Document:

Exhibit 10.22

THIS
CONVERTIBLE PROMISSORY NOTE (THIS “NOTE”) AND THE SECURITIES THAT MAY BE
ACQUIRED PURSUANT TO THIS NOTE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR UNDER THE SECURITIES LAWS OF
ANY STATE OR OTHER JURISDICTION. THIS NOTE AND SUCH OTHER SECURITIES MAY NOT BE
SOLD, OFFERED FOR SALE, PLEDGED,
HYPOTHECATED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF A REGISTRATION STATEMENT AND LISTING APPLICATION IN EFFECT
WITH RESPECT TO THIS NOTE OR SUCH OTHER
SECURITIES UNDER THE SECURITIES ACT AND ANY OTHER APPLICABLE SECURITIES
LAW, OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION AND LISTING ARE NOT REQUIRED PURSUANT TO
A VALID EXEMPTION THEREFROM UNDER THE
SECURITIES ACT AND THE APPLICABLE SECURITIES LAW OF ANY STATE OR OTHER
JURISDICTION.

ANY UNITED STATES PERSON WHO HOLDS THIS OBLIGATION WILL BE
SUBJECT TO LIMITATIONS
UNDER THE UNITED STATES INCOME TAX LAWS, INCLUDING LIMITATIONS PROVIDED IN SECTIONS 165(J) AND I287(A) OF THE
INTERNAL REVENUE CODE.

FORM OF
CONVERTIBLE PROMISSORY NOTE

due November 28, 2008

US $
20,600,000

November 28, 2005

FOR
VALUE RECEIVED, Osiris Therapeutics, Inc.,
a Delaware corporation (the “Company”), having an address of 2001 Aliceanna Street, Baltimore, MD 21231, U.S.A., hereby
promises to pay to the order of [          ], a company established under the laws of                
(the “Holder”), at the offices of Holder at                                                                                                  or such other place as may be
designated by Holder to the Company in writing, the aggregate of (i) twenty million six hundred thousand U.S.  Dollars (U.S.$
20,600,000) (the “Principal”), together with, and upon and
subject to the terms and conditions hereinafter set forth, (ii) accrued and
unpaid interest thereon, and (iii) an
additional amount corresponding to 27% of the Principal (such aggregate the “Final
Payment Amount”).  Notwithstanding anything to the contrary, no
payment on the note will be made by mail to an
address in the United States or by wire transfer to an account maintained by
the Holder in the United States.

1.                    
Payment Terms.  The
Company promises to pay to Holder the Final Payment Amount on November 28, 2008 (the “Maturity Date”),
unless this Note is earlier redeemed by the Company or converted into Common Stock (as hereinafter defined) of the
Company, pursuant to Section 3 or Section 5, hereof, as applicable. 
All accrued and unpaid interest shall be due and payable in accordance with Section
2 hereof.  All payments hereunder
shall be made in lawful money of the United States of America.  Payment
shall be credited first to the accrued and unpaid interest then due and payable
and the remainder to Principal.

 

 

2.            
Interest.  Interest on the outstanding portion of Principal of
this Note shall accrue at a rate of six percent (6%) per annum.  All computations of interest shall
be made on the basis of a 360-day year for actual days elapsed.  All accrued interest shall be due and payable on
each Payment Date (as hereinafter defined), the Maturity Date, the IPO Redemption Date (as hereinafter defined), the
Company Redemption Date (as hereinafter defined) or the IPO Conversion
Date (as hereinafter defined), as the case may be, in each case in accordance with the terms and conditions of this
Note.  “Payment Date” means each of November 28, 2006 and November 28, 2007.  If a Payment Date, the
Maturity Date, the IPO Redemption Date, the Company Redemption Date or
the IPO Conversion Date is on a day that is not a business day, payment of any
amounts due and payable on such date shall be effected on the immediately
following business day.

3.            
Conversion or Redemption of this Note.

(a)          
Conversion or Redemption at Option of
Holder.  Upon the initial
closing by the Company of its first firm commitment underwritten public
offering of shares of the Company’s common stock, par value U.S.$0.001 per share (or as amended from
time to time as envisaged by Section 6 below) (“Common Stock”) of not less than U.S.$25 million (such closing an “IPO”),
this Note may, at the sole option of Holder, be, in whole or in part,
(i) converted into shares of Common Stock, in accordance with Section 3(a)(i) hereof, if such IPO
takes place on or after 20 December 2006, but prior to the Maturity Date or (ii) redeemed by the Company for
cash in accordance with Section 3(a)(ii) hereof, if such IPO takes place
at any time prior to the Maturity Date.  The date of conversion is referred
to as the “IPO Conversion Date” and the date of such redemption is referred to
as the “IPO Redemption Date”.

(i)           
Conversion.  In the event of an IPO and Holder’s
election to convert this Note, in whole or in part, into Common Stock,
the number of shares of Common Stock to which Holder shall be entitled upon
such conversion (the “IPO Conversion Shares”) shall be equal to the result of
the following calculation: (i) the percentage of (the Principal in relation to
which the Holder elects to convert this Note
into Common Stock multiplied by (ii) the sum of (x) the Principal
multiplied by the IPO Adjustment
Factor (as defined below) and (y) the accrued and unpaid interest on the IPO
Conversion Date, such product divided by (iii) the IPO Price (as defined
below).

The “IPO Adjustment Factor” amounts to

•                                         
109%
for the time period until 28 November, 2006;

•                                         
115%
for the time period beginning 29 November, 2006 and ending 28 May, 2007;

•                                         
118% for the time period beginning 29 May, 2007 and ending
28 November, 2007;

•                                         
124%
for the time period beginning 29 November, 2007 and ending 28 May, 2008;

 

2

 

•                                         
127% for the time period beginning 29 May, 2008 and ending
28 November, 2008.

“IPO
Price” shall mean the price per share at which shares of Common Stock are sold
to the public in the IPO.  Upon the
election by Holder to convert this Note, in whole or in part, pursuant to this Section 3(a)(i), the Company shall immediately take all necessary steps to register
the IPO Conversion Shares under the Securities Act pursuant to the Registration
Rights Agreement dated on or about 28 November
2005 among, inter alia, the
Company and the Holder.

(ii)          
Redemption.  In the event of an IPO and Holder’s
election to have this Note redeemed by the Company, the Company shall
effect such redemption by paying, in immediately available funds, an amount to Holder equal to the result of the
following calculation: (i) the percentage of the Principal in relation
to which the Holder elects to have this Note redeemed multiplied by (ii) the
sum of (x) the Principal multiplied by the IPO Adjustment Factor and (y) the
accrued and unpaid interest on the IPO Redemption
Date (the “IPO Redemption Price”).

(b)          
Conversion or Redemption.  Following the initial filing by the
Company of a registration statement in connection with the IPO and at least 30
days prior to the anticipated effective date of such registration statement,
the Company shall provide written notice (the “Company Notice”) to Holder of
the filing of such registration statement.  Holder shall elect, by
delivery of a written notice, substantially in the form attached as Annex 1
(the “Exercise Notice”), to Company within 15 days of Holder’s receipt of the
Company Notice, to convert this Note upon the IPO, in whole or in part,
pursuant to Section 3(a)(i) above, if the IPO takes place on or after 20
December 2006, but prior to the Maturity Date, or to have this Note then
redeemed, in whole or in part, pursuant to Section 3(a)(ii) above, if
the IPO takes place at any time prior to the Maturity Date.  If the Holder
elects to convert this Note in part into Common Stock pursuant to Section
3(a)(i) above and to have this Note in part redeemed pursuant to Section
3(a)(ii) above, the Holder shall specify the portion of Principal that
shall be converted into Common Stock and the portion of Principal that shall be
redeemed in the Exercise Notice.  The Holder’s right to elect partial
conversion or redemption of this Note may be exercised in increments of
U.S.$100,000.  In the event Holder fails to respond to the Company Notice
in a timely manner, the Company shall understand such failure to mean that
Holder has elected to redeem this Note in accordance with Section 3(a)(ii)
above.  Notwithstanding the foregoing, the Company shall not be obligated
to deliver the IPO Conversion Shares issued upon conversion of this Note by the
Holder or pay the IPO Redemption Price unless the original of this Note is
delivered to the Company or Holder notifies the Company in writing that such
original of this Note has been lost, stolen or destroyed, and Holder executes
an agreement satisfactory to the Company to, among other things, indemnify the
Company from any loss incurred by the Company in connection with such original
of this Note.  Upon surrender by Holder to the Company of the original of
this Note at the office of the Holder to an authorized representative of the
Company, such representative shall issue and deliver to Holder promptly at such
office and in Holder’s name as shown on the original of this Note, the IPO
Conversion Shares or the IPO Redemption Price pursuant to the information
provided in the Exercise Notice under “4. Settlement”.

(c)          
No Fractional Shares. The number of IPO Conversion Shares resulting from
a conversion of this Note pursuant to Section 3(a)(i) above shall
be rounded up to the next

 

3

 

higher
integral share of Common Stock, and no fractional shares shall be issuable by
the Company upon conversion of this Note. 
Conversion of this Note shall be deemed payment in full of this Note and this
Note shall thereupon be cancelled.

4.                                      
Subordination.  The
indebtedness evidenced hereby ranks pari passu in right of payment to all existing and future
non-subordinated indebtedness of the Company, including lease and equipment
finance obligations of the Company, indebtedness of the Company vis-a-vis banks and indebtedness of the
Company resulting from the loan agreement dated as of March 5, 2003 between the
Company and Boston Scientific Corporation,
as amended.  The indebtedness evidenced hereby ranks senior in right of
payment to all other convertible
debt securities issued by the Company insofar as the terms thereof provide for
subordination of the payment thereof, and to all classes and series of the
Company’s capital stock.

5.                                        
Redemption.  This Note may
be redeemed by the Company at any time by payment to Holder in immediately
available funds of the sum of (i) the Principal multiplied by the Company
Redemption Premium Factor (as defined below)
and (ii) the accrued and unpaid interest on the Company Redemption Date (as
defined below). “Company Redemption
Premium Factor” means (i) 109% if the redemption takes place before 29 November, 2006; (ii) 118% if the redemption
takes place on or after 29 November, 2006 but before 29 November, 2007; or (iii) 127% if the
redemption takes place on or after 29 November, 2007.  The Company must
provide written notice to Holder not less than 30 days prior to the effective
date of such redemption (the “Company
Redemption Date”).

6.                                      
Representations
and Warranties of the Company.  The Company represents and
warrants to Holder as follows:

(a)          
The execution and delivery by the Company of this Note (i) are within the
Company’s corporate power and authority, and (ii) have been duly authorized by
all necessary corporate action.

(b)          
This Note is a legally binding obligation of
the Company, enforceable against the Company in accordance with the
terms hereof, except to the extent that (i) such enforceability is limited by bankruptcy, insolvency, reorganization,
moratorium or other laws relating to or affecting generally the enforcement of creditors’ rights, and (ii) the
availability of the remedy of specific performance or in injunctive or other equitable relief is subject
to the discretion of the court before which any proceeding therefore may be
brought.

7.                                      
Use
of Proceeds.  The proceeds received by the Company from the sale
of this Note shall be used by the Company for working capital or other general
corporate purposes.

8.                                      
No
Waiver in Certain Circumstances.  Except as set out in Section
3(b) sentence 5 above, no course of dealing of Holder nor any failure or
delay by Holder to exercise any right, power or privilege under this Note shall
operate as a waiver hereunder and any single or partial exercise of any such
right, power or privilege shall not preclude any later exercise thereof or any
exercise of any other right, power or privilege hereunder.

9.                                      
Certain
Waivers by the Company.  Except as expressly provided otherwise in
this Note, the Company and every endorser or guarantor, if any, of this Note
waive presentment, demand, notice, protest and all other demands and notices in
connection with the delivery,

 

4

 

acceptance,
performance, default or enforcement of this Note, and assent to any extension
or postponement of the time of payment or any other indulgence, to any
substitution, exchange or release of collateral available to Holder, if any,
and to the addition or release of any other party or person primarily or
secondarily liable.

10.          
No Unlawful Interest.  Notwithstanding anything herein to the
contrary, payment of any interest or other amount hereunder shall not be
required if such payment would be unlawful. In any such event, this Note shall
automatically be deemed amended so that interest charges and all other payments
required hereunder, individually and in the aggregate, shall be equal to but
not greater than the maximum permitted by law.

11.          
Miscellaneous.  No modification, rescission, waiver, forbearance,
release or amendment of any provision of this Note shall be made, except by a
written agreement duly executed by each of the Company and Holder.  This Note may not be conveyed,
assigned or transferred by Holder without the prior written consent of the
Company.  All notices hereunder shall be in writing and be deemed given if
personally delivered, sent by overnight
courier (provided proof of delivery is received) or sent by telecopy (provided
a confirmation of transmission is
received) at the addresses of the respective parties set forth in the initial
paragraph of this Note or such other address as either party shall
notify the other of from time to time.  The Company hereby submits to
personal jurisdiction in the State of Maryland, consent to the jurisdiction of
any competent state or federal district court sitting in the County of
Montgomery County, Maryland, and waives any and all rights to raise lack of
personal jurisdiction as a defense in any action, suit or proceeding in
connection with this Note or any related matter.  This Note shall be
governed by, and construed and interpreted in accordance with, the laws of the
State of Maryland, without reference to conflicts of law provisions of such
state.

IN WITNESS WHEREOF, the undersigned have caused this
Note to be executed and delivered by a duly authorized
officer as of the date first above written.

	
  Osiris
  Therapeutics, Inc.

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Name:

  	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  	
  Title:

  	
   

  

 

5

 

 

 

 

ANNEX 1

EXERCISE NOTICE

 

 

 

 

 

EXERCISE NOTICE

Osiris Therapeutics, Inc. (the “Company”)

US $ 20,600,000

CONVERTIBLE PROMISSORY NOTE

due November 28, 2008 

(the “Note”)

When
completed, this Exercise Notice should be delivered in writing or by telefax to
Osiris Therapeutics, Inc. at 2001 Aliceanna
Street, Baltimore, MD 21231, U.S.A., to arrive not later than 15 days after
Holder’s receipt of the Company
Notice pursuant to Section 3(b) sentence 2 of the terms and conditions
of the Note (the “Conditions”), or if such date is not a
business day, the immediately succeeding business day (the “Exercise Date”).

In the event
Holder fails to properly complete this Exercise Notice or to timely submit a
substantially similar form of Exercise
Notice to the Company, the Company shall understand such failure to mean that
Holder has elected to have this Note
redeemed by the Company in accordance with Section 3(a)(ii) of the
Conditions.

Pursuant to Section 3(a) of the Conditions, the Note
may, at the sole option of Holder, be, in whole or in part, (i) converted into
shares of the Company’s common stock, par value U.S.$0.001 per share (“Common
Stock”), in accordance with Section 3(a)(i) of the
Conditions, or (ii) redeemed by the Company for cash in accordance with Section 3(a)(ii) of the Conditions.  Pursuant to
Section 3(b) of the Conditions, the Holder’s right to elect partial conversion or redemption of this Note may be
exercised in increments of U.S.$100,000.

Capitalized
terms used in this Exercise Notice shall have the meaning attributed to them in
the Note.

1.                                     
Name and Address of
Holder:

Name

Address

2.                                     
Exercise
of Right to Elect Conversion or Redemption Election

(a)         
Conversion or Redemption in whole, *

I
hereby elect:

(i)           
to convert this Note in whole pursuant to Section
3(a)(ii) of the Conditions;* OR

 

 

(ii)          
to have this Note redeemed in whole pursuant to Section 3(a)(ii) of the
Conditions.*

(b)         
Conversion or Redemption in part*

I
hereby elect:

(i)           
to convert this Note in part pursuant to Section 3(a)(i) of the Conditions with
respect to a portion of the Principal in the amount of
U.S.$      00.000.00;* AND

(ii)          
to have this Note redeemed in part pursuant to Section 3(a)(ii) of the
Conditions with respect to a portion of the Principal in the amount of
U.S.$      00.000.00.*

3.            
Account details

	
   

  	
  Securities
  Account

  
	
   

  	
   

  	
   

  
	
   

  	
  No.:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Holder:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Bank or Broker:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Bank Code:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Cash
  Account

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  No.:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Holder:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Bank:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Bank Code:

  	
   

  	
   

  

 

4.            
Settlement

Set
out in paragraph 3 above are the details of my (i) Securities Account for
delivery by the Company of the IPO
Conversion Shares, if any, and (ii) Cash Account to be credited with payment by
the Company of the IPO Redemption
Price, if any.

Name of Holder

Signed/By:

Dated:

*             
Please delete or complete as appropriate.Exhibit
10.23

 

LEASE

BY AND BETWEEN SAGA LIMITED PARTNERSHIP,

A MARYLAND LIMITED PARTNERSHIP

AND

MARYLAND ECONOMIC DEVELOPMENT CORPORATION,

A BODY POLITIC AND CORPORATE AND CONSTITUTED AS A

PUBLIC INSTRUMENTALITY OF THE STATE OF MARYLAND

 

 

DATED JANUARY 18, 1995

 

 

 

 

TABLE
OF CONTENTS

 

	
  Section

  	
   

  	
  Caption

  
	
  Section 1

  	
   

  	
  Definitions

  
	
  Section 2

  	
   

  	
  Demise Of Premises

  
	
  Section 3

  	
   

  	
  Rent

  
	
  Section 4

  	
   

  	
  Late Payments

  
	
  Section 5

  	
   

  	
  Intentionally Omitted

  
	
  Section 6

  	
   

  	
  Inspection Of
  Books/Records

  
	
  Section 7

  	
   

  	
  Extension

  
	
  Section 8

  	
   

  	
  Utilities

  
	
  Section 9

  	
   

  	
  Taxes

  
	
  Section 10

  	
   

  	
  Additions To The Building

  
	
  Section 11

  	
   

  	
  Common Areas

  
	
  Section 12

  	
   

  	
  Tenant Ti Work

  
	
  Section 13

  	
   

  	
  Restrictions On Use

  
	
  Section 14

  	
   

  	
  Services, Installation,
  Repairs, And Maintenance By Tenant

  
	
  Section 15

  	
   

  	
  Repairs By Landlord

  
	
  Section 16

  	
   

  	
  Force Majeure

  
	
  Section 17

  	
   

  	
  Surrender Of Premises

  
	
  Section 18

  	
   

  	
  Vacating Or Abandoning The
  Premises Or Personal Property

  
	
  Section 19

  	
   

  	
  Quiet Enjoyment

  
	
  Section 20

  	
   

  	
  Indemnification And Waiver
  Of Claim

  
	
  Section 21

  	
   

  	
  Insurance Of Tenant

  
	
  Section 22

  	
   

  	
  Insurance Of Landlord

  
	
  Section 23

  	
   

  	
  Effect On Insurance

  
	
  Section 24

  	
   

  	
  Total Or Partial
  Destruction Of Premises

  
	
  Section 25

  	
   

  	
  Alterations

  
	
  Section 26

  	
   

  	
  Mechanics’ Lien

  
	
  Section 27

  	
   

  	
  Breach Or Default

  
	
  Section 28

  	
   

  	
  Effect Of Breach

  
	
  Section 29

  	
   

  	
  Access By Landlord

  
	
  Section 30

  	
   

  	
  Assignment And Subletting

  
	
  Section 31

  	
   

  	
  Condemnation

  
	
  Section 32

  	
   

  	
  Execution Of Estoppel
  Certificate

  
	
  Section 33

  	
   

  	
  Non-Disturbance,
  Subordination And Attornment

  
	
  Section 34

  	
   

  	
  Signs And Advertising

  
	
  Section 35

  	
   

  	
  Rules And Regulations

  
	
  Section 36

  	
   

  	
  Parking Spaces

  
	
  Section 37

  	
   

  	
  Purchase Option/Right Of
  First Refusal

  
	
  Section 38

  	
   

  	
  Expansion

  
	
  Section 39

  	
   

  	
  Environmental
  Indemnification/Representation

  
	
  Section 40

  	
   

  	
  Accord And Satisfaction

  
	
  Section 41

  	
   

  	
  No Partnership

  

 

 

	
  Section 42

  	
   

  	
  Holding Over

  
	
  Section 43

  	
   

  	
  Recordation

  
	
  Section 44

  	
   

  	
  Waivers/Brokerage
  Commission

  
	
  Section 45

  	
   

  	
  Remedies For Landlord

  
	
  Section 46

  	
   

  	
  Table Of Contents;
  Captions

  
	
  Section 47

  	
   

  	
  Notices

  
	
  Section 48

  	
   

  	
  Applicable Law

  
	
  Section 49

  	
   

  	
  Successors And Included
  Persons

  
	
  Section 50

  	
   

  	
  Waiver Of Trial By Jury

  
	
  Section 51

  	
   

  	
  Rights Of And Claims
  Against Landlord

  
	
  Section 52

  	
   

  	
  Calculation Of Time

  
	
  Section 53

  	
   

  	
  Severability; Reduction Of
  Charges

  
	
  Section 54

  	
   

  	
  Counterparts

  
	
  Section 55

  	
   

  	
  Total Agreement

  
	
  Section 56

  	
   

  	
  No Merger

  
	
  Section 57

  	
   

  	
  Time Of The Essence/Good
  Faith And Fair Dealing

  
	
  Section 58

  	
   

  	
  Commercial Purpose

  
	
  Section 59

  	
   

  	
  Abatement Of Rent Relating
  To Unsubleased Space

  
	
  Section 60

  	
   

  	
  Repayment Of “Abated” Rent

  
	
  Section 61

  	
   

  	
  Limitation Of Tenant
  Liability

  
	
  Section 62

  	
   

  	
  Vacating Of Office Space
  By The Belt’s Corporation

  

 

 

LEASE AGREEMENT

THIS LEASE (this “Lease”) is
made as of the 18th day of January, 1995, by and between SAGA LIMITED
PARTNERSHIP, a Maryland limited partnership (hereinafter referred to as
“Landlord”) and MARYLAND ECONOMIC DEVELOPMENT CORPORATION, a body politic and
corporate and constituted as a public instrumentality of the State of Maryland
(hereinafter referred to as “Tenant”).

RECITALS

WHEREAS, Landlord is the fee
simple owner of the Property (as hereinafter defined), and the Building (as
hereinafter defined) and desires to lease space therein; and

WHEREAS, Tenant has agreed
to perform certain improvements to the Building and to lease the Premises (as
hereinafter defined) within the Building for sublease to one or more third
parties, all for the purpose of providing affordable laboratory space and
accessory office space to various emerging business enterprises to encourage
the growth of the medical research industry in the State of Maryland; and

WHEREAS, the parties desire
to enter into this Lease in order to define and carry out their respective
rights, duties, and liabilities relating to the Property, the Building and the
Premises.

NOW, THEREFORE, WITNESSETH
in consideration of the mutual promises and covenants contained herein, and
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, Landlord and Tenant hereby covenant and agree as follows:

SECTION 1

DEFINITIONS

 

For the purposes of this Lease, Landlord and
Tenant hereby agree that the following terms shall have the indicated meanings:

Additional Rent:  all sums of money or charges required to be
paid by Tenant under this Lease other than Annual Rent, whether or not such
sums or charges are designated “Additional Rent”.

Annual Rent:  The sum of $6.82 per square foot per annum
multiplied by the actual square footage of the leased Premises during the first
three (3) years of the Original Term and the amount during the remaining years
of the Original Term and any Extension Term as set forth in Section 3.

Assignment:  any assignment, transfer, mortgage, or
encumbrance, whether voluntarily, non-voluntarily, or by operation of law, of
Tenant’s interest in this Lease, or such other events determined to be
Assignments pursuant to Section 30.

 

 

Bondholder:  Whiting-Turner Contracting Company whose
address is 300 E. Joppa Road, Towson, Maryland 21204.

Building:  the building located on the Property and
known as 2001 Aliceanna Street, Baltimore, Maryland 21231-2001, consisting of
184,962 square feet, more or less, as measured in accordance with BOMA
standards.

Common Areas:  those portions of the Property which Landlord
may from time to time designate for Tenant’s and any Subtenant’s non-exclusive
use, which may include parking areas, if any, as designated in Exhibit F; and
any other areas so provided by Landlord but excluding any areas included in any
other lease or part of the Premises specifically limited for use by one or more
other designated party.

Environmental Requirements:  any federal, state or local law, statute,
ordinance or regulation, or decree or administrative order or desire or other
agreement or restriction, whether public or private (including but not limited
to any condition or requirement imposed by any insurer or surety company), now
existing or hereafter created, issued or enacted and all amendments thereto,
modifications thereof and substitutions therefor, which in any way pertains to
human health, safety or welfare, Hazardous Materials, Hazardous Materials
contamination or the environment (including but not limited to ground, air,
water or noise pollution or contamination, and underground or above ground
tanks).

Extension Terms:  (a) a period of six and one-half (6 1⁄2) years
commencing upon the expiration of the Original Term (“First Extension Term”);
(b) a period of five (5) years commencing upon the expiration of the First
Extension Term (“Second Extension Term”); and (c) a period of five (5) years
commencing upon the expiration of the Second Extension Term (“Third Extension
Term”).

