Sample Business Contracts

Maryland-Rockville-9640 Medical Center Drive Lease - Red Gate III LP and EntreMed Inc.

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  • Commercial Lease. Start a state-specific lease for the rental of commercial property. Specify the term and rent due, as well as whether the landlord or tenant is responsible for property taxes, insurance, and maintenance and repairs.
  • Commercial Sublease. When a tenant vacates commercial property before the lease term has expired, it may be able to rent the premises to a third party. The tenant would be the sublessor and the third party would be the sublessee. Besides preparing a sublease, both parties will want to review the provisions for assignment or subletting in the original lease agreement between the landlord and the sublessor.
  • Sublease Agreement. Tenants of residential property should prepare a sublease agreement if they are seeking to sublease a room or the entire apartment or house to a third party. All parties should review the original lease agreement to see if there are any restrictions on subletting or assigning the premises.
  • Triple Net Lease. Triple net leases are a type of commercial leases where the tenant has to pay for property taxes, insurance, utilities, and maintenance, in addition to the monthly rent.
  • Office Space Lease. When renting an office space, tenants should understand the amount of the rent and duration of the lease. Other important terms include whether the space can be subleased, which parties are responsible for maintenance, and whether any furniture and furnishings will be provided.

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                                 LEASE AGREEMENT

     THIS LEASE AGREEMENT, made this 10TH day of June, 1998 by and between RED

                              W I T N E S S E T H:


        Landlord hereby demises unto Tenant, and Tenant hereby leases from
        Landlord for the terms and upon the conditions set forth in this Lease
        46,267 square feet of space in the building located at 9640 Medical
        Center Drive, Shady Grove Road, Rockville, Maryland 20850 (the
        "Building"), all as set forth on Exhibit A and Exhibit B, hereto
        attached, said space being referred to as the "Premises."

2.      TERM

        The term of this Lease shall be for a period of 10 years, commencing on
        the 1st day of November, 1998, and terminating on the 31st day of
        October, 2008, with two additional 5 year options on the same terms and
        conditions in this Lease, provided that Tenant shall have given the
        Landlord written notice of Tenant's intention to do so at least six (6)
        months prior to the expiration of this Lease and that Tenant is not in
        default under this Lease.

        In the event the Landlord is not able to deliver possession of the
        Premises to Tenant on the date this Lease is to commence because
        Landlord has not fully completed the Landlord's Work as set forth on
        Exhibit A, the commencement date shall be extended to the date said Work
        is completed and the expiration date shall be similarly extended.

        The date of delivery of the Premises by Landlord to Tenant shall be that
        date on which all required improvements to be furnished by Landlord as
        stated in Exhibit "A" have been substantially completed except for punch
        list items and the occupancy certificate has been issued. Rent shall be
        pro-rated for any portion of the initial month in which Tenant is
        required to commence rental payments hereunder, which does not commence
        with the first day thereof as set forth below.

        Occupancy of the 46,267 square feet will occur in four phases, i.e. by
        floor. Rent for each floor will commence when occupancy certificates are
        issued for laboratories and offices. The Lease commences upon issuance
        of the occupancy certificate for the third floor with rental to be paid
        hereunder on a pro-rated basis in accordance with Exhibit B attached

        At any time prior to delivery of possession of the Premises, Tenant
        shall have the right to enter upon the Premises for the purpose of
        taking measurements and for completing Tenant's construction of
        improvements, provided such entry does not unreasonably interfere with
        or obstruct the progress of work being done by the Landlord.

3.      RENT

        The Tenant shall pay to the Landlord an annual rental (herein called
        "Minimum Rent") in the amount of SEVEN HUNDRED EIGHTY SIX THOUSAND FIVE
        HUNDRED THIRTY NINE and NO/100 DOLLARS ($786,539.00), subject to
        adjustment as hereinafter set forth, payable without deduction or set
        off in equal monthly installments of SIXTY FIVE THOUSAND FIVE HUNDRED
        FORTY FOUR and 92/100 DOLLARS ($65,544.92) per month in advance, the
        first installment of which is due and payable when occupancy
        certificates are issued; all subsequent installments due and payable on
        the first day of each calendar month thereafter during the term of the
        Lease until the total rent provided for herein is paid. No payment by
        Tenant or receipt of Landlord of a lesser amount than a monthly
        installment of rent herein stipulated, or endorsement or statement on
        any check or any letter accompanying any check for payment as rent be
        deemed an accord and satisfaction, and Landlord may accept such check
        for payment without prejudice to Landlord's right to recover the balance
        of such rent or pursue any other remedy provided for in this Lease. (See

<PAGE>   2

        Exhibit B for rent rate details).


