Exhibit 10.7

 

THIRD AMENDMENT TO AGREEMENT OF LEASE

 

THIS THIRD AMENDMENT TO AGREEMENT OF LEASE (this “Amendment”) is made this 25th
day of September 2014, by COLUMBIA GATEWAY S-28, L.L.C., a Maryland limited
liability company (“Landlord”) and OSIRIS THERAPEUTICS, INC., a Maryland
corporation (“Tenant”).

 

W I T N E S S E T H:

 

WHEREAS, Landlord and Tenant entered into that Agreement of Lease dated June 6,
2006, as amended by that certain Letter Agreement dated June 14, 2006, that
certain First Amendment to Agreement of Lease dated June 19, 2010, and that
certain Second Amendment to Agreement of Lease dated July 9, 2010 (collectively,
the “Lease”), by the terms of which Tenant leases from Landlord and Landlord
leases to Tenant that certain premises containing an agreed upon equivalent of
61,203 square feet of rentable area (the “Premises”), comprised of the entire
office building located at 7015 Albert Einstein Drive, Columbia, Maryland 21044
(the “Building”), all as more particularly described in the Lease for a term
which expires on July 31, 2016;

 

WHEREAS, Landlord and Tenant mutually desire to extend the term of the Lease and
to amend the same with respect to the Base Rent and certain other matters of the
Lease, all as more particularly set forth below; and

 

WHEREAS, all capitalized terms used in this Amendment which are not defined
herein shall have the meanings given to them in the Lease, unless the context
otherwise requires.

 

NOW, THEREFORE, in consideration of the above Recitals and the mutual covenants
and conditions contained herein, and for other good and valuable consideration,
the receipt and sufficiency of which is hereby acknowledged, Landlord and Tenant
agree as follows:

 

1.                                      Extension of Term.  Landlord and Tenant
agree that the Term of the Lease shall be extended for one (1) additional period
of seven (7) years and three (3) months, commencing on August 1, 2016, and
expiring October 31, 2023 (the “First Renewal Term”).  Tenant’s rental of the
Premises during the First Renewal Term shall be on the same terms, covenants and
conditions set forth in the Lease, provided, however, that Tenant shall pay as
Base Rent during the First Renewal Term the amounts set forth below:

 

Period of First

 

 

 

 

 

Monthly Installment

 

Renewal Term

 

$PSF

 

Annual Base Rent

 

of Annual Base Rent

 

8/1/16*

-

7/31/17

 

$

18.75

 

$

1,147,556.28

 

$

95,629.69

 

8/1/17*

-

7/31/18

 

$

19.22

 

$

1,176,321.72

 

$

98,026.81

 

8/1/18*

-

7/31/19

 

$

19.70

 

$

1,205,699.16

 

$

100,474.93

 

8/1/19

-

7/31/20

 

$

20.19

 

$

1,235,688.60

 

$

102,974.05

 

8/1/20

-

7/31/21

 

$

20.69

 

$

1,266,290.04

 

$

105,524.17

 

8/1/21

-

7/31/22

 

$

21.21

 

$

1,298,115.60

 

$

108,176.30

 

8/1/22

-

7/31/23

 

$

21.74

 

$

1,330,553.28

 

$

110,879.44

 

8/1/23

-

10/31/23

 

$

22.28

 

$

1,363,602.84

*

$

113,633.57

 

 

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*The entire Base Rent, Building CAM Expenses and Taxes shall be abated for the
entire calendar months of August 2016, 2017, 2018 during the First Renewal Term.

 

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**Annualized based on a full year.

 

