Document:

Unassociated Document

    

    Exhibit 10.1

    

    

    

    INDENTURE
OF LEASE

    

    by
and between

    

    RIVERTECH
ASSOCIATES II, LLC

    

    (“LESSOR”)

    

    and

    

    NEOSTEM,
INC.

    

    (“LESSEE”)

    

    

      
        

      

    

    

    RIVERSIDE
TECHNOLOGY CENTER

    

    840
Memorial Drive

    Cambridge,
Massachusetts

    

      
 

    

    

    

    

    

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    
 

    RIVERSIDE
TECHNOLOGY CENTER

    

    COMMERCIAL
LEASE

    

    BETWEEN

    

    RIVERTECH
ASSOCIATES II, LLC

    

    AND

    

    NEOSTEM,
INC.

    

    

    Agreement
entered into this ____ day of August 2009 in consideration of the covenants and
other benefits herein contained, the receipt and sufficiency of said
consideration being hereby acknowledged (the “Lease”).

    

    Rivertech Associates II, LLC,
a Massachusetts limited liability corporation, c/o The Abbey Group, 575 Boylston
Street, Boston, MA 02116 (herein “LESSOR”), does hereby lease to and NeoStem, Inc. a Delaware
corporation duly qualified to do business in the Commonwealth of
Massachusetts with a principal place of business in New York, New York (herein
“LESSEE”), does hereby lease from said LESSOR, certain space located at 840
Memorial Drive, Cambridge, Massachusetts (herein “Building”) being that portion
of the fourth (4th) floor
of the Building (and certain ancillary space on the third (3rd) floor
of the Building), shown on Exhibit A attached hereto (herein, “Lease Plan”)
consisting of approximately 8,060 rentable square feet on said fourth (4th) floor
and approximately 50 rentable square feet on said third (3rd) floor,
for a combined approximate 8,110 rentable square feet, all as appearing on said
Lease Plan, (the “Leased Premises” or “Premises”);  with the right in
common with others in the Building to use such common areas of the Building as
are designated by the LESSOR, from time to time including but not limited to the
1st  floor
common lavatories; shared loading dock; shared passenger and freight elevators;
and common walkways, driveways and lobbies; as well as the additional accessory
areas set forth in Section 6 hereof.

    

    1.   Lease
Term.     LESSOR shall deliver the Leased
Premises to the LESSEE as set forth in Section 32 hereof, the date of delivery
being referred to herein as the “Delivery Date”. LESSEE hereby leases the Leased
Premises for an original Term of thirty six (36) consecutive months (herein,
“Lease Term”).  The Term of the Lease shall begin on that date which
is the first day of the next calendar month after the Delivery Date occurs,
referred to herein as the “Commencement Date”, and shall end on the last day of
the calendar month which is thirty six (36) full months therefrom, referred to
herein as the “Termination Date”.  The period between the Delivery
Date and the Commencement Date (if any, as may be occasioned by delivery on a
date other than the first of any calendar month) is referred to herein as the
“Interim Period”, during which all terms and conditions of the Lease shall fully
apply as set forth herein. The “First Lease Year” shall commence on the
Commencement Date and shall end on the last day of the calendar month which is
twelve (12) full months therefrom.   Each successive Lease Year
shall be the next twelve full month period after the end of the First Lease
Year.   By way of illustration, if the Delivery Date is September
10th, 2009
then: (i) the Commencement Date shall be October1, 2009; (iii) the First Lease
Year shall begin on October 1, 2009 and shall conclude on September 30, 2010;
the Second Lease Year shall begin on October1, 2010; and each successive Lease
Year shall begin on the next October1st; and
the Termination Date would be September 30, 2012.

    

    
      
         

      

      
        1

        
          

        

      

      
         

      

    

    LESSOR
agrees to use commercially reasonable efforts to substantially complete LESSOR’s
build-out and to deliver the Leased Premises on or before September 1, 2009; but
LESSOR shall incur no liability, nor shall there be any abatement of Annual Base
Rent or other payments due hereunder, if the Delivery Date occurs subsequent to
said target date; provided, however, that in the event that the Delivery Date
(as defined in Section 32) has not occurred on or before September 15, 2009 for
whatever reason (the “Outside Termination Date”), then LESSEE shall have the
right to terminate this Lease by written notice to LESSOR delivered within 15
business days after the Outside Termination Date, and the Lease shall be deemed
to be terminated if the Delivery Date has thereafter not occurred by September
30, 2009 (absent separate written agreement of the parties).

    

    The Term
may be extended as contemplated by Section 33 hereof.

    

    2.   Annual Base Rent
and Additional Rent.     LESSEE shall pay to
LESSOR an Annual Base Rent pursuant to the schedule below during each Lease Year
(or portion thereof as the case may be) of the Term hereof, (herein, “Annual
Base Rent”).  Annual Base Rent shall be payable in advance, in equal
monthly installments, due on the first day of each calendar month, pursuant to
the schedule below. Annual Base Rent due for any partial month shall be prorated
based on the number of days in that month.  LESSEE’s first payment of
Annual Base Rent for the first month of the first Lease Year and LESSEE’s
payment of Annual Base Rent for the Interim Period (which shall be calculated by
multiplying the number of days in the Interim Period (i.e. starting with the
Delivery Date through the last day of the month prior to the Commencement Date)
by an applicable per diem rate reflecting Annual Base Rent for the First Lease
Year (First Six Months) on an annualized basis shall both be due on the Delivery
Date. 

    

    All
payments of Annual Base Rent (and any Additional Rent or other sums due LESSOR)
shall be made to LESSOR at 575 Boylston Street, Boston, Massachusetts 02116 or
to such other agent or at such other place as LESSOR may designate in
writing.  The covenants to pay all Annual Base Rent and all Additional
Rent hereunder (collectively, “Rent”) shall be independent from any and all
other covenants of LESSOR to LESSEE hereunder; and all Rent shall be promptly
paid when due hereunder.

    

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

    LESSEE
shall pay interest from the date due, at an annual rate of eighteen (18%)
percent of any installments of Annual Base Rent, or Additional Rent or other
payments which are not received by LESSOR within ten days after written notice
from LESSOR that any such Rent was not received.

    

    SCHEDULE OF ANNUAL BASE
RENT

     

    
      
        	
                Lease
      Year

              	 	
                Annual
      Base Rent

              	 	 	
                Monthly
      Installment

              	 
	
                First
      Lease Year

                (first
      six months)

              	 	 	$243,300.00	 	 	 	$20,275.00	 
	 	 	 	 	 	 	 	 	 
	
                First
      Lease Year

                (last
      six months)

              	 	 	$324,400.00	 	 	 	$27,033.33	 
	 	 	 	 	 	 	 	 	 
	
                Second
      Lease Year

              	 	 	$356,840.00	 	 	 	$29,736.67	 
	 	 	 	 	 	 	 	 	 
	
                Third
      Lease Year

              	 	 	$369,005.00	 	 	 	$30,750.42	 

      

    

     

    This
Lease is intended to be a triple net lease, and as such LESSEE shall also be
responsible for payment of its pro rata share of Operating Expenses (see Section
3 herein), real estate taxes (see Section 4 herein) and utilities (see Section 7
herein).  All payments due to LESSOR hereunder in addition to those
under Section 2 shall be deemed to be “Additional Rent” characterized as such,
or as “Rent” interchangeably.

    

    LESSEE’s
allocable pro rata share is 6.29 % (the LESSEE’s “Allocable Percentage”) as that
concept is used herein to compute Additional Rent.

    

    3.  Additional Rent
(Operating Expenses).     LESSEE, in addition to
the sums payable to LESSOR as Annual Base Rent as determined in Section 2 hereof
shall pay to LESSOR for each year (or portion thereof, as applicable) of the
Lease Term, as Additional Rent, LESSEE’s Allocable Percentage of any and all
actual Operating Expenses attributable to the Building for said year of the
Lease Term (herein, “Additional Operating Expense Rent”).  Operating
Expenses as set forth in Exhibit B hereto are the unaudited actuals for calendar
year 2008 (and will be subject to change based on actual costs and expenses
incurred for each of the categorized Exhibit B costs and expenses in the
remainder of 2009 and for each subsequent calendar year during the
Term).

    

    “Operating
expenses” means the costs incurred by the LESSOR in connection with the
operation, management and maintenance of the Building.” Operating Expenses”
shall not include the following:  the costs of LESSEE’s or any other
tenant’s improvements and services for which LESSEE or any tenant is obligated
to reimburse LESSOR, or pays third persons at LESSOR’s directions; the costs of
improvements to other tenants’ or vacant tenant spaces (vis a vis common areas)
in the Building; income or franchise taxes of the LESSOR; the costs incurred in
any rehabilitation, reconstruction or other work occasioned by any insured
casualty (i.e. as to which LESSOR is required to carry insurance hereunder), or
by the exercise of the right of eminent domain (except to the extent of any
so-called “deductible” amount under policies of insurance or any costs actually
incurred for which any insurance company does not reimburse or compensate LESSOR
or owner); depreciation or interest payments on the building; general corporate
overhead of the LESSOR entity; expenses incurred in any direct dispute with any
particular tenant (other than those incurred which are of benefit to or protect
the rights of other tenants in the building, generally); costs of renovations to
vacant or other tenants’ spaces; costs of capital improvements to the Building
its systems and appurtenances (but not including maintenance, repairs or
replacements), and any rental payments for equipment which, if purchased, would
be excluded as a capital improvement under generally accepted accounting
standards in LESSOR’s reasonable judgment; costs for the removal, encapsulation
or other remediation of hazardous substances in the Building or the land unless
such hazardous substances were introduced by LESSEE; brokerage
and advertising costs in seeking or leasing to new tenants; and penalties
incurred due to LESSOR’s willful violation or any direct violation of any
government order; any ground or underlying lease rental; bad debt expenses and
interest, principal, points and fees on debts or amortization on any mortgage or
other debt instrument encumbering the building or the property; costs arising
from LESSOR’s charitable or political contributions; costs of selling,
syndicating, financing, mortgaging or hypothecating any of LESSOR’s interest in
the Building; management fees paid or charged by LESSOR in connection with the
management of the building other than a management fee based on five (5%)
percent of income which is the management fee uniformly and customarily charged
to other tenants in the Building by LESSOR; costs and expenses (including taxes)
to operate the parking garage, valet and other parking services for the
building, and any replacement garages or parking facilities and any shuttle
services as may be placed in service, including any capital improvements to the
parking areas; direct expenses in connection with services directly and
selectively provided to other tenants of the Building; costs and expenses paid
to subsidiaries or affiliates of LESSOR for goods or services to the extent the
amount exceeds (without justification) generally accepted costs or expenses
incurred by other comparable buildings in Cambridge, Mass.

    

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

    LESSEE
shall pay its Allocable Percentage of Additional Operating Expense Rent to
LESSOR based on a prospective annual schedule prepared by the LESSOR, in monthly
increments based on said schedule, with each monthly payment of Annual Base Rent
due hereunder.  LESSOR, at its discretion, may assess LESSEE for any
extraordinary item of cost or expense which may actually occur as a direct
result of LESSEE’s own distinct uses or activities which shall be itemized,
invoiced separately, and paid by LESSEE within thirty (30) days of its receipt
of the invoice.  Within one hundred twenty (120) days of the close of
each calendar year, LESSOR shall provide LESSEE with a reasonably detailed
accounting of Operating Expenses for such prior calendar year, and shall adjust
the prior year’s schedule of Additional Operating Expense Rent to account for
actual and properly accrued costs, expenses, and liabilities, and shall issue
LESSEE a refund or deficiency statement for that year, as
appropriate.  LESSEE shall pay any deficiency shown thereon within
thirty (30) days of its receipt of said invoice.  Any rebates due
LESSEE (not contested by LESSOR) shall, in LESSOR’s reasonable discretion, be
credited toward current monthly Rent or paid to LESSEE within thirty (30)
days.

    

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

    Upon
LESSEE’s request, subsequent to LESSEE’s receipt of such annual accounting,
LESSOR shall make available to LESSEE for inspection, during normal business
hours and at LESSOR’s offices in Massachusetts, all relevant books, records and
invoices upon which Operating Expenses are calculated.  If there is
any dispute, LESSOR and LESSEE shall attempt to negotiate reconciliation
thereof, neither party being under any obligation to enter into any such
settlement or compromise.  If such negotiated reconciliation fails,
then either LESSOR or LESSEE, upon thirty (30) days prior written notice to the
other, may submit any dispute regarding Operating Expenses to arbitration in the
City of Cambridge or Boston, Massachusetts under the Expedited Procedures
provisions of the Commercial Arbitration Rules of the American Arbitration
Association and the decision and award of the arbitrator(s) shall be final and
conclusive on the parties and enforceable in any court of competent
jurisdiction.  All such arbitration results shall apply to the parties
only (and not any other tenants of the Building) and shall be kept confidential
by LESSOR and LESSEE.  Each party shall be responsible for its own
costs and expenses of the arbitration proceedings.

