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Exhibit 10.21
 
VIRGINIA TECH CORPORATE RESEARCH CENTER
 
LEASE
 
FUNDAMENTAL LEASE PROVISIONS

Date:
 
June 19, 2006
     
Landlord:
 
Virginia Tech Foundation, Inc. 
     
Tenant:
 
New River Pharmaceuticals Inc.
     
Lease Term:
 
Commencing 6/1/06 and expiring 5/31/07.
     
Demised Premises:
 
Area described in Exhibit A attached hereto, in Suite 2050, VT KnowledgeWorks I,
2200 Kraft Drive, Blacksburg, VA 24060, consisting of approximately 18242
Rentable Square Feet. Rentable Square Feet is defined as the Useable Area of the
Demised Premises plus 16 percent of the Useable Area as set forth in Article 49.
     
Basic Rent:
 
Basic Rent for months 1-12 is Two Hundred, Eighty Four Thousand, Twenty Eight
and 00/100 Dollars ($284028.00) payable in twelve (12) equal monthly
installments of Twenty Three Thousand, Six Hundred, Sixty Nine and 00/100
Dollars ($23669.00) in advance, on the first day of each calendar month of the
Lease Year, during the lease term. Basic Rent is based on a rate of $ 15.57 per
rentable square foot per year. By modification to this lease, rent will commence
for the laboratory space upon commencement of construction and in the balance of
the demised premises upon move-in.
     
Rent Payment:
 
The following address shall be used for payments:
Corporate Research Center
c/o First National Bank
1872 Pratt Drive, Suite 1125
Blacksburg, VA 24060
     
Rent Escalations:
 
For a multi-year lease, rent will be escalated annually, on the lease
anniversary date, by the change in the Consumer Price Index as set forth in
Article 3.
     
Security Deposit:
 
Twenty Three Thousand, Six Hundred, Sixty Nine and 00/100 Dollars ($23669.00) to
be paid two weeks prior to occupancy.
     
Landlord's Address:
 
1872 Pratt Drive, Suite 1000
Blacksburg, VA 24060
     
Tenant's Address:
 
2200 Kraft Drive, Suite 2050, Blacksburg, VA 24060
     
Improvements by Landlord:
 
As outlined in Lease Rider 1 attached and made a part hereto
     
Permitted Use:
 
Manages and develops novel pharmaceutical delivery systems.

The foregoing Fundamental Lease Provisions are an integral part of this Lease,
and each reference in the body of this Lease to any Fundamental Lease Provisions
shall be construed to incorporate all of the items set forth above

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TABLE OF CONTENTS
 
ARTICLE 1 - DEMISED PREMISES
  1
ARTICLE 2 - TERM
  1
ARTICLE 3 - RENT
  1
ARTICLE 4 - DUTY OF CARE FOR DEMISED PREMISES
  2
ARTICLE 5 - ALTERATIONS
  4
ARTICLE 6 - NUISANCE
  5
ARTICLE 7 - ENTRY FOR REPAIRS AND INSPECTION
  6
ARTICLE 8 - ENDORSEMENTS
  6
ARTICLE 9 - PERMITTED USE
  7
ARTICLE 10 - ADDRESS
  7
ARTICLE 11 - EQUIPMENT
  7
ARTICLE 12 - QUIET POSSESSION
  7
ARTICLE 13 - CONDITION OF PREMISES
  7
ARTICLE 14 - SERVICES
  7
ARTICLE 15 - OTHER AMENITIES AND BENEFITS
  8
ARTICLE 16 - TELECOMMUNICATIONS SERVICES
  9
ARTICLE 17 - INABILITY TO PERFORM SERVICES
  9
ARTICLE 18 - ASSIGNMENT OR SUBLETTING
  9
ARTICLE 19 - TRANSFER OF LANDLORD'S RIGHTS
10
ARTICLE 20 - EMINENT DOMAIN AND FORCE MAJEURE
10
ARTICLE 21 - BINDING EFFECT
11
ARTICLE 22 - DAMAGE OR DESTRUCTION
12
ARTICLE 23 - RELOCATION
12
ARTICLE 24 - SUBORDINATION
13
ARTICLE 25 - LAWS AND REGULATIONS
13
ARTICLE 26 - USES OF DEMISED PREMISES
13
ARTICLE 27 - BUILDING RULES AND REGULATIONS
14
ARTICLE 28 - ENVIRONMENTAL PROVISIONS
14
ARTICLE 29 - PERSONAL PROPERTY TAXES
15
ARTILCE 30 - REAL PROPERTY TAXES
15
ARTICLE 31 - BUSINESS, PROFESSIONAL AND OCCUPATIONAL LICENSE
16
ARTICLE 32 - DECLARATION OF USES AND RESTRICTIONS
16

 

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ARTICLE 33 - PARKING AREAS
16
ARTICLE 34 - INDEMNITY, LIABILITY AND LOSS OR DAMAGES
16
ARTICLE 35 - INSURANCE
16
ARTICLE 36 - WAIVER OF SUBROGATION
17
ARTICLE 37 - DEFAULT
18
ARTICLE 38 - LIEN FOR RENT
 21
ARTICLE 39 - DEFAULTS BY TENANT ON THIRD PARTY
 21
ARTICLE 40 - WAIVER OF DEFAULT
 21
ARTICLE 41 - WAIVER OF TRIAL BY JURY
 21
ARTICLE 42 - CROSS DEFAULTS
 21
ARTICLE 43 - ABANDONMENT
 21
ARTICLE 44 - HOLDING OVER
22
ARTICLE 45 - ATTORNEY'S FEES
22
ARTICLE 46 - INTEREST ON PAST DUE OBLIGATIONS
22
ARTICLE 47 - SECURITY DEPOSIT
22
ARTICLE 48 - APPLICATION
23
ARTICLE 49 - MEASUREMENT OF SPACE
23
ARTICLE 50 - LEASE EFFECTIVE UPON EXECUTION
23
ARTICLE 51 - AUTHORITY
23
ARTICLE 52 - INCORPORATION OF PRIOR AGREEMENTS
24
ARTICLE 53 - AMENDMENTS
24
ARTICLE 54 - SEVERABILITY CLAUSE
24
ARTICLE 55 - GENDER
24
ARTICLE 56 - TIME OF THE ESSENCE
24
ARTICLE 57 - BUILDING NAME
24
ARTICLE 58 - BROKERS
24
ARTICLE 59 - ESTOPPEL CERTIFICATE
24
ARTICLE 60 - NOTICES
25
ARTICLE 61 - RECORDING OF LEASE
25
ARTICLE 62 - HEADINGS AND TABLE OF CONTENTS
25

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LEASE AGREEMENT

THIS LEASE (the “Lease”) is made as June 19, 2006, between Virginia Tech
Foundation, Inc., a Virginia corporation ("Landlord"), and New River
Pharmaceuticals Inc., (“Tenant").

Landlord and Tenant hereby agree as follows:

ARTICLE 1 - DEMISED PREMISES 

In consideration of the obligation of Tenant to pay rent as herein provided and
in consideration of the other terms, covenants and conditions hereof, Landlord
hereby demises and leases to Tenant, and Tenant hereby takes from Landlord,
approximately 18242 rentable square feet of space, the Demised Premises (as more
particularly described on Exhibit A, attached hereto), located in Suite 2050, VT
KnowledgeWorks I, 2200 Kraft Drive, Blacksburg, VA 24060 (“the Building”), to
have and to hold the same for the Lease Term defined herein, unless sooner
terminated pursuant to any provision herein, all upon the terms and conditions
set forth in this Lease.

ARTICLE 2 - TERM

The term of this Lease (the “Lease Term”) shall commence as of 6/1/06 (the
“Lease Commencement Date”) and shall expire on 5/31/07, unless such Lease Term
shall be sooner terminated or, if appropriate, extended as hereinafter provided.

A.
The term “Rent Commencement Date” means the earlier of the date on which the
Demised Premises are deemed suitable for occupancy by the project architect or
the date on which Tenant takes possession of the Demised Premises. In no event
shall the Rent Commencement Date be prior to the Lease Commencement Date.

B.
The term “Lease Year” means a period of twelve (12) consecutive calendar months.
The first Lease Year of this Lease shall begin on the Rent Commencement Date
unless such date is other than the first day of a calendar month, in which event
the first Lease Year shall commence on the first day of the calendar month
immediately preceding the Rent Commencement Date. Each succeeding Lease Year of
this Lease shall commence upon the anniversary of the beginning of the first
Lease Year.

ARTICLE 3 - RENT
 
A.
Beginning with the Rent Commencement Date and continuing through the first Lease
Year, Tenant shall pay to Landlord annual rent of Two Hundred, Eighty Four
Thousand, Twenty Eight and 00/100 Dollars ($284028.00) (“Basic Rent”).

B.
Basic Rent shall be adjusted for each Lease Year after the first Lease Year in
an amount equal to the Basic Rent due during the previous Lease Year plus an
amount representing the percentage increase, if any, in the Consumer Price Index
for All Urban Consumers (“CPI-U”) issued by the United States Department of
Labor, Bureau of Labor Statistics (or a properly adjusted substitute index if
hereafter changed) for the period beginning January 1 and ending December 31 of
the previous year. Until the CPI-U becomes available for such period, Landlord
shall be entitled to use an estimate of the change in the CPI-U. Adjustments
shall be made to reflect the actual increase when it becomes available. Failure
by Landlord to notify Tenant of the amount of a scheduled increase shall not
absolve Tenant’s obligation to pay such increase.

C.
Tenant shall pay Basic Rent in equal monthly installments of Twenty Three
Thousand, Six Hundred, Sixty Nine and 00/100 Dollars ($23669.00) on the first
day of each calendar month to the order of Corporate Research Center, c/o FIRST
NATIONAL BANK, 1872 PRATT DRIVE, SUITE 1125, BLACKSBURG, VA 24060, or at such
other place as Landlord may hereafter specify, without notice, offset, reduction
or abatement, except for adjustments expressly permitted by this Lease.

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D.
If the Rent Commencement Date is on a day other than the first day of a calendar
month, then Tenant shall pay, upon the Rent Commencement Date, the monthly rent
described above. At the commencement of the second month of the term, Tenant
shall pay the monthly rent described above prorated on a per diem basis with
respect to the preceding fractional calendar month beginning on the Rent
Commencement Date. All rental payments thereafter will be for a full calendar
month and will be in the amount as specified above. By modification to this
lease, rent will commence in the laboratory suites upon commencement of
construction and in the balance of the suite upon move-in.

E.
The obligation of Tenant to pay Basic Rent is an independent covenant, and no
act or circumstance, whether constituting a breach of this Lease by Landlord or
not, shall relieve Tenant of the obligation to pay Basic Rent.

F.
Basic Rent due from Tenant to Landlord hereunder which is not paid within
fifteen days after the same is due shall bear interest at the rate of twelve
percent (12%) per annum from the due date until paid, but the payment of such
interest shall not excuse or cure any default by Tenant under this Lease. Such
interest is separate and cumulative and is in addition to and shall not diminish
or represent a substitute for any or all of Landlord's rights or remedies under
any other provision of this Lease. In addition to such interest, if the monthly
rental provided herein is not paid within fifteen (15) days after the same is
due, a late charge equal to five percent (5%) of the amount so overdue shall
become immediately due and payable by Tenant to Landlord.

