Document:

Exhibit
10.20

THIS
EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST.  REDACTED MATERIAL IS MARKED
WITH A “*” AND BRACKETS AND HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION.

MARKETING,
COLLABORATION AND LICENSE AGREEMENT

This Agreement is effective as of August 11, 1999, (“the EFFECTIVE
DATE”) by and between Osiris Therapeutics, Inc., a Delaware corporation, having
an address at 2001 Aliceanna Street, Baltimore, Maryland 21231 (“OSIRIS”), and
BIOWHITTAKER, Inc., a Delaware corporation having offices at 8830 Biggs Ford
Road, Walkersville, MD 21793 (“BIOWHITTAKER”).

 

NOW, THEREFORE, in consideration of the mutual promises and other good
and valuable consideration, the parties agree as follows:

 

SECTION 1 - Definitions.

 

The terms used in this Agreement have the following meaning:

 

1.1           “AFFILIATE” as
applied to a person or entity, means any other person or entity controlled by
such person or entity.  The term “control”
means possession of the power to direct or cause the direction of the
management and policies whether through the ownership of voting securities, by
contract or otherwise.  The ownership of
voting securities of a person, organization or entity, however, shall not, in
and of itself, constitute “control” for purposes of this definition, unless
said ownership is of a majority of the outstanding securities entitled to vote
of such person, organization or entity. 
Affiliate shall also mean a limited partnership in which a subsidiary of
such person, organization or entity is a general partner.  Affiliate shall also mean any entity in the
Cambrex Biotechnology Group.

 

1.2           “BIOWHITTAKER
AGREEMENTS” means the agreements of Appendix A as may be amended from time to
time.

 

 

THIS
EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST.  REDACTED MATERIAL IS MARKED
WITH A “*” AND BRACKETS AND HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION.

1.3           “BIOWHITTAKER FIELD”
means use for research for commercial and non-commercial purposes, but not
including human clinical trials.

 

1.4           “BIOWHITTAKER MSC
PATENT(S)” means any patent or patent application (or equivalents thereof, such
as extensions or other rights that give the right to exclude others such as
Supplementary Protection Certificates) anywhere in the world, that is
(i) owned, in whole or in part, by BIOWHITTAKER or its AFFILIATES and
(ii) is directed to an invention that is BIOWHITTAKER MSC TECHNOLOGY.

 

1.5           “BIOWHITTAKER MSC
TECHNOLOGY” means all materials, substances, media compositions, information
and data (including, but not limited to, formulae, procedures, protocols,
techniques and results of experimentation and testing) that (i) was or is
conceived, developed or reduced to practice prior to the EFFECTIVE DATE or
during the RESEARCH TERM; and (ii) is an MSC PRODUCT or is directed to the
manufacture, use or delivery of an MSC PRODUCT and/or is discovered by use of
an MSC or its committed lineage descendant(s) or a cell made by use thereof;
and (iii) is necessary or useful for OSIRIS to make, use or sell a
THERAPEUTIC PRODUCT or DIAGNOSTIC PRODUCT; and (iv) is owned by
BIOWHITTAKER or its AFFILIATES.

 

1.6           “DIAGNOSTIC PRODUCT”
means a service, process, product, composition, or material for assaying for
(i) a disease or disorder or (ii) susceptibility to or prediction of
a disease or disorder or (iii) response or predicted response to treatment
for and/or use of a therapy or pharmaceutical for treating and/or preventing a
disease or disorder and/or (iv) any substance, organism or material for other
than research purposes.

 

1.7           “FTE” means research
performed by one or more qualified research persons which in the aggregate
equals one year of research as well as the reagents, equipment and supplies
required for such one year of research.

 

2

 

THIS
EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST.  REDACTED MATERIAL IS MARKED
WITH A “*” AND BRACKETS AND HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION.

 

1.8           “IDENTIFIED
PRODUCT(S)” means MSC PRODUCTS in the BIOWHITTAKER FIELD as specified in
Section 3.8 and/or 3.9.

 

1.9           “LICENSED TERRITORY”
 means all countries of the world.

 

1.10         “MSC(s)” means a
human or non-human cell that is capable of differentiating into more than one
mesenchymal cell lineage.

 

1.11         “MSC PRODUCT” means
(i) an MSC(s) or its committed lineage descendant(s) or differentiated
cells obtained therefrom and/or (ii) any product, material, or composition
for identification, maintenance, growth, proliferation, regulation, recovery,
separation, purification, commitment or differentiation of MSCs or their
committed progenitors, or (iii) any cell that is produced through use of
an MSC or its committed lineage descendants.

 

1.12         “NET SALES” means,
with respect to any PRODUCT, the invoiced sales price of such PRODUCT sold by a
PARTY, or its AFFILIATES, as the case may be, to independent customers who are
not AFFILIATES, less (a) actual and customary credits, allowances,
discounts and rebates to, and chargebacks from the account of, such independent
customers for spoiled, damaged, out-dated, rejected or returned PRODUCT;
(b) actual freight and insurance costs incurred in transporting such
PRODUCT to such customers; (c) actual and customary cash, quantity and
trade discounts; (d) sales, use, value-added taxes or governmental  charges (excluding what is commonly known as
income taxes) incurred in connection with the exportation or importation of
such PRODUCT; and (e) a reasonable allowance for bad debt, all in
accordance with Generally Accepted Accounting Principles. For purposes of
determining NET SALES, a sale shall have occurred when an invoice therefor
shall be generated or the PRODUCT shipped for delivery. If there is a sale of a
PRODUCT by a PARTY or its AFFILIATE or SUBLICENSEE to any of their respective
AFFILIATES or SUBLICENSEES which is a reseller thereof, then the higher of such
NET SALES

 

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THIS
EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST.  REDACTED MATERIAL IS MARKED
WITH A “*” AND BRACKETS AND HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION.

or
the subsequent sale of such PRODUCT by such AFFILIATES or SUBLICENSEE to an
unrelated party shall be deemed NET SALES hereunder.

 

1.13         “NOVARTIS AGREEMENT”
means that agreement dated June 16, 1997, between Novartis Pharmaceuticals
Corporation and Osiris Therapeutics, Inc.

 

1.14         “OSIRIS AGREEMENT(S)”
means the agreements of Appendix B.

 

1.15         “OSIRIS PATENT(S)”
means any patent or patent application (or equivalents thereof, such as
extensions or other rights that give the right to exclude others such as
Supplementary Protection Certificates) anywhere in the world, to the extent the
claims of which would be infringed by the manufacture, use or sale of a MSC
PRODUCT for use in the BIOWHITTAKER FIELD that is (i) owned, in whole or
in part, by OSIRIS and (ii) is directed to an invention conceived or
reduced to practice as of the EFFECTIVE DATE or during the RESEARCH TERM.

 

1.16         “OSIRIS TECHNOLOGY”
means all materials, substances, media compositions, information and data
(including, but not limited to, formulae, procedures, protocols, techniques and
results of experimentation and testing) that (i) was developed prior to
the EFFECTIVE DATE or during the RESEARCH TERM and (ii) is necessary or
useful to make, use or sell an IDENTIFIED PRODUCT for use in the BIOWHITTAKER
FIELD; and (iii) is owned by OSIRIS or its AFFILIATES.

 

1.17         “PARTY(IES)” means
OSIRIS and BIOWHITTAKER individually and collectively, as the case may be.

 

1.18         “PRODUCT” means
individually and collectively, MSC PRODUCT, THERAPEUTIC PRODUCT and DIAGNOSTIC
PRODUCT.

 

1.19         “RESEARCH TERM” means
the period beginning on the EFFECTIVE DATE and ending five (5) years
thereafter.

 

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THIS
EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST.  REDACTED MATERIAL IS MARKED
WITH A “*” AND BRACKETS AND HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION.

1.20         “SUBLICENSEE” means
any THIRD PARTY that is granted a sublicense by a PARTY under the licenses and
sublicenses granted by this Agreement.

 

1.21         “THERAPEUTIC PRODUCT”
means a process, product, composition or material for the prevention and/or
treatment of a disease or disorder.

 

1.22         “THIRD PARTY(IES)”
means a person or entity other than OSIRIS or BIOWHITTAKER or any of their
AFFILIATES.

 

1.23         “VALID CLAIM” means a
claim of an issued and unexpired patent which has not been held permanently
revoked, unenforceable or invalid by a decision of a court or other
governmental agency of competent jurisdiction, unappealable or unappealed
within the time allowed for appeal, and which has not been admitted to be
invalid or unenforceable through reissue or disclaimer or otherwise.

 

1.24         The use herein of the
plural shall include the singular, and the use of the masculine shall include
the feminine.

 

1.25         All dollars are
United States Dollars.

 

1.26         “UNPATENTED
BIOWHITTAKER MSC CELL MEDIUM PRODUCT” means a cell medium PRODUCT invented
solely by BIOWHITTAKER, upon which BIOWHITTAKER has chosen not to file a patent
application.

 

SECTION 2 - Research.

 

2.1           For each year of the
RESEARCH TERM, each PARTY shall perform research with respect to MSC PRODUCT
with a minimum of two FTEs per year.  For
the first year, the FTEs of BIOWHITTAKER shall perform research with respect to
the development of a non-animal, non-serum based media for cell attachment and
expansion of human mesenchymal stem cells. 
This

 

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THIS
EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST.  REDACTED MATERIAL IS MARKED
WITH A “*” AND BRACKETS AND HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION.

research
effort is also described in section 2.1 of the Supply Agreement between the
parties of even date herewith.

 

2.2           The research
performed under Section 2.1 shall be managed by a Steering Committee, with
BIOWHITTAKER and OSIRIS each appointing two persons to the Steering
Committee.  The Steering Committee shall
meet once each calendar quarter and a quorum shall require one member appointed
by OSIRIS and one member appointed by BIOWHITTAKER.  At the Steering Committee meetings,
BIOWHITTAKER shall have one vote and OSIRIS shall have one vote irrespective of
the number of representatives present. 
Meetings of the Steering Committee shall alternate between BIOWHITTAKER’s
facility and OSIRIS’ facility, each in Maryland.  The Steering Committee may direct one or more
persons of OSIRIS or BIOWHITTAKER, respectively, performing research under
section 2.1 to perform such research for a limited time at the facility of
BIOWHITTAKER or OSIRIS, respectively.  If
there is a tie vote at any Steering Committee meeting that cannot be resolved,
the issue shall be referred to the respective chief executive officers of
OSIRIS and BIOWHITTAKER for a decision, and if they cannot decide the issue in
sixty (60) days, the issue shall be submitted to arbitration under Section
15.2.

 

2.3           BIOWHITTAKER and
OSIRIS shall each submit a Research Plan for the research to be performed
pursuant to Section 2.1 for the remainder of the calendar year within sixty
(60) days after the EFFECTIVE DATE and thereafter for each calendar year, or
part thereof, during the RESEARCH TERM. 
Such respective Research Plans shall be submitted three months prior to
the beginning of the applicable calendar year. 
BIOWHITTAKER and OSIRIS shall perform research pursuant to Section 2.1
in accordance with a Research Plan approved by the Steering Committee.

 

2.4           Within thirty (30)
days after the end of each calendar year, BIOWHITTAKER and OSIRIS shall each
submit to the Steering Committee a general report of the results of the
research

 

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THIS
EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST.  REDACTED MATERIAL IS MARKED
WITH A “*” AND BRACKETS AND HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION.

performed
under Section 2.1 for the applicable calendar year (the last report shall be
submitted by and to OSIRIS and BIOWHITTAKER, respectively, within thirty (30)
days after the end of the RESEARCH TERM).

 

2.5           BIOWHITTAKER shall
have the right to publish BIOWHITTAKER MSC TECHNOLOGY, only if BIOWHITTAKER
provides OSIRIS with the opportunity to review any proposed manuscript or any
other proposed disclosure describing such work sixty (60) days prior to its
submission for publication or other proposed disclosure.  BIOWHITTAKER and OSIRIS shall discuss whether
or not such publication or disclosure should occur and it is expressly
understood that BIOWHITTAKER shall have the sole right to make a final
determination as to whether or not such publication or disclosure shall occur.
Neither PARTY has the right to publish Confidential Information of the other
PARTY and the treatment of Confidential Information shall be governed by
Section 4.

