EX-10.9: LEASE AGREEMENT

 

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                                                                    EXHIBIT 10.9

 

                    DATE OF LEASE EXECUTION: August 4th, 2005

                          (To be completed by Landlord)

 

                                    ARTICLE I

                                 REFERENCE DATA

 

1.1    SUBJECTS REFERRED TO:

 

      Each reference in this Lease to any of the following subjects shall be

construed to incorporate the data stated for that subject in this Section 1.1:

 

LANDLORD:            MCC3, LLC, a Delaware limited liability company

 

MANAGING AGENT:      Spaulding and Slye LLC

 

LANDLORD'S ADDRESS: c/o Spaulding and Slye LLC

                    255 State Street

                    Boston, MA 02109

                    Attn: Chief Financial Officer

 

                    with a copy of all notices to:

 

                    Spaulding and Slye LLC

                    1717 Pennsylvania Avenue, N.W.

                    Washington, DC 20006

                    Attn: Director of Property Management

 

                          and

 

                    New Boston Fund, Inc.

                    60 State Street

                    Suite 1500 Boston, MA 02109

                    Attn: Jerome L. Rappaport, Jr.

 

LANDLORD'S REPRESENTATIVE: Sue Kravitz

 

TENANT:              Vanda Pharmaceuticals, Inc., a Delaware Corporation

 

TENANT'S ADDRESS (FOR NOTICE AND BILLING):

 

                    Before Commencement Date:

 

                    Vanda Pharmaceuticals, Inc.

                    9620 Medical Center Drive, Suite 201

                    Rockville, MD 20850

                    Attn: Chip Clark

 

                    After Commencement Date:

 

                    Vanda Pharmaceuticals, Inc.

                    9605 Medical Center Drive

                    Rockville, MD 20850

                    Attn: Chip Clark

 

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                    with a copy of all notices to:

 

                    Looney, Cohen, Reagan & Aisenberg LLP

                    109 State Street, 2nd Floor

                    Boston, MA 02109

                     Attn: James H. Cohen, Esq.

 

TENANT'S REPRESENTATIVE: Chip Clark

 

BUILDING: The building located on the parcel of land described in Exhibit A

      hereto. References in the Lease to "Base Building" mean the Building shell

      including base Building mechanical, electrical and plumbing systems (other

      than the horizontal distribution lines, ducts or equipment); main lobby

      and elevator lobbies on the first floor, but excluding all leased or

      leasable areas within the Building. A more detailed description of the

      Building Standard Completed Shell is set forth in Part 1 of Exhibit C

      hereto.

 

BUILDING ADDRESS: 9605 Medical Center Drive, Rockville, MD 20850

 

RENTABLE FLOOR AREA OF TENANT'S SPACE: Approximately 17,002 square feet,

      measured in accordance with Section 10.24 hereof.

 

TOTAL RENTABLE FLOOR AREA OF THE BUILDING: Approximately 115,691 square feet,

      measured in accordance with Section 10.24 hereof.

 

TENANT'S DESIGN COMPLETION DATE: See Exhibit C - Part I

 

SCHEDULED TERM COMMENCEMENT DATE: January 1, 2006

 

TERM EXPIRATION DATE: June 30, 2016 or if the Commencement Date occurs other

      than January 1, 2006, then the Term Expiration Date shall be the last day

      of the 126th full calendar month of the Term.

 

APPROXIMATE TERM: Ten (10) years, six (6) months

 

ANNUAL RENT: $421,770.00 (triple net) for the first Lease Year (subject to an

      annual adjustment as provided in Section 4.1), computed as follows:

 

<TABLE>

<S>                                                 <C>

  $23.00 p.r.s.f. X 17,002 rentable square feet    =      $391,046.00 (the "Base Annual Rent")

+ $ 1.81 p.r.s.f. X 17,002 rentable square feet    =      $ 30,773.62 (the "Additional Allowance Charge")

                                                         -----------

                                                  =      $421,819.62 Annual Rent

                                                        ===========

</TABLE>

 

ANNUAL ELECTRICAL COST: As provided in Section 4.4.

 

SECURITY DEPOSIT: $430,230.00

 

GUARANTOR: N/A

 

TENANT ALLOWANCE: In accordance with Section 3.5, Tenant shall receive an

      allowance for design and construction of improvements in accordance with

      Section 3.1 (a) in up to 2,578 square feet of the Premises to be used as a

      wet laboratory (the "Lab Space") not to exceed the sum of (i) $40.00

      p.r.s.f. of the Lab Space (the "Tenant Allowance"), plus (ii) at Tenant's

      option, up to an additional $70.00 p.r.s.f. of Lab Space (the "Additional

      Allowance"). Landlord shall complete improvements in the remainder of the

      Premises (the "Office Space") on a turnkey basis as provided in Section

      3.1(b). The costs incurred by Landlord in connection with the design and

      construction of improvements in the Office Space are herein sometimes

      referred to as the "Turnkey Costs." The Additional Allowance shall be

      amortized with interest thereon

 

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      at twelve percent (12%) per annum over the first ten (10) Lease Years, and

      the amount amortized each Lease Year (herein referred to as the

      "Additional Allowance Charge") shall be added to Annual Rent payable by

      Tenant as herein provided. If Landlord does not provide the entire

       Additional Allowance to pay costs of completing laboratory space as herein

      provided, the amount of the Additional Allowance actually provided by

      Landlord shall be confirmed by Landlord and Tenant on the Lease

      Commencement Date Agreement and the Additional Allowance Charge p.r.s.f.

      shall be reduced to reflect the actual amount of Additional Allowance

      actually provided by Landlord, using the applicable interest rate and

      amortization period, and the Annual Rent shall be adjusted accordingly.

      Tenant shall have the option to prepay any or all of the Additional

      Allowance prior to the expiration or earlier termination of this Lease

      without penalty or additional finance charge on the amount so prepaid.

 

TENANT'S SHARE: Tenant's Share shall be equal to a fraction, the numerator of

          which shall be the Rentable Floor Area of Tenant's Space (as the same

          may be increased or decreased in accordance with this Lease) and the

          denominator of which shall be the Total Rentable Floor Area of the

          Building.

 

PERMITTED USES: Office and laboratory use (including development and testing,

          including genetic testing, of pharmaceutical drugs, but excluding

          human or animal testing) allowable per applicable law only and no

          other use.

 

PUBLIC LIABILITY INSURANCE: SINGLE OCCURRENCE: $5,000,000

                            AGGREGATE: $10,000,000

 

LEASE YEAR: For all purposes of this Lease, the term "Lease Year" shall mean any

          period of twelve consecutive calendar months during the Term of this

          Lease which begins on the Commencement Date or an anniversary thereof,

          provided, however, that if the Commencement Date does not occur on the

          first day of a month, then the term "Lease Year" shall mean any period

          of twelve consecutive calendar months during the Term of this Lease

          beginning on the first day of the next calendar month following the

          Commencement Date, and the first Lease Year shall also include the

          period between the Commencement Date and the first day of such

          succeeding calendar month and provided further that the last Lease

          Year shall terminate on the Term Expiration Date or such earlier date

          on which the Lease may be terminated.

 

SPECIAL PROVISIONS: Provided Tenant is not in default hereunder, one half of

          each monthly installment of Base Annual Rent due for the first twelve

          (12) months of the initial Term shall be abated. The Security Deposit,

          whether in cash or in substantially the form of the letter of credit

          attached hereto as Exhibit I (the "Letter of Credit"), shall be due

          upon the execution of this Lease by Tenant.

 

1.2    EXHIBITS.

 

      The exhibits and appendix listed below in this section are incorporated in

this Lease by reference and are to be construed as part of this Lease:

 

EXHIBIT A     Legal Description of Lot

EXHIBIT B     Part I - Plan Showing Tenant's Space

             Part II - First Offer Space

EXHIBIT C     Part I - Building Standard Completed Shell

             Part II - Office Space Plan

             Part III- Milestone Schedule

EXHIBIT D     Landlord's Services

EXHIBIT E     Rules and Regulations

EXHIBIT F     Intentionally Omitted

EXHIBIT G     Form of Estoppel Certificate

 

 

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EXHIBIT H     Form of Lease Commencement Date Agreement

EXHIBIT I     Form of Acceptable Letter of Credit

EXHIBIT J     Form of Mortgagee Subordination and Nondisturbance Agreement

EXHIBIT K     Form of Ground Lessor Nondisturbance and Attornment Agreement

APPENDIX A    Method of Measurement

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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1.3    TABLE OF CONTENTS

 

                                                                         PAGE

                                                                         ----

ARTICLE I        REFERENCE DATA .........................................    1

 

         1.1      SUBJECTS REFERRED TO: ..................................    1

 

        1.2      EXHIBITS ...............................................    3

 

        1.3      TABLE OF CONTENTS.......................................    5

 

ARTICLE II       PREMISES AND TERM ......................................    8

 

        2.1      PREMISES ...............................................    8

 

        2.2      TERM....................................................    8

 

        2.3      OPTION TO EXTEND .......................................    8

 

        2.4      RIGHT TO CANCEL ........................................    9

 

        2.5      RIGHT OF FIRST OFFER ...................................   10

 

        2.6      OPTION TO EXPAND .......................................   11

 

ARTICLE III      CONSTRUCTION ...........................................   12

 

        3.1      INITIAL CONSTRUCTION ...................................   12

 

        3.2      PREPARATION OF PREMISES FOR OCCUPANCY ..................   14

 

        3.3       GENERAL PROVISIONS APPLICABLE TO CONSTRUCTION ..........   16

 

        3.4      REPRESENTATIVES ........................................   16

 

        3.5      TENANT ALLOWANCE .......................................   16

 

        3.6      LEASE COSTS ............................................   17

 

ARTICLE IV       RENT ...................................................   17

 

        4.1      RENT....................................................   17

 

        4.2      OPERATING COSTS ........................................   18

 

        4.3      REAL ESTATE TAXES ......................................   22

 

        4.4      REFUNDS ................................................   24

 

        4.5      ELECTRICITY.............................................   24

 

         4.6      CHANGE OF FISCAL YEAR ..................................   25

 

        4.7      PAYMENTS ...............................................   25

 

ARTICLE V        LANDLORD'S COVENANTS ...................................   25

 

        5.1      LANDLORD'S COVENANTS DURING THE TERM....................   25

 

                5.1.1   Building Services ...............................   25

 

                5.1.2   Additional Building Services ....................   26

 

                5.1.3   Repairs .........................................   26

 

                5.1.4   Quiet Enjoyment .................................   26

 

                5.1.5   Access/Security..................................   26

 

                5.1.6   Intentionally Omitted ...........................   26

 

                5.1.7   Indemnity .......................................   26

 

                5.1.8   Tenant's Costs ..................................   26

 

                5.1.9   Lobby Directory..................................   26

 

                 5.1.10 Compliance ......................................   27

 

                5.1.11 Insurance........................................   27

 

        5.2      INTERRUPTIONS ..........................................   27

 

 

                                        5

 

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ARTICLE VI       TENANT'S COVENANTS .........................................   28

 

        6.1      TENANT'S COVENANTS DURING THE TERM .........................   28

 

                6.1.1    Tenant's Payments ..................................   28

 

                6.1.2    Repairs and Yielding Up ............................   28

 

                6.1.3    Occupancy and Use ..................................   29

 

                6.1.4    Rules and Regulations ..............................   29

 

                 6.1.5    Safety Appliances and Licenses .....................   29

 

                6.1.6    Assignment and Subletting ..........................   30

 

                6.1.7    Indemnity ..........................................   31

 

                 6.1.8    Tenant's Insurance .................................   31

 

                6.1.9    Tenant's Worker's Compensation Insurance ...........   32

 

                6.1.10   Landlord's Right of Entry ..........................   32

 

                6.1.11   Loading ............................................   33

 

                6.1.12   Landlord's Costs ...................................   33

 

                6.1.13   Tenant's Property ..................................   33

 

                6.1.14   Laboror Materialmen's Liens ........................   33

 

                6.1.15   Changes or Additions ...............................   33

 

                6.1.16   Holdover ...........................................   34

 

                6.1.17   Financial Statements ...............................   34

 

                6.1.18   Compliance .........................................   34

 

                6.1.19   Laboratories/Janitorial ............................   34

 

        6.2      BANKRUPTCY .................................................   35

 

ARTICLE VII      CASUALTY AND TAKING ........................................   36

 

        7.1      CASUALTY AND TAKING.........................................   36

 

        7.2      TAKING .....................................................   37

 

        7.3      RESERVATION OF AWARD .......................................   38

 

ARTICLE VIII     RIGHTS OF MORTGAGEE ........................................   38

 

        8.1      PRIORITY OF LEASE ..........................................   38

 