G.
No payment by Tenant or receipt by Landlord of a lesser amount than that
stipulated herein for rent, additional rent or any other charge shall be deemed
to be other than on account of the earliest stipulated rent, additional rent or
other charge then due, nor shall any endorsement or statement on a check or
letter accompanying any check or payment be deemed an accord and satisfaction
and Landlord may accept such check or payment without prejudice to Landlord's
rights to recover the balance of such rent, additional rent or other charges or
pursue any other remedy in this Lease, at law or in equity.

H.
Monthly payments from leases that are defined under Article 2 as having a term
less than one year (including month-to-month leases) shall be collected from the
tenant via automatic payment drafting (ACH Debits) provided by First National
Bank. An authorization agreement to initiate debit entries can be found in
Attachment 1, attached hereto

 
PART I - OTHER TENANT RESPONSIBILITIES

ARTICLE 4 - DUTY OF CARE FOR DEMISED PREMISES

A.
Tenant will, at Tenant's own cost and expense, maintain the Demised Premises and
all other improvements to the extent covered by this Lease in sound condition
and good repair, and shall repair or replace any damage or injury done to the
Demised Premises or any part thereof by Tenant or Tenant's agents, employees,
invitees and visitors. If Tenant fails to make such repair or replacements
promptly, or within fifteen (15) days of occurrence, to the satisfaction of
Landlord, Landlord may, at its option, make such repairs or replacements, and
Tenant shall reimburse Landlord for the cost thereof on demand. Tenant waives
all right to make repairs at the expense of Landlord, or to deduct the cost
thereof from Basic Rent. Further, Tenant agrees:

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i.
that it will not commit or allow any waste or damage to be committed on any
portion of the Demised Premises, and shall, at the termination of this Lease by
lapse of time or otherwise, return the Demised Premises to Landlord in as good
condition as such Demised Premises were in on the Rent Commencement Date,
ordinary wear and tear excepted, and upon termination of this Lease, Landlord
shall have the right to re-enter and resume possession of the Demised Premises;

 
ii.
that any special wiring installed for or by Tenant, including, but not limited
to, cable and conduits, shall be removed at Tenant’s expense within seven (7)
days of the expiration of this Lease, but only if such removal is requested by
Landlord;

 
iii.
that any improvements, including, but not limited to wall coverings, floor
coverings or carpet, paneling, doors and hardware or cabinetry are made to the
Demised Premises at Tenant's expense or under any agreement with Tenant whereby
Tenant is given an allowance or rent reduction in exchange for Landlord's
agreement to install or allow to be installed lease improvements shall become
the property of Landlord and shall not be removed by Tenant;

 
iv.
that Tenant shall not lay linoleum, tile, carpet or any other floor covering
without Landlord’s prior written approval. The expense of repairing any damage
resulting from a violation of this rule or the removal of any floor covering
shall be borne by Tenant.

 
v.
that all wallpaper or vinyl fabric materials which Tenant may install on painted
walls shall be applied with a strippable adhesive. The use of non-strippable
adhesives will cause damage to the walls when materials are removed, and repairs
made necessary thereby shall be made by Landlord at Tenant's expense.

 
vi.
if Tenant requires telegraphic, telephonic, burglar alarm or similar services,
it shall first obtain, and comply with, Landlord's instruction with respect to
their installation.

 
vii.
that Tenant will be responsible for any damage to the Demised Premises,
including carpeting and flooring, as a result of: rust or corrosion of file
cabinets, roller chairs, metal objects, or spills of any type of liquid.

 
viii.
that Tenant shall not alter any lock or access device or install a new or
additional lock or access device or any bolt on any door of the Demised Premises
without the prior written consent of Landlord. If Landlord consents to such
installation, Tenant shall furnish Landlord with a key for any new or additional
lock.

B.
Landlord shall have the right to determine and prescribe the weight and proper
position of any unusually heavy equipment including safes, large files, etc.,
that are to be placed in the Demised Premises, and only those which Landlord
believes will not damage the floors, structure and/or freight elevator, may be
moved into the Demised Premises. Any damage caused by or resulting from the
moving or installing of such articles in the Building or into the Demised
Premises or the presence of such articles in the Demised Premises shall be paid
for by Tenant, unless otherwise covered by insurance.

 
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ARTICLE 5 - ALTERATIONS

A.
Tenant will not make or allow to be made any alterations, additions and
improvements including, but not limited to, painting, in or to the Demised
Premises without prior written consent of Landlord, which shall not be
unreasonably withheld. Landlord may impose, as a condition to consent, such
requirements as Landlord in its sole discretion may deem reasonable or
desirable, including, without limiting the generality of the foregoing,
requirements as to the manner in which, the time or times at which, and the
contractor by whom such work shall be done as well as requiring Tenant to
provide a completion bond.

B.
Any alterations, additions, or improvements made to the Demised Premises by
Tenant shall be surrendered to Landlord and become the property of Landlord upon
termination of this Lease. If prior to termination of this Lease, or within
fifteen (15) days thereafter, Landlord so directs by written notice to Tenant,
Tenant shall promptly remove any alterations, additions, or improvements, placed
in or on the Demised Premises by Tenant that are designated in said notice and
shall repair any damage caused by such removal and in default thereof Landlord
may effect said removals and repairs at Tenant's expense. This clause shall not
apply to movable non-attached fixtures of Tenant.

C.
All work with respect to alterations, additions, and improvements must be done
in a good and workmanlike manner and diligently prosecuted to completion.

D.
Any alterations, additions and improvements shall be completed strictly in
accordance with the laws and ordinances relating thereto, and with the
requirements of all carriers of insurance on the Demised Premises and the Board
of Underwriters, Fire Rating Bureau, or similar organization. Tenant shall
obtain, at its sole cost and expense, all required licenses and permits. In
performing the work of any such alterations, additions or improvements, Tenant
shall have the work performed in such a manner so as not to obstruct the access
to the Building of any other tenant.

E.
Before commencing any work or construction in or about the Demised Premises,
Tenant shall notify Landlord in writing of the expected date of commencement and
completion thereof. Landlord shall have the right at any time and from time to
time to post and maintain on the Demised Premises such notices as Landlord deems
necessary to protect the Building, the Demised Premises and Landlord from the
liens of mechanics, laborers, materialmen, suppliers or vendors.

F.
Tenant has no authority to and shall not create any liens for labor or material
on or against the Building, the Demised Premises or any interest therein. Tenant
agrees to notify any materialman, supplier, contractor, mechanic, or laborer
involved with work on the Demised Premises at Tenant's request that they must
look only to Tenant or Tenant's other property interests. All materialmen,
suppliers, contractors, mechanics and laborers may be put on notice of this
Section by the recordation, at Landlord's option, of a memorandum of this Lease
in the Clerk’s Office of the Circuit Court of Montgomery County, Virginia and
Tenant shall promptly execute and acknowledge such a memorandum if requested to
do so by Landlord. Tenant shall require from any and all materialmen, suppliers,
contractors, mechanics, laborers and subcontractors that they deliver to Tenant
duly executed waivers of lien with respect to Landlord's interest prior to the
commencement of any work thereon or in the Demised Premises.

 
G.
Notwithstanding the foregoing, if by reason of any construction, alteration,
repair, labor performed, or materials furnished to the Demised Premises for or
on behalf of Tenant, any mechanic's or other lien shall be filed, claimed,
perfected or otherwise established as provided by laws against the Building or
the Demised Premises, Tenant shall discharge or remove the lien by bonding or
otherwise within fifteen (15) days after Tenant receives notice of the filing of
same. Nothing contained herein shall authorize Tenant to create any liens for
labor or materials on or about Landlord's interest in the Building or the
Demised Premises or any portion thereof.

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ARTICLE 6 - NUISANCE

Tenant will conduct its business, and control its agents, employees, invitees
and visitors in such a manner as not to create any nuisance, interfere with,
annoy, or disturb other tenants or Landlord in the management of the Building.
Tenant specifically agrees to abide by the following provisions:

A.
Tenant will refer all contractors, contractor's representatives and installation
technicians, rendering any service to Tenant, to Landlord for Landlord's
supervision, approval, and control before performance of any contractual
service. This provision shall apply to all work performed in the Demised
Premises including installations of telephones, telegraph equipment, electrical
devices and attachments, and installations of any nature affecting the floors,
walls, woodwork, trim, windows, ceilings, equipment or any other physical
portion of Demised Premises.

B.
Movement in or out of the Building of furniture or office equipment, or dispatch
or receipt by Tenant of any merchandise or materials which require use of
elevators or stairways, or movement through the Building entrances or lobby
shall be restricted to hours designated by Landlord. All such movement shall be
under supervision of Landlord and in the manner agreed between Tenant and
Landlord by pre-arrangement before performance. Such pre-arrangement initiated
by Tenant will include determination by Landlord as to time, method, and routing
of movement and as to limitations imposed for safety or other concerns which may
prohibit any article, equipment or any other item from being brought into the
Building. Tenant shall assume all risks as to damage to articles moved and
injury to persons or public engaged or not engaged in such movement, including
equipment, property and personnel of Landlord if damaged or injured as a result
of acts in connection with Landlord’s performance of this service for Tenant,
and Landlord shall not be liable for acts of any person engaged in, or any
damage or loss to any of said property or persons resulting from any act in
connection with such service performed for Tenant.

C.
The entries, passages, doors, elevators, elevator doors, hallways or stairways
shall not be blocked or obstructed. No rubbish, litter, trash, or material of
any nature shall be placed, emptied, or thrown into these areas. Such areas
shall not be used at any time except for ingress or egress by Tenant, Tenant's
agents, employees, invitees or visitors to or from the Demised Premises.

D.
Plumbing fixtures and appliances shall be used only for the purposes for which
they were constructed, and no sweepings, rubbish, rags or other unsuitable
material shall be thrown or placed therein. Damage resulting to any such
fixtures or appliances from misuse by Tenant shall be repaired or replaced at
Tenant's sole cost and expense, and Landlord shall not be responsible therefore.

E.
Tenant shall not place, install or operate in the Demised Premises or in any
part of the Building, any engine or machinery, or maintain, use or keep any
flammable, explosive, or hazardous material without prior written consent of
Landlord.

F.
Tenant will not place or suffer to be placed or maintained on any exterior door,
wall or window of the Demised Premises any sign, awnings or canopy, or
advertising matter or other thing of any kind, and will not place or maintain
any decoration, lettering or advertising matter on the glass of any window or
door of the Demised Premises without first obtaining Landlord's prior written
approval and consent in each instance. Tenant further agrees to maintain any
permitted sign, awnings, canopy, decoration, lettering, advertising matter or
other thing in good condition at all times.

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G.
No sign, poster, placard, picture, name, advertisement or notice, visible from
the exterior of the Demised Premises shall be inscribed, painted, affixed,
installed or otherwise displayed by Tenant either on the Demised Premises or any
part of the Building without prior written consent of Landlord, and Landlord
shall have the right to remove any such sign, placard, picture, name,
advertisement, or notice without notice to and at the expense of Tenant. If
Landlord shall have given such consent to Tenant at any time, whether before or
after the execution of this Lease, such consent shall in no way operate as a
waiver or release of any of the provisions hereof or of this Lease, and shall be
deemed to relate only to the particular sign, placard, picture, name,
advertisement or notice so consented to by Landlord and shall not be construed
as dispensing with the necessity of obtaining the specific written consent of
Landlord with respect to any other sign, placard, picture, name, advertisement
or notice. All approved signs shall be printed, painted, affixed and inscribed
at the expense of Tenant by a person approved by Landlord. All approved signs
must be removed by Tenant upon vacating the Demised Premises.