 

SECTION 3 - License.

 

3.1           (a)           OSIRIS hereby grants to BIOWHITTAKER
(and to Poeitics and Clonetics, subsidiaries of BIOWHITTAKER) a royalty bearing
license (without the right to grant sublicenses) for the LICENSED TERRITORY
under OSIRIS PATENTS and OSIRIS TECHNOLOGY and a sublicense under the OSIRIS AGREEMENTS,
which license is (i) a sole and exclusive license to sell and offer to
sell MSC PRODUCT for use in the BIOWHITTAKER FIELD; and, (ii) a sole and
exclusive license to make, have made, import and export MSC PRODUCT for sale of
MSC PRODUCT for use in the BIOWHITTAKER FIELD.

 

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THIS
EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST.  REDACTED MATERIAL IS MARKED
WITH A “*” AND BRACKETS AND HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION.

(b)           BIOWHITTAKER agrees
that BIOWHITTAKER will not develop, make, have made, sell, offer to sell,
export or import an MSC PRODUCT in the BIOWHITTAKER FIELD pursuant to the
license granted under Section 3.1(a) that is not an IDENTIFIED PRODUCT.

 

(c)           The license granted
to BIOWHITTAKER under Section 3.1 (a) specifically excludes any rights that
were granted under the NOVARTIS AGREEMENT.

 

(d)           To the extent that
the rights and licenses granted to BIOWHITTAKER under Section 3.1(a) is a
sublicense under an OSIRIS AGREEMENT, the rights and licenses granted to
BIOWHITTAKER under such sublicense are limited to the rights and licenses that
are licensed to OSIRIS under the OSIRIS AGREEMENT and only to the extent that
OSIRIS can grant sublicenses under the OSIRIS AGREEMENTS; such sublicense is
subject to the terms, conditions and restrictions of the OSIRIS AGREEMENTS
which OSIRIS shall disclose in pertinent part to BIOWHITTAKER, and BIOWHITTAKER
agrees to be bound by the terms, conditions and obligations thereunder that are
applicable to a sublicensee thereunder. 
BIOWHITTAKER shall not knowingly take or omit to take any action the
effect of which would cause OSIRIS to be in breach of OSIRIS’ obligations under
the OSIRIS AGREEMENTS.

 

3.2           BIOWHITTAKER agrees
that all MSC PRODUCT sold or transferred by BIOWHITTAKER will be sold with an
appropriate notice advising all recipients of MSC PRODUCT that use of MSC
PRODUCT is limited to the BIOWHITTAKER FIELD and that no license or right is
granted directly, by implication, by estoppel or otherwise to transfer, make,
use or sell MSC PRODUCT other than for use in the BIOWHITTAKER FIELD.  OSIRIS shall provide BIOWHITTAKER with
language acceptable to OSIRIS.

 

3.3           BIOWHITTAKER agrees
that it will not sell, distribute, lease or transfer MSC PRODUCT to any person
or entity that to BIOWHITTAKER’S knowledge is using such MSC

 

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THIS
EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT REQUEST.  REDACTED MATERIAL IS MARKED WITH A “*” AND
BRACKETS AND HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.

PRODUCT
outside of the BIOWHITTAKER FIELD, or is transferring MSC PRODUCT to a person
or entity who is using MSC PRODUCT outside of the BIOWHITTAKER FIELD.  It is understood that “knowledge” of
BIOWHITTAKER as used in this Section 3.3 includes knowledge provided to
BIOWHITTAKER by OSIRIS.

 

3.4           BIOWHITTAKER agrees
that BIOWHITTAKER will use, make, have made, offer to sell, sell, export and
import MSC PRODUCTS only as licensed under and permitted by this Agreement.

 

3.5           (a)           BIOWHITTAKER hereby grants to OSIRIS
a sole and exclusive royalty bearing license for the LICENSED TERRITORY under
BIOWHITTAKER MSC PATENTS and BIOWHITTAKER MSC TECHNOLOGY and a sublicense under
BIOWHITTAKER AGREEMENTS to research, develop, make, have made, use, sell, have
sold, offer to sell, import and export THERAPEUTIC PRODUCTS and DIAGNOSTIC
PRODUCTS.

 

(b)           The license granted
under Section 3.5(a) includes the right to grant sublicenses.

 

(c)           To the extent that
the rights and licenses granted to OSIRIS under Section 3.5(a) is a sublicense
under a BIOWHITTAKER AGREEMENT, the rights, and licenses granted to OSIRIS
under such sublicense are limited to the rights and licenses that are licensed
to BIOWHITTAKER under the BIOWHITTAKER AGREEMENT and only to the extent that
BIOWHITTAKER can grant sublicenses under the BIOWHITTAKER AGREEMENTS; such
sublicense is subject to the terms, conditions and restrictions of the BIOWHITTAKER
AGREEMENTS which BIOWHITTAKER shall disclose in pertinent part to OSIRIS, and
OSIRIS agrees to be bound by the terms, conditions and obligations thereunder
that are applicable to a sublicensee thereunder.  OSIRIS shall not knowingly take or omit to
take any action the effect of

 

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THIS
EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST.  REDACTED MATERIAL IS MARKED
WITH A “*” AND BRACKETS AND HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION.

which
would cause BIOWHITTAKER to be in breach of BIOWHITTAKER’s obligations under
the BIOWHITTAKER AGREEMENTS.

 

3.6           Except as otherwise
expressly provided in this Agreement, or the parties otherwise expressly agree
in writing, neither PARTY shall obtain any right or license in any patent
rights, know-how, materials or technology of the other PARTY (by implication,
estoppel or otherwise) for any purpose.

 

3.7           To the extent that
any rights licensed by a PARTY to another PARTY are jointly owned with a THIRD
PARTY, the licensing PARTY is only licensing its interest therein.

 

3.8           (a)           BIOWHITTAKER shall identify to OSIRIS
in writing each MSC PRODUCT that BIOWHITTAKER will develop and/or offer to sell
and/or sell for use in the BIOWHITTAKER FIELD. 
If, within sixty (60) days thereafter, OSIRIS notifies BIOWHITTAKER in
writing that the offering or selling of such MSC PRODUCT to THIRD PARTIES will
potentially adversely affect OSIRIS’ (or its licensees’) interest in developing
and/or commercializing MSC PRODUCTS outside of the BIOWHITTAKER FIELD, the
respective chief executive officers of OSIRIS and BIOWHITTAKER shall discuss
whether or not BIOWHITTAKER shall offer such MSC PRODUCT to THIRD PARTIES.  If the chief executive officers cannot reach
an agreement as to whether or not such MSC PRODUCT should be offered and/or
sold to THIRD PARTIES, the decision as to whether or not such offer and/or
sales should be made, shall be submitted to and determined by binding
arbitration pursuant to Section 15.2. 
Each MSC PRODUCT(s) for which OSIRIS fails to give such written notice
or for which after such written notice OSIRIS and BIOWHITTAKER agree and/or an
arbitrator decides that BIOWHITTAKER shall have the right to sell and offer to
sell such MSC PRODUCT in the BIOWHITTAKER FIELD, in each case, shall be an
IDENTIFIED PRODUCT.

 

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THIS
EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST.  REDACTED MATERIAL IS MARKED
WITH A “*” AND BRACKETS AND HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION.

3.9           OSIRIS shall have
the right to request that BIOWHITTAKER develop and commercialize a MSC
PRODUCT(s) in the BIOWHITTAKER FIELD by written notice to BIOWHITTAKER.  If within sixty (60) days after such written
notice from OSIRIS to BIOWHITTAKER, BIOWHITTAKER notifies OSIRIS in writing
that BIOWHITTAKER will develop and commercialize such MSC PRODUCT in the
BIOWHITTAKER FIELD, then such MSC PRODUCT shall be an IDENTIFIED PRODUCT.  If within sixty (60) days after such written
notice from OSIRIS to BIOWHITTAKER, fails to notify OSIRIS in writing that
BIOWHITTAKER will develop and commercialize such MSC PRODUCT in the BIOWHITTAKER
FIELD, then the rights and licenses granted to BIOWHITTAKER for such MSC
PRODUCT shall be automatically terminated.

 

3.10         In the event that
OSIRIS decides to offer a license to a THIRD PARTY to sell a DIAGNOSTIC PRODUCT
that is a reagent or a reagent kit, prior to initiating discussions with said
THIRD PARTY, OSIRIS shall notify BIOWHITTAKER in writing of such intent, and if
by written response thirty (30) days thereafter, BIOWHITTAKER notifies OSIRIS
of its interest in securing such a license, OSIRIS shall delay the offering
thereof to a THIRD PARTY for an additional thirty (30) days in order to provide
BIOWHITTAKER with the opportunity to make an offer to OSIRIS to secure such a
license.  If OSIRIS does not accept such
offer, then OSIRIS shall have the unrestricted right to offer to and/or enter
into a license with a THIRD PARTY with respect to such DIAGNOSTIC PRODUCT under
any terms and conditions as determined by OSIRIS.

 

3.11         Within sixty (60)
days of the EFFECTIVE DATE, BIOWHITTAKER, at the cost and expense of
BIOWHITTAKER, shall transfer to OSIRIS the BIOWHITTAKER MSC TECHNOLOGY existing
as of the EFFECTIVE DATE.  Promptly after
the end of each calendar quarter thereafter during the RESEARCH TERM,
BIOWHITTAKER, at the cost and expense of

 

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THIS
EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST.  REDACTED MATERIAL IS MARKED
WITH A “*” AND BRACKETS AND HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION.

BIOWHITTAKER,
shall transfer to OSIRIS the BIOWHITTAKER MSC TECHNOLOGY not previously
delivered to OSIRIS.

 

3.12         At the cost and
expense of OSIRIS, after an MSC PRODUCT becomes an IDENTIFIED PRODUCT, OSIRIS
shall promptly transfer OSIRIS TECHNOLOGY to BIOWHITTAKER.

 

SECTION 4 - Confidentiality.

 

4.1           During the term of
this Agreement, it is contemplated that each PARTY may disclose to the other
PARTY confidential information which is owned or controlled by the PARTY
providing such information or which that PARTY is obligated to maintain in confidence
and which is designated by the PARTY providing such information as confidential
(“Confidential Information”).  Each PARTY
shall have the right to refuse to accept the other PARTY’S Confidential
Information.  Each PARTY agrees to retain
the other PARTY’S Confidential Information in confidence, to limit disclosure
of any such Confidential Information to its officers, directors, employees,
consultants, sublicensees and permitted assigns on a need to know basis.  Each PARTY agrees to use the other PARTY’S
Confidential Information only as permitted by this Agreement, and not to
disclose any such Confidential Information to any other person or entity
without the prior written consent of the PARTY providing such Confidential
Information. In the event that OSIRIS desires to disclose Confidential
Information to sublicensees and permitted assigns, OSIRIS shall notify
BIOWHITTAKER first of such proposed disclosure; BIOWHITTAKER shall not
unreasonably withhold permission for such disclosure.

 

4.2           The obligations of
confidentiality and non-use of Section 4.1 will not apply to:

 

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EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST.  REDACTED MATERIAL IS MARKED
WITH A “*” AND BRACKETS AND HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION.

(a)           Confidential
Information generally known to the public prior to its disclosure hereunder; or

 

(b)           Confidential
Information that subsequently becomes generally known to the public by some
means other than a breach of this Agreement; or

 

(c)           Confidential
Information that is subsequently disclosed to the receiving party by a THIRD
PARTY having a lawful right to make such disclosure and who is not under an
obligation of confidentiality; or

 

(d)           is
approved for release by the PARTIES.

 

4.3           Except as required
by law, rule or regulation, neither party may publicly disclose the terms and
conditions of this Agreement without the written approval of the respective
PARTIES.  Provided, however, that no
approval shall be required with respect to disclosing the terms, existence
and/or and conditions of this Agreement to a licensee(s) or prospective
licensee(s) or in connection with a financing, or stock offering, or in
connection with a merger or acquisition or with respect to filings made to a
regulatory agency, or to a licensor where a party is receiving a sublicense to
rights granted by the licensor.  The
PARTIES agree to cooperate in making a coordinated initial announcement
describing their relationship.