    

    4.   Additional Rent
(Real Estate Taxes).     LESSEE, in addition to
the sums payable to LESSOR as Annual Base Rent as determined in Section 2
hereof, shall pay to LESSOR for each year (or portion thereof, as applicable) of
the Lease Term, as Additional Rent, LESSEE’S Allocable Percentage of all sums
attributable to the municipal real estate taxes on the Building and land on
which it is situated (herein the “Additional Real Estate Tax
Rent”).

    

    Notwithstanding
the foregoing, LESSOR shall be under no obligation to file for any abatement of
taxes for FY 2009, 2010 or any other fiscal year, and LESSEE shall pay all
amounts as invoiced by LESSOR, receiving a rebate based on its Allocable
Percentage only if abatement is sought and received by LESSOR.

    

    LESSEE
shall pay its Allocable Percentage of Additional Real Estate Tax Rent to LESSOR
based on a prospective annual schedule prepared by the LESSOR, in monthly
increments based on said schedule, with each monthly payment of Annual Base Rent
due hereunder.  Within one hundred twenty (120) days of the close of
each calendar year, LESSOR shall adjust the prior year’s schedule of Additional
Real Estate Tax Rent to account for actual and properly accrued costs, expenses,
and liabilities, and shall issue LESSEE a refund or deficiency statement for
that year, as appropriate.  LESSEE shall pay any deficiency shown
thereon within thirty (30) days of its receipt of said invoice.  In
the event of any disagreement, the parties shall engage in the negotiation and
arbitration processes set forth in the last paragraph of Section 3
hereof.  Any rebates due LESSEE (not contested by LESSOR) shall, in
LESSOR’s reasonable discretion, be credited toward Additional Rent or paid to
LESSEE within thirty (30) days.  LESSOR shall provide copies of the
relevant tax bills to LESSEE within a reasonable time after LESSEE’s
request.

    

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

    5.   Security
Deposit.     Upon execution hereof, LESSEE shall
post with LESSOR (and maintain at all times during the Original and Extended
Term), a Security Deposit in the amount of Eighty Four Thousand One Hundred
Forty One ($ 84,141.00) Dollars (the “Security Deposit Amount”) as described
below; which shall be held as security for LESSEE’s performance as herein
provided, to be returned to LESSEE at the end of this Lease Term (as may be
extended), subject to LESSEE’s satisfactory compliance with the terms and
conditions hereof.  To the extent LESSEE has not defaulted (beyond any
notice, grace and cure periods) in the performance of any LESSEE’s obligations
under this Lease prior to the second Lease Year hereunder, then LESSEE may
reduce the Security Deposit Amount to Fifty Six Thousand Ninety Four ($
56,094.00) Dollars for the balance of the Term hereof as of the start of the
second Lease Year.  LESSEE may do so by delivery of cash or a
replacement Letter of Credit to the Letter of Credit posted below.

    

    The
Security Deposit Amount shall be delivered to LESSOR, on LESSEE’s execution of
this Lease, either by:

    

    
      	
               
      

            	
              (a)

            	
              certified
      or bank check drawn on a Massachusetts bank (which sum, plus any interest
      thereon, LESSOR shall be entitled to commingle and use with LESSOR’s own
      funds); or

            

    

    

    
      	
               
      

            	
              (b)

            	
              irrevocable
      stand-by Letter of Credit, drawn on a commercial bank reasonably
      acceptable to LESSOR.

            

    

    

    If
available to LESSEE, the Letter of Credit shall be the full term of this
Lease.  However, the Letter of Credit may be written on an annual
basis with a provision that it may be drawn upon if LESSEE fails to provide a
renewal or replacement therefor forty-five (45) days prior to the expiration of
the then existing Letter of Credit.

    

    The
Letter of Credit shall: (i) name LESSOR as beneficiary; (ii) be for a term equal
to the Lease Term (or any extended term, as and when appropriate); (iii) be
cancelable only with a minimum 30 days prior notice to LESSOR; and (iv) be
substantially in the form attached hereto as Exhibit C and in all respects in
form and substance reasonably satisfactory to LESSOR.

    

    LESSOR
reserves the right, at any time, at which the LESSOR reasonably questions the
economic viability of the bank issuing the then existing Letter of Credit, to
require that the original Letter of Credit be replaced by another Letter of
Credit issued by another commercial bank reasonably acceptable to
LESSOR.  LESSEE shall be required to make its substitution within
fifteen (15) days from receipt of LESSOR’s notice.  Failure to provide
said replacement Letter of Credit shall entitle LESSOR to draw on the existing
Letter of Credit and hold the cash proceeds thereof as the Security Deposit
hereunder.

    

    
      
         

      

      
        6

        
          

        

      

      
         

      

    

    6.   Use of Leased
Premises.     LESSEE shall use the leased
premises for general office, research and development, and laboratory space
(inclusive of an adult stem cell collection center) only, which uses LESSOR
warrants and represents are currently allowed under local zoning regulations
(subject to compliance with federal, state and municipal safety, healthy,
building, and sanitary codes).  LESSEE will use the Leased Premises in
a careful, safe and proper manner and will not do or permit any act or thing
which is contrary to any legal or insurance requirement referred to in Section
17 hereof or which might impair the value of the Leased Premises or Building or
any part thereof or which constitutes a material risk to the safety, health or
well-being of other Lessees in the Building or the community, or creates a
public or private or private nuisance or waste.

    

    LESSEE
shall not be entitled to bring any animals (including without limitation
laboratory mice, rats or other mammals or primates, reptiles or aquatic life);
micro-organisms; or bacteriological, biological, or pathological agents into the
Building or the Leased Premises without prior written notice to LESSOR and
LESSOR’s express written consent; which consent LESSOR shall not unreasonably
withhold, delay or condition.  LESSOR hereby expressly approves
LESSEE’s use of the animals, micro-organisms, bacteriological, biological, and
pathological agents listed on Exhibit E attached hereto in the Leased
Premises.  As to any of the foregoing, if and to the extent permitted
by LESSOR, LESSEE, at its sole cost and expense, shall comply with all
applicable local, state and federal governmental statutes, regulations, rulings
and orders applicable thereto (including procuring any required permits or
authorizations).  LESSOR may condition its consent to the presence of
such animals based on quantity, type, arrangements for storage, sanitation,
transportation, and other physical and logistical considerations as LESSOR may
reasonably determine in each instance and from time to time as circumstances may
require.   LESSEE hereby indemnifies and holds harmless LESSOR
from and against any and all damages, liabilities, claims, demands, actions or
other losses arising from LESSEE’s non-compliance with this clause, or
non-compliance with any conditions imposed by LESSOR hereunder in the
future.

    

    LESSEE
shall have access to the Leased Premises and the Building parking garage for
LESSEE’s use seven days per week and twenty four hours per day for each day of
the Term, subject to the provisions of Section 7 hereof relative to overtime
heat and air-conditioning.  LESSEE shall keep the Leased Premises in a
clean and orderly and presentable condition equivalent to the reasonable
standards set by LESSOR for the Building; and LESSEE shall be solely responsible
to provide its own cleaning and janitorial services to the Leased Premises, at
its sole cost and expense.

    

    LESSEE
shall be responsible for its own cleaning of the Leased Premises, and the prompt
and proper disposal of all garbage, refuse, debris and other waste as mandated
by reasonable Building regulations.  LESSOR shall provide and maintain
a trash dumpster and/or compactor at the Building loading dock, for the
non-exclusive use of all tenants for disposal of non-hazardous/non controlled
materials and substances.  LESSEE may, but shall not be obligated
(except as required by law) to implement a recycling program, but its
implementation, maintenance, or operation shall be, except as required by law,
without any cost or expense to LESSOR or any other tenants of the
Building.  Except as required by law, LESSOR is not obligated to
coordinate any such program in any respect.

    

    
      
         

      

      
        7

        
          

        

      

      
         

      

    

    In
addition to its rights to occupy and use the Leased Premises, LESSEE shall also
be entitled to use the following areas, as follows:

    

    

    (a)           LESSEE
shall be entitled to the shared use (with other tenants) during the Lease Term
of an emergency generator provided by LESSOR.  LESSOR will maintain
and service the emergency generator during the Term.   LESSEEis
required to install, prior to its use thereof, at its own cost and expense (but
under LESSOR’s direction), a separate panel to the existing emergency generator
panel, along with a separate submeter to allow readings of LESSEE’s own use.
LESSOR shall be entitled to access the submeter periodically and shall invoice
LESSEE for its use, which invoices shall be paid by LESSEE within thirty (30)
days of receipt, said payments to be considered to be Additional Rent
hereunder.  As an express condition to LESSEE’s use of the emergency
generator as provided above, LESSEE agrees its use of the emergency generator
shall be at its sole risk at all times, and that LESSOR shall not be liable for
any claims, damages or liabilities arising the operation or malfunction of the
emergency generator, unless LESSOR fails to adequately maintain or service the
emergency generator.

    

    All
tenants sharing use of the emergency generator, from time to time, shall pay
their own proportional share for its operation (including without limitation all
costs and expenses of service and maintenance), with LESSEE to be responsible
for its respective proportional share. Payments shall be made within thirty (30)
days of invoicing by LESSOR.  Cost sharing allocations shall be based
on the amount of power (amperage) allocated to each such tenant by LESSOR, such
that all tenants engaged in such sharing shall account for 100% of all such
costs.  For example two tenants sharing the emergency generator where
tenant A is allocated 30% and tenant B allocated 70% shall share all such costs
in that proportion; if a third tenant is added such that tenant A is allocated
30%, tenant B allocated 40%, and tenant C allocated 30% then they shall share
all such costs in that proportion; etc.  Tenant shall have the right
to review LESSOR’s documentation resulting in any charges to LESSEE hereunder
upon request.

    

    Alternative
to the use of the shared emergency generator, LESSEE shall have the option in
its discretion to install its own emergency generator in a location either on
the roof of the Building, or alternatively, in another location designated by
LESSOR (e.g. parking garage level) by mutual agreement of LESSOR and LESSEE;
LESSOR to approve the specifications therefor (such approval not to be
unreasonably withheld or delayed); with all costs and expenses thereof to be
borne by the LESSEE.

    

    
      
         

      

      
        8

        
          

        

      

      
         

      

    

    (b)           LESSEE
shall be entitled to install its own additional HVAC equipment, antennas,
satellite dishes and other communications equipment on the roof of the Building
(with wiring, cabling, ducting, and conduits, as needed through the Building to
the Leased Premises); LESSOR to approve the locations and specifications
therefor (such approval not to be unreasonably withheld or delayed); with all
costs and expenses thereof to be borne by the LESSEE (including all costs and
expenses of operation, servicing, maintenance and repair;

    

    (c)           LESSEE
shall have the exclusive use of an acid neutralization system to be installed by
LESSOR in the Leased Premises (LESSOR representing that it is in good operating
condition and repair (including lime chips) and proper working order as of the
Delivery Date, as required by the MWRA, but otherwise making no representations
or warranties with respect thereto); LESSEE being fully responsible to all
maintenance, repairs and replacements thereto at its sole cost and expense and
for obtaining its own MWRA permit therefor.

    

    7.   Utilities.     LESSOR
shall provide to the Leased Premises the building standard facilities for heat
and air conditioning for the Leased Premises, and also to the common areas and
facilities which LESSEE enjoys the right to use, as required for comfortable
occupancy, during 8 AM to 6 PM each business day (herein “Normal Business
Hours”).