H
No Tenant shall use, keep or permit to be used or kept in the Demised Premises
any foul or noxious gas or substance or permit or suffer such Demised Premises
to be occupied or used in a manner offensive or objectionable to Landlord or
interfere in any way with other tenants or those having business therein. Tenant
shall not bring or permit to be kept in or about Demised Premises, animals,
reptiles, or birds without the prior written consent of Landlord. Tenant shall
not permit to be used in or about the Demised Premises or around the Building
skateboards, roller-skates, roller-blades, or other such devices. Bicycles
brought to the Building must be immediately secured in storage areas provided by
Landlord.

ARTICLE 7 - ENTRY FOR REPAIRS AND INSPECTION

Tenant will permit Landlord, or Landlord’s officers, agents, and
representatives, the right to enter into and upon all parts of the Demised
Premises, at all reasonable hours to inspect same or clean or make repairs or
alterations or additions as Landlord may deem necessary, and Tenant shall not be
entitled to any abatement or reduction of rent by reason thereof and Landlord
shall not be liable to Tenant for inconveniences to Tenant's business when
effecting repairs. In the event of an emergency, Tenant hereby grants to
Landlord the right to enter the Demised Premises at any time. In addition,
Tenant shall permit Landlord or Landlord's agent and any other person authorized
by the same to enter the Demised Premises during the last twelve (12) months of
the Lease Term for the purpose of showing the Demised Premises to prospective
tenants.

ARTICLE 8 - ENDORSEMENTS

Tenant shall not imply endorsement either by the Virginia Tech Corporate
Research Center, Inc., (“VTCRC”) or Virginia Polytechnic Institute and State
University (“Virginia Tech”) in any advertisement or solicitation. Specifically,
Tenant agrees to include the following statements in all prospectuses or other
investment solicitations:

"The location of New River Pharmaceuticals Inc. in the Virginia Tech Corporate
Research Center is not to be construed as an endorsement by the Virginia Tech
Corporate Research Center, Inc., or Virginia Polytechnic Institute and State
University, their affiliates, agents or employees, of New River Pharmaceuticals
Inc. or New River Pharmaceuticals Inc.’s activities."

Landlord reserves the right to conduct an investigation of Tenant's activities
for the purpose of establishing whether Tenant is an appropriate candidate for
occupancy at the Virginia Tech Corporate Research Center (“the Center”),
consistent with the mission of the Center. This Lease can be canceled after
Landlord gives Tenant 30 days prior written notice in the event that Landlord
determines that Tenant is conducting activities which are not consistent with
the mission of the Center. The presence of Tenant in the Virginia Tech Corporate
Research Center and any other aspect of Tenant's relationship with the Virginia
Tech Corporate Research Center is not to be construed as an endorsement, either
expressed or implied, of Tenant or Tenant's activities by VTCRC or Virginia
Tech.

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ARTICLE 9 - PERMITTED USE

Tenant shall use the Demised Premises only as detailed in the Permitted Use
outlined in the Fundamental Lease Provisions. Use for any other purposes shall
be an act of default.

ARTICLE 10 - ADDRESS

Tenant shall use the address stated in this Lease only during its tenancy at the
Center. At such time that this Lease expires or is terminated, Tenant agrees to
discontinue usage of the address on any printed materials.

ARTICLE 11 - EQUIPMENT

Subject to the security interest granted by Tenant in favor of Landlord
hereunder, Tenant shall have the right to remove Tenant's personal property from
the Demised Premises at the termination of the Lease Term, and shall be
permitted seven (7) days after the effective date of termination of the term or
any renewal or hold-over term within which to accomplish removal, and shall be
obligated to repair any damage caused by removal.

PART II - LANDLORD RESPONSIBILITIES

ARTICLE 12 - QUIET POSSESSION

Landlord hereby covenants that Tenant, upon paying Basic Rent as herein
provided, and performing all covenants and agreements herein contained, shall
and may peacefully and quietly have, hold and enjoy the Demised Premises.

ARTICLE 13 - CONDITION OF PREMISES

Tenant acknowledges that neither Landlord nor any agent of Landlord has made any
representation or warranty with respect to the Demised Premises or the Building
or with respect to the suitability of either the conduct of Tenant's business or
profession. By taking of possession of the Demised Premises, Tenant shall
conclusively establish that the Demised Premises and the Building were in
satisfactory condition at such time.

ARTICLE 14 - SERVICES

Provided Tenant is not in default, Landlord agrees to furnish Tenant while
occupying the Demised Premises by Landlord the following services at Landlord's
expense:

A.
Water and sewer access at designated common areas of the Building. This
specifically excludes water used in any cooling or manufacturing process.

B.
Heating, ventilation, and air conditioning (“HVAC”) in such quantity and of such
quality as Landlord determines in its sole discretion is reasonably necessary
for Tenant's comfortable use and enjoyment of the Demised Premises. HVAC shall
be operable from the hours of 7: 00 a.m. - 6:00 p.m. on Monday - Friday and the
hours of 7:00 a.m. - 1:00 p.m. on Saturdays. No HVAC will be provided on
Sundays, on New Year’s Day, Memorial Day, Independence Day, Thanksgiving or
Christmas. At all other times, Tenant shall have the capability of pressing an
override button to temporarily (two hours in most cases) obtain HVAC services.
If Tenant requires constant HVAC services for cooling of equipment, Tenant shall
be responsible for installing equipment to achieve this level of service at
Tenant’s cost.

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C.
Lighting and electric current for fractional horsepower equipment within the
Demised Premises will be supplied by Landlord to Tenant at all times. Tenant
shall not install any equipment or lights that generate undue amounts of heat or
any high-power usage equipment without the prior written consent of Landlord. If
Landlord has given its written consent Tenant shall advance on the first day of
each month during the Term, the reasonable amount estimated by Landlord as the
expense of furnishing electricity for the operation of any such heat generating
or high-power usage equipment so installed and the costs (including costs of
installation, operation and maintenance) of any supplementary air conditioning
necessitated thereby. Further, Landlord may install and operate, at Tenant's
expense, a monitoring/ metering system in the Demised Premises to measure the
added demands on electricity, heating, ventilation and air conditioning system
resulting from Tenant's heat generating and high-power equipment usage and
after-hours service requirements.

D.
Housekeeping services Landlord reasonably deems to be required.

E.
Electrical lighting for public areas and special service areas of the Building
in the manner and to the extent deemed by Landlord to be standard.

F.
Snow and ice removal for the parking lots and sidewalks as Landlord reasonably
deems to be required and achievable.

ARTICLE 15 - OTHER AMENITIES AND BENEFITS

A.
KEYS - As of the Rent Commencement Date, Tenant shall be entitled to two keys to
any locked door in the Demised Premises and two keys to the exterior door of the
Building. For each 200 square feet of space leased, Tenant is entitled to one
additional key to the exterior of the Building. Additional keys needed after the
commencement of the lease will cost $2.00 per key. Tenant is responsible for
returning all keys to Landlord either upon termination of this Lease or at such
time that Landlord should provide new door hardware. Failure to return a key
will result in Tenant being financially responsible for re-keying all locks to
which keys are not returned. If exterior door keys are not returned, this means
that Tenant is financially responsible for re-keying all exterior doors and
providing new keys to all individuals that have keys to the doors.

B.
VIRGINIA TECH ID CARDS - Because of its affiliation with Virginia Tech, Landlord
is currently able to offer all employees who work at the Center a Virginia Tech
ID Card, otherwise known as a Hokie Passport. These ID cards enable the holder
to obtain free and reduced priced services at Virginia Tech affiliated
locations. Applications for these ID cards can be obtained from the Center’s
administrative offices. Tenant is responsible for assuring that ID cards are
obtained only by employees who are physically located at the Center. Filing an
application for an ID card for a person that is not actually employed by Tenant
shall result in a default under this Lease. Tenant is also responsible for
making sure that ID cards are collected from employees who leave Tenant’s
employment. Audits will be conducted annually to assure that all individuals
that have ID cards are still employed by Tenant. A $50 penalty will be assessed
to Tenant for each ID card that is not returned upon an employee’s termination.
Landlord makes no guarantees that this benefit will be maintained throughout the
term of this Lease. Virginia Tech may cancel this program at any time.

C.
CONFERENCE ROOMS AND AUDIO-VISUAL EQUIPMENT - Conference rooms and assorted
audio-visual equipment are available at the Center on a first-reserved,
first-served basis. Reservations can be made by calling the Center’s
administrative offices. Reservations will only be accepted for periodic meetings
that occur more frequently than monthly only one week in advance. For instance,
weekly staff meetings cannot be booked in a Center conference room without
calling each week to reserve the room.

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D.
SIGNAGE - At its own expense, Landlord will place a directory, in a prominent
place in the Building, listing Tenant as an occupant of the Building. Landlord
will also place one standard sign in the corridor of the Building outside one of
Tenant’s entrances. Landlord will also list Tenant on the outside directory sign
to the extent that spaces are available on the sign. In cases where spaces are
not available for every tenant, precedence will be given to tenants that rent
the most space.

 
ARTICLE 16 - TELECOMMUNICATIONS SERVICES
 
Landlord shall have no obligation to provide telecommunications services
pursuant to this lease. Tenant may secure such services from any provider.

Tenant may contract for provision of such services by Landlord pursuant to one
or more separate agreements. Non-tenant use of Landlord telecommunications
infrastructure is prohibited. Tenants will not be permitted to host non-tenant
corporate or personal computers in their suites effective November 1, 1998.
Tenants violating this provision will be assessed damages of $1,000.00 per month
for each non-Tenant owned computer that has been hosted on the Demised Premises
without Landlord’s authorization. Landlord offers a facility for location of
non-Tenant computers desiring access to Landlord’s telecommunications
infrastructure. Information about this service can be obtained from Landlord.

ARTICLE 17 - INABILITY TO PERFORM SERVICES

Failure to any extent to furnish, or any stoppage of, the services, amenities or
benefits described above, resulting from causes beyond control of Landlord or
from any cause, shall not render Landlord liable in any respect for damages to
either person or property, nor be construed as an eviction of Tenant or result
in an abatement of rent, nor relieve Tenant from fulfillment of any covenant or
agreement herein. If any equipment or machinery breaks down, or ceases to
function properly, Landlord shall use reasonable diligence to repair such
equipment or machinery promptly, but Tenant shall have no claim for rebate of
Basic Rent or damages on account of any interruptions in service occasioned
thereby or resulting therefrom.

PART III - TRANSFER OF OWNERSHIP RIGHTS OR CHANGE OF BUILDING STATUS

ARTICLE 18 - ASSIGNMENT OR SUBLETTING

A.
Tenant will not sell, mortgage, transfer, or assign this Lease, or allow the
same to be assigned by operation of law or otherwise, or sublet the Demised
Premises, or any part thereof, or use or permit the same to be used for any
other purpose than stated in the Permitted Use Clause hereof without the prior
written consent of Landlord, which such consent will not be unreasonably
withheld. Written consent of Landlord to sublease the Demised Premises shall be
in the form of a consent line on the appropriate sub-lease agreement.