        8.2      RIGHTS OF MORTGAGE HOLDERS: LIMITATION OF MORTGAGEE'S

                LIABILITY ..................................................   39

 

        8.3      INTENTIONALLY OMITTED ......................................   39

 

        8.4       NO PREPAYMENT OR MODIFICATION, ETC .........................   39

 

        8.5      NO RELEASE OR TERMINATION ..................................   39

 

        8.6      CONTINUING OFFER ...........................................   40

 

        8.7      MORTGAGEE'S APPROVAL .......................................   40

 

ARTICLE IX       DEFAULT ....................................................   40

 

        9.1      EVENTS OF DEFAULT ..........................................   40

 

        9.2      TENANT'S OBLIGATIONS AFTER TERMINATION .....................   41

 

ARTICLE X        MISCELLANEOUS ..............................................   41

 

       10.1      NOTICE OF LEASE ............................................   41

 

       10.2      INTENTIONALLY OMITTED ......................................   42

 

       10.3      NOTICES FROM ONE PARTY TO THE OTHER ........................   42

 

       10.4      BIND AND INURE .............................................   42

 

       10.5      NO SURRENDER ...............................................   42

 

       10.6      NO WAIVER, ETC..............................................   42

 

       10.7      NO ACCORD AND SATISFACTION .................................   42

 

       10.8      CUMULATIVE REMEDIES ........................................   43

 

       10.9      RIGHT TO CURE ..............................................   43

 

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      10.10      ESTOPPEL CERTIFICATE ...................................    43

 

      10.11      WAIVER OF SUBROGATION ..................................    43

 

      10.12      INTENTIONALLY OMITTED ..................................    43

 

      10.13      FORCE MAJEURE ..........................................    44

 

      10.14      BROKERAGE ..............................................    44

 

      10.15      SUBMISSION NOT AN OFFER ................................    44

 

      10.16      REPRESENTATIONS OF LANDLORD ............................    44

 

      10.17      NO MERGER OF TITLE .....................................    44

 

      10.18      WAIVER OF TRIAL BY JURY ................................    45

 

      10.19      HAZARDOUS MATERIALS ....................................    45

 

      10.20      PARKING ................................................    47

 

      10.21      SURVIVAL ...............................................    48

 

      10.22      APPLICABLE LAW AND CONSTRUCTION ........................    48

 

      10.23      CONFIDENTIALITY ........................................    48

 

      10.24      METHOD OF MEASUREMENT ..................................    49

 

      10.25      APPROVALS ..............................................    49

 

      10.26      GROUND LEASE PROVISIONS ................................    49

 

ARTICLE XI       SECURITY DEPOSIT .......................................    50

 

ARTICLE XII      SATELLITE DISH ANTENNA AND SUPPLEMENTAL AIR UNITS ......    52

 

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                                   ARTICLE II

                               PREMISES AND TERM

 

2.1    PREMISES.

 

      Subject to and with the benefit of the provisions of this Lease and the

Ground Lease (as hereinafter defined) relating to the parcel of land described

in Exhibit A attached hereto and made a part hereof (the "Lot"), Landlord hereby

leases to Tenant, and Tenant leases from Landlord, Tenant's Space shown in

Exhibit B attached hereto and made a part hereof, on the third (3rd) floor of

the Building on the Lot, excluding exterior faces of exterior walls, the common

facilities areas and building service fixtures and equipment serving exclusively

or in common other parts of the Building. Tenant's Space, with such exclusions,

is hereinafter referred to as the "Premises."

 

      Tenant shall have, as appurtenant to the Premises, the right to use in

common with others entitled thereto: (a) the common facilities included in the

Building or on the Lot to the extent and in the location from time to time

designated by Landlord and the common facilities, if any, on the Johns Hopkins

University Montgomery County Campus (the "Campus") of which the Building and Lot

are a part to the extent such facilities are available for use by tenants of the

Building, and (b) the building service fixtures and equipment serving the

Premises.

 

      Landlord reserves the right from time to time, without notice or liability

to Tenant, (a) to install, repair, replace, use, maintain and relocate for

service to the Premises and to other parts of the Building or either, building

service fixtures and .equipment wherever located in the Building and (b) to

alter or relocate any common facilities, provided, however, that the same do not

materially adversely affect Tenant's use of or access to the Premises except in

the case of temporary disruptions caused by such activities. Landlord shall use

reasonable efforts to minimize any disruption to Tenant's enjoyment of the

Premises from construction and repair activity within the Building. Tenant

acknowledges that Johns Hopkins University ("JHU") will conduct evening and

weekend classes in the Building and that to accommodate such users, the Building

common areas will be open from 7:00 a.m. to 11:00 p.m., Monday through Friday,

and from 8:00 a.m. to 6:00 p.m., Saturday, Sunday and Holidays (subject to

adjustment from time to time).

 

2.2    TERM.

 

      To have and to hold for a period (the "Term") commencing on the earliest

of (a) the later of (i) the Scheduled Term Commencement Date, or (ii) the date

on which the Premises are deemed ready for occupancy as provided in Section 3.2,

or (b) in any event, the date on which Tenant occupies ail or any part of the

Premises for the purpose of conducting its business operations (whichever of

said dates is appropriate being hereafter referred to as the "Commencement

Date"), and continuing until the Term Expiration Date, unless sooner terminated

as provided in this Lease. Promptly following Landlord's request, Landlord and

Tenant agree to execute a Lease Commencement Date Agreement in the form of

Exhibit H which shall establish the Commencement Date and become part of the

Lease.

 

2.3    OPTION TO EXTEND.

 

      Tenant shall have the right to renew the Lease in its entirety for one

consecutive additional term of five (5) years (the "Extension Term"), upon

written notice delivered to Landlord (the "Extension Notice") not less than 12

months nor more than 15 months prior to the Term Expiration Date; provided that

at the time Tenant gives the Extension Notice to Landlord and at the time of

expiration of the initial Term, (i) Tenant is not in default hereunder beyond

expiration of any applicable grace or cure periods, and (ii) except for a

Permitted Assignment (as defined in Section 6.1.6), Tenant has not assigned this

Lease and is not subleasing in the aggregate more than fifty percent (50%) of

the Premises. In no event shall any assignee (other than a Permitted Assignee,

as defined in Section 6.1.6) or subtenant be entitled to exercise the right to

renew set forth in this paragraph.

 

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      If this right to renew is exercised by Tenant, all terms, covenants,

conditions and provisions of the Lease (including, without limitation, those

related to additional rent, Operating Cost Escalations, Real Estate Tax

Escalations, Tenant's Annual Electrical Cost and, if applicable, Tenant's Annual

Water or Gas Cost) shall apply during the Extension Term, and the Lease shall

continue in full force and effect except that: (a) Tenant shall occupy the

Premises in its then "as is" and "where is" condition; (b) the provisions of

this Lease as to Tenant Allowance, Turnkey Costs, Additional Allowance, and

rental abatement for the first Lease Year shall not apply to the Extension

Term; (c) the Annual Rent for the Premises shall be adjusted as hereinafter

provided; and (d) Tenant shall have no further right to renew or extend this

Lease unless otherwise agreed to in writing by the parties. Annual Rent for the

first year of the Extension Term will be equal to the then-projected market rate

of rent with market concessions for space of a similar quality and otherwise

comparable to the Premises in the Building and in the market area as of the

expiration of the initial Term and shall thereafter escalate, in accordance with

market terms as determined in accordance herewith provided, however, in no event

shall Annual Rent be less than the Base Annual Rent payable by Tenant hereunder

during the 12-month period prior to commencement of the Extension Term, plus any

remaining unpaid portion of the Additional Allowance Charge.

 

      If, by the date thirty (30) calendar days following timely and valid

delivery of Tenant's Extension Notice exercising its option to extend the Term,

Landlord and Tenant have not agreed in writing as to the Annual Rent to be paid

by Tenant, including annual escalations thereof, or the tenant allowance, if

any, to be paid by Landlord during the applicable Extension Term, either

Landlord or Tenant may elect that the fair market rent, escalations and tenant

allowance, if any, be determined in accordance with the following procedure

(which procedure is herein referred to as the "Three-Broker Method"). If neither

Landlord nor Tenant delivers notice to the other electing to use the

Three-Broker Method (the "Appraisal Notice") within seven (7) business days

following the aforesaid thirty (30) day period, then Tenant's exercise of its

right to extend the Term shall be void and Tenant's options to renew in

accordance herewith shall terminate and be null and void. If either Landlord or

Tenant timely delivers the Appraisal Notice, Landlord and Tenant shall each

appoint one commercial real estate broker, and the two so selected shall

mutually select a third. Said real estate brokers shall each be licensed in

Maryland, specializing in the field of commercial real estate leases (including

those with wet labs) in the Montgomery County, Maryland area, having no less

than ten (10) years' experience in such field, and recognized as ethical and

reputable within their field. Landlord and Tenant agree to make their

appointments promptly within seven (7) business days after delivery of the

Appraisal Notice. The two brokers selected by Landlord and Tenant shall promptly

select a third broker within seven (7) business days after they have both been

appointed. Within ten (10) business days after the third broker is selected,

each broker shall submit his or her determination of the then-projected

prevailing market rent, including annual escalations thereof and tenant

allowance and other market concessions, if any, for comparable space in

comparable buildings within the market area. For purposes hereof, the prevailing

market rent, escalations thereof and tenant allowance and other concessions, if

applicable, shall be deemed to equal the mean of the two closest rental rate,

escalation and allowance determinations. However, if either party fails to

appoint a broker within seven (7) business days as provided above, the one

broker who was timely appointed by the other party shall by himself make the

determination of the prevailing market rent, escalations and allowance, if any.

Landlord and Tenant shall each be bound by such determinations. Landlord and

Tenant shall each pay the fees of the broker that it appointed and shall each

pay one-half of the fees of the third broker, or the single broker as the case

may be.

 

2.4    RIGHT TO CANCEL.

 

      Notwithstanding anything to the contrary contained in this Lease, if

Tenant is not in default beyond applicable notice and cure periods as of the

date it delivers a Cancellation Notice (as defined below) and as of the Early

Expiration Date (as defined below), Tenant may terminate this Lease effective

upon the last day of the sixty-sixth (66th) calendar month of the Term (the

"Early Expiration Date"), by delivery of a written notice (the "Cancellation

Notice") and the applicable Termination Payment (as described below) to Landlord

no later than the last day of the fifty-fourth (54th) calendar month of the

Term. The Termination Payment due to Landlord should Tenant elect to terminate

this Lease shall be the unamortized value, determined as herein provided, of the

"Lease Transaction Costs" (as defined below). For purposes hereof, the Lease

Transaction Costs shall mean all the Tenant Allowance, Turnkey Costs,

 

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Additional Allowance, and all other costs incurred by Landlord with respect to

all Leasehold Improvements to or for the Premises paid for by Landlord

(including interest thereon, if any, at the cost to Landlord to obtain funds to

pay for such obligations), the full amount of the Base Annual Rent abated in

accordance with Section 1.1, and all reasonable legal fees incurred by Landlord

in connection with the negotiation of this Lease as amended and all brokerage

commissions incurred by Landlord in connection with this Lease as it may be

amended, but excluding the Test Fit Allowance (as defined in Section 3.4) paid

by Landlord for the initial space plan for the Premises. For the purpose of

determining the Termination Payment, the Lease Transaction Costs shall be

amortized on a straight-line basis over the initial ten (10) Lease Years of the

Term, and the unamortized value shall be measured by Landlord as of the Early

Expiration Date. Upon the Commencement Date, Landlord and Tenant shall execute a

Lease Commencement Date Agreement (Exhibit H) that stipulates the amount of

unamortized costs as stated above that will be due upon delivery of a

Cancellation Notice.

 

      If Tenant validly terminates this Lease as herein provided, this Lease

shall terminate as of the Early Expiration Date as if such date were the

original Term Expiration Date set forth in this Lease and Tenant will vacate and

surrender the Premises on the Early Expiration Date in the condition required by

Subsection 6.1.2.