    

    LESSOR
shall provide electricity to the Leased Premises (to be distributed throughout
the Leased Premises however, at LESSEE’s sole cost and
expense).  Notwithstanding the foregoing, LESSEE shall pay all charges
for electricity used on the Leased Premises.  LESSEE shall pay all
actual charges, without mark-up or profit to LESSOR, for electricity used on the
Leased Premises as it may be separately metered to the Leased Premises, or based
on LESSEE’s Allocable Percentage of the total electric bill for the Building if
not separately metered or if only partially separately metered to the Leased
Premises (whichever or both as may be applicable), at the reasonable
determination of the LESSOR.   LESSOR shall determine any such
electric charges not separately metered to the Leased Premises in a uniform and
non-discriminatory manner relative to other lessees and occupants in the
Building whose electric charges are not separately metered.  LESSEE
shall pay its electrical charges to LESSOR as invoiced by LESSOR on a monthly
basis (whether based on actual or estimated charges) within thirty (30) days of
its receipt of the invoice.  Within one hundred twenty (120) days of
the close of each calendar year, LESSOR shall adjust the LESSEE’s prior year’s
electrical payments to account for the actual and properly accrued charges, and
shall issue LESSEE a refund or deficiency statement for that year, as
appropriate.  LESSEE shall pay any deficiency shown thereon within
thirty (30) days of its receipt of said invoice.  In the event of any
disagreement, the parties shall engage in the negotiation and arbitration
processes set forth in the last paragraph of Section 3 hereof.  Any
rebates due LESSEE (not contested by LESSOR) shall, in LESSOR’s reasonable
discretion, be credited toward then current Rent.  LESSOR shall
provide copies of the relevant electric bills, and information regarding which
spaces in the Building are not separately metered to other lessees and
occupants, to LESSEE upon LESSEE’s request.

    

    
      
         

      

      
        9

        
          

        

      

      
         

      

    

    LESSOR
shall maintain an average temperature in the Building between 60 degrees
Fahrenheit and 80 degrees Fahrenheit at all times; and an average temperature in
the Leased Premises generally between 68 degrees Fahrenheit and 76 degree
Fahrenheit during Normal Business Hours.  LESSOR shall make available
overtime heat and air-conditioning and LESSEE shall pay as additional rent,
overtime heat and air-conditioning as may be requested by LESSEE for the Leased
Premises on the basis of $ 150.00 per zone (there being one zone in the office
portion of the Leased Premises), per hour, (subject to increase by the same
percentage amount by which the standard electric rates are increased), as billed
by LESSOR.  LESSEE shall give LESSOR forty eight (48) hours prior
notice of any requirements for specialized overtime heating and
air-conditioning.  LESSOR shall not be liable to LESSEE for any
interruption, interference, damage or loss to LESSEE’s research or
experimentation occasioned as a result of any failure in the heating,
ventilation, air conditioning, or electrical services or other utilities
servicing the Building or the Leased Premises not caused by LESSOR’s negligence,
willful misconduct, or failure to use reasonably diligent efforts to restore any
service interruption within its reasonable control.  No plumbing or
electrical work which affects the base Building systems or which requires a
municipal permit or which may interfere with any other tenant in the Building
shall be done without LESSOR’s approval which approval shall not be unreasonably
withheld or delayed and the appropriate municipal permit and inspector’s
approval.  Hot and cold water for domestic type sanitary and drinking
purposes and ordinary office pantry purposes (only) shall be supplied at
LESSOR’s expense.  There shall be separately metered and separately
paid for by LESSEE, non-potable laboratory water and water for other
particularized uses in the Leased Premises.

    

    LESSOR
shall also provide the following services in accordance with comparable first
class research laboratory and office buildings in the mid-Cambridge submarket at
no additional charge: (a) non-exclusive shared passenger and freight elevator
service and loading dock service to the Leased Premises on a 24-hour basis, (b)
base Building fire and life-safety systems; and (c) janitorial and cleaning
service to common lavatories and common areas.

    

    LESSEE
shall not be required to pay for any utilities as aforesaid to the extent the
same are included in Operating Expenses.

    

    8.   Compliance with
Laws.     LESSEE acknowledges that no trade,
occupation, or activity shall be conducted in the Leased Premises or use made
thereof which will be unlawful, improper, noisy or offensive, or contrary to any
federal or state law or administrative regulations, or any municipal ordinance
or regulations in force at any time in Cambridge.  LESSEE shall keep
all employees working in the Leased Premises covered with Worker’s Compensation
Insurance, as applicable.  Specifically, LESSEE shall be responsible
for causing the Premises and any work conducted therein to be in full compliance
with the Occupational Safety and Health Act of 1970 and any amendments
thereto.  LESSEE shall strictly adhere to any and all federal, state,
and municipal laws, ordinances, and regulations governing the use of LESSEE’s
laboratory scientific experimentation.  LESSEE shall be solely
responsible for procuring and complying at all times with any and all necessary
permits directly relating or incident to: the conduct of its office and research
activities on the Premises; its scientific experimentation; transportation;
storage; handling; use and disposal of any low level radioactive or
bacteriological or pathological substances or organisms or other hazardous
wastes or environmentally dangerous substances or materials.  LESSOR
agrees to cooperate (with no direct or indirect costs or expenses, or increase
in any liability whatsoever, to LESSOR) with LESSEE’s reasonable efforts to
obtain and maintain in force and effect all such permits. LESSEE shall promptly
give notice to LESSOR of any warnings or violations relative to the above
received from any federal, state, or municipal agency or by any Court of Law,
and shall promptly cure the conditions causing any such violations; and LESSOR
shall permit LESSEE to cure said harm or hazard prior to any active intervention
by LESSOR, except where such intervention is necessitated by the emergency
nature of the harm or hazard; or where the harm or hazard impairs the value of
the Building, (directly or as collateral on any debt); interferes with any other
tenant’s rights; or is required by any governmental agency or
authority.

    

    
      
         

      

      
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    Throughout
the Term, LESSOR shall cause the base Building (including common areas and
lavatories) to comply with all applicable laws, governmental rules and
regulations.

    

    LESSEE
shall fully indemnify and hold harmless in all respects LESSOR from any and all
claims, demands, losses, liabilities, and damages (including all necessary and
reasonable expenses for contractors, consultants, environmental engineers,
attorneys, and other professionals utilized by LESSOR to evaluate and remediate
any hazard or harm which LESSEE has failed to cure; and further including any
and all fines or fees assessed by any governmental agency relative to any hazard
or harm), directly arising from the conduct of its activities on the Leased
Premises (especially relating to or involving hazardous substances), or LESSEE’s
obligations and responsibilities as set forth above and herein, and excepting
liability for any claims and damages resulting from the acts or negligence of
LESSOR or its agents or employees.

    

    LESSOR
shall fully indemnify and hold harmless in all respects LESSEE from any and all
claims, demands, losses, liabilities, and damages (including all necessary and
reasonable expenses for contractors, consultants, environmental engineers,
attorneys, and other professionals utilized by LESSOR to evaluate and remediate
any hazard or harm which LESSOR has failed to cure; and further including any
and all fines or fees assessed by any governmental agency relative to any hazard
or harm), directly arising from the negligence of LESSOR or LESSOR’s breach of
its obligations under this Lease, and excepting liability for any claims and
damages resulting from the acts or negligence of LESSEE or its agents or
employees.

    

    
      
         

      

      
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    9.   Fire and General
Insurance Requirements.     LESSEE shall not
permit any use of the Leased Premises which will make voidable, increase any
premium (unless LESSEE agrees to pay such increase), or decrease any insurance
on the Building and property of which the Leased Premises are a part, or on the
contents of said Building, or which shall be contrary to any law, regulation, or
order from time to time to established or issued by the local Fire Department,
or any similar body, or any restriction contained in any of LESSOR’S insurance
policies as to the Building and property of which LESSEE has been
notified.  LESSEE shall, within 30 days after demand accompanied by
reasonable evidence, reimburse LESSOR, all extra insurance premiums caused by
LESSEE’s use of the Leased Premises for other than standard office purposes.
LESSOR shall insure the Building on a replacement cost basis and maintain a
policy of commercial liability insurance, all in manner consistent with owners
of comparable first class research laboratory and office buildings in the
mid-Cambridge submarket.  Each party hereby waives any right of
recovery against the other for injury or loss covered by insurance maintained or
required to be maintained by such party to the extent of the injury or loss
covered and paid by the applicable insurance company (or, if such party failed
to maintain the insurance required hereunder, which would have been paid by the
applicable insurance company if such party had maintained such
insurance).

    

    LESSEE
shall not vacate the Leased Premises or permit the same to be unoccupied other
than during LESSEE’s customary non-business days or hours, unless suitable
alternative arrangements are made with LESSOR to ensure the security of the
Leased Premises and its maintenance in a safe condition not posing any threat of
any harm to any other tenants in the Building.

    

    10.  Maintenance of Leased
Premises.     LESSOR shall be responsible for
all structural maintenance of the Leased Premises including without limitation
the roof of the Building of which the Leased Premises are a part and for the
normal maintenance, repair and replacement of all LESSOR’s heating and cooling
equipment, doors, locks, plumbing, and electrical wiring and base Building
electrical and mechanical equipment, elevators, base Building fire and
life-safety systems, common areas and lavatories, parking areas and walkways,
all in accordance with standards applicable to comparable first class research
laboratory and office buildings in the mid-Cambridge submarket, but specifically
excluding damage caused by the careless, malicious, willful, or negligent acts
of LESSEE, and chemical, water or corrosion damage from any source within the
control of LESSEE.  LESSEE agrees to maintain at its expense all other
elements and components of the Leased Premises in the same condition as they are
at the commencement of the Term or as they may be put in during the Term of this
lease, normal wear and tear and damage by fire or casualty only excepted, and
whenever necessary, to replace light bulbs (after the first six months of the
Term), plate glass and other glass therein, acknowledging that the Leased
Premises upon delivery are in good order and the light bulbs and glass
whole.  LESSEE will properly control or vent all solvents, degreasers,
and the like and shall not cause the area surrounding the Leased Premises to be
in anything other than a neat and clean condition, depositing all waste in
appropriate receptacles.  LESSEE shall not permit the Leased Premises
to be overloaded, damaged, stripped or defaced, suffer any waste of the Leased
Premises, nor keep any animals within the Leased Premises (except as otherwise
expressly provided herein).  Any maintenance which is the
responsibility of LESSOR and which is necessitated by some specific aspect of
LESSEE’s willful acts or negligent use of the Leased Premises shall be at
LESSEE’s expense.  All maintenance provided by LESSOR shall be
performed as reasonably required at LESSOR’s discretion and except for
emergencies, during LESSOR’s normal business hours (unless the same shall
materially interfere with the operation of LESSEE’S business, in which case
during reasonable times that will minimize interference).  LESSEE may
not keep any animals on the Leased Premises without prior written notice to and
approval from LESSOR in each instance, which approval may be denied or
conditioned in LESSOR’s reasonable discretion.  LESSEE shall be solely
responsible for maintenance and operation of any and all of its systems
installed or servicing the Leased Premises, and shall waive any and all claims
against LESSOR and other tenants in the Building for any damage, impairment, or
loss relative to these systems unless caused by the acts or negligent or
reckless acts of those persons.  Specifically, LESSEE shall maintain,
at its sole expense, and pay all charges for electrical service and use of, the
following: (a) LESSEE’s customized “cold room” or “warm room” (if any) and all
equipment associated with its operation; and, (b) backflow preventers; (c) acid
neutralization chip tanks; and (d) any other specialized equipment or mechanical
systems servicing the Leased Premises.

    

    
      
         

      

      
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    11.   Lessee’s
Alterations to Leased Premises – Condition at Lessor’s Delivery – Lessee’s
Construction Allowance.    LESSEE shall not make
structural alterations or additions of any kind to the Leased Premises, but may
make nonstructural alterations provided LESSOR consents thereto in writing, said
consent not to be unreasonably withheld or delayed.  Except with
respect to decorative work (such as painting and carpeting) for which a building
permit is not required, plans and specifications shall be submitted by LESSEE to
LESSOR in each instance, in advance of any proposed work, in sufficient detail
and scope to enable LESSOR to make a reasonable determination
thereon.  LESSOR shall not charge LESSEE for any supervisory,
management or other fees of its own staff (but may charge LESSEE for any
reasonable fees required from third party engineers deemed necessary by LESSOR
in order to fully review and approve LESSEE’s work).  All such allowed
alterations shall be at LESSEE’s expense and shall be in quality at least equal
to the present construction.  If LESSOR performs any requested
services for LESSEE in connection with such alterations or otherwise, any
invoice therefor will be promptly paid.  LESSEE shall be responsible
to use such contractors as will ensure harmonious labor relations in the
Building and on the site; and to prevent strikes, work stoppages, picketing and
other labor actions. LESSEE shall provide LESSOR with reasonably acceptable
general liability and builder’s risk insurance certificates naming LESSOR and
its lender as additional insureds prior to the commencement of any work by
LESSEE. LESSEE shall not permit any mechanics liens, or similar liens, to remain
upon the Leased Premises in connection with work of any character performed or
claimed to have been performed at the direction of LESSEE and shall cause any
such lien to be released, removed or bonded forthwith without cost to
LESSOR.  Any alternations undertaken by LESSEE, including without
limitation window blinds or other window treatments, shall be building standard
unless LESSOR expressly agrees otherwise.  LESSOR shall have the right
at any time to change the arrangement of parking areas, stairs, walkways or
other common areas of the Building of which the Leased Premises are a part,
provided such changes do not interfere with LESSEE’s use or access to such areas
and facilities.