B.
If Landlord consents to an assignment or sublease of the Demised Premises:

 
i.
the agreement between Tenant and sub-Tenant shall be on a lease form prepared by
or approved by Landlord.

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ii.
if the sub-lease or assignment results in rental payments in excess of the
monthly payments due and owing under the terms of this Lease, such excess rental
payments shall be deemed to be rental payments due and owing Landlord.

C.
As a further condition to Landlord's consent to any subleasing, assignment or
other transfer of part or all of Tenant's interest in the Demised Premises

 
i.
Tenant shall be required to pay Landlord's reasonable attorney's fees and other
costs incurred in connection with the review and execution of any documentation
in connection therewith;

 
ii.
any sub-Tenant of part or all of Tenant's interest in the Demised Premises shall
agree that in the event Landlord gives such sub-Tenant notice that Tenant is in
default under this Lease, such sub-Tenant shall thereafter make all sublease or
other payments directly to Landlord, which payments will be received by Landlord
without any liability whether to honor the sublease or otherwise (except to
credit such payments against sums due under this Lease), and such sub-Tenant
shall agree to attorn to Landlord, or its successors and assigns, at its request
should this Lease be terminated for any reason. In no event shall Landlord or
its successors or assigns be obligated to accept such attornment; and

 
iii.
Landlord may require that Tenant not then be in default under this Lease in any
respect. If Tenant files any type of petition in bankruptcy or has the same
filed against it and Landlord does not elect to terminate this Lease, and if the
trustee or receiver appointed by the bankruptcy court attempts to assume this
Lease and thereupon assign it to a third party, then Landlord shall have the
right to terminate this Lease within thirty (30) days upon gaining knowledge of
such attempted assumption and assignment, or upon being given written notice of
same by Tenant, whichever is later.

D.
Any sale, hypothecation, transfer, assignment or subletting which is not in
compliance with the provisions of this Article shall be voidable by Landlord and
shall, at the option of Landlord, constitute a default under this Lease.
Landlord's acceptance of rent directly from any subtenant, assignee or other
transferee shall not be construed as Landlord's approval or consent thereto nor
Landlord's agreement to accept the attornment of any subtenant in the event of
any termination of this Lease. In no event shall Landlord's consent to an
assignment or subletting be construed as (i) relieving Tenant from the
obligation to obtain Landlord's express written consent to any further
assignment or subletting or (ii) releasing Tenant from any liability or
obligation hereunder whether or not then accrued, and Tenant shall continue to
be fully, jointly and severally liable hereunder.

 
ARTICLE 19 - TRANSFER OF LANDLORD'S RIGHTS

Landlord shall have the right without Tenant’s consent to transfer and assign,
in whole or in part, all and every feature of its rights and obligations
hereunder and in the Building and property referred to herein. Such transfers or
assignments may be either to a corporation, trust company, individual or group
of individuals, and howsoever made are to be in all things respected and
recognized by Tenant.

ARTICLE 20 - EMINENT DOMAIN AND FORCE MAJEURE

A.
If all of the Demised Premises are taken or condemned either permanently or
temporarily for any public or quasi-public use or purpose by any competent
authority in appropriation proceedings or by any right of eminent domain or by
agreement or conveyance in lieu thereof (each being hereinafter referred to as
"condemnation"), this Lease shall terminate as of the day possession shall be
taken by such authority, and Tenant shall pay Basic Rent and perform all of its
other obligations under this Lease up to that date with a proportionate refund
by Landlord of any Basic Rent as shall have been paid in advance for a period
subsequent to the date of the taking.

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B.
If less than all of the Demised Premises is taken by condemnation, Landlord and
Tenant shall each have the right to terminate this Lease upon notice in writing
to the other party within ninety (90) days after possession is taken by such
condemnation. If this Lease is so terminated, it shall terminate as of the day
possession shall be taken by such authority, and Tenant shall pay Basic Rent and
perform all of its obligations under this Lease up to that date with a
proportionate refund by Landlord of any Basic Rent as may have been paid in
advance for a period subsequent to the date of the taking. If this Lease is not
so terminated, it shall terminate only with respect to the part of the Demised
Premises so taken as of the day possession shall be taken by such authority, and
Tenant shall pay Basic Rent up to that day with a proportionate refund by
Landlord of any Basic Rent as may have been paid for a period subsequent to the
date of the taking and, thereafter, the Basic Rent shall be reduced in direct
proportion to the amount of area of the Demised Premises taken.

C.
If any part of the Building is taken by condemnation so as to render, in
Landlord's judgment, the remainder unsuitable for use as an office building,
Landlord shall have the right to terminate this Lease upon notice in writing to
Tenant within one hundred twenty (120) days after possession is taken by such
condemnation without regard to whether such taking includes the Demised Premises
or any part thereof. If Landlord so terminates this Lease, it shall terminate as
of the day possession is taken by the condemning authority, and Tenant shall pay
Basic Rent, and perform all of its other obligations under this Lease up to that
date with a proportionate refund by Landlord of any Basic Rent as may have been
paid in advance for a period subsequent to such possession.

D.
As between Landlord and Tenant, any award for paid damages for any condemnation
of all or any part of the Building, including, but not limited to, all damages
as compensation for diminution in value of the leasehold, reversion and fee, and
Tenant's leasehold improvements, shall belong to Landlord without any deduction
therefrom for any present or future estate of Tenant, and Tenant hereby assigns
to Landlord all its right, title and interest to any such award. Although all
damages in the event of any condemnation belong to Landlord, whether such
damages are awarded as compensation for diminution in value of the leasehold,
reversion or fee of the Demised Premises, or Tenant's leasehold improvements,
Tenant shall have the right to claim and recover from the condemning authority,
but not from Landlord such compensation as may be separately awarded or
recoverable by Tenant in Tenant's own right on account of any and all damage to
Tenant's business by reason of the condemnation and for or on account of any
cost or loss which Tenant might incur in removing Tenant's merchandise,
furniture and fixture.

E.
Landlord shall not be liable or responsible for any loss or damage to any
property or person occasioned by theft, fire, act of God, public enemy,
injunction, riot, strike, insurrection, war, court order, requisition or order
of a government body or authority, or other matter beyond the control of
Landlord or for any damage or inconvenience which may arise through repair or
alteration of any part of the Building or failure to make any such repairs, or
from any cause whatsoever, unless caused solely by Landlord's gross negligence.

ARTICLE 21 - BINDING EFFECT 

This Lease shall also inure to the benefit of the respective successors and
assigns of Landlord and Tenant.

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ARTICLE 22 - DAMAGE OR DESTRUCTION

If the Demised Premises or the Building is damaged by any cause or means
whatsoever not caused or contributed to by the negligence or fault of Tenant,
its employees, agents, invitees or visitors, and if insurance proceeds have been
made available therefore, and if said damage can be repaired within a period of
ninety (90) days by using standard working methods and procedures, Landlord
shall within a reasonable time after the occurrence of said damage, and to the
extent of the insurance proceeds available therefore, enter and make repairs and
this Lease shall not be affected but shall continue in full force and effect.
However, if said damage cannot be repaired within a period of ninety (90) days
by using standard working methods and procedures, then this Lease shall cease
and terminate as of the date of such occurrence, and Tenant shall pay rent
hereunder to such date and immediately surrender the Demised Premises to
Landlord, unless within a period of sixty (60) days from the date of such
occurrence Landlord shall elect to keep this Lease in force and to restore the
Demised Premises to substantially the condition as existed prior to the date of
such occurrence by giving Tenant written notice of such election within said
sixty (60) day period. If Landlord so elects to continue this Lease and restore
the Demised Premises, Landlord shall within a reasonable time after the date of
the notice of said election enter and make repairs, and this Lease shall not be
affected, except that rents hereunder shall be reduced or abated while such
repairs are being made for the period of time and in the proportion that the
Demised Premises are untenantable. If, however, such damage is contributed to or
results from the fault of Tenant, Tenant's employees, agents, invitees or
visitors, and if Landlord does not have insurance covering such damage, such
damage shall be repaired by and at the expense of Tenant under the control,
direction and supervision of Landlord, and the rent shall continue without
abatement or reduction. The completion of the repairs of all such damages is
subject to reasonable delays resulting from survey of such damage, obtaining
plans and letting contracts for repair, adjustments or insurance loss, strikes,
labor difficulties, unavailability of material, or other causes beyond the
control of the party obligated to make such repairs.

ARTICLE 23 - RELOCATION

A.
Landlord has the right to relocate the Demised Premises to another part of the
Building, or to another building at the Center, in accordance with the
following:

 
i.
The new Demised Premises will be substantially the same in size, dimensions,
configuration, decor, and nature as the Premises described in this Lease and
shall be placed in that condition by Landlord at its cost;

 
ii.
The physical relocation of the Demised Premises will be accomplished by Landlord
at its cost;

 
iii.
Landlord will give Tenant at least thirty (30) days prior written notice of
Landlord's intention to relocate the Demised Premises;

 
iv.
The physical relocation of the Demised Premises will take place on a weekend and
will be completely accomplished before the Monday following the weekend in which
the relocation takes place. If the physical relocation has not been completed in
that time, Basic Rent will abate in full from Monday to the time it is
completed;

 
v.
All reasonable costs incurred by Tenant as a result of the relocation,
including, without limitation, costs incurred in changing addresses on
stationery, business cards, directories, advertising, and such other items will
be paid by Landlord.

B.
If Tenant desires to vacate the Demised Premises and occupy the same amount or
more space available in another facility owned by Landlord or its parent
corporation, Landlord shall release Tenant from this Lease without penalty upon
the express written approval of Landlord. Tenant shall give Landlord ninety (90)
days written notice of its intention to exercise this option. Landlord shall not
withhold such approval without reasonable cause.

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ARTICLE 24 - SUBORDINATION

Tenant hereby subordinates this Lease and all rights of Tenant hereunder to any
mortgage or mortgages, or vendor's lien or similar instruments which now are or
which may from time to time be placed upon the Demised Premises covered by this
Lease and such mortgage or mortgages or liens or other instruments shall be
superior to and prior to this Lease. Tenant further covenants and agrees that if
the mortgagee or other lien holder acquires the Demised Premises as a purchaser
at any foreclosure sale (any such mortgagee or other lien-holder or purchaser at
the foreclosure sale being each hereinafter referred to as the "Purchaser at
Foreclosure"), Tenant shall thereafter, but only at the option of the Purchaser
at Foreclosure, as evidenced by the written notice of its election given to
Tenant within a reasonable time thereafter, remain bound by novation or
otherwise to the same effect as if a new and identical Lease between the
Purchaser at Foreclosure, as landlord, and Tenant, as tenant, had been entered
into for the remainder of the term of this Lease in effect at the institution of
the foreclosure proceedings. Tenant agrees to execute any instrument or
instruments which may be deemed necessary or desirable to further effect the
subordination of this Lease to each such mortgage, lien or instrument or to
confirm any election to continue this Lease in effect in the event of
foreclosure, as above provided. Tenant hereby irrevocably appoints Landlord as
its special attorney-in-fact to execute and deliver any document provided for
herein for and in the name of Tenant. Such power, being coupled with an
interest, is irrevocable.