 

2.5    RIGHT OF FIRST OFFER.

 

      Subject to the conditions subsequently set forth in this Section 2.5,

Tenant shall, following the initial leasing of all of the space in the Building

(the "Initial Lease-Up") and during the remainder of the initial Term of this

Lease, have a right of first offer with respect to the lease of the space

identified as the "First Offer Space" shown on Exhibit B-2 hereto and contiguous

to the Premises (herein referred to as the "First Offer Space"), excepting any

portion thereof leased by Tenant pursuant to Section 2.6, when such rentable

space becomes Available for Leasing (as hereinafter defined). This right of

first offer shall be subject and subordinate to the rights granted to any tenant

or tenants under leases in the Building entered into prior to the Date of Lease

Execution set forth at the beginning of this Lease. As a result, Tenant's rights

hereunder in the First Offer Space shall arise only (i) upon the expiration of

early termination of the term of any lease of such space entered into prior to

the Date of Lease Execution or pursuant to an option, right of refusal, offer or

negotiation granted to a tenant under a lease executed prior to the Date of

Lease Execution, including all permitted extensions or expansions thereof, and

(ii) after Landlord first offers such space to other tenant(s) of the Building

holding options to expand or rights of first refusal, offer or negotiation as to

the First Offer Space pursuant to the terms of their respective leases (provided

such leases were executed prior to the Date of Lease Execution) and such

tenant(s) fail or refuse to lease the same in accordance with their respective

leases. For purposes hereof, First Offer Space shall be "Available for Leasing"

if such space is then or will within 12 months thereafter be vacant and

unencumbered by any lease, option or right in favor of another tenant or tenants

in the Building under leases executed prior the Date of Lease Execution.

 

      If and when the First Offer Space or any portion thereof (herein referred

to as the "Offered Space") becomes Available for Leasing in accordance with the

preceding paragraph, prior to entering into a lease of such area with another

person or entity, Landlord, by written notice to Tenant ("Landlord's Offer

Notice), shall first offer to lease to Tenant the Offered Space provided that no

other tenant has a prior claim to such space as described in the preceding

paragraph and provided further that the conditions set forth herein are

satisfied. Upon the receipt of Landlord's Offer Notice, Tenant shall have 10

days after receipt of Landlord's Offer Notice to advise Landlord in writing of

Tenant's election to lease the entire Offered Space (the 'Tenant's Election

Notice"), failing which Tenant's rights as to the Offered Space under this

Section 2.5 shall terminate and shall be null and void and Landlord shall be

free to lease the Offered Space in its sole discretion to another party or

parties or to otherwise encumber the same in favor of other new or existing

tenant(s) in the Building on such terms as Landlord may elect.

 

      Any space taken by Tenant pursuant to this Section 2.5 shall, except as

expressly provided in this Section 2.5, be taken by Tenant in its "as is" and

"where is" condition and added to the Premises under the terms of this Lease,

provided that Landlord shall have no obligation to incur Turnkey Costs or

provide Tenant with the Tenant Allowance, Additional Allowance, or rent

abatement for the first Lease Year

 

                                       10

<PAGE>

 

provided under this Lease and Annual Rent for the Offered Space shall be

determined as hereinafter provided. The Annual Rent payable by Tenant for

Offered Space leased by Tenant in accordance with this Section 2.5 shall be

equal to the then-prevailing market rate of rent with market concessions for

comparable space in the market area and shall escalate annually in accordance

with market terms, provided however, that in no event shall Annual Rent for the

Offered Space be less than the Base Annual Rent payable by Tenant hereunder. In

the event Landlord and Tenant are unable to reach agreement upon an amendment to

this Lease adding the Offered Space to the Premises, including the rate of rent

for such space, within thirty (30) days following the date Landlord received

Tenant's Election Notice, Tenant's rights under this Section 2.5 shall terminate

and shall be null and void with respect to the Offered Space designated in that

particular Offer Notice, and Landlord shall be free to lease such Offered Space

in its sole discretion to another party or parties or to otherwise encumber the

same in favor of other or new tenant(s) in the Building on such terms as

Landlord may elect.

 

      Tenant acknowledges and agrees that Landlord shall have no obligation to

lease First Offer Space to Tenant under this Section 2.5 unless at the time the

Offered Space is added to the Premises no less than three years remains of the

initial Term of the Lease.

 

      At the time Tenant seeks to exercise any right provided to Tenant under

this Section 2.5, (i) Tenant shall not be in default under the terms of this

Lease beyond applicable grace or cure period, and (ii) except for a Permitted

Assignment, Tenant may not have assigned this Lease or be subletting in the

aggregate more than twenty five percent (25%) of the Premises. In no event shall

any assignee (other than a Permitted Assignee) or subtenant have the right to

exercise Tenant's right under this Section 2.5.

 

2.6    OPTION TO EXPAND.

 

      Subject to the conditions subsequently set forth in this Section 2.6,

Tenant shall have an option to the lease of up to 10,000 rentable square feet of

the First Offer Space identified as the "Option Space" on Exhibit B-2 hereto,

and contiguous to the Premises (such portion of the First Offer Space, if any

leased by Tenant under this Section 2.6, is herein referred to as the "Option

Space").

 

      If Tenant elects to lease all or any portion of the Option Space, then not

later than sixty (60) days following the Date of Lease Execution Tenant shall

give Landlord written notice of such election (identifying the area of Option

Space, if less than all, that Tenant has elected to lease) (the 'Tenant's Option

Election Notice"), failing which (or if Tenant does not elect to lease all of

the Option Space in the Tenant's Option Election Notice) Tenant's rights under

this Section 2.6 as to the entire Option Space or as to portion thereof Tenant

has not timely elected to lease hereunder, as the case may be, shall terminate

and shall be null and void.

 

      Any space taken by Tenant pursuant to this Section 2.6 (the "Taken Option

Space") shall be taken by Tenant in its "as is" and "where is" condition and

added to the Premises under the terms of this Lease, including without

limitation the terms of this Lease as to the rate of Annual Rent and Tenant

Allowance per rentable square foot, provided however that Landlord shall have no

obligation to incur any Turnkey Costs for such Space and the Additional

Allowance, if any, shall apply only as to the Taken Option Space improved for

use as wet laboratory, but in no event more than 30% of the Taken Option Space.

If the Taken Option Space is less than all of the Option Space, the portion

leased by Tenant hereunder shall be contiguous with the Premises and

satisfactory to Landlord (in it sole but reasonable discretion) so that the

remaining unleased portion of the Option Space is of a size, configuration and

location on the floor that in Landlord's judgment is marketable for the full

rental value of the Taken Option Space. In the event Tenant timely elects to

lease any or all of the Option Space as herein provided, Landlord and Tenant

shall execute and deliver an appropriate amendment to this Lease prepared by

Landlord and adding the Taken Option Space to the Premises within thirty (30)

days following the date Landlord received Tenant's Option Election Notice. If

Tenant fails to execute any such amendment as and when herein provided, Tenant's

rights under this Section 2.6 shall terminate and shall be null and void.

 

                                       11

<PAGE>

 

       At the time Tenant seeks to exercise any right provided to Tenant under

this Section 2.6, (i) Tenant shall not be in default under the terms of this

Lease beyond applicable grace or cure period, and (ii) except for a Permitted

Assignee, Tenant may not have assigned this Lease or be subletting in the

aggregate more than twenty five percent (25%) of the Premises. In no event shall

any assignee (other than a Permitted Assignee) or subtenant have the right to

exercise Tenant's right under this Section 2.6.

 

                                    ARTICLE III

                                  CONSTRUCTION

 

3.1    INITIAL CONSTRUCTION.

 

      Tenant acknowledges that Tenant has had an opportunity to inspect the

Premises. Except as expressly herein provided as to the completion of Leasehold

Improvements, the Premises shall be delivered to Tenant "as is" and "where is"

with all faults and without representation, warranty or guaranty of any kind by

Landlord to Tenant.

 

      (a) Lab Space. Tenant shall provide to Landlord for approval on or before

Tenant's Design Completion Date, complete sets of drawings and specifications

for construction of leasehold improvements in the Lab Space (such complete sets,

once approved by Landlord, are referred to herein as the "Lab Space Complete

Plans") all of which shall be prepared at Tenant's expense by an architect

selected by Tenant and approved by Landlord (herein referred to as Tenant's

Architect") and Landlord's engineer, including but not limited to:

 

      a.     Furniture and Equipment Layout Plans

 

      b.     Dimensioned Partition Plans

 

      c.     Dimensioned Electrical and Telephone Outlet Plans

 

      d.     Reflected Ceiling Plans

 

      e.     Door and Hardware Schedules

 

      f.     Room Finish Schedules including wall, carpet and floor tile colors

 

      g.     Electrical, mechanical and structural engineering plans

 

      h.     All necessary construction details and specifications.

 

      Tenant shall deliver such complete construction drawings and

specifications to Landlord at Landlord's Address and Landlord shall have 5

business days (or 10 business days if the contemplated improvements will affect

the structure of the Building or mechanical, electrical or plumbing systems)

from the date it receives the same to review such drawings and specifications

and notify Tenant as to whether they are approved by Landlord, it being

understood that any such approvals are for the limited purposes set forth in

Section 10.25 of the Lease. If Tenant's drawings and specifications are not

approved by Landlord, Landlord shall inform Tenant of the reason and Tenant

shall have the opportunity to submit revised plans (the "Revised Plans") and the

Landlord shall have 5 business days from the date it receives the Revised Plans

to review the same and notify the Tenant as to whether the Revised Plans are

approved by Landlord.

 

      Landlord and Tenant shall initial the Lab Space Complete Plans after the

same have been submitted by Tenant and approved by Landlord. Tenant shall not

amend or supplement the Lab Space Complete Plans, including by change order,

without Landlord's approval.

 

                                       12

<PAGE>

 

      All of Tenant's construction, installation of furnishings, and later

changes or additions for the Lab Space shall be coordinated with any other work

being performed by Landlord in such manner as to maintain harmonious labor

relations and not to damage the Building or Lot or interfere with construction

of the Building or related improvements or Building operations. All work

described in the Lab Space Complete Plans (the "Lab Space Leasehold

Improvements") shall be performed by Spaulding and Slye Construction Company,

Limited Partnership (the "Landlord's Contractor").

 

      The subcontractors for building the Lab Space Leasehold Improvements shall

be selected according to the following process. Landlord's Contractor shall (i)

solicit bids from at least three subcontractors for each trade, if applicable,

and at the time of submission of final bid and pricing drawings pursuant to

Milestone #5 set forth in Part III of Exhibit C hereto, Tenant may designate the

name of at least one qualified subcontractor to be included in Landlord's

Contractor's list; (ii) allow Tenant to review the results of bids received for

the Lab Space Leasehold Improvements prior to awarding subcontracts for the

work, provided, that any delay occasioned by Tenant's review shall be deemed a

Tenant Delay (as hereinafter defined); and (iii) select the lowest qualified bid

timely received in accordance with the foregoing process, provided that in no

event shall Landlord's Contractor be required to accept any bid which Landlord's

Contractor believes to be in error, or any bid from a subcontractor to which

Landlord's Contractor may have reasonable objection. If Tenant elects that a

trade not go through the three-bid process described above, Landlord's

Contractor will obtain prices from a subcontractor in such trade and present the

same to Tenant. The Tenant shall then have the right to approve such

subcontractor and its prices or reject such subcontractor in which case the

Landlord's Contractor will choose a subcontractor pursuant to the three bid

process described above, and any delay occasioned by Tenant's rejection of any

subcontractor shall be deemed a Tenant Delay (as hereinafter defined).

 

      The Landlord's Contractor shall perform the Lab Space Leasehold

Improvements for a guaranteed cost (including a 5% contractor's fee and the

Landlord's Contractor's general conditions costs) established in accordance with

procedure set forth above. Landlord shall not charge Tenant any fee for

construction management. Landlord's Contractor shall obtain all necessary

building permits for constructing the Lab Space Leasehold Improvements and the

initial certificate of occupancy for the Lab Space.

 

      Landlord, in its sole discretion, may elect by written notice to Tenant at

the time it approves the Lab Space Complete Plans, not to approve any proposed

construction, alterations or additions requiring unusual expense to readapt the

Lab Space to normal laboratory use on lease termination or increasing the cost

of construction, insurance or taxes on the Building or of Landlord's services

called for by Section 5.1 unless Tenant first gives assurances acceptable to

Landlord that such readaptation will be made prior to such termination without

expense to Landlord and makes provisions acceptable to Landlord for payment of

such increased cost. Landlord will also disapprove any alterations or additions

requested by Tenant which will delay completion of the Premises or the Building.

All changes and additions shall be part of the Building except such items as by

writing at the time of approval the parties agree either shall be removed by

Tenant on termination of this Lease or shall be removed at Tenant's cost or left

at Tenant's election.

 

      Tenant shall also pay to Landlord as additional rent the Tenant

Improvement Reimbursement to Landlord (also herein referred to as "TIR") for the

Lab Space. Tenant Improvement Reimbursement to Landlord for the Lab Space shall

be the amount equal to the excess of (a) all costs incurred by Landlord on

account of the Lab Space Leasehold Improvements including in the costs so

incurred any fees and charges of Tenant's Architect or Landlord's engineer paid

by Landlord and the cost and fees charged to Landlord by Landlord's Contractor

over (b) the Tenant Allowance for the Lab Space set forth in Section 1.1 hereof

and, if applicable, the Additional Allowance. Tenant shall pay to Landlord the

TIR for the Lab Space parri passu with the disbursement by Landlord of the

Tenant Allowance and, if applicable, Additional Allowance for the Lab Space, and

the remainder upon substantial completion of Lab Space Leasehold Improvements,

in each case, on submission by Landlord to Tenant of a statement therefor. In

addition to paying TIR as provided above, Tenant shall pay an amount equal to

all costs incurred by Landlord as a result of any change orders signed by Tenant

and Landlord affecting the Lab Space Complete Plans, including the costs and

fees charged to Landlord by Landlord's Contractor with respect

 

                                       13

<PAGE>

 

to such change orders. Amounts due and payable on account of such change orders

shall be included in the statements relating to TIR provided for above, and

Tenant shall pay therefor in accordance with each such statement within thirty

(30) days, and in all events by the Commencement Date.