        The Minimum Rent shall be increased at the end of each lease year during
        the term hereby by three percent (3%) of the rent then being paid. There
        shall be no additional pass-throughs of increases in operating expenses
        except for real estate taxes or as otherwise provided for herein.


        In the event the real estate taxes levied or assessed against the land
        and Building on which the Premises are a part in future tax years are
        greater than the real estate taxes for the Base Year, the Tenant shall
        pay within thirty (30) days after submission of the bill to Tenant for
        the increase in real estate taxes, as additional rent, a proportionate
        share of such increase, which proportionate share shall be computed at
        100 % of the increase in taxes, but shall exclude any fine, penalty, or
        interest charge for late or non-payment of taxes by Landlord. The Base
        Year shall be July 1, 1998 to June 30, 1999.


        Tenant shall be responsible for the payment of all utilities used or
        consumed by the Tenant in and upon the Premises. Electric, Gas, and
        Water shall be separately metered by Landlord. In the event any utility
        service to the Premises shall be interrupted for a period of more than
        two (2) days due to the negligence or willful misconduct of Landlord,
        its agents or servants, the Minimum and Additional Rent shall abate
        until such services are fully rendered.

        Landlord shall not be liable to Tenant for any damage or inconvenience
        caused by the cessation or interruption of any utility service, or the
        elevators in the Building, occasioned by fire, accident, strike or other
        cause beyond Landlord's control.


        Tenant shall use the Premises only for Offices and Laboratories purposes
        including animal facilities and pilot production facilities, and for no
        other purpose, except as approved by Landlord in advance, in writing,
        which approval shall not be unreasonably withheld. Tenant shall not make
        any use of the Premises which would disturb the quiet enjoyment of the
        Landlord or other tenants in the Building or prejudice or increase the
        fire insurance premiums for the Building, and shall comply with all laws
        and regulations of all governmental authorities pertaining to Tenant's
        use of Premises.


        Tenant shall be responsible for removal of waste generated by Tenant's
        operation and direct payment for same. This includes waste service fees
        levied by local jurisdictions.

<PAGE>   3


        Tenant shall be permitted to store Hazardous Materials on the Premises
        and shall comply with all laws and regulations of all governmental
        authorities pertaining to Tenant's use of the Premises, including,
        without limitation, all Environmental Laws (as hereinafter defined) and
        laws pertaining to Hazardous Materials and Air and Water Quality. The
        term "Hazardous Materials" means and includes any petroleum products
        and/or any hazardous toxic or other dangerous waste, substance or
        material defined as such in the Environmental Laws. The term
        "Environmental Laws" means the Comprehensive Environmental Response,
        Compensation and Liability Act, any "Superfund" or "Superlien" law, or
        any other federal, state or local statute, law, ordinance, code,
        regulation, order or decree regulating, relating to, or imposing
        liability or standards of conduct concerning the use or storage of
        Hazardous Materials. All such materials must be completely removed upon
        expiration of this Lease, and any de-contamination certificates required
        by the Landlord or any government authority must be obtained and
        delivered to the Landlord.

        Tenant shall obtain and maintain, in full force and effect, all
        necessary government licenses, permits and approvals legally required
        for materials used in the conduct of its business. If the presence of
        any Hazardous Materials on the Premises caused or permitted by Tenant
        results in any contamination of the Premises or any portion of the
        Building or Common Areas, Tenant shall promptly take all actions, at its
        sole expense, necessary to return the Premises to the condition existing
        prior to the introduction of such Hazardous Materials, provided that all
        such actions shall be subject to the approval of Landlord, which
        approval shall not be unreasonably withheld.

        At the Commencement Date of the Lease and on January 15 of each year
        thereafter, Tenant shall disclose to Landlord the names and amounts of
        all Hazardous Materials which are to be stored, used or disposed of on
        the Premises.

        Any Hazardous Materials stored or used on the Premises must not in any
        way prejudice the Landlord's insurance or increase the fire hazards to a
        greater extent than necessarily incident to the business for which the
        Premises are leased.