PART IV - LAWS AND REGULATIONS

ARTICLE 25 - LAWS AND REGULATIONS

Tenant will maintain the Demised Premises in a clean and healthful condition and
comply with all laws, ordinances, orders, rules, and regulations (state,
federal, municipal, and other agencies or bodies having any jurisdiction
thereof) with reference to conditions or occupancy of the Demised Premises. This
includes, but is not limited to, compliance with regulations set by the
Occupational Safety and Health Administration (OSHA) and compliance with the
Americans with Disabilities Act within the Demised Premises as it relates to
barriers created by furniture and fixtures not owned by Landlord.

ARTICLE 26 - USES OF DEMISED PREMISES

Tenant will not occupy or use, nor permit any portion of the Demised Premises to
be occupied or used for any business or purpose which is (i) unlawful in part or
in whole; (ii) deemed to be disreputable in any manner, or (iii) extra hazardous
on account of fire. Tenant shall not obstruct or interfere with the rights of
other tenants or occupants of the Building or injure or annoy them, or permit
anything to be done which will in any way increase the rate of fire insurance or
liability insurance on the building or contents, and in the event that, by
reason of acts of Tenant, there is any increase in rate of such insurance on the
Building or contents created by Tenant's acts or conduct of business, then
Tenant hereby agrees to pay such increase. It is further agreed that:

A.
business machines and mechanical equipment belonging to Tenant which cause noise
or vibration that may be transmitted to the structure of the Building or any
space therein to such a degree as to be objectionable to Landlord or to any
tenant in the Building shall be installed and maintained by Tenant, at Tenant's
expense, on vibration eliminators or other devices sufficient to eliminate such
noise and vibration.

B.
Tenant shall not interfere, nor cause interference with, any satellite or
transmission or reception, nor shall Tenant interfere or cause interference
with, the radio frequency being used by another tenant for scientific purposes.

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C.
If the Tenant elects to use the CRC shared network for telecommunications, the
Tenant shall comply with the terms of the Tenant Data Services Agreement.

D.
Tenant shall use the Demised Premises solely for the purpose specified in the
Permitted Use section of this Lease. In addition, Tenant shall conduct business
in and from the Demised Premises solely under the trade name specified in the
Fundamental Lease Provisions. Tenant shall, at its expense, procure any and all
governmental licenses and permits, including without limitation sign permits,
required for the conduct of Tenant's business on the Demised Premises and shall,
at all times, comply with the requirement of each such license and permit.
Landlord is not required, and does not represent or warrant that it will obtain
or endeavor to obtain for Tenant (or that Tenant will be able to obtain) any
license or permit.

E.
Tenant acknowledges and understands that the proper tenant mix of the Building
is essential to the successful operation of the Building and that the
restriction against the unauthorized use of the Demised Premises is not intended
to act as a restraint of trade but to protect and insure the correct tenant mix.

ARTICLE 27 - BUILDING RULES AND REGULATIONS

Tenant and Tenant's agents, employees, and invitees will comply fully with all
requirements of the Building Rules and Regulations which are attached as Exhibit
B and made a part hereof as though fully set out herein. Landlord shall at all
times have the right to change such Rules and Regulations or to amend them in
such reasonable manner as may be deemed advisable for the safety, care and
cleanliness of the Demised Premises and for the preservation of good order
therein, all of which Rules and Regulations, changes and amendments will be
forwarded to Tenant in writing and shall be carried out and observed by Tenant.

ARTICLE 28 - ENVIRONMENTAL PROVISIONS 

A.
Tenant represents and warrants that all materials and chemicals used in the
normal course of its business are classified as Generally Regarded as Safe
("GRAS") by the Food and Drug Administration ("FDA"). Tenant represents and
warrants that it will not conduct any activities on the Demised Premises or in
the Building which may constitute a violation of any environmental law, statute
and/or regulation. Tenant agrees not to employ or utilize the Demised Premises
or the Building for the purpose of disposing, treating, storing, handling or
transporting any materials which may be deemed to constitute “Hazardous or Toxic
Materials”.

B.
Tenant agrees to defend, indemnify and hold Landlord harmless against any and
all Claims, as hereinafter defined, which Landlord may hereafter become liable
for, suffer, incur or pay arising under any applicable laws and resulting from
any activity, act or violation of this Article on the part of Tenant, its
agents, employees, or assigns. In addition, Tenant agrees to defend, indemnify
and hold Landlord harmless against any and all Claims which Landlord may
hereafter be liable for, suffer, incur, or pay resulting from or arising out of
any handling, storage, treatment, transportation, disposal, and/or release of
GRAS, Hazardous or Toxic Materials from or on the Demised Premises or the
Building.

C.
The term "Claims" shall mean and include all actions, causes of action, whether
common law or statutory, demands, remedies, liability, suits, judgments,
expenses, personal injuries, property damages, incidental and consequential
damages resulting thereby, clean up costs, civil penalties, reasonable
attorneys' fees, litigation expenses, abatement costs, abatement and corrective
relief, injunctive relief requiring removal and/or remedial action, all costs of
removal or remedial action, and damages to natural resources.

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D.
The Term "Hazardous or Toxic Materials" means any materials which may be deemed
hazardous or toxic including, but no limited to, (i) materials defined as
"hazardous waste" under the Federal Resource Conservation and Recovery Act and
similar state laws; (ii) "hazardous substances" as identified under the Federal
Comprehensive Environmental Response, Compensation and Liability Act and
especially in CERCLA Section 101(14) and as set forth in Title 40, Title of
Federal Regulations, Part 302; (iii) those elements or compounds which are
contained in the list of hazardous substances adopted by the United States
Environmental Protection Agency ("EPA") and the list of toxic pollutants
designated by Congress or the EPA or defined by any other federal, state or
local statute, law, ordinance, code, rule, regulation, order or decree
regulating, relating to, or imposing liability or standards of conduct
concerning, any hazardous, toxic, polluting, or dangerous waste substance or
material, as such lists are now or any time hereafter in effect; (iv) petroleum
products; and (v) such other materials, substances or waste which are otherwise
dangerous, hazardous, harmful or deleterious to human, plant or animal health or
well being.

E.
The provisions set forth in this Article shall survive the termination of this
Lease. If Tenant's transportation, storage, use or disposal of GRAS or Hazardous
or Toxic Materials on the Demised Premises or Building results in (i)
contamination of the soil or surface or ground water; or (ii) loss, damage or
inconvenience to person(s) and/or property, then Tenant agrees to (i) notify
Landlord immediately of any contamination, claim of contamination, loss or
damage or inconvenience; (ii) after consultation and approval by Landlord, to
clean up the contamination in full compliance with all applicable statutes,
regulations and standards; and (iii) to indemnify, defend and hold harmless
Landlord from and against any Claim arising from or connected with any such
contamination, claim of contamination, loss, damage. Further, upon written
notice from Landlord, Tenant shall immediately cease any activity that may cause
any inconvenience to either Landlord or other tenants, or their agents,
employees or invitees. In the event of a conflict of the provisions of this
Section E with any other provision in this Article, the provision in this
Section E shall prevail.

F.
Tenant has the Landlord’s permission to use all of the chemicals shown in
Exhibit F.

ARTICLE 29 - PERSONAL PROPERTY TAXES

With respect to Tenant's fixtures, furnishings, equipment and all other personal
property located in the Demised Premises, Tenant shall pay prior to delinquency
all taxes assessed against or levied thereon and when possible, shall cause the
same to be assessed and billed separately from the property of Landlord, but if
the same shall be assessed and taxed with the property of Landlord, Tenant shall
pay to Landlord its share of such taxes within ten (10) days after Landlord's
delivery to Tenant of a statement in writing setting forth the amount of such
taxes applicable to Tenant's property. In addition, Tenant shall pay promptly
when due all taxes imposed upon Tenant's rents, gross receipts, charges and
business operations.

ARTICLE 30 - REAL PROPERTY TAXES

Landlord is exempt from real property taxes imposed by the County of Montgomery
and Town of Blacksburg, Virginia. Section 58.1-3203 of the Virginia code allows
the appropriate local municipalities to tax the leasehold interest in property
that is exempt from taxation to the owner. The tax of the leasehold interest is
reduced by two percent for each year that a lease is less than 50 years in
length, but the reduction is limited to 85%. In other words, for a one-year
lease, taxes on the leasehold estate are equal to 15% of the taxes that would
normally be assessed. By executing this Lease, Tenant acknowledges that these
taxes are Tenant’s responsibility.

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ARTICLE 31 - BUSINESS, PROFESSIONAL AND OCCUPATIONAL LICENSE

The Town of Blacksburg, Virginia has a Business, Professional and Occupational
License (BPOL) tax based on the gross revenue received on an annual basis.
Tenants certify that they are licensed to do business in Blacksburg, Virginia
and if applicable, the Commonwealth of Virginia.

ARTICLE 32 - DECLARATION OF USES AND RESTRICTIONS

Tenant agrees to abide by the Declaration of Uses and Restrictions related to
Landlord's research park made by Virginia Tech Corporate Research Center, Inc.
and Virginia Tech Foundation, Inc. recorded in the land records of the Circuit
Court of Montgomery County, Virginia at Deed Book 823, Page 465, as the same may
be amended or modified from time to time. A copy of the current version of the
Declaration is attached as Exhibit D and is incorporated by reference into the
lease.

ARTICLE 33 - PARKING AREAS

The parking area, employee parking space, driveways, entrances, and exits and
all other common areas and facilities provided by Landlord for general use, in
common, of Tenant, its employees and customers, shall at all times be subject to
the exclusive control and management of Landlord, and Landlord shall have the
right to establish, modify, change and enforce uniform and non-discriminatory
rules and regulations with respect to the parking area, employee parking area,
and other common areas and facilities hereinabove mentioned, and Tenant, agrees
at all times to abide by and conform to such rules and regulations.

PART V - INDEMNITY AND INSURANCE

ARTICLE 34 - INDEMNITY, LIABILITY AND LOSS OR DAMAGES

By moving into the Demised Premises or taking possession thereof, Tenant accepts
the Demised Premises as suitable for the purposes for which the same are leased
and accepts the Building and each and every appurtenance thereof, and except as
expressly set forth in this Lease, and Tenant waives any and all defects
therein. Landlord shall not be liable to Tenant or Tenant's agents, employees,
guests, invitees or to any person claiming by, through or under Tenant for any
injury to person, loss or damage to property, or for loss or damage to Tenant's
business, caused by or through the acts or omissions of Landlord or any other
person, or by any other cause whatsoever except Landlord's gross negligence or
willful misconduct. If any action shall be commenced by or against Landlord,
Landlord shall protect and hold Tenant harmless and shall pay all costs,
expenses, and reasonable attorney’s fees. Tenant shall indemnify Landlord and
save Landlord harmless from all suits, actions, damages, liability and expense
in connection with loss of life, bodily or personal injury or property damage
arising from or out of any occurrence in, upon, at or from the Demised Premises
or the occupancy or use by Tenant of the Demised Premises or any part thereof,
if caused wholly or in part by any action or omission of Tenant, its agents,
contractors, employees, servants, invitees, or licensees during the Term of this
Lease. If any action shall be commenced by or against Tenant, Tenant shall
protect and hold Landlord harmless and shall pay all costs, expenses, and
reasonable attorney’s fees.