 

      (b) Office Space. Landlord will provide design development plans and

complete sets of construction drawings and specifications and engineering

drawings prepared by Landlord's architect or engineer at Landlord's expense

(such construction drawings and engineering drawings are referred to herein as

the "Construction Plans") to build out the Office Space according to the

approved space plan and other documents identified in Exhibit C - Part II

attached hereto. Landlord will submit the design development plans and the

Construction Plans for the Office Space to Tenant, it being understood that

Landlord will not agree to any changes to the design development plans or the

Construction Plans that will increase the cost or delay the completion of the

improvements described therein (the "Office Space Leasehold Improvements").

Notwithstanding the foregoing, Landlord may approve changes to the design

development plans or the Construction Plans that may increase the cost of the

Office Space Leasehold Improvements provided Tenant pays in advance all costs

associated with such changes in accordance with this Section 3.1 (b) and

executes a written change order signed by Tenant's Representative agreeing that

any such delay will be deemed a Tenant Delay. Landlord and Tenant shall initial

the Construction Plans for the Office Space after the same have been completed

by Landlord and delivered to Tenant. The completed Construction Plans so

initialed by Landlord and Tenant shall be deemed the "Office Space Complete

Plans." All work described in the Office Space Complete Plans shall be performed

by Landlord's Contractor.

 

      Landlord will not approve any construction, alterations or additions'

requiring unusual expense to readapt the Office Space to normal office use on

lease termination or increasing the cost of construction, insurance or taxes on

the Building or of Landlord's services called for by Section 5.1 unless Tenant

first gives assurances acceptable to Landlord that such readaptation will be

made prior to such termination without expense to Landlord and makes provisions

acceptable to Landlord for payment of such increased cost. Landlord will also

disapprove any alterations or additions requested by Tenant which will delay

completion of the Premises or the Building. All changes and additions shall be

part of the Building except such items as by writing at the time of approval the

parties agree either shall be removed by Tenant on termination of this Lease or

shall be removed at Tenant's costs or left at Tenant's election.

 

      Tenant shall pay to Landlord as additional rent the Tenant improvement

Reimbursement to Landlord for the Office Space. Tenant Improvement Reimbursement

to Landlord for the Office Space shall be the amount equal to all costs incurred

by Landlord on account of changes to the Office Space Complete Plans requested

by Tenant or resulting from act, omission, delay or default by Tenant ("Tenant

Delay") including in the costs so incurred the cost to Landlord of Landlord's

Contractor's overhead and profit equal to twenty percent (20%) of costs of work.

Tenant shall pay to Landlord the TIR for the Office Space parri passu, with the

expenditure of funds by Landlord to pay costs payable by Landlord for design

and construction of the Office Space Leasehold Improvements and the remainder

upon substantial completion of the Office Space Leasehold Improvements, in each

case upon submission by Landlord to Tenant of a statement therefor. In addition

to paying TIR as provided above, Tenant shall pay an amount equal to all costs

incurred by Landlord as a result of any change orders signed by Tenant and

Landlord affecting the Office Space Complete Plans, including the costs and fees

charged to Landlord by Landlord's Contractor with respect to such change orders.

Amounts due and payable on account of such change orders shall be included in

the statements relating to TIR provided for above, and Tenant shall pay therefor

in accordance with each such statement within thirty (30) days, and in all

events by the Commencement Date.

 

3.2    PREPARATION OF PREMISES FOR OCCUPANCY.

 

      Landlord agrees to use reasonable efforts to substantially complete the

Lab Space Leasehold Improvements and Office Space Leasehold Improvements

(collectively the "Leasehold Improvements") by the Scheduled Term Commencement

Date, which date shall, however, be extended for a period equal to that of any

delays incurred by Landlord due to Force Majeure (as defined in Section 10.13)

or Tenant Delay. The Premises shall be deemed ready for occupancy on the date on

which (i) the Leasehold

 

                                       14

<PAGE>

 

Improvements, to be constructed by Landlord's Contractor (collectively

"Landlord's Work"), are substantially complete as certified in writing to Tenant

by Landlord's architect with the exception of minor items which can be fully

completed within sixty (60) days without material interference with Tenant and

other items which because of the season or weather or the nature of the item are

not practicable to do at the time, provided that none of said items is necessary

to make the Premises tenantable for the Permitted Uses; and (ii) a temporary

certificate of occupancy is issued for the Premises; provided further, however,

that if Landlord is unable to obtain a temporary certificate of occupancy for

the Premises or any part thereof or complete construction of Landlord's Work due

to long lead items (as hereinafter defined) included in the Lab Space Complete

Plans or the Office Space Complete Plans (collectively, the "Complete Plans") or

any act or omission of Tenant or its agents, employees, contractors, invitees or

licensees or due to delay in Tenant's compliance with the provisions of Section

3.1 of this Lease or the Milestones set forth in Part III of Exhibit C hereof

(herein sometimes referred to as "Tenant Delays"), then the Premises shall be

deemed ready for occupancy no later than the date the Landlord's Work would have

been substantially completed and a temporary certificate of occupancy would have

been available but for such Tenant Delays. For purposes hereof, "long lead item"

shall mean any item(s) of work included in the Complete Plans, or in any change

order requested by Tenant, that cannot be completed in accordance with the

Landlord's construction schedule (without overtime or acceleration of the work),

provided that Landlord's Contractor advises Tenant that the item is a long lead

item before commencement of construction.

 

      Tenant shall select a specialties contractor ("Tenant's Contractor") to

install telephone, computer and data processing cables, and wiring on the

Premises at Tenant's direction and expense. All such work shall be coordinated

with work being performed by or for Landlord on the Premises and the Building.

Tenant covenants to pay for all work performed by Tenant or Tenant's Contractor,

and Tenant shall apply for all permits and licenses required in connection with

such work and shall pay all fees due in connection therewith. Tenant shall

provide to Landlord the originals of all such permits and licenses. All such

improvements, whether or not paid for by Landlord, and any other improvements

which are affixed to the Premises shall be and remain the property of Landlord.

During the performance of any work, Tenant must provide Landlord evidence that

Tenant or its contractor has in place (i) a policy insuring against "all risks

of physical loss" on a builder's risk non-reporting form, having replacement

cost and agreed amount endorsements, and (ii) commercial general liability with

underlying coverage totaling not less than Ten Million Dollars ($10,000,000),

each such policy to name Landlord and Landlord's lenders as an additional

insured (and as loss payee on policies other than public liability insurance)

and to be in a form reasonably acceptable to Landlord). Such contractor also

must provide evidence that it has in place workmen's compensation insurance in

amounts and in form statutorily required. Without in any manner limiting

Landlord's rights and Tenant's obligations under any other indemnity set forth

in this Lease, Tenant shall defend, with counsel reasonably acceptable to

Landlord, save harmless and indemnify Landlord from (a) claims or demands of

Tenant's Contractor or anyone claiming by, through or under Tenant's Contractor,

and (b) liability for injury, loss, accident, or damage to any person or

property, including, without limitation, bodily injury and/or death, and from

any claims, actions, proceedings and expenses and costs in connection therewith

(including, without limitation, reasonable counsel fees) arising from the acts

or omissions of Tenant, its agents, employees, contractor or subcontractors, in

performance of any construction, remodeling or redecoration.

 

      Landlord shall permit Tenant access for installing tele/data equipment and

systems furnishings in the Premises prior to the Term if it can be done without

material interference with completion of the Building or remaining portions of

the Leasehold Improvements.

 

      In the event of Tenant's failure to comply with the provisions of this

Article III or the Milestones set forth in Part III of Exhibit C hereof or to

submit information or to deliver final bidding and pricing documents or the

Complete Plans approved by Landlord as herein required and by the date set forth

in the Milestones set forth in Part III of Exhibit C hereto and if Tenant does

not cure such failure within thirty (30) days of written notice thereof from

Landlord, Landlord may, at Landlord's option, exercisable by notice to Tenant,

terminate this Lease on the date specified in said notice to Tenant, and upon

such termination Landlord shall have all the rights provided in Article IX of

this Lease in the event of Tenant's default.

 

                                       15

<PAGE>

 

      If for any reason, other than Force Majeure or Tenant Delay, Landlord

fails to achieve Landlord's Milestone set forth in item 9 of Part III of Exhibit

C hereto, Tenant may, as its sole and exclusive remedy at law or in equity, have

the remedy if any, provided to Tenant in item 9 of Part III of Exhibit C hereto.

 

3.3    GENERAL PROVISIONS APPLICABLE TO CONSTRUCTION.

 

      All construction work required or permitted by this Lease, shall be done

in a good and workmanlike manner and in compliance with all applicable laws and

all lawful ordinances, regulations, orders, permits and approvals of

governmental authority and insurers of the Building. Either party may inspect

the work of the other at reasonable times and promptly shall give notice of

observed defects. Landlord's obligations under Section 3.1 shall be deemed to

have been performed when Tenant commences to occupy any portion of the Premises

for the Permitted Uses except for (i) items relating to the Leasehold

Improvements which are incomplete or do not conform with the requirements of

Section 3.1 and as to which Tenant shall in either case have given written

notice to Landlord prior to such commencement, and (ii) latent defects relating

to the Leasehold Improvements not readily observable prior to the Commencement

Date, but as to which Tenant makes a claim in writing within one (1) year

following the date of substantial completion of such work by Landlord's

Contractor. If Tenant shall not have commenced to occupy the Premises for the

Permitted Uses within 30 days after they are deemed ready for occupancy as

provided in Section 3.2, a certificate of completion by a licensed architect or

registered engineer shall be conclusive evidence that Landlord has performed all

such obligations except for items stated in such certificate to be incomplete or

not in conformity with such requirements.

 

3.4    REPRESENTATIVES.

 

      Each party authorizes the other to rely in connection with their

respective rights and obligations under this Article III upon approval and other

actions on the party's behalf by Landlord's Representative in the case of

Landlord or Tenant's Representative in the case of Tenant or by any person

designated in substitution or addition by notice to the party relying.

 

3.5    TENANT ALLOWANCE.

 

      Provided Tenant is not in default hereunder (beyond the giving of notice

and expiration of any grace or cure period provided hereunder), Landlord shall

provide the Tenant Allowance and, if applicable, the Additional Allowance in the

amount specified in Section 1.1 to be applied not later than December 31, 2006,

against the costs incurred by Tenant for initial space planning by Tenant's

Architect, the cost of preparation and administration of the Lab Space Complete

Plans and the cost incurred by Landlord in construction of the Lab Space

Leasehold Improvements (including, without limitation, architects' and

engineers' fees, sprinklers, fire alarms, smoke detectors, exit lights, cabling

and costs of compliance with all applicable laws such as, without limitation,

the Americans with Disabilities Act), the cost of obtaining all permits,

licenses and fees related to Landlord's construction of the Lab Space Leasehold

Improvements in accordance with this Article III and as otherwise provided in

this Section.

 

      If all costs to be incurred by Tenant on account of Leasehold Improvements

(including Landlord's Contractor's fee) will exceed the Tenant Allowance and, if

applicable, the Additional Allowance, Landlord may require as a condition

precedent to the first disbursement of the Tenant Allowance, evidence reasonably

satisfactory to Landlord that Tenant has set aside funds sufficient to pay such

excess and may disburse the Tenant Allowance and Additional Allowance parri

passu with the disbursement of such funds by Tenant.

 

      No portion of the Tenant Allowance shall be used to reimburse Landlord for

the $0.11 per rentable square foot Landlord agreed to pay for Tenant's initial

test fit for the Premises (the "Test Fit Allowance").