        If any installment of rent accruing hereunder or any other sums payable
        hereunder shall not be paid within thirty (30) days after written notice
        to Tenant, such installment and other sums shall be increased without
        affecting the Landlord's other rights under this Lease, by a late charge
        of five percent (5%) of the delinquent installment.


        Landlord shall be responsible for all structural repairs, including
        repairs to the structure, foundation, roof, exterior walls, exterior
        doors, glazing systems and load-bearing walls of the Building, for
        maintaining the parking area and sidewalks, and the Common Areas (as
        hereinafter defined) in the Building. Landlord shall also be responsible
        for repairing damage to non load-bearing walls caused by structural
        defects. Landlord will provide elevator maintenance service and service
        to building core electric, fire protection and plumbing. The Tenant
        shall be responsible for the maintenance and repair of the Premises and
        all fixtures, appliances and equipment therein, including, but not
        limited to, the Heating and Air Conditioning system. Landlord will pay
        for major Heating and Air Conditioning component replacement and all
        repairs to the heating and air conditioning system in excess of Two
        Hundred Fifty Dollars ($250.00) per occurrence/ per Heating and Air
        Conditioning unit. Tenant shall also provide its own char service.
        Landlord will repair and replace any glass breakage, provided it is not
        the result of the Tenant's willful or negligent act. Tenant, at its sole
        expense, shall keep all Tenant fixtures and equipment in the Premises in
        safe and sanitary condition and good working order and repair, together
        with related plumbing, electrical or other utility service, whether
        installed by Tenant or by Landlord on Tenant's behalf. Tenant shall pay
        for all damage to the Building and any fixtures and appurtenances
        related thereto due solely to the malfunction, lack of repair, or
        improper installation of the Tenant's fixtures and equipment.

        Landlord warrants that the HVAC system will maintain at a temperature of
        74(Degrees)F +/- 3(Degrees)F in the summer and 72(Degrees)F +/-
        3(Degrees)F in the winter. Based on original equipment loads by Tenant,
        the Landlord     

<PAGE>   4

        also warrants that the relative humidity in the Premises will be no
        higher than 50% during summer months. Exceptions to these conditions
        may occur in Tenant's cage wash area(s).


        Landlord will regularly maintain live plants in the atrium and maintain
        external building lights. Landlord is responsible for maintaining common
        areas, landscaping, external window cleaning and snow removal at
        Landlord's expense.


        Landlord shall make the following improvements to the Premises prior to
        the commencement of the term of the Lease:

        (a)    Construction in accordance with Exhibit A.


        All alterations, improvements, or additions to the demised Premises to
        be made by Tenant shall be subject to the written consent of the
        Landlord, which consent shall not be unreasonably withheld, provided
        such alterations and improvements do not weaken the structural integrity
        of the Building or detract from its dignity and/or uniformity. All
        alterations and improvements and/or additions made by Tenant shall
        remain upon the Premises at the expiration or earlier termination of
        this Lease and shall become the property of the Landlord, unless
        Landlord shall, at the time of approval of the alteration, provide
        written notice to Tenant to remove the same, in which event Tenant
        shall, at the expiration or earlier termination of this Lease, remove
        such alterations, improvements and/or additions, and restore the
        Premises to the same order and condition in which it was at the
        commencement of this Lease, reasonable wear and tear and unavoidable
        casualty excepted. Should Tenant fail to do so, Landlord may do so,
        collecting the reasonable cost and expense thereof from Tenant as
        additional rent.


        All trade fixtures, telephone equipment, and apparatus installed by
        Tenant in the Premises shall remain the property of Tenant and shall be
        removed at the expiration or earlier termination of this Lease and, upon
        such removal, Tenant shall repair any damage caused by the removal and
        shall promptly restore the Premises to their same order and condition in
        which it was at the commencement of this Lease, reasonable wear and tear
        and unavoidable casualty excepted. Any such trade fixture not removed
        prior to such termination shall be considered abandoned property, but
        such abandonment shall not release Tenant of its obligation to pay for
        the cost of removing such trade fixtures and repairing any damage caused
        by the removal.


        Landlord covenants that, upon payment of the rent herein provided and
        performance by the Tenant of all other covenants herein contained,
        Tenant shall and may peaceably and quietly have, hold and enjoy the
        Premises for the term hereof and options.


