94	  	$	65,414.54	  	$	261,658.16
	 	  	 	 	  	 	 	  	  
	 Total Rent:
	  	$	3,769.524.36

  

 1 

	    	The above rent schedule does not include Additional Rent provided for in Section 4.5 and related sections of the Lease. 

  

	6.	Tenant’s Proportionate Share. Effective on the Expansion Premises Commencement Date, Section 4.6 of the Lease, entitled “Tenant’s Proportionate Share”,
shall be amended to provide that Tenant’s Proportionate Share is 74.1725%. 

  

	7.	Brokers’ Commissions. Section 13.15 of the Lease, entitled “Real Estate Brokers”, shall be amended to provide that Tenant has not dealt with any real estate
broker, finder or other person with respect to this Second Amendment, the lease for the Expansion Premises and the extension of the Lease, except for Insignia MetaPartners, through Paul Munana, whose address is 14600 Weston Parkway, Suite 100, Cary,
North Carolina 27513. 

  

	8.	Option to Extend Lease Term. Exhibit D of the Lease, entitled “Option to Extend Lease Term”, shall be amended to provide that the renewal right applies to all of
the Premises, including the Expansion Premises, and that the Renewal Lease Term shall commence, if the option to extend is exercised, upon the expiration of the Lease Term, as extended in this Second Amendment. 

  

	9.	Expansion Option – Right to Relocate Other Tenants. The section of Exhibit F of the Lease, entitled “Expansion Option” and related section entitled
“Expansion Option – Exercise of Right to Relocate Other Tenants”, shall be amended to provide that Tenant’s option to expand and right to relocate existing tenants shall extend through November 30, 2005 exercised by six (6)
months prior written notice from Tenant to Landlord; that any lease for Relocation Premises (as defined in Exhibit F) shall commence six months after the date the notice of the intent to exercise the expansion right is received by Landlord (unless,
if for any reason the Relocation Premises are not available to Tenant at such commencement date for reasons outside of Tenant’s control, in which case the actual commencement date, and rent commencement, shall be deferred according); and that
Tenant shall only be responsible for up to $50,000.00 of the relocation costs. 

  

	10.	Workletter. The attached Workletter shall be incorporated into the Lease for the purpose of making improvements to the Expansion Premises. 

  

	11.	Miscellaneous. The foregoing is intended to be an addition and a modification to the Lease. Unless otherwise defined herein, all capitalized terms used in this Second
Amendment shall have the same definitions ascribed in the Lease. Except as modified and amended by this Second Amendment, the Lease shall remain in full force and effect. If anything contained in this Second Amendment conflicts with any terms of the
Lease, then the terms of this Second Amendment shall govern and any conflicting terms in the Lease shall be deemed deleted in their entirety. 

  

	12.	Tenant Acknowledgment. Tenant acknowledges that Landlord has complied with all of its obligations under said Lease to date, and, to the extent not expressly modified hereby,
all of the terms and conditions of said Lease shall remain unchanged and in full force and effect. 

  
 [REMAINDER OF PAGE INTENTIONALLY BLANK 
 SIGNATURE BLOCKS ON NEXT PAGE] 
  

 2 

 IN WITNESS WHEREOF, Tenant and Landlord have caused this instrument to be executed as of the date first
above written, by their respective officers or parties thereunto duly authorized. 
  
 Tenant: 
  

	 CLOSURE MEDICAL CORPORATION

	 a Delaware corporation

			
	 	 	 By:
	 	 William M. Cotter

	 	 	 Name:
	 	 William M. Cotter

	 	 	 Title:
	 	 VP of Operations

			
	 	 	 Date:
	 	 5/9/03

			
	 	 	 Attest:
	 	 Debra L. Pawl

	 	 	 	 	 Vice President & General Counsel

			
	 	 	 	 	 Corporate Seal:

  
 Landlord: 
  

	 AP SOUTHEAST PORTFOLIO PARTNERS, L.P.