    

    
      
         

      

      
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    Notwithstanding
the foregoing, prior to the commencement of the Term hereof LESSOR shall, at its
sole cost and expense, deliver the Leased Premises to the LESSEE on the Delivery
Date as set forth in Section 32 hereof, in an “AS/IS” condition in all respects;
but nevertheless such that:

    

    (i)           the
Leased Premises conforms to LESSOR’s standard Buildingspecificationswith all
base building systems in good working conditionand suitable for general
laboratory uses;

    

    (ii)           the
base Building (including common areas and lavatories) is
ADAcompliant;

    

    (iii)           the
Leased Premises is ADA compliant, and with code compliantdemising walls and
common area corridors; and

    

    (iv)           the
Leased Premises conforms with the specifications for “Landlord’sWork” set forth
on Exhibit D hereto;

    
      

      (v)           The
following items of “additional work” shall be
completed:

    

    

    
      	
              -  

            	
              Hoods
      – LESSOR will complete installation of 2 chemical hoods (not including
      plumbing), with flammable storage bases for the hoods; and LESSOR will cap
      cup sink openings

            

    

    

    
      	
              -  

            	
              Electric
      outlets – LESSOR will provide 12 electrical outlets on knee spaces on lab
      benches

            

    

    

    
      	
              -  

            	
              Ice
      Machine – LESSOR will install Tenant provided ice
  machine

            

    

    

    
      	
              -  

            	
              Fire
      safety – LESSOR will provide the sprinklers to the Leased Premises and
      smoke detectors, up to code requirements; and LESSOR will provide 4 fire
      extinguishers to LESSEE for its use (but makes no warranties or
      representations of any kind with respect to their
  use)

            

    

    

    
      	
              -  

            	
              Chemical
      storage – LESSOR will provide additional chemical storage space to LESSEE
      as designated by LESSOR on the lower level of the Building, at LESSEE’s
      sole cost and expense

            

    

    

    
      	
              -  

            	
              Loading
      Dock Signage – LESSSOR will provide directional signage on the Loading
      Dock.

            

    

    

    
      
         

      

      
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    Any other items of work that LESSEE
desires to be done by LESSOR shall be separately priced and agreed to in a “side
letter”, but shall not be deemed to be a condition for delivery of the Leased
Premises by LESSOR nor shall it delay the Delivery Date.

    
 

    LESSEE
may make alterations to the Premises, inclusive of installing and equipping the
Premises for laboratory and research use, commencing upon LESSOR’s approval of
LESSEE’s plans and specifications as contemplated above (herein, “LESSEE’s
Build-Out”).  LESSEE’s customized improvements to the Leased Premises,
including without limitation all laboratory equipment (and including but not
limited to hoods, vacuum pumps, and RODI water system(s)) shall be provided and
installed at LESSEE’s sole cost and expense, and shall remain the property of
LESSEE.  LESSEE may make alterations to the Leased Premises that
include, without limitation, the following:  (i) transforming
an  interior lab into a “glasswash facility” including installation of
a glasswasher, autoclave, and pure water systems, (ii) placing cable data and
telephone drops throughout the Leased Premises; (iii) carpeting lab offices;
(iv) installing shelving; and (v) installing electrical outlets within the
Leased Premises and tying into the emergency generator system at the appropriate
locuses.

    

    12.   Assignment and
Subletting.     LESSEE covenants and agrees that
neither this Lease nor the Term and estate hereby granted, nor any interest
therein will be assigned, mortgaged, pledged, encumbered or otherwise
transferred, and that neither the Leased Premises, nor any part thereof, will be
encumbered in any manner by reason or by act or omission of LESSEE, or used or
occupied, or permitted to be used or occupied, by anyone other than LESSEE, its
servants, agents and employees, or for any use or purpose other than as above
stated, or be sublet, or offered or advertised for sub-letting, without in each
case LESSOR’S prior written consent, which shall not be unreasonably withheld,
or delayed. Notwithstanding the foregoing, LESSOR’s prior written consent shall
not be required for any assignment or sublet to an entity which owns or controls
LESSEE, or is owned or controlled by LESSEE, or is under common ownership or
control with LESSEE, or any entity succeeding to LESSEE as a direct result of a
merger or consolidation or asset or stock transfer (“Permitted
Transfer”).  Additionally, LESSEE may enter into an office sharing
agreement for portions of the Leased Premises with Alnara Pharmaceuticals, Inc.,
during the first and second Lease Years hereunder (the “Permitted Office
Share”). Such Permitted Office Share shall be on terms and conditions
satisfactory to LESSEE and will not require LESSOR’s consent; shall not be
subject to the Rent Mark Up (as defined below) due to the LESSOR; and shall not
trigger LESSOR’s recapture rights (as set forth below).

    

    The
grounds upon which LESSOR may reasonably withhold its consent are as
follows:

    

    (i)           The
prospective assignee’s or sublessee’s intended use of the Premises is not a
permitted use under or will not conform with the restrictions set forth in
Section 6 of the Lease; or,

    

    
      
         

      

      
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    (ii)           The
nature, character, class and standards of the prospective assignee’s or
sublessee’s business will not be consistent with those of other lessees in the
Building; or,

    

    (iii)           The
financial strength and reliability of a prospective assignee is not sufficient,
in LESSOR’s reasonable business judgment, to meet all of LESSEE’s obligations to
be performed as of and from the date of said assignment.  The
prospective assignee must produce to LESSOR’s accountants, if available, a
verified and current audited financial statement, (or if none has been prepared
by said prospective assignee within the past three years, a CPA or CFO certified
current financial statement); or,

    

    (iv)           The
operations of the prospective assignee or sub-lessee will violate any exclusive
or other rights given any other lessees in the Building; or,

    

    (v)           The
failure of LESSOR’s institutional mortgage lender(s) to consent, if required by
the terms of the mortgage (LESSOR to use diligent efforts to request such
consent).

    

    LESSOR,
in addition to Annual Base Rent and all Additional Rent hereunder, shall be
entitled to fifty (50%) percent of the amount of any and all sums assessed or
collected by LESSEE, in whatever form, attributable arising out of any permitted
subletting or assignment (after deduction for reasonable and actual brokerage
commissions and reasonable and actual attorneys fees incurred which exceed said
Annual Base Rent or Additional Rent hereunder, (herein, “Rent
Mark-Up”).

    

    Notwithstanding
LESSOR’s consent to the assignment or subletting, as contemplated above, LESSEE
shall remain primarily liable to LESSOR for the payment of all Rent and for the
full performance of the covenants and conditions of this Lease; and LESSOR may
(immediately in the case of an assignment, or in the case of a sublease after
default by LESSEE after notice and expiration or any applicable cure period)
collect all sums due as Rent directly from the assignee/subtenant.

    

    Notwithstanding
the foregoing, in the event that LESSEE desires to assign this Lease (other than
a Permitted Transfer) or sublet the Premises or any portion thereof (other than
a Permitted Transfer or a Permitted Office Share), LESSEE shall in each such
instance notify the LESSOR in writing, stating the intended effective date of
the proposed assignment or sublet (the “Assignment/Sublet Effective
Date”).  LESSOR shall have a period of 60 days from the date it
receives such notice to exercise an election to recapture the Take Back Space
(as such term is defined below) in accordance with terms and conditions of this
paragraph, in LESSOR’s sole discretion and without any obligation to do
so.  LESSEE shall provide LESSOR, upon request, any material
information in the possession of LESSEE (or its intended assignee or subtenant)
reasonably necessary for LESSOR to make its decision LESSEE shall identify to
LESSOR the space proposed to be assigned or sublet (the “Take Back Space”) and
the term of the proposed sublease (if less than the entire remaining
term).  If LESSOR elects to recapture the Take Back Space, LESSOR
shall send written notice thereof to LESSEE within such 60 day period, time of
the essence; and LESSEE shall be irrevocably bound to surrender and vacate the
Take Back Space as if the Term of the Lease had expired on the Assignment/Sublet
Effective Date set forth in the LESSEE’s initial notice to LESSOR; and provided
LESSEE vacates and surrenders on said date, without being in default of any
provision hereof as of said date, this Lease shall be null and void and without
recourse to either party hereto with respect to such space (but for terms and
conditions contemplated herein to survive termination of this Lease) and, if
such recapture is for less than the entire Premises, the Rent and Tenant’s
Allocable Percentage hereunder shall be adjusted pro-rata. If LESSOR fails to
exercise its option to recapture the Take Back Space strictly in accordance with
terms of this paragraph then LESSOR shall have no further rights under this
section to recapture the Take Back Space and LESSEE shall be free to sublet or
assign the Take Back Space subject to LESSOR’s consent requirements set forth
herein, but only as to the Take Back Space and the identified
parties.  LESSEE shall not be entitled to any payments, commissions,
credits, offsets, or any kind or nature arising from said sublet, nor shall any
individual or entity acting by, through, or under LESSEE be so
entitled.  If LESSOR elects to recapture the Take Back Space in
accordance with terms herein, LESSEE shall be subject to the penalties for
holding over set forth in this Lease, if it fails to vacate and surrender the
Premises or applicable portion thereof by the Sublet/Assignment Effective Date,
or if it fails to discharge (or cause its lenders or others with which LESSEE
has dealt to discharge) any and all liens or other encumbrances, notices, or
restrictions on its leasehold or contractual interest in and to the Premises or
applicable portion thereof as of said date.  Nothing in this paragraph
shall require LESSOR to make an election to take back the Premises or applicable
portion thereof, and nothing in the aforesaid process shall relieve LESSEE of
its liability under this Lease should LESSOR elect not to take back the Premises
or applicable portion thereof.

    

    
      
         

      

      
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    13.   Subordination.    This
Lease shall be subject and subordinate to any and all instruments of record,
mortgages, and other instruments in the nature of a mortgage, extant or coming
into existence at any time hereafter, and LESSEE shall, when requested, promptly
within fifteen (15) days of request, execute and deliver such reasonable written
instruments (on LESSOR’s lender’s form) as shall be reasonably necessary to show
the subordination of this lease to said instruments of record, mortgages, or
other such instruments in the nature of a mortgage; and LESSOR shall use best
efforts to ensure that the holders of such mortgages provide LESSEE with
non-disturbance agreements recognizing the rights of LESSEE under this
Lease.  The LESSOR’s lender’s SNDA form attached hereto as Exhibit F
and the terms and conditions set forth herein shall be deemed to be
presumptively reasonable with respect to the foregoing standard.

    

    Notwithstanding
the foregoing, LESSOR shall promptly obtain non-disturbance agreements from any
ground or underlying lessors or present or future mortgagees of Landlord's
interest in the Leased Premises, in exchange for the execution of the
subordination agreement by the LESSEE.  The subordination of this
Lease to mortgages hereinafter placed on the Building or land (as described
above) shall be conditioned on the receipt by LESSEE from the mortgagee of a
non-disturbance agreement, in recordable form, providing in substance that in
the event of a foreclosure of such mortgage, this Lease, and LESSEE'S possession
shall not be disturbed. The LESSOR’s lender’s SNDA form attached hereto and the
terms and conditions set forth herein shall be deemed to be presumptively
reasonable with respect to the foregoing standard.

    

    
      
         

      

      
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    14.   Lessor’s Access
to Leased Premises.     LESSOR or agents of
LESSOR may at reasonable times and upon reasonable notice where possible enter
to view the Leased Premises and may remove any signs not approved and affixed as
herein provided, and may make repairs and alterations as LESSOR is required or
elects to do and repairs which LESSEE is required but has failed to do (but only
after notice and an opportunity to repair being provided to LESSEE), and may
show the Leased Premises to prospective mortgagees, appraisers, brokers, and
others and, during the final year of the Term, to prospective
tenants.  Additionally, to the extent necessary to service other
portions of the Leased Premises or the common areas or other tenant spaces in
the building; LESSOR may add, relocate, or maintain a chase, pipes, conduits, or
ducts, within the Leased Premises provided the aforesaid do not materially
interfere with LESSEE’s use of the Leased Premises or its aesthetics or
materially reduce the useable space within the Leased Premises.  Any
entry by LESSOR onto the Leased Premises for this purpose shall be done in such
manner as to minimally interfere with the business conducted thereon by LESSEE,
and undertaken with reasonable steps to protect LESSEE’s property.