 

                                       16

<PAGE>

 

3.6    LEASE COSTS.

 

      If Tenant (i) defaults under the Lease prior to Commencement Date and

fails to cure such default after any applicable notice and cure periods, (ii)

fails to occupy the Premises for the conduct of its business within sixty (60)

days after the Commencement Date, or (iii) fails to pay any Annual Rent or

Additional Rent due upon Commencement Date, if applicable, or upon the date that

the first monthly installment of Annual Rent and Additional Rent are not abated

pursuant to Article I hereto, then in any such event, in addition to and not in

lieu of any other rights and remedies Landlord may have pursuant to this Lease

or at law or in equity, Tenant shall forthwith repay to Landlord upon demand,

the Tenant Allowance, the Turnkey Costs and Additional Allowance, plus any other

costs incurred by Landlord associated with the design and construction of the

Leasehold Improvements including, but not limited to, design costs, engineering

costs and the cost of construction, together with interest thereon at the

Default Rate from the date of delivery of the Premises by Landlord in accordance

with this Lease until such amount is paid by Tenant (the "Pre-Term Costs").

 

                                   ARTICLE IV

                                      RENT

 

4.1    RENT.

 

      Commencing on the Commencement Date and continuing for the remainder of

the Term, Tenant agrees to pay rent to Landlord, without any offset or reduction

whatever (except as otherwise expressly set forth in this Lease), in an amount

equal to 1/12th of the Annual Rent in equal installments in advance on the first

day of each calendar month included in the Term; and for any portion of a

calendar month at the beginning or end of the Term, at the proportionate rate

payable for such portion, in advance, provided that the first installment of

Annual Rent shall be due and payable pursuant to the Special Provisions set

forth in Article I hereof. Notwithstanding the foregoing, provided that Tenant

is not in default hereunder, one-half (1/2) of each monthly installment of Base

Annual Rent payable by Tenant for the first twelve (12) months of the initial

Term shall be abated as provided in accordance with the Special Provisions of

Section 1.1 hereof.

 

      As used herein, "Annual Rent" shall mean the sum set forth in Section 1.1.

On the first day of the Second Lease Year and on the first day of each

subsequent Lease Year or portion thereof during the initial Term, the amount of

Annual Rent shall be increased as follows (as adjusted based upon the actual

amount of the Additional Allowance as provided in Section 1.1):

 

                                        17

<PAGE>

 

<TABLE>

<CAPTION>

                BASE

               ANNUAL            RENTABLE                                ADDITIONAL

  LEASE           RENT       X       SQUARE         =     BASE ANNUAL    +      ALLOWANCE      =

  YEAR           P.R.S.F.             FEET                  RENT               CHARGE               ANNUAL RENT

<S>             <C>         <C>    <C>             <C>   <C>            <C>   <C>             <C>    <C>

  Second         $23.69      X       17,002         =     $402,777.38    +      $30,773.62     =      $433,551.00

  Third          $24.40      X       17,002         =     $414,848.80    +      $30,773.62     =      $445,622.42

  Fourth         $25.13      X       17,002         =     $427,260.26    +      $30,773.62     =      $458,033.88

  Fifth          $25.89      X       17,002         =     $440,181.78    +      $30,773.62     =      $470,955.40

  Sixth          $26.66      X       17,002         =     $453,273.32    +      $30,773.62     =      $484,046.94

Seventh         $27.46      X       17,002         =     $466,874.92    +      $30,773.62     =      $497,648.54

  Eighth         $28.29      X       17,002         =     $480,986.58    +      $30,773.62     =      $511,760.20

  Ninth          $29.14      X       17,002         =     $495,438.28    +      $30,773.62     =      $526,211.90

  Tenth          $30.01      X       17,002         =     $510,230.02    +      $30,773.62     =      $541,003.64

Eleventh        $30.91      X       17,002         =     $525,531.82    +      $    -0-        =      $525,531.82

</TABLE>

 

      The term "additional rent" shall mean Tenant's Share of Operating Costs

(as defined below), Tenant's Share of Real Estate Taxes (as defined below),

Tenant's Annual Electrical Cost (as defined below), Tenant Improvement

Reimbursement to Landlord (whether for the Office Space or the Lab Space), and

all other costs, charges and impositions, in addition to Annual Rent, payable by

Tenant in accordance with the terms of this Lease.

 

4.2    OPERATING COSTS.

 

      Commencing on the Commencement Date and continuing for the remainder of

the Term, Tenant shall pay to Landlord, as additional rent, Tenant's Share of

Operating Costs (as defined below) in monthly installments on the first day of

each month during the Term and as otherwise provided in this Section 4.2. Within

one-hundred eighty (180) days after the end of each fiscal year ending during

the Term and within one hundred twenty (120) days after Lease termination,

Landlord shall render a statement ("Landlord's Operating Cost Statement") in

reasonable detail and according to usual accounting practices, certified by

Landlord, and showing for the preceding fiscal year or fraction thereof, as the

case may be, Landlord's operating costs ("Operating Costs") which shall:

 

      (a) EXCLUDE, notwithstanding any other, provisions in this Section 4.2 to

the contrary, the following:

 

            (i) Ground rent or other rental payments made under any ground lease

or underlying lease or payments of principal, interest, late charges, penalties

or other charges made on account of any loan;

 

            (ii) Costs of improvements or replacements to the Building which

under generally accepted accounting principles are capitalized except as

expressly included in Operating Costs under part (b) of this Section 4.2

("Capital Improvements");

 

            (iii) Costs of leasing commissions, legal, space planning,

construction and other expenses incurred in procuring tenants for the Building;

 

            (iv) Costs of painting, redecorating or other work performed solely

for the benefit of another tenant, prospective tenant or occupant;

 

                                       18

<PAGE>

 

            (v) Salaries, wages, or other compensation paid to officers or

executives of Landlord or its property manager at the level of senior vice

president and above;

 

            (vi) Salaries, wages, or other compensation or benefits paid to

employees of Landlord or its property manager who are not assigned to the

operation, management, maintenance, or repair of the Building or Campus; and in

the case of any offsite or other employees who are not assigned full time to the

operation, management, maintenance or repair of the Building or Campus, Landlord

shall reasonably allocate the compensation paid for the wages, salary, or other

compensation or benefits paid to such employees among the properties to which

such employees are assigned and Operating Costs shall exclude the portion of

such compensation not reasonably allocated to the Building or Campus;

 

            (vii) Any fines or penalties incurred due to the violation by

Landlord of any governmental rule or authority;

 

            (viii) Any costs for which Landlord actually receives reimbursement

from insurance, condemnation awards, or any other source, including other

tenants of the Building if charged to such tenants specially and not as an

Operating Cost, Real Estate Tax or Electrical Cost;

 

            (ix) Costs in excess of the deductible on applicable insurance

policies for repairs, restoration, replacements or other work occasioned by (a)

fire, windstorm or other casualty which Landlord is hereunder required to insure

against (whether such destruction be total or partial) and (b) the exercise by

governmental authorities of the right of eminent domain;

 

            (x) Attorneys' fees and expenses and costs of litigation in

connection with disputes with tenants, other occupants or prospective tenants,

or with consultants, management agents, leasing agents, purchasers or mortgagees

of the Building; and costs incurred by Landlord due to Landlord's violation of

the terms of this Lease which would not have been incurred by Landlord but for

such violation;

 

            (xi) Costs incurred in connection with the original construction of

the Building or other improvements constructed with the Building;

 

            (xii) Costs relating to another tenant's or occupant's space which

(A) were incurred in rendering any service or benefit to such tenant that

Landlord was not required to provide, or were for a service in excess of the

service that the Landlord was required to provide to Tenant hereunder or (B)

were otherwise in excess of the Building standard services then being provided

by Landlord to all tenants or other occupants in the Building, whether or not

such other tenant or occupant is actually charged therefor by Landlord;

 

            (xiii) Costs incurred in connection with the acquisition of the Lot

or sale, financing, refinancing, mortgaging, selling or change of ownership of

the Building and/or the Lot, including, but not limited to, attorneys' fees,

title insurance premiums, and recording costs;

 

            (xiv) Fines, interest, penalties, legal fees or costs of litigation

incurred due to the late payments of loan payments, taxes and utility bills;

 

            (xv) Landlord's or its property manager's general home office

overhead expenses;

 

             (xvi) Costs incurred for any items to the extent covered by a

manufacturer's, materialman's, vendor's or contractor's warranty;

 

            (xvii) Non-cash items, such as deductions for depreciation and

amortization of the Building and the Building equipment (except as expressly

included in Operating Costs under part (b) of this Section 4.2); interest on

capital invested; bad debt losses; rent losses and reserves for such losses;

 

                                       19

<PAGE>

 

            (xviii) Costs incurred in connection with the operation of any lobby

shop or cafeteria owned, operated or subsidized by Landlord (except the

non-capital costs of any cafeteria expressly included in Operating Costs under

part (b) of this Section 4.2);

 

             (xix) Costs incurred by Landlord which are associated with the

operation of the business of the legal entity which constitutes Landlord as the

same is separate and apart from the costs of the operation of the Building,

including legal entity formation and maintenance charges;

 

            (xx) All amounts which would otherwise be included in Operating

Costs which are paid to any affiliate or subsidiary of Landlord to the extent

the cost of such goods or services exceed the market rate for similar services

under arms length contracts in the Washington, D.C. metropolitan area;

 

            (xxi)    Rentals and other related expenses incurred in leasing

                    elevators or other equipment ordinarily considered to be of

                    a capital nature;

 

            (xxii)   Contingency or replacement reserves;

 

            (xxii)   Costs incurred in the remediation or removal of Hazardous

                    Materials (as defined in Section 10.18) released on or from

                    the Building or Lot in violation of Environmental Laws (as

                    defined in Section 10.18) provided, however, any such costs

                    arising from Tenant's use of the Premises shall be charged

                    directly to Tenant;

 

             (xxiii) Marketing and advertising expenses;

 

            (xxiv) Utility costs for which any tenant directly contracts and

pays the supplier thereof; and;

 

            (xxv) Costs of acquiring or renting works of art displayed in the

Common Area.

 

       (b) BUT INCLUDE, without limitation: costs of maintenance and repair of

any cafeteria or fitness room generally available to tenants of the Building;

expenses of any proceedings for abatement of Real Estate Taxes and assessments

with respect to any fiscal year or fraction of a fiscal year; premiums for

insurance; fees payable to third parties for audits of Operating Costs, provided

that such costs are not incurred due to Landlord's overcharging tenants for

Operating Costs; reasonable legal fees and costs payable.in seeking a reduction

of Real Estate Taxes and in connection with Building service contracts;

compensation and all fringe benefits, worker's compensation insurance premiums

and payroll taxes paid by Landlord to, for or with respect to all persons

engaged in the operating, maintaining or cleaning of the Building and Lot; all

utility charges other than electricity not billed directly to tenants by

Landlord or the utility; payments to Landlord's property manager and other

independent contractors (including, without limitation, affiliates of Landlord,

if applicable) under service contracts for cleaning, operating, managing,

maintaining, repairing or testing the Building and Lot; payments made to

consultants retained to advise Landlord regarding compliance by tenants of the

Building with applicable Laws (as defined in Section 6.1;18); rent paid by the

managing agent or imputed cost equal to the loss of market rent by Landlord for

making available to the managing agent space for an office in the Building (not

exceeding 1,000 rentable square feet) on the ground floor or above; and all

other costs and expenses incurred in connection with owning, administering,

cleaning, operating, managing, maintaining and repairing the Building and Lot,

or either, and the Building's pro-rata share of all such costs and expenses

applicable to owning, administering, cleaning, operating, managing, maintaining

and repairing common areas on the Campus, including, without limitation, common

area rent and other charges applicable to the Shady Grove Life Sciences Center.

If Landlord installs or constructs a new or replacement capital item for the

purpose of reducing Operating Costs or complying with requirements of law, the

cost thereof as reasonably amortized by Landlord in accordance with generally

accepted accounting principles, with interest at Landlord's cost of funds plus

one percent (1%) per annum (the "Prime Rate"), on the unamortized amount, shall

be included in Landlord's Operating Costs.

 

                                        20

<PAGE>

 

      "Tenant's Share of Operating Costs" shall be equal to the product of (a)

Operating Costs as indicated in Landlord's Operating Cost Statement, multiplied

by (b) "Tenant's Share."

 

      Landlord's Operating Cost Statement shall also show the average number of

square feet of the Building which were occupied for the preceding fiscal year or

fraction thereof. If less than ninety-five percent (95%) of the Net Rentable

Area of the Building is occupied during any full or fractional year of the Term

(including the Base Year), the actual Operating Costs for those costs that vary

with occupancy (such as, without limitation, cleaning and janitorial) shall be

adjusted for such year to an amount which Landlord estimates would have been

incurred in Landlord's reasonable judgment had ninety-five (95%) of the Net

Rentable Area of the Building been occupied, provided, however, that Operating

Costs as so adjusted shall not exceed the actual costs Landlord would have

incurred had the Building been ninety-five percent (95%) occupied.

 

      In case of special services which are provided to Tenant but are not

rendered to all areas on a comparable basis, the proportion allocable to the

Premises shall be the same proportion which the Rentable Floor Area of Tenant's

Space (as the same may be increased or decreased in accordance with this Lease)

bears to the total rentable floor area to which such service is so rendered

(such latter area to be determined in the same manner as the Total Rentable

Floor Area of the Building).