2.                                      Tenant Improvement Allowance.  Tenant
acknowledges that except as otherwise described herein, the Premises are leased
to Tenant for the First Renewal Term in its “as-is” condition as of the date of
this Amendment and that Landlord is not obligated to make any improvements to
the Premises.  At anytime during the period of January 1, 2015 — December 31,
2016, Tenant, at Tenant’s request, shall have the right to make such
improvements to the Premises as are approved by Landlord, such approval not to
be unreasonably withheld, conditioned or delayed. Landlord hereby grants Tenant
an allowance not to exceed One Million Five Hundred Thirty Thousand Seventy Five
and 00/100 Dollars ($1,530,075.00) (the “Allowance”) towards the costs of such
improvements.  Such improvements shall be subject to the provisions of
Section 10 of the Lease. Tenant shall be responsible for preparing all
construction documents (“Tenant’s Construction Documents”), subject to
Landlord’s prior consent, which consent shall not be unreasonably withheld,
conditioned or delayed.  Tenant shall submit to Landlord completed construction
documents for Landlord’s review and approval.  Within ten (10) business days
following Landlord’s receipt of the Tenant Construction Documents, Landlord
shall review, and in Landlord’s reasonable discretion, either approve the same
or notify Tenant of Landlord’s objections thereto and, if applicable, Landlord’s
proposed modifications. If Landlord has any objections to the Tenant
Construction Documents, Landlord shall identify such objections in a written
notice to Tenant.  Within five (5) business days of receiving Landlord’s
objections, Tenant shall address the objections and deliver revised Tenant
Construction Documents to Landlord for approval in the same manner.  The Tenant
Construction Documents shall conform to all Legal Requirements applicable to the
Tenant Work, and to Landlord’s rules and regulations concerning Building safety,
fire and protection of persons from injury.  Notwithstanding the foregoing,
Landlord’s approval of the Tenant Construction Documents shall not constitute a
representation or warranty by Landlord that the Tenant Construction Documents
are in compliance with building codes or other applicable laws. Tenant’s
improvements shall be referred to as the “Tenant’s Work.” Tenant shall apply for
and obtain all required permits and deliver copies thereof to Landlord prior to
commencing Tenant’s Work.  In such event, Landlord shall disburse the Allowance
in accordance with the following provisions:

 

2.1                               The Allowance shall be disbursed to Tenant on
a progress payment basis.  Proper draw requests submitted by the 20th day of any
calendar month shall be paid by the 15th day of the following calendar month. 
Each of Landlord’s progress payments shall be limited to an amount equal to the
aggregate amounts theretofore paid by Tenant (as certified by Tenant’s
architect) to Tenant’s contractors, subcontractors, material suppliers, and
vendors, and which have not been subject to previous disbursements from the
Allowance.  Tenant shall withhold from its general contractor, and shall require
its general contractor to withhold from each subcontractor, a retainage equal to
ten percent (10%) of each progress payment made until the Tenant’s Work is fifty
percent (50%) complete, and thereafter no further incremental retainage shall be
required if the work is being satisfactorily prosecuted.  Tenant shall, upon
Landlord’s request, provide adequate evidence of such retainage, and in the
event that Tenant fails to provide such evidence, then Landlord may withhold an
amount equal to the retainage described above.  All requests for disbursement of
the Allowance, if any, shall be accompanied by certificate signed by Tenant or
Tenant’s architect (a) that the sum then requested was paid by Tenant to
contractors, subcontractors, materialmen, engineers and other persons who have
rendered services or furnished materials in connection with work on the Tenant
Work, (b) a complete description of such services and materials and the amounts
paid or to be paid to each of such persons in respect thereof, and (c) that the
work described in the certificate has been completed substantially in accordance
with the approved plans and specifications and (ii) paid receipts or such other
proof of payment as Landlord shall reasonably require for all such work
completed.

 

2.2                               If any of the Allowance is not paid pursuant
to subsection 2.1 above, it shall be paid by Landlord to Tenant upon completion
of the Tenant’s Work, to reimburse Tenant for amounts actually paid by Tenant in
connection therewith to Tenant’s vendors, suppliers or contractors, provided
that Landlord shall have received (i) a certificate in accordance with the
requirements of subsection 2.1 above, accompanied by lien waivers satisfactory
to Landlord executed by any contractors or subcontractors for whose labor or
material Tenant has previously been reimbursed pursuant to subsection 2.1 above,
(ii) paid receipts or such other proof of payment as Landlord shall reasonably
require evidencing that final payment has been made for all materials and labor
furnished in connection with the Tenant Work, and (iii) a copy of a final
unconditional certificate of occupancy evidencing that Tenant may commence
occupancy of the Premises for all purposes set forth in the Lease if one is
required for Tenant’s occupancy.