Hazardous Materials:  Including, but is not limited to, asbestos or
any substance containing asbestos, polychlorinated biphenyls, any explosives,
radioactive materials, chemicals known or suspected to cause cancer or
reproductive toxicity, pollutants, effluents, contaminants, emissions,
infectious wastes, any petroleum or petroleum-derived waste or product or
related materials and any items defined as “hazardous substances”, “hazardous
materials”, “hazardous wastes”, “toxic substances” or other similar designations
under any Hazardous Material Law, including but not limited to, the Resource
Conservation and Recovery Act (the Solid Waste Disposal Act), 42 U.S.C. §6901 et
seq.; the Comprehensive Environmental Response, Compensation and
Liability Act as amended by the Superfund Amendments and Reauthorization Act of
1986 (“SARA”); the Hazardous Materials Transportation Act, 49 U.S.C. §1801 et
seq.; the Federal Water Pollution Control Act, 33 U.S.C. §1251 et
seq.; the Clean Air Act, 42 U.S.C. §7401 et  seq.; the
Toxic Substances Control Act, 15 U.S.C. §2601 et  seq.; and the
Safe Drinking Water Act, 42 U.S.C. §300f et  seq.; the
Occupational Safety and Health Act, 29 U.S.C. §655 et  seq.; the
Federal Insecticide, Fungicide and Rodenticide Act, 7 U.S.C. §136 et  seq.
and any other present or future local, state, federal or international law,
treaty, statute, ordinances, rules, regulations, advisories and guidelines
relating to public health, safety, or the environment, and any and all
amendments, regulations, orders, decrees, permits, licenses, or deed
restrictions now or hereafter promulgated thereunder (collectively referred to
as the “Environmental Laws”).

 

2

 

Landlord:  SAGA Limited Partnership, a Maryland Limited
Partnership.

Landlord’s Address:  2001 Aliceanna Street, Baltimore, Maryland
21231-2001, Attn: S.A. “Skip” Brown, III.

Landlord’s Mortgagee:  the beneficiary of any mortgage or deed of
trust.

Landlord’s Telecopier Number:  (410) 675-2399.

Lease Commencement Date:  Sixty (60) days following the date this Lease
is fully executed by the parties.

MIDFA:  Maryland Industrial Development Financing
Authority, a ______________________.

Monthly Installment of
Annual Rent:  At lease
inception, Seventeen Thousand and Fifty Dollars ($17,050.00).  Being one-twelfth (1/12th) of the Annual
Rental as set forth in Section 3.

Mortgage:  any mortgage, deed of trust, ground lease or
security agreement affecting the Property, or, any part thereof, at any time,
including, but not limited to, a certain Deed of Trust dated as of November 1,
1992, executed by Landlord in favor of certain named trustees for the benefit
of the Maryland National Bank, recorded among the Land Records of Baltimore
City, Maryland at Liber_______, Folio________.

Normal Business Hours:  the hours from 8:30 a.m. to 5:00 p.m., Monday
through Friday, except legal holidays.

Notices:  all notices, requests, demands, or other
communications which may be or are required or permitted to be served or given
under this Lease.

Option Space:  50,000 square feet of space, more or less,
within the Building, which is the space that Tenant has the option to lease
hereunder, and which is outlined in Exhibit A, and such other space as Tenant
has the right to lease pursuant to any rights granted to Tenant under Section
38, infra.

Original Term:  commencing March 19, 1995 and continuing for
a period of approximately six and one-half (6 1⁄2) years from the Rental
Commencement Date, and ending at 5:00 p.m. on December 31, 2001.

Parking Spaces:  Fifty (50) parking spaces as shown on Exhibit
B shall be made available by Landlord for Tenant’s and any Subtenant’s
non-exclusive use.

Premises:  initially consisting of 30,000 square feet,
more or less, within the Building, which is the space to be leased by Tenant
hereunder and outlined in Exhibit C (hereinafter called the “Original Space”),
which may be increased from time to time by the incorporation of the Option
Space in accordance with options/rights granted to Tenant.  The actual square footage of the Premises
shall be measured in accordance with BOMA standards, and the parties hereto
agree to execute confirmatory statements (prior to lease commencement and in
the event the square

 

3

 

footage increases due to Tenant’s exercise of
any option rights contained herein) to record in writing the actual square
footage contained in the leased Premises.

Property:  all that tract or parcel of land owned by
Landlord situate in Baltimore City, Maryland consisting of approximately 3.304
acres, more or less, and more particularly described in Exhibit D.

Rent:  all Annual Rent, Monthly Installments of
Annual Rent, and Additional Rent payable by Tenant to Landlord under this
Lease.

Rental Commencement Date:  The earlier of (a) the completion of the
Osiris Work (as defined herein) or (b) July 1, 1995.

Sublease:  any sublease or agreement to sublet executed
by and between the Tenant and any third party or parties for all or a portion
of the Premises, as the same may be amended, revised or otherwise modified from
time to time, which sublease or agreement to sublet shall be substantially in
the form of Exhibit H attached hereto and incorporated herein by
reference.  Any material change in the
form of any sublease which affects or may affect Landlord’s rights under the
sublease, shall first be approved by Landlord.

Subtenant:  any Subtenant under a Sublease.

Taxes:  all taxes, assessments, and governmental
charges of any kind and nature whatsoever levied or assessed against the Property,
Building or Premises.

Tenant:  Maryland Economic Development Corporation, a
body politic and corporate and constituted as a public instrumentality of the
State of Maryland or any permitted assignee under Section 30.

Tenant’s Address:  36 South Charles Street, Suite 1911,
Baltimore, Maryland 21201, Attn: Hans F. Mayer, Executive Director.

Tenant’s Building Work:  all those improvements and allocations to be
performed by Tenant to the shell, structure, building systems, roof, interior
and exterior of the Building in accordance with the plans and specifications
prepared by Gaudreau, Inc., Kibart, Inc. and Faissant Associates, Inc. dated
September 16, 1994, as more particularly described on Exhibit E.

Tenant’s Telecopier Number:  (410) 625-1848.

Tenant TI Work:  all those improvements and renovations to the
Premises to be performed by Tenant from time to time during the Term to
renovate and/or build-out the Premises for medical laboratory and accessory
office use including but not limited to those improvements and renovations
shown on the plans and specifications prepared by Gaudreau, Inc., Kibart, Inc.
and Faissant Associates, Inc. dated September 16, 1994 as well as any other
improvements or renovations as more particularly described on Exhibit E (hereinafter
referred to as the “Osiris Work”).

 

4

 

Tenant’s Pro Rata Share:  the percentage equivalent to a fraction
having as its numerator the number of net rentable square feet in the Premises
and its denominator the number of square feet of net rentable floor space in
the Building, initially being sixteen and twenty-two one hundredths percent
(16.22%).

Term:  the Original Term and any Extension Term as
to which Tenant exercises an option.

Vacant:  With regard to the Premises, all or any
portion thereof which is not occupied by Tenant or Subtenant.  For purposes of this Lease, space shall be
deemed to be vacant even though a Subtenant is still physically occupying such
space so long as such Subtenant is not actively conducting its business from
such space and Subtenant is engaged in the process of closing down or moving
its business or operations.

When used herein, the
singular shall apply to the plural, the plural to the singular, and the use of
any gender shall apply to all genders.

SECTION 2

DEMISE OF PREMISES

 

Landlord leases to Tenant
and Tenant hereby leases from Landlord the Premises for the Term, Rent, and
upon the terms, covenants, and conditions set forth herein.  Except as specifically set forth herein, Tenant
hereby accepts the Premises in “as is” condition and as complying with all
obligations of Landlord with respect to the condition, order and repair
thereof.

SECTION 3

RENT

 

Tenant shall begin paying
rent on the Rental Commencement Date and shall pay the Monthly Installments of
Annual Rent in advance on the first day of each month for the Term of this
Lease; and (except as specifically set forth herein including Section 60)
without deduction, set-off, recoupment, counterclaim, or demand, at Landlord’s Address
or at such other place as shall be designated in writing by Landlord.  If the rental payments shall commence or end
on a day other than the first day of a month, the Monthly Installments of
Annual Rent for any such partial month of the Term shall be prorated on a per
diem basis.  Upon the execution of this
Lease, Tenant shall pay one (1) Monthly Installment of Annual Rent and, if the
Original Term does not commence on the first day of a month, Tenant shall also
pay a prorated Monthly Installment of Annual Rent for the period from the first
day of the Original Term until the last day of such month.

During the first three (3)
years of this Lease from the Rent Commencement date, the Annual Rent for the
Original Space shall be the sum of $6.82 per square foot per annum, multiplied
by the actual square footage of the leased Premises, payable in equal monthly
installments.  Commencing July 1, 1998,
the Annual Rent for the Original Space shall be increased by ten and nine-tenths
percent (10.9%), being $7.561 per square foot, per annum.

 

5

 

Commencing July 1, 1999 and
every year thereafter, during the Original Term and any Extension Term(s) of
this Lease, the Annual Rent for the Original Space shall be increased by three
and one-half percent (3.5%) per annum. 
Accordingly, the Annual Rent for the Original Space shall be increased
as follows:

	
  Increase Date

  	
   

  	
  Amount

  Per Sq. Ft.

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  July 1, 1998

  	
   

  	
  $7.561

  	
   

  
	
  July 1, 1999

  	
   

  	
  $7.826

  	
   

  
	
  July 1, 2000

  	
   

  	
  $8.100

  	
   

  
	
  July 1, 2001

  	
   

  	
  $8.384

  	
   

  
	
  July 1, 2002

  	
   

  	
  $8.677

  	
   

  
	
  July 1, 2003

  	
   

  	
  $8.981

  	
   

  

 

and so forth, increasing at
three and one-half percent (3.5%) per annum.

The Annual Rent for the
Option Space shall be calculated as follows:

As to any Option Space which
Tenant shall have executed any option or right, the Annual Rent for the Option
Space if leased during the first three (3) years of this Lease shall be the sum
of $5.15 per square foot, per annum, multiplied by the actual square footage of
the leased Option Space, payable in equal monthly installments.

Commencing July 1, 1998, the
Annual Rent for the Option Space shall be increased by ten and nine-tenths
percent (10.9%), being $5.711 per square foot, per annum.

Commencing July 1, 1999 and
every year thereafter, during the Original Term and any Extension Term(s) of
this Lease, the Annual Rent for the Option Space shall be increased by three
and one-half percent (3.5%) per annum. 
Accordingly, the Annual Rent for the Option Space shall be increased as
follows:

	
   

  	
   

  	
  Amount

  	
   

  
	
  Increase Date

  	
   

  	
  Per Sq.
  Ft.

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  July 1, 1998

  	
   

  	
  $5.711

  	
   

  
	
  July 1, 1999

  	
   

  	
  $5.911

  	
   

  
	
  July 1, 2000

  	
   

  	
  $6.118

  	
   

  
	
  July 1, 2001

  	
   

  	
  $6.332

  	
   

  
	
  July 1, 2002

  	
   

  	
  $6.554

  	
   

  
	
  July 1, 2003

  	
   

  	
  $6.783

  	
   

  

 

and so forth, increasing at
three and one-half percent (3.5%) per annum.

 

6

 

SECTION 4

LATE PAYMENTS

In the event that any
Monthly Installment of Annual Rent or Additional Rent shall be past due for
more than fifteen (15) days, Tenant shall pay to Landlord as Additional Rent a
late charge equal to the greater of (a) five percent (5%) of the unpaid Rent,
or (b) the interest on the unpaid Rent from the date when due until payment at
the rate of fifteen percent (15%) per annum, or, if less, the highest rate
permitted by law.  The late charge imposed
under this Section 4 is not a penalty and has been agreed to by Landlord
and Tenant as necessary to compensate Landlord for its additional costs
associated with late payment.

SECTION 5

INTENTIONALLY OMITTED

 

SECTION 6

INSPECTION OF BOOKS/RECORDS

 

For any cost or expense
incurred by Landlord or relating to the Building, Property or Premises for
which Tenant must reimburse or pay to Landlord, Tenant shall be entitled to
review, and examine any and all of Landlord’s books, records and other papers
relating to such cost or expense within fifteen (15) business days from any
such request.  All such payments due and
owing by Tenant shall reflect credits or discounts received by Landlord and
shall not include any fines, penalties or late charges incurred by Landlord,
unless same is caused solely by Tenant’s late payment to Landlord.

SECTION 7

EXTENSION

 

Upon the expiration of the
Original Term, and provided Tenant is not then in default under any material
term, covenant, or condition (or if so, such default is cured prior to the
expiration of any applicable grace period), Tenant shall have three (3)
separate successive options to extend this Lease, the first for an Extension
Term of six and one-half (6 1⁄2) years, and the second and third for an Extension
Term of five (5) years each, provided that Tenant gives Landlord at least two
(2) months’ prior written notice of its exercise of each such option.  In the event that Tenant exercises its option
as to any Extension Term, all provisions of this Lease shall apply during each
Extension Term except the Annual Rent shall be as set forth in Section 3.

SECTION 8

UTILITIES

 

From and after the
Commencement Date, Tenant shall make (or cause its Subtenants to make)
agreements with each utility company and public body to provide, in Tenant’s or

 

7

 

Subtenant’s name, as
applicable, gas, electricity, water, sewer, telephone, heat and air
conditioning necessary for use of the Premises, and Tenant, or Subtenant, as
applicable, shall cause all such utilities to be separately metered, to the
extent possible.  Tenant shall pay (or
cause its Subtenants to pay) directly to the companies furnishing utility
service the cost of all service connection fees and the cost of all utilities
consumed throughout the Term.  If the
water and/or sewer service is not capable of being separately metered, Landlord
shall pay the water and/or sewer bills for the Building, and Tenant shall pay,
or cause its Subtenants to pay, to Landlord prior to the time when each bill
becomes due, for their actual use of the said utility as reflected on the
bill.  In the event that Tenant, or
Subtenant, as applicable, fails to pay in a timely manner any sum required
under this Section 8, Landlord shall have the right, but not the obligation, to
pay any such sum.  Any sum so paid by
Landlord shall be deemed to be owing by Tenant to Landlord and due and payable
as Additional Rent within five (5) days after written demand.

Tenant’s obligations for
payment of the costs incurred for utilities which serve the Premises prior to
the termination of this Lease shall survive such termination.

SECTION 9

TAXES

 

(a)           Tenant and/or any Subtenant shall be liable for Taxes
levied against personal property, trade fixtures, and the Tenant TI Work and/or
improvements placed or constructed by Tenant and/or any Subtenant in the
Premises.  If any such Taxes are levied
against Landlord or Landlord’s property and if Landlord elects to pay the same
or if the assessed value of Landlord’s property is increased thereby and
Landlord elects to pay the Taxes based on such increase, Tenant and/or any
Subtenant shall pay to Landlord within five (5) days of written demand that
part of such Taxes for which Tenant or any Subtenant is primarily liable
hereunder.

(b)           Landlord shall pay all taxes assessed against the Building
and the Property.  Tenant agrees to pay
to Landlord as Additional Rent all (i.e. 100%) of such taxes attributable to
the Premises, Tenant’s Pro Rata Share of the taxes attributable to the Common
Areas and Tenant’s Pro Rata Share of the taxes attributable to the Building
(without duplication of any sum for which Tenant is responsible for pursuant to
Section 9(a) above), as based upon the tax worksheet allocations which are
commonly used by the assessors.  Tenant
shall pay, or cause to be paid, such amount within thirty (30) days after
receipt of copies of the applicable tax bills and assessment notices.

(c)           If Tenant should fail to pay any Taxes required to be paid
by Tenant hereunder, in addition to any other remedies provided herein,
Landlord may, if it so elects, pay such Taxes. 
Any sum so paid by Landlord shall be deemed to be owing by Tenant to
Landlord and due and payable as Additional Rent within five (5) days after
written demand.

(d)           If at any time during the Term of this Lease, the present
method of taxation shall be changed so that in lieu of the whole or any part of
any taxes, assessments, levies, or charges levied, assessed, or imposed on real
estate and the improvements thereon, there shall be levied, assessed, or
imposed on Landlord a capital levy or other tax directly on the rents received

 

8

 

therefrom and/or a franchise tax assessment, levy or
charge measured by or based, in whole or in part, upon such rents or the
Building, then such taxes, assessments, levies or charges that are in lieu of
the present method of taxation shall be deemed to be included with the term
“Taxes” for the purposes hereof.

(e)           So long as Tenant is provided with prior written notice of
Landlord’s decision to contest, in addition to the other payments under this
Section 9, Tenant shall pay as Additional Rent, within five (5) days of written
demand, Tenant’s Pro Rata Share of any reasonable fees, reasonable expenses,
and reasonable costs incurred by Landlord in contesting any Tax, or any
assessments, levies, or tax rate, applicable to the Property or portions
thereof, so long as Landlord undertakes such contest and contests in good faith
and in an appropriate manner or by appropriate proceedings.

(f)            Landlord agrees to promptly pay in full and discharge any
and all Taxes assessed against the Building and/or the Property and to exhibit
to Tenant, within sixty (60) days after such payment, the receipted bills for
such Taxes, all of which Taxes Landlord shall pay prior to the day upon which
the same shall become delinquent.  Taxes
assessed against the Building and/or the Property shall be considered
delinquent as of the first day any interest or penalties commence to accrue
thereon.  If Landlord fails to pay the
Taxes described in this Section 9(f) prior to the same becoming delinquent,
Tenant may, but shall have no obligation to, pay such Taxes.  Upon presentation to Landlord of the
receipted bills for such Taxes, Landlord shall reimburse Tenant for such amount
(plus interest at the rate of five percent (5%) per annum until paid).  If Landlord does not pay such amount within
ten (10) days after receipt of the receipted bills, Tenant shall have the right
to set-off such amount against that portion of next month’s Applicable Rent
and, if applicable, any future month’s applicable Rent.

(g)           Notwithstanding anything above to the contrary, the amount
of Taxes for which Tenant is liable hereunder shall not be subject to increase
by reason of increased assessments in the value of the Building or Property
resulting from (i) any improvements, alterations or additions to the Building
or Property, other than for the Premises (including any Option Space
incorporated therein) or the Common Areas, or (ii) any sale of the Building or
Property.

SECTION 10

ADDITIONS TO THE BUILDING

 

Landlord shall have the
exclusive right to use all or any part of the roof and exterior walls of the
Building for any purpose, provided, however, in connection with any exercise by
Landlord of any rights of entry or access to the Premises described in this
Section 10 or in any other provision of this Lease, Landlord and its
contractors use reasonable efforts to avoid interference with the use or
occupancy of the Premises by Tenant or its Subtenants, and that such use does
not materially interfere with Tenant’s or

 

9

 

any Subtenant’s business or
activities; to make alterations to and to build additional stories on the
Building in which the Premises are located and to build adjoining the same,
provided, however, that such use does not materially interfere with Tenant’s or
any Subtenant’s business or activities; and to erect and maintain in connection
with any construction thereof, temporary scaffolds and other aids to
construction on the exterior of the Building, provided, however, that such use
does not materially interfere with Tenant’s or any Subtenant’s business or
activities.  Upon forty-eight (48) hours
advance notice, Landlord shall have access to the Premises that may be
necessary or desirable to perform such work, and Tenant shall not be entitled
to any abatement of rent on account thereof unless such work materially
interferes with Tenant’s or any Subtenant’s business or activities.  Tenant and all Subtenants shall have free and
unobstructed access to and from their respective demised premises at all times
during which work or alterations are being performed pursuant to this Section 10.

SECTION 11

COMMON AREAS

 

In addition to the use of
the Premises, Tenant, any Subtenant, and its and their employees, customers,
agents and business invitees shall have the right to use the Common Areas in
common with Landlord and other tenants of the Building, their employees,
customers, agents and business visitors. 
Tenant shall not obstruct, or permit any Subtenant to obstruct, the
Common Areas or use them, or permit any Subtenant to use them, for any purpose
other than their customary or intended purposes.

All Common Areas shall be
subject to the exclusive control of Landlord. 
Landlord shall operate, manage and maintain the Common Areas in good
order, condition and repair and shall maintain the Property in a manner
consistent with the operation of comparable office/laboratory facilities in
metropolitan Baltimore and Landlord shall have the sole right and exclusive
authority to employ and discharge all personnel with respect thereto.  Tenant shall pay Tenant’s Pro Rata Share of
all costs incurred by Landlord for the operation and maintenance of the Common
Areas.  Common Area costs include, but
are not limited to, costs and expenses for the following:  landscaping; utilities, water and sewage
charges attributable to the Common Areas (and not for any space which is
occupied or intended to be occupied); maintenance of signs (other than tenants’
signs); premiums for liability, property damage, fire and other types of
casualty insurance covering the Common Areas and workers’ compensation
insurance for personnel engaged in the management or operation of the Property
(or prorated equitably for part-time personnel); all property taxes and
assessments levied on or attributable to the Common Areas; fees for required
licenses and permits; routine maintenance and repair of roof membrane,
flashings, gutters, downspouts, roof drains, skylights and waterproofing;
maintenance of paving (including sweeping, snow and ice removal, striping,
repairing, resurfacing, and repaving); general maintenance; painting; lighting;
cleaning; refuse removal; and a reasonable allowance to Landlord for Landlord’s
supervision of the Common Areas (not to exceed three percent (3%) of the gross
rents of the Property for the Calendar year). 
Landlord may cause any or all of such services to be provided by third
parties and the cost of such services shall be included in Common Area
Costs.  Landlord agrees that the cost of
maintaining the Common Areas will not include (i) any costs incurred in
connection with procuring additional tenants or subtenants, including those
costs involved in negotiating or enforcing any leases or subleases, improving
or altering any space for such parties’ occupancy or performing any structural
work in connection therewith; or (ii) any costs for which Landlord is entitled
to reimbursement from other tenants or occupants of the Property.  Landlord further agrees not to set up any
reserves or require from Tenant contribution to any reserves for Common Area
Maintenance that has not yet occurred.

 

10

 

Landlord hereby expressly
reserves the right but not the obligation to maintain security for the Common
Areas; to change the size, area, level, location, and arrangement of the Common
Areas, provided the Common Areas as reconfigured is comparable to the Common
Area as now existing; to close temporarily all or any portion of the Common
Areas for the purpose of making repairs, changes, or alterations thereto or
performing necessary maintenance in connection with any emergency or for any
other purpose whatsoever, whether such purpose is similar or dissimilar to the
foregoing, provided that any such closing shall be for the shortest possible
time and provided that reasonable access to and from the Premises and a public
way shall be available at all times.

Tenant shall remove, or
cause to be removed, all litter, debris, waster and trash (which do not
constitute medical waste or are not subject to any Environmental Requirement)
from the Premises.  Landlord shall
provide and be responsible for the removal of litter, debris, waste and trash
from the Common Areas.

With regard to litter,
debris, waste and trash which constitute medical waste or are subject to any
Environmental Requirement, Tenant shall remove, or cause to be removed, the
same from the Premises by an individual or entity licensed to remove such
items.  The costs and expenses for the
removal of such items noted in this paragraph shall be borne by Tenant or the
applicable Subtenant.

SECTION 12

TENANT TI WORK

 

Tenant shall, at its own
expense, commence to construct the Osiris Work in accordance with the plans and
specifications prepared by Gaudreau, Inc., Kibart, Inc., and Faissant
Associates, Inc. (as more particularly described on Exhibit F-1 attached hereto
and incorporated herein by reference) (the “Building Plans and Specifications”).  Tenant shall also, at Tenant’s expense, put a
new roof on that part of Building which contains the Premises.  By executing this Lease, Landlord
acknowledges and agrees that it has reviewed and approved the Building Plans
and Specifications and that no further consent of Landlord is necessary or
required.  Tenant shall complete the
Osiris Work not later than June 30, 1995, time being of the essence.

Landlord further
acknowledges and agrees that Tenant may from time to time during the Term, improve
and/or renovate the Premises (non-structural only) by removing or altering the
then-existing Osiris Work and/or adding other Tenant TI Work, however, the
plans and specifications shall be given to and approved by Landlord before
Tenant commences any such Tenant TI Work, such approval shall not be
unreasonably withheld or delayed.