 

      Notwithstanding any other provision of this Section 4.2, if the Term

expires or is terminated as of a date other than the last day of a fiscal year,

then for such fraction of a fiscal year at the end of the Term, Tenant's last

payment to Landlord under this Section 4.2 shall be prorated and made on the

basis of Landlord's reasonable best estimate of the items otherwise includable

in Landlord's Operating Cost Statement which shall be delivered to Tenant within

one-hundred twenty (120) days following expiration or termination of the Term,

and shall be made on or before the date 10 days after Landlord delivers such

estimate to Tenant.

 

      Tenant shall pay, as additional rent, on the first day of each month of

such fiscal year and each ensuing fiscal year thereafter, "Estimated Monthly

Payments" equal to 1/12th of Tenant's Share of the estimated Operating Costs for

the respective fiscal year, with an appropriate additional payment or credit to

be made after Landlord's Operating Cost Statement is delivered to Tenant. If the

amount paid by Tenant for Tenant's Share of estimated Operating Costs is less

than Tenant's Share of the actual Operating Costs, Tenant agrees to pay, as

additional rent, to Landlord the amount of the differential. If the amount paid

by Tenant for Tenant's Share of estimated Operating Costs is more than Tenant's

Share of the actual Operating Costs, then Landlord shall credit such excess

against Tenant's subsequent monthly payments for Tenant's Share of Operating

Costs, as appropriate, until such excess is exhausted (or refund such excess to

Tenant if at the end of the Term). Landlord may adjust such Estimated Monthly

Payment from time to time and at any time during a fiscal year (but not more

often than twice per fiscal year), and Tenant shall pay, as additional rent, on

the first day of each month following receipt of Landlord's notice thereof, the

adjusted Estimated Monthly Payment. Each of Landlord's Operating Cost Statements

given by Landlord pursuant to the Lease shall be conclusive and binding upon

Tenant unless, within ninety (90) days after the receipt of the statement,

Tenant notifies Landlord that it wishes to audit Landlord's Operating Costs for

the preceding year. If Tenant gives such notice timely requesting the right to

review or audit Landlord's books and records pertaining to Operating Costs for

the preceding year, Landlord shall make available to Tenant for inspection or

auditing during normal business hours not more than six (6) months following

delivery to Tenant of the Operating Cost Statement to which such review related,

at the offices of Landlord's managing agent where such records are kept, the

books and records with respect to Landlord's Operating Costs for the fiscal year

in question. If such books and records are not kept in the Washington, D.C.

Greater Metropolitan Area, Landlord shall upon Tenant's written request, not

more often than once per year, make copies of such books and records available

to Tenant for inspection or audit as herein provided at an office of Landlord or

Landlord's managing agent in the Washington, D.C. Greater Metropolitan Area.

Pending the resolution of any such dispute as to Landlord's Operating Cost

Statement, Tenant shall pay the adjustments, including any underpayment of

Tenant's Share of Operating Costs, as specified in accordance with Landlord's

Operating Cost Statement, without prejudice to Tenant's position, as herein

provided. If the dispute shall be resolved in Tenant's favor, Landlord shall

credit or pay to Tenant (as hereinabove provided) the amount of Tenant's

overpayment. In

 

                                       21

<PAGE>

 

addition, if there has been an overcharge to Tenant of Operating Costs in excess

of five percent (5%) of Tenant's Share of the Operating Costs in such year,

Landlord shall reimburse Tenant for its reasonable costs incurred in connection

with Tenant's review of Landlord's books and records of Operating Costs.

 

      If Landlord fails to furnish Tenant any statement of Landlord's estimate

of Tenant's Share of Operating Costs for any fiscal year or if Landlord shall

furnish such estimate for any fiscal year subsequent to the commencement

thereof, then until the first day of the month following the month in which such

estimate is furnished to Tenant, Tenant shall pay to Landlord on the first day

of each month an amount equal to the monthly sum payable by Tenant to Landlord

under this Section 4.2 .in respect of the last month of the preceding fiscal

year.

 

4.3    REAL ESTATE TAXES.

 

      Commencing on the Commencement Date and continuing for the remainder of

the Term, Tenant shall pay to Landlord, as additional rent, Tenant's Share of

Real Estate Taxes (as defined below), if any, in monthly installments on the

first day of each month during the Term and as otherwise provided in this

Section 4.3. Within one-hundred eighty (180) days after the end of each Fiscal

Year ending during the Term and after Lease termination, Landlord shall render a

statement ("Landlord's Real Estate Tax Statement") certified by Landlord, and

showing for the preceding fiscal year or fraction thereof, as the case may be,

Real Estate Taxes for the Building and Lot, accompanied by copies of the tax

bills relating thereto.

 

      Tenant's Share of Real Estate Taxes" shall be equal to the product of (a)

the Real Estate Taxes as indicated in Landlord's Real Estate Tax Statement,

multiplied by (b) Tenant's Share.

 

      The term "Real Estate Taxes" as used above shall mean all taxes of every

kind and nature assessed by any governmental authority on the Lot, the Building

and improvements, or both, or on any easement benefiting the same, on the income

derived from the Building, or on the rents payable by tenants of the Building

which the Landlord shall become obligated to pay because of or in connection

with the ownership, leasing and operation of the Lot, the Building and

improvements, or both; installments and interest on assessments for public

betterments or public improvements; special assessments, fees, charges, levies,

penalties, service payments, excises, assessments, charges, and costs for

transit, transit encouragement, traffic reduction programs, or any other

purpose; impositions or taxes of every kind or nature whatsoever assessed or

levied or imposed by any governmental entity, governmental authority or any

improvement or assessment district of any kind having the direct or indirect

power to tax, whether or not consented to or joined in by Landlord, against the

Building or Lot or any legal or equitable interest of Landlord therein, whether

now or hereafter imposed, and whether or not customary in the contemplation of

the parties on the date of this Lease; subject to the following: there shall be

excluded from Real Estate Taxes all federal state or local taxes based upon the

net income of Landlord, excess profits taxes, excise taxes, franchise taxes, and

estate, succession, inheritance and transfer taxes, provided, however, that if

at any time during the Term the present system of ad valorem taxation of real

property shall be changed so that in lieu of the whole or any part of the ad

valorem tax on real property, there shall be assessed on Landlord a capital levy

or other tax on the rents received with respect to the Lot, Building and

improvements, or both, or a federal, state, county, municipal, or other local

income, franchise, excise, sales, profit or similar tax, assessment, levy or

charge (distinct from any now in effect) measured by or based, in whole or in

part, upon any such rents, then any and all of such taxes, assessments, levies

or charges, to the extent so measured or based, shall be deemed to be included

within the term "Real Estate Taxes." Tenant acknowledges that in the event that

Real Estate Taxes are reduced because nonprofit entities occupy the Building,

the share of Real Estate Taxes paid by such tenants shall be structured so that

the tax-exempt tenant(s) for which such reduction is given receives(s) the full

benefit of the property tax exemption.

 

      Notwithstanding any other provision of this Section 4.3, if the Term

expires or is terminated as of a date other than the last day of a fiscal year,

then for such fraction of a fiscal year at the end of the Term, Tenant's last

payment to Landlord under this Section 4.3 shall be prorated and made on the

basis of Landlord's reasonable best estimate of the items otherwise includable

in Landlord's Real Estate Tax

 

                                       22

<PAGE>

 

Statement which shall be delivered to Tenant within one-hundred twenty (120)

days after the Term expires or is terminated and shall be made on or before 10

days after Landlord delivers such estimate to Tenant. Within thirty (30) days

following the date Real Estate Taxes are finally determined for the period for

which Tenant made estimated payments, Tenant or Landlord, as the case may be,

shall pay to the other the balance of any underpayment or overpayment,

respectively, of Tenant's Share of Real Estate Taxes. This paragraph shall

survive the expiration or earlier termination of this Lease.

 

      Tenant shall pay, as additional rent, on the first day of each month of

such fiscal year and each ensuing fiscal year thereafter, Estimated Monthly Real

Estate Taxes equal to 1/12th of Tenant's Share of the estimated Real Estate

Taxes for the respective fiscal year, with an appropriate additional payment or

credit to be made after Landlord's Real Estate Tax Statement is delivered to

Tenant. If the amount paid by Tenant for Tenant's Share of estimated Real Estate

Taxes is less than Tenant's Share of the actual Real Estate Taxes, Tenant agrees

to pay, as additional rent, to Landlord the amount of the differential. If the

amount paid by Tenant for Tenant's Share of estimated Real Estate Taxes is more

than Tenant's Share of the actual Real Estate Tax, then Landlord shall credit

such excess against Tenant's subsequent monthly payments for Tenant's Share of

Real Estate Taxes, as appropriate, until such excess is exhausted (or refund

such excess to Tenant if at the end of the Term). Landlord may adjust such

Estimated Monthly Real Estate Tax Payment from time to time and at any time

during a fiscal year (but not more often than twice per fiscal year), and Tenant

shall pay, as additional rent, on the first day of each month following receipt

of Landlord's notice thereof, the adjusted Estimated Monthly Real Estate Tax

Payment. Each of Landlord's Real Estate Tax Statements given by Landlord

pursuant to the Lease shall be conclusive and binding upon Tenant unless, within

ninety (90) days after the receipt of such statement, Tenant notifies Landlord

that it wishes to audit Landlord's books and records pertaining to Landlord's

Real Estate Taxes for the preceding year. If Tenant gives such notice timely

requesting the right to review or audit Landlord's books and records pertaining

to Landlord's Real Estate Taxes, Landlord shall make available to Tenant for

inspection or auditing during normal business hours, at the offices of

Landlord's managing agent where such records are kept, the books and records

with respect to Landlord's Real Estate Taxes for the fiscal year in question. If

such books and records are not kept in the Washington, D.C. Greater Metropolitan

Area, Landlord shall upon Tenant's written request, not more often than once per

year, make copies of such books and records available to Tenant for inspection

or audit as herein provided at an office of Landlord or Landlord's managing

agent in the Washington, D.C. Greater Metropolitan Area. Pending the resolution

of any such dispute as to Landlord's Real Estate Tax Statement, Tenant shall pay

the adjustments, including any underpayment of Tenant's Share of Real Estate

Taxes, as specified in accordance with Landlord's Real Estate Tax Statement,

without prejudice to Tenant's position, as herein provided. If the dispute shall

be resolved in Tenant's favor, Landlord shall credit or pay to Tenant (as

hereinabove provided) the amount of Tenant's overpayment. In addition, if there

has been an overcharge to Tenant of Real Estate Taxes in excess of five percent

(5%) of Tenant's Share of Landlord's Real Estate Taxes in such year, Landlord

shall reimburse Tenant for its reasonable costs incurred in connection with

Tenant's review of Landlord's books and records of Real Estate Taxes.

 

      In the event that the method currently used for the computation of the

assessed market value of the Building and/or the Lot is discontinued or revised

by the State of Maryland, the determination of the increase in Real Estate Taxes

under this Section 4.3 shall thereafter be determined by Landlord according to a

formula and procedure which, in Landlord's reasonable judgment, most nearly

approximates the method of determination hereinabove set forth. In the event

that any business, rent or other taxes which are now or hereafter levied upon

Tenant's use or occupancy of the Premises, on Tenant's leasehold improvements,

on Tenant's business at the Premises or on Landlord by virtue of Tenant's

occupancy of the Premises, are enacted, changed or altered so that any of such

taxes are levied against Landlord or in the event that the mode of collection of

such taxes is changed so that Landlord is responsible for collection or payment

of such taxes, any and all such taxes shall be deemed to be a part of the Real

Estate Taxes and Tenant shall pay to Landlord the full amount of all of such

taxes or if they relate to all tenants in the Building, then Tenant's Share

thereof.

 

      If Landlord fails to furnish Tenant any statement of Landlord's estimate

of Tenant's Share of Real Estate Taxes for any fiscal year or if Landlord shall

furnish such estimate for any fiscal year subsequent to the commencement hereof,

then until the first day of the month following the month in which such

 

                                       23

<PAGE>

 

estimate is furnished to Tenant, Tenant shall pay to Landlord on the first day

of each month an amount equal to the monthly sum payable by Tenant to Landlord

under this Section 4.3 in respect of the last month of the preceding fiscal

year.

 

4.4    REFUNDS.

 

      Tenant shall be entitled to its pro rata share of any refund of Real

Estate Taxes received by Landlord, net of reasonable costs incurred by Landlord

in obtaining such refund not to exceed Real Estate Taxes paid by Tenant with

respect to the tax year to which such refund relates (it being understood that

the Real Estate Taxes paid by Tenant for any tax year may fall into two separate

fiscal years so long as the tax year is not the same as the fiscal year).