 

2.3                               Tenant shall be permitted to apply the
Allowance and Amortized Amount to costs associated with Tenant’s Work, including
without limitation, the Tenant’s Work, space planning and design, mechanical,
electrical

 

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and plumbing engineering costs, construction fees, tenant improvement cabling,
voice/data, phone data costs, built-in furniture and any professional or
consulting fees specifically related to Tenant’s Work. Any unused Allowing
remaining as of January 1, 2016 shall be deemed forfeited by Tenant and shall
not be reserved for future improvements or credited to rent due under the Lease.
Notwithstanding the foregoing, in the event Tenant is involved in litigation,
arbitration or other similar claim dispute with a vendor, supplier or contractor
that completed work as part of Tenant’s Work and as the result of such dispute
Tenant is unable to provide the necessary lien waiver documentation to Landlord
as part of its request for final Allowance disbursement, upon receipt of written
notice from Tenant, Landlord agrees to extend the deadline of January 1, 2016
for an amount not to exceed ten percent  (10%) of the Allowance, until July 1,
2016.

 

3.                                      Landlord’s HVAC Work. On or before
March 31, 2015, subject to reasonable delays caused by weather events, Landlord,
at its sole cost and expense and not paid from the Allowance or included as a
Building Expense, shall replace and resize all existing base Building HVAC
units, including those which service the Premises, but excluding those specific
units which have been previously installed by Tenant which are dedicated to
Tenant’s clean room (i.e, Units #10, 13, 17, 19, 24 and 27) (“Landlord’s HVAC
Work”). Landlord’s HVAC Work shall be fully designed and engineered by a
professional engineer registered in the state of Maryland, permitted and
inspected by the authority having jurisdiction, and meet the performance
criteria (i.e. thermal comfort, dehumidification, and energy consumption) for
similar Class A flex buildings in Columbia, MD and ASHRAE and humidity standards
for office use and upon completion of Landlord’s HVAC Work, Landlord shall
ensure the new units have been properly balanced by an NEBB Certified balancing
contractor and all operation and controls fully tested and commissioned by the
installation contractor, building controls vendor and HVAC equipment
manufacturer, with such commissioning observed by Tenant or Tenant’s
representatives. Landlord and Tenant hereby agree to reasonably cooperate with
each other during the completion of Landlord’s HVAC Work in order to minimize
any disruption to Tenant’s business. Following the completion of Landlord’s HVAC
Work, Tenant shall be responsible for the repair and maintenance of the new HVAC
units at its sole cost and expense in accordance with Section 11 of the Lease.
Landlord shall purchase a one (1) year warranty from the installation contractor
on all parts and labor and shall administer this warranty on behalf of Tenant
during this one (1) year period.  Landlord shall also reasonably assist Tenant
in administering any manufacturer warranties on behalf of Tenant.  Landlord and
Landlord’s installation contractor shall provide training on all new HVAC
equipment and shall provide detailed O&M manuals to Tenant.

 

4.                                      Landlord’s Roof Work. On or before
March 31, 2015, subject to reasonable delays caused by weather events, Landlord,
at its sole cost and expense and not paid from the Allowance or included as a
Building Expense, shall replace the roof of the Building (“Landlord’s Roof
Work”). Landlord and Tenant hereby agree to use commercially reasonable efforts
to cooperate with each other during the completion of Landlord’s Roof Work in
order to minimize any disruption to Tenant’s business.

 

5.                                      Laboratory Restoration. As part of
Tenant’s Work, Tenant hereby agrees to perform certain improvements to the
laboratory portion of the Premises approved by Landlord, such approval not to be
unreasonably withheld, conditioned or delayed.

 

6.                                      Repairs and Maintenance. Effective as of
January 1, 2015, Sections 11.1 and 11.2 of the Lease are hereby deleted in their
entirety and the following is hereby inserted in lieu thereof:

 

11.1                        Tenant’s Care of the Premises and Building.  During
the Term Tenant shall:

 

(i)                                     keep the Premises and the fixtures,
appurtenances, improvements and equipment therein in good order and condition;

 

(ii)                                  make any and all repairs and replacements
to the Premises required because of Tenant’s misuse or primary negligence,
except to the extent that the repairs or replacements are covered by Landlord’s
insurance as required hereunder;

 

(iii)                               repair and replace special equipment or
decorative treatments installed by or at Tenant’s request and that serve the
Premises only, except to the extent the repairs or replacements are needed
because of Landlord’s misuse or primary negligence, and are not covered by
Tenant’s insurance as required hereunder;

 

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(iv)                              pay for all damage to the Building, its
fixtures and appurtenances, as well as all damages sustained by Tenant or
occupants of the Building due to any waste, misuse or neglect of the Premises,
its fixtures and appurtenances by Tenant, except to the extent that the repair
of such damage is covered by Landlord’s insurance as required hereunder to the
extent that Landlord actually receives proceeds there from;

 

(v)                                 provide regular janitorial service to the
Premises and remove all trash to receptacles designated by Landlord; and

 

(vi)                              not commit waste.