	 a Delaware limited partnership

		
	 	 	By: Highwoods Properties, Inc., its manager a Maryland corporation
				
	 	 	 	 	 By:
	 	 Edward J. Fristsch

	 	 	 	 	 	 	 Edward J. Fritsch, Executive Vice President and Chief Operating Officer

				
	 	 	 	 	 Date:
	 	May 12, 2003
				
	 	 	 	 	 Attest:
	 	Lisa L. Betts
	 	 	 	 	 	 	 Assistant Secretary

				
	 	 	 	 	 	 	 Corporate Seal:

  

 3 

 WORKLETTER. This Workletter sets forth the rights and obligations of Landlord and Tenant with
respect to space planning, engineering, final workshop drawings, and the construction and installation of any improvements to the Premises to be completed before the Expansion Premises Commencement Date (“Tenant Improvements”). This
Workletter contemplates that the performance of this work will proceed in four stages in accordance with the following schedule: (i) preparation of a space plan; (ii) final design and engineering and preparation of final plans and working drawings;
(iii) preparation by the Contractor (as hereinafter defined) of an estimate of the cost of the Tenant Improvements; (iv) submission and approval of plans by appropriate governmental authorities and construction and installation of the Tenant
Improvements by the Expansion Premises Commencement Date. 
  
 In
consideration of the mutual covenants hereinafter contained, Landlord and Tenant do mutually agree to the following: 
  
 1. Allowance. Landlord agrees, at its sole cost and expense, to provide an allowance of $387,140.00, to design, engineer, install, supply
and otherwise to construct the Tenant Improvements in the Premises that will become a part of the Building (the “Allowance”); otherwise, Tenant is fully responsible for the payment of all costs in connection with the Tenant Improvements.
Up to 20% of the Allowance may be applied, at Tenant’s discretion, as a rent credit, provided that Landlord has the right to determine the time period upon which the credit is to be applied no sooner than 1/1/04 no later than 1/1/5. Any unused
allowance shall be forfeited by Tenant. 
  
 2. Space
Planning, Design and Working Drawings. Tenant shall provide and designate architects and engineers licensed in State in which the Expansion Premises are located and reasonably acceptable to Landlord, which architects and engineers will
complete construction and mechanical drawings and specifications as required to construct the Tenant Improvements. The architects and engineers shall comply with the following: 
  
 a. Attend a reasonable number of meetings with Tenant and Landlord’s agent to define Tenant
requirements. Tenant shall provide one complete space plan prepared by Tenant’s architect in order to obtain Landlord’s approval of such space plan. 
  

b. Complete construction drawings for Tenant’s partition layout, reflected ceiling grid, telephone and electrical outlets, keying,
and finish schedule (subject to the limitation expressed in Section 2 below). 
  
 c. Complete building standard mechanical plans where necessary (for installation of air conditioning system and ductwork, and heating and electrical facilities) for the work to be done in the Expansion Premises.

  
 d. All plans and working drawings for the
construction and completion of the Expansion Premises (the “Plans”) shall be subject to Landlord’s prior written approval. Any changes or modifications Tenant desires to make to the Plans shall also be subject to Landlord’s prior
approval. Landlord agrees that it will not unreasonably withhold its approval of the Plans, or of any changes or modifications thereof; provided, however, Landlord shall have sole and absolute discretion to approve or disapprove any improvements
that will be visible to the exterior of the Expansion Premises, or which may affect the structural integrity of the Building. Any approval of the Plans by Landlord shall not constitute approval of any Delays caused by Tenant and shall not be deemed
a waiver of any rights or remedies that may arise as a result of such Delays. 
  
 e. If Tenant makes any revisions to the space plan after it has been approved by both Landlord and Tenant, Tenant shall pay all additional costs and expenses incurred as a result of such revisions. 
  
 3. Signage and Keying. Door and/or directory signage and suite
keying in accordance with building standards shall be provided and installed by Tenant. Tenant shall have early access to the Premises in order to facilitate design and construction of Tenant improvements upon execution of this lease amendment.