 

4.4           The obligations of
this Section 4 shall not apply to the extent that a PARTY is required to
disclose information by applicable law, regulation or bona fide legal
process, provided that the PARTY required to make the disclosure takes reasonable
steps to restrict and maintain confidentiality of such disclosure and provides
reasonable prior notice to the other PARTY.

 

4.5           Notwithstanding the
foregoing, a PARTY shall have the right to disclose Confidential Information of
the other PARTY to a THIRD PARTY in order to exercise the rights and licenses
granted to such PARTY under this Agreement (including the granting of
sublicenses where

 

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EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST.  REDACTED MATERIAL IS MARKED
WITH A “*” AND BRACKETS AND HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION.

permitted)
or under the Development and Supply Agreement between the PARTIES provided that
the THIRD PARTY undertakes an obligation of confidentiality and non-use with
respect to such information, at least as restrictive as the obligations under
this Section 4.  Notwithstanding the
foregoing, OSIRIS will not disclose Confidential Information of BIOWHITTAKER
with respect to a cell medium to an entity that competes with BIOWHITTAKER with
respect to sale of cell medium, except where OSIRIS is permitted to have a
THIRD PARTY manufacture and sell cell medium or cell media to OSIRIS as
permitted by the Development and Supply Agreement between the PARTIES.

 

4.6           The parties’
obligations under this Section 4 shall terminate ten (10) years after the
expiration or termination of this Agreement. 
Notwithstanding the foregoing, the parties’ obligations under this Section
4 shall be perpetual with respect to media compositions.

 

SECTION 5 - Patents.

 

5.1           (a)           At its cost and expense, OSIRIS (or
its licensor) shall file, prosecute and maintain OSIRIS PATENTS through patent
counsel selected by OSIRIS (or its licensor).

 

(b)           At its cost and
expense, BIOWHITTAKER (or its licensor) shall file, prosecute and maintain
BIOWHITTAKER MSC PATENTS through patent counsel selected by BIOWHITTAKER (or
its licensor).

 

5.2           With respect to any
BIOWHITTAKER MSC PATENTS, each patent application, office action, response to
office action, request for terminal disclaimer, and request for reissue or
reexamination or extension of any patent issuing from such application shall be
provided to OSIRIS sufficiently prior to the filing of such application,
response or request to allow for review and comment by OSIRIS.  BIOWHITTAKER agrees to consider such comments
and follow reasonable

 

14

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EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST.  REDACTED MATERIAL IS MARKED
WITH A “*” AND BRACKETS AND HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION.

comments
unless BIOWHITTAKER believes that such comments are adverse to the interests of
BIOWHITTAKER.

 

5.3           For the purpose of
this Section 5, any patent or application jointly owned by OSIRIS and
BIOWHITTAKER shall be an OSIRIS PATENT.

 

5.4           (a)           As between BIOWHITTAKER and OSIRIS,
BIOWHITTAKER shall own all patents and patent applications claiming inventions
invented by only BIOWHITTAKER employees and OSIRIS shall own patents and patent
applications claiming inventions invented by only OSIRIS employees, and patents
and patent applications shall be jointly owned by BIOWHITTAKER and OSIRIS where
there is at least one BIOWHITTAKER employee and at least one OSIRIS employee as
inventors.  Inventorship shall be
determined in accordance with the patent law of the United States.

 

(b)           With respect to
patents and patent applications owned jointly by BIOWHITTAKER and OSIRIS, their
respective interests therein are licensed to each other in accordance with this
Agreement.

 

(c)           With respect to
rights not licensed exclusively to each other, BIOWHITTAKER and OSIRIS shall
have the right to practice under such patents without accounting to the other
in any and all countries of the world.

 

5.5           BIOWHITTAKER shall
promptly disclose to OSIRIS any and all inventions that are BIOWHITTAKER MSC
TECHNOLOGY and BIOWHITTAKER shall advise OSIRIS at such time whether or not
BIOWHITTAKER will file a patent application with respect thereto.  If BIOWHITTAKER does not intend to file a
patent application and the invention is not directed to a cell medium, then
OSIRIS shall have the right but not the obligation to file a patent
application(s) with respect to such invention at the cost and expense of
OSIRIS, and BIOWHITTAKER will and

 

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EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST.  REDACTED MATERIAL IS MARKED
WITH A “*” AND BRACKETS AND HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION.

hereby
does assign to OSIRIS all right title and interest in and to such patent
application(s), the invention(s) on which they are based and the patents issued
thereon.  BIOWHITTAKER will perform and
cause its employees to perform any and all acts and to sign and execute any and
all papers reasonably necessary to perfect such assignment.

 

5.6           Each UNPATENTED
BIOWHITTAKER MSC CELL MEDIUM PRODUCT shall be disclosed in reasonable detail to
OSIRIS and listed in Appendix C.

 

SECTION 6 - Royalties.

 

6.1           (a)           BIOWHITTAKER shall pay to OSIRIS a
royalty of [**********] of NET SALES of MSC PRODUCTS sold by BIOWHITTAKER or
its AFFILIATES provided that the royalty shall be reduced to [**********] for
an MSC PRODUCT developed by BIOWHITTAKER that is a cell medium that does not
include cells.

 

(b)           The royalty of
Section 6.1 (a) shall be paid on an MSC PRODUCT-by-MSC PRODUCT and
country-by-country basis for a period that ends ten (10) years after initiation
of nationwide sales of an MSC PRODUCT in a country, provided, however, that
royalties shall continue for each MSC PRODUCT in each country after the
applicable ten (10) year period if such MSC PRODUCT where manufactured, used or
sold infringes a VALID CLAIM of an OSIRIS PATENT or a VALID CLAIM of a patent
sublicensed to BIOWHITTAKER under an OSIRIS AGREEMENT.

 

6.2           (a)           OSIRIS shall pay to BIOWHITTAKER a
royalty of:

 

(i)            [**********] of NET
SALES of THERAPEUTIC PRODUCTS, and [**********] of NET SALES of DIAGNOSTIC
PRODUCT sold by OSIRIS or its AFFILIATES that, where manufactured or sold, the
therapeutically active compound or diagnostically active

 

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EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST.  REDACTED MATERIAL IS MARKED
WITH A “*” AND BRACKETS AND HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION.

component
thereof, as the case may be, either: 
a) infringes a VALID CLAIM of a BIOWHITTAKER MSC PATENT licensed to
OSIRIS or a patent sublicensed to OSIRIS under a BIOWHITTAKER AGREEMENT; or,
b) is an UNPATENTED BIOWHITTAKER MSC CELL MEDIUM PRODUCT listed on
Appendix C;

 

(ii)           [**********] of NET
SALES of THERAPEUTIC PRODUCTS, and [**********] of NET SALES of DIAGNOSTIC
PRODUCT sold by OSIRIS or its AFFILIATES that, where manufactured or sold
either infringes a VALID CLAIM of a BIOWHITTAKER MSC PATENT licensed to OSIRIS
or a patent sublicensed to OSIRIS under a BIOWHITTAKER AGREEMENT or is an
UNPATENTED BIOWHITTAKER MSC CELL MEDIUM PRODUCT listed on Appendix C and for
which royalties are not owed under Section 6.2(a)(i);

 

(iii)          [**********] of
royalties received by OSIRIS from a SUBLICENSEE of OSIRIS for a DIAGNOSTIC
PRODUCT or THERAPEUTIC PRODUCT sold by the SUBLICENSEE which, where
manufactured or sold by the SUBLICENSEE, the diagnostically active or the
therapeutically active compound thereof, as the case may be, either:  a) infringes a VALID CLAIM of a
BIOWHITTAKER MSC PATENT that is licensed to OSIRIS or a patent that is
sublicensed to OSIRIS under a BIOWHITTAKER AGREEMENT; or, b) is an UNPATENTED
BIOWHITTAKER CELL MEDIUM PRODUCT listed on Appendix C; or

 

(iv)          [**********] of
royalties received by OSIRIS from a SUBLICENSEE of OSIRIS for a DIAGNOSTIC
PRODUCT or THERAPEUTIC PRODUCT sold by the SUBLICENSEE which, where
manufactured or sold by the SUBLICENSEE, either infringes a VALID CLAIM of a
BIOWHITTAKER PATENT that is licensed to OSIRIS or a patent that is sublicensed
to OSIRIS under a BIOWHITTAKER AGREEMENT or is an UNPATENTED

 

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EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST.  REDACTED MATERIAL IS MARKED
WITH A “*” AND BRACKETS AND HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION.

BIOWHITTAKER
CELL MEDIUM PRODUCT listed on Appendix C and for which royalties are not owed
under Section 6.2(a)(iii).

 

(b)           On a
PRODUCT-by-PRODUCT and country-by-country basis, OSIRIS’ obligation to pay
royalties therefor shall terminate when such PRODUCT no longer infringes a
VALID CLAIM of a patent licensed to OSIRIS under this Agreement, or in the case
of an UNPATENTED BIOWHITTAKER CELL MEDIUM PRODUCT, when ten (10) years have
elapsed since said product was first listed on Appendix C.

 

(c)           OSIRIS shall not owe
any royalties under this Section 6.2 with respect to a THERAPEUTIC PRODUCT or
DIAGNOSTIC PRODUCT in the case where OSIRIS or its SUBLICENSEE, as the case may
be, has purchased from BIOWHITTAKER.

 

6.3           In the event that
royalties are to be paid by OSIRIS to a THIRD PARTY(IES) for a THERAPEUTIC
PRODUCT or a DIAGNOSTIC PRODUCT for which royalties are also due to
BIOWHITTAKER, then the royalties to be paid to BIOWHITTAKER therefor by OSIRIS
shall be reduced by one-half of the amount of such royalties to such THIRD
PARTY(IES), but in no event shall any royalties for any such PRODUCT in any
calendar quarter be reduced by more than fifty percent (50%).

 

6.4           In the event that a
THERAPEUTIC PRODUCT or DIAGNOSTIC PRODUCT includes a therapeutically or
diagnostically active component that, if sold individually, would not be
subject to a royalty payment by OSIRIS to BIOWHITTAKER (hereinafter “Other
Component”) in combination with a therapeutically active or diagnostically
active component that would be subject to a royalty payment to BIOWHITTAKER
hereunder (hereinafter “Royalty Component”) (such combination being a “Combination
Product”), then NET SALES of such Combination Product upon which a royalty is
paid shall be subject to the following adjustment.  If the Royalty Component and

 

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EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST.  REDACTED MATERIAL IS MARKED
WITH A “*” AND BRACKETS AND HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION.

the
Other Component are sold separately in a country, then NET SALES of such
Combination Product in such country upon which a royalty is paid shall be
multiplied by the fraction A/A+B, where A equals the average sales price of
such Royalty Component sold separately in such country, and B equals the
average sales price of the Other Component sold separately in such country,
over the applicable royalty period. 
Otherwise, the parties shall enter into good faith negotiations and
attempt to reach mutual agreement to determine an appropriate adjustment to the
NET SALES of such Combination Product in a country to reflect the relative
contributions of the Royalty Component and the Other Component to the value of
the Combination Product in such country. 
If such mutual agreement is not reached within ninety (90) days after
commencement of such negotiations, then the determination shall be submitted to
and determined by binding arbitration under Section 15.2.

 

6.5           A PARTY shall keep
and shall cause, where applicable, each of its AFFILIATES and SUBLICENSEES to
keep full and accurate books of account containing all particulars that may be
necessary for the purpose of calculating all royalties payable to the other
PARTY.  Such books of account, together
with all necessary supporting data, shall be kept at their principal place of
business, and for the three (3) years next following the end of the calendar
year to which each pertains, shall be open for inspection by an independent
certified accountant selected by the other PARTY and reasonably acceptable to
such PARTY upon reasonable notice during normal business hours at the other
PARTY’S expense for the sole purpose of verifying royalty statements or
compliance with this Agreement, but in no event more than once in each calendar
year.  All information and data offered
shall be used only for the purpose of verifying royalties and shall be treated
by the inspecting PARTY as Confidential Information subject to the obligations
of this Agreement.

 

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EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST.  REDACTED MATERIAL IS MARKED
WITH A “*” AND BRACKETS AND HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION.