 

4.5    ELECTRICITY.

 

      Commencing on the Commencement Date and continuing for the remainder of

the Term, Tenant shall pay, as additional rent in addition to Tenant's Share of

Operating Costs and Tenant's Share of Real Estate Taxes during the Term,

Tenant's Annual Electrical Cost in accordance with this Section 4.5. Tenant's

Annual Electrical Cost shall mean the cost to Landlord for Tenant's use of

electrical energy in the Premises as shown on the Meter (as hereinafter

defined). Landlord shall cause electricity for lighting and operation of

Tenant's equipment, facilities and fixtures in the Premises to be metered by a

separate utility meter or check meter (the "Meter"). If the Meter is a separate

meter directly from the utility, the Tenant's Annual Electrical Cost shall be

equal to the amount billed to Landlord on such meter. If the Meter is a check

meter measuring Tenant's consumption of electricity but not separately billed by

the utility, Tenant's Annual Electrical Cost shall mean the Landlord's "average

cost per kilowatt hour" (as hereinafter defined) of electrical energy used on

the Premises as shown on the Meter.

 

      For every fiscal year or portion thereof beginning on the Commencement

Date and during the Term hereof, as the same may be extended, Tenant shall pay,

as additional rent, Tenant's Annual Electrical Cost in monthly installments on

the first day of each month during the Term and as otherwise provided in this

Section 4.5. As soon as practicable after the end of each fiscal year during the

Term, and after Lease termination, Landlord shall render a statement (the

"Landlord's Electrical Statement") in reasonable detail and according to usual

accounting practices certified by Landlord and showing for the preceding

calendar year or fraction thereof Tenant's Annual Electrical Cost.

 

      Tenant shall pay, as additional rent, on the first day of each month of

such fiscal year and each ensuing fiscal year thereafter, Estimated Monthly

Electricity Cost Payments equal to 1/12th of Landlord's estimate of Tenant's

Annual Electrical Cost for the respective fiscal year, with an appropriate

additional payment or credit to be made after Landlord's Electrical Statement is

delivered to Tenant. If the amount paid by Tenant for estimated Annual

Electrical Cost is less than the actual Annual Electrical Cost, Tenant agrees to

pay, as additional rent, to Landlord the amount of the differential. If the

amount paid by Tenant for estimated Annual Electrical Cost is more than the

actual Annual Electrical Cost, then Landlord, shall credit such excess against

Tenant's subsequent monthly payments for Tenant's Annual Electrical Cost, as

appropriate, until such excess is exhausted (or refund such excess to Tenant if

at the end of the Term. Landlord may adjust such Estimated Monthly Electrical

Cost Payment from time to time and at any time during a fiscal year (but not

more often than twice per fiscal year), and Tenant shall pay, as additional

rent, on the first day of each month following receipt of Landlord's notice

thereof, the adjusted Estimated Monthly Electrical Cost Payment.

 

      If Landlord fails to furnish Tenant any statement of Landlord's estimate

of Tenant's Annual Electrical Cost for any fiscal year or if Landlord shall

furnish such estimate for any fiscal year subsequent to the commencement hereof,

then until the first day of the month following the month in which such estimate

is furnished to Tenant, Tenant shall pay to Landlord on the first day of each

month an amount equal to the monthly sum payable by Tenant to Landlord under

this Section 4.5 in respect of the last month of the preceding fiscal year.

 

                                        24

<PAGE>

 

      Tenant shall have the right from time to time during the Term to read the

Building electricity meter and the Meter serving the Premises. Each Landlord's

Electrical Statement delivered to Tenant hereunder shall be conclusive and

binding upon Tenant unless, within ninety (90) days after receipt of the

statement, Tenant notifies Landlord that it wishes to audit Landlord's books and

records with respect to Annual Electrical Cost for the.preceding fiscal year. If

Tenant gives such notice timely requesting the right to audit Landlord's books

and records, Tenant shall have the right, at a reasonable time and upon

reasonable notice, to examine Landlord's books and records respecting the

Building which relate to the determination and computation of Tenant's Annual

Electrical Cost for the fiscal year in question. If such books and records are

not kept in the Washington, D.C. Greater Metropolitan Area, Landlord shall upon

Tenant's written request, not more often than once per year, make copies of such

books and records available to Tenant for inspection or audit as herein provided

at an office of Landlord or Landlord's managing agent in the Washington, D.C.

Greater Metropolitan Area.

 

      For the purpose of this Lease, Landlord's "average cost per kilowatt hour"

for any year (or applicable portion thereof at the beginning or end of the term)

shall mean the cost calculated by dividing the sum of the costs charged Landlord

by the public utility for electricity consumed in the Building in the applicable

period by the sum of the number of kilowatt hours used by the Building during

such period as measured by the Building master meter.

 

4.6    CHANGE OF FISCAL YEAR.

 

      Landlord shall have the right from time to time to change the periods of

accounting under Sections 4.2, 4.3 and 4.5 to any annual period other than a

calendar year, and upon any such change all items referred to in Sections 4.2,

4.3 and 4.5 shall be appropriately apportioned. In all Landlord's Statements

(including Operating Cost Statements or Real Estate Tax Statements or Landlord's

Electrical Statement) rendered under Section 4.2, 4.3 or 4.5, amounts for

periods partially within and partially without the accounting periods shall be

appropriately apportioned, and any items which are not determinable at the time

of a Landlord's Statement shall be included therein on the basis of Landlord's

estimate, and with respect thereto Landlord shall render promptly after

determination a supplemental Landlord's Statement, and appropriate adjustment

shall be made according thereto. All Landlord's Statements shall be prepared on

an accrual basis of accounting.

 

4.7    PAYMENTS.

 

      All payments of Annual Rent and additional rent shall be made to Managing

Agent, or to such other person or place as Landlord may from time to time

designate. If any installment of Annual Rent or additional rent or on account of

TIR is not paid within five (5) days following the due date thereof, at

Landlord's election, (a) it shall bear interest at a rate equal to the average

prime commercial rate from time to time established by the three largest

national banks in Washington, D.C. plus 3% per annum (the "Default Rate") from

such due date, which interest shall be immediately due and payable as further

additional rent, and (b) Tenant shall also pay, as additional rent, a late fee

equal to five percent (5%) of the late installment.

 

                                    ARTICLE V

                              LANDLORD'S COVENANTS

 

5.1    LANDLORD'S COVENANTS DURING THE TERM.

 

      Landlord covenants during the Term:

 

      5.1.1 Building Services. Landlord shall furnish, through Landlord's

            employees or independent contractors, the services listed in Exhibit

            D.

 

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      5.1.2 Additional Building Services. Landlord shall furnish, through

            Landlord's employees or independent contractors, reasonable

            additional Building operation services upon reasonable advance

            request of Tenant at equitable rates from time to time established

            by Landlord to be paid by Tenant.

 

      5.1.3 Repairs. Except as otherwise provided in Article VII, Landlord shall

            make such repairs to the Building's roof, exterior walls, floor

            slabs, mechanical (including HVAC), electrical, plumbing and

            fire/life safety systems serving the Building in general and the

            Premises (except for supplemental systems installed by and

            exclusively serving Tenant), other structural components and common

            facilities of the Building as may be necessary to keep them in good

            working condition.

 

      5.1.4 Quiet Enjoyment. Landlord covenants that Landlord has the right to

             make this Lease and that Tenant on paying the rent and performing

            its obligations hereunder shall peacefully and quietly have, hold

            and enjoy the Premises throughout the Term without any manner of

            hindrance or molestation from Landlord or anyone claiming under

            Landlord, subject however to all the terms and provisions hereof.

 

      5.1.5 Access/Security. Tenant shall have access to the Premises 24 hours

            per day, 7 days of the week; subject, however, to a key card access

            system in the Building at the main entry to the Building and at the

            secondary Building door (the Tenant shall receive 4 key cards for

            each 1,000 rentable square feet of floor area in the Premises at no

            cost), provided that the Building main entry door and secondary

            entry door may remain unlocked 7 a.m, to 11 p.m. Monday through

            Friday and 8 a.m. to 6 p.m. on Saturday); provided further, however,

            that no representation or warranty is made by Landlord as to the

            adequacy, completeness or integrity of said access control system

            and failure of such access control system shall not modify or affect

            the limitations on Landlord's liability under this Lease.

 

      5.1.6 Intentionally Omitted.

 

      5.1.7 Indemnity. Landlord shall indemnify, defend, protect and save

            harmless Tenant, any trustee, stockholder, officer, director or

            employee of Tenant ("Indemnified Tenant Parties"), to the extent

            permitted by law, from and against any and all liabilities, losses,

            damages, costs, expenses (including reasonable attorneys' fees and

            expenses), causes of action, suits, claims, demands or judgments of

            any nature arising from injury to or death of any person or damage

            to or loss of property on the Premises caused by the negligence or

            willful misconduct of Landlord or its agents or employees, except to

            the extent caused by the negligence or willful misconduct of Tenant

            or its agents, employees, contractors, licensees or sublessees.

            Tenant shall give Landlord prompt and timely notice of any claim

            made or suit against it or any other party of which it has

            knowledge, relating to any matter which in any way may result in

            indemnification pursuant to this Section 5.1.7. Subject to the prior

            rights, if any, of insurers, Landlord shall be entitled to control

            the defense and compromise of an such claim or suit to the extent of

            any actual or potential claim for indemnification made or reserved

            by Tenant (as well as any claim made against Landlord or any of

            those for whom it is legally responsible).

 

      5.1.8 Tenant's Costs. Landlord shall pay all costs including, without

            limitation, reasonable attorneys' fees incurred by Tenant in

            connection with the successful enforcement by Tenant of any

            obligations of Landlord or remedies of Tenant under this Lease.

 

      5.1.9 Lobby Directory. Landlord shall install, at Landlord's expense,

            Tenant's name on the Building directory in the Building lobby.

            Building standard suite signage (at the entrance to the Premises)

            shall be provided at Landlord's expense, but any changes to the

            signage may only be made in accordance with the terms of this Lease

             and such changes shall be at the expense of the Tenant. In the event

            that Landlord maintains a monument sign upon the Lot with the names

            of Building tenants, Landlord shall also install, at Tenant's

            expense, Tenant's name in Building standard signage on such monument

            sign.

 

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     5.1.10 Compliance. Landlord shall be responsible for the Building's

            overall compliance with the Americans with Disabilities Act as it

            relates to the common areas of the Building (including, without

            limitation, core area bathrooms) except to the extent that any

            improvement or renovation is required due to Tenant's special use of

             the Premises (other than general office or laboratory use). As used

            in this Section, the Americans with Disabilities Act shall mean

            the Americans with Disabilities Act of 1991,42 U.S.C. Sections

            12.101, et seq. and all regulations applicable thereto promulgated

            as of the date hereof (collectively, "ADA"). Following the

            Commencement Date, Tenant shall have the responsibility to comply

            with the requirements of the ADA in the Premises.

 

     5.1.11 Insurance. Landlord shall procure and maintain throughout the Term

            of this Lease a policy or policies of insurance, at its sole cost

            and expense (but subject to Section 4.2), causing the Building and

            any other improvements on the Lot to be insured in the amounts (with

            full replacement cost endorsement) and coverages required under the

            Ground Lease, a policy of commercial general liability insurance

            satisfying the terms of the Ground Lease, and such other insurance

            or higher limits as may be required under the Ground Lease or by the

            holder of any mortgage on the Building. Any insurance provided for

            in this Section 5.1.11 may be maintained by means of a policy or

            policies of blanket insurance, covering additional items or

            locations or insureds, provided, however, that the coverage afforded

            Landlord and any such other parties in interest will not be reduced

             or diminished by reason of the use of such blanket policy of

            insurance.

 

5.2    INTERRUPTIONS.

 

      Landlord shall not be liable to Tenant for any compensation or reduction

of rent by reason of inconvenience or annoyance or for loss of business arising

from power losses or shortages or from the necessity of Landlord's entering the

Premises for any of the purposes in this Lease authorized, or for repairing the

Premises or any portion of the Building or Lot, or for interruption or

termination (by reason of any cause reasonably beyond Landlord's control,

including without limitation, loss of any applicable license or governmental

approval), of the services provided by Landlord pursuant to Section 5.1. In case

Landlord is prevented or delayed from making any repairs, alterations or

improvements, or furnishing any service or performing any other covenant or duty

to be performed on Landlord's part, by reason of any cause reasonably beyond

Landlord's control, Landlord shall not be liable to Tenant therefor, nor, except

as expressly otherwise provided in Article VII, shall Tenant be entitled to any

abatement or reduction of rent by reason thereof, nor shall the same give rise

to a claim in Tenant's favor that such failure constitutes actual or

constructive, total or partial, eviction from the Premises.