    

    15.   Snow
Removal.     LESSOR will be responsible for the
removal or other treatment of snow and ice on walkways, sidewalks, entryways and
parking areas.  Notwithstanding the foregoing, however, LESSEE shall
hold LESSOR harmless from any and all claims by LESSEE’s agents,
representatives, employees or business invitees for damage or personal injury
resulting in any way from snow or ice on any area serving the Building, provided
LESSOR has performed this obligation absent LESSOR’s gross negligence or willful
misconduct.

    

    16.   Access and
Parking.     LESSEE shall be granted, at current
rates (which may be increased from time to time to reflect market increases),
the right to park up to twelve (12) cars in the Building’s on-site indoor
parking lot or facility on an unassigned and unreserved basis, in single or
tandem spaces or on a valet basis which LESSOR in its sole discretion shall
designate from time to time.   The initial parking rate therefor
shall be

    $ 210 per
month, per car, which monthly rate may be changed by LESSOR in its discretion
subject to and reflective of periodic market changes.  All payments
for these parking rights shall be considered to be Additional Rent under this
Lease.  Additionally, LESSEE shall be entitled to up to an additional
four (4) parking spaces (i.e. sixteen (16) parking spaces in total) in the
building garage (but only on a valet basis, and only to the extent LESSOR is
providing valet service to the building garage, which LESSOR shall not be
obligated to do), at then current rates as set by LESSOR in its discretion.   The Building
garage, plus any stairs, walkways or other means of ingress or egress controlled
by the LESSOR shall not in any case be considered extensions of the Leased
Premises.  LESSEE will not obstruct in any manner any portion of the
Building or the walkways or approaches to the Building, and will conform to all
reasonable and non-discriminatory rules now or hereafter made by LESSOR for
parking, and for the access and egress, security, care, use, or alteration of
the Building garage, its facilities and approaches.  LESSEE further
warrants that LESSEE will not permit any employee or visitor to violate this or
any other covenant or obligation to LESSEE.  No vehicles shall be
stored or left in any parking area for more than three (3) nights without
LESSOR’s written approval.  Unregistered or disabled vehicles, or
storage trailers of any type, may not be parked overnight at any
time.  LESSEE agrees to assume all expense and risk for the towing of
any misparked vehicle belonging to LESSEE or LESSEE’s agents, employees,
business invitees, or callers, at any time.  For the purpose of this
section the term “space” shall mean general access for one motor
vehicle.  All vehicles shall be parked and left on the premises at
their owners’ sole risk and LESSOR shall not be liable for any damages caused to
said vehicles while they are parked or left on the premises, except to the
extent due to LESSOR’S negligence or willful misconduct.

    

    
      
         

      

      
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    17.   Lessee’s
Liability Insurance.     LESSEE shall be solely
responsible as between LESSOR and LESSEE for deaths or personal injuries to all
persons whomsoever occurring in or on the Leased Premises from whatever cause
arising, (unless caused by the negligent acts or omissions of LESSOR), and
damage to property to whomsoever belonging arising out of the use, control,
condition or occupation of the Leased Premises by LESSEE; and LESSEE agrees to
indemnify and save harmless LESSOR from any and all liability, reasonable
expenses, damage, causes of action, suits, claims or judgments caused by or in
any way growing out of any matters aforesaid.  LESSEE will secure and
carry at its own expense a comprehensive general liability policy insuring
LESSEE, LESSOR (and its lenders and any other entity reasonably requested by
LESSOR) against any claims based on bodily injury (including death) arising out
of the condition of the Leased Premises or their use by LESSEE, such policy to
insure LESSEE, LESSOR and said other entities against any claim up to Three
Million ($3,000,000.00) Dollars per occurrence for personal injury or damage to
property.  LESSOR and its lenders shall be included in such policy as
additional insureds.  LESSEE will promptly file with LESSOR
certificates showing that such insurance is in force, and thereafter will file
renewal certificates prior to the expiration of any such
policies.  All such insurance certificates shall provide that such
policies shall not be canceled without at least thirty (30) days prior written
notice to each insured named therein.

    

    18.   Fire, Casualty,
Eminent Domain.     Should a substantial portion
of the Leased Premises, or of the property of which they are a part, be
substantially damaged by fire or other casualty, or be taken by eminent domain,
a just and proportionate abatement of rent shall be made, and LESSOR may elect
to terminate this Lease by written notice given within sixty (60) days of the
fire, casualty or taking, in which case this Lease shall terminate as of the
date of such fire, casualty or taking.  When such fire, casualty, or
taking renders the Leased Premises substantially unsuitable for LESSEE’s use, a
just and proportionate abatement of rent shall be made, and LESSEE may elect to
terminate this Lease if: (a) LESSOR fails to give written notice within sixty
(60) days of intention to restore Leased Premises, or (b) LESSOR fails to
restore the Leased Premises to a condition substantially suitable for LESSEE’s
use within one hundred eighty (180) days of said fire, casualty or taking, or
(c) Leased Premises cannot reasonably be anticipated to be restored to a
condition substantially suitable for LESSEE’s use within one hundred eighty
(180) days of said fire, casualty or taking. If any portion of the Leased
Premises are damaged by fire or other casualty or taken by eminent domain and no
termination has been elected, a just and proportionate abatement of rent shall
be made, and LESSOR shall proceed with diligence to restore the Leased
Premises.  LESSOR reserves all rights for all damages or injury to the
Leased Premises for any taking by eminent domain; except for damage to LESSEE’s
moveable fixtures, property or equipment, or moving expenses, which are
specifically allocated to LESSEE by the taking authority or
arbitrators.

    

    
      
         

      

      
        19

        
          

        

      

      
         

      

    

    19.   Brokerage.     LESSEE
and LESSOR each warrants and represents to the other that they have dealt with
no broker or third person with respect to this Lease or the Leased Premises or
Building entitled to a commission as a result of this Lease, other than CB
Richard Ellis and Colliers Meredith & Grew, whose fee shall be paid by
LESSOR pursuant to a separate written agreement; and LESSOR and LESSEE each
agree to indemnify and hold harmless the other from any fees, expenses, or
damages arising from breach of the above warranty.

    

    20.   Signage.     LESSEE
shall have the right, at LESSOR’s expense, to have its name included in any
central directory in the Building’s lobby maintained by LESSOR listing the
Building’s other tenants.  LESSOR authorizes LESSEE, if desired, to
display one sign on LESSEE’s office entrance door (at LESSEE’s expense)
consistent with similar signs of other tenants.  LESSEE shall obtain
the written consent of LESSOR before erecting any sign on the Leased Premises
visible from outside the Leased Premises, which consent may be conditioned on
compliance with LESSOR’s requests as to size, wording, and location of such
signs, but which shall not be unreasonably withheld or delayed.

    

    21.   Default.     In
the event that: (a) LESSEE shall default in the payment of the security deposit
or any installment of Annual Base Rent of any Additional Rent, and such default
shall continue for five (5) business days after written notice thereof; or (b)
LESSEE shall default in the observance or performance of any other of LESSEE’s
covenants, agreements, or obligations hereunder and such default shall not be
corrected within thirty (30) days after written notice thereof or within such
longer time as may be reasonably necessary provided LESSEE commences to cure
within such 30-day period and diligently pursues such cure to completion; (c)
LESSEE shall be declared bankrupt or insolvent according to law, or if any
voluntary or involuntary petition for bankruptcy is filed against LESSEE and not
discharged within sixty (60) days from filing; or if any assignment shall be
made of LESSEE’s property for the benefit of creditors; then, while such default
continues, and without demand or further notice, LESSOR shall have the right to
re-enter and take complete possession of the Leased Premises, to declare the
term of this Lease ended, and to remove LESSEE’s effects, without being guilty
of any manner of trespass and without prejudice to any remedies which might be
otherwise used for arrears of rent and other default of breach of
covenant.  LESSEE shall indemnify LESSOR against all loss of Rent and
other payments which LESSOR may incur by reason of such termination during the
remainder of the term, it being expressly understood that LESSOR shall use
reasonable efforts to relet the Leased Premises and collect all rents from such
reletting.  If LESSEE shall default, after reasonable notice thereof,
in the observance or performance of any conditions or covenants on LESSEE’s part
to be observed or performed under or by virtue of any one of the provisions in
any section of this Lease, LESSOR, without being under any obligation to do so
and without thereby waiving such default, may after the expiration of any
applicable cure period, remedy same for the account and at the expense of
LESSEE, (including but not limited to application of any or all of the Security
Deposit held by LESSOR).  If LESSOR pays or incurs any obligations for
the payment of money in connection therewith, including but not limited to
reasonable attorney’s fees in instituting, prosecuting or defending any action
or proceeding, such sums paid or obligations incurred, with interest at the rate
of eighteen percent per annum and costs, shall be paid to LESSOR by LESSEE as
additional rent.  Upon default of this Lease by LESSEE, and because
the payment of Rent in monthly installments is for the sole convenience of
LESSEE, the entire balance of the Rent which would accrue hereunder shall at the
option of LESSOR become immediately due and payable.  The foregoing
shall be subject to LESSOR’s agreement to take reasonable steps to mitigate its
damages (in which case the LESSOR shall repay to LESSEE the mitigated amount
against the accelerated Rent paid by LESSEE), but such mitigation shall not be
construed to require LESSOR to lease to any substitute tenant: (a) at any Rent
that is less than the lower of: (i) the Rent that is set forth in this Lease, or
(ii) the Rent for comparable space in the Building being marketed by LESSOR as
of the date of the default; (b) for a Term that is less than the remaining
balance of the Term of the Lease; (c) on any terms or conditions that are
materially less favorable to LESSOR than those set forth in the Lease; or (d) if
such substitute tenant is reasonably objectionable to the
LESSOR.  Notwithstanding the foregoing, LESSEE agrees to pay
reasonable attorney’s fees incurred by LESSOR in enforcing any or all
obligations of LESSEE under this Lease at any time.

    

    
      
         

      

      
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    22.   Notices.     Any
notice from LESSOR to LESSEE relating to the Leased Premises or to the occupancy
thereof shall be deemed duly served if delivered to the Leased
Premises  or LESSEE’s last designated address by reputable overnight
courier with receipt acknowledged, or by certified mail, return receipt
requested, postage prepaid, addressed to LESSEE.  Any notice from
LESSEE to LESSOR relating to the Leased Premises or to the occupancy thereof
shall be deemed duly served if delivered to LESSOR or reputable overnight
courier with receipt acknowledged, or by certified mail, return receipt
requested, postage prepaid, addressed to: Rivertech Associates II, LLC 575
Boylston Street, Boston, Massachusetts 02116 or at LESSOR’s last designated
address.  Notices shall be deemed given upon the date of actual
delivery or refusal to accept delivery.  Time is of the essence in
delivery of any notice, and the performance of any obligations relating
thereto.

    

    23.   Lessee’s
Occupancy.     In the event that LESSEE remains
in any part of the Leased Premises after the agreed termination date of this
Lease without the written permission of LESSOR, then all other terms of this
Lease shall continue to apply, except that LESSEE shall be liable to LESSOR for
any direct loss, damages or expenses incurred by LESSOR (but not consequential
damages), and all Annual Base Rent and other Rent shall be due in full monthly
installments at a rate of two hundred fifty (250%) percent of that which would
otherwise be due under this Lease, it being understood between the parties that
such extended occupancy as a tenant at sufferance is solely for the benefit and
convenience of LESSEE.

    

    
      
         

      

      
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    24.   Rules and
Regulations.     LESSEE and LESSEE’s servants,
employees, agents, invitees and licensees shall observe faithfully and comply
strictly with such reasonable and non-discriminatory rules and regulations
governing the use of the Building and site and all common areas as LESSOR may
from time to time, adopt and of which LESSEE has been notified.

    

    25.   Outside Area
Limitations.     No goods or things of any type
or description shall be held or stored outside the Leased Premises at any time
without the express written approval of LESSOR, except bicycles which shall be
stored only in the bicycle rack to be provided by LESSOR.