6.6           In each year the
amount of royalty due shall be calculated quarterly as of March 31,
June 30, September 30 and December 31 (each being the last day
of an “ACCOUNTING PERIOD”) and shall be paid quarterly within the sixty (60)
days next following such date.  Every
such payment shall be supported by the accounting prescribed in Section 6.7 and
shall be made in United States currency. 
Whenever for the purpose of calculating royalties conversion from any
foreign currency shall be required, such conversion shall be at the average of
the rate of exchange (local currency per US$1) published in the Eastern Edition
of The Wall Street Journal under the caption “Currency Trading” for the
last business day of each month during the applicable ACCOUNTING PERIOD.

 

6.7           With each quarterly
payment, the PARTY paying royalties shall deliver to the other PARTY a full and
accurate accounting of the calculation of the royalties owing hereunder to
include at least the following information:

 

(a)           Quantity of each
PRODUCT subject to royalty sold (by country) by the PARTY, its AFFILIATES and
SUBLICENSEES;

 

(b)           NET SALES for each
PRODUCT (by country) and the calculation thereof;

 

(c)           Total royalties
payable for each PRODUCT (by country) and the total royalties payable for all
PRODUCTS (for all countries).

 

6.8           Any tax required to
be withheld by a PARTY under the laws of any foreign country for the account of
the other PARTY shall be promptly paid by such PARTY for and on behalf of the
other PARTY to the appropriate governmental authority, and such PARTY shall
furnish the other PARTY with proof of payment of such tax.  Any such tax actually paid on the other PARTY’S
behalf shall be deducted from royalty payments due the other PARTY.

 

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EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST.  REDACTED MATERIAL IS MARKED
WITH A “*” AND BRACKETS AND HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION.

6.9           Only one royalty
shall be due and payable under each of the applicable subsections under this
Section 6 for the manufacture, use and sale of a PRODUCT irrespective of the
number of patents or claims thereof which cover the manufacture, use and sale
of such PRODUCT.

 

SECTION 7 - Equity Purchase.

 

7.1           BIOWHITTAKER agrees
to purchase 770,000 shares of OSIRIS common stock in an aggregate amount of
Five Million Five Thousand Dollars ($5,005,000) at a price of Six Dollars and
Fifty Cents ($6.50) per share in a confidential private placement memorandum
and amendment dated May 16, 1999, and August 6, 1999, respectively,
in accordance with the Stock Purchase Agreement of Appendix D.

 

7.2           BIOWHITTAKER agrees
to purchase shares of OSIRIS common stock as part of the Initial Public
Offering of OSIRIS securities (or through a private sale coincident with the
Initial Public Offering) at a price per share equal to that paid by other
investors in the Initial Public Offering, which purchase shall be in the
aggregate amount of Two Million Dollars ($2,000,000).

 

7.3           Without the written
permission of OSIRIS, BIOWHITTAKER shall not own at any time a number of shares
of OSIRIS that in the aggregate exceeds eight percent of the total number of
outstanding shares of OSIRIS.

 

7.4           BIOWHITTAKER shall
not have a right to a seat on the Board of Directors of OSIRIS.

 

7.5           In the event of
future OSIRIS stock offerings, BIOWHITTAKER may exercise preemptive rights to
maintain BIOWHITTAKER’s stock ownership at 4.7% of the total number of
outstanding shares of OSIRIS.

 

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EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST.  REDACTED MATERIAL IS MARKED
WITH A “*” AND BRACKETS AND HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION.

SECTION 8 - Infringement.

 

8.1           (a)           If any of the patents under which
OSIRIS is licensed or sublicensed hereunder is infringed by the sale by a THIRD
PARTY of a THERAPEUTIC PRODUCT or DIAGNOSTIC PRODUCT, subject to the provisions
of the BIOWHITTAKER AGREEMENT with respect to sublicensed patents, OSIRIS shall
have the first right and option but not the obligation to bring an action for
such infringement, at its sole expense, against such THIRD PARTY in the name of
OSIRIS and/or in the name of BIOWHITTAKER and/or in the name of a licensor of
BIOWHITTAKER, as the case may be, and to join BIOWHITTAKER or its licensor as a
party plaintiff if required.  OSIRIS shall
promptly notify BIOWHITTAKER of any such infringement and shall keep
BIOWHITTAKER informed as to the prosecution of any action for such
infringement.  No settlement, consent
judgment or other voluntary final disposition of the suit which adversely affects
a patent licensed or sublicensed to OSIRIS hereunder may be entered into
without the consent of BIOWHITTAKER, which consent shall not unreasonably be
withheld.

 

(b)           In the event that
OSIRIS shall undertake enforcement under Section 8.1(a), any recovery of
damages by OSIRIS for any such suit shall be applied first in satisfaction of
any out of pocket expenses and legal fees of OSIRIS regarding such suit, and
BIOWHITTAKER shall receive ten percent (10%) of the remaining amount.

 

8.2           In the event that
OSIRIS elects not to pursue an action for infringement under Section 8.1, upon
written notice to OSIRIS by BIOWHITTAKER, BIOWHITTAKER shall have the right and
option, but not the obligation at its cost and expense to initiate infringement
litigation and to retain any recovered damages.

 

8.3           (a)           If any of the patents under which
BIOWHITTAKER is licensed or sublicensed hereunder is infringed by the sale by a
THIRD PARTY of a MSC PRODUCT in the

 

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EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST.  REDACTED MATERIAL IS MARKED
WITH A “*” AND BRACKETS AND HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION.

BIOWHITTAKER
FIELD, subject to the provisions of the OSIRIS AGREEMENTS with respect to
sublicensed patents, BIOWHITTAKER shall have the right and option but not the
obligation to bring an action for such infringement, at its sole expense,
against such THIRD PARTY in the name of BIOWHITTAKER and/or in the name of
OSIRIS and/or in the name of a licensor of OSIRIS, as the case may be, and to
join OSIRIS or its licensor as a party plaintiff if required.  BIOWHITTAKER shall promptly notify OSIRIS of
any such infringement and shall keep OSIRIS informed as to the prosecution of
any action for such infringement.  No
settlement, consent judgment or other voluntary final disposition of any suit
that is brought which adversely affects a patent licensed or sublicensed to
BIOWHITTAKER hereunder may be entered into without the consent of OSIRIS, which
consent shall not unreasonably be withheld.

 

(b)           If, after
permission, BIOWHITTAKER shall undertake enforcement under Section 8.3(a), any
recovery of damages by BIOWHITTAKER for any such suit shall be applied first in
satisfaction of any out of pocket expenses and legal fees of BIOWHITTAKER
regarding such suit, and OSIRIS shall receive ten percent (10%) of the
remaining amount.

 

8.4           If, after permission
is granted, BIOWHITTAKER elects not to pursue an action for infringement under
Section 8.3, upon written notice to BIOWHITTAKER by OSIRIS, OSIRIS shall have
the right and option, but not the obligation at its cost and expense to
initiate infringement litigation and to retain any recovered damages.

 

8.5           In any infringement
suit either PARTY may institute to enforce a patent pursuant to this Agreement,
the other PARTY hereto shall, at the request of the PARTY initiating such suit,
reasonably cooperate and, to the extent reasonably possible, have its employees
testify when requested and make available relevant records, papers, information,
samples, specimens, and the

 

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EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST.  REDACTED MATERIAL IS MARKED
WITH A “*” AND BRACKETS AND HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION.

like.  All reasonable out-of-pocket costs incurred
in connection with rendering cooperation requested hereunder shall be paid by
the party requesting cooperation.

 

SECTION 9 - Warranties.

 

9.1           Each of OSIRIS and
BIOWHITTAKER warrants and represents to the other that:

 

(a)           it has the corporate
power and authority and the legal right to enter into this Agreement and to
perform its obligations hereunder;

 

(b)           it has taken all
necessary corporate action on its part to authorize the execution and delivery
of this Agreement and the performance of its obligations hereunder; and

 

(c)           this Agreement has
been duly executed and delivered on its behalf, and constitutes a legal, valid,
binding obligation, enforceable against it in accordance with its terms.

 

9.2           Disclaimer.  EXCEPT AS OTHERWISE EXPRESSLY SET FORTH IN
SECTION 9.1, NEITHER PARTY MAKES ANY REPRESENTATION OR EXTENDS ANY WARRANTIES
OF ANY KIND EITHER EXPRESS OR IMPLIED, INCLUDING BUT NOT LIMITED TO WARRANTIES
OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, NONINFRINGEMENT, OR
VALIDITY OF ANY PATENT RIGHTS ISSUED OR PENDING.

 

SECTION 10 - Indemnification.

 

10.1         (a)           BIOWHITTAKER agrees to indemnify,
defend and hold harmless OSIRIS, its directors, officers, employees,
shareholders and agents (collectively, the “OSIRIS Indemnitees”) from and
against all losses, liabilities, damages and expenses (including reasonable
attorneys’ fees and costs) incurred in connection with any claims, demands,
actions or other proceedings by any THIRD PARTY arising from (a) the
research, development, manufacture, use or sale of MSC PRODUCTS by
BIOWHITTAKER, its AFFILIATES or SUBLICENSEES, (b) the use of such MSC

 

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EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST.  REDACTED MATERIAL IS MARKED
WITH A “*” AND BRACKETS AND HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION.

PRODUCTS
by any purchasers thereof, (c) the use by BIOWHITTAKER, its AFFILIATES or
SUBLICENSEES of the OSIRIS PATENTS, OSIRIS TECHNOLOGY or rights sublicensed to
BIOWHITTAKER hereunder, or (d) any act or omission by BIOWHITTAKER, its
AFFILIATES OR SUBLICENSEES the effect of which would be known to BIOWHITTAKER
to cause OSIRIS to be in breach of its obligations under the OSIRIS AGREEMENTS
(without regard to any applicable cure or notice requirements thereof) in each
case, except those that result from the gross negligence or willful misconduct
of an OSIRIS Indemnitee.

 

(b)           OSIRIS agrees to
indemnify, defend and hold harmless BIOWHITTAKER, its directors, officers,
employees, shareholders and agents (collectively, the “BIOWHITTAKER Indemnitees”)
from and against all losses, liabilities, damages and expenses (including reasonable
attorneys’ fees and costs) incurred in connection with any claims, demands,
actions or other proceedings by any third party arising from (a) the research,
development, manufacture, use or sale of THERAPEUTIC PRODUCT or DIAGNOSTIC
PRODUCT by OSIRIS, its AFFILIATES or SUBLICENSEES, (b) the use of
THERAPEUTIC PRODUCT or DIAGNOSTIC PRODUCT by any purchasers thereof,
(c) the use by OSIRIS, its AFFILIATES or SUBLICENSEES of the BIOWHITTAKER
MSC PATENTS, BIOWHITTAKER MSC TECHNOLOGY or rights sublicensed to OSIRIS
hereunder, or (d) any act or omission by OSIRIS, its AFFILIATES OR
SUBLICENSEES the effect of which would be known to OSIRIS to cause BIOWHITTAKER
to be in breach of its obligations under the BIOWHITTAKER LICENSE AGREEMENTS
(without regard to any applicable cure or notice requirements thereof), except
those that result from the gross negligence or willful misconduct of an
BIOWHITTAKER Indemnitee.

 

10.2         A person or entity
that intends to claim indemnification under Section 10.1 (the “Indemnitee”) shall
promptly notify the indemnifying PARTY (the “Indemnitor”) of any loss, claim,

 

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EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST.  REDACTED MATERIAL IS MARKED
WITH A “*” AND BRACKETS AND HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION.

damage,
liability or action in respect of which the Indemnitee intends to claim such
indemnification.  The Indemnitor shall
assume the defense of any claim that is indemnified hereunder, whether or not
rightfully brought, with counsel mutually satisfactory to the Indemnitee;
provided, however, that an Indemnitee shall have the right to retain its own
counsel, with the fees and expenses to be paid by the Indemnitor if Indemnitor
does not assume the defense; or, if representation of such Indemnitee by the
counsel retained by the Indemnitor would be inappropriate due to actual or
potential differing interests between such Indemnitee and any other party
represented by such counsel in such proceedings.  The indemnity agreement in this Section 10
shall not apply to amounts paid in settlement of any loss, claim, damage,
liability or action if such settlement is effected without the consent of the
Indemnitor, which consent shall not be withheld unreasonably.  The failure to deliver notice to the
Indemnitor within a reasonable time after the commencement of any such action,
if prejudicial to its ability to defend such action, shall relieve such
Indemnitor of any liability to the Indemnitee under this Section 9, but the
omission so to deliver notice to the Indemnitor will not relieve it of any
liability that it may have to any Indemnitee otherwise than under this Section
10.  The Indemnitee under this Section
10, its employees and agents, shall cooperate fully with the Indemnitor and its
legal representatives in the investigation of any action, claim or liability
covered by this indemnification.  In the
event that each PARTY claims indemnity from the other and one PARTY is finally
held liable to indemnify the other, the Indemnitor shall additionally be liable
to pay the reasonable legal costs and attorneys’ fees incurred by the
Indemnitee in establishing its claim for indemnity.