 

In addition Tenant shall not place a load upon any floor of the Premises
exceeding the floor load per square foot area which such floor was designed to
carry and which may be allowed under Applicable Laws.  Landlord reserves the
right to prescribe the weight and position of all heavy equipment brought onto
the Premises and prescribe any reinforcing required under the circumstances, all
such reinforcing to be at Tenant’s expense.

 

11.2                        Landlord’s Repairs.  Except for the repairs and
replacements that Tenant is required to make pursuant to Section 11.1 above,
Landlord shall maintain, repair and replace, as necessary, the exterior Common
Areas and Building (including Building fixtures and equipment) as shall be
reasonably deemed necessary to maintain the Building in a condition comparable
to other first class suburban office buildings in the Baltimore-Washington
corridor area.  This maintenance shall include the roof, designated parking
areas, foundation, exterior walls, interior structural walls, all structural
components, and all systems such as mechanical, electrical, HVAC, and plumbing. 
The costs associated with such repairs shall be deemed a part of Building
Expenses; provided, however, that costs of all of such repairs which would be
considered capital in nature under generally accepted accounting principles
(“GAAP”) shall be included in Building Expenses, amortized in accordance with
GAAP.  There shall be no allowance to Tenant for a diminution of rental value,
no abatement of rent, and no liability on the part of Landlord by reason of
inconvenience, annoyance or injury to business arising from Landlord, Tenant or
others making any repairs or performing maintenance as provided for herein.
Notwithstanding, Landlord will use commercially reasonable efforts to not
interfere with Tenant’s business operations.

 

7.                                      Building Expenses. Effective as of
January 1, 2015, Section 6.2.2 of the Lease is hereby deleted in its entirety
and the following is hereby inserted in lieu thereof:

 

6.2.2  “Building Expenses” shall be all those expenses, charges and fees paid or
incurred by Landlord in connection with the owning, maintaining, operating,
servicing, insuring and repairing of the Property or any part thereof, in a
manner deemed reasonable and appropriate by Landlord and shall include, without
limitation, the following:

 

6.2.2.1  All costs and expenses of operating, repairing, lighting, cleaning, and
insuring (including liability for personal injury, death and property damage and
workers’ compensation insurance covering personnel) the Property or any part
thereof, as well as all costs incurred in removing snow, ice and debris
therefrom and of policing and regulating traffic with respect thereto, and
depreciation of all machinery and equipment used therein or thereon, replacing
or repairing of pavement, parking areas, curbs, walkways, drainage, lighting
facilities, landscaping (including replanting and replacing flowers and other
planting);

 

6.2.2.2 Except to the extent directly paid by Tenant pursuant to Section 24 of
the Lease, electricity, steam and fuel used in lighting, heating, ventilating
and air conditioning and all costs, charges, and expenses incurred by Landlord
in connection with any change of any company providing electricity service,
including, without limitation, maintenance, repair, installation and service
costs associated therewith, as well as all expenses associated with the
installation of any energy or cost savings devices;

 

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6.2.2.3  Maintenance and repair of mechanical and electrical equipment including
heating, ventilating and air conditioning equipment;

 

6.2.2.4  Window cleaning;

 

6.2.2.5  Maintenance of any exterior Common Areas;

 

6.2.2.6 Repair and maintenance of the parking areas, including without
limitation, the resurfacing and striping of said areas;

 

6.2.2.7  Sales or use taxes on supplies or services;

 

6.2.2.9 Management fees equal to 3% of gross rental received by Landlord at the
Property (allocated to their time spent working with respect to the Property)
and the provision of amenities to all tenants in the Property (including
Landlord’s share of all payroll taxes and the cost of an on-site or near-site
office and segregated storage area for Landlord’s parts, tools and supplies);

 

6.2.2.8  Costs and expenses that may result from compliance with any
governmental laws or regulations that were not applicable to the Property at the
time same were originally constructed; and

 

6.2.2.9  All other expenses which under generally accepted accounting principles
would be considered as an expense of the Property.  Notwithstanding the
foregoing, all expenses (whether or not such expenses are enumerated on items 1
through 11 of this Section 6.2.2) which would be considered capital in nature
under generally accepted accounting principles shall be excluded from “Building
Expenses” unless same are amortized in accordance with generally accepted
accounting principles over the useful life of the improvement.