All Tenant TI Work is to be
commenced, constructed and completed pursuant to the terms of this Section 12
and shall be done in a workmanlike manner and shall conform to all applicable
laws, statutes, ordinances and codes (including without limitation, building,
health and fire codes) of all applicable governmental authorities.  Tenant shall obtain all required permits,
approvals, licenses and permissions, to enable Tenant to commence construction
of the Tenant TI Work; however, Landlord agrees to cooperate with and assist
Tenant in obtaining any of the foregoing. 
The Osiris Work shall be deemed to be “substantially complete” when the

 

11

 

Osiris Work has been
completed (except for minor punch list items) as evidenced by an executed AIA
form certification of substantial completion, provided that any and all
governmental approvals required for the occupancy of the Premises are then issued
and in full force and effect (including any occupancy permit required by state
or local law).  During the course of the
construction of any Tenant TI Work, Landlord shall have the right to inspect
the area or areas under construction at least once each month, and in a timely
manner, shall notify Tenant in writing of any objection that it may have in the
performance of the Tenant TI Work and shall set forth in such written notice
the repair or replacement that Landlord desires in order to cure such objection.  Landlord shall be deemed to have waived any
objection it may have to the performance of the Tenant TI Work to the extent
that (a) Landlord did not raise an objection within one (1) month after such
objectionable Tenant TI Work was performed and (b) Landlord’s failure to raise
the objection within the time would substantially and adversely effect Tenant’s
ability to cure such objectionable Tenant TI Work.  Tenant shall promptly undertake any
reasonable repair or replacement set forth by Landlord in order to correct such
objection.

The approval by the Landlord
of the Plans and Specifications, nor any subsequent inspections or approvals by
Landlord of any Tenant TI Work during or after construction shall not
constitute a warranty or representation by the Landlord or any of its agents as
to the technical sufficiency, adequacy or safety of any structure or any of its
component parts, including, without limitation, any fixtures, equipment or
furnishings, nor shall such approvals or inspections constitute such a warranty
or representation that the said Tenant TI Work complies or conforms to any and
all applicable laws, statutes, ordinances, and codes (including, without
limitation, building, health and fire codes), of all applicable governmental
authorities.  All acts, including any
failure to act, relating to the Tenant TI Work by Landlord or any agent,
representative or designee of the Landlord are performed solely for the benefit
of the Landlord to confirm that Tenant is complying with the provisions of this
Lease, and are not for the benefit of Tenant nor the benefit of any other
person or entity.

SECTION 13

RESTRICTIONS ON USE

 

Tenant shall not use or
permit the Premises, or any part thereof, to be used for any purpose other than
laboratory space for medical research and office use related thereto.  Furthermore, no use of the Premises shall be
made or permitted to be made that shall result in:  (a) waste of the Premises, or any part
thereof; (b) a public or private nuisance that may disturb the quiet enjoyment
of Landlord or other tenants of the Property; (c) any illegal or unlawful use;
(d) any use involving the sale, storage or preparation of food, alcoholic
beverages or materials generating an odor on the Premises; or (e) noises or
vibrations that may unreasonably disturb the Landlord or other tenants.  Tenant shall comply at its own expense with
all restrictive covenants and governmental regulations, laws, ordinances and
statutes affecting the Premises either now or in the future.  Landlord shall not voluntarily enter into any
restrictive covenant or similar arrangement materially and adversely affecting
Tenant’s right or ability to use the Premises for the purposes permitted by
this Lease without Tenant’s prior written consent.

 

12

 

SECTION 14

SERVICES, INSTALLATION, REPAIRS, AND MAINTENANCE BY TENANT

 

After written approval by
Landlord of any applicable written non-structural plans and specifications,
which approval shall not be unreasonably withheld or delayed, Tenant and any
Subtenant may install, at its or their own expense, any additional electrical
wiring, plumbing, ventilation, security system and any other building system
which may be required in connection with Tenant’s or any Subtenant’s use of the
Premises.

Tenant shall at all times at
its own expense keep and maintain, or cause to be kept and maintained, the
Premises in good order and repair, and in a neat, safe, clean and orderly
condition, including, but not limited to, reasonable periodic painting and
making all nonstructural ordinary and extraordinary, foreseen and unforeseen
repairs and replacements to the Premises under Landlord’s supervision
including, without limitation, repairs and replacements to the plumbing and
electrical and all systems and facilities serving the Premises
exclusively.  Tenant shall not overload
the electrical wiring serving the Premises or within the Premises, and will
install at its own expense under Landlord’s supervision, but only after
obtaining Landlord’s written approval, which approval shall not be unreasonably
withheld or delayed, any electrical wiring which may be required in connection
with the Premises.

Tenant and/or any Subtenant
will repair promptly at its own expense by or under the direction of Landlord
any damage (whether structural or nonstructural) to the Premises or the
Building caused by Tenant and/or any Subtenant, their agents, servants and
employees, including, but not limited to, any construction or alterations
performed by Tenant and/or any Subtenant or by bringing into the Premises or on
the Property any property for Tenant’s and/or any Subtenant’s use, or by the
installation or removal of such property, regardless of fault or by whom such
damage shall be caused, unless caused solely by the negligence of Landlord or
its contractors or subcontractors or its or their agents or employees.

Tenant shall supply to the
Premises and shall be solely responsible, at its own cost and expense, for the
following:  trash removal; interior and
exterior window cleaning, and repair and replacement of any glass (including
windows) serving all or a part of the Premises; extermination services; heat
and air conditioning for the Premises, and Tenant shall maintain a reasonable
minimum temperature in order to properly maintain and protect the Premises and
its components; and security to the Premises.

Tenant shall pay to Landlord
as Additional Rent its Pro Rata Share of the Common Area expenses and
maintenance, including grounds maintenance and parking lot maintenance, snow
and ice removal, and the like.

Tenant shall have no right
to direct or instruct any of Landlord’s contractors, subcontractors, agents or
employees, except with the prior written agreement of Landlord.

In the event Tenant fails in
the performance of any of its obligations under this Lease, and such failure
continues for a period of ten (10) days after written notice from Landlord
(except that in an emergency no notice shall be required), Landlord, in
addition to Landlord’s

 

13

 

other remedies under this
Lease, at or in equity, may (but shall not be obligated to do so) cure such
default on behalf of Tenant without any liability of Landlord for damage to
Tenant’s fixtures or other property or to the business of Tenant or any
assignee, subtenant, concessionaire, or licensee by reason thereof, and Tenant
shall reimburse Landlord, as Additional Rent, within five (5) days of written
demand, for any reasonable sums paid or reasonable costs incurred during curing
such default and the late charge specified under Section 4 shall accrue from
the date Landlord cures such default until it is reimbursed therefor.

Tenant understands and
acknowledges that one or more of the aforesaid services or utilities may be
suspended or reduced by reason of accident, emergency or reason specified in
Section 16, or for repairs, alterations, replacements, or improvements which in
the judgment of Landlord are desirable or necessary to be made.  No such interruption or suspension of
services or utilities shall be deemed an eviction or disturbance to Tenant’s
use and enjoyment of the Premises or any part thereof, nor shall any such
interruption or suspension of services or utilities render Landlord liable to
Tenant for damages, unless such interruption or suspension of services or
utilities is solely the result of the negligence of Landlord, its agents,
servants or employees.

SECTION 15

REPAIRS BY LANDLORD

 

Landlord shall make all
structural repairs, including, but not limited to, structural columns and
floors (excluding floor coverings, such as carpet and floor tile) of the
Premises, the roof of the Building, and the exterior walls of the Building
(excluding glass) provided Tenant gives Landlord written notice specifying the
need for and nature of such repairs; provided, however, if Landlord is required
to make any repairs to such portions of the Premises or Building by reason, in
whole or in part, of the negligent act or failure to act by Tenant or any
Subtenant or its or their contractors or subcontractors or its or their agents
or employees, or by reason of any non-permitted use of the Premises by Tenant,
Landlord may collect the cost of such repairs, as Additional Rent, within five
(5) days of written demand.  Landlord
shall keep all of the components of the Building and the Property for which it
is responsible as aforesaid in good order and repair.

Except as provided herein,
unless solely due to Landlord’s or its agents’, servants’ or employees’
negligence, Landlord shall have no liability to Tenant or any Subtenant by
reason of any inconvenience, annoyance, interruption, or injury to business
arising from the making of any repairs or changes which Landlord is required or
permitted by this Lease to make, or by any other tenant’s lease or required by
law to make in or to any portion of the Premises, Building or Common Areas.

If without Landlord’s prior
consent, Tenant performs or permits to be performed any alterations, additions,
improvements, changes, affixations of chattels, or other work which affects the
structural portions of the Premises and/or the roof of the Building or which
adversely affects the structural integrity of the Building, such action by
Tenant shall release and discharge Landlord as of the commencement of such
alteration, addition, improvement, affixation, or other work of and from such
repair obligation.  Thereafter, Tenant
agrees to be solely responsible under Landlord’s supervision for the
maintenance, repair, and replacement of any or all such

 

14

 

structural portions and/or
roof which have been affected as aforesaid, and Tenant shall commence promptly
after demand by Landlord to make all such repairs and replacements and proceed
diligently to complete them.  In the
event Tenant shall fail in the performance, to Landlord’s satisfaction, of such
responsibilities, Landlord, in addition to Landlord’s other remedies under this
Lease, at law or in equity, may (but shall not be obligated to do so) cure such
failure on behalf of Tenant without any liability of Landlord for damage to
Tenant’s fixtures or other property or to Tenant’s business by reason thereof,
and Tenant shall reimburse Landlord, as Additional Rent, within five (5) days
of written demand, for sums paid or costs incurred in curing such failure and
the late charge specified under Section 4 shall accrue from the date that
Landlord cures such default until it is reimbursed therefor.  For the purpose of the foregoing, if Tenant
performs or permits to be performed any such alterations, additions,
improvements, changes, affixations, or other work in a manner not consistent
with Landlord’s prior consent thereto, such work shall be deemed to have been
performed without Landlord’s consent.

SECTION 16

FORCE MAJEURE

 

This Lease and the
obligation of Tenant to pay Rent hereunder and perform all of the other
covenants and agreements hereunder on the part of Tenant to be performed shall
not be affected, impaired or excused because Landlord is unable to fulfill any
of its obligations under this Lease or is unable to supply, or is delayed in
supplying, any service to be supplied by it under the terms of this Lease or is
unable to make, or is delayed in making, any repairs, additions, alterations,
or decorations, or is unable to supply or is delayed in supplying, any
equipment or fixtures, if Landlord is prevented or delayed or otherwise
hindered from doing so by reason of any outside cause whatsoever, including,
without limitation, acts of God; fire; earthquake; flood; explosion; action of the
elements; declared or undeclared war; riots; civil disturbances; inability to
procure or a general shortage of labor, equipment, energy, materials, or
supplies in the open market; breakage or accident to machinery; partial or
entire failure of utilities; failure of transportation; strikes; lockouts;
action of labor unions; condemnation; injunction; court order or decree;
governmental preemption; any rule, order or regulation of any department of
subdivision of any government agency; or the conditions of supply and demand
which have been or are affected by war or other emergency.  Similarly, Landlord shall not be liable for
any interference with any services supplied to Tenant by others if such
interference is caused by any of the reasons listed in this Section.  Nothing contained in this Section shall be
deemed to impose any obligation on Landlord not expressly imposed by other
provisions of this Lease.

Other than Tenant’s
obligation to pay Rent or any other payment to cure default, and except as
otherwise provided in this Lease, Tenant shall be excused for the period of any
delay in the performance of any obligation when such delay is due to any cause
or causes beyond Tenant’s control which include but are not limited to any
labor dispute; governmental laws, regulations or controls; fire or other
casualty; inability to obtain any material or service; or through acts of
God.  Tenant shall give to Landlord
notice of the existence of the force majeure within five (5) days after
commencement of the force majeure.

 

15

 

SECTION 17

SURRENDER OF PREMISES

 

(a)           At the expiration or earlier termination of the Term of
this Lease, Tenant shall peaceably surrender the Premises in broom clean
condition and good order and repair and otherwise in the same condition as the
Premises were upon the commencement of this Lease, except ordinary wear and
tear.

(b)           If Landlord elects to require that alterations,
installations, changes, work, replacements, additions, or improvements comprised
within the Tenant TI Work and made by or on behalf of Tenant to the Premises be
removed at the termination of this Lease, Tenant hereby agrees to cause the
same to be removed at its sole cost and expense.  If Tenant fails to remove the same, Landlord
may cause them to be removed at Tenant’s expense, and Tenant hereby agrees to
reimburse Landlord for the cost of such removal together with all and any
damages which Landlord may suffer and sustain by reason of failure of Tenant to
remove the same.  At Landlord’s election,
any or all of the Tenant TI Work, alterations, installations, changes,
replacements, additions to, or improvements made by Tenant upon the Premises
shall remain at the termination of this Lease and not be removed.  Tenant shall surrender to Landlord all keys
for the Premises at the place then fixed for the payment of rent and shall
notify Landlord in writing of all combinations of locks, safes, and vaults, if
any, in the Premises.  Tenant’s
obligation to observe and perform the covenants set forth in this Section shall
survive the expiration or earlier termination of this Lease.

(c)           At the termination of this Lease, Tenant shall immediately
remove all personal property which it owns and is permitted to remove from the
Premises under the provisions of this Lease, and failing to do so, Landlord at
its option may either (i) cause that personal property to be removed at the
risk and expense of Tenant (both as to loss and damage), and Tenant hereby
agrees to pay all reasonable costs and expenses incurred thereby, including
sums paid to store the personal property elsewhere and the cost of any repairs
to the Premises caused by the removal of the property, or (ii) upon twenty (20)
days’ written notice to Tenant, which the parties agree is commercially
reasonable, sell at public or private sale any or all such personal property,
whether exempt or not from sale under execution or attachment (such property
being deemed charged with a lien in favor of Landlord for all sums due
hereunder), with the proceeds to be applied as set forth in Sub-section 28(a),
or (iii) at Landlord’s option, title shall pass to Landlord.

SECTION 18

VACATING OR ABANDONING THE PREMISES OR PERSONAL PROPERTY

 

Tenant and or any Subtenant
shall have the right to vacate the Premises for a period not exceeding six (6)
months, provided that Tenant first pays to Landlord upon demand, as Additional
Rent, the cost of any additional premium resulting from Landlord’s obtaining a
“vacancy permit” endorsement to Landlord’s insurance policy.  Tenant shall provide at least thirty (30)
days’ prior written notice of any intent to vacate the Premises, to provide
sufficient time to Landlord to obtain such an endorsement.  Should Tenant not comply with the above procedure,
by Tenant to provide appropriate notice, by failing to pay the cost of the said

 

16

 

endorsement, and/or by
vacating the Premises for a period longer than six (6) months, the Premises
shall be considered as being abandoned by Tenant.  If Tenant does abandon the Premises or is
dispossessed by process of law, any personal property belonging to Tenant left
on the Premises may, at the option of Landlord, be deemed to have been
abandoned by Tenant, and the provisions of Sub-section 17(c) shall apply.

SECTION 19

QUIET ENJOYMENT

 

Landlord warrants that
Tenant shall be granted peaceable and quiet enjoyment of the Premises free from
any eviction or interference by Landlord or any other party if Tenant pays the
Annual Rent and Additional Rent provided herein pursuant to the terms of this
Lease, and otherwise fully performs the terms, covenants, and conditions
imposed herein.  Landlord represents and
warrants that the Property is zoned M-3 Industrial.  If necessary from time to time during the
Term, Landlord further agrees to assist and cooperate in obtaining a use and
occupancy permit to enable Tenant or any Subtenant to use the Premises for
medical laboratory and ancillary storage and office space in differing
proportions from those set forth above and Landlord shall keep such use and
occupancy permit in full force and effect. 
Tenant shall reimburse Landlord for any costs and expenses incurred by
Landlord within five (5) days of written demand.  Landlord represents and warrants that the
only present restrictive covenants affecting the Premises are set forth in
Exhibit C.

SECTION 20

INDEMNIFICATION AND WAIVER OF CLAIM

 

Tenant will defend and will
indemnify Landlord, its partners, agents, servants and employees, and save it
and them harmless from and against any and all claims, actions, damages,
liability, costs, and expense (including, but not limited to, reasonable
attorneys’ fees and disbursements) in connection with the loss of life, bodily
injury, or damage to property or business arising from, related to, or in
connection with the occupancy or use by Tenant or any assignee, subtenant,
concessionaire, or licensee of the Premises or any part of Landlord’s personal
property or the Premises, Property or Building or occasioned wholly or in part
by any act or omission of Tenant or any assignee, subtenant, concessionaire, or
licensee or its or their contractors, subcontractors, or its or their agents or
employees or other persons on the Premises arising from events occurring after
the Commencement Date; provided, however, that such indemnification shall not
apply to the negligence or willful acts of Landlord or its contractors,
employees, invitees or subcontractors, or its or their agents or
employees.  Tenant shall also pay all
costs, expenses, and reasonable attorneys’ fees that may be expended or
incurred by Landlord in enforcing the covenants and agreements of this Lease
should Landlord prevail in such action(s). 
The provisions of this Section shall survive the termination or earlier
expiration of this Lease.

Landlord shall not be liable
for, and Tenant, in consideration of Landlord’s execution of this Lease, hereby
releases all claims against Landlord for bodily injury, death, loss or property

 

17

 

damage that may be
occasioned by or through the acts or omissions of other tenants, their
contractors and subcontractors and their agents, or employees.

Notwithstanding anything to
the contrary contained in this Lease, Landlord and Tenant do mutually each
release and discharge the other, and all persons against whom the insurance
company or companies would have a right or claim by virtue of subrogation, of
and from all suits, claims, and demands whatsoever, for loss or damage to the
property of the other, even if caused by or occurring through or as a result of
any negligent act or omission of the party released hereby or its contractors,
subcontractors, agents, or employees, so long as and to the extent that such
loss or damage is covered by insurance benefiting the party suffering such loss
or damage or was required to be so covered under this Lease.  Each party further agrees that each at its
own cost will cause its policies of insurance for fire and extended coverage to
be so written as to include a waiver of subrogation by causing such policies to
contain a clause in substantially the following form:

It is hereby stipulated that
this insurance shall not be invalidated should the insured or any of them waive
in writing prior to a loss any or all right of recovery against any person or
entity for loss occurring to the property described herein.

The provisions of this
Section 20 shall survive the termination or earlier expiration of the Term of
this Lease with respect to any loss, damage, injury, or death occurring prior
to such termination.

SECTION 21

INSURANCE OF TENANT

 

(a)           Tenant will keep in force, or cause to be kept in force,
with companies licensed to do business in the State of Maryland and which have
a policyholder’s rating of A or better and a financial size rating of X or
larger from Best’s Key Rating Guide, Property Casualty Reports (or comparable
insurance rating service), at Tenant’s expense at all times during the Term of
this Lease and during such other times as Tenant occupies the Premises or any
part thereof:

(i)            Commercial general liability insurance written on an
occurrence basis with respect to the Premises and the business operated by
Tenant and any Subtenants, concessionaires, or licensees of Tenant in the
Premises with minimum combined single limits of Five Million Dollars
($5,000,000.00) per occurrence and in the aggregate.  Such liability insurance shall, in addition,
extend, through contractual liability insurance, to any liability of Tenant
arising out of the indemnities provided in Section 20 and shall be subject to
the waiver of subrogation specified therein. 
Such liability insurance shall also include broad form endorsement
coverage, including personal injury coverage.

(ii)           Fire insurance with standard broad form extended coverage
endorsement covering all of Tenant’s furniture, furnishings, such equipment as
is not affixed to the Premises, and signs.

 

18

 

(iii)          Workers’ compensation insurance for all employees of the
Tenant in such amount as is required by law.

(iv)          During any period of construction of the Tenant TI Work,
builder’s risk insurance (non-reporting form) of the type customarily carried
in the case of similar construction for the full replacement cost of work in
place and materials stored at or upon the Premises.

(v)           During any period of construction of the Tenant TI Work,
Tenant shall require any contractor of Tenant performing such work to keep in
force, at contractor’s expense, comprehensive general liability insurance,
including contractor’s liability coverage, contractual liability coverage,
completed operations coverage, broad form property damage endorsement and
contractor’s protective liability coverage to afford protection with minimum
combined single limits of Five Million Dollars ($5,000,000.00) per occurrence
and in the aggregate.  Tenant shall also
require such contractors to keep in effect workers’ compensation affording
statutory coverage.

(vi)          A hazardous material/environmental insurance policy listing
Landlord as a named insured protecting Landlord from any and all liability both
on and off site caused by, related to, or connected with Tenant and Subtenant’s
operation of the Building and Premises; from an insurance company and under
terms and conditions of coverage acceptable to Landlord, providing coverage
limits of not less than Two Million Dollars ($2,000,000.00).  In the event that Landlord sells, transfers
or conveys the Property to any third party (not related to or affiliated with
Landlord) the requirements of this Section 21(a)(vi) shall terminate and expire
upon the said sale, transfer or conveyance to the third party.

(b)           On or before the Commencement Date, Tenant will deposit
with Landlord policies of insurance required by the provisions of this Section
together with satisfactory evidence of payment of the required premiums
thereof.  Failure to deposit such
policies shall not relieve Tenant of its obligations to obtain and keep in
force insurance coverage required by this Lease.  The insurance required hereby may be
maintained by means of a policy or policies of blanket insurance so long as the
provisions of this Lease are fully satisfied and the required amounts are
specifically allocated to the Premises without possibility of determination
because of occurrences on other properties.

(c)           All policies of insurance required to be carried by Tenant
by this Section 21 shall provide that the policy shall not be subject to
cancellation, termination, or change except after thirty (30) days prior
written notice to Landlord, and all such policies shall name Landlord as an
additional insured as its interest may appear. 
Tenant shall promptly pay all premiums when due on all insurance
required by this Section 21 and, not less than thirty (30) days prior to the
expiration dates of each such policy, Tenant will deliver to Landlord a renewal
policy or policies marked “premium paid” or accompanied by other evidence of
payment satisfactory to Landlord which indicates that the insurance required by
this Section 21 is in full force and effect. 
Tenant will immediately give Landlord notice of any cancellation of, or
change in, any insurance policy.

(d)           If Tenant shall not comply with its covenants made in this
Section 21, and provided that such failure shall continue for five (5) days or
longer after written notice to Tenant, Landlord, in addition to Landlord’s
other remedies hereunder, may (but shall not be obligated to)

 

19

 

cause insurance as aforesaid, to be issued, and in
such event Tenant agrees to pay the premium for such insurance as Additional
Rent within five (5) days after Landlord’s written demand.

SECTION 22

INSURANCE OF LANDLORD

 

(a)           Landlord will keep in force with companies licensed to do
business in the State of Maryland, at Landlord’s expense at all times during
the Term of this Lease and during such other times as Tenant occupies the
Premises or any part thereof:

(i)            Commercial general liability insurance written on an
occurrence basis with respect to the Building, the Common Areas, and the
Property with minimum combined single limits of One Million Dollars
($1,000,000.00) per occurrence and in the aggregate.  Such liability insurance shall also include
broad form endorsement coverage including personal injury coverage.

(ii)           All-risk casualty insurance for the replacement cost value
of the Building and improvements.

(b)           On or before the Commencement Date, Landlord will deposit
with Tenant copies of policies of insurance required by the provisions of this
Section 22 together with satisfactory evidence of the payment of the required
premium or premiums thereof.  Each year
during the Term of this Lease, Landlord shall provide Tenant with evidence
(satisfactory to Tenant) that the insurance required by this Section 22 is in
full force and effect.  Failure to
deposit such policies shall not relieve Landlord of its obligations to obtain
and keep in force insurance coverage required by this Lease.  The insurance required hereby may be
maintained by means of a policy or policies of blanket insurance so long as the
provisions of this Lease are fully satisfied and the required amounts are
specifically allocated to the Premises without possibility of diminution
because of occurrences or other properties.

(c)           All policies of insurance required to be carried by
Landlord by this Section 22 hereof shall provide that the policy shall not be
subject to cancellation, termination, or change except after thirty (30) days’
prior written notice to Tenant, and all such policies shall name Tenant as a certificate
holder.  Landlord shall promptly pay all
premiums when due on all insurance required by this Section 22 and, Landlord
will deliver to Tenant a renewal policy or policies marked “Premium paid” or
accompanied by other evidence of payment satisfactory to Tenant which indicates
that the insurance required by this Section 22 is in full force and
effect.  Landlord will immediately give
Tenant notice of any cancellation of, or change in, any insurance policy.

(d)           If Landlord shall not comply with its covenants made in
this Section and such failure shall continue for five (5) days or longer after
written notice from Tenant, Tenant may (but shall not be obligated to) cause
insurance as aforesaid to be issued, and in such event Landlord agrees to
reimburse Tenant for the premium for such insurance promptly upon Tenant’s
demand, and if Landlord does not do so Tenant may subtract such amount from the
next monthly installment(s) of Rent due hereunder.

 

20

 

(e)           Tenant shall pay, or cause to be paid, as Additional Rent
the following:  Landlord shall provide
Tenant with a copy of the insurance premium for the insurance referred to in
Section 22(a)(ii) above each year during the Term of this Lease and any
Extension Term and Tenant shall pay the full amount of such insurance cost to
Landlord relating to Tenant’s Premises and Tenant’s Pro Rata Share of any
Common Areas, based upon the underwriting breakdown of the insurance premium as
provided by Landlord’s insurance carrier or agent.