 

10.3         The Indemnitor shall
have the exclusive right to control the defense of any action which is to be
indemnified in whole by the Indemnitor hereunder and to settle any claim,
provided that, without the written consent of the Indemnitee (which shall not
be unreasonably withheld or

 

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EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST.  REDACTED MATERIAL IS MARKED
WITH A “*” AND BRACKETS AND HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION.

delayed),
the Indemnitor shall not agree to settle any claim against the Indemnitee to
the extent such claim has a material adverse effect on the Indemnitee.

 

SECTION 11 - Assignment; Successors.

 

11.1         This Agreement shall
not be assigned or otherwise transferred (in whole or in part, whether
voluntarily, by operation of law or otherwise) by either of the PARTIES without
the prior written consent of the other PARTY (which consent shall not be
unreasonably withheld); provided, however, that either PARTY may, without such
consent, assign this Agreement and its rights and obligations hereunder to an
AFFILIATE or in connection with the transfer or sale of all or substantially
all of its business, or in the event of its merger or consolidation.

 

11.2         Subject to the
limitations on assignment herein, this Agreement shall be binding upon and
insure to the benefit of said successors in interest and assigns of a
PARTY.  Any such successor or assignee of
a PARTY’S interest shall expressly assume in writing the performance of all the
terms and conditions of this Agreement to be performed by said PARTY.

 

SECTION 12 - Commercialization.

 

12.1         BIOWHITTAKER agrees
to use best efforts to develop market and sell and to continue to market and
sell each IDENTIFIED PRODUCT.

 

12.2         (a)           BIOWHITTAKER agrees that each MSC
PRODUCT in the BIOWHITTAKER FIELD that is offered for sale by BIOWHITTAKER will
be included and highlighted in a separate section of the BIOWHITTAKER
catalogue, which section shall include diagrams and color photos.

 

(b)           BIOWHITTAKER agrees
that any and all catalogues, marketing material, advertising, technical
material, promotional material, packaging, labeling and inserts with respect to

 

27

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EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST.  REDACTED MATERIAL IS MARKED
WITH A “*” AND BRACKETS AND HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION.

MSC
PRODUCT(S) in the BIOWHITTAKER FIELD will prominently display that the MSC PRODUCT(S)
is licensed from OSIRIS THERAPEUTICS, INC. 
of Baltimore, MD.

 

12.3         BIOWHITTAKER agrees
to sell to OSIRIS any and all research reagents that are sold by BIOWHITTAKER
at a price that is the lower of the best customer or distributor price at which
the reagent is sold.

 

SECTION 13 - Term and Termination.

 

13.1         Except as otherwise
specifically provided herein and unless sooner terminated pursuant to Section
13.2 of this Agreement, this Agreement and the licenses and rights granted
thereunder shall remain in full force and effect until each PARTY has no
further royalty obligation hereunder. 
When a PARTY is no longer obligated to pay royalties for a PRODUCT as a
result of having paid royalties for the period required under this Agreement,
such PARTY shall have a fully paid-up, non-cancelable license.

 

13.2         If there is a
material breach of this Agreement by a PARTY, the other PARTY shall have the
right, but not the obligation, to provide the breaching PARTY, with written
notice of such breach, and if such breach is not cured within sixty (60) days
(thirty (30) days for a payment breach) after such written notice, the other
PARTY may terminate the rights and licenses granted to the breaching PARTY
under this Agreement by written notice to the breaching PARTY, provided such
written notice is given within thirty (30) days after the initial sixty-day
period (or initial thirty (30) day period in the case of a payment
breach).  The rights and licenses granted
to the other PARTY shall not be affected by termination under this Section 13.2
of the rights and licenses granted to the breaching PARTY.

 

28

THIS
EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST.  REDACTED MATERIAL IS MARKED
WITH A “*” AND BRACKETS AND HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION.

13.3         Upon any termination
of a PARTY’s rights and licenses under this Agreement, such PARTY, at its
option, shall be entitled to sell any completed inventory of PRODUCT which
remains on hand as of the date of the termination, so long as such PARTY pays
to the other PARTY the royalties applicable to said subsequent sales in
accordance with the same terms and conditions as set forth in this Agreement.

 

13.4         In the event that a
PARTY’S rights and licenses under this Agreement are terminated, any sublicense
granted under this Agreement by such PARTY shall remain in full force and
effect as a direct license between the other PARTY and such PARTY’S SUBLICENSEE
under the terms and conditions of the sublicense agreement, subject to the
SUBLICENSEE agreeing to be bound to the other PARTY under such terms and
conditions within thirty (30) days after the other PARTY provides written
notice to such SUBLICENSEE of the termination of this Agreement.  At the request of a PARTY, the other PARTY
will acknowledge to a PARTY’S SUBLICENSEE the other PARTY’S obligations to the
SUBLICENSEE under this Section.

 

13.5         The provisions of
Sections 2.4, 4, 5.1-5.4, 7, 9, 10 and 13.2-13.4, shall survive any expiration
or termination of this Agreement, or a PARTY’S rights and licenses thereunder.

 

13.6         Upon expiration or
termination of this Agreement for any reason or any rights or licenses
thereunder, nothing herein shall be construed to release either PARTY from any
obligation that matured prior to the effective date of such expiration or
termination.

 

13.7         All rights and
licenses granted under or pursuant to this Agreement by one PARTY to the other
PARTY are, and shall irrevocably be deemed to be, “intellectual property” as
defined in Section 101(56) of the Bankruptcy Code.  In the event of the commencement of a case by
or against either party under any Chapter of the Bankruptcy Code, this
Agreement shall be deemed an executory contract and all rights and obligations
hereunder shall be determined in accordance with

 

29

THIS
EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST.  REDACTED MATERIAL IS MARKED
WITH A “*” AND BRACKETS AND HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION.

Section
365(n) thereof.  Unless a PARTY rejects
this Agreement and the other party decides not to retain its rights
hereunder, the other PARTY shall be entitled to a complete duplicate of (or
complete access to, as appropriate) all intellectual property and all
embodiments of such intellectual property held by the party and the PARTY shall
not interfere with the rights of the other PARTY, which are expressly granted
hereunder, to such intellectual property and all embodiments of such
intellectual property from another entity. 
Further, this Agreement shall be deemed, upon presentation to another
entity, to be the same as an express instruction by the PARTY to such other
entity to provide such intellectual property and all embodiments of such
intellectual property directly to the other PARTY.  Without limiting the foregoing provisions in
this paragraph, the other PARTY shall be entitled to all
post-bankruptcy-petition improvements, updates, or developments of intellectual
property created hereunder.  If such
intellectual property is not fully developed as of the commencement of any
bankruptcy case, the other PARTY shall have the right to complete development
of the property.

 

SECTION 14 - Force Majeure.

 

14.1         No failure or
omission by the parties hereto in the performance of any obligation of this
Agreement (other than an obligation for the payment of money) shall be a breach
of this Agreement, nor shall it create any liability, if the same shall arise
from any cause or causes beyond the reasonable control of the affected party,
including, but not limited to, the following, which for purposes of this
Agreement shall be regarded as beyond the control of the PARTY in question:
acts of God; acts or omissions of any government; any rules, regulations, or
orders issued by any governmental authority or by any officer, department,
agency or instrumentality thereof; fire; storm; flood; earthquake; accident;
war; rebellion; insurrection; riot; invasion; strikes; and lockouts or the
like; provided that the PARTY so affected shall use its commercially reasonable
efforts to avoid or

 

30

THIS
EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST.  REDACTED MATERIAL IS MARKED
WITH A “*” AND BRACKETS AND HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION.

remove
such causes or nonperformance and shall continue performance hereunder with the
utmost dispatch whenever such causes are removed.

 

SECTION 15 - General Provisions.

 

15.1         The relationship
between OSIRIS and BIOWHITTAKER is that of independent contractors.  OSIRIS and BIOWHITTAKER are not joint
venturers, partners, principal and agent, master and servant, employer or
employee, and have no relationship other than as independent contracting
parties.  OSIRIS shall have no power to
bind or obligate BIOWHITTAKER in any manner. 
Likewise, BIOWHITTAKER shall have no power to bind or obligate OSIRIS in
any manner.

 

15.2         Any matter or
disagreement under Sections 2.2, 3.8(a) and 6.4 which this Agreement specifies
is to be resolved by arbitration shall be submitted to a mutually selected
single arbitrator to so decide any such matter or disagreement.  The arbitrator shall conduct the arbitration
in accordance with the Rules of the American Arbitration Association, unless
the parties agree otherwise.  If the
parties are unable to mutually select an arbitrator, the arbitrator shall be
selected in accordance with the procedures of the American Arbitration
Association.  The decision and award
rendered by the arbitrator shall be final and binding.  Judgment upon the award may be entered in any
court having jurisdiction thereof.  Any
arbitration pursuant to this section shall be held in Washington, D.C., or such
other place as may be mutually agreed upon in writing by the parties.  The prevailing party in any such arbitration
shall be entitled to recover from the other party all reasonable attorneys’
fees and costs incurred by the prevailing party in connection therewith.

 

15.3         This Agreement sets
forth the entire agreement and understanding between the parties as to the
subject matter thereof and supersedes all prior agreements in this
respect.  There shall be no

 

31

THIS
EXHIBIT HAS BEEN REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT
REQUEST.  REDACTED MATERIAL IS MARKED
WITH A “*” AND BRACKETS AND HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND
EXCHANGE COMMISSION.

amendments
or modifications to this Agreement, except by a written document which is
signed by both parties.

 

15.4         This Agreement shall
be construed and enforced in accordance with the laws of the State of Maryland
without regard to the conflicts of law principles thereof.

 

15.5         The headings in this
Agreement have been inserted for the convenience of reference only and are not
intended to limit or expand on the meaning of the language contained in the
particular article or section.

 

15.6         Any delay in
enforcing a party’s rights under this Agreement or any waiver as to a
particular default or other matter shall not constitute a waiver of a party’s
right to the future enforcement of its rights under this Agreement, excepting
only as to an expressed written and signed waiver as to a particular matter for
a particular period of time.

 

15.7         Any notices given
pursuant to this Agreement shall be in writing, delivered by any means,
addressed to the other party at its address indicated below, or to such other
address as the addressee shall have last furnished in writing to the addresser
and (except as otherwise provided in this Agreement) shall be effective upon
receipt by the addressee.

 

	
  To OSIRIS:

  	
   

  	
  OSIRIS THERAPEUTICS, INC.

  
	
   

  	
   

  	
  2001 Aliceanna Street

  
	
   

  	
   

  	
  Baltimore, Maryland 21231

  
	
   

  	
   

  	
  Attn: Vice President for
  Patents and Business

  
	
   

  	
   

  	
  Development

  
	
   

  	
   

  	
   

  
	
  Copy to:

  	
   

  	
  Carella, Byrne, Bain,
  Gilfillan,

  
	
   

  	
   

  	
  Cecchi, Stewart &
  Olstein

  
	
   

  	
   

  	
  6 Becker Farm Road

  
	
   

  	
   

  	
  Roseland, New Jersey 07068

  
	
   

  	
   

  	
  Fax No. (973) 994-1744

  
	
   

  	
   

  	
  Attn: Elliot M. Olstein, Esq.

  
	
   

  	
   

  	
   

  
	
  To BIOWHITTAKER:

  	
   

  	
  BIOWHITTAKER CORPORATION

  
	
   

  	
   

  	
  8830 Biggs Ford Road

  

 

32

THIS EXHIBIT HAS BEEN
REDACTED AND IS THE SUBJECT OF A CONFIDENTIAL TREATMENT REQUEST.  REDACTED MATERIAL IS MARKED WITH A “*” AND
BRACKETS AND HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION.