    

    26.   Environmental
Compliance.     LESSEE will conduct its
operations within the Leased Premises so as not to interfere in any way with the
use and enjoyment of other tenants in the Building, by reason of offensive
odors, smells, noise, accumulation of garbage or trash, vermin or other pests or
otherwise and will, at its expense, employ a professional pest control service
if necessary as a result of LESSEE’s operations.  LESSEE agrees to
maintain efficient and effective device for preventing damage to heating
equipment from harmful solvents, degreasers, or cutting oils, which may be used
within the Leased Premises.  No hazardous wastes, radioactive
materials chemicals or harmful biological agents or materials of any sort shall
be stored or allowed to remain within the Leased Premises at any time, without
LESSOR’s prior notice and consent, which consent shall not be unreasonably
withheld or delayed.  LESSOR hereby expressly approves LESSEE’s
storage and use of the chemicals and materials listed on Exhibit E attached
hereto in the Leased Premises.

    

    Prior to
vacating the Leased Premises at the end of the Term (or any applicable
extension), or sooner in the event of a default hereunder that remains uncured
after any notice or cure period, LESSEE at its sole cost and expense shall
provide LESSOR with an environmental audit by a qualified environmental
engineering firm reasonably satisfactory to LESSOR.  The aforesaid
environmental audit shall affirmatively certify that the Leased Premises are
free from any and all contaminants, pollutants, radioactive materials, hazardous
wastes or materials, bacteriological agents or organisms which would render the
Leased Premises in violation of G.L.c.21E, CERCLA, or SARA, or any regulations,
promulgated thereunder.  LESSEE shall be responsible to LESSOR (and
any Lenders to the Building) for any and all environmental hazards or conditions
which did not appear on the environmental audit provided to LESSOR by the
LESSEE, and which preclude or condition the foregoing affirmative certification
due from LESSEE as contemplated above, to the extent said hazards or conditions
are reasonably attributable to LESSEE’s activities and use of their
space.

    

    
      
         

      

      
        22

        
          

        

      

      
         

      

    

    LESSOR
represents and warrants that LESSOR has not received any current outstanding
notices that the Building and all tenants of the Building are not in compliance
with all applicable laws rules and regulations, including, but not limited to,
environmental laws.

    

    27.   Responsibility.     Except
to the extent due to LESSOR’s negligence or willful misconduct, LESSOR shall not
be held liable to anyone for loss or damage caused in any way by the use,
leakage or escape of water or for cessation of any service rendered customarily
to said Leased Premises or buildings or agreed to by the terms of this Lease,
due to any accident, to the making of repairs, alterations or improvements, to
labor difficulties, weather conditions, or mechanical breakdowns, to trouble or
scarcity in obtaining fuel, electricity, service or supplies from the sources
from which they are usually obtained for said building, or to any cause beyond
the LESSOR’s immediate control.  In the event there is an interruption
of either services or any other event within LESSOR’s control which materially
interferes with LESSEE’s use and enjoyment of the Leased Premises (in whole or
in substantial part) and which interruption continues uninterrupted for more
than five (5) business days, then Rent shall be proportionately abated until use
is restored.

    

     

    28.   Surrender.     LESSEE
shall have the right, but not the obligation, to remove, at the expiration or
sooner termination of this Lease, (except upon LESSEE’s uncured Event of
Default) any and all LESSEE’s Property purchased, paid for, and brought into or
installed in the Leased Premises by LESSEE after the execution of this Lease,
including without limitation trade fixtures, furniture, and equipment
(collectively, “Lessee’s Property”); however, LESSEE shall, prior to the
expiration or sooner termination of the Lease, repair any damage caused by such
removal.  LESSEE shall deliver to LESSOR the Leased Premises and all
keys locks, and, except for LESSEE’s Property, all built-in fixtures, built-in
equipment, alterations, additions and improvements made to or upon the Leased
Premises prior to the execution of this Lease, including but not limited to any
offices, partitions, cold room, plumbing and plumbing fixtures, air conditioning
equipment and ductwork of any type, exhaust fans or heaters, built-in water
coolers, burglar alarms, telephone wiring, wooden or metal shelving which has
been bolted, welded or otherwise attached to any concrete or steel, member of
the Building, compressors, air or gas distribution piping, cabinetry, overhead
cranes, hoists, trolleys or conveyors, counters or signs attached to walls or
floors, and all electrical work, including but not limited to lighting fixtures
of any type, wiring, conduit, EMT, distribution panels, bus ducts, raceways,
outlets and disconnects, and excluding the compressors, and any built-in
component work stations that LESSEE may install during the
term.  LESSEE shall deliver the Leased Premises reasonable wear and
tear and damage by fire or other casualty only excepted.  In the event
of LESSEE’s failure to remove any of LESSEE’s Property from the premises, LESSOR
is hereby authorized, without liability to LESSEE for loss or damage thereto and
at the sole risk of LESSEE to remove and store any such property at LESSEE’s
expense, or to retain same under LESSOR’s control or to sell at public or
private sale, without notice, any or all of the property not so removed and to
apply the net proceeds of such sale to the payment of any sum due hereunder, or
to destroy such property which shall be conclusively deemed to have been
abandoned.

    

    
      
         

      

      
        23

        
          

        

      

      
         

      

    

    29.   Quiet
Enjoyment.     So long as LESSEE keeps, observes
and performs each of the terms herein contained on the part of LESSEE to be
kept, observed and performed, LESSEE shall quietly enjoy the Leased Premises
without hindrance or molestation by LESSOR or any parties claiming through
LESSOR.

    

    30.   Miscellaneous
Provisions.     The invalidity or
unenforceability of any provision of this Lease shall not affect or render
invalid or unenforceable any other provision hereof.  The obligations
of this Lease shall run with the land, and this Lease shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
assigns, except that LESSOR shall be liable only for obligations occurring as of
the beginning of the term of this lease, or thereafter while LESSOR of the
Leased Premises.  The obligations of LESSOR and LESSEE shall not be
binding upon any director, officer, shareholder, partner, Trustee or beneficiary
of LESSOR or LESSEE.  Notwithstanding the definition herein of
“Commencement Date”, “Termination Date”, or “Term”, or LESSOR’s obligations to
deliver the Premises, this Lease shall be binding and enforceable as against the
parties hereto as of the date of its execution.

    

    31.   Waivers and
Legal Limitations.     No consent or waiver,
express or implied, by LESSOR or LESSEE, to or of any other breach of the other
party of any covenant, condition or duty of that party shall be construed as a
consent or waiver to or of any other breach of the same or any other covenant,
condition or duty.  If LESSEE is several persons or a partnership,
LESSEE’s obligations are joint or partnership and also
several.  Unless repugnant to the extent.  “LESSOR” and
“LESSEE” mean the person or persons, natural or corporate, named above as LESSOR
and as LESSEE respectively, and their respective heirs, executors,
administrators, successors and assigns.

    

    32.   Lessor’s
Delivery of the Leased Premises.     The date
upon which LESSOR first delivers the Leased Premises to LESSEE in compliance
with the terms and conditions of this Lease (including but not limited to
providing a current valid Certificate of Occupancy for the Leased Premises) is
referred to herein as the “Delivery Date.”  The Delivery Date shall be
conclusively established by delivery of a notice to LESSEE granting LESSEE
access to the Leased Premises accompanied by a Certificate of Occupancy for the
Leased Premises on the 4th floor
of the Building (the “Delivery Notice”).  The Lease Premises will
comply with the conditions set forth in Section 11 hereof as of the Delivery
Date.

    

    Notwithstanding
the Delivery Date or subsequent Commencement Date as contemplated in Section 1
hereof, this Lease shall take effect and be binding upon the parties hereto as
of its execution.

    

    
      
         

      

      
        24

        
          

        

      

      
         

      

    

    33.   Option to
Extend.     LESSEE, provided it is not then in
default under this Lease after notice and the expiration of any applicable cure
period, or has not defaulted after notice and the expiration of any applicable
cure period more than two times, shall have an option to extend its tenancy as
to the Leased Premises, on the terms and conditions herein, for one additional
period of thirty six (36) months at the then current "Market Rent”, (including
annual escalations thereon for each year of the extended term based on increases
in the consumer price index or fixed increases, as the case may
be,  in accordance with then prevailing market forces), (herein, the
“Extended Term”).    Said Extended Term shall commence,
subject to proper exercise of LESSEE’s option hereunder, on the Termination Date
of the original Term, and shall terminate on that date which is thirty six (36)
months after the original Termination Date.

    

    LESSEE
shall exercise its option by delivering to LESSOR its written notice not later
than twelve (12) full months prior to the original Termination
Date.  Once delivered, written notice to extend is
irrevocable.

    

     “Market
Rent” as used herein shall be that rent charged for comparable first class
research laboratory and office space in the mid-Cambridge submarket as of the
end of the original Term; but in no event shall “Market Rent” for the Extended
Term be less than that figure payable by LESSEE during the last Lease Year of
the original Term. If, after good faith attempts, but no later than sixty (60)
days prior to the expiration of the original Term, the LESSOR and LESSEE cannot
agree on a figure representing Market Rent, then either party, upon written
notice to the other, may request arbitration of the issue as provided in this
section.  Within fourteen (14) days of the request for arbitration,
each party shall submit to the other the name of one unrelated individual or
entity with proven expertise in the leasing of commercial real estate in greater
Boston/Cambridge to serve as that party’s appraiser.  Each appraiser
shall be paid by the party selecting him or it.  The two appraisers
shall each submit their final reports to the parties within thirty (30) days of
their selection.  The two appraisers shall meet within the next
fourteen (14) days to reconcile their reports and collaboratively determine the
Market Rent.  They shall make their determination in writing,
including a statement if such is the case, that they are at an
impasse.  Such a statement of impasse shall be submitted to the
parties along with the Market Rent figure which each appraiser has selected and
his reasons and substantiation therefor.  The appraisers, in case of
an impasse, shall also agree on one unrelated individual or entity with
expertise in commercial real estate in greater Boston, who shall evaluate the
reports of the two original appraisers and within fourteen (14) days of
submission of the issue to him, and make his own determination as to the figure
representing Market Rent.  The determination of this individual or
entity (i.e. arbitrator) absent, fraud, bias or undue prejudice shall be binding
upon the parties.

    

    Annual
Base Rent and Additional Rent during any Extended Term shall be payable in
advance, in equal monthly installments on the first day of each calendar
month.

    

    
      
         

      

      
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    34.   Extended Term
Additional Rent.     LESSEE in addition to the
sums payable annually to LESSOR as Annual Base Rent, shall pay to LESSOR for
each year of any Extended Term, as Additional Rent, LESSEE’s Allocable
Percentage (as determined by the approximate total rentable space leased) for
Operating Expenses, Real Estate Taxes and Utilities as contemplated in Sections
3, 4 and 7 hereof.

    

    35.   Estoppel
Certificates.  Upon not less than fifteen days prior written
request by LESSOR, LESSEE shall execute, acknowledge and deliver to LESSOR a
statement in writing certifying that that to the best of LESSEE’s knowledge this
Lease is unmodified and in full force and effect and that LESSEE has at the time
of such statement no defenses, offsets or counterclaims against its obligations
to pay Annual Base Rent and Additional Rent and any other charges and to perform
its other covenants under this Lease (or, if there have been any modifications
that the same is in full force and effect as modified and stating the
modifications and, if there are any defenses, offsets or counterclaims, setting
them forth in reasonable detail), and the dates to which the Annual Base Rent
and Additional Rent and other charges have been paid.  Any such
statement delivered pursuant to this Section may be relied upon by any
prospective purchase or mortgagee of the Premises, or any prospective assignee
of any such mortgagee or the LESSOR.  Upon not less than fifteen days
prior written request by LESSEE, LESSOR shall deliver a similar statement in
writing to LESSEE, and any such statement may be relied upon by any prospective
sublessee or assignee of this Lease.

    

    36.   Governing Law.
  This Lease constitutes the full and complete agreement
between the parties shall be construed under and according to the laws of the
Commonwealth of Massachusetts.  Any provision of this Lease which is
deemed void or unenforceable shall not invalidate or render void or
unenforceable the entire Lease.

    

    

    

    

    

    

    [Signatures
Provided on the Following Page]

    

    

    

    
      
         

      

      
        26

        
          

        

      

      
         

      

    

    IN WITNESS WHEREOF, LESSOR AND
LESSEE have hereunto set their hands and  seals and intend to be
legally bound hereby as of the date first written above.

    

    

    LESSOR

    

    RIVERTECH
ASSOCIATES II, LLC

    By
Rivertech Associates II, Inc.,

    its
duly authorized Manager

    

    By:_______________________________

         Robert
Epstein, President

    

    

    

    LESSEE

    

    NEOSTEM,
INC.