        Upon the expiration or termination of this Lease, Tenant shall quit and
        surrender the Premises to the Landlord. Tenant shall restore the
        Premises to substantially the same order and condition in which it was
        at the commencement of this Lease, reasonable wear and tear and
        unavoidable casualty excepted, except as modified with Landlord's
        approval as stipulated in Paragraph 14.


        Tenant covenants and agrees to maintain and carry, at all times during
        the term of this Lease, in companies qualified and authorized to
        transact business in the State of Maryland, general liability insurance
        in amounts of $500,000.00 per person, $1,000,000.00 per occurrence and
        $100,000.00 for damage to property on the Premises or arising out of the
        use thereof by Tenant or its agents. All policies of insurance shall
        provide that they may not be canceled, except on thirty (30) days

<PAGE>   5

        written notice to Landlord, and all such policies shall name Landlord as
        an additional insured.

        Prior to commencement, Tenant shall furnish Landlord with satisfactory
        proof that the insurance herein provided for is at all times in full
        force and effect. If either party hereto is paid any proceeds under any
        policy of insurance naming such party as an insured on account of any
        loss, damage or liability, then such party hereby releases the other
        party to (and only to) the extent of the amount of such proceeds, from
        any and all liability for such loss or damage, notwithstanding negligent
        or intentionally tortuous act or omission of the other party, its agents
        or employees; provided, such release shall be effective only as to a
        loss of damage occurring while the appropriate policy of insurance of
        the releasing party provides that such release shall not impair the
        effectiveness of such policy or the insured's ability to recover
        thereunder. Each party hereto shall use reasonable efforts to have a
        clause to such effect included in its said policies, and shall promptly
        notify the other in writing if such clause cannot be included in any
        such policy.


        Tenant shall indemnify and hold harmless the Landlord from, and name
        LANDLORD as additional insured on policy regarding, any and all
        liability, damage, expense, cause of action, or claims arising out of
        injury to persons or to property on the Premises, except for the
        negligence or willful misconduct of Landlord, its agents, employees, or


        If the Premises are damaged by fire or other casualty, but are not
        thereby rendered untenantable in whole or in part, Landlord, at it's own
        expense, and subject to the limitations set forth in this Lease, shall
        cause such damage to be repaired and the Minimum Rent and Additional
        Rent shall not be abated. If, by reason of any damage or destruction,
        the Premises shall be rendered untenantable in whole or in part and
        cannot be repaired and made tenantable within sixty (60) days after such
        damage: (i) Landlord, at its option and its own expense, may cause the
        damage to be repaired and the Minimum Rent and Additional Rent shall be
        abated proportionately as to the portion of the Premises rendered
        untenantable while it is untenantable; or (ii) Landlord shall have the
        right, to be exercised by notice in writing delivered to tenant within
        thirty (30) days of the occurrence of such damage or destruction, to
        terminate this Lease, whereupon the Minimum Rent and Additional Rent
        shall be adjusted as of the date of such termination. Landlord shall
        provide Tenant with back-up space if available in another Landlord


        Tenant acknowledges that Landlord has entered into this Lease because of
        Tenant's financial strength, goodwill, ability and expertise and that
        accordingly, this lease is personal to Tenant. Taking this into
        consideration, tenant shall not assign, mortgage, sublet, pledge or
        encumber this Lease, in whole or in part, except with the written
        consent of the Landlord, which shall not be unreasonably withheld or
        delayed. Tenant agrees that, in the event of any such assignment or
        subletting, Tenant shall nevertheless remain liable for the performance
        of all terms, covenants, and conditions of this Lease.


        This Lease shall be subject to and subordinate at all times to the lien
        of any mortgage and/or deeds of trust and all land leases now or
        hereafter made on any portion of the Premises, and to all advances
        thereunder, provided the mortgagee or trustee named in said mortgage or
        deed of trust shall agree to recognize this Lease and agrees, in the
        event of foreclosure, not to disturb the Tenant's possession hereunder,
        provided Tenant is not in default under this Lease. This subordination
        shall be self-operative and no further instrument of subordination shall
        be required.