ARTICLE 35 - INSURANCE

A.
Tenant covenants and agrees that from and after the date of delivery of the
Demised Premises from Landlord to Tenant, Tenant will carry and maintain, at its
sole cost and expense, the following types of insurance, in the amounts
specified and in the form hereinafter provided:

 
i.
General Liability and Property Damage. Commercial General Liability Insurance
covering the Demised Premises and Tenant's use thereof against claims for
personal injury or death and property damage occurring upon, in or about the
Demised Premises, such insurance to afford protection to the limit of not less
than $1,000,000 in respect of injury or death to any number of persons arising
out of any one occurrence and such insurance against property to afford
protection to the limit of not less than $500,000 in respect of any instance of
property damage. The insurance coverage required under this Article, 35.A.i.,
shall, in addition, extend to any liability of Tenant arising out of the
indemnities provided for in Article 4.

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ii.
Tenant Leasehold Improvements and Property. Insurance covering all of the items
included in Tenant's leasehold improvements, heating, ventilating and air
conditioning equipment, if any, trade fixtures, merchandise and personal
property from time to time in, on or upon the Demised Premises, and alterations,
additions or changes made by Tenant pursuant to Article 4 in an amount not less
than One Hundred Percent (100%) of their full replacement cost from time to time
during the Lease Term, and which insurance shall provide protection against
causes of loss commonly known as "all risks" or "special form". Any policy
proceeds from such insurance shall constitute trust funds in the hands of Tenant
to be used solely for the repair, reconstruction and restoration or replacement
of the property damaged or destroyed.

B.
All policies of insurance provided for in this Article shall be issued in form
acceptable to Landlord by insurance companies with a rating of not less than A-
as rated in the most current available "Best Insurance Reports," and qualified
to do business in the Commonwealth of Virginia. Each and every such policy:

 
i.
shall be issued in the name of Tenant (with Landlord and any other parties in
interest from time to time designated in writing named as additional insureds);

 
ii.
shall be for the mutual and joint benefit and protection of Landlord and Tenant
and any such other parties in interest;

 
iii.
shall be delivered to Landlord and such other parties in interest within ten
(10) days after delivery of possession of the Demised Premises to Tenant and
thereafter within thirty (30) days prior to the expiration of each such policy
and as often as any such policy shall expire or terminate, renewal or additional
policies shall be procured and maintained by Tenant in like manner and to like
extent;

 
iv.
shall be written as a primary policy which does not contribute to and is not in
excess of coverage which Landlord may carry; and

 
v.
shall contain a provision that Landlord and any such other parties in interest,
although named as an insured, shall nevertheless be entitled to recover under
said policies for any loss occasioned to it, its servants, agents and employees
by reason of the negligence of Tenant.

C.
Tenant agrees that Landlord shall not be responsible for any damage to Tenant's
stock in trade, furniture, equipment, contents, or other removable items
situated in the Demised Premises, and Landlord shall not be required to carry
insurance to cover any such items.

ARTICLE 36 - WAIVER OF SUBROGATION

Tenant hereby waives all right of subrogation by any insurance company issuing
policies carried by Tenant with respect to the Demised Premises, Tenant's
fixtures, personal property, or leasehold improvements, or Tenant's business.

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PART VI - NON-COMPLIANCE WITH LEASE

ARTICLE 37 - DEFAULT

A.
If (i) Tenant fails to comply with any term, provision, condition, or covenant
of this Lease or any of the Rules and Regulations now or hereafter established
for government of the Building; (ii) Tenant deserts or vacates the Demised
Premises; (iii) any petition is filed by or against Tenant under any section or
chapter of the Bankruptcy Reform Act of 1978, as amended, or under any similar
law or statute of the United States or of any state thereof; (iv) Tenant becomes
insolvent or makes a transfer in fraud of creditors; (v) Tenant makes an
assignment for benefit of creditors; (vi) a receiver is appointed for Tenant or
any of the assets of Tenant: or (vii) tenant ceases to be a going concern; then
Landlord may, after ten (10) days prior written notice to cure any non-monetary
default and after five (5) days prior written notice to cure any monetary
default in this Lease and thereafter, Landlord shall have the option to do any
one or more of the following without any notice or demand, in addition to and
not in limitation of any other remedy permitted by law or by this Lease:

 
i.
Terminate this lease, in which event Tenant shall immediately surrender the
Demised Premises to Landlord and if Tenant fails so to do, Landlord may without
prejudice to any other remedy which it may have for possession or arrearage in
rent, enter upon and take possession of the Demised Premises and expel or remove
Tenant and any other person who may be occupying such Demised Premises or any
part thereof, by force if necessary, without being liable for prosecution or any
claim of damages.

 
ii.
Enter upon and take possession of the Demised Premises and expel or remove
Tenant and any other person who may be occupying such Demised Premises or any
part thereof, by force if necessary, without being liable for prosecution or any
claim for damages therefor, and relet the Demised Premises and receive the rent
therefor.

 
iii.
Enter upon the Demised Premises, by force if necessary without being liable for
prosecution or any claim for damages therefor, and do whatever Tenant is
obligated to do under the terms of this lease and Tenant agrees to reimburse
Landlord on demand for any expenses which Landlord may incur in thus effecting
compliance with Tenant's obligations under this Lease and Tenant further agrees
that Landlord shall not be liable for any damages resulting to Tenant from such
action, whether caused by the negligence of Landlord or otherwise.

 
iv.
Upon three (3) days written notice to Tenant, alter all locks and other security
devices at the Demised Premises without terminating this Lease.

B.
Exercise by Landlord of any one or more remedies hereunder granted or otherwise
available shall not be deemed to be an acceptance of surrender of the Demised
Premises by Tenant whether by agreement or by operation of law, it being
understood that such surrender can be effected only by the written agreement of
Landlord and Tenant. No alteration of locks or other security devices and no
removal or other exercise of dominion by Landlord over the property of Tenant or
others at the Demised Premises shall be deemed unauthorized or constitute a
conversion. All claims for damages by reason of re-entry, repossession and/or
alteration of locks or other security devices are hereby waived, as are all
claims for damages by reason of any distress warrant, forcible detainer
proceedings, sequestration proceedings or other legal process. Tenant agrees
that any re-entry by Landlord may be pursuant to judgment obtained in forcible
detainer proceedings or other legal proceedings or without the necessity for any
legal proceedings, as Landlord may elect, and Landlord shall not be liable in
trespass or otherwise.

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C.
If Landlord elects to terminate this Lease by reason of an event of default,
then, notwithstanding, such terminations, Tenant shall be liable for and pay to
Landlord, at the address specified for notice to Landlord herein, the sum of all
rental and other indebtedness accrued to date of such termination (minus any
amounts collected from any guarantor of this Lease) plus as damages, an amount
equal to the difference between (i) the total rental hereunder for the remaining
portion of this Lease term (had such term not been terminated by Landlord prior
to the date of expiration stated herein), and (ii) the present value of the then
fair rental value of the Demised Premises for such period.

D.
If Landlord elects to repossess the Demised Premises without terminating this
Lease, then Tenant shall be liable for and shall pay to Landlord, at the address
specified for notice to Landlord herein, all rental and other indebtedness
accrued to the date of such repossession, plus rental required to be paid by
Tenant to Landlord during the remainder of the Lease Term until the date of
expiration of the Lease Term as stated in herein diminished by any net sums
thereafter received by Landlord through reletting the Demised Premises during
said period (after deducting expenses incurred by Landlord as provided in
Sub-Article 36.E. below). In no event shall Tenant be entitled to any excess of
any rental obtained by reletting over and above the rental herein reserved.
Actions to collect amounts due by Tenant to Landlord under this subparagraph may
be brought from time to time, on one or more occasions, without the necessity of
Landlord's waiting until expiration of the Lease Term.

E.
In case of any event of default or breach by Tenant , Tenant shall also be
liable for and shall pay to Landlord at the address specified for notice to
Landlord herein in addition to any sum provided to be paid above, brokers fees
incurred by Landlord in connection with reletting the whole or any part of the
Demised Premises; the costs of removing and storing Tenant's or other occupant's
property; the costs of repairing, altering, remodeling or otherwise putting the
Demised Premises into condition acceptable to a new tenant or tenants; and all
reasonable expenses incurred by Landlord in enforcing or defending Landlord's
right and/or remedies including reasonable attorney's fees.

F.
In the event of termination or repossession of the Demised Premises for an event
of default, Landlord shall make good faith, commercially reasonable efforts to
relet or to attempt to relet the premises, or any portion thereof, or to collect
rental after reletting and in the event of reletting, Landlord may relet the
whole or any portion of the premises for any period to any tenant and for any
use and purpose. Any sums received by Landlord as a result of any such reletting
shall be credited against any damages due to Landlord because of Tenant’s
default, but only to the extent that such monies are paid to Landlord for the
use of the premises during what would have been the Lease Term.

G.
If Tenant fails to make any payment or cure any default hereunder within the
time herein permitted, Landlord, without being under any obligation to do so and
without thereby waiving such default, may make such payment and/or remedy such
other default for the account of Tenant (and enter the premises for such
purpose), and thereupon Tenant shall be obligated to, and hereby agrees to pay
Landlord, upon demand, all costs, expenses and disbursements (including
reasonable attorney's fees) incurred by Landlord in taking such remedial action.

H.
In the event of any default by Landlord, Tenant's exclusive remedy shall be an
action for damages. Tenant hereby waives the benefit of any laws granting a lien
upon the property of Landlord and/or upon rent due Landlord), but prior to any
such action, Tenant will give Landlord written notice specifying such default
with particularity, and Landlord shall thereupon have thirty (30) days in which
to cure any such default. Unless and until Landlord fails to cure any default
after such notice, Tenant shall not have any remedy or cause of action by reason
thereof. All obligations of Landlord hereunder will be construed as covenants,
not conditions; and all such obligations will be binding upon Landlord only
during the period of its possession of the premises and not thereafter. The term
"Landlord" shall mean only the owner, the Demised Premises, and in the event of
the transfer by such owner of its interest in the Demised Premises, such owner
shall thereupon be released and discharged from all covenants and obligation of
Landlord thereafter accruing, but such covenants and obligations shall be
binding during the Lease Term upon each new owner for the duration of such
owner's ownership. Notwithstanding any other provision to the contrary herein,
Landlord shall not have any personal liability hereunder. In the event of any
breach or default by Landlord in any term or provision of this Lease, Tenant
agrees to look solely to the equity or interest then owned by Landlord in the
Demised Premises; however, in no event, shall any deficiency judgment or any
money judgment of any kind be sought or obtained against Landlord.