SECTION 23

EFFECT ON INSURANCE

 

Tenant and any Subtenant
will not do, omit to do, or suffer to be done or keep or suffer to be kept
anything in, upon or about the Property which will violate the provisions of
Landlord’s policies insuring the Premises and the Building against loss or
damage by fire, or other hazards (including, but not limited to, public
liability), which will adversely affect Landlord’s fire or liability insurance
premium rating or which will prevent Landlord from procuring such policies in
companies acceptable to Landlord.  If
anything done, omitted to be done, or suffered to be done by Tenant and any
Subtenant, or kept or suffered by Tenant and any Subtenant to be kept in, upon
or about the Property shall cause the premium rate of fire or other insurance
on the Premises or the Property in companies acceptable to Landlord to be
increased beyond the established rate from time to time fixed by the
appropriate underwriters with regard to the use of the Premises for the
purposes permitted under this Lease or to the Property for the use or uses
being made thereof, Tenant will pay the amount of such increase as Additional
Rent within five (5) days of Landlord’s demand in writing and will thereafter
pay the amount of such increase, as the same may vary from time to time, with
respect to every premium relating to coverage of the Premises and the Property
during a period falling within the Term of this Lease until such increase is
eliminated.  In addition, if applicable,
Landlord may at its option rectify the condition existing on the Property which
is causing or is a contributing cause of the increased premium rate in the
event that the Tenant should fail to do so, provided that such condition is not
a permitted use of the Premises as contemplated by this Lease, and Landlord may
charge the cost of such action to Tenant as Additional Rent, payable within
five (5) days of written demand together with the late charge specified in
Section 4, which shall accrue from the date that Landlord became obligated for
the costs of such action.  In determining
whether increased premiums are the result of Tenant’s use of the Premises or
elsewhere on the Property, a schedule, issued by the organization setting the
insurance rate on the Premises and the Property, showing various components of
such rate, shall be conclusive evidence of the several items and charges which
make up the fire insurance on the Premises and the Property.

If for any reason including,
but not limited to, the abandonment of the Premises, Tenant’s failure to pay
any insurance premium, or Tenant’s failure to occupy the Premises as herein
permitted, Tenant fails to provide and keep in force any or all of the
insurance policies set forth in Section 21, then in such event Tenant shall
indemnify and hold Landlord harmless against any loss which would have been
covered by such insurance.

 

21

 

SECTION 24

TOTAL OR PARTIAL DESTRUCTION OF PREMISES

 

(a)           If the Premises are damaged by fire or other casualty but
are not thereby rendered untenantable in an amount in excess of fifty percent
(50%) of the entire Premises and such damage is, in the opinion of an
independent architect or consultant selected by Landlord, capable of being
repaired using reasonable diligence within one hundred and eighty (180) days
after the loss, Landlord, at its own expense, subject to the limitations set
forth in this Lease, shall cause such damage to be repaired, and the Annual
Rent and Additional Rent shall not be abated. 
If by reason of any damage or destruction to the Premises wherein the
Premises shall be rendered untenantable in an amount in excess of fifty percent
(50%) of the entire Premises, (i) Landlord, at its own option, at its own
expense, subject to the limitations set forth in this Lease, may cause the
damage to be repaired if such damage, in the opinion of an independent
architect or consultant selected by Landlord, is capable of being repaired by
using reasonable diligence within one hundred and eighty (180) days after the
loss, and the Annual Rent and Additional Rent shall be abated proportionately
as to the portion of the Premises rendered untenantable while it is
untenantable, or (ii) Landlord shall have the right, to be exercised by notice
in writing delivered to Tenant within thirty (30) days from and after the
occurrence of such damage or destruction, to terminate this Lease, and the
Annual Rent and Additional Rent shall be adjusted as of the date of the
occurrence of the casualty giving rise to such loss.  In no event shall Landlord be obligated to
expend for any repairs or reconstruction pursuant to this Section 24 an amount
in excess of the insurance proceeds, if any, recovered by it and allocable to
the damage to the Premises after deducting therefrom Landlord’s reasonable
expenses in obtaining such proceeds and any amounts required to be paid to
Landlord’s mortgagee.

(b)           Tenant covenants and agrees that it will give written
notice to Landlord of any accident or damage, whether such accident of damage
is caused by insured or uninsured casualty, occurring in, on or about the
Premises within five (5) business days after Tenant has knowledge of the
occurrence of such accident or damage. 
If Tenant breaches its covenants set forth hereunder, Landlord in
addition to all other rights and remedies under this Lease, at law or in equity
shall, at its option, be relieved of any of its obligations under this Section
24.

SECTION 25

ALTERATIONS

 

Except as permitted under
Section 12, supra, Tenant agrees that it will not make any alterations
(whether structural or otherwise), improvements, additions, repairs, or changes
to the interior or exterior of the Premises during the Term of this Lease
without in each instance obtaining Landlord’s prior written consent.  Together with each request for consent,
Tenant shall present to Landlord reasonably detailed plans and specifications
for such proposed alterations, improvements, additions, repairs or changes;
provided, however, approval of such plans and specifications by Landlord shall
not constitute any assumption of responsibility by Landlord for their accuracy
of sufficiency, and Tenant shall be solely responsible for such items.  All alterations, improvements, additions,

 

22

 

repairs, or changes shall be
done either by or under the direction of Landlord, but at the expense of
Tenant.  All alterations, improvements,
additions, repairs, or changes made by Tenant, shall, unless Landlord gives
notice to Tenant to remove the same, remain upon the Premises at the expiration
or earlier termination of the Term of this Lease and shall become the Property
of Landlord immediately upon installation thereof.  The same shall remain the property of
Landlord (without any obligation of Landlord to pay compensation therefor)
unless Landlord gives Tenant written notice to remove any or all of the
aforesaid, in which event Tenant shall remove at Tenant’s expense such of the
same as may be specified in Landlord’s notice to Tenant, and Tenant shall
promptly restore the Premises to the same good order and condition as it was at
the commencement of the Term of this Lease except (i) to the extent the
Premises is not required to be repaired and/or maintained by Tenant and (ii)
damage by fire or other casualty to the extent there is actually paid to
Landlord, to repair any damage to the Premises, sufficient net proceeds for
policies of insurance which Tenant is obligated to provide and to maintain
under the provisions of this Lease. 
Should Tenant fail to do so, Landlord may do so, collecting, at
Landlord’s option, the cost and expense thereof from Tenant, as Additional
Rent, upon demand.

Notwithstanding anything
above, in Section 17 or elsewhere in this Lease to the contrary, Landlord
hereby permits Tenant to remove at the end of the lease term, and as long as
Tenant is not then in default or breach of any material provision in this
Lease, any non-structural improvements, provided that Tenant and/or any
Subtenant shall in each and every instance of removal reasonably repair and
restore the Premises to its functional shell condition.

SECTION 26

MECHANICS’ LIEN

 

Tenant shall not do or
suffer to be done any act, matter or thing whereby Landlord’s or Tenant’s
interest in the Premises, or any part thereof, may be encumbered by any
mechanics’ lien.  Tenant shall discharge
or stay the enforcement by bond or otherwise, within sixty (60) days after the
date of filing, any mechanics’ liens filed against Tenant’s interest in the
Premises, or any part thereof, purporting to be for labor or material furnished
to Tenant.  Landlord may, at its option,
discharge any such mechanics’ lien not discharged by Tenant within such sixty
(60) day period, and Tenant, within five (5) days of written demand, shall
reimburse Landlord for any such reasonable expense incurred by Landlord.  Any reasonable monies expended by Landlord
shall be deemed Additional Rent, collectible as such by Landlord and the late
charge specified in Section 4 shall accrue from the date Landlord becomes
obligated for such expenses.  Landlord
shall not be liable for any labor or materials furnished or to be furnished to
Tenant upon credit, and no mechanics’ or other lien for labor or materials
shall attach to or affect the reversionary or other estate or interest of
Landlord in and to the Premises or the Building.

SECTION 27

BREACH OR DEFAULT

 

Tenant shall have breached
this Lease and shall be considered in default hereunder if (a) Tenant files a
petition in bankruptcy or insolvency or for reorganization under any bankruptcy
or insolvency law or act, or makes an assignment for the benefit of creditors;
(b) involuntary proceedings are instituted against Tenant under any bankruptcy
or insolvency law or act and the

 

23

 

same are not set aside
within ninety (90) days; (c) Tenant fails to pay any Annual Rent, Monthly
Installment of Annual Rent, or Additional Rent within five (5) days from
written notice from Landlord; (d) Tenant fails to perform or comply with any of
the covenants or conditions of this Lease or the rules and regulations now or
hereinafter established for the Premises, Building or Property within thirty
(30) days after written notice thereof, provided that if the failure is not
capable of being cured within thirty (30) days, Tenant shall have such
additional time as reasonably required if within such thirty (30) day period
Tenant commences the cure and thereafter diligently pursues the same to
completion; and/or (e) the Premises are abandoned by Tenant in violation of the
applicable provisions of this Lease.

SECTION 28

EFFECT OF BREACH

 

(a)           In the event of a breach of this Lease as set forth in
Section 27, Landlord shall have the option to do any of the following in
addition to and not in limitation of any other remedy permitted by law or by
this lease:  (i) to re-enter the
Premises, using force if necessary, to dispossess Tenant and all other
occupants from the Premises and to remove any or all of Tenant’s property at
the Premises; (ii) to store Tenant’s property in a public warehouse or
elsewhere at the cost, risk, and expense of Tenant, without Landlord’s being
deemed guilty of trespass or becoming liable for any loss or damage, which may
occur on Tenant’s property; and (iii) upon thirty (30) days’ written notice to
Tenant, which the parties agree is commercially reasonable, to sell at public
or private sale any or all of said property, whether exempt or not from sale
under execution or attachment (such property being deemed charged with a lien
in favor of Landlord for all sums due hereunder), with the proceeds of sale to
be applied:  first, to the costs and
expenses of retaking, removal, storage, preparing for sale, and sale of the
property (including reasonable attorneys’ fees); and second, to the payment of
any sum due hereunder to Landlord (including Rent, Additional Rent, charges,
and damages, both theretofore and thereafter accruing); and, third, any surplus
to Tenant.

(b)           Further, upon the occurrence of any such breach, Landlord,
in addition to any other remedies it may have at law, in equity, by statute, or
under any other provision of this Lease, shall have the right to terminate this
Lease, as well as all right, title, and interest of Tenant hereunder, by giving
to Tenant not less than thirty (30) days’ advance written notice of Landlord’s
election to cancel and to terminate this Lease. 
Upon the expiration of this time fixed in the notice of termination,
this Lease and the balance of the Term then remaining, as well as all of the
right, title, and interest of Tenant under this Lease, shall expire in the same
manner and with the same force and effect (except for the Tenant’s liability as
hereinafter set forth) as if the expiration of the time fixed in the notice of
termination was the date upon which the Term would normally have expired.  Tenant shall then immediately quit and
surrender the Premises and each and every part thereof to Landlord, and
Landlord may enter upon the Premises, by force, summary proceedings, or
otherwise.  In any of such events,
Landlord shall be entitled to the benefit of all provisions of the ordinances
and public local laws of the city or county where the Property is located and
of the Public General Laws and tenements held over by tenants or proceedings in
forcible entry and detainer.  Upon any
entry or re-entry by Landlord, with or without legal process, Landlord shall
also have the right (but not the obligation) to relet all or part of the
Premises, from time to time, at the risk and expense of Tenant.  No re-entry by

 

24

 

Landlord with or without a declaration of
termination shall be deemed to be an acceptance or a surrender of this Lease or
as a release of the Tenant’s liability for damages under the provisions of this
Section.

(c)           Tenant further agrees (i) notwithstanding re-entry by
Landlord with or without termination pursuant to the provisions of Sub-section
(a) of this Section, or (ii) if this Lease is otherwise terminated by reason of
Tenant’s default, or (iii) if Landlord retakes possession with or without
process of law and/or re-enters with or without a declaration of termination,
or (iv) if Landlord, following any of the foregoing events, elects to let or
relet the Premises (whether once or more than once during the remainder of the
Term, and upon such conditions as are satisfactory to Landlord) that Tenant
shall, nevertheless, in each instance, remain liable for the performance of any
covenant of this Lease then in default and for all Rent and all other charges
and damages which may be due or sustained before and after the date of default,
together with the cost of seizure and repossession of the Premises and
reasonable attorneys’ fees incurred by Landlord as a result of the breach of
this Lease.

(d)           In any of the events described in the preceding
Sub-section, Tenant agrees that it will remain liable to Landlord for
liquidated damages to be calculated and paid as follows:  Tenant shall pay an amount of money equal to
the total amount of Rent and all other payments and charges which would have
become payable during the unexpired portion of the Term remaining at the time
of re-entry, repossession, or termination, less the net amount of Rent, if any,
received by Landlord during the remaining Term from others to whom the Premises
may be rented, at such times, upon such terms and conditions and at such
rentals as Landlord shall deem proper.

(e)           In connection with any such reletting(s), Landlord shall
have the absolute right, without such actions being or being deemed to be a
surrender of its rights or as a termination of this Lease or as a release of
the Tenant’s liability hereunder for the balance of the Term or Extension Term,
to let or relet the Premises for a longer or shorter term than that remaining
after Tenant’s default, to lease more or less area than that contained in the
Premises, to lease the Premises together with other premises or property owned
or controlled by Landlord, and to change the character or use of the
Premises.  Landlord shall deduct from any
amounts received from any such letting or reletting (i) first, all reasonable
costs and expenses incurred in connection with Tenant’s default, including, but
not limited to, the cost to repair, restore, renovate, or decorate the Premises
for a new Tenant, reasonable attorneys’ fees, real estate commissions, the cost
of any legal actions brought against Tenant, and other costs reasonably
incurred, and then (ii) Landlord shall deduct all Monthly Installments of
Annual Rent and Additional Rent due hereunder. 
Tenant shall continue to be responsible for and liable for any deficit
created thereby, and Landlord shall retain and apply any surplus until all such
liquidated damages shall have been paid in full to Landlord.  The liquidated damages shall be payable in
monthly installments, in advance, on the first day of each calendar month
following re-entry, with or without termination, and shall continue until the
date fixed herein as the normal expiration date of the Term of this Lease.  In no event shall Tenant be entitled to
receive any portion of the amounts received by Landlord in connection with the
letting or reletting of the Premises.

 

25

 

(f)            No entry or re-entry by Landlord, whether had or taken
under summary proceedings or otherwise, nor any letting or reletting shall
absolve or discharge Tenant from liability hereunder.  Tenant’s liability hereunder, even if there
be no letting or reletting, shall survive the issuance of any dispossess
warrant, order of court terminating this Lease, or any other termination based
upon Tenant’s default. The words “enter”, “re-enter”, and “re-entry” as used in
this Section and elsewhere in this Lease are not restricted to their technical
legal meanings.

(g)           Suit or suits for the recovery of such deficiency or
damages or for a sum equal to any Monthly Installment or Installments of Annual
Rent and Additional Rent and other charges payable hereunder may be brought by
Landlord from time to time, at Landlord’s election.  Nothing herein contained shall be deemed to
require Landlord to await the date when this Lease or the Term would have
normally expired had there been no such default by Tenant or no such
termination by Landlord, nor shall Landlord be barred by any claim involving a
statute of limitations or other defense should Landlord delay in filing suit.

(h)           No payment received by Landlord from Tenant after re-entry
or the termination of this Lease in any lawful manner shall reinstate, continue
or extend the Term of this Lease or affect any notice theretofore given to
Tenant by Landlord or operate as a waiver of the right of Landlord to recover
possession of the Premises by proper suit, action, proceedings, or other
remedy.

(i)            In the event Tenant fails to vacate the Premises at any
time after termination of this Lease as provided above, Tenant shall pay double
Rent and double Additional Rent for such holdover period.

(j)            Nothing in this Section shall limit or prejudice the
right of Landlord to prove and to obtain, as liquidated damages by reason of a
termination arising out of the provisions of this Section, an amount equal to
the maximum allowed by any statute or rule of law in effect as of the time
when, and governing the proceedings in which such damages are to be proved,
whether or not such amount be greater, equal to, or less than the amount of
liquidated damages computed under this Section.

(k)           Landlord agrees that it shall use such efforts to relet
the Premises and to mitigate damages and liability of Tenant as are required by
any applicable laws, regulations or statutes.

(l)            Notwithstanding anything to the contrary contained in
this Lease, after the occurrence of a default by Tenant under the terms or
conditions of this Lease, and prior to termination of this Lease under Section
28(b) above, Landlord hereby agrees that MIDFA and/or Bondholder shall have the
right to cure such default of Tenant under this Lease, and Landlord agrees that
it will not exercise any of its rights or remedies provided for in this Lease
or under applicable law arising from the breach against Tenant until the
expiration of the time for termination fixed in the notice of termination as
required above.

 

26

 

SECTION 29

ACCESS BY LANDLORD

 

(a)           Landlord and its contractors and subcontractors, and its
or their agents and employees may at all reasonable times and with at least
twenty-four (24) hours notice during the Term of this Lease enter to inspect
the Premises and/or may show the Premises and Property to others, provided that
such entrance is consistent with Tenant’s or any Subtenant’s security
obligations.  In the event of notice of
termination of this Lease or during the last three (3) months of the Term,
unless Tenant has theretobefore properly exercised any remaining option to
extend this Lease, Landlord shall have the right from the date of such notice
to display (but not so as to unreasonably obstruct the view thereof or access
thereto) the customary “For Rent” sign, and Landlord may show the Premises and
all parts thereof to prospective tenants during Normal Business Hours.

(b)           Landlord also reserves the right after reasonable notice
of intention to so enter (except that in the event of an emergency, no notice
shall be required) to enter the Premises at any time and from time to time to
make such repairs, additions, or alterations as it may deem necessary for the
safety, improvement, or preservation thereof, or of the Property, but Landlord
assumes no obligation to do so, and the performance thereof by Landlord shall
not constitute a waiver of Tenant’s default in failing to perform the
same.  Landlord shall in no event be
liable for any inconvenience, disturbance, loss of business, or other damage to
Tenant by reason of the performance by Landlord of any work in, upon, above,
under, or outside the Premises, unless such performance materially interferes
with Tenant’s or any Subtenant’s business or activities and arises solely from
the negligence or willful misconduct of Landlord or Landlord’s agents, servants
or employees.  If Tenant shall have
vacated or abandoned the Premises, or in the event of an emergency, or if in
any other instance after Landlord has given notice of Landlord’s intention to
enter, Tenant or Tenant’s agents or employees shall not be personally present
to permit an entry into the Premises, then in such event, Landlord and its
contractors and subcontractors and its or their agents and employees may enter
the same by the use of force or otherwise without rendering Landlord liable
therefor, and without in any manner affecting Tenant’s obligations under this
Lease.

(c)           If during the last months of the Term, Tenant has vacated
the Premises and removed all or substantially all of its personal property,
Landlord may immediately enter and alter, renovate, and redecorate the Premises.  The exercise of any such reserved right by
Landlord shall not be deemed an eviction or disturbance of Tenant’s use and
possession of the Premises and shall not render Landlord liable in any manner
to Tenant or to any other person, nor shall the same constitute any grounds for
an abatement of Rent hereunder.

SECTION 30

ASSIGNMENT AND SUBLETTING

 

(a)           Tenant shall not make or permit an Assignment of this
Lease or any interest of Tenant herein, in whole or in part, by operation of
law or otherwise, without first obtaining in

 

27

 

each and every instance the prior written consent of
Landlord, which consent may be withheld at the sole and absolute discretion of
Landlord.

(b)           Any consent by Landlord to an Assignment shall be held to
apply only to the specific transaction thereby authorized and shall not
constitute a waiver of the necessity for such consent to any subsequent
Assignment, including, but not limited to, a subsequent Assignment by any
trustee, receiver, liquidator, or personal representative of Tenant.  In the event Tenant executes an agreement to
effect an Assignment, such agreement shall provide (i) that the tenant,
subtenant or other occupier of space shall take subject to this Lease, (ii)
that the occupier shall also fulfill all obligations of Tenant under this Lease
as they pertain to the portion of the Premises set forth in the Assignment, and
(iii) that with respect to such portion of the Premises, the occupier shall be
deemed to be the Tenant under this Lease.

(c)           If this Lease or any interest herein be assigned without
Landlord’s prior written consent having been obtained thereto, Landlord may
nevertheless collect Rent (including Additional Rent) from the assignee, and
apply the net amount collected to the Rents herein reserved.  No such Assignment or collection shall be
deemed a waiver of the covenant herein against Assignment by others, or the
acceptance of the assignee, as Tenant hereunder, or constitute a release of
Tenant from the further performance by Tenant of the terms and provisions of
this Lease.

If
this Lease or any interest of Tenant herein be assigned or if the whole or any
part of the Premises be sublet or used or occupied by others, after having
obtained Landlord’s prior written consent thereto, Tenant shall nevertheless
remain fully liable for the full performance of all obligations under this
Lease to be performed by Tenant, and Tenant shall not be released therefrom in
any manner, unless otherwise expressly agreed to by Landlord in writing.

(d)           If Tenant is a corporation and if at any time during the
Term of this Lease any part or all of the corporate shares of Tenant, or of a
parent corporation of which Tenant is a direct or indirect subsidiary, shall be
transferred by sale, assignment, bequest, inheritance, operation of law, or
other disposition so as to result in a change in the present effective voting
control of Tenant or of such parent corporation by the person or persons owing
or controlling a majority of the shares of Tenant or of such parent corporation
on the date of this Lease, Tenant shall promptly notify Landlord in writing of
such change, and such change in voting control shall constitute an Assignment
of this Lease for all purposes of this Section; provided, however, that this
provision shall not apply in the event that as of the date of this Lease over
fifty percent (50%) of the voting power of the Tenant corporation or of such
parent corporation is held by fifty (50) or more unrelated shareholders or
distributed to such number of unrelated shareholders in a public distribution
of securities.

(e)           If Tenant is a partnership and if at any time during the
Term of this Lease any person or entity which at the time of the execution of
this Lease owns a general partner’s interest ceases to own such general
partner’s interest, such cessation of ownership shall constitute an Assignment
for all purposes of this Section, and Tenant shall promptly notify Landlord in
writing of such change.

 

28

 

(f)            Landlord hereby consents to Tenant’s sublease of the
Premises (or the sub-sublease or assignment of any sublease by any Subtenant)
to one or more third parties who intend to use the Premises (or a portion
thereof) for laboratory space in connection with medical research,
biomanufacturing, biotech-related research, or office space in connection with
the foregoing.  In addition, Landlord
hereby consents to the sublease between Tenant and Osiris Therapeutics,
Inc.  As to subleases (or sub-subleases
or assignments of subleases by any Subtenant) to third parties not in the
medical research, biotech-related research, biomanufacturing or office usage
industry, Tenant and Subtenant must first obtain in each and every instance the
prior written consent of Landlord for such
sublease/assignment/sub-sublease.  As to
any and all subleases/assignments/sub-subleases entered into by Tenant or
Subtenant (as the case may be) as to all or any portion of the leased Premises,
Tenant and Subtenant shall provide in any indemnification, release from
liability, defense and/or hold harmless agreements or provisions given by the
Subtenants (or other occupant of the space) for the benefit of Tenant or
Subtenant (as the case may be), that Landlord, its partners, agents, servants
and employees, also be included as benefited, protected or released parties on
the same basis as Tenant.  In addition,
as to any insurance policies required of any Subtenant (or other occupant of
the space) in any and all subleases, should Tenant require that Subtenant’s
policy to name Tenant as an additional insured, Tenant shall provide in the
sublease that Subtenant’s insurance policy name Landlord as an additional
insured on the same basis as Tenant (and likewise Subtenant shall require
Sub-subtenant or Assignee to so name Landlord).

SECTION 31

CONDEMNATION

 

If the whole of the Premises
shall be taken by a public or quasi-public authority under the power of eminent
domain, condemnation, or expropriation or in the event of a conveyance in lieu
thereof, then this Lease shall terminate as of the date on which possession of
the Premises is required to be surrendered to the condemning authority, and
Tenant shall have no claim against Landlord for the value of the unexpired Term
of this Lease.

If any part of the Premises
shall be so taken or conveyed, and if such partial taking or conveyance shall
render the Premises unsuitable for the business of Tenant or any Subtenant in
the reasonable opinion of Landlord, then the Term of this Lease shall cease and
Terminate as of the date on which possession of the part of the Premises so
taken or conveyed is required to be surrendered to the condemning authority,
and Tenant shall have no claim against Landlord for the value of any unexpired
Term of this Lease.  In the event such
partial taking or conveyance is not extensive enough to render the Premises
unsuitable for the business of Tenant, this Lease shall continue in full force
and effect except that the Annual Rent shall be reduced in the same proportion
that the floor area of the Premises so taken or conveyed bears to such floor
area immediately prior to such taking or conveyance, such reduction commencing
as of the date Tenant is required to surrender possession of such part of the
Premises so taken or conveyed.  Landlord
shall promptly restore the Premises, to the extent of condemnation proceeds
available for such purpose, as nearly as practicable to a condition comparable
to its condition at the time of such condemnation less the part lost in the
taking or conveyance, and thereafter Tenant shall promptly make all necessary
repairs, restoration, and alterations of Tenant’s fixtures, equipment, and
furnishings and shall promptly re-enter the Premises.  For purposes of determining the

 

29

 

amount of funds available
for restoration of the Premises from the condemnation awarded, said amount will
be deemed to be that part of the award which remains after payment of
Landlord’s reasonable expenses incurred in recovering the condemnation award
and any amounts due to Landlord’s Mortgagee, and which represents a portion of
the total sum so available (excluding any award or other compensation for land)
which is equitably allocable to the Premises.