 

8.                                      Services and Utilities. Effective as of
January 1, 2015, Section 23 of the Lease is hereby deleted in its entirety and
the following is hereby inserted in lieu thereof:

 

23.                               Services and Utilities.  Landlord shall
provide the following listed services and utilities, namely:

 

(a)                                 electric energy in accordance with
Section 24 following;

 

(b)                                 hot and cold water sufficient for drinking,
lavatory toilet and ordinary cleaning purposes from fixtures either within the
Premises (if provided pursuant to this Lease) or on the floor on which the
Premises are located, all in accordance with Section 24 following; and

 

(c)                                  maintenance of exterior Common Areas in a
manner comparable to other first class suburban office buildings in the
Baltimore-Washington corridor.

 

Landlord reserves the right to stop service of the plumbing and electric
systems, when necessary, by reason of accident, or emergency, or for repairs,
alterations, replacements, or improvements, which in the judgment of Landlord
are desirable or necessary to be made, until the repairs, alterations,
replacements, or improvements shall have been completed.  Landlord shall have no
responsibility or liability for failure to supply plumbing and electric service,
during the period when prevented from so doing by laws, orders, or regulations
of any Federal, State, County or Municipal authority or by strikes, accidents or
by any other cause whatsoever beyond Landlord’s control.

 

9.                                      Tenant’s Proportionate Share. As of the
date of this Amendment, the term “Tenant’s Proportionate Share” means that
percentage which is computed by a fraction, the numerator of which is the
Rentable Area of the Premises and the denominator of which is the Rentable Area
of the Building.  As of the date of this Amendment, Tenant’s Proportionate Share
is 100%.

 

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10.                               Option to Extend Lease Term.  Landlord and
Tenant hereby agree that all remaining options to extend the Term of the Lease
pursuant to Section 3.3 of the Lease are hereby deleted and Tenant shall have
the right and option to extend the Term of the Lease in accordance with the
provisions set forth below.

 

Tenant shall have the option to extend the Term of the Lease for two
(2) additional periods of five (5) years each (the “Second Renewal Term” and
“Third Renewal Term”) to commence immediately upon the expiration of the First
Renewal Term or the Second Renewal Term, as applicable, provided Tenant is not
in default of any term, covenant or condition of the Lease after the expiration
of all applicable cure periods (i) on the date Tenant notifies Landlord of its
intent to exercise for the applicable Renewal Term and (ii) on the date the
applicable Renewal Term is otherwise scheduled to commence.

 