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I.
If Landlord shall take possession of the Demised Premises pursuant to the
authority herein granted, then Landlord shall have the right to keep in place
and use all of the furniture, fixtures and equipment at the Demised Premises,
including that which is owned by or leased to Tenant at all times prior to any
foreclosure thereon by Landlord or repossession thereof by any Landlord thereof
or third party having a lien thereon. Landlord shall also have the right to
remove from the Demised Premises (without the necessity of obtaining a distress
warrant, writ of sequestration or other legal process) all or any portion of
such furniture, fixtures, equipment and other property located thereon and to
place same in storage at any Demised Premises within the county in which the
Demised Premises is located; and in such event, Tenant shall be liable to
Landlord for costs incurred by Landlord in connection with such removal and
storage. Landlord shall also have the right to relinquish possession of all or
any portion of such furniture, fixtures, equipment and other property to any
person ("Claimant") claiming to be entitled to possession thereof who present to
Landlord a copy of any instrument represented to Landlord by Claimant to have
been executed by Tenant (or any predecessor of Tenant) granting Claimant the
right under various circumstances to take possession of such furniture,
fixtures, equipment or other property, without the necessity on the part of
Landlord to inquire into the authenticity of said instrument or Tenant's or
Tenant's predecessor's signature thereon and without the necessity of Landlord
making any investigation or inquiry as to the validity of the factual or legal
basis upon which Claimant purports to act. Tenant agrees to indemnify and hold
Landlord harmless from all costs, expense, loss damage and liability incident to
Landlord's relinquishment of possession of all or any portion of such furniture,
fixtures, equipment or other property to Claimant. The rights of Landlord herein
stated shall be in addition to any and all other rights that Landlord has or may
hereafter have at law or in equity. Tenant stipulates and agrees that the rights
herein granted Landlord are commercially reasonable.

J.
No act or thing done by Landlord or its agents during the term hereof shall be
deemed an acceptance of a surrender of the Demised Premises, and no agreement to
accept a surrender of the Demised Premises shall be valid unless made in writing
and signed by Landlord.

K.
The mention in this Lease of any particular remedy shall not preclude Landlord
from any other remedy Landlord might have, either in law or in equity, nor shall
the waiver of or redress for any violation of any covenant or condition
contained in this Lease or any of the Rules and Regulations attached hereto or
hereafter adopted by Landlord, prevent a subsequent act, which would have
originally constituted a violation, from having all the force and effect of an
original violation.

L.
The receipt by Landlord of rent with knowledge of the breach of any covenant
contained in this Lease shall not be deemed a waiver of such breach.

M.
The failure of Landlord to enforce any of the Rules and Regulations attached
hereto, or hereafter adopted, against Tenant and/or any other tenant in the
Building shall not be deemed a waiver.

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N.
If it becomes necessary or proper for Landlord to bring any action under this
Lease or to consult with an attorney concerning, or for the enforcement of, any
of Landlord's rights under this Lease, Tenant agrees in each and any such case
to pay to Landlord its attorney's fees.

ARTICLE 38 - LIEN FOR RENT

In consideration of mutual benefits arising by virtue of this Lease, Tenant does
hereby grant to Landlord a security interest in all property of Tenant now or
hereinafter placed in or upon the Demised Premises (except such part of Tenant's
property or merchandise which may be exchanged, replaced or sold from time to
time in the ordinary course of operations or trade), and such property is hereby
subjected to a lien in favor of Landlord and shall be and remain subject to such
lien of Landlord for payment of all rents and other sums agreed to be paid by
Tenant herein; provided that said lien shall be subordinate to any security
interest in connection with purchase money financing by Tenant. Tenant agrees to
execute appropriate security agreements and financing statements as may be
required by law to perfect Landlord's subordinate security interest if so
requested by Landlord.

ARTICLE 39 - DEFAULTS BY TENANT ON THIRD PARTY

Tenant shall not default on any of its covenants under loan agreements, with any
lending, mortgage or financial institution and Tenant immediately shall advise
Landlord in writing if any such default by Tenant should incur.

ARTICLE 40 - WAIVER OF DEFAULT

In the event Tenant should default on any of its covenants herein, Landlord may
pursue remedies in accordance with Article 37. However, Landlord, at its option,
may waive such event of default and this Lease will continue in full force and
effect, provided, however, that Landlord's waiver is in writing and signed by
Landlord.

ARTICLE 41 - WAIVER OF TRIAL BY JURY

Each of Landlord and Tenant agree it shall, and it hereby does, waive trial by
jury in any action, proceeding or counterclaim brought by either of the parties
hereto against the other on any matter arising out of or in any way connected
with this Lease, including, but not limited to, the relationship of Landlord and
Tenant, and Tenant's use or occupancy of the Demised Premises. Tenant further
agrees that it shall not interpose any counterclaim in a summary proceeding or
in any action based on nonpayment of Basic Rent or any other payment required of
Tenant hereunder.

ARTICLE 42 - CROSS DEFAULTS

If Tenant, or any subsidiary or affiliate of Tenant, has other leases for other
Demised Premises in the Building, any default by Tenant under such other leases
shall be deemed to be default hereunder and Landlord shall be entitled to
enforce all of its rights and remedies for default as provided herein.

ARTICLE 43 - ABANDONMENT

If the Demised Premises are abandoned or vacated by Tenant, Landlord shall have
the right, but not the obligation, to:

A.
re-let the Demised Premises for the remainder of the period covered hereby; and
if the rent received through such re-leasing is not at least equal to the rent
provided hereunder, Tenant shall pay and satisfy any deficiencies between the
amount of rent called for under this Lease and that received through reletting
and all expenses incurred by any such reletting, including but not limited to,
the cost of renovating, altering and decorating for a new occupancy; and/or

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B.
provide for the storage of any personal property remaining in the Demised
Premises without liability of any kind or nature for the cost of storage or the
return of the personal property to Tenant or take title to the abandoned
personal property which title shall pass to Landlord under this Lease as a Bill
of Sale without additional payments or credit from Landlord to Tenant.

Notwithstanding the foregoing, during the last ninety (90) days of the term of
this Lease, if Tenant removes a substantial portion of Tenant's property or
Tenant has been in physical absence for ten (10) days, it shall constitute a
vacation and Landlord may enter the Demised Premises for the purpose of
renovating, altering and decorating the Demised Premises for occupancy at the
end of the Lease Term by a new tenant without in any way affecting Tenant's
obligation to pay rent and comply with all other terms and conditions of this
Lease. Nothing herein shall be construed as in any way denying Landlord the
right, in case of abandonment, vacation of the Demised Premises, or other breach
of this Lease by Tenant, to treat the same as an entire breach, and, at
Landlord's option, immediately sue for the entire breach of this Lease and any
and all damages occasioned Landlord thereby.

ARTICLE 44 - HOLDING OVER

In case of holding over by Tenant after expiration or termination of this Lease,
Tenant will pay as liquidated damages double rent for the entire holdover
period, and will pay all reasonable attorney's fees, and expenses incurred by
Landlord in enforcing its rights hereunder. No holding over by Tenant after the
Lease Term, shall operate to extend this Lease for a longer period than one
month; and holding over with the consent of Landlord in writing shall thereafter
constitute a month to month lease. If Tenant fails to surrender the Demised
Premises to Landlord on expiration of the term as required by this Article 44,
Tenant shall hold Landlord harmless from all damages resulting from Tenant's
failure to surrender the Demised Premises including without limitation, claims
made by a succeeding tenant resulting from Tenant's failure to surrender the
Demised Premises. The foregoing provisions of this Article 44 are in addition to
and do not affect Landlord's right of re-entry or any other rights of Landlord
hereunder or as otherwise provided by law.

ARTICLE 45 - ATTORNEY'S FEES 

In case Tenant defaults in the performance of any of the terms, covenants,
agreements or conditions contained in this Lease, and Landlord places the
enforcement of this Lease, or any part thereof, or the collection of any rent
due, or to become due hereunder or recovery of the possession of the Demised
Premises in the hands of an attorney or files suit upon the same, Tenant agrees
to pay Landlord's attorney's fees, and payment of the same shall be secured in
like manner as is herein provided, as to all remedies which may be invoked by
Landlord to secure payment of rent.

ARTICLE 46 - INTEREST ON PAST DUE OBLIGATIONS

Any amount due from Tenant hereunder which is not paid when due shall bear
interest at the rate of twelve percent (12%) per annum from the due date until
paid, unless otherwise specifically provided herein, but the payment of such
interest shall not excuse or cure any default by Tenant under this Lease.

ARTICLE 47 - SECURITY DEPOSIT

Not later than two weeks prior to the Rent Commencement Date, Tenant shall
deposit the sum of Twenty Three Thousand, Six Hundred, Sixty Nine and 00/100
Dollars($23669.00) as a security deposit. Any security deposit remaining from a
prior lease will be applied as appropriate after review of that suite. An
invoice will be processed for the amount due. Upon the occurrence of any event
of default by Tenant, Landlord may, from time to time, without prejudice to any
other remedy use the security deposit paid to Landlord by Tenant as herein
provided to the extent necessary to make good any arrears of Basic Rent and any
other damage, injury, expense or liability caused to Landlord. If any portion of
said deposit is so used or applied, Tenant shall, within five (5) days after
written demand therefore, deposit cash with Landlord in an amount sufficient to
restore the security deposit to its original amount. Tenant shall not be
entitled to interest on the security deposit. Tenant shall not grant anyone a
security interest of any kind in such security deposit and no such security
agreement shall be binding on Landlord. If Tenant fully and faithfully performs
every provision of this Lease to be performed by it, the security deposit, or
any balance thereof remaining, shall be returned to Tenant at the expiration of
the Lease Term and upon Tenant's vacation of the Premises. Such security deposit
shall not be considered an advance payment of Basic Rent or a measure of
Landlord's damages in case of default by Tenant. In the event Landlord should
have good cause to doubt the full and faithful performance of every provision of
this Lease by Tenant, Landlord shall have the right to demand that Tenant post
an additional security deposit in the same amount as the original security
deposit. Upon the showing by Tenant that this full and faithful performance is
no longer in doubt, the additional security deposit shall be returned to
Tenant. 

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PART VII - LEASE ADMINISTRATION AND MISCELLANEOUS ARTICLES

ARTICLE 48 - APPLICATION 

All prospective tenants and sub-tenants of the Virginia Tech Corporate Research
Center must complete an application that identifies, among other things, the
work that will be done in the Center, and gives financial details of the
prospective tenant’s past operations or of the principal of the company.
Tenant’s application is attached hereto as Exhibit C and made part of this
Lease. All information contained in the application is deemed to be true and
providing false information on the application shall be grounds for default
under the terms of this Lease. Landlord may require Tenant to complete a new
application and to provide up-to-date financial information as often as once per
year.

ARTICLE 49 - MEASUREMENT OF SPACE 

Useable Area shall be determined by application of the most recent version of
American National Standard’s Institute (ANSI) standard Z65.1. The factor used to
increase Useable Square Feet to Rentable Square Feet represents the common area
of the Building and the free use of other Corporate Research Center assets
including conference rooms, audio-visual equipment, display units and
recreational amenities. Because of these extra amenities, the factor used is not
necessarily the same one that would be derived by use of ANSI standard Z65.1 and
therefore Rentable Square Feet is not equal to the ANSI definition of Rentable
Square Feet.

ARTICLE 50 - LEASE EFFECTIVE UPON EXECUTION

Delivery of this Lease, duly executed by Tenant, constitutes an offer to lease
the Demised Premises as herein set forth, and under no circumstances shall such
delivery be deemed to create an option or reservation to lease the Demised
Premises for the benefit of Tenant. This Lease shall only become effective and
binding upon execution hereof by Landlord and delivery of a signed copy to
Tenant.