In the event of any
condemnation or taking as hereinbefore provided, whether whole or partial, the
Tenant shall not be entitled to any part of the award granted to Landlord as
damages or otherwise for such condemnation, and Landlord and Landlord’s
Mortgagee are to receive the full amount of such award as their respective
interests may appear.

Although all damages awarded
to Landlord in the event of any condemnation are to belong to the Landlord and
Landlord’s Mortgagee as aforesaid, whether such damages are awarded as full
compensation for diminution in value of the leasehold or the fee of the
Premises, Tenant shall have the right, to the extent that same shall not
diminish the Landlord’s or such Mortgagee’s award to claim, recover from the
condemning authority, but not from Landlord or such Mortgagee, such
compensation as may be separately awarded or recoverable by Tenant under law,
in Tenant’s own right for or on account of, and limited solely to, any cost to
which Tenant might be put in removing Tenant’s furniture, fixtures, leasehold improvements,
and equipment.

SECTION 32

EXECUTION OF ESTOPPEL CERTIFICATE

 

At any time, and from time
to time, upon the written request of either party hereto or any Mortgagee,
Tenant, within twenty (20) days of the date of such written request, agrees to
execute and deliver to such requesting party, without charge and in a form
satisfactory to such requesting party, a written statement:  (a) ratifying this Lease; (b) confirming the
commencement and expiration dates of the Term of this Lease; (c) certifying that
Tenant is in occupancy of the Premises, and that the Lease is in full force and
effect and has not been modified, assigned, subleased, supplemented, or amended
except by such writings as shall be stated; (d) certifying that all conditions
and agreements under this Lease to be satisfied or performed by the other party
have been satisfied and performed except as stated; (e) certifying that the
other party is not in default under the Lease and there are no defenses,
set-offs, recoupments, or counterclaims against the enforcement of this Lease
by the other party, or stating the defaults, defenses, set-offs, recoupments,
and/or counterclaims, claimed by the other party; (f) reciting the amount of
advance Rent, if any, paid by Tenant and the date to which such Rent has been
paid; (g) reciting the amount of security deposited with Landlord, if any; and
(h) containing any other information which Landlord or Tenant or the Mortgagee
shall reasonably require.

SECTION 33

NON-DISTURBANCE, SUBORDINATION AND ATTORNMENT

 

(a)           Tenant agrees: (i) that this Lease is, and all of Tenant’s
rights hereunder are and shall always be, subject and subordinate to any
Mortgage now existing or hereafter given by

 

30

 

Landlord and to all advances made or to be made
thereunder and to the interest thereon, and all renewals, replacements,
modifications, consolidations, or extensions thereof; and (ii) that if any
Landlord’s Mortgagee or if the purchaser at any foreclosure sale or at any sale
under a power of sale or assent to decree contained in attorn to, and recognize
such Mortgagee or purchaser, as the case may be, as Landlord under this Lease
for the balance then remaining of the Term of this Lease, subject to all terms
of this Lease; and (iii) that the aforesaid provisions shall be self-operative,
and no further instrument or document shall be necessary unless required by any
such Mortgagee or purchaser.

(b)           Notwithstanding anything to the contrary set forth above,
any Landlord’s Mortgagee may at any time subordinate its Mortgage to this
Lease, without Tenant’s consent, by execution of a written document
subordinating such Mortgage to this Lease to the extent set forth therein, and
there upon this Lease shall be deemed prior to such Mortgage to the extent set
forth in such written document without regard to their respective dates of
execution, delivery and or recording.  In
that event, to the extent set forth in such written document, such Mortgagee
shall have the same rights with respect to this Lease as though this Lease had
been executed and this Lease or memorandum thereof recorded prior to the
execution, delivery, and recording of the Mortgage.  Should Landlord or any Mortgagee or purchaser
desire confirmation of either such subordination or such attornment, as the
case may be, Tenant upon written request, and from time to time, will execute
and deliver without charge and in form satisfactory, to Landlord, the
Mortgagee, or the purchaser all instruments and/or documents that may be
requested to acknowledge such subordination and/or agreement to attorn, in
recordable form, within fifteen (15) days of such request.

(c)           Tenant agrees that no Landlord Mortgagee, Landlord
Mortgagee-in-possession, or purchaser shall be bound by any payment of Rent made
more than thirty (30) days prior to its due date, and any such sum shall be due
and payable on the due date.  Tenant
further agrees that no Landlord’s Mortgagee, Landlord’s
Mortgagee-in-possession, or purchaser shall be responsible for the Security Deposit
or other similar funds in respect to this Lease not actually paid to it.

(d)           In the event that Tenant fails to execute and deliver the
instruments and documents as provided for in this Section within the time
period set forth herein, Tenant does hereby make, constitute, and appoint
Landlord or such Mortgagee or purchaser, as the case may be, as Tenant’s
attorney-in-fact and in its name, place and stead to do so.  The aforesaid power of attorney is given as
security coupled with an interest and is irrevocable.

(e)           So long as no default as set forth in Section 27 has
occurred which has continued to exist for such period of time (after notice and
cure period, required by this Lease) as would entitle Landlord to terminate
this Lease or would cause, without any further action of Landlord, the
termination of this Lease, this Lease shall not be terminated, nor shall
Tenant’s use, possession or enjoyment of the Premises be interfered with, nor
shall the leasehold estate granted by this Lease be affected in any other
manner, in any foreclosure or any action or proceeding instituted under or in
connection with the Mortgage (or any other mortgage, deed of trust, security
agreement or lien instrument of any type or nature) or, in case Mortgagee (or
any secured party or beneficiary under any of the foregoing) takes possession
of the Premises

 

31

 

pursuant to any provision of the Mortgage.  Upon the request of Tenant, Landlord agrees
to use its reasonable efforts to have any Mortgagee execute a document to this
effect.

(f)            If Landlord transfers title to the Property, Tenant shall
attorn to such transferee, provided that the transferee fully assumes
Landlord’s covenants and obligations under this Lease and recognizes Tenant’s
right under this Lease, and Tenant shall continue to perform Tenant’s
obligations under this Lease.

SECTION 34

SIGNS AND ADVERTISING

 

Tenant and/or any Subtenant
shall not inscribe, paint, affix, or display any sign, notice, or advertisement
on any of the windows, doors, walls, or any part of the outside of the Premises
and the remainder of the Property without the prior written consent of
Landlord.  Any installation of the same
shall be under the supervision of Landlord. 
Tenant shall have full responsibility to maintain such signs and also to
remove such signs at the termination of this Lease and to restore the Building
or the Premises to its state before the placing of said signs, reasonable wear
and tear excepted.

SECTION 35

RULES AND REGULATIONS

 

Landlord reserves the right
from time to time to adopt and promulgate reasonable rules and regulations
applicable to the Building and the Property, and to supplement such rules and
regulations, and Tenant agrees to be bound thereby provided the same are not inconsistent
with this Lease or any applicable law or regulation.  Notice of such rules and regulations and of
any amendment and supplements thereto shall be given to Tenant, and Tenant
agrees thereupon to comply with and observe all such rules and regulations.  A breach of any of such rules and
regulations, whether now existing or hereinafter adopted, shall be deemed a
breach of this Lease.  Landlord shall not
adopt or promulgate any rules or regulations which materially interfere with
Tenant’s or any Subtenant’s use of the Premises.

SECTION 36

PARKING SPACES

 

Landlord shall make
available for Tenant’s and any Subtenant’s non-exclusive use the Parking Spaces
free of charge.

At Landlord’s written
request, Tenant shall provide Landlord with the license plate number, year,
make and model of the automobiles entitled to use the Parking Spaces, and if
requested by Landlord, such automobiles shall be identified by stickers
provided by Landlord, and only such designated automobiles shall be entitled to
use the Parking Spaces.

 

32

 

Except for its obligations
to maintain the Common Areas as stated in Section 11, supra, Landlord
assumes no responsibility or liability to Tenant or any Subtenant, their
agents, servants, invitees, or employees of any kind whatsoever from any cause
with respect to the use of the Parking Spaces or other parking spaces,
adjoining streets, sidewalks, driveways, property, and passage ways, or the use
thereof of anyone entitled to use the area.

SECTION 37

PURCHASE OPTION/RIGHT OF FIRST REFUSAL

 

(a)           At any time prior to the fourth (4th) anniversary date of
the Rental Commencement Date, Tenant and/or any Subtenant shall have the option
to purchase the Building and Property from Landlord upon written notice to
Landlord subject to the following terms and conditions:

(i)            The purchase price for the Building and Property shall be
as follows:

(a)           If the option is exercised on or before June 30, 1996, the
sum of Six Million and Sixty-Five Thousand Dollars ($6,065,000.00);

(b)           If the option is exercised after June 30, 1996, but on or
before June 30, 1997, the sum of Six Million Three Hundred Sixty-Eight Thousand
Two Hundred and Fifty Dollars ($6,368,250.00);

(c)           If the option is exercised after June 30, 1997, but on or
before June 30, 1998, the sum of Six Million Six Hundred Eighty-Six Thousand
Six Hundred and Sixty-Three Dollars ($6,686,663.00).

(ii)           Settlement for the purchase and sale of the Premises shall
be held in a place designated by Tenant and/or Subtenant in Baltimore City and
at a time designated by Tenant and/or Subtenant, provided that settlement shall
be held within ninety (90) days after exercise of the option by Tenant and/or
Subtenant.

(iii)          The Rent shall cease and shall be adjusted as of the date
of settlement.  Water rent, real property
taxes, and all other public or governmental charges or assessments shall be
adjusted as of the date of settlement.

(iv)          At settlement, Landlord shall execute and deliver to Tenant
or Subtenant, at Tenant’s or Subtenant’s expense, a fee simple deed containing
covenants of special warranty and further assurances, which shall convey good
and merchantable title to the Building and Property, subject only to (a) all
building, zoning, and applicable ordinances and regulations of governmental
authorities having jurisdiction over the Property; (b) all easements,
restrictions, rights, agreements, covenants, encumbrances and conditions of
record and/or shown on any recorded Plat for the Property; (c) all liens for
real property taxes and assessments due and payable following the date of
Closing; (d) all existing utility and drainage easements and rights-of-way; (e)
all facts and matters which an accurate survey and/or inspection of the
Property would show; and (f) all existing leases (other than the present
Lease).

 

33

 

(v)           Recordation and transfer taxes shall be paid by the Tenant
and/or Subtenant (purchaser).

(vi)          Recording fees shall be paid by the Tenant and/or Subtenant
(purchaser).

The purchase option set
forth above is subject to termination by Landlord upon thirty (30) days of
Landlord giving an Offer Notice (as hereinafter defined) in the event Landlord
makes or receives an Acceptable Offer (as hereinafter defined) prior to Tenant
and/or Subtenant exercising the above-noted purchase option.  Nevertheless, during such thirty (30) day
period Tenant and/or Subtenant shall have the right of first refusal to
purchase the Building and Property, or any portion thereof, as hereinafter more
fully set forth:

(b)           In the event that (i) Landlord should decide to sell,
convey, or transfer the Building and Property, or any portion thereof, and (ii)
Landlord should make or receive an offer therefor that Landlord deems
satisfactory to it and is satisfactory to a third party (hereinafter referred
to as an “Acceptable Offer”), then Landlord shall send to Tenant and any
Subtenant a duplicate copy of the Acceptable Offer together with a notice
stating that Landlord intends to accept the same (hereinafter referred to as
the “Offer Notice”).  Within thirty (30)
business days of Landlord’s giving Tenant and any Subtenant an Offer Notice,
Tenant and any Subtenant shall have the right to advise Landlord in writing
that Tenant and/or any Subtenant desires to purchase the Building and Property,
or portion thereof, in accordance with the Acceptable Offer.

(c)           If Tenant or any Subtenant advises Landlord in a timely
fashion that it desires to purchase the Building and Property, or portion
thereof, in accordance with the Acceptable Offer, Landlord and Tenant or
Subtenant shall promptly enter into a contract of sale for the Building and
Property, or portion thereof, in accordance with the provisions of the
Acceptable Offer; provided that the contract of sale shall provide that the
Lease shall terminate as of the day of settlement of the contract of sale, with
all Rent payable under this Lease to be adjusted as of such date unless Tenant
or Subtenant elects that the sale shall be subject to the terms, covenants, and
conditions of this Lease (other than the provisions of this Section 37).

(d)           If Tenant or Subtenant advises Landlord in a timely
fashion that it does not desire to purchase the Building and Property, or
portion thereof, in accordance with the Acceptable Offer, or if Tenant or
Subtenant does not advise Landlord within thirty (30) business days of
Landlord’s giving Tenant an Offer Notice that it desires to purchase the
Building and Property, or portion thereof, in accordance with the Acceptable
Offer, then Landlord shall be free to enter into a contract of sale with a
third party on the terms contained in the Acceptable Offer or on terms more
favorable to Landlord; provided that settlement thereunder occurs within six
(6) months of Landlord’s sending Tenant and Subtenant notice of the Acceptable
Offer.

(e)           In the event that Landlord does not consummate the sale of
the Building and Property, or portion thereof, in accordance with the
Acceptable Offer (or on terms more favorable to Landlord) within six (6) months
of Landlord’s giving Tenant and Subtenant notice of the Acceptable Offer,
Landlord may not sell, convey, or transfer the Building and Property, or any
portion thereof, thereafter without re-offering the same to Tenant and
Subtenant in accordance with the provisions of this Section 37.

 

34

 

(f)            In the event that Tenant and/or Subtenant does not
exercise its right to purchase the Building and Property, or portion thereof,
in accordance with, the provisions of this Section 37 and Landlord sells,
conveys, or transfers the Building and Property, or any portion thereof, to
another person or entity, such sale shall be subject to the terms, covenants,
and conditions of this Lease; provided, however, that the provisions of this
Section 37 shall terminate upon any such sale, transfer, or conveyance.

(g)           Tenant’s and/or Subtenant’s rights contained in this
Section 37 are not assignable to any other person or entity without the prior
written consent of Landlord, which consent can be withheld in the sole and
absolute discretion of Landlord.

SECTION 38

EXPANSION

 

(a)           Provided that this Lease is then in full force and effect,
on or before June 30, 1998, Tenant shall have the option to lease the Option
Space for the Option Space Rent on and subject to the terms and conditions
hereinafter set forth.  Should Tenant
desire to lease the Option Space, it must so advise Landlord in writing on or
before June 30, 1998 and the lease of the Option Space shall commence sixty
(60) days after the date such notice is given to Landlord (or sooner by
agreement of the parties).  In the event
that Tenant exercises its option to lease the Option Space, as of the day on
which the lease of the Option Space commences, the Option Space shall be included
within the Premises, the term “Rent” shall include the Option Space Rent, and
all of the other terms and conditions of this Lease shall be applicable to the
Option Space.  In the event that Tenant
does not exercise this expansion option in the time set forth above, Tenant
shall have no further rights of expansion to the Option Space.

(b)           Tenant shall have a right of first offer with respect to
the leasing of any space which Landlord elects to market for occupancy within
the Building not then leased by Tenant under the terms of this Lease
(excluding, however, that portion of the second (2nd) floor of the Building,
consisting of approximately forty thousand (40,000) square feet, located at the
easterly side of the Building and occupied by Belfort Instruments Company as of
the Commencement Date, which space may be surrendered to Landlord in the near
future, which, Tenant acknowledges, Landlord may market for occupancy after any
such surrender, free of any preemptive rights or options in favor of Tenant).  Such right of first offer would be superior
to any rights or options which may, at any time after the date hereof, be
granted to any party by or on behalf of Landlord, but would be subject and
subordinated to any renewal or lease extension rights which may presently be
available to any other tenants under current leases (or any lease entered into
with respect to the space to be surrendered by Belfort Instruments Company as
described above) affecting any of the space in the Building otherwise subject
to the right of first offer described in this paragraph.  In the event that Tenant should elect to
exercise such right, the space incorporated into the Premises in consequence of
such exercise would be governed by all of the terms and conditions of this
Lease; provided, however, that the base rent with regard to such space would be
those for which such space was marketed by Landlord.  In the event that Tenant waives or declines
to exercise its right of first offer as to any space in the Building to be
marketed by Landlord for occupancy, Landlord may proceed to offer the same for
occupancy by others, provided that Tenant would be entitled to revive its
preemptive right to in the event that

 

35

 

the terms of any lease or occupancy agreement
subsequently offered to a third party in respect of a proposed lease or other
offer that Tenant had theretofore waived or declined, should be materially more
favorable to the tenant thereunder than those which had been offered to, and declined
by, Tenant as provided above.  Tenant’s
right to revive its preemptive right as aforesaid shall not apply to proposed
leases or occupancy agreements covering space as to which Tenant had
theretofore declined to exercise such right which provided for short-term or
interim occupancy rights (which for the purposes of this sentence, shall be
deemed to include only leases or other occupancy agreements which, giving
effect to any renewal or extension terms available to the proposed tenant or
occupant in connection therewith, do not provide for a term in excess of five
(5) years).  As to any space leased by
Landlord to a third party on a long-term lease (greater than five (5) years)
which Tenant does not exercise its right of first offer, Tenant’s rights shall
terminate as to said space and Tenant shall have no future rights of first
offer as to the space.

SECTION 39

ENVIRONMENTAL INDEMNIFICATION/REPRESENTATION

 

Tenant shall comply with all
Environmental Laws in its use of the Premises and Property, including, without
limitation, the obligation to obtain and maintain in effect and comply with all
requisite permits and reporting and notification requirements.  Tenant hereby agrees that (a) no activity
will be conducted on the Property that will produce or cause the release of any
Hazardous Materials; (b) the Property will not be used in any manner for the
storage of any Hazardous Materials; and (c) except as set forth below, Tenant
will not permit any Hazardous Materials to be brought onto the Property, and if
so brought or found located thereon, the same shall be immediately removed, at
Tenant’s sole cost and expense; all Premises which are subject to any
Environmental Requirement; (ii) there are no underground storage tanks
(“Tanks”) at the Premises, the Building or the Property as such Tanks are
defined pursuant to the Federal Underground Storage Tank Law, as amended
(Subtitle I of the Resource Conservation and Recovery Act, P.L. 98-616, 42
U.S.C. Chapter 6991 et  seq.) and the regulations promulgated
thereunder and any successor or similar statutes, including the Underground
Storage Tank Division of the Maryland Department of the Environment; (iii)
Landlord has no knowledge of any pre-existing Tanks, if any, or that any
pre-existing Tanks have been removed; (iv) the Premises, the Property and the
Building are not in violation of or subject to any existing, pending, or
threatened investigation or inquiry by any governmental authority pertaining to
any applicable federal, state or local environmental law or Environmental
Requirement; (v) there are no friable asbestos or any material containing
asbestos deemed hazardous by federal and/or state regulations, which have been
installed in the Premises, the Property or the Building; and (vi) there
are no hazardous substances, hazardous wastes, or other materials that may pose
a threat to human health or the environment which have been disposed of or
otherwise released or discharged on or to the Premises, the Building or the
Property.

SECTION 40

ACCORD AND SATISFACTION

 

No payment by Tenant or
receipt by Landlord of a lesser amount than any payment of Annual Rent or
Additional Rent herein stipulated shall be deemed to be other than on account
of

 

36

 

the earliest stipulated Annual
Rent or Additional Rent due and payable, nor shall any endorsement or statement
on any check or any letter accompanying any check or payment as Rent be deemed
an accord and satisfaction.  Landlord may
accept such check or payment without prejudice to Landlord’s right to recover
the balance of such Rent or pursue any other remedy provided in this Lease, at
law or in equity.

SECTION 41

NO PARTNERSHIP

 

Landlord does not, in any
way or for any purpose, become a partner of Tenant in the  conduct of its Business, or otherwise, or
joint venturer or a member of a joint enterprise with Tenant.  This Lease establishes a relationship solely
of landlord and tenant.

SECTION 42

HOLDING OVER

 

Should Tenant hold over in
possession of the Premises after the expiration of this Lease, Tenant shall be
deemed to be occupying the Premises from month to month, subject to such
occupancy’s being terminated by either party upon at least thirty (30) day’s
written notice, at double the Annual Rent and Additional Rent in effect at the
expiration of this Lease, all calculated from time to time as though this Lease
had continued, and otherwise subject to all of the other terms, covenants, and
conditions of this Lease insofar as the same may be applicable to a
month-to-month tenancy.  In addition,
Tenant shall pay as Additional Rent to Landlord for all damages sustained by
reason of Tenant’s retention of possession. 
Nothing in this Section 42 excludes Landlord’s right of re-entry or any
other right hereunder.

SECTION 43

RECORDATION

 

Either party may record this
Lease without the consent (written or otherwise) of the other party.  Upon the request of either party, the parties
agree to execute a short form of this Lease for recording purposes.  If this Lease or a short form thereof is presented
to a clerk for record, the costs and taxes imposed upon recordation shall be
borne by the party presenting this Lease, or on whose behalf this Lease is
presented.  If such a short form of this
Lease is recorded, upon the termination of this Lease, Tenant shall upon
written request by Landlord, execute, acknowledge, and deliver to Landlord an
instrument in writing releasing and quitclaiming to Landlord all right, title
and interest of Tenant in and to the Premises arising from this Lease or
otherwise upon the termination hereof, all without cost or expense to Landlord.

 

37

 

SECTION 44

WAIVERS/BROKERAGE COMMISSION

 

The failure of Landlord to
insist for a period of time on strict performance of any one or more of the
terms, covenants, or conditions hereof shall not be deemed a wavier of the
rights or remedies that Landlord may have, and shall not be deemed a waiver of
any subsequent breach or default in any term, covenant, or condition hereof.  No waiver by Landlord of any provision hereof
shall be deemed to have been made unless expressed in writing and signed by
Landlord.

The parties hereto agree
that no person or entity is entitled to a brokerage commission, finder’s fee or
other similar form of compensation in connection with this Lease.  Each party agrees to indemnify, defend and
hold the other harmless (including, without limitation reasonable attorneys’
fees) for any such claim made because of its action.

SECTION 45

REMEDIES FOR LANDLORD

 

Any and all remedies
available to Landlord for the enforcement of the provisions of this Lease are
cumulative and not exclusive, and Landlord shall be entitled to pursue either
the rights enumerated in this Lease or remedies authorized by law, or both.  Tenant shall be liable for any costs or
expenses incurred by Landlord in enforcing any terms of this Lease, or in
pursuing legal action for the enforcement of Landlord’s rights, including court
costs and reasonable attorneys’ fees, in amounts to be affixed by court.

SECTION 46

TABLE OF CONTENTS; CAPTIONS

 

The Table of Contents and
captions appearing in this Lease are inserted only as a matter of convenience
and do not define, limit, construe, or describe the scope or intent of the
Sections of this Lease nor in any way affect this Lease.

SECTION 47

NOTICES

 

Any and all notices
permitted or required to be given hereunder shall be in writing and shall be
deemed duly given three (3) days after such notice shall be deposited into the
United States mail, if delivery is by postage paid, registered or certified,
return receipted mail.

Any notice in any other
manner shall be in writing and shall be deemed given when actually
received.  Such notice shall be sent to
the respective party at the address given in this Lease or to any other address
that the respective party may designate by notice delivered pursuant
hereto.  Nothing herein contained shall
be construed to preclude personal service of any notice in the manner
prescribed for personal service of a summons or other legal process.

 

38

 

Landlord agrees that
whenever notice is required to be provided to Tenant under Section 27 or
Section 28, notice shall also be given by Landlord to:

(a)           MIDFA, whose address is 217 E. Redwood Street, 22nd Floor,
Baltimore, Maryland 21202, Attn.: Executive Director.

(b)           Baltimore Development Corporation, whose address is 36
South Charles Street, 16th Floor, Baltimore, Maryland 21202, Attn: President.

(c)           Whiting-Turner Contracting Company, whose address is 300
E. Joppa Road, Towson, Maryland 21204, Attn: Williard Hackerman, President,
with an additional copy to Edward L. Wender, Esquire, Venable, Baetjer and
Howard, 2 Hopkins Plaza, 1800 Mercantile Bank and Trust Building, Baltimore,
Maryland 21201.

SECTION 48

APPLICABLE LAW

 

This Agreement shall be
governed by and construed in accordance with the laws of the State of Maryland,
and the parties hereto agree to submit to the jurisdiction of the Courts of the
State of Maryland for the resolution of any disputes arising hereunder.