        If any proceedings are commenced to foreclose any mortgage or deed of
        trust encumbering the Premises, Tenant agrees to attorn to the purchaser
        at the foreclosure sale, if requested to do so by any such purchaser,
        and to recognize such purchaser as the Landlord under this Lease,
        provided purchaser shall agree that Tenant's rights hereunder shall not
        be disturbed so long as Tenant has not committed any event of default as
        to which the applicable cure period has not expired. Further, the
        purchaser at a foreclosure sale as Landlord will be liable for all
        terms, covenants and conditions of this Lease.

<PAGE>   6


        (a)    If the whole of the Premises shall be taken by any public or
               quasi-public authority under the power of eminent domain,
               condemnation or conveyance in lieu thereof, then this Lease
               shall terminate as of the date on which possession of the
               Premises is required to be surrendered to the condemning
               authority and the Tenant shall have no claim against Landlord or
               the condemning authority for the value of the unexpired term of
               this Lease. Tenant shall have the right to claim, however, the
               unamortized cost of any improvements or additions made to the
               Premises by Tenant at its cost, the value of any Tenant
               fixtures and furnishings and any moving expenses.
        (b)    If a portion of the Premises shall be so taken or conveyed, and
               if such partial taking or conveyance shall render the Premises
               unsuitable for the business of the Tenant, then the term of this
               Lease shall cease and terminate as of the date on which
               possession of the portion of the Premises is surrendered to the
               condemning authority, and Tenant shall have no claim against
               Landlord or the condemning authority for the value of any
               unexpired term of this Lease.

               In the event such partial taking or conveyance is not extensive
               enough to render the Premises untenantable for the business of
               Tenant, as reasonably judged by both Landlord and Tenant, this
               Lease shall continue in full force and effect, except that the
               Minimum and Additional Rent shall be reduced in the same
               proportion that the floor area of the Premises so taken or
               conveyed bears to such floor area immediately prior to such
               taking or conveyance.

               In the event of such partial taking and continuation of Lease,
               Landlord shall promptly restore the Premises, at Landlord's
               expense, as nearly as practical to the condition comparable to
               that which existed prior to the condemnation.


        The occurrence of any of the following shall constitute an event of
        default hereunder:

        (a)    Failure of Tenant to pay installment of rent hereunder within
               fifteen (15) days of the due date, or failure of Tenant to pay
               within twenty (20) days after receipt of written notice of rent
               or any other sum herein required to be paid by Tenant.

        (b)    Tenant's failure to perform any other covenant or condition of
               this Lease within thirty (30) days after receipt of written
               notice and demand, unless the failure is of such a character as
               to require more than thirty (30) days to cure in which event
               Tenant's failure to proceed diligently to cure such failure shall
               constitute an event of default.


        Upon the occurrence of any event of default, Landlord may, at Landlord's
        sole option, exercise any or all of the following remedies, together
        with any such other remedies as may be available to Landlord at law or
        in equity.

        (a)    Landlord may terminate this Lease by giving Tenant written
               notice of its election to do so, as of a specified date not less
               than sixty (60) days after the date of the giving of such notice
               and this Lease shall then expire on the date so specified, and
               Landlord shall then be entitled to immediately regain possession
               of the Premises as if the date had been originally fixed as the
               expiration date of the term of this Lease. Landlord may then
               re-enter upon the Premises, either with or without due process
               of law, and remove all persons therefrom, the statutory notice
               to quit or any other notice to quit being hereby expressly
               waived by Tenant. Tenant expressly agrees that the exercise by
               Landlord of the right of re-entry shall not be a bar to or
               prejudice in any way other legal remedies available to Landlord.
               In that event, Landlord shall be entitled to recover from Tenant
               as and for liquidated damages an amount equal to the rent and
               additional rent reserved in this Lease less any and all amounts
               received by Landlord from the rental of the Premises to another
               tenant. Nothing herein contained, however, shall limit or
               prejudice the right of Landlord to

<PAGE>   7

               prove for and obtain as liquidated damages, by reason of such
               termination, an amount equal to the maximum allowed by any
               statute or rule of law in effect at the time when, and governing
               the proceedings in which such damages are to be proved, whether
               or not such amount may be greater, equal to, or less than the
               amount of the difference referred to above, and Landlord may, in
               his own name, but as agent for Tenant, re-let the Premises. Any
               recovery by the Landlord shall be limited to the rent hereunder
               (plus any reasonable costs incurred in re-letting) less any rent
               actually paid by the new tenant.