Tenant’s rental of the Premises during the Second Renewal Term and Third Renewal
Term shall be upon the same terms, covenants and conditions contained in the
Lease, except that Tenant shall pay to Landlord as Base Rent the “Prevailing
Market Rate” for the Premises for the Second Renewal Term or the Third Renewal
Term, as applicable, as hereinafter defined (including annual adjustments).  The
term “Prevailing Market Rate” shall mean the then prevailing market rate being
charged for comparable space in comparable office buildings within a ten
(10) mile radius of the Premises, with consideration given for construction
allowances, commissions, free rent, and other concessions or premiums.  In order
to exercise its option granted herein, Tenant shall notify Landlord in writing
of its intent to renew not less than twelve (12) months prior to the expiration
of the First Renewal Term or the Second Renewal Term, as applicable.  Within
thirty (30) days following the exercise by Tenant of its option to extend the
Lease for the Second Renewal Term or the Third Renewal Term, as applicable,
Landlord shall notify Tenant in writing of its determination of the Prevailing
Market Rate for the Second Renewal Term or the Third Renewal Term, as
applicable, as reasonably determined by Landlord (“Landlord’s Notice”). Within
ten (10) days after receipt of Landlord’s Notice, Tenant shall notify Landlord
in writing of Tenant’s acceptance or rejection of such rate.  If Tenant shall
accept such Prevailing Market Rate, Landlord and Tenant shall enter into an
amendment to the Lease acknowledging such renewal and setting forth any terms at
variance with the terms of the Lease.  If within the ten (10) day period, Tenant
shall reject such Prevailing Market Rate as determined by Landlord for the
Second Renewal Term or the Third Renewal Term, as applicable, then within twenty
(20) days thereafter, Landlord and Tenant shall meet at a mutually acceptable
time and place and shall use their reasonable efforts to agree upon the
Prevailing Market Rate. If Landlord and Tenant shall fail to agree upon such
Prevailing Market Rate within the twenty (20) day period, Landlord and Tenant
shall each appoint an independent experience Howard County commercial leasing
broker licensed in the Maryland area with at least ten (10) years experience
working with tenants having a title equivalent to Vice President or above within
the next ten (10) days (the “Brokers”). Such Brokers shall deliver their
respective estimates of the Prevailing Market Rate within ten (10) days after
being appointed. If the estimates of the Prevailing Market Rate as quoted by the
Brokers are within seven percent (7%) of each other, the Prevailing Market Rate
shall be deemed to be the average of the estimates presented by the Brokers.  If
the estimates of the Prevailing Market Rate as quoted by the Brokers differ by
more than seven percent (7%), then Landlord and Tenant shall jointly appoint a
third independent commercial leasing broker licensed in the Maryland area using
the same broker criteria set forth above within ten (10) days after the receipt
of the initial brokers’ estimates (the “Third Broker”) who shall deliver its
estimate of the Prevailing Market Rate within ten (10) days after being
appointed and such estimate shall be deemed to be the Prevailing Market Rate. 
Tenant shall notify Landlord within ten (10) days after receipt of the estimate
of the Prevailing Market Rate (whether as resulting from the average of the
Brokers or from the Third Broker, as applicable), whether Tenant shall accept
such Prevailing Market Rate, whereupon Landlord and Tenant shall enter into an
amendment to the Lease acknowledging such renewal and setting forth any terms at
variance with the terms of the Lease. If (i) Tenant shall fail to deliver the
requisite notice exercising its option to extend by the date prescribed above,
(ii) Tenant does not respond within ten (10) days following receipt of
Landlord’s Notice or (iii) Tenant does not accept the Prevailing Market Rate
within ten (10) days following Landlord’s notification of the Prevailing Market
Rate, as determined either by the average of the Brokers or from the Third
Broker, as applicable, then Tenant’s option to extend the Lease for the Second
Renewal Term or the Third Renewal Term, as the case may be, shall be void and
inoperable. Landlord and Tenant shall each pay the fee of the broker designated
by them originally and shall split the fees of the Third Broker.

 

Notwithstanding anything to the contrary contained herein, Landlord hereby
agrees that Tenant may elect to exercise either Renewal Term for only a portion
of the Premises which is not less than fifty percent (50%) of

 

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the Rentable Area of the Premises as of the date of this Amendment; provided,
however, the surrendered portion of the Premises shall be of size, dimension and
location which is reasonably approved by Landlord so that Landlord can market
such space to a third-party. In such event, Landlord shall pay all costs to
re-demise the Premises.

 

11.                               Options to Terminate.

 

11.1                        First Termination Right. Tenant shall have the right
to terminate the Lease during the First Renewal Term effective on July 31, 2019,
provided that (i) Tenant gives Landlord at least nine (9) months prior written
notice of its intent to terminate the Lease, (ii) prior to the effective date of
termination, there has been a “change in control” event whereby (A) more than
fifty percent (50%) of the voting stock of Tenant has been acquired by any
individual or entity (other than employees or shareholders of Tenant) or (B) a
sale of substantially all of Tenant’s assets has occurred, (iii) there is no
outstanding Event of Default beyond all applicable cure periods at the time that
Tenant notifies Landlord of its intent to terminate the Lease or as of the date
of termination, and (iv) on or before the effective date of termination, Tenant
pays to Landlord a termination fee in the amount equal to the sum of (w) the
unamortized amount of the Allowance paid by Landlord, at Landlord’s expense, in
accordance with the provisions of Section 2 of this Amendment applying an
interest rate of eight and one-half percent (8.5%) per annum, (x) unamortized
amount of the brokerage commissions payable in accordance with Section 15 of
this Amendment, applying an interest rate of eight and one-half percent (8.5%)
per annum, (y) unamortized amount (using a 15 year amortization period) of the
costs of Landlord’s HVAC Work and Landlord’s Roof Work (as such terms are
defined in Sections 3 and 4 of this Amendment, respectively), applying an
interest rate of eight and one-half percent (8.5%) per annum, and (z) an amount
equal to nine (9) Monthly Installments of Annual Base Rent in effect as of the
date of termination. If Tenant fails to exercise its termination rights strictly
in accordance with the foregoing provision, the Lease shall remain in full force
and effect and Tenant shall have no further right to terminate the Lease except
as set forth in Section 11.2 below.