    

    By:____________________________________

    
 

    

    By:____________________________________

    

    

    

    
      
         

      

      
        27THESE
SECURITIES AND THE COMMON STOCK THAT THE HOLDER SHALL RECEIVE UPON EXERCISE OF
THIS WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"), AND MAY NOT BE OFFERED, SOLD, PLEDGED,
HYPOTHECATED, ASSIGNED OR TRANSFERRED EXCEPT (i) IN ACCORDANCE WITH REGULATION S
(RULE 901 THROUGH 905), (ii) PURSUANT TO A REGISTRATION STATEMENT UNDER THE
SECURITIES ACT WHICH HAS BECOME EFFECTIVE AND IS CURRENT WITH RESPECT TO THESE
SECURITIES, OR (iii) PURSUANT TO A SPECIFIC EXEMPTION FROM REGISTRATION UNDER
THE SECURITIES ACT BUT ONLY UPON A HOLDER HEREOF FIRST HAVING OBTAINED THE
WRITTEN OPINION OF COUNSEL REASONABLY ACCEPTABLE TO THE COMPANY, THAT THE
PROPOSED DISPOSITION IS CONSISTENT WITH ALL APPLICABLE PROVISIONS OF THE
SECURITIES ACT AS WELL AS ANY APPLICABLE "BLUE SKY" OR SIMILAR SECURITIES LAW.”
ANY HEDGING TRANSACTION INVOLVING THESE SECURITIES MAY NOT BE CONDUCTED UNLESS
IN COMPLIANCE WITH THE SECURITIES ACT.

     

    Warrant
Holder:

    

    
      
        	 
      	
                Dated:

              
	 
      	 
      
	
                For
      the Purchase of __________Shares of Common Stock

              	
                No. S-

              

      

    

    

    WARRANT
FOR THE PURCHASE OF

    SHARES
OF COMMON STOCK OF

     

    DEER
CONSUMER PRODUCTS, INC.

     

    Expiring
Three Years from the Date Hereof

     

    FOR VALUE
RECEIVED, Deer Consumer Products, Inc. (“Company”), hereby certifies that the
Warrant Holder specified above, or his registered assigns (“Registered Holder”),
is entitled, subject to the terms set forth below, to purchase from the Company
on or before the third anniversary of the date hereof, that number of shares of
Common Stock, $.001 par value, of the Company (“Common Stock”) set forth above,
at a purchase price equal to $10.00 per share (as may be adjusted as provided
below) upon the terms and conditions set forth herein.  The number of
shares of Common Stock purchasable upon exercise of this Warrant, and the
purchase price per share, each as adjusted from time to time pursuant to the
provisions of this Warrant, are hereinafter referred to as the “Warrant Shares”
and the “Exercise Price,” respectively.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    1.           Registration of Transfers
and Exchanges.

     

    (i)           The
Company shall register the transfer of any portion of this Warrant in the
Warrant Register, upon surrender of this Warrant, with the Form of Assignment
attached hereto duly completed and signed, to the Transfer Agent or to the
Company, provided, however, that the Holder shall not make any transfers to any
transferee pursuant to this Section for the right to acquire less than 50,000
Warrant Shares (or the balance of the Warrant Shares to which this Warrant
relates).  Upon any such registration or transfer, a new warrant to
purchase Common Stock, in substantially the form of this Warrant (any such new
warrant, a “New Warrant”), evidencing the portion of this Warrant so transferred
shall be issued to the transferee and a New Warrant evidencing the remaining
portion of this Warrant not so transferred, if any, shall be issued to the
transferring Holder.  The acceptance of the New Warrant by the
transferee thereof shall be deemed the acceptance of such transferee of all of
the rights and obligations of a holder of a Warrant.

     

    (ii)           This
Warrant is exchangeable, upon the surrender hereof by the Holder to the office
of the Company for one or more New Warrants, evidencing in the aggregate the
right to purchase the number of Warrant Shares which may then be purchased
hereunder.  Any such New Warrant will be dated the date of such
exchange.

     

    2.           Exercise.

     

    (i)           Procedure for
Exercise.  Subject to the conditions and terms set forth
herein, this Warrant may be exercised by the Registered Holder (“Conversion
Right”), in whole or in part, by the surrender of this Warrant (with the Notice
of Exercise Form attached hereto as Exhibit 1 duly executed by such Registered
Holder) at the principal office of the Company, or at such other office or
agency as the Company may designate, accompanied by payment in full, in lawful
money of the United States, of an amount equal to the then applicable Exercise
Price multiplied by the number of Warrant Shares then being purchased upon such
exercise.

     

    (ii)           Exercise of Conversion
Right.  Subject to the terms and conditions set forth herein,
the Conversion Right may be exercised by the Holder on any business day by
delivering to the Company the Warrant with a duly executed Notice of Exercise
Form attached hereto as Exhibit 1 with the conversion section completed by
specifying the total number of shares of Common Stock the Registered Holder will
purchase pursuant to such conversion.

     

    (iii)           If
the Common Stock is registered under Section 12 of the Securities Exchange
Act of 1934, as amended, the Registered Holder may elect to pay all or part of
the Exercise Price by surrendering shares of Common Stock to the Company,
including by allowing the Company to deduct from the number of Warrant Shares
deliverable upon exercise of this Warrant, such number of such shares which has
an aggregate Fair Market Value (defined below), determined as of the average of
the Last Sale Price (defined below) of the Common Stock for the 20 consecutive
trading days immediately preceding the date of exercise of this Warrant, equal
to the aggregate Exercise Price. (By way of example, if the Registered Holder
exercises 50,000 warrants at an exercise price of $10.00 and the 20 day average
price is $15.00, then Shares deliverable on exercise: 50,000. Aggregate Exercise
Price: $500,000. Number of shares deliverable: $500,000/$15 or 33,334. Net
Shares delivered to Registered Holder on Cashless Exercise: 50,000 – 33,334 =
16,666 shares) In the event that the Warrant Holder elects to utilize the
“cashless exercise” procedure contained in this Section 2(iii), this
Warrant is exercisable upon surrender of this Warrant to the Company together
with a duly completed Notice of Exercise in the form attached hereto and
surrender of that number of shares of Common Stock equal to the aggregate
Exercise Price determined in accordance with this Section 2.1(iii)(a) or
(b). “Fair Market Value” per share of Common Stock on any relevant date shall be
determined in accordance with the following provisions:

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

    (a)           If
the Common Stock is at the time traded on the NASD OTC Bulletin Board or other
electronic quotation service, then the Fair Market Value shall be the average of
the last sale price per share of the Common  Stock for the 20 consecutive
trading days preceding the date of exercise of this Warrant; or

     

    (b)           If
the Common Stock is at the time listed on any Exchange (as defined below), the
Fair Market Value shall be the average of the last sale price per share of the
Common Stock for the 20 consecutive trading days preceding the date of exercise
of this Warrant, on the Exchange determined to be the primary market for the
Common Stock. “Exchange” shall mean the any of the NASDAQ markets, the New York
Stock Exchange, American Stock Exchange or any organization or association that
is defined as a national exchange by the Securities and Exchange
Commission.

     

    “last
sale price” shall mean (X) if the Common Stock is listed on an Exchange or
quoted on the Nasdaq markets or NASD OTC Bulletin Board (or successor such as
the Bulletin Board Exchange), the last sale price of the Common Stock in the
principal trading market for the Common Stock as reported by the Exchange,
Nasdaq or the NASD, as the case may be; (Y) if the Common Stock is not listed on
an Exchange or quoted on the Nasdaq markets, or the NASD OTC Bulletin Board (or
successor such as the Bulletin Board Exchange), but is traded in the
over-the-counter market, the closing bid price for the Common Stock on the last
trading day preceding the date in question for which such quotations are
reported by the Pink Sheets, LLC or similar publisher of such quotations; and
(Z) if the fair market value of the Common Stock cannot be determined pursuant
to clause (X) or (Y) above, such price as the Board of Directors of the Company
shall in good faith determine at their sole discretion.

     

    (iv)           Date of
Exercise.  Each exercise of this Warrant shall be deemed to
have been effected immediately prior to the close of business on the day on
which this Warrant shall have been surrendered to the Company.  At
such time, the person or persons in whose name or names any certificates for
Warrant Shares shall be issuable upon such exercise shall be deemed to have
become the holder or holders of record of the Warrant Shares represented by such
certificates.

     

    (v)           Issuance of
Certificate.  As soon as practicable after the exercise of the
purchase right represented by this Warrant, the Company at its expense will
cause to be issued in the name of, and delivered to, the Registered Holder, or,
subject to the terms and conditions hereof, to such other individual or entity
as such Holder (upon payment by such Holder of any applicable transfer taxes)
may direct:

     

    (a)           a
certificate or certificates for the number of full shares of Warrant Shares to
which such Registered Holder shall be entitled upon such exercise plus, in lieu
of any fractional share to which such Registered Holder would otherwise be
entitled, cash in an amount determined pursuant to Section 4 hereof,
and

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

    (b)           in
case such exercise is in part only, a new warrant or warrants (dated the date
hereof) of like tenor, stating on the face or faces thereof the number of shares
currently stated on the face of this Warrant minus the number of such shares
purchased by the Registered Holder upon such exercise as provided in subsection
2(i) above.

     

    (vi)           Exercise of
Warrant.  The Warrant may be exercised in whole or from time to
time in part on or prior to the third anniversary of the date hereof, as first
set forth above.

     

    3.           Adjustments.

     

    (i)           Split, Subdivision or
Combination of Shares.  If, at any time while this Warrant
remains outstanding and unexpired, the outstanding shares of the Company’s
Common Stock shall be subdivided or split into a greater number of shares, or a
dividend in Common Stock shall be paid in respect of Common Stock, the Exercise
Price in effect immediately prior to such subdivision or at the record date of
such dividend shall, simultaneously with the effectiveness of such subdivision
or split or immediately after the record date of such dividend (as the case may
be), shall be proportionately decreased.  If the outstanding shares of
Common Stock shall be combined or reverse-split into a smaller number of shares,
the Exercise Price in effect immediately prior to such combination or reverse
split shall, simultaneously with the effectiveness of such combination or
reverse split, be proportionately increased.  When any adjustment is
required to be made in the Exercise Price, the number of shares of Warrant
Shares purchasable upon the exercise of this Warrant shall be changed to the
number determined by dividing (i) an amount equal to the number of shares
issuable upon the exercise of this Warrant immediately prior to such adjustment,
multiplied by the Exercise Price in effect immediately prior to such adjustment,
by (ii) the Exercise Price in effect immediately after such
adjustment.

     

    (ii)           Reclassification,
Reorganization, Consolidation or Merger.  In the case of any
reclassification of the Common Stock (other than a change in par value or a
subdivision or combination as provided for in subsection 3(i) above), or any
reorganization, consolidation or merger of the Company with or into another
corporation (other than a merger or reorganization with respect to which the
Company is the continuing corporation and which does not result in any
reclassification of the Common Stock), or a transfer of all or substantially all
of the assets of the Company, or the payment of a liquidating distribution then,
as part of any such reorganization, reclassification, consolidation, merger,
sale or liquidating distribution, lawful provision shall be made so that the
Registered Holder of this Warrant shall have the right thereafter to receive
upon the exercise hereof, the kind and amount of shares of stock or other
securities or property which such Registered Holder would have been entitled to
receive if, immediately prior to any such reorganization, reclassification,
consolidation, merger, sale or liquidating distribution, as the case may be,
such Registered Holder had held the number of shares of Common Stock which were
then purchasable upon the exercise of this Warrant.  In any such case,
appropriate adjustment (as reasonably determined by the Board of Directors of
the Company) shall be made in the application of the provisions set forth herein
with respect to the rights and interests thereafter of the Registered Holder of
this Warrant such that the provisions set forth in this Section 3 (including
provisions with respect to the Exercise Price) shall thereafter be applicable,
as nearly as is reasonably practicable, in relation to any shares of stock or
other securities or property thereafter deliverable upon the exercise of this
Warrant.

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

    (iii)           Price
Adjustment.  No adjustment in the per share Exercise Price
shall be required unless such adjustment would require an increase or decrease
in the Exercise Price of at least $0.01; provided, however, that any adjustments
which by reason of this paragraph are not required to be made shall be carried
forward and taken into account in any subsequent adjustment.  All
calculations under this Section 3 shall be made to the nearest cent or to the
nearest 1/100th of a share, as the case may be.