        (b)    No termination of this Lease or any taking of possession of the
               Premises shall deprive Landlord of any of its remedies or actions
               against Tenant for past or future rent, nor shall the bringing of
               any action for rent or breach of covenant, or the resort to any
               other remedy herein provided for the recovery of rent, be
               construed as a waiver of the right to obtain possession of the

        (c)    In addition to any damages becoming due under this paragraph,
               Landlord shall be entitled to recover from Tenant and Tenant
               shall pay to Landlord an amount equal to all reasonable expenses,
               including reasonable attorneys' fees, if any, incurred by the
               Landlord in recovering possession of the Premises, and all
               reasonable costs and charges for the care of said Premises while
               vacant, which damages shall be due and payable by Tenant to
               Landlord at such time or times as such expenses are incurred by
               the Landlord.

        (d)    In the event of a default or threatened default by Tenant of any
               of the terms or conditions of this Lease, Landlord shall have the
               right of injunction and the right to invoke any remedy allowed by
               law or in equity as if no specific remedies of Landlord were set
               forth in this Lease.

        (e)    If default be made and a compromise and settlement shall be had
               thereupon, it shall not constitute a waiver of any covenant
               herein contained, nor of the Lease itself, unless otherwise
               agreed to in writing by the parties.


        Landlord reserves the following rights with respect to the Premises:
        During normal business hours, upon having given mutual agreeable notice,
        to go upon and inspect the Premises, and at Landlord's option, to make
        repairs, and/or install equipment in support of the Building of which
        the Premises are a part, provided there is no interference with Tenant's
        occupancy. An Agent of the Tenant shall be present for inspection, if
        requested by Tenant.


        If Tenant holds possession of the Premises after the termination of this
        Lease or any renewal or extension thereof, Tenant shall become a Tenant
        from month to month at 115% of the then current rental rate.


        Except as may result from their negligence, Landlord and Landlord's
        agents, employees, and contractors shall not be liable for, and Tenant
        hereby releases all claims for, damages to persons or property sustained
        by Tenant (or any person claiming through Tenant) resulting from any
        fire, accident, occurrence or condition in or upon the Premises or
        Building, including but not limited to such claims for damage resulting
        from (1) any defect in or failure of plumbing, heating or
        air-conditioning equipment, electric wiring or installation thereof,
        water pipes, stairs, railings or walks; (2) any equipment or apparatus
        becoming out of repair; (3) the bursting, leaking or running of any
        tank, washstand, water closet, waste pipe, drain or any other pipe or
        tank, upon or about such building or premises; (4) the backing up of any
        sewer pipe or downspout; (5) the escape of steam or hot water; (6)
        water, snow or ice being upon or coming through the roof of any other
        place upon or near the Building or Premises or otherwise; (7) the
        falling of any fixtures, plaster or stucco; (8) broken glass; and (9)
        any act or omission of occupants of adjoining or contiguous property of

29.     NOTICE

<PAGE>   8

        All notices required under this Lease shall be given in writing and
        shall be deemed to be properly served if sent by certified or registered
        United States Mail, postage prepaid, or overnight courier with receipt
        of delivery as follows:

<PAGE>   9

               If to the Landlord:          Red Gate III Limited Partnership
                                            c/o W.M. Rickman Construction Co.
                                            15215 Shady Grove Road
                                            Rockville, Maryland  20850

               If to the Tenant:       EntreMed, Inc.
                                            9640 Medical Center Drive
                                            Rockville, Maryland  20850

        or to such other address as either may have designated from time to time
        by written notice to the other. The date of service of such notices
        shall be the date such notices are deposited in any United States Post
        Office or delivered upon receipt in the case of overnight courier


        Tenant covenants and agrees:

        (a)    To give to Landlord prompt written notice of any accident, fire,
               or damage occurring on or to the Premises.

        (b)    To keep the thermostats in the Premises set at a temperature
               sufficient to prevent freezing of water pipes, fixtures and HVAC

        (c)    To keep the Premises clean, orderly, sanitary, and free from all
               objectionable odors and from insects, vermin and other pests as
               reasonably possible.

        (d)    To comply with the requirements of the State, Federal and County
               statutes, ordinances, and regulations applicable to Tenant and
               its use of the Premises, and to save Landlord harmless from
               penalties, fines, costs, and expenses resulting from failure to
               do so, provided Tenant shall not be obligated to make structural
               repairs or alterations to so comply.