ARTICLE 51 - AUTHORITY

The officers of Tenant executing this Lease on Tenant's behalf hereby make the
following representations, in their personal and corporate capacities, upon
which Landlord is relying in consenting hereto:

A.
that Tenant has been duly organized, is validly existing and is in good standing
in the Commonwealth of Virginia;

B.
that the officers executing this Lease on Tenant's behalf have been duly
authorized by all necessary corporate action to execute the same, and that upon
the execution hereof, this Lease shall be the valid and binding obligation of
Tenant;

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C.
that the financial statements supplied by Tenant to Landlord on, before, or
after the date hereof are true and accurate in all respects.

ARTICLE 52 - INCORPORATION OF PRIOR AGREEMENTS

This Lease contains all of the agreements of the parties hereto with respect to
all matters related to this Lease, and no prior agreement or understanding,
whether oral or written, pertaining to any such matter shall be effective for
any purpose.

ARTICLE 53 - AMENDMENTS

No provision of this Lease may be amended or added to except by an agreement in
writing signed by the parties hereto or their respective successors in interest.
Any written addenda to this Lease, when signed by the contracting parties shall
be deemed a part of this Lease to the same full extent as if incorporated
herein.

ARTICLE 54 - SEVERABILITY CLAUSE

If any clause or provision of this Lease is deemed illegal, invalid, or
unenforceable, then and in that event, it is the intention of the parties hereto
that the remainder of this Lease shall not be affected thereby, and it is also
the intention of the parties to this Lease that in lieu of each clause or
provision that is illegal, invalid, or unenforceable there be added as a part of
this Lease a clause or provision as similar in terms to such illegal, invalid or
unenforceable clause or provision as may be possible and be legal, valid and
enforceable.

ARTICLE 55 - GENDER

Throughout this Lease the masculine gender shall be deemed to include the
feminine and the neuter and the singular, the plural and vice versa.

ARTICLE 56 - TIME OF THE ESSENCE

Time is of the essence with respect to the performance of every provision of
this Lease in which time of performance is a factor.

ARTICLE 57 - BUILDING NAME

Landlord hereby reserves the right to change the name of the Building and Tenant
shall have no recourse under this Lease.

ARTICLE 58 - BROKERS

Tenant warrants that it has had no dealings with any real estate broker or agent
in connection with the negotiation of this Lease and that Tenant knows of no
other real estate broker or agent who is or might be entitled to a commission in
connection with this Lease. If Tenant has dealt with any other person or real
estate broker in respect of leasing or renting space in the Building, Tenant
shall be solely responsible for the payment of any fee due said person or firm
and Tenant shall hold Landlord free and harmless against any liability in
respect thereto.

ARTICLE 59 - ESTOPPEL CERTIFICATE

Tenant shall at any time and from time to time, upon not less than five (5) days
prior written from Landlord, execute, acknowledge and deliver to Landlord within
such five (5) day period a statement in writing certifying that this Lease is
unmodified and in full force and effect (or, if modified, stating the nature of
such modification and certifying that this Lease, as so modified, is in full
force and effect), the dates to which Basic Rental and other charges, if any,
are paid in advance and the amount of Tenant's security deposit, if any, and
acknowledging that there are not, to Tenant's knowledge, any uncured defaults,
on the part of Landlord hereunder, and that there are no events or conditions
then in existence which, with the passage of time or notice or both, would
constitute a default on the part of Landlord hereunder, or specifying such
defaults events or conditions, if any are claimed. It is expressly understood
and agreed that any such statement or any other reasonable request may be relied
upon by any prospective purchaser or encumbrancer of all or any portion of the
Building or property on which the Building is situated. Tenant's failure to
deliver such statement within such time shall, at the option of Landlord,
constitute a default under this Lease and, in any event, shall be conclusive
upon Tenant that this Lease is in full force and effect without modification
except as may be represented by Landlord in any such certificate prepared by
Landlord and delivered to Tenant for execution.

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ARTICLE 60 - NOTICES

Any notice required or permitted to be given hereunder by one party to the other
shall be deemed to be given when deposited in the United States Mail, certified
or registered, return receipt requested, or delivered by hand with a receipt,
therefore, addressed to the respective party to whom notice is intended to be
given at the addresses of the parties as stipulated in the Fundamental Lease
Provisions.

ARTICLE 61 - RECORDING OF LEASE

This Lease shall not be recorded unless agreed to by both parties hereto, but
either party may record a short form of this Lease with the cost therefore to be
paid for by the party requesting the recording.

ARTICLE 62 - HEADINGS AND TABLE OF CONTENTS

The Table of Contents, and the section, article and paragraph headings are for
the purpose of convenience of reference only and in no other way define, limit
or describe the scope or intent of this Lease or in any way affect this Lease.

IN WITNESS WHEREOF this Lease is entered into by the parties hereto on the date
and year first set forth above.

 
LANDLORD: Virginia Tech Foundation, Inc.
           
BY:
/s/ Raymond D. Smoot, Jr
June 20, 2006
   
      Raymond D. Smoot, Jr., COO and Sec.-Treas.
(date)
                 
TENANT: New River Pharmaceuticals Inc.
           
BY:
/s/ Dr. John Thottathil
June 20, 2006
   
      Dr. John Thottathil, CSO
(date)

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LEASE RIDER 1 - TENANT IMPROVEMENTS SCHEDULE

This Tenant Improvements Schedule made part of this Lease dated June 19, 2006,
by and between Virginia Tech Foundation, Inc., ("Landlord"), and New River
Pharmaceuticals Inc., ( “Tenant").

Landlord and Tenant have entered into a lease ("the Lease") covering certain
premises (the “Demised Premises") in Suite 2050, consisting of approximately
18242 rentable square feet. Landlord and Tenant have agreed as follows regarding
the improvements that will be made to the Demised Premises prior to the Rent
Commencement date:
 
ARTICLE 1 - COMPLETION AND RENT COMMENCEMENT DATE

By modification to this lease, rent will commence for the laboratory space upon
commencement of construction and in the balance of the demised premises upon
move-in.

 
LANDLORD: Virginia Tech Foundation, Inc.
           
BY:
/s/ Raymond D. Smoot, Jr
June 20, 2006
   
      Raymond D. Smoot, Jr., COO and Sec.-Treas.
(date)
                 
TENANT: New River Pharmaceuticals Inc.
           
BY:
/s/ Dr. John Thottathil
June 20, 2006
   
      Dr. John Thottathil, CSO
(date)

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LEASE RIDER 2

This Rider is made part of this Lease dated June 19, 2006, by and between
Virginia Tech Foundation, Inc., ("Landlord"), and New River Pharmaceuticals
Inc., ( “Tenant").

Landlord and Tenant have entered into a lease ("the Lease") covering certain
premises (the “Demised Premises") in Suite 2050, consisting of approximately
18242 rentable square feet.

Whereas the Landlord and Tenant desire to modify the provisions of the Lease
from the time of its original execution, they hereby agree as follows:

ARTICLE 7 - In addition:

The landlord or agents of the landlord are required to be escorted by an
authorized person of New River Pharmaceuticals Inc. when entering the computer
room, chemical storage room, or the controlled substance storage area.

ARTICLE 28 - B Replaced with the following:

i.    Tenant agrees to defend, indemnify and hold Landlord harmless against any
and all Claims, as hereinafter defined, which Landlord may hereafter become
liable for, suffer, incur or pay arising under any applicable laws and resulting
from any activity, act or violation of this Article during the term of this
Lease on the part of Tenant, its agents, employees, or assigns. In addition,
Tenant agrees to defend, indemnify and hold Landlord harmless against any and
all Claims which Landlord may hereafter be liable for, suffer, incur, or pay
resulting from or arising out of any handling, storage, treatment,
transportation, disposal, and/or release of GRAS, Hazardous or Toxic Materials
from or on the Demised Premises or the Building during the Term of this Lease.

ii.    Landlord agrees to defend, indemnify and hold Tenant harmless against any
and all Claims, as hereinafter defined, which Tenant may hereafter become liable
for, suffer, incur or pay arising under any applicable laws and resulting from
any activity, act or violation of this Article by the Landlord, its agents,
employees, assigns or any former tenant prior to the Term of this Lease
(hereafter, “Landlord Parties”). In addition, Landlord agrees to defend,
indemnify and hold Tenant harmless against any and all Claims which Tenant may
hereafter be liable for, suffer, incur or pay resulting from or arising out of
any handling, storage, treatment, transportation, disposal, and/or release of
GRAS, Hazardous or Toxic Materials from or on the Demised Premises or the
Building prior to the Term of this Lease. It is hereby acknowledged that
Landlord has had a Phase One environmental assessment conducted on the Demised
Premises, and a copy of that report is attached hereto as Exhibit 28(B).
Landlord shall be responsible for the removal and associated cleanup, if any, of
the materials identified in such report.

ARTICLE 28 - E Replaced with the following:

i.    The provisions set forth in this Article shall survive the termination of
this Lease. If Tenant’s transportation, storage, use or disposal of GRAS or
Hazardous or Toxic Materials on the Demised Premises or Building during the Term
of this Lease results in (i) contamination of the soil or surface or ground
water; or (ii) loss, damage or inconvenience to person(s) and/or property, then
Tenant agrees to (i) notify Landlord immediately of any contamination, claim, of
contamination, loss or damage or inconvenience; (ii) after consultation and
approval by Landlord, to clean up the contamination in full compliance with all
applicable statutes, regulations and standards; and (iii) to indemnify, defend
and hold harmless Landlord from and against any Claim arising from or connected
with any such contamination, claim of contamination, loss, or damage. Further,
upon written notice from Landlord, Tenant shall immediately cease any activity
that may cause any inconvenience to either Landlord or other tenants, or their
agents, employees or invitees. In the event of a conflict of the provisions of
this Section E(1) with any other provision in this Article, the provision of
this Section E(i) shall prevail.

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ii.    The provisions set forth in this Article shall survive the termination of
this Lease. If the Landlord Parties’ transportation, storage, use or disposal of
GRAS or Hazardous or Toxic Materials on the Demised Premises or Building results
in, or in the event that Landlord becomes aware that it has resulted in (i)
contamination of the soil or surface or ground water; or (ii) loss, damage or
inconvenience to person(s) and/or property, then Landlord agrees to (i) notify
Tenant immediately of any contamination, claim, of contamination, loss or damage
or inconvenience; (ii) after consultation with Tenant, to clean up the
contamination in full compliance with all applicable statutes, regulations and
standards; and (iii) to indemnify, defend and hold harmless Tenant from and
against any Claim arising from or connected with any such contamination, claim
of contamination, loss, or damage. Further, upon written notice from Tenant,
Landlord shall immediately cease any activity that may cause any inconvenience
to either Tenant or other tenants or their agents, employees or invitees. In the
event of a conflict of the provisions of this Section E(2) with any other
provision in this Article, the provision of this Section E(ii) shall prevail.

 
LANDLORD: Virginia Tech Foundation, Inc.
           
BY:
/s/ Raymond D. Smoot, Jr
June 20, 2006
   
      Raymond D. Smoot, Jr., COO and Sec.-Treas.
(date)
                 
TENANT: New River Pharmaceuticals Inc.
           
BY:
/s/ Dr. John Thottathil
June 20, 2006
   
      Dr. John Thottathil, CSO
(date)

 

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