SECTION 49

SUCCESSORS AND INCLUDED PERSONS

 

All rights, obligations, and
liabilities herein given to, or imposed upon, the respective parties hereto
shall extend to and bind the several respective personal representatives,
successors, and assigns of the said parties; and if Tenant shall consist of
more than one person or entity, they shall all be bound jointly and severally
by the terms, covenants, and conditions herein. 
No rights, however, shall inure to the benefit of any personal representative,
successor, or assign of Tenant unless the Assignment to such party has been
approved by Landlord in writing as provided in Section 30.

In any provision of this
Lease involving Landlord’s being defended, released from liability,
indemnified, held harmless, or not being deemed to be liable for any action,
omission, or circumstance, the term “Landlord” shall include Landlord and
Landlord’s contractors and subcontractors and its or their present and future
controlling persons, partners, directors, officers, employees, and agents.

In any provision of this
Lease involving Tenant’s being defended, released from liability, indemnified,
held harmless, or not being deemed to be liable for any action, omission, or
circumstance, the term “Tenant” shall include Tenant and Tenant’s contractors
and subcontractors and its or their present and future controlling persons,
partners, directors, officers, employees, and agents.

 

39

 

SECTION 50

WAIVER OF TRIAL BY JURY

 

Landlord and Tenant hereby
waive trial by jury in any action or proceeding or counterclaim brought by
either party hereto against the other party on any and every matter, directly
or indirectly, arising out of or with respect to this Lease.

SECTION 51

RIGHTS OF AND CLAIMS AGAINST LANDLORD

 

(a)           Tenant waives all rights to bring any non-mandatory
counterclaim in any action brought by Landlord for the non-payment of Rent or
any other summary proceeding thereon.

(b)           Except the extent specifically provided herein to the
contrary, whenever Landlord’s consent or approval is required to be given under
any provisions of this Lease, such consent or approval may be withheld in the
sole discretion of Landlord, and Landlord shall not be required to respond to
any request for consent or approval within a time period determined by
Tenant.  Tenant further waives the right
to any claim against Landlord for money damages by reason of any refusal, or
delaying by Landlord of any consent, approval, or statement of satisfaction, and
in such event, Tenant’s only remedies therefor shall be an action for specific
performance, injunction, or declaratory judgment to enforce any such
requirement.

(c)           All obligations of Landlord hereunder shall be construed
as covenants, not conditions.

(d)           Landlord may transfer all or part of its interest in the
Premises and this Lease without the consent of Tenant, at any time and from
time to time.

(e)           Except as specifically set forth herein, Landlord may
lease any portion of the Building to others on such terms and for such purposes
as Landlord considers appropriate and may terminate or modify leases with
others for any portion of the Building without obligation to Tenant and without
relieving Tenant of any obligation under this Lease.

(f)            If Tenant obtains a money judgment against Landlord or
its successors or assigns under any provisions of, or with respect to this
Lease or on account of any matter, condition, or circumstance arising out of
the relationship of the parties under this Lease, Tenant’s occupancy of the
Premises or Landlord’s ownership of the Premises, Tenant shall be entitled to
have execution upon such judgment only upon Landlord’s estate in the Property
and rents and other revenue generated thereby and not out of any other assets
of Landlord, any of its partners, or its successors or assigns; and Landlord
shall be entitled to have any such judgment so qualified as to constitute a
lien only on Landlord’s estate, subject to any liens antedating such judgment.

(g)           At any time when there is an outstanding Mortgage covering
Landlord’s interest in the Premises, Tenant may not exercise any remedies for
default by Landlord hereunder unless

 

40

 

and until the Mortgagee shall have received written
notice of such default and a reasonable time to cure such default after
Landlord’s period to cure shall have elapsed.

SECTION 52

CALCULATION OF TIME

 

In computing any period of
time prescribed or allowed by any provision of this Lease, the day of the act,
event or default from which the designated period to time begins to run shall
not be included.  The last day of the
period so computed shall be included, unless it is a Saturday, Sunday or a
legal holiday, in which event the period runs until the end of the next day
which is not a Saturday, Sunday or legal holiday.  Unless otherwise provided herein, all notice
and other periods expire as of 5:00 p.m. (local time in Maryland) on the last
day of the notice or other period.

SECTION 53

SEVERABILITY; REDUCTION OF CHARGES

 

If the application of any
term or provision of this Lease, whether in whole or in part, be held invalid
or unenforceable in general or in any instance, the remainder of this Lease
shall not be affected by such holding and shall remain fully valid and
enforceable.

In the event that any late
charge, interest rate, or other payment provided herein exceeds the maximum
applicable charge legally allowed, such late charge, interest rate, or other
payment shall be reduced to the maximum legal charge, rate, or amount.

SECTION 54

COUNTERPARTS

 

This Lease may be executed
in multiple counterparts or in duplicate, and when so executed by all parties
shall constitute one agreement.

SECTION 55

TOTAL AGREEMENT

 

This Lease contains the
entire agreement between the parties and cannot be changed or modified except
by a written instrument subsequently executed by the parties hereto.

SECTION 56

NO MERGER

 

There shall be no merger of
this Lease or of the leasehold estate hereby created with the fee estate in the
Premises or any part thereof by reason of the fact that the same person, firm,

 

41

 

corporation or other legal
entity may acquire or hold, directly or indirectly, this Lease or the leasehold
estate and the fee estate in the Premises or any interest in such fee estate,
without the prior written consent of Landlord’s Mortgagee.

SECTION 57

TIME OF THE ESSENCE/GOOD FAITH AND FAIR DEALING

 

Time is of the essence in
all provisions of this Lease.  Landlord
and Tenant acknowledge their dudes to exercise their rights and remedies, and
perform their duties in good faith and deal fairly with each other.

SECTION 58

COMMERCIAL PURPOSE

 

The parties stipulate that
the Premises is being leased exclusively for business, commercial, manufacturing,
mercantile, or industrial purposes within the meaning of Section 8-110(a)
of the Real Property Article of the Annotated Code of Maryland, and that the
provisions of Section 8-110(b) of such Article (or any future statute)
pertaining to the redemption of reversionary interests under leases shall be
inapplicable to this Lease; provided, however, this Section 58 is not intended
nor shall it be construed to impair or otherwise effect the purchase option set
forth in Section 37 of this Lease.

SECTION 59

ABATEMENT OF RENT RELATING TO UNSUBLEASED SPACE

 

Notwithstanding anything
above to the contrary, during the Original Term only, the parties hereby agree
that in the event all or any portion of the Premises becomes vacant, i.e. not
under sublease, (but only after the expiration or termination of Tenant’s
initial sublease with Osiris Therapeutics, Inc.) the following rental
abatements shall apply:

(a)           That Landlord will abate proportionately one (1) month’s
rental payment of the Annual Rent due to Landlord for any portion of the leased
Premises that becomes vacant.  By way of
example, should fifty percent (50%) of the leased Premises become vacant,
Landlord shall abate fifty percent (50%) of one (1) month’s rental due from
Tenant.

(b)           After such space has remained vacant for longer than
thirty (30) days, Landlord shall partially abate the Monthly Installment of
Annual Rent payable by Tenant on the vacant space only to an amount
equal to sixty percent (60%) of the regular Monthly Installment of Annual Rent
due to Landlord had the space not been vacant. 
By way of example, should fifty percent (50%) of the leased Premises
remain vacant for longer than thirty (30) days, Landlord shall partially abate
Tenant’s total Monthly Rental by twenty percent (20%).  By way of further example, should one hundred
percent (100%) of the leased Premises remain vacant for longer than thirty (30)
days, Landlord shall partially abate Tenant’s total Monthly Rental by forty
percent (40%).  The said proportionate
partial abatement shall commence with the next Monthly

 

42

 

Installment of Annual Rent and continue on a
month-to-month basis until the entire leased premises become fully occupied by
one or more Subtenants of Tenant.

SECTION 60

REPAYMENT OF “ABATED” RENT

 

This Lease provides for a
period of “free” rent or other rent concession, such postponed rent or “free”
rent is called the “Abated Rent”.  Tenant
shall be credited with having paid all of the Abated Rent upon the expiration
of the Original Lease Term only if Tenant has fully, faithfully, and punctually
performed all of Tenant’s material obligations hereunder, including the payment
of all Rent (other than Abated Rent) and all other monetary obligations and the
surrender of the Premises in the physical condition required by this
Lease.  Tenant acknowledges that its
right to receive credit for the Abated Rent is absolutely conditioned upon
Tenant’s full, faithful and punctual performance of its material obligations
under this Lease.  If Tenant defaults and
does not cure within any applicable grace period, the Abated Rent shall
immediately become due and payable in full and this Lease shall be enforced as
if there were no such rent abatement or other rent concession.  In such case, Abated Rent shall be calculated
based on the full rent payable under this Lease.

SECTION 61

LIMITATION OF TENANT LIABILITY

 

Notwithstanding anything
above or in this Lease to the contrary, and/or provided that Tenant and
Subtenants comply with and maintain all obligations and requirements as set
forth in Sections 21, 22 and 23, supra, Landlord agrees that as to any
monetary liability of Tenant due to or arising from any breach or default of
this Lease, and not covered by any applicable policy of insurance required
under Sections 21 and 22, supra, Tenant’s monetary liability under this
Lease shall be limited to the maximum amount of Five Hundred Thousand Dollars
($500,000.00).  In the event that
Landlord’s monetary claim against Tenant exceeds the amount of Five Hundred
Thousand Dollars ($500,000.00) and that because of the limitation set forth
herein, Landlord receives less than the full amount of its claim, Tenant does,
to the extent permitted by applicable law, hereby grant and convey to Landlord
(and further agrees to execute such other and further documents as are
necessary in Landlord’s reasonable opinion) any rights and claims Tenant may
have against any Subtenant and/or third party which created or caused
Landlord’s claim against Tenant to the effect that Landlord shall have
subrogation rights to any such claim of Tenant in the amount that Landlord’s
claim as aforesaid is reduced by the said limitation granted to Tenant.  By way of example, should Landlord have a
claim against Tenant in the amount of Six Hundred Thousand Dollars
($600,000.00) caused by a breach of this Lease by Subtenant, and Tenant’s
liability is limited to Five Hundred Thousand Dollars ($500,000.00), Landlord
would have subrogation rights from Tenant to pursue any claim Tenant may have
against Subtenant in the amount of One Hundred Thousand Dollars ($100,000.00).

 

43

 

SECTION 62

VACATING OF OFFICE SPACE BY THE BELT’S CORPORATION

 

Notwithstanding any other
provision of this Lease to the contrary, Tenant acknowledges that possession of
a portion of the Premises, consisting of approximately 7500 square feet of
office space currently occupied by The Belt’s Corporation (“Belt’s”), a tenant
of Landlord, will not be delivered to Tenant until the earlier of (a) ninety
days after the Lease Commencement Date, or (b) the date on which substitute
office space for Belt’s (935 S. Wolfe Street and 947 Fell Street) has been
completed and is ready for occupancy by issuance of the required use and
occupancy permit by Baltimore City. 
Neither Belt’s nor Landlord shall be responsible to Tenant or any
Subtenant for the payment of rent in respect of the space so occupied (which is
referred to herein as the “Belt’s Space”) during the period described in the
preceding sentence.

Landlord agrees that
regardless of Belt’s continuing occupancy of the Belt’s Space, Landlord shall,
and shall cause Belt’s to, cooperate in good faith with Tenant, Osiris, and all
contractors engaged in the performance of Tenant’s TI Work and the Osiris Work
in order to minimize the effect of Belt’s continuing occupancy of the Belt’s
Space on the schedule for the completion of such work.  Landlord shall, and shall cause Belt’s to,
permit Tenant and Osiris and their contractors and representatives to enter the
Belt’s Space and to perform any and all construction work therein which may be
required for the timely completion of the Tenant’s TI Work and the Osiris Work,
provided that:  (i) such construction
work in the Belt’s Space does not begin prior to forty-five (45) days after the
Lease Commencement Date; (ii) any such construction work occurs only on the
first floor of the Belt’s Space; (iii) Tenant and Osiris shall provide Landlord
with reasonable prior notice of the timing and nature of the work proposed to
be performed within the Belt’s Space; (iv) any and all work performed within
the Belt’s Space shall be performed in such a way as to permit Belt’s to
continue to occupy the Belt’s Space for the conduct of its business without
unreasonable interference or disruption; and (v) all work to be performed
within the Belt’s Space shall be performed with maximum attention to the safety
and security of Belt’s employees, personnel and equipment.  Tenant and Osiris shall consult with Landlord
with respect to the scope and nature of any and all work to be performed within
the Belt’s Space prior to the performance thereof.  Landlord acknowledges and has advised Belt’s
that the nature of the work to be performed within the Belt’s Space may require
some temporary interruption of Belt’s normal office routines, and may require
the temporary movement of personnel and equipment within the Belt’s Space.

 

44

 

IN WITNESS WHEREOF, Landlord
and Tenant have caused this Lease to be executed, under seal, as of the date
and year first above written.

	
  ATTEST/WITNESS:

  	
   

  	
  LANDLORD:

  
	
   

  	
   

  	
  SAGA LIMITED PARTNERSHIP

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  /s/ Illegible

  	
   

  	
  By:

  	
  /s/ S. A. Brown, III

  	
  (SEAL)

  
	
   

  	
   

  	
  S. A. Brown, III, General
  Partner

  
	
   

  	
   

  	
   

  
	
  ATTEST/WITNESS:

  	
   

  	
  TENANT:

  
	
   

  	
   

  	
  MARYLAND ECONOMIC
  DEVELOPMENT CORPORATION

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  /s/ Illegible

  	
   

  	
  By:

  	
  /s/ Hans F. Mayer

  	
  (SEAL)

  
	
   

  	
   

  	
  Hans F. Mayer, Executive
  Director

  

 

45

 

EXHIBIT “E”

 

Plans and Specifications Prepared by
Gaudreau, Inc.,

Kibart, Inc. and Faissant Associates, Inc.

Dated September 16, 1994

 

46

	
   

  	
  April 6, 1998

  
	
   

  	
   

  
	
   

  	
   

  
	
  Hans F. Mayer, Esquire

  	
  Mr. James S. Burns

  
	
  Executive Director

  	
  Chairman and CEO

  
	
  MEDCO

  	
  Osiris Therapeutics, Inc.

  
	
  36 S. Charles Street,
  Suite 2410

  	
  2001 Aliceanna Street

  
	
  Baltimore, MD 21201

  	
  Baltimore, MD 21231-3043

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Re:

  	
  Lease Agreement between
  SAGA Limited

  
	
   

  	
  Partnership and MEDCO,
  dated January 18,

  
	
   

  	
  1995 (the “Lease
  Agreement) and

  
	
   

  	
  Sublease Agreement between
  MEDCO

  
	
   

  	
  and Osiris Therapeutics,
  Inc., with an

  
	
   

  	
  effective date of January
  18, 1995

  
	
   

  	
  (the “Sublease Agreement”)

  
			

 

Gentlemen:

This letter will serve as an
amendment to the above-referenced Lease and Sublease Agreements between the
respective parties.  In consideration of
the mutual promises and covenants contained herein and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
the parties hereto covenant and agree to the following:

1.             Any and all options and/or first offer rights granted to
Tenant and Sub-Tenant concerning the Option Space, as defined in the Lease
Agreement, set forth in Section 38 of the Lease Agreement and Section 23 of the
Sublease Agreement, are hereby terminated and extinguished effective
immediately.  Accordingly, Tenant and
Sub-Tenant shall have no option and/or first offer rights whatsoever to the
Option Space.

2.             SAGA Limited Partnership agrees to lease to Maryland
Economic Development Corporation (“MEDCO”), and MEDCO agrees to sublease to
Osiris Therapeutics, Inc. (“Osiris”) on a month-to-month basis only, beginning
April 1, 1998, certain space on the first floor of the building consisting of
the agreed-upon square footage of 9,184 sq. ft., as shown on Exhibit A,
attached hereto and made a part hereof (the “Temporary Space”).  The Temporary Space shall be subject to all
terms and provisions of the Lease Agreement and Sublease Agreement (including
Section 3 Rent), except, however, as to the Term, which shall be solely on a
month-to-month basis as set forth above. 
Any party shall have the right to terminate such month-to-month lease
with thirty (30) days prior written notice to the other parties.  The Lease Term of the Original Space (as
defined in the Lease Agreement), as well as the Lease Term of the Option Space
which Tenant and Sub-Tenant have previously exercised their right of first
offer in March, 1997 (consisting of the entire second floor, and a portion of
the first floor of the building containing

 

 

80,097 square feet), shall not be affected by the
terms of this amendment, and shall remain as originally stated in the earlier
Lease and Sublease Agreements.

Please re-confirm your
agreement to this amendment by signing where indicated below and returning an
original, executed copy to the undersigned. 
This letter of amendment may be executed in multiple counterparts or in
duplicate, and when so executed by all parties, shall constitute one
agreement.  Except for the terms of this
amendment set forth above, in all other respects, all other terms and
provisions of the agreements earlier agreed to by the parties shall remain in
full force and effect and are hereby ratified and re-affirmed.

	
   

  	
  Very
  truly yours,

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  SAGA
  LIMITED PARTNERSHIP

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:
  

  	
  /s/
  S.A. Brown, III

  
	
   

  	
   

  	
  S.
  A. “Skip” Brown, III

  
	
   

  	
   

  	
  General
  Partner

  

 

	
  AGREED and ACCEPTED

  	
   

  
	
  this18th_ day of April,
  1998

  	
  AGREED and ACCEPTED

  
	
   

  	
  this15th_ day of APRIL,
  1998

  
	
  MARYLAND ECONOMIC

  	
   

  
	
  DEVELOPMENT CORPORATION

  	
  OSIRIS THERAPEUTICS, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By: 

  	
  /s/ Hans F. Mayer

  	
   

  	
   

  
	
   

  	
  Hans F. Mayer

  	
  By: 

  	
  /s/ James S. Burns

  
	
   

  	
  Executive Director

  	
   

  	
  James S. Burns

  
	
   

  	
   

  	
  Chairman and CEO

  
					

 

 

Exhibit
A

 

FIGURE

 

 

AMENDMENT
TO LEASE AGREEMENT

THIS AMENDMENT TO LEASE AGREEMENT is made this 2nd day of
July, 1998, but is effective as of September 1, 1997, by and between SAGA
LIMITED PARTNERSHIP, a Maryland limited partnership (hereinafter referred to as
“Landlord”), and MARYLAND ECONOMIC DEVELOPMENT CORPORATION, a body politic and
corporate and constituted as a public instrumentality of the State of Maryland
(hereinafter referred to as the “Tenant”).

RECITALS:

WHEREAS, the parties entered into a Lease Agreement dated
January 18, 1995; and

 

WHEREAS, said Lease Agreement provided, inter  alia,
in Section 38(b) that Tenant shall have the Right of First Offer with respect
to the lease of any space which Landlord elects to market for occupancy within
the building and not then leased by Tenant under the terms of the original
Lease Agreement; and

 

WHEREAS, Landlord notified Tenant that it intended to
market for occupancy 80,097 sq. ft. comprised of the entire second floor of the
Building and a portion of the first floor, which had been previously leased to
TransTechnology Corporation (the “Right of First Offer Space”); and

 

WHEREAS, Tenant has notified Landlord of its exercise of
its Right of First Offer to lease the said Right of First Offer Space under the
terms as set forth as follows; and

 

WHEREAS, the parties desire to enter into this Amendment to
Lease Agreement to incorporate the Right of First Offer Space, which is the
subject of Tenant’s election of its Right of First Offer.

 

NOW, THEREFORE, WITNESSETH, in consideration of the
Recitals set forth above, which are incorporated herein and made a part of this
Agreement, and of the mutual promises and

 

 

covenants contained herein, and other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, Landlord and Tenant hereby covenant and agree as follows:

 

1.             The
following subsections of the Lease Agreement are hereby deleted in their
entirety and the following substituted in place of the original language:

 

(a)           SECTION 1.  DEFINITIONS - Annual Rent

“Annual Rent.  As to the
Original Space initially leased under the Lease Agreement dated January 18,
1995, the sum of Six Dollars Eighty-Two Cents ($6.82) per square foot per
annum, multiplied by 28,878 square feet, being One Hundred Ninety-Six Thousand
Nine Hundred Forty-Seven Dollars and Ninety-Six Cents ($196,947.96), per annum,
during the first three (3) years of the Original Term and the amount during the
remaining years of the Original Term any extension term as set forth in Section
3; and as to the Right of First Offer Space, the sum of Four Dollars
Ninety-Five Cents ($4.95) per sq. ft. per annum multiplied by 80,097 sq. ft.,
being Three Hundred Ninety-Six Thousand Four Hundred Eighty Dollars
($396,480.00) per annum, from September 1, 1997 through June 30, 1998, and the
amount during the remaining years of the Original Term and any extension term
as set forth in Section 3.”

 

(b)           SECTION 1. DEFINITIONS - Landlord’s
Address

“Landlord’s Address:  949
Fell Street, Baltimore, Maryland 21231, Attn: S.A. Brown, III.”

 

2

 

(c)           SECTION 1. DEFINITIONS - Monthly Installment of Annual
Rent.

“Monthly Installment of Annual Rent.  As Of September 1, 1997, Sixteen Thousand
Four Hundred Twelve Dollars Thirty-Three Cents ($16,412.33) for the Original
Space initially leased under the Lease Agreement, plus Thirty-Three Thousand
Forty Dollars ($33,040.00) for the Right of First Offer Space, for a total of
Forty-Nine-Thousand Four Hundred Fifty-Two Dollars Thirty-Three Cents
($49,452.33), being one-twelfth (1/12th) of the Annual Rent due as set forth in
Section 3.”

 

(d)           SECTION 1. DEFINITIONS - Premises.

“Premises.  Beginning  September 1, 1997, being 108,975 sq. ft.,
comprised of the 28,878 sq. ft. of the first floor of the Building, which is
the space initially leased by Tenant hereunder and outlined in Exhibit C
(hereinafter called the “Original Space”); as increased by the Right of First
Offer Space, consisting of 80,097 sq. ft.; and which may be further increased from
time to time by the incorporation of the Option Space and/or any additional
space leased by Tenant in accordance with options/rights granted to
Tenant.  The actual square footage of any
such Option Space shall be measured in accordance with the suburban industrial
standard as commonly used by commercial real estate brokers and developers in
the Baltimore metropolitan area which reflect single-tenant, direct entry use
of the premises (such standard incorporating the measurement of all outside
wall

 

3

 

dimensions, as well as dedicated loading
areas), and the parties hereto agree to execute confirmatory statements (in the
event the square footage increases due to Tenant’s exercise of any option
rights contained herein) to record in writing the actual square footage
contained in the leased Premises.”

 

(e)           SECTION 1. DEFINITIONS - Rental
Commencement Date.

“Rental Commencement Date.  As to the Original Space, July 1, 1995; and
as to the Right of First Offer Space, September 1, 1997.”

 

(f)            SECTION 1. DEFINITIONS - Tenant’s
Pro Rata Share.

“Tenant’s Pro Rata Share. 
The percentage equivalent to a fraction having as its numerator the
number of net rentable square feet in the Premises and the denominator of which
is the number of square feet of net rentable floor space in the Building, being
58.89% as of September 1, 1997.”

 

2.             The
following new subsection is to be added to the Lease Agreement in Section 1,
Definitions:

 

“Right
of First Offer Space.  Beginning
September 1, 1997, 80,097 square feet of space within the
Building, which incorporates the entire second floor of the Building, and a
portion of the first floor, previously leased in its entirety by
TransTechnology Corporation, and outlined on the attached Exhibit G, which is
incorporated herein and made a part of this Agreement.”

 

4

 

3.             The
following Section is to be amended and modified by the addition (but not
substitution) of the following at the end of the present Section:

 

“SECTION
3. RENT.  ...Tenant shall begin paying Rent
on the Right of First Offer Space on September 1, 1997, and shall pay the
monthly installments of Annual Rent in advance on the first day of each month
for the Term of this Lease; and (as specifically set forth herein, including
Section 60) without deduction, set off, recoupment, counterclaim, or demand, at
Landlord’s address or at such other place as shall be designated in writing by
Landlord.  Commencing July 1, 1998, and
every year thereafter, during the Original Term and any extension term of this
Lease, the Annual Rent for the Right of First Offer Space shall be increased by
three and one-half percent (3.5%) per annum. 
Accordingly the Annual Rent for the Right of First Offer Space shall be
increased as follows:

 

	
  Increase Date

  	
   

  	
  Annual Rent

  	
   

  
	
  July 1, 1998

  	
   

  	
  $410,356.80

  	
   

  
	
  July 1, 1999

  	
   

  	
  $424,719.24

  	
   

  
	
  July 1, 2000

  	
   

  	
  $439,584.48

  	
   

  
	
  July 1, 2001

  	
   

  	
  $454,969.92

  	
   

  
	
  July 1, 2002

  	
   

  	
  $470,893.80

  	
   

  

 

and
so forth, increasing at three and one-half percent (3.5%) per annum.”