        (e)    Tenant shall promptly pay all contractors, suppliers of material
               and persons Tenant engages to perform work and provide materials
               for construction work on the Premises so as to minimize the
               possibility of a lien attaching to the Premises. Should any such
               lien be made or filed, Tenant shall cause the same to be
               discharged and released of record by bond or otherwise within
               thirty (30) days of receipt of written request from Landlord.


        LANDLORD shall, from time to time, have the right to alter or modify the
        site plan of the Building and to rearrange the driveways and parking
        areas, as well as the entrance and exits to the Premises, provided such
        alterations do not affect Tenant's access or use and occupancy of the


        LANDLORD agrees to furnish no less than 100 unreserved parking spaces
        contiguous to building 9640 Medical Center Drive.


        This Lease contains the entire agreement of the parties. There are no
        oral agreements existing between them.

<PAGE>   10


        This Lease, and the covenants and conditions herein contained shall
        inure to the benefit of and be binding upon the Landlord, its successors
        and assigns, and shall inure to the benefit of and be binding upon the
        Tenant, its permitted successors and permitted assigns.


        If Tenant shall make an assignment of its assets for the benefit of
        creditors, or if Tenant shall file a voluntary petition in bankruptcy,
        or if any involuntary petition in bankruptcy or for receivership be
        instituted against the Tenant and the same be not dismissed within
        thirty (30) days of the filing thereof, or if Tenant shall be adjudged
        bankrupt, then and in any of said events, this Lease shall immediately
        cease and terminate at the option of the Landlord upon written notice to
        Tenant with the same force and effect as though the date of said event
        was the date herein fixed for expiration of the term of this Lease.


        In the event the Landlord shall be unable to give possession of the
        Premises because construction of the Building is not complete for
        cause(s) reasonably beyond the control of the Landlord, the Landlord
        shall not be liable to Tenant for any damage resulting from failure to
        give possession.


        If any term, covenant, or condition of this Lease or the application
        thereof to any person or circumstance shall be held to be invalid and
        unenforceable, the remainder of this Lease, and the application of such
        terms, covenants, or conditions shall be valid and enforceable to the
        fullest extent permitted by law.


        With the exception of those provisions contained herein regarding the
        payment of rent, the inability of either party to perform any of the
        terms, covenants or conditions of this Lease shall not be deemed a
        default if the same shall be due to any cause beyond the reasonable
        control of that party.


        The Tenant shall from time to time, within ten (10) business days after
        being requested to do so by the Landlord or any Mortgagee of Landlord,
        execute, acknowledge and deliver to the Landlord (or, at the Landlord's
        request, to any existing or prospective purchaser, transferee, assignee
        or Mortgagee of any or all of the Premises) an instrument in recordable
        form, certifying (a) that this Lease is unmodified and in full force and
        effect (or, if there has been any modification thereof, that it is in
        full force and effect as so modified, stating therein the nature of such
        modification); (b) as to the dates to which the Minimum Rent and other
        charges arising hereunder have been paid; (c) as to the amount of any
        prepaid Rent or any credit due to the Tenant hereunder; (d) that the
        Tenant has accepted possession of the Premises or a portion thereof, and
        the date on which the Term commenced; (e) as to whether, to the best
        knowledge, information and belief of the signer of such certificate, the
        Landlord or the Tenant is then in default in performing any of its
        obligations hereunder (and, if so, specifying the nature of each such
        default); and (f) as to any other fact or condition reasonably requested
        by the Landlord or such other addressee. In the event the Tenant fails
        or refuses to provide such a certificate, Tenant shall be liable to
        Landlord for any loss or damage (including reasonable counsel fees)
        arising out of or in connection with such failure or refusal.

        IN WITNESS WHEREOF, the parties have caused this Lease Agreement to be
        executed on the year and date first written.

ATTEST:                             RED GATE III LIMITED PARTNERSHIP

<PAGE>   11

  /s/ P.L. ENGLEHART                  /s/ WILLIAM M. RICKMAN
------------------------            ---------------------------
                                          By:    William M. Rickman


ATTEST:                                   ENTREMED, INC.

  /s/ R. NELSON CAMPBELL              /s/ JOHN W HOLADAY, JR.
------------------------            ---------------------------