 

11.2                        Second Termination Right. Provided Tenant has
exercised its right to terminate the Lease in accordance with Section 11.1
above, Tenant shall have the right to terminate the Lease during the First
Renewal Term effective on July 31, 2021, provided that (i) Tenant gives Landlord
at least twelve (12) months prior written notice of its intent to terminate the
Lease, (ii) prior to the effective date of termination, there has been a “change
in control” event whereby (A) more than fifty percent (50%) of the voting stock
of Tenant has been acquired by any individual or entity (other than employees or
shareholders of Tenant) or (B) a sale of substantially all of Tenant’s assets
has occurred, (iii) there is no outstanding Event of Default beyond all
applicable cure periods at the time that Tenant notifies Landlord of its intent
to terminate the Lease or as of the date of termination, and (iv) on or before
the effective date of termination, Tenant pays to Landlord a termination fee in
the amount equal to the sum of (x) the unamortized amount of the Allowance paid
by Landlord, at Landlord’s expense, in accordance with the provisions of
Section 2 of this Amendment applying an interest rate of eight and one-half
percent (8.5%) per annum, (y) unamortized amount of the brokerage commissions
payable in accordance with Section 15 of this Amendment, applying an interest
rate of eight and one-half percent (8.5%) per annum and (z) an amount equal to
six (6) Monthly Installments of Annual Base Rent in effect as of the date of
termination. If Tenant fails to exercise its termination rights strictly in
accordance with the foregoing provision, the Lease shall remain in full force
and effect and Tenant shall have no further right to terminate the Lease.

 

12.                               Reserved Parking. Within thirty (30) days
following the date of this Amendment, Landlord shall designate twenty (20)
parking spaces directly in front of the Building as “OSIRIS or Visitor Reserved”
at no cost to Tenant, and any reasonable and actual costs incurred by Landlord
to properly designate such spaces shall be paid from the Allowance or reimbursed
by Tenant within thirty (30) days following receipt of written request. The
designation of such twenty (20) parking spaces shall continue so long as Tenant
is the sole occupant of the Building.

 

13.                               Security Deposit.  Within ten (10) days
following the date of this Amendment, Landlord hereby agrees to release the
Letter of Credit issued by Wells Fargo Bank, N.A. to satisfy Tenant’s
obligations under Section 4 of the Lease, and in lieu thereof, Landlord agrees
to accept from Tenant a cash or Letter of Credit Security Deposit in an amount
equal to Ninety Five Thousand Six Hundred Twenty Nine and 69/100 Dollars
($95,629.69) (the “Security Deposit’). The Security Deposit shall be paid by
Tenant simultaneously with the execution of this Amendment.  Landlord shall
deliver the released Letter of Credit to Tenant within ten (10) days following
receipt of the Security Deposit.  The Security Deposit shall be held by Landlord
for the remainder of the Tern in accordance with Section 4 of the Lease as
modified below.

 

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Accordingly, as of the date of this Amendment, Section 4 of the Lease is hereby
deleted in its entirety and the following is inserted in its place:

 

4.                                      Security Deposit .

 

4.                                      Security Deposit.  Tenant has this day
paid to Landlord the Security Deposit to be held by Landlord as security for the
payment and performance by Tenant of all obligations imposed on Tenant
hereunder, in an account the proceeds of which may be commingled by Landlord
with any other account or proceeds.  If Tenant shall perform all such
obligations, the Security Deposit shall be refunded to Tenant, without interest,
following the end of the Term.  If Tenant shall default in any such obligation
and such default shall continue beyond all applicable cure periods, Landlord
shall be entitled to apply all or any portion of the Security Deposit, pro
tanto, to cure any such default, and Tenant shall replenish the Security Deposit
to the full amount within thirty (30) days after receipt of a written notice
from Landlord which sets forth the amount to be replenished.  If the Security
Deposit is not fully restored, it shall constitute an immediate Event of Default
(as defined in Section 21) under the terms of the Lease (without need of notice
or the expiration of any cure period), and Landlord shall have the benefit of
all remedies permitted pursuant to the terms of the Lease and the laws of the
State of Maryland. The Security Deposit shall not be considered an advance
payment of rent or a measure of Landlord’s damages in case of default by Tenant.
In the event of the sale or transfer of Landlord’s interest in the Building,
Landlord shall have the right to transfer the Security Deposit to the purchaser
or transferee and upon such transfer Tenant shall look only to the new landlord
for the return of the Security Deposit and Landlord shall thereupon be released
from all liability to Tenant for the return of or accounting for the Security
Deposit.”