	
   

  	
   

  	
  Walkersville, MD 21793

  
	
   

  	
   

  	
  Attn: President Cambrex
  Biotechnology Group

  
	
   

  	
   

  	
   

  
	
  Copy to:

  	
   

  	
  CAMBREX CORPORATION

  
	
   

  	
   

  	
  One Meadowlands Plaza

  
	
   

  	
   

  	
  East Rutherford, New
  Jersey 07073

  
	
   

  	
   

  	
  Attn: General Counsel

  

 

15.8         In each country of
the TERRITORY, BIOWHITTAKER shall comply with the patent marking provisions
with respect to each MSC PRODUCT sold by BIOWHITTAKER.

 

IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date set forth above.

 

	
  OSIRIS
  THERAPEUTICS, INC.

  	
   

  	
  BIOWHITTAKER,
  INC.

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
  /s/
  James S. Burns

  	
   

  	
  By:

  	
  /s/
  Peter E. Thauer

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Name:

  	
  James S. Burns

  	
   

  	
  Name:

  	
  Peter E. Thauer

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Title:

  	
  President & CEO

  	
   

  	
  Title:

  	
  Vice President

  

 

Cambrex Corporation, a Delaware corporation, having offices at One
Meadowlands Plaza, East Rutherford, New Jersey 07073 agrees to be bound by the
terms and conditions of this Agreement and unconditionably guarantees that
BIOWHITTAKER will perform all of BIOWHITTAKER’S obligations under this
Agreement.

 

	
   

  	
   

  	
  CAMBREX
  CORPORATION

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
  /s/
  Peter E. Thauer

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  	
  Peter E. Thauer

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Title:

  	
  Vice President

  

 

33Exhibit 10.21

REGISTRATION
RIGHTS AGREEMENT

REGISTRATION
RIGHTS AGREEMENT, dated as of August __, 1999, between Osiris
Therapeutics, Inc., a Delaware corporation (the “Company”), and Cambrex Corporation, a Delaware corporation (the “Stockholder”)

RECITALS

A.            The Company and the Stockholder have
entered into a Subscription Agreement, dated the date hereof (the “Subscription
Agreement”), pursuant to which the Stockholder has agreed to purchase from the
Company 770,000 shares of Common Stock of
the Company (the “Initial Shares”), upon the terms and conditions described in
such Subscription Agreement.

B.            In order to induce
the Stockholder to enter into the Subscription Agreement, the Purchaser has agreed to grant to the
Stockholder certain registration rights with respect to the shares of Common
Stock to be purchased, upon the terms and conditions set forth herein.

C.             Capitalized
terms used in this Agreement have the meanings given to them in Section 3.

NOW
THEREFORE, for good and valuable consideration, the receipt and sufficiency of
which is hereby acknowledged, the parties hereto agree as follows:

Section 1.1             “Piggy-Back” Registration
Rights.  (a)  Right to Participate.  Subject to Section 1.4 herein, if the Company
at any time proposes to register any of its securities under the Securities
Act, whether or not for sale for its own account, the Company shall give prompt written notice to each Holder of its intention
to do so and of the rights of the Holders under this Section 1.1, provided
that such notice shall not be required if such proposed registration is (i) a
registration effected pursuant to Section 2.1 of the Registration Rights
Agreement dated December 31, 1996 by and between the Company and the State of Maryland Department of Business and Economic
Development, as modified by a letter agreement of even date therewith
(unless and only to the extent the State of Maryland Department of Business and
Economic Development gives its consent in writing, which consent the Company
shall promptly request and use its reasonable best efforts to obtain), (ii) a registration effected pursuant to Section 9.2
of the Warrant to Purchase Shares of Series A Preferred Stock, granted February
27, 1994 to Dominion Ventures, Inc. (unless and only to the extent all
holders of such Warrant and any person or entity to whom the
registration rights granted under such Warrant have been transferred pursuant
to Section 9.9 therein give their consent in writing, which consent the Company
shall promptly request and use its reasonable best efforts to obtain), (iii) a
registration effected pursuant to Section
9.2 of the Warrant to Purchase Shares of Series D Preferred Stock,
granted June 20, 1995 to Dominion Ventures, Inc. (unless and only to the extent
all holders of such Warrant and any person
or entity to whom the registration rights granted under such Warrant have been
transferred pursuant to Section 9.9 therein give their consent in
writing, which consent the Company shall promptly request and use its
reasonable best efforts to obtain), (iv) a registration relating solely to the
sale of securities to current or former
employees, officers, advisors, consultants or directors of the Company or any
subsidiary of the Company pursuant to a stock purchase plan or stock option or
stock awards

 

 

approved by the Board of
Directors of the Company, (v) a registration on Form S-4 or S-8 or any similar
or successor forms, (vi) a registration in which the only Common Stock
being registered is Common Stock issuable upon conversion of debt securities
which are also being registered, or (vii) a registration statement relating to
an offering of securities solely to the Company’s existing stockholders.

Upon the terms and subject
to the conditions of this Agreement, upon the written request of any Holder (each such requesting Holder, a “Selling
Stockholder”) received by the Company within 20 days after the delivery
of any such notice by the Company (which request shall specify the Registrable
Securities intended to be disposed of by any Selling Stockholder and the
intended method or methods of such disposition), the Company shall use its reasonable best efforts to effect the
registration under the Securities Act of all Registrable Securities of
the same class as the securities being registered which the Company has been so requested to register by such
Selling Stockholder.  If, at any time after giving written notice of its intention to
register any such securities and prior to the effective date of the
registration statement filed in connection with such registration, the Company
determines for any reason not to register or to delay registration of such
securities, the Company may, at its election, give written notice of such
determination to each Selling Stockholder and, thereupon, (i) in the case of a
determination not to register, the Company need not register any Registrable
Securities in connection with such registration (but shall, in such
case, pay the reasonable fees and expenses of counsel to the Selling Stockholders in addition to the
Registration Expenses), and (ii) in the case of a determination to delay
registering, the Company may delay registering any Registrable Securities for
the same period as the delay in registering such other securities.

(b)           Priority in
Piggy-Back Registration Rights.  If a registration pursuant to this Section
1.1 involves an underwritten offering and the managing or lead underwriter or underwriters advises the Company in writing (a
copy of which shall be provided by the Company to each Selling Stockholder)
that, in its or their opinion, the number of securities requested and
otherwise proposed to be included in such registration exceeds the number that can be sold in such offering within a price
range reasonably acceptable to the Company, or, if the registration is a
secondary registration on behalf of a Person or Persons other than a Holder,
reasonably acceptable to such Person or Persons (such number being referred to
hereinafter as the “Total Salable Shares”), (i) if the registration is a primary registration on behalf of the Company,
the Company shall include in such registration the Total Salable Shares
by including, (x) first, the securities proposed to be included by the Company (the “Company Shares”), and (y) second,
the Registrable Securities requested to be included in such registration by the
Selling Stockholders and the securities of other Persons requested to be
included in such registration (the “Requested Shares”), each pro rata in
accordance with the total amount of Registrable Securities or other such
securities entitled to be included therein owned by each Selling Stockholder and by each such other Person, provided, however,
that if the number of Requested Shares so included is less than the
difference between the Total Salable Shares and the Company Shares, the Company shall increase the number of
Requested Shares to be included in such registration proportionately among the holders of Requested Shares (but
not, with respect to any one such holder, by a number exceeding the
number of such holder’s Requested Shares) until the number of Requested Shares
included in the registration together with the
Company Shares equals the Total Salable Shares, and (ii) if the registration is
a secondary registration on behalf of a Person or Persons other than a
Holder, the Company shall include in such
registration the Total Salable Shares by

 

2

 

including the Requested Shares pro rata
in accordance with the total amount of Registrable Securities or other such
securities entitled to be included therein owned by each Selling Stockholder
and by each such other Person, provided, however, that if the
number of Requested Shares so included is
less than the Total Salable Shares, the Company shall increase the number of
Requested Shares to be included in such registration proportionately
among the holders of Requested Shares (but not, with respect to any one such
holder, by a number exceeding the number of
such holder’s Requested Shares) until the number of Requested Shares included
in the registration equals the Total Salable Shares, or in such other
proportions as shall be agreed to by a majority in interest of the Selling
Stockholders and such other Person or Persons; except, in the
case of both preceding clauses (i) and (ii), as otherwise provided in (A) Sections 1.2(b) and 1.8 of the Investors’
Rights Agreement dated May 25, 1994 by and between the Company and the
purchasers of the Company’s Series C Convertible Preferred Stock specified
therein; (B) Section 4(d) of the Placement Agency Agreement dated June 25, 1993
by and between the Company and Spencer Trask Securities Incorporated; or
(C) Section 3 of the letter agreement dated December 31, 1996 by and
between the Company and the State of Maryland Department of Business and Economic
Development.

(c)           Inconsistent Rights.  The Company
shall not grant to any holder of its securities any registration rights
inconsistent with the provisions of this Section 1.1 (it being understood that neither the granting of
demand registration rights (with respect to which the holders of Registrable Securities may participate pro rata
under Sections 1.1 (a) and (b) hereof) nor the granting of pro rata
piggyback or incidental registration rights, each on terms comparable to the
terms hereof, is considered inconsistent with the terms hereof).

(d)           Expenses.  The Company shall pay all Registration
Expenses in connection with any registration requested pursuant to this Section
1.1.

(e)           Selection of Underwriters.  If an incidental registration pursuant to
this Section 1.1 involves an underwritten offering, the selection of managing
or lead underwriter or underwriters shall
not be subject to the approval of the Selling Stockholders.

Section 1.2             Registration
Procedures.  If and whenever the Company is required to use its best
efforts to effect the registration of any Registrable Securities as provided in
Section 1.1, the Company shall as
expeditiously as reasonably possible:

(a)           furnish to a single counsel to the Selling Stockholders
(designated by the Selling Stockholder proposing to sell the greatest number of
securities in the registration), prior to the filing thereof with the
Commission, a copy of any registration statement, and each amendment thereto
and each amendment or supplement, if any, to the prospectus included therein
and shall use their best efforts to reflect in each such document, when so
filed with the Commission, such comments as such counsel reasonably and
promptly may propose; provided that, in the event such comments are not
so reflected, the Selling Stockholders may, in their sole discretion, withdraw
the Registrable Securities requested to be registered pursuant to this
Agreement;

(b)           prepare and file with the Commission such amendments and
supplements to such registration statement and the prospectus used in
connection therewith as may be

 

3

 

necessary to keep such registration statement
continuously effective for a period of either (i) not less than 30 days
(subject to extension pursuant to the last paragraph of this Section 1.2) or,
if such registration statement relates to an underwritten offering, such longer
period as in the opinion of counsel for the underwriters a prospectus is
required by law to be delivered in connection with sales of securities by an
underwriter or dealer; or (ii) such shorter period as is required for the
disposition of all of the securities covered by such registration statement in
accordance with the intended methods of disposition by the seller or sellers
thereof set forth in such registration statement (but in any event not before
the expiration of any longer period of effectiveness required under the
Securities Act), and to comply with the provisions of the Securities Act with
respect to the disposition of all securities covered by such registration
statement until such time as all of such securities have been disposed of in
accordance with the intended methods of disposition by the seller or sellers
thereof set forth in such registration statement;

(c)           furnish to each seller of securities covered by such
registration statement such number of conformed copies of such registration
statement and of each such amendment and supplement thereto (in each case
including all exhibits), such number of copies of the prospectus contained in
such registration statement (including each preliminary prospectus and any
summary prospectus) and any other prospectus filed under Rule 424 under the
Securities Act, in conformity with the requirements of the Securities Act, and
such other documents in order to facilitate the disposition of such securities
owned by such seller in accordance with such seller’s intended method of
disposition, as such seller may reasonably request, but only during such time
as the Company shall be required under the provisions hereof to cause such
registration statement to remain effective;

(d)           use its best efforts to register or qualify securities
covered by such registration statement under such other securities or blue sky
laws of such jurisdictions in the United States as each seller thereof shall
reasonably request, to keep such registration or qualification in effect for so
long as such registration statement remains in effect, and to take any other
action which may be reasonably necessary to enable such seller to consummate
the disposition in such jurisdictions in the United States of the securities
owned by such seller, provided that the Company shall not for any such
purpose be required to (i) qualify generally to do business as a foreign
corporation in any jurisdiction where it would not otherwise be required to
qualify but for the requirements of this subsection (d), (ii) consent to general service of process
in any such jurisdiction, (iii) subject itself to taxation in any such
jurisdiction or (iv) conform its capitalization or the composition of its
assets at the time to the securities or blue sky laws of such jurisdiction;