 

      Landlord reserves the right to stop any service or utility system when

necessary by reason of accident or emergency or until necessary repairs have

been completed. Except in case of emergency repairs, Landlord will give Tenant

reasonable advance notice of any contemplated stoppage and will use reasonable

efforts to avoid unnecessary inconvenience to Tenant by reason thereof.

 

      Landlord also reserves the right to institute such policies, programs and

measures as may be necessary, required or expedient for the conservation or

preservation of energy or energy services or as may be necessary or required to

comply with applicable codes, rules, regulations or standards.

 

      Notwithstanding the foregoing provisions of this Section 5.2 and any other

provision of this Lease to the contrary, in the event that any interruption of

service(s) results from a cause arising on the Building or Lot not reasonably

beyond Landlord's control or results from any negligent or willful act or

omission of Landlord or its agents or their employees and as a result of such

interruption the Premises or material portion thereof is made untenantable for

the conduct of Tenant's business for a period of five (5) consecutive business

days and during such period Tenant does not use or occupy the affected space,

the Annual Rent and the additional rent payable by Tenant hereunder for the

portion of the Premises which is so untenantable and unused by Tenant shall

abate for the period commencing on the day after such fifth (5th) consecutive

business day and ending on the day upon which the interrupted service(s) is(are)

restored.

 

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                                   ARTICLE VI

                                TENANT'S COVENANTS

 

6.1    TENANT'S COVENANTS DURING THE TERM.

 

      Tenant covenants:

 

   6.1.1   Tenant's Payments. Tenant shall pay when due (a) all Annual Rent and

          additional rent, (b) all taxes which may be imposed on Tenant's

          personal property in the Premises (including, without limitation,

          Tenant's fixtures and equipment) regardless to whomever assessed, (c)

          all charges by public utilities for telephone and other utility

          services (including service inspections therefor) rendered to the

          Premises not otherwise required hereunder to be furnished by Landlord

          without charge and not consumed in connection with any services

          required to be furnished by Landlord without charge, and (d) as

          additional rent, all charges to Landlord for services rendered

          pursuant to Section 5.1.2 hereof.

 

   6.1.2   Repairs and Yielding Up. Except as otherwise provided in Article VII,

          Section 5.1.3 and Section 10.11, Tenant shall keep the Premises in

          good order, repair and condition, reasonable wear and tear and

          casualty damage required hereunder to be covered by Landlord's

          insurance and damage due to condemnation only excepted; and at the

          expiration or termination of this Lease peaceably to yield up the

          Premises and all changes and additions therein in such order, repair

          and condition and free of any and all Hazardous Materials (as

           hereinafter defined), first removing all goods and effects of Tenant

          and any items, the removal of which is required by agreement or

          specified herein to be removed at Tenant's election and which Tenant

          elects to remove, and repairing all damage caused by such removal and,

          if required hereunder, restoring the Premises as and to the extent

          required and leaving them clean and neat. Notwithstanding the

          foregoing, Tenant shall not be obligated to remove any of the initial

          alterations in the Premises performed by or for Tenant before the

          Commencement Date except to the extent that Landlord's approval of

          such alterations was expressly conditioned, in writing, upon Tenant's

          agreement to remove the same at the end of the Term, and provided

          further that Tenant shall be obligated to remove Tenant's cabling from

          the Building risers. At least three (3) months prior to the surrender

          of the Premises, Tenant shall deliver to Landlord a narrative

          description of the actions proposed (or required by any governmental

          authority) to be taken by Tenant in order to surrender the Premises

          (including any installations permitted by Landlord to remain in the

          Premises) at the expiration or earlier termination of the Term, free

          from any residual impact from the use, storage, generation, release or

          disposal of Hazardous Materials ("Tenant HazMat Operations") and

          otherwise released for unrestricted use and occupancy (the "Surrender

          Plan"). Such Surrender Plan shall be accompanied by a current listing

          of (i) all Hazardous Materials licenses and permits held by or on

           behalf of Tenant with respect to the Premises, and (ii) all Hazardous

          Materials used, stored, handled, treated, generated, released or

          disposed of from the Premises, and shall be subject to the review and

          approval of Landlord's environmental consultant. In connection with

          the review and approval of the Surrender Plan, upon the request of

          Landlord, Tenant shall deliver to Landlord or its consultant such

          additional information concerning Tenant HazMat Operations as Landlord

          shall reasonably request. On or before such surrender, Tenant shall

          deliver to Landlord evidence that the approved Surrender Plan shall

          have been satisfactorily completed and Landlord shall have the right,

          at Landlord's expense except as set forth below, to cause Landlord's

          environmental consultant to inspect the Premises and perform such

          additional procedures as may be deemed reasonably necessary to confirm

          that the Premises are, as of the effective date of such surrender or

          early termination of the Lease, free from any residual impact from

          Tenant HazMat Operations. Landlord shall have the unrestricted right

          to deliver such Surrender Plan and any report by Landlord's

          environmental consultant with respect to the surrender of the Premises

          to third parties. If Tenant shall fail to prepare or submit a

          Surrender Plan approved by Landlord in its reasonable discretion, or

          if Tenant shall fail to complete the approved

 

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<PAGE>

 

          Surrender Plan, or if such Surrender Plan, whether or not approved by

          Landlord, shall fail to adequately address any residual effect of

          Tenant HazMat Operations in, or about the Premises, Landlord shall

          have the right to take such actions as Landlord may deem reasonable or

          appropriate to assure that the Premises and the Project are

          surrendered free from any residual impact from Tenant HazMat

          Operations, the cost of which actions shall be reimbursed by Tenant as

          Additional Rent, without regard to the limitation set forth above in

          this Section 6.1.2.

 

   6.1.3   Occupancy and Use. Tenant shall use and occupy the Premises only for

          the Permitted Uses; Tenant shall not use or permit the Premises or any

          portion thereof to be used for any Prohibited Use (as hereinafter

          defined) or by any Prohibited Person (as defined in Section 14.4 of

          the Ground Lease as set forth in Section 10.26 hereof). Tenant shall

          not injure or deface the Premises, Building, or Lot or permit animal,

          laboratory or other odors, noises or emissions to emanate from the

          Premises; and shall not permit in the Premises any use thereof which

          is improper, offensive, contrary to law or ordinances, or liable to

          create a nuisance or to invalidate or increase the premiums for any

          insurance on the Building or its contents or liable to render

          necessary any alteration or addition to the Building. For purposes

          hereof: (a) "Prohibited Use" shall mean (i) the manufacture or sale of

          consumer products (such as, without limitation, alcoholic beverages,

          tobacco products, or weapons but not including drugs sold over the

          counter or by medical prescription) recognized as hazardous to human

          health by federal or Maryland state governmental authorities, (ii) the

          publication, manufacture, sale, distribution, promotion or purveyance

          of pornographic material, or (iii) gambling; (b) a "Controlled

          Affiliate" of any person shall mean any person controlling, controlled

          by or under common control with such person; and (c) for purposes of

          the definition of "Controlled Affiliate" the term "controlled"

          (including the terms, "controlled," "controlling," "controlled by,"

           and "under common control" with) means the possession, direct or

          indirect, of the power to: (y) vote ten percent (10%) or more of the

          outstanding voting securities of, or other ownership interests in,

          such person if the person is a company whose stock or other ownership

          interests are publicly traded and, if not, to vote more than fifty

          percent (50%) of the outstanding voting securities of, or other

          ownership interests in, such person, or (z) otherwise direct the

          management policies of such person by contract or otherwise. As used

          herein, a "person" shall mean any individual, partnership,

          corporation, limited liability company, unincorporated association,

           trust, estate, or other legal entity. Notwithstanding the foregoing,

          no federal, state, or local governmental entity, agency or authority

          (other than a college or university) shall be a "Prohibited Person"

          for the purposes of this Lease.

 

   6.1.4   Rules and Regulations. Tenant shall comply with the Rules and

          Regulations set forth in Exhibit E and all other reasonable Rules and

          Regulations hereafter made by Landlord (not inconsistent with the

          terms of this Lease), of which Tenant has been given notice, for the

          care and use of the Building and Lot and their facilities and

          approaches. Landlord shall take commercially reasonable steps to

          enforce said Rules and Regulations, it being understood however that

          Landlord shall not be liable to Tenant for the failure of other

          tenants of the Building to conform to such Rules and Regulations, and

          provided further, however, that Landlord shall not apply the Rules and

          Regulations more strictly against Tenant than against other tenants in

          the Building similarly situated.

 

   6.1.5   Safety Appliances and Licenses. Tenant shall keep the Premises

          equipped with all safety appliances required by law or ordinance or

          any other regulation of any public authority because of any particular

          use (including laboratory use) made by Tenant and shall procure all

          licenses and permits so required because of such use and, if requested

          by Landlord, Tenant shall do any work so required because of such

          particular use (including laboratory use), it being understood that

          the foregoing provisions shall not be construed to broaden in any way

           Tenant's Permitted Uses.

 

                                       29

<PAGE>

 

   6.1.6   Assignment and Subletting. Tenant shall not without the prior written

          consent of Landlord assign this Lease, make any sublease, or permit

          occupancy of the Premises or any part thereof by anyone other than

          Tenant, voluntarily or by operation of law. As additional rent, Tenant

          shall reimburse Landlord promptly for reasonable legal and other

          expenses incurred by Landlord in connection with any request by Tenant

          for consent to assignment or subletting (not to exceed $1,000 in the

          aggregate in connection with each such request). No assignment or

          subletting shall affect the continuing primary liability of Tenant

          (which, following assignment, shall be joint and several with the

          assignee). No consent to any of the foregoing in a specific instance

          shall operate as a waiver in any subsequent instance. Landlord's

           consent to any proposed assignment or subletting is required both as

          to the terms and conditions thereof, and as to the creditworthiness of

          the proposed assignee or subtenant and the consistency of the proposed

          assignee's or subtenant's business with other uses and tenants in the

          Building. Landlord's consent to assignment or subletting by Tenant

          shall not be unreasonably withheld or delayed, provided that Tenant is

          not then in default under this Lease (beyond any applicable grace or

          cure period). In the event that any assignee (other than a Permitted

          Assignee) or subtenant pays to Tenant any amounts which (after

          deducting therefrom costs to Tenant of reasonable legal fees,

          brokerage fees, improvements, allowances or rent concessions made by

          Tenant in connection with such sublease or assignment and further

          deducting any Additional Allowance Charges prepaid by Tenant) exceed

          the Annual Rent and additional rent then payable hereunder, or pro

          rata portion thereof on a square footage basis for any portion of the

          Premises, Tenant shall promptly pay fifty percent (50%) of said excess

          to Landlord as and when received by Tenant. If Tenant requests

          Landlord's consent to assign this Lease (other than an assignment to a

          Permitted Assignee) or sublet (other than a sublease to a Permitted

          Assignee) more than fifty percent (50%) of the Premises for

          substantially all of the remainder of the Term, Landlord shall have

          the option, exercisable by written notice to Tenant given within 20

          days after receipt of such request, to terminate this Lease (a)

          entirely in the case of an assignment or (b) with respect to the

          portion of the Premises desired to be sublet, as the case may be, as

          of a date specified in such notice which shall be not less than 30 or

          more than 60 days after the date of such notice.

 

          If, at any time during the Term of this Lease, Tenant is: (i) a

          corporation or a trust (whether or not having shares of beneficial

          interest) and there shall occur any direct or indirect change in the

          identity of the persons or entities owning or controlling more than

          fifty percent (50%) of the voting rights or shares of stock or other

          ownership interests in Tenant or in the trustees or other persons

          exercising like functions and managing the affairs of Tenant; or (ii)

          a partnership or association or otherwise not a natural person (and is

          not a corporation or a trust), and there shall occur any direct or

          indirect change in the identity of any of the persons who then are

          members of such partnership or association or who comprise Tenant,

          Tenant shall so notify Landlord and Landlord may terminate this Lease

          by notice to Tenant given within 90 days thereafter if, in Landlord's

          reasonable judgment, the credit of Tenant is thereby impaired.

 

          If Tenant shall at any time or times during the term of this Lease

          desire to assign this Lease or sublet all or a portion of the

          Premises, Tenant shall give written notice thereof to Landlord, which

          notice shall be accompanied by: (a) a conformed or photostatic copy of

          the proposed assignment or sublease, the effective or commencement

          date of which shall be at least thirty (30) days after the giving of

          such notice; (b) a statement setting forth in reasonable detail the

          identity of the proposed assignee or subtenant, the nature of its

          business and its proposed use of the Premises; (c) current financial

          information with respect to the proposed assignee or subtenant,

          including, without limitation, its most recent financial report and

          any contract of sale if Tenant is selling its business, and (d) a

           written confirmation by such subten