 

Notwithstanding anything contained herein to the contrary, there shall be no
reduction in the amount of the Security Deposit held by Landlord prior to the
expiration of the of the Lease.

 

14.                               SNDA. Within sixty (60) days following the
date of this Amendment, Landlord, at its sole cost and expense, hereby agrees to
use commercially reasonable efforts to procure a Subordination, Nondisturbance
and Attornment Agreement (“SNDA”) signed by any current mortgagee in the form
attached hereto as Exhibit “A”. In addition, Landlord shall use commercially
reasonable efforts to obtain an SNDA from any future mortgagee.

 

15.                               Broker.   Tenant represents that Tenant has
not dealt directly or indirectly with any broker in connection with this
Amendment other than Jones Lang LaSalle Brokerage, Inc. (“Broker”), and Tenant
warrants that no other broker negotiated this Amendment or is entitled to any
commissions in connection with this Amendment.  Tenant shall indemnify and hold
Landlord harmless for any breach of the foregoing representations.  Landlord
shall pay Broker its commission due for the First Renewal Term.

 

16.                               Ratification of Lease.  All other terms,
covenants and conditions of the Lease shall remain the same and continue in full
force and effect, and shall be deemed unchanged, except as such terms, covenants
and conditions of the Lease have been amended or modified by this Amendment and
this Amendment shall, by this reference, constitute a part of the Lease.

 

[SIGNATURES ON FOLLOWING PAGE]

 

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IN WITNESS WHEREOF, Landlord and Tenant have respectively affixed their hands
and seals to this Amendment as of the day and year first above written.

 

 

WITNESS:

LANDLORD:

 

 

 

 

 

COLUMBIA GATEWAY S-28, L.L.C.

 

 

 

 

 

 

 

/s/ LEE W. MURRAY

 

By:

/s/ STEPHEN E. BUDORICK

(SEAL)

 

 

 

 

 

Stephen E. Budorick

 

 

 

 

 

 

 

Executive Vice President

 

 

 

 

 

 

 

WITNESS:

TENANT:

 

 

 

 

 

OSIRIS THERAPEUTICS, INC.

 

 

 

 

 

 

 

/s/ MEENU MARIE SURI

 

By:

/s/ PHILIP R. JACOBY, JR.

(SEAL)

 

 

 

 

 

Name:

Philip R. Jacoby, Jr.

 

 

 

 

 

 

Title:

Chief Financial Officer

 

 

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STATE OF MARYLAND, COUNTY OF HOWARD, TO WIT:

 

I HEREBY CERTIFY, that on this 30th day of September, 2014, before me, the
undersigned Notary Public of said State, personally appeared STEPHEN E.
BUDORICK, who acknowledged himself to be Executive Vice President of COLUMBIA
GATEWAY S-28, L.L.C., a Maryland limited liability company, known to me (or
satisfactorily proven) to be the person whose name is subscribed to the within
instrument, and acknowledged that he executed the same for the purposes therein
contained as the duly authorized Executive Vice President by signing the name of
the company by himself as Executive Vice President.

 

WITNESS my hand and Notarial Seal.

 

 

 

/s/ MONIQUE Y. JONES

 

 

 

Notary Public

 

My Commission Expires:  November 21, 2016

 

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STATE OF MARYLAND, COUNTY OF HOWARD, TO WIT:

 

I HEREBY CERTIFY, that on this 25th day of September, 2014, before me, the
undersigned Notary Public of said State, personally appeared Philip R.
Jacoby, Jr., known to me (or satisfactorily proven) to be the person whose name
is subscribed to the within instrument, and acknowledged himself/herself to be
the Chief Financial Officer of OSIRIS THERAPEUTICS, INC., a Maryland
corporation, that he/she, as such Chief Financial Officer, being authorized so
to do, executed the foregoing instrument on behalf of said Corporation by
himself/herself as such Chief Financial Officer.

 

WITNESS my hand and Notarial Seal.

 

 

 

/s/ DIANE KATHLEEN SAVOIE

 

 

 

Notary Public

 

My Commission Expires: May 16, 2015

 

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