(e)           use its best efforts to cause all securities covered by
such registration statement to be registered with or approved by such other
Governmental Authorities as may be necessary by virtue of the business and
operations of the Company to enable the sellers to consummate the disposition
thereof;

(f)            if provided to any Person other than the Selling
Stockholder or an underwriter in connection with a registration in which the
Selling Stockholder has requested to participate in accordance with Section 1.1
hereof, furnish to each Selling Stockholder a signed counterpart, addressed to
such Selling Stockholder (and the underwriters, if any), of

 

4

 

(i)            an opinion of counsel for the
Company, dated the effective date of such registration statement (and, if such
registration includes an underwritten public offering, dated the date of the
closing under the underwriting agreement), in form and substance reasonably
satisfactory to such Selling Stockholder, and

(ii)           a “comfort” letter, dated the
effective date of such registration statement (and, if such registration
includes an underwritten public offering, dated the date of the closing under
the underwriting agreement), in form and substance reasonably satisfactory to
such Selling Stockholder, signed by the independent public accountants who have
certified the Company’s financial statements included in such registration
statement,

covering substantially the same matters with
respect to such registration statement (and the prospectus included therein)
and, in the case of the accountants’ letter, with respect to events subsequent
to the date of such financial statements as are customarily covered in opinions
of issuer’s counsel and in accountants’ letters delivered to the underwriters
in underwritten public offerings of securities;

(g)           (i)  notify each
Selling Stockholder, at any time when a prospectus relating thereto is required
to be delivered under the Securities Act, upon discovery that, or upon the
discovery 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 any material fact required to be
stated therein or necessary to make the statements therein not misleading in
the light of the circumstances under which they were made, and (ii) at the
request of any such Selling Stockholder, promptly prepare and furnish to such
Selling Stockholder a reasonable number of copies of a supplement to or an
amendment of such prospectus as may be necessary so that, as thereafter
delivered to the purchasers of such securities, such prospectus shall not
include an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading in the light of the circumstances under which they were made;

(h)           otherwise use its reasonable best efforts to comply with
all applicable rules and regulations of the Commission, and make available to
its security holders, as soon as reasonably practicable, an earnings statement
covering a period of at least twelve months beginning after the effective date
of such registration statement, which earnings statement shall satisfy the
provisions of Section 1l(a) of the Securities Act; and

(i)            use its reasonable efforts to cause all such Registrable
Securities covered by such registration statement to be listed on each
securities exchange on which similar equity securities issued by the Company
are then listed, and to provide a transfer agent and registrar for such
Registrable Securities not later than the effective date of such registration
statement.

It shall be a condition
precedent to the Company’s registration of any Registrable Securities of a
prospective Selling Stockholder having requested such registration pursuant to
this Agreement that such Selling Stockholder furnish the Company in writing for
inclusion in the registration statement such information regarding such Selling
Stockholder and the distribution

 

5

 

of such Registrable
Securities being sold as the Company may from time to time reasonably request.

Each Selling Stockholder
agrees that upon receipt of any notice from the Company of the happening of any
event of the kind described in Section 1.2(h), such Selling Stockholder shall
forthwith discontinue such Selling Stockholder’s disposition of Registrable
Securities pursuant to the registration statement relating to such Registrable
Securities until such Selling Stockholder’s receipt of the copies of the
supplemented or amended prospectus contemplated by Section 1.2(h) and, if so
directed by the Company, such Selling Stockholder shall use its reasonable
efforts to deliver to the Company (at the Company’s expense) all copies, other
than permanent file copies then in such Selling Stockholder’s possession, of
the prospectus relating to such Registrable Securities current at the time of
receipt of such notice.  If the Company
shall give any such notice, the applicable time period mentioned in Section
1.2(b) during which a registration statement is to remain effective shall be
extended by the number of days during the period from and including the date of
the giving of such notice pursuant to Section 1.2(h), to and including the date
when each Selling Stockholder shall have received the copies of the
supplemented or amended prospectus contemplated by Section 1.2(h).

Section 1.3             Delay of Filing or Sales.  The Company shall have the right, upon giving
notice to the Selling Stockholders of the exercise of such right, to require
such Selling Stockholders not to sell any Registrable Securities pursuant to a
registration statement for a period of 180 days from the date on which such
notice is given, or such shorter period of time as may be specified in such
notice or in a subsequent notice delivered by the Company to such effect prior
to or during the effectiveness of the registration statement, if (i) the
Company is engaged in negotiations with respect to, or has taken a substantial
step to commence, or there otherwise is pending, any merger, acquisition, other
form of business combination, divestiture, tender offer, financing or other
similar transaction, or there is an event or state of facts relating to the
Company, in each case which is material to the Company (any of the foregoing, a
“Material Activity”), (ii) such Material Activity would be reasonably likely,
in the opinion of counsel for the Company, to require disclosure so as to
permit the Registrable Securities to be sold in compliance with law, and (iii)
such disclosure would, in the reasonable judgment of the Company, be adverse to
its interests.

Section 1.4             Underwritten Offerings.  (a)  Piggy-Back
Underwritten Offerings.  If the
Company at any time proposes to register any of its securities under the
Securities Act as contemplated by Section 1.1 and such securities are to be
distributed by or through one or more underwriters, the Company shall, if
requested by the Selling Stockholders pursuant to Section 1.1 and subject to
the provisions of Section 1.1(b), use its reasonable best efforts to arrange
for such underwriters to include those Registrable Securities designated by the
Selling Stockholders among the securities to be distributed by such
underwriters.  The right of any Selling
Stockholder to such inclusion shall be conditioned upon such Selling
Stockholder’s participation in such underwriting, the inclusion of such Selling
Stockholder’s Registrable Securities in the underwriting to the extent provided
herein, and such Selling Stockholder’s acceptance of the terms of the
underwriting as agreed upon between the Company and the underwriters selected
by it (or by other persons entitled to select the underwriters).  The Selling Stockholders shall be parties to
the underwriting agreement between the Company and such underwriters and may,
at their option, require that any or all of the representations and warranties
by, and the other

 

6

 

agreements on the part of, the Company to and for
the benefit of any other stockholder of the Company selling securities of the
Company pursuant to such underwriting agreement shall also be made to and for
the benefit of such Selling Stockholders and that any or all of the conditions
precedent to the obligations of such underwriters under such underwriting
agreement be conditions precedent to the obligations of such Selling
Stockholders.  No underwriting agreement
(or other agreement in connection with such offering) shall require any Selling
Stockholder to make any representations or warranties to or agreements with the
Company or the underwriters other than representations, warranties or
agreements regarding such Selling Stockholder, such Selling Stockholder’s
Registrable Securities and such Selling Stockholder’s intended method of
distribution and any other representations required by law.

(b)           Holdback Agreements.  Each Holder agrees by becoming a holder of
Registrable Securities not to effect any public sale or distribution of any
equity securities of the Company, or any securities convertible into or
exchangeable or exercisable for such securities, including a sale pursuant to
Rule 144 under the Securities Act (or any similar provision then in force),
during the ten days before and the 60 days after any underwritten registration
pursuant to Section 1.1 has become effective, except as part of such
underwritten registration.  This
Agreement not to effect any public sale or distribution shall be in addition
to, and shall in no way limit, any obligation of a Holder not to effect
transactions in the Company’s Common Stock arising under the Subscription
Agreement.

Section 1.5             Indemnification.  (a)  Indemnification
by the Company.  In the event of any
registration of any securities of the Company under the Securities Act pursuant
to Section 1.1, the Company will indemnify and hold harmless each Selling
Stockholder, its directors, officers, employees, agents and advisors, and each
other Person, if any, who controls such Selling Stockholder within the meaning
of the Securities Act, against any losses, claims, damages or liabilities,
joint or several, to which each such Person may become subject under the
Securities Act or otherwise, 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

(i)            any untrue statement or alleged
untrue statement of any material fact contained in any registration statement
under which such securities were registered under the Securities Act, any
preliminary prospectus, final prospectus or summary prospectus contained
therein or used in connection with the offering of securities covered thereby,
or any amendment or supplement thereto,

(ii)           any omission or alleged omission to
state therein a material fact required to be stated therein or necessary to
make the statements therein not misleading, or

(iii)          any violation or alleged violation by
the Company, or any of its directors, officers, employees, agents or advisors,
of any law or regulation applicable to the Company with respect to such
registration or offer or sale of Registrable Securities,

and the Company will reimburse such Person
for any legal or other expenses reasonably incurred by it in connection with
investigating or defending any such loss, claim, liability, action or

 

7

 

proceeding; provided that the Company
shall not be liable in any such case to the extent that any such loss, claim,
damage, liability (or action or proceeding in respect thereof) or expense
arises out of or is based upon an untrue statement or alleged untrue statement,
or omission or alleged omission, made in such registration statement, any such
preliminary prospectus, final prospectus, summary prospectus, amendment or
supplement, in reliance upon and in conformity with written information
prepared and furnished to the Company by any Selling Stockholder specifically
for use in the preparation thereof; provided, further, that the
Company shall not be liable to any Selling Stockholder who participates as an
underwriter in any such registration or any other Person who controls such
underwriter within the meaning of the Securities Act, in any such case to the
extent that any such loss, claim, damage, liability (or action or proceeding in
respect thereof) or expense arises out of such Person’s failure to send or give
a copy of the final prospectus, as the same may be then supplemented or
amended, to the Person asserting an untrue statement or alleged untrue
statement or omission or alleged omission at or prior to the written
confirmation of the sale of the securities to such Person if such statement or
omission was timely corrected in such final prospectus.  It is agreed that the indemnity contained in
this Section 1.5(a) shall not apply to amounts paid in settlement of any loss,
claim, damages, liability or action if such settlement is effected without the
consent of the Company (which consent shall not be unreasonably withheld).  Such indemnity shall remain in full force and
effect regardless of any investigation made by or on behalf of any such Person
and shall survive the transfer of such securities by such Person.  The Company shall not be obligated to pay the
fees and expenses of more than one counsel or firm of counsel for all parties
indemnified in respect of a claim for each jurisdiction in which such counsel
is required unless a conflict of interest exists between such indemnified party
and any other indemnified party in respect of such claim.

(b)           Indemnification by the Selling Stockholders.  If any Registrable Securities held by a
Selling Stockholder are included in any registration statement filed pursuant
to Section 1.1 hereof, the Stockholder and, if different, such Selling
Stockholder, will indemnify and hold harmless (in the same manner and to the
same extent as set forth in Section 1.5(a)) the Company, each director,
officer, employee, agent and advisor of the Company and each other Person, if
any, who controls the Company within the meaning of the Securities Act (other
than such Persons who are Selling Stockholders), with respect to any untrue
statement or alleged untrue statement in or omission or alleged omission from
such registration statement, any preliminary prospectus, final prospectus or
summary prospectus contained therein, or any amendment or supplement thereto,
if such untrue statement or alleged untrue statement or omission or alleged
omission was made in reliance upon and in conformity with written information
prepared and furnished to the Company by such Selling Stockholder specifically
for use therein.  Such indemnity shall
remain in full force and effect, regardless of any investigation made by or on
behalf of the Company or any such director, officer, employee, agent, advisor
or controlling Person and shall survive the transfer of such securities by such
Selling Stockholder.  The indemnity
provided by each Selling Stockholder under this Section 1.5(b) shall be only
with respect to its own misstatements and omissions (and, in the case of the
Stockholder, shall be only with respect to misstatements and omissions by the
Stockholder and/or its Affiliates) and not with respect to those of any other
seller or prospective seller of securities, and not jointly and severally, and
shall be limited in amount to the net amount of proceeds received by such
Selling Stockholder from the sale of Registrable Securities pursuant to such
registration statement.  It is agreed
that the indemnity contained in this Section 1.5(b) shall not apply to amounts
paid in settlement of any loss, claim, damages, liability or action if such
settlement is effected without

 

8

 

the consent of the indemnifying Selling Stockholder
(which consent shall not be unreasonably withheld).