     

    (iv)           No
Impairment.  The Company will not, by amendment of its Articles
of Incorporation or through any reorganization, transfer of assets,
consolidation, merger, dissolution, issue or sale of securities or any other
voluntary action, avoid or seek to avoid the observance or performance of any of
the terms to be observed or performed hereunder by the Company but will at all
times in good faith assist in the carrying out of all the provisions of this
Section 3 and in the taking of all such actions as may be necessary or
appropriate in order to protect against impairment of the rights of the
Registered Holder of this Warrant to adjustments in the Exercise
Price.

     

    (v)           Notice of
Adjustment.  Upon any adjustment of the Exercise Price or
extension of the Warrant exercise period, the Company shall forthwith give
written notice thereto to the Registered Holder of this Warrant describing the
event requiring the adjustment, stating the adjusted Exercise Price and the
adjusted number of shares purchasable upon the exercise hereof resulting from
such event, and setting forth in reasonable detail the method of calculation and
the facts upon which such calculation is based.

     

    4.           Fractional
Shares.  The Company shall not be required to issue fractions
of shares of Common Stock upon exercise.  If any fractions of a share
would, but for this Section 4, be issuable upon any exercise, in lieu of such
fractional share the Company shall round up or down to the nearest whole
number.

     

    5.           Limitation on
Sales.  Each holder of this Warrant acknowledges that this
Warrant and the Warrant Shares, as of the date of original issuance of this
Warrant, have not been registered under the Securities Act of 1933, as amended
(“Act”), and agrees not to sell, pledge, distribute, offer for sale, transfer or
otherwise dispose of this Warrant or any Warrant Shares issued upon its exercise
in the absence of (i) an effective registration statement under the Act as to
this Warrant or such Warrant Shares or (ii) an opinion of counsel, reasonably
acceptable to the Company and its counsel, that such registration and
qualification are not required.  The Warrant Shares issued upon
exercise thereof shall be imprinted with a legend in substantially the following
form:

     

    "THE
SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND MAY NOT BE
OFFERED, SOLD, PLEDGED, HYPOTHECATED, ASSIGNED OR TRANSFERRED EXCEPT (i) IN
ACCORDANCE WITH REGULATION S (RULE 901 THROUGH 905), (ii) PURSUANT TO A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT WHICH HAS BECOME EFFECTIVE AND
IS CURRENT WITH RESPECT TO THESE SECURITIES, OR (iii) PURSUANT TO A SPECIFIC
EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT BUT ONLY UPON A HOLDER
HEREOF FIRST HAVING OBTAINED THE WRITTEN OPINION OF COUNSEL REASONABLY
ACCEPTABLE TO THE COMPANY, THAT THE PROPOSED DISPOSITION IS CONSISTENT WITH ALL
APPLICABLE PROVISIONS OF THE SECURITIES ACT AS WELL AS ANY APPLICABLE "BLUE SKY"
OR SIMILAR SECURITIES LAW.” ANY HEDGING TRANSACTION INVOLVING THESE SECURITIES
MAY NOT BE CONDUCTED UNLESS IN COMPLIANCE WITH THE SECURITIES
ACT."

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

    6.           Notices of Record
Date.  In case:  (i) the Company shall take a record
of the holders of its Common Stock (or other stock or securities at the time
deliverable upon the exercise of this Warrant) for the purpose of entitling or
enabling them to receive any dividend or other distribution, or to receive any
right to subscribe for or purchase any shares of any class or any other
securities, or to receive any other right, or (ii) of any capital reorganization
of the Company, any reclassification of the capital stock of the Company, any
consolidation or merger of the Company with or into another corporation (other
than a consolidation or merger in which the Company is the surviving entity), or
any transfer of all or substantially all of the assets of the Company, or (iii)
of the voluntary or involuntary dissolution, liquidation or winding-up of the
Company, then, and in each such case, the Company will mail or cause to be
mailed to the Registered Holder of this Warrant a notice specifying, as the case
may be, (i) the date on which a record is to be taken for the purpose of such
dividend, distribution or right, and stating the amount and character of such
dividend, distribution or right, or (ii) the effective date on which such
reorganization, reclassification, consolidation, merger, transfer, dissolution,
liquidation or winding-up is to take place, and the time, if any is to be fixed,
as of which the holders of record of Common Stock (or such other stock or
securities at the time deliverable upon the exercise of this Warrant) shall be
entitled to exchange their shares of Common Stock (or such other stock or
securities) for securities or other property deliverable upon such
reorganization, reclassification, consolidation, merger, transfer, dissolution,
liquidation or winding-up.  Such notice shall be mailed at least ten
(10) days prior to the record date or effective date for the event specified in
such notice, provided that the failure to mail such notice shall not affect the
legality or validity of any such action.

     

    7.           Reservation of
Stock.  The Company will at all times reserve and keep
available, solely for issuance and delivery upon the exercise of this Warrant,
such shares of Common Stock and other stock, securities and property, as from
time to time shall be issuable upon the exercise of this Warrant.  So
long as this Warrant remains outstanding, the Company shall maintain the listing
of the shares of Common Stock to be issued upon exercise on each national
securities exchange on which Common Stock is listed (on the Nasdaq
Over-The-Counter service if the Common Stock is then quoted on such
service/bulletin board).

     

    8.           Replacement of
Warrants.  Upon receipt of evidence reasonably satisfactory to
the Company of the loss, theft, destruction or mutilation of this Warrant and
(in the case of loss, theft or destruction) upon delivery of an indemnity
agreement (with surety if reasonably required) in an amount reasonably
satisfactory to the Company, or (in the case of mutilation) upon surrender and
cancellation of this Warrant, the Company will issue, in lieu thereof, a new
Warrant of like tenor.

    
      
         

      

      
        6

        
          

        

      

      
         

      

    

    9.           Transfers,
etc.

     

    (i)           Warrant
Register.  The Company will maintain a register containing the
names and addresses of the Registered Holders of this Warrant.  Any
Registered Holder may change its, his or her address as shown on the warrant
register by written notice to the Company requesting such change.

     

    (ii)           Registered
Holder.  Until any transfer of this Warrant is made in the
warrant register, the Company may treat the Registered Holder of this Warrant as
the absolute owner hereof for all purposes; provided, however, that if and when
this Warrant is properly assigned in blank, the Company may (but shall not be
obligated to) treat the bearer hereof as the absolute owner hereof for all
purposes, notwithstanding any notice to the contrary.

     

    10.           No Rights as
Stockholder.  Until the exercise of this Warrant, the
Registered Holder of this Warrant shall not have or exercise any rights by
virtue hereof as a stockholder of the Company.

     

    11.           Successors.  The
rights and obligations of the parties to this Warrant will inure to the benefit
of and be binding upon the Company and any transferees of Warrant
Holder.

     

    12.           Change or
Waiver.  Any term of this Warrant may be changed or waived only
by an instrument in writing signed by the party against which enforcement of the
change or waiver is sought.

     

    13.           Headings.  The
headings in this Warrant are for purposes of reference only and shall not limit
or otherwise affect the meaning of any provision of this Warrant.

     

    14.           Governing
Law.  This Warrant shall be governed by and construed in
accordance with the laws of the state of New York, without giving effect to
principles of conflicts of laws.

     

    15.           Jurisdiction and
Venue.  The Company (i) agrees that any legal suit, action or
proceeding arising out of or relating to this Warrant shall be instituted
exclusively in any state court located in New York, New York or in the United
States District Court for the Southern District of New York, (ii) waives any
objection to the venue of any such suit, action or proceeding and the right to
assert that such forum is not a convenient forum for such suit, action or
proceeding, and (iii) irrevocably consents to the jurisdiction of any state
court located in New York, New York and the United States District Court for the
Southern District of New York in any such suit, action or proceeding, and the
Company further agrees to accept and acknowledge service or any and all process
which may be served in any such suit, action or proceeding in any state court
located in New York, New York or in the United States District Court for the
Southern District of New York and agrees that service of process upon it mailed
by certified mail to its address shall be deemed in every respect effective
service of process upon it in any suit, action or proceeding.

    
      
         

      

      
        7

        
          

        

      

      
         

      

    

    16.           Mailing of Notices,
etc.  All notices and other communications under this Warrant
(except payment) shall be in writing and shall be sufficiently given if sent to
the Registered Holder or the Company, as the case may be, by hand delivery,
private overnight courier, with acknowledgment of receipt, or by registered or
certified mail, return receipt requested, as follows:

     

    Registered
Holder:  To Registered Holder’s address as provided on the
Subscription Agreement or otherwise in the Company’s Records.

     

    The
Company:  To the Company’s Principal Executive Offices Attention:
President and Chief Executive Officer.

     

    (with a
copy, which shall not constitute notice to):

    The
Newman Law Firm, PLLC

    14 Wall
Street, 20th
Floor

    New York,
NY  10005

     

    or to
such other address as any of them, by notice to the others may designate from
time to time.  Time shall be counted to, or from, as the case may be,
the date of delivery in person or by overnight courier or five (5) business days
after mailing.

     

    
      
        
          
            
              
                
                  	
                          DEER
      CONSUMER PRODUCTS, INC.

                        
	 
      	 
      
	
                          By: 

                        	 
      
	
                          Name:  Ying
      He

                        
	
                          Title:  Chief
      Executive
Officer

                        

                

              

            

          

        

      

    

    
      
         

      

      
        8

        
          

        

      

      
         

      

    

    EXHIBIT
1

    

    NOTICE OF
EXERCISE

     

    Date:
_____________________________
 

    TO:           Deer
Consumer Products, Inc.

    Area 2,
1/F, Building M-6, Central High-Tech Industrial Park, Nanshan, Shenzhen,
Peoples

    Republic
of China

    Attn: Mr.
Ying He, Chief Executive Officer

    

    (Check
one)

     

    o          
1.           The
undersigned hereby elects to purchase ______ shares of the Common Stock of Deer
Consumer Products, Inc. pursuant to terms of the attached Warrant, and tenders
herewith payment of $______ (at the rate of $_____ per share of Common Stock) in
payment of the Exercise Price(s) pursuant thereto, together with all applicable
transfer taxes, if any.

    

    o          
1.           The
undersigned hereby elects to surrender shares of Common Stock or Warrant Shares
pursuant to the cashless exercise procedure provided for in the following
paragraph; and (4) requests that a certificate for the Warrant Shares be issued
in the name of the undersigned, or the undersigned’s designee, and delivered to
the undersigned, or the undersigned’s designee, at the address specified
below:

     

    The
undersigned hereby elects to subscribe for Warrant Shares by cashless exercise
of the Warrant in accordance with Section 2.(iii), and indicates below the
number of shares of Common Stock or Warrant Shares to be surrendered and
provides the calculation (pursuant to Section 2.1(iii)(a) or (b) of the
Warrant) for the number of shares to be surrendered:

     

    Number of
shares to be Surrendered:

    

    Calculation
Pursuant to Section 2(iii):

    

    2.           Please
issue a certificate or certificates representing said shares of the Common Stock
in the name of the undersigned or in such other name as is specified
below.

    

    3.           The
undersigned is not a U.S. person and the attached Warrant is not being exercised
on behalf of a U.S. person.

     

    4.           The
undersigned agrees that the terms and conditions of the Subscription Agreement
between the Company and the Undersign apply to the shares of Common Stock
issuable upon the exercise of this Warrant.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      
        
          
            
              	 
      
	
                      Signature
      of Registered Holder

                    
	 
      
	 
	
                      Print
      Name:

                    

            

          

        

      

    

     

    Notice:  The
signature to this form must correspond with the name as written upon the face of
the within Warrant in every particular without alteration or enlargement or any
change whatsoever.

     

    INSTRUCTIONS
FOR REGISTRATION OF SECURITIES

     

    
      
        
          
            
              	
                      Name:

                    	 
      
	 
      	
                      (Print
      in Block Letters

                    
	 
      	 
      
	
                      Address:

                    	 
      

            

          

        

      

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    

    [To be
completed and signed only upon transfer of Warrant]

    

    FOR VALUE
RECEIVED, the undersigned hereby sells, assigns and transfers unto
__________________________ the right represented by the within Warrant to
purchase______ shares of Common Stock of Deer Consumer Products, Inc. to which
the within Warrant relates and appoints _____________________________ attorney
to transfer said right on the books of Deer Consumer Products, Inc. with full
power of substitution in the premises.

     

    Dated:

    ______________,
____

     

    
      
        
          
            
              
                	 
      
	
                        (Signature
      must conform in all respects to name

                        of
      holder as specified on the face of the

                        Warrant)

                      
	 
      
	 
      
	
                        Address
      of Transferee

                      
	 
      
	 
      
	 
      
	 
      

              

            

          

        

      

    

     

    
      
        
          	
                  In the presence of:

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