 

4.             The
third paragraph of Section 39 is hereby deleted in its entirety and the
following substituted in place of the original language:

 

5

 

 

Notwithstanding
anything above to the contrary, Landlord shall permit Tenant or any Subtenant
to bring into the Premises, store and use such Hazardous Materials as are
essential to the operation of such Tenant’s or Subtenant’s business so long as
such business constitutes a permitted use of the Premises, provided, however,
that such Hazardous Materials are normally and customarily used in similar
businesses; that Tenant or such Subtenant maintains a record of all material
safety data sheets for any such material used or located at the Premises, which
would be available for inspection by Landlord at any time during normal
business hours; annually, on the anniversary of the Rental Commencement Date,
Tenant or such Subtenant shall provide Landlord with copies of all such
material safety data sheets for Hazardous Materials then used or kept at the
Premises; that Tenant or any Subtenant only bring into the Premises and store
such quantities of any Hazardous Material as are necessary for Tenant’s or such
Subtenant’s business activities; that Tenant or Such Subtenant provide written
notification in advance to Landlord of any Hazardous Materials which Tenant or
Such Subtenant proposes to store on site in excess of two (2) gallons of each
such material so that Landlord may confirm with the applicable insurer(s) that such
storage shall not be in violation of the applicable insurance policies; that
Tenant and Such Subtenant comply with all requirements of Landlord’s insurer(s)
regarding handling and storage of such Hazardous Materials; that Tenant and
Such Subtenant comply with all Environmental Laws with regard to any such
Hazardous Materials; and that Tenant and Such Subtenant agree never to dispose
of any such Hazardous Material on the Premises, Building and/or Property or
adjacent property and that Tenant and Such Subtenant agree to properly dispose
of any such Hazardous Materials off-site in accordance and compliance with all
Environmental Laws.  Further, if Tenant
or Such Subtenant breaches the foregoing, Tenant or Such Subtenant shall give
Landlord written notice of such breach and shall immediately undertake remedial
action in accordance with applicable Environmental Laws.

5.             The
following section of the Lease Agreement is hereby deleted in its entirety and
the following substituted in place of the original language:

 

SECTION 38

EXPANSION OPTION

Pursuant
to a separate agreement, Subtenant and Tenant have relinquished the option
described in Section 38(a) of the Master Lease to lease the “Option Space,” as
defined in the Master Lease, and the right of first offer described in Section
38(b) of the Master Lease.  In the event
that Subtenant, Tenant and Landlord agree in writing that Subtenant and Tenant
may lease additional space in the Building (the “Expansion Premises”), such
space shall be leased on the same terms and conditions as the Original Space
(except for the rental for such space).

6.             All
other terms and provisions of the original Lease Agreement dated January 18,
1995, shall apply to the Right of First Offer Space being leased by Tenant
beginning September 1, 1997, and the parties to this Amendment to Lease
Agreement hereby re-allege and re-affirm all provisions of the said original
Lease Agreement dated January 18, 1995, except as amended herein.

 

6

 

7.             Landlord
hereby consents to the Amended and Restated Sublease Agreement of or about even
date herewith between Tenant and Osiris Therapeutics, Inc. in accordance with
Section 30 of the original Lease Agreement.

 

8.             This
Amendment to Lease Agreement may be executed in any number of counterparts,
each of which shall be considered an original for all purposes, but all such
counterparts shall together constitute one and the same instrument.

 

IN WITNESS WHEREOF, Landlord and Tenant have
caused this Amendment to Lease Agreement to be executed, under seal, as of the
date and year first above written.

 

	
  WITNESS/ATTEST:

  	
  LANDLORD: SAGA LIMITED
  PARTNERSHIP

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
  (SEAL)

  
	
   

  	
  S.A. Brown, III, General
  Partner

  
	
   

  	
   

  
	
  WITNESS/ATTEST:

  	
  TENANT: MARYLAND: ECONOMIC
  DEVELOPMENT CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
  /s/ Charlotte B. Trainor

  	
   

  	
  By:

  	
  /s/ Hans F. Mayer

  	
  (SEAL)

  
	
   

  	
  Hans F. Mayer, Executive
  Director

  

 

The undersigned hereby
consents to this Amendment of Lease per Section 14 of the Sublease effective
January 18, 1995.

 

	
   

  	
  Subtenant:

  
	
   

  	
  OSIRIS THERAPEUTICS, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ James S. Burns

  	
  (SEAL)

  
	
   

  	
   

  	
  James S. Burns,

  
	
   

  	
   

  	
  President and Chief
  Executive Officer

  

 

7

FOURTH
AMENDMENT OF LEASE

THIS FOURTH AMENDMENT OF
LEASE (this “Amendment”) is made as of the 30 day of June, 1998, by and between
ARE-2001 ALICEANNA STREET, LLC, a Delaware limited liability company (“Landlord”)
and MARYLAND ECONOMIC DEVELOPMENT CORPORATION, a body politic and corporate and
constituted as a public instrumentality of the State of Maryland (“Tenant”).

INTRODUCTION

A.            SAGA Limited Partnership (“Original Landlord”) and Tenant
entered into a Lease Agreement, dated as of January 18, 1995 (the “Original
Lease”), whereby Tenant agreed to lease from Original Landlord approximately
28,878 square feet of Space (the “Original Premises”) in the building (the “Building”)
known as 2001 Aliceanna Street, Baltimore, Maryland.

B.            Original Landlord and Tenant entered into a letter
agreement, dated March 5, 1997 (the “First Amendment”), whereby Tenant agreed
to lease from Original Landlord approximately 80,097 square feet of space in
the Building.

C.            Original Landlord and Tenant entered into a letter
agreement, dated April 6, 1998 (the “Second Amendment”), whereby Tenant agreed
to lease from Original Landlord approximately 9,184 square feet of space in the
Building.

D.            Original Landlord and Tenant entered into an Amendment to
Lease Agreement, dated June 30, 1998 (but effective as of September 1, 1997)
(the “Third Amendment”) which formalized the First Amendment.

E.             Landlord intends to purchase the Building from Original
Landlord.

F.             The Original Lease, the First Amendment, the Second
Amendment

and the Third Amendment are herein collectively referred to as the “Lease”.

G.            Landlord and Tenant now desire to further amend the
Lease.

NOW, THEREFORE, in
consideration of the covenants of the parties herein and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, Landlord and Tenant hereby agree as follows:

1.             Capitalized Terms.  All capitalized terms in this Amendment shall
have the same meanings as those set forth in the Lease, unless specifically set
forth otherwise in this Amendment.

2.             Definitions. 
The following definitions contained in Section 1 of the Lease shall be,
and hereby are, amended to read as follows:

“Annual Rent:  The sum of $5.50 per square foot per annum
multiplied by 118,159, subject to increases pursuant to Section 3 and Section
65.”

 

 

“Extension Terms: (a)
a period of five (5) years commencing upon the expiration of the Original Term
(“First Extension Term”), (b) a period of five (5) years commencing upon
expiration of the First Extension Term (the “Second Extension Term”); and (c) a
period of five (5) years commencing upon expiration of the Second Extension
Term (the “Third Extension Term”).

“Landlord:  ARE-2001 Aliceanna Street, LLC, a Delaware
limited liability company.”

“Landlord’s Address:
135 N. Robles Avenue, Suite 250, Pasadena, CA 91101, Attn: Corporate Secretary,
with a copy to: 11440 West Bernardo Court, Suite 170, San Diego, CA 92127,
Attn: Gary A. Kreitzer, Esq.”

“Landlord’s Telecopier
Number: (626) 578-0770.”

“Monthly Installment of
Annual Rent: $54,156.21, being one-twelfth (1/12th) of the
Annual Rent.”

“Mortgage:  Any mortgage, deed of trust, ground lease or
security agreement, affecting the Property, or any part thereof, at any time.”

“Original Term:
Commencing on the Effective Date (as such term is hereinafter defined) and
expiring on the last day of the month during which the tenth (10th)
anniversary of the Effective Date occurs.”

“Parking Spaces:
Eighty nine (89) parking spaces within the cross-hatched area shown on Exhibit
B shall be made available by Landlord for Tenant’s and any Subtenant’s
non-exclusive use.”

“Premises: 118,159
square feet, more or less, within the Building, which is the space to be leased
by Tenant hereunder and outlined in Exhibit C.”

“Property: All those
tracts or parcels of land described in Exhibit D.”

“Tenant’s Address: 36
South Charles Street, Suite 2410, Baltimore, Maryland 21201, Attn: Hans F.
Meyer, Executive Director.”

“Tenant’s Pro Rata Share:
The percentage equivalent to a fraction having as its numerator the number of
net rentable square feet in the Premises and its denominator the number of
square feet of net rentable floor space in the Building, being sixty four and
two-tenths percent (64.2%).”

The defined term “Option
Space” contained in Section 1 of the Lease shall be, and hereby is, deleted in
its entirety.  References in the Lease to
such term shall be, and hereby are, deleted.

 

2

 

The
following definition shall be, and hereby is, added to Section 1 of the Lease:

Effective Date:  The date of the closing of the purchase of
the Building by Landlord from Original Landlord.

3.             Section 3 of the Lease shall be, and hereby is, amended
to read as follows:

“Tenant shall begin paying
rent on the first day of the calendar month following the month during which
the Effective Date occurs.  Monthly
Installments of Annual Rent shall be paid in advance on the first day of each
month during the Term of this Lease; and (except as specifically set forth
herein including Section 60) without deduction, set-off, recoupment,
counterclaim, or demand, at Landlord’s Address or at such other place as shall
be designated in writing by Landlord.  If
the rental payments shall commence or end on a day other than the first day of
a month, the Monthly Installments of Annual Rent for any such partial month of
the Term shall be prorated on a per diem basis.”

“During the first year of
this Lease from the Effective Date, the Annual Rent for the Premises shall be
the sum of $649,874.50, payable in equal monthly installments.”

“The Annual Rent shall be
adjusted on the first anniversary of the Effective Date and on each subsequent
anniversary of such date every year thereafter during the Term (each, a “Rent
Adjustment Date”).  On every Rent Adjustment
Date, Annual Rent shall be increased by an amount equal to two and one-half
percent (22%) of the Annual Rent payable immediately preceding the applicable
Rent Adjustment Date.”

4.             Section 4 of the Lease shall be, and hereby is, amended
to read as follows:

“In the event that any
Monthly Installment of Annual Rent or Additional Rent shall be past due for
more than ten (10) days, Tenant shall pay to Landlord as Additional Rent a late
charge equal to three percent (3%) of the unpaid Rent, or, if less, the highest
rate permitted by law.  The late charge
imposed under this Section 4 is not a penalty and has been agreed to by
Landlord and Tenant as necessary to compensate Landlord for its additional
costs associated with late payment.  In
the event that a payment of Additional Rent shall remain unpaid for more than
fifteen (15) days, Tenant shall pay to Landlord, as Additional Rent, interest
on the amount of such unpaid Additional Rent at the rate of nine and one half
percent (92%) per annum from the date such Additional Rent was initially due to
the date of payment thereof.”

5.             Section 7 of the Lease shall be, and hereby is, amended
to read as follows:

“Upon the expiration of the
Original Term, and provided Tenant is not then in default under any material term,
covenant, or condition (or if

 

3

 

so, such default is cured
prior to the expiration of any applicable grace period), Tenant shall have
three (3) separate successive options to extend this Lease, each for an
Extension Term of five (5) years, provided that Tenant gives Landlord at least
one year’s prior written notice of its exercise of each such option.  In the event that Tenant exercises its option
as to any Extension Term, all provisions of this Lease shall apply during such
Extension Term.”

6.             Section 11 of the Lease shall be, and hereby is, amended
to read as follows:

“SECTION
11”

“COMMON
AREAS AND OPERATING EXPENSES”

“In addition to the use of
the Premises, Tenant, any Subtenant, and its and their employees, customers,
agents and business invitees shall have the right to use the Common Areas in
common with Landlord and other tenants of the Building, their employees,
customers, agents and business visitors. 
Tenant shall not obstruct, or permit any Subtenant to obstruct, the
Common Areas or use them, or permit any Subtenant to use them, for any purpose
other than their customary or intended purposes.”

“All Common Areas shall be
subject to the exclusive control of Landlord. 
Landlord shall operate, manage and maintain the Common Areas in good
order, condition and repair and shall maintain the Property in a manner
consistent with the operation of comparable office/laboratory facilities in
metropolitan Baltimore and Landlord shall have the sole right and exclusive
authority to employ and discharge all personnel with respect thereto.”

“Landlord hereby expressly
reserves the right but not the obligation to maintain security for the Common
Areas; to change the size, area, level, location, and arrangement of the Common
Areas, provided the Common Areas as reconfigured are comparable to the Common
Area as now existing and such reconfiguration does not interfere with the
conduct of Tenant’s business; to close temporarily all or any portion of the
Common Areas for the purpose of making repairs, changes, or alterations thereto
or performing necessary maintenance in connection with any emergency or for any
other purpose whatsoever, whether such purpose is similar or dissimilar to the
foregoing, provided that any such closing shall be for the shortest possible
time and provided that reasonable access to and from the Premises and a public
way shall be available at all times.”

“Tenant shall remove, or
cause to be removed, all litter, debris, waste and trash (which do not constitute
medical waste or are not subject to any Environmental Requirement) from the
Premises.  Landlord shall

 

4

 

provide and be responsible
for the removal of litter, debris, waste and trash from the Common Areas.”

“With regard to litter,
debris, waste and trash which constitute medical waste or are subject to any
Environmental Requirement, Tenant shall remove, or cause to be removed, the
same from the Premises by an individual or entity licensed to remove such
items.  The costs and expenses for the
removal of such items noted in this paragraph shall be borne by Tenant or the
applicable Subtenant.”

“As used herein, the term “Operating
Expenses” shall include all reasonable costs of any kind paid or incurred
by Landlord in connection with the operation and maintenance of the Building
and the Property including, by way of examples and not as a limitation upon the
generality of the foregoing, costs of repairs and replacements to the Building
or the other improvements within the Property as appropriate to maintain the
Building or the Property as required hereunder; costs of utilities furnished to
the Common Areas; sewer fees; trash collection; cleaning, including windows;
heating; ventilation; air-conditioning; maintenance of landscape and grounds;
maintenance of drives and parking areas; security services and devices;
building supplies; maintenance for and replacement of equipment utilized for
operation and maintenance of the building; license, permit and inspection fees;
sales; use and excise taxes on goods and services purchased by Landlord in
connection with the operation, maintenance or repair of the Property and
Building systems and equipment; telephone, postage, stationery supplies and
other expenses incurred in connection with the operation, maintenance, or
repair of the Building and the Property; accounting legal and other
professional fees and expenses incurred in connection with the operation,
maintenance and repair of the Building and the Property, cost of landscaping
and other customary and ordinary items of personal property provided by
Landlord for use in Common Areas, capital expenditures, costs of complying with
any applicable laws or hazardous waste remediation rules or regulations, costs
of insurance, including, without limitation, environmental and earthquake
insurance, service contracts, costs of services of independent contractors
retained to do work of the nature or type herein referenced, and costs of
compensation (including employment taxes and fringe benefits) to the extent
equitably allocable to the Building and the Property of all persons who perform
regular and recurring duties connected with the day-to-day operation and
maintenance of the Building and the Property, its equipment, adjacent walks,
landscaped areas, drives, and parking areas, including without limitation,
janitors, floor waxers, window-washers, watchmen, gardeners, sweepers, and
handymen and costs of management services, which fee for property management
services shall be reasonable and may not exceed three percent (3%) of the gross
rents of the Building.”

 

5

 

“Operating Expenses shall be
determined in accordance with generally accepted accounting principles.  Operating Expenses shall be appropriate for
the prudent management, operation, maintenance, servicing and repair of the
Building and the Property and shall be reduced by all cash discounts, trade
discounts or quantity discounts received by Landlord or Landlord’s managing
agent in the purchase of any goods, utilities or services in connection with
the prudent operation of the Building and the Property.  If Landlord charges a user fee for use of a
building amenity or facility, then Operating Expenses shall be deemed reduced
by the amount of such fees.  Landlord
shall equitably prorate bills for services rendered to the Building and to any
other property owned by Landlord.”

“The following costs and
expenses shall be excluded from Operating Expenses:

(a)               Any costs incurred in connection with procuring
additional tenants or subtenants, including those costs involved in negotiating
or enforcing any leases or subleases, improving or altering any space for such
parties occupancy or performing any structural work in connection therewith; or

(b)              Any costs for which Landlord is entitled to
reimbursement from other tenants or occupants of the Property.”

“Within thirty (30) days
after the Effective Date Landlord shall provide to Tenant Landlord’s estimate
of the monthly amount of Tenant’s Pro Rata Share of Operating Expenses for the
balance of calendar year 1998. 
Thereafter, prior to the commencement of each calendar year during the
Term, Landlord shall provide to Tenant Landlord’s estimate of the monthly
amount of Tenant’s Pro Rata Share of Operating Expenses for the following
calendar year.  Tenant shall pay to
Landlord on the first day of each calendar month of the Term, as Additional
Rent, Landlord’s estimate of Tenant’s Pro Rata Share of Operating Expenses for
such month.”

“Within ninety (90) days
after the conclusion of each calendar year (or such longer period as may be
reasonably required), Landlord shall furnish to Tenant a statement showing in
reasonable detail the actual Operating Expenses and Tenant’s Pro Rata Share of
Operating Expenses for the previous calendar year (“Annual Statement”),
prepared in accordance with the terms of this Lease which are applicable to the
preparation of such Annual Statement and certified to be correct by a
responsible representative of Landlord. 
Any additional sum due from Tenant to Landlord shall be due and payable
within thirty (30) days after Landlord provides Tenant with notice
thereof.  If the amounts paid by Tenant
exceed Tenant’s Pro Rata Share of Operating Expenses for the

 

6

 

previous calendar year,
Landlord shall, at Tenant’s option, either (i) credit the excess amount to the
next succeeding installments of estimated Additional Rent, or (ii) pay the
excess to Tenant within thirty (30) days after delivery of such
statements.  Any amount due under this
Section for any period which is less than a full month shall be prorated (based
on a thirty (30) day month) for such fractional month.”

“Landlord’s Annual Statement
shall be final and binding upon Tenant unless Tenant, within six (6) months
after Tenant’s receipt thereof, shall contest any item therein by giving
written notice to Landlord, specifying each item contested and the reason
therefor.  At Tenant’s request, Landlord
will provide Tenant with access to Landlord’s books and records relating to the
calculation of Operating Expenses or any other Additional Rent or other charges
paid by Tenant hereunder.  In the event
that after Tenant’s review of such information, Landlord and Tenant cannot
agree upon the amount of Tenant’s Pro Rata Share of Operating Expenses, then
Tenant shall have the right to have an independent public accounting firm hired
by Tenant (at Tenant’s sole cost and expense) and approved by Landlord (which
approval shall not be unreasonably withheld or delayed) audit and/or review
such Landlord’s books and records for the year in question (the “Independent
Review”).  The results of any such
Independent Review shall be binding on Landlord and Tenant.  If the Independent Review shows that Tenant’s
Pro Rata Share of Operating Expenses actually paid for the calendar year in
question exceeded Tenant’s obligations for such calendar year, Landlord shall
at Tenant’s option either (1) credit the excess amount to the next succeeding
installments of estimated Additional Rent or (2) pay the excess to Tenant
within thirty (30) days after delivery of such statement.  In addition, any inspection or audit that
discloses that annual Operating Expenses have been overstated by more than five
percent (5%) shall be at Landlord’s expense. 
If the Independent Review shows that Tenant’s payments of Tenant’s Pro
Rata Share of Operating Expenses for such calendar year were less than Tenant’s
obligation for the calendar year, Tenant shall pay the deficiency to Landlord
within thirty (30) days after delivery of such statement.”

“The parties agree that
statements in this Lease to the effect that Landlord is to perform certain of
its obligations hereunder at its own or sole cost and expense shall not be
interpreted as excluding any cost from Operating Expenses if such cost is
otherwise defined as an Operating Expense pursuant to the terms of this Lease.”

7.             Section 37 of the Lease shall be, and hereby is, deleted
in its entirety.

8.             There shall be, and hereby is, added to the lease the
following new Sections:

 

7

 

“SECTION 63”

“SECURITY DEPOSIT”

“Tenant has caused Osiris
Therapeutics, Inc.  (“Osiris”) to deposit
with Landlord the sum of One Hundred Fifty Thousand Dollars ($150,000) (the “Security
Deposit”), which Security Deposit shall be held by Landlord as security for the
performance by Osiris of all of the terms, covenants, and conditions of that
certain Second Amended and Restated Sublease Agreement, dated as of even date
herewith, between Tenant and Osiris (the “Sublease”) to be kept and performed
by Osiris during the Term.  If Tenant is
in default under this Lease due to the default by Osiris under the Sublease to
Osiris, after the expiration of all applicable notice and cure periods,
Landlord may (but shall not be required to) use, apply or retain all or any
part of the Security Deposit for the payment of any Rent or any other sum in
default, or to compensate Landlord for any other loss or damage which Landlord
may suffer by reason of Tenant’s default. 
If any portion of the Security Deposit is so used or applied, Tenant
shall, upon demand therefor, cause Osiris to deposit cash with Landlord in an
amount sufficient to restore the Security Deposit to its original amount, and
Tenant’s failure to do so shall be a material breach of this Lease.  Landlord shall not be required to keep the
Security Deposit separate from its general fund, and Osiris shall not be
entitled to any interest on the Security Deposit.  In lieu of cash, Tenant may permit Osiris to
deposit with Landlord, at any time and from time to time, a letter of credit in
the amount of One Hundred Fifty Thousand Dollars ($150,000).  Any such letter of credit shall constitute
the Security Deposit.  Any letter of
credit so deposited shall be an irrevocable, unconditional “clean” letter of
credit having a term of not less than two (2) years and issued by a financial
institution acceptable to Landlord in its sole and absolute discretion.  In the event that Landlord has not received a
replacement letter of credit on or before the date that is 45 days prior to the
expiration date of the letter of credit then held by Landlord, Landlord shall
have the right to draw upon the letter of credit and retain the cash proceeds
as the Security Deposit.  If Landlord
draws upon the letter of credit for any purpose permitted pursuant to this
Section 63, except for the conversion of the Security Deposit from the letter
of credit to cash as described above, Tenant shall, upon demand by Landlord, cause
Osiris to deposit cash with Landlord in an amount sufficient to restore the
Security Deposit to its original amount, and Tenant’s failure to do so shall be
a material breach of this Lease.”

“Landlord may deliver the
Security Deposit to any purchaser of Landlord’s interest in the Premises
provided that Landlord obtains such purchaser’s written agreement to be bound
by Landlord’s obligations under this Lease from and after the date of the
transfer of Landlord’s interest in the Premises and provides a copy of such
written agreement to Tenant and Osiris. 
Upon fulfilling such conditions, Landlord shall be

 

8

 

discharged from any further
liability with respect to the Security Deposit. 
This provision shall also apply to any subsequent transfers.”

“The Security Deposit, or
any balance thereof, shall be returned to Osiris within thirty (30) days after
the expiration or earlier termination of the Sublease.”

“SECTION
64”

“TEMPORARY
PREMISES”

“Landlord hereby leases to
Tenant and Tenant hereby hires from Landlord 29,000 rentable square feet of
space on the first floor of the Building, as shown on Exhibit I attached hereto
and made a part hereof (the “Temporary Premises”) for a term commencing on the
Effective Date and expiring on the last day of the month during which the first
anniversary of the Effective Date occurs. 
Rent for the Temporary Premises shall be at the rate of One Hundred
Forty Five Thousand Dollars ($145,000) per annum, payable, in advance, in equal
monthly installments on the first day of each calendar month, except that rent
for the period from the Effective Date through the last day of the month during
which the Effective Date occurs shall be paid within three (3) days following
the Effective Date.  Tenant shall accept
the Temporary Premises in its “as is” condition as of the date hereof, subject
to reasonable wear and tear between the date hereof and the Effective
Date.  Landlord shall pay to Tenant, as a
tenant improvement allowance, the sum of One Hundred Forty Five Thousand
Dollars ($145,000) payable in twelve (12) equal monthly installments on the
first day of each calendar month commencing on the first day of the calendar
month following the calendar month during which the Effective Date occurs.  If and to the extent that Landlord fails to
pay to Tenant any portion of the tenant improvement allowance payable pursuant
to this Section 64, Tenant shall have the right to offset such unpaid tenant
improvement allowance against rent for the Temporary Premises.  Landlord shall have the right at any time to
terminate the lease of the Temporary Space, any such termination to be
effective as of the last day of the month during which Landlord elects to so
terminate.  Upon such termination,
Landlord shall not have any obligation to make payments to Tenant of the tenant
improvement allowance in respect of the Temporary Space thereafter becoming due
and Tenant shall not have any obligation to make payments to Landlord of rent
in respect of the Temporary Space thereafter becoming due.  Tenant shall not have any obligation to pay
Operating Expenses in respect of the Temporary Space.  Except to the extent otherwise specifically
provided in this Section 64, the leasing of the Temporary Space is upon the
same terms, covenants and conditions as are set forth in this Lease.”