  
 4. Work and Materials at Tenant’s Expense; Payment
of Allowance. 
  
 a. Tenant shall select
Contractors licensed in State in which the Expansion Premises are located, to provide the work and materials to construct the Tenant 

  

 4 

 
Improvements; provided that Landlord shall first approve such Contractors, such approval not to be unreasonably withheld. 
  
 b. ALL WORK IS TO BE PERFORMED IN COMPLIANCE WITH
LANDLORD’S CONSTRUCTION RULES, REGULATIONS AND SPECIFICATIONS (“CONSTRUCTION RULES”), A COPY OF WHICH HAS BEEN PROVIDED TO TENANT. IT IS TENANT’S RESPONSIBILITY TO MAKE SURE THAT ITS CONTRACTOR COMPLIES WITH ALL CONTRUCTION
RULES. IF TENANT HAS NOT RECEIVED A COPY OF THE CONSTRUCTION RULES, IT IS THE RESPONSIBILITY OF TENANT TO OBTAIN A COPY PRIOR TO COMMENCEMENT OF ANY CONSTRUCTION ACTIVITIES. FAILURE TO COMPLY WITH THE CONSTRUCTION RULES IS A DEFAULT UNDER THE
LEASE. 
  
 c. Landlord shall participate with
Tenant and the Contractor in the creation of a punchlist and the construction shall not be deemed completed until Landlord has accepted the final construction. 
  

d. Tenant agrees that Tenant and its contractor and anyone acting on behalf of its contractor or Tenant shall comply with any of
Landlord’s requests that pertain to protecting the Building and the rights of other tenants to enjoyment of their leased space. 
  
 e. Tenant shall pay Landlord a fee of $1,500.00 to reimburse Landlord for its costs and expenses in monitoring construction of the Tenant
Improvements to assure they are being constructed in accordance with the approved Plans. This fee may be deducted from the Allowance by Landlord. 
  
 f. Upon completion of the Tenant Improvements and within five (5) days after demand by Landlord, Tenant shall deliver to Landlord (i)
final releases of lien from all contractors, subcontractors and materialmen performing any work or providing any materials for the Tenant Improvements, and from any lienors giving notice required under law; (ii) a final contractor’s affidavit
from the general Contractor in accordance with applicable law; and (iii) any supporting documentation evidencing final completion and payment of the Tenant Improvements reasonably requested by Landlord. 
  
 g. Landlord shall pay the Allowance to Tenant in monthly
increments after construction of the Tenant Improvements has commenced; provided that Tenant shall not be entitled to receive any portion of the Allowance unless it presents Landlord with evidence establishing that Tenant has paid the vendors and
obtained lien waivers (when appropriate) for the work being reimbursed by the monthly increment. Tenant shall not be entitled to receive the final 5% of the Allowance, until the conditions provided in f. above have been met. 
  
 5. Expansion Premises Commencement Date. Landlord shall
be deemed to have delivered possession of the Expansion Premises on the Expansion Premises Commencement Date set forth in this Second Amendment, and the Expansion Premises Commencement Date of the Lease shall not be delayed by reason of the
non-completion of the Tenant Improvements or the failure to obtain a certificate of occupancy or a temporary certificate of occupancy. 
  
 6. Materials and Workmanship. Tenant covenants and agrees that all work performed in connection with the construction of the Expansion
Premises shall be performed in a good and workmanlike manner and in accordance with all applicable laws and regulations and with the final approved Plans. Tenant agrees to exercise due diligence in completing the construction of the Expansion
Premises. 
  
 7. Insurance; Indemnity. Prior to any
entering the Expansion Premises or commencing construction, Tenant shall comply with all insurance provisions of the Lease. All waiver and indemnity provisions of the Lease shall apply upon Tenant’s (or it’s contractor’s) entry of the
Expansion Premises. 
  

 5 

 Exhibit A-1 
 Expansion Premises 
  

 6

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