(c)           Notices of Claims, etc.  Promptly after receipt by an indemnified
party of notice of the commencement of any action or proceeding involving a
claim referred to in the preceding subsections of this Section 1.5, such
indemnified party will, if a claim in respect thereof is to be made against an
indemnifying party, give written notice to the latter of the commencement of
such action; provided that the failure of any indemnified party to give
notice as provided herein shall not relieve the indemnifying party of its
obligations under this Section 1.5, except to the extent that the indemnifying
party is actually prejudiced by such failure to give notice.  In case any such action or proceeding is
brought against an indemnified party, unless a conflict of interest between
such indemnified and indemnifying parties exists in respect of such claim, the
indemnifying party shall be entitled to participate in and to assume the
defense thereof, jointly with any other indemnifying party similarly notified
to the extent that it may wish, with counsel reasonably satisfactory to such
indemnified party, and after notice from the indemnifying party to such
indemnified parry of its election so to assume the defense thereof, if the
indemnifying party is entitled to do so hereunder, the indemnifying party shall
not be liable to such indemnified party for any legal or other expenses
subsequently incurred by the latter in connection with the defense thereof
other than reasonable costs of investigation; provided, however, that if
representation of such indemnified party by the counsel retained by the
indemnifying party would be inappropriate due to a conflict of interest between
such indemnified party and any other party represented by such counsel in such
action or proceeding, an indemnified party shall have the right to retain its
own counsel, with the fees and expenses to be paid by the indemnifying
party.  No indemnifying party shall,
without the consent of the indemnified party, consent to entry of any judgment
or enter into any settlement which does not include as an unconditional term
thereof the giving by the claimant or plaintiff to such indemnified party of a
release from all liability in respect to such claim or litigation.

(d)           Contribution. 
If for any reason the indemnity set forth in the preceding subsections
of this Section 1.5 is unavailable, or is insufficient to hold harmless an indemnified
party, other than by reason of the exceptions provided therein, then the
indemnifying party shall contribute to the amount paid or payable by the
indemnified party as a result of such losses, claims, damages or liabilities 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 offering of securities and the statements or omissions
or alleged statements or omissions which resulted in such loss, claim, damage,
or liability, as well as any other relevant equitable considerations.  The relative fault of the indemnifying party
and of the indemnified party shall be determined by reference to, among other
things, whether the untrue statement of a material fact or the omission to
state a material fact relates to information supplied by the indemnifying party
or by the indemnified party.  No party
shall be liable for contribution under this Section l.5(d) except to the extent
and under such circumstances as such party would have been liable to indemnify
under this Section 1.5 if such indemnification were enforceable under
applicable law.

(e)           Payments. 
The indemnification or contribution required by this Section 1.5 shall
be made by periodic payments of the amount thereof during the course of the
investigation or defense, as and when bills are received or expense, loss,
damage or liability is

 

9

 

incurred, subject to refund if the party receiving
such payments is subsequently found not to have been entitled thereto
hereunder.

Section 2.               Other Provisions.

Section 2.1             Rule 144.  The Company shall file the reports required
to be filed by it under the Securities Act and the Exchange Act and the rules
and regulations promulgated thereunder and shall take such further action as
any Holder may reasonably request, all to the extent required from time to time
to enable such Holder to sell Registrable Securities without registration under
the Securities Act pursuant to (a) Rule 144 under the Securities Act, as such
rule may be amended from time to time, or (b) any similar rule or regulation
hereafter promulgated.  Upon the request
of any Holder, the Company shall deliver to such Holder a written statement as
to whether it has complied with such requirements.

Section 2.2             Transfer of Registration Rights
and Obligations.  This Agreement and
the rights provided herein are for the benefit of all Holders in addition to
the Stockholder, and all such Holders may enforce their rights and remedies
directly against the Company.  In the
event the Company issues or distributes, or proposes to issue or distribute,
any shares or other securities of another issuer to any Holder and such shares
or other securities would be Registrable Securities, the Company shall use its
reasonable best efforts to cause such issuer to deliver to the Holders a
written instrument, in form and substance reasonably satisfactory to the
Holders, that such issuer is bound by and subject to all the terms and
conditions of this Agreement to the same extent as the Company and that the
rights and remedies provided herein to the Holders apply in all respects to the
Registrable Securities of such issuer.

Section 3.               Definitions.  Capitalized terms, as used in this Agreement,
have the following meanings:

Affiliate means, with
respect to any specified Person, any other Person which directly or indirectly,
controls, is controlled by or is under common control with, such specified
Person.  For the purposes of this
definition, “control” means the possession of the power to direct or cause the
direction of the management and policies of such Person, whether through the
ownership of voting securities, by contract or otherwise.

Beneficial ownership and owned
beneficially have the meanings given to them in Rule 13d-3 under the
Exchange Act.

Commission means the
Securities and Exchange Commission.

Company has the
meaning given to it in the Introduction.

Exchange Act means The
Securities Exchange Act of 1934, and the rules and regulations promulgated
thereunder, all as the same shall be in effect at the time.

Governmental Authority means any
government, any political subdivision, any governmental agency, bureau,
department, board or commission, any court or tribunal or any other
governmental instrumentality, whether federal, state or local, domestic or
foreign.

 

10

 

Holder means any
Person who owns, beneficially or of record, any Registrable Securities.

Initial Shares has the
meaning given to it in the Recitals.

Material Activity has the
meaning given to it in Section 1.3.

Person means an
individual, corporation, trust, joint venture, association, partnership or
other entity, or any governmental or political subdivision or an agency or
instrumentality thereof.

Registrable Securities means, at any
given time, any of the following securities owned at such time, beneficially
and of record, by the Stockholder or any Affiliate of the Stockholder:  (i) any Initial Shares, and any securities
into which any such Initial Shares are converted or exchanged; (ii) any shares
of Common Stock, or other securities, of the Company distributed as a dividend
or other distribution in respect of the securities in clause (i), and any
securities into which any such Common Stock is converted or exchanged; and
(iii) any shares or other securities issued or proposed to be issued with
respect to any of the securities in clause (i) or (ii) by way of a dividend or
other distribution (including a stock dividend or a dividend of securities of
another issuer), stock split or in connection with a combination of shares,
recapitalization, merger, consolidation or other reorganization.  As to any particular Registrable Securities,
such securities shall cease to be Registrable Securities when (i) a
registration statement with respect to the sale of such securities shall have
become effective under the Securities Act and such securities shall have been
disposed of in accordance with such registration statement, (ii) they shall
have been sold to the public pursuant to Rule 144 under the Securities Act or
(iii) they are eligible for sale in their entirety under Rule 144.

Registration Expenses means all
expenses incident to the Company’s performance of or compliance with Section 1,
including, (a) all registration, filing and NASD fees, (b) all fees and
expenses of complying with securities or blue sky laws, (c) all word
processing, duplicating and printing expenses, (d) messenger and delivery
expenses, (e) the fees and disbursements of counsel for the Company and of its
independent public accountants, including the expenses of any “comfort” letters
required by or incident to such performance and compliance, (f) premiums and
other costs of policies of insurance against liabilities arising out of the
public offering of the Registrable Securities being registered (if the Company
elects to obtain any such insurance), (g) any fees and disbursements of
underwriters customarily paid by issuers or sellers of securities, including
counsel for the underwriters but excluding underwriting discounts and
commissions, and (h) reasonable costs and expenses incurred for presentations
to or meetings with prospective investors in connection with the offer or sale
of Registrable Securities in a public offering thereof; provided, that
(x) except as otherwise specifically provided herein, fees and disbursements of
counsel to the Selling Stockholders, and (y) transfer taxes, and underwriting
discounts or commissions and brokerage fees for the sale of Registrable
Securities, shall not be included as Registration Expenses and shall not be
paid by the Company.

Securities Act means the
Securities Act of 1933, and the rules and regulations promulgated thereunder,
all as the same shall be in effect at the time.

Selling
Stockholder has the meaning given to it
in Section 1. l(a).

Stockholder has the
meaning given to it in the Introduction.

 

11

 

Section 4.               Miscellaneous.

Section 4.1             Term.  This Agreement shall be effective as of the
date hereof and shall terminate, except for the provisions of Section 1.5,
which shall survive any such termination, at such time as no Registrable
Securities remain outstanding.

Section 4.2             Notices.  All notices, consents, requests, instructions,
approvals and other communications provided for in, or in connection with, this
Agreement shall be in writing and shall be deemed validly given upon personal
delivery or one day after being sent by overnight courier service or by
telecopy (so long as for notices or other communications sent by telecopy, the
transmitting telecopy machine records electronic confirmation of the due
transmission of the notice), at the following address or telecopy number, or at
such other address or telecopy number as a party may designate to the other
parties:

If to the Company, to:

 

Osiris
Therapeutics, Inc.

2001
Aliceanna Street

Baltimore,
Maryland  21231-3043

Telecopy:  (410)
522-6999

Attention: 
Corporate Secretary

 

If to the Stockholder or any
other Holder, to:

 

Cambrex
Corporation

One
Meadowlands Plaza

East Rutherford, New
Jersey  07073

Telecopy:  (201) 804-9851

Attention:  General Counsel

 

Section 4.3             Governing Law.  This Agreement will be governed by and
interpreted in accordance with the internal laws of the State of Delaware,
without giving effect to principles of conflicts of law.

Section 4.4             Amendments; Waivers, etc.  (a) 
Any provision of this Agreement may be amended or supplemented and the
observance thereof 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 holders of at least fifty-one percent (51%) of the Registrable
Securities then outstanding.  Any
amendment, supplement or waiver effected in accordance with this Section 4.4
shall be binding upon each Holder of Registrable Securities and the Company.

(b)           No failure or delay by
any party in exercising any right, power or privilege under this
Agreement shall operate as a waiver thereof nor shall any single or partial
exercise thereof preclude any other or further exercise thereof or the exercise
of any other right, power or privilege. 
The rights and remedies provided herein shall be cumulative and not exclusive of any rights or remedies provided
by law.

 

12

 

Section 4.5             Assignment.  Except as otherwise contemplated by Section
2.2, this Agreement shall not be assignable or otherwise transferable by a
party without the prior written consent of the other party, and any attempt to
so assign or otherwise transfer this Agreement without such consent shall be
void and of no effect.  This Agreement
shall be binding upon the respective successors and assigns of the parties hereto.

Section 4.6             Third Party Beneficiaries.  Except as provided in Section 2.2, nothing in
this Agreement shall be construed as giving any Person, other than the parties
hereto and their successors and permitted assigns (including Holders other than
the Stockholder), any right, remedy or claim under or in respect of this
Agreement or any provision hereof.

Section 4.7             Severability.  If any provision of this Agreement is held to
be invalid or unenforceable for any reason, it shall be adjusted rather than
voided, if possible, in order to achieve the intent of the parties hereto to
the maximum extent possible.  In any
event, the invalidity or unenforceability of any provision of this Agreement in
any jurisdiction shall not affect the validity or enforceability of the
remainder of this Agreement in that jurisdiction or the validity or
enforceability of this Agreement, including that provision, in any other
jurisdiction.

Section 4.8             Section Headings.  The article and section headings of this
Agreement are for convenience of reference only and are not to be considered in
construing this Agreement.

Section 4.9             Integration.  This Agreement, and the other documents
delivered pursuant hereto constitute the full and entire understanding and
agreement of the parties and supersede any and all prior agreements, arrangements
and understandings relating to the subject matters hereof and thereof, except
as otherwise provided in Section 1.4(b) herein.

Section 4.10           Counterparts.  This Agreement may be executed in any number
of counterparts, each of which shall be deemed an original and all of which
shall together constitute one and the same instrument.

Section 4.11           Specific Performance.  In the event of a breach or a threatened
breach by any party to this Agreement of its obligations under this Agreement,
any party injured or to be injured by such breach will be entitled to specific
performance of its rights under this Agreement or to injunctive relief, in
addition to being entitled to exercise all rights provided in this Agreement
and granted by law.  The parties agree
that the provisions of this Agreement shall be specifically enforceable, it
being agreed by the parties that the remedy at law, including monetary damages,
for objection in any action for specific performance or injunctive relief that
a remedy at law would be adequate is waived.

 

13

 

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

	
   

  	
  OSIRIS
  THERAPEUTICS, INC.

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  CAMBREX CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

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