 

9

 

“SECTION 65”

“OPTIONAL ALLOWANCE”

“At the request of Osiris,
Landlord shall contribute up to Eight Million Dollars ($8,000,000) (the “Optional
Allowance”) toward the costs and expenses incurred in connection with the
performance of Tenant TI Work in the Premises which may be performed by Osiris
after the Effective Date and prior to the second anniversary of the Effective
Date (the “Optional Allowance Period”). 
In the event that Osiris has not used the entire Optional Allowance
prior to the second anniversary of the Effective Date, if Osiris extends the
term of the Sublease and Tenant extends the Original Term of this Lease (each
for an additional period of five (5) years) prior to the second anniversary of
the Effective Date, Osiris shall have the right to receive advances of the
unused portion of the Optional Allowance to pay the costs and expenses incurred
in connection with the performance of Tenant TI Work in the Premises performed
by Osiris prior to the third anniversary of the Effective Date and the “Optional
Allowance Period” shall be extended to such third anniversary.  The rental rate in respect of the Premises
shall be increased by $0.13 per annum for each one dollar of the Optional
Allowance paid by Landlord to Osiris commencing upon the date of each such
advance.  In the event that Tenant
desires to have Landlord advance all or any portion of the Optional Allowance,
Osiris shall give no less than ninety (90) days prior notice to Landlord on or
before the second anniversary of the Effective Date which notice shall set
forth the amount Tenant desires to have advanced.  Between the second and fifth anniversaries of
the Effective Date, Landlord shall use its best efforts to make available to
Osiris any undisbursed portion of the Optional Allowance.  The work to be paid for through the Optional
Allowance shall be performed, and advances of the Optional Allowance shall be
disbursed, in accordance with the applicable provisions of this Lease including
Section 12, Section 25, Section
26 and this Section 65.”

“Landlord shall be paid by
Osiris for monitoring and inspecting Tenant TI Work an amount equal to three
percent (3%) of the cost of the Tenant TI Work, which sum shall be deducted
from the Optional Allowance. 
Notwithstanding the provisions of the immediately preceding sentence, in
no event shall Landlord’s fee for monitoring and inspecting Tenant TI Work
exceed $50,000 for any individual project. 
An “individual project” shall mean a project for which there is an
approved project budget.  The Optional
Allowance may be used for the payment of construction costs and expenses,
including, without limitation, laboratory improvements, fixtures, building permits
and fees, architectural, engineering, design and consulting fees.  The Optional Allowance shall in no event be
used to purchase any furniture, personal property or other non-building systems
or equipment.  Landlord shall not have
any obligation to

 

10

 

advance to Osiris any
portion of the Optional Allowance until Landlord shall have reasonably approved
the project budget for the Tenant TI Work. 
Prior to approval of the project budget Osiris shall pay all of the
costs and expenses incurred in connection with the Tenant TI Work.  Following approval of the project budget,
Osiris shall have the right to be reimbursed for costs and expenses paid by
Osiris prior to budget approval.  In the
event that the approved project budget is greater than the Optional Allowance,
Landlord’s advances against the Optional Allowance shall be in an amount equal
to Landlord’s pro rata portion of requested amounts.”

“Prior to the commencement
of the Tenant TI Work, Osiris shall submit to Landlord, for Landlord’s approval
(which approval shall not be unreasonably withheld, conditioned or delayed), a
list of project managers, contractors and/or subcontractors who will perform
the Tenant TI Work.  Landlord shall give
Osiris notice of its approval or disapproval within seven (7) business days
after Landlord’s receipt of Osiris’ list. 
Landlord hereby approves The Whiting Turning Contracting Company, as
Osiris’ general contractor (“Tenant’s Contractor”).  Landlord may require that Tenant’s Contractor
provide a performance and payment bond in industry standard form.  For all major subcontracts, Tenant’s
Contractor shall be required to provide to Osiris at least two (2) competitive
bids.”

“Upon submission by Osiris
to Landlord of a statement (“Advance Request”) setting forth the amount
requested and a reasonably detailed summary of the work performed (which shall
be satisfied by a copy of an AIA standard form Application for Payment (G702)
executed by Tenant’s Contractor and by Tenant’s architect) accompanied by lien
releases from Tenant’s Contractor and the subcontractors in respect of the
prior advance, Landlord, within five (5) business days following receipt by
Landlord of the Advance Request and the accompanying materials, shall advance to
Osiris such amount as Landlord shall reasonably determine to be due in
accordance with the Advance Request and the accompanying statements.  Tenant may submit Advance Requests not more
than two times per thirty (30) day period.”

“If the entire Optional Allowance
is not applied toward the costs of the Tenant TI Work during the Optional
Allowance Period, Osiris shall not receive a credit of such unused portion of
the Optional Allowance.”

“The Tenant TI Work shall be
“complete(d)” at such time as Osiris shall (1) furnish evidence satisfactory to
Landlord that all of the Tenant TI Work has been completed and paid for in full
(which may be evidenced by Tenant’s architect’s Certificate of Substantial
Completion and Tenant’s Contractor’s and subcontractor’s final waivers and
releases of liens) (and such work has been approved by Landlord); that any and
all liens therefor that have been or might be filed have been discharged of
record (by payment, bond, order of a court of competent jurisdiction or
otherwise) or

 

11

 

waived and that no security
interests relating thereto are outstanding; (2) furnish to Landlord copies of
all certifications and approvals with respect to the Tenant TI Work that may be
required from any governmental authority and any board of fire underwriters or
similar body for the use and occupancy of the Premises; (3) furnish to Landlord
evidence of the insurance required by the Lease; and (4) furnish a statement
from Tenant’s architect certifying that all work performed in the Premises is
in substantial accordance with the plans and specifications therefor approved
by Landlord.”

“Landlord shall have the
opportunity to inspect the Premises upon notification that the Tenant TI Work
is complete to, among other things, confirm that the Tenant TI Work is in
conformance with the plans and specifications. 
In the event that Landlord shall notify Osiris of any construction
defect in the Premises discovered by Landlord, Osiris shall use reasonable
efforts to cause Tenant’s Contractor to remedy any such construction defect
within ninety (90) days thereafter. 
Notwithstanding the foregoing, Osiris shall not be in default if, by the
nature of such defect, more than ninety (90) days are required to correct and
remedy such construction defect and Osiris commences its remedial action within
such ninety (90) day period and thereafter diligently and continuously
prosecutes such curative and remedial action to completion.”

“Any approval or consent by
Landlord of the Tenant TI Work shall in no way obligate Landlord in any manner
whatsoever in respect of the finished product designed and/or constructed by
Osiris.  Any deficiency in design or
construction of the Tenant TI Work, although the same has prior approval of
Landlord, shall be solely the responsibility of Osiris.  All materials and equipment furnished by
Osiris shall be new or “like-new”.  All
work shall be performed in a first-class workmanlike manner.”

“This Section 65 is made and
entered into for the benefit of Osiris, and Osiris shall be a direct third
party beneficiary of, and shall have the right to make direct claims against
Landlord under, the terms and provisions of this Section 65.”

9.             Exhibits B, C and D attached hereto shall be, and hereby
are, substituted for Exhibits B, C and D attached to the Lease.

10.           The Lease, as amended hereby, is in full force and
effect.  Tenant hereby certifies that (a)
all conditions and agreements under the Lease to be satisfied or performed by
Landlord through the date hereof have been satisfied and performed; (b)
Landlord is not in default under the Lease and there are no defenses setoffs,
recoupments or counterclaims against the enforcement of this Lease by Landlord;
and (c) Rent has been paid through the last day of June, 1998.

 

12

 

11.           Each party hereby reaffirms and agrees to be bound by the
covenants, promises, representations and agreements set forth in the Lease, as
amended hereby.

12.           This Amendment may be executed in any number of
counterparts, each of which shall be considered an original for all purposes,
but all such counterparts shall together constitute one and the same
instrument.

13.           This Amendment shall be effective on the Effective
Date.  If the Effective Date does not
occur by October 31, 1998, this Amendment shall be null and void ab  initio.

IN WITNESS WHEREOF, Landlord
and Tenant have caused this Amendment to be executed as of the date first above
written.

	
   

  	
  LANDLORD:

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  ARE-2001
  ALICEANNA STREET, LLC

  
	
   

  	
  By:
  Alexandria Real Estate Equities, L.P.

  
	
   

  	
  By:
  ARE-QRS Corp.

  
	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:
  

  	
  /s/
  Lynn Anne Shapiro

  
	
   

  	
   

  	
  Name:

  	
  Lynn
  Anne Shapiro

  
	
   

  	
   

  	
  Title:

  	
  Assistant
  Secretary

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  TENANT:

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  MARYLAND
  ECONOMIC DEVELOPMENT CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:
  

  	
  /s/
  Hans F. Mayer

  
	
   

  	
   

  	
  Name:

  	
  Hans
  F. Mayer

  
	
   

  	
   

  	
  Title:

  	
  Executive
  Director

  
						

 

The undersigned hereby consents to this
Amendment and agrees to the provisions of Sections 63 and 65 of the Lease.

 

	
   

  	
  SUBTENANT:

  
	
   

  	
   

  	
   

  
	
   

  	
  OSIRIS
  THERAPEUTICS, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:
  

  	
  /s/
  James S. Burns

  
	
   

  	
   

  	
  Name:

  	
  James
  S. Burns

  
	
   

  	
   

  	
  Title:

  	
  President
  & CEO

  
					

 

13

October 27, 1998

Maryland Economic Development Corporation

36 South Charles Street

Suite 2410

Baltimore, MD  21201

	
   

  	
  Re:

  	
  Fourth Amendment of Lease, dated as of June 30,
  1998, between ARE-2001 Aliceanna Street, LLC and Maryland Economic
  Development Corporation covering a portion of the building known as 2001
  Aliceanna Street, Baltimore, MD (the “Amendment”)

  

 

Gentlemen:

Reference is hereby made to
the Amendment.

This letter will confirm
that (a) the reference in the last sentence of paragraph 3 of Section 3 of
the Amendment to “22%” should read “21⁄2%” and (b) the reference in the last
sentence of Section 4 of the Amendment to “92%” should read “91⁄2%”.

Please confirm the foregoing by signing and returning
to the undersigned the enclosed duplicate originals of this letter.

	
   

  	
  Very truly yours,

  
	
   

  	
   

  
	
   

  	
  ARE-2001 ALICEANNA
  STREET, LLC

  
	
   

  	
   

  
	
   

  	
  By:

  	
  Alexandria Real Estate
  Equities, L.P.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  ARE-QRS Corp.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Lynn Anne Shapiro

  
	
   

  	
   

  	
   

  	
  Name:

  	
  Lynn Ann Shapiro

  
	
   

  	
   

  	
   

  	
  Title:

  	
  General Counsel

  
						

 

	
   

  	
   

  
	
  CONFIRMED:

  	
   

  
	
   

  	
   

  
	
  MARYLAND
  ECONOMIC DEVELOPMENT

  	
   

  
	
  CORPORATION

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/ Hans F. Mayer

  	
   

  	
   

  
	
   

  	
  Name:

  	
  Hans F. Meyer

  	
   

  
	
   

  	
  Title:

  	
  Executive Director

  	
   

  
					

 

 

SIXTH
AMENDMENT TO LEASE

This
Sixth Amendment (the “Sixth Amendment”) to Lease is made as of August  26, 2003,
by and between ARE-2001 ALICEANNA STREET, LLC,
a Delaware limited liability company, having an address at
135 North Los Robles Avenue, Suite 250, Pasadena,
California  91101 (“Landlord”),
and MARYLAND ECONOMIC DEVELOPMENT CORPORATION,
a body politic and corporate and constituted as a public instrumentality of the
State of Maryland, having an address at 36 South Charles Street,
Suite 2410, Baltimore, Maryland  21201 (“Tenant”).

RECITALS

A.            SAGA Limited Partnership (“Original Landlord”) and Tenant entered into a Lease Agreement,
dated as of January 18, 1995 (the “Original
Lease”), whereby Tenant agreed to lease from Original Landlord
approximately 28,878 square feet of Space (the “Original Premises”) in the building (the “Building”) known as
2001 Aliceanna Street, Baltimore, Maryland.

B.            Original Landlord and Tenant entered into a letter
agreement, dated March 5, 1997 (the “First Amendment”), whereby Tenant agreed to lease from
Original Landlord approximately 80,097 square feet of space in the Building
(the “First Expansion Space”).

C.            Original Landlord and Tenant entered into a letter
agreement, dated April 6, 1998 (the “Second Amendment”), whereby Tenant agreed to lease from
Original Landlord approximately 9,184 square feet of space in the Building (the
“Second Expansion Space”, together
with the Original Premises and First Expansion Space, is herein collectively,
the “Premises”).

D.            Original Landlord and Tenant entered into an Amendment to
Lease Agreement, dated June 30, 1998 (but effective as of
September 1, 1997) (the “Third
Amendment”) which formalized the First Amendment.

E.             Landlord purchased the Building from Original Landlord
on June 30, 1998, and contemporaneously therewith, Landlord and
Tenant further amended the Original Lease pursuant to that certain Fourth
Amendment of Lease, dated as of June 30, 1998, between Landlord and
Tenant (the “Fourth Amendment”).

F.             Landlord and Tenant entered into a letter agreement,
dated October 27, 1998, (the “Fifth
Amendment”) whereby Landlord and Tenant clarified certain provisions
of the Fourth Amendment.  The Original
Lease, as amended by the First Amendment, Second Amendment, Third Amendment,
Fourth Amendment and Fifth Amendment, is herein collectively, the “Lease”.

G.            Tenant desires to expand the Premises demised under the
Lease by adding 8,331 rentable square feet of space in the Building (the “Third Expansion Space”), and Landlord is willing to lease
such portion of the Building to Tenant on the terms herein set forth.

 

 

H.            Landlord and Tenant desire to amend the Lease to, among
other things, add the Third Expansion Space to the Premises demised under the
Lease.

AGREEMENT

Now,
therefore, the parties hereto agree that the Lease is amended as follows:

1.             Premises. 
Effective upon full execution hereof by Landlord and Tenant and
satisfaction of the conditions precedent set forth in Section 4 below (the
“Effective Date”), the Premises
demised under the Lease are hereby expanded to include the Third Expansion
Space, which Third Expansion Space consists for all purposes of the Lease of
8,331 rentable square feet, as such Third Expansion Space is described on Exhibit A, attached hereto and
incorporated herein by this reference. 
From and after the Effective Date, the Premises, as expanded by the
Third Expansion Space, shall consist of 126,430 rentable square feet.

2.             Rent for Third
Expansion Space.  The
Annual Rent payable with respect to the Third Expansion Space shall be $5.50
per square foot per annum (as such sum shall be subject to increases pursuant
to Section 3 and Section 65 of the Lease), multiplied by 8,331, for a
total of $45,820.50 per year.  The
Monthly Installment of Annual Rent payable with respect to the Third Expansion
Space, shall be $3,818.38, which is equal to one-twelfth of the Annual Rent for
such space.

3.             Tenant’s Pro Rata
Share.  Tenant’s Pro Rata
Share based on the Premises, as expanded by the Third Expansion Space, shall be
equal to seventy-four percent (74%).

4.             Osiris Lease.

(a)           Landlord and Tenant hereby recognize
and acknowledge that Tenant has sublet all of its right, title and interest in
and to the Premises to Osiris Acquisition II, Inc., a Delaware corporation,
d/b/a Osiris Therapeutics, Inc. (“Osiris”),
pursuant to that certain Second Amended and Restated Sublease Agreement, dated
as of June 30, 1998, between Tenant, as sublandlord, and Osiris, as
subtenant, as amended pursuant to that certain letter agreement dated as of
October 27, 1998, between Tenant and Osiris (the Second Amended and
Restated Sublease Agreement, as amended, is herein the “Sublease”) and that under the Sublease,
Osiris is obligated to perform all of Tenant’s obligations under the Lease.

(b)           As an express condition to this Sixth
Amendment, Tenant will contemporaneously herewith amend the Sublease and obtain
the joinder of Osiris to this Sixth Amendment as set forth below.  Landlord hereby consents to Tenant’s sublease
of the Third Expansion Space to Osiris, provided that Osiris amends the
Sublease to incorporate the terms herein and joins in this Sixth Amendment by
the joinder attached to this Sixth Amendment.

(c)           Landlord neither approves nor
disapproves the terms, conditions and agreements contained in the Sublease, all
of which shall be subordinate and at all times subject to:  (a) all of the covenants, agreements,
terms, provisions and conditions contained in the Lease, as amended hereby,
(b) superior ground leases, mortgages, deeds of trust, or any other
hypothecation or security now existing or hereafter placed upon the real
property of which the Premises are a part, and to any and all advances secured
thereby, and to all renewals,

 

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modifications, consolidations,
replacements and extensions thereof, and (c) all matters of record
affecting the Premises and all laws, ordinances and regulations now or
hereafter affecting the Premises.

(d)           Nothing contained herein or in the
Sublease shall be construed to:

1.                                       modify, waive, impair, or
affect any of the terms, covenants or conditions contained in the Lease, or to
waive any breach thereof, or any rights or remedies of Landlord under the Lease
against any person, firm, association or corporation liable for the performance
thereof, or to enlarge or increase Landlord’s obligations or liabilities under
the Lease, and all terms, covenants and conditions of the Lease are hereby
declared by each of Landlord and Tenant to be in full force and effect; or

2.                                       require Landlord to accept
any payments from Osiris on behalf of Tenant, except as expressly provided in
paragraph (k) below.

(e)           Tenant is, and shall remain, liable
and responsible for the due keeping, performance and observance of all the
terms, covenants and conditions set forth in the Lease on the part of the
Tenant to be kept, performed and observed and for the payment of the annual
rent, additional rent and all other sums now and hereafter becoming payable
thereunder for all of the Premises.

(f)            Osiris does hereby expressly assume
and agree to be bound by and to perform and comply with, for the benefit of
Landlord, each and every obligation of Tenant under the Lease, as amended by
this Sixth Amendment, to the extent applicable under the Sublease.  Landlord and Osiris each hereby release the
other from, and waive their respective rights of recovery against the other
for, direct or consequential loss or damage arising out of or incident to the
perils covered by property insurance carried by such party to the extent of
such insurance and waive any right of subrogation which might otherwise exist
in or accrue to any person on account thereof.

(g)           Tenant and Osiris agree to each of
the terms and conditions of this Sixth Amendment, and upon any conflict between
the terms of the Sublease and this Sixth Amendment, the terms of this Sixth
Amendment shall control.

(h)           The Sublease shall be deemed and
agreed to be a sublease only and not an assignment and there shall be no
further subletting or assignment of all or any portion of the Premises demised
under the Lease (including as demised to Osiris by the Sublease) except in
accordance with the terms and conditions of the Lease.

(i)            If Landlord terminates the Lease, as
amended by this Sixth Amendment, as a result of a default by Tenant thereunder
or the Lease, as amended by this Sixth

 

3

 

Amendment, terminates for
any other reason, the Sublease shall automatically terminate concurrently
therewith.

(j)            Tenant and Osiris acknowledge and
agree that if Tenant or Landlord elects to terminate the Lease, as amended by
this Sixth Amendment, pursuant to the terms thereof, or if Landlord and Tenant
voluntarily elect to terminate the Lease, as amended by this Sixth Amendment,
Landlord shall have no responsibility, liability or obligation to Osiris, and
the Sublease shall terminate.

(k)           Upon a default by Tenant under the
Lease, as amended by this Sixth Amendment, Landlord may proceed directly
against Tenant, Osiris, any guarantors or anyone else liable under the Lease,
as amended by this Sixth Amendment, or the Sublease without first exhausting
Landlord’s remedies against any other person or entity liable thereon to
Landlord.  If Landlord gives notice to
Osiris that Tenant is in default under the Lease, Osiris shall thereafter make
directly to Landlord all payments otherwise due Tenant, which payments will be
received by Landlord without any liability to Landlord except to credit such
payments against amounts due under the Lease. 
The mention herein of any particular remedy shall not preclude Landlord
from any other remedy in law or in equity.

(l)            Tenant and Osiris agree that the
Sublease will not be modified or amended in any way without the prior written
consent of Landlord, which consent shall not be unreasonably withheld or
delayed.  Tenant and Osiris hereby agree
that it shall be reasonable for Landlord to withhold its consent to any
modification or amendment of the Sublease which would change the permitted use
of the Premises or which would affect Landlord’s status as a real estate
investment trust.  Any modification or
amendment of the Sublease without Landlord’s prior written consent shall be
void and of no force or effect.

5.             Miscellaneous.

(a)           This Sixth Amendment is the entire
agreement between the parties with respect to the subject matter hereof and
supersedes all prior and contemporaneous oral and written agreements and
discussions.  This Sixth Amendment may be
amended only by an agreement in writing, signed by the parties hereto.

(b)           This Sixth Amendment is binding upon
and shall inure to the benefit of the parties hereto, their respective agents,
employees, representatives, officers, directors, divisions, subsidiaries,
affiliates, assigns, heirs, successors in interest and shareholders.

(c)           This Sixth Amendment may be executed
in any number of counterparts, each of which shall be deemed an original, but
all of which when taken together shall constitute one and the same
instrument.  The signature page of any counterpart
may be detached therefrom without impairing the legal effect of the
signature(s) thereon provided such signature page is attached to any other
counterpart identical thereto except having additional signature pages executed
by other parties to this Sixth Amendment attached thereto.

(d)           Landlord and Tenant each represent
and warrant that it has not dealt with any broker, agent or other person
(collectively “Broker”) in
connection with this

 

4

 

transaction.  Landlord and Tenant each hereby agree to
indemnify and hold the other harmless from and against any claims by any Broker
claiming a commission or other form of compensation by virtue of having dealt
with Tenant or Landlord, as applicable, with regard to this leasing
transaction.

(e)           Except as amended and/or modified by
this Sixth Amendment, the Lease is hereby ratified and confirmed and all other
terms of the Lease shall remain in full force and effect, unaltered and
unchanged by this Sixth Amendment.  In
the event of any conflict between the provisions of this Sixth Amendment and
the provisions of the Lease, the provisions of this Sixth Amendment shall
prevail.  Whether or not specifically
amended by this Sixth Amendment, all of the terms and provisions of the Lease
are hereby amended to the extent necessary to give effect to the purpose and
intent of this Sixth Amendment.

(Signatures on Next Page)

 

5

 

IN
WITNESS WHEREOF, the parties hereto have executed this Sixth Amendment as of
the day and year first above written.

	
   

  	
  TENANT:

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  MARYLAND ECONOMIC DEVELOPMENT
  CORPORATION, a body
  politic and corporate and constituted as a public instrumentality of the
  State of Maryland

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Hans F. Mayer

  
	
   

  	
  Its:

  	
  Hans F. Mayer

  
	
   

  	
   

  	
  Executive Director

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  LANDLORD:

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  ARE-2001
  ALICEANNA STREET, LLC,

  
	
   

  	
  a Delaware limited
  liability company

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  Alexandria Real Estate
  Equities, L.P., a Delaware limited partnership, managing member

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  ARE-QRS Corp., a Maryland
  corporation, general partner

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
  /s/ Peter J. Nelson

  
	
   

  	
   

  	
   

  	
   

  	
  Peter J. Nelson

  
	
   

  	
   

  	
   

  	
   

  	
  Senior Vice President and
  Chief Financial Officer

  
								

 

6

 

JOINDER
OF OSIRIS

TO SIXTH AMENDMENT TO LEASE

OSIRIS
ACQUISITION II, INC., a Delaware
corporation, d/b/a OSIRIS THERAPEUTICS, INC.
(“Osiris”), hereby joins in this
Sixth Amendment for the benefit of Landlord, hereby represents and warrants to
Landlord that: Osiris has had opportunity to review this Sixth Amendment with
counsel, and hereby agrees that

A.                                   The
modification of the Lease does not in any way release, impair or discharge the
obligations of Osiris to Tenant under the Sublease;

B.                                     All references
in the Sublease to the Lease will henceforth mean and include the Lease as
amended by this Sixth Amendment;

C.                                     The Sublease is
hereby amended to incorporate the terms and conditions set forth in this Sixth
Amendment; and

D.                                    Whether or not
specifically amended by this Sixth Amendment, all of the terms and provisions
of the Sublease are hereby amended to the extent necessary to give effect to
the purpose and intent of this Sixth Amendment.

IN
WITNESS WHEREOF, Osiris has executed this Joinder of Osiris to Sixth Amendment
to Lease as of the   19   day of August, 2003.

	
   

  	
  OSIRIS
  ACQUISITION II, INC., a Delaware corporation, d/b/a OSIRIS THERAPEUTICS, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Donald J. Fallon

  
	
   

  	
  Name:

  	
  Donald J. Fallon

  
	
   

  	
  Title:

  	
  VP, Finance & CFO

  
					

 

7

 

Exhibit
A (Figure